Navigating Workers' Compensation and Medicare Interactions: Insights to Consider
Navigating workers' compensation when enrolled in Medicare or on the brink of eligibility is essential to dodge unwarranted claim denials and reimbursement obligations. Here's the lowdown on this complex dance:
First off, workers' comp is an insurance policy that covers federal employees and certain groups who have sustained job-related injuries or illnesses. The Department of Labor's Office of Workers' Compensation Programs manages this benefit.
When you're enrolled in Medicare or about to be, it's crucial to understand how workers' comp could affect your medical coverage. Otherwise, you risk encountering complications in covering work-related medical expenses.
So, how does a workers' comp settlement interact with Medicare? Medicare adheres to a secondary payer policy, meaning workers' comp should pay for any treatment connected to a work-related injury first. However, if urgent medical expenses arise before receiving the workers' comp settlement, Medicare might pay initially, triggering a recovery process handled by the Benefits Coordination & Recovery Center (BCRC).
To avoid the recovery process and potential financial complications, the Centers for Medicare & Medicaid Services (CMS) prefers monitoring the amount received from workers' comp for injury or illness-related medical care. In some instances, Medicare might request a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will cover medical care only after the WCMSA funds have been exhausted.
Now, who needs to submit a report about the settlement to Medicare? When a person is already enrolled in Medicare based on age or Social Security Disability Insurance and the settlement is $25,000 or more, or when the person will qualify for Medicare within 30 months of the settlement date and the settlement amount is $250,000 or more, submitting a report is necessary. Also, don't forget to report if you file a liability or no-fault insurance claim.
The FAQ below touches on contacting Medicare, the necessity of a WCMSA, and the consequences of misusing WCMSA funds:
Q: How do I contact Medicare with questions?A: You can reach Medicare at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, live chat is also available on Medicare.gov. If you have questions about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 855-797-2627).
Q: Is a WCMSA mandatory if I want to set one up?A: No, it's voluntary. However, to set up a WCMSA, your workers' compensation settlement must be over $25,000 if you're a Medicare beneficiary or over $250,000 if you're eligible for Medicare within 30 months.
Q: What happens if I misuse WCMSA funds?A: Misusing WCMSA funds could lead to claim denials and the need to reimburse Medicare.
In essence, a WCMSA is a financial arrangement for sizing a portion of a workers' comp settlement to cover future injury-related medical expenses, ensuring Medicare does not pay for what should be covered by workers' comp. The WCMSA process involves creating an allocation report that estimates projected Medicare-allowable expenses, followed by the administration of the set-aside funds.
To avoid legal and financial pitfalls, it's essential to understand when a WCMSA is required—when you're a Medicare beneficiary or likely to be within 30 months of the settlement date, or when the settlement amount is significant. With recent changes by CMS, it's worth noting that Medicare's interests may still be considered even without a formal allocation.
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- Workers' compensation, a policy covering job-related injuries or illnesses, interacts with Medicare, a health insurance program for older adults or individuals with specific medical conditions.
- Medicare follows a secondary payer policy, meaning workers' compensation should pay for treatment of work-related diseases or injuries before Medicare steps in.
- If urgent medical expenses arise before receiving a workers' compensation settlement, Medicare might pay initially, which triggers a recovery process handled by the Benefits Coordination & Recovery Center (BCRC).
- To avoid complications, the Centers for Medicare & Medicaid Services (CMS) prefers monitoring funds from workers' comp for injury or illness-related medical care and might request a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds.
- A WCMSA is a financial arrangement that sets aside a portion of a workers' comp settlement to cover future injury-related medical expenses, preventing Medicare from paying for what should be covered by workers' comp.
- Submitting a report about the settlement to Medicare is necessary when enrolled in Medicare or will be within 30 months and the settlement is $25,000 or more, or when the settlement amount is over $250,000 and the individual will qualify for Medicare within 30 months, or when filing a liability or no-fault insurance claim.
