MEDICARE COMPLIANCE
Welcome to Synergy’s blog page dedicated to the topic of Medicare compliance. Our team of Medicare experts share their InSights and knowledge on the latest developments and best practices for law firms to stay compliant with the MSP. Stay up-to-date with the latest trends and strategies to ensure that you have the information you need to navigate the complex world of Medicare compliance. Our blogs provide practical tips and advice for ensuring that your clients receive the medical care they need while complying with Medicare’s requirements. Let our experts guide you through the intricacies of Medicare compliance and help you stay on top of the latest developments in this rapidly-evolving field.
Demystifying Medicare Set-Asides: What Every Legal Professional Should Know
What is a Medicare Set-Aside and why should legal professionals be concerned about them? It all centers around the questions of Medicare’s future interests. That’s where Medicare Set-Asides (MSAs) come in. But even experienced trial lawyers and paralegals find MSAs confusing. No statute requires them. CMS guidance is limited. Liability settlements have zero guidance in this regard.
So what are you supposed to do?
Here’s what you need to know and what your law firm should be doing now to stay compliant and protect your clients.
What Is a Medicare Set-Aside?
An MSA is a portion of a settlement earmarked to cover future Medicare-covered treatment for injury-related care. If one is set up as part of a settlement, Medicare isn’t supposed to pay for these services until the set-aside funds are properly exhausted.
The amount of the set-aside is determined case by case. In Workers’ Compensation claims, MSAs can be submitted to CMS for approval if they meet certain review thresholds. For liability cases, CMS review is rare. Most regional offices won’t review submissions.
Key point: even though MSAs are common in Workers’ Comp, there’s no federal statute requiring one not even in Comp.
Why Are MSAs a Big Deal?
The Medicare Secondary Payer Act (MSP) prohibits Medicare from paying when another primary payer exists. That includes settlement proceeds intended to cover future medical care.
In practice, this means that if Medicare thinks your client was compensated for future care but didn’t set money aside, they could possibly deny payment for that care. And if it did, the appeals process is lengthy and punishing.
Lawyers often ask: If CMS doesn’t review liability MSAs, and no statute mandates them, why bother?
Because CMS has been clear, shifting the cost of future care to Medicare violates their interpretation of the MSP. Failing to consider Medicare’s future interests can harm your client and expose your firm to risk.
The Regulatory Reality
There are no clear laws. No formal rules. And yet, Medicare’s expectations haven’t changed.
Since 2001, CMS has released guidance via memos and its Workers’ Comp Set-Aside Reference Guide. In liability cases, there have been repeated attempts to codify rules but every time, CMS has pulled back due to practical and legal challenges.
In 2022, CMS formally withdrew a proposed rule that would have established new requirements for liability MSAs. That doesn’t mean personal injury firms are relieved of any obligations under the MSP. On the contrary, CMS has not changed its formal regulatory position.
Case Law You Should Know
Several trial court cases help clarify how MSAs may be handled when full value isn’t recovered:
- Aranki v. Burwell: No law requires MSAs, but Medicare’s future interests still matter. The court did not say you can ignore them.
- Sterrett v. Klebart: If a settlement doesn’t fund future medicals, an MSA isn’t required. The court recognized that compromise settlements don’t always compensate for future care.
- Benoit v. Neustrom: The court allowed a reduction to the MSA based on the proportion of the settlement compared to total damages. This is a blueprint for arguing that Medicare’s interests were reasonably considered when recovery is limited.
These cases offer practical tools, but no guarantees. They are not binding on CMS. They are persuasive authority to be used strategically when documenting your file and protecting your client.
Practical Steps for Law Firms
To avoid the risks of potential Medicare denials, malpractice claims, or other potential negative consequents, you need a process:
- Identify Medicare beneficiaries which you represent.
- Analyze whether future medicals were funded.
- Advise clients about the risks of not setting anything aside.
- Document your decision and your client’s consent.
- Coordinate with the defense on what ICD codes are reported under MIR.
This isn’t theoretical. The Department of Justice has pursued personal injury firms that failed to resolve conditional payments. Similar exposure could follow for future care if lawyers fail to address it during settlement.
What You Should Be Doing Right Now
Every firm should have a Medicare compliance checklist. Educate your clients. Consult experts on complex cases. Push back on unreasonable release language. And most of all, treat the MSP as a serious compliance obligation, not a box to check.
There are no shortcuts. But there are smart, defensible approaches that protect both your client’s recovery and your practice.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
When you represent a Medicare beneficiary in a personal injury case, doing nothing about Medicare Secondary Payer (MSP) futures compliance is not a defensible option. Ignoring the risks can lead to denied care for your client and exposure to legal malpractice. Although Medicare Set-Asides (MSAs) are not mandated by law in liability cases, the Centers for Medicare & Medicaid Services (CMS) expects you to consider Medicare’s future interests. Failing to do so invites serious consequences.
The Trigger: Mandatory Insurer Reporting
Any settlement over $750 involving a Medicare beneficiary will trigger Mandatory Insurer Reporting (MIR). The reporting includes ICD codes for injury-related diagnoses, which Medicare uses to determine whether it should cover future treatment. Once those codes are submitted, Medicare can easily deny coverage for future care it believes should be funded from the settlement.
When a denial occurs, your client must exhaust a four-level administrative appeals process before reaching a federal court. This takes time, often years, during which your client may either delay treatment or pay out of pocket. In cases involving catastrophic injuries, the denial of care could severely impact your client’s long-term quality of life.
Exposure for You and Your Firm
In these scenarios, the consequences extend beyond the client. If the client was not advised of the risks of failing to set aside funds for future care, and Medicare later denies coverage, you may be liable for legal malpractice. The Department of Justice has already taken action against firms that failed to reimburse Medicare for conditional payments. While those cases didn’t involve future care, they send a strong signal: the federal government is watching and willing to pursue firms that fall short of MSP compliance obligations.
Where Most Lawyers Make Mistakes
One of the most common missteps is assuming that no action is needed because MSAs are not required by statute. Some practitioners rely on generic defense-side Medicare language in release documents without fully understanding the implications. Others neglect to document any client education about the risks of denied future care. Another major error is overlooking which ICD codes will be reported, a technical detail that can have long-lasting implications for Medicare coverage.
When Medicare Futures Compliance Applies
You only need to address Medicare futures if your client is a current Medicare beneficiary. If the settlement includes compensation for future medical expenses, you must assess whether any portion should be set aside. If future medicals are not funded or if the case settles far below full value, those facts affect your analysis. But in either scenario, the risks of doing nothing remain.
There Is No Standard Answer
Medicare compliance in the context of future care must be addressed on a case-by-case basis. No universal rule applies. But there is a clear standard of care emerging: lawyers must evaluate the risk, educate the client, and document every step.
Your process should begin by identifying whether your client is Medicare eligible. You then need to determine if the settlement includes future medicals and, if so, whether those are related to Medicare-covered services. You should then advise your client about the MSP and the risk of Medicare denying care in the future. Finally, it is best practice to document the advice given and your client’s informed decision. If the client chooses not to set aside funds, that decision and the reasoning behind it should be clearly recorded in the file.
What If Your Client Doesn’t Want to Use an MSA?
Even if you determine that future medicals are funded, a formal Medicare Set-Aside isn’t the only option. Alternatives include securing private health insurance, structuring the settlement to pay for medical care, using a medical preservation trust, or having the client pay as a self-payer.
The essential requirement is not that you create an MSA, but that you conduct a legal analysis to determine whether one is necessary and explain the reasoning to your client. This step is not about satisfying the defense or CMS, it is about protecting your client’s access to future care and safeguarding your firm from liability.
CMS’s Position on Future Care
CMS’s guidance is unambiguous. Medicare expects injury victims to use a portion of their settlement funds to pay for future Medicare-covered treatment before returning to Medicare for payment. While this is not a statutory or regulatory requirement, CMS treats it as policy. According to CMS, once a properly funded MSA is exhausted, Medicare resumes payment. But until that point, the agency may deny coverage.
What Law Firms Must Do Now
To reduce your exposure and protect your clients, you must develop a consistent process for handling MSP futures compliance. Begin by screening for Medicare eligibility at intake. Educate clients about the risk of Medicare denying future care. When appropriate, obtain an allocation and consider alternatives to a formal MSA by employing competent experts. Always document your legal analysis, the client’s decision, and any expert consultation.
It is equally important to understand what ICD codes the defense intends to report under MIR. Work with opposing counsel to ensure accurate reporting. Review release language carefully and push back on terms that are unnecessary or harmful.
Above all, start early. Do not wait until settlement is finalized to address these issues. Early intervention gives you more control, reduces client risk, and protects your practice.
Final Thought
There is no law requiring a Medicare Set-Aside in liability cases, but ignoring Medicare’s interest in future care is dangerous. CMS’s interpretation of the MSP Act is clear: Medicare should not pay for care already compensated by a settlement. Failing to address this issue invites denials and potential compliance issues.
MSP futures compliance is about protecting your client’s access to care and managing your firm’s risk. The stakes are too high to get it wrong.
Let Synergy help you handle these issues with confidence.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
Why Medicare Compliance Can’t Be Ignored
If you represent injury victims who are Medicare eligible, strict Medicare Secondary Payer Act (MSPA) compliance is not an option. The risks are real, and the consequences can be serious. Missteps don’t only harm your clients, they also put your law firm in the government’s crosshairs. Enforcement actions, financial penalties, and malpractice exposure are becoming more and more common.
Government Enforcement Is Accelerating
The DOJ is very serious about MSP compliance. In one case, a Harrisburg personal injury firm paid over $53,000 to resolve its failure to reimburse Medicare more than $84,000 in conditional payments after settling a malpractice case involving a Medicare beneficiary. A Philadelphia firm settled a similar claim by paying over $6,600 and agreeing to firm-wide changes, including appointing a compliance officer and conducting regular debt reviews. In Baltimore, a firm that had referred a case to co-counsel was still held accountable when Medicare was not reimbursed. That firm paid over $91,000, and the DOJ made clear that joint representation does not absolve firms from their MSPA obligations. In another case, a Maryland firm paid $250,000 because it relied on a conditional payment letter rather than a final demand from Medicare before disbursing funds.
These enforcement actions underscore a consistent message: the government expects personal injury lawyers to address Medicare’s interests compliantly. Delegating the responsibility or assuming someone else will handle it is not a defense.
Common Errors That Create Risk
Several common mistakes repeatedly trigger liability. Disbursing settlement funds without waiting for a final demand letter from Medicare or relying upon a Conditinal Payment Letter is one common mistake. Others fail to identify or resolve Medicare Advantage (Part C) liens which can be a very costly mistake. Some lawyers assume that co-counsel or referring attorneys will take care of the Medicare obligations, but still end up being held accountable. Signing off on release language that includes misleading or overly broad “Medicare compliance” terms without proper review is another significant mistake. Failing to track the ICD codes reported to CMS or to educate clients about the potential impact on their future Medicare coverage are also frequent errors.
You do not have to willfully violate the MSPA to be exposed. Process failures or oversight can be enough.
What the Government Expects from Your Firm
In settlement enforcement actions, the Department of Justice has made its expectations clear. Law firms must appoint someone within the firm who is responsible for Medicare compliance. That individual must be properly trained. The firm must also regularly review and confirm compliance at least every six months.
Why Waiting Until Settlement Is a Mistake
A reactive approach to Medicare compliance is especially risky. Waiting until settlement to start Medicare compliance efforts often results in delays, misinformation, and missteps. Incorrect data may be reported to CMS through Mandatory Insurer Reporting (MIR). Conditional payments may be estimated too low if based on early letters rather than final demands. In some cases, settlement proceeds are disbursed before confirming the final Medicare lien amount, which can leave the firm directly liable for reimbursement. Late-stage engagement also means losing leverage to negotiate a compromise or waiver with CMS.
A Proactive Process Is Your Best Defense
The best way to manage MSP compliance is to treat it as a core part of case intake and your resolution process. This begins with identifying whether the client is a Medicare beneficiary or is likely to become one within 30 months. From there, you need to collect and verify their benefit status, consult Medicare compliance professionals early, and initiate the process of identifying and resolving all conditional payments and liens, including those from Medicare Advantage plans.
You also need to inform clients about the legal and practical risks of not addressing Medicare’s reimbursement rights or failing to plan for future injury-related care. If your client does not address Medicare’s future interest, Medicare may later deny coverage. Every step of this process, including the decision-making and client education, should be well documented in your file.
The Cost of Inaction
There’s more at stake than compliance. If your firm mishandles Medicare issues, the government may claw back funds, assess penalties, or face legal malpractice exposure if your client is denied care or forced to repay Medicare years later.
Medicare compliance is not a technicality. It’s a legal obligation with serious consequences when ignored.
How Synergy Can Help
Synergy’s MSP compliance experts work with law firms to prevent these problems. From identifying at-risk clients to final demand resolution and lien negotiation, we help your practice remain compliant and protect client recoveries.
The real cost of MSP mistakes is too high to ignore. Start protecting your clients and your firm now, before it becomes a problem you can’t fix.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
If your client is on Medicare, Medicare compliance must be part of your resolution strategy. Failing to address the Medicare Secondary Payer Act (MSP) can trigger denials of future care, government recovery actions, or worse, personal liability for your law firm.
Here’s what you need to know, and what you should be doing about it.
Why the MSP Matters
Medicare is a secondary payer. That means it only pays for injury-related care if no other insurer is responsible. When a personal injury case settles and Medicare has already paid for related treatment, the government wants its money back. These are called conditional payments.
However, that isn’t the end of the matter. If a settlement includes compensation for future medical care, the Centers for Medicare & Medicaid Services (CMS) expects the injured party to use that money before billing Medicare. Failing to consider Medicare’s future interests can lead to Medicare denying coverage for future care.
Two Key Compliance Risks
- Conditional Payment Recovery
Medicare can recover what it paid before settlement. Errors in resolution can cause serious compliance risks for personal injury firms.
- Future Medicals and Set-Asides
Settlements that include future medicals may require considering Medicare’s future interests. One way to consider Medicare’s interests is with a Medicare Set-Aside (MSA)—a portion of funds set aside to pay for future Medicare-covered services. While not legally required in liability cases, CMS policy strongly encourages this. The risk? Medicare might deny care and your client could claim malpractice against your firm for failing to advise them.
How the Government Enforces the MSP
Trial lawyers are being held accountable related to mistakes in terms of MSP compliance. Recent Department of Justice actions include:
- A $250,000 settlement with a law firm that failed to repay conditional payments.
- A firm required to start a compliance program and assign a specific employee to handle MSP obligations.
- Cases where the DOJ pursued lawyers even when co-counsel failed to repay Medicare.
Making mistakes related to these obligations isn’t just risky for your client—it’s risky for your practice.
Best Practices for Trial Lawyers
- Screen Every Client
Identify Medicare beneficiaries or those reasonably expected to become eligible within 30 months. This includes clients on SSDI.
- Follow the CAD Protocol
- Consult with experts to address conditional payments and possible futures.
- Advise your client about Medicare’s rights and what might happen if they don’t protect them.
- Document the file, especially if the client declines to set aside funds.
- Control the MIR Narrative
Collaborate with defense counsel to ensure accurate ICD codes and dates of accident are properly reported. Incorrect data can trigger denial of care or new demands from Medicare.
- Reject Bad Release Language
Many defense-prepared releases include overreaching or outright inaccurate Medicare language. Avoid agreeing to anything not supported by law.
- Don’t Disburse Too Early
Always wait for Medicare’s final demand, not just a conditional payment letter, before disbursing funds.
Educate Clients and Protect Your Firm
Make sure your client understand Medicare’s rights to reimbursement. In addition, your client needs to understand the risk of doing nothing when it comes to futures. Document your advice.
Final Thought
Medicare compliance is not optional. Trial lawyers must take proactive steps to protect both their clients and their firms. You don’t need to be a compliance expert, but you should work with one.
Want to avoid costly mistakes and closes cases compliantly? Synergy is the nation’s leading MSP compliance partner for law firms. We can help you get it right, every time.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
A significant portion of my legal practice has focused on workers’ compensation insurance defense. Although this area is rich with Medicare Secondary Payer (MSP) compliance guidance from the Centers for Medicare & Medicaid Services (CMS), it has often been misunderstood by practicing attorneys. Part of the problem may stem from the “unsexy” nature of Medicare, after all, who doesn’t associate Medicare with visions of older people?
When I realized that MSP compliance issues couldn’t be ignored, I dove into studying the MSP statute and became a self-proclaimed MSP compliance nerd. (Yes, Virginia, there are quite a few of us.)
My admittedly irrational interest in MSP compliance led me into the world of MSP vendors, where beginning in 2010 I consulted on both liability and workers’ compensation cases. My shift to the plaintiff side began in 2020 when I joined Synergy as their Director of MSP Compliance. My work involves advising attorneys and their injured Medicare beneficiary clients about how the MSP Act may impact their personal injury settlements.
Over the years, as I’ve consulted with attorneys and their Medicare beneficiary clients, my definition of an “old” person has changed profoundly. Although many beneficiaries are significantly injured, they are resilient and often have inspiring attitudes. So when I filled out my online Medicare application this past November, I found myself genuinely looking forward to receiving my Medicare Beneficiary Identifier number in the mail. Stay tuned for tips as I begin mastering the art of being a Medicare beneficiary.
Written by: Rasa Fumagalli JD, MSCC, CMSP-F | Director of MSP Compliance at Synergy.
If your firm is settling personal injury cases, Medicare conditional payments and Medicare Advantage Plan (MAO) liens aren’t just red tape, they’re legal minefields. Overlooking them could cost your client and your firm big.
Here’s what you need to know and why it matters.
Medicare Conditional Payments: Serious Risk, Strict Rules
Under the Medicare Secondary Payer Act (MSPA), Medicare has a statutory right to recover payments it made for injury-related care when another party (like a liability insurer) is responsible. These are called conditional payments.
CMS doesn’t just have a lien, it has subrogation rights, a private cause of action, and the power to seek double damages. That means if you disburse funds before resolving Medicare’s claim, your firm could be sued.
The process is bureaucratic and slow. You must:
- Contact the Benefits Coordination and Recovery Contractor (BCRC) early
- Review and dispute the Conditional Payment Letter (CPL)
- Report the final settlement
- Wait for and pay the Final Demand within 60 days
Failing to do this properly can lead to interest, Treasury enforcement, or worse, a malpractice claim.
Medicare Advantage Plans: Same Rights, Different Rules
MAOs (Part C plans) are private companies paid by Medicare to provide benefits. Thanks to the Third Circuit’s ruling in In re Avandia, MAOs have the same recovery rights as traditional Medicare under the MSPA.
The kicker: MAOs often work through aggressive recovery contractors like Rawlings/Machinify or Optum/Katch. These entities move fast, push hard, and don’t care about fairness, they care about getting paid.
Trial lawyers need to:
- Identify whether a client is covered by an MAO
- Demand plan documents to confirm repayment rights
MAO liens are often inflated or misapplied. Without deep knowledge of their limits and defenses, you’re fighting blind.
Why It Matters
Ignoring or mishandling Medicare or MAO liens:
- Delays disbursement
- Exposes your firm to liability
- Reduces your client’s net recovery
- Damages your reputation
It’s not just about compliance. It’s about outcomes.
Best Practices
Here’s how experienced firms protect themselves:
- Start early. Identify Medicare and MAO liens pre-settlement.
- Audit everything. Challenge unrelated charges. Don’t rely on preliminary numbers.
- Pay smart. Consider compromise or waiver post-payment to reduce what’s owed.
- Know your defenses. Made whole, procurement cost offsets, and the requirement to follow Medicare protocols can all be leveraged.
- Outsource strategically. A lien resolution partner with Medicare expertise is not a luxury—it’s risk mitigation.
Why Partner with Experts Like Synergy
At Synergy, our lien resolution team understands the nuances of Medicare and MAO claims. We’ve handled thousands of cases and negotiated countless reductions. We know the playbook of recovery contractors, and we use that to protect your client’s recovery.
Let your team focus on trials. Let us handle the liens.
Written by: Teresa Kenyon Esq., Vice President of Lien Resolution Strategy at Synergy
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