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Last Modified: 2/10/2013
Location: FL, PR, USVI
Business: Part B
How is a Medicare secondary payment determined?
Q. How is a Medicare secondary payment determined?
A. The Medicare secondary payment is determined by a series of calculations and comparisons. The primary insurer’s claim processing details on their Explanation of Benefits (EOB) is needed to determine the secondary payment amount.
Three calculations are made per procedure. The lowest of the three is the secondary payment.
1. Determine what Medicare’s primary payment would be.
• Note the Medicare allowed amount for the procedure.
• If applicable, subtract the Medicare deductible amount applied toward the procedure.
• Multiply the difference by the appropriate percentage, 62.5%, 80% or 100%, depending on the procedure code.
2. Compare the Medicare allowed amount to the primary insurer’s allowed amount and select the higher of the two. Subtract the primary insurer’s paid amount from the highest allowance.
3. Subtract the primary insurer’s paid amount from the billed amount or the Obligated to Accept Payment in Full (OTAF) amount (use the lower amount between billed amount or OTAF amount).
Also, please see the Medicare secondary payer (MSP) calculator in the Tools Center. http://medicare.fcso.com/MSP/233072.asp
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