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What is Medicare conditional payment?


Medicare will make a conditional payment for Medicare covered services in liability, no-fault, and workers compensation situations where another payer is responsible for payment, when a proper claim has been filed, and the claim is not expected to be paid promptly within the necessary timeframe. Medicare makes conditional payments to prevent the beneficiary from using his or her own money to pay the claim.  Medicare issues conditional payments with the intention of reimbursement.  Medicare has the right to recover any conditional payments.

For Example: John is driving his car when someone in another car hits him and John has to go to the hospital. John has Medicare insurance. The hospital tries to bill the other driver’s (who hit John) liability insurer. The insurance company disputes who was at fault, and won’t pay the claim promptly. The hospital then bills Medicare, and Medicare makes a conditional payment to the hospital for health care services that John received. Later, when a settlement is reached with the liability insurer, John makes sure that Medicare gets its money back for the conditional payment.

Definition for Promptly - No-fault Insurance, WC and Liability insurance

For no-fault insurance and WC, promptly means payment within 120 days after receipt of the claim (for specific items and services) by the no-fault insurance or WC carrier. In the absence of evidence to the contrary, the date of service for specific items and service must be treated as the claim date when determining the promptly period. Further with respect to inpatient services, in the absence of evidence to the contrary, the date of discharge must be treated as the date of service when determining the promptly period.

Liability Insurance “Promptly” Definition

For liability insurance (including self-insurance), promptly means payment within 120 days after the earlier of the following:

• The date a general liability claim is filed with an insurer or a lien is filed against a potential liability settlement; or

• The date the service was furnished or, in the case of inpatient hospital services, the date of discharge.

Situations Where a Conditional Payment Can be Made for No-Fault and WC Claims

Conditional payments for claims for specific items and service may be paid by Medicare where the following conditions are met:

• There is information on the claim or information on Medicare’s CWF (Common Working File) that indicates the no-fault insurance or WC is involved for that specific item or service;

• There is/was no open GHP (Group Health Plan) record on the Medicare CWF MSP file as of the date of service;

• There is information on the claim that indicates the physician, provider or other supplier sent the claim to the no-fault insurer or WC entity first; and

• There is information on the claim that indicates the no-fault insurer or WC entity did not pay the claim during the promptly period.

Situations Where a Conditional Payment Can be Made for Liability (including Self Insurance) Claims

Conditional payments for claims for specific items and service may be paid by Medicare where the following conditions are met:

• There is information on the claim or information on Medicare’s CWF that indicates liability insurance (including self-insurance) is involved for that specific item or service;

• There is/was no open GHP record on the Medicare’s CWF MSP file as of the date of service;

• There is information on the claim that indicates the physician, provider or other supplier sent the claim to the liability insurer (including the self-insurer) first, and

• There is information on the claim that indicates the liability insurer (including the self insurer) did not make payment on the claim during the promptly period.

Conditional Primary Medicare Benefits Paid When a GHP is a Primary Payer to Medicare

Conditional primary Medicare benefits may be paid if the beneficiary has GHP coverage primary to Medicare and the following conditions are NOT present:

• It is alleged that the GHP is secondary to Medicare;

• The GHP limits its payment when the individual is entitled to Medicare;

• The services are covered by the GHP for younger employees and spouses but not for employees and spouses age 65 or over;

• If the GHP asserts it is secondary to the liability (including self insurance), no-fault or workers’ compensation insurer.

Situations Where Conditional Payment is Denied

Liability, No-Fault, or WC Claims Denied

1. Medicare will deny claims when:

• There is an employer GHP that is primary to Medicare; and

• You did not send the claim to the employer GHP first; and

• You sent the claim to the liability insurer (including the self-insurer), no-fault, or WC entity, but the insurer entity did not pay the claim.

2. Medicare will deny claims when:

• There is an employer GHP that is primary to Medicare; and

• The employer GHP denied the claim because the GHP asserted that the liability insurer (including the self-insurer), no-fault insurer or WC entity should pay first; and

• You sent the claim to the liability insurer (including the self-insurer), no-fault, insurer or WC entity, but the insurer entity did not pay the claim.

Denial Codes

To indicate that claims were denied by Medicare because the claim was not submitted to the appropriate primary GHP for payment, Medicare contractors will use the following codes on the remittance advice sent to you:

• Claim Adjustment Reason Code 22 - "This care may be covered by another payer per coordination of benefits" and

• Remittance Advice Remark Code MA04 -Secondary payment cannot be considered without the identity of or payment information from the primary payer. The information was either not reported or was illegible.”

Reference: http://cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM7355.pdf
 

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