CMS Pub. 100-05, ch. 2, § 80.3.1

The nondifferentiation provision does not prohibit a plan from paying benefits

secondary to Medicare after the coordination period. However, a plan may not

otherwise differentiate, as described in §70.2 and §70.3, in the benefits it provides.

EXAMPLE 1:

Mr. Smith works for employer A and he and his wife are covered through employer A's

GHP (Plan A). Neither is eligible for Medicare nor has ESRD. Mrs. Smith works for

employer B and is also covered by employer B's plan (Plan B). Plan A is more

comprehensive than Plan B and covers certain items and services, such as prescription

drugs, which Plan B does not cover. If Mrs. Smith obtains a medical service, Plan B pays

primary and Plan A pays secondary. That is, Plan A covers Plan B copayment amounts

and items and services that Plan A covers but that Plan B does not.

Mr. Jones also works for employer A and he and his wife are covered by Plan A. Mrs.

Jones does not have other GHP coverage. Mrs. Jones develops ESRD and becomes

entitled to Medicare on that basis. Plan A pays primary to Medicare during the first 30

months of Medicare entitlement based on ESRD. When Medicare becomes the primary

payer, the plan converts Mrs. Jones' coverage to a Medicare supplemental policy. That

policy pays Medicare's deductible and coinsurance amounts but does not pay for items

and services not covered by Medicare which Plan A would have covered. That

conversion is impermissible because the plan is providing a lower level of coverage for

Mrs. Jones who has ESRD than it provides for Mrs. Smith who does not. In other words,

if Plan A pays secondary to primary payers other than Medicare, it must provide the same

level of secondary benefits when Medicare is primary in order to comply with the

nondifferentiation provision.