Medicare Enrollment Considerations in Handling and Settling Workers’ Compensation, No-Fault, and Liability Claims
A pivotal part of Medicare Secondary Payer (MSP) compliance is determining whether a claimant is a Medicare beneficiary, and once confirmed as a beneficiary, identifying the Medicare plan(s) they are or have been enrolled in during the pendency of the claim. This knowledge informs what MSP obligations must be addressed during the claims handling and settlement process, and which potential lien holders could seek recovery during same.
Several plan options exist for Medicare beneficiaries:
Medicare Plans
Medicare Part A covers inpatient hospital stays.
Medicare Part B provides coverage for doctor visits, outpatient care, preventive services, medical equipment, and other medically necessary services.
Many individuals who receive Social Security benefits will automatically have their Medicare Part B premium deducted from their monthly Social Security payment. The standard monthly Part B premium is $202.90 for 2026; the projected Part B premium for 2027 is $209.50[i].
Medicare Part C (Medicare Advantage Plan or MAP) combines Part A and Part B services together and is administered by private health plans who contract with Medicare. MAPs often offer a Part D prescription drug coverage component, and must provide the same coverage as Original Medicare but they often entice enrollment by offering enrollees additional benefits such as vision, hearing, dental, and wellness benefits that are not offered by Original Medicare.
Medicare Part D (Prescription Drug Plan or PDP) provides prescription drug coverage and, like Part C, is administered by private insurance companies.
Every plan has a list of covered prescriptions called a formulary. It is important to look at the plan’s prescription drug formulary to determine what medications are covered under the plan.
While there are several other “plan” types in the marketplace for Medicare beneficiaries, including Medigap Plans, which provide for supplemental coverage to cover certain costs (coinsurance and deductibles) that Original Medicare does not pay, no plan types outside of A-D trigger MSP compliance obligations.
In addition to understanding the various Medicare plan options, beneficiaries must also understand the time periods for enrollment. Missing applicable enrollment deadlines can result in coverage delays or late-enrollment penalties. Medicare enrollment rules can vary depending on the individual’s circumstances.
Medicare Enrollment Periods
Initial Enrollment Period (IEP) – Qualified individuals can enroll in Medicare Parts A, B, C, and/or Part D plans.
For those eligible due to age, this lasts seven (7) months: it begins three (3) months before their 65th birthday, includes their birthday month, and ends three (3) months after their birthday month.
Disabled individuals receiving Social Security Disability Insurance (SSDI) benefits are automatically enrolled in Medicare following receipt of benefits for 24 months.
Medicare Open Enrollment or Annual Election Period – This occurs each year from October 15th through December 7th and is a time for beneficiaries to shop around and change plans if they so choose.
It is important for individuals to compare total costs by checking monthly premiums, deductibles, copays, and out-of-pocket maximums. During this time, reviewing prescription drug plan coverage and verifying preferred doctors and hospitals for in network coverage is crucial.
Special Enrollment Period (SEP) – Beneficiaries may apply for, add, drop, or change Medicare coverage outside of other enrollment periods due to certain life circumstances such as a recent retirement or change in employer health coverage, etc.
General Enrollment Period – This is a three-month period from January 1st to March 31st each year that allows those who missed the IEP or those who do not qualify for a SEP.
MSP Compliance: Recovery Considerations
As mentioned above, Original Medicare, MAPs, and PDPs (i.e., Parts A-D) have certain rights available to them under the MSP Statute that impact non-group health plan (NGHP) (workers’ compensation, no-fault, and liability insurance) claims.
Each change a beneficiary makes to their Medicare plan(s) during the pendency of an NGHP claim could impact conditional payment lien recovery as a claimant-beneficiary may be enrolled in several types of Medicare plans during that time, and each plan has conditional payment lien recovery rights if injury related medical expenses are paid by the plan and responsibility for payment by a primary payer is demonstrated.
Admittedly, it can be difficult to keep track of what plan(s) a claimant-beneficiary enrolls in during the pendency of the claim, so it’s important to understand a specific “tool” in any claims handler or defense attorney’s “toolbelt.” That tool is the monthly Query Response File received by the NGHPs as part of their efforts to comply with Section 111 Mandatory Insurer Reporting obligations that also fall under the MSP Statute.
Best practice for NGHPs is to utilize Medicare’s Section 111 voluntary query process to determine if a claimant is or has ever been enrolled in Medicare, and to identify the type(s) of plan(s) the claimant-beneficiary has been enrolled in for the preceding three (3) years. While this tool provides useful information, it does not prevent lien exposure. Instead, primary payers should leverage the information available to investigate, dispute/appeal, and ultimately resolve liens to avoid the risk of potential Treasury offset or the imposition of double damages provided for under the MSP Statute. Settlement documents should also reflect how conditional payment liens will be resolved and by whom.
Helpful Resources
State Health Insurance Plans (SHIP) - SHIPs provide insurance counseling and assistance to Medicare-eligible individuals, their families, and caregivers. Get Medicare Help from Your Local SHIP Program | SHIP TA Center
Medicare - Welcome to Medicare | Medicare
Social Security Administration - The United States Social Security Administration
Social Security Benefit Verification Letter - This letter includes one's Medicare Beneficiary Identifier (MBI), Part A Effective Date, Part B Effective Date, and Premium Deductions.
About Sanderson Firm
Sanderson Firm is dedicated to helping carriers, self-insureds, governmental entities, and third-party administrators meet their MSP compliance obligations. Lien resolution, Section 111 Reporting, Medicare Set-Aside allocations and a compliant MSP settlement strategy are key areas of compliance that should be addressed in every settlement. For more information on Medicare conditional payment lien resolution services or general MSP compliance, or to learn more about how Sanderson Firm can assist with your specific claim needs, contact us.