Medicare and Workers' Compensation: Essential Information for Your Understanding
Navigating the world of workers' compensation and Medicare can be a tricky business. Here's a breakdown of what you need to know to avoid any potential pitfalls when it comes to workers' comp settlements and Medicare coverage.
First off, it's crucial to understand that Medicare is a secondary payer when it comes to workers' compensation. This means that workers' comp must cover any treatment related to a work injury before Medicare kicks in. If medical expenses arise before the workers' comp settlement, Medicare might pay first and initiate a recovery process to get reimbursed.
Now, to avoid such a recovery process, it's essential to report your workers' compensation settlement to Medicare. The Centers for Medicare & Medicaid Services (CMS) usually wants to monitor the amount a person receives from workers' comp for their injury-related medical care. In some cases, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover care after all the money in the WCMSA has been exhausted.
Reporting is required if a Medicare beneficiary is currently enrolled based on their age or based on receiving Social Security Disability Insurance, and the settlement is $25,000 or more. Even if the person is not currently enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more, reporting is necessary. Additionally, reporting is required when a person files a liability or no-fault insurance claim.
MSA, or Medicare Set-Aside, is a voluntary arrangement, but if a Medicare beneficiary wants to set one up, their workers' compensation settlement must be over $25,000. Misusing the money in an MSA is prohibited, which can lead to claim denials and reimbursement obligations.
To maintain accurate records, beneficiaries must keep records of all expenses from the MSA account, including settlement dates, diagnoses, injury details, and transactional data from medical billing. Every year, they need to submit an attestation to Medicare’s Benefits Coordination & Recovery Center, confirming that the MSA funds were used correctly.
By following these steps, Medicare beneficiaries can ensure that their workers’ compensation settlements are properly reported and managed to maintain Medicare coverage and avoid unnecessary reimbursement obligations.
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
- In the realm of workers' compensation, it's important to note that Medicare functions as a secondary payer, implying that workers' comp covers any treatment related to a work injury before Medicare becomes active.
- To prevent Medicare from initiating a recovery process after paying for medical expenses before the workers' comp settlement, it's mandatory to report the settlement to Medicare's Centers for Medicare & Medicaid Services (CMS).
- Reporting is compulsory if the Medicare beneficiary is enrolled based on their age or SSDI, and the settlement is $25,000 or more, or if the person will qualify within 30 months and the settlement amount is $250,000 or more.
- The Centers for Medicare & Medicaid Services (CMS) may suggest a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds if a Medicare beneficiary receives a settlement over $25,000, and misusing funds in a WCMSA is prohibited, potentially leading to claim denials and reimbursement obligations.
