EXECUTIVE SUMMARY:
The Medicare secondary payer (MSP) program requires Medicare to be the secondary payer for hospital and medical services provided to certain Medicare beneficiaries. Certain program provisions pertain to beneficiaries age 65 and older who are covered under employer group health plans (EGHP) based on their own employment or that of their spouses of any age. Based on our statistical sample of AEtna Life Insurance Company (AEtna) customers, we estimate that as much as $13.6 million in Medicare payments may have been mistakenly paid during the period January 1, 1988 through December 31, 1989. The mistaken Medicare payments occurred primarily because beneficiaries did not always give the providers of service, accurate information on their spouses' EGHP coverage and employment status. As a result, EGHP coverage was not always identified or billed to the appropriate payer, AEtna.