CMS Pub. 100-18, ch. 14, § 50.12

The MMA (section 1860D-2(a)(4) of the Act) extended MSP requirements that are

applicable to MA organizations to include Part D sponsors. Accordingly, Part D sponsors

will have the same responsibilities under MSP requirements as MA plans, including the

collection of mistaken primary payment from insurers, group health plans, employer

sponsors, enrollees, and other entities; and the relationship between MSP rules and State

laws. Part D sponsors must properly apply MSP requirements and regulations to their

payments (e.g., working aged, worker’s compensation (WC)).

Part D sponsors are responsible for adjudicating enrollees’ claims in accordance with MSP

requirements. Under CMS’ adjudication logic for Part D MSP claims, the

provider/pharmacy receives at least the Part D sponsor’s negotiated price for the drug.

Policy regarding Part D payments for MSP claims applies the following order of payment:

primary insurer’s payment, beneficiary cost sharing under the Part D plan, and finally the

Part D plan payment. If the primary payment is greater than or equal to the Part D

negotiated price, no other payment is made. If the primary payment is less than the Part D

negotiated price, t he beneficiary pays the lesser of either: the negotiated price minus the

primary payment; or the beneficiary’s cost sharing liability under the plan. This policy is

supported by Federal regulations at § 411.33(e) and addressed in section 17 of the PDE

Guidance available on the CMS Website . See Appendix B for the specific Web address.

A claim for a drug that should be paid as MSP may not be submitted or paid as a primary

claim by the Medicare plan. Additionally , the Part D sponsor should not require the

pharmacy to submit MSP claims with different 4Rx or unique BIN/PCN information than

would otherwise be used for any other claim submitted to the Medicare Part D benefit.

According to statute, Medicare is the secondary payer in the following situations:

1. Employer group health plans (EGHP) MSP

a. Working Aged Group Health Plan (GHP) – The beneficiary is actively

working and is covered under the employer's GHP or the beneficiary's spouse is

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actively working and the beneficiary is covered under the spouse's employer

GHP (≥20 employees; or another employer in GHP> 20 employees.) (42

U.S.C. §1395(y)(b)).

b. Disability with GHP – The beneficiary is actively working for a large

employer and is covered under the employer's GHP, or a beneficiary’s family

member is actively working for a large employer and the beneficiary is covered

under the family member’s employer GHP (LGHP, ≥100 employees).

c. End Stage Renal Disease (ESRD) GHP – GHP (any size) is primary for the

first 30 months when an individua l also becomes eligible for Medicare Part A due

to ESRD status. After 30 months of Part A eligibility, Medicare becomes primary.

2. Non-GHP MSP

a. Workers’ Compensation (WC) – Beneficiary covered under WC due to job-related illness or injury.

b. Black Lung (BL) – The beneficiary has black lung disease and is covered

under the Federal Black Lung Program.

c. No-Fault/Liability – The beneficiary is covered by no-fault or liability

insurance due to an accident.

However, Part D sponsors should not immediately pay only as a secondary payer. The

action required of the Part D sponsor is dependent on the type of other primary payer as

follows:

1. For the types of Employer Group Health Plans (EGHP) listed above, the Part D

sponsor will always deny primary claims that fall within the EGHP’s applicable

coverage dates and default to MSP. The types, as listed above, include: working

aged GHP, disability GHP, and ESRD GHP for first 30 months of Medicare Part A

eligibility.

2. For WC, BL, and No-Fault or Liability coverage, the sponsor will always make

conditional primary payment unless the sponsor is aware that the enrollee has

WC/BL/No-Fault/Liability coverage and has previously established that a certain

drug is being used exclusively to treat a related injury. For example, when a

beneficiary refills a prescription previously paid for by WC, the Part D sponsor may

deny primary payment and default to MSP.

In all other instances, the Part D sponsor is required to make conditiona l primary payment

then recover any mistaken payments where it should have only paid secondary to

WC/BL/No-Fault/Liability coverage. For example, if a sponsor does not know whether a

given drug for which it is billed is related to the covered injury, the sponsor must pay for the

drug (if it is a covered Part D drug) and later recoup any amounts that the other insurance

should have covered.

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Part D sponsors are responsible for identifying and recovering any Coordination of B enefits

(e.g. where a Part D sponsor paid for a claim and another payer should have paid), MSP-related mistaken payments and submitting associated adjustments to CMS. Recovery of

payments when the sponsor determines no payment at all should have been made or the

amount paid was more than it should have been should be sought from the responsibl e other

party. Sponsors should implement processes to handle payment resolution in these

situations directly with the primary payer or in limited cases with the beneficiary Any

required adjustments to PDE records should be handled in accordance with the J uly 3, 2013

guidance from CMS entitled, “PDE Guidance for Post Point -of-Sale Claims Adjustments.”

This guidance is available on the CMS Website . See Appendix B for the specific Web address.

If the sponsor has established it should pay only secondary for a Part D enrollee and receives

a primary claim, the sponsor should not pay the primary claim. Rather, receipt of the

primary claim should prompt the sponsor to question whether MSP requirements continue to

apply. If MSP is no longer applicable, this information should be reported to the BCRC via

ECRS to update CMS. Additionally, since many primary payers pay claims based on a

specific drug/condition, the Part D plan should not require a different 4Rx for MSP claims

than primary claims.

Similarly, absent information on the COB file that Part D is secondary for a Part D enrollee,

should the sponsor receive a secondary claim, the claim cannot be paid. Instead, the sponsor

should determine if the enrollee has coverage that is primary to Medicare and, if so, report

this information to the BCRC via ECRS to update CMS. If the sponsor has determined that

it is has paid out of order, the sponsor should coordinate the benefits directly with the other

payers without requiring the pharmacy to resubmit the claim or take back funds from the

pharmacy.

The following sections provide clarification regarding a limited number of MSP situations;

however, Part D sponsors are required to apply all MSP requirements, whether or not they

are specifically mentioned here.