Medicare and Workers' Compensation: Essential Facts to Understand
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Understanding the connection between workers' compensation and Medicare is crucial to avoid claim denials, potential reimbursements, and complications with medical costs related to on-the-job injuries or illnesses.
Workers' compensation is a type of insurance covering employees who suffer work-related injuries or illnesses. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor manages this benefit for federal employees, their families, and select entities.
For individuals already on Medicare or preparing to qualify soon, it's essential to understand how workers' compensation can impact Medicare's coverage of their medical claims. This knowledge can help prevent issues regarding medical costs associated with job-related injuries.
How do Workers' Comp Settlements Affect Medicare?
Medicare follows a secondary payer policy, which means that workers' compensation must be the primary payer for any treatments related to a work-related injury. However, in cases when immediate medical bills arrive before the workers' compensation settlement, Medicare may cover the expenses first and initiate a recovery process overseen by the Benefits Coordination & Recovery Center (BCRC). To avoid the recovery process, it's best to keep Medicare informed about the amount received from workers' compensation for injury or illness-related medical care.
In some instances, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only provide coverage after the WCMSA funds have been depleted.
What Settlements Should be Reported to Medicare?
Workers' compensation must submit a total payment obligation to the claimant (TPOC) to Medicare to ensure appropriate Medicare coverage of medical expenses. The TPOC represents the total amount owed to the individual or on their behalf.
It is necessary to submit a TPOC under specific conditions:
- For individuals already enrolled in Medicare due to age or Social Security Disability Insurance, and the settlement exceeds $25,000.
- For individuals who will qualify for Medicare within 30 months of the settlement date and the settlement amount is $250,000 or more.
Situations where a person files a liability or no-fault insurance claim also warrant reporting to Medicare.
Frequently Asked Questions
Questions regarding Medicare can be addressed by contacting Medicare via phone at 800-MEDICARE (800-633-4227) or by using the live chat available on Medicare.gov. For questions about the Medicare recovery process, reach out to the BCRC at 855-798-2627.
A Medicare set-aside is optional, but if a beneficiary chooses to set one up, their workers' compensation settlement must be over $25,000. Alternatively, if they are eligible for Medicare within 30 months, the settlement must be over $250,000.
Using money from a Medicare set-aside arrangement (such as a WCMSA) for purposes other than those designated can lead to claim denials and the need to reimburse Medicare.
"Learn more: What to know about Medicare set-aside## Key Points
- Workers' compensation is a benefit for federal employees and certain other groups covering work-related injuries or illnesses.
- It's essential for Medicare enrollees to understand the impact of workers' compensation on their Medicare coverage to prevent issues with medical costs.
- Reporting workers' compensation agreements to Medicare is crucial to avoid future claim rejections and reimbursement obligations.
Additional Resources
Discover additional resources to guide you through the complex world of medical insurance by visiting our Medicare hub.
- In instances where individuals are already enrolled in Medicare or expected to qualify within 30 months due to age or Social Security Disability Insurance, and their workers' compensation settlement exceeds $25,000, it is crucial to report the total payment obligation to the claimant (TPOC) to Medicare.
- Understanding the secondary payer policy of Medicare, which requires workers' compensation to be the primary payer for treatments related to work-related injuries, is of paramount importance to avoid potential complications with medical costs and the recovery process initiated by the Benefits Coordination & Recovery Center (BCRC).
- When the settlement amount received from workers' compensation for injury- or illness-related medical care exceeds $250,000 for those qualifying for Medicare within 30 months, it is essential to establish a workers' compensation Medicare set-aside arrangement (WCMSA) for those funds, as Medicare will only provide coverage after the WCMSA funds have been depleted.
