Medicare Crossover is a streamlined process designed to manage costs for individuals who have both Medicare and a secondary insurance. It is the automated transmission of a claim from Medicare, the primary payer, to a secondary payer, such as Medicaid or a Medigap policy, after Medicare has paid its portion of the bill. This mechanism ensures that the remaining balance, which typically includes patient cost-sharing like deductibles and co-insurance, is automatically forwarded for potential coverage. This coordination is important for millions of Americans who qualify for both Medicare and Medicaid, often referred to as “dual eligibles.” The crossover process reduces the administrative burden on providers and protects beneficiaries from unexpected bills.
The Dual Eligibility Requirement
The efficacy of the Medicare Crossover process depends on a beneficiary’s enrollment status, specifically whether they qualify as “dual eligible” through a state’s Medicaid program. Medicaid offers specific assistance, known as Medicare Savings Programs (MSPs), which serve as the foundation for the crossover of costs. These programs have strict limits on both income and countable resources, such as savings and investments, though the primary residence and certain personal items are not counted.
The most comprehensive of these is the Qualified Medicare Beneficiary (QMB) program, which covers individuals whose income is at or below 100% of the Federal Poverty Level. QMB status is significant for the crossover, as it ensures coverage of Medicare Part A and Part B premiums, as well as all deductibles, co-insurance, and co-payments for Medicare-covered services.
The Specified Low-Income Medicare Beneficiary (SLMB) program is for those with slightly higher incomes, covering only the Medicare Part B premium. The Qualifying Individual (QI) program assists individuals with incomes above the SLMB limits but below a higher cap, and it also covers only the Part B premium. Since SLMB and QI status do not cover deductibles and co-insurance, the crossover mechanism is less comprehensive than for QMB beneficiaries.
How the Crossover Payment Mechanism Works
The Medicare Crossover process is an electronic, sequential workflow established through a national system called the Coordination of Benefits Agreement (COBA). The process begins when a healthcare provider submits a claim for services directly to Medicare, which acts as the primary insurer. Medicare processes the claim according to its rules, determines the approved amount, and pays its portion, typically 80% of the Medicare-approved amount for Part B services.
Once Medicare completes its payment, the claim information, including the remaining patient responsibility, is automatically transferred electronically to the secondary payer. For dual eligibles, this transfer is routed to the state Medicaid agency. This automated transmission eliminates the need for the provider to manually submit a second claim to Medicaid, simplifying the billing cycle.
Medicaid then reviews the crossed-over claim, acting as the payer of last resort, meaning it only pays after all other insurance has paid its share. Medicaid reviews the remaining balance, such as the 20% co-insurance, and pays the amount up to its own state-specific allowable rate for that service. If the Medicaid-allowable rate is lower than the remaining balance, the provider must accept the combined payments as payment in full.
Eliminating Out-of-Pocket Costs
For beneficiaries with QMB status, the Medicare Crossover acts as a financial safeguard, eliminating out-of-pocket expenses for covered medical services. A typical Medicare beneficiary is responsible for a Part B premium, an annual deductible, and a 20% co-insurance for most Part B services. The crossover mechanism ensures that the state Medicaid program assumes responsibility for these costs.
The QMB program covers the monthly Part B premium, providing significant savings. When a QMB beneficiary receives a Part B service, such as a doctor visit or outpatient procedure, Medicare pays 80% of the cost. The remaining 20% co-insurance, which a standard Medicare beneficiary would normally pay, is automatically crossed over to Medicaid.
Medicaid then pays that remaining co-insurance amount, up to the Medicaid-allowable rate, leaving the beneficiary with no remaining balance. This financial relief also extends to the annual Part B deductible, which is covered under QMB status through the crossover. This provision ensures that low-income dual eligibles can access necessary healthcare without the financial burden of cost-sharing.
Billing and Provider Considerations
For healthcare providers, the Medicare Crossover process simplifies billing by automating the claim submission to the secondary payer. Participation in the crossover system comes with specific legal obligations, particularly concerning QMB beneficiaries. Federal law strictly prohibits providers who accept Medicare and Medicaid from billing a QMB patient for Medicare cost-sharing amounts, including deductibles and co-insurance.
Providers must accept the combined payment from Medicare and Medicaid as payment in full for covered services. This means the provider must write off any difference between the amount billed and the total amount paid by the two government programs. If a QMB beneficiary receives a bill for a covered service, they should contact the provider immediately, as the bill is prohibited under federal law.
To ensure the crossover is successful, providers must accurately verify the patient’s dual eligibility status and ensure their billing systems are correctly set up to transmit claims via the electronic COBA process. Any mismatch in patient information or incorrect indication of secondary coverage can cause the automatic crossover to fail. This failure requires the provider to manually submit the claim to Medicaid.