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Billing Medicare secondary when primary insurance is out-of-network

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Hello! We've found ourselves in a tricky situation for one of our long-time patients. Here are the details.

Our patient has BCBS HMO as his primary insurer; Medicare is secondary.
Our provider is out-of-network with BCBS HMO; provider is in-network with Medicare.
The patient's BCBS HMO policy has no out-of-network benefits.

It's been a long, hard struggle with both insurance companies, but the question I have now is, should Medicare cover services rendered under these circumstances?

I have gotten mixed results from our MAC as well as the independent contractor (C2C Innovative Solutions) that handles second level appeals. Medicare has covered some visits and denied others. The independent contractor has given both favorable and unfavorable second level appeals, each citing various CMS Publications.

As of this year, our provider has nipped this issue in the bud by joining the BCBS HMO network so that he doesn't have to refer the patient out. But we're really hoping to get paid for the work that he did last year. Any insights would be greatly appreciated! Thank you!

We have had similar situations and Medicare has paid.  Medicare should pay if the provider is enrolled in Medicare.  They would consider the primary (BCBS) and see that the primary did not allow or pay anything because the provider is out of network and the patient has no out of network benefits.  Since the patient is responsible for the entire thing Medicare should process and apply their allowed amount, and deductible, etc.  The patient would owe any deductible and the 20% coinsurance. 

The issue may be in the denial from the primary.  It may indicate something such as "no authorization" or some other reason.  It may not specifically spell out "Out of network". 

Is the denial from BCBS being sent to Medicare?  What does the denial indicate?

Well, this whole affair was a bit of a mess. BCBS initally gave us incorrect denials (saying that no authorization had been obtained); I unwittingly filed these with Medicare and got denials. When I got BCBS to correct the denial to "no coverage for services performed by an out of network provider", Medicare has paid for some and denied others (with code 22-This care may be covered by another payer per coordination of benefits).

The claims are not being crossed over from BCBS to Medicare; I submit paper claims to Medicare with the BCBS EOBs. Medicare does know that it is secondary; however, in this case BCBS is dba LA Health Indemnity. Medicare has the patient's primary as LA Health Indemnity. Of course, my paper EOBs from BCBS dba LA Health Indemnity do not make any mention of LA Health Indemnity. Initially, we thought this might be why Medicare was denying. I have not entirely ruled this out, but considering all of the arguments from the Novitas Solutions appeals department and the QIC's appeals, I think something else is going on.

The QIC has repeatedly cited CMS Manual Publication 100-05, Chapter 05, Section 40.1.2-40.1.2:

"Services by Outside Sources Not Covered (Rev. 1, 10-01-03)
Where Medicare is secondary payer for a person enrolled in an employer sponsored managed care health plan (e.g., Health Maintenance Organization (HMO)/Competitive Medicare Plan (CMP)), Medicare does not pay for services obtained from a source outside the employer-sponsored managed care health plan if:
• The same type of services could have been obtained as covered services through, or paid for by, the managed care employer health plan, or
• The particular services can be paid for by the plan (e.g., emergency or urgently needed services).
Medicare benefits are precluded under these circumstances even if the individual receives services outside of the managed care health plan's service area, e.g., while the individual is away from home.
At the time of admission, providers are to ask beneficiaries that are enrolled in GHPs whether the plan is a managed care health plan. If the individual is enrolled in such a plan, Medicare is not billed. (However, a no-payment bill is required to be sent to intermediaries per Chapter 3, §40.1.)
NOTE: This restriction only affects Medicare beneficiaries enrolled in employer sponsored managed care health plans that either do not have a Medicare contract or have a Medicare cost contract. Beneficiaries in HMO/CMPs that have Medicare risk contracts are not affected because beneficiaries enrolled in a risk-basis HMO/CMP are locked into the plan in all instances except for emergency or urgently needed services."

BUT, the QIC, in one favorable decision, cited the exception to this rule:
" - Exception (Rev. 1, 10-01-03)
A3-3490.16.B, A3-3491.17.B, B3-3329.4.B, HO-263.17, HO-264.17, SNF-335.17, SNF-336.17, HH-252.17, HH-253.16, B3-3329.4B
If a beneficiary obtains services from a source outside the managed care GHP, and has not been notified in writing of this special rule, Medicare pays, provided the plan will not pay for legitimate reasons. In general, it is assumed that written notification has not been given in the absence of evidence to the contrary, e.g., the contractor’s internal system indicates that the beneficiary is a working aged, ESRD, or disabled beneficiary who belongs to a managed care GHP and that the beneficiary has been notified that Medicare will not pay. Where payment is made for services from a source outside the managed care health plan, the Medicare Benefits Notice (Form CMS-1533), or the MSN, where applicable, states the following:
Our records show that you are a member of an employer sponsored managed care health plan. Since Medicare is secondary payer for you, services from sources outside your health plan are not covered. However, since you were not previously notified of this, we will pay this time. In the future, payment will not be made for non-plan services that could have been obtained from or through the prepaid health plan."

In short, this is a hot mess and our doctor is probably not going to be paid for a lot of his work. Thanks for taking the time to respond, Michele!

Do you have the ability to submit electronically?  I would submit to Medicare electronically and indicate that the services were denied due to out of network.  WHen they are denied with the code 22 it simply means that the EOB wasn't attached (at least not when they processed!  Common for them to separate the eob from the claim and then deny for no eob!).  Since they did pay some, it sounds like it may be covered. 

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