Medicare and workers' compensation: Essential insights
Rewritten Article:
Navigating the intersection of Medicare and workers' compensation is a must. Neglecting to inform Medicare about a workers' comp arrangement might lead to claim denials and the need to repay Medicare.
Workers' compensation serves as insurance for employees who suffer injuries or illnesses directly linked to their jobs. The Office of Workers' Compensation Programs (OWCP), under the Department of Labor, oversees this benefit for federal workers, their families, and selected other entities.
Individuals currently enrolled in Medicare or soon to be eligible should comprehend how their workers' comp benefits may influence Medicare's coverage of medical claims associated with workplace injuries. This understanding helps prevent conflicting medical costs.
Workers' comp settlements and Medicare: What's the deal?
Under Medicare's secondary payer policy, workers' comp must cover any treatment for a work-related injury prior to Medicare stepping in.
If immediate medical costs arise before an individual receives their workers' comp settlement, Medicare might pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid this recovery process, the Centers for Medicare & Medicaid Services (CMS) generally monitors the amount an individual receives from workers' comp for injury or illness-related medical care. In certain cases, Medicare may propose a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover care after the funds in the WCMSA have been exhausted.
What settlements require reporting to Medicare?
Workers' comp should submit a Total Payment Obligation to the Claimant (TPOC) to CMS to guarantee proper Medicare coverage for an individual's medical expenses. This represents the total amount owed to the individual or on their behalf by workers' comp.
TPOC submission is necessary if an individual is currently enrolled in Medicare either due to age or Social Security Disability Insurance, and the settlement is $25,000 or more. TPOCs are also required if the person isn't already enrolled in Medicare but will qualify for the program within 30 months of the settlement date, and the settlement amount is $250,000 or higher.
In addition to workers' comp, reporting to Medicare is required for any liability or no-fault insurance claims filed by an individual.
FAQs
To address any questions, a person can call Medicare at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, live chat is also available on Medicare.gov. If a person has questions about the Medicare recovery process, they can contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary, but if a Medicare beneficiary wants to set one up, their workers' comp settlement must be over $25,000. Alternatively, it must be over $250,000 if they are eligible for Medicare within 30 months.
Yes, it's forbidden to use the money in a Medicare set-aside arrangement for any purpose other than the one for which it's designated. Misusing the funds can lead to claim denials and the need to reimburse Medicare.
Additional Insights:
- Starting April 4, 2025, full and final workers' compensation settlements involving Medicare beneficiaries must now report through the Section 111 reporting process, regardless of whether CMS approval is sought [1].
- The settlement amount, WCMSA allocation (if applicable), and the funding mechanisms (lump sum or annuity) must be reported [1].
- Failure to comply can result in civil penalties or the denial of future Medicare benefits for injured workers. Proper documentation and potential audits should be prepared for [1].
- The Medicare Secondary Payer policy, workers' compensation set-asides, and Section 111 reporting are crucial for compliance with Medicare reporting requirements and avoiding potential legal and financial complications.
"Learn more: What to know about Medicare set-asides## Takeaway
Workers' compensation insurance covers job-related injuries or illnesses for federal employees and certain other groups.
For those enrolled in Medicare or soon to be eligible, understanding how workers' compensation might impact Medicare coverage is essential to prevent complications with medical costs for injuries or illnesses sustained at work.
Informing Medicare about workers' comp agreements is crucial to prevent future claim rejections and repayment obligations.
Medicare resources
For more resources to help navigate the complex world of medical insurance, visit our Medicare hub.
- Medicare's secondary payer policy mandates that workers' compensation must cover any treatment for work-related injuries before Medicare steps in.
- In certain cases, Medicare may propose a workers' compensation Medicare set-aside arrangement (WCMSA) for the funds received from workers' comp for injury or illness-related medical care. Medicare will only cover care after the funds in the WCMSA have been exhausted.
- Workers' comp should submit a Total Payment Obligation to the Claimant (TPOC) to Medicare to ensure proper Medicare coverage for an individual's medical expenses if the individual is currently enrolled in Medicare or soon to be eligible, and the settlement is $25,000 or more.
- Starting April 4, 2025, full and final workers' compensation settlements involving Medicare beneficiaries must report through the Section 111 reporting process, regardless of whether CMS approval is sought.
