When is Medicare a Secondary Payer?

What You Need to Know

The DME MAC Supplier Manuals require you to refund overpayments on claims involving Medicare as a secondary payer (MSP). But how do you determine whether Medicare is primary or secondary? Chapter 11 of the Supplier Manual spells out the situations in which Medicare is secondary, which include (but are not limited to):

1. If the beneficiary is over the age of 65 and also has insurance through an employer with 20 or more employees.
2. If the beneficiary is under the age of 65, permanently disabled, and has insurance through an employer with 100 or more employees.
3. If the beneficiary's services/device have been paid for/can reasonably be expected to be paid by workers' compensation. 
4. If no-fault insurance is involved.
5. If liability insurance (e.g., automobile insurance) is involved.

 What this Means for You

The Supplier Manual states that "Prior to billing Medicare, you must take an active role in the identification of MSP claims/cases." You can do several things to comply with this directive: 

• Regularly verify with all Medicare beneficiaries whether they have any other sources of payment relevant to the condition for which they are seeking treatment.
• If they do have other sources of payment, you can use the DME MAC MSP Decision Tree tool to confirm what policy is primary. (Note: the above link is for Region C, but the MSP standards are identical in all DME MAC regions, so you can use this tool wherever you are.)
• Educate staff on how to correctly note primary and secondary insurers in your EMR to avoid software-related errors that result in Medicare getting billed when it should be a secondary payer.

For complete information about MSP regulations, you can review your DME MAC's Supplier Manual, Chapter 11.