Medicare and Accident or Workers’ Compensation Claims

Adapted from How Medicare Works with Other Insurance, Centers for Medicare & Medicaid Services. The selected guidance concerns Medicare coverage and payment, not a recommendation for medical treatment. Numbered page references below refer to the linked source publication.

Coverage can depend on medical necessity, the setting, provider participation, and your plan’s rules. Use the cited publication for the full conditions and check the plan year when comparing costs or enrollment choices.

Coverage from a different source

No-fault, liability, or workers’ compensation accident or injury claims

What’s no-fault insurance?

No-fault insurance may pay for health care services you get if you’re injured or your property gets damaged in an accident, regardless of who’s at fault for causing the accident. Some types of no-fault insurance include:

• Automobile plans
• Homeowners’ plans
• Commercial insurance plans

Your no-fault insurance pays first, and Medicare pays second for health care services related to the accident or injury.

What’s liability insurance?

Liability insurance (including self-insurance) protects against claims for things like negligence or other types of potential wrongdoing (for example, inappropriate action or inaction that causes someone to get injured or causes property damage).

Some types of liability insurance include:

• Homeowners
• Automobile
• Product
• Malpractice
• Uninsured motorist
• Underinsured motorist

If you have a liability insurance claim for your medical expenses, you or your lawyer should notify Medicare as soon as possible.

Your liability insurance pays first and Medicare pays second for health care services related to the accident or injury.

If doctors or other providers are told you have a no-fault insurance or liability insurance claim, they must try to get the insurance company to pay before billing Medicare. If your accident or injury is an open Ongoing Responsibility for Medicals case, then the liability or no-fault insurance must pay first. However, if your liability or no-fault case doesn’t receive Ongoing Responsibility for Medicals, then processing your bill may take a long time. If the insurance company doesn’t pay the claim promptly (usually within 120 days), your doctor or other provider may bill Medicare.

Medicare may make a conditional payment to pay the bill, and then later recover the payment after a settlement, judgment, award, or other payment on the claim has been made by the liability insurance.

What else do you need to know?

If the no-fault or liability insurance denies your medical bill or is found not liable for payment, Medicare pays first, but only for Medicare-covered services. You’re still responsible for your share of the bill (like coinsurance, a deductible or copayment) and for the cost of services Medicare doesn’t cover.

Example: Nancy is 69 years old. She’s a passenger in her granddaughter’s car, and they have an accident. Nancy’s granddaughter has Personal Injury Protection/ Medical Payments (Med Pay) coverage as part of her automobile insurance. While at the emergency room, the hospital asks Nancy about available coverage related to the accident. Nancy tells the hospital that her granddaughter has Med Pay coverage. Because this coverage pays regardless of fault, it’s considered no-fault insurance. The hospital bills the no-fault insurance for the emergency room services, and only bills Medicare if the no-fault insurance doesn’t pay for some Medicare-covered services.

What’s workers’ compensation?

Workers’ compensation is a law or plan requiring employers to give benefits to most employees who get sick or injured on the job. To find out if you’re covered, talk to your employer, or contact your state workers’ compensation division or department.

Workers’ compensation pays first for items, including drugs, or services related to the workers’ compensation claim.

If you have Medicare and get injured on the job, workers’ compensation pays first on health care items or services you got because of your work-related illness or injury. There can be a delay between when a doctor or other provider bills for a work-related illness or injury and when the workers’ compensation insurance (a private insurance carrier or a state fund) decides if it should pay the bill.

Medicare can’t pay for items or services that workers’ compensation will pay for promptly or if the claim falls under an Ongoing Responsibility for Medicals case, or there is an open Workers’ Compensation Medicare Set-aside Arrangement. Generally, these include items or services that Workers’ Compensation Medicare Set-aside Arrangement pays within 120 days of the date you received the service or the date of your inpatient hospital discharge (if applicable), whichever is earlier.

Medicare may make a conditional payment if the workers’ compensation insurance company denies payment for your medical bills, pending a review of your claim.

Note: This isn’t the same situation as when your workers’ compensation case has been settled and you’re using funds from your Workers’ Compensation Medicare Set-aside Arrangement to pay for your medical care. The conditional payment rules don’t apply to an open and active Ongoing Responsibility for Medicals case. They also don’t apply to open Workers’ Compensation Medicare Set-aside Arrangement, accident, and injury cases.

Example: Tom was injured at work. He filed a workers’ compensation claim. His doctor billed the state workers’ compensation agency for payment, but she didn’t get paid within 120 days, so she billed Medicare for a conditional payment. Medicare made a conditional payment to Tom’s doctor for Tom’s health care services. If Tom eventually gets a settlement, judgment, award, or other payment from the state workers’ compensation agency, it’s Tom’s responsibility to make sure Medicare gets repaid for the conditional payment.

What else do you need to know?

If you think you have a work-related illness or injury, tell your employer, and file a workers’ compensation claim.

You or your lawyer also need to call the Benefits Coordination & Recovery Center toll-free at 1-855-798-2627 as soon as you file your workers’ compensation claim. TTY users can call 1-855-797-2627.

What if workers’ compensation denies payment?

If workers’ compensation insurance denies payment, and you give Medicare proof of the claim’s denial, Medicare may pay for Medicare-covered items and services as appropriate. Medicare can’t pay, however, if you have a Workers’ Compensation Medicare Set-aside Arrangement that has contributed funds towards your future workers’ compensation-related health care needs, unless all of those funds have been used to pay for medical care. Medicare can’t pay for accident-related claims if you have an open Ongoing Responsibility for Medicals case related to this accident or injury.

Can workers’ compensation decide to pay only part of your bill?

Yes, if you had an injury or illness before you started your job (called a “pre-existing condition”), and the job made it worse, workers’ compensation may not pay your whole bill because the job didn’t cause the original problem. In this case, workers’ compensation insurance may agree to pay only a part of your doctor or hospital bills.

If Medicare covers the treatment for your pre-existing condition, then Medicare may pay its share for part of the doctor or hospital bills that workers’ compensation doesn’t cover.

Your workers’ compensation claim is getting ready to settle. What happens next?

If you settle your workers’ compensation claim, you can volunteer to put some of the settlement money in a Workers’ Compensation Medicare Set-aside Arrangement, to pay for future medical care and drugs that are related to your work injury or illness. In many cases, before reaching a settlement, the workers’ compensation agency will ask Medicare to review certain medical documentation and approve an amount that can be put in the Workers’ Compensation Medicare Set-aside Arrangement.

You must use all funds in your arrangement to pay for related medical care, including drugs, before Medicare will begin paying for related care. Visit go.cms.gov/WCMSASelfAdm to learn more about Workers’ Compensation Medicare Set-aside Arrangements.

What if you have a Medicare-approved Workers’ Compensation Medicare Set-aside Arrangement amount?

You must:

• Only use money from your arrangement to pay for future medical expenses, including drugs, related to your work injury or illness that otherwise would’ve been paid by Medicare.
• Use funds from the arrangement to pay for future medical expenses, including drugs, even if you’re in a Medicare Advantage Plan.
• Use money from your Workers’ Compensation Medicare Set-aside Arrangement to pay for drugs that are related to your work illness or injury, even if you have a Medicare drug plan (or a Medicare Advantage Plan with drug coverage).

You can’t use money from your arrangement to pay for any other work-related injury or illness, or for any medical items or services that Medicare doesn’t cover (like dental services). You must spend all of your money from the arrangement on appropriate related medical expenses before Medicare (either Original Medicare or Medicare Advantage) will pay for any Medicare-covered medical expenses or drugs related to your workers’ compensation claim.

Before using any of the funds from your arrangement, you should become familiar with the types of services Medicare covers by visiting Medicare.gov/coverage or calling 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.

Keep detailed records of your workers’ compensation-related medical expenses, including drug expenses. These records should show what items and services you received and how much money you spent on your work-related injury or illness. You’ll need these records to prove you used the money from your arrangement to pay your workers’ compensation-related medical expenses.

Visit go.cms.gov/WCMSASelfAdm to learn more about managing your Workers’ Compensation Medicare Set-aside Arrangement.

Conditional Payments

What’s a conditional payment?

A conditional payment is a payment Medicare makes for services another payer may be responsible for. Medicare makes this conditional payment so you won’t have to use your own money to pay the bill. The payment is “conditional” because it must be repaid to Medicare by the responsible person or payer. If you get a settlement, judgment, award, or other payment, you’re responsible for repaying Medicare for the conditional payment.

When does Medicare make conditional payments?

Medicare may make a conditional payment if the liability, no-fault, or workers’ compensation insurance company doesn’t pay the claim promptly (usually within 120 days). Medicare may recover any payments the primary payer should’ve made. Your doctor should bill the accident or injury insurer first if they want to get quicker payment. However, if the insurer denies the claim, the insurer must send the reason for denial to your doctor. Then your doctor must send the denial to Medicare, so Medicare can review the claim to determine whether a Medicare payment can be made before the 120-day period.

Note: Medicare can’t make a conditional payment for an accident or injury-related claim if you have either an open Workers’ Compensation Medicare Set-aside Arrangement or an Ongoing Responsibility for Medicals case related to that claim.

How does Medicare recover conditional payments?

If Medicare makes a conditional payment for your liability, no-fault, or workers’ compensation related claim, and you or your representative haven’t reported your settlement, judgment, award, or other payment to Medicare, call the Benefits Coordination & Recovery Center at 1-855-798-2627 (TTY: 1-855-797-2627). The Benefits Coordination & Recovery Center:

• Gathers information about conditional payments Medicare makes.
• Calculates the final amount owed (if any) on your recovery case.
• Sends you a letter asking for repayment.

How do you make sure that Medicare gets repaid for the conditional payment?

If a conditional payment is made for a liability, no-fault, or workers’ compensation related claim, you’re responsible for making sure Medicare gets repaid from any settlement, judgment, award, or other payment you get.

If you or your provider files a liability, no-fault or workers’ compensation claim and Medicare makes a conditional payment for medical claims, you or your lawyer should report the claim and payment by calling the Benefits Coordination & Recovery Center toll-free at 1-855-798-2627. TTY users can call 1-855-797-2627.

The Benefits Coordination & Recovery Center will gather information about any conditional payments for medical claims Medicare made related to your liability, no-fault, or workers’ compensation claim. If you get a settlement, judgment, award, or other payment, you or your lawyer should call the Benefits Coordination & Recovery Center.

If you have Original Medicare, the Benefits Coordination & Recovery Center will calculate the final repayment amount (if any) on your case and send you a letter asking for repayment. If your pending workers’ compensation claim is eventually abandoned or dismissed, you or your lawyer should contact the Benefits Coordination & Recovery Center with that information.

Example: Joan is driving her car when someone in another car hits her. Joan has to go to the hospital. The hospital tries to bill the other driver’s insurance company for Joan’s health care services. The insurance company disputes who was at fault and won’t pay the claim right away. The hospital bills Medicare, and Medicare makes a conditional payment to the hospital for Joan’s health care services. When a settlement is reached with the other driver’s insurance company, Joan must make sure Medicare gets repaid for the conditional payment.

Example: Bob has a heart attack. Medicare pays for Bob’s medical care for his heart attack and his recovery. Bob later learns that one of his prescription medications may have triggered his heart attack. He’s part of a class action lawsuit against the company that makes the medication, and he gets a settlement. Bob must make sure that Medicare gets repaid for any conditional payments it made for him that are related to his settlement.

What if Medicare pays for a claim that should have been paid for by your Workers’ Compensation Medicare Set-aside Arrangement?

Medicare may pay for medical or drug claims before knowing that the claims are related to your workers’ compensation settlement. When this occurs, Medicare must be repaid from the Workers’ Compensation Medicare Set-aside Arrangement. If you have Original Medicare, the Benefits Coordination & Recovery Center will investigate claims and ask you for repayment. If you’re in a Medicare Advantage Plan or a Medicare drug plan, the plan will contact you to investigate claims and ask for repayment. You are responsible for cooperating with the Benefits Coordination & Recovery Center, Medicare Advantage Plan, or Medicare drug plan’s efforts to verify if claims are related to your workers’ compensation settlement and repaying Medicare for those claims from your Workers’ Compensation Medicare Set-aside Arrangement.

Source and further reading

How Medicare Works with Other Insurance — Centers for Medicare & Medicaid Services. Public domain U.S. government educational material, accessed October 28, 2026. Fynoptic has selected sections, removed print navigation, and reformatted the text for this guide. The agency does not endorse Fynoptic.