Understanding Interplay between Workers' Compensation and Medicare: Essential Information
Understanding the Interplay Between Workers' Compensation and Medicare is Crucial for Beneficiaries
Any Medicare beneficiary who receives a workers' compensation settlement for job-related injuries or illnesses must notify Medicare to avoid claim denials and potential reimbursement obligations. This is due to Medicare's secondary payer policy, which stipulates that workers' compensation must be the primary payer for any treatment a person receives for a work-related injury.
Workers' compensation is an insurance program designed for federal employees and certain other groups who suffer injuries or illnesses directly related to their jobs. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor manages this benefit.
It is essential for Medicare enrollees or those soon to qualify to comprehend how their workers' compensation benefits may impact Medicare coverage of their medical claims. This knowledge will help prevent complications with medical costs arising from work-related injuries or illnesses.
The Impact of a Workers' Compensation Settlement on Medicare
Under Medicare's secondary payer policy, workers' compensation must pay for any treatment a person receives for a work-related injury before Medicare steps in, except in cases of immediate medical expenses before the individual receives their workers' compensation settlement. In such instances, Medicare may cover the initial costs, followed by recovery procedures managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid a recovery process and manage the amount paid by Medicare, 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). Medicare will only cover care after all the money in the WCMSA has been expended.
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 represents the total amount owed to the person or on their behalf.
A TPOC must be submitted if the person is already enrolled in Medicare based on age, Social Security Disability Insurance, or if the settlement is $25,000 or more. If the person is not currently enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more, a TPOC must also be submitted. In addition to workers' compensation, a person must inform Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
To contact Medicare with any questions, dial 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is also available on Medicare.gov. If a person has questions about the Medicare recovery process, they can contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary, but if a Medicare beneficiary wants to establish one, their workers' compensation settlement must exceed $25,000. Alternatively, it must be over $250,000 if they are eligible for Medicare within 30 months. 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. Misusing the money can lead to claim denials and reimbursement obligations to Medicare.
For more resources to help navigate the complex world of medical insurance, visit our Medicare hub.
- Under Medicare's secondary payer policy, therapies and treatments for work-related injuries must be paid by workers' compensation before Medicare steps in, provided that the individual hasn't already received their workers' compensation settlement.
- Nutrition, health-and-wellness, and other unspecified medical expenses for work-related injuries might be initially covered by Medicare in certain circumstances, but these will be subject to recovery proceedings managed by the Benefits Coordination & Recovery Center (BCRC) once the workers' compensation settlement is received.
- In some cases, Medicare may require a Medicare set-aside arrangement (WCMSA) for the coverage of treatment costs, where Medicare will only cover care after all the money in the WCMSA has been expended.
- To avoid complications with Medicare coverage and ensure the correct portion of medical expenses is covered, it is essential to inform Medicare if a workers' compensation settlement, liability or no-fault insurance claim exceeds specific thresholds.
