a. General Requirements

When Medicare is the secondary payer, the claim must first be submitted to the primary insurer. The primary insurer must process the claim in accordance with the coverage provisions of its contract. If, after processing the claim, the primary insurer does not pay in full for the services, the claim may be submitted to Medicare electronically or via a paper claim for consideration of secondary benefits.

Note: It is the provider’s responsibility to obtain primary insurance information from the beneficiary and bill Medicare appropriately. Claim filing extensions will not be granted because of incorrect insurance information.

The Medicare claim must include a copy of the primary insurer’s explanation of benefits (EOB). The EOB should include the following information:

name and address of the primary insurer
name of subscriber and policy number

name of the provider of services
itemized charges for all procedure codes reported
a detailed explanation of any denials or payment codes
date of service

NOTE: A detailed explanation of any primary insurer denial or payment codes MUST be submitted with the claim and EOB. If the denial/payment code descriptions or any of the above information is not included with the claim, it may result in a delay in processing or denial of the claim.

If the beneficiary is covered by more than one insurer primary to Medicare (e.g., a working aged beneficiary who was in an automobile accident), the explanation of benefits statement from BOTH plans must be submitted with the claim.

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b. Electronic Claim Submission

To submit Medicare Secondary Payer (MSP) claims electronically, please refer to the American National Standards Institute (ANSI) ASC X12N Implementation Guide. To learn how to report MSP claims in your software, contact your software vendor.

The following records are required in order to get a MSP claim to process. Other records may also be necessary depending on the information obtained by the primary insurer.

Data Explanation ANSI ASC X12 837 Version 40.10A1

Payer Paid Amount
The amount paid by the
primary insurer 2320 AMT02 and 2430 SVD02
Adjudication date The date of payment or
denial by the primary payer 2330B DTP03 or 2430 DTP03
Adjustment Group Code The code identifying who is responsible 2320 CAS01 or 2430 CAS01
(one or the other but not both)
Claim Adjustment Reason Code The code identifying the detailed reason the
adjustment was made 2320 CAS02 or 2430 CAS02
(one or the other but not both)
Monetary Amount The amount of the adjustment 2320 CAS03 or 2430 CAS03
(one or the other but not both)
Primary Insurer The name of the primary insurer 2330B NM1


Correct reporting of MSP type on electronic claims

Please take a few minutes to ensure you obtain Medicare secondary payer (MSP) insurance information and report the correct corresponding MSP type on your Medicare secondary claim submissions. Effective for claims processed on or after April 27, 2017, failure to supply the correct MSP type will result in a return unprocessable claim (RUC) denial with claim adjustment reason code (CARC) code 16 and remittance advice remark code (RARC) N245. These messages indicate the claim information was reported incorrectly and you must submit a new claim with the correct MSP type.

When submitting an electronic claim to Medicare, you are required to obtain MSP insurance information from the patient. The patient’s insurance is classified as either a group health plan (GHP) or a non-group health plan (NGHP). Examples of GHP coverage are working aged (WA), disability, or end-stage renal disease (ESRD). These types of coverage are based on current or past employment. Examples of NGHP coverage are automobile/no-fault, workers’ compensation (WC), and liability. These types of coverage are typically the result of an accident, injury, or lawsuit. Although there are other types of MSP coverage, these are the most common.

We receive many MSP claims with the incorrect insurance type reported. It is extremely important to report the correct MSP insurance type on a claim. Some examples of incorrect MSP insurance types are:

• Reporting MSP type 47 (liability) as a default code
• Reporting MSP type 12 (WA) instead of 43 (disability) or 13 (ESRD)

Please reference the chart below for the two-digit MSP insurance type and a brief description of the MSP provision.


MSP insurance type  GHP or NGHP MSP provision

12   GHP            Working aged – Beneficiaries age 65 or older who are insured through their own or their spouse’s current employment. The beneficiary must be aged 65 or older. There must be at least 20 or more employees.

43  GHP         Disability – This coverage is for beneficiaries who are under age 65 and disabled. Insurance is based on their own current employment or through the current employment of a family member. There must be 100 or more employees.

13  GHP End-stage renal disease – This coverage is for beneficiaries enrolled with Medicare solely due to renal failure and are insured through their own, or through a family member’s current or former employment. Medicare is secondary payer for the first 30 months. There is no age restriction on this type of coverage. The beneficiary may be under or over age 65.

14 NGHP Automobile/no-fault – No-fault insurance that pays for medical expenses for injuries sustained from a motor vehicle accident. This coverage is not based on employment.

15 NGHP Workers’ compensation – This is insurance that employers are required to provide employees that become ill or injured on the job.

47 NGHP  Liability – Insurance (including a self-insured plan) that provides payment based on the policyholder’s alleged legal liability for injury, illness or damage to property. Some examples of this coverage could be product liability, malpractice, and homeowner’s coverage.

b.1 Paper Claim Submission

When submitting a paper claim to Medicare as the secondary payer:

The CMS-1500 (08-05) claim form must indicate the name and policy number of the beneficiary’s primary insurance in items 11-11c. Please refer to Chapter 9 for additional instructions on completing the CMS 1500 (08-05) claim form.

Providers must submit a claim to Medicare if a beneficiary provides a copy of the primary explanation of benefits (EOB). The claim must be submitted to Medicare for secondary payment consideration with a copy of the EOB. If the beneficiary is not cooperative in supplying the EOB, the beneficiary may be billed for the amount Medicare would pay as the secondary payer.

Providers must bill both the primary insurer and Medicare the same charge for rendered services. If the primary insurer is billed $50.00 for an office visit and they pay $35.00, do not bill Medicare the remaining $15.00. Medicare must also be billed for the $50.00 charge, and a copy of the primary insurer’s EOB must be attached to the completed claim form.


Q. If a claim is rejected for Medicare as a secondary payer (MSP) and the common working file (CWF) is updated, what action should be taken on the claim?

A. Follow the guidelines below if your claim falls within the status outlined:

• If your claim has rejected (“R” status), you should be able to adjust the claim and resubmit through your electronic software.
• If the claim has been returned to provider (“T” status), you should correct the errors and resubmit through your electronic software.

Remember you can only void/cancel a paid claim.

Electronic filing of Medicare part B secondary payer claims (MSP) in the 5010 format

In order to bill MSP claims electronically, there are several critical pieces of information that are necessary to ensure your claims are processed and adjudicate correctly.

MSP claims require:

• Medicare indicated as the secondary payer
• Insurance type indication (explains why is Medicare secondary)
• Coordination of benefits (COB) payer paid amount
• COB adjustment amount(s), claim adjudication date
• Service line data, line adjudication information, and any line adjustment(s)

The information below is intended to provide you and your software IT staff with a reference point to provide the necessary MSP information for electronic claim filing in the ASC X12 5010 format.

Identifying Medicare as the secondary payer 2000B SBR / 2320 SBR

In the ASC X12 5010 format indication of payer priority is identified in the SBR segment. The format allows for primary, secondary, and tertiary payers to be reported. The payer priority is identified by the value provided in the 2000B and the 2320 SBR01. Currently, Medicare does not accept electronically filed claims when there is more than one payer primary to Medicare. Claims that involve more than one primary payer to Medicare must be submitted on the 1500 paper claim form, with all appropriate attachments.

When billing Medicare as the secondary payer, the destination payer loop, 2000B SBR01 should contain ‘S’ for secondary and the primary payer loop, 2320 SBR01 should contain a ‘P’ for primary.

The example below represents the syntax of the 2000B SBR segment when reporting information about the destination payer (Medicare).

SBR*S*18***12****MB
SBR01=‘S’ indicates secondary payer
SBR02=‘18’ indicates self as the subscriber relationship code. The insurer is always the subscriber for Medicare
SBR05=‘12’, indicates Medicare secondary working aged beneficiary or spouse with employer group health plan. Select the appropriate Insurance Type code for the situation.
SBR09=‘MB’ indicating Medicare part B

The example below represents the syntax of the 2320 SBR segment when reporting information about the primary payer.

SBR*P*18*XR12345**14****CI
SBR01=‘P’ indicating primary payer
SBR02=Individual relationship code‘18’ indicates self
SBR03=’XR12345’, insured group/policy number
SBR09=‘CI’ indicate Commercial insurance. Claim filing indicator must not be equal to ‘MA’ or ‘MB’ in the 2320 SBR 09

Claim level reporting for COB

When submitting an electronic claim to Medicare on which Medicare is not the primary payer, the prior payer paid amount is required to be present in the 2320 AMT segment of the primary payer. If the prior payer adjudicated the claim, but did not make payment on the claim, it is acceptable to show “0” (zero) as the amount paid.

The claim adjudication date is used to identify when the claim was adjudicated or paid by the primary payer and is required on MSP claims. Claim level information in the 2330B DTP segment should only appear if line level information is not available and could not be provided at the service line level (2430 loop).

Service line level reporting for COB


Line adjudication information

Line adjudication information should be provided if the claim was adjudicated by the payer in 2330B NM1 and the service line has payment and/or adjustments applied to it. This information should be reported at the service level but may be reported at the claim level if line level information is unavailable. Note, if the service line adjudication segment, 2430 SVD, is used, the service line adjudication date segment, 2430 DTP, is required.

Below is an example of the 2430 SVD segment provided for syntax representation. The 2430 SVD segment contains line adjudication information.

SVD*00813*48*HC>99213**1~
SVD01=actual other payer identifier code
SVD02=actual service line paid amount
SVD03-1=‘HC’ indicates service line HCPCS/procedure code
SVD03-2= the procedure code
SVD05=number of paid units

Line adjustment information

Line adjustments should be provided if the primary payer made line level adjustments that caused the amount paid to differ from the amount originally charged. This information should be reported at the service level but may be reported at the claim level if line level information is unavailable.
Below is an example of the 2430 CAS segment provided for syntax representation. The 2430 CAS segment contains the service line adjustment information. This information should come from the primary payer’s remittance advice.

CAS*CO*45*10~
CAS01=‘CO’ indicates contractual obligation. The appropriate claim adjustment group code should be used.
CAS02=‘45” indicates that the charges exceed the fee schedule/maximum allowable or contracted/legislated fee arrangement. The appropriate claim adjustment reason code should be used.

CAS03=’10’ actual monetary adjustment amount. This is the difference between the billed amount (2400 SV102) and the primary insurance paid amount (2430 SVD02).
Helpful Information

• 2000B SBR05 must be present on an MSP claim and should contain the appropriate Insurance Type Code, which defines the type of insurance plan that is primary to Medicare

• 2320 SBR03 is the insured group or policy number. The contents of this field should not be equal to the 2330A NM109, insured identification number.

• If an insured group (or policy) number is provided in 2320 SBR03, the insured group name, 2320 SBR04 cannot be present. The converse is also true; if 2320 SBR04 is present then 2320 SBR03 cannot be given.

• 2320 SBR09 (primary payer claim filing indicator) cannot contain ‘MB’, Medicare Part B.

• The equations for the balancing routines are as follows:

• Claim payer paid amount [2320 AMT02 (AMT01=D)] = line level paid amounts [(all) 2430 SVD02] – claim level adjustment [2320 CAS monetary amounts (CAS03, 06, 09, 12, 15 and 18)].

• Line charge amount [2400 SV102 ]= payer paid amount [2430 SVD02 ]+ line level adjustments [2430 CAS monetary amounts (CAS03, 06, 09, 12, 15 and 18)].

• The value in 2430 SVD01 (Other Payer Primary Identifier) should be the same value as in 2330B NM109 or else the amount in SVD02 won’t be used in the balancing equation.

• The same adjustment can’t be reported in both the claim level CAS and the service level CAS or else the claim won’t balance.

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