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Clarification of Medicare Secondary Payer (MSP) Billing
The Centers for Medicare & Medicaid Services (CMS) recently published Change Request (CR) 4261 that discusses balancing of claims sent to Medicare for secondary payment. Due to questions received about this CR, Cahaba Government Benefit Administrators®, LLC feels that clarification is needed in how adjustments should be reported on an ANSI X12 837 Medicare Secondary Payer (MSP) claim.
Many providers are sending the same adjustments at both the claim and line level, thereby, overstating the actual adjustment amounts. When providers replicate adjustments at both the claim and line level, it results in an out of balance claim. We understand there may be times when a primary payer may take adjustments at the claim level and also at the line level. For example, a primary payer may report a patient's deductible as a claim level adjustment and all other adjustments (i.e. co-payments, write-offs, or discount amounts) are reported at the line level. Cahaba GBA®, LLC would like to remind providers to send the adjustment information exactly as it is reported on the primary payer's EOB.
The formula Cahaba GBA®, LLC must use to determine whether a primary payer's claim data balances is as follows:
Formula for Professional Claims:
- Submitted charges as contained in CLM02,
- minus all CAS adjustment amounts
([Loop 2320 CAS03+CAS06+CAS09+CAS12+CAS15+CAS18] + [Loop 2430 CAS03+CAS06+CAS09+CAS12+CAS15+CAS18])- must equal the amount paid by the primary payer as contained in AMT02 of the COB Payer Paid Amount AMT in Loop 2320 (D qualifier, Payer Amount Paid, in AMT01)
Formula for Institutional Claims:
- Amount billed to the primary payer as contained in AMT02 of the COB Total submitted charges AMT segment in Loop 2320,
- minus all CAS adjustment amounts
([Loop 2320 CAS03+CAS06+CAS09+CAS12+CAS15+CAS18] + [Loop 2430 CAS03+CAS06+CAS09+CAS12+CAS15+CAS18])- must equal the amount paid by the primary payer as contained in AMT02 of the Payer Prior Payment AMT in Loop 2320 (C4 qualifier, Prior Payment-Actual in AMT01)
If the total billed to the primary payer less the total of all adjustments made by that primary payer does not equal the total paid by the primary payer, the primary payer data does not balance and that claim must be rejected for correction and resubmission.
Because of the complexity involved in sending MSP claims correctly, Cahaba GBA®, LLC wants to give providers and their software vendors or clearinghouses an opportunity to accommodate the formula above. Therefore, we will not begin to enforce this balancing requirement until September 6, 2006 at which time edit #377 will be returned on the audit report.
The following are examples of correctly and incorrectly billed MSP claims for your reference.
