Understanding workers' compensation and its interaction with Medicare: Essential information for your awareness
Simplifying Workers' Compensation and Medicare: A Crucial Connection
Navigating the intersection between workers' compensation and Medicare is vital for those who have sustained job-related injuries or illnesses. Failure to understand this connection can lead to claim denials and reimbursement obligations.
Workers' compensation serves as insurance for federal employees and certain groups, covering injuries or illnesses directly related to their jobs. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor manages this benefit.
For those already enrolled in Medicare or about to join, it's essential to comprehend how workers' compensation might affect Medicare's coverage of their medical claims. This awareness can prevent complications with medical costs for work-related injuries.
Understanding Workers' Compensation Settlements and Medicare
Under Medicare's secondary payer policy, workers' compensation must be the primary payer for any treatment related to a work-related injury. 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 a recovery process, the Centers for Medicare & Medicaid Services (CMS) generally monitors 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.
When to Report Workers' Compensation Settlements to Medicare
Workers' compensation 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. 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 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.
In addition to workers' comp, a person must report to Medicare if they file a liability or no-fault insurance claim.
Key Takeaways
- Workers' compensation is insurance for job-related injuries or illnesses for federal employees and certain other groups.
- It's crucial that those enrolled in Medicare or about to join educate themselves on how workers' compensation may affect their Medicare coverage to prevent issues with medical expenses.
- Informing Medicare about workers' compensation agreements is essential to avoid future claim rejections and reimbursement obligations.
For Further Insights
Dive deeper into the intricacies of Medicare set-asides with our comprehensive resources. Visit our Medicare hub for additional guidance navigating the complex world of medical insurance.
[1] Source: Federal Register, December 13, 2010[2] Source: Medicare.gov[3] Source: CMS.gov[4] Source: Federal Register, February 15, 2022[5] Source: CMS.gov, July 2022 Update on $0 WCMSA Policy Changes
- Workers' compensation settlements can impact Medicare's coverage of health-and-wellness expenses for work-related injuries, as per Medicare's secondary payer policy.
- Medicare may require the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for funds received from workers' compensation, if the amount is deemed significant enough.
- It's important to report total payment obligation to the claimant (TPOC) to Medicare for settlements over $25,000, to ensure Medicare's coverage of a person's medical expenses.
- Therapies-and-treatments for workers' compensation recipients may be covered by Medicare only after the exhaustion of funds in the WCMSA.
