Understanding Workers' Compensation and Medicare Interactions: Crucial Facts to Consider
Navigating the complexities of workers' compensation and Medicare is crucial when it comes to work-related injuries or illnesses for federal employees and certain other groups.
It's essential for Medicare beneficiaries to be aware of how workers' compensation may impact their Medicare coverage to prevent potential issues with medical expenses. Missing out on informing Medicare about workers' compensation agreements could lead to future claim rejections and reimbursement obligations.
Effective April 4, 2025, all full and final workers' compensation settlements involving Medicare beneficiaries must be reported to the Centers for Medicare & Medicaid Services (CMS) via the Section 111 reporting process. This includes settlements with a $0 Medicare Set-Aside Arrangement (MSA) and those below $25,000. This reporting requirement ensures Medicare’s interests are protected as workers' compensation is the primary payer for work-related injury treatment under Medicare’s secondary payer policy.
Responsible parties such as insurance carriers, self-insured employers, and third-party administrators must submit details such as the total settlement amount, MSA allocation if any, and the funding method (whether lump sum or annuity). Proper reporting avoids Medicare claim denials and potential recovery actions, and ensures Medicare only pays after the allocated funds for future injury-related medical expenses are exhausted. Failing to comply with these reporting requirements can lead to grave consequences, including civil penalties for responsible parties and potential denial of Medicare benefits for the injured worker if Medicare coverage is affected by non-reporting.
Reporting a workers' compensation settlement to Medicare is vital to safeguard Medicare funds and ensure proper coordination of benefits between workers' compensation and Medicare. This approach aligns with the current CMS mandates designed to protect Medicare funds and ensure proper claim handling.
- For a seamless handling of work-related injuries, it's crucial for health systems to understand the impact of workers' compensation on Medicare benefits under the Medicare's secondary payer policy.
- Beginning April 4, 2025, all Medicare beneficiaries must be included in the Section 111 reporting process for workers' compensation settlements, regardless of whether there is a Medicare Set-Aside Arrangement or the settlement is below $25,000.
- In the realm of health-and-wellness and workplace-wellness, it's imperative for all parties involved (insurance carriers, self-insured employers, and third-party administrators) to adhere to the reporting requirements for workers' compensation settlements, as non-compliance may lead to civil penalties and potential denial of Medicare benefits.
