The Medicare Secondary Payer Act of 1980 ("MSP") -- Link to the MSP Manual -- was enacted to limit the financial burden on taxpayers for the medical expenses of Medicare beneficiaries whose medical needs are the primary responsibility of some other source.
Until 2010, the MSP's main focus was on workers' compensation cases. (Florida's workers' compensation laws are contained in Chapter 440 of Florida's statutes.) Injured workers who receive a lump sum settlement in a workers' compensation case are required to pay all or a portion of those proceeds for the medical care related to their job accident injuries before Medicare will pay penny-one. While third-party civil liability plaintiffs have always been expected to reimburse Medicare for benefits paid in the past, the same regulations with regard to future coverage was never applied. In other words, Medicare was not expecting these Medicare beneficiaries to cover the expenses of future medical care resulting from their accidents from settlement proceeds.
For some time, The Centers for Medicare and Medicaid Services ("CMS"), the federal agency responsible for administering Medicare and Medicaid (as well as a host of other federal programs ) within the Department of Health and Human Services, has been hinting that the Medicare Secondary Payer Act applied to future medical services in third party liability cases, pointing out that the statutory language is the same for workers' compensation and liability cases. With regard to liability cases, Barbara Wright of CMS stated: "So where future medicals are a consideration in arriving at the settlement, appropriate arrangements should be made for appropriate exhaustion of the settlement before Medicare is billed for related services."
One consequence of this new thinking is that insurers and self-insured entities are currently required to report claims made by Medicare-eligible claimant/plaintiffs to the Centers for Medicare and Medicaid Services ("CMS"). This suggests that "appropriate exhaustion of the settlement before Medicare is billed for related services" is required "before Medicare is billed for related services" in personal injury cases. Interestingly, as of the posting of this blog, Medicare has not taken the next step of denying the payment of bills where the care is related to injuries sustained in an accident for which future medicals were considered in arriving at a settlement.