Understanding the Intersection of Workers' Compensation and Medicare: Key Facts to Consider
Understanding the Importance of Informing Medicare about Workers' Compensation Settlements
The proper management of workers' compensation settlements is essential for those enrolled in Medicare to prevent claim denials and reimbursement obligations. Workers' compensation serves as insurance for employees who have sustained injuries or illnesses directly related to their job duties. The Office of Workers' Compensation Programs (OWCP) within the Department of Labor handles this benefit, which applies to federal employees, their families, and certain other entities.
It is crucial for individuals currently enrolled in Medicare or soon to be eligible for the program to comprehend the potential impact of their workers' compensation benefits on Medicare's coverage of medical claims. Proper understanding can help avoid complications with medical costs for work-related injuries or illnesses.
Workers' Compensation Settlements and Medicare Coverage
Under the Medicare secondary payer policy, workers' compensation should serve as the primary payer for any treatment a person receives for a work-related injury. However, 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 this 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.
Reporting Settlements to Medicare
Workers' compensation must report the Total Payment Obligation to the Claimant (TPOC) to CMS for any settlement exceeding $25,000 if the individual is already enrolled in Medicare or eligible within 30 months. TPOCs are also required if the person files a liability or no-fault insurance claim.
Frequently Asked Questions
- To contact Medicare, dial 800-MEDICARE (800-633-4227), or for TTY users, call 877-486-2048. During specified hours, live chat is also available on Medicare.gov. For questions about the Medicare recovery process, call the BCRC at 855-798-2627 (TTY 855-797-2627).
- A Medicare set-aside is voluntary. However, if a Medicare beneficiary wishes to set one up, their workers' compensation settlement must exceed $25,000 or $250,000 if the beneficiary is eligible for Medicare within 30 months.
- Misusing the funds in a Medicare set-aside arrangement is prohibited and can result in claim denials and reimbursement obligations.
Workers' compensation is an essential aspect of insurance for job-related injuries or illnesses. To avoid any issues with medical expenses, it is essential to educate oneself on how workers' compensation affects Medicare coverage and inform Medicare about workers' compensation agreements. Proper management can help ensure that the appropriate portion of medical expenses is covered by Medicare, safeguarding one's financial wellbeing.
The proper management of workers' compensation agreements is vital to preventing potential issues with Medicare coverage, especially for those who have already enrolled in Medicare or will be signing up in the next 30 months. Under the Medicare secondary payer policy, workers' compensation must pay for any treatment related to work-related injuries before Medicare steps in. If the workers' compensation settlement exceeds $25,000, it should be reported to the Centers for Medicare & Medicaid Services (CMS). In some instances, a Medicare set-aside arrangement (WCMSA) may be required to ensure Medicare will only cover expenses after the WCMSA funds have been depleted. It is advisable to avoid misusing funds in a Medicare set-aside arrangement, as doing so could result in claim denials and reimbursement obligations.
