Number: RL33587
Title: Medicare Secondary Payer: Coordination of Benefits
Authors: Hinda Chaikind, Domestic Social Policy Division 
Abstract: Generally, Medicare is the "primary payer" - that is, it pays health claims first, and if a beneficiary has other insurance, that insurance may fill in all or some of Medicare's gaps. However, §1862(b) of the Social Security Act authorizes the Medicare Secondary Payer (MSP) program, which identifies specific conditions under which another party pays first and Medicare is only responsible for qualified secondary payments, thereby reducing expenditures under the Medicare program. The law prohibits Medicare payments for any item or service when payment has been made or can reasonably be expected to be made by a third-party payer. Medicare is the secondary payer to insurance plans and programs, under certain conditions, for beneficiaries covered through (1) a group health plan based on either their own or a spouse's current employment; (2) auto and other liability insurance; (3) no-fault liability insurance; and (4) workers' compensation situations, including the Black Lung program. Additionally, under §1862(a) of the Social Security Act, items and services paid for directly or indirectly by a government entity, subject to certain limitations, are excluded from Medicare coverage. This includes the U.S. Department of Veterans Affairs, among others. As a result, Medicare also coordinates benefits for cases involving the Veterans Health Administration. The circumstances detailing when Medicare is primary or secondary are discussed below. In some circumstances, Medicare may make a conditional payment; however, this payment is subject to repayment.
Pages: 15
Date: July 10, 2008