Medicare Secondary Payment for Managed Care Organizations'

40.7.6 - Medicare Secondary Payment for Managed Care Organizations' (MCO) Copayments (Rev. 11550; Issued: 08-12-22; Effective: 10-13-22; Implementation:10-13-22) Most managed care organizations (MCOs) (e.g., HMOs, CMPs, health care prepayment plans (HCPPs)) charge copayment amounts for which Medicare Part B secondary payment may be made once the individual has met the Part B deductible. The deductible can be met either by covered services obtained outside the MCO or by covered services obtained through the MCO. The amounts credited to the deductible for MCO services are the Medicare allowable amounts that would have been allowed for the services if they had been furnished on a fee-for-service basis plus any copayments charged for the services. Once the deductible is met, the Medicare secondary payment is the amount Medicare would pay if the services were not covered by a GHP (the MCO) or the copayment amount, whichever is less. The MCO must file a claim showing all the usual claims information except the amount of the charges and the amount paid since payment is made on a capitation basis. If the MCO does not submit the claim, the A/B MAC (Part B) or DME MAC advises the MCO in writing that, under §1848(g)(4) of the Act, a claim must be submitted. Willful failure to comply within one year of the date of the service will subject the provider to a civil monetary penalty of up to $2,000 under §1842(p)(3) of the Act. The A/B MAC Part B or DME MAC asks the beneficiary to submit the copayment receipts together with a signed statement explaining that the beneficiary is a member of an employer-sponsored MCO that is primary to Medicare and is requesting that Medicare pay secondary benefits for the MCO's copayment charges. This will serve as a substitute for the GHP's explanation of benefits notice. The Medicare secondary payment would be the lesser of the: • Amount Medicare would pay on the basis of the Medicare allowable amount if Medicare were primary, or • MCO's copayment. The below examples are for paper claims submitted by beneficiaries who want to be reimbursed by Medicare for copayments made to the physicians, providers or other suppliers. Most claims of these types are submitted electronically by healthcare professionals and are processed through the MSPPAY module. Providers, physicians and other suppliers shall not accept co-payments from Medicare beneficiaries when there is a primary payer to Medicare. The copayment expected should be sent as claim by the provider, physician or other supplier to Medicare for payment. A Medicare remittance advice will be returned stating whether there is a remaining beneficiary responsibility. All A/B MACs and DME MACs shall re-educate providers, physicians and other suppliers reminding them of this policy as necessary. EXAMPLE 1: Mr. Jones is enrolled in a non-Medicare HMO, which is his primary payer. His Part B deductible has been met. He required the services of a specialist and the HMO referred him to Dr. Smith who does not accept assignment. The doctor charged him a copayment of $25 for each visit. After eight visits, Mr. Jones contacted the A/B MAC (Part B) requesting secondary benefits. The A/B MAC (Part B) should request Mr. Jones submit his copayment receipts with a dated statement that he is requesting secondary benefits from Medicare for the copayments he paid to the physician. This statement will then serve as Mr. Jones claim. Then the A/B MAC (Part B) requests the HMO to submit Form CMS-1500 showing the usual claims information, except for the charges and the amount paid. The Medicare allowable amount for the nonparticipating physician was $55. The Medicare secondary payment is calculated as follows: A. The Medicare payment is determined in the usual manner: .80 x $440 ($55 per visit x 8 visits) = $352. B. The copayment for the 8 visits total $200 ($25 x 8). C. Medicare pays $200, the total copayment, since that amount is lower than the amount Medicare would pay as primary payer. EXAMPLE 2: Mr. Smith belongs to an employer sponsored HMO that is primary to Medicare. He had two visits with a doctor for which he paid a $10 copayment per visit. He has not met his Medicare deductible. He wishes Medicare to make secondary payments to reimburse him for these copayments. The Medicare allowable amount for each of Mr. Smith’s visits was $32 giving a total of $64 for the two visits. To determine whether a Medicare secondary payment can be made, the following calculation is used: A. The Medicare payment is determined in the usual manner: .80 x $64 ($32 per visit x 2 visits) = $51.20. B. The copayments for the 2 visits total $20. C. If the deductible had been met, the lowest of steps A or B would be payable. Since it was not met, the amount credited toward the deductible is: • The Medicare allowable amount for the covered services if they had been furnished on a fee-for-service basis ($32 x 2 = $64). • To this amount, the total copayments are added for those covered services: $64 + ($10 x 2) = $84. Mr. Smith is credited with $84 toward his deductible. Since Mr. Smith has not met the Medicare deductible, no MSP amount is payable.