MSP Contractor Action if a Liability Claim Is Pending and Medicare Benefits

40.13 – MSP Contractor Action if a Liability Claim Is Pending and Medicare Benefits Were Paid (Rev. 12438; Issued: 01-04-24; Effective: 02-06-24; Implementation: 02-06-24) If the MSP Contractor has specific information from a third party payer, beneficiary, or attorney that an insurer had primary payment responsibility for a particular MSP situation, the MSP Contractor must search all applicable claims history, identify primary payments related to the MSP situation, and recover any conditional payments Medicare has made. The MSP Contractor develops all cases where there is no specific information that an MSP situation does exist but there is evidence that an MSP situation may exist to determine if an MSP situation does exist. If the MSP Contractor development establishes that an MSP situation does exist and that there are primary payments to be recovered, the MSP Contractor must recover the conditional payments identified. If a Medicare claim has been paid and there is indication that a liability claim is pending, the MSP Contractor takes steps to assure that, in the event a liability insurance payment is made, any conditional primary Medicare payments are refunded for services related to the injury. If the services were not related to the accident, but were used to procure the settlement, the MSP Contractor recovers Medicare’s payments. If the services were unrelated to the accident, the MSP Contractor will not recover Medicare’s payments. However, the entire amount of a settlement is subject to recovery, whether the liability payment is made at the time of settlement, or over a period of time agreed to by the parties in a structured settlement. The MSP Contractor notifies the beneficiary of Medicare’s right to reimbursement. If the beneficiary has an attorney, the MSP Contractor also notifies the attorney and retains a copy of the notification in its files. If disbursement has not yet been made to the beneficiary (e.g., beneficiary’s attorney is holding monies in an escrow account, or a multiple party check is yet unsigned), the MSP Contractor attempts to recover Medicare’s portion of the settlement. It is very important that the file reflect that Medicare’s right to reimbursement was asserted before the beneficiary had an opportunity to dispose of the funds. This information is especially important if a future request for waiver or compromise is submitted. When a liability claim is pending, and Medicare made conditional payments for services rendered before settlement, and Medicare is billed after the settlement has been reached, the MSP Contractor may recover Medicare’s payment for the additional claims if Medicare did not have knowledge of them at the time of settlement. See 42 C.F.R. § 411.50-54.