Most plaintiff’s attorneys understand that Medicare is a secondary payer when a client is injured in a workers’ compensation case. They also understand that Medicare’s interests need to be considered before settling a workers’ compensation claim that includes future medical expenses.
The same principles apply in liability cases but the guidance is far less clear.
Under the Medicare Secondary Payer (MSP) Act, Medicare is generally a secondary payer when payment has been made, or can reasonably be expected to be made, under a workers’ compensation plan, liability insurance, or no-fault insurance. CMS expressly identifies liability insurance, including self-insurance, as a primary payer to Medicare in these circumstances.
The problem for plaintiff’s attorneys is that CMS has developed a substantial body of guidance concerning future medical expenses in workers’ compensation settlements, while providing comparatively little specific guidance concerning liability settlements that contain a component for future injury-related care.
That does not mean the MSP issue disappears in a liability case. It means attorneys have to look carefully at the guidance that does exist.
Workers’ Compensation Provides a Road Map
CMS has made its position clear in the workers’ compensation context. A Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) allocates a portion of a settlement to pay for future medical expenses related to the work injury that would otherwise be covered by Medicare. Those funds must be appropriately exhausted before Medicare becomes responsible for future treatment related to the settled injury.
Importantly, CMS states in its current WCMSA Reference Guide that Medicare remains the secondary payer until the settlement proceeds are appropriately exhausted. The guide also explains that a claimant receiving a workers’ compensation settlement that includes future medical expenses must take Medicare’s interests into account.
There is no comparable CMS approval process for liability MSAs. That distinction is important.
A liability settlement is not a workers’ compensation settlement, and plaintiff’s attorneys should not assume that the WCMSA rules can simply be transferred wholesale to a personal injury case. The underlying claims, defenses, settlement dynamics and applicable state laws are different.
Nevertheless, the workers’ compensation guidance provides an important window into how CMS views its secondary payer rights when a settlement compensates a Medicare beneficiary for future injury-related medical care.
The fundamental concept is straightforward: Medicare should not be paying for medical care that another payer has already paid for through a settlement.
Part C and Part D Impact the Analysis
Medicare Advantage organizations also have statutory and regulatory rights to recover payments made when another payer should have been primary. The recovery rights granted by the Medicare Secondary Payer statutes are similar for original Medicare, Medicare Advantage and PDP plans.
CMS has made it very clear that MSP coordination is not limited to traditional Medicare Parts A and B. In November 2025, CMS announced enhanced data sharing with Medicare Part D plan sponsors concerning WCMSAs. Beginning in February 2026, CMS began providing Part D sponsors with additional WCMSA-related prescription drug information that can be used to improve coordination of benefits and prevent improper Part D payments.
The significance of this development goes beyond workers’ compensation. It demonstrates a broader trend toward more sophisticated coordination between CMS, Medicare Advantage organizations and Part D plans.
The current WCMSA Reference Guide (Version 4.6) also specifically addresses Medicare Advantage and Part D plans. CMS instructs those plans to conduct MSP investigations when they are notified that a WCMSA has been approved and to determine whether particular treatments or medications should have been paid from the WCMSA rather than by the plan. CMS also advises beneficiaries that their Medicare Advantage or prescription drug plan may contact them or their administrator to determine which expenses are covered by the WCMSA. It warns that failure to respond to the plan’s investigation efforts may result in coverage being delayed or cancelled.
The lesson for plaintiff’s attorneys is not that CMS has created a liability MSA requirement. It has not. The lesson is that post-settlement coordination is becoming more sophisticated—and the payer that ultimately receives the claim may have more information about the settlement than it did in the past.
Section 111 Gives CMS Visibility Into the Settlement
Section 111 of the Medicare, Medicaid, and SCHIP Extension Act adds another important piece to the analysis.
Section 111 requires applicable liability insurers, self-insured entities, no-fault insurers and workers’ compensation entities to report certain settlements, judgments, awards and other payments involving Medicare beneficiaries. CMS explains that this reporting helps the government determine when another payer is primary to Medicare and supports MSP recovery efforts.
In other words, the settlement does not simply disappear once the check is issued. CMS has information about the underlying claim and the payment. CMS can use that information in coordinating benefits and identifying Medicare payments that should have been the responsibility of another payer. For attorneys, this makes it increasingly difficult to treat Medicare as an issue that exists only at the time of settlement. The more important question is whether the settlement has been structured in a way that makes sense when the client begins receiving medical treatment after the case is closed.
What About Future Medical Expenses?
This is where liability settlements present the greatest uncertainty. Suppose a Medicare beneficiary has sustained a significant injury. The settlement includes compensation for future surgery, therapy, physician visits, prescription medications or other injury-related care. The settlement agreement may allocate a portion of the recovery to those future expenses.
What happens when the client subsequently begins treating and Medicare or the Medicare Advantage plan is asked to pay? There is no CMS-approved liability MSA process that gives the plaintiff’s attorney a definitive answer. That does not mean counsel should ignore the issue. Instead, counsel should consider whether the settlement should include a defensible allocation of future medical expenses and whether the file should document the methodology used to arrive at that allocation.
Depending on the facts, that analysis may include:
- The client’s age and Medicare status
- The nature and severity of the injury
- The medical records and treatment history
- The physician’s prognosis
- Anticipated future surgeries and procedures
- Future therapy and rehabilitation
- Prescription medications
- The likelihood that particular treatment will be Medicare-covered
- The expected duration of future treatment
- The value of the settlement as a whole
- The extent to which the settlement actually compensates the client for future medical expenses.
The objective is not to manufacture a “liability WCMSA.” The objective is to create a reasonable, well-documented record demonstrating that Medicare’s interests were considered. There is no one size fits all solution when it comes to addressing post settlement injury related care in a liability settlement.
The Bottom Line
A liability settlement involving a Medicare beneficiary should not be treated as though Medicare’s involvement ends when the settlement check clears. For past medical expenses, counsel needs to identify and resolve the applicable Medicare, Medicare Advantage and Part D recovery claims. For future medical expenses, counsel should consider whether the settlement adequately accounts for the client’s anticipated injury-related care and whether the file contains sufficient documentation to demonstrate that Medicare’s interests were considered.
The law surrounding liability settlements and future medical expenses may still be developing. But the direction is clear. More data. More coordination. More sophisticated recovery efforts. Plaintiff’s attorneys who address these issues before settlement will be in a far better position than those who wait until the client’s first post-settlement medical bill is denied.
Synergy is the leading MSP compliance partner for plaintiff personal injury firms all across the country. Top trial lawyers and paralegals depend on Synergy’s industry leading team to assist them in compliantly closing files involving Medicare beneficiaries. Learn more at https://partnerwithsynergy.com/services/future-medical-damages/medicare-set-aside-msa/
Written by: Rasa Fumagalli JD, MSCC, CMSP-F | Director of MSP Compliance at Synergy.