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CMS Memorandums

Medicare Secondary Payer History

Medicare Secondary Payer (“MSP”) Act was passed by Congress in 1980 to shift costs from Medicare to identified primary payers, to protect the Medicare Trust Funds in situations where Medicare is not the beneficiary’s primary health insurance carrier. It was not until 2003 that the MSP Act was clarified to identify when Medicare was the secondary payer, but no formal process for reported was established. To begin enforcing the MSP Act, Medicare began addressing the secondary payer issues with the July 23, 2001 Patel Memo. This led to further memorandums and the enactment of the Medicare, Medicaid and SCHIP Extension Act on December 29, 2007, which required mandatory reporting duties for liability insurance plans, private self-insured entities, group health plans, no fault insurance plans and workers’ compensation plans. Commonly known as Section 111 reporting. Today Medicare continues to evolve the MSP Act guidelines with updated memo’s and Reference Guides.

July 23, 2001 Policy Memo (Patel Memo)
Defines commutation versus compromise settlements, provides guidance for taking Medicare’s interests into account with workers’ compensation settlements

April 22, 2003 Policy Memo
Further defines the Patel Memo guidelines for workers’ compensation settlements with the Medicare Secondary Payment Act, cites the MSP related federal statutes, gives examples of what reasonable expectation means in relation to Medicare beneficiaries.

May 23, 2003 Policy Memo
Defines the workload review thresholds for workers’ compensation cases.

May 7, 2004 Policy Memo
Altered the administrative fee and attorney costs from prior memos and disallowed payment of attorney fees or costs from the MSA.

October 15, 2004 Policy Memo
Discusses specific workers’ compensation settlement issues, MSA self-administration, and structured funding of MSA’s.

May 7, 2005 Policy Memo
Addressed questions resulting from the October 15, 2004 Memo.

July 5, 2005 High Level Memo
Summarizes past memos.

July 11, 2005 Policy Memo
Addressed questions resulting from the October 15, 2004 Memo.

December 30, 2005 Policy Memo
Addressed questions regarding Medicare Part D.

April 25, 2006 Policy Memo
Replaces the response to an question answered in the July 11, 2005 Memo.

July 24, 2006 Policy Memo
Replaces the Medicare Part D and WCMSA December 30, 2005 Memo.

May 20, 2008 Policy Memo
Confirms the CDC Life Table Medicare has approved to use for life expectancy calculations.

August 25, 2008 Policy Memo
Discusses Medicare policy on implants and rated ages.

April 3, 2009 Policy Memo
Medicare announced they will begin reviewing future prescription medications in MSA’s.

June 1, 2009 Policy Memo
Further defines the prescription medication guidelines for MSA’s.

June 8, 2010 Policy Memo
Announced the requirement for rated age language in WCMSA submissions.

May 1, 2011 Policy Memo
Confirmed the WCMSA workload review threshold and confirmed there are not any statutory provisions regarding MSA submission.