Medicare and Workers’ Compensation Settlements

By Luann Jenkins, CPC, CPMA, CEMC, CFPC

Have you ever received this denial from Medicare?

CPB : Online Medical Billing Course

PR 201 Workers’ Compensation case settled. Patient is responsible for amount of this claim/service through WC Medicare set aside arrangements or other agreement.

This denial happens when the Centers for Medicare & Medicaid Services (CMS) has been involved in the settlement of a Workers’ Compensation case. CMS is required to review workers’ compensation settlements if the worker involved is:

  • Currently a Medicare Beneficiary, and total settlement is over $25,000
  • Currently not a Medicare beneficiary but there is a reasonable expectation of Medicare enrollment within 30 months, and settlement is for $250,000 or more

From these reviews Medicare may require a Workers’ Compensation Medical Set-Aside Arrangement (WCMSA), whereby Medicare agrees to address future medical benefits. The WCMSA can be established as a structured arrangement, through which payments are made on a defined schedule to cover projected future expenses.

These agreements require a patient receiving medical services to pay from a fund that he or she personally controls, or that is managed by another entity. Patients are responsible to cover medical expenses until the funds are exhausted, after which Medicare will be responsible. The CMS website has further information.


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