Medicare and Medicaid Duplicate Payment

10.2 – Medicare and Medicaid Duplicate Payment (Rev. 12438; Issued: 01-04-24; Effective: 02-06-24; Implementation: 02-06-24) Medicare and a State Medicaid agency may both conditionally or erroneously pay for items and/or services, and the amount recoverable for these items and/or services may be insufficient to reimburse both Medicare and Medicaid. In these situations, while both Medicare and Medicaid might have a recovery claim, Medicare’s right to recovery has priority over Medicaid’s recovery claim pursuant to 42 CFR § 405.908. Medicare’s priority right of recovery over Medicaid does not violate the concept of Medicaid being a payer of last resort. Under § 1862(b) of the Act, Medicare’s ultimate statutory authority is not to pay at all where payment can reasonably be expected to be made by a third party that is primary to Medicare; and Medicare has a concomitant right to recover any conditional benefits it has paid. The right of Medicaid agencies to recover benefits derives from an assignment by Medicaid beneficiaries to the States of their rights to third party reimbursement. Since the beneficiary can assign to the State a right no higher than the beneficiary’s own, and since Medicare’s statutory right is higher than the beneficiary’s, Medicare’s right is superior to that assigned to the State. Where both Medicare and Medicaid seek reimbursement from a primary payer, the MSP Contractor informs the other parties to the claim that it must reimburse Medicare before it can pay any other entity, including a State Medicaid agency. Where a beneficiary, attorney, provider, physician, or other supplier receives payment from a primary plan, and the amount paid is less than the combined amounts paid by Medicare and Medicaid, the MSP Contractor informs the payee that it is obligated to refund the Medicare payment up to the full amount of Medicare’s claim before paying the State Medicaid agency. Only after Medicare has recovered the full amount of its claim does the beneficiary, attorney, provider, physician, or supplier have the right to reimburse Medicaid or another entity. If a State Medicaid agency receives reimbursement from a primary payer before Medicare, the MSP Contractor asks the State Medicaid Agency or the beneficiary to reimburse Medicare from any primary payment funds remaining. If the remainder of the primary payment is insufficient to reimburse Medicare in full, the MSP Contractor asks the State Agency to reimburse Medicare up to the full amount the Agency received. The MSP Contractor explains the legal basis for Medicare’s right to recover. If the State Medicaid Agency refuses to reimburse in full, the MSP Contractor refers the case to the CMS Regional Office (RO). The RO’s recovery actions may include offset of Medicare’s claim against any Federal Financial Participation funds otherwise due the State. The MSP Contractor will inform the primary payer that in future cases involving claims by Medicare and Medicaid, it must reimburse Medicare first.