	Introduction

Medicare is a federal program that covers medical services for qualified beneficiaries. Medicare now consists of four parts (A-D) that cover hospitalizations, physician services, prescription drugs, skilled nursing facility care, home health visits, hospice care, and other treatments. If an enrollee has other insurance, the beneficiary, physician, or other supplier can bill that insurance only after Medicare is billed to fill in possible gaps in Medicare coverage. The 1980 OBRA made Medicare a secondary payer for medical claims involving non-group health insurance such as liability and no-fault insurance. In 1981, Congress expanded MSP to cover certain Medicare beneficiaries in employer-sponsored group health plans. In general, Medicare is now the secondary payer for an item or service when payment has been made, or can reasonably be expected to be made, by responsible third-party payers. Medicare also does not cover services paid for by another government entity, such as the Department of Veterans Affairs (VA). In certain cases where Medicare is the secondary payer but primary payment is delayed, Medicare may step in to pay claims, thereby ensuring that beneficiaries do not have a break in coverage. Title II of the legislation (The SMART Act) creates a new process for resolving MSP conditional payment claims to speed up resolution of liability, no-fault and similar cases. 1845 by unanimous consent on December 28, 2012, and President Obama signed the measure into law on January 10, 2013 ( P.L. 112-242 ). The law requires HHS to create a password-protected website that beneficiaries and their representatives can access to view information on conditional payments relating to a potential settlement, judgment, or award. Working Aged

Under MSP rules, employer-sponsored health insurance is the primary payer (with some exceptions) for Medicare-eligible individuals who have group coverage due to their own or a spouse's current employment. MSP and Non-Group Insurance

		No-Fault and Liability Insurance

Medicare is the secondary payer when payment has been made, or can reasonably be expected to be made, under automobile medical insurance, and other forms of no-fault and liability insurance. In addition, Medicare has other recovery rights. Medicare does not pay for services covered under the Federal Black Lung Program for Medicare beneficiaries who are entitled to Black Lung medical benefits, in accordance with the Federal Coal Mine Act (P.L. 2007 MMSEA Mandatory Reporting

In addition to the general data reporting requirements, Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007, ( P.L. 110-173 , MMSEA) requires Responsible Reporting Entities (RRE) that include group health plans and what CMS calls non-group health plans such as liability, no-fault, and workers' compensation insurers, to provide information regarding health insurance status of employees, as well as judgments, payments, or settlements involving Medicare beneficiaries. The SMART Act ( P.L. The Medicare secondary payment amount is subject to certain limits. Medicare will not make conditional payments under the following conditions: (1) a third-party payer plan alleges that it is secondary to Medicare; (2) a plan limits payment when the individual is entitled to Medicare; (3) a plan provides covered services for younger employees and spouses, but not for employees and spouses who are 65 and older; (4) a proper claim is not filed, or is not filed in a timely manner, for any reason other than the physical or mental incapacity of the beneficiary; or (5) a group health plan fails to furnish needed information to CMS to determine whether or not an employer plan is primary to Medicare. Payments are expected to reach about $8 billion in FY2012 as well. Issues for Congress

During the past several decades, Congress has expanded the scope of the MSP program in order to ensure that other insurers make contractually required payments, reduce Medicare expenditures, and extend the life of the Medicare Trust Fund. The act's provisions make substantive and procedural changes to the MSP statute and current CMS procedures, including provisions relating to Medicare conditional payments, MMSEA Section 111 reporting requirements, appeal rights, use of Social Security numbers, and statutes of limitations.
Medicare is a federal program that covers medical services for qualified beneficiaries. Established in 1965 to provide health insurance to individuals age 65 and older, Medicare has been expanded to include disabled individuals under 65. Medicare now consists of four parts (A-D) that cover hospitalizations, physician services, prescription drugs, skilled nursing facility care, home health visits, hospice care, and other treatments. Generally, Medicare is the "primary payer" for medical services, meaning that it pays health claims first. If a beneficiary has other health insurance, that insurance is billed after Medicare has made payments, to fill all, or some, of any gaps in Medicare coverage. In certain situations, however, federal Medicare Secondary Payer (MSP) law prohibits Medicare from making payments for an item or service when payment has been made, or can reasonably be expected to be made, by another insurer such as an employer-sponsored group health plan. Congress initiated MSP in 1980 to ensure that certain insurers met their contractual obligations to beneficiaries and to reduce Medicare expenditures, thus extending the life of the Medicare Trust Fund. According to the Department of Health and Human Services (HHS), private insurers designated legally primary to Medicare now pay about $8 billion in claims from Medicare recipients each year.
In general, Medicare is the secondary payer for beneficiaries who are also covered through (1) a group health plan based on their own or their spouse's current employment; (2) auto and other liability insurance; (3) no-fault liability insurance; and (4) workers' compensation programs, including the Federal Black Lung Program. Additionally, Medicare is prohibited from covering items and services paid for directly, or indirectly, by another government entity, such as the Department of Veterans Affairs (subject to certain limitations), although Medicaid is always secondary to Medicare. In cases when Medicare is the secondary payer but primary payment is delayed or in dispute—for example, a medical liability lawsuit—Medicare can step in to cover claims to ensure that beneficiaries do not experience a gap in coverage. Medicare must be reimbursed for these conditional payments when a primary insurer makes payment.
To identify cases where Medicare is the secondary payer and prevent improper Medicare payments, HHS matches information about Medicare recipients against data from the Social Security Administration and Internal Revenue Service. The Medicare, Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173) requires private insurers such as group health plans, liability insurers, no-fault insurers, and workers' compensation plans to regularly submit coverage information to HHS regarding Medicare beneficiaries. In December 2012, Congress approved, H.R. 1845 (the SMART Act, P.L. 112-242), which includes provisions designed to speed up the process for settling Medicare conditional claims in liability, no-fault, and similar cases. President Obama signed the act into law in January 2013. Title II of P.L. 112-242 requires HHS to establish a secure website that beneficiaries and their representatives can access to view information on conditional payments relating to a potential settlement, judgment, or award. The law made additional changes to the MSP statute and current HHS procedures, including data reporting requirements, appeal rights, use of Social Security numbers, and statutes of limitations. Separately, HHS has been attempting to create streamlined processes for settling smaller-dollar liability and workers' compensation cases involving Medicare beneficiaries. In September 2013, HHS published interim final regulations to implement the SMART Act. This report examines the MSP system, reporting requirements, liability issues, and issues for Congress.