Medicare Secondary Payer (MSP) is a statute that requires insurance companies and other “primary payers” to reimburse Medicare when evidence shows that they are liable for Medicare’s costs. If the primary payer fails to do so, MSP permits Medicare to sue to recover the funds.

For years, plaintiffs’ lawyers have brought novel lawsuits trying to expand the MSP statute into a bounty-hunting law, in the hope of recovering double damages from an expansive class of defendants. Now, after repeatedly failing in the court system, the trial lawyer lobby is turning to Congress to expand MSP liability through legislative action.

This trial lawyer-backed legislation would change these pre-existing laws to allow Medicare Secondary Payer liability to be imposed with far less evidence. While trial lawyers now have to produce evidence that a primary payer’s actions harmed the plaintiffs in some way, this bill would allow statistics to constitute proof of liability instead. 

Additionally, only the government or the injured Medicare patient currently has standing to sue. However, proposals to change the MSP statute would allow any person to bring an action.

ILR’s opposition to this particular legislative initiative should not be confused with separate legislation aimed at improving the MSP process, thus easing the regulatory burden on businesses.  This legislation, which the U.S. Chamber supports, is titled the Medicare Secondary Payer Enhancement Act of 2010.