GHP Does Not Pay for Certain Services

40.7.4.1 - GHP Does Not Pay for Certain Services (Rev. 11550; Issued: 08-12-22; Effective: 10-13-22; Implementation:10-13-22) When a GHP pays for certain services furnished to an individual but does not pay for other services or when the benefits available under the policy or plan have been exhausted, Medicare may pay primary benefits for the services not reimbursed by the GHP, provided they are otherwise covered. EXAMPLE 1: A physician charges $600 for services related to an on-the-job injury. The physician also charges $400 for the services of an independent physical therapist in his or her office, which were for treatment of a preexisting condition unrelated to the job injury. The fee schedule amount for the physician's services is $400 and the fee schedule for the therapist's services is $300. The beneficiary does not have GHP coverage. The beneficiary previously met the Medicare Part B deductible. Workers Compensation paid a fee schedule amount of $375 for the work-related injury, which the physician was required to accept as payment in full for services, but WC did not pay for physical therapy related to the preexisting condition. Since the WC payment is payment in full for the physician's services, no secondary Medicare benefits are payable for these services. However, Medicare may pay for the covered physical therapy services (provided by an independent physical therapist) not covered by WC. Medicare pays primary benefits of $240 (80 percent of the fee schedule amount of $300) for the independent therapist's services. EXAMPLE 2: A beneficiary is injured in an automobile accident. The beneficiary is covered by no-fault insurance that has a $2,500 benefit limit. Over a 12-month course of treatment, a physician charges $1,400 for services and $1,800 for the services of an independent physical therapist in his or her office. The physician bills all charges to the no-fault insurer. The A/B MAC (Part B) determines that the fee schedule amount for the physician's services is $1,050 and $1,350 for the therapist's services. The beneficiary previously met the Part B deductible. The no-fault insurer paid the physician's charges in full and $1,100 of the therapist's charges for a total of $2,500. Since the physician received full payment for the services, no secondary Medicare benefits are payable for these services. However, Medicare may pay secondary benefits for the therapist's services because the no-fault insurance benefits are exhausted. The Medicare secondary payment amount is calculated as follows: A. Actual charge of $1,800 minus the third-party payment of $1,100 = $700. B. The Medicare payment is determined in the usual manner: .80 x $1,350 = $1,080. C. No-fault insurer's allowable charge of $1,800 (which is higher than Medicare's fee schedule amount of $1,350) minus the $1,100 paid by the insurer equals $700. D. Medicare pays $700 (lowest of amounts in steps A, B, or C). The physician cannot bill the beneficiary because the sum total of the primary payment ($1,100) and the Medicare secondary payment ($700) exceeds the fee schedule amount ($1,350). (See Chapter 3, §10.2.1.)