Nancy A. Baerwaldt, Commissioner of Insurance
Official Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Medicare Benefits [§3109(1)]
TOPICAL INDEXING:
Medicare Benefits
CASE SUMMARY:
This Insurance Bureau Bulletin attempts to clarify the sometimes confusing relationship between Medicare benefits and no-fault benefits, particularly where the no-fault policy is a coordinated benefits policy. In LeBlanc v State Farm (Item number 377) the Michigan Supreme Court ruled that absent a coordinated benefits provision in a no-fault policy, a no-fault carrier could not setoff Medicare benefits against no-fault medical expense benefits.
On December 5,1980, President Carter signed into law the Omnibus Reconciliation Act of 1980. Section 953 of this Act provides that Medicare's liability is secondary whenever payment has been made or can reasonably be expected to be made under a liability or no-fault insurance policy.
Pursuant to this statute, the Health Care Financing Administration (HCFA) of the U.S. Department of Health and Human Services, published final regulations 405.322 through 405.329 implementing §953. These regulations appeared in the April 5,1983 Federal Register. These regulations make it clear that Medicare benefits are secondary to no-fault insurance policies or no-fault state laws even //the insurance policy or state law states that the no-fault benefit is secondary to Medicare. Commissioner Baerwaldt, in summarizing these federal regulations, states "the effect of the regulations is that Medicare will be secondary when benefits are payable under the personal injury protection benefits of a no-fault policy even if a state law or private contract of insurance stipulates that Medicare is primary."
The troublesome aspect of §953 of the Federal Law and the subsequent HCFA regulations is the determination of the date of effectiveness. With regard to this issue, Commissioner Baerwaldt ruled that "the regulations are effective for services related to injuries which occurred on or after December 5, 1980. However, because regulations may not have retroactive application, HCFA will not seek to recover Medicare payments made to persons injured after this date (December 6, 1980) if the services covered by the payments were furnished prior to June 6,1983." If the services were rendered after June 6,1983 (and were for injuries occurring after 12/5/80) and Medicare paid for those services, Medicare will seek and will be entitled to reimbursement.
