Medicare and Workers' Compensation Interactions: Essential Knowledge
Understanding the Importance of Informing Medicare About Workers' Compensation Settlements
Workers' compensation is a crucial insurance program that provides benefits for federal employees and certain other entities who have suffered work-related injuries or illnesses. However, individuals who are already enrolled in Medicare or are soon to qualify must be aware of how workers' compensation benefits may impact their Medicare coverage. Failure to properly notify Medicare can lead to claim denials and reimbursement obligations.
When a workers' compensation settlement is reached, the Centers for Medicare & Medicaid Services (CMS) aims to monitor the amount received for injury or illness-related medical care to avoid a recovery process. Medicare operates as a secondary payer in such cases, meaning workers' compensation must be the primary payer for any treatment related to the work-related injury.
In some instances, Medicare may establish a workers' compensation Medicare set-aside arrangement (WCMSA) to manage funds designated for future medical expenses related to the injury. Once these funds have been exhausted, Medicare will cover any remaining medical costs.
It is essential to submit a Total Payment Obligation to Claimant (TPOC) to CMS when the settlement is $25,000 or more for individuals already enrolled in Medicare or those who will qualify within 30 months of the settlement date. TPOCs are also required for settlements $250,000 or more if the person is not currently enrolled in Medicare but will be eligible within 30 months of the settlement date.
Additionally, a person must report to Medicare if they file a liability or no-fault insurance claim. For any questions or concerns, Medicare can be contacted via phone, 800-MEDICARE (800-633-4227, TTY 877-486-2048) or through a live chat on Medicare.gov during certain hours. For inquiries about the Medicare recovery process, the Benefits Coordination & Recovery Center (BCRC) can be reached at 855-798-2627 (TTY 855-797-2627).
It is prohibited to use the funds allocated in a Medicare set-aside arrangement for purposes other than what it was designated for, as misuse could lead to claim denials and reimbursement obligations. The creation of a WCMSA is voluntary, but it is required if the settlement is over $25,000 or $250,000, depending on the claimant's eligibility for Medicare.
- In light of Medicare's role as a secondary payer in workers' compensation cases, it's crucial to remember that any funds from settlements related to work-related injuries or illnesses should primarily cover treatments.
- Healthsystems need to understand the importance of categorizing Medicare as a secondary payer in workers' compensation cases, as failure to do so could result in claim denials and reimbursement obligations.
- A significant part of health-and-wellness and therapies-and-treatments for work-related injuries may be managed through a Medicare set-aside arrangement (WCMSA), which sets aside funds for future medical expenses.
- Nutrition and health-related expenses related to workers' compensation settlements of $25,000 or more must be appropriately reported to Medicare, as required by the Total Payment Obligation to Claimant (TPOC), to avoid potential issues and ensure proper reimbursement.
