Understanding the Interplay Between Workers' Compensation and Medicare: Crucial Facts Explained
Navigating workers' compensation while on Medicare is a must. Failing to notify Medicare about a workers' compensation arrangement could lead to claim denials and the need to reimburse Medicare.
Workers' compensation serves as insurance for employees who have suffered job-related injuries or illnesses. The responsibility for this benefit falls under the Office of Workers' Compensation Programs (OWCP) under the Department of Labor. This aids federal employees, their families, and specific other entities.
People who are currently on Medicare or are approaching eligibility for the insurance program must understand the potential impact of their workers' compensation benefits on Medicare's coverage of their medical claims. This can prevent complications related to work-related injury or illness medical costs.
Workers' comp settlements and Medicare: what's the deal?
Under Medicare's secondary payer policy, workers' compensation must be the primary payer for any treatment related to a work-related injury.
However, 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) aims to monitor the amount a person receives from workers' compensation for their injury or illness-related medical care. In some cases, Medicare may ask for the establishment of 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.
Which settlements need to be reported to Medicare?
When a workers' compensation settlement exceeds $25,000 for an individual already on Medicare or nearing eligibility within 30 months, the total payment obligation to the claimant (TPOC) must be reported to CMS. It's essential to provide this TPOC if the person is already enrolled in Medicare or will be within 30 months due to age or receiving Social Security Disability Insurance, and the settlement is $25,000 or more.
Apart from workers' comp, it's necessary to report to Medicare if a person files a liability or no-fault insurance claim.
Common questions
For queries related to Medicare, a person can reach out to Medicare by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During specified hours, a 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. However, if a Medicare beneficiary wants to set one up, their workers' compensation settlement must be over $25,000 or $250,000 if they are eligible for Medicare within 30 months.
Yes, it is prohibited to use the money in a Medicare set-aside arrangement (like a WCMSA) for purposes other than the intended one. Misusing the funds can result in claim denials and the need to reimburse Medicare.
For more in-depth information about Medicare set-asides, visit our Medicare hub.
To Summarize:
- Workers' compensation is necessary for federal employees who suffer job-related injuries or illnesses.
- Educating oneself about how workers' compensation may affect Medicare coverage is essential to prevent complications with work-related medical expenses.
- Informing Medicare about workers' compensation agreements is crucial to avoid future claim rejections and reimbursement obligations.
If you are a Medicare beneficiary and have received a workers’ compensation settlement, consult your settlement administrator or attorney to determine whether a WCMSA is involved and what your specific reporting obligations are.
- Under Medicare's secondary payer policy, workers' compensation is required to be the primary payer for any treatment related to a work-related injury.
- When a workers' compensation settlement exceeds $25,000 for an individual already on Medicare or nearing eligibility within 30 months, the total payment obligation to the claimant (TPOC) must be reported to CMS.
- A Medicare set-aside is voluntary but is necessary if a Medicare beneficiary wants to set one up and their workers' compensation settlement is over $25,000 or $250,000 if they are eligible for Medicare within 30 months.
- Misusing funds in a Medicare set-aside arrangement (like a WCMSA) for purposes other than the intended one can result in claim denials and the need to reimburse Medicare.
