Navigating Workers' Compensation and Medicare: Crucial Insights to Understand
The Lowdown on Notifying Medicare About Workers' Compensation:
Navigating the waters of workers' compensation and Medicare can be tricky, but it's crucial to stay afloat. Ignoring the rules could lead to claim denials and the dreaded obligation to pay back Medicare.
Workers' compensation serves as insurance for those who've suffered job-related injuries or illnesses. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor handles this benefit for federal employees, their families, and specific other entities.
For individuals currently on Medicare or soon qualifying, understanding how workers' compensation might impact Medicare coverage is essential to avoid complications when it comes to covering medical costs from work-related injuries or illnesses.
Workers' Comp Settlement Impact on Medicare:
Under Medicare's secondary payer policy, workers' compensation should cover any treatment related to work injuries before Medicare steps in. However, if immediate medical expenses arise before the workers' compensation settlement, Medicare may cover the initial costs and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid this, the Centers for Medicare & Medicaid Services (CMS) tends to monitor the amount a person receives from workers' compensation for their injury-related medical care. In some situations, 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 the WCMSA funds are exhausted.
Reportable Settlements:
Workers' compensation must provide a total payment obligation to the claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of a person's medical expenses. This represents the total amount of workers' compensation owed to the person or on their behalf.
Submitting a TPOC is necessary if a person is already enrolled in Medicare based on their age or based on receiving Social Security Disability Insurance and if the settlement is $25,000 or more. TPOCs are also mandatory 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, filing a liability or no-fault insurance claim requires reporting to Medicare.
Miscellaneous FAQs:
A person can contact Medicare with any questions by phone at 800-MEDICARE (800-633-4227), TTY 877-486-2048, or during certain hours, a live chat is available on Medicare.gov. For questions about the Medicare recovery process, the BCRC can be reached at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary, but if a Medicare beneficiary wants to set one up, their workers' compensation settlement must be over $25,000 or over $250,000 if they are eligible for Medicare within 30 months. It is prohibited to misuse the money in a Medicare set-aside arrangement for purposes other than those designated, as doing so can lead to claim denials and the need to reimburse Medicare.
"Insights:Reporting of workers' compensation settlements, and particularly Workers' Compensation Medicare Set-Asides (WCMSAs), plays a significant role in Medicare coverage and reimbursement. Below is a summary of this process and its implications:
Reporting Requirements:
- Mandatory Reporting: Federal law, specifically the Medicare, Medicaid, and SCHIP Extension Act (MMSEA), requires primary payers (like insurers and self-insured employers) to report workers' compensation settlements involving Medicare beneficiaries to the CMS. This applies regardless of whether the settlement includes payment for medical expenses or not, if the claim involves a potential for Medicare coverage[1][5].
- Data Points Reported: For WCMSA-related cases, primary payers must report key data, such as WCMSA amount, funding method (lump sum or annuity), initial deposit amount, annual deposit (if applicable), and the WCMSA period. Additional details, like the case control number and administrator EIN, may be required or optional depending on recent CMS guidance[2].
- Timing and Penalties: Failure to comply with these reporting requirements can result in civil penalties up to $1,000 per day per incident. If Medicare must take legal action to recover payments made in error, it may recover up to double the amount owed[1][5].
Effect on Medicare Coverage and Reimbursement:
- Coordination of Benefits: Reporting allows CMS to coordinate benefits effectively. When a settlement or award includes funds for future medical expenses related to the workers' compensation injury, a WCMSA is established to pay for those future medical expenses. This ensures that Medicare does not pay for injury-related medical costs that are the responsibility of the workers' compensation insurer[5].
- Medicare Denial of Payment: After reporting, CMS places a marker in its systems to identify cases involving a WCMSA. This marker helps CMS deny payment for treatment and prescription drugs related to the workers' compensation injury, as these costs should be covered from the WCMSA funds[5].
- WCMSA Review Thresholds: CMS reviews proposed WCMSA amounts when certain thresholds are met, ensuring the set-aside is sufficient to cover future Medicare-covered expenses. If the set-aside is exhausted, Medicare may begin to pay for injury-related expenses as long as the claimant is otherwise eligible[2][5].
- Policy Updates: Recent policy changes, such as the new $0 WCMSA process, require even more detailed reporting and documentation. CMS now requires that if a MSA allocation (including a $0 allocation) was prepared on the case, that information must be entered into CMS’s system[2][4].
"Bucket Summary:- Prevents Medicare From Paying for Injury-Related Expenses: Proper reporting and WCMSA establishment prevent Medicare from paying for medical expenses that should be covered by workers' compensation funds.- Ensures Compliance and Avoids Penalties: Accurate and timely reporting is required by law, and non-compliance can result in significant penalties[1][5].- Facilitates Efficient Claims Processing: Reporting and WCMSA establishment streamline the adjudication of claims and help prevent improper billing to Medicare.**
"Final Thought:Workers' compensation serves as insurance for job-related injuries or illnesses, primarily for federal employees and specific groups. It's essential for those enrolled in Medicare or soon to be eligible to educate themselves on how workers' compensation might affect their Medicare coverage to avoid complications with medical expenses and to properly inform Medicare about workers' compensation arrangements to avoid future claim rejections and reimbursement obligations.**
Medicare Resources:
For more resources to help navigate the intricate world of medical insurance, visit our Medicare hub.
- In some situations, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for funds related to injury-related medical care.
- Submitting a total payment obligation to the claimant (TPOC) is necessary if a person is already enrolled in Medicare based on their age or based on receiving Social Security Disability Insurance and if the settlement is $25,000 or more.
- Reporting and WCMSA establishment streamline the adjudication of claims and help prevent improper billing to Medicare.
- A Medicare set-aside is voluntary, but if a Medicare beneficiary wants to set one up, their workers' compensation settlement must be over $25,000 or over $250,000 if they are eligible for Medicare within 30 months.
