Medicare Secondary Payer Act (MSP Act): Medicare as secondary payer, US may bring action against any primary payer, Medicare secondary to workers’ compensation and liability insurance.

Applicability of the Medicare Secondary Payer Act

There are two general situations where the MSP Act applies.
The first situation is when an individual suffers injuries from a
third party requiring medical care that is paid for by Medicare
and then is subsequently compensated for those injuries by a
responsible party. The second situation is when an individual
suffers injuries that will need future medical care covered by
Medicare and a responsible party agrees to pay or is ordered
to pay for such future medical care and treatment that would
otherwise be covered by Medicare. Both of these are the events
that trigger applicability of the MSP Act.

Medicare is Secondary Payer When Payment Expected to be
Made by Responsible Party

Medicare is a secondary payer whenever there is another source or party responsible for payment of medical expenses associated with a claim, and the law on this is clear. “Payment may not be made with respect to any item or service to the extent that payment has been made, or can reasonably be expected to be made, under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.” 42 USC Section 1395y(b)(2)(A).

The US May Bring Action Against Any Primary Payer

In order to recover payment for such an item or service, “the United States may bring an action against any entity which is required or responsible (directly, as third-party administrator, or otherwise) to make payment with respect to such item or service (or any portion thereof) under a primary plan (and may, in accordance with paragraph (3)(A) collect double damages against that entity), or against any other entity (including any attorney, physician or provider) that has received payment from that entity with respect to the item or service.” 42 USC Section 1395y(b)(2)(B).

Medicare is Secondary to Workers’ Compensation and Liability Insurance

“Medicare benefits are secondary to benefits payable by a third party payer even if state law or the third party payer states that its benefits are secondary to Medicare benefits or otherwise limits its payments to Medicare beneficiaries.” 42 CFR Section 411.32. In other words, “Medicare benefits are secondary to workers’ compensation and liability insurance, payments based on legal liability for injury or illness or damage to property, including self insured plans, automobile liability insurance, uninsured motorist insurance, underinsured motorist insurance, homeowners’ liability insurance, malpractice insurance, product liability insurance, general casualty insurance, and no-fault insurance.” 42 CFR Section 411.50.