TIPS, TRICKS AND TACTICS: COMPLYING WITH NEW MSP EDITS

by Kristi Kenny

Medicare is enforcing a new edit when practices submit secondary claims after primary payment for services provided to beneficiaries - and it's causing blood pressures to rise all across the country. Just a few months ago, Medicare revised the method used to calculate total charges submitted on ANSI X12 837 Medicare Secondary Payer (MSP) claims and, during adjudication, will now reject claims that do not conform to current rules.

To help customers comply, Navicure has instituted a front-end edit that flags claims during processing, before they are sent to local Medicare carriers. Customers are automatically notified of the MSP problem, giving them time to recalculate the secondary payment amount and avoid the time-consuming, payment-delaying rejection/resubmission process. The Navicure edit reads: "Calculations - Invalid. Claim charges must equal sum of all adjustments plus the payer paid amount."

So, what should you do when you receive this notification from Navicure? You'll need to recalculate the amount billed on the MSP. Here's how...

Medicare requires that:

1. The amount submitted (as contained on CLM02),
2. Minus all CAS adjustment amounts,
3. Must equal the amount paid by the primary insurer (as contained on the COB Payer Paid Amount).

What does all this jargon mean? Basically, that Medicare adds up all of the adjustments at both the claim level and at the service line level, along with the total amount paid, and checks to see if the total of all of these amounts equals the original charge. CLM02 refers to the total original charge (Box 22), while CAS refers to the various types of adjustment reason codes that affect the billed amount. These might include, for instance, patient responsibility (PR) amounts, contractual obligations (CO), payer initiated reductions (PI), or other adjustments (OA).

The most common reason for this rejection is when a claim contains claim level adjustments that reflect the totals of the adjustments noted at the service level. Medicare calculates the claim level adjustments as additional adjustments.

Therefore, when submitting MSP claims, you must follow these steps*:

1. Claim Level Primary Payer Paid Amount
For claim level information, physicians and suppliers must indicate the other payer paid amount for the claim in loop 2320 AMT01 = D (qualifier) and AMT02 the paid amount. NOTE: All line level payments, when added together, must equal the total amount paid on the claim.

2. Claim Level Primary Payer Allowed Amount
For claim level information, physicians and suppliers must indicate the other payer allowed amount for the claim in loop 2320 AMT01 = B6 (qualifier) and AMT02 the allowed amount. NOTE: All line level allowed/approved amounts must equal the total allowed amount on the claim when added together.

3. Claim Level Obligated to Accept as Payment in Full Amount (OTAF)
For claim level information, if applicable, physicians and suppliers must indicate the OTAF amount in loop 2300 CN101 = 9 and CN102 = the OTAF amount. While it is possible that the OTAF amount could be zero, providers should not populate the field with "0" if they are not actually indicating an OTAF amount. NOTE: All line level OTAF amounts must equal the total OTAF amount on the claim when added together.

4. Line Level Primary Payer Paid
For line level information, physicians and suppliers must indicate the other payer paid amount for that particular service in loop 2430 SVD02.

5. Line Level Primary Payer Approved
For line level information, physicians and suppliers must indicate the other payer approved amount for that particular service in loop 2400 AMT01 = AAE (qualifier) and AMT02 the monetary amount. NOTE: For most payers including Medicare, the line level approved amount is used to show the line item level allowed amount.

6. Line Level Obligated to Accept as Payment in Full Amount (OTAF)
For line level information when applicable, physicians and suppliers must indicate the OTAF amount for that service line in loop 2400 CN101 = 9 and CN102 is the OTAF amount. If OTAF amounts are submitted at both the claim level and at the line level, the total of the line level OTAF amounts must match the claim level OTAF amount.

Here are examples of a claim that would be rejected, followed by one that would be accepted.

Example of a claim that will reject:

Click image to enlarge

Calculation —
All reason code amounts are added up together (claim and service):

$167.26 + $26.57 + $167.26 + $26.57

Note that because the service level reason codes were added at the claim level, all of the reason codes are added together. Medicare does not want totals at the claim level. Send only claim level reason codes if your remittance returned a code at the claim level.

Total of all reason code amounts = $387.66

When that amount is added to the total payer amount paid, the result should equal the total claim charge. In this case, however, it does not - which causes the claim to be rejected:

$387.66 + $239.17 = $626.83 (not equal to $433.00)

Example of a claim that will pass the edit:

Click image to enlarge

Calculation —
All reason code amounts are added up together (claim and service):
$167.26 + $26.57
Total of all reason code amounts = $193.83

When that amount is added to the total payer amount paid, the result should equal the total claim charge - which, in this case, it does. Therefore, the claim will be accepted:

$193.83 + $239.17 = $433.00

As always, Navicure's Client Service's team stands ready to help you navigate this complex issue at 770-342-0800 or clientservices@navicure.com. For additional information, you can also visit Medicare's website and read the entire transmittal containing these instructions, or review a brief explanation issued by MLN Matters.

* Compiled by Navicure from documentation featured on the CMS Website

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