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Last Modified: 2/28/2014 Location: FL, PR, USVI Business: Part B

Requesting Medicare secondary payer conditional payments

What is a conditional payment?

A conditional payment is a Medicare payment for Medicare covered services for which another insurer is primary payer. Conditional payments are made under the condition that they are subject to repayment if and when the primary payer makes payment.

When will Medicare make a conditional payment?

Medicare will make a conditional payment for Medicare covered services in the situations listed below. For more specific circumstances under which a Medicare conditional payment may not be made, refer to the CMS Internet-Only Manuals, Publication 100-05 Medicare Secondary Payer Manual external link.
If the Workers Compensation (WC), No-Fault (NF), or liability insurance will not pay or will not pay promptly (i.e., within 120 days), Medicare makes conditional payments to prevent the patient from using his or her own money to pay the claim. However, Medicare has the right to recover any conditional payments. Refer to the MSP Manual, Chapter 1, Section 20, for the definition of “Promptly.”
Note: If the injury resulted from an automobile accident and/or there is an indication of primary coverage under a Group Health Plan (GHP), the provider bills the liability insurer or no-fault insurer and/or GHP as appropriate before requesting conditional Medicare payments.
In Third Party Liability (TPL) cases, the provider may, after 120 days:
Bill Medicare for conditional payments while withdrawing all claims/liens against the liability insurance/patient’s liability insurance settlement (liens may be maintained for services not covered by Medicare and for Medicare deductibles and coinsurance), or
Maintain all claims/liens against the liability insurance/patient’s liability insurance settlement. If this option is chosen, Medicare may not be billed until the settlement is reached and only then if no monies were paid to the patient. All usual claims processing rules would still apply. The provider may charge beneficiaries actual charges, up to the amount of the proceeds of the liability insurance less applicable procurement costs but may not collect payment from the patient until after the proceeds of the liability insurance are available to the patient.
If because of physical or mental incapacity of the patient, the provider or patient failed to file a proper claim with the primary payer.
Note: A proper claim is a claim that is filed timely and meets all other claims filing requirements specified by the plan, program, or insurer (e.g., mandatory second opinion, prior notification before seeking treatment).
When benefits have been exhausted under the non-group health plan (WC, NF, Liability).
When the provider files a proper claim with the GHP and the GHP denies the claim in whole or in part for reasons that include:
The patient is not entitled to benefits,
The plan benefits are exhausted,
The services rendered are not covered services under the plan,
The patient is appealing the GHP’s denial (refer to MSP Manual, Chapter 5, Section 40.6 for exception),
The primary payer is bankrupt or insolvent and proceedings have concluded (refer to MSP Manual, Chapter 5, Section 40.5 for additional information).

How to request a conditional payment

When submitting paper claims:
For providers who have been approved to submit paper claims, attach a copy of the primary payer’s Explanation of Benefits (EOB) statement or other supporting documentation that clearly shows the reason for non-payment or payment delay.
When submitting electronic claims:
The following fields must be completed, as indicated, for a conditional Medicare payment request. For all other data segments that must normally be completed for an MSP claim, please refer to the HIPAA EDI Implementation Guide.
For Claim Level coding:
Enter six zeroes in the syntax of the 2320 loop AMT segment for the Coordination of Benefits (COB) Allowed Amount:
AMT01 = “B6” indicating Allowed Amount
AMT02 = ‘0000.00
Enter six zeroes in the syntax of the 2320 loop AMT segment for the COB Payer Paid Amount:
AMT01 = “D” indicating Payer Amount Paid
AMT02 = ‘0000.00
Enter the date the claim was adjudicated by the primary payer in the syntax of the 2330B loop DTP segment for Adjudication Date:
DTP01 = ‘573’ indicating Date Claim Paid
DTP02 = ‘D8’ indicating Date Format
DTP03 = Actual primary payer adjudication date
Enter the reason code and adjustment amount for the services not paid by the primary payer in the syntax of the 2430 loop CAS segment for Line Adjustment Information:
CAS01 = Claim Adjustment Group Code
CAS02 = Claim Adjustment Reason Code
For Line Level coding:
Enter six zeroes in the syntax of the 2400 loop AMT segment for the Approved Amount:
AMT01 = “AAE” indicating Approved Amount
AMT02 = ‘0000.00
Enter six zeroes in the syntax of the 2430 loop SVD segment for Line Adjudication Information:
SVD02 = ‘0000.00
Enter the date the claim was adjudicated by the primary payer in the syntax of the 2430 loop DTP segment for Line Adjudication Date:
DTP01 = ‘573’ indicating Date Claim Paid
DTP02 = ‘D8’ indicating Date Format
DTP03 = Actual primary payer adjudication date
Enter the reason code and adjustment amount for the services not paid by the primary payer in the syntax of the 2430 loop CAS segment for Line Adjustment Information:
CAS01 = Claim Adjustment Group Code
CAS02 = Claim Adjustment Reason Code
CAS03 = Actual Monetary Adjustment Amount
CAS04 = Actual Service Line Adjusted Units

When a Medicare MSP denial is received

Submit a written request to the address indicated below along with a copy of the primary payer’s Explanation of Benefits (EOB) statement or other supporting documentation that clearly shows the reason for non-payment or payment delay. Please ensure that the correspondence clearly states, “Conditional Payment Request.”
First Coast Service Options Inc.
Attn: Medicare Part B Claims Redetermination
P. O. Box 2360
Jacksonville, Florida 32231-0018
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Source: IOM Pub 100-05 MSP Manual

First Coast Service Options (First Coast) strives to ensure that the information available on our provider website is accurate, detailed, and current. Therefore, this is a dynamic site and its content changes daily. It is best to access the site to ensure you have the most current information rather than printing articles or forms that may become obsolete without notice.