Many people hear the term Medicare secondary payer and they do not know what this means. Often, it is confused with other types of Medicare related terms, and if the confusion persists, then it could cause costly problems for anyone covered by Medicare. It is important that you know a term like Medicare secondary payer because it could affect you.
Just what is Medicare secondary payer? This refers to a specific incidence when Medicare is not the only coverage that a person has. If a person has a regular insurance policy, then this policy would pay first and Medicare would be considered the second payer. This effects how much money that Medicare will pay out based on the situation. The Medicare secondary payer policy only comes into effect with certain types of insurance coverages. If you have any of the coverages below, then your Medicare policy would be considered secondary.
What’s happening with Medicare Secondary Payer?
Legislation to fix it, known as the SMART Act — Strengthening Medicare and Repaying Taxpayers Act — has been introduced in both the House and the Senate. They’ve picked up bipartisan support, but it’s still not clear they have the momentum to get something enacted this year.
“We hope that the bills get passed and that this is the year,” said David Farber, an attorney with Patton Boggs whose client, the Medicare Advocacy Recovery Coalition, has pushed for the overhaul. ”We have deep congressional interest in this issue.”
Medicare, in almost every instance, is the primary payer for medical services for people 65 and older and some of the disabled. But in some cases, such as auto accidents, on-the-job injuries or slip-and-fall accidents, Medicare becomes the secondary payer. It may be billed first and pay for the immediate care — but the medical costs are really somebody else’s primary responsibility. So Medicare has the right to recoup them from the responsible party.
For instance, if a senior is injured in a car accident, the hospital bills Medicare. But if there’s a settlement, or if the case goes to court and a person is awarded damages, Medicare has a right to recoup at least some of what it paid. The settlement also must take into account future Medicare costs that could arise from the condition or injury. Read more at Politico.
Health insurance through your work. If you have insurance through your work, and your company employs more than 20 people, then your Medicare policy will only come into play after your health insurance pays.
Worker’s Comp. If you are currently getting worker’s comp, which covers any injury that you sustained while on the job, then the company that your worker’s comp insurance policy is with would be responsible for paying before Medicare.
VA. The VA, or Veteran’s Administration, is a specialty medical care program designed for those veteran’s of military service. In this case, Medicare would also be considered as the secondary payer.
Automobile Liability. If you were in a car accident and someone else was responsible, then their liability insurance should cover your medical care as a result of the injuries that you may have received. This is also a case when Medicare secondary payer policy would come into play.
As a final note, it is important to understand that Medicare secondary payer and Medigap or Medicare Supplemental insurance are not the same. The latter (both terms refer to the same thing) would be a special insurance policy that you get in order to cover any medical care that is not covered by your Medicare policy. The former is not a policy. Instead, Medicare secondary payer is simply a term in reference to certain situations when Medicare is not the primary payer of medical care for a patient. By understanding this, you will be better prepared to sort out what will be covered in your medical care and what will not.