Understanding the Intersection of Workers' Compensation and Medicare: Key Points to Consider
Navigating Medicare and Workers' Compensation Payments: A Guide
Staying informed about how workers' compensation affects Medicare is crucial to avoid claim denials and hefty reimbursements. Here's a straightforward rundown of the facts:
Workers' Compensation Medicare Set-Aside Accounts (WCMSA)
In cases where a workers' compensation settlement involves future medical expenses, Medicare Set-Aside Accounts (MSAs) are essential. These accounts make sure that Medicare avoids paying for expenses that should be covered by the workers' compensation settlement. The main objective of an MSA is to safeguard Medicare eligibility by placing funds aside for future medical treatments related to the injury or illness[2].
Reporting Workers' Compensation Settlements
- Reporting to CMS: In some cases, employers and insurers need to report settlements, judgments, or awards to the Centers for Medicare and Medicaid Services (CMS). This includes any payments made to a Medicare beneficiary that have the potential for medical payments[1].
- Thresholds for WCMSA Review: Certain circumstances necessitate the submission of a WCMSA for CMS approval.
- The total settlement amount exceeds $25,000, or
- The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date, and the anticipated total settlement amount for future medical expenses and disability or lost wages is over $250,000[5].
Policy Changes
Starting July 17, 2025, CMS will no longer review or approve $0 WCMSAs. Instead, claimants will be responsible for guaranteeing Medicare's interests have been properly considered during the settlement process[4][5].
Consequences of Non-compliance
Failure to comply with reporting requirements may result in civil penalties of $1,000 per day per incident. Additionally, if Medicare needs to take legal action to recover payments, it may recover up to twice the amount due[1].
Best Practices
- Ensure that all settlements are reported as required.
- Implement WCMSAs when necessary to safeguard Medicare eligibility.
- Keep yourself updated on CMS policies and threshold changes to ensure compliance.
By following these practices, claimants and employers can maintain compliance with Medicare regulations and steer clear of possible penalties.
- To avoid claim denials and excessive reimbursements, it's essential to stay informed about the intersection of workers' compensation and Medicare, including the implementation of Healthsystems' Medicare Set-Aside Accounts (WCMSA) for future medical expenses.
- Employers and insurers might need to report settlements, judgments, or awards related to health-and-wellness, therapies-and-treatments, and nutrition to the Centers for Medicare and Medicaid Services (CMS) if they have potential for Medicare payments.
- Circumstances where a WCMSA review by CMS is necessary include scenarios where the total settlement amount exceeds $25,000 or the claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date, and the anticipated total settlement amount for future medical expenses and disability or lost wages is over $250,000.
- As of July 17, 2025, CMS will no longer review or approve WCMSAs with a $0 value, making it the responsibility of claimants to ensure Medicare's interests have been properly considered during the settlement process, in the realm of uncategorized science and policy developments.
