Medicare and Workers' Compensation Interactions: Essential Information to Understand
Adequate Communication with Medicare is vital to avoid claim denials and reimbursement for workers' compensation arrangements. Without notification, individuals risk having their medical claims connected to work-related injuries denied.
Workers' compensation serves as insurance coverage for employees who have sustained job-related injuries or illnesses. This benefit, administered by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor, is available to federal employees, their families, and certain other entities.
Individuals who are already enrolled in Medicare or will soon become eligible for the program should understand how their workers' compensation benefits may influence Medicare's coverage of their medical claims related to work injuries or illnesses. This understanding is crucial for avoiding complications with medical costs.
Understanding Workers' Compensation Settlement Impact on Medicare
Medicare follows a secondary payer policy, meaning that workers' compensation must cover any treatment related to a work-related injury before Medicare offers coverage. In cases where immediate medical expenses arise before an individual receives their workers' compensation settlement, Medicare may pay initially and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
The Centers for Medicare & Medicaid Services (CMS) generally monitors the amount a person receives from workers' compensation for injury or illness-related medical care to avoid a recovery process. In some instances, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover treatment after all the money in the WCMSA has been spent.
Reporting 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 includes the total amount of workers' compensation owed to the person or on their behalf.
TPOC submissions are necessary if an individual is already enrolled in Medicare due to age or Social Security Disability Insurance, and the settlement is $25,000 or more. Additionally, TPOCs are required 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. Furthermore, individuals must report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
Individuals can contact Medicare with any questions by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is available on Medicare.gov. For questions about the Medicare recovery process, individuals can contact the BCRC at 855-798-2627 (TTY 858-598-2627).
A Medicare set-aside arrangement is voluntary. However, if a Medicare beneficiary wants to set one up, their workers' compensation settlement must be over $25,000 or $250,000 if they are eligible for Medicare within 30 months. It is prohibited to use the funds in a Medicare set-aside arrangement for any purpose other than the one for which it is designated, as misuse can lead to claim denials and reimbursement obligations.
Contact Medicare for more information on setting up a Medicare set-aside. For additional resources to help navigate the complex world of medical insurance, visit our Medicare hub.
Further insights:
- CMS ensures that Medicare acts as a secondary payer for medical expenses related to a work injury or illness, waiting to pay until workers' compensation funds designated for those expenses are fully used.
- Medicare Set-Aside (MSA) arrangements are allocated portions of a workers' compensation settlement specifically for future medical expenses related to the injury or illness under CMS supervision.
- Compliance requires reporting settlements involving Medicare beneficiaries to CMS and using the funds in the MSA exclusively for Medicare-covered services related to the injury. If medical expenses exceed the set-aside amount, Medicare then covers the excess expenses.
- Medicare follows a secondary payer policy, meaning that it covers medical expenses related to work-related injuries or illnesses only after workers' compensation benefits have been exhausted.
- In some instances, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for funds designated for future medical expenses related to the injury or illness.
- Workers' compensation settlements involving Medicare beneficiaries must be reported to CMS, and the funds in a Medicare set-aside arrangement must be used exclusively for Medicare-covered services related to the injury.
- Compliance with Medicare's rules for workers' compensation settlements is crucial to avoid complications with medical costs and claim denials.
