Medicare and Workers' Compensation: Essential Facts Explored
Informing Medicare about Workers' Compensation: An Essential Guide
Staying in the loop when it comes to workers' compensation and Medicare is vital to avoid claim denials and potential reimbursement obligations. Here's what you need to know:
Workers' compensation serves as insurance for job-related injuries or illnesses for federal employees and selected groups. To ensure proper coverage, it's crucial for Medicare beneficiaries and those becoming eligible soon to understand how workers' compensation impacts their Medicare benefits.
Workers' Comp Settlements and Medicare: Breaking it Down
Under Medicare's secondary payer policy, workers' compensation should cover medical care for work-related injuries first. In instances where immediate expenses arise before the settlement, Medicare might cover the costs initially, launching a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid a recovery process, the Centers for Medicare & Medicaid Services (CMS) monitors the amount received from workers' compensation for injury- or illness-related medical care. In some cases, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover care after all WCMSA funds have been exhausted.
Settlements to Report
Workers' compensation must submit a total payment obligation to the claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of a person's medical expenses. This represents the total amount of workers' compensation owed to the person or on their behalf.
TPOCs are necessary if a person is already enrolled in Medicare based on their age or based on receiving Social Security Disability Insurance, and the settlement is $25,000 or more.
TPOCs are also necessary if the person is not currently enrolled in Medicare but will qualify for the program within 30 months of the settlement date, and the settlement amount is $250,000 or more.
In addition to workers' comp, a person must report to Medicare if they file a liability or no-fault insurance claim.
FAQs
Contact Medicare with any questions by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is also available on Medicare.gov. If you have questions about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 858-577-2627).
A Medicare set-aside is voluntary. However, a beneficiary must have a workers' compensation settlement of over $25,000 or $250,000 if they are eligible for Medicare within 30 months to set one up.
Using a Medicare set-aside arrangement (such as a WCMSA) for purposes other than those for which it is designated is strictly prohibited. Misuse can lead to claim denials and the obligation to reimburse Medicare.
Pro Tip: To learn more about Medicare set-asides, check out our Medicare hub for additional resources.
- For proper healthcare management, Medicare beneficiaries should be informed about the impact of workers' compensation on their coverage, particularly in terms of medical care for job-related injuries.
- Healthsystems and healthcare providers should understand that, under Medicare's secondary payer policy, workers' compensation should cover medical care for work-related injuries before Medicare steps in.
- In cases where a workers' compensation settlement exceeds $25,000 (or $250,000 if the person will qualify for Medicare within 30 months), a Medicare set-aside arrangement (WCMSA) may be required to avoid potential reimbursement obligations to Medicare for health-and-wellness expenses related to the injury or illness.
- Nutrition, therapies-and-treatments, and other health-related expenses covered under Medicare should only be paid after all funds in the Medicare set-aside arrangement (WCMSA) have been exhausted.
