For many claims organizations, the Medicare Set-Aside process has become almost automatic.
A settlement starts to take shape. Someone identifies Medicare exposure. The file is sent to an MSA vendor, and a few weeks later an allocation comes back. From that point forward, the number tends to control the conversation.
Sometimes that process works exactly as intended. The accepted conditions are clear, the treatment is current, and the parties simply need a reliable projection of future Medicare-covered care.
Other times, the report creates more questions than it answers. The allocation includes a medication the claimant no longer takes. A possible surgery is projected over life expectancy even though it was mentioned once several years ago. Treatment for a denied condition appears in the final number. The employer or carrier is then left trying to understand why it is being asked to fund care that may not be part of its legal responsibility.
That is where the difference between an MSA vendor and MSP counsel becomes important.
An MSA vendor is typically asked to calculate future medical costs. MSP counsel is focused on determining the payer’s Medicare-related legal exposure and developing a defensible way to address it.
The issue is not whether claims organizations need medical expertise or legal expertise. Most complex claims require both. The more important question is who should lead the analysis.
When disputed responsibility, settlement strategy, reporting, and legal exposure are involved, the process should begin with MSP counsel and draw on clinical expertise as needed, rather than the other way around.
The Traditional MSA Vendor Model
A strong MSA vendor brings real value to the process. The vendor reviews medical records, prescription histories, treatment recommendations, life expectancy, Medicare coverage rules, and applicable pricing methodology. Many vendors also provide clinical intervention, physician follow-up, pharmacy review, CMS submission support, and professional administration.
When the claim is accepted and the future medical exposure is reasonably clear, that may be exactly what the file needs.
Problems arise when the medical allocation is treated as though it also answers the legal questions surrounding the claim.
Medical records tell us what has been diagnosed, discussed, prescribed, and recommended by treating clinicians. They do not always tell us what the payer has accepted, what was denied, what was found compensable, or what remains legally payable after settlement.
That distinction is not academic. It is often where the money is.
A chart may list several diagnoses because physicians tend to carry conditions forward from prior notes. A medication may remain on a list after it has been discontinued. A surgeon may discuss a procedure as one of several options without ever formally recommending it. A treating provider may address a body part or psychological condition that was never accepted as part of the claim.
A medical allocation can pick up all of those items. Someone still has to decide whether they belong in the payer’s future exposure.
How MSP Counsel Looks at the File
MSP counsel generally starts with the claim rather than the allocation.
That means understanding the accepted conditions, what remains disputed, the payment history, the jurisdiction, the treatment posture, and the terms under which the parties are trying to settle. Only then does the analysis turn to how Medicare’s interests should be addressed.
In practice, this changes the sequence of the work.
Instead of asking a vendor to project everything that appears in the record and challenging the number later, counsel first identifies the boundaries of the payer’s responsibility. Clinical professionals can then evaluate the treatment that falls within those boundaries.
This does not make the medical review less important. It gives the medical review a more focused role.
A counsel-led analysis may consider whether treatment is related to the accepted injury, whether causation remains disputed, whether the payer has limited responsibility, whether the treatment is current, and whether the payer has a continuing obligation under state law. It also considers how the MSA position fits with the release, Section 111 reporting, conditional payment resolution, Medicare Advantage recovery, and any remaining responsibility for medical benefits.
This broader view matters because an MSA is not a stand-alone transaction. It sits inside the settlement, and the settlement sits inside a larger Medicare reporting and recovery framework.
A counsel-led engagement may also allow the payer to obtain confidential legal advice while the strategy is being developed. That benefit should not be overstated. An allocation intended for CMS, exchanged with the claimant, or attached to settlement documents may not remain privileged.
The value lies in having a protected space to analyze compensability, reporting inconsistencies, settlement risk, and alternative approaches before the final position is selected and disclosed.
When the Allocation Takes Over the Claim
Claims professionals have seen the same scenario play out repeatedly.
The parties are close to settlement, and the MSA is ordered late. The allocation comes back much higher than expected, and the entire negotiation stalls.
The adjuster has to revisit reserves while answering questions from the employer about where the number came from. Defense counsel begins reviewing years of records to determine whether the projected care is even part of the claim. The applicant or plaintiff may begin treating the allocation as additional settlement value.
Meanwhile, the file stays open.
The delay creates its own expense. Medical treatment and litigation costs continue, settlement authority may need to be renewed, and a claimant who was ready to resolve the case may lose confidence in the process.
The issue is not simply that the MSA number is high. The issue is that the legal and claims analysis occurred after the projection rather than before it.
A better process identifies the major cost drivers early and determines whether they are medically current and legally supportable before the settlement is built around them.
The financial impact becomes clearer when outdated medical assumptions are allowed to remain in a lifetime projection.
What Published Case Studies Tell Us
Two published case studies illustrate how easily an allocation can overstate future exposure when outdated or unsupported information remains in the file.
In one case, a second-opinion review found that a high-cost medication had been discontinued and replaced by a lower-cost alternative, but the original allocation had never been updated. Correcting the prescription history reduced the projected MSA by approximately $98,000. The revised allocation was later approved by CMS without a development request.
In another matter, CMS had previously approved an MSA of $147,483, but the claim did not settle. Nearly four years later, an amended review found that the claimant was no longer using a supplemental oxygen system and could switch from brand-name Crestor to its generic equivalent. After obtaining confirmation from the treating physician, the allocation was revised to $46,171. CMS approved the new amount, reducing the MSA by $101,312.
Neither example proves that every high MSA is wrong, and neither result depended on legal analysis alone. They do demonstrate something experienced claims professionals already know: a lifetime projection is only as reliable as the facts underneath it.
A discontinued medication can become a six-figure mistake when projected over life expectancy. An old recommendation can remain buried in the allocation long after the treatment plan has changed. Once those costs are built into settlement expectations, removing them becomes harder.
The practical lesson is to challenge the inputs before they become the final number.
Medical MSAs and Legal-Opinion MSAs
A traditional medical MSA estimates the future cost of Medicare-covered treatment associated with the claim.
A legal-opinion MSA addresses a narrower but more consequential issue: the treatment for which the payer remains legally responsible.
That distinction is especially important when the file includes denied conditions, disputed causation, prior judicial findings, apportionment issues, or a settlement that reflects litigation risk rather than full acceptance of liability.
A legal opinion may support the exclusion or limitation of treatment that is unrelated, no longer recommended, connected to a denied body part, or outside the payer’s responsibility under applicable law. It may also address whether an MSA is necessary, whether CMS review is advisable, or whether a zero-dollar position can be supported.
This is not a license to remove expensive treatment simply because it makes settlement difficult.
A legal-opinion MSA still has to be grounded in the record. The claim history, medical evidence, legal posture, and settlement documents should all point in the same direction. A position that cannot be explained later is not a cost-saving strategy. It is unresolved exposure.
The strongest legal opinions are written so that a claims professional, risk manager, defense attorney, auditor, or future file handler can understand the reasoning without reconstructing the claim from scratch.
This distinction also changes where the payer looks for savings.
Much of the traditional cost-containment discussion centers on fee schedules, pharmacy pricing, physician clarification, and clinical intervention. Those tools matter, but they address only part of the opportunity.
Reducing the projected cost of treatment is helpful. Determining that the payer is not legally responsible for that treatment can be far more consequential.
Consider a disputed psychological condition, a nonindustrial comorbidity, or a surgery tied to a body part that was never accepted. A traditional medical review may price the care accurately.
The legal issue is whether the payer owes it.
That is where MSP counsel can produce savings that are not available through medical repricing alone.
The objective is not the smallest possible MSA. It is the lowest supportable allocation that accurately reflects the payer’s responsibility and reasonably protects Medicare.
Timing Matters More Than Most Articles Acknowledge
One of the gaps in much of the published commentary is the timing of the MSP review.
Too often, the analysis begins after the parties have reached a tentative settlement number. By then, the negotiation may already assume that future medical exposure can be resolved within a certain range.
A high allocation arriving late can destroy that framework.
The better time to involve MSP counsel is when the settlement strategy is being developed, not after the terms are effectively agreed upon. Early review allows the team to identify missing records, obtain physician clarification, address discontinued medications, confirm accepted conditions, and resolve reporting inconsistencies before those issues become obstacles.
For larger legacy portfolios, this can also help determine which claims are actually ready for settlement and which need additional work.
That is a different way of measuring MSP performance. Instead of asking how quickly a report was delivered, leadership should consider whether the process improved settlement velocity, reduced unnecessary funding, and prevented the file from returning for repeated corrections.
CMS Review Should Be a Decision, Not a Reflex
CMS review provides meaningful certainty in the right workers’ compensation case.
When CMS approves a proposed WCMSA amount, that approved amount establishes what must be properly exhausted before Medicare begins paying for related care. CMS also makes clear that submission of a proposed WCMSA amount is not required.
Some claims benefit from CMS approval because the payer and claimant want the certainty that comes with an approved amount. Other claims involve disputed liability, timing concerns, or settlement structures that warrant a different approach.
The submit-versus-non-submit decision should be made with a clear understanding of the tradeoff. CMS states that its voluntary review process is the only process that provides the parties with CMS-backed finality as to the approved amount. Without approval, Medicare may deny related claims or seek recovery up to the full settlement amount under the circumstances described in its guidance.
That does not mean every eligible file must be submitted. It means the decision should not be based solely on convenience, delay, or a preference for a lower number.
Someone needs to evaluate the risk and document why the selected approach makes sense.
Zero-Dollar Positions Require More, Not Less, Discipline
CMS stopped accepting zero-dollar WCMSA proposals for review on July 17, 2025. CMS now directs parties to determine whether a zero-dollar allocation is appropriate under its stated parameters and to maintain documentation supporting the position.
Without a CMS approval letter, the strength of a zero-dollar position rests largely on the quality of the claim file.
The denial history, payment record, settlement language, medical evidence, and reporting data should all support the same conclusion. A generic paragraph in the release stating that Medicare’s interests were considered is not a substitute for a documented basis.
The files most likely to support a zero-dollar position often involve complete denials, no ongoing payments, findings that no future treatment is needed, or binding determinations that the payer has no further medical responsibility. CMS identifies similar circumstances in its current guidance.
The Reporting Issue Most MSA Articles Overlook
The industry has traditionally treated MSA preparation and Section 111 reporting as separate workstreams. That separation is becoming increasingly difficult to defend.
Since April 2025, Responsible Reporting Entities (RREs) have been required to report WCMSA-related data for applicable workers’ compensation settlements. CMS has since warned that inaccurate or premature reporting can affect its systems, the voluntary review process, and the beneficiary.
In an April 2026 webinar, CMS explained that once it receives a TPOC report containing WCMSA data, it may presume the settlement and WCMSA are final, even if a voluntary submission is still pending. CMS specifically instructed RREs to coordinate with all parties before reporting the settlement and MSA information.
This is not a minor administrative detail.
An adjuster, defense attorney, MSA professional, reporting agent, and settlement administrator may each hold different versions of the same data. If the MSA amount, TPOC date, diagnosis codes, funding method, or professional administrator information do not match, the consequences can extend beyond a rejected reporting record.
CMS has stated that the information reported through Section 111 affects its systems and may affect the beneficiary. It has also advised parties to confirm that reported information agrees with any WCMSA proposal reviewed or approved by CMS.
This is one of the strongest arguments for an integrated MSP counsel model.
The settlement documents, MSA analysis, reporting instructions, and administration plan should be reviewed as parts of the same transaction. When they are handled by disconnected vendors, no one may have responsibility for confirming that the final story is consistent.
Administration Should Be Considered Before Settlement
Another frequently missed issue is what happens after the settlement funds.
A properly calculated MSA can still create problems if no one has considered how the account will be administered, how expenses will be documented, or how the claimant will understand the rules.
CMS expects the funds to be properly exhausted and accounted for before Medicare pays for related care. Administration is therefore not simply a claimant-side issue. It is part of settlement design.
The parties should know whether the MSA will be self-administered or professionally administered, whether it will be funded through a lump sum or structure, and whether the reporting data accurately reflects that arrangement. CMS has identified professional administrator information as one of the data areas capable of creating system errors when reported incorrectly.
Counsel does not need to administer the account. Counsel should make sure the settlement, MSA documents, funding arrangement, and reporting instructions all describe the same plan.
Workers’ Compensation, Liability, and Auto Do Not Fit the Same Template
The established CMS review process applies to workers’ compensation MSAs. That does not mean the same analysis can simply be transferred to general liability and auto claims.
Workers’ compensation usually provides the clearest framework because the claim has defined
accepted conditions, statutory medical obligations, and a formal CMS review process.
General liability claims are different. Settlements may reflect disputed fault, comparative negligence, causation issues, policy limits, evidentiary problems, or the cost of litigation. The settlement amount may represent a compromise rather than full compensation for every alleged future medical expense.
A medical projection that assumes full responsibility can therefore overstate the liability payer’s actual exposure.
Auto claims present their own complications. There may be no-fault benefits, medical payments coverage, policy exhaustion, multiple defendants, or overlapping insurers. The medical record cannot determine which party is legally responsible for future care.
These lines require a liability analysis, not merely a workers’ compensation allocation methodology applied to a different claim type.
That is another area where MSP counsel adds value. The analysis can account for why the case settled, what liability remained disputed, how the payment was structured, and how the release should describe the compromise.
What Claims Leaders Should Take from This
A counsel-led model does not eliminate the need for nurses, pharmacists, or experienced allocation professionals. The strongest approach uses each discipline for the work it is best equipped to perform.
Counsel defines the legal responsibility and settlement risk. Clinical professionals evaluate the treatment and major cost drivers. The adjuster confirms the accepted conditions, payment history, and reserve posture. Defense counsel provides jurisdiction-specific insight. The reporting team ensures that the final transaction is implemented consistently.
That structure is similar to the model used by specialized MSP law firms such as Cattie & Gonzalez, where the MSA is treated as one piece of a broader compliance and settlement strategy rather than as a stand-alone medical report.
A vendor may be retained to deliver a report. Counsel is retained to advise the client, explain the risk, and stand behind the reasoning.
A traditional vendor-led allocation may be sufficient when compensability is accepted, the treatment record is current, the claimant’s Medicare status is clear, and the parties intend to pursue a conventional CMS submission.
MSP counsel should take the lead when the file involves denied conditions, contested causation, prior orders, a zero-dollar position, a non-submit strategy, liability or auto exposure, inconsistent Section 111 reporting, or settlement language that must preserve a disputed legal position.
The right question is not whether MSA vendors or MSP counsel are universally better. The better question is what the file actually requires.
A clean, accepted workers’ compensation claim may need a well-prepared medical allocation and an efficient CMS submission. A disputed legacy claim with questionable diagnoses, old pharmacy exposure, prior orders, and inconsistent reporting needs a broader analysis.
The mistake is treating both files the same.
Claims leaders should also look beyond the price of the MSA report. The more meaningful measure is total claim cost. That includes unnecessary allocation funding, settlement delay, added litigation expense, repeat reviews, reserve disruption, and the risk of inconsistent CMS reporting.
A less expensive report is not a savings if it causes the payer to fund $100,000 in unsupported treatment.
The Bottom Line
Traditional MSA vendors remain an important part of the Medicare compliance process. They bring clinical knowledge, allocation experience, and CMS submission capabilities that many claims organizations need.
MSP counsel brings something different.
It connects the medical projection to the payer’s actual legal responsibility. It evaluates the settlement as a whole, not just the allocation. It also creates a single point of accountability for the MSA position, the supporting documentation, the release, and the reporting implications.
Many Medicare problems are not caused by a lack of expertise. They are caused by poor handoffs between experts.
Defense counsel may negotiate one set of terms, the MSA professional may rely on a different treatment history, the reporting agent may receive incomplete funding information, and the administrator may be brought in after the release is signed. A counsel-led model can reduce that fragmentation by assigning one party responsibility for reconciling the final transaction before funds are released.
That broader view is becoming more important as CMS reporting becomes more integrated with the settlement process and claims organizations look for defensible ways to close complex files without overfunding future medical exposure.
The strongest outcome is not simply a lower MSA. It is an allocation the payer can explain, a settlement that can be implemented, and a compliance position that still makes sense when someone reviews the file years later.
Disclosure: This article is intended for general educational purposes and does not constitute legal advice. Medicare Secondary Payer obligations and settlement strategies depend on the specific facts, jurisdiction, line of coverage, and current CMS guidance.