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Policy and Procedure Name:
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Lump Sum Settlement (LSS)
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Policy #:
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CP-12-01
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Code/Rule Reference:
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ORC 4123.512;
ORC
4123-54 (J); ORC 4123.65;
ORC
4123.88
OAC
4123-3-34
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Industrial Commission (IC) Resolution/Memo
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N/A
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Effective Date:
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09/25/2025
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Approved:
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Shawn Crosby, Chief Operating Officer
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Origin:
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Operational Policy and Support
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Supersedes:
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Policy # CP-12-01, effective 08/25/2023
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History:
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Previous versions of this policy are available upon
request
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Table of Contents
I. POLICY PURPOSE
II. APPLICABILITY
III. DEFINITIONS
Administrative Settlement
Court Settlement
Conditional Payment Letter (CPL)
Death Benefits
Disabled Workers’ Relief Fund
Indemnity-only Settlement
Intent to Settle
Lump Sum Settlement
Net Present Value (NPV)
Partial Settlement
Parties to a Claim
Prosthetics-only Settlement
IV. POLICY
A. LSS Initiation by
Claimant or Employer
B. Settlements Initiated
Pursuant to ORC 4123.512
C. Submission of the
Settlement Application
D. Signatures
E. BWC Authority
F. Disapproval of a
Settlement Application
G. Medicare Set-Aside -
Medicare Secondary Payer Act (MSPA)
H. Execution of an Amended
Settlement Agreement and Release (C-241)
I. Approval of a Settlement
Application, 30-Day Waiting Period and IC Review
J. Death of the IW/Claimant
K. Family Support
L. Disabled Workers’ Relief
Fund
M. SI Settlements
N. Corrective Action
O. Court Settlements
V. PROCEDURE
A. General Claim Note and
Documentation Requirements
B. Settlement Workbook
C. Assignment of the Claim
D. Reviewing for Pending
Court Appeals
E. Reviewing for Subrogation
F. Reviewing for Violation
of a Specific Safety Requirement (VSSR)
G. Reviewing For and
Obtaining Signatures
H. Required Language
Outlining Reason for Settlement
I. Reviewing for
Authorization to Receive Workers’ Compensation Payment When the IW/Claimant is
Represented by an Attorney
J. Reviewing for Other Open
Claims
K. Issues Affecting
Settlement
L. Overpayments
M. Lump Sum Advancements
N. Unpaid Premiums When the
Claimant is the IW and the Employer
O. Insurance Services Office
(ISO)
P. Fraud
Q. Assessing the Value of the
Settlement
R. Probability Factors
S. Medical Benefits/Costs
T. Evaluating Future
Indemnity
U. Calculation of Other
Types of Compensation
V. Obtaining Authority,
Negotiation, and Decision
W. Finalizing and Closing the
Settlement
X. 30-Day Waiting Period
(“Cooling Off Period”)
Y. Death of the Claimant
Z. Potential Fraud
Discovered After Approval
AA. Withdrawal from Settlement
BB. IC Approval or Disapproval
CC. Processing Upon Expiration
of the 30-Day Waiting Period
DD. Payment Issues
EE. Injuries Sustained in a
Vocational Rehabilitation Program
FF. Court Settlements
The purpose of this policy is to ensure that administrative lump
sum and court settlements are processed consistently, timely, and equitably, in
accordance with all applicable rules and law.
This policy applies to BWC staff who process LSS
applications.
Administrative
Settlement: A settlement of the medical and/or
indemnity portion(s) of a workers’ compensation claim(s) pursuant to Ohio
Revised Code (ORC) 4123.65.
Court
Settlement: A settlement of a BWC claim(s) related
lawsuit, which is approved by the court in which the lawsuit is filed.
Conditional
Payment Letter (CPL): A notification from Medicare
indicating the amounts Medicare has paid to the injured worker (IW) for
treatment that may relate to the conditions in the claim.
Death
Benefits: Benefits payable pursuant to ORC 4123.59 and
ORC 4123.60 to a dependent of an IW who has died because of an injury or
occupational disease (OD) contracted in the course of, and arising out of the
IW’s employment.
Disabled
Workers’ Relief Fund: A special fund that supplements
the benefits received by permanently and totally disabled IWs whose benefits
fall below a threshold amount determined annually, based on the cost-of-living
index.
Indemnity-only
Settlement: A settlement that includes only the
compensation portion of a claim (e.g., temporary total disability, permanent
total disability).
Intent
to Settle: A request for consideration of settlement
prior to court of appeals action.
Lump
Sum Settlement: A written agreement that results in
closure of a claim(s), or part of a claim(s), as defined by the terms of the
settlement agreement. A LSS agreement may be entered into at the
administrative, intent to settle, or court level.
Net
Present Value (NPV): The present value of a monetary
award, as opposed to what the award would be worth if spread out over a period
of time (i.e., the time value of money).
Partial
Settlement: Settlement of only part of a claim or
claims.
Parties
to a Claim: The IW or IW’s dependent, the employer,
and BWC.
Prosthetics-only
Settlement: A settlement that is generally for
self-insured (SI) claims in which BWC has approved and paid the cost of a
prosthetic device in the allowed SI claim. BWC settling the prosthetic portion
of a SI claim often occurs prior to the overall settlement of the SI
claim.
1. Pursuant
to ORC 4123.65 a LSS may be initiated by a claimant or an employer at any time
during the life of the claim; or
2. Pursuant
to ORC 4123.512, a LSS may be initiated by filing a notice of intent to settle.
1. Requests
may be submitted within 30 days after the receipt date of the final decision by
the Ohio Industrial Commission (IC) on cases eligible to be appealed to the
Court of Common Pleas. This action will extend the timeframes for appealing to
the Court of Common Pleas to 150 days.
2. It
is BWC’s policy that notices of intent to settle must be filed on a Notice
of Intent to Settle (C-512) form.
a. The
C-512 must be emailed to the BWC
Intent to Settle mailbox or faxed to BWC Legal at 614-621-3395.
b. If
the notice of intent to settle is not submitted on the C-512, BWC staff may
contact the filing party and request that a C-512 be completed and submitted
within the statutory timeframes.
3. When
a C-512 is filed, normal claims processing continues.
4. A
BWC settlement attorney will handle all settlement negotiations and obtain all
necessary forms or documents for settlements initiated pursuant to this
provision.
a. If a
tentative agreement is reached, the terms of the settlement will be set forth
on an Agreement and Application for Approval of Settlement Agreement
(C-240).
b. The
party who filed the notice of intent to settle will have 14 days from the date
the tentative agreement was reached to submit the C-240 with the appropriate
signatures.
5. Settlements
initiated with a C-512 must be completed and paid before the extended statutory
timeframe expires.
1. It is
BWC’s policy to ensure timely processing and avoid the possibility of
disapproval of a C-240 (whether filed to initiate the settlement or following
the filing of a C-512). The application:
a. Should
be submitted to BWC on the most recent version;
b. Must
be completed in its entirety, including a statement indicating why the proposed
settlement is deemed desirable;
c. Include
supplemental forms and/or documentation as indicated on the C-240; and
d. Must
include IW/claimant checking “Yes” or “No” and initialing the acknowledgement
of incarceration language, along with all other sections of the settlement
agreement.
2. Must
include the signature of the IW/claimant and their attorney if represented. BWC
will notify the IW/claimant or their attorney if there is any required
information and/or documentation missing. BWC will disapprove a settlement
request if the required information or documentation is not received within 14
days after notification by BWC.
3. An
employer is prohibited from denying or withdrawing consent to a settlement
application if the employee is no longer employed by the employer, and:
a. The
claim is no longer within the employer’s experience or impacting its future
premiums;
b. The
claim is identified as a no coverage claim; and
c. The
employer is currently lapsed during the period of settlement.
4. To
maintain proper confidentiality, it is BWC’s policy that a C-240 only contain
the name and related claims of one employer. If the settlement agreement seeks
to settle claims involving different employers, a separate C-240 must be
submitted for each employer.
5. An IW/claimant
that has pending legal charges in any court of law may be denied a settlement.
6. An IW/claimant
who is currently incarcerated will be barred from settlement.
1. The IW/claimant
and their attorney must sign the C-240.
a. If
the IW/claimant has assigned power of attorney (POA) to another or has an
appointed guardian, legally sufficient documentation must be submitted
verifying the POA or guardianship. See the Custody,
Guardianship, Power of Attorney and Incapacitation policy for
additional information.
b. A
custodial parent will be presumed to be the legal guardian, and no further
documentation will be required unless BWC receives evidence suggesting the
presumption is erroneous.
2. If
applicable, the employer or the employer’s attorney must sign the C-240.
a. If
the employer’s signature is required, but missing, BWC will notify the employer
of the filing of the C-240 and provide the employer the opportunity to respond
within 14 days. If the employer does not respond, BWC will disapprove the
settlement application.
b. If
the employer’s signature is not required, but the employer is still doing
business in Ohio, BWC will notify the employer of the filing of the C-240 and
provide the employer 30 days to respond.
i.
If the employer does not respond within 30 days, BWC will process the
settlement application without the employer’s signature.
ii. If
the employer responds and objects in writing to the settlement application, BWC
will contact the employer to determine if the IW is currently working for the
employer.
a) If
the IW is still their employee, BWC will disapprove the settlement application.
b) If the IW
is no longer their employee, the employer will be advised they cannot object
per ORC 4123.65(G).
3. When
Disabled Workers’ Relief Fund benefits are paid as part of the settlement, the
employer’s signature is required on a C-240 if the employer’s policy has been
combined, and the employer is now SI. BWC will pay and bill SI employers for
any Disabled Workers’ Relief Fund benefits allocated in a settlement.
4. All
signatures required on the C-240 must be dated no more than 18 months prior to
the date of filing.
1. BWC
approval is required before any administrative settlement becomes final.
2. It
is BWC’s policy to independently evaluate and determine a fair settlement value
and attempt, as appropriate, to facilitate agreement between the parties.
3. When
a settlement has been initiated with the filing of a C-240 (rather than a
C-512) and the employer has indicated, by checking “Box A” on the C-240, that
it is supportive and agreeable to the settlement up to the amount listed on the
C-240, BWC may renegotiate the agreed settlement amount, considering the
following:
a. Is
the agreed-upon settlement amount more than BWC’s calculated value of the
claim?
b. Does
an “arm’s-length” relationship exist between the parties, so the settlement
outcome is not unfairly influenced (e.g., the IW is not a relative or a
partner/proprietor in the company)?
c. Is
the employer experience rated, and is the claim within the policy year
experience period?
d. Does
the settlement exceed the claim’s maximum value as determined by BWC?
e. Can
the settlement be reasonably justified?
1. It
is BWC’s policy to disapprove a settlement request when:
a. BWC
has determined that the settlement agreement is not equitable or in the best
interests of a party and/or BWC;
b. A
party does not agree to settle subject to ORC 4123.65(G) for employers;
c. The
Special Investigations Unit (SIU) or the Subrogation Department has requested
disapproval; or
d. A
party has not timely submitted information requested by BWC.
2. Questions
regarding disapproval of a settlement application may be staffed with an LSS Injury
Management Supervisor (LSS IMS) or BWC settlement attorney.
1. BWC
will notify the IW or their attorney by letter when the IW is a Medicare
recipient or has a reasonable expectation of receiving Medicare within 30
months.
2. BWC
will disapprove the settlement application if the Medicare Set-Aside Letter
(MSA letter) is not received within the requested timeframe (typically 14 days
from the date of the request).
1. Parties
to an administrative settlement must execute a C-241 if:
a. A
change is made to the originally requested settlement amount, terms, or
conditions as submitted on the C-240; or
b. The
settlement was not filed on the most recent C-240 application.
2. The
LSS Claims Service Specialist (LSS CSS) will discuss any variation or
exceptions with their LSS IMS and/or a BWC settlement attorney.
1. BWC
will provide notification via Approval of Settlement Agreement letter (herein
after, “approval letter”) letter to all parties of any approval of a settlement
application.
a. The
day after the approval letter is sent is counted as day one of the 30-day
waiting period.
b. The
waiting period cannot be waived by any party for any reason.
c. Ongoing
compensation and medical benefits are suspended effective the date of the
approval letter.
2. Withdrawal
from Settlement
a. Any
party may withdraw from a settlement before the expiration of the 30-day
waiting period subject to ORC 4123.65(G) for employers.
b. The
withdrawal must be in writing and sent to all other parties to the settlement.
c. BWC
must receive the withdrawal request before the expiration of the 30-day waiting
period, regardless of the date the withdrawal is mailed or sent.
d. If
the 30th day falls on a weekend or holiday, the 30th day
is extended through the next business day.
3.
IC Review of Settlements
a. BWC
must send all administrative settlements to the IC for review within five days.
b. If
the IC finds a “gross miscarriage of justice” or finds the settlement terms
“clearly unfair” during the 30-day waiting period, the IC may disapprove the
settlement.
c. If
the IC does not disapprove a settlement within the 30-day waiting period, the
settlement is approved by operation of law.
1. If
the IW/claimant dies prior to BWC approval of the settlement, BWC will disallow
the settlement as abated by death.
2. If
the IW/claimant dies during the 30-day waiting period, any party may void the
settlement for good cause.
3. If
the IW/claimant dies after the 30-day waiting period, the settlement becomes
final.
4. When
an IW/claimant’s death occurs during or after the 30-day waiting period, the
necessary documentation to complete the settlement includes, but is not limited
to:
a. Probate
estate documents from a Probate Court naming an Administrator Executrix, or
Executor of the claimant’s estate;
b. An
updated Claimant Authorized Representative (R-2) and Authorization to
Receive Workers’ Compensation Payment (C-230) from the claimant’s counsel
indicating they represent the estate of the claimant;
c. The
IW/claimant’s death certificate; and
d. Medical
records surrounding the time of death.
5. For
the claimant’s legal representative to be authorized to receive the LSS check,
the estate of the claimant must file a C-230.
1. Any
LSS amount BWC pays is a final release that is subject to valid court-ordered
family support, even if the family support amount is for the entire amount of
the LSS.
2. BWC
must notify the family support agency associated with the claim, upon issuance
of the approval of the settlement.
3. BWC
will recover any overpayment first, attorney fees second, and any remaining
amount will be considered for family support.
1. Any
allocations made for Disabled Workers’ Relief Fund must be issued as a separate
check.
2. Allocations
for Disabled Workers’ Relief Fund must be separately identified on the C-241
and the approval letter.
3. If
the employer is SI, BWC must secure the employer’s signed agreement to settle
the Disabled Workers’ Relief Fund.
4. Settlement
of death benefits is not eligible for Disabled Workers’ Relief Fund.
1. Settlements
with an SI employer must be filed on the Self-Insured Joint Settlement
Agreement and Release (SI-42) form.
2. The
SI employer will process the settlement request for LSS.
3. The
IC will review and approve or disapprove SI settlement agreements.
1. Settlement
of a claim does not prevent BWC from taking corrective action, including
recovery of benefits against a physician of record, a vendor, an IW/claimant,
or an employer. BWC’s subrogation recovery rights are not impaired by LSS.
2. Questions
regarding these issues may be staffed with the BWC settlement attorney.
1. BWC
will process a court settlement in compliance with the terms of the agreement
and as directed by the court.
2. Questions
regarding court settlements may be staffed with a BWC settlement attorney.
1. BWC
staff will refer to the Standard
Claim File Documentation and Altered Documents policy and procedure for
claim note and documentation requirements; and
2. Must
follow any other specific instructions for claim notes and documentation
included in this procedure.
1. BWC
staff who process LSS applications must use and maintain the Settlement
Workbook as required by Claims Operations management and as instructed in this
procedure.
2. When
the LSS IMS reviews the New Settlement Workbook report, indicating the
filing of a C-240, the LSS IMS will:
a. Review
the C-240;
b. Assign
the C-240 to the appropriate LSS CSS; and
c. Ensure
a copy of the C-240 is imaged into each claim.
1. Upon
assignment of the claim, the LSS CSS will:
a. Ensure
the C-240 filed is the most recent version; and
b. Determine
if all the information and documentation required have been submitted.
i.
If any required information or documentation is missing, the LSS CSS
will notify the claimant and request the required documentation/information.
ii. If
the required documentation/information is not received within 14 days, the LSS
CSS will review the C-240 with their LSS IMS for possible disapproval.
2. Any
additional information requested by BWC (e.g., court records, medical
documents, business licensure, marriage records, etc.) or submitted to BWC and
related to the calculation of the claimant’s life expectancy, must be imaged by
BWC in a confidential folder.
3. The
LSS CSS must additionally:
a. Notify
the Disability Management Coordinator (DMC), if the IW is participating in a
vocational rehabilitation program;
b. Ensure
a separate C-240 is filed for each employer, with claims being included in the
settlement agreement (a single C-240 must not include claim number(s) involving
another employer or the employer’s name(s));
c. Review
whether the claim is no longer within the employer’s experience for impacting
its future premiums, and if the employee is no longer employed by the employer;
d. Run
the Social Security cross-check verification to determine Medicare eligibility;
e. Review
the claims for pending applications.
i.
Other than as provided in Section V.C.3.i below, the status of pending
applications will be changed to “Suspend.”
ii. Suspended
applications include, but are not limited to:
a) Requests
for additional conditions;
b) New
requests for compensation;
c) Requests
for scheduled loss compensation; and
d) Any
pending Application for Determination of Percentage of Permanent Partial
Disability or Increase of Permanent Partial Disability (C-92).
f.
Contact the exam scheduling region to suspend an exam, if a BWC exam is
scheduled, unless it is related to temporary total disability (TT);
g. Create
a new case for any new application or request received following the filing of
the C-240 application and place it in “Suspend” status;
h. Create
a “Legal” case in all claims included on the C-240 and any subsequent claims
included in the settlement:
i.
Identify the issue in the case as either an “administrative” or “512
Intent;”
ii. Update
to the appropriate issue status, including the 30-day hold when appropriate;
and
iii. Add the
appropriate activity to the case and fully update it once the settlement is
complete.
i.
Continue to process the following until settlement approval is issued:
i.
Permanent total disability (PTD);
ii. Extension
of TT benefits only;
iii. Extension for wage
loss (WL) benefits only;
iv. Alternative
dispute resolutions (ADR);
v. Requests
for medical treatment:
a) When
the timeframe of medical treatment will exceed the settlement timeline, the LSS
CSS will staff with the LSS IMS or a BWC settlement attorney; or
b) If the
timeline of the medical treatment does not exceed the settlement timeline, no
staffing is necessary.
vi. Actions
related to determining maximum medical improvement (MMI);
vii. Any application other
than those listed above, which may impact the advisability or value of the
settlement, should be staffed with the LSS IMS or a BWC settlement attorney.
1. The
LSS CSS must review all claims associated with the IW/claimant to ensure there
are no pending court appeals, with the exclusion of SI claims.
a. Documents
titled “AG referral,” “court appeal,” or “court document” may indicate court
appeals.
b. The
LSS CSS may consult with a BWC settlement attorney if the status of an appeal
is unclear.
2. If
there appears to be an outstanding court appeal, the LSS CSS must advise the
IW/claimant or their attorney that the IW/claimant may choose to pursue either
the administrative settlement or the court case, but not both.
a. If
the IW/claimant chooses to pursue:
i.
The court case, the LSS CSS will issue an “LSS Disapproval” letter and
include the following language: “The application is denied. All parties do
not agree with the settlement terms. This claim is currently pending a court
proceeding. You may pursue settlement through the Attorney General’s Office.”
ii. The
administrative settlement, the IW/claimant will provide a date-stamped
dismissal entry from the court.
b. The
LSS CSS will disapprove the C-240 if a dismissal entry is not received within
14 days of a request.
1. The
LSS CSS will review all claims to be included in the settlement for any open
subrogation case(s).
2. If
there is an open subrogation case, the LSS CSS will notify the BWC subrogation
contact assigned to the service office and ask whether the settlement can
proceed.
3. The
subrogation contact will update the claims management system to reflect whether
the settlement may proceed.
a. If
the subrogation contact indicates that the settlement should not proceed, the
LSS CSS will:
i.
Notify the parties, and their attorneys, if applicable, that BWC does
not agree to the settlement; and
ii. Disapprove
the settlement, indicating that all parties do not agree to the settlement.
b. If
the subrogation contact indicates that the settlement should proceed, the LSS
CSS will continue to process the settlement request.
4. The
LSS CSS may reference the Subrogation
policy and procedure for further information.
1. The
LSS CSS must review the claim(s) to be settled to determine if there is a
pending or active VSSR application.
2. If
there is a pending VSSR application, the LSS CSS will follow the directions in
Section V.T.3 of this procedure.
1. The
LSS CSS must ensure that the C-240 contains the signature of the IW/claimant or
their attorney and the signature of the employer or employer’s attorney unless
an exception applies.
a. Dates
of signature: All signatures required on the C-240 must be dated no more than
18 months before the settlement application date.
b. Power
of attorney (POA) and guardian: If the settlement involves an IW/claimant that
assigned power of attorney to another individual or the IW/claimant has a
guardian, the LSS CSS must ensure:
i.
The claim file contains legal documentation, including a copy of the
POA, verifying the POA or guardian status of the individual claiming such
status, except in the case of a minor child, BWC will presume the custodial
parent is the legal guardian;
ii. The
POA or guardian signs both the IW/claimant’s and their own name on the C-240,
and;
iii. There is
compliance with any other applicable provisions of the Custody,
Guardianship, Power of Attorney and Incapacitation policy and
procedure.
2. Multiple
claims and employers: If there are multiple claims being settled with more than
one employer, the LSS CSS must ensure each employer signed the C-240/C-241 that
contains the claims involving that employer (unless an employer signature
exception applies).
3. Disabled
Workers’ Relief Fund: If Disabled Workers’ Relief Fund benefits are being paid
as part of the settlement, the LSS CSS must ensure the employer’s signature is
on a C-240/241 if the employer’s policy has been combined and the employer is
now SI.
4. If
the SI employer’s policy is in final-cancel status, but the employer is still
in business, the LSS CSS must verify the application for settlement is filed
and the employer’s signature is required.
5. If
an employer’s business has been sold, the LSS CSS will contact the BWC Employer
Services Division to determine if liability has been transferred to the
acquiring employer.
a. If
BWC has transferred liability, the acquiring (combined risk) employer’s
signature on the application is required.
b. If
BWC has not transferred liability to the acquiring employer, the employer’s
signature is not required.
6. Exceptions
to Employer Signature Requirement
a. The
LSS CSS will not require the employer’s signature if the employer is no longer
doing business in Ohio.
b. If
before the settlement, the LSS/CSS must look at the status of the employer
policy at the time of injury, and if the policy is cancelled prior to the date
of injury, they must staff the issue with the LSS IMS and BWC settlement
attorney.
c. The
LSS CSS will not require a signature from an employer still doing business in
Ohio when the LSS CSS has mailed the employer an “Employer 30-day letter for
Lump Sum Settlement”, did not receive a response within 30 days, and one of the
following apply:
i.
The IW is no longer employed by that employer and the claim has no
further impact on the employer’s premiums; or
ii. The
employer is not in compliance with ORC 4121.35 because of one of the following:
a) A
lapsed policy; or
b) No
coverage on the date of injury.
d. An
employer’s signature is not required in cases in which the employer is
prohibited from denying or withdrawing consent to a settlement application. To
meet this condition, the LSS CSS will verify:
i.
The claim is no longer within the employer’s experience for impacting
its future premiums; and
ii. The
employee is no longer employed by the employer.
7. Obtaining
Signatures
a. If
the IW/claimant’s (or their attorney’s) signature is missing on the C-240, the
LSS CSS must contact the IW/claimant or their attorney by phone or “LSS-IW
Signature Letter,” and set a task for 14 days from the date of the telephone
call or letter to determine if the required signature has been provided.
i.
If the required signature is provided, the LSS CSS will continue to
process the settlement application.
ii. If
the IW/claimant does not submit the required signature, the LSS CSS will send a
“LSS Disapproval” letter.
b. If
the employer’s (or their attorney’s) signature is missing and their signature
is required:
i.
The LSS CSS will send the “Employer Signature Letter for C-240” to the
employer, requesting that the signature be provided within 14 days of the
mailing date. Situations when this letter must be sent include, but are not
limited to:
a) All
state agency claims;
b) A
retrospectively rated employer’s claims are within their 10-year period of
impact; or
c) Any
claim in a deductible program where the deductible has not been met.
ii. The
LSS CSS will set a 14-day task from the date of the letter to follow up.
iii. If the employer
does not submit the required signature, the LSS CSS will disapprove the
settlement using the LSS Disapproval Letter (herein after “disapproval
letter”).
c. If
the employer’s signature is not required and they have not signed the C-240,
but are still doing business in Ohio:
i.
The LSS CSS will send the “Employer 30 Day Letter for Lump Sum
Settlement” to notify them.
ii. If
the employer does not respond within 30 days of the date of the letter, the LSS
CSS will process the settlement application without the employer’s signature.
1. The
LSS CSS will ensure the C-240 includes a statement or a separate written
statement that provides a description of the circumstances of the settlement
and why it is deemed desirable.
a. The
LSS CSS will ensure the statement provided does not waive IW/claimant liability
for fraud, pending criminal charges or convictions, overpayment, or
subrogation, or otherwise change the terms of the settlement agreement.
b. If
the sufficiency of the required language is unclear, the LSS CSS will staff the
issue with the LSS IMS or BWC settlement attorney.
2. If
the LSS IMS or BWC settlement attorney determines that the statement is not
acceptable, the LSS CSS will advise the IW/claimant to submit a new C-240.
a. The
LSS CSS will set a task for 14 days from the date of the request to determine
if the new C-240 has been received.
b. If
the IW/claimant returns an adequate, new C-240, the LSS CSS will process the
settlement.
c. If
the IW/claimant does not return the new C-240, the LSS CSS will disapprove the
settlement application.
1. If
the LSS CSS is aware that an attorney represents the IW/claimant, the LSS CSS
will ensure that:
a. The
IW/claimant properly signed the authorization on the C-240; or
b. There
is a valid C-230 on file in the claim.
2. If
the IW/claimant has not signed the authorization (the attorney is not
authorized to sign on the IW/claimant’s behalf) and there is no valid C-230 on
file, the LSS CSS will contact the IW/claimant’s attorney to determine their
intention regarding distribution of any potential payment.
3. If
any possible conflict exists, the LSS CSS may contact the IW/claimant for
clarification.
1.
The LSS CSS will identify all open claims filed by the IW/claimant, and:
a. Encourage,
but not require the IW/claimant to include all claims in the settlement;
b. Document
reasons why the IW declined to settle all claims in the Settlement Workbook;
and
c. Document
attempts to fully settle the claim in cases of partial settlement requests in
the Settlement Workbook.
2.
BWC may deny the settlement application or reduce the settlement amount
when:
a. It
is not in BWC’s interest to exclude claims from the settlement; or
b. The
LSS CSS finds that the costs for the claim being settled could shift to another
claim not included in the settlement.
1. Incarceration
a. If
there is evidence in the claim indicating the IW/claimant may be incarcerated,
the LSS CSS will investigate further to verify the claimant’s status. The LSS
CSS will disapprove the settlement application if:
i.
The date of injury is on or after Aug. 22, 1986; and
ii. The
claimant is incarcerated in a state or federal correctional institution, or in
any county jail in lieu of incarceration in a state or federal correctional
institution (in this or any other state), for the conviction of a state or
federal crime.
b. If
the date of injury is before Aug. 22, 1986, the LSS CSS will consult with a BWC
settlement attorney to determine if the settlement is in the best interest of
BWC.
2. Pending
Criminal Charges: If the LSS CSS has evidence or suspicion that a claimant has
pending criminal charges, the LSS CSS will staff the claim with a BWC
settlement attorney.
3. If
the C-240 indicates that a claimant has pending criminal charges, is out on
bond, or has criminal convictions, the LSS CSS must staff the claim with a BWC
settlement attorney.
1. The
LSS CSS will review the claim to determine if there is an outstanding or
disputed overpayment in any of the IW/claimant’s claims.
2. If
there is an overpayment, declared or in dispute, the LSS CSS will recoup 100%
of the overpayment from the settlement amount, unless a BWC settlement attorney
approves an adjustment or waiver in writing.
3. The
LSS CSS must ensure that the C-240 or C-241 and the Approval
of Settlement Agreement letter (hereinafter “approval letter”), as
applicable, address all overpayments, specifically including the amount of the
overpayment.
a. The
LSS CSS must only recoup Disabled Workers’ Relief Fund overpayments from
Disabled Workers’ Relief Fund awards. Any Disabled Workers’ Relief Fund
overpayments will be identified on the C-240 or C-241.
b. Disabled
Workers’ Relief Fund overpayments can be moved to a regular overpayment in the
system if the settlement is an AG settlement or Disabled Workers’ Relief Fund
was allowed, paid, and later overturned and denied.
4. The
LSS CSS may declare an IW/claimant overpaid if the overpayment results from
continued payments after the effective settlement date.
a. The
LSS CSS will issue an “Overpayment Created after Settlement” letter to declare
the overpayment.
b. A
BWC order will not be issued for an overpayment in these circumstances.
5. Waiver
of Overpayment
a. If
there is a waiver of an overpayment in writing from the Legal Division or AG
Order, and the source claim of the overpayment is settled, then the LSS CSS
will send an email to the BWC Service Desk to have the overpayment removed from
the system.
b. If
the source claim of the overpayment is not settled, BWC may either recoup the
overpayment from the settlement amount or allow the overpayment to remain. The
LSS CSS will leave the overpayment on the claims management system for
recoupment at a later date, unless otherwise instructed by a BWC settlement
attorney.
1. The
LSS CSS will offset any settlement award by previous lump sum advancements that
have not been fully recouped, using the current rate at the time of settlement.
2. The
LSS CSS may staff these issues with their LSS IMS or a BWC settlement attorney.
1. The
LSS CSS will identify if the IW/claimant is also the employer of record (EOR).
If so, the LSS CSS will staff with BWC Employer Services to determine if the
IW/claimant/EOR owes premiums and the amount.
2. If
unpaid premiums are identified, the LSS CSS will contact the IW/claimant/EOR
before or while processing the settlement to determine if the parties can reach
agreement on deducting the entire unpaid premium amount from the proposed
settlement amount.
a. If
the IW/claimant/EOR does not agree, the LSS CSS will disapprove the settlement
as not in the best interest of the parties.
b. If
the IW/claimant/EOR agrees, the C-241 will reflect the agreement, and the LSS
CSS will continue to process the settlement application.
i.
The LSS CSS will add BWC Accounts Section as an Alternate Payee on the “Participants”
tab of the claims management system.
ii. The
LSS payment will be allocated as follows:
a) Check
1 to the IW and their attorney;
b) Check 2,
to BWC Accounts.
iii. The LSS CSS will
notify the Benefits Payable department to have the check payable to BWC,
pulled, and credited to the IW’s policy balance.
1. The
LSS CSS may request an ISO report whenever the LSS CSS determines it may be
useful in valuing and negotiating the settlement agreement.
2. When
an ISO report has been obtained, the LSS CSS will inform the BWC settlement
attorney of any records that impact the settlement's value.
1. If
the LSS CSS suspects fraud in a claim at any point in the settlement process,
the LSS CSS will notify the Special Investigations Division (SID).
2. SID
will review and ask the LSS CSS to either disapprove the settlement application
or proceed with the settlement application with consideration of a potential
fraud overpayment.
a. If
SID determines that the settlement should be disapproved, the LSS CSS will
notify the BWC settlement attorney.
b. If
SID agrees to the settlement process proceeding, the LSS CSS will ensure that
the BWC settlement attorney and SID are kept informed of the settlement’s
status.
1. Net
Present Value (NPV) Factors
a. The
LSS CSS will reference the current year’s NPV chart available on COR, to
calculate NPV when extending compensation benefits beyond six months into the
future.
i.
If the PTD value is based on an injury, as opposed to an OD, the “PTD
non-OD” category will be used to determine the NPV factor.
ii. If
the PTD value is based on an OD claim that is not a lung disease, the LSS CSS
will use the “PTD-OD-Non-Lung” category.
iii. If the PTD value
is based on an OD claim that is related to a lung disease, the LSS CSS will use
the “PTD-OD Lung” category.
iv. When
evaluating death claims, the LSS CSS will use the “Survivor” category and will
not include Disabled Workers’ Relief Fund benefits.
v. If
the compensation value will be extended greater than six months, use the
“Period” category on the NPV chart.
b. If
the LSS CSS is unsure which category to use for the calculation, they may staff
the issue with the LSS IMS.
2. All
NPV totals are subject to probability factors.
3. The
LSS CSS will not reduce medical benefits to NPV, unless after staffing with the
BWC settlement attorney, it is agreed that unusual circumstances exist,
justifying such a reduction.
1. The
LSS CSS will use probability factors to assess indemnity or medical costs
projected to start sometime in the future, such as the likelihood of a surgery
or other major treatment and associated compensation.
2. In
the case of an allowed PTD, death, or pre-PTD claim, to estimate the likelihood
of the IW/claimant reaching full life expectancy and, for a pre-PTD claim, the
likelihood that PTD will be awarded.
1. The
LSS CSS will consider IW/claimant lifestyle, co-morbidities, prognoses, and
aging when projecting future treatment types and frequency. A probability
factor will be used to estimate likelihood of the IW obtaining a particular
type of medical service in the future.
2. The
LSS CSS will ensure that the IW’s projected medical services and costs are
reasonably supported by appropriate documentation, indicating that such
services are likely to be required in the future.
1. Temporary
Total Disability (TT)
a. The
LSS CSS will ensure that all projected periods of compensation are supported by
medical documentation.
b. TT
will not be factored into the LSS value in claims with a date of injury prior
to Nov. 15, 1973, if the IW/claimant has received the maximum amount of TT.
c. The
LSS CSS will consider the following when determining the amount of expected TT
compensation:
i.
The TT the IW is entitled to, but is not yet paid; and
ii. The
likelihood of TT being awarded in the future.
2. Permanent
Total Disability
a. Medical
History and Disclosure and Medical Records
i.
The LSS CSS will ensure that a Medical History and Disclosure
(C-242), a PTD-Death Settlement Acknowledgement and Waiver Full and Final
Settlement (C-243), or Indemnity Only Waiver (C-245), and the two
most recent years of medical records are submitted.
ii. The
C-242 must be signed by both the IW and their attorney if they are represented.
iii. The C-243 and
C-245 must be signed by the IW.
iv. If the
C-242, C-243, or C-245 and medical records are not submitted with the C-240,
the LSS CSS will staff with the LSS IMS.
a) After
staffing, may disallow the C-240.
b) BWC may
reinstate if additional documentation is received within 30 days.
v. The
LSS CSS will staff any questions regarding the extent of medical records
required with the BWC settlement attorney.
b. Evaluating
the Likelihood the IW Will be Granted PTD (Pre-PTD):
i.
The LSS CSS will consider the following factors when evaluating the
likelihood of the IW being granted PTD:
a) Claim
history that impacts the IW’s ability to return to work;
b) Medical
history and current treatment indicating the status of the IW’s allowed
conditions;
c) Vocational
rehabilitation history;
d) The filed Application
for Compensation for Permanent Total Disability (IC-2);
e) Medical
reports submitted in association with the PTD application;
f) Non-medical
PTD factors, including:
i)
Educational level;
ii) Work
history;
iii) Literacy skills;
iv) Other factors
such as learning disabilities, English as a second language, supervisory skills,
or special training.
g) Any
other factors that impact the ability and likelihood of the IW returning to
work.
c. Applying
Probability Factors and NPV
i.
For PTD and Pre-PTD the LSS CSS will use the appropriate PTD and Disabled
Workers’ Relief Fund worksheet to determine life expectancy and NPV.
ii. PTD:
The LSS CSS will:
a) Review
the C-242 and the medical records submitted and on file to identify any
co-morbidities or lifestyle factors (e.g., smoking, alcohol or drug abuse); and
b) Apply a
probability factor that reflects the impact of these conditions on the present
value of a PTD settlement.
iii. When PTD Has Not
Been Previously Granted (Pre-PTD): The LSS CSS will apply the appropriate NPV
factor relative to the IW co-morbidities and the probability that the IW will
obtain PTD.
iv. Disabled Workers’
Relief Fund
a) Where
potential Disabled Workers’ Relief Fund is involved in a PTD settlement, the
LSS CSS will complete and attach a PTD and Disabled Workers’ Relief Fund
worksheet to the Settlement Workbook.
b) The LSS
CSS will adjust the Disabled Workers’ Relief Fund calculation based on the same
probability factors that are used for the overall PTD calculation.
c) The
LSS CSS will only deduct Disabled Workers’ Relief Fund overpayments from the
Disabled Workers’ Relief Fund portion of a settlement.
d) The LSS
CSS must identify and detail Disabled Workers’ Relief Fund overpayments in the
“Settlement Justification” section of the Settlement Workbook separately from
other compensation overpayments.
3. VSSR
a. The
LSS CSS may determine if the employer has settled its VSSR liability by
staffing the claim with a BWC settlement attorney.
b. If
the employer has not separately settled its VSSR liability with BWC:
i.
BWC may settle the underlying claim after the VSSR is settled or
disapproved; or
ii. If
the parties request that the VSSR be settled along with the underlying claim:
a) The
LSS CSS will evaluate the claim without consideration of the VSSR, which the
employer will pay.
b) The LSS
CSS will obtain authority and tentatively negotiate the settlement with the
understanding that the employer will pay the VSSR portion of the settlement
pursuant to separate agreement with the claimant.
c) The
IW/claimant and employer must file with and receive approval from the IC of a
separate VSSR settlement application before the LSS CSS issues the LSS approval
letter.
iii. If the parties
do not wish to settle the VSSR along with the underlying claim, the LSS CSS
will disapprove the C-240.
iv. If the
employer’s liability for the claim, including the VSSR, has been settled
through BWC’s Adjudicating Committee, the LSS CSS:
a) Will
evaluate and negotiate the VSSR component of the settlement as if the employer
is out of business; or
b) Must
document the settlement of employer liability regarding the VSSR as part of the
settlement justification.
v. When
the employer is still in business and a VSSR has not been awarded:
a) The
employer is responsible for the settlement and payment of the VSSR.
b) The LSS
CSS will disapprove the C-240 pending resolution of the VSSR, unless the
parties request that the VSSR be settled along with the underlying claim.
vi. When the
employer is out of business and VSSR has not yet been awarded:
a) The
LSS CSS will staff with a BWC VSSR attorney.
b) Upon the
request of the VSSR attorney, the LSS CSS will provide an evaluation of future
indemnity to assist in negotiation of the pending VSSR.
c) Once
the IC approves the VSSR settlement, the LSS CSS may proceed with settling the
underlying claim.
vii. If an employer settles
the VSSR, then goes out of business before the VSSR is paid:
a) The
LSS CSS must staff with the BWC VSSR attorney.
b) BWC may
request that the VSSR settlement be vacated and the VSSR application be
reopened by the IC.
c. When
calculating VSSR settlements, the LSS CSS will calculate each compensation type
separately, excluding Disabled Workers’ Relief Fund, using the appropriate NPV
factor and using maximum rates from the year of the injury.
1.
The LSS CSS will only factor WL and/or living maintenance wage loss
(LMWL) into future indemnity if the IW is likely to be eligible for WL or LMWL
in the future and has not already received the maximum number of weeks for WL
or LMWL.
a.
The LSS CSS will reference the Wage
Loss Compensation and/or Living
Maintenance Wage Loss policy and procedure and respective tips and
tools available on COR to determine if the IW has received the maximum number
of weeks.
b.
The LSS CSS may also staff the claim with their LSS IMS regarding
calculation issues for WL and LMWL.
2.
Percentage of Permanent Partial Disability (%PP)
a.
LSS CSS will consider %PP if the IW has not yet received a %PP award, or
if the LSS CSS determines that an additional %PP award is likely.
b.
The LSS CSS will ensure that the combined value of any prior %PP awarded
and the %PP being factored into the LSS appears reasonable based on the allowed
conditions or conditions likely to be added to the claim.
c.
The LSS CSS will consider if there is evidence of ongoing or recent
medical services indicating a change in the condition(s).
d.
The LSS CSS will not update the claims management system to reflect the
amount of %PP allocated to a settlement.
3.
Temporary Partial (TP)
a.
The LSS CSS will only factor in a value for TP in claims with a date of
injury prior to Aug. 22, 1986, and only when the IW has suffered or will suffer
impairment in earning capacity.
b.
The LSS CSS will not factor TP if the IW has received the maximum TP
award for the date of injury.
c.
When the IW is receiving TP, the LSS CSS will:
i.
Determine what TP has been paid to date and include the total dollars
and number of weeks paid;
ii. Determine
if the IW will continue to suffer an impairment in earning capacity; and
iii. Estimate the
expected TP indemnity costs that are probable for the claim.
4.
Death Benefits
a. The
LSS CSS must ensure that a C-242, a C-243, and the two most recent years of
medical records are submitted from the surviving spouse and each adult
dependent included in the valuation of the claim.
b. The
LSS CSS will request the C-242, C-243, and the two most recent years of medical
records.
i.
If the requested medical records are not received within 14 days, the
LSS CSS will disapprove the C-240. If additional documentation is sent in, BWC
may reinstate within 30 days.
ii. The
LSS CSS will use the appropriate PTD and Disabled Workers’ Relief Fund
worksheet to determine the life expectancy and NPV for death benefits. Use of
this worksheet is for calculation of death benefits but must exclude Disabled
Workers’ Relief Fund. Disabled Workers’ Relief Fund is a benefit meant only for
living IWs.
c. The
LSS CSS will consider and apply a probability factor that addresses
co-morbidities (e.g., diabetes or cancer) or lifestyle factors, (e.g., smoking).
d. The
LSS CSS will consider the surviving spouse’s age, number of children, length of
marriage, length of widowhood, and other factors indicating the likelihood of
the surviving spouse remarrying.
e. The
LSS CSS will offset any settlement award by previous lump sum advancements made
in the death claim that are outstanding at the time of settlement. The LSS CSS
may staff the LSA calculation with the LSS IMS or BWC attorney.
f.
The LSS CSS will consider the entitlement period for any dependent child
to be age 18 unless the LSS CSS finds, based on evidence on file or submitted
by the parent/legal guardian, there is a likelihood that:
i.
The child will enroll or continue to be enrolled in an accredited
educational program up to the age of 25;
ii. The
child is, or is likely to be, physically or mentally incapacitated from earning
wages beyond the age of 18; or
iii. The child has
co-morbidities that are likely to reduce the benefit entitlement period.
g. Disabled
Workers’ Relief Fund benefits are not a factor and are not included in the
settlement of death benefits.
h. The
LSS CSS may reference the Death
Claims policy and procedure for further explanation of dependency
status and benefit periods.
i.
The LSS CSS will staff all settlement requests involving dependent
children with the BWC settlement attorney.
j.
The LSS CSS will document all projected death benefits by recipient,
including spousal, adult dependent, and dependent minor child benefits.
5. Indemnity
Only
a. When
a settlement request is for indemnity only, the LSS CSS will ensure
documentation addresses medical treatment relevant to the potential indemnity
award (i.e., for a pre-PTD, the IW/claimant’s surgical and recent medical
history, as well as medical evidence submitted in the PTD process).
b. The
LSS CSS will value the indemnity-only settlement following the procedures for a
full settlement and then apply an appropriate indemnity-only discount based on
the estimated future medical costs.
6. Medical-Only
Claim/Medical Portion of Lost-Time Claim
a. The
LSS CSS may settle a medical-only claim.
b. The
LSS CSS must staff any C-240 seeking to settle only the medical portion of a
lost-time claim(s) with an LSS IMS or BWC settlement attorney.
7. Disabled
Workers’ Relief Fund Only Settlement
a. The
LSS CSS will staff any C-240 seeking to settle only the Disabled Workers’
Relief Fund portion of a claim(s) with an LSS IMS; or
b. If
necessary, with a BWC settlement attorney.
8. Claims
with Negligible Value
a. If a
settlement agreement includes claims of negligible value, the LSS CSS will
reflect that in the settlement agreement; and
b. Document
the value of those negligible-value claims at $0.
9.
Requesting Additional Medical Documentation
a. For
claims where a C-242 and additional medical is not already required, if the LSS
IMS, or BWC settlement attorney determine that additional medical is needed,
the LSS CSS will request that the IW/claimant complete and submit a C-242 and
submit the most recent two years of unrelated medical documentation.
b. If
two years of unrelated medical documentation is unavailable, the following list
of documents may be accepted as an equivalent:
i.
A full physical examination;
ii. Blood
work which is to include the CBC;
iii. Office notes
detailing the physical examination;
iv. A copy of
all test results; and
v. Any
other testing the physician recommends and the results
c. The
LSS CSS will set a task for 30 days from the date of the request for the C-242
and required documentation.
i.
If the form and required documentation is not provided within 30 days,
the LSS CSS will staff with the LSS IMS or BWC settlement attorney for
disapproval of the C-240 or determine if reduced probabilities would be
appropriate.
ii. If
additional documentation is received within 30 days, BWC may reinstate.
1.
The LSS CSS has the authority to, and may approve settlements valued
$25,000 or less, subject to the exceptions listed in V3.a below. The LSS CSS
must obtain settlement authority for recommended settlement amounts above
$25,000 as follows:
|
Amount
|
Authorizing Individual
|
|
$25,001 to
$150,000
|
LSS IMS or BWC
Settlement Attorney
|
|
$150,001 to
$250,000
|
Executive Round
Table
|
|
$250,001 and above
|
Administrator or
designee
|
2. The
Executive Roundtable (ERT) is a group of senior BWC Management whose role is to
review all settlements exceeding a specific threshold for accuracy, compliance
with BWC law, rules, and policy, and consideration of new/complex issues they
wish to review.
a. The
members of the ERT will be the chief operating officer, the chief of claims,
and the chief legal officer or their designee. A back-up from Claims and BWC
Legal will be designated.
b. An
ERT meeting will be scheduled on a bi-weekly basis when all members will meet
as a collective. When circumstances warrant, individual reviews may occur.
c. All
settlements received in BWC Legal within one week of the next ERT meeting will
be presented at the next roundtable.
d. BWC
settlement attorneys will present proposed settlements to the members.
e. The
ERT will review each settlement and have one of three options: reject,
authorize, or request clarification/corrections to the proposed settlement.
f.
The ERT may occur virtually or in person, and the members will indicate
their rejection, authorization, clarification, or corrections of any proposed
settlement within seven days of the workflow being initiated. If the ERT
requests clarification or corrections regarding the proposed settlement, it
should be provided within a reasonable period not to exceed five days.
g. Resubmissions
for clarifications/corrections or a change in settlement terms may be presented
to the ERT with approval by the LSS IMS or BWC settlement attorney.
Resubmissions should be limited, especially when the sole reason for return is
to increase the settlement amount without a mistake in calculations, new
justification, or evidence.
3. The
LSS CSS will staff with the LSS IMS or BWC settlement attorney the following:
a. Settlements
that include the following types of claims:
i.
Disallowed or undetermined claims;
ii. Respiratory
occupational disease claims;
iii. A sole
proprietorship, partnership, or any other situation in which an arm’s length
position or relationship may not exist;
iv. Claims
with ISO hits;
v. Claims
that arise while an IW/claimant is participating in a vocational rehabilitation
program;
vi. Claims
containing overpayments where waiver is requested;
vii. Death benefits claims;
viii. PTD and pre-PTD claims;
ix. VSSR
(where BWC is settling);
b. Indemnity-only
settlements (including Disabled Workers’ Relief Fund only settlements);
c. Medical-only
portion of a lost-time claim;
d. Settlements
with issues that cannot be resolved by the LSS CSS;
e. Any
settlement where a guardian or an individual with POA is signing on behalf of
the IW/claimant; and
f.
Any other settlements with unusual circumstances.
4. Deference
to a Previously Negotiated Agreement
a. The
LSS CSS will independently evaluate settlement value based on the merits of the
claim and the employer’s risk exposure, even when the employer agrees to the
settlement up to the amount listed in Box A on the C-240.
b. The
LSS CSS may defer to the employer’s Box A preference when all the following are
true:
i.
The agreed settlement amount is greater than the LSS CSS’s calculated
value of the claim, and the parties are unwilling to permit the LSS CSS to
negotiate a lesser amount on the employer’s behalf;
ii. An
arm’s length relationship exists between the parties (e.g., the IW/claimant is
not a relative of the employer or a partner/shareholder in the company);
iii. The employer is
experience-rated, and the claim is within the policy year experience period;
iv. The
settlement will not exceed the claim’s maximum value; and
v. The
settlement can be reasonably justified.
5. Preparing
the Settlement Offer
a. The
LSS CSS will review the settlement demand and:
i.
Identify common ground between the parties, such as projections of
benefits or treatment that both parties can agree upon; and
ii. Determine
an appropriate initial offer based upon the LSS CSS’s professional experience
and knowledge.
b. The
LSS CSS may staff any concerns with this process with their LSS IMS.
6. Presentation
of the Settlement Offer
a. The
LSS CSS may consult with the LSS IMS or BWC settlement attorney in advance to
determine a baseline settlement negotiation strategy.
b. The
LSS CSS will present the offer to the IW/claimant or their attorney who has
settlement authority.
i.
The LSS CSS will:
a) Document
that an offer was made in claim notes. Negotiation amounts are not to be
documented in the claims management system;
b) Document
the details of the ongoing negotiation, offers, counteroffers, and amounts on
the “Summary” tab of the Settlement Workbook;
c. The
LSS CSS’s initial offer will be designed to allow the parties to reach
agreement within the authorized settlement amount.
d. The
LSS CSS will request and obtain a counteroffer before increasing BWC’s
settlement offer.
7. Discussing
the Settlement Terms with the Parties
a. Regardless
of the amount or type of settlement, the LSS CSS will be the primary point of
contact between the parties regarding settlement negotiations.
b. If,
for any reason, the LSS IMS or the BWC settlement attorney discusses the
settlement with the parties, they will promptly:
i.
Inform the LSS CSS and document the communication in claim notes; and
ii. Document
the details of the conversation in the “Summary” tab of the Settlement
Workbook.
c. The
LSS CSS will refer the IW/claimant to their attorney regarding questions they
may have about the settlement negotiations.
d. The
LSS CSS will ensure the parties are aware of any:
i.
Family support orders or overpayments that will affect the final
settlement amount; and
ii. Ongoing
compensation being stopped.
e. The
LSS CSS will seek direction from the LSS IMS or the BWC settlement attorney any
time it becomes apparent that the best interests of any party are not being
protected, at which time the settlement process may be stopped.
f.
The LSS CSS will discuss any changes to the original C-240 with the LSS
IMS or the BWC settlement attorney, regarding next steps and whether they should
be documented on the C-241 and approval letter.
g. Any alteration
of any of the forms by the IW/claimant or their attorney should be staffed with
the BWC settlement attorney.
1.
Medicare Secondary Payer Act (MSPA)
a. The
LSS CSS will send a MSA letter to the IW or the IW’s attorney when the IW is on
Medicare or has a reasonable expectation of receiving Medicare within 30
months.
b. The
IW has a reasonable expectation of receiving Medicare within 30 months if the IW:
i.
Is on Social Security Disability (SSD);
ii. Is
age 62 ½;
iii. Has been
diagnosed with end-stage renal disease;
iv. Has
applied for SSD; or
v. Has
had an adverse decision regarding SSD and has appealed the denial.
c. Information
regarding the processing of the MSA letter may be found in the “Medicare
Reporting Job Aid” located on the LSS CSS Dashboard. The LSS CSS will follow
the instructions outlined in the job aid in conjunction with this policy.
2. C-241
a. The
LSS CSS will request a C-241 when a change is made to the originally requested
settlement amount, terms, or conditions, or if any additional conditions have
not been addressed on the C-240. This can include:
i.
Incarceration language;
ii. Overpayments;
iii. Premiums owed to
BWC;
iv. Disabled
Workers’ Relief Fund allocations.
b. The
LSS CSS will set a task for 14 days from the request.
i.
If the C-241 has not been provided, the LSS CSS will contact the
IW/claimant or their attorney to advise them that the C-240 will be
disapproved.
ii. The
LSS CSS will review the settlement with their LSS IMS’s approval.
c. The
LSS CSS will reinstate the settlement if the required C-241 is received within
30 days of the disapproval.
d. If
the required C-241 is received later than 30 days after disapproval, the LSS
CSS will staff the claim with an LSS IMS or BWC settlement attorney.
3. Disapproval
of the Settlement
a. The
LSS CSS will disapprove the settlement, with their LSS IMS’s consent, when:
i.
Any party to the settlement does not agree or fails to provide any
required information or documentation;
ii. A
member of the SID or Subrogation Department requests disapproval; or
iii. An IW/claimant
dies, (see Section V.Y below);
iv. An
IW/claimant is incarcerated or has a pending/open case where the settlement
attorney does not want to settle.
b. The
LSS CSS will notify the parties of the disapproval and publish a disapproval letter.
After issuing the letter, the LSS CSS will ensure:
i.
All included claims are updated with a copy of the disapproval letter;
ii. The
case issue is updated in the claims management system to “Denied by BWC,” and
the case is closed; and
iii. All suspended
actions are reinstated.
c. In
cases in which the LSS CSS reinstates the C-240 following the disapproval
without the filing of a new application, the LSS CSS will:
i.
Index the document into the original C-240 into the document management
system; and
ii. Build
a new settlement case in the claims management system using the new doc ID with
the reindexed C-240.
4. Approving
the Settlement and Building the Plan
a. To
approve the settlement, the LSS CSS will publish the approval letter.
i.
If the employer was previously in the state fund but is now SI, and a Disabled Workers’ Relief Fund value is placed in the
settlement, the LSS CSS will include language in the approval letter stating
that the SI employer is responsible for paying the Disabled Workers’ Relief
Fund portion of the settlement.
ii. If
Social Security apportionment language is submitted with a C-240 or C-241, or
is requested during negotiations, the LSS CSS will include the following
language on the approval letter: “Social Security apportionment language was
submitted as an attachment to the C-240 or C-241 and is incorporated herein. A
copy is attached.”
iii. The LSS CSS will
produce an approval letter for each claim.
b. When
the approval letter is sent, the LSS CSS will update the claims management
system under “Claims Management,” and:
i.
Go to “Claim Dates”>“Other Claim Dates,” and select from the
drop-down menu:
a) Pending
Settled/Both;
b) Pending
Settled/Indemnity; or
c) Pending
Settled/Medical (only used for AG claims).
ii. Go
to “Claim Type” and select from the drop-down menu:
a) Pending
Settled/Both;
b) Pending
Settled/Indemnity; or
c) Pending
Settled/Medical (only used for AG claims).
iii. When the claim
is settled for indemnity and/or medical related to a specific condition only,
the LSS CSS will update the claims management system under “Claim Maintenance”>“ICD
status,” and select from the drop-down menu:
a) Pending
Settled/Both;
b) Pending
Settled/Indemnity; or
c) Pending
Settled/Medical.
iv. In all
claims, the LSS CSS will update the claim status by going to “Status,” select
the “Change Status Reason,” and from the drop-down menu select:
a) Pending
Settled/Both;
b) Pending
Settled/Indemnity; or
c) Pending
Settled/Medical (only used for AG claims).
c. The
LSS CSS will update the case to “Thirty Day Hold.”
5. Sending
to IC for Review
a. Within
one business day, the LSS CSS will ensure that the following information, as
applicable, is built into the OnBase System and renamed “LSSPAC,” in this
specific order:
i.
Approval letter;
ii. Claim
demographic page(s) from the Settlement Workbook;
iii. C-240;
iv. C-241;
v. The
Social Security apportionment language; and
vi. Employer
30 Day letter.
6. The
LSS CSS will go to the claims management system under “Claim Details,” and
complete an Interface Request for “Settlement Referral to the IC.”
1. For
purposes of tracking the 30-day waiting period, the LSS CSS will consider the
day after the date that is printed on the approval letter as mail day one.
2. If
the 30th day is a weekend or holiday the LSS CSS will consider the next
business day as the 30th day of the waiting period, and payment of the
settlement will be made the following business day.
3. For
purposes of determining overpaid compensation and payment of medical services,
the LSS CSS will consider the date printed on the approval letter as the
effective date of the LSS.
4. The
date printed on the approval letter is the date the LSS CSS will update the
claim to a “settled-pending” status.
5. The
claims management system will automatically generate a notice to the managed
care organization (MCO).
6. The
LSS CSS will never accept waivers of the 30-day waiting period.
7. The
LSS CSS will staff any request for action (outside of medical bill payments
prior to the date of settlement) regarding the settlement after the expiration
of the 30-day waiting period with the BWC settlement attorney.
1.
When the LSS CSS receives notice of the death of a claimant, the LSS CSS
will:
a. Verify
the death by obtaining a copy of the death certificate and related medical
records around the time of death (three months) to confirm the cause of death
and determine whether BWC has good cause to withdraw from the settlement;
b. Ensure
a new R-2 and a C-230 are filed by the representative of the estate; and
c. Obtain
legal documentation from the probate court naming an administrator, executor,
or executrix of the estate.
2. If
the claimant dies before the LSS CSS issues the approval letter, the request
for settlement abates. The LSS CSS will issue a disapproval letter due to
abatement.
3.
If the LSS CSS discovers the death before the expiration of the 30-day
waiting period, the LSS CSS will withdraw from the settlement agreement, and
issue an LSS Withdrawn Notice. Any party may void the settlement for
good cause shown.
a. BWC
will withdraw from the settlement until such time as their investigation is
completed.
b. If
BWC determines that good cause:
i.
Does not exist to void the settlement, the settlement will be reinstated
and paid to the estate of the deceased IW/claimant upon receipt of necessary
documentation.
ii. Exists
to void the settlement, the settlement will be voided.
4. If
the LSS CSS discovers the death of the claimant following the expiration of the
30-day waiting period, but before issuance of the check, the LSS CSS will:
a. Staff
the settlement with the BWC settlement attorney; and
b. As
recommended by the BWC settlement attorney, either void the settlement for good
cause or issue the check payable to the estate of the deceased claimant.
5. If
the LSS CSS discovers the death following the expiration of the 30-day waiting
period and issuance of the check, but before the check is cashed, the LSS CSS
will:
a. Staff
the settlement with the BWC settlement attorney;
b. If
the check has been issued but not yet endorsed at the time of the IW/claimant’s
death, the LSS CSS will seek to have the check returned; and
c. If
the check is returned, the LSS CSS will reissue the check payable to the estate
of the claimant upon receipt of necessary documentation.
6. If
the LSS CSS discovers the death following the expiration of the 30-day waiting
period and after the check has been issued and cashed, the LSS CSS will staff
with the BWC settlement attorney.
7. Settlement
funds are not considered as accrued compensation, and an Application for
Accrued Compensation (C-6) cannot be filed to issue payment.
1.
If potential fraud is identified after the approval letter is issued,
but before expiration of the 30-day waiting period, the LSS CSS will
immediately:
a.
Notify the BWC settlement attorney; and
b.
Issue a LSS Withdrawn Notice to all parties, using the following
language without reference to potential fraud: “Settlement is not in
BWC's best interest at this time."
2. If
potential fraud is identified after the 30-day waiting period, the LSS CSS will
immediately staff the claim with the LSS IMS, BWC settlement attorney, and SID.
1.
If a party to the settlement submits a request in writing to withdraw
from the settlement before the settlement becomes final, the LSS CSS will
confirm that the request was sent to all parties to the settlement (e.g.,
written notice from one of the parties; and indicates copies were sent to the
other parties).
2. If
all parties were notified of the withdrawal, the LSS CSS will issue a LSS Withdrawn Notice, including the reason for the withdrawal (e.g., written
notice from one of the parties; parties no longer in agreement), as outlined in
ORC 4123.65(G).
1.
BWC must send all administrative settlements to the IC for review within
five days, per Ohio Administrative Code (OAC) 4123-3-34.
2.
If the 30-day waiting period expires without the issuance of an IC
approval or disapproval, the LSS CSS will:
a.
Check to make sure the IC referral was made;
b.
Wait one additional business day to make sure that a disapproval was
timely issued by the IC, but failed to attach to the claim; and
c. Acknowledge
that the settlement is approved by the operation of law, if the IC was given
the opportunity to review the settlement.
3. When
the LSS CSS becomes aware during the 30-day waiting period that the IC has
disapproved a settlement as being a gross miscarriage of justice or clearly
unfair, the LSS CSS will immediately notify the LSS IMS or BWC settlement
attorney.
1.
Upon expiration of the 30-day waiting period, the LSS CSS will:
a. Update
the claim status to the appropriate settled status in the claims management
system;
b. If
applicable, update any cases that were suspended to “dismissed,” and update the
case status to “closed;”
c. If
applicable, update open compensation case status to “closed;” and
d. Keep
open any active medical cases.
2. The
LSS CSS will then release the payment.
1.
Family Support: If there is a family support order in the claim, the LSS
CSS will follow the procedures set forth in the Family
Support Orders and Attorney Fees Paid Pursuant to Deductions of Child Support
from Lump Sum Payments procedure and the Training “Family
Support Job Aid”.
2.
Disabled Workers’ Relief Fund Payment: The LSS CSS will issue payment
for the Disabled Workers’ Relief Fund portion of a settlement by a separate
check, and charge that portion to the Disabled Workers’ Relief Fund using the “Disabled
Workers’ Relief Fund LSS” benefit plan in the claims management system.
1.
For injuries that occurred during participation in a BWC vocational
rehabilitation program:
a. A
representative of BWC will sign the C-240 for vocational rehabilitation program
claims.
b. A
representative of BWC that did not sign the C-240 may approve the settlement.
2. Questions
regarding this issue may be staffed with the BWC settlement attorney.
1. The
following BWC staff may authorize a court settlement, up to the amounts
indicated:
|
Amount
|
Authorizing Individual
|
|
Up to $75,000
|
BWC Field Attorneys
|
|
$75,001 to
$150,000
|
BWC Settlement
Attorneys
|
|
$150,001 and above
|
Executive Round
Table, w/ Administrator sign-off
|
2. Processing
the Settlement
a. The
Legal Division will be notified via email by the Attorney General's Office (AG)
of a court settlement agreement being reached.
b. The
Legal Division will forward the email it received from the AG with the subject
line “Court Settlement Notification” to the BWC Claims Services AG LSS
email box for processing the settlement.
c. LSS
staff will do the following upon receipt of the email from the Legal Division:
i.
Check the LSS email box daily for notifications and final paperwork
packets;
ii. Create
a coversheet in the “Regional AG Settlement Worklist” tab on the LSS Dashboard
and assign based on the AG Notification Tracker rotation list; and
iii. Add a note in
the claim if it is the only claim listed on the order. In other circumstances,
the LSS CSS will add the note to indicate receipt of the court settlement
notification.
3. LSS
staff will do the following upon receipt of the email from the Legal Division:
a. Reassign
all the included claims to themselves;
b. Run
a SSN cross-check;
c. Create
a legal case;
d. Under
“Claim Details,” update “Claim Type” and “Claim Dates” to “Settled>Medical,”
and the claim status to “Settled>Medical;”
e. If
exclusions exist, do a claim search by the IW’s customer record to ensure all
claims are identified;
f.
If the claimant has multiple active claims, ensure all claims have a
settlement notification note. This will not be done for any claims that are
listed in the AG email as excluded from the court settlement;
g. Set
a task for 30 days to review for receipt of the signed court documents from the
AG's office;
h. Ensure
that ongoing compensation payments (e.g., TT, PTD) continue until receipt of
the AG paperwork and the claim is placed in the appropriate settled status.
i.
Ensure any compensation paid after the effective settlement date is
declared an overpayment, including any payment for permanent partial disability
unless specifically excluded in the AG email.
4. Upon
receipt of the AG closing documents in the LSS mailbox, LSS staff will:
a. Forward
the email containing the AG closing documents to the assigned LSS CSS;
b. Review
all claims listed on the AG closing documents to determine if any of the claims
need to be redacted prior to being imaged into the imaging system;
c. Ensure
AG closing documents are indexed/imaged into all claims; and
d. Index
the documents if there is more than one claim.
5. Upon
receipt of the email containing AG closing documents the LSS staff will:
a. Read
the settlement agreement for special findings (i.e., confirm claims that are
excluded or settlement of indemnity/medical/condition only);
b. If
exclusions exist, do a claim search by the IW’s customer record to ensure all
claims are identified;
c. Run
SSN verification to determine whether MSA is needed;
d. Create
a legal case for the AG settlement and place it in “pending external” status;
e. If
there are no exclusions, include all State Fund and SI-Bankrupt claims in the
settlement;
f.
Complete and mail a Court Ordered Settlement-BWC Findings of Fact
to all the parties and their representatives to document how BWC is perfecting
the court settlement separately for each employer;
g. Create
a Court Ordered Settlement-BWC Findings of Fact notice for each claim
for each employer with claims included in the settlement and the settlement
agreement in each of the claimant’s files that is being settled. When there are
multiple employers, a copy will be imaged in each claim included in the settlement;
h. Update
medical and indemnity claim settled dates, as appropriate. Injury status codes
will not be updated to “deny or “disallowed,” nor the status of the claim
changed to “disallowed” if previously allowed;
i.
If the settled claim had been disallowed, charge the settlement payment
to the State Fund unless the court-ordered settlement agreement states to
charge it to the Surplus Fund, or other specific terms are described;
j.
If to be charged to the Surplus Fund, notify the Employer Adjustment
Unit by sending them an email and include details regarding the court-ordered
settlement and request the settlement be charged to the Surplus Fund;
k. Enter
the “from” and “to” dates in the payment plan as the date of settlement on the
court order;
l.
Ensure the notes in all claims are updated to reflect the settlement is
a court settlement; and
m. Staff any
request by the claimant to terminate their legal representative, cancel an
authorization to receive payment, and/or any other request to not send payment
to the legal representative with the BWC attorney.
6. The
LSS CSS will recoup from the settlement amount any payments of compensation
made after the effective date of settlement.
7. The
LSS CSS will update any pending cases as “dismissed,” including suspended cases
except when there is a medical or pharmacy case, which will remain untouched.
8. The
LSS CSS will deny any new requests for compensation in the claims included in
the settlement.
9. The
LSS CSS will follow the Overpayment
of Compensation policy and procedure.
10. If the LSS CSS discovers the
claimant's death before the issuance of the check, or after the issuance of the
check but before the check is cashed, the LSS CSS will staff with the BWC
settlement attorney.