What Is Medicare as Secondary Payer?

Medicare as Secondary Payer — also called Medicare Secondary Payer (MSP), 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.

Also known as

MSP

Medicare Secondary Payer

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).