Medicare Secondary Payer (MSP)

Published 10/24/2023

Medicare Secondary Payer (MSP) is the term generally used when Medicare does not have primary payment responsibility. In this situation, another entity has the responsibility for paying on a claim before Medicare. Medicare remains the primary payer for beneficiaries who are not covered by other types of health insurance or coverage. 

The guidelines governing these processes can be found on the CMS website.
Other CMS Reference Material

Palmetto GBA is committed to helping providers understand the MSP process. For more information and the options available to you, please select the link below for additional information regarding the MSP process.

Brief Description
This tool is designed to help you determine if Medicare is the primary or secondary payer by walking you through a few simple questions.
In certain situations Medicare will pay claims for eligible beneficiaries as a secondary payer to the beneficiary’s primary plan. 
The MSP Contractor consolidates the activities that support the collection, management and reporting of other insurance coverage for Medicare beneficiaries.
What does “Reasonable and Necessary” mean?
What are the valid MSP types that may be submitted on an electronic claim?
The "working aged" are employed people age 65 or over, and people age 65 or over with employed spouses of any age, who have group health plan (GHP) coverage because of their own or their spouse's current employment.
Medicare cannot make payment for covered items or services when payment has been made or can reasonably be expected to be made promptly by auto, medical, no-fault or liability insurance.
Payment under Medicare may not be made for any claims if payment has been made or can be made under a workers' compensation (WC) law or plan of the United States or any state.
The Medicare secondary payer provisions state that Medicare may be the secondary insurer for a beneficiary under the age of 65 years who is eligible for Medicare solely on the basis of End Stage Renal Disease (ESRD).
Payment under Medicare may not be made for any claims if payment has been made or can be made under the federal Black Lung program.
Medicare claims where Veteran’s Affairs (VA) liability may be involved. Claims involving the VA are not considered MSP.
The regulations provide that a person has CES even if he or she is not actively working and/or if he or she is receiving disability benefits from an employer for up to six months.
The Administrative Simplification Compliance Act (ASCA) requires that claims be submitted to Medicare electronically with few exceptions. MSP claims are not an exception unless there is more than one primary payer to Medicare.
MSP claims may be submitted electronically; however, claims will be rejected if there is a mismatch between the MSP type submitted on the claim and the specific patient’s Medicare record.
There are times when a provider will receive a primary payment from another insurance company after Medicare has paid as primary. When this happens, it is assumed that Medicare should be the secondary payer. If you receive two primary payments, you should refund Medicare's payment in full.
Palmetto GBA offers providers the ability to estimate the amount to reimburse. The online calculator is designed to provide an estimate only.
A Medicare secondary payer (MSP) overpayment can occur when Medicare has processed and paid a claim as the primary payer, but should have paid as secondary. 
  • In order to report an MSP overpayment to Medicare without submitting a payment, the MSP inquiry form must be submitted along with the primary insurer EOBs
  • If you are submitting a payment along with the disclosed overpayment, the appropriate MSP Voluntary Refund form must be submitted along with the primary insurer EOBs

MSP records are maintained by the MSP Contractor. Medicare contractors are unable to update a patient’s insurance information with the MSP Contractor by phone. The MSP Contractor can accept MSP change information from providers in some situation. In others, the MSP Contractor may ask providers to fax or mail proof of insurance information, or require the beneficiary to call to report the change. 

Providers can also reference the Medicare Learning Network (MLN) Special Edition Article SE1416 – Updating Beneficiary Information with the MSP Contractor.

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