Importance of Notifying Medicare on Workers' Compensation Arrangements
Understanding the Interplay between Workers' Compensation and Medicare: Essential Insights
Timely communication with Medicare about workers' compensation arrangements is crucial to avoid claim denials and potential reimbursement obligations.
Workers' compensation functions as insurance for employees who suffer injuries or illnesses directly related to their jobs. The responsibility for this benefit lies with the Office of Workers' Compensation Programs (OWCP) of the Department of Labor, applying to federal employees, their families, and specific other entities as well.
As the population enrolled in Medicare grows, individuals need to understand the potential impact of their workers' compensation benefits on Medicare's coverage for medical claims related to work injuries. This knowledge is instrumental in preventing complications regarding work-related medical costs.
Interplay between Workers' Comp Settlements and Medicare
Under Medicare's secondary payer policy, workers' compensation must cover all treatment for a work-related injury before Medicare takes over. Initially, when a person incurs medical expenses prior to receiving their workers' compensation settlement, Medicare might pay first, initiating a recovery process handled by the Benefits Coordination & Recovery Center (BCRC).
To prevent such recovery processes and ensure that Medicare covers only the necessary portion of the person's medical expenses, the Centers for Medicare & Medicaid Services (CMS) monitors the funds received from workers' compensation for injury-related care. In some cases, Medicare may ask for the creation of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds, covering care only after the WCMSA fund has been exhausted.
Settlements Warranting Report to Medicare
Workers' compensation is required to submit a Total Payment Obligation to the Claimant (TPOC) to Medicare in specific cases. This submission is necessary if an individual is already enrolled in Medicare based on age or Social Security Disability Insurance, and the settlement exceeds $25,000. It is also required if the person is not yet enrolled in Medicare but will do so within 30 months of the settlement date, and the settlement value is $250,000 or more.
Apart from workers' comp, a person must report the settlement to Medicare if they file a liability or no-fault insurance claim as well.
Frequently Asked Questions
For any questions about Medicare, individuals may contact Medicare at 800-MEDICARE (800-633-4227), TTY 877-486-2048, or during certain hours, via live chat on Medicare.gov. For questions regarding the Medicare recovery process, they can reach out to the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary. If a Medicare beneficiary intends to set it up, their workers' compensation settlement must be over $25,000, or over $250,000 if they are eligible for Medicare within 30 months. It is prohibited to utilize the funds in a Medicare set-aside arrangement for any purpose other than its designated purpose, as misuse can lead to claim denials and the need to reimburse Medicare.
For comprehensive information and guidance, visit our Medicare hub.
- The healthcare system, particularly in regard to Medicare, needs to be aware of how it interacts with workplace wellness and health-and-wellness programs, as the money from these sources may impact the coverage of work-related medical claims.
- The Centers for Medicare & Medicaid Services (CMS) sometimes advocates for the creation of a Medicare set-aside arrangement (WCMSA) for funds received from workers' compensation, which would only cover care after the WCMSA fund has been depleted.
- Under certain circumstances, such as when an individual receiving workers' compensation is already enrolled in Medicare or will enroll within 30 months, or when the settlement value exceeds $250,000, the workers' compensation system is obligated to report the settlement to Medicare.
