Workers' Compensation and Medicare Interactions: Essential Facts to Understand
Heads Up! Workers' Comp and Medicare: Navigating the Nitty-Gritty
Navigating the interplay between workers' compensation and Medicare can be a tricky business. Failing to report a workers' comp arrangement might result in claim denials and the need to repay Medicare.
Workers' compensation, overseen by the Office of Workers' Compensation Programs (OWCP) under the Department of Labor, provides benefits to federal employees, their families, and other eligible entities who incur job-related injuries or illnesses.
If you're enrolled in Medicare or will be soon, understanding how workers' comp may influence Medicare's coverage of medical claims for work-related ailments is crucial to prevent medical cost issues.
So, how does workers' comp affect Medicare?
Under Medicare's secondary payer policy, workers' comp should foot the bill for any treatment related to a work injury. If immediate medical expenses crop up before you receive your workers' comp settlement, Medicare might cover first and instigate a recovery process managed by the Benefits Coordination & Recovery Center (BCRC).
The Centers for Medicare & Medicaid Services (CMS) typically keeps tabs on the amount you receive from workers' comp for medical care related to your work injury to avoid a recovery process. In some cases, Medicare may ask for the setup of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare won't cover care until all the money in the WCMSA is used up.
What payments should be reported to Medicare?
Under certain circumstances, workers' comp is expected to submit the Total Payment Obligation to the Claimant (TPOC) to CMS to ensure Medicare handles the appropriate portion of your medical expenses. This represents the total amount of workers' comp owed to you or on your behalf.
You need to submit a TPOC if you're already enrolled in Medicare due to age or SSDI, and the settlement is $25,000 or more. If you're not yet enrolled in Medicare but will qualify within 30 months of the settlement date, and the settlement amount is $250,000 or more, you'll also need to report it.
Apart from workers' comp, it would help if you reported to Medicare if you file a liability or no-fault insurance claim.
FAQs
Questions? Call Medicare at 800-MEDICARE (800-633-4227, TTY 877-486-2048), or during specific hours, chat with them on Medicare.gov. 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 you want to set one up, your workers' comp settlement must be over $25,000 if you're a Medicare beneficiary or over $250,000 if you will qualify for Medicare within 30 months.
Yes. It is prohibited to misuse the funds in a Medicare set-aside arrangement for anything other than the intended purpose, which can lead to claim denials and the need to repay Medicare.
"Insights: Reporting workers' compensation settlements to CMS is essential for Medicare beneficiaries to protect Medicare's interests. As of April 4, 2025, reporting is mandatory for all full and final settlements involving Medicare beneficiaries, regardless of whether CMS approval is required. Proper reporting ensures that Medicare users can access necessary medical coverage without fearing claim denials or reimbursement issues.
"Takeaway: Workers' compensation is insurance for job-related injuries or illnesses for federal employees and other eligible groups. It's crucial for Medicare beneficiaries to understand the impact of workers' comp on their Medicare coverage and report workers' compensation arrangements to avoid claim denials and reimbursement obligations. Be informed, and protect your benefits!
Medicare Resources
For additional guidance on navigating the complex world of medical insurance, head over to our Medicare hub.**
- Understanding the influence of workers' compensation on Medicare's coverage of work-related medical claims is vital for Medicare beneficiaries to prevent medical cost issues, as Medicare's secondary payer policy requires workers' comp to cover treatment related to a work injury.
- The Centers for Medicare & Medicaid Services (CMS) may ask for the setup of a workers' compensation Medicare set-aside arrangement (WCMSA) to avoid a recovery process, and Medicare won't cover care until all the money in the WCMSA is used up.
- In certain circumstances, workers' comp is expected to submit the Total Payment Obligation to the Claimant (TPOC) to CMS if the settlement is $25,000 or more for a Medicare beneficiary or $250,000 or more for someone who will qualify for Medicare within 30 months.
- Apart from workers' comp, if you file a liability or no-fault insurance claim, it is necessary to report it to Medicare as well.
- Reporting workers' compensation settlements to CMS is crucial for Medicare beneficiaries to protect Medicare's interests, as of April 4, 2025, reporting will be mandatory for all full and final settlements involving Medicare beneficiaries, regardless of whether CMS approval is required. This will help Medicare users access necessary medical coverage without fearing claim denials or reimbursement issues.
