Medicare and Workers' Compensation Interactions: Essential Information Revealed
Navigating Medicare and workers' compensation can be a tricky dance, especially when it comes to settlements. Here's a breakdown of what you need to know to avoid unnecessary hassles and keep your medical bills straight.
First off, it's essential to understand that workers' compensation is insurance for job-related injuries or illnesses for federal employees and other specific groups. When this insurance overlaps with Medicare coverage, it can lead to complications if you're not in the know.
When you receive a workers' compensation settlement for work-related injuries or illnesses, it's crucial to notify Medicare. Failing to do so can result in claim denials and potential reimbursement obligations.
Settlement Effects on Medicare
Under Medicare's secondary payer policy, workers' compensation should cover any treatment for a work-related injury before Medicare steps in. However, if immediate medical expenses crop up before the settlement, Medicare may pay first and initiate a recovery process. To avoid this recovery process, the Centers for Medicare & Medicaid Services (CMS) monitors the amount a person receives from workers' compensation for their injury-related medical care.
In some cases, Medicare may require a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover the care after all the money in the WCMSA has been exhausted.
Reporting Settlements to Medicare
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 is necessary if the 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.
Additionally, 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, submitting a TPOC is also necessary.
Moreover, a person must report to Medicare if they file a liability or no-fault insurance claim.
FAQs
To get in touch with Medicare, call 800-MEDICARE (800-633-4227). During certain hours, live chat is also available on Medicare.gov.
A Medicare set-aside is voluntary, but if a Medicare beneficiary wants to set one up, their workers' compensation settlement must be over $25,000 or over $250,000 if they will qualify for Medicare within 30 months.
Misusing the money in a Medicare set-aside arrangement can lead to claim denials and reimbursement obligations.
Learn More
For more resources to help guide you through the complexities of medical insurance, visit our Medicare hub.
Enrichment Data:
To ensure compliance and maintain access to necessary medical services, Medicare beneficiaries involved in workers' compensation settlements must report these settlements to Medicare through specific channels. Here's a step-by-step guide on how to do this:
- Registration with CMS: Responsible Reporting Entities (RREs), such as employers or insurers, must register with the Centers for Medicare and Medicaid Services (CMS) to report settlements involving Medicare beneficiaries. This is required if the settlement includes medical expenses, regardless of liability determinations[1].
- Information to Report: For workers' compensation settlements with Medicare beneficiaries, the following information must be reported:
- WCMSA amount
- WCMSA funding method (lump sum or annuity)
- Initial deposit amount
- Anniversary (annual deposit amount)
- WCMSA period[4].
- MSA Allocation Reporting: As of April 4, 2025, Medicare requires that if a Medicare Set-Aside (MSA) allocation was prepared, this information must be entered into the WCMSA field during the reporting process. This ensures that Medicare is aware of the MSA amount, even if the case was not submitted for approval[5].
- Annual Attestation: After the settlement, Medicare beneficiaries must maintain accurate records of expenses related to the Medicare Set-Aside (MSA) account. They must annually attest that they used the funds correctly for Medicare-covered, case-related treatment[3].
- Submission Method: Beneficiaries can submit their annual attestations either by mail or electronically through the WCMSA Portal on Medicare.gov[3].
- Timing: The attestation must be submitted no later than 30 days after the anniversary date of the workers' compensation settlement[3].
By following these steps, Medicare beneficiaries can ensure compliance with reporting requirements and maintain access to necessary medical services.
- Workers' compensation settlements that involve Medicare beneficiaries must be reported to the Centers for Medicare & Medicaid Services (CMS) for proper Medicare coverage, especially when the settlement is $25,000 or more, or if the beneficiary will qualify for Medicare within 30 months of the settlement date.
- A necessary piece of information to report for workers' compensation settlements with Medicare beneficiaries includes the Medicare Set-Aside (MSA) amount, funding method, initial deposit amount, annual deposit amount, and the MSA period.
- After the settlement, Medicare beneficiaries must maintain accurate records of expenses related to the Medicare Set-Aside (MSA) account and submit an annual attestation, confirming that they used the funds correctly for Medicare-covered, case-related treatment.
- Medicare beneficiaries can submit their annual attestations either by mail or electronically through the WCMSA Portal on Medicare.gov, with the attestation due no later than 30 days after the anniversary date of the workers' compensation settlement.
