CMS Pub. 100-05, ch. 1, § 20

Under the Medicare law, as enacted in 1965, Medicare was the primary payer for all services

except those covered by workers' compensation (WC). In 1980, Congress enacted the first

of a series of provisions that made Medicare the secondary payer to certain additional

primary plans. The purpose was to shift costs from the Medicare program to private sources

of payment. These provisions are known as the Medicare Secondary Payer (MSP)

provisions and are found at section 1862(b) of the Social Security Act (the Act), and

implemented by 42 CFR § 411.20 and following. These provisions prohibit Medicare from

making payment if payment has been made or can reasonably be expected to be made by

the following primary plans: employer-sponsored group health plans (GHPs), workers’

compensation plans, liability insurance (including self-insurance), or no-fault insurance

(collectively known as Non-GHPs or NGHPs.) If payment has not been made or cannot be

expected to be made promptly by a workers’ compensation law or policy of the United

States, liability insurance (including self-insurance), or no-fault insurance, Medicare may

make a conditional payment under some circumstances, subject to Medicare payment rules.

Conditional payments are made subject to repayment when the primary plan makes

payment. When Medicare is the secondary payer, any and all payers primary to Medicare

are expected to pay before Medicare. Medicare does not determine primacy between or

among other payers when multiple payers are primary to Medicare for a given item or

service.

When Medicare is the secondary payer, the provider, physician, or other supplier, or

beneficiary must first submit the claim to the primary payer. The primary payer is required

to process and make primary payment on the claim in accordance with the coverage

provisions of its contract. The primary payer may not decline to make primary payment on

the grounds that its contract calls for Medicare to pay first. If, after the primary payer

processes the claim, it does not pay in full for the services, Medicare secondary benefits

may be paid for the services as prescribed in §10.8. Generally, the beneficiary is not

disadvantaged where Medicare is the secondary payer because the combined payment by a

primary payer and by Medicare as the secondary payer is the same as or greater than the

combined payment when Medicare is the primary payer.