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).
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