Medicare and Workers' Compensation Claims: Essential Facts to Understand
Navigating workers' comp and Medicare ain't always a walk in the park, but it's crucial to get it right. Here's the lowdown on what you need to know.
Worker's comp, that insurance for on-the-job injuries or illnesses, gets handled by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor. This benefits federal employees, their families, and certain other entities.
For those already on Medicare or about to join the club, it's essential to understand how workers' comp might impact Medicare's coverage of medical claims. Avoiding complications with medical costs for work-related injuries is vital.
So, how does a workers' comp settlement affect Medicare? Under Medicare's secondary payer policy, workers' comp must be the primary payer for any treatment related to a work injury. However, if immediate medical expenses pop up before the individual receives their workers' comp settlement, Medicare might pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
The Centers for Medicare & Medicaid Services (CMS) generally aim to monitor the amount a person receives from workers' comp for their injury-related medical care to avoid a recovery process. In some cases, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare won't cover the care until all the money in the WCMSA has been used up.
Now, what settlements need to be reported to Medicare? Workers' comp 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 based on receiving Social Security Disability Insurance and if the settlement is over $25,000. 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.
It's not just workers' comp that needs to be reported; a person must also report to Medicare if they file a liability or no-fault insurance claim.
Got questions? You can reach out to Medicare by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048) or during certain hours through a live chat on Medicare.gov. If you have questions about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is optional, but if a Medicare beneficiary wants to set one up, their workers' comp settlement must be over $25,000 (or over $250,000 if they become eligible for Medicare within 30 months). Misusing the money in a Medicare set-aside arrangement can lead to claim denials and having to reimburse Medicare.
With the changes enforced as of April 4, 2025, all full and final settlements involving Medicare beneficiaries must be reported to the Centers for Medicare & Medicaid Services (CMS), regardless of the settlement amount or whether CMS approval is sought. This ensures that Medicare's interests are protected and that future medical expenses are managed appropriately. The reporting is done through the Section 111 Mandatory Insurer Reporting (MIR) program, involving submitting detailed information about the settlement, including the MSA allocation and whether it is paid as a lump sum or annuity. Failure to comply can result in civil penalties and potential denial of Medicare benefits.
Educating yourself on how workers' comp might impact Medicare coverage is vital to prevent issues with medical expenses. Don't forget to report your workers' comp agreements to avoid future claim rejections and reimbursement obligations.
- Workers' comp settlements can affect Medicare's coverage of medical claims, as per Medicare's secondary payer policy, making workers' comp the primary payer for any treatment related to a work injury.
- A person must report to Medicare if they receive a workers' comp settlement over $25,000, or if they become eligible for Medicare within 30 months and the settlement amount is $250,000 or more.
- A Medicare beneficiary can set up a Medicare set-aside arrangement for workers' comp funds, which is optional but necessary if the settlement is over $25,000, or over $250,000 if they become eligible for Medicare within 30 months.
- As of April 4, 2025, all full and final settlements involving Medicare beneficiaries, regardless of the settlement amount or whether CMS approval is sought, must be reported to the Centers for Medicare & Medicaid Services (CMS) through the Section 111 Mandatory Insurer Reporting (MIR) program to protect Medicare's interests and manage future medical expenses appropriately.
