CMS Pub. 100-16, ch. mc86c18b, § 170

Insurance

(Rev. 30, 09-05-03)

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

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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.