Medicare and Workers' Compensation: Essential Facts to Understand
Navigating the interplay between workers' compensation and Medicare is essential, especially for those eligible or enrolled in Medicare. Here's a breakdown of what you need to know to protect your Medicare coverage:
Workers' compensation insurance covers job-related injuries or illnesses for federal workers and others. As a Medicare beneficiary, it's vital to understand how this insurance might impact your Medicare coverage to avoid running into troubles with medical costs for work-related injuries.
How does a workers' comp settlement impact Medicare?
Medicare generally considers worker's compensation as the primary payer for any treatment related to a work-related injury. However, if immediate medical expenses arise before the settling amount is received, Medicare might pay first, triggering a recovery process handled by the Benefits Coordination & Recovery Center (BCRC). To avoid such a recovery process, the Centers for Medicare & Medicaid Services (CMS) often keeps an eye on the amount received for injury-related medical care from workers' compensation.
In specific cases, Medicare may ask for the creation of a workers' compensation Medicare set-aside arrangement (WCMSA) for these funds. Medicare will only cover medical care once the money in the WCMSA is exhausted.
What settlements need to be reported to Medicare?
Workers' compensation must report the total payment obligation to the claimant (TPOC) to CMS to ensure Medicare covers the appropriate portion of a person's medical expenses. This TPOC submission is necessary when a person is already enrolled in Medicare based on their age or based on receiving Social Security Disability Insurance, and the settlement is $25,000 or more.
Additionally, TPOCs are required when the person is not yet 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. Besides workers' comp, a person must also report to Medicare if they file a liability or no-fault insurance claim.
Key Insights:
- Understand Medicare’s Reporting Obligations: The settling party is legally required to report the settlement to the Centers for Medicare & Medicaid Services (CMS), while beneficiaries should confirm with their attorney or the settling party that required reporting has been completed.
- Medicare Set-Aside (MSA) Arrangements: MSAs help protect Medicare's future interests and ensure that Medicare does not pay for care that should be covered by the settlement until the set-aside funds are exhausted. Many beneficiaries opt for professional administration of their MSA funds.
- CMS Reporting for WCMSAs: CMS now requires reporting of specific data points for all settlements involving Medicare beneficiaries, such as WCMSA amount, funding method, initial deposit, annual deposits (if annuity), and WCMSA period.
- Beneficiary Responsibilities: Beneficiaries must confirm reporting, use MSA funds correctly, and keep detailed records. Some MSAs require annual reporting to Medicare.
- Workers' compensation settlements worth $25,000 or more for Medicare beneficiaries, or settlements expected to qualify a person for Medicare within 30 months, should be reported to the Centers for Medicare & Medicaid Services (CMS) to avoid affecting their Medicare coverage.
- In order to protect Medicare's future interests and ensure that Medicare does not pay for care that should be covered by the settlement, Medicare Set-Aside (MSA) arrangements might be created for certain cases.
- The Centers for Medicare & Medicaid Services (CMS) has implemented new reporting requirements for all settlements involving Medicare beneficiaries, requiring the submission of specific data points such as WCMSA amount, funding method, initial deposit, annual deposits, and WCMSA period.
- As a beneficiary with an MSA, it is essential to responsibly use the funds, confirm the reporting has been completed, and keep detailed records, with some MSAs requiring annual reporting to Medicare.
