What is MSP in Medical Billing

Medicare started back in 1966, this federal medical health insurance used to be the primary payment provider for all medical claims submitted by the patients. Primary payer means that Medicare had to step in first to cover the costs of medical bills. 

However, later in 1980, Congress approved an amendment bill that established Medicare’s status as an MSP for medical billing. The aim was to redirect the expense of Medical Health claims to private insurance companies to cover the cost. What is MSP in medical billing? Let us find out. 

MSP in Medical Billing

MSP in medical billing is an acronym for Medicare Secondary Payer. This is a common term that indicates that when a policyholder files a claim, Medicare will not have to pay your claim amount first. Instead your private insurance company will have to bear the cost. 

This is where the term "coordination of benefits" will come into play. This term actually determines which party will make the payment first on the medical health claim filed by the patient/policyholder. As Medicare does not make the first payment, a third party such as a private medical health insurance provider will make the payment. 

Let us suppose the third-party insurance provider cannot pay the entire claim's amount. Only then Medicare is going to cover the remaining amount. 

The bill-making pertaining to MSP since its inception has helped protect Medicare's Funds. This is because Medicare as a second Payer makes sure that it does not pay for any health services and bills already covered by any of patient’s health insurance service provider/s. 

If a private insurance company covers certain treatments, they must be the first party to step in to bear all the costs pertaining your treatment. However, MSP doesn’t apply to people who do not have any other insurance but Medicare as their primary insurer.

Suppose you only have Medicare as your only healthcare insurance coverage. In that case, Medicare will step in to cover your cost first because you have no other coverage available. As per terms mentioned in Medicare's policy, all healthcare service providers sending bills to Medicare for all services provided to the patient must first discuss it with beneficiaries to find out whether Medicare is an MSP Or a primary payer. 

How to Ensure You Bill, the Right Payer

Whether you are a medical healthcare service provider or a NEMT company, you must implement good medical billing software to maintain detailed medical records on all your patients. This will help you determine the primary and secondary cost bearer. This will save you time and resources as you will avoid wrongly billing Medicare as a primary insurer when it is an MSP. 

BillPro is a Leading Billing Software

If you are looking for medical billing software, we can help. BillPro is medical billing software that can bill various payers across various states. Our main focus is billing Medicaid in NYS, but we have solution for other states and payers as well. BillPro is easy, efficient, and has a track record of fewer denied claims. Please speak to our team or try NY BillPro today!