Understanding Intersections between Workers' Compensation and Medicare: Crucial Information
Navigating the interplay between workers' compensation and Medicare is a must for anyone eligible for or enrolled in Medicare. Failing to do so may lead to claim denials and the need to repay Medicare.
Workers' compensation serves as an insurance policy for individuals who have sustained job-related injuries or illnesses. The Office of Workers' Compensation Programs under the Department of Labor administers this benefit, which applies to federal employees, their families, and certain entities.
It is vital to comprehend how workers' compensation benefits could impact Medicare's coverage of medical claims to avoid complications with medical costs stemming from work-related injuries.
How does a workers' comp settlement affect Medicare?
Under Medicare's secondary payer policy, workers' compensation must cover any treatment related to a work-related injury before Medicare steps in. If immediate medical expenses emerge before an individual receives their workers' compensation settlement, Medicare may pay first 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) generally monitors the amount a person receives from workers' compensation for their injury- or illness-related medical care. In some instances, 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 used.
Which settlements must be reported 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 of workers' compensation owed to the person or on their behalf.
You must report a settlement to Medicare if:
- You are already enrolled in Medicare based on your age or based on receiving Social Security Disability Insurance, and the settlement is $25,000 or more.
- You are not currently enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more.
Besides workers' comp, you must also report to Medicare if you file a liability or no-fault insurance claim.
FAQs
You can contact Medicare with any query by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is also available on Medicare.gov. If you have questions about the Medicare recovery process, you 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 set one up, their workers' compensation settlement must be over $25,000. If you are eligible for Medicare within 30 months, the settlement must be over $250,000.
Yes, 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 funds can result in claim denials and the need to reimburse Medicare.
New Insights (2025 Onwards)
Reporting a workers' compensation settlement involving a Medicare beneficiary has become more standardized with new regulations effective April 4, 2025. Here's a step-by-step process to ensure proper Medicare coverage:
- Section 111 Reporting: All full and final workers' compensation settlements involving Medicare beneficiaries must be reported to the Centers for Medicare & Medicaid Services (CMS) through the Section 111 reporting process. This includes details such as the settlement amount, Medicare Set Aside (MSA) allocation, and funding mechanisms (lump sum or annuity)[1].
- Settlement Details: Ensure that the settlement agreement includes the MSA amount, even if it is $0. This is required for all settlements involving Medicare beneficiaries, regardless of the settlement amount[2][4].
- MSA Allocation: The MSA must cover future Medicare-covered items and services related to the injury. Beneficiaries must use these funds first before Medicare covers related treatments[2][5].
Taking it Forward
By following these guidelines, Medicare beneficiaries can ensure that their workers' compensation settlements are properly reported, maintaining their Medicare coverage for future medical needs related to the injury. For more resources to help navigate the complexities of medical insurance, visit our Medicare hub.
- Workers' compensation benefits, administered by the Office of Workers' Compensation Programs, must cover any treatment related to work-related injuries before Medicare steps in, under Medicare's secondary payer policy.
- If immediate medical expenses associated with work-related injuries emerge before an individual receives their workers' compensation settlement, Medicare may pay first 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) generally monitors the amount a person receives from workers' compensation for their injury- or illness-related medical care, and in some instances, may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds.
- Workers' compensation must submit a total payment obligation to the claimant (TPOC) to CMS if the settlement represents the total amount of workers' compensation owed to the person or on their behalf.
- It's essential to report a settlement worth $25,000 or more to Medicare if you are already enrolled or will qualify within 30 months, as well as in cases of filing liability or no-fault insurance claims.
