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Under the Medicare Secondary Payer (MSP) law, first enacted in 1980 and updated many times since then, Medicare may not pay claims when another payment is available or reasonably expected to be available.

But, if payment (from a workers’ compensation litigated claim, for example) is not available, Medicare may pay the beneficiary’s claim and later recover from the settling parties once a case is resolved through a settlement or judgment. If the “primary plan” refuses to repay, the government can sue to collect.

In 1986, a problem arose – how would the government know when a group health insurer refused to repay the government, thus forcing the government to pay a Medicare secondary payer claim? To address this issue, Congress added a “private cause of action”42 U.S.C. § 1395y (b)(3)(A).- to the Medicare Secondary Payer (MSP) allowing anyone who incurred “damages” to bring a double damage lawsuit against the insurer and allowing the person suing to keep the money (rather than return it to the Medicare Trust Fund).

If a beneficiary is injured and another entity is required to cover their healthcare expenses – such as in a tort case, workers’ compensation claim or auto insurance payment – the impacted individual’s medical care and coverage may be negatively impacted for years to come.

Whether or not the provision made sense when enacted in 1986, Congress changed the MSP statute in 2007 (in Section 111 of the MMSEA) and rendered the “Private Cause of Action” theoretically moot by specifically requiring that any entity paying a settlement, judgment, or award to report the payment to Medicare which then shares this information with Medicare Advantage and Part D plans.

Section 111 requires insurers to electronically report certain settlements and claims to CMS involving Medicare beneficiaries, subject to a potential penalty of up to a $1,000 per day, per claimant.

As a result, the Medicare Advocacy Recovery Coalition (MARC) says there are no longer cases where only private parties, and not the government, are aware of primary plan non-payment, and there is no purpose to empower private collection efforts.

​MARC was formed in September of 2008 by a group of industry leaders who saw a critical need to improve the MSP system. It has now been instrumental in creating a proposed solution, the Repair Abuse in MSP Payments (RAMP) Act – H.R. 8063​, which has been introduced by Representatives Brad Schneider (D-IL) and Gus Bilirakis (R-FL) in Congress to repeal the MSP “Private Cause of Action” provision.

MARC successfully advocated for the passage of the Strengthening Medicare and Repaying Taxpayers Act (SMART Act) (P.L. No: 112-242) back in 2012 and, more recently, the Provide Accurate Information Directly Act (PAID Act) (P.L. No. 116-215) in 2020.

The proposed RAMP Act will now face a number of legislative hurdles that will likely take months, if not years, to overcome before it can become law. One might think that with MARC support, and in light of its successful track record, that the RAMP Act has a decent chance of passage.