Understanding the Intersection of Workers' Compensation and Medicare: Key Points to Consider
Navigating workers' compensation and Medicare can be a tricky business, especially when it comes to work-related injuries or illnesses. Here's the lowdown on how to keep your medical costs under control and avoid any headaches with the Centers for Medicare & Medicaid Services (CMS).
First things first - understand that workers' comp is insurance for job-related injuries or illnesses, and it applies to federal employees and specific other groups. If you're already on Medicare or will be soon, it's essential to know how workers' compensation might impact your Medicare coverage to dodge any medical expense shocks.
How a Workers' Comp Settlement Affects Medicare
Medicare follows a secondary payer policy, meaning workers' comp must cover any treatment for work-related injuries before Medicare steps in.However, if you incur immediate medical expenses before your settlement, Medicare might pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC). To avoid this, the CMS keeps an eye on the amount received from workers' compensation for injury/illness-related care. In some cases, they may even ask for a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover care after all the money in the WCMSA has been exhausted.
Settlements That Need to Be Reported
When your workers' comp settlement reaches $25,000 (or $250,000 if you'll be Medicare-eligible within 30 months), you'll need to submit a total payment obligation to the claimant (TPOC) to the CMS. This includes cases where you're already on Medicare based on age or SSDI, or when you won't qualify for Medicare but will within 30 months of the settlement date. You'll also need to report any liability or no-fault insurance claims.
Reporting to CMS
To report a workers' compensation settlement to the CMS, the Responsible Reporting Entity (RRE), typically the workers' compensation insurer or self-insured employer, must follow guidelines provided by CMS under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007. The RRE can submit claim information through either an electronic file exchange or a manual direct data entry process using the Section 111 COBSW for low-volume submissions. The RRE must report specific data points, including WCMSA Amount, WCMSA Funding Method, Initial Deposit Amount, Annual Deposit Amount, and WCMSA Period. Starting April 4, 2025, WCMSAs must be reported for records with a TPOC date.
The Bottom Line
Educate yourself on the intricacies of workers' compensation and Medicare to stay on top of your medical expenses and prevent future claim rejections or reimbursement obligations. And, don't forget to keep CMS informed about your workers' compensation arrangements to avoid unnecessary complications. For more resources, visit our Medicare hub to help you navigate the complex world of medical insurance.
- If you receive a workers' compensation settlement worth $25,000 or more (or $250,000 if you will be Medicare-eligible within 30 months), it is necessary to report this information to the Centers for Medicare & Medicaid Services (CMS) according to the Total Payment Obligation to the Claimant (TPOC) guidelines.
- Medicare generally follows a secondary payer policy for work-related injuries or illnesses; therefore, it is essential to understand that workers' comp must cover any treatment for these incidents before Medicare steps in.
- In some cases, the CMS may request a workers' compensation Medicare set-aside arrangement (WCMSA) if they deem it necessary to manage the funds related to the injury/illness-related care.
- Navigating the health-and-wellness landscape, especially with regards to therapies and treatments, nutrition, and Medicare, becomes easier when you educate yourself on the intricacies of workers' compensation and Medicare to stay on top of your medical expenses and avoid future complications.
