Medicare Secondary Payor Program, Special Rules | San Diego Injury Law Firm

MSP statute: 42 U.S.C. § 1395y(b)(2)

Congress enacted Medicare in 1965, “a federally funded program of health insurance for the aged, disabled and persons suffering from end-stage renal disease.” (Ds’ MSJ at 4.) The Secretary of the Department of Health and Human Services is charged with broad authority to “prescribe such regulations as may be necessary to carry out the administration of the insurance programs under this subchapter.” Id. (citing 42 U.S.C. § 1395hh(a)(1)). She acts through the Administrator of the CMS program.

In 1980, Congress enacted the MSP provisions at issue in this case in an effort to “stem the skyrocketing costs of the Medicare program.” Id. (citation omitted). The MSP provisions “– require liability and no-fault insurance to be the primary payers for services rendered to Medicare beneficiaries, leaving the Medicare program to provide benefits only as a ‘secondary’ payer.” Id. (citation omitted). Two mechanisms protect Medicare funds and ensure that Medicare is the secondary payer.

The Secretary’s regulations provide, “Special rules [] [i]n the case of liability insurance settlements . . . If Medicare is not reimbursed . . ., the primary payer must reimburse Medicare even though it has already reimbursed the beneficiary or other party.” 42 C.F.R. § 411.24(i).

The Ninth Circuit considered the MSP statute, section 1395y(b)(2)(B), in Zinman v. Shalala, 67 F.3d 841 (9th Cir. 1995), which at that time included only five subsections because today’s subsection (i) and (ii) were combined then as subsection (i), and the current subsection (iii) was then subsection (ii) and reached only primary plans,” but subsection (ii) in 1995 provided the United States with a cause of action against an entity receiving payment from a primary plan and by regulation the Secretary defined an entity as “a supplier, beneficiary, attorney, State agency, or private insurer.” 42 C.F.R. § 411.24(g).

Mark C. Blane is a San Diego Auto Accident Attorney, and the managing lawyer of the Law Offices of Mark C. Blane, a San Diego, California Personal Injury Law Firm devoted to representing families of injured persons of automobile accidents. If you or someone you love, has been injured or killed in San Diego County, or Southern California, due to the negligence of another, please order your FREE copy of Mr. Blane's book, The 10 Secrets You Need To Know About Your Injury Case, BEFORE You Call A Lawyer. It is full of helpful information, insights, and secrets that will help you protect your legal rights.  It normally sells for $16.95; however, it is free to all California residents, or those injured in a California accident.