Medicare and Workers' Compensation: Key Information for Understanding Interactions
Understanding the interaction between workers' compensation and Medicare is crucial for employees who have experienced job-related injuries or illnesses. Failure to notify Medicare about a workers' comp arrangement can lead to claim denials and the necessity of reimbursing Medicare.
Workers' compensation serves as insurance coverage for those dealing with injuries or illnesses that are directly work-related. The responsibility of administering this benefit falls under the Office of Workers' Compensation Programs (OWCP) within the Department of Labor, covering federal employees, their families, and certain other entities.
It's essential for individuals currently enrolled in Medicare or those approaching Medicare eligibility to be aware of how their workers' compensation benefits might influence Medicare's coverage of medical claims associated with work injuries. This knowledge is vital in mitigating potential complications with medical costs stemming from work-related injuries or illnesses.
How does a workers' comp settlement affect Medicare?
In accordance with Medicare's secondary payer policy, workers' comp must be the primary source of coverage for any medical treatment related to a work injury. However, if immediate medical expenses arise before the individual receives their workers' comp settlement, Medicare may cover the costs initially and initiate a recovery process handled by the Benefits Coordination & Recovery Center (BCRC).
To prevent a recovery process and consequently avoid potential claim denials and reimbursement obligations, the Centers for Medicare & Medicaid Services (CMS) generally monitor the amount an individual receives from workers' comp for their injury or illness-related medical treatment. In some cases, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds, covering medical care only after the entire WCMSA has been exhausted.
What settlements need to be reported to Medicare?
Employers offering workers' comp must submit a Total Payment Obligation to the Claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of a person's medical expenses. A TPOC is necessary if a person is already enrolled in Medicare based on their age or due to receiving Social Security Disability Insurance and the settlement is $25,000 or more.
Additionally, TPOCs must be submitted if the individual is not yet 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. It's also essential to report to Medicare if a liability or no-fault insurance claim is filed.
Frequently Asked Questions
For questions about Medicare, individuals can contact Medicare toll-free at 800-MEDICARE (800-633-4227) or use a live chat via the Medicare.gov website within specific hours. For inquiries concerning the Medicare recovery process, they can contact the BCRC at 855-798-2627.
A Medicare set-aside is voluntary, but it is necessary for individuals to set one up if their workers' compensation settlement exceeds $25,000 or $250,000 if they are eligible for Medicare within 30 months. Misusing the money from a Medicare set-aside arrangement can lead to claim denials and the requirement to reimburse Medicare.
Learn more about Medicare set-asides in our dedicated article.
Takeaway
Workers' compensation serves as insurance for job-related injuries or illnesses for federal employees and eligible groups. It's crucial for those enrolled in Medicare or soon to qualify for the program to understand how workers' compensation may impact their Medicare coverage and to report their workers' comp arrangements to Medicare to prevent claim denials and reimbursement obligations.
Medicare Resources
For additional guidance and resources on medical insurance, visit our Medicare hub.
- In the event of a workers' compensation settlement, the Centers for Medicare & Medicaid Services (CMS) requires a Total Payment Obligation to the Claimant (TPOC) to be submitted for Medicare to cover the appropriate portion of medical expenses.
- Medicare’s secondary payer policy mandates workers' comp as the primary source of coverage for medical treatment resulting from work injuries. However, if immediate medical expenses arise before the workers' comp settlement, Medicare may initially cover costs and initiate a recovery process.
- To avoid potential claim denials and reimbursement obligations, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for funds exceeding $25,000, which covers medical care only after the entire WCMSA has been exhausted.
- Beneficiaries currently enrolled in Medicare or approaching eligibility should be mindful of how their workers' compensation benefits might influence Medicare's coverage of medical claims associated with work injuries to mitigate potential complications with medical costs.
