Medicare and Workers' Compensation Interactions: Key Facts to Understand
Comprehensive understanding of workers' compensation and Medicare coordination is essential to avoid claim denials and reimbursement obligations for work-related injuries or illnesses.
Workers' compensation, an insurance program designed for federal employees and certain other groups suffering from job-related injuries or illnesses, is managed by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor. Individuals already enrolled in Medicare or nearing eligibility must be aware of how workers' compensation may affect their medical claim coverage to prevent complications with medical costs.
A person's workers' compensation settlement significantly impacts their Medicare coverage, with Medicare acting as a secondary payer for work-related injuries. In cases where immediate medical expenses arise prior to the worker receiving their settlement, Medicare may cover the costs initially, initiating a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid such recovery processes, the Centers for Medicare & Medicaid Services (CMS) closely monitor the amount a person receives from workers' compensation for their injury- or illness-related medical care.
In some instances, Medicare may request the establishment of a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) for these funds, covering medical care only after the WCMSA funds have been depleted. Workers' compensation must submit a Total Payment Obligation to the Claimant (TPOC) to CMS to ensure proper Medicare coverage if the person is currently enrolled in Medicare or will soon be eligible, and the settlement exceeds $25,000.
When filing workers' compensation and approaching eligibility for Medicare, claimants must report settlements and liability or no-fault insurance claims to Medicare. Contacts for Medicare, the Medicare recovery process, and information about WCMSA can be found on their official website, Medicare.gov.
It is essential for beneficiaries to understand the reporting process, as they do not directly report settlements to Medicare. Instead, it is the responsibility of the insurer or claims administrator to submit detailed WCMSA information, including the WCMSA amount, WCMSA funding method, initial deposit amount, anniversary (annual deposit amount), and WCMSA period.
Using a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) is recommended for settlements over $25,000 to prevent potential Medicare coverage issues or reimbursement claims from Medicare. As long as the insurer or claims administrator submits the required information and establishes a CMS-approved WCMSA, the beneficiary will be protected from reimbursement obligations or denial of future injury-related Medicare coverage.
By ensuring that their insurer or claims administrator follows these updated rules and reports all required information, Medicare beneficiaries can maintain their coverage and avoid future reimbursement obligations.
- Despite the Medicare program not covering workers' compensation claims directly, it is crucial for individuals receiving a workers' compensation settlement to understand how it may impact their existing or future Medicare coverage.
- In some cases, Medicare may require the establishment of a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) to manage work-related injury medical costs that exceed $25,000.
- For claims that meet the $25,000 threshold, the insurer or claims administrator must submit a Total Payment Obligation to the Claimant (TPOC) to Medicare, detailing WCMSA information such as the WCMSA amount, funding method, initial deposit, annual deposit, and WCMSA period.
- To maintain their coverage and avoid future reimbursement obligations, it is essential for Medicare beneficiaries to ensure their insurers or claims administrators follow the proper reporting procedures for workers' compensation settlements, including WCMSA establishment when necessary.
