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What does ‘paying secondary to Medicare’ mean?

When there is more than one payer involved in healthcare services, coordination of benefits rules apply. A secondary payer does not pay for services and items that another health insurance or coverage is primarily responsible for paying. The secondary (or second) payer comes into play after the primary (or first) payer has covered its appropriate share of the costs. 

Medicare can be a secondary payer in the following situations.

  • A person enrolled in Medicare Part A (the beneficiary) has health insurance coverage through an employer with 20 or more employees. Medicare is not the beneficiary’s primary health insurance. The group plan is the primary payer. 
  • A beneficiary was injured in a car crash. The automobile insurance would be the first payer. 
  • The beneficiary is receiving care under Worker’s Compensation Insurance. Federal law requires this insurance to be the primary payer. 
  • A beneficiary slipped on a spill in a grocery store aisle and is suing the management. The grocery’s store liability insurance would be responsible for this care.  

In these situations, Medicare as the secondary payer will pay for Medicare-covered expenses that the primary insurance did not cover. 

Medicare as a secondary payer is often referred to as MSP. For more information about MSP, check out “Medicare and Other Health Benefits:  Your Guide to Who Pays First.” 

Last updated: 08-29-2018