Congress created the original Medicare program (Parts A and B) in 1965. It was designed to offer older and disabled Americans access to affordable health insurance. With the Balanced Budget Act of 1997, Medicare Part C was born with the intention of giving beneficiaries a choice: opt for original Medicare or choose the newly created Part C plans, better known as Medicare Advantage Plans (MAP).
These plans, with coverage provided by private insurers, cover all Medicare services and offer additional benefits such as prescription coverage, dental, and vision. However, problems can occur when workers covered by these plans sustain workers’ compensation injuries and use the plan to pay for medical care.
If a worker is receiving Medicare benefits and is hurt on the job, workers’ compensation insurance (WC) is the primary payer. An insurer or workers’ compensation plan cannot, by contract or otherwise, supersede federal law--for instance by alleging its coverage is supplemental to Medicare.
WC is always the primary payer for Medicare beneficiaries’ work-related illnesses or injuries, and Medicare beneficiaries are required to apply for all applicable WC benefits. If a Medicare beneficiary has WC coverage, providers, physicians, and other suppliers must bill WC first.
In situations in which Medicare has paid for WC-claim-related care before the beneficiary has obtained a settlement, judgment, award, or other payment, those Medicare payments are referred to as “conditional payments.” They are considered conditional payments because Medicare pays under the condition that it is reimbursed when the beneficiary gets a WC settlement, judgment, award, or other payment.
This an evolving issue in the courts, and it continues to be discussed and debated. Courts have ruled both ways on this issue. Here are some examples:
There is still uncertainty among insurers and employers when settling cases with Medicare beneficiaries who have ever received benefits from a MAP. Claim management departments need to consider the recovery rights of MAP’s when settling claims. The logical starting point would involve confirming the type of Medicare coverage at issue. Determine if the claimant is a beneficiary under traditional Medicare or under a MA plan.
For help meeting your compliance obligations, or to obtain quality worker's comp insurance at the right price, call us at (800) 947-1270 or (610) 775-3848 or contact us onlilne.