By Louis Porrazzo, Esq., Chief Legal Officer, Tower MSA Partners and Claimify

For the past 25 years, the Medicare Set-Aside Arrangement (MSA) has been treated as the crown jewel of Medicare Secondary Payer (MSP) compliance. And rightfully so! An inappropriately high-dollar MSA can derail a settlement, an improperly prepared MSA may not survive review by the Centers for Medicare and Medicaid Services (CMS), and an insufficiently funded MSA can leave the injured worker in a Medicare quagmire.

During that same timeframe, the industry has become reasonably proficient at ensuring that an MSA is appropriately calculated, that an MSA submitted to Medicare has a strong likelihood of approval near the submitted amount, and that the MSA is properly funded and administered.

And yet, parties still routinely encounter MSP-related issues that prevent or delay settlement.  Even when an MSA has been prepared, submitted, approved or indemnified, and funding and administration have been arranged, the parties still carry ongoing MSP obligations that must be met.

Improper Section111 reporting, failure to properly address conditional payments, and inconsistent claim information can derail a settlement at the eleventh hour. Individually, each of these issues can be managed without much difficulty. The challenge is that they are rarely identified early enough to be handled as routine compliance work.

MSP compliance must be fully integrated into all aspects of claims handling. If the first meaningful discussion about Medicare occurs during settlement negotiations, the parties are already at a disadvantage.

Here are five MSP-related issues to address before the settlement becomes derailed:

1. Section111 Data is Inconsistent

The handling adjuster is responsible for maintaining accurate claim information, ensuring appropriate ICD codes are used, and paying only for treatment and services for which the payer is responsible. Defense counsel may be litigating the accepted body parts, correct date of injury, causal relationship, and other aspects of the claim. And some organizations have entire departments or outside vendors dedicated to Medicare reporting. Their efforts should be aligned. Too often, they are not.

Dates of injury, ICD codes, ORM (Ongoing Responsibility for Medicals) status and termination dates, TPOC (Total Payment Obligation to the Claimant) information, and other reporting data should accurately reflect the claim being settled. This has become even more important as CMS has expanded Section111 reporting requirements to include WCMSA information and increased its focus on reporting timeliness and accuracy. CMS began quarterly Section 111 reporting audits in the first quarter of 2026, sampling accepted records and assessing civil money penalties where ORM assumption or TPOC was reported outside the required timeframe. Reporting data that was merely untidy a year ago now carries a direct financial consequence.

Inconsistent data can create significant problems. Multiple Medicare records may be established or associated with a claim, potentially triggering unnecessary recovery activity. Inaccurate information can complicate settlement documentation and reporting. And improper coding may cause confusion regarding which injuries and medical treatment are actually related to the workers’ compensation claim.

Before the parties settle, they should ensure that what is reported under Section111 matches the claim that is about to close.

2. Ambiguity Surrounding ORM

When an accepted workers’ compensation claim is settled and the payer’s responsibility for medical treatment ends, ORM generally needs to be terminated, and applicable TPOC information reported under Section 111. The key question is whether ORM should have been accepted in the first place.

• When did responsibility for medical treatment begin?
• Was it ever accepted or denied?
• Does it remain open?
• Is there a legitimate basis for terminating ORM?
• If so, when should the termination be reported?

These decisions should not be made automatically simply because a claim is established at the front end or the claim is settling on the back end. Inaccurately accepting ORM can create problems beyond Section111 reporting itself, including unnecessary conditional payment recovery efforts and confusion regarding accepted injuries.

Settlement is a good time to review Section111 and ORM activities, but it should not be the first time these questions are asked.

3. Forgotten Conditional Payments

Far too often, conditional payments are an afterthought.  The industry has become very good at knowing how to prepare an MSA, how to obtain approval when submission is appropriate, how to fund it, and how to administer it.  But conditional payments still go unaddressed until the last minute. 

CMS may seek reimbursement for payments it believes are related to the workers’ compensation claim, including charges that the payer believes are unrelated or otherwise not their responsibility. Failing to investigate and address those payments early can lead to unnecessary reimbursement demands and delays in bringing the claim to final resolution.

Organizations can save money by addressing conditional payments in a timely fashion. Just as importantly, accurate Section 111 reporting and proper conditional payment resolution can reduce confusion over responsibility for medical treatment. These issues can usually be resolved, but resolution takes time.  A conditional payment issue discovered months before settlement is a compliance task. The same issue discovered days before settlement can become a settlement problem.

4. When Everyone Owns MSP Compliance, No One Does

It is important for all parties to align on MSP-related activities and expectations.  The adjuster and defense attorney should be in lockstep when it comes to handling the MSA, conditional payments or Section 111 questions.  Both parties should have a working relationship with the MSP vendor of choice.  And the claimant’s counsel should understand their obligations in denied workers’ compensation cases.

MSP compliance involves multiple interconnected obligations, and treating each one as an independent transaction creates opportunities for things to be missed. Each party should know which tasks belong to them. Before settlement discussions begin, parties should understand:

• What is accepted and what remains denied or disputed?
• Is the claimant Medicare eligible or reasonably expected to become Medicare eligible?
• Is §111 reporting accurate, including ORM status?
• Who is responsible for resolving conditional payments?
• What is the strategy for MSA preparation, funding, and administration?
• If an MSA is appropriate, will the parties pursue CMS submission or utilize another risk-management approach such as indemnification?

While different people will be handling different aspects of MSP compliance, it is important to have one person or department leading the charge and bringing all parties together to ensure MSP compliance.

5. MSP Protocol vs. “Getting an MSA”

Every entity should have a defined MSP protocol in place to ensure compliance. The mindset should shift from “getting an MSA” to “complete MSP compliance.” Any settlement strategy should include Medicare from the beginning.

Is there a discrepancy in treatment? Address it during claims handling so it doesn’t become an issue at settlement.

Is the case denied? Do not automatically assume that ORM should be reported. Analyze whether responsibility for medical treatment has actually been accepted and report accordingly.

Is the claimant treating body parts unrelated to the injury? Do not pay for that treatment. Those payments can inflate the MSA and complicate CMS approval.

By the time everyone has agreed on a settlement number, expectations have been created and momentum matters. An unexpected Medicare issue at that stage does more than increase costs. It can destroy that momentum and prevent the settlement from closing.

Final Thoughts

MSP compliance should be built into the overall claims strategy from the beginning. Section 111 reporting, conditional payments, future medical exposure, and settlement all intersect, and problems in one area can quickly affect another. A well-defined MSP protocol gives the parties an opportunity to identify and resolve those issues while there is still time to keep the claim moving toward settlement.

The best time to discover a Medicare problem is when there is still time to do something about it. When the claimant wants to settle, counsel agrees to settlement terms, the adjuster has authority, and the MSA is complete, the last thing anyone wants to hear is “We still have a Medicare issue.” A well-built MSP Protocol is what keeps that sentence out of the room.

On Wednesday, September 16, at 2:00 p.m. ET, join Tower’s Chief Legal Officer, Lou Porrazzo, and Tower’s Chief Compliance Officer, Dan Anders, for a practical discussion of five MSP-related issues that commonly delay workers’ compensation settlements and what claims professionals can do to identify and resolve them earlier.

Register for the webinar today!

Frequently Asked Questions About MSP Issues That Delay Settlement

Louis Porrazzo, Esq. serves as Chief Legal Officer for Tower MSA Partners. A recognized authority on Medicare Secondary Payer (MSP) compliance, Lou is a frequent national speaker and author known for translating complex Medicare compliance issues into practical strategies for claims professionals, attorneys, insurers, and self-insured organizations. He is licensed to practice law in the Commonwealth of Massachusetts and brings extensive experience in MSP compliance, workers’ compensation, and general liability defense. Outside of his professional work, Lou chairs the Kids’ Chance of Massachusetts Fundraising Committee and is a CrossFit Level 2 Certified Trainer. He can be reached at Louis.Porrazzo@TowerMSA.com.