Medicare Secondary Payer and Settlement Delay

Published in: Journal of Empirical Legal Studies, Volume 15, Issue 2, pages 356–377 (June 2018). doi: 10.1111/jels.12181

Posted on RAND.org on December 11, 2020

by Eric Helland, Jonathan Klick

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The Medicare Secondary Payer Act of 1980 and its subsequent amendments require that insurers and self-insured companies report settlements, awards, and judgments that involve a Medicare beneficiary to the Centers for Medicare and Medicaid Services. The parties then may be required to compensate CMS for its conditional payments. In a simple settlement model, this makes settlement less likely. Also, the reporting delays and uncertainty regarding the size of these conditional payments are likely to further frustrate the settlement process. We provide results, using data from a large insurer, showing that, on average, implementation of the MSP reporting amendments led to a delay in the resolution of disputes involving auto accidents of about six months.

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