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1991.06.25 :  Medicare Secondary Payors

Contact:  Bob Hardy (202) 245-6145
June 25, 1991

        HHS Secretary Louis W. Sullivan, M.D., announced today
that approximately 800,000 employers have started to receive
questionnaires on health coverage of specific employees to
determine when claims for health benefits should have been paid
by employer health plans instead of Medicare.
        The information will enable Medicare to recover mistaken
payments and avoid making future payments for claims that should
be covered by employer health plans. 
        Secretary Sullivan said that "more than $600 million and
possibly as much as $1 billion are expected to be recovered from
employer health plans that should have been the primary payers of
claims paid by Medicare."
        The secretary said that the employers are being asked to
provide detailed information about health plan coverage for
workers who have been identified in a computer match of data from
Medicare, the Social Security Administration and the Internal
Revenue Service.                 
        The current mailing is the second phase of the project. 
An earlier mailing identified employers who do not offer health
coverage or have too few employees to be subject to the law
governing when Medicare is the secondary payer.
        In general, Medicare is the secondary payer when the
health 
care of an employed Medicare beneficiary or spouse is covered by
an employer health plan. 
        Gail R. Wilensky, Ph.D., administrator of the Health Care
Financing Administration, said that a central computer system in
HCFA will process the information reported by employers on the
health coverage for 8.9 million employed Medicare beneficiaries
or their spouses. 
        For every Medicare payment of a claim that should have
been paid by an employer plan, HCFA will take action to recover
the funds from the entity responsible for payment.
        Dr. Wilensky said that "we have consulted with business
organizations and are taking every possible step to conduct this
project with the least possible burden on employers."
        The questionnaire will provide the employer with the
name, Social Security number and a date for each identified
employee.  The date represents the earliest possible date that
Medicare could have been the secondary payer for the employee or
the employee's spouse.  Employers, therefore, will only be
required to provide information for periods of time in which
Medicare is or was the secondary payer.
        The Phase II questionnaires also ask employers for the
sizes of their companies, the names of health plans offered, and
how plans are organized:  insurance, health maintenance
organizations, self-insurance or other structures.

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