Medicare and workers' compensation: Essential information to grasp
Navigating the interplay between workers' compensation and Medicare is essential for federal employees and other groups receiving workers' comp benefits. It's crucial especially for Medicare enrollees or those approaching eligibility to grasp how workers' compensation could impact their Medicare coverage.
To avoid complications with medical costs related to work-related injuries or illnesses, it's vital to inform Medicare about workers' compensation arrangements. One common issue avoided by doing so is claim rejections and reimbursement obligations.
The Impact of Workers' Comp Settlements on Medicare
Under Medicare's secondary payer policy, workers' compensation must take the lead in covering any treatment for work-related injuries. In cases where immediate medical expenses arise before the workers' compensation settlement, Medicare might pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To bypass the recovery process and protect the funds, the Centers for Medicare & Medicaid Services (CMS) usually aims to monitor the amount a person receives from workers' compensation for medical care related to the injury or illness. At times, Medicare may ask for the establishment of a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) for these funds. Medicare will only pay for the care once the WCMSA is fully depleted.
Reportable Settlements and Claims
The CMS requires the submission of a Total Payment Obligation to the Claimant (TPOC) to ensure Medicare covers the appropriate portion of a person's medical expenses in cases where they are either already enrolled in Medicare based on age or Social Security Disability Insurance, or will qualify within 30 months of the settlement date. This requirement applies if the settlement is $25,000 or more.
Situations calling for the submission of a TPOC also include those where a person is not currently enrolled in Medicare but will soon qualify and the settlement amount is $250,000 or more. Additionally, individuals must report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
- A person can reach out to Medicare via phone at 800-MEDICARE (800-633-4227, TTY: 877-486-2048) or through live chat on Medicare.gov during specific hours. For queries about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY: 855-797-2627).
- Establishing a Medicare set-aside is voluntary. However, if an individual wants to set one up, their workers' compensation settlement should exceed $25,000, or if they are eligible for Medicare within 30 months, it should be $250,000 or more.
- Misusing the money in a Medicare set-aside arrangement (such as a WCMSA) for purposes other than the designated one can lead to claim denials and the need for reimbursement to Medicare.
Tidbits
- Reporting a workers' compensation settlement or liability claim to Medicare entails several steps focused on ensuring Medicare's interests are protected following the reporting requirements outlined above.
- Workers' compensation insurers or employers are mandated to submit a TPOC to CMS for all settlements involving Medicare beneficiaries, regardless of whether CMS approval is sought. Additionally, they should report all WCMSA details, including total amount, funding method (lump sum or structured annuity), and duration of coverage.
- Compliance with Medicare's interests is crucial to prevent claim denials and ensure that Medicare funds are used properly for future medical care.
Conclusion
Workers' compensation is essential insurance for job-related injuries or illnesses. To avoid issues with medical expenses, it's vital to understand how workers' compensation may affect Medicare coverage and report workers' compensation agreements to Medicare accordingly.
[1] National Alliance of Medicare Set-Aside Professionals (NAMSAP). (n.d.). Medicare and workers' compensation [Online]. Available: https:// namsap.org/wp-content/uploads/2020/02/Guidance-Report-Medicare-and-WC.pdf
[2] CMS Center for Program Integrity. (2018). Medicare and workers’ compensation [Online]. Available: https://www.cms.gov/Regulations-and-Guidance/Bulletins/Archive-Series/R18-08-Workers-Compensation.html
[3] Office of the Medicare Inspector General. (2021). Medicare Secondary Payer Program Integrity Manual [Online]. Available: https://www.oig.hhs.gov/programs/workcomp/01_introducton.asp
[4] Social Security Administration. (2021). Reporting workers' compensation, settlements, and other personal injury payments [Online]. Available: https://www.ssa.gov/pubs/EN-05-10103.pdf
- Medicare, as a secondary payer, requires that workers' compensation take precedence in covering treatment for work-related injuries, with the Centers for Medicare & Medicaid Services (CMS) monitoring the amount received for related medical care.
- The Total Payment Obligation to the Claimant (TPOC) is required to be submitted to CMS if a settlement is $25,000 or more for Medicare enrollees or those approaching eligibility, or $250,000 or more for those not yet enrolled but set to qualify within 30 months.
- Failure to establish a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) for settlements exceeding the mentioned thresholds may result in Medicare paying for medical expenses before the WCMSA is depleted.
- Medicare enrollees and those approaching eligibility need to inform Medicare about workers' compensation arrangements to avoid complications with medical costs and claim rejections.
- The Office of the Medicare Inspector General emphasizes that non-compliance with Medicare's interests can lead to claim denials, the need for reimbursement, and potential risks to the healthsystems, health-and-wellness, therapies-and-treatments, and nutrition of those involved.
- To ensure proper use of Medicare funds for future medical care, federal employees, along with other groups receiving workers' comp benefits, should familiarize themselves with the interplay between workers' compensation and Medicare and follow the submission guidelines as required by law.
