Important information on intersection of Workers' Compensation and Medicare benefits: Key considerations explained
Navigating the Intersection of Workers' Compensation and Medicare
It's crucial to inform Medicare about a workers' compensation agreement to avoid claim rejections and reimbursement obligations. Here's a lowdown on this intricate relationship between two significant insurance programs.
Workers' compensation is a safety net for employees who suffer injuries or illnesses directly connected to their jobs. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor oversees this benefit for federal employees, their families, and certain other entities.
For individuals enrolled in Medicare or soon-to-be enrollees, it's essential to understand the potential impact of workers' compensation benefits on Medicare's coverage of medical claims, as this could prevent complications with medical costs for work-related injuries.
Workers' Comp Settlements and Medicare: A Snapshot
Under Medicare's secondary payer policy, workers' compensation must cover any treatment related to a work-related injury. However, if immediate expenses arise before the individual receives their workers' compensation settlement, Medicare may pay first, initiating a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid this recovery process, the Centers for Medicare & Medicaid Services (CMS) generally monitors the amount a person receives from workers' compensation for injury-related medical care. In some cases, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds.
Reporting Settlements to Medicare
Workers' compensation must submit a total payment obligation to the claimant (TPOC) to CMS if the person is already enrolled in Medicare based on their age or disability, or if the settlement is $25,000 or more. TPOCs are also 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. Apart from workers' comp, a person must also report to Medicare if they file a liability or no-fault insurance claim.
Common Questions, Simple Answers
A person can contact Medicare with questions by phone at 800-MEDICARE (800-633-4227) and TTY 877-486-2048. During certain hours, a live chat is also available on Medicare.gov. For questions about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Closer Look: Workers' Compensation Medicare Set-Aside Arrangements (WCMSA)
A WCMSA is a voluntary arrangement used in workers' compensation settlements to protect Medicare's future interests. Specialist vendors assess the injured worker's medical needs and estimate future costs of Medicare-covered treatments related to the injury. The estimated costs are set aside from the settlement, and these funds must be used first for future medical expenses before Medicare will cover them. As of April 4, 2025, all settlements involving Medicare beneficiaries must report the MSA amounts, regardless of the settlement's size or whether it meets specific thresholds.
Why WCMSAs Matter
A WCMSA is necessary in the following situations:
- The injured party is currently receiving Medicare benefits.
- The injured party will become eligible for Medicare within the next 30 months.
- The individual is over 62.5 years old or receiving Social Security Disability Insurance (SSDI) benefits.
- There is a need for ongoing, Medicare-covered treatments related to the injury based on medical records.
Establishing a WCMSA ensures compliance with the Medicare Secondary Payer (MSP) statute, preventing Medicare from paying for medical expenses when another primary payer exists. Failure to address Medicare's interests can result in denial of Medicare coverage for future treatments related to the injury.
Wrapping Up
Workers' compensation serves as a safety net for job-related injuries or illnesses for federal employees and certain other groups. For individuals enrolled in Medicare or soon-to-be enrollees, it's essential to understand the potential impact of workers' compensation on their Medicare coverage to prevent issues with medical expenses. Informing Medicare about workers' compensation agreements is crucial to avoid claim rejections and reimbursement obligations.
Additional Resources
For more resources to help navigate the intricate world of medical insurance, visit our Medicare hub.
- In workers' compensation settlements, it's essential to remember that Medicare, as a secondary payer, should cover any treatment related to a work-related injury.
- The Centers for Medicare & Medicaid Services (CMS) often monitor the amount a person receives from workers' compensation for injury-related medical care to prevent complications with medical costs for work-related injuries.
- Workers' compensation must submit a total payment obligation to the claimant (TPOC) to CMS if the person is already enrolled in Medicare or soon-to-be enrollees, or if the settlement is $25,000 or more.
- A Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) is a voluntary arrangement used in workers' compensation settlements to protect Medicare's future interests.
- In the context of workplace-wellness and health-and-wellness, it's crucial to understand that WCMSAs are necessary in situations where the injured party is currently receiving Medicare benefits or will become eligible for Medicare within the next 30 months.
- Navigating the intersection of workers' compensation and Medicare requires knowledge of the potential risks and the proper steps for submitting information related to a workers' compensation settlement, as well as understanding the science, therapies, and treatments available for work-related injuries.
