Medicare and Workers' Compensation Interactions: Key Insights
Medicare Beneficiaries Must Report Workers' Compensation Settlements to Avoid Claim Denials and Repayments
Ensuring that Medicare is informed about workers' compensation arrangements is crucial for persons who are currently enrolled in Medicare or will soon become eligible. Failing to do so may result in claim denials and the need to reimburse Medicare.
Workers' compensation provides insurance coverage for job-related injuries or illnesses to federal employees and certain other categories. The Office of Workers' Compensation Programs under the Department of Labor oversees this benefit, which extends to federal employees, their families, and other entities.
Individuals should be aware of the impacts that workers' compensation benefits may have on Medicare's coverage of their medical claims for work-related injuries. Proper understanding of this relationship can prevent complications in managing medical costs related to workplace injuries or illnesses.
The Effect of Workers' Comp Settlements on Medicare
Under Medicare's secondary payer policy, workers' compensation must assume the primary role in covering any treatment for work-related injuries. However, if initial medical expenses occur prior to the beneficiary receiving their workers' compensation settlement, Medicare may pay first and instigate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid a recovery process, the Centers for Medicare & Medicaid Services (CMS) typically monitor the amount a person receives from workers' compensation for medical care related to their injury or illness. In some cases, Medicare asks for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover care after all the money in the WCMSA has been depleted.
Settlements to be Reported to Medicare
Workers' compensation must submit the total payment obligation to the claimant (TPOC) to CMS to ensure that Medicare pays the appropriate portion of a person's medical expenses. This represents the total amount that workers' compensation owes to the person or on their behalf.
Submitting a TPOC is essential if a person is already enrolled in Medicare due to age or receiving Social Security Disability Insurance, and the settlement is $25,000 or more. Additionally, if the person will become eligible for Medicare within 30 months of the settlement date, and the settlement amount is $250,000 or more, TPOCs are also required.
A person must also report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
Persons with questions about Medicare should contact Medicare by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). Live chat is available on Medicare.gov during certain hours. Those with questions about the Medicare recovery process can reach the Benefits Coordination & Recovery Center at 855-798-2627 (TTY 855-797-2627).
Medicare Set-aside arrangements are optional. However, if a Medicare beneficiary wishes to set one up, their workers' compensation settlement must exceed $25,000, or $250,000 if they are eligible for Medicare within 30 months.
It is prohibited to use the funds in a Medicare set-aside arrangement for purposes other than those designated. Misusing the funds may lead to claim denials and the need to reimburse Medicare.
- Medicare needs to be notified about the total payment obligation to the claimant (TPOC) from workers' compensation for proper allocation of medical expenses.
- If a Medicare beneficiary receives a workers' compensation settlement of $25,000 or more, they must submit the TPOC to Medicare.
- If a Medicare beneficiary is expected to become eligible for Medicare within 30 months of the settlement date and the settlement amount is $250,000 or more, they must still submit the TPOC to Medicare.
- A person must also report to Medicare if they file a liability or no-fault insurance claim alongside their workers' compensation claim.
