Medicare Secondary Payer (MSP) is the general term used when Medicare is not responsible as the source of primary payment. 42 U.S.C. §1395y(b). Medicare benefits are considered secondary to group insurance plans and all other forms of first party insurance. The Medicare statute specifies that Medicare may not make payment if workers compensation, no-fault, or liability insurance is the proper primary payer, but Medicare may make a conditional payment if the first party insurance will not pay or will not pay promptly within 120 days. However, all such payments are conditioned upon reimbursement to Medicare if it is later demonstrated that the first party insurance had or has the primary payment responsibility. 42 C.F.R. §411.24.
The Centers for Medicare and Medicaid Services (CMS) is the agency that administers Medicare, and CMS is given broad recovery rights. CMS may initiate recovery against, “any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.” 42 C.F.R. §411.24(g). If the Medicare beneficiary or any other party receives a payment from the primary source, reimbursement must be made to Medicare within 60 days. 42 C.F.R. §411.24(h).