Medicare and Workers' Compensation: Essential Facts You Should Be Aware Of
Navigating Medicare when it comes to workers' compensation can be tricky, but it's crucial to get it right. Workers' comp is insurance for job-related injuries or illnesses, primarily for federal employees and others.
Don't risk claim denials or reimbursement obligations by not notifying Medicare about your workers' comp arrangement. To prevent complications with medical costs for job-related injuries, it's vital to understand how workers' comp may affect your Medicare coverage.
Workers' Comp Settlements and Medicare
Medicare follows the secondary payer policy, meaning workers' comp must cover treatments related to your work injury first. If you have immediate medical expenses before receiving your workers' comp settlement, Medicare may pay first and initiate a recovery process.
To avoid a recovery process, the Centers for Medicare & Medicaid Services (CMS) monitors the amount from your workers' comp settlement for injury-related medical care. In some cases, Medicare may ask for a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) to manage these funds.
Settlements That Need to be Reported
It's essential to report your workers' comp settlement to CMS to ensure Medicare covers the appropriate portion of your medical expenses. Report a Total Payment Obligation to the Claimant (TPOC) to CMS if you're already enrolled in Medicare or will soon qualify for it, and the settlement is $25,000 or more. Also, report if you're not currently enrolled in Medicare and will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more.
Remember, you need to report to Medicare if you file a liability or no-fault insurance claim too.
Frequently Asked Questions
Questions can be directed to Medicare by calling 800-MEDICARE or via live chat on Medicare.gov during specific hours. Questions about the Medicare recovery process can be directed to the Benefits Coordination & Recovery Center at 855-798-2627 (TTY 855-797-2627).
A WCMSA is voluntary, but you'll need a settlement over $25,000 or $250,000 under certain conditions to establish one. Using funds from a WCMSA for anything other than their intended purpose is prohibited and could lead to claim denials and reimbursement obligations.
Learn More: Medicare Set-Aside Arrangements
For more insights on navigating Medicare effectively, visit our Medicare hub.
Sources
- Centers for Medicare & Medicaid Services. (2014). Medicare Coverage of Medical Expenses Related to Workers' Compensation and Other Workers' Compensation Arrangements. https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R15-01.pdf
- Centers for Medicare & Medicaid Services. (2022). Section 1862(b)(2)(A)(iii) of the Act Election to Opt-In to WCMSA Review (Paiment Options 1 and 2). https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-FAQs.html
- National Committee for Quality Assurance. (2019). Workers' Compensation Medical Directory. https://www.ncqa.org/Research/Research-Reports-Publications/Workers-Compensation-Medical-Directory/
- Workers' Compensation Clear Porject. (2022). Best Practices Manual for Workers' Compensation Medicare Set-Aside Arrangements (WCMSA) & Future Medicals. https://www.wcarn.org/wp-content/uploads/2015/04/WCMSA-Guide.pdf
- Medicare's secondary payer policy requires workers' comp to cover treatments related to work injury before Medicare steps in.
- If Medicare pays first for immediate medical expenses before workers' comp settlement, it initiates a recovery process.
- CMS monitors the amount from workers' comp settlements for injury-related medical care and may ask for a WCMSA to manage these funds.
- It's mandatory to report workers' comp settlements to CMS if they are $25,000 or more for Medicare enrollees, or $250,000 or more for those not enrolled yet but will qualify within 30 months.
- Using funds from a WCMSA for anything other than their intended purpose is prohibited and may lead to claim denials and reimbursement obligations.
- For deeper insights on navigating Medicare, workers' comp, and WCMSA, visit our healthsystems, health-and-wellness, therapies-and-treatments, and nutrition hubs, including relevant science and FAQs. Some helpful sources include CMS, NCQA, and Workers' Compensation Clear Project.
