CMS Pub. 100-05, ch. 5, § 30.5.2

Coinsurance Provision in Policy

(Rev. 11550; Issued: 08 -12-22; Effective: 10 -13-22; Implementation:10 -13-22)

In a number of States, no-fault insurers may reduce no-fault insurance benefits by deductible or

coinsurance amounts, or may offer the option for such a reduction. If such contract provisions apply

to all policyholders, Medicare pays benefits with respect to otherwise Medicare-covered expenses

that are not reimbursable under such a no-fault contract. Therefore, if a no-fault insurer has been

billed and has made no payment

because of a deductible or coinsurance, or only a partial payment (e.g., the insurance deductible has

been bridged), Medicare may pay but, before payment is made. The CARCs are utilized to determine

why the claim was not paid by the no-fault insurer and whether a Medicare payment is warranted.

For paper claims an NGHP EOB is utilized showing the status of the no-fault insurance deductible

after taking into account the expenses for which Medicare is being billed.

EXAMPLE 1:

A beneficiary receives physician services covered by no-fault insurance. Total charges are $200.

The no-fault insurer is billed but makes no payment because of a $1000 deductible in the policy.

The provider on behalf of the beneficiary submits a paper claim for $200 to Medicare along with a

copy of explanation of benefits from the no-fault insurer. Medicare can pay benefits on this claim.

EXAMPLE 2:

Beneficiary's operation is covered by no-fault insurance, which allows physician's full charges of

$1640, but pays only $756 because it reduces payment by an $800 unmet deductible under the no-fault policy, as well as by $84 coinsurance. The physician bills Medicare for $884. If the physician

did not submit a copy of the no-fault insurer's explanation of benefits, or the CARC does not

identify the adjustment amounts, deny the claim if there is not enough information to process the

MSP claim. The Medicare reasonable charge for the services is $1200. The beneficiary has not

previously met the Medicare deductible for that year. Calculate the payment as noted below.

1. The actual charge by the supplier (or the amount the supplier is obligated to accept as payment

in full if that is less than the charges) minus the amount paid by the primary payer.

$1640 - $756 = $884

2. The amount that Medicare would pay if the services were not covered by a primary payer.

$1200 reasonable charge - $233.00 deductible = $967 x 80% = $773.60

3. The higher of the Medicare fee schedule, Medicare reasonable charge, or other amount which

would be payable under Medicare (without regard to any applicable Medicare deductible or

coinsurance amounts) or the primary payer’s allowable charge (without regard to any

deductible or co-insurance imposed by the policy or plan) minus the amount actually paid by

the primary payer.

$1640 – 756 = $884

Medicare pays the lowest of the 3 calculations. Medicare pays $773.60.