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.

First, section 1395y(b)(2)(A)(i) prohibits Medicare from making payments for covered medical items and services if payment has already been made or can reasonably be expected to be made by another source with primary payer responsibility. Medicare is directed to not pay benefits when “payment has been made or can reasonably be expected to be made under . . . an automobile or liability insurance policy or plan (including self insured plan) or under no fault insurance.” 42 U.S.C. § 1395y(b)(2)(A)(ii). “A ‘primary plan’ is ‘a group health plan or large group health plan, . . . and a workers’ compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan), or no-fault insurance . . .. An entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or part.” 42 U.S.C. § 1395y(b)(2)(A).

Second, any Medicare payment to which subparagraph A, above, applies is conditioned on reimbursement when notice or other information demonstrates that the primary plan has or had a responsibility to make payment with respect to a service or item. This mechanism permits a beneficiary to receive needed medical care, while ensuring that the Medicare Trust Funds will be reimbursed when payment becomes available from another source with primary payment responsibility. (Ds’ MSJ at 5) (citation omitted). “Both the Medicare Payer statutory provisions and the applicable regulations require a beneficiary to reimburse Medicare within 60 days of receiving payment from a primary plan.” Id. (citing 42 U.S.C. § 1395y(b)(2)(B)(ii); 42 C.F.R. § 411.24(h)). Plaintiffs challenge whether this provision authorizes the Secretary to require a beneficiary to reimburse Medicare within 60 days of receiving payment from a primary plan, when the reimbursement claim is disputed by the beneficiary.

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.