Medicare and Workers' Compensation: Essential Information You Should Understand
Unraveling the Medicare Maze: Workers' Compensation
Navigating the intersection of workers' compensation and Medicare is essential for avoiding claim denials and unnecessary reimbursements to Medicare.
Workers' compensation is a safety net for employees who suffer injuries or illnesses directly related to their jobs. This insurance, managed by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor, is available to federal employees, their families, and select entities.
For individuals currently on Medicare or about to join the program, understanding how workers' comp might affect Medicare's medical claim coverage is crucial to avoid costly complications.
Dancing with Workers' Compensation and Medicare
Under Medicare's secondary payer policy, workers' compensation ought to be the main payer for any medical treatment related to a work-related injury. However, if immediate expenses emerge before the workers' compensation settlement, Medicare might initially cover the costs and instigate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To prevent recovery processes, the Centers for Medicare & Medicaid Services (CMS) generally tracks the amount an individual receives from workers' compensation for their injury or illness-related medical care. In certain cases, Medicare might request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover the care once the WCMSA funds have been exhausted.
Reporting Responsibilities
Workers' compensation must provide the CMS with a total payment obligation to the claimant (TPOC) to ensure Medicare covers the appropriate portion of a person's medical expenses. This report represents the total amount owed to the person or on their behalf.
TPOCs are essential in the following scenarios:
- If a person 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 within 30 months of the settlement date, and the settlement amount is $250,000 or more.
In addition to workers' comp, a person must report to Medicare if they file a liability or no-fault insurance claim.
Key Questions, Answered
A person can contact Medicare with any question by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is also available on Medicare.gov. If a person has questions about the Medicare recovery process, they can contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary. However, if a Medicare beneficiary wants to set one up, their workers' compensation settlement must be over $25,000 or, if they are eligible for Medicare within 30 months, over $250,000. Misusing the funds can lead to claim denials and reimbursement obligations to Medicare.
Insights to Remember
- Educate yourself on how workers' compensation may affect your Medicare coverage to prevent medical expenses issues.
- Report workers' compensation agreements to Medicare to avoid future claim rejections and reimbursement obligations.
- Keep detailed records of expenses paid from the Medicare set-aside funds and submit annual attestations to Medicare’s Benefits Coordination & Recovery Center (BCRC).
For further help navigating the complex world of medical insurance, visit our Medicare hub.
- To ensure accurate coverage of medical expenses and avoid claim denials, it's crucial for individuals who are on Medicare or about to join, and are also claiming workers' compensation, to understand the role of workers' compensation in their health-and-wellness scenario.
- Under the Medicare Secondary Payer (MSP) policy, workers' compensation is expected to be the primary payer for medical treatment resulting from work-related injuries. The Centers for Medicare & Medicaid Services (CMS) should be provided with the Total Payment Obligation to the Claimant (TPOC) to facilitate proper Medicare coverage.
- In cases where a person has a workers' compensation Medicare set-aside arrangement (WCMSA), Medicare will only cover medical expenses once the WCMSA funds have been exhausted, highlighting the need for meticulous record-keeping and annual attestation submissions to the Benefits Coordination & Recovery Center (BCRC) for continued Medicare support.
