Medicare’s Recovery from a Primary Payer

40.9 – Medicare’s Recovery from a Primary Payer (Rev. 12438; Issued: 01-04-24; Effective: 02-06-24; Implementation: 02-06-24) There is no Medicare overpayment until the beneficiary receives a settlement, judgment, award, or other payment. Medicare’s claim comes into existence by operation of law (Section 1862(b)(2)(B)(ii) of the Act) when payment for medical expenses that Medicare conditionally paid for has been made by a third party payer. Consequently, while Medicare may alert beneficiaries and their attorneys of Medicare’s right to recover settlement proceeds in pre-settlement correspondence, no demand for recovery may be made until a settlement has been reached. However, the MSP Contractor should send a letter to the beneficiary and attorney giving notice of possible recovery by Medicare.