Medicare is the U.S. national health insurance program. It used to be the primary payment provider for Americans.
However, in 1980, Congress amended the law, making Medicare the MSP or Medicare Secondary Payer.
What is MSP in Healthcare?
MSP means another entity is tasked with the primary payment of healthcare expenses instead of Medicare.
The transfer of primary payment responsibility was done to protect the Medicare Trust Fund. The goal is to ensure that Medicare beneficiaries are prioritized in the federal funds for the program.
Who are the main Medicare beneficiaries?
- People older than 65 years old
- People under 65 with disabilities
- People with end-stage renal disease
Understanding MSP in Medical Billing
What is MSP in medical billing?
Medical billing is the process of creating and submitting a bill for services rendered by a medical or healthcare facility.
The acronym MSP (Medicare Secondary Payer) appears on some medical bills. It only means that for the services noted in the bill, the primary payer or private insurance company will pay for the costs.
There are instances when the insurance company cannot cover everything billed by the healthcare facility. This is when the MSP comes in to cover the remaining amount.
In cases where Medicare is the primary insurer, it doesn’t serve as MSP.
How MSP Impacts Healthcare Billing
MSP can be a cause for confusion, which would lead to errors in medical billing and coding. The fact that there are primary and secondary payers could impact the bill and the corresponding claims.
A simple error could lead to millions in denied claims, particularly when health services are tagged to Medicare for payment. Upon audit, if Medicare determines that the billed services are supposed to be for the primary insurance provider, it would deny the claims outright. The situation could be financially disastrous to the healthcare facility.
This is why healthcare facilities must hire the best medical billers for the job.
Medical insurance billing software like ClaimGenix can also do wonders for preventing or minimizing billing errors.
Types of MSP Coverage and Requirements
MSP - what arec the types of MSP? The official government healthcare insurance program takes a backseat in payments when there is a private provider.
There are seven types of MSPs. The Centers for Medicare and Medicaid Services (CMS) lists the following types and the corresponding primary payer:
Working Aged Beneficiary With Employer Group Health Plan (GHP)
Medicare is the primary payer for individuals 65 years old and older who are still working and have GHP coverage. Either that, or their spouse is employed and has GHP coverage. In either case, the employer must have fewer than 20 employees.
If an employer has more than 20 employees, then Medicare becomes an MSP.
End-Stage Renal Disease (ESRD) Beneficiary
If an individual has ESRD and is in the first 30 months of the coordination period with an employer’s GHP, then Medicare is the secondary payer.
The MSP is the same if the person has Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) coverage.
Person With Disability
Medicare is secondary when a person with a disability has GHP coverage through employment or as a beneficiary of a family member’s employment. In such a case, the employer must have more than 100 employees.
COBRA Beneficiaries
Medicare is the primary payer for COBRA beneficiaries who are 65 years old and older or younger with disabilities.
It becomes MSP when an individual has ESRD, as earlier stated.
Retiree Health Plans
When an individual is 65 years old and older and has an employer retirement plan, Medicare becomes the primary payer, while the retiree coverage becomes secondary.
Individuals in an Accident With No-Fault Insurance
A person who was in an accident will have the no-fault or liability insurance provider as their primary payer, while Medicare is secondary.
Individuals Covered Under Worker’s Compensation Insurance
Medicare becomes MSP when an individual is covered under workers’ compensation following a job-related injury or illness.
In general, Medicare doesn’t cover any healthcare service that worker’s compensation already covers. But for those the primary payer doesn’t cover, the patient may submit a claim for Medicare coverage.
What are the Challenges for MSP Billing?
1. Errors
Because the various primary and secondary payers depend on certain situations, the main challenge in MSP billing is ensuring accurate records are kept. What is MSP in Medicare? This will be a common question that medical billers and coders must consistently ask. Such a complex system may take some getting used to. If they are not careful, mistakes can happen.
A single mistake in one document could affect a whole slew of paperwork, which may result in claim denial.
2. Beneficiaries fail to respond promptly
Medical billers or healthcare facilities may have questions about claims, but the beneficiary may not reply right away or at all. Such a situation would have consequences for the overall process.
3. Change in status
With seven types of MSP coverage and requirements, changes in status could impact the primary or secondary payer. For example, when a person turns 65 or becomes disabled, their MSP may also change. Failure to adjust to the change will result in errors in billing and recording.
Tips for MSP Billing Success
Two critical things will mean the success of MSP billing: careful recording of billing information and the use of reliable billing software.
First, human error can be expected in any field. But with proper training and a proper system at the workplace, mistakes can be minimized.
Second, the risk of errors can be further reduced with medical insurance billing software, which usually comes with automated checks. And when it detects errors, the software will immediately notify relevant personnel or even correct them.
For seamless workflow, the healthcare facility may even integrate a prospective payment system into the software.
Conclusion
Identifying what services are covered under private health insurance or Medicare can be quite confusing because of the nuances. Confusion could lead to errors and a denial of a claim that could hurt a healthcare company’s finances.
ClaimGenix provides all-in-one software solutions to medical insurance billing and helps make the process seamless and much simpler. Companies can bill thousands of payers from one platform. Get a ClaimGenix demo here.