The Landscape: Transformation or Transition?
The overturning of the Chevron doctrine fundamentally altered administrative law by ending the presumption that courts should defer to federal agencies' reasonable interpretations of ambiguous statutes. Instead, courts must now exercise independent judgment to determine "the best reading" of statutory text. For CMS and its extensive body of MSA guidance developed over decades, this represented a potential seismic shift.
The reality one year later is more nuanced: evolutionary rather than revolutionary, with significant changes emerging but not always directly traceable to Loper Bright alone.
CMS Policy Changes: Correlation or Causation?
CMS has implemented several significant policy modifications in 2025 that have reshaped workers' compensation settlements:
1. Elimination of Zero-Dollar MSA Reviews
Effective July 17, 2025, CMS announced it would no longer accept or review Workers' Compensation Medicare Set-Aside (WCMSA) proposals with zero-dollar allocations. This represents a substantial shift from prior practice, where parties could obtain CMS approval for $0 MSAs when certain conditions were met—providing a protective "blessing" that insulated claimants from future benefit denials.
Instead, CMS now requires parties to independently document compliance with specific criteria when no MSA funding is appropriate. These criteria include situations where treating physicians certify no further treatment is necessary, where claims were timely denied with no benefits paid, or where a court has determined no additional benefits are owed.
While CMS characterizes this as a streamlining measure—noting that reviewing $0 allocations provides "little benefit to the Medicare Trust Fund"—the timing raises questions about whether Loper Bright influenced this retreat from interpretive oversight.
2. Expanded Section 111 Reporting Requirements
Beginning April 4, 2025, CMS mandated comprehensive Section 111 reporting of WCMSA data for all settlements involving Medicare beneficiaries, including those with zero-dollar allocations and settlements below the traditional $25,000 review threshold. This enhanced data collection aims to improve coordination of benefits and enforcement of secondary payer rules.
The expansion creates new compliance obligations for Responsible Reporting Entities while giving CMS unprecedented visibility into non-submitted medical allocations. Some observers note this represents CMS asserting authority through reporting mandates rather than interpretive guidance—possibly a response to the post-Loper Bright environment.
3. Amended Review Flexibility
Effective April 7, 2025, CMS eliminated the one-year waiting period for amended review requests, allowing parties to seek adjustments to approved MSAs immediately after approval. This practical change addresses longstanding industry frustration with delays in correcting seemingly inflated CMS approvals.
The Litigation Front: Caution Rather Than Chaos
Despite widespread predictions of an immediate flood of challenges to CMS's MSA policies, the anticipated tsunami has not materialized—at least not yet in workers' compensation specifically.
Where Loper Bright Has Bitten
The decision's impact has been most pronounced in other regulatory spheres:
- The Fifth Circuit struck down the Department of Labor's 80/20 tip-credit rule, explicitly citing Loper Bright
- Multiple challenges to DOL overtime regulations have invoked the new standard
- OSHA workplace standards face renewed scrutiny without Chevron deference
- State workers' compensation agencies have experienced collateral effects as seven states ended or limited deference to state agencies in 2025
The MSA Question Marks
Legal commentators have identified numerous CMS policies potentially vulnerable under the post-Loper Bright framework:
- Whether CMS can require approved MSAs without specific statutory language
- The proper statute of limitations for conditional payment recovery
- CMS's authority to enforce provisions in Reference Guides absent explicit statutory support
- The interaction between state workers' compensation laws and federal MSP requirements
- Medicare's interest in denied liability settlements with no medical allocation
Yet actual litigation challenging these policies remains limited. Why the restraint?
The Calculus of Uncertainty
Several factors explain the measured response in workers' compensation:
- Stare Decisis Protection: Loper Bright explicitly stated that prior cases upholding specific agency actions under Chevron remain valid precedent. This protects many existing CMS policies from wholesale reversal.
- Statutory Framework: Unlike some regulatory schemes, the MSP Act itself provides CMS with express statutory authority in several areas. Courts applying Loper Bright have continued upholding agency rules where Congress delegated clear authority—even while exercising independent judgment.
- Pragmatic Considerations: Challenging CMS policies involves substantial litigation costs and risks. For insurers and self-insured employers, the calculus must weigh potential savings against the value of settlement certainty and relationship preservation with Medicare.
- Industry Inertia: The workers' compensation system relies heavily on predictable settlement processes. Widespread challenges would create operational chaos that few stakeholders desire.
State-Level Ripple Effects
An unexpected dimension of Loper Bright's impact has emerged at the state level. While the decision applied only to federal courts interpreting federal statutes, seven states—North Carolina, Missouri, Louisiana, Oklahoma, Texas, Utah, and Kentucky—ended or significantly restricted deference to their own state agencies in 2025.
This trend could affect state workers' compensation systems where administrative agencies have historically received deference in interpreting state statutes. The long-term implications for state-level benefit determinations, coverage disputes, and regulatory enforcement remain unclear.
The Professional Administrator Perspective
Medicare Set-Aside administrators and workers' compensation professionals report that daily practice has evolved more than transformed:
- Greater emphasis on documenting compliance with CMS guidelines
- Increased scrutiny of medical necessity and evidence-based treatment planning
- More conservative approaches to settlement structures
- Enhanced documentation for zero-dollar allocations and non-submit MSAs
- Closer attention to state law interactions with federal requirements
The professional consensus suggests practitioners are "hedging their bets" by maintaining compliance with CMS guidance while recognizing its potentially diminished legal authority.
Looking Forward: The Next Chapter
As we enter year two of the post-Chevron era, several developments bear watching:
- Pending Challenges: Legal challenges to other healthcare regulations may establish precedents applicable to CMS's MSP administration. Cases involving Medicare reimbursement calculations, coverage determinations, and payment rules could provide courts opportunities to address CMS authority more broadly.
- Regulatory Caution: Federal agencies increasingly recognize they can no longer rely on Chevron deference. This may lead to more conservative rulemaking—or conversely, to requests for clearer congressional delegation of authority.
- Corner Post Wild Card: The Supreme Court's Corner Post decision, issued days after Loper Bright, allows challenges to regulations within six years of when a plaintiff is injured—potentially opening decades-old rules to fresh litigation. This could eventually affect longstanding CMS policies.
- Congressional Response: Congress may respond by either providing clearer statutory authority for CMS or restricting the agency's discretion. Legislative action could reshape the entire landscape more definitively than court decisions.
The Practical Bottom Line
For workers' compensation insurers, employers, and injured workers, what does this mean today?
- Compliance Remains Essential: CMS's MSA guidance, while potentially more vulnerable to challenge, remains the safest pathway to settlement certainty. Non-compliance risks remain substantial.
- Documentation Is Critical: The elimination of $0 MSA reviews and potential challenges to other CMS policies make thorough documentation of Medicare interests more important than ever.
- Monitor Developments: Stay informed about court decisions applying Loper Bright to healthcare regulations, as precedents will emerge gradually.
- Strategic Flexibility: Consider whether particular CMS positions that significantly impact settlement value might be worth challenging—but proceed with expert guidance and realistic expectations.
- State Law Matters: Pay attention to evolving state court treatment of state agency deference, particularly in states that have followed the federal lead in limiting administrative deference.
Conclusion: Evolution, Not Revolution
One year after Loper Bright, the workers' compensation system has not experienced the dramatic upheaval some predicted. CMS has modified its policies—whether in response to the decision or independently of it—but continues to administer the MSP Act with substantial authority.
The decision's legacy in workers' compensation may ultimately be less about immediate disruption and more about long-term recalibration of the relationship between statutory text, agency interpretation, and judicial oversight. Courts now bear greater responsibility for interpreting Medicare statutes, but many existing precedents survive, and agencies retain significant expertise and authority.
The revolution, if it comes, will likely unfold case by case, challenge by challenge, over years rather than months. For now, the workers' compensation community continues navigating a landscape marked more by uncertainty about future possibilities than by present chaos.
As Justice Kagan warned in her dissent, predicting the full consequences of overturning a forty-year-old precedent requires patience: "The majority gets to pick what is left of Chevron. But that is more up in the air than it wants to admit."
One year in, that observation rings true. The dust is still settling.
Related Resources:
- CMS Workers' Compensation Medicare Set-Aside Arrangements Page
- WCMSA Reference Guide Version 4.4 (July 2025)
- Loper Bright Enterprises v. Raimondo, Supreme Court Opinion
- Original Blog Post: Chevron's Fall (September 2024)
Recommended Citation: Gelman, Jon L., Chevron Falls: Workers' Compensation Survives, www.gelmans.com (11/16/2025)
Jon L. Gelman of Wayne, NJ, is the author of NJ Workers' Compensation Law (Thomson Reuters) and co-author of the national treatise Modern Workers' Compensation Law (Thomson Reuters).
Blog: Workers' Compensation
LinkedIn: JonGelman
Email: jon@gelmans.com
Phone: 1.973.696.7900
© 2025 Jon L Gelman. All rights reserved.
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