Medicare Secondary Payer

Medicare Secondary Payer (MSP) is the term used by Medicare when it is not responsible for paying a claim first. When Medicare began on July 1, 1966, it was the primary payer for all beneficiaries, except for those who received benefits from the Federal Black Lung Program, Workers’ Compensation (WC), and those that receive all covered health care services through the Veterans Health Administration (VHA) program. Beginning in 1980, changes to Medicare laws increased the number of coverage and benefit programs that are primary to Medicare. These changes help to preserve the Medicare Trust Fund and limit the beneficiary’s out-of- pocket costs. However, these changes also made the billing process more complex, especially when trying to determine if Medicare is the first or second payer.