Navigating Workers' Compensation and Medicare: Key Insights to Consider
Importance of Informing Medicare About Workers' Compensation Settlements
When workers experience job-related injuries or illnesses, they are entitled to workers' compensation benefits, which cover their medical expenses. However, for those enrolled in Medicare or soon to become eligible, it is crucial to be aware of how workers' compensation might impact Medicare coverage. Failure to report a workers' compensation arrangement could result in claim denials and the necessity to reimburse Medicare.
Workers' compensation is managed by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor, and it provides insurance for federal employees, their families, and certain other entities. In the event of a work-related injury, workers' compensation should be the primary payer for the injured party's medical treatment.
If the injured party requires immediate medical attention before receiving their workers' compensation settlement, Medicare may cover the costs initially and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). In this case, the Centers for Medicare & Medicaid Services (CMS) aims to monitor the amount received from workers' compensation for injury- or illness-related medical care to avoid a recovery process. In some cases, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) to manage these funds.
To ensure Medicare covers the appropriate portion of a person's medical expenses, the Total Payment Obligation to the Claimant (TPOC) must be reported to CMS if the person is already enrolled in Medicare or will soon qualify within 30 months of the settlement date, and if the settlement is $25,000 or more for current Medicare enrollees or $250,000 or more for future enrollees. In addition to workers' comp, a person must report to Medicare if they file a liability or no-fault insurance claim.
For more information, people can contact Medicare by phone at 800-MEDICARE or through a live chat on Medicare.gov. If they have questions about the Medicare recovery process, they can contact the BCRC at 855-798-2627.
A Medicare set-aside is voluntary, but if a Medicare beneficiary wants to set one up, their workers' compensation settlement must be over $25,000, or over $250,000 if they are eligible for Medicare within 30 months. It is prohibited to misuse the money in a Medicare set-aside arrangement for any purpose other than the one for which it is designated to avoid claim denials and reimbursement obligations.
Starting April 4, 2025, CMS will require mandatory reporting of all workers' compensation settlements involving Medicare beneficiaries, including settlements that allocate funds for future medical care covered by Medicare. This reporting is primarily the responsibility of the workers' compensation carrier or the Responsible Reporting Entity (RRE), but beneficiaries and their representatives should be aware of the process to ensure compliance and avoid coverage issues. The reported data must include the total settlement amount, WCMSA amount allocated for future medical expenses, the period covered by the WCMSA, the funding method, and initial and anniversary deposit amounts. Civil monetary penalties for non-compliance with Section 111 reporting requirements became effective as of October 2024, underscoring the importance of timely and accurate settlement reporting.
Beneficiaries must confirm that their settlement administrator or lawyer understands and complies with Section 111 reporting, keep documentation of the settlement, and ensure that their workers' compensation settlement includes proper Medicare Set Aside arrangements if future medicals are expected. Proper coordination ensures Medicare remains a secondary payer and helps avoid coverage disruptions or the need for reimbursement to Medicare in the future. For more resources to help navigate the complex world of medical insurance, visit the Medicare hub.
- When Medicare beneficiaries or those soon to be eligible receive workers' compensation settlements, it's essential to report these arrangements to Medicare to prevent claim denials and potential reimbursement obligations.
- For beneficiaries with Florida-related workers' compensation claims, the Centers for Medicare & Medicaid Services (CMS) will implement mandatory reporting starting April 4, 2025, requiring the reporting of settlements that allocate funds for future medical care covered by Medicare.
- In addition to workers' compensation, Medicare enrollees must report liabilities or no-fault insurance claims to maintain proper coordination of medical expenses to ensure Medicare remains a secondary payer and avoid coverage disruptions or reimbursement obligations.
- A Medicare set-aside is a voluntary arrangement that helps manage funds from workers' compensation settlements for future injury- or illness-related medical care, but it's prohibited to misuse these funds for any purpose other than their intended purpose to avoid claim denials and reimbursement obligations.
