Medicare Secondary Payer (MSP)

Published 09/22/2022

Yes. Unless you have been approved to submit hard copy claims to Medicare, submit all Medicare claims electronically, including Medicare Secondary Payer (MSP) claims. An exception to this requirement is when a patient has two or more payers who are primary to Medicare. In situations where Medicare is the tertiary payer, these claims may be submitted hard copy.

The ASC v5010 format allows for electronic submission of primary payer information for MSP claims. Palmetto GBA also offers the PC-ACE Pro32 EDI billing software, which supports electronic submission of MSP claims.

Last Reviewed: 9/22/2022

Medicare Secondary Payer (MSP) refers to instances in which Medicare does not have primary responsibility for paying the medical expenses of a Medicare beneficiary. This is because the Medicare beneficiary may be entitled to other coverage, which should pay the primary health benefits.

Medicare secondary claims can be submitted electronically. However, Palmetto GBA has rejected some claims because there was a mismatch between the MSP Type submitted on the claim and the specific patient's Medicare record. Below are some examples of situations that you may wish to verify when you receive these Medicare rejections:

  • Do you routinely submit claims containing the same MSP Type (example: MSP type 47) when Medicare does not show this to be a valid MSP type for the specific patient?
  • If you submit your claims to a clearinghouse, does your clearinghouse understand that claims must be submitted with the correct MSP Type?
  • Is your patient covered by Medicare as an Aged Worker (Type 12), but claims for the patient are being submitted as Disability (Type 43)?
  • Was your patient's injury related to Workers' Compensation (Type 15), but you submitted the MSP claim as an Aged Worker (Type 12)?
  • If you submit claims through an electronic clearinghouse, make sure you provide the clearinghouse with the correct MSP Type for each claim. If you are still receiving rejections from Medicare, verify that your clearinghouse is submitting the MSP Type you provided for each patient.

If you answered "Yes" to any of the above questions, your Medicare MSP claims are most likely rejecting because there is a mismatch of the type submitted and the Medicare MSP files. This situation can drastically impact the cash flow for your office. Below are the loops and segments where this information should be located in the electronic claims format:

Loop, Segment, Element Description Value
2000B, SBR, 05 Insurance Type Code 12, 13, 14, 15, 41, 43, 47
  • Always submit the appropriate MSP type for the beneficiary's insurance coverage
  • If the submitted MSP type does not correspond to the information Medicare has on file, your claim will be rejected. Rejected claims must be submitted as new claims.

Below is a list of the valid Medicare Secondary Payer types that may be submitted on electronic claims.

MSP Type Description
12 Working aged: age 65 or over, employer's group plan has at least 20 employees
13 End Stage Renal Disease (ESRD): 30-month initial coordination period in which other insurer is primary
14 No-fault situations: Medicare is secondary if illness/injury results from a no-fault liability. This type would most likely not be submitted to Palmetto GBA because we will pay services conditionally, as primary, based on your decision to submit the claim to Medicare for the Liability situation. In these cases, we do not require MSP information.
15 Workers' compensation (WC) situations
41 Black Lung benefits
43 Disability: under age 65, person or spouse has active employment status and employer's group plan has at least 100 employees
47 Liability situations: Medicare is secondary if illness/injury results from a liability situation

Last Reviewed: 9/22/2022

Are you unsure if Medicare should pay as the primary or secondary insurer for your patient? Use our MSP tool to answer your questions and find your solutions. The questionnaire is easy and quick to use for all of your patients.

Before You Begin: Facts to Know

  • For patients that have both Medicare and Medicaid and no other insurance, Medicare is the primary payer
  • In most cases, federal law takes precedence over state laws and private contracts. Even if a state law or insurance policy states that they are a secondary payer to Medicare, the MSP regulations should be followed to determine the correct primary payer.
  • Medicare records may not reflect the patient's current insurance status. If you find that there is a discrepancy between Medicare records and the patient's current insurance status, call the BCRC Contractor at 855—798—2627 or TDD/TYY 855—797—2627. The BCRC Contractor may also need to speak to the patient. However, providers are permitted to call.
  • In some cases, if a patient or his/her spouse is working and is covered by an employer group health plan (EGHP), you must know the number of people employed by the company in order to use this tool most effectively. Either you or the patient may contact the employer to obtain this information.
  • Providers are required to file claims on behalf of their Medicare patients, including patients for whom Medicare is the secondary payer
  • These claims must be filed electronically, unless you qualify for a waiver to submit paper claims

Last Reviewed: 9/22/2022

Medicare Secondary Payer (MSP) records are maintained by the Benefits Coordination and Recovery Center (BCRC). The BCRC can accept MSP change information from providers by phone in some situations. In other cases, the BCRC may ask providers to fax or mail proof of the insurance information or require the beneficiary to call to report the change.

The BCRC’s contact information is:

  • Telephone: 855–798–2627 (8 a.m. to 8 p.m. ET)
  • Fax: (405) 869–3307 (address the fax to Medicare — MSP General Correspondence)

Mailing Address

Medicare — MSP General Correspondence
P.O. Box 138897
Oklahoma City, OK 73113-8897

Last Reviewed: 9/22/2022

"Reasonable and Necessary" describes services that are:

  • Safe and effective (versus experimental or investigational)
  • Appropriate, including the duration and frequency that is considered appropriate for the service, in terms of whether it:
    • Is provided within accepted standards of medical practice for the diagnosis or treatment of the patient’s condition, or to improve the function of a malformed body member
    • Is furnished in a setting appropriate to the patient’s medical needs and condition
    • Is ordered and provided by qualified personnel
    • Meets, but does not exceed, the patient’s medical need

There are several exceptions to the requirement that a service be reasonable and necessary for diagnosis or treatment of illness or injury. The exceptions appear in the full text of The Federal Register at Section 1862(a)(1)(A) and include but are not limited to:

  • Pneumococcal, influenza and hepatitis B vaccines are covered if they are reasonable and necessary for the prevention of illness
  • Hospice care is covered if it is reasonable and necessary for the palliation or management of terminal illness
  • Screen mammography is covered if it is within frequency limits and meets quality standards
  • Screening pap smears and screening pelvic exam are covered if they are within frequency limits
  • Prostate cancer screening tests are covered if within frequency limits
  • Colorectal cancer screening tests are covered if within frequency limits
  • One pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens

Source: IOM 100-08 Medicare Program Integrity Manual, Chapter 3 Verifying Potential Errors and Taking Corrective Actions, section 3.6.2.2 Reasonable and Necessary Criteria.

Last Reviewed: 9/22/2022

MA04 means that the claim was submitted with an invalid Medicare Secondary Payer (MSP) code or an MSP code was not included. When this happens, check to ensure the information is correct in loop 2320 for an electronic claim or attach the summary notice from the primary insurer that specifically corresponds to the claim you are submitting for paper claims. Once the information is corrected, resubmit the claim to Railroad Medicare.

You can refer to our article, Valid MSP Types for Electronic Claims, for a listing of Medicare Secondary Payer types.

Last Reviewed: 9/22/2022

When filing a claim electronically, it is important to use the correct MSP type. The MSP types are as follows:

Type 12: Working Age — Beneficiary is 65 years of age or older.
Type 43: Disabled — Beneficiary is less than 65 years old.
Type 13: ESRD — End Stage Renal Disease
Type 14: Auto No-Fault
Type 47: Liability
Type 15: Workers Compensation
Type 16: Federal
Type 41: Black Lung

To find out whether Medicare should pay as primary or secondary, use the Palmetto GBA MSP Lookup Tool. Ask your patient a series of yes/no questions and select the answers using our online tool.

Last Reviewed: 9/22/2022