Workers' Compensation and Medicare: Essential Information
Getting the lowdown on Medicare and workers' compensation is a must. If you don't inform Medicare about your work comp arrangement, you could end up dealing with claim rejections and having to pay back Medicare.
Workers' comp is insurance that covers work-related injuries and sicknesses for federal employees and certain other groups. The Office of Workers' Compensation Programs (OWCP) inside the Department of Labor is in charge of this benefit.
People on Medicare or soon to be on it need to know how workers' comp might influence Medicare's coverage of medical claims related to work injuries. Under Medicare's secondary payer policy, workers' comp should cover any treatment for a work-related injury before Medicare steps in.
Workers' comp settlement and Medicare: What you need to know
In case of immediate medical expenses before you receive your workers' comp settlement, Medicare might pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid this recovery process, the Centers for Medicare & Medicaid Services (CMS) usually keeps track of the amount you receive from workers' comp for injury or illness-related medical care. In some instances, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only pay for care after all the money in the WCMSA has been spent.
What settlements need to be reported to Medicare?
Workers' comp must provide a Total Payment Obligation to the Claimant (TPOC) to CMS for Medicare to cover the appropriate portion of your medical expenses. Submitting a TPOC is necessary if you're already on Medicare based on age or SSDI and the settlement is $25,000 or more, or if you're not yet on Medicare but will be within 30 months of the settlement date and the settlement amount is $250,000 or more. Additionally, you must report to Medicare if you file a liability or no-fault insurance claim.
FAQs
You can contact Medicare by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048), or during certain hours, a live chat is available on Medicare.gov. If you have questions about the Medicare recovery process, you can contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary, but if you want to set one up, your workers' comp settlement must be over $25,000, or over $250,000 if you're eligible for Medicare within 30 months. Misusing the funds in a Medicare set-aside arrangement can lead to claim denials and having to reimburse Medicare.
Starting April 4, 2025, all full and final settlements involving Medicare beneficiaries must be reported to CMS whether CMS approval is requested or not, and regardless of the settlement amount. This includes settlements where a Workers' Compensation Medicare Set-Aside (WCMSA) is $0. The reporting must be completed through the Section 111 process, which requires providing details such as the settlement amount, WCMSA allocation, and funding mechanisms (whether lump sum or annuity). By following these steps, Medicare beneficiaries can ensure that their settlements are properly reported to CMS, protecting both parties' interests and ensuring future medical expense coverage.
- Workers' comp is essential for federal employees and certain groups, overseen by the Office of Workers' Compensation Programs (OWCP) within the Department of Labor.
- Under Medicare's secondary payer policy, workers' comp should cover treatment for work-related injuries before Medicare steps in.
- If immediate medical expenses occur before receiving workers' comp settlement, Medicare might pay first, initiating a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
- To avoid this recovery process, the Centers for Medicare & Medicaid Services (CMS) usually keeps track of the amount received from workers' comp for injury or illness-related medical care.
- In some cases, Medicare may ask for the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds, paying for care only after all the money in the WCMSA has been spent.
- To ensure that workers' comp settlements are properly reported to Medicare, all full and final settlements involving Medicare beneficiaries must be reported to CMS, starting from April 4, 2025, regardless of the settlement amount or whether a WCMSA is involved.
