CMS updates Chapter 7 of the Medicare secondary payer (MSP) recovery manual

By Mark Popolizio, J.D., Shawn Johnson, J.D.

May 17, 2021 / 2 min read

The Centers for Medicare and Medicaid Services (CMS) has released an update to Chapter 7 of its Medicare secondary payer (MSP) recovery manual.[1] The updated changes are effective on April 19, 2021.

By way of brief background, CMS removed Chapter 7 from its MSP recovery manual several years ago for updating due to law and other changes.[2] CMS has now completed these updates and is reintroducing its revised Chapter 7 to the MSP recovery manual. As part of these updates, CMS indicates that the revised chapter is smaller than the previous version “due to the fact that many of the recoveries are now performed by the Coordination of Benefits & Recovery Contractors and are no longer required to be in the [MSP recovery manual].”[3]

Through Chapter 7, CMS communicates its policy directives to its Medicare Administrative Contractors (MACs) regarding various aspects of its conditional payment recovery process for both non-group health plans (NGHP) and group health plans (GHP). This article focuses on NGHP recovery. CMS is sending the Chapter 7 updates to its Medicare parts A/B MACs and DME MACs for review and comments.[4] Further, CMS indicates that the A/B MACs and DME MACs “shall adhere to all MSP policies and procedures” as outlined in Chapter 7.[5]

While a detailed review of Chapter 7 is beyond the scope of this article, in general this chapter provides CMS’s MACs with the agency’s policy directives regarding numerous aspects and situations regarding MSP recovery. Overall, from the authors’ general review, this chapter essentially charts current and established CMS policies pertaining to NGHP recovery.

By way of example, in the NGHP context, this chapter, in part, addresses the following MSP recovery topics:

General recovery policies pertaining to workers’ compensation, liability, and no-fault claims;
Determination of primary payers among non-Medicare payers;
Wrongful death statutes and claims;
Claims involving deceased beneficiaries;
Cases involving duplicate payments;
Disputes and appeals;
Waiver and compromise requests;
Collection of MSP debts;
Treasury referral and dispute process; and
Claims involving bankruptcy.

While CMS’s manual is directed to its MACs, Chapter 7 nonetheless provides helpful and interesting insight into CMS’s positions and practices regarding the above (and other) NGHP recovery areas. The authors will continue to monitor any additional developments on this front and provide future updates as warranted.

In the interim, please do not hesitate to contact the authors if you have any questions.

[1] CMS Manual System, Pub. 100-05 Medicare Secondary Payer, Change Request 11332, Transmittal 10629, Subject: Update Internet Only Manual (IOM) Chapter 7 Medicare Secondary Payer (MSP) Recovery Manual, (March 23, 2021).
[2] In this regard, CMS states the following in relation to reintroducing Chapter 7 to the MSP recovery manual:
Several years ago, Medicare Secondary Payer (MSP) Internet Only Manual (IOM) 100-05, Chapter 7 was removed from the IOM for MSP recovery processing revisions. [CMS] has completed the updates to the manual and is sending the IOM out to the A/B MACs and DME MACs for review and comments. Certain references have been removed because either the law has been repealed, such as the Internal Revenue Service (IRS)/Social Security Administration (SSA)/CMS Data Match or the system no longer exists, such as the Recovery Management System (ReMAS). Overall, the IOM is smaller than previously due to the fact that many of the recoveries are now performed by the Coordination of Benefits & Recovery Contractors and are no longer required to be in the IOM. See, CMS Manual System, Pub. 100-05 Medicare Secondary Payer, Change Request 11332, Transmittal 10629, Subject: Update Internet Only Manual (IOM) Chapter 7 Medicare Secondary Payer (MSP) Recovery Manual, (March 23, 2021) at 1.
[3] See n. 2
[4] CMS Manual System, Pub. 100-05 Medicare Secondary Payer, Change Request 11332, Transmittal 10629, Subject: Update Internet Only Manual (IOM) Chapter 7 Medicare Secondary Payer (MSP) Recovery Manual, (March 23, 2021) at 1.
[5] CMS Manual System, Pub. 100-05 Medicare Secondary Payer, Change Request 11332, Transmittal 10629, Subject: Update Internet Only Manual (IOM) Chapter 7 Medicare Secondary Payer (MSP) Recovery Manual, (March 23, 2021), at Attachment-Business Requirements, I. General Information, B. Policy.