Medicare and Workers' Compensation Interaction: Key Insights
Understanding the ins and outs of notifying Medicare about workers' compensation arrangements is essential to avoid claim denials and potential complications with medical costs. Here's a breakdown of what you need to know:
Workers' comp basics:Workers' compensation is insurance that covers injuries or illnesses directly related to a job for federal employees, their families, and certain other entities. The Office of Workers' Compensation Programs under the Department of Labor handles this benefit.
Impact on Medicare:Under Medicare's secondary payer policy, workers' compensation must cover any treatment for a work-related injury before Medicare steps in. However, if immediate medical expenses arise before the individual receives their workers' compensation settlement, Medicare may pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
Workers' comp settlement reporting:To ensure Medicare covers the appropriate portion of a person's medical expenses, the Centers for Medicare & Medicaid Services (CMS) requires a Total Payment Obligation to the Claimant (TPOC) submission if a person is currently enrolled in Medicare, based on their age or receiving Social Security Disability Insurance, and the settlement is $25,000 or more. Additionally, 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, a TPOC must be submitted.
Important Notes:People must also report to Medicare if they file a liability or no-fault insurance claim. It's prohibited to use the money in a Medicare set-aside arrangement for any purpose other than the one for which it is designated, as misusing the money can lead to claim denials and reimbursement obligations.
Common Questions:You can contact Medicare with any question by phone at 800-MEDICARE or through a live chat on Medicare.gov during certain hours. For questions about the Medicare recovery process, contact the BCRC at 855-798-2627.
Medicare Set-asides:While a Medicare set-aside is voluntary, it is required if a Medicare beneficiary wants to set one up, and their workers' compensation settlement must be over $25,000. Alternatively, if they are eligible for Medicare within 30 months, the settlement must be over $250,000.
New Reporting Requirements:As of April 4, 2025, the CMS mandates that all full and final settlements involving injured workers who are, or were, Medicare beneficiaries must report WCMSA data, regardless of settlement amount or CMS approval. Key data points required in the reporting include the WCMSA total amount, WCMSA period, payment structure, and initial seed money or annual deposit amount (for structured settlements).
Takeaway:Workers' compensation is vital to cover job-related injuries or illnesses. To prevent future claim rejections and reimbursement obligations, it's crucial to inform Medicare about workers' compensation agreements, especially as the reporting requirements have recently changed significantly.
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- To guarantee appropriate Medicare coverage for medical expenses and prevent claim denials, a Total Payment Obligation to the Claimant (TPOC) must be submitted if a person is enrolled in Medicare, receiving Social Security Disability Insurance, or will qualify for Medicare within 30 months, and the workers' compensation settlement is $25,000 or more.
- It's essential to report to Medicare if an individual files a liability or no-fault insurance claim, and misusing money intended for a Medicare set-aside can lead to claim denials and reimbursement obligations.
- The reporting of WCMSA data is mandatory for all full and final settlements involving injured workers who are, or were, Medicare beneficiaries as of April 4, 2025, regardless of settlement amount or CMS approval status.
- Uncategorized entities can benefit from workers' compensation insurance, which is handled by the Office of Workers' Compensation Programs under the Department of Labor and provides coverage for injuries or illnesses directly related to a job for federal employees and certain other entities.
- Under Medicare's secondary payer policy, Healthsystems must cover any treatment for a work-related injury before Medicare steps in; otherwise, the Benefits Coordination & Recovery Center (BCRC) will initiate a recovery process.
