If you represent Medicare beneficiaries, the message from Washington is clear: compliance is no longer optional—and CMS is now enlisting artificial intelligence to enforce it.
In June 2025, the Medicare Trustees sounded the alarm: the Medicare Hospital Insurance (HI) Trust Fund will be insolvent by 2033. That means Medicare will be able to pay only 89% of scheduled benefits unless something changes. With the financial clock ticking, CMS is being pushed to aggressively cut waste and recover overpayments, including those tied to injury-related care that should have been paid by liability insurance, not Medicare.
Here’s what personal injury firms need to know.
CMS Gets “WISeR”: AI Is Watching Injury Claims
CMS has launched a new six-year initiative called the Wasteful and Inappropriate Services Reduction (WISeR) Model. It uses artificial intelligence and machine learning to pre-screen Medicare claims before they’re paid—flagging services that might not be medically necessary or should have been covered by a primary payer like a settlement. WISeR will run for six years from January 1, 2026, to December 31, 2031.
That’s a big shift from the usual slow, post-payment audits. Under WISeR:
- AI is used to scan claims for risk.
- High-risk claims may be denied in real-time or require clinical review.
- The program targets services common in personal injury cases—orthopedic procedures, nerve stimulators, skin substitutes, etc.
And the kicker: CMS plans to reward vendors based on how much they help save the Trust Fund.
What This May Mean for PI Settlements
If CMS is using AI to root out waste, it will inevitably sharpen focus on settlements involving Medicare beneficiaries. Here’s how that could affect your recovery process:
- Conditional Payments Could Spike Faster
AI may flag more services as potentially injury-related, especially when ICD codes were reported by the defense insurer at settlement. Expect more aggressive and earlier conditional payment letters. Finalized closing documents will however still be needed in order to obtain a final conditional payment demand from CMS.
- Futures Are Under the Microscope
CMS is likely to use AI to detect whether future medicals were released in a settlement. If the reported diagnosis codes suggest future treatment, the risk of Medicare denying post-settlement care increases since Medicare is a Secondary Payer when there is a workers’ compensation, liability or no-fault settlement, judgement or award.
For clients, this means real risks of treatment denial. For law firms, it could mean malpractice exposure if those risks weren’t explained.
- More Denials = More Appeals
A claim for injury-related treatment could now be denied automatically based on AI analysis. This makes accurate MSP planning—and clear documentation at settlement—more critical than ever. Your Medicare Secondary Payer compliance vendor should be prepared to support post-settlement appeals with detailed allocation or no allocation is warranted analyses
“One Big, Beautiful Bill” and the use of AI
Legislation nicknamed the “One Big Beautiful Bill”, pushed by House Republicans, includes directives for HHS to use AI to crack down on improper Medicare payments., CMS clearly isn’t waiting and WISeR shows they’re already executing that mandate.
What You Should Do Now
Here’s how to stay ahead:
- Confirm Medicare status early: Flag clients who are Medicare-eligible or will be within 30 months. Get their cards and award letters.
- Collaborate on ICD code reporting: Work with the defense to ensure the codes reflect what was actually paid in the settlement, especially if you negotiated a reduced payout on certain claims.
- Document MSP strategy: If future care is funded, create a memo or MSA allocation. If future medicals aren’t funded, explain why.
- Educate clients: Use disclosure letters or decision memos to explain the risk of future care denials. Have clients sign off.
Final Thought
CMS isn’t just tightening the rules, it’s automating them. The combination of financial pressure and artificial intelligence means more scrutiny, faster action, and fewer second chances. Proper MSP compliance isn’t just about protecting clients; it’s about protecting your license to practice law and your firm.
Written by: By Rasa Fumagalli JD, MSCC, CMSP-F | Director of MSP Compliance Services