Determination of Primary Payers among Non-Medicare Payers

10.3 – Determination of Primary Payers among Non-Medicare Payers (Rev. 12438; Issued: 01-04-24; Effective: 02-06-24; Implementation: 02-06-24) Medicare determines if it is a primary payer pursuant to 42 CFR § 411.26; however, as to other payers, Medicare does not make determinations as to which of these payers might be primary. Medicare may recover its mistaken and conditional payments from any party determined to have primary payment responsibility. a) More Than One Primary Insurer There may be instances where Medicare is secondary payer to more than one primary insurer (e.g., an individual who is covered under his/her own Group Health Plan (GHP) and under the GHP of an employed spouse or under no-fault insurance). In such cases, the other, primary payers will customarily coordinate benefits. If a portion of the charges remains unpaid after the other insurers have paid primary benefits, a Medicare payment may be made. Coordination of benefits arrangements between or among private plans, whether based on State law or private agreements, cannot supersede Federal law that makes Medicare secondary payer to certain GHPs for individuals and spouses age 65 or over. Therefore, where the individual has GHP coverage based on current employment status in addition to GHP coverage as a retiree, Medicare is secondary to the GHP coverage based on current employment status and primary to the GHP coverage based on retirement regardless of the coordination of benefits arrangements between the plans. b) Coordination of Benefits Rules Conflict with MSP Rules Coordination of benefits arrangements between or among private plans, whether based on State law or private agreements, cannot supersede Federal law that makes Medicare secondary payer to GHPs and Large Group Health Plans (LGHPs) in certain situations. There are two scenarios to consider: i. The first scenario is where an individual has dependent GHP coverage that is primary to Medicare (e.g., coverage based on the employment of the individual’s spouse) in addition to nondependent coverage that is secondary to Medicare (e.g., coverage based on the individual's retirement), Medicare is secondary to the dependent coverage and primary to the nondependent coverage. In other words, the dependent coverage pays first, and the nondependent coverage pays second even though under private coordination of benefits agreements, the nondependent coverage would be expected to pay before the dependent coverage. For example: Chris Thomas, age 67, is a Medicare beneficiary with coverage under Part A and Part B. He has been employed continuously by XYZ Bolt Company since 2002 and has GHP coverage through his employer. His wife, Ann, age 62, has been retired from the local police department since 2000 and received retirement health insurance coverage for herself and her husband, which coverage is secondary to Medicare for her husband. The order of payment for Chris’s medical expenses is as follows: A) Chris's GHP, based on current employment status is primary payer. B) Medicare is secondary payer. C) The spouse's retirement plan is the tertiary (third) payer. ii. The second scenario is where a plan's payment would normally be secondary to Medicare but, under coordination of benefit provisions, the payment is primary to a primary payer under Section 1862(b) of the Act, the combined payment of both plans constitutes the primary payment to which Medicare is a secondary payer. In other words, both plans pay first. For example: John Jones, age 75, is a Medicare beneficiary with coverage under Part A and Part B. He retired from the Acme Tool Company in 2003 and received retirement health insurance coverage that is secondary to Medicare. His wife, Mary, age 64, has been employed continuously with the local police department since 1977 and since that time has received coverage for herself and her husband under the department's GHP. The priority of payment for John’s medical expenses is as follows: A) The GHP of the spouse who has current employment status is primary payer. However, the retirement plan must coordinate benefits with the employed spouse’s GHP (i.e., the spouse’s GHP will not pay until after the retirement plan pays). Under these circumstances, the combined benefit of the two plans is primary to Medicare. B) Medicare is secondary payer. NOTE: When the retirement plan pays after the GHP under the private coordination of benefits, the order of payment will be as follows: A) The GHP will be primary, B) Medicare will be secondary, and C) The retirement plan will be tertiary (third) payer.