Medicare and Workers' Compensation: Essential Facts You Need to Understand
Navigating the interplay between workers' compensation and Medicare is crucial. If you don't inform Medicare about a workers' comp arrangement, you might face claim denials and be obligated to repay Medicare.
Workers' compensation is an insurance that covers employees who sustain injuries or illnesses directly related to their work. The Office of Workers' Compensation Programs within the Department of Labor manages it for federal employees, their families, and certain other entities.
If you're already on Medicare or will soon be eligible, understanding how your workers' comp benefits could impact Medicare's coverage of your workplace-related medical claims is essential. This helpsprevent complications with your medical costs.
Here's the deal with workers' comp settlements and Medicare:
Under Medicare's secondary payer policy, workers' comp should cover any treatment for work-related injuries before Medicare does. However, if immediate medical expenses crop up before you receive your workers' comp settlement, Medicare might pay first and start a recovery process handled by the Benefits Coordination & Recovery Center (BCRC). To avoid this recovery process, the Centers for Medicare & Medicaid Services (CMS) keeps a close eye on the amount you receive from workers' comp for your injury or illness-related medical care.
In some cases, Medicare might ask for a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover your care after all the money in the WCMSA has been used up.
These settlements must be reported to Medicare:
Workers' comp must submit a total payment obligation to the claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of your medical expenses. This means the total amount of workers' comp owed to you or on your behalf. You need to submit a TPOC if you're already on Medicare, based on your age or receiving Social Security Disability Insurance, and the settlement is $25,000 or more.
TPOCs are also necessary if you're not on Medicare yet but will be within 30 months of the settlement date, and the settlement amount is $250,000 or more.
Additionally, you must report to Medicare if you file a liability or no-fault insurance claim.
Frequently asked questions:
You can reach Medicare by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is available on Medicare.gov. If you have questions about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is optional, but if you want to set one up, your workers' comp settlement must be over $25,000. Alternatively, it must be over $250,000 if you're eligible for Medicare within 30 months.
Yes, it's prohibited to use the money in a Medicare set-aside arrangement for any purpose other than the one it's designated for. Misusing the money can result in claim denials and the need to repay Medicare.
Extra Insights:
The Centers for Medicare & Medicaid Services (CMS) has established specific reporting requirements for workers' compensation settlements involving Medicare beneficiaries. These requirements are designed to ensure that Medicare's interests are protected and that settlements are appropriately reported to prevent Medicare from paying for case-related expenses that should be covered by the settlement. A few key reporting requirements include determining if the injured party is a Medicare beneficiary, reporting settlement amounts and MSAs, and adhering to Section 111 reporting requirements to avoid penalties.
The Bottom Line:
Workers' compensation is insurance for job-related injuries or illnesses for federal employees and certain other groups.
It's important that people enrolled in Medicare or who will soon be eligible educate themselves on how workers' compensation may affect their Medicare coverage to prevent issues with medical expenses.
Informing Medicare about workers' comp agreements is crucial to avoid future claim rejections and repayment obligations.
- Understanding the impact of workers' compensation on Medicare's coverage of workplace-related medical claims is essential, especially for those who are already on Medicare or will soon be eligible.
- Medicare's secondary payer policy dictates that workers' comp should cover any treatment for work-related injuries before Medicare does, but if immediate expenses arise before the workers' comp settlement, Medicare might pay first and initiate a recovery process handled by the Benefits Coordination & Recovery Center (BCRC).
- Workers' comp must submit a total payment obligation to the claimant (TPOC) to CMS if the settlement is $25,000 or more and the claimant is already on Medicare or receiving Social Security Disability Insurance, or if the claimant will be within 30 months of the settlement date and the settlement amount is $250,000 or more.
- If a Medicare set-aside arrangement (WCMSA) is established, Medicare will only cover care after all the money in the WCMSA has been used up, and misusing the funds can result in claim denials and the need to repay Medicare.
