Understanding interplay between worker's benefits and Medicare: Crucial insights
Importance of Informing Medicare About Workers' Compensation Settlements
Workers' compensation is a crucial insurance program for federal employees and eligible groups, providing coverage for job-related injuries or illnesses. However, misunderstanding the interaction between workers' compensation and Medicare can lead to claim denials and reimbursement obligations for Medicare beneficiaries.
Under Medicare's secondary payer policy, workers' compensation must be the primary payer for any treatment a person receives for a work-related injury. This policy ensures that Medicare's coverage of medical claims for injuries or illnesses sustained at work is not compromised.
People currently enrolled in Medicare or approaching eligibility should beware of potential complications with medical costs associated with work-related injuries. To prevent such complications, it is essential to understand how workers' compensation benefits may affect Medicare's coverage.
Interplay Between Workers' Compensation Settlements and Medicare
If immediate medical expenses arise before an individual receives their workers' compensation settlement, Medicare may 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' compensation for injury-related medical care. In some cases, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds.
Reporting Workers' Compensation 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. The submission of a TPOC is necessary when a person is enrolled in Medicare based on their age or Social Security Disability Insurance (SSDI), and the settlement is $25,000 or more. TPOCs are also required if the person is not currently enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more.
TPOC reporting requirements have been mandatory for records with a TPOC date on or after April 4, 2025. Failure to accurately report workers' compensation settlements involving Medicare beneficiaries can result in civil monetary penalties of up to $1,000 per day, per claim beginning October 2025.
FAQs
A person can ask questions about the workers' compensation reporting process to Medicare by calling 800-MEDICARE during designated hours. Live chat is also available on Medicare.gov. For questions about the Medicare recovery process, contact the BCRC at 855-798-2627.
Frequently Asked Questions
- A Medicare set-aside is optional, but if a person wants to establish one, their workers' compensation settlement must be over $25,000 or over $250,000 if they are eligible for Medicare within 30 months.
- It is prohibited to misuse the funds in a Medicare set-aside arrangement (such as a WCMSA) for any purpose other than the one for which it is designated. Misusing such funds can lead to claim denials and reimbursement obligations.
Takeaway
Understanding the mechanism connecting workers' compensation and Medicare is crucial for individuals enrolled in Medicare or approaching eligibility to prevent complications with medical expenses. Properly informing Medicare about workers' compensation agreements is essential to avoid claim denials and reimbursement obligations.
For more resources, visit our Medicare hub to help navigate the complexities of medical insurance.
- If a workers' compensation settlement involves a Medicare beneficiary, it should be reported to the Centers for Medicare & Medicaid Services (CMS) to ensure appropriate coverage of medical expenses.
- The Total Payment Obligation to the Claimant (TPOC) must be submitted to CMS when a person is enrolled in Medicare based on their age or Social Security Disability Insurance (SSDI), and the settlement is $25,000 or more.
- TPOC reporting is also necessary if the person is not currently enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more.
- Failure to accurately report workers' compensation settlements can result in civil monetary penalties starting October 2025, with penalties of up to $1,000 per day, per claim.
- A Medicare set-aside arrangement (such as a WCMSA) is optional, but if established, it should only be used for injury-related medical care to avoid claim denials and reimbursement obligations. Misuse of funds can lead to penalties.
- For questions about the workers' compensation reporting process or the Medicare recovery process, you can contact CMS at 800-MEDICARE or the Benefits Coordination & Recovery Center (BCRC) at 855-798-2627. For more resources, visit the Medicare hub on our website.
