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Billing Medicare as the secondary payer

When a patient has Medicare and other coverage that pays before it, Medicare pays second. Medicare will only accept a claim billed to it as the secondary payer if the claim says why Medicare pays second — that reason is the Medicare Secondary Payer (MSP) insurance type code. Leave it off and Medicare rejects the claim. Pabau lets you attach that code on the secondary claim itself, so you don't have to leave and submit it through the clearinghouse portal by hand.

NOTE: The insurance billing module is available for practices in the United States and works with your connected Claim.MD account. This code is only needed when the secondary payer is Medicare — every other payer ignores it.

Before you start

The MSP code goes on a secondary claim, so the primary has to be settled first. You need:

  • The primary claim in the Paid status, carrying the primary payer's line-by-line adjudication — see Submitting secondary claims in Pabau for how a secondary is created from a paid primary.
  • The patient's Medicare details on file as their second policy (payer and Medicare number).
  • To know why Medicare is secondary for this patient — that's what the code names (see the table below). It's usually obvious from the patient's situation: still working with an employer plan, an accident/no-fault claim, workers' comp, and so on.

Adding the MSP type code

Open the paid primary claim and click Create secondary claim in the settlement bar at the top. In the dialog:

  • Choose Medicare as the secondary payer and enter the patient's Medicare number (Pabau pre-fills it if the Medicare policy is on file).
  • Open the Medicare secondary (MSP) type dropdown and pick the reason Medicare pays second. It defaults to Not Medicare / not applicable, so it never gets in the way on an ordinary secondary claim.
  • Click Submit secondary claim. Pabau sends the claim to Claim.MD as a secondary with the primary payer's paid amounts and adjustment codes attached, plus the MSP type code Medicare needs.

TIP: Only set this when the secondary payer really is Medicare. On a secondary claim to a commercial payer, leave it on Not Medicare / not applicable.

Which code to pick

Pick the one that matches why Medicare is the secondary payer for this patient:

  • 12 — Working aged: the patient (or spouse) is still working and covered by an employer group health plan.
  • 13 — End-stage renal disease (ESRD), during the coordination period.
  • 14 — No-fault insurance, including auto.
  • 15 — Workers' compensation.
  • 16 — Public Health Service or another federal agency.
  • 41 — Black lung.
  • 42 — Veterans Affairs.
  • 43 — Disabled under 65 and covered by a large group health plan.
  • 47 — Liability insurance.

NOTE: If you're not sure which situation applies, the patient's primary insurer or Medicare can confirm it. The wrong code, or a missing one, is the usual reason a Medicare-secondary claim comes back rejected.

Tracking it

The secondary rides on the same claim as the primary — the settlement bar shows both results side by side, and the claim's activity log records the secondary submission. If Medicare rejects it, you can correct the code and resubmit from the same claim (see Resubmitting a rejected secondary claim).