Workers' Compensation and Medicare: Crucial Insights to Understand
Important: Notifying Medicare About Workers' Compensation Arrangements Prevents Claim Denials and Repayment Obligations
Workers' compensation insurance is essential for employees who sustain work-related injuries or illnesses. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor handles this benefit for federal employees, their families, and selected entities.
For individuals enrolled in Medicare or approaching eligibility, it is crucial to understand the potential impact of workers' compensation benefits on Medicare coverage for work-related medical claims. This understanding helps avoid complications in managing medical expenses related to work injuries or illnesses.
Understanding Workers' Compensation Settlements and Medicare
Medicare's secondary payer policy requires workers' compensation to cover any treatment for work-related injuries before Medicare steps in. If immediate medical expenses arise before the receipt of workers' compensation settlement, Medicare may pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
The Centers for Medicare & Medicaid Services (CMS) typically monitors workers' compensation settlements to prevent a recovery process. In some cases, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only pay for care after the WCMSA funds have been exhausted.
Reporting Workers' Compensation Settlements to Medicare
Workers' compensation must submit the Total Payment Obligation to the Claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of a person's medical expenses. This submission is necessary for two scenarios:
- If the individual is already enrolled in Medicare due to age or Social Security Disability Insurance, and the settlement is $25,000 or more.
- If the person is not yet enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount exceeds $250,000.
Additionally, an individual must report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
Individuals can contact Medicare with 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 inquiries about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary, but it is essential if the workers' compensation settlement is over $25,000 (or $250,000 if the person will be eligible for Medicare within 30 months). Misusing these funds for any purpose other than their intended purpose can lead to claim denials and repayment obligations.
Learn more about Medicare set-asides through our Medicare hub for resources designed to guide you through the intricacies of medical insurance.
Takeaway
By understanding the implications of workers' compensation on Medicare coverage and informing Medicare about workers' compensation agreements, individuals can avoid potential claim denials and repayment obligations. It is crucial to report workers' compensation settlements to Medicare to secure proper coverage and avoid complications in managing medical expenses.
For more resources on medical insurance, visit our Medicare hub.
- In circumstances where a workers' compensation settlement exceeds $25,000, it is essential to submit the Total Payment Obligation to the Claimant (TPOC) to Medicare, as stipulated by their Medicare set-aside policy.
- The Centers for Medicare & Medicaid Services (CMS) strongly advises establishing a workers' compensation Medicare set-aside arrangement (WCMSA) for settlements over $25,000, especially if the individual will become eligible for Medicare within 30 months.
- Misusing funds from Medicare set-asides for purposes other than the intended ones can result in claim denials and repayment obligations, as highlighted by the Centers for Medicare & Medicaid Services (CMS).
- For individuals concerned about the impact of workers' compensation benefits on their Medicare coverage, it is advisable to consult science-backed resources related to health-and-wellness, therapies-and-treatments, nutrition, and other healthsystems to make informed decisions and navigate the complex world of medical insurance.
