Medicare and Workers' Compensation: Essential Information You Need
** navigating workers' compensation and Medicare: a must-know guide**
Navigating the ins and outs of workers' compensation and Medicare is crucial for those dealing with work-related injuries or illnesses. Missteps can lead to claim denials, financial strain, and reimbursement obligations.
What is workers' compensation?
Offered by insurance companies, workers' compensation is a benefit for employees who suffer job-related injuries or illnesses. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor manages this program, providing benefits to federal employees, their families, and certain other entities.
Understanding the impact on Medicare
Since Medicare is a secondary payer, workers' compensation must cover the expenses first. In case of immediate medical expenses before the workers' compensation settlement, Medicare may pay and demand reimbursement. To avoid this, the Centers for Medicare & Medicaid Services (CMS) usually monitors workers' compensation funds to ensure appropriate use.
In some cases, Medicare may ask for a workers' compensation Medicare set-aside arrangement (WCMSA) to cover expenses after the WCMSA funds have been exhausted.
What settlements need reporting to Medicare?
Workers' compensation must submit a Total payment obligation to the claimant (TPOC) to CMS to ensure Medicare properly covers medical expenses. TPOC submission is necessary if the person is currently enrolled in Medicare or approaching eligibility and the settlement is $25,000 or more for individuals already enrolled, or $250,000 or more for those who will qualify within 30 months. Additionally, Liability or no-fault insurance claims must also be reported.
Essential tips for reporting
- Medicare Set-Aside Allocation (MSA) reports are essential for estimating future Medicare-covered expenses related to the injury. From April 4, 2025, any MSA allocation prepared for a case should be entered into the WCMSA field during the reporting process.
- Regardless of whether the MSA allocation is submitted to CMS for approval, Medicare requires this information to be reported to track and enforce the use of MSA funds for appropriate expenses.
- Maintain detailed records of all expenses related to the MSA account, including receipts, bank statements, and tax records.
- Annually, one month after the settlement anniversary, submit an attestation to Medicare stating that the MSA funds were used correctly via mail or the WCMSA Portal on Medicare.gov.
- Notify Medicare upon MSA fund depletion. Professional administrators can assist with this process and ensure compliance.
Compliance and consequences
- Compliance: Accurate accounting and annual attestations are vital to ensure Medicare steps in as the primary payer once MSA funds are depleted.
- Non-compliance: Failure to provide necessary documentation may result in Medicare denying payments for Medicare-covered, case-related treatments until the funds are properly accounted for and used according to Medicare guidelines.
Changes in CMS policy
As of July 17, 2025, CMS will no longer review or approve $0 WCMSAs. The emphasis is now on considering Medicare's interests in the settlement process, highlighting the importance of accurate reporting and adherence to MSA guidelines for all settlements, regardless of the MSA amount.
Supporting your Medicare journey
For additional resources to help navigate the complexities of medical insurance, check out our Medicare hub.
- Workers' compensation, as a primary payer, should cover expenses related to job-related injuries or illnesses, while Medicare, acting as a secondary payer, may reimburse initial costs in certain situations.
- In order to ensure proper Medicare coverage, it's essential to report Total payment obligation to the claimant (TPOC) to the Centers for Medicare & Medicaid Services (CMS), especially when the settlement is $25,000 or more for existing Medicare beneficiaries or $250,000 or more for those approaching eligibility within 30 months.
- Medicare Set-Aside Allocation (MSA) reports are important for estimating future Medicare-covered expenses and should be submitted during the reporting process, starting from April 4, 2025.
- Adherence to reporting guidelines, including submitting attestations annually, maintaining detailed records, and notifying Medicare upon MSA fund depletion, is crucial to avoid Medicare denying payments for Medicare-covered treatments related to the injury, as well as to ensure Medicare becomes the primary payer once MSA funds are depleted.
As the CMS policy change on July 17, 2025, no longer requires review or approval of $0 WCMSAs, it's essential to focus on considering Medicare's interests in the settlement process, emphasizing accurate reporting and adherence to MSA guidelines for all settlements, regardless of the MSA amount.
For further assistance in navigating the complexities of medical insurance and Medicare, consult our Medicare hub dedicated to healthsystems, health-and-wellness, therapies-and-treatments, nutrition, and other related fields.
