A Federal Retiree on Workers' Comp Still Has FEHB Coverage. Since November 2, Medicare Pays First.
CMS Change Request 14603 says Medicare is the primary payer, ahead of the Federal Employees Health Benefits plan, for a federal annuitant who also receives federal workers' compensation. It applies to dates of service from November 2, 2026. If your front desk bills the FEHB plan first for these patients, the claims will go to the wrong payer.
On October 2, 2026, CMS issued Transmittal 13981 (Change Request 14603). It changes the Medicare Secondary Payer Manual, chapter 2, section 50. The policy is one sentence: Medicare is the primary payer relative to FEHBP coverage for federal annuitants who also have federal workers' compensation benefits through the Office of Workers' Compensation Programs (OWCP). The change took effect on November 2, 2026, and CMS says the effective date is the date of service.
The patients it touches are a small group: former federal employees who keep their Federal Employees Health Benefits (FEHB) plan, receive federal workers' compensation, and also have Medicare. Small groups are where coordination-of-benefits errors last the longest, because nobody sees them often enough to learn the rule.
Why there was confusion
In 2022, the Office of Personnel Management (OPM) changed its annual benefits booklet. It said that for these annuitants, Medicare was secondary to the FEHB plan. That reversed OPM's direction for 2021 and earlier. CMS says this conflicted with its own rule on "current employment status" in 42 CFR 411.104, and the new manual text sets out CMS's position.
The manual explains the reasoning. Under 5 CFR 809.101, a "compensationer" is an employee or former employee who is entitled to compensation and whom the Department of Labor finds unable to return to duty. Federal law treats a compensationer as an annuitant for coordination with Medicare. Because the person is not expected to return to work, the FEHB coverage is no longer coverage by reason of current employment. The manual states that when a beneficiary keeps FEHB coverage, receives federal workers' compensation and is deemed unable to return to work after six months, Medicare is primary and the FEHB plan is secondary.
The work injury is a separate claim
This change is about who pays first for the patient's ordinary care. It does not move the work injury itself onto Medicare. The same manual section says Medicare may not pay for items and services to the extent that a workers' compensation law or plan has paid, or can reasonably be expected to pay, for them. That includes the Federal Employees' Compensation Act.
So one patient can have three billing paths in the same month:
- Treatment of the accepted work injury: bill the workers' compensation program first.
- Care for anything else, such as a diabetes visit or a skin check: bill Medicare first, then the FEHB plan as secondary.
- Care for the injury that the workers' compensation program will not pay because the provider is not one it authorized: the manual says Medicare can pay for these services.
What to check at the front desk
This is general information, not legal advice. For any Medicare patient who shows an FEHB card, add three questions to check-in:
- Are you retired from federal service, or still working? An active federal employee follows different rules.
- Are you receiving federal workers' compensation for an injury or illness? If yes, write down the claim number and the body part or condition it covers.
- Is today's visit for that injury? If yes, the claim goes to workers' compensation. If no, Medicare is primary for dates of service from November 2, 2026.
Then look at the insurance order in your practice system. A patient set up with the FEHB plan as primary will keep sending claims there until someone changes it. Run a report of Medicare patients who have an FEHB plan listed first, and check whether any of them receive federal workers' compensation.
The change request does not say what happens to claims for dates of service before November 2, 2026. Do not rebill older claims on your own. If an earlier claim is in question, ask the FEHB plan and your Medicare contractor how they want it handled, and keep a note of who told you.
Why it is worth ten minutes
A claim sent to the wrong primary payer does not usually fail loudly. It gets denied for coordination of benefits, or it gets paid and taken back months later. Either way the money arrives late, if at all. If you want to see how often payer order is behind your denials, a revenue review can look at one payer's denials over the last 90 days and show which ones started at check-in.
Sources
CMS Transmittal 13981, Change Request 14603 (Pub. 100-05), October 2, 2026
Medicare is primary to FEHBP for federal annuitants who also have federal workers' compensation through OWCP; effective and implementation date November 2, 2026, effective date is the date of service; OPM's 2022 booklet change and conflict with 42 CFR 411.104; compensationer definition (5 CFR 809.101, 5 U.S.C. 8901(3)); six-month rule; Medicare does not pay to the extent workers' compensation pays; Medicare can pay when workers' compensation does not pay because the source was not authorized.
42 CFR 411.104, Current employment status
Definition of current employment status used for Medicare Secondary Payer rules, including the six-month limit for disability benefits.
All figures are as reported by the sources above at the time of writing. Outcome statements reflect typical client engagement outcomes and are not guarantees.
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