Recovery of Liability or No-Fault Payments from the Beneficiary

40.15 – Recovery of Liability or No-Fault Payments from the Beneficiary (Rev. 12438; Issued: 01-04-24; Effective: 02-06-24; Implementation: 02-06-24) Pursuant to 42 C.F.R. § 411.24, if a liability or no-fault insurance payment was made to the beneficiary, the MSP Contractor recovers the amount of primary benefits Medicare paid in excess of any secondary Medicare benefits payable. Regulations permit reducing that amount to allow for the beneficiary’s costs in procuring liability or no-fault benefits only in cases where the claim was in dispute (i.e., the no-fault insurer at first would not pay and only after an attorney intervened was payment made). If the beneficiary claims procurement costs to obtain liability insurance payments, the MSP Contractor secures a breakdown between the two; however, the MSP Contractor will not seek this additional information if the beneficiary is deceased. If a beneficiary is paid by a liability insurer, MSP Contractors recover from the beneficiary, Medicare’s primary payment, reduced by a proportionate share of the beneficiary’s procurement costs, if any. The MSP Contractor uses the formula in § 40.18 of this Chapter to determine the amount of Medicare’s claim when there are beneficiary procurement costs. If a negligent party who carries liability insurance decides to pay a liability claim with their own funds rather than submit the claim to the liability insurer, Medicare recovers its benefits from such a payment because it is deemed to be a liability insurance payment. Medicare benefits are also subject to recovery from payments by a self-insured party. (See Chapter 1, § 10 of the Medicare Secondary Payer Manual).