Medicare Secondary Payer (MSP) Guidelines

Published 10/24/2023

Until 1980, the Medicare program was the primary payer in all cases except those involving workers' compensation (including Black Lung) benefits. Medicare was also precluded from making payment for services that were paid for by the Department of Veterans Affairs or other governmental entities. Since 1980, a series of changes in the Medicare laws has resulted in Medicare also being the secondary payer for individuals:

  • Who are age 65 or older and working (hence the term "working-aged") with coverage under an employer-sponsored or employee organization group health plan (GHP)
  • Who are 65 or older and covered by a working spouse's employer group health plan. The working spouse can be any age.
  • With coverage under automobile, no-fault or liability insurance
  • With kidney failure, for up to the first 30 months of Medicare entitlement, if they have coverage under their own employer-sponsored or employee organization group health plan, or if coverage is provided to them because they are the spouse or dependent of an individual with group health plan coverage
  • Who are disabled and have coverage under their own large group health plan (LGHP) because of their current employment or who are disabled and have coverage under the large group health plan of a family member who is currently employed. A large group health plan is provided by an employer who employs 100 or more persons or a plan belonging to a multi-employer plan where at least one employer has 100 or more full or part-time employees.

Before You Begin: Facts to Know

  • For patients that have both Medicare and Medicaid and no other insurance, Medicare is the primary payer
  • In most cases, federal law takes precedence over state laws and private contracts. Even if a state law or insurance policy states that they are a secondary payer to Medicare, the MSP regulations should be followed to determine the correct primary payer.
  • Medicare records may not reflect the patient's current insurance status. If you find that there is a discrepancy between Medicare records and the patient's current insurance status, submit a “Medicare Secondary Payer Inquiry Form” and include any applicable EOB from another insurer. Palmetto GBA will review and determine if a request should be made to the MSP Contractor to research and update the information.
  • In some cases, if a patient or his or her spouse is working and is covered by an employer group health plan (EGHP), you must know the number of people employed by the company in order to use this tool most effectively. Either you or the patient may contact the employer to obtain this information.
  • Providers are required to file claims on behalf of their Medicare patients, including patients for whom Medicare is the secondary payer
  • These claims must be filed electronically, unless you qualify for a waiver to submit paper claims

CMS regulation reference: Medicare Secondary Payer ManualPublication 100-05.

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