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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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R.C.
4123.512; R.C. 4123-54
(J); R.C.4123.65; R.C. 4123.88; O.A.C.
4123-3-34
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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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All Injury Management policies,
procedures, directives and memos regarding LSS that predate the effective
date of this policy and procedure.
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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
II. APPLICABILITY
III. DEFINITIONS
Administrative Settlement
Court Settlement
Conditional Payment Letter (CPL)
Death Benefits
Disabled Workers’ Relief Fund
IV. POLICY
A. Lump
Sum Settlement (LSS) Initiation by Claimant or Employer
B. Settlements
Initiated Pursuant to R.C. 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 Industrial Commission
(IC) Review
J. Death
of the IW/Claimant
K. Family
Support
L. Disabled
Worker’s 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 Specific Safety Requirement (VSSR)
G. Reviewing for Signatures
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 Service 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
(also referred to as the “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 Settlement Procedure
I. POLICY PURPOSE
The purpose of this policy is to ensure that administrative LSSs
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 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.
LSS: 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 BWCIntenttoSettle@bwc.ohio.gov or faxed to BWC Legal at 614-621-3395.
b. If the
notice of intent to settle is not submitted on the C-512 form, 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
form 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.
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 Custody, Guardianship and Power of Attorney 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
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 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 an Amended Settlement Agreement
and Release (C-241) if;
a. A change
is made to the originally requested settlement amount, terms, or conditions as
submitted on the C-240.
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 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 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. Please see the Family Support Job Aid.
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 LSS 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;
2. The
directions provided in the LSS Standard Notes document; and
3. 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.
b.
Determine if all the information and documentation required have
been submitted.
a)
If any required information or documentation is missing, the LSS
CSS will notify the claimant and request the required
documentation/information.
b)
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 h 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 for further information.
F.
Reviewing for Violation of Specific Safety Requirement (VSSR)
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 procedures in
the VSSR procedural section of this
document.
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 provision 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.
i.
If BWC has transferred liability, the acquiring (combined risk)
employer’s signature on the application is required.
ii. 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 needs to 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 need to staff it 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”, and 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.
ii. The
employer is not in compliance with ORC 4121.35 because of one of the following:
a) A lapsed
policy;
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 letter
(using the “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 (or the employer’s attorney’s) signature is missing:
i.
If their signature is required, 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. It’s important to note a letter
would need to be sent, including but not limited to the following situations:
a) All state
agency claims.
b) A
retrospectively rated employer’s claims that are within their 10-year period of
impact.
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.”
c. If
the employer’s signature is not required and they have not signed the C-240,
but are still doing business in Ohio, the “Employer 30 Day Letter for Lump Sum
Settlement” will be sent to notify them.
d. 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 diary/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 the IW/claimant properly signed the authorization on the C-240,
or the claim contains a valid C-230.
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;
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.
c. 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.
d. 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 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.
3. If
the IW/claimant/EOR does not agree, the LSS CSS will disapprove the settlement
as not in the best interest of the parties.
4. If
the IW/claimant/EOR agrees, the C-241 will reflect the agreement, and the LSS
CSS will continue to process the settlement application.
5. The
LSS CSS will add BWC Accounts Section as an Alternate Payee on the Participants
tab of the Claims Management system.
6. The
LSS payment will be allocated as follows:
a. Check
1, to the IW and their attorney;
b. Check
2, to BWC Accounts.
7. 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.
3. If
SID determines that the settlement should be disapproved, the LSS CSS will
notify the BWC settlement attorney.
4. 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 Factors (NPV)
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 occupational
disease (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 net present value, 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 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.
T.
Evaluating Future Indemnity
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. If
the C-242, C-243, or C-245 and medical records are not submitted with the
C-240, the LSS CSS may, after staffing with the LSS IMS, disallow the C-240.
BWC may reinstate if additional documentation is received within 30 days.
iii. The C-242 must
be signed by both the IW and their attorney, if they are represented.
iv. The IW
must sign the C-243 and C-245.
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:
a) Educational
level;
b) Work
history;
c) Literacy
skills;
d) Other
factors such as learning disabilities, English as a second language,
supervisory skills or special training.
ii. 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 PTD Disabled Workers’
Relief Fund worksheet to determine life expectancy and NPV.
ii. PTD:
The LSS CSS will 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). The LSS CSS will then 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.
d. Disabled
Workers’ Relief Fund
i.
Where potential Disabled Workers’ Relief Fund is involved in a PTD
settlement, the LSS CSS will complete and attach a PTD/ Disabled Workers’
Relief Fund worksheet to the Settlement Workbook.
ii. 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.
iii. The LSS CSS will
only deduct Disabled Workers’ Relief Fund overpayments from the Disabled
Workers’ Relief Fund portion of a settlement.
iv. 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.
e. VSSR
i.
The LSS CSS may determine if the employer has settled its VSSR liability
by staffing the claim with a BWC settlement attorney.
ii. If
the employer has not separately settled its VSSR liability with BWC:
a) BWC
may settle the underlying claim after the VSSR is settled or disapproved; or
b) If the
parties request that the VSSR be settled along with the underlying claim:
i.
The LSS CSS will evaluate the claim without consideration of the VSSR,
which the employer will pay.
ii.
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.
iii.
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
BWC LSS approval letter.
iv.
If the parties do not wish to settle the VSSR along with the underlying
claim, the LSS CSS will disapprove the C-240.
v.
If the employer’s liability for the claim, including the VSSR has been
settled through BWC’s adjudicating committee, the LSS CSS:
i.
Will evaluate and negotiate the VSSR component of the settlement as if
the employer is out of business; or
ii. Must
document the settlement of employer liability regarding the VSSR as part of the
settlement justification.
c) When
the employer is still in business and a VSSR has not been awarded:
i.
The employer is responsible for the settlement and payment of the VSSR.
ii.
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.
d) When the
employer is out of business and VSSR has not yet been awarded:
i.
The LSS CSS will staff with a BWC VSSR attorney.
ii.
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.
iii.
Once the IC approves the VSSR settlement, the LSS CSS may proceed with
settling the underlying claim.
e) If
an employer settles the VSSR, then goes out of business before the VSSR is
paid:
i.
The LSS CSS must staff with the BWC VSSR attorney.
ii.
BWC may request that the VSSR settlement be vacated and the VSSR
application be reopened by the IC.
f.
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 wage loss (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 procedures 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
a.
LSS CSS will consider percentage of permanent partial disability (%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
a.
The LSS CSS will only factor in a value for temporary partial (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 PTD 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 procedures 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 diary/task for 30 days from the date of the request for the
C-242 and required documentation.
d. 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. 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.
i.
Identification of common ground between the parties, such as projections
of benefits or treatment that both parties can agree upon; and
ii. Determination
of 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.
Document that an offer was made in claim notes. Negotiation amounts are
not to be documented in the claims management system.
ii. Document
the details of the ongoing negotiation, offers, counteroffers, and amounts in
the Settlement Workbook on the summary page.
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 family support orders or
overpayments that will affect the final settlement amount. The LSS CSS will
ensure the parties are aware of any 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 it 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 “Medicare Set-Aside Letter” (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. Amended
Settlement Agreement and Release (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:
i.
Incarceration language;
ii. Overpayments;
iii. Premiums owed to
BWC;
iv. Disable
Workers’ Relief Fund allocations.
b. The
LSS CSS will set a task for 14 days from the request. 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. 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 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.
c. The
LSS CSS will publish an “LSS Disapproval Letter.” After issuing the letter, the
LSS CSS will ensure:
i.
All included claims are updated with a copy of the “LSS 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.
d. 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;
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.
b. When
the approval letter is sent, the LSS CSS will update the claims management
system under “Claims Management” and:
i.
Go to “Claims 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).
c. 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:
i.
Pending Settled/Both;
ii. Pending
Settled/Indemnity; or
iii. Pending
Settled/Medical.
d. 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:
i.
Pending Settled/Both;
ii. Pending
Settled/Indemnity; or
iii. Pending
Settled/Medical (only used for AG claims).
e. The
LSS CSS will update the case to “Thirty Day Hold”.
f.
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.
g. 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.
h. The
LSS CSS will produce an approval letter for each claim.
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.
Settlement Approval Letter;
ii. Settlement
Workbook Claim Demographic page(s);
iii. C-240;
iv. C-241;
v. The
Social Security apportionment language;
vi. “Employer
30 Day letter.”
b. 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 track 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 whether BWC has good cause to withdraw from the settlement;
b. Ensure
a new Claimant Authorized Representative (R-2) form and an Authorization to
Receive Payment (C-230) form 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 “LSS 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.
d. BWC
will withdraw from the settlement until such time as their investigation is
completed.
e. If
BWC determines:
i.
Good cause 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. Good
cause 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, BWC will seek to have the check returned.
c. If
the check is returned, BWC 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 a 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” letter 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:
a.
Issue a “LSS Withdrawn Notice”; and
b.
On the “LSS Withdrawn Notice”, list 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
5 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. 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.
If applicable, update any cases that were suspended to “dismissed” and update
the case status to “closed.”
2. If
applicable, update open compensation case status to “closed.”
3. Any
active medical cases should remain open.
4. Update
the claim status to the appropriate settled status, and;
5. 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.
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’s 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
the “Claim Details Tab”, 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., temporary total disability, permanent
total disability) 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” or 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 with the
BWC attorney 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.
n. The
LSS CSS will recoup from the settlement amount any payments of compensation
made after the effective date of settlement.
o. 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.
p. The
LSS CSS will deny any new requests for compensation in the claims included in
the settlement.
q. The
LSS CSS will follow the procedures in the Overpayments policy and procedures.
r. 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.