CMS Pub. 100-16, ch. mc86c17b, § 330

Insurance

(Rev. 4, 10-01-01)

Under §1862(b)(2)(A) of the Act (42 U.S.C. 1395y(b)(2)(A)), payment may not be made

under Medicare for covered items or services to the extent that payment has been made,

or can reasonably be expected to be made promptly, under a liability insurance policy or

plan (including a self-insured plan). All Medicare payments are contingent upon payment

to the Medicare program to the extent that payment with respect to the same items or

services has been made, or could be made, under a liability insurance policy or plan

(including a self-insured plan). Medicare is subrogated to the rights of the beneficiary and

may also recover its benefits directly from liability insurance companies and self-insured

plans, and from any entity, including the beneficiary, that has been paid by a liability

insurer. Medicare’s right to recover its benefits from liability insurers, and from those

who have been paid by liability insurers takes precedence over the claims of any other

party, including Medicaid.

Under this Medicare Secondary Payer (MSP) provision, the program is a claimant against

the responsible party and the liability insurer, to the extent that Medicare has made

payments to or on behalf of the beneficiary. Medicare can be a party to any claim by a

beneficiary or other entity against a liability insurer, can participate in negotiations

concerning the total liability insurance payment and the amount to be repaid to Medicare,

and may seek recovery of conditional payments directly from the liability insurer. Section

1862(b) of the Act provides that any claimant has the right to take legal action against a

liability insurer that fails to pay primary benefits for services covered by the insurer, and

to collect double damages.