Understanding the Interplay between Workers' Compensation and Medicare: Essential Insights
Understanding the Importance of Notifying Medicare about Workers' Compensation Arrangements
Failure to inform Medicare about a workers' compensation agreement can lead to claim denials and the need for reimbursement.
Workers' compensation acts as insurance for employees who have suffered work-related injuries or illnesses. The Office of Workers' Compensation Programs (OWCP), part of the Department of Labor, is responsible for this benefit, which applies to federal employees, their families, and certain other entities.
It's essential for individuals currently enrolled in Medicare or approaching eligibility to grasp how workers' compensation may impact Medicare coverage for their medical claims. This understanding can prevent issues with medical costs related to work injuries or illnesses.
Workers' Compensation Settlement Impact on Medicare
Under Medicare's secondary payer policy, workers' compensation should be the primary payer for any treatment related to a work-related injury. However, if immediate medical expenses arise before an individual receives their workers' compensation settlement, Medicare may pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid a recovery process, the Centers for Medicare & Medicaid Services (CMS) generally monitors the amount an individual receives from workers' compensation for injury- or illness-related medical care. In some cases, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover care after the WCMSA funds have been exhausted.
Reporting Workers' Compensation Settlements to Medicare
Workers' compensation is required to submit a Total Payment Obligation to the Claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of an individual's medical expenses. This submission is necessary if the individual is already enrolled in Medicare based on their age or Social Security Disability Insurance, and the settlement is $25,000 or more.
TPOCs are also necessary if the individual is not currently enrolled in Medicare but will be eligible within 30 months of the settlement date, and the settlement amount is $250,000 or more. In addition to workers' compensation, an individual must report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
Individuals can contact Medicare with any questions by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is also available on Medicare.gov. For questions about the Medicare recovery process, individuals can contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary. However, if an individual wishes to establish one, their workers' compensation settlement must be over $25,000. Alternatively, it must be over $250,000 if the individual is eligible for Medicare within 30 months.
It's prohibited to use the money in a Medicare set-aside arrangement for any purpose other than its designated use. Misusing the money can result in claim denials and the requirement for reimbursement to Medicare.
For more resources to help navigate the complex world of medical insurance, visit our Medicare hub.
- The Centers for Medicare & Medicaid Services (CMS) requires workers' compensation to submit a Total Payment Obligation to the Claimant (TPOC) for individuals who are already enrolled in Medicare or becoming eligible within 30 months, if the settlement is $25,000 or more for current enrollees or $250,000 or more for future enrollees.
- In some cases, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) to manage any injury- or illness-related medical care costs not covered by the workers' compensation insurance.
- A Medicare set-aside is a voluntary arrangement, but it is mandatory to use the funds in this arrangement only for its designated purpose and not for other purposes, to avoid claim denials and the need for reimbursement to Medicare.
