The workers’ compensation bar has grown increasingly familiar with Medicare Set-Asides (MSAs), but 2026 has proven to be a defining year. With the Centers for Medicare & Medicaid Services (CMS) officially ending its review of zero-dollar MSAs as of July 17, 2025, the impact has now taken full effect. For plaintiff attorneys, this shift signals one clear message: the liability risk is quietly shifting from CMS back onto our shoulders.
The End of Zero-Dollar Reviews — Why It Matters
Historically, some attorneys utilized zero-dollar MSA submissions when liability for future Medicare-covered treatment was arguable or when the carrier denied ongoing medical exposure. Having CMS sign off on that position provided a level of insulation if Medicare later attempted recovery.
With CMS no longer reviewing these allocations, plaintiff counsel will owe the justification at trial. That means if Medicare later determines the injured worker did, in fact, receive settlement funds intended for future medical expenses, the client, and potentially counsel, could face conditional payment recovery or allegations of settlement misrepresentation.
In short: “CMS didn’t review it” will no longer be a safe shield.
Why MSAs Are No Longer Just a “Defense Problem”
Too many plaintiff attorneys still assume MSA compliance is primarily an insurance carrier or defense-side concern. Our ethical duty of competence and protection of client settlement value directly intersects with MSA handling.
Improper allocation or worse, ignoring the issue altogether, can trigger:
- Delayed settlement approvals
- Post-settlement Medicare recovery claims
- Client dissatisfaction if treatment is later denied
- Professional consequences- Legal malpractice or grievance exposure for failure to advise
The moment your client is a Medicare beneficiary or likely to become one within 30 months, the MSA conversation becomes part of your risk management strategy.
The New 2025 Standard: Documentation Is Your Best Defense
With CMS stepping back from zero-dollar confirmation, file documentation becomes everything. If you plan to argue that no future work-related medical treatment is warranted, the client’s file should be notated to reflect:
✔ A treating physician’s written statement clearly indicating no future medical treatment is expected.
✔ Confirmation that no medical bills were paid by Medicare during the pendency of the claim.
✔ Clear carrier correspondence denying future medical liability.
✔ A medical cost projection or legal memorandum supporting the position, not just a line in the settlement agreement. To download a free Medicare Set-Aside Justification Memorandum – Zero Dollar / Reduced Allocation Position, click here.
If your justification exists only in a defense adjuster’s verbal position or an email attachment, you do not have protection. Assume that every zero-allocation case could be scrutinized years after settlement.
MSAs as a Negotiation Tool — Not Just a Compliance Hurdle
Rather than viewing MSAs as a burdensome compliance exercise, savvy plaintiff attorneys are using medical cost projections and MSA preparation as leverage.
Here’s why:
- Defense often undervalues future medical exposure.
- Presenting a well-supported cost projection forces a more realistic settlement conversation.
- Plaintiff attorney can have a counter MSA or medical cost projections report prepared – allowing the plaintiff to retain control of the narrative rather than letting defense dictate numbers based on internal vendor reports.
By owning the numbers, you position yourself not just as a litigator but as a strategist who protects long-term settlement value.
Don’t Forget the Malpractice Angle
The most overlooked risk isn’t Medicare recovery; it’s client expectation and attorney liability. If future medical treatment is denied because an MSA wasn’t properly handled or funded, your client will not call the carrier; they’ll call you.
Bar complaints and legal malpractice suits tend to follow communication failures, rather than poor legal outcomes. That’s why your file should also include:
- A written advisement to the client explaining how Medicare impacts settlement structure.
- A choice acknowledgment, confirming that the client was informed about MSA implications and made an educated decision.
This isn’t fear-based lawyering; it’s professional file hygiene.
Key Takeaways for 2025 and Beyond
Here’s what plaintiff attorneys need to integrate into their settlement workflow immediately:
✔ Identify early whether the client is a Medicare beneficiary or likely to become one.
✔ You cannot rely on CMS review to validate zero-dollar allocations. That safety net is gone.
✔ Use medical cost projections and physician statements proactively—for both compliance and negotiation.
✔ Document everything: client advisements, denial of future care, medical rationales, and your legal reasoning.
✔ Treat MSA handling as a value-protection tool, not just a regulatory task.
About Medivest
At Medivest, we specialize in Medicare Secondary Payer (MSP) compliance and settlement planning solutions designed to protect plaintiff attorneys, injured workers, and their settlements. For over 25 years, Medivest has been a trusted partner in the workers’ compensation and liability settlement space, ensuring that Medicare’s interests are protected, settlement funds are properly allocated, and clients maintain access to medical care long after the case closes.