Medicare and Workers' Compensation: Essential Facts to Understand
Navigating workers' compensation in relation to Medicare is vital to avoid claim denials and reimbursement obligations. Medicare covers federal employees and certain other groups for job-related injuries or illnesses, but it's essential to understand how this might impact Medicare's medical claims coverage.
Under Medicare's secondary payer policy, workers' compensation must cover medical expenses for work-related injuries. In case immediate medical expenses arise before the workers' compensation settlement, Medicare might pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid this process, it's wise to let the Centers for Medicare & Medicaid Services (CMS) monitor the amount received from workers' compensation for medical care related to the injury or illness.
In some cases, Medicare might request a workers' compensation Medicare set-aside arrangement (WCMSA). Medicare will only cover care after all the money in the WCMSA has been spent.
Workers' compensation settlements over $25,000 or $250,000, depending on the Medicare eligibility timeline, must be reported to Medicare. This is necessary if the person is already enrolled in Medicare or will soon qualify for the program. Additionally, liability or no-fault insurance claims must also be reported.
Workers' Compensation Settlements Reporting Updates
As of April 4, 2025, Medicare requires all final settlements involving Medicare beneficiaries—regardless of the payment amount—to be reported. This means that the old reporting threshold has been removed. The Workers' Compensation payer or responsible reporting entity must submit detailed WCMSA data to the Centers for Medicare & Medicaid Services (CMS) as part of the settlement reporting.
Failing to report settlement details can lead to serious penalties from CMS.
Key Takeaways
- Workers' compensation offers insurance for job-related injuries or illnesses for federal employees and certain other groups.
- Reporting workers' compensation agreements to Medicare is crucial to prevent claim denials and reimbursement obligations.
- As of April 4, 2025, all workers' compensation settlements involving Medicare beneficiaries must be reported to CMS, regardless of the payment amount.
- Noncompliance may result in serious penalties from CMS.
For further assistance on navigating Medicare, visit our dedicated Medicare hub for valuable resources.
- Healthsystems should be aware of the significance of navigating workers' compensation, particularly in relation to Medicare, to avoid claim denials and reimbursement obligations.
- Medicare set-aside arrangements (WCMSAs) may be requested by Medicare for work-related injuries to cover care only after all the money in the arrangement has been spent.
- Proper reporting of workers' compensation agreements to Medicare is essential, even for settlements below the previously established thresholds, as per the April 4, 2025, regulation changes.
- Failing to report detailed WCMSA data to the Centers for Medicare & Medicaid Services (CMS) may result in serious penalties.
- In order to maintain a comprehensive understanding of health and wellness, it's crucial to consider therapies and treatments, nutrition, and science in the context of workers' compensation and Medicare.
- Seeking guidance on Medicare-related issues is advised, especially when it comes to understanding the complexities of medicare, medicare set-asides, and the processes of submitting claims within the healthsystems.
