Medicare as Secondary Payer — MSP
Federal rules deciding when Medicare pays second after another insurance pays first. Common with employer coverage at 65+, workers' comp, or auto claims.
Official source: cms.gov
## What MSP means
Medicare Secondary Payer (MSP) is the set of federal rules that decide whether Medicare or another insurer pays first for a given service. Getting this wrong leads to denied claims, Medicare liens, and surprise bills.
## When Medicare is **secondary**
- You are 65+, still working, and covered by an employer group health plan from a company with **20+ employees**. - You are on SSDI and covered by a large group health plan (generally 100+ employees) through your own or a family member's job. - You have workers' compensation for a work-related injury. - You have auto insurance, liability insurance, or no-fault insurance for an accident. - You have black lung benefits or VA care for a service-connected condition.
## When Medicare is **primary**
- Your employer has fewer than 20 employees. - You are retired (no current employer coverage). - You have individual (non-group) insurance only. - TRICARE for inactive duty members in most cases.
## Why this matters
Submitting a claim to Medicare when it should be secondary is a violation of the Medicare Secondary Payer Act. Medicare can demand repayment, sometimes years later, via a **Medicare lien**.
## Personal injury settlements
If you have a personal injury settlement (auto accident, slip and fall), Medicare has a right to recover what it paid for injury-related care from your settlement proceeds. Your attorney should:
- Obtain a conditional payment letter from the Benefits Coordination & Recovery Center (BCRC). - Resolve the Medicare lien before disbursing the settlement. - Consider whether a Medicare Set-Aside is required for future care.
## Working past 65
If you keep employer coverage at 65, talk with HR before declining Part B. Decline only if:
- Your employer has 20+ employees, AND - The plan provides creditable coverage.
Otherwise, you may face a late enrollment penalty when you do sign up for Part B.
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Frequently asked questions about Medicare as Secondary Payer
How do I know if Medicare is primary or secondary?+
It depends on the source of the other coverage and the size of the employer. Ask your employer's HR or call 1-855-798-2627 (Benefits Coordination & Recovery Center) to confirm.
What happens if Medicare pays when it should not have?+
Medicare can demand repayment from you, your insurance, or your settlement (called a Medicare lien). This is enforced under the Medicare Secondary Payer Act.
Does VA care change MSP rules?+
VA care for service-connected conditions is usually paid by the VA, not Medicare. For non-service-connected care, Medicare and the VA each pay separately for what they cover.
Should I delay Part B if I am still working at 65?+
Only if your employer has 20+ employees and offers creditable coverage. Otherwise, you risk a Part B late enrollment penalty.
How are personal injury settlements handled?+
Medicare must be reimbursed for injury-related care it paid before disbursement. Your attorney resolves the lien with the Benefits Coordination & Recovery Center (BCRC).
Source: cms.gov