Medicare and Workers' Compensation: Essential Information for Understanding Interactions
Navigating workers' compensation and Medicare can be tricky, especially when it comes to settling claims. Here's a breakdown to help you avoid potential complications and medical cost issues.
Workers' Compensation: An Overview
Workers' compensation is an insurance program designed for employees who suffer job-related injuries or illnesses. This program is managed by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor. It applies to federal employees, their families, and certain other entities.
Workers' Compensation and Medicare Interaction
Under Medicare's secondary payer policy, workers' compensation must cover any treatment related to work injuries before Medicare steps in. However, if immediate medical expenses arise before the workers' compensation settlement, Medicare might pay first and then initiate a recovery process. To avoid such situations, the Centers for Medicare & Medicaid Services (CMS) monitors workers' compensation funds allocated 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, covering the care only after the WCMSA funds are exhausted.
Reporting Settlements to Medicare
Several factors determine whether you need to report your workers' compensation settlement to Medicare:
- If you are already enrolled in Medicare based on your age or Social Security Disability Insurance, and your settlement is $25,000 or more.
- If you are not currently enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more.
In addition, if you file a liability or no-fault insurance claim, you must report it to Medicare.
Workers' Compensation Medicare Set-Aside Arrangements (WCMSA)
A WCMSA is an agreement that sets aside a portion of your workers' compensation settlement exclusively for future medical expenses related to your work injury or illness. This arrangement is voluntary, but it's necessary if your workers' compensation settlement exceeds $25,000 or $250,000 under specific circumstances (as mentioned above). Misusing the funds in a WCMSA can lead to claim denials and the need to reimburse Medicare.
Frequently Asked Questions
- You can contact Medicare with any questions by phone at 800-MEDICARE or via a live chat on Medicare.gov during certain hours.
- The Medicare recovery process is managed by the Benefits Coordination & Recovery Center (BCRC) at 855-798-2627 (TTY 855-797-2627).
- A WCMSA is mandatory if your settlement exceeds the specified thresholds.
- It's prohibited to use the funds in a WCMSA for any purpose other than those designated for future medical expenses related to your work injury or illness.
Takeaway
Navigating workers' compensation and Medicare can be complex, but understanding the interaction between the two can help prevent potential issues with medical expenses. Properly reporting settlements and considering a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) when necessary can save you from claim rejections and reimbursement obligations.
Resources
Visit our Medicare hub for more resources to help you navigate the world of medical insurance.
- The health-and-wellness of employees who suffer job-related injuries or illnesses is often addressed through workers' compensation, an insurance program managed by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor.
- Under Medicare's secondary payer policy, healthsystems covering treatment related to work injuries must be provided by workers' compensation before Medicare steps in, to avoid potential complications and medical cost issues.
- To manage future medical expenses related to work injuries or illnesses, certain workers' compensation settlements may require the establishment of a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA).
- In cases where the settlement exceeds a certain threshold, the utilization of funds in a WCMSA must be restricted to nutrition, therapies-and-treatments, and other health-and-wellness expenses related to the job-related injury or illness.
