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No-fault insurance is insurance that pays for health care services resulting from bodily injury or damage to property regardless of who is at fault for causing the accident. Types of no-fault insurance include but are not limited to automobile insurance, homeowners’ insurance, and commercial insurance plans. Liability insurance is coverage that protects against claims based on negligence, inappropriate action, or inaction that results in bodily injury or damage to property. Liability insurance includes but is not limited to homeowners’ liability insurance, automobile liability insurance, product liability insurance, malpractice liability insurance, uninsured motorist liability insurance, and underinsured motorist liability insurance. Federal Law Takes Precedence Over State Law and Private ContractsMedicare is the secondary payer of claims when no-fault or liability insurance is available as the primary payer, even though state law or the insurance plan or policy states that its benefits are secondary to Medicare or otherwise excludes/limits its payments if the injured party is also entitled to Medicare benefits. With the exception of conditional payments as discussed belwo, no Medicare payments are made when payment has been made or can reasonably be expected to be made by the no-fault or liability insurer, and until no-fault or liability insurance has been exhausted. A provider or supplier may not collect payment from a beneficiary until after the proceeds of the no-fault or liability insurance settlement are available to the beneficiary. Medicare can Make Conditional PaymentsIf it is determined that the no-fault or liability insurer will not pay "promptly" (within 120 days), providers and suppliers may submit claims to Medicare, and Medicare may make a conditional payment. However, when the proceeds from the no-fault or liability settlement become available, Medicare has priority right of recovery. This means that Medicare collects the money it used for the conditional payment from the settlement before other providers and suppliers may collect from the settlement. After that 120-day period, a provider or supplier may choose to bill Medicare conditionally. In a liability insurance situation, if the provider/supplier chooses to bill Medicare, they must withdraw claims against the liability insurer and any liens placed on the beneficiary’s settlement. If they choose to continue their claim against the liability insurance settlement, they may not also bill Medicare.
Page Last Modified: 12/14/2005 12:00:00 AM
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