COB News
Volume 3, December 2001
Coordination of Benefits (COB) News is a quarterly newsletter for Medicare contractors, employers, and others interested in Medicare COB.
Inside This Issue:
The COB Contractor (COBC) initiates a Medicare Secondary Payer (MSP) investigation when it learns that a beneficiary has other insurance. The purpose of this investigation is to determine whether Medicare or the other insurance has primary responsibility for meeting the health care costs. This process involves developing additional information related to the beneficiary's health benefit coverage and resolving any conflicts in the information to ensure Medicare pays only what it is obligated to pay.
When Medicare is Secondary
Medicare is secondary for individuals with employer group health plan (EGHP) coverage. Federal Law requires employers to offer their employees age 65 or over and their spouses, of any age, the same coverage offered to employees and their spouses under age 65, i.e., coverage that is primary to Medicare. This equal-benefit rule applies to coverage offered to full-time and part-time employees.
Medicare beneficiaries are free to reject employer plan coverage, in which case they retain Medicare as their primary coverage. When Medicare is primary payer, employers cannot offer such employees or their spouses secondary coverage for items and services covered by Medicare. Where an EGHP is the primary payer but does not pay in full for the services, secondary Medicare benefits may be paid to supplement the amount paid by the EGHP for Medicare covered services. If an EGHP denies payment for services because they are not covered by the plan, primary Medicare benefits may be paid if Medicare covers the services.
Medicare may be secondary for the following individuals with group health plan (GHP) coverage:
Working Aged
Working Aged are beneficiaries age 65 or over who have GHP coverage because of their current employment or their spouse's current employment. For the working aged, Medicare is secondary payer for claims. For the purposes of the MSP Working Aged provision, a GHP is any health plan that is for or contributed to by an employer of 20 or more employees that provides medical care, directly or through other methods, such as insurance or reimbursement to current or former employees and their families. The "20 or more employees" threshold is met when an employer has 20 or more full and/or part-time employees for each working day in each of 20 or more calendar weeks in the current calendar year or the preceding calendar year. The 20 calendar weeks do not have to be consecutive. The requirements of the Medicare secondary law are based on the number of employees, not the number of people covered under the plan.
End-Stage Renal Disease/Permanent Kidney Failure
A GHP is primary to Medicare during a 30-month coordination period for beneficiaries who have Medicare because of permanent kidney failure. This rule applies to both those with permanent kidney failure who have their own coverage under a GHP and to those covered under a GHP as dependents. Additionally, this rule applies without regard to the number of employees or to the enrollee's employment status. The period for which the GHP is primary payer begins with the earlier of:
- The first month of the enrollee's entitlement to Medicare Part A on the basis of permanent kidney failure, or
- The first month in which the enrollee would have been entitled to Medicare Part A if he or she had filed an application for Medicare on the basis of permanent kidney failure.
Disability
Medicare is secondary payer for claims for beneficiaries under age 65 who have Medicare because of a disability and who are covered under a large group health plan (LGHP) through their current employment or through the current employment of any family member. A GHP that covers employees of at least one employer that has 100 or more employees on 50 percent or more of its business days during the preceding calendar year meets the definition of an LGHP. LGHP's include plans sponsored or contributed to by a employer or employee organization, such as a union, as well as plans in which employees pay all the costs. The plan provides health care to employees, former employees, the employer, or their families and covers at least 100 or more full and/or part-time employees.
MSP Claims Investigation
An MSP investigation may be prompted by information on or missing from a claim or MSP questionnaire or information received by the COBC through telephone or written inquires. To help you better understand the MSP Claims Investigation process, two types of MSP investigations are discussed below.
First Claim Development
When a Medicare beneficiary receives medical services for the first time under Medicare insurance, the claim is submitted to a Medicare intermediary or carrier for payment. Medicare checks to see if the beneficiary has given us information on other insurance that may pay before Medicare. If Medicare does not have such information, the Medicare intermediary or carrier receiving this claim will process the claim for payment, and the COBC will generate an MSP development questionnaire to the provider of service submitting the first claim. This process is known as First Claim Development (FCD).
A Medicare provider, whether a physician, non-physician practitioner, laboratory, or other supplier (durable medical equipment supplier, etc.) is required to indicate if there is other insurance that may be primary to Medicare when submitting a Medicare claim for payment. If Medicare has no record of other insurance that may be secondary to Medicare, the provider may be asked to complete a First Claim Development (FCD) Questionnaire.
Trauma Code Development
Trauma/injury diagnosis codes submitted on a Medicare claim will alert the COBC that an accident or traumatic injury may have occurred and the possibility of an MSP situation warrants development. This process is known as Trauma Code Development (TCD).
In situations where the medical services are related to a workers' compensation injury, automobile accident, or other liability, another payer has the primary responsibility for payment of medical claims related to the injury. When the possibility of a liability situation arises to the extent that payment has been made or can reasonably be expected to be made by another liable party, and the Medicare claim submitted does not contain pertinent information about the other payer, a development questionnaire is issued. Payment may not be made under Medicare when payment has been made or can reasonably be expected to be made promptly (120 days) for covered items or services under any no-fault insurance including a self-insured plan. Medicare is secondary to no-fault insurance even if state law or private contract of insurance stipulates that its benefits are secondary to Medicare benefits or otherwise limits its payments to Medicare beneficiaries. If Medicare payments have been made but should not have been, or if the payments were made on a conditional basis, they are subject to recovery. If an MSP liability situation is identified after the Medicare claim is paid primary, the provider may be required to reimburse Medicare. The claim may be reprocessed or adjusted to reflect Medicare as the secondary payer.
A properly filed claim prevents the need for follow-up development and expedites the payment process. In these situations, it is important that the provider includes the date of incident and the insurance carrier's name, address, and policy number on the Medicare claim.
Additional Information Gathering
An Initial Enrollment Questionnaire (IEQ) is sent approximately three (3) months before an individual is entitled to Medicare. This questionnaire asks the beneficiary if they have other health care coverage that may be primary to Medicare.
Also, the IRS/SSA/CMS Data Match, under the OBRA 1989 law, requires employers to complete a questionnaire that requests GHP information on identified workers who are either entitled to Medicare or married to a Medicare beneficiary. As stated in COB News, Volume 2, published May 2001, voluntary data sharing agreements are available to certain employers and insurers as an alternative to the IRS/SSA/CMS Data Match so that Medicare and GHP eligibility information may be exchanged electronically between the employer or insurer and the Centers for Medicare & Medicaid Services (CMS), formerly the Health Care Financing Administration.
The Provider's Role in Data Gathering
Our COB database provides a complete picture of a beneficiary's eligibility and the availability of other health insurance that is primary to Medicare. The provider's assistance in streamlining the data collection process is needed. Prior to billing Medicare, providers must ensure that they are billing the correct primary payer. A few minutes during each visit can later save time and money. When collecting this data, the provider must indicate if the health care coverage is due to retirement and a supplemental policy.
A sample of the kind of questions that should be asked are listed below:
- Does the patient have any GHP coverage based upon his/her current employment? (Medigap coverage should not be indicated.)
- Does the patient have any GHP coverage based upon his/her former employment?
- How many employees, including the patient, work for the employer from whom the patient has health insurance?
- Does the patient have any GHP coverage based upon his/her spouse's or another family member's current employment?
- Does the patient have any GHP coverage based upon his/her spouse's or another family member's former employment?
- How many employees, including the patient's spouse or other family members, work for the employer from whom the patient has health insurance?
- Is the patient receiving Black Lung benefits?
- Is the patient receiving workers' compensation benefits?
- Is the patient receiving treatment for an injury or illness for which another party could be held liable or is covered under automobile no-fault insurance?
The answers to these questions will help the provider and their staff complete the claim and submit it to the correct first payer. It is important that the questionnaire be completed in its entirety and in the exact format of the questionnaire.
Contacting the COBC
All MSP inquiries including the reporting of potential MSP situations, incorrect insurance information, and general MSP questions/concerns should be directed to our office. Use our toll-free lines: 1-800-999-1118 or TTY/TDD: 1-800-318-8782 for the hearing and speech impaired. Customer Service Representatives are available to assist you from 8 a.m. to 8 p.m., Monday through Friday, Eastern Time, except holidays. Written inquiries may be sent to the appropriate address listed below. For more information regarding the MSP Claims Investigation process visit our Web site at:
Medicare - COB
P.O. Box 125
New York, NY 10274-0125
Medicare - COB
MSP Claims Investigation Project
P.O. Box 5041
New York, NY 10274-5041
MEDICARE – COB
Voluntary Agreement Project
P.O. Box 660
New York, NY 10274-0660
Customer Service Center
1-800-999-1118 or TTY/TDD: 1-800-318-8782
Please continue to call the local intermediary and/or carrier regarding claims-related and recovery questions.
