Medicare and Workers' Compensation Interactions: Essential Information for Claimants
Working with Medicare and Workers' Compensation: Navigating the system when you've been injured on the job is crucial. Neglecting to notify Medicare about your workers' compensation arrangement could lead to claim denials and the need to pay back Medicare.
Workers' compensation provides benefits for employees who've suffered injuries or illnesses directly linked to their jobs. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor is responsible for this insurance, which applies to federal employees, their families, and certain other entities.
As a Medicare recipient or soon-to-be member, it's essential to understand how workers' comp may affect Medicare's coverage of medical expenses related to job-related injuries or illnesses. This knowledge helps prevent complications with medical costs for injuries or illnesses incurred at work.
How does a workers' comp settlement affect Medicare?
Under Medicare's secondary payer policy, workers' compensation must be the primary payer for any treatment a person receives for a work-related injury. 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). To avoid this process, the Centers for Medicare & Medicaid Services (CMS) often aims to monitor the amount a person receives from workers' compensation for their injury or illness-related medical care.
In some cases, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover the care after all the money in the WCMSA has been exhausted.
What settlements have to be reported to Medicare?
If a person is already enrolled in Medicare based on their age or based on receiving Social Security Disability Insurance and the settlement is $25,000 or more, they must submit a total payment obligation to the claimant (TPOC) to CMS. TPOCs are also necessary 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. Additionally, if a person files a liability or no-fault insurance claim, they must report to Medicare as well.
Important Information for Workers' Compensation Reporting
- New standards, effective April 4, 2025, require WCMSA reporting for all full and final settlements involving Medicare beneficiaries, whether CMS approval is requested or not. This includes settlements below $25,000 and those with a $0 WCMSA allocation.
- Failure to report can lead to civil penalties or denial of Medicare benefits for future medical care. Employers and carriers could face legal action if Medicare denies coverage due to non-compliance.
- Reporting must include the settlement amount, WCMSA allocation, and funding mechanisms through the Section 111 reporting process.
If you have questions about workers' compensation or Medicare, contact the Centers for Medicare & Medicaid Services at 800-MEDICARE (800-633-4227, TTY 877-486-2048), or visit Medicare.gov during certain hours to chat live. If you have questions about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 855-797-2627).
Remember, a Medicare set-aside is voluntary, but it must be over $25,000 if a Medicare beneficiary wants to set one up. If a non-beneficiary is soon to become eligible for Medicare, a WCMSA might be advisable, especially if the settlement is substantial enough to impact Medicare's secondary payer role. Misusing the money in a Medicare set-aside arrangement can lead to claim denials and the need to pay back Medicare.
"Dig Deeper: Understanding Medicare Set- Asides"
Takeaway
Workers' compensation provides benefits for job-related injuries or illnesses for federal employees and certain other groups. Educating yourself about how workers' compensation might affect your Medicare coverage can help prevent issues with medical expenses. Informing Medicare about workers' compensation agreements is crucial to avoid future claim rejections and reimbursement obligations. Pay close attention to reporting requirements, especially if you're a Medicare beneficiary, as new standards, effective April 4, 2025, require comprehensive reporting for all settlements.
- Medicare must be notified about a worker's compensation arrangement to avoid potential claim denials and the need to pay back Medicare.
- Under Medicare's secondary payer policy, workers' compensation should be the primary payer for any treatment related to job-related injuries, but if expenses arise before the workers' compensation settlement, Medicare may pay first.
- If a Medicare recipient receives a workers' compensation settlement of $25,000 or more, they must submit a total payment obligation to the claimant (TPOC) to Medicare.
- New reporting standards, effective April 4, 2025, require the reporting of all full and final settlements involving Medicare beneficiaries, regardless of the settlement amount or the need for Medicare approval.
