Medicare Secondary Payer (MSP) Manual 
Chapter 5 - Contractor Prepayment Processing Requirements 
Crosswalk 
New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  10            AB-00-107  Coordination With the Coordination of 
Benefits Contractor (COBC) 
5  10.1            AB-00-107  FI and Carrier MSP Auxiliary File Update 
AB-02-022  Responsibility 
AB-02-107 
5  10.2            AB-00-107  COBC Electronic Correspondence Referral 
System (ECRS) 
5  10.2.1            AB-00-107  ECRS Functional Description 
5  10.2.2            AB-00-107  Technical Overview - Impact on FI/Carrier 
Data Centers 
5  10.2.2.1            AB-00-107  CWF Assistance Request - Data Elements and 
Definitions 
5  10.2.2.2            AB-00-107  MSP Inquiry Information - Data Elements and 
B-01-033  Definitions 
5  10.3            AB-00-107  Providing Written Documents to the COBC 
5  10.4            AB-00-107  FI and Carrier Record Retention 
5  10.5            AB-00-107  Notification to FI or Carrier of MSP Auxiliary 
File Updates 
5  10.6            AB-00-107  Referring Calls to the COBC 
5  10.7            AB-00-107  Changes in FI and Carrier Initial MSP 
Development Activities 
B-01-033  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  10.8            AB-00-107  Additional Activities Arranged by Non-GHP 
AB-02-022  MSP Type 
5  10.8.1            AB-00-107  No-Fault Development 
5  10.8.2            AB-00-107  Workers' Compensation (WC) Development 
5  10.8.3            AB-00-107  Liability Development 
5  10.9            AB-00-107  COBC Numbers 
5  20  A3-3489.3  B3-3328.6      SNF-337    Sources That May Identify Other Insurance 
A3-3492.J  B3-4301  Coverage 
B3-3338.2 
5  20.1  A3-3418.5  B3-3340.4  HO-262.8  HHA-248  SNF-334  AB-00-107  Identification of Liability and No-Fault 
Situations 
A3-3489  B3-4305 
A3-3489.3A  B3-3338.2A 
B3-4301 
5  20.2  A3-3409  B3-3330.1          Identify Claims with Possible WC Coverage 
A3-3409.1  B3-3330.2 
A3-3409.2  B3-4305 
5  20.3    B3-4304          Medicare Claims Where Veterans' Affairs 
(VA) Liability May Be Involved 
5  20.3.1    B3-4304.1          VA Payment Safeguards 
B3-4304.2 
 
5  30  A3-3686            Develop Claims for Medicare Secondary 
Benefits 
5  30.1  A3-3686.1            Further Development Is Not Necessary 
5  30.2              Further Development Is Required  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  30.3  A3-3491  B3-4302  HO-253  HHA-253  SNF-336    GHP May Be Primary to Medicare 
A3-3686  B3-3328.6 
A3-3492.I 
5  30.3.1    B3-4301.1D        B-01-033  Limits on Development 
5  30.3.2    B3-4303          Develop ESRD Claims Where Basis for 
Medicare Entitlement Changes 
5  30.4  A3-3409.3  B3-3330.3    HHA-250.19  SNF-329.7    Workers' Compensation Responses 
A3-3409.9 
5  30.4.1    B3-3330.4          Patient Receives Concurrent Services Which 
Are Not Work-Related 
5  30.5  A3-3489.3B            No-Fault Responses 
5  30.5.1    B3-3338.4          No-fault Insurer Denies That It Is the Primary 
Payer 
5  30.5.2  A3-3489.4  B3-3338.5  HO-262.12  HHA-248.4  SNF-334.4    No-Fault Insurance Does Not Pay All Charges 
Because of a Deductible or Coinsurance 
Provision in Policy 
5  30.5.3  A3-3489.5  B3-3338.6  HO-262.12  HHA-248.4  SNF-334.4    State Law or Contract Provides That No-Fault 
HO-262.13  HHA-248.5  SNF-334.5  Insurance Is Secondary to Other Insurance 
5  30.6  A3-3489.6  B3-3338.7          Liability Claim Is Filed and There is Also 
Coverage Under Automobile or Non-
B3-3340.7 
Automobile Medical or No-Fault Insurance 
5  30.7  A3-3686  B3-3328.7          Beneficiary Refuses to Provide Requested 
Information 
5  30.8  A3-3491.5    HO-263.3  HHA-252.7  SNF-335.7    Audit Trail of Primary Coverage 
A3-3490.3  HO-264.7  HHA-253.6  SNF-336.6 
5  40              FI and Carrier Claim Processing Rules 
5  40.1  A3-3490.3  B3-3328.7          Claim Indicates Medicare is the Primary Pay 
IM3491  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  40.1.1  A3-3409.4  B3-3330.5          Facts Indicate Reasonable Likelihood of 
Workers' Compensation Coverage (Other Than 
Federal Black Lung Benefits) 
5  40.1.1.1  A3-3409.5  B3-3330.6A          The Beneficiary Is on the Black Lung 
Entitlement Rolls 
5  40.1.2  A3-3490.16A  B3-3329.4A  HO-263.17  HHA-253.16  SNF-335.17    Services by Outside Sources Not Covered 
A3-3491.17A  HO-264.17  HHA-253.17  SNF-336.17 
5  40.1.2.1  A3-3490.16B  B3-3329.4B  HO-263.17  HHA-252.17  SNF-335.17    Exception 
A3-3491.17B  HO-264.17  HHA-253.16  SNF-336.17 
5  40.1.3  A3-3490.16C  B3-3329.4  HO-263.17  HHA-252.17  SNF-335.17    Notice to Beneficiary 
A3-3491.17C  HO-264.17  HHA-253.16  SNF-336.17 
5  40.2  A3-3490.16D  B3-3329.4D  HO-264.17  HHA-252.17  SNF-335.17    Update CWF MSP Auxiliary File 
A3-3491.17DC 
5  40.2.1    B3-3338.2C.1  HO-263.17  HHA-253.16  SNF-336.17    Action if Payment Has Been Made Under No-
Fault Insurance 
5  40.3    B3-3328.7          Processing Part B Claims Involving GHPs 
5  40.3.1  A3-3491.9  B3-3328.4  HO-263.10  HHA-253.10  SNF-336.10    GHP Denies Payment for Primary Benefits 
A3-3490.3D  B3-3328.C1 
A3-3490.3F  B3-3328.5 
5  40.3.2    B3-3328.8          GHP Does Not Pay Because of Deductible or 
Coinsurance Provision 
5  40.3.3    B3-3328.9          GHP Gives Medicare Beneficiary Choice of 
Using Preferred Provider 
5  40.4    B3-3328.2          GHP Pays Primary 
5  40.4.1    B3-3328.2          GHP Pays Charges in Full 
5  40.4.2    B3-3328.3          GHP Pays Portion of Charges  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  40.4.3  A3-3490.13  B3-3328.16          GHP Pays Primary Benefits When Not 
Required 
5  40.5    B3-3328.14          Primary Payer Is Bankrupt or Insolvent 
5  40.5.1    B3-3328.14B          Billing Beneficiaries During the Liquidation 
Process 
5  40.5.2    B3-3328.14C          When to Make a Medicare Secondary Payment 
5  40.5.3    B3-3328.14D          Amount of Secondary Payment 
5  40.5.4    B3-3328.14E          Time Limits for Filing Secondary Claims After 
Liquidation Process 
5  40.6  A3-3490.3E            Conditional Primary Medicare Benefits 
A3-3682.5B 
A3-3682.5E 
A3-3682.5G 
5  40.6.1  A3-3407.6B  B3-3338.3          Conditional Medicare Payment 
A3-3682  B3-2370.6 
5  40.6.2  A3-3690.3F  B3-3338.3  HO-262.14  HHA-248.6  SNF-334.6    When Primary Benefits and Conditional 
Primary Medicare Benefits Are Not Payable 
A3-3489.8 
A3-3682.5D 
A3-3682.5E 
A3-3682.5G 
5  40.6.3    B3-3328.C1          Conditional Primary Payment in Cases 
Involving a Denied Claim That Was Appealed 
5  40.7    B3-4301.1          Carrier Processing Procedures for Medicare 
Secondary Claims 
5  40.7.1              Crediting the Part B Deductible 
5  40.7.2    B3-4301.1          Medicare Payment Calculation Methodology 
B3-3328.20  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  40.7.3    B3-3328.20          Medicare Secondary Payment Calculation 
Methodology for Services Reimbursed on 
Reasonable Charge or Other Basis Under Part 
B 
5  40.7.4    B3-3328.20B          Effect of Medicare Limiting Charge on 
Medicare Secondary Payments 
5  40.7.4.1    B3-3328.20C          GHP Does Not Pay for Certain Services 
5  40.7.4.2    B3-3328.20D          Third Party Payment Includes Both Medicare 
Covered and Noncovered Services 
5  40.7.5    B3-3328.21          Effect of Failure to File Proper Claim 
5  40.7.6    B3-3328.23          Medicare Secondary Payment for Managed 
Care Organizations' (MCO) Copayments 
5  40.7.7    B3-3328.25          Charging Expenses Against Annual Limit on 
Incurred Expenses for Services of 
Independently Practicing Physical Therapists 
5  40.8  A3-3490.3    HO-475        Intermediary Processing Procedures for 
Medicare Secondary Claims 
A3-3685.B 
A3-3685.C 
5  40.8.1  IM3497.2    HO-475        Medicare Secondary Payment Calculation 
Methodology When Proper Claim Has Been 
IM3497.5 
Filed 
A3-3407B3 
A3-3490.7 
A3-3491.11 
A3-3682 
IM3497.5 
A3-3685.A.1  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  40.8.2  IM3497.5B    HO-473  HHA-498  SNF-573    Rule to Determine the Amount of Secondary 
Benefits 
A3-3685.A1  HO-475 
A3-3683 
A3-3682.3B6 
A3-3682.4B4 
A3-3685.D 
5  40.8.3  A3-3682.1B6    HO-472.3  HHA-498  SNF-574    Application of the MSP Formula 
A3-3683  HO-473 
A3-3685.C  HO-475 
5  40.8.4  A3-3682.2            PIP Reduction 
5  40.8.5  A3-3682.2.A    HO-472.3        MSP Part B Claims (Outpatient and Other Part 
A3-3682.1C  B Services, Home Health Part B and Ancillary 
Services When Part A Benefits are Exhausted) 
5  40.8.6  A3-3695.A    HO-477        MSP Outpatient Claims Involving LAB 
Charges Paid by Fee Schedule 
5  40.8.6.1  A3-3695.B            Prorating Primary Payments 
5  40.8.6.2  A3-3695.C            Calculation of Deductible and Coinsurance 
5  40.8.7  IM3497.5            Calculating Medicare Secondary Payments 
IM3497.6  When Proper Claim Has Not Been Filed With 
Third Party Payer 
5  40.8.8  A3-3682.B3    HO-472.3        Determining Patient Utilization Days, 
A3-3682.1B  HO-475  Deductible, and Coinsurance Amounts 
A3-3685.A3 
IM3497.6 
IM3497.7 
5  40.8.9  A3-3684    HO-474    SNF-574    Benefits Exhausted Situations When Medicare 
Is Secondary Payer for Reasonable Cost 
Providers  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  40.8.10  A3-3688    HO-476    SNF-575    Deductible and/or Coinsurance Rates Spanning 
Two Calendar Years 
5  40.8.11  A3-3682.1A    HO-472.3        Submit Data to CWF When Full Payment 
Made by Primary Payer 
A3-3682.3A 
5  40.8.12  A3-3682.1A    HO-472.3        Submit Data to CWF When Partial Payment 
Made by Primary Payer 
A3-3682.B7 
A3-3682.1B7 
A3-3682.2B5 
5  50    B3-4306          MSP Pay Modules to Calculate Medicare 
Secondary Payment Amount 
5  50.1    B3-4306          Medicare Secondary Payer (MSP) Payment 
Modules (MSPPAY) for Carriers 
5  50.1.1  A3-3697.B  B3-4306.B          Payment Calculation Processes for MSP 
Claims 
5  50.1.2    B3-4306C          MSPPAY "Driver" Module 
5  50.1.3    B3-4306D          Return Codes 
5  50.1.4    B3-4306E          Executing and Testing MSPPAY Software 
5  50.1.5    B3-4306F          Carrier MSPPAY Processing Requirements 
5  50.1.6    B3-4306G          Error Resolution 
5  50.1.7    B3-4306.1          Payment Calculation for Physician/Supplier 
Claims (MSPPAYB Module) 
5  50.1.8    B3-4306.2          Payment Calculation for Physician/Supplier 
Claims (MSPPAYBL) 
5  50.2  A3-3697            Medicare Secondary Payer (MSP) Payment 
Modules (MSPPAY) For Intermediaries 
5  50.2.1  A3-3697            Payment Calculation Processes for MSP 
Claims 
5  50.2.2  A3-3697.C            MSPPAY "Driver" Module  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  50.2.3  A3-3697.D            Return Codes 
5  50.2.4  A3-3697.E            Installation 
5  50.2.5  A3-3697.F            Intermediary Processing Requirements 
5  50.2.6  A3-3697.G            Error Resolution 
5  50.2.7  A3-3697.1            Payment Calculation for Inpatient Bills 
(MSPPAYAI Module) 
A3-3697.1A 
5  50.2.8  A3-3697.2            Payment Calculation for Outpatient Claims 
(MSPPAYOL) 
5  50.2.8.1            A-03-006  MSPPAY Update to Apportion Prospective 
Payment System (PPS) Outlier Amounts to All 
Service Lines with Potential Outlier 
Involvement 
5  50.2.9  A3-3697.3            Payment Calculation for Outpatient Bills 
(MSPPAYAO Module) 
A3-3697.3B 
5  50.3            AB-03-011  Multiple Primary Payer Amounts For a Single 
Service 
5  60  A3-3899  B3-13450          MSP Reports 
5  60.1  A3-3899.1  B3-13450.1          Monthly Intermediary Report (Form CMS-
1563) and Monthly Carrier Report (Form 
CMS-1564) on Medicare Secondary Payer 
Savings 
5  60.1.1  A3-3899.2  B3-13450.2          Overview of Report 
A3-3899.3  B3-13450.3 
A3-3899.4  B3-13450.4 
5  60.1.2  A3-3899.5  B3-13450.5          Savings Calculations 
A3-3418.25 
5  60.1.3  A3-3899.6  B3-13450.6          Recording Savings 
5  60.1.3.1  A3-3899.7  B3-13450.7          Source of Savings  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  60.1.3.2  A3-3899.8  B3-13450.8          Type of Savings 
5  60.1.3.2.1  A3-3899.8A  B3-13450.8          Unpaid (Cost Avoided) MSP Claims 
5  60.1.3.2.2  A3-3899.8  B3-13450          Full Recoveries 
5  60.1.3.2.3  A3-3899.8  B3-13450          Partial Recoveries 
5  60.1.3.2.4  A3-3899.8  B3-13450          Totals 
5  60.1.3.2.5  A3-3899.8  B3-13450.8          Pending Claims/Cases 
5  60.1.3.3  A3-3899.9  B3-13450.9          Electronic Submission 
5  60.1.3.3.1  A3-3899.9  B3-13450.9          Data Entry of the Forms CMS-1563 and CMS-
1564 
5  60.1.3.3.2  A3-3899.9  B3-13450.9          Edits for Forms CMS-1563 and CMS-1564 
5  60.2  A3-3418.26            Liability Settlement Tracking Report 
5  70  A3-3693    HO-480        Hospital Review Protocol for Medicare 
Secondary Payer 
5  70.1  A3-3691.1    HO-480.1        Reviewing Hospital Files 
HO-480.2 
HO-480.4 
5  70.1.1  A3-3693.2    HO-480.3        Frequency of Reviews and Hospital Selection 
Criteria 
HO-480.6 
5  70.1.2  A3-3693.3    HO-480.5        Methodology for Review of Admission and 
Bill Processing Procedures 
5  70.2  A3-3693.4    HO-480.7        Selection of Bill Sample 
5  70.3  A3-3693.5    HO-480.8        Methodology for Review of Hospital Billing 
Data 
5  70.3.1  A3-3693.5C    HO-480.5C        Review of Form CMS-1450 
5  70.3.1.1  A3-3693.5C1            General Review Requirements 
5  70.3.1.2  A3-3693.5C2            Working Aged Bills  New  New  Int.  Carrier  HO  HHA  SNF  PMs  Subject 
Chap  Section  Pub. 13  Pub. 14  Pub. 10  Pub. 11  Pub. 12 
5  70.3.1.3  A3-3693.5C3            Accident Bills 
5  70.3.1.4  A3-3693.5C4            Workers' Compensation Bills 
5  70.3.1.5  A3-3693.5C5            ESRD Bills 
5  70.3.1.6  A3-3693.5C6            Bills for Federal Government Programs 
5  70.3.1.7  A3-3693.5C7            Disability Bills 
5  70.3.2  A3-3693.5D            Use of Systems Files for Review 
5  70.3.3  A3-3693.6    HO-480.6        Review of Hospitals With Online Admissions 
Query 
5  70.4  A3-3693.7    HO-480.7        Assessment of Hospital Review 
5  70.5  A3-3693.8            Exhibits 
5  70.5.1              Exhibit 1: Assessment of Medicare Secondary 
Payer Hospital Review 
5  70.5.2              Exhibit 2: Survey of Bills Reviewed 
5  70.5.3              Exhibit 3: Entrance Interview Checklist 
5  70.5.4              Exhibit 4: Entrance Interview Checklist: 
Billing Procedures 
5  Att 1            AB-03-081a  Electronic Correspondence Referral System 
(ECRS) User Guide v6.0 
5  Att 2            AB-03-081b  Electronic Correspondence Referral System 
(ECRS) - Quick Reference Card