CMS Pub. 100-05, ch. 5, § 40.8.5

Home Health Part B and Ancillary Services When Part A Benefits are

Exhausted)

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

These provisions apply to outpatient and other Part B services, Home Health Part B and

ancillary services for individuals who have exhausted their Part A benefits.

If payment by the primary payer for Medicare covered services (as determined by the

formula above) equals or exceeds the provider's charges for those services or the current

Medicare gross payment amount (without regard to the deductible or coinsurance) or the

provider accepts, or is obligated to accept, the primary payer's payment as payment in full

and it receives at least this amount and the provider knows the individual has already met

the outpatient deductible, no bill is submitted. However, a bill is submitted where the

deductible may not yet be met. Although Medicare can make no payment, the expenses

can be applied to the beneficiary's deductible. The provider completes the bill according to

the instructions in the Medicare Claims Processing Manual. In addition, the provider

determines the charges as usual, including those covered by the primary payer's payment.

The charges shown in total charges are treated as noncovered for payment purposes.

When the primary payer amount satisfies the claim in full, the A/B MAC (Part A)

does not record the deductible, coinsurance, or charges on the PS&R.

EXAMPLE 1: Primary Payer's Payment Is Less Than Unmet Deductible

A Medicare beneficiary incurred $300 of covered charges for outpatient services. No part

of the beneficiary's $233 Part B deductible had been met. The primary payer paid $200

for Medicare covered services. The current Medicare gross payment (without regard to

the deductible or coinsurance) for these services is $250. As secondary payer, Medicare

pays the lowest of:

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the primary payer's payment: $250 - $200 =

$50;

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the applicable Medicare deductible and

coinsurance: $250 - $233 = $17;

• The provider's charges minus the primary payer's payment: $300 - $200 =

$100; or

• The provider's charges minus the applicable Medicare

deductible and coinsurance: $300 - $233 = $67.

*The coinsurance is calculated as follows:

300 charges - $233 deductible = $67 x 20% = $13.40

Medicare pays $17. The beneficiary’s liability is $46.40 ($33.00 for the

deductible and $13.40 for the coinsurance.

The beneficiary's $233 deductible is satisfied$200 by the primary payer’s

payment and $33.00 by the beneficiary.

(For the PS&R, the A/B MAC (Part A) records $233 deductible and $13.40

coinsurance.)

EXAMPLE 2: Primary Payer's Payment Is More Than Unmet Deductible

Same facts as in Example 1 except the primary payer's payment for Medicare covered

services is $250:

As secondary payer, Medicare pays the lowest of:

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the primary payer's payment: $250 - $250 = $0;

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the applicable Medicare deductible and

coinsurance: $250 - $233 - $13.40 = $3.60;

• The provider's charges minus the primary payer's payment: $300 - $250 =

$50; or

• The provider's charges minus the applicable Medicare

deductible and coinsurance: $300 - $233 - $13.40 = $53.60.

(*See Example 1 for coinsurance calculation.)

Medicare pays $0. The provider may not charge the beneficiary since the deductible and

coinsurance were met by the primary payer's payment. (For the PS&R, the A/B MAC (Part

A) records $233 deductible, $13.40 coinsurance, and $3.60 primary payment which totals

to the primary payer’s payment of $250.

EXAMPLE 3: Primary Payer's Payment Equals Unmet Deductible

Same facts as in Example 1 except the primary payer's payment for Medicare covered

services is $233:

As secondary payer, Medicare pays the lowest of:

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the primary payer's payment: $250 - $233 =

$17;

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the applicable Medicare deductible and

coinsurance: $250 - $233 - $13.40* = $3.60;

• The provider's charges minus the primary payer's payment: $300 - $233 =

$67; or

• The provider's charges minus the applicable Medicare

deductible and coinsurance: $300 - $233 - $13.40 = $53.60

(*See Example 1 for coinsurance calculation.)

Medicare pays $3.60. The provider may bill the beneficiary $13.40 for coinsurance. The

$233 Medicare deductible is satisfied by the primary payer’s payment. For the PS&R,

the Part A/B MAC (Part A) records $233 Medicare deductible and $13.40 coinsurance.

EXAMPLE 4: Deductible Met Prior To Primary Payer's Payment

Same facts as in Example 1, except the deductible has been met.

As secondary payer, Medicare pays the lowest of:

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the primary payer's payment: $250 - $200 =

$50;

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the applicable Medicare coinsurance: $250 -

$60* = $190; $

• The provider's charges minus the primary payer's payment: $300 - $200 =

$100; or

• The provider's charges minus the applicable Medicare coinsurance: $300 -

$60* = $240.

*The coinsurance is calculated as follows:

$300 charges x 20% = $60 coinsurance.

Medicare pays $90. The hospital may not charge the beneficiary since the coinsurance is

paid by the primary payer's payment. (For the PS&R, the A/B MAC (Part A) records

$60 coinsurance and $140 primary payer payment which totals the $200 primary payer

payment.)

EXAMPLE 5: Amount Provider Accepted Less Than Charges

A Medicare beneficiary incurred $450 covered charges for outpatient services, and the

current Medicare gross payment amount (without regard to the deductible and

coinsurance) was $400. The primary payer paid $300 due to a deductible requirement

under its plan. The amount the provider is obligated to accept as payment in full ($350) is

considered by Medicare to be the provider's charges in this situation. As secondary payer,

Medicare pays the lowest of:

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the primary payer's payment: $400 - $300 =

$100;

• The current Medicare gross payment amount (without regard to

deductible or coinsurance) minus the applicable Medicare deductible and

coinsurance: $400 - $233 - $43.40* = $123.60;

• The OTAF amounts minus the primary payer's payment: $350 - $300 = $50;

or

• The OTAF amounts minus the applicable deductible and coinsurance:

$350 - $233 = $117 - $43.40 = $73.60.

*The coinsurance is calculated as follows:

$450 charges - $233 = $217 x 20% = $43.40 coinsurance.

Medicare pays $50. The provider may not charge the beneficiary since the beneficiary's

Medicare deductible and coinsurance were satisfied by the primary payer's payment.

(For the PS&R report, the A/B MAC (Part A) records $233, deductible, $43.40

coinsurance and $23.60 primary payment which equals the $300 primary payment.

EXAMPLE 6: ESRD Services

An ESRD beneficiary received eight dialysis treatments for which a facility charged $500

$160 per treatment for a total of $4,000. No part of the beneficiary's $233 Part B

deductible had been met. The primary payer paid $2,000 for Medicare covered services.

The Medicare payment per dialysis treatment at this facility is $257 or $2,056 for 8

treatments. There is no OTAF identified on the claim. As secondary payer, Medicare

pays the lowest of:

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the primary payer's payment: $2,056 - $2,000 =

$56;

• The current Medicare gross payment amount (without regard to the

deductible or coinsurance) minus the applicable Medicare deductible and

coinsurance: $2,056 - $233 - $364.60* = $1,458.40;

• The provider's charges minus the primary payer's payment: $4,000 -

$2,000 = $2,000; or

• The provider's charges minus the applicable deductible and coinsurance:

$4,000 - $233 - $364.60* = $3,402.40.

*The coinsurance is calculated as follows:

$2,056 Medicare payment - $233 Medicare deductible = $1,823 x 20% = $364.60

coinsurance.

Medicare pays $56. The provider may not charge the beneficiary since the beneficiary's

Medicare deductible and coinsurance were satisfied by the primary payer's payment.

(For the PS&R, the A/B MAC (Part A) records $233 Medicare deductible, $354.60

coinsurance, and $1,412.40 primary payment which totals the $2,000 primary payment.

EXAMPLE 7: ESRD PPS Bundled Payment for Services

An individual received 6 dialysis treatments over a one-month period for which an

independent facility charged $500 per treatment. The facility bills on a monthly basis.

The ESRD PPS payment rate for these services is $257.90 per treatment. The

beneficiary's $233 Part B deductible was previously met. The primary payer paid $200

per visit for a total of $1,200 paid for the 6 Medicare covered services. No OTAF is

identified on the claim. As secondary payer, Medicare pays the lowest of:

• The ESRD PPS Bundled Rate (without regard to the deductible or

coinsurance) minus the primary payer's payment: $1,547.40 - $1,200 = $347.40;

• The ESRD PPS Bundled Rate for the separately billable services (without

regard to the deductible or coinsurance) minus the applicable coinsurance:

$1,547.40 - $309.48* = $1,237.92;

• The provider's charges minus the primary payer's payment: $3,000 -

$1,200 = $1,800; or

• The provider's charges minus the applicable Medicare coinsurance: $3,000

- $309.48* = $2,690.52.

*The coinsurance is calculated as follows:

$1,547.40 (ESRD PPS Payment) x 20% = $309.48 coinsurance.

Medicare pays $347.40. The facility may not charge the beneficiary since the

coinsurance was met by the primary payer's payment. (For the PS&R, the A/B MAC

(Part A) records $309.48 coinsurance and $890.52 primary payment which totals the

$1,200 primary payment.)