CMS – Medicare Secondary Payer Rule and Mandatory Reporting Provisions

  • Applies to: Human Subjects Research
  • Effective date:  Ongoing

Medicare Secondary Payer (MSP) is the term used by Medicare when Medicare is not responsible for paying first.  In other words, any “liability insurance policy or plan,” which includes self-insured plans, must be billed first, prior to any claim presented to Medicare. See Medicare Secondary Payer.

In research studies, if a study sponsor offers to pay any study service costs and/or subject injury costs, that sponsor is considered a “liability insurer” for purposes of MSP.  Thus, for any study that has a billing plan, budget, contract, and/or informed consent that states that the study will pay these costs, the study must pay “primary” to Medicare. If any of these study costs are billed to Medicare first, the claims are subject to the False Claims Act and will incur recovery action and potential fines by Medicare. For more information, see Chapter III Section 6.5 of the Medicare Secondary Payer (MSP) Non-Group Health Plan (NGHP) User Guide 

Many Sponsors have template language in their contracts and informed consent that ask sites to bill insurance first for study service and/or study subject injury costs. This is called “insurance contingency” language and most research institutions, including UF, will not accept this language in their contracts and/or informed consents.  For more information, see Insurance Contingency Language in UF Clinical Agreements and Consents.

When payments are made by sponsors of clinical research studies for complications or injuries arising out of studies, such payments are considered to be payments by liability insurance (including self-insurance) and must be reported by the sponsor. See Mandatory Medicare Second Payer Reporting.