Medicare and Workers' Compensation Interactions: Key Points to Understand
Advising Medicare of a workers' compensation arrangement is essential to avoid claim denials and potential reimbursement obligations.
Workers' compensation is insurance coverage for employees who suffer job-related injuries or illnesses. Administered by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor, this benefit extends to federal employees, their families, and select other entities.
Those already enrolled in Medicare or soon eligible should understand the possible impact of workers' compensation benefits on Medicare's medical claim coverage to prevent complications with work-related medical expenses.
The Impact of Workers' Comp Settlements on Medicare
Under Medicare's secondary payer policy, workers' compensation is expected to be the primary payer for medical treatment associated with work-related injuries. However, if immediate medical expenses arise before receiving workers' compensation settlement, Medicare may cover initial costs and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid the recovery process and preserve funds, the Centers for Medicare & Medicaid Services (CMS) monitors the amount received from workers' compensation 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 following the exhaustion of funds in the WCMSA.
Reportable Settlements to Medicare
When submitting workers' compensation settlements to CMS, a Total Payment Obligation to the Claimant (TPOC) must be reported if the individual is enrolled in Medicare based on age or Social Security Disability Insurance, and the settlement exceeds $25,000. Additionally, TPOCs are necessary if the person will qualify for Medicare within 30 months of the settlement date, and the settlement amount is $250,000 or more.
Liability or no-fault insurance claims filing must also be reported to Medicare.
Notably, the use of funds in a Medicare set-aside arrangement, such as a WCMSA, should be restricted to the intended purpose to avoid claim denials and reimbursement obligations. Misusing these funds can lead to complications.
Key Points to Remember
- Educate yourself on how workers' compensation may affect Medicare coverage to prevent medical expense issues.
- Report workers' compensation agreements to Medicare to avoid claim rejections and reimbursement obligations.
- For more resources to assist with navigating medical insurance, visit the Medicare hub.
- Workers' compensation benefits could interfere with Medicare's medical claim coverage, hence understanding the impact is crucial to avoid complications.
- The Office of Workers' Compensation Programs administers workers' compensation insurance for employees with job-related injuries or illnesses.
- In cases where initial medical expenses occur before workers' compensation settlement, Medicare may initially cover costs and initiate a recovery process.
- Medicare's secondary payer policy dictates that workers' compensation is the primary payer for medical treatment related to work-related injuries.
- If the workers' compensation settlement exceeds $25,000 for Medicare-eligible individuals, it must be reported to CMS, including settlements that will make them eligible for Medicare within 30 months.
- Misusing funds in a Medicare set-aside arrangement (WCMSA) can lead to claim denials, reimbursement obligations, and potential complications.
- To ensure workplace wellness, health systems may offer fitness and exercise programs along with nutrition guidance, science-based therapies, and treatments as part of a comprehensive health-and-wellness plan, potentially reducing reliance on Medicare and managing personal-finance better through wealth-management strategies and responsible business practices in personal-finance management.
