Medicare and Workers' Compensation: Key Facts to Understand
Topic: Reporting Workers' Compensation Settlements to Medicare
Navigating workers' compensation and Medicare can be a tricky business, but understanding how they interact is crucial to avoid complications and potential financial issues.
Workers' compensation offers support for employees who sustain injuries or illnesses as a direct result of their job. The Office of Workers' Compensation Programs (OWCP) falls under the Department of Labor and covers federal employees, their families, and select other entities.
As a Medicare beneficiary, it's essential to comprehend how workers' compensation can impact your Medicare coverage, particularly when it comes to medical expenses related to work-related injuries.
How does a workers' comp settlement interact with Medicare?
Medicare's secondary payer policy indicates that workers' compensation should be the primary care provider for any treatment received due to a job-related injury. However, in situations where immediate medical expenses arise prior to the workers' compensation settlement, Medicare may cover initial costs and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid a recovery process and protect your funds, the Centers for Medicare & Medicaid Services (CMS) may monitor the amount received from workers' compensation for injury- or illness-related medical care. In certain instances, CMS may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) to manage these funds. Once the WCMSA funds are depleted, Medicare will then cover the remaining medical costs.
What settlements necessitate reporting to Medicare?
When it comes to reporting workers' compensation settlements to Medicare, the total payment obligation to the claimant (TPOC) must be submitted to CMS by responsible parties such as insurance carriers, self-insured employers, and third-party administrators (TPAs). This is done to ensure Medicare covers the appropriate portion of the claimant's medical expenses.
Submitting a TPOC is necessary when an enrolled Medicare recipient receives a settlement of $25,000 or more, or when someone who will become eligible for Medicare within 30 months of the settlement date receives a settlement of $250,000 or more, even if they are not currently enrolled in Medicare. Additionally, if a person files a liability or no-fault insurance claim, it should also be reported to Medicare.
Key takeaways
- Workers' compensation offers support for job-related injuries or illnesses within specific groups, including federal employees.
- To avoid claim denials and reimbursement obligations, it's essential to inform Medicare about workers' compensation arrangements.
- Familiarize yourself with how workers' compensation might affect your Medicare coverage to prevent issues with medical expenses.
For further assistance or questions regarding Medicare, don't hesitate to contact their help desk at 800-MEDICARE (800-633-4227, TTY 877-486-2048). If you require guidance on the Medicare recovery process, you can contact the BCRC at 855-798-2627 (TTY 855-797-2627).
Enrichment data indicates that starting on April 4, 2025, the Centers for Medicare & Medicaid Services (CMS) requires reporting of Workers’ Compensation Medical Set-Aside (WCMSA) data for all full and final settlements involving Medicare beneficiaries in workers' compensation claims. This covers all settlements, regardless of size, as previously only settlements over $25,000 required reporting. Violating these reporting requirements may lead to penalties, potential denial of future Medicare benefits, and increased litigation risks. Employers and insurance carriers must update their internal processes, coordinate with Medicare Secondary Payer compliance, and ensure staff receive adequate training on the new CMS reporting rules to ensure compliance.
Sources:1. CMS.gov, Workers' Compensation Medicare Set-Aside Arrangements (WCMSA) - Frequently Asked Questions2. StrongErrorAttorneys.com, Workers' Compensation Settlements: Key Takeaways, Implications, and Trends in 20233. National Federation of Independent Business (NFIB), Workers' Compensation: A Guide for Small Businesses4. Mercer Law and Public Policy Institute, Workers' Compensation Special Report: The 111(d) Reporting Revolution (Part 2)5. CMS.gov, Workers' Compensation Reporting and Medicare Set-Aside Arrangements (WCMSA) Reporting
- To avoid penalties and maintain Medicare benefits, employers and insurance carriers must adapt their procedures to comply with the CMS requirement starting April 4, 2025, which mandates reporting of Workers' Compensation Medical Set-Aside (WCMSA) data for all settlements involving Medicare beneficiaries.
- In light of the change, it's crucial for these entities to coordinate with Medicare Secondary Payer compliance and provide training for staff to understand the new CMS reporting rules effectively.
- As of April 4, 2025, all workers' compensation settlements, regardless of size, must be reported to Medicare, unlike before, when only settlements over $25,000 were required reporting.
- Neglecting to report workers' compensation arrangements can result in potential denial of future Medicare benefits, increased litigation risks, and violating these reporting requirements.
- In addition to workers' compensation, it's vital to understand how health systems, nutrition, therapies, and treatments, and health-and-wellness can interplay with Medicare to ensure proper coverage and avoid complications.
- Medicare beneficiaries can seek assistance with navigating workers' compensation, settlements, or the Medicare recovery process by contacting CMS at 800-MEDICARE (800-633-4227, TTY 877-486-2048) or the Benefits Coordination & Recovery Center at 855-798-2627 (TTY 858-559-1540).
