For over two decades, the Medicare Secondary Payer Act has been the source of more confusion, frustration, and regulatory concern than just about any other issue personal injury firms face at settlement. As an industry commentator and someone with a professional Medicare certification, I have lived through every twist and turn of it. The Advanced Notices of Proposed Rulemaking that went nowhere. The mandatory insurer reporting under MMSEA Section 111 that kicked in back in 2010. The Stallcup memo in 2011 that created a firestorm and then faded. Multiple attempts at formal rulemaking, all withdrawn without explanation.
Through all of that, one thing stayed constant. Medicare’s enforcement of its future interest protections remained, to be blunt, limited. The government simply did not have the bandwidth to chase down every settlement involving a Medicare beneficiary and connect the dots between injury-related treatment paid for after a case resolved and the settlement itself. Not across fifty states. Not across hundreds of millions of settlements spanning decades. Not with a patchwork quilt of inconsistent damages laws, caps, and reporting requirements.
That reality shaped how I have counseled clients for years. At the close of every case involving a Medicare beneficiary, or someone who may become one within thirty months, I sit down and walk them through what happens next. I explain how Medicare might deny their future injury-related treatment. I explain that if Medicare pays for care connected to the settlement, it could deny future care.
I have also been honest with clients about the practical likelihood of Medicare actually catching up to them. With limited staff and resources to sift through mountains of medical and billing records to connect the dots, the statistical odds of enforcement were, historically, low. Not zero. But low. I always told clients to be prepared. Just not panicked.
That calculus may be about to change. And change fast.
CMS Is Now Deploying AI on Medicare Claims
In January 2026, the Centers for Medicare and Medicaid Services launched a pilot program called the Wasteful and Inappropriate Service Reduction Model, or WISeR. It is running in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. The program runs through 2031.
Here is what WISeR does. It uses artificial intelligence and machine learning to evaluate prior authorization requests for certain Medicare services. Doctors in those six states now have to get AI-backed approval before providing specific types of care under traditional fee-for-service Medicare. This is a first. Prior authorization has never been a standard feature of original Medicare. It has been common in Medicare Advantage, but not in the traditional program.
The stated goal is to reduce waste and cut down on low-value services. CMS says the program targets treatments with limited clinical benefit, things like certain skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for osteoarthritis. Six private technology companies are participating as model contractors. They include Cohere Health, Genzeon Corporation, Humata Health, Innovaccer, Virtix Health, and Zyter.
The program is already drawing fire. The Electronic Frontier Foundation filed a FOIA lawsuit against CMS in late March 2026, alleging the agency has refused to turn over basic records about how the AI works, what data trained the models, and what safeguards exist against bias. Early results out of Texas are not encouraging. Only 62% of prior authorization requests were initially approved by the AI. That number rose to 84% once a human reviewed them. Nationwide, 92% of prior authorization requests in Medicare Advantage are fully or partially approved. The gap is significant.
Perhaps most concerning is the financial incentive structure. The vendor companies participating in WISeR are compensated, in part, based on the savings they generate from denied or averted claims. According to the EFF, vendors can receive up to 20% of the expenditures associated with care they deny. That is a structure that rewards saying no.
Why This Matters for Personal Injury Firms
Now let me explain why I think WISeR, or something very much like it, should be on the radar of every personal injury firm in the country.
WISeR itself is focused on prior authorization. It is not, today, a tool for tracking settlements or pursuing reimbursement of conditional payments. But what it represents is far more important than its current scope. It represents CMS embracing AI as a tool to monitor, evaluate, and act on Medicare claims data at scale. That is the real headline here.
Think about what has historically protected clients from aggressive Medicare enforcement after settlement. It was not the law. The law has always been clear. Under the MSP, Medicare’s position as secondary payer means that if a settlement includes damages for future medical care, the burden to pay for future care should not be shifted to Medicare. CMS has been consistent on that point for years, even as the regulatory landscape around set-asides has remained undefined.
What protected clients was the practical reality of enforcement. Medicare could not hire enough people to comb through the massive universe of medical records, billing data, settlement reports, and treatment histories to figure out which beneficiaries received injury-related care after settling a case and failed to reimburse Medicare or failed to set aside funds appropriately. The data existed. The ability to process it did not.
AI changes that equation.
The Safari Into the Black Hole
Imagine for a moment that CMS applies the same kind of AI capability it is testing with WISeR to its MSP enforcement. Instead of using AI to gatekeep prior authorizations, picture it sifting through the MMSEA Section 111 mandatory insurer reporting data, cross-referencing it with post-settlement medical claims, identifying patterns of injury-related treatment paid for by Medicare after a case was resolved, and flagging those cases for recovery action.
This is not science fiction. The data is already there. Since 2010, every settlement involving a Medicare beneficiary of $750 or more has been reported to Medicare. Medicare already has the settlement data. It already has the claims data. What it has never had, until now, is a tool sophisticated enough to connect the two at scale.
If CMS deploys AI to launch that safari into the black hole of past and present records, the results could be dramatic. We are talking about the potential to identify reimbursement opportunities in settlements completed years ago. And when the federal government smells easy money, it gets motivated. History tells us that much.
The MSP’s private cause of action for double damages makes this even more urgent. We have already seen Medicare Advantage plans use the double damages provision aggressively. MSP entities have built an entire business model around data mining and demanding payment under the MSP. A 2026 industry forecast predicted increased activity from these entities, not less. Now imagine the federal government itself armed with AI to do the same thing, but with the full weight of the Department of Treasury behind it, including the ability to offset tax refunds and Social Security payments.
What This Means for Your Practice Right Now
I want to be clear. I am not predicting that CMS will announce an AI-powered MSP enforcement program tomorrow. But I am telling you that the building blocks are now in place. CMS has shown it is willing to hand AI tools to private vendors and incentivize them financially. It has shown it is willing to apply those tools to Medicare claims processing. The step from prior authorization review to settlement recovery analysis is not a large one technically. It is a matter of will and budget, and the federal government has both when it comes to protecting the Medicare Trust Fund.
So what should you be doing right now?
First, take MSP compliance seriously at every stage of the case. This is not new advice. But the risk of cutting corners is growing. Identify Medicare beneficiaries and those approaching eligibility early. Do it at intake and do it again before disbursement. Document everything.
Second, educate your clients thoroughly at settlement. Every client who is on Medicare or will be within thirty months needs to understand what happens with their future medical treatment. They need to know that Medicare can deny care. They need to understand the risks of not setting aside funds appropriately. And they need that explanation documented in the file.
Third, do not assume that low enforcement odds from the past will hold in the future. The landscape is shifting. CMS is investing in technology. Private recovery entities are becoming more aggressive. The combination of mandatory insurer reporting data, AI, and financial incentives to recover funds creates a very different risk profile than what we have seen over the last two decades.
Fourth, watch the WISeR program closely. The EFF lawsuit may force some transparency about how the AI models work, what data they use, and what safeguards are in place. That information will be valuable for understanding what CMS is capable of and where it is heading.
Fifth, consider how AI could be used offensively on behalf of your clients. If insurers and CMS are deploying AI, plaintiff firms need to understand these tools too. You should be thinking about how to use discovery to expose algorithmic decision-making in claims handling. Several carriers are already facing lawsuits for using AI to improperly deny claims in Medicare Advantage. The same types of challenges may become relevant in the MSP context.
The Bigger Picture
The Medicare Secondary Payer Act has always been, as the Eleventh Circuit put it, “notoriously complex.” For most of the last twenty-plus years, that complexity was matched by enforcement that was inconsistent, underfunded, and slow. Personal injury firms could afford to treat MSP compliance as something between an annoyance and a genuine risk, depending on the size of the case and the client’s Medicare status.
Those days are ending. The government is getting smarter. Literally. AI gives CMS the potential to do what it has always had the legal authority to do but lacked the practical capacity to accomplish, which is to systematically identify and pursue reimbursement on settlements where Medicare’s interests were not adequately protected.
For personal injury firms, this is not a reason to panic. It is a reason to prepare. Build your compliance processes now. Educate your clients. Work with qualified MSP compliance professionals. And keep your eyes open, because the rules of engagement in this space are about to change in ways we have not seen since MMSEA was passed in 2007.
The quiet period is over. Medicare just got smarter. Your practice needs to be smarter too.
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