Workers' Compensation and Medicare Interactions: Essential Facts Explored
Educating oneself about the implications of workers' compensation on Medicare is integral for individuals enrolled in or planning to enroll in the health insurance program. Failure to notify Medicare about a workers' compensation arrangement can result in claim denials and the need to reimburse the federal program.
Workers' compensation offers financial assistance to employees who have sustained job-related injuries or illnesses. The Office of Workers' Compensation Programs, under the U.S. Department of Labor, is responsible for this benefit, which applies to federal workers, their families, and specified other entities.
People already enrolled in Medicare or those who will soon qualify need to understand how workers' compensation may impact Medicare's coverage of their medical claims. It is crucial to avoid complications with medical costs associated with work-related injuries or illnesses.
Understanding Workers' Comp and Medicare Interaction
Under Medicare's secondary payer policy, workers' compensation serves as the primary payer for treatments related to a work-related injury. If immediate medical expenses arise before the individual receives their workers' compensation settlement, however, Medicare may cover the costs 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) typically tracks the amount received from workers' compensation for the injury or illness-related medical care.
In particular cases, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA). Medicare will only cover treatment after all the funds in the WCMSA have been utilized.
Reporting Workers' Compensation Settlements to Medicare
Workers' compensation must submit a Total Payment Obligation to the Claimant (TPOC) to CMS to ensure that 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 the person is currently enrolled in Medicare based on age or Social Security Disability Insurance and if the settlement exceeds $25,000. TPOCs are also necessary for those who will qualify for Medicare within 30 months of the settlement date, provided the settlement amount is $250,000 or more. Additionally, a person must report to Medicare if they file a liability or no-fault insurance claim.
Frequently asked questions can be addressed by contacting Medicare at 800-MEDICARE (800-633-4227) or via live chat on Medicare.gov during certain hours. Inquiries about the Medicare recovery process can be directed to the BCRC at 855-798-2627.
A Medicare set-aside is voluntary, but if a Medicare beneficiary chooses to set one up, their workers' compensation settlement must be over $25,000 (or $250,000 if the beneficiary will be eligible for Medicare within 30 months of the settlement date). It is prohibited to use the money in a Medicare set-aside arrangement for any purpose other than the one for which it is designated, as misusing the funds can lead to claim denials and the need to reimburse Medicare.
Workers' compensation settlements involving a Medicare beneficiary must be reported via the Section 111 process through the CMS Coordination of Benefits Secure Website (COBSW) platform once a TPOC is established, especially after April 4, 2025. The reporting is required for RREs, typically insurance carriers or third-party administrators, using the COBSW to submit claim information via electronic file exchange or manual direct data entry on the COBS website.
It is essential to understand the intricacies of workers' compensation and its impact on Medicare to prevent issues with medical expenses and complications in claim reimbursements. Informed decision-making is crucial when dealing with workers' compensation settlements and Medicare enrollment or eligibility.
- To ensure proper Medicare coverage for work-related treatments, Medicare's secondary payer policy positions workers' compensation as the primary payer for such injuries.
- In certain cases, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) and will only cover treatment after all the funds in the WCMSA are exhausted.
- In order to optimize Medicare's coverage of medical expenses for a worker's compensation claim, Total Payment Obligation to the Claimant (TPOC) must be submitted to CMS when the settlement exceeds $25,000, or $250,000 for those Medicare-eligible within 30 months of the settlement date.
- Preventing complications with medical costs and claim reimbursements calls for understanding the intricacies of workers' compensation and its impact on Medicare, as failing to notify Medicare about a workers' compensation arrangement can result in claim denials and the need to reimburse the federal program.
