Understanding Interactions between Workers' Compensation and Medicare: Crucial Information
Rewritten Article:
When it comes to workers' comp and Medicare, it's crucial to keep Medicare in the loop. Skipping this step could lead to claim denials and potential reimbursements down the line.
Workers' compensation is the insurance that kicks in when employees suffer injuries or illnesses directly related to their jobs. This benefit is managed by the Office of Workers' Compensation Programs (OWCP), which operates under the Department of Labor. It covers federal employees, their families, and certain other entities.
If you're already on Medicare or planning to join soon, it's vital to understand how your workers' comp benefits will interact with Medicare. This knowledge helps prevent any unwanted complications with medical costs related to work-related injuries.
How a Workers' Comp Settlement Interacts with Medicare
Under Medicare's secondary payer policy, workers' comp must cover any treatment for work-related injuries before Medicare takes over. However, if immediate medical expenses arise before you receive your workers' comp settlement, Medicare may pay first and start a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid this recovery process, the Centers for Medicare & Medicaid Services (CMS) generally monitors the amount you receive from workers' comp for your injury or illness-related medical care. In some cases, Medicare might require 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 used up.
Settlements that Need to be Reported to Medicare
Workers' comp should send a total payment obligation to the claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of your medical expenses. This represents the total amount of workers' comp owed to you or on your behalf.
You'll need to submit a TPOC if you're already on Medicare based on your age or Social Security Disability Insurance, and the settlement is $25,000 or more. TPOCs are also required if you aren't on Medicare yet but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more.
In addition to workers' comp, you'll also need to report to Medicare if you file a liability or no-fault insurance claim.
FAQ
You can contact Medicare with any questions by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, live chat is also available on Medicare.gov. If you have questions about the Medicare recovery process, reach out to the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary. However, if you want to set one up, your workers' comp settlement must be over $25,000. Alternatively, it must be over $250,000 if you're eligible for Medicare within 30 months.
Yes, it's prohibited to misuse the money in a Medicare set-aside arrangement, such as a WCMSA, for anything other than the purpose it's designated for. Misuse can lead to claim denials and the need to reimburse Medicare.
"Takeaway
Workers' compensation is insurance for job-related injuries or illnesses for federal employees and certain other groups. It's important that those enrolled in Medicare or planning to soon educate themselves on how workers' compensation may affect their Medicare coverage.
Reporting workers' compensation settlements to Medicare helps prevent future claim rejections and reimbursement obligations. With new regulations coming into effect on April 4, 2025, it's essential to understand the reporting requirements and the information you'll need to share."
Additional Insights
Starting April 4, 2025, all workers' compensation settlements involving Medicare beneficiaries that include medical treatment or costs must be reported to CMS, regardless of whether CMS approval is requested. This applies to all settlements, including those that:
- Do not meet CMS thresholds for review
- Include evidence-based Medicare Set-Aside (MSA) amounts
- Include no allocation for future medical treatment
Failure to report can result in civil money penalties for employers or responsible parties. The reporting process involves submitting the settlement details via the CMS Section 111 Mandatory Insurer Reporting process, which includes the MSA allocation, expected duration, funding method, and more. The purpose of this reporting is to ensure Medicare's interests are considered and to prevent it from paying for medical expenses that should be covered by workers' compensation.
- Uncategorized: It's significant to understand the interactions between workers' comp and science, specifically Medicare's secondary payer policy, to prevent future claim rejections and reimbursement obligations.
- Healthsystems and health-and-wellness: The Benefits Coordination & Recovery Center (BCRC) manages a recovery process when Medicare pays first for immediate medical expenses related to work-related injuries before workers' comp takes over, but this can be avoided by following the proper guidelines.
- Nutrition: Workers' comp settlements should be reported to Medicare, as represented by the total payment obligation to the claimant (TPOC), to ensure Medicare covers the appropriate portion of the medical expenses, especially for settlements exceeding $25,000 or $250,000 based on certain eligibility conditions.
- Therapies-and-treatments: As of April 4, 2025, all workers' compensation settlements involving Medicare beneficiaries that include medical treatment or costs must be reported to CMS, regardless of whether CMS approval is requested, to protect Medicare's interests and prevent it from paying for medical expenses that should be covered by workers' compensation.
