Medicare and workers' compensation: Essential insights
Working with Medicare and Workers' Compensation: A Crucial Understanding
Navigating the intersection of workers' compensation and Medicare is essential for avoiding claim denials and costly reimbursements.
Workers' compensation provides insurance for individuals who sustain job-related injuries or illnesses, including federal employees and specific other groups. The Department of Labor's Office of Workers' Compensation Programs (OWCP) oversees this benefit.
For those currently on Medicare or soon to join, it's crucial to understand how workers' compensation might influence Medicare's coverage of medical claims for work-related injuries. This understanding safeguards you from unnecessary medical expenses and financial complications.
How Does a Workers' Comp Settlement Impact Medicare?
Medicare deems workers' compensation as the primary payer for treatment of work-related injuries under the secondary payer policy. However, if immediate medical expenses arise prior to receiving the workers' compensation settlement, Medicare may 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) seeks to monitor the amount received from workers' compensation for injury- or illness-related medical care. In some instances, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover the care after all the funds in the WCMSA have been depleted.
What Settlements Need Reporting to Medicare?
Responsible reporting entities (RREs), typically insurance carriers, third-party administrators, or other workers' compensation payers, must submit a Total Payment Obligation to Claimant (TPOC) to CMS when the person is already enrolled in Medicare based on age or SSDI; the settlement is $25,000 or more; or, if the person is not currently enrolled in Medicare but will qualify for the program within 30 months of the settlement date, and the settlement amount is $250,000 or more.
In addition to workers' comp, reporting is necessary if the person files a liability or no-fault insurance claim.
A Closer Look: Medicare Reporting Requirements
RREs are responsible for Medicare reporting obligations. They must determine if the injured party is a Medicare beneficiary at the time of settlement or will be within a 30-month period. If the individual is (or will be) a Medicare beneficiary and medical payments are being claimed or released, the RRE must submit the required information to Medicare.
Essential Resources
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Enrichment Data: Reporting Obligations - RREs (insurance carriers, third-party administrators, or other workers' compensation payers) are responsible for reporting - They must determine if the injured party is a Medicare beneficiary and submit required information if applicable - Workers' compensation Medicare set-aside arrangements (WCMSAs) must be reported starting April 2025 for cases with a TPOC date - Five main data points must be reported as part of the TPOC/WCMSA process: WCMSA amount, WCMSA funding method, initial deposit amount, annual deposit amount, and WCMSA period - Timely reporting within 30 days of settlement finalization is required to avoid penalties
The Centers for Medicare & Medicaid Services (CMS) requires responsible reporting entities (RREs) to submit a Total Payment Obligation to Claimant (TPOC) when the person is on Medicare based on age or SSDI, the settlement is $25,000 or more, or if the person will qualify for Medicare within 30 months of the settlement date and the settlement amount is $250,000 or more. RREs must determine if the injured party is a Medicare beneficiary at the time of settlement or will be within a 30-month period.
Working with Medicare and Workers' Compensation involves understanding the primary payer role of workers' compensation for treatment of work-related injuries under Medicare's secondary payer policy. Medicare may pay first if immediate medical expenses arise prior to receiving the workers' compensation settlement, and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid a recovery process, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for the funds received from workers' compensation for injury- or illness-related medical care. Medicare will only cover the care after all the funds in the WCMSA have been depleted.
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