Medicare and Workers' Compensation Interactions: crucial insights
Essential Steps for Reporting Workers' Compensation Settlements to Medicare
Navigating the intersection of workers' compensation and Medicare is crucial for avoid financial complications due to claim denials or reimbursement obligations. Here is a comprehensive guide on what individuals should know about reporting these settlements to Medicare.
Understanding Workers' Compensation
Workers' compensation insurance provides aid for employees who suffer injuries or illnesses directly linked to their employment. The Office of Workers' Compensation Programs (OWCP), under the Department of Labor, oversees these benefits for federal employees, their families, and select other entities.
Due to the overlapping coverage between workers' compensation and Medicare, it is essential that Medicare recipients or those soon to become eligible educate themselves on how this arrangement may affect their Medicare coverage.
The Impact of Workers' Compensation Settlements on Medicare
The secondary payer policy of Medicare mandates that workers' compensation should be the primary payer for any treatment related to a work-related injury. However, if immediate medical expenses arise before the individual receives their workers' compensation settlement, Medicare may cover the costs first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid triggering the recovery process and to protect their interests, the Centers for Medicare & Medicaid Services (CMS) typically monitor the amount a person receives from workers' compensation for their injury or illness-related medical care. In some cases, 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 funds in the WCMSA have been exhausted.
Reporting Requirements
Workers' compensation settlements must be reported to CMS if they meet the following criteria:
- If the person is currently enrolled in Medicare based on age or Social Security Disability Insurance and the settlement is $25,000 or more.
- 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, a person must also report to Medicare if they file a liability or no-fault insurance claim.
Detailed Steps for Reporting Workers' Compensation Settlements
- Identify the Responsible Reporting Entity (RRE): The insurance carrier or third-party administrator is typically responsible for reporting to Medicare under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act.
- Gather Necessary Data: Ensure all information required for reporting (over 200 data fields related to the case) is obtained, including ICD-9 and ICD-10 codes and accident descriptions.
- Submit Information: The RRE submits this information to Medicare through the Section 111 COBSW website.
- Consider a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA): If the settlement meets the thresholds, a WCMSA may be submitted for approval to protect Medicare's interests.
Other Considerations
- Failure to Report: May result in civil monetary penalties of up to $1,000 per day per claim.
- Medicare's Role: Once the information is received, Medicare tracks and denies case-related treatments until settlement funds are exhausted.
Stay informed on the latest CMS guidelines and user guides for updated instructions on reporting requirements and thresholds.
For more resources to help guide you through the intricate world of medical insurance, visit our Medicare hub.
- Engaging in health-and-wellness practices and maintaining a balanced nutrition can contribute to a quicker recovery after a work-related injury, as part of a comprehensive approach that also includes therapies-and-treatments and the correct reporting of workers' compensation settlements to Medicare.
- Since the Centers for Medicare & Medicaid Services (CMS) monitor the amount a person receives from workers' compensation for their injury or illness-related medical care, it is important for to understand the criteria for reporting these settlements to Medicare, such as when the settlement is $25,000 or more for Medicare recipients or soon-to-be eligible individuals.
- Navigating the intersection of workers' compensation and Medicare is critical to avoid financial complications, and the Office of Workers' Compensation Programs (OWCP) oversees these benefits for federal employees, their families, and select other entities.
- Understanding the secondary payer policy of Medicare, which mandates that workers' compensation should be the primary payer for any treatment related to a work-related injury, is important for workers and their families to know, as it may impact their Medicare coverage.
