Is a municipality immune from conditional payment liability under the Medicare Secondary Payer Act, 42 U.S.C. §1395y(b)(8)? No. This answer may surprise claims managers for public entities, but the law provides no protection whatsoever for municipalities. Not even federal government agencies are exempt. The rationale is simple: Medicare needs to be made whole. Social Security and Medicare represent 14 percent of the U.S. budget, and Medicare alone has an unfunded liability of $89 trillion. The unfunded liability is the difference between the benefits that have been promised to current and future retirees and what will be collected in dedicated taxes and Medicare premiums. Insufficient taxes are being collected, benefit payments exceed those taxes, and the shortfall must come from somewhere. Medicare has in its crosshairs defendants, both private and public, who must take on this burden, reimbursing Medicare for conditional payments made for an alleged accident
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