Medicare and workers' compensation interplay: Key insights
Informing Medicare About Workers' Compensation Arrangements: A Must-Do Guide
Properly notifying Medicare about a workers' compensation arrangement is more than just good practice; it's crucial to avoid potential claim denials and reimbursement obligations.
Workers' compensation, administered by the Office of Workers' Compensation Programs (OWCP), provides benefits for federal employees and others who sustain job-related injuries or illnesses. It's essential for those already enrolled in Medicare or imminently eligible to understand how workers' compensation can interact with Medicare and the medical expenses related to work-related injuries.
Workers' Compensation and Medicare: Breaking it Down
Under Medicare's secondary payer system, workers' compensation must be the primary payer for any medical treatment related to a work-related injury. In the event of immediate expenses before the workers' compensation settlement arrives, Medicare may 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) generally monitors the amount a person receives from workers' compensation for their injury-related medical care and may require a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds.
Who Needs to Report Workers' Compensation Settlements to Medicare
When a Workers' compensation settlement exceeds specific thresholds, Medicare must be notified. The total payment obligation to the claimant (TPOC) must be submitted to CMS. This is necessary if a person is already enrolled in Medicare based on their age or Social Security Disability Insurance (SSDI) eligibility, and the settlement is $25,000 or more. Similarly, TPOCs are necessary when a person is not currently enrolled in Medicare but will qualify for the program within 30 months of the settlement date, and the settlement amount is $250,000 or more. Additionally, a person should report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
Individuals can contact Medicare with questions by phone at 800-MEDICARE or 800-633-4227 (TTY: 877-486-2048), with a live chat offered on Medicare.gov during specific hours. Inquiries about the Medicare recovery process can be directed to the BCRC at 855-798-2627 (TTY: 855-797-2627).
A Medicare set-aside is voluntary, but if a claimant desires to set one up, the workers' compensation settlement must exceed $25,000 or $250,000 within 30 months, depending on the Medicare eligibility timeline. Misusing funds in a Medicare set-aside can result in claim denials and reimbursement obligations.
What to Know About Medicare Set-Asides
Learn More: Top Considerations for Medicare Set-Aside Arrangements
Takeaway
Understanding how workers' compensation interacts with Medicare is crucial to prevent complications with medical costs for injuries or illnesses sustained at work. Reporting workers' compensation agreements to Medicare helps ensure claim accuracy and protect the beneficiary from future reimbursement obligations.
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- To prevent potential claim denials and reimbursement obligations, it is essential for workers' compensation to be the primary payer for medical treatments related to work-related injuries and for Medicare to be properly notified.
- Under Medicare's secondary payer system, a Medicare set-aside arrangement (WCMSA) may be necessary for injury-related medical care funds if Medicare is already aware of or becomes aware of a workers' compensation settlement that exceeds specific thresholds.
- It's important for individuals who are either already enrolled in Medicare or will be eligible within 30 months of a workers' compensation settlement to report the settlement if it exceeds $25,000 or $250,000, respectively.
- Misusing funds in a Medicare set-aside can lead to claim denials and reimbursement obligations, making it crucial for beneficiaries to ensure smart financial management of these dedicated funds.
