Navigating Workers' Compensation and Medicare: Crucial Information
Navigating the labyrinth of workers' comp and Medicare is crucial for federal employees and eligible parties. Here's a straightforward guide on what you need to know:
The Breakdown
- Workers' comp 101: Workers' compensation is insurance designed for folks who suffer work-related injuries or illnesses.The Office of Workers' Compensation Programs (OWCP) under the Department of Labor oversees this benefit for federal workers, their families, and other specified entities.
- Workers' comp vs. Medicare: To prevent issues with medical expenses and potential complications, it's essential to understand how a workers' comp settlement can impact Medicare's coverage. Medicare follows a "secondary payer policy," which means that workers' comp must cover medical expenses related to work injuries first before Medicare steps in.
- When Medicare steps in: If immediate medical expenses arise before workers' comp settlement, Medicare might pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid this process, the Centers for Medicare & Medicaid Services (CMS) keeps a close eye on the amount a person receives from workers' comp for injury-related medical care.
- WCMSA: In certain cases, Medicare may ask for a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare won't cover the care until all the money in the WCMSA is exhausted.
- Reporting to Medicare: Workers' comp must submit a Total Payment Obligation to the Claimant (TPOC) to CMS if a person is enrolled in Medicare based on age or SSDI and the settlement is $25,000 or more. TPOCs are also necessary if the person is not currently enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more.
- Frequently Asked Questions: Contact Medicare at 800-MEDICARE for questions, or schedule a live chat on Medicare.gov during select hours. You can learn more about Medicare's recovery process from the BCRC at 855-798-2627.
- Medicare Set-Aside (MSA): Creating a Medicare Set-Aside arrangement is voluntary, but one is essential if the workers' comp settlement is over $25,000 or $250,000, depending on Medicare eligibility. Misusing funds in a Medicare Set-Aside arrangement can result in claim denials and reimbursement obligations.
The Lowdown
In essence, reporting a workers' compensation settlement to CMS is crucial for Medicare beneficiaries. This is mandated through the Section 111 reporting process, which requires all full and final settlements involving Medicare beneficiaries, irrespective of thresholds or CMS approval. Failure to report can lead to claim denials and enforcement actions by CMS.
- It's vital to understand that workers' comp settlements can impact Medicare coverage, as Medicare follows a "secondary payer policy," requiring workers' comp to cover work-related medical expenses first.
- In cases where Medicare might pay first due to immediate medical expenses, they will initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC) to recoup costs.
- Medicare may ask for a workers' compensation Medicare set-aside arrangement (WCMSA) for injury-related funds, preventing Medicare from covering care until the WCMSA funds are exhausted.
- Workers' comp must submit a Total Payment Obligation to the Claimant (TPOC) to CMS if a person is enrolled in Medicare based on age or SSDI, or if they will qualify within 30 months, and the settlement is above certain thresholds ($25,000 or $250,000, depending on Medicare eligibility).
