In most cases, workers' compensation pays first for treatment related to your work injury. Medicare is typically the secondary payer, which means it generally steps in only when workers' compensation isn't responsible for the bill or doesn't pay within the required timeframe.
Your medical providers should bill the workers' compensation carrier first for injury-related care. Medicare covers treatment unrelated to your work injury the way it normally would.
How the secondary payer rule works
Under the Medicare Secondary Payer (MSP) rules, Medicare generally won't pay for services that workers' compensation has paid for or can reasonably be expected to pay for. Medicare.gov puts it simply: workers' comp "pays first for items or services (including drugs) related to the workers' compensation claim."
You're responsible for making sure workers' compensation is billed first for injury-related treatment. That responsibility doesn't end when your claim settles. Our FAQ on your obligation to Medicare explains those ongoing responsibilities in more detail.
When Medicare pays before workers' comp
Sometimes treatment can't wait.
If a workers' compensation carrier denies a claim or doesn't pay within 120 days, Medicare may make what's called a conditional payment so you can still receive care. The payment is considered "conditional" because Medicare may expect to be reimbursed if you later receive a settlement, judgment, or award related to the injury.
Medicare's recovery contractors track these payments and may send a conditional payment letter outlining what Medicare paid on your behalf.
Review that letter carefully. If any charges aren't related to your work injury, you may be able to dispute them. Repayment is typically made from settlement proceeds, and interest may be charged if a final demand is not repaid within 60 days.
What to do when workers' comp and Medicare both deny your bill
As frustrating as it sounds, this situation does happen.
A workers' compensation carrier may deny a bill because it believes the treatment isn't related to your injury or because the claim has been closed. Medicare may then deny the same bill because its records still show the condition as work-related. When that happens, these steps can help move things forward:
- Get the workers' compensation denial in writing. A denial letter or explanation of benefits shows Medicare that workers' compensation is not paying for the treatment.
- Ask your provider to resubmit the claim to Medicare and include the denial. CMS guidance states that a workers' compensation denial letter is generally enough for Medicare to review and process the claim. If the treatment is unrelated to your work injury, supporting medical documentation can also help Medicare approve payment.
- Contact the Benefits Coordination & Recovery Center (BCRC) at 1-855-798-2627. The BCRC maintains the workers' compensation information associated with your Medicare file. If the workers' compensation carrier is no longer responsible for your medical care, an end date should be reported so previously denied claims can be reviewed again.
- Appeal if Medicare still denies the claim. You can request a redetermination within 120 days of receiving your Medicare Summary Notice.
Keep in mind that if Medicare pays after a workers' compensation denial, it may still treat that payment as conditional. If your case later settles, Medicare may seek reimbursement from settlement funds.
Who pays first after you settle?
The answer depends on how your settlement is structured.
If your settlement includes funds for future injury-related medical care, those funds generally need to be used before Medicare begins paying for treatment related to your work injury.
When there is a CMS-approved Workers' Compensation Medicare Set Aside (WCMSA), the WCMSA Reference Guide states that the MSA must be appropriately exhausted before Medicare will pay for covered injury-related care. Without an MSA, Medicare may still deny payment until the portion of the settlement intended for future medical treatment has been properly spent.
Denials can continue after settlement, too. An Ametros analysis of Medicare claims data from 2018 to 2020 found an average of five denied claims per beneficiary, totaling approximately $2,376 per denied claim.
That's one reason many injured individuals choose professional administration. Professional administration helps manage future medical funds after settlement, pay injury-related bills, and handle Medicare reporting requirements so you don't have to navigate those responsibilities on your own.
