Medicare and Workers' Compensation: Essential Information to Understand
Adequate reporting of workers' compensation arrangements to Medicare is paramount to prevent claim denials and reimbursement obligations. Failure to inform Medicare about these matters may lead to patients being responsible for medical expenses related to work-related injuries or illnesses.
Workers' compensation serves as insurance for federal employees or specific entities who have incurred job-related injuries or ailments. The Office of Workers' Compensation Programs, a division under the Department of Labor, oversees this benefit.
To understand the potential impact of workers' compensation benefits on Medicare's coverage of medical claims, it is crucial for individuals enrolled in Medicare or approaching eligibility to be well-informed about such matters. This knowledge is essential to prevent complications with their medical costs resulting from work-related injuries or illnesses.
How does a workers' comp settlement affect Medicare?
Under Medicare's secondary payer policy, workers' compensation should be the primary payer for any treatment linked to a work-related injury. However, if immediate medical costs arise before an individual receives their workers' compensation settlement, Medicare may cover the initial costs and initiate a recovery process handled by the Benefits Coordination & Recovery Center (BCRC). To avoid this recovery process, the Centers for Medicare & Medicaid Services (CMS) generally monitor the amount a person receives from workers' compensation for their injury- or illness-related medical care. In some cases, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover the care following the exhaustion of the WCMSA funds.
Settlements Requiring Notification to Medicare
Workers' compensation must submit a total payment obligation to the claimant (TPOC) to the CMS to ensure Medicare covers the appropriate proportion of a person's medical expenses. A TPOC is required if a person is already enrolled in Medicare based on their age or based on receiving Social Security Disability Insurance, and the settlement amount is $25,000 or more. TPOCs are also necessary 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. Additionally, a person must report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
Individuals can get in touch with Medicare with any questions by phone at 800-MEDICARE (800-633-4227; TTY 877-486-2048) or during certain hours, through a live chat 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 a person must have a workers' compensation settlement over $25,000 or $250,000 (if they will be eligible for Medicare within 30 months) to establish one. Using the funds from a Medicare set-aside arrangement for purposes other than the designated one may result in claim denials and reimbursement obligations to Medicare.
For more resources to help guide individuals through the complexities of medical insurance, visit our Medicare hub.
- To avoid potential complications with medical costs related to work-related injuries or illnesses for individuals enrolled in Medicare or approaching eligibility, it is essential to understand how workers' compensation may impact Medicare's coverage of medical claims.
- In cases where immediate medical costs arise before a workers' compensation settlement, Medicare may cover the initial costs and initiate a recovery process handled by the Benefits Coordination & Recovery Center (BCRC).
- Workers' compensation must submit a total payment obligation to the claimant (TPOC) to Medicare if the person is already enrolled in Medicare based on their age, SSDI, or if they will qualify for Medicare within 30 months and the settlement amount is $25,000 or more (for existing Medicare beneficiaries) or $250,000 or more (for those becoming eligible within 30 months).
- A Medicare set-aside arrangement (WCMSA) may be established for workers' compensation funds to avoid claim denials and reimbursement obligations to Medicare, with the requirement that the funds are used only for designated purposes.
