CMS Pub. 100-04, ch. 21, § 10.3.7

This section provides calculations for correctly displaying dollar amounts in certain

columns of the MSN.

NOTE THAT THE FOLLOWING SECTION HAS BEEN UPDATED TO REFLECT

NEW COLUMN NAMES, BUT HAS NOT OTHERWISE BEEN ALTERED FROM

THE FORMER ITERATION OF CHAPTER 21. SSMs ARE TO CONTINUE

CURRENT PRACTICE FOR CALCULATIONS UNTIL ACCURATE REVISIONS

COULD BE MADE AT A FUTURE DATE.

• Part A - “Claim Approved?” column is new; Is the “Amount Medicare Paid”

column comparable to the old “Deductible and Coinsurance” column? If not, it

needs new instructions. Date of Service now shows up at top of claim, not in its

own column; first column now shows Benefit Period date.

• Part B - “Service Approved?” column is new; Date of Service now shows up at

top of claim, not in its own column

• Unassigned Part B - “Service Approved?” column is new; Date of Service now

shows at top of claim, not in its own column.

• B of A - “Service Approved?” column is new; Are the “Medicare-Approved

Amount” and “Amount Medicare Paid” columns comparable to the old “Non-Covered Charges” and “Deductible and Coinsurance” columns? If not, these need

instructions. Date of Service now shows up at top of claim, not in its own

column.

• DME - “Item/Service Approved?” column is new; Date of Service now shows up

at top of claim, not in its own column.

A. Part A Calculations

“Maximum You May Be Billed” Column

The following chart is to be used to display the “Maximum You May Be Billed” amounts

for each service line on outpatient claims other than those that have a Medicare secondary

payment less than the amount Medicare would have paid if it were primary. See the

Medicare Secondary Payer Manual, Chapter 5, if the Medicare secondary payment is less

than the amount Medicare would pay if it were primary.

Calculations for Completing

“Maximum You May Be Billed”

Column - Outpatient Claims

Instructions/Source of Dollar Amount for Calculations

A. Service line billed amount This is the service line billed amount. This amount

should be shown in the “Amount Provider Charged”

column of the MSN.

B. Psychiatric reduction B = A x .375 This is applicable only to services

subject to the outpatient psychiatric limitation. For all

other services, B = 0.

C. Amount remaining after

psychiatric reduction

C = A - B.

D. Deductible applied This is the amount of deductible applied on the service

line. If no deductible applied, D = 0.

E. Amount charged less

deductible

E = C - D.

Calculations for Completing

“Maximum You May Be Billed”

Column - Outpatient Claims

Instructions/Source of Dollar Amount for Calculations

F. Less Medicare copayment

amount

Depending upon the service, F may equal any of:

1. E - where services are paid at 100% of the

approved amount;

2. 80% of E - where coinsurance is based on approved

amount;

3. E minus 20% of E - where coinsurance is based on

charges; or

4. OPPs payment amount minus the fixed beneficiary

copayment where hospital outpatient PPS is involved.

G. Amount after deductible,

copayment and psychiatric

reduction

G = E - F.

H. Of the billed amount This is dollar amount shown in “A.”

I. Less what Medicare owes This is the dollar amount shown in “G.”

J. Net responsibility J = H - I.

K. Plus charges that Medicare

does not cover

This step represents charges that Medicare does not

cover shown in the “Non-Covered Charges” column

on the MSN. Charges for which the beneficiary is

determined to have no liability should be excluded

from this step. Exclude dollar amounts for denials

such as:

• Services determined not to be medically

necessary and the beneficiary was not

informed in writing, in advance, that the

services may not be paid;

• The provider failed to tell the beneficiary if the

diagnostic test was purchased, from whom it

was purchased, the acquisition cost of the

purchased test, or the cost of the professional

component;

• Missing information such as ICD-9, UPIN,

etc.;

• The charge was denied as a duplicate;

• The service was part of a major surgery, test

panel or bundled code; or

Calculations for Completing

“Maximum You May Be Billed”

Column - Outpatient Claims

Instructions/Source of Dollar Amount for Calculations

• The service was denied/reduced because of

utilization reasons.

L. Beneficiary responsibility L = J + K Display this amount in the “Maximum You

May Be Billed” column for service lines on outpatient

claims. Claims submitted with a beneficiary paid

amount require the additional calculations shown in

Subsection C below.

Display of the “Maximum You May Be Billed” Column for MSP Claims

If the Medicare secondary payment plus the amount the primary insured paid equals or

exceeds what Medicare would have paid, the “Maximum You May Be Billed” column

for each approved service should display “$0.00.”

If the primary insurer paid amount is less than what Medicare would have paid, the

amount shown in “Maximum You May Be Billed” column for each service line needs to

be reduced using the following formula.

For the first service line, the amount “Maximum You May Be Billed” = Deductible +

Coinsurance - Primary Paid Amount + Non-Covered Charges.

For the second service line, the same formula would be followed with the Primary

Amount equaling the Primary Paid minus the Deductible + Coinsurance from the first

line.

Continue in this manner until the primary paid amount equals either $0.00 or the

Deductible + Coinsurance equals $0.00.

Display of the “Maximum You May Be Billed” Column for Claims Submitted with a

Beneficiary Paid Amount:

If a claim is submitted with a beneficiary paid amount, the amount(s) in the “Maximum

You May Be Billed” column will be reduced by the amount the beneficiary prepaid the

provider.

Apply the beneficiary paid amount to each service line sequentially until the beneficiary

paid amount is reduced to zero or all service lines have been considered.

Step 1: If the amount the beneficiary paid is less than or equal to the amount shown for

the “Maximum You May Be Billed” column, subtract the amount the beneficiary paid

from that amount, and display the difference in the “Maximum You May Be Billed”

column for that service line.

Step 2: If the amount the beneficiary paid is greater than the amount calculated for the

“Maximum You May Be Billed” column, subtract the “Maximum You May Be Billed”

amount for the first service line from the amount the beneficiary paid, and show zero in

the “Maximum You May Be Billed” column.

Repeat these steps with any remaining beneficiary paid amounts. If a balance remains

after all services lines have been considered, that amount should match the check amount

to the beneficiary on that claim. If payment was made to the beneficiary, the balance

should be shown in the appropriate blank of message 34.4. If a check was not issued,

print message 34.2.

B. Part B Calculations

“Medicare Paid You/Provider” Column - Assigned and Unassigned Claims

The following chart is to be used to display the Medicare paid amount for each service

line on assigned and unassigned claims other than those that have a Medicare secondary

payment less than the amount Medicare would have paid if it were primary.

Steps for Displaying “Medicare

Paid Amounts” on the Service

Line

Instructions/Source of Dollar Amounts

A. Service line approved amount This is the approved amount for the service. Do not

include interest amounts paid or applied to the service

line.

B. Mental Health Treatment

Limitation

B = A x 37.5 This is applicable only for services

subject to the outpatient mental health treatment

limitation. For all other services, B = 0.

C. Amount remaining after mental

health treatment limitation

C = A - B.

D. Deductible applied This is the amount of deductible applied on the

service line. If no deductible applied, D = 0.

E. Approved amount less

deductible

E = C - D.

F. Less Medicare copayment F = E x .20 Services paid at 100% of the approved

amount do not have a copayment. For services paid

at 100%, F = 0.

G. Amount after deductible,

copayment and mental health

treatment limitation

G = E - F.

H. Less 10% for late filing H = G x .10 If service line is part of an unassigned

claim or there is no reduction for late filing, H = 0.

I. Payment after reduction I = G - H.

J. Less Balanced Budget Law

Reduction

The total Balanced Budget Law reductions applied to

the service line. If no reduction, J = 0.

Steps for Displaying “Medicare

Paid Amounts” on the Service

Line

Instructions/Source of Dollar Amounts

K. Payment after reduction K = I - J.

L. Medicare paid amount L = K - Display this amount in the “Medicare Paid

You/Provider” column.

“MAXIMUM You May Be Billed” Column - Assigned Claims

The following chart is to be used to display the “Maximum You May Be Billed” amounts

for each service line on assigned claims other than those that have a Medicare secondary

payment less than the amount Medicare would have paid if it were primary.

Calculations for Completing

“Maximum You May Be Billed”

Column - Assigned Claims

Instructions/Source of Dollar Amount for

Calculations

A. Service line approved amount This is the service line approved amount. This

amount should be shown in the “Medicare

Approved” column of the MSN.

B. Mental Health Treatment

Limitation

B = A x 37.5 This is applicable only to services

subject to the outpatient psychiatric limitation. For

all other services, B = 0.

C. Amount remaining after mental

health treatment limitation

C = A - B.

D. Deductible applied This is the amount of deductible applied on the

service line. If no deductible applied, D = 0.

E. Approved amount less deductible E = C - D.

F. Less Medicare copayment amount F = E x .20 Services paid at 100% of the approved

amount do not have a copayment. For services

paid at 100%, F = 0.

G. Amount after deductible,

copayment and mental health

treatment limitation

G = E - F.

H. Of the approved amount This is dollar amount shown in “A.”

I. Less what Medicare owes This is the dollar amount shown in “G.”

J. Net responsibility J = H - I.

Calculations for Completing

“Maximum You May Be Billed”

Column - Assigned Claims

Instructions/Source of Dollar Amount for

Calculations

K. Plus charges that Medicare does

not cover

This step represents charges that Medicare does not

cover and the beneficiary is liable.

Charges for which the beneficiary is determined to

have no liability should be excluded from this step.

Exclude dollar amounts for denials or reductions

such as:

• Services determined not to be medically

necessary and the beneficiary was not

informed in writing, in advance, that the

services may not be paid;

• The provider failed to tell the beneficiary if

the diagnostic test was purchased, from

whom it was purchased, the acquisition cost

of the purchased test, or the cost of the

professional component;

• Missing information such as ICD-9, UPIN,

etc.;

• The charge was denied as a duplicate;

• The service was part of a major surgery, test

panel or bundled code; or

• The service was denied/reduced because of

utilization reasons.

L. Beneficiary responsibility L = J + K Display this amount in the “Maximum

You May Be Billed” column for service lines on

assigned claims. Claims submitted with a

beneficiary paid amount require additional

calculations. See Subsection F below.

“Maximum You May Be Billed” Column - Unassigned Claims

The following chart is used to display the “Maximum You May Be Billed” amounts for

each service line on unassigned claims other than those that have a Medicare secondary

payment less than the amount Medicare would have paid if it were primary.

Calculations for Completing

“Maximum You May Be Billed”

Column - Unassigned Claims

Instructions/Source of Dollar Amount for

Calculations

A. Of the total charges The billed amount for the service line.

B. Approved amount The service line approved amount.

C. Amount exceeding limiting charge For unassigned services subject to the limiting

charge, this is the actual dollar amount by which

the limiting charge is exceeded. If the amount is

less than $1.00, C = 0. Do not include services

being reduced or denied for any of the conditions

under E.

D. Net Responsibility D = A - C.

Calculations for Completing

“Maximum You May Be Billed”

Column - Unassigned Claims

Instructions/Source of Dollar Amount for

Calculations

E. Less charges beneficiary is not

liable for

This step represents charges that were denied or

reduced and the beneficiary is not liable for the

denial or the reduction. Include dollar amounts for

denials or reductions such as:

• Services determined not to be medically

necessary, and the beneficiary was not

informed in writing in advance that the

services may not be paid;

• The provider failed to tell the beneficiary if

the diagnostic test was purchased, from

whom it was purchased, the acquisition

cost of the purchased test, or the cost of the

professional component;

• The claim did not have an ICD-9 code

listed, or the service was not linked to an

ICD-9 code;

• The charge was denied as a duplicate;

• The service was part of a major surgery, test

panel, or bundled code;

• The service was denied because of

utilization reasons; or

• Rebundling of services when the minor

service was paid before the major service

was billed. Use the amount allowed for the

minor service in step E, or Reductions due

to coverage.

F. Beneficiary Responsibility F = D - E Display this amount in the “Maximum

You May Be Billed” column for unassigned

claims. Claims submitted with a beneficiary paid

require additional calculations, therefore, proceed

to §10.3.10.2(f).

Display of the “Medicare Paid You” and “Medicare Paid Provider” Columns for

MSP Claims

Medicare secondary payment is computed by the MSP pay module based on claim totals.

However, the MSN displays calculations by service line. In order to complete the

“Medicare Paid Provider” and “Medicare Paid You” columns for MSP claims, the MAC

must apportion the total amount Medicare paid on the claim among the approved service

lines.

For the first approved service line, show the lesser of 80 percent (50 percent if the

outpatient psychiatric limit applies, or 100 percent for services paid at 100 percent) of the

Medicare approved amount, less any deductible applied, or the amount Medicare actually

paid on the claim.

For the second approved service line, show the lesser of:

• 80 percent (50 percent if the outpatient psychiatric limit applies, or 100 percent

for services paid at 100 percent) of the Medicare approved amount less any

deductible applied, or

• The actual amount Medicare paid on the claim minus the amount shown under

Medicare Paid for the prior approved service lines.

Continue on following lines in this manner until the entire Medicare secondary payment

for the claim has been exhausted.

Display of the “Maximum You May Be Billed” Column for MSP Claims

1. Assigned Claims

If the Medicare secondary payment plus the amount the primary insurer paid equals or

exceeds the Medicare approved amount, display “$0.00” in the “Maximum You May Be

Billed” column for each approved service line.

If the Medicare secondary payment plus the amount the primary insurer paid is less than

the Medicare approved amount, A/B MACs (B)/DME MACs calculate the total

beneficiary responsibility for approved services by subtracting the sum of the primary

insurer’s payment and the Medicare secondary payment from the total Medicare

approved amount for those services.

Amount Medicare Approved on Claim - (Primary Insurer Payment + Medicare Payment)

= Total Beneficiary Responsibility

For the first approved service line, A/B MACs (B)/DME MACs show the lesser of 20

percent (50 percent if the outpatient psychiatric limit applies) of the Medicare approved

amount or the beneficiary’s total responsibility for all approved services on the claim.

For the second approved service line, A/B MACs (B)/DME MACs show the lesser of 20

percent (50 percent if the outpatient psychiatric limit applies) of the approved amount for

the line or the beneficiary’s total responsibility for approved services minus the amount

shown for the prior approved service line.

Continue in this manner until the entire beneficiary responsibility has been exhausted.

Enter $0.00 in the “Maximum You May Be Billed” column for denied services for which

the beneficiary is not liable.

Enter the amount charged in the “Maximum You May Be Billed” column for denied

services for which the beneficiary is responsible.

NOTE: If there is an “obligated to accept” amount submitted on the claim, and that

amount is greater than zero but less than the Medicare approved amount, use the

“obligated to accept” amount in place of the Medicare approved amount when

performing the above calculations.

2. Unassigned Claims

The amount in the “Maximum You May Be Billed” column for approved services is the

amount charged or the limiting charge, whichever is less.

NOTE: If there is an “obligated to accept” amount submitted on the claim and that

amount is greater than zero but less than the amount charged or the limiting charge, use

the “obligated to accept” amount when performing this calculation.

Enter $0.00 in the “Maximum You May Be Billed” column for denied services for which

the beneficiary is not liable. Enter the amount charged in the “Maximum You May Be

Billed” column for denied services for which the beneficiary is responsible.

Display of the “Maximum You May Be Billed” Column for Claims Submitted with a

Beneficiary Paid Amount

1. Assigned Claims

If an assigned claim is submitted with a beneficiary paid amount, the amount(s) in the

“Maximum You May Be Billed” column will be reduced by the amount the beneficiary

prepaid the provider.

Apply the beneficiary paid amount as indicated below to each service line sequentially

until the beneficiary paid amount is reduced to zero or all service lines have been

considered.

Step 1: Subtract the amount of the beneficiary check, if any, from the patient amount

submitted on the claim. Use the difference as the new patient paid amount. If there was

no check to the beneficiary, use the patient paid amount submitted on the claim for

remaining steps.

Step 2: If the new patient paid amount is less than or equal to the amount calculated for

the “Maximum You May Be Billed” column, subtract the new patient paid amount from

the original “Maximum You May Be Billed” amount, and display the difference in the

“Maximum You May Be Billed” column for that service line.

Step 3: If the new patient paid amount is greater than the amount calculated for the

“Maximum You May Be Billed” column, subtract the original “Maximum You May Be

Billed” amount for the first service line from the new patient paid amount, and show zero

in the “Maximum You May Be Billed” column.

Repeat these steps with any remaining beneficiary paid amounts.

2. Unassigned Claims

If an unassigned claim is submitted with a beneficiary paid amount, the amount(s) in the

“Maximum You May Be Billed” column will be reduced by the amount the beneficiary

prepaid the provider. Apply the beneficiary paid amount for each service line

sequentially until the beneficiary paid amount is reduced to zero or all service lines have

been considered.

Step 1: If the amount the beneficiary paid is less than or equal to the amount calculated

for the “Maximum You May Be Billed” column, subtract the amount the beneficiary paid

from that amount, and display the difference in the “Maximum You May Be Billed”

column for that service line.

Step 2: If the amount the beneficiary paid amount is less than or equal to the amount

calculated for the “Maximum You May Be Billed” column, subtract the “Maximum You

May Be Billed” amount for the first service line from the amount the beneficiary paid,

and show zero in the “Maximum You May Be Billed” column for that service line.

Repeat these steps with any remaining beneficiary paid amounts.

If there is a balance after all service lines have been considered on unassigned claims,

that amount is what the beneficiary overpaid the provider. A/B MACs (B)/DME MACs

have the option of printing claim level message 34.3 in this situation if their system

permits.

Print message 34.2 on assigned claims when the beneficiary paid amount does not exceed

coinsurance and deductible and for all unassigned claims submitted with a beneficiary

paid amount.

Display of the “Medicare Paid You” Column for Unassigned Claims with a Previous

Overpayment Amount Withheld

The “Medicare Paid You” column should show the actual amount that would have been

paid if no previous overpayment had been withheld from the check issued to the

beneficiary. Use message 32.1 to show the amount by which the check is reduced to

recover an overpayment from the beneficiary.

Display of the “Medicare Paid You” Column for Assigned and Unassigned

Adjustment Claims

Show all service lines for the adjustment claim. The “Medicare Approved” and

“Medicare Paid” columns will display the same allowed and paid amounts as were shown

on the original MSN for service lines that are not subject to adjustment.

The “Medicare Approved” and “Medicare Paid” columns for adjusted service lines will

show the total combined amount approved and paid for both the original and adjusted

claim. Likewise, “Claim Total” lines for adjusted claims will reflect the combined total

amounts approved and paid for the original and adjusted claim.

The “Maximum You May Be Billed” column will show the beneficiary’s total

responsibility. The MAC uses message 31.13 on all adjustments where a partial payment

was previously made.

C. Suppression of Claims From MSNs

A/B MACs (A), (B), (HHH), and DME MACs have the option to suppress claims from

MSNs when all of the following three conditions apply:

• The claim is a coordination of benefits (crossover) claim for Medicaid;

• There is no resulting beneficiary liability; and

• Suppression of the MSN is cost effective.

In addition, if the MAC’s system denies an exact duplicate of a claim, the MAC may

suppress the claim from the MSN. An exact duplicate claim is one in which every field

of the duplicate claim matches every field of the original claim.

Since appeal rights are not affected, do not display claims on MSNs for services paid at

100 percent of the fee schedule where no deductible or coinsurance is applied, e.g.,

diagnostic laboratory services. If other services on that claim will appear on the MSN,

include all services being paid.

Upon the beneficiary’s request, create and send MSNs for previously suppressed claims.

Do not suppress claims from MSNs when any of the following conditions apply:

• One or more services were denied because one of the exclusions from Medicare

coverage in 1862(a)(1) of the Social Security Act (the Act) applies;

• The claim is denied as not filed within the time limits required by 1842(b)(3) of

the Act;

• The claim is denied in full or in part because the beneficiary was not enrolled in

Part A or B of Medicare when the services in question were provided; or

• An initial determination is made on a claim not later than the 45-day period

beginning on the date the A/B MAC (A), (B), (HHH), or DME MAC receives a

claim.