Understanding the Interplay between Workers' Compensation and Medicare: Crucial Information
Rewritten Article
Navigating the intersection of workers' compensation and Medicare is essential, lest you risk claim denials and the burden of reimbursing Medicare.
Workers' compensation, an insurance scheme for employees suffering work-related injuries or illnesses, falls under the Office of Workers' Compensation Programs (OWCP), part of the Department of Labor. It benefits federal employees, their families, and certain other entities.
For those currently enrolled in Medicare or about to join, understanding how workers' compensation might impact Medicare's coverage of work-related medical claims is necessary to streamline medical costs and avoid complications.
The influence of a workers' comp settlement on Medicare
Under Medicare's secondary payer policy, workers' compensation should cover any medical treatment for a work-related injury before Medicare takes over. However, if medical expenses crop up before the person receives the workers' compensation settlement, Medicare might pay first, and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid a recovery process, the Centers for Medicare & Medicaid Services (CMS) tends to monitor the amount a person receives from workers' compensation for their injury-related medical care.
In some instances, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover care after all the money in the WCMSA has been exhausted.
Settlements requiring notification to Medicare
Workers' compensation must submit a total payment obligation to the claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of the person's medical expenses. This represents the total amount of workers' compensation owed to the person.
Submitting a TPOC becomes necessary if a person is already enrolled in Medicare based on age or Social Security Disability Insurance, and the settlement exceeds $25,000. Additionally, TPOCs are necessary if the person is not enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount surpasses $250,000.
Furthermore, any liability or no-fault insurance claim filed by the person must also be reported to Medicare.
Frequently asked questions
For any inquiries, Medicare can be contacted at 800-MEDICARE (800-633-4227, TTY: 877-486-2048) or through a live chat on Medicare.gov during certain hours. Questions about the Medicare recovery process can be directed to the BCRC at 855-798-2627 (TTY: 855-797-2627).
A Medicare set-aside is voluntary but is necessary if the workers' compensation settlement exceeds $25,000 or $250,000 if the person eligible for Medicare within 30 months.
Misusing funds from a Medicare set-aside arrangement (such as a WCMSA) is prohibited and may lead to claim denials and reimbursement obligations.
"Learn more: Understanding Medicare Set-Asides
Key Insights
From April 4, 2025, all workers' compensation full and final settlements involving Medicare beneficiaries must be reported to CMS, regardless of whether CMS approval is requested. Compliance with these reporting requirements is crucial to prevent civil penalties, claim denials, and Medicare reimbursement demands.
Ensuring proper management of workers' compensation settlements and adherence to CMS's reporting rules can help protect Medicare benefits for beneficiaries.
Medicare resources
Our Medicare hub provides valuable resources to help you navigate the complex world of medical insurance.
[1]: https://www.cms.gov/medicare/coordination-of-benefits-and-recovery/coordination-of-benefits-and-recovery-policy-manual/ learn-about-section-111-reporting-process
- Navigating the intersection of workers' compensation and Medicare is vital to avoid claim denials and the obligation of reimbursing Medicare.
- Under Medicare's secondary payer policy, workers' compensation should cover work-related medical treatments before Medicare takes over, but if expenses arise before compensation, Medicare might pay first.
- In such cases, Medicare may request a workers' compensation Medicare set-aside arrangement (WCMSA) for the funds, only covering care after the WCMSA's depletion.
- Workers' compensation is required to submit a total payment obligation to the claimant (TPOC) to Medicare if the settlement exceeds $25,000 for those already enrolled in Medicare or $250,000 for those qualifying within 30 months.
- Failing to follow CMS's reporting requirements from April 4, 2025, could lead to civil penalties, claim denials, and Medicare reimbursement demands.
- To streamline medical costs and avoid complications, it is essential to understand the potential impact of workers' compensation on Medicare's coverage of work-related medical claims, especially in the context of health-and-wellness, healthsystems, therapies-and-treatments, nutrition, and science.
