Medicare Secondary Payer and Settlement Delay
35 Pages Posted: 11 Jul 2015 Last revised: 17 Jul 2015
Date Written: July 9, 2015
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.
Keywords: Medicare, Torts, Litigation, Settlement, Insurance
JEL Classification: K13, K41
Suggested Citation: Suggested Citation