Understanding Intersection of Workers' Compensation and Medicare Benefits: Crucial Insights
Working with Medicare and Workers' Compensation: A Comprehensive Guide
Navigating the intersection of workers' compensation and Medicare is essential for those who have job-related injuries or illnesses and are enrolled in Medicare or approaching eligibility. Here's what you need to know to avoid claiming issues and reimbursement obligations:
Workers' compensation is an insurance policy for federal employees and certain other groups who experience work-related injuries or illnesses. When a workers' compensation claim results in a settlement, it's crucial to understand how it might affect Medicare coverage for related medical costs.
Workers' Compensation Settlements and Medicare Coverage
Under Medicare's secondary payer policy, workers' compensation must cover the initial medical expenses for a work-related injury before Medicare steps in. However, if immediate medical care is required before the settlement is received, Medicare might pay first and implement a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To prevent this recovery process and protect Medicare's interests, the Centers for Medicare & Medicaid Services (CMS) often monitors the amount a person receives from workers' compensation for injury- or illness-related medical care. In some cases, a workers' compensation Medicare set-aside arrangement (WCMSA) may be requested, with Medicare covering care only after the WCMSA funds have been depleted.
Settlements Requiring Reporting to Medicare
When a person enrolled in Medicare or eligible within 30 months of the settlement date receives a workers' compensation total payment obligation to the claimant (TPOC) of $25,000 or more, it must be reported to CMS. This applies even if the person is already enrolled in Medicare due to age or Social Security Disability Insurance.
Similarly, if a person is not currently enrolled in Medicare but will qualify within the next 30 months and receives a settlement of $250,000 or more, the TPOC must be reported.
Additionally, if the individual files a liability or no-fault insurance claim, they must report this to Medicare as well.
Medicare Set-Aside Arrangements
A Medicare Set-Aside (MSA) is a voluntary arrangement to allocate a portion of the settlement to cover future medical expenses related to the work injury that would have been covered by Medicare. The amount set aside must be documented and reported to CMS, even if an MSA approval is not requested.
Recent changes by the CMS require all full and final workers' compensation settlements involving Medicare beneficiaries, regardless of the amount, to be reported through the Section 111 mandatory insurer reporting process. This applies as of April 4, 2025.
Frequently Asked Questions
- To contact Medicare with questions, call 800-MEDICARE or use the live chat feature on Medicare.gov. For questions regarding the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 855-797-2627).
- A Medicare set-aside is voluntary, but if a Medical beneficiary wants to establish one, the settlement must be over $25,000 or $250,000 within 30 months.
- It is prohibited to misuse the funds in a Medicare set-aside arrangement for purposes other than those for which it is designated. Misuse can lead to claim denials and the need to reimburse Medicare.
Takeaway
Understanding the connection between workers' compensation and Medicare is crucial for those enrolled in Medicare or soon to be eligible. Reporting requirements and compliance processes are essential, especially for settlements over $25,000 or $250,000 within 30 months. To learn more, visit our Medicare hub.
- When navigating the intersection of workers' compensation and Medicare, it's important to understand how workers' compensation settlements might affect Medicare coverage, especially for related medical costs.
- The Benefits Coordination & Recovery Center (BCRC) may implement a recovery process if Medicare pays for immediate medical care before a workers' compensation settlement is received.
- To avoid this recovery process and protect Medicare's interests, a Centers for Medicare & Medicaid Services (CMS) monitoring of the amount a person receives from workers' compensation for injury- or illness-related medical care may occur, and a workers' compensation Medicare set-aside arrangement (WCMSA) may be requested.
- If a person enrolled in Medicare or eligible within 30 months of the settlement date receives a workers' compensation total payment obligation to the claimant (TPOC) of $25,000 or more, it must be reported to CMS, even if already enrolled due to age or Social Security Disability Insurance.
- It is also necessary to report a workers' compensation settlement to Medicare if the person will qualify within the next 30 months and receives a settlement of $250,000 or more, or files a liability or no-fault insurance claim.
