Medicare Secondary Payer (MSP) FAQs

Today’s Medicare Advantage plans must manage payment integrity from two angles. First, they must ensure claims payments are accurate. And they must make sure that premium dollars coming in from the Centers for Medicare and Medicaid Services (CMS) are accurate. However, inaccurate member eligibility data often results in Medicare Advantage plans receiving fewer premium dollars than they’re owed.

Medicare Secondary Payer Validation is a key factor in quickly and accurately confirming CMS records, correcting inaccuracies, and restoring millions in underpaid premium dollars. Here are answers to a few frequently asked questions about Medicare Secondary Payer Validation.

What is Medicare Secondary Payer?

Medicare Secondary Payer, also known as MSP, is a term used by Medicare when another payer is primary, establishing that Medicare is the secondary payer. This applies to both Part C medical coverage and Part D prescription drug coverage. In both cases, the Medicare Advantage plan is paid a per-member monthly premium by CMS to administer the plan.

What is the financial impact of Medicare Secondary Payer to Medicare Advantage plans?

Premiums paid by the Centers for Medicare and Medicaid Services to Medicare Advantage plans are reduced 82% per month when other primary medical coverage exists. CMS puts the burden on Medicare Advantage plans to prove when they deserve primary premiums, and many plans don’t realize how much revenue they lose in underpaid premiums. The good news is that the Centers for Medicare and Medicaid Services allows Medicare Advantage plans to recover premiums from the previous 84 months.

Identifying inaccuracies in the CMS Common Working File is like looking for a needle in a haystack. How can this be more effective and efficient?

Finding inaccuracies and identifying primacy changes requires the right mix of data modeling, sophisticated tracking, and workflow technology. The key is to focus only on those records that have the greatest potential to negatively affect premiums.

Beyond identifying inaccurate records, how complex is the process?

There are several challenges and complexities in MSP validation. The plan may lack a dedicated or specialized team to focus on the problem, or there may be multiple points of ownership throughout the organization (e.g., claims and finance).

The validation process itself is complicated and time-consuming. It requires finding and contacting the other insurance provider, capturing and sharing validation data, and communicating with CMS to get the record corrected. Due to this inherent complexity, premium restoration is often delayed.

What do I need to consider when partnering with a Medicare Secondary Payer validation vendor?

Since MSP validation can have such a significant financial impact for Medicare Advantage plans, finding a Medicare Secondary Payer validation partner is wise. There are several factors to consider. Most important is making sure the vendor has expertise in the process.

In addition, the ideal partner will manage the entire process from start to finish, requiring minimal to no involvement from the plan. Rather than providing leads and stopping there, the vendor will make updates directly to the CMS source file and then monitor and report on the results.

The partner will back this up with the right mix of data modeling, sophisticated tracking, and workflow technology. The right validation vendor will also provide complete financial transparency and insight, helping to track, monitor, and reconcile the financial impact.

Lastly, the vendor will fill gaps in the Medicare Secondary Payer validation process, aligning the organization, simplifying compliance, bringing focus to validation activities—and providing measurable value.


Contact us today for more information about how Discovery Health Partners can improve your Medicare Secondary Payer validation and premium restoration.

Discovery Health PartnersMedicare Secondary Payer (MSP) FAQs

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