Medicare and Workers' Compensation: Essential information to understand
Importance of Informing Medicare About Workers' Compensation Arrangements
Federal employees or groups under the Office of Workers' Compensation Programs (OWCP) can face claim denials and reimbursement obligations if they fail to notify Medicare about their workers' compensation arrangements.
Workers' compensation offers a financial safety net for those who suffer job-related injuries or illnesses. Any medical expenses related to such injuries or illnesses are covered by this insurance, with the Department of Labor's Office of Workers' Compensation Programs responsible for its administration.
To prevent complications and manage medical costs effectively, it is vital that individuals currently enrolled in Medicare or those approaching Medicare eligibility understand how their workers' compensation benefits may impact Medicare coverage for work-related medical claims.
Under Medicare's secondary payer policy, workers' compensation must pay for any treatment associated with a work-related injury before Medicare coverage kicks in. If immediate medical expenses arise before the claimant receives their workers' compensation settlement, Medicare may cover the costs initially and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To prevent a recovery process, the Centers for Medicare & Medicaid Services (CMS) typically monitors the amount a person receives from workers' compensation for their injury or illness-related medical care. CMS may require a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds, after which Medicare will only cover care once the money in the WCMSA is exhausted.
In order to report a workers' compensation settlement to Medicare, the responsible reporting entity (RRE) must submit a Total Payment Obligation to the Claimant (TPOC). This is necessary when the claimant is already enrolled in Medicare or will soon qualify due to age or Social Security Disability Insurance, and the settlement's amount exceeds $25,000. In cases where the person isn't currently enrolled in Medicare but will qualify within 30 months of the settlement date, reporting is required if the settlement amount is $250,000 or more.
Individuals can reach out to Medicare through a phone call at 800-MEDICARE (800-633-4227), TTY 877-486-2048, or a live chat on the Medicare.gov website during certain hours. Beneficiaries with questions about the Medicare recovery process can contact the BCRC at 855-798-2627 (TTY 855-797-2627).
RREs report various data points related to the WCMSA, including the WCMSA amount, funding method, initial deposit, anniversary deposit, and WCMSA time frame. Optional details, such as the WCMSA case control number and the professional administrator’s employer identification number, may also be reported when available.
Starting April 4, 2025, RREs must report all workers’ compensation settlements involving Medicare beneficiaries via the Section 111 TPOC reporting process. For precise minimum thresholds or further guidance, consulting the CMS NGHP User Guide or contacting CMS directly is advisable.
- Recipients of workers' compensation benefits may need to consider the impact on their Medicare coverage, as Medicare's secondary payer policy dictates that workers' compensation should cover work-related medical expenses before Medicare kicks in.
- Healthsystems and providers ensuring the well-being of individuals in health-and-wellness programs should be aware of the importance of informing Medicare about workers' compensation arrangements, as failure to do so may lead to claim denials and reimbursement obligations.
- Understanding the role of nutrition in therapies and treatments, it is essential for science to help develop procedures to ensure smooth integration between Medicare and workers' compensation claims, facilitating efficient coverage for work-related medical expenses.
- Medicare beneficiaries entering into settlements related to workers' compensation may need to involve healthsystems in the reporting process, as the Centers for Medicare & Medicaid Services require that responsible reporting entities submit a Total Payment Obligation to the Claimant (TPOC) to prevent a recovery process and maintain Medicare coverage.
