CMS explains January Medicare Secondary Payer adjustment-code processing

What happened

MLN Matters article MM14553 describes Medicare Secondary Payer claims-processing changes under CR14553 and transmittal R13932OTN. The instruction is effective January 1, 2027, with implementation January 4. It directs Part A Medicare Administrative Contractors and their shared claims systems on which claim adjustment reason codes can process automatically and which require suspension for manual review or denial. These are processing rules for claims in which Medicare is secondary. They do not mean that every adjustment code follows the same automated route or that a returned claim has necessarily reached a final payment determination.

The underlying data comes from the primary payer’s payment information. CMS instructs providers to take the claim adjustment segment values from the primary payer’s 835 remittance and report them unchanged on the institutional 837 submitted to Medicare for secondary payment. Contractors use those adjustment amounts and reason codes to calculate the Medicare payment. If Medicare cannot process a claim, the contractor may return it with a reason on the remittance advice, allowing correction and, in many cases, resubmission to Medicare or the primary payer. The operational work is therefore to preserve the original adjustment data and route returned claims for appropriate correction, rather than inventing replacement adjustment amounts to force processing.

Why it matters

Claim adjustments from the primary payer must flow unchanged from the 835 into the secondary 837. Returned claims may need correction and resubmission.

Sources

• MM14553, Medicare Secondary Payer claim processingOfficial · CMS · 2026-09-04 · Source review 2026-10-11