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Workers’ compensation, or workers’ comp, is a state-based program that pays for healthcare that is needed as a result of job-related injuries.
Medicare can help you cover costs that workers’ compensation cannot.
Medicare may cover any conditional payments that arise if workers’ compensation has not made a decision within 120 days to cover your healthcare costs.
Medicare and workers’ comp work together through a program known as the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA).
The WCMSA exists for you to set aside funds in case you settle a workers’ compensation claim and need money to pay future medical bills and/or reimburse Medicare for any conditional payments.
If you’re a senior on Medicare and you suffer a serious injury on the job, you may find yourself wondering, “How do Medicare and workers’ compensation fit together?” After all, you’ll need both in some form to cover your medical expenses. That begs the question: do Medicare and workers’ comp actually coexist?
In some ways, yes, Medicare and workers’ comp coexist. Like in the relationship between Medicare and Social Security, these programs do not work together directly, but they fit together in a way that can help you cover medical costs as they arise. Essentially, Medicare does not have a “Medicare workers’ compensation” plan, but it can help take care of certain costs that workers’ compensation will not.
It all sounds complicated, but the cooperation between Medicare and workers’ comp is more cut and dry than it seems. Let’s take a look at how Medicare and workers’ comp fit together.
No matter how safe a workplace may be, accidents are going to happen. When an accident happens at work that affects your ability to handle your duties, your employer affords you some compensation for the time you miss due to injury and covers some of the medical costs you incur as a result of the accident. This is handled with workers’ compensation insurance, also known as workers’ compensation or workers’ comp.
Workers’ compensation serves two primary functions. One is to ensure that you receive proper health care for your injury, as well as compensation for some of the income you lost while you were out of work. The other is to protect employers from potential lawsuits by injured employees. Regardless of who was at fault for the accident, you can receive workers’ comp benefits. If one is unfortunately killed while working, workers’ compensation will provide death benefits for the worker’s dependents.
It’s important to know that workers’ compensation policies are not “one size fits all”. State laws and court decisions dictate the way the program is run in each state. This means that no two states share the same workers’ compensation laws and regulations. As a result, the features of the program vary drastically by state. For instance, each state’s workers’ compensation program features differences in:
If you qualify for both Medicare and workers’ comp, both will pay for healthcare related to injuries as a result of job-related incidents. However, Medicare will not be the primary source of payment for your medical bills.
In these situations, “coordination of benefit” rules determine which insurance is the primary payer and secondary payer. When you are eligible for both Medicare and workers’ comp, workers’ compensation is the primary payer for medical expenses related to injuries that happen on the job. Medicare is the secondary payer.
What this essentially means is that if there are medical bills that workers’ compensation will not pay for, Medicare will make conditional payments for those bills. However, Medicare will not pay for medical items or services that workers’ compensation will immediately cover. Medicare may also cover a portion of your medical bills that workers’ compensation will not cover if your injury is only partially covered by the program.
For companies that carry workers’ compensation that have Medicare beneficiaries on their payroll, Medicare’s interests must always be protected when settling claims. It is for this reason that Workers’ Compensation Medicare Set-Aside Arrangements are established.
A Medicare Set Aside is a portion of funds that workers’ compensation sets aside to handle certain work-related injury costs that Medicare would likely otherwise pay. In some ways, it also serves as a type of reimbursement for medical costs typically paid by Medicare. You may ask, “How does a Medicare Set Aside serve as a type of reimbursement for Medicare?” A Medicare Set Aside can serve as a type of reimbursement for Medicare as those funds can also be used to reimburse Medicare for conditional payments made for medical bills before your workers’ compensation could kick in.
If you want to establish a Workers’ Compensation Medicare Set Aside arrangement, it’s recommended that you submit a proposal to CMS for review. If you choose to submit a Medicare Set Aside proposal to CMS, it’ll have to meet certain Medicare Set Aside requirements before CMS will even review it. These Medicare Set Aside requirements for CMS review include:
To ensure a speedy and efficient review process, you can submit your Workers’ Compensation Medicare Set Aside arrangement proposal electronically through the WCMSA portal.
It’s well-known that the rules and regulations regarding workers’ comp and Medicare programs can often be vague and tough to follow. However, the Centers for Medicare and Medicaid Services (CMS) are always working to clear up misunderstandings and conflicts between their rules and the rules of workers’ compensation providers.
New laws put into place are designed to keep the burden of premium costs low by allowing workers’ compensation insurers to look into whether or not Medicare may have been used to pay any part of a claim. Lack of transparency in the past created unnecessary costs for both workers’ comp and Medicare insurers as workers who received Medicare benefits would not disclose whether or not they were beneficiaries. This led to unnecessary cost burdens on Medicare, Medicare Advantage, and workers’ comp insurers, which led to many lawsuits.
These new laws increase transparency by ensuring that CMS discloses enrollee information to workers’ compensation and liability insurance companies when requested. As a result of this transparency, each system pays their share as necessary, with workers’ comp handling primary costs and Medicare handling what may be left. This makes for a better working relationship between both systems.