Rule to Determine the Amount of Secondary Benefits

40.8.2 - Rule to Determine the Amount of Secondary Benefits (Rev. 11550; Issued: 08-12-22; Effective: 10-13-22; Implementation:10-13-22) The amount of secondary benefits payable to providers is the lowest of the following: • The gross amount payable by Medicare (see definition for PPS providers and non-PPS providers above) minus the applicable deductible and/or coinsurance amount; or, • The gross amount payable by Medicare minus the amount paid by the primary payer for Medicare covered services; or, • The provider's charges (or an amount less than the charges that the provider is obligated to accept as payment in full), minus the amount paid by the primary payer for Medicare covered services; or • The provider's charges (or an amount less than the charges that the provider is obligated to accept in full), minus the applicable Medicare deductible and/or coinsurance amounts. NOTE: When the primary payer pays less than actual charges (e.g., under the terms of a preferred provider agreement) and less than the amount the provider is obligated to accept as payment in full (e.g., because of imposition of a primary payer's deductible and/or copayment, but not because of failure to file a proper claim), Medicare uses the amount the provider is obligated to accept as payment in full in its payment calculation. In such cases, the provider reports in value code 44 the amount it is obligated to accept as payment in full. Medicare considers this amount to be the provider's charges. Absent a lower amount that the provider is obligated to accept as payment in full, the amount of the provider's actual charges is used. The provider uses condition code 77 to indicate it has accepted or is obligated/required due to a contractual arrangement or law to accept payment as payment in full. Therefore, no Medicare secondary payment nor any beneficiary payment is due. The beneficiary has no liability for Medicare covered services if the primary payment is greater than the applicable Medicare deductible and coinsurance amounts. Otherwise, the beneficiary's liability is limited to the applicable Medicare deductible and coinsurance amounts less the primary payment.