Guide

Duals: lesser-of payments and the write-off that follows

Summary

For a patient with both Medicare and Medicaid, Medicare pays first, the claim crosses over to the state Medicaid program, and Medicaid — as the payer of last resort — pays the Medicare cost-sharing only up to what its own rules allow. Because the state's allowed amount is often at or below what Medicare already paid, the secondary payment is frequently small or zero, and the leftover balance becomes a contractual write-off, never a bill to the patient.

By Gale Editorial · Updated 2026-07-26. Every figure cited to a dated source. How we write.

How a dual claim settles, start to finish

For a dual-eligible patient — one covered by both Medicare and Medicaid — Medicare pays first, the claim crosses over to the state Medicaid program, and Medicaid, as the payer of last resort, pays the Medicare cost-sharing only up to what its own rules allow 1Ref 1Centers for Medicare & Medicaid Services (2026).Coordination of Benefits and Recovery Overview.That Medicare pays primary and Medicaid is the payer of last resort, that a dual claim crosses over to the state program through Medicare's Coordination of Benefits Contractor, and that a dual-eligible patient's Medicare cost-sharing is coordinated to the state rather than billed to the patient.. Because the state's allowed amount for a service is often at or below what Medicare already paid, the secondary payment is frequently small or zero, and the deductible or coinsurance Medicare left becomes a contractual write-off you absorb.

The part that trips up new billers is the last step. The write-off is not a shortfall you can chase; for a dual-eligible patient, the unpaid cost-sharing is not the patient's bill. Understanding why means walking the claim through its three stages — the payer order, the crossover, and the lesser-of calculation — and knowing which piece is federal and which your state sets.

Why Medicaid pays last

Medicaid is the payer of last resort by law, which means every other source of coverage pays before it does. For a dual-eligible patient, that puts Medicare first and Medicaid second, and coordination-of-benefits rules fix that order — it is not a choice you or the patient make 1Ref 1Centers for Medicare & Medicaid Services (2026).Coordination of Benefits and Recovery Overview.That Medicare pays primary and Medicaid is the payer of last resort, that a dual claim crosses over to the state program through Medicare's Coordination of Benefits Contractor, and that a dual-eligible patient's Medicare cost-sharing is coordinated to the state rather than billed to the patient.. Medicare adjudicates the claim against its own fee schedule, pays its share, and leaves the ordinary patient cost-sharing; only then does the state program look at what remains.

This ordering is the same coordination-of-benefits logic that governs any secondary payer, applied to the Medicaid case. What makes duals distinctive is not the order but what the secondary payer does with the leftover cost-sharing once it receives the claim — which is where the lesser-of rule and the write-off come in.

The crossover: how the claim reaches Medicaid

Most dual claims reach Medicaid automatically. After Medicare pays, its Coordination of Benefits Contractor forwards the claim to the state Medicaid program when the patient's coordination record is on file, so you often submit one claim to Medicare and the secondary claim crosses over without a second submission 1Ref 1Centers for Medicare & Medicaid Services (2026).Coordination of Benefits and Recovery Overview.That Medicare pays primary and Medicaid is the payer of last resort, that a dual claim crosses over to the state program through Medicare's Coordination of Benefits Contractor, and that a dual-eligible patient's Medicare cost-sharing is coordinated to the state rather than billed to the patient.. The mechanics of how these crossovers are handled are set out in Medicare's claims-processing instructions 2Ref 2Centers for Medicare & Medicaid Services (2026).Internet-Only Manuals (IOMs).That Medicare's Claims Processing Manual is the operative CMS instruction for how crossover claims to a secondary payer are handled., and the Medicare-primary side is adjudicated by your regional MAC, which CMS's directory identifies 3Ref 3Centers for Medicare & Medicaid Services (2026).Medicare Administrative Contractors.That the Medicare-primary claim is processed by the provider's regional MAC and that CMS publishes which MAC serves each jurisdiction..

When a claim does not auto-cross — usually because the patient's Medicaid eligibility or the coordination record is missing or out of date — the secondary claim will not appear at the state on its own. In that case you submit it to the state program directly, with the Medicare remittance attached as proof of the primary payment. It is worth checking that crossover is actually happening for your dual patients rather than assuming it, because a claim that never crossed is a claim that never gets its secondary determination.

Lesser-of, and the write-off that follows

The secondary payment is where duals surprise people. When the state receives the crossover, it does not simply pay the Medicare deductible and coinsurance in full. Most state Medicaid programs pay the cost-sharing only up to their own allowed amount for the service — a lesser-of calculation — and the state's rate is frequently at or below what Medicare already paid 4Ref 4Centers for Medicare & Medicaid Services (2026).Physician Fee Schedule Search.That the Medicare allowed amount for a code and locality — the starting point for the lesser-of comparison against the state's rate — is available in CMS's Physician Fee Schedule search tool.. When it is, the state owes little or nothing, and the balance Medicare left is written off. Start from Medicare's allowed amount, which you can look up for any code and locality 4Ref 4Centers for Medicare & Medicaid Services (2026).Physician Fee Schedule Search.That the Medicare allowed amount for a code and locality — the starting point for the lesser-of comparison against the state's rate — is available in CMS's Physician Fee Schedule search tool.; the difference between it and the state's rate is what disappears.

The exact secondary payment is not a national number. Your state Medicaid program's fee schedule and cost-sharing methodology control it, and they vary from state to state, so the write-off is larger in some places than others. Confirm your own state's rule with its Medicaid agency rather than assuming — but plan on the common outcome, which is that a dual visit collects close to the Medicare payment alone.

What to verify before you see a dual patient

A few checks before the visit keep the economics from surprising you. First, confirm the service is covered by Medicare at all: if Medicare denies it as not covered, the state generally will not pay either, so a coverage determination checked in advance is worth the minute 5Ref 5Centers for Medicare & Medicaid Services (2026).Medicare Coverage Database (MCD) Search.That whether Medicare covers a service is determined by the national or local coverage determination in the Medicare Coverage Database, which a provider confirms before delivering a service that might be denied.. Medicaid coverage and the codes it uses can differ from Medicare's, and behavioral health in particular may run on the state's own H-codes rather than the CPT codes Medicare uses, so confirm both — and whether a service is covered as medicaid telehealth is its own separate check.

Second, verify the patient's Medicaid eligibility and QMB status, and confirm crossover is set up so the secondary claim actually reaches the state 3Ref 3Centers for Medicare & Medicaid Services (2026).Medicare Administrative Contractors.That the Medicare-primary claim is processed by the provider's regional MAC and that CMS publishes which MAC serves each jurisdiction.. Third, go in with the numbers understood: a dual visit often means full Medicare cost-sharing that the state pays little of, so the effective collection is close to the Medicare payment alone. That is a caseload and panel decision to make deliberately, not a remittance to be shocked by.

Common questions

Often not in full. Most state Medicaid programs pay the Medicare cost-sharing only up to their own allowed amount for the service, and that amount is frequently at or below what Medicare already paid. When it is, the state pays little or nothing and the balance becomes a write-off. Your state Medicaid program's methodology sets the exact secondary payment, so confirm it with the state.

No. For a dual-eligible patient the Medicare cost-sharing is coordinated to the state program, not billed to the patient, and balance-billing a Qualified Medicare Beneficiary for deductible or coinsurance is prohibited. The unpaid difference is a contractual write-off. Confirm the patient's dual status before the visit so you are not collecting something you will have to refund.

Usually automatically. After Medicare pays, its Coordination of Benefits Contractor forwards the claim to the state Medicaid program when the crossover is set up in the patient's file. When it does not auto-cross — often because eligibility or the coordination record is missing — you submit to the state directly with the Medicare remittance attached. Your MAC processes the Medicare-primary side.

That is a practice decision, not a billing rule. Many solos do, accepting that the effective collection is often close to the Medicare payment alone. What matters is going in with the economics understood rather than surprised: verify dual status, expect a small or zero secondary payment, and factor it into your caseload and panel planning rather than discovering it on the remittance.

Generally not when Medicare denied it as not covered — if the service is outside Medicare's coverage and outside the state's too, neither pays. Check the coverage determination before delivering the service. Medicaid coverage and the codes it uses can differ from Medicare's, so confirm both, especially for behavioral health, where the state may use its own service codes.

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References

1.Centers for Medicare & Medicaid Services (2026). Coordination of Benefits and Recovery Overview. Centers for Medicare & Medicaid Services (CMS). link ✓That Medicare pays primary and Medicaid is the payer of last resort, that a dual claim crosses over to the state program through Medicare's Coordination of Benefits Contractor, and that a dual-eligible patient's Medicare cost-sharing is coordinated to the state rather than billed to the patient.
2.Centers for Medicare & Medicaid Services (2026). Internet-Only Manuals (IOMs). Centers for Medicare & Medicaid Services (CMS). link ✓That Medicare's Claims Processing Manual is the operative CMS instruction for how crossover claims to a secondary payer are handled.
3.Centers for Medicare & Medicaid Services (2026). Medicare Administrative Contractors. Centers for Medicare & Medicaid Services (CMS). link ✓That the Medicare-primary claim is processed by the provider's regional MAC and that CMS publishes which MAC serves each jurisdiction.
4.Centers for Medicare & Medicaid Services (2026). Physician Fee Schedule Search. Centers for Medicare & Medicaid Services (CMS). link ✓That the Medicare allowed amount for a code and locality — the starting point for the lesser-of comparison against the state's rate — is available in CMS's Physician Fee Schedule search tool.
5.Centers for Medicare & Medicaid Services (2026). Medicare Coverage Database (MCD) Search. Centers for Medicare & Medicaid Services (CMS). link ✓That whether Medicare covers a service is determined by the national or local coverage determination in the Medicare Coverage Database, which a provider confirms before delivering a service that might be denied.

https://www.gale.care/for-providers/mc-medicaid-as-secondary · 5 sources. Competitor details are cited to dated public sources and maintained as they change; figures are estimates, not commitments. Synthetic demonstration.

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