Submitting Medicare Secondary Payer (MSP) Claims and Adjustments

The Centers for Medicare & Medicaid (CMS) requires that CAS segments be submitted on MSP claims and adjustment where the primary insurance has made a payment. CAS segments are utilized when MSP claims and adjustments are submitted using the American National Standard Institute (ANSI) ASC X12N 837 format. However, CAS segments are not utilized when MSP claims and adjustments are submitted via direct data entry (DDE) (directly into the Fiscal Intermediary Standard System (FISS), and if submitted, they will be returned to the provider (RTP) with reason code 31265 (MSP claims and adjustments cannot be entered via direct data entry (DDE) thru FISS). The following provides guidance on how MSP claims/adjustments can be submitted under certain MSP situations.

Note: For additional clarification, refer to the article Clarification on Submitting Medicare Secondary Payer (MSP) Claims and Adjustments and Reason Code 31265.

Submit MSP Claims/Adjustments via:	When:
FISS DDE	Services are unrelated to an open MSP record (liability, workers’ comp, no-fault, etc.) The primary insurance denied payment.
Electronically (i.e., a billing software in the American National Standard Institute (ANSI) ASC X12N 837 4010-A1 format (e.g., PC-Ace Pro32 v. 2.14))	Claim is for services where another insurer has made a payment.
Paper Note: If your facility does not have a waiver due to meeting the small provider exception, (CMS Pub. 100-04, Ch. 24, §90), see the instructions below under the “Unable to Submit Claims Electronically” header.	Claims where another insurer is primary, and there is a possibility/expectation that the primary insurer will make a payment in the future. Example, services are related to a liability record; however, there was no prompt response/payment (within 120 days) from the primary insurer after submitting your claim to them. Claims where the primary insurer applied the charges to the deductible. Claims where the beneficiary has coverage through Black Lung. Refer to Cahaba’s Federal Black Lung (BL) Program Web page for additional information.

Correcting MSP Claims and Adjustments

If an MSP claim/adjustment is required to be submitted electronically (837 format) or on paper due to the MSP situation, and is sent to RTP (status/location T B9997) for correction, the claim/adjustment cannot be corrected out of RTP. A new electronic or paper claim/adjustment would need to be submitted. If you correct the claim via FISS DDE, the claim/adjustment will receive reason code 31265 and will remain in the RTP file. If the MSP claim/adjustment can be submitted FISS DDE, as indicated above, it can be corrected from RTP using FISS DDE.

Note: To avoid MSP claims from going to the RTP file, it is important that providers verify that all required claim data is present for the type of bill they are submitting (example, home health final claim or hospice claim), and that the information (including the required MSP claim data) is complete and correct.

Unable To Submit Claims Electronically

If you are unable to submit claims electronically using the 837 format:

Step 1: Submit a claim via FISS DDE showing Medicare as the primary payer. This will result in the claim being rejected.

Please be aware that claims may reject to FISS status/location (S/LOC) R B75XX or R B9997. If your claim rejects to an R B75XX S/LOC, it will remain there for at least 75 days. Providers will be unable to submit an adjustment to a rejected claim until it moves to a finalized R B9997 S/LOC.

Step 2: Submit a hardcopy (paper) adjustment to the rejected (R B9997) claim and include all the information regarding payment from the primary payer source. This includes the amount received as payment (if payment was received), the amount the provider is obligated to accept as payment in full, and any deductible or coinsurance amounts that were applied. For additional information about submitting MSP information, refer to Cahaba’s Medicare Secondary Payer (MSP) Billing: Quick Reference Tool

Send the hardcopy (paper) adjustment to the Medicare Secondary Payer address listed on the Write Us page.

PC-Ace Pro32

If your vendor's software program does not allow you to send MSP claims with CAS segments, you can use the free Microsoft Windows based claims submission software PC-Ace Pro32 to send MSP claims and adjustments electronically in the 837 format. Refer to the EDI Software Downloads / Instructions Web page at for additional information. To request PC-Ace Pro32, complete the EDI Services Enrollment Application.