Medicare and Workers' Compensation Interactions: Crucial Information
Medicare Beneficiaries Must Report Workers' Compensation Settlements for Proper Claim Processing
Individuals enrolled in Medicare or approaching eligibility should be aware of the implications of workers' compensation settlements and the importance of reporting these settlements to Medicare to ensure appropriate coverage for work-related medical expenses. Improper claim handling can result in delays, claim denials, and reimbursement obligations to Medicare.
Workers' compensation is insurance that provides benefits to employees who incur work-related injuries or illnesses. The Office of Workers' Compensation Programs, a branch of the Department of Labor, manages this benefit for federal employees, their families, and certain other entities.
When an individual participates in Medicare and experiences a job-related injury, it is essential to understand how the workers' compensation benefits may impact Medicare's coverage of associated medical claims. Proper planning can help prevent complications and possible difficulties when it comes to medical expenses for work-connected injuries.
Workers' comp settlements and Medicare:
Under Medicare's secondary payer policy, workers' compensation entities must serve as the primary payer for any medical treatment related to a work-related injury. In cases where immediate medical expenses arise before the individual receives their workers' compensation settlement, Medicare may cover the initial costs and implement a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To avoid a recovery process and ensure proper coordination between workers' compensation and Medicare, the Centers for Medicare & Medicaid Services (CMS) generally monitors the amount received by a person from workers' compensation for their injury or illness-related medical care. In certain instances, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare coverage will only become effective after the WCMSA funds have been depleted.
Reporting workers' compensation settlements to Medicare:
The Total Payment Obligation to the Claimant (TPOC) must be submitted to CMS by the workers' compensation entity. This report represents the total amount owed to the person or on their behalf as part of the settlement.
TPOC reports must be submitted if the person is already enrolled in Medicare based on age or Social Security Disability Insurance (SSDI) eligibility and the settlement is $25,000 or more. If the individual is not enrolled in Medicare yet but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more, TPOC reports are also necessary.
In addition to workers' compensation, a person must report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions (FAQ):
Individuals can contact Medicare with any 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 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 but is required if the workers' compensation settlement is over $25,000 for Medicare beneficiaries or over $250,000 if they are eligible for Medicare within 30 months. Misusing funds allocated for a Medicare set-aside arrangement can lead to claim denials and reimbursement obligations to Medicare.
Takeaway:
Proper reporting and management of workers' compensation settlements as a Medicare beneficiary can help prevent future claim rejections and reimbursement obligations. Compliance with CMS Section 111 reporting requirements, particularly the updates in effect as of April 4, 2025, is crucial in this process. By ensuring proper Section 111 reporting, establishing and funding a WCMSA when necessary, and managing the WCMSA funds correctly, beneficiaries can protect Medicare's secondary payer rights and avoid potential claim denials or reimbursement demands. Additional resources are available through our Medicare hub to help guide you through the complex world of medical insurance.
- To ensure that Medicare covers work-related medical expenses properly, Medicare Beneficiaries are obliged to report their workers' compensation settlements accurately.
- In instances where workers' compensation serves as the primary payer for a work-related injury, Medicare may require the establishment of a Medicare set-aside arrangement (WCMSA) for related funds.
- The Centers for Medicare & Medicaid Services (CMS) requires the Total Payment Obligation to the Claimant (TPOC) to be reported by the workers' compensation entity if the individual is already enrolled in Medicare or will qualify within 30 months of the settlement date, with a settlement amount of $25,000 or more for Medicare beneficiaries or $250,000 or more for those becoming eligible.
- Proactive management of workers' compensation settlements, adherence to CMS Section 111 reporting requirements, and the judicious use of WCMSA funds can prevent future claim rejections and reimbursement obligations for Medicare beneficiaries.
