Medicare and Workers' Compensation: Essential Information
Taking care of your health and finances, especially when it comes to workers' compensation and Medicare, is essential. Here's a breakdown of what you need to know to navigate this crucial aspect of job-related injuries or illnesses for federal employees and certain other groups.
People enrolled in Medicare or approaching eligibility must understand how workers' compensation benefits may influence Medicare's coverage of their medical claims, ensuring they avoid confusion and complications regarding medical costs associated with workplace injuries.
How a Workers' Comp Settlement Impacts Medicare
Under Medicare's secondary payer policy, workers' compensation should act as the primary payer for any work-related injury treatment. If immediate medical costs emerge before the individual receives their workers' compensation settlement, Medicare may pay upfront 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) keeps tabs on the amount a person receives from workers' compensation for their injury or illness-related medical care. In some cases, Medicare may request the establishment of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover the care after all the money in the WCMSA has been depleted.
Reporting Required Settlements to Medicare
Workers' compensation must submit a total payment obligation to the claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of a person's medical expenses. This represents the total amount of workers' compensation owed to the person or on their behalf. Submitting a TPOC is crucial if a person is already enrolled in Medicare based on their age or based on receiving Social Security Disability Insurance and if the settlement is $25,000 or more. TPOCs are also mandatory if the 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 must report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
- If you have questions about anything related to Medicare, you can reach out to Medicare by phone at 800-MEDICARE (800-633-4227, TTY 877-486-2048). During certain hours, a live chat is also 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).
- Medicare set-aside is a voluntary arrangement, but a Medicare beneficiary seeking to establish one must have a workers' compensation settlement of over $25,000 or over $250,000 if they are eligible for Medicare within 30 months.
- Yes, misusing the money in a Medicare set-aside arrangement can lead to claim denials and the need to reimburse Medicare.
- For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
The Importance of Compliance with Workers' Compensation Settlement Reporting
Beginning April 4, 2025, new rules require that every full and final workers’ compensation settlement involving a Medicare beneficiary must be reported to CMS, regardless of whether Medicare approval of a Medicare Set-Aside (MSA) is requested or whether the settlement meets any previous monetary thresholds for reporting[1][3]. Workers' compensation insurance carriers, self-insured employers, and third-party administrators (TPAs) must report the Total Payment Obligation to the Claimant (TPOC) to CMS using the Section 111 reporting system[1][2][3][4]. The reporting must include the settlement amount, any Medicare Set-Aside allocation, and the funding mechanism (e.g., lump sum or structured annuity)[1][3][5]. Reporting applies to all settlements regardless of size, and failure to comply with these reporting requirements can result in civil penalties, denial of Medicare benefits related to the injury, and potential litigation[1]. This comprehensive reporting ensures Medicare’s interests are protected by tracking and safeguarding funds for future medical expenses related to the injury[1][3][5].
- Understanding the impact of workers' compensation benefits on Medicare's coverage is vital for individuals enrolled in Medicare or approaching its eligibility.
- Medicare's secondary payer policy requires workers' compensation to act as the primary payer for work-related injury treatment, with Medicare initiating a recovery process if immediate medical costs occur before settlement.
- To bypass Medicare's recovery process, the Centers for Medicare & Medicaid Services (CMS) monitors workers' compensation payments for injury-related medical care, and may establish a workers' compensation Medicare set-aside arrangement (WCMSA) if necessary.
- Workers' compensation must submit a Total Payment Obligation to the Claimant (TPOC) to CMS for people already enrolled in Medicare, those approaching eligibility based on age or Social Security Disability Insurance, and those who will qualify within 30 months if the settlement is $25,000 or more.
- It is essential to report TPOCs to Medicare for people with Medicare set-asides involving $250,000 or more, those with liability or no-fault insurance claims, and starting April 4, 2025, for all full and final workers' compensation settlements involving a Medicare beneficiary, regardless of settlement size.
- Compliance with these reporting requirements ensures Medicare's interests are protected and provides a safeguard for future medical expenses related to work injuries.
- Failure to comply with these reporting requirements can lead to civil penalties, denial of Medicare benefits related to the injury, and potential litigation.
- For more resources on navigating the complex world of medical insurance, visit our Medicare hub, which provides information on health-and-wellness, fitness-and-exercise, nutrition, and personal finance, in addition to business and finance topics.
