Coordination of Benefits - HMSA and Medicare

I. Coordination of Benefits Between HMSA and Medicare

When a member is covered by an HMSA group plan and Medicare, federal laws and regulations are applied to determine how benefits are coordinated.

In 1980, Congress passed legislation making Medicare the secondary payer and group health plans the primary payer in a variety of situations. These laws apply when a patient has both Medicare and an employer group health plan, and when the employer has the minimum required number of employees as described in the following paragraphs.

II. Medicare Coordination Rules

1. Age 65 or Older

   When a member is age 65 or older, entitled to Medicare based on his or her age and is also covered by a group health plan because the member or his or her spouse is still working, and the employer has 20 or more employees, the employer’s group plan will be primary and Medicare will be secondary. If the employer has less than 20 employees, Medicare will be primary in most cases.

2. Under Age 65 With Disability

   When a member is younger than age 65, eligible for Medicare because of a disability other than End-Stage Renal Disease (ERSD), and is also covered by a group health plan from his or her work — or — from a family member who is working, and the employer has 100 or more employees, the employer’s group plan will be primary and Medicare will be secondary. If the employer has less than 100 employees, Medicare will be primary.

3. Under Age 65 With End-Stage Renal Disease (ESRD)

   When a member is under age 65 and eligible for Medicare only because of ESRD, the employer’s group plan will be primary for the first 30 months of Medicare coverage for ESRD. After 30 months, the group coverage will become secondary to the member’s Medicare coverage.

4. Dual Medical Eligibility

   When a member is eligible for Medicare because of ESRD and another disability or because of ESRD and also being age 65 or older, and the member’s group plan was primary to Medicare when the member became eligible for ESRD benefits, the employer group plan will continue to be primary during the first 30 months of the ESRD Medicare coverage. If the member’s group plan was secondary to Medicare when the member became eligible for ESRD benefits, the employer group plan will continue to be secondary.

5. Medicare is the Primary Payer

   If a member is covered under both Medicare and an employer group plan and Medicare is the primary payer, HMSA plans will cover the remaining Medicare copayments and deductibles, except as detailed below. HMSA benefits will be paid up to the Medicare Approved Charge.

6. Exhaustion of Medicare Benefits

   HMSA will begin applying plan benefits as though HMSA were primary after Medicare benefits have been exhausted.

   When an inpatient hospital stay is extraordinarily long and costly and some or all of the stay is not covered by Medicare because Medicare’s inpatient hospital benefits (including lifetime reserve days) have been exhausted, HMSA will pay the lesser of:

   1. HMSA’s eligible charge for the entire confinement less any Medicare inpatient hospital payments and Medicare Part B payments for inpatient lab, diagnostic, and x-ray services on those days; or
   2. HMSA's eligible charges for the inpatient days which Medicare did not cover less any Medicare Part B payments for inpatient lab, diagnostic, and x-ray services on those days.

   When a confinement is not covered by Medicare, HMSA payments are subject to HMSA plan provisions and deductibles.

7. Facilities or Providers Not Eligible or Entitled to Medicare Payment

   When services are rendered by a facility or provider that is ineligible or otherwise not entitled to receive reimbursement from Medicare and Medicare is the primary payer, HMSA will pay no more than the amount that would be paid to supplement the payment made by Medicare for an eligible provider, even though Medicare benefits were not paid.

8. Providers Who Are Not Registered/Not Enrolled with Medicare

   Medicare non-registered/non-enrolled providers must inform patients they are not registered with Medicare and that Medicare will not pay for their services. If the patient still wants to be treated by the provider, the provider must have the patient sign a waiver form acknowledging that they understand Medicare will not pay for the service but still want to receive the service. If the patient does not sign an acknowledgment/waiver form, the provider may not collect money from the patient for the service. If the patient did sign the acknowledgment/waiver form, the provider is required to keep the signed form on file as proof in order to bill the patient.

   Non-registered/non-enrolled providers must include a copy of the signed waiver form with their claims submissions for HMSA members with primary Medicare coverage. (If the waiver form is not included, HMSA will deny the claim stating that Medicare is the primary insurer.) HMSA will make payment for the services as the secondary payer as if Medicare had made primary payment for the services (assuming the services are an HMSA plan benefit). Payment will be based on HMSA’s eligible charges and members will owe the provider up to the HMSA eligible charge for services from HMSA participating providers.

   NOTE: These requirements do not apply to claims for members with primary Medicare Advantage coverage submitted by non-registered/non-enrolled providers that are not excluded from Medicare. These providers may submit claims under the member’s Medicare Advantage number, and HMSA will pay the Medicare Advantage claims directly to the provider and will coordinate benefits under the secondary HMSA private business plan.

9. Providers Who Opt Out of Medicare

   Providers may choose to opt out of Medicare by contacting CMS. A letter confirming the provider has opted out for a two year period is generated by CMS. A copy of this letter must be attached to each claim submission filed by the opt-out provider to HMSA when HMSA is secondary to Medicare. The letter must include the date range of the opt-out period and it must coincide with the service date filed on the claim form.

10. Medicare Primary to HMSA QUEST Integration (QI) Plan and Pre-Certification Policy

    If an HMSA QUEST Integration (QI) plan requires pre-certification for a service/item and Medicare is primary to HMSA, providers do NOT need to submit a pre-certification request if Medicare allows the service (i.e., if Medicare pays for a service, we will still coordinate with the Medicare payment WITHOUT a pre-certification under the QI plan).

    If an HMSA Medicare Advantage (MA) plan is primary to a QI plan and the HMSA MA plan does NOT require pre-certification for the service/item, but the QI plan requires pre-certification for the service/item, the QI plan will waive the pre-certification requirement for the service/item as long as the HMSA MA plan pays for the service/item.

    If another carrier’s Medicare Advantage (MA) plan is primary to an HMSA QI plan and the QI plan requires pre-certification for the service/item, the HMSA QI plan will waive the pre-certification requirement for the service/item as long as the other carrier MA plan pays for the service/item (refer to the Other Carrier Primary to HMSA and Pre-Certification Policy article for related information).

    If the provider submitted a pre-certification request to HMSA that was denied, but Medicare paid for the service, HMSA would process the claim by following Medicare’s decision.

11. Medicare Primary to HMSA Private Business (PB) Plan and Pre-Certification Policy

    If an HMSA Private Business (PB) plan requires pre-certification for a service/item and Medicare is primary to HMSA, providers do NOT need to submit a pre-certification request if Medicare allows the service (e.g., if Medicare pays for a service, we will still coordinate with the Medicare payment WITHOUT a pre-certification under the PB plan).

    If an HMSA Medicare Advantage (MA) plan is primary to a PB plan and the HMSA MA plan does NOT require pre-certification for the service/item, but the PB plan requires pre-certification for the service/item, the PB plan will waive the pre-certification requirement for the service/item as long as the HMSA MA plan pays for the service/item.

    If another carrier’s Medicare Advantage (MA) plan is primary to an HMSA PB plan and the PB plan requires pre-certification for the service/item, the HMSA PB plan will waive the pre-certification requirement for the service/item if the other carrier MA plan pays for the service/item.

    If the provider submitted a pre-certification request to HMSA that was denied, but Medicare paid for the service, HMSA would process the claim by following Medicare’s decision and coordinate with the Medicare payment.

    The above does NOT apply to mental health services for plans with limited visits (e.g., 24 outpatient and 30 inpatient visits etc.). For example, if Medicare pays for the 25th outpatient mental health visit in a calendar year for a plan that has mental health visit limits, the HMSA plan will deny unless there’s pre-certification for the two-for-one mental health benefit exchange.

    In addition, providers who opt out of Medicare are required to advise the member prior to services being rendered that they have opted out of Medicare, and to receive services from the opt-out provider it will require that the member waive their primary Medicare benefits. This does not preclude the member from receiving services from other providers that have not opted out of Medicare. The provider should also advise the member that HMSA secondary benefits will be limited to secondary benefit levels and this will result in a higher out of pocket for the member. If the member agrees to these conditions, a private contract must be signed by both the member and the provider, and the provider should also keep a copy of this private contract on file. It is not necessary to include a copy of the private contract with claims submissions to HMSA.

    Please refer to the following CMS website for more information on private contract and other requirements for opt-out providers: Centers for Medicare & Medicaid Services (CMS).

Participating HMSA providers who chose to opt out of Medicare are held to the HMSA’s eligible charge. Refer to example below:

III. Changes to Dual Medical Coverage

1. An HMSA member is required to notify HMSA when he or she has other medical coverage.

   Other coverage includes:

   1. Group insurance.
   2. Other group benefit plans.
   3. Non-group insurance.
   4. Medicare or other governmental benefits, including Medicare Advantage plans.
   5. Medical benefit coverage from auto insurance, when applicable.

2. Although HMSA proactively seeks medical coverage change information from your patients during open enrollment and prior to their 65th birthdate, such notification does not always happen in a timely manner.

   To document changes to a patient’s medical coverage, please have the patient complete and sign the Coordination of Benefits Subscriber Questionnaire [PDF] while in your office.

3. Please fax the information to HMSA at (808) 948-6357, or mail the completed form to:

   HMSA

   Attn: CA/Other Party Liability, 8th Floor

   P.O. Box 860

   Honolulu, HI  96808

   HMSA will update its claims processing system with the changes indicated as soon as the information is received.

IV. Medicare Claims Filing Information

1. If Medicare is the Primary Payer:

   1. When Medicare is the primary payer, please submit your patient’s medical claims to the appropriate Medicare Administrative Contractor (MAC) for Hawaii, which at the time of this writing is:

      • Palmetto GBA for Part A/B services, and
      • Noridian for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS).
      • Note: Submit Medicare Advantage claims directly to the commercial payer.

      Medicare will pay the amount that it determines to be due from Medicare benefits. For patients who have a secondary HMSA health plan, Medicare will notify HMSA of balances owing. This notification is referred to as a Medicare crossover claim and eliminates the need for providers to submit a claim for secondary benefits. This cooperative sharing of claims information between Medicare and HMSA is a value-added service provided by HMSA for your convenience.

   2. If HMSA is your patient’s secondary carrier, and our membership data has been electronically linked with Medicare, HMSA will process the claim based on the information we receive directly from Medicare. Payment will be made based on Medicare’s Approved Charge. You should receive payment from HMSA three to four weeks after your original payment from Medicare.
   3. Refer to the Medicare Remittance Notice to determine if the claim needs to be submitted for HMSA secondary health plan coverage. If Medicare sends a crossover claim, a message indicating such will be displayed on the Medicare Remittance Notice as Claim Remark Code “MA18”.
   4. The intent of this sharing arrangement is to reduce the amount of administrative work a provider must do to receive payment for a secondary coverage claim. If you submit a duplicate claim to HMSA for secondary benefits, you will not realize the administrative cost savings and may inadvertently cause a delay in the processing of the claim.
   5. If your Medicare payment report does not contain Claim Remark Code “MA18”, please submit a claim to HMSA along with the Medicare payment information. COB claims can be submitted electronically or via hardcopy paper form.

   6. The following information from Medicare Explanation of Benefits (EOB) or Remittance Advice must be submitted on an electronic claim containing Medicare primary payment information:

      837 P/I - Loop 2320
      Payer Responsibility Sequence Number Code Loop 2320 - SBR01: “P” = Primary. “S” = Secondary. “T” = Tertiary.
      Claim Filing Indicator Code Loop 2320 - SBR09: “MA” = Medicare Part A. “MB” = Medicare Part B.
      Claim Level Adjustments Loop 2320 - CAS segment(s): AMT01 = “C4”. AMT02 = Amount Paid. Adjustments to Billed Charges: CAS01 = Claim Adjustment Group Code “CO” = Contractual Obligation. “PR” = Patient Responsibility. CAS02 = Adjustment Reason Code “1” = Deductible. “2” = Coinsurance. CAS03 = Adjustment Amount Dollar value associated to each CAS01 and CAS02.. Claim level payments and adjustments are reported for Medicare Part A claims only. Medicare Part B claims require Medicare payments and adjustments to be reported at the line level.

      837 P/I - Loop 2330B
      Other Payer Name Loop 2330B: NM101 = “PR”. NM102 = “2”. NM103 = Payer last name or organization name. NM108 = “PI” (Payer ID). NM109 = Use the Complementary Insurer Identifiers located in the HMSA Trading Partner Manual, Appendix C.

   7. Claims must be submitted with the same services and charges that were originally submitted to Medicare. For hardcopy submissions, do not cut the Medicare payment report or use a highlighter to identify the claim for which you are requesting secondary benefits as this hinders our scanning procedure. Instead, identify the applicable claim by marking an arrow or asterisk in the margin beside it and “black out” or otherwise obscure information related to the Protected Health Information (PHI) of patients other than the HMSA member on the claim.
   8. When a provider has appealed a claim previously processed by Medicare and a new Medicare payment report has been issued showing an adjustment, HMSA will receive information about the adjustment via automatic crossover. If your Medicare payment report indicates that the adjusted claim was forwarded to HMSA for processing, it is not necessary to send HMSA a duplicate claim.

   9. HMSA sometimes receives claims requesting payment for services for which Medicare has already paid 100 percent of the Medicare approved charge. If Medicare has paid 100 percent of its approved charge and you have accepted Medicare assignment, do not submit a claim to HMSA as the claim has been paid in full and secondary benefits are not applicable.

      In addition, if Medicare denies a service or claim on the basis of medical necessity, HMSA will defer to this decision and will not make payment.

      Similarly, if Medicare reduces charges for services that should have been combined and billed globally, HMSA will defer to this decision and pay only the remaining portion of the Medicare Approved Charge according to the global fee.

2. If HMSA is the Primary and Secondary Payer:

   When member has a Medicare Advantage plan, there is no need to submit a claim for secondary benefits when the member also has another HMSA plan. HMSA has internal processes that will automatically generate the claim for secondary benefits after the Medicare primary plan has finalized the claim.

3. Where to Submit Claims by Plan:

   1. HMSA Medicare Supplement Plans

      Note: all claims go to Medicare first and secondary claims will be sent via crossover when a member’s HMSA membership information is electronically linked.

      1. Senior Connection A, coverage code 405, send claims to:

         Medicare Part A Fiscal Intermediary, Medicare Part B Carrier, or Durable Medical Equipment MAC for Jurisdiction D.

      2. Senior Connection B, coverage code 160, send claims to:

         Medicare A Fiscal Intermediary, Medicare Part B Carrier, or Durable Medical Equipment MAC for Jurisdiction D.

      3. Senior Connection C, coverage code 170, send claims to:

         Medicare A Fiscal Intermediary, Medicare Part B Carrier, or Durable Medical Equipment MAC for Jurisdiction D.

Note: HMSA MA plan members do NOT owe a separate tax amount (including GET) for Medicare benefits. If providers bill tax on a separate line, it will be denied. Notwithstanding the foregoing, members may be held responsible for tax on services which are NOT Medicare benefits but are benefits under HMSA MA plans (e.g., world-wide coverage etc.).

Revision History