Medicare Secondary Payer and Settlement Delay

35 Pages Posted: 11 Jul 2015 Last revised: 17 Jul 2015

See all articles by Eric Helland

Eric Helland

Claremont McKenna College - Robert Day School of Economics and Finance; RAND

Jonathan Klick

University of Pennsylvania Law School; Erasmus School of Law; PERC - Property and Environment Research Center

Multiple version iconThere are 2 versions of this paper

Date Written: July 9, 2015

Abstract

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

Helland, Eric A. and Klick, Jonathan, Medicare Secondary Payer and Settlement Delay (July 9, 2015). U of Penn, Inst for Law & Econ Research Paper No. 15-24. Available at SSRN: https://ssrn.com/abstract=2628899 or http://dx.doi.org/10.2139/ssrn.2628899

Eric A. Helland

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States
909-607-7275 (Phone)
909-621-8243 (Fax)

RAND ( email )

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Jonathan Klick (Contact Author)

University of Pennsylvania Law School ( email )

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Philadelphia, PA 19104
United States
2157463455 (Phone)

Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands

PERC - Property and Environment Research Center

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Suite A
Bozeman, MT 59718
United States

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