Workers' Compensation and Medicare: Essential Facts to Understand
Working with Medicare and Workers' Compensation: A Must-know Guide
Navigating the overlap between workers' compensation and Medicare is essential for those who have work-related injuries or illnesses and are enrolled in or planning to enroll in Medicare. Failure to understand the connection can lead to claim denials and reimbursement obligations.
Workers' compensation serves as insurance for federal employees and select other groups who sustain injuries or illnesses on the job. The Office of Workers' Compensation Programs (OWCP) under the Department of Labor handles this benefit.
Under Medicare's secondary payer policy, workers' compensation must cover any treatment for work-related injuries before Medicare steps in. However, in situations where immediate medical expenses arise before the worker's compensation settlement, Medicare may pay first and initiate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
To ensure proper Medicare coverage, the Centers for Medicare & Medicaid Services (CMS) monitors the amount a person receives from workers' compensation for injury- or illness-related medical care and may establish a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will cover care only after the WCMSA funds have been exhausted.
Workers' Compensation Settlement Reporting to Medicare
Medicare beneficiaries do not report workers' compensation settlements personally. Instead, it's the workers' compensation payers (insurance carriers or third-party administrators) who are responsible for submitting the settlement details to CMS.
As of April 4, 2025, CMS requires all workers' compensation settlements involving Medicare beneficiaries to be reported, regardless of settlement amount [3]. The report must include detailed information about the settlement, such as the funding method for the Medicare Set-Aside [1][2].
Reporting Thresholds
There is no specified minimum settlement amount for reporting to CMS. All settlements involving Medicare beneficiaries must be reported to ensure compliance with Medicare's interests and to prevent future coverage issues [1][2].
In addition to workers' comp, a person must report to Medicare if they file a liability or no-fault insurance claim.
Frequently Asked Questions
To contact Medicare, you can call 800-MEDICARE (800-633-4227, TTY 877-486-2048) or use the live chat on Medicare.gov during specific hours. If you have questions about the Medicare recovery process, contact the BCRC at 855-798-2627 (TTY 855-797-2627).
A Medicare set-aside is voluntary. However, if a Medicare beneficiary wants to set one up, their workers' compensation settlement must be over $25,000, or over $250,000 if they are eligible for Medicare within 30 months.
Misusing the money in a Medicare set-aside arrangement can lead to claim denials and reimbursement obligations.
"Learn more: Understanding Medicare Set-Asides## Takeaway
Workers' compensation insurance is essential for job-related injuries or illnesses for federal employees and specific entities.
To ensure proper Medicare coverage for work-related injuries or illnesses, it's crucial to understand the connection between workers' compensation and Medicare. Proper reporting of workers' compensation settlements to Medicare can help avoid future claim rejections and reimbursement obligations.
For more resources to help navigate the complex world of medical insurance, visit our Medicare hub.
[1] Centers for Medicare & Medicaid Services[2] Workers' Compensation[3] Medicare Learning Network[4] Medicare Secondary Payer Program[5] Medicare Secondary Payer Payment Integrity Contractor
- In addition to filing a workers' compensation claim, individuals must report to Medicare if they receive a liability or no-fault insurance claim.
- The Centers for Medicare & Medicaid Services (CMS) requires workers' compensation settlements involving Medicare beneficiaries, regardless of the settlement amount, to be reported as of April 4, 2025.
- A Medicare set-aside arrangement (WCMSA) can be voluntary, but it requires a workers' compensation settlement over $25,000 or $250,000 if the beneficiary will be eligible for Medicare within 30 months.
- Misusing the money in a Medicare set-aside arrangement can result in claim denials and reimbursement obligations.
