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Policy and Procedure Name:
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Lump Sum Settlement
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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.4123.65; R.C. 4123.88; O.A.C. 4123-3-34
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Effective Date:
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02/03/22
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Approved:
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Ann M. Shannon, Chief of Claims Policy and Support
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Origin:
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Claims Policy
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Supersedes:
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All Injury Management policies, procedures, directives and
memos regarding Lump Sum Settlement that predate the effective date of this
policy ands procedure.
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History:
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Previous versions of this policy are available upon
request
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I. POLICY PURPOSE
II. APPLICABILITY
III. DEFINITIONS
IV. POLICY
A. It is the policy of the
BWC that lump sum settlement (LSS) may be initiated by an employer or a
claimant:
B. Settlements Initiated
Pursuant to R.C. 4123.512
C. Submission of the
Settlement Agreement and Application for Approval of Settlement Agreement
(C-240), including settlement pursuant to R.C. 4123.512.
D. Signatures
E. BWC Authority
F. Disapproval of a
Settlement Application
G. Medicare Set-Aside
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 Claimant
K. Disabled Worker’s
Relief Fund (DWRF), Family Support, and Fraud
L. Self-Insured (SI)
Settlements
M. Settlement of a claim
does not prevent the BWC from taking corrective action, including recovery of
benefits against a physician of record, a vendor, a claimant or an employer.
N. Court Settlement: The
BWC will process a court settlement in compliance with the terms of the
agreement and as directed by the court.
V. PROCEDURE
A. General Claim Note and
Documentation Requirements
B. Task Received by
Regional Settlement Supervisor
C. Reviewing for Pending
Court Appeals
D. Reviewing for
Subrogation
E. Reviewing for Violation
of Specific Safety Requirement (VSSR)
F. Reviewing for
Signatures and Obtaining Signatures
G. Reviewing for Required
Language
H. Reviewing for
Authorization to Receive Workers’ Compensation Payment When the Claimant is
Represented by an Attorney
I. Reviewing for Other
Open Claims
J. Issues Affecting
Settlement
K. Overpayments
L. Lump Sum Advancements
M. Unpaid Premiums When the
Claimant is the IW and the Employer
N. Insurance Services
Office (ISO)
O. Fraud
P. Valuating the
Settlement
Q. Probability Factors
R. Medical Benefits/Costs
S. Valuating Future
Indemnity
T. Obtaining Authority,
Negotiation and Decision
U. Finalizing and Closing
the Settlement
V. Thirty-Day Waiting
Period (also referred to as the “cooling off period”)
W. Death of the Claimant
X. Potential Fraud
Discovered After Approval
Y. Withdrawal from
Settlement
Z. IC Approval or
Disapproval
AA. Processing upon Expiration
of the 30-day Waiting Period
BB. Payment Issues
CC. Injuries Sustained in a
Vocational Rehabilitation Program
DD. Court Settlement Procedure
The
purpose of this policy is to ensure that administrative lump sum settlements
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 lump sum settlement applications.
Administrative
Settlement: A settlement of the
medical and/or indemnity portion(s) of a workers’ compensation claim(s)
pursuant to R.C. 4123.65.
Claimant: For purposes of this policy, one who seeks the lump sum
settlement of medical and/or indemnity benefits - typically the injured worker
or a dependent receiving death benefits.
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 IW
for treatment that may relate to the conditions in the claim.
Death
Benefits: Benefits payable pursuant
to R.C. 4123.59 and R.C. 4123.60 to a dependent of an injured worker who has
died as a result of an injury or occupational disease received in the course
of, and arising out of, the injured worker’s employment.
Disabled Workers’ Relief Fund (DWRF): A special fund that supplements the benefits
received by permanently and totally disabled injured workers 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).
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 lump sum settlement agreement may be
entered into at the administrative 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, leaving certain conditions, compensation and/or benefits,
or combinations of conditions, compensation and/or benefits open for future
use.
Parties to a claim:
The injured worker (IW) or IW’s dependent, the employer and BWC.
1. At any
time during the life of the claim; or
2. Pursuant to R.C. 4123.512, with the filing of a notice of
intent to settle.
1. It is the
policy of the BWC, that notices of intent to settle pursuant to R.C. 4123.512
must be filed on a Notice of Intent to Settle (C-512) form.
a. The C-512
must be faxed to BWC Legal at (614) 621-3395 or mailed to the address provided
on the form.
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 of R.C. 4123.512.
2. It is the
policy of BWC that BWC Legal 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 shall 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 shall have 14 days from the date the
tentative agreement was reached to submit the C-240 with the appropriate
signatures.
3. It is the
policy of the BWC that settlements initiated pursuant to R.C. 4123.512 must be
completed and paid (if applicable) prior to expiration of the extended
statutory timeframe provided by R.C. 4123.512 for appeal.
1. It is the
policy of BWC, to avoid delays in processing or the possibility of disapproval,
a C-240 (whether filed to initiate the settlement or following the filing of a
C-512):
a. Must 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; and
c. Include
supplemental forms and/or documentation as indicated on the C-240.
2. BWC will notify the claimant or the claimant’s 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 fourteen (14) days after notification by BWC.
3. An
employer is prohibited from denying or withdrawing consent to a settlement
application if:
a. The claim
is no longer within the employer’s experience for impacting its future
premiums, and;
b. The employee
is no longer employed by the employer.
4. It is the policy of BWC, in order to maintain proper
confidentiality, that a C-240 shall only contain the name and related claims of
one employer. If the settlement agreement is seeking to settle claims involving
different employers, a separate C-240 must be submitted for each employer.
1. The claimant or the claimant’s attorney must sign the
C-240.
a. If the claimant’s attorney signs the C-240 on behalf of
the claimant, the claimant must sign and file an Amended Settlement
Agreement and Release (C-241). The claimant’s signature must be on
either the C-240 or a C-241.
b. If the 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).
c. 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. The employer or the employer’s attorney must sign the
C-240 unless one of the following exceptions apply, pursuant to R.C.
4123.65(A):
a. The employer is no longer doing business in Ohio;
b. The claim is no longer in the employer's industrial
accident or occupational disease experience as provided in R.C. 4123.34(B) and the claimant is no longer employed by that
employer; or
c. The
employer has failed to comply with R.C. 4123.35.
3. If the employer’s signature is required, but missing, BWC
will send the employer notification 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.
4. If the employer’s signature is not required, but the
employer is still doing business in Ohio, BWC will send the employer notice of
the filing of the C-240 and provide the employer 30 days to respond.
a. If the employer does not respond within 30 days, BWC will
process the settlement application without the employer’s signature.
b. 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. If they are, BWC will disapprove the
settlement application. If they no longer work for the employer the employer
will be advised they cannot object per HB81.
5. When DWRF 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 self-insured. BWC will pay and bill
self-insuring employers for any DWRF benefits allocated in a settlement.
6. 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 the policy of BWC 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 (as opposed to the filing of a notice of intent to settle), 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
re-negotiate the agreed settlement amount, considering the following:
a. Is the
agreed upon settlement amount more than BWC’s calculated value of the claim,
and are the parties willing to permit BWC to negotiate a lesser amount on their
behalf;
b. Does an
“arm’s-length” relationship exist between the parties so the settlement outcome
is not unfairly influenced (e.g., the injured worker 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; and
e. Can the
settlement be reasonably justified?
1. It is the
policy of the BWC 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;
c. The Special Investigations Unit (SIU) or the Subrogation
Department has requested disapproval, and a BWC settlement attorney has agreed
to the disapproval; or
d. BWC has requested information, but a party has not timely
submitted the requested information.
1. Prior to approving a settlement agreement, BWC will
require an IW/claimant to establish a Medicare Set-Aside and provide BWC a
signed “Medicare Secondary Payer Act Letter” (MSPA letter) when:
a. A full and
final settlement is valued at $10,000 or greater and the IW/claimant is on
Medicare or has a reasonable expectation of receiving Medicare within thirty
(30) months because the IW:
i. Is
on Social Security Disability (SSD);
ii. Is
age 62 ½ or older;
iii. Has
applied for SSD;
iv. Has had an
adverse decision regarding SSD but has appealed the denial; or
v. Suffers
from end-stage renal failure.
b. A full and
final settlement is valued at $100,000 or greater, even if the IW/claimant is
not on Medicare and does not have a reasonable expectation of receiving
Medicare within 30 months.
2. The MSPA
letter must:
a. Contain
the signature of the IW/claimant;
b. Require
the IW/claimant to acknowledge and agree that a Medicare set-aside trust fund
will be established for all claim-related benefits; and
c. Provide
the name of the bank or financial institution where the account will be
located.
3. The BWC
will disapprove the settlement application if the MSPA letter is not provided
within the requested timeframe (typically 14 days from the date of the
request).
1. It is the
policy of the BWC that parties to an administrative settlement must execute an
Amended Settlement Agreement and Release (C-241) when any of the following
apply:
a. The C-240
filed was not the most recent version and the BWC did not request a new C-240
to be filed; or
b. A change
is made to the originally requested settlement amount, terms or conditions as submitted
on the C-240; or
2. Claims
services staff shall staff any variation or exceptions with the above list with
their supervisor and/or the legal department.
1. It is the
policy of the BWC to send a letter notifying all parties of BWC’s 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. On-going
compensation and medical benefits are suspended effective the mailing date of
the approval letter.
2. Withdrawal
from Settlement
a. Any party
may withdraw from a settlement prior to the expiration of the 30-day waiting
period.
b. The
withdrawal must be in writing and sent to all other parties to the settlement.
c. The
BWC must receive the withdrawal request prior to the expiration of the 30-day
waiting period, regardless of the date the withdrawal is mailed or sent.
3. IC Review
of Settlements
a. The BWC
must send all administrative settlements to the IC
for review.
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
claimant dies prior to BWC approval of the settlement, the BWC will disallow
the settlement as abated by death.
2. If the
claimant dies during the 30-day waiting period:
a. Any party
may void the settlement for good cause shown; and
b. If the BWC
determines that good cause does not exist to void the settlement, the
settlement will be reinstated and paid to the estate of the deceased claimant
upon receipt of necessary documentation. Necessary documentation to complete
the settlement includes, but is not limited to:
i. Probate
estate documents from a Probate Court naming an Administrator Executrix or
Executor of the claimant’s estate;
ii. An
updated R-2 and C-230 from the claimant’s counsel indicating they represent the
estate of the claimant;
iii. The
claimant’s death certificate; and
iv. Medical records
surrounding the time of death.
3. If the
claimant dies after the 30-day waiting period, the settlement becomes final.
a. If the
warrant has been issued but not yet endorsed at the time of the claimant’s
death, the BWC will seek to have the warrant returned; and
b. If the the
warrant is returned, the BWC will reissue the warrant payable to the estate of
the claimant upon receipt of necessary documentation. Necessary documentation
to complete the settlement includes, but is not limited to:
i. Probate
estate documents from a Probate Court naming an Administrator Executrix or
Executor of the claimant’s estate;
ii. An
updated R-2 and C-230 from the claimant’s counsel indicating they represent the
estate of the claimant;
iii. The claimant’s
death certificate; and
iv. Medical records
surrounding the time of death.
4. In order
for the claimant’s legal representative to receive the LSS warrant, the
claimant must:
a. File an
Authorization to Receive Workers’ Compensation Check (C-230) form; or
b. Provide
authorization on the C-240.
1. Any LSS
amount the 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. The BWC’s
subrogation recovery rights are not impaired by an LSS.
3. A finding
of fraud at any time permits the BWC to rescind the LSS agreement, seek and
recoup administrative overpayments due to the finding of fraud, and refer the
claimant for criminal prosecution, if and when appropriate.
1. Settlements
with a self-insuring 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. BWC staff
shall refer to the Standard
Claim File Documentation and Altered Documents policy and procedure for
claim note and documentation requirements; and
2. Shall
follow any other specific instructions for claim notes and documentation
included in this procedure.
3. Claims
services staff shall recognize that “claimant” as referenced in this procedure
may refer to an injured worker (IW) or if the IW is deceased, to a dependent or
an estate. Some steps will only apply if the claimant is the IW; in these
circumstances, the term “IW/claimant” is specifically used.
4. Claims
services staff shall utilize and maintain the “Settlement Workbook” as required
by Claims Operations management and as instructed in this procedure.
1. When the
regional settlement supervisor receives a task in the claims management system,
indicating the filing of an Application for Settlement Agreement and
Application for Approval of Settlement Agreement (C-240):
a. The
regional settlement supervisor shall:
i. Review
the C-240; and
ii. Assign
the C-240 to the appropriate lump sum settlement (LSS) region as needed
(regions are determined by Claims Operations management).
2. The
regional settlement supervisor in receipt of the C-240 shall assign the C-240
to an LSS claims service specialist (CSS).
3. Ensure a
copy of the C-240 is imaged into each claim.
4. Upon
Assignment of the claim, the LSS CSS shall:
a. Ensure the
C-240 filed is the most recent version.
i. If
the claimant has not filed the most recent version of the C-240 the LSS CSS
shall determine if all the information and documentation required has been
submitted.
ii. If
any required information or documentation is missing, the LSS CSS shall notify
the claimant and request the required documentation/information.
iii. If the
required documentation/information is not received within fourteen (14) days
the LSS CSS will review with their supervisor for possible disapproval.
b. The LSS
CSS may request the claimant re-submit the settlement request using the most
recent C-240, if doing so is more efficient than requesting the claimant to
submit missing information or documentation separately.
5. Any
information additionally requested by the BWC (e.g. court records, medical
documents, business licensure, marriage records, etc) or submitted to the BWC
and related to the calculation of the claimant’s life expectancy, should be
imaged by BWC in a confidential folder.
6. Notify the
disability management coordinator (DMC), if the IW/claimant is participating in
a vocational rehabilitation program;
7. Ensure a
separate C-240 is filed for each employer with claims being included in the
settlement agreement (a single C-240 shall not include claim number(s)
involving another employer or the employer’s name(s);
8. 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.
9. Review the
claims for pending applications.
a. Other than
as provided in section IV.B.4.b below, the status of pending applications shall
be changed to “Suspend”.
i. 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).
ii. If
there is a pending C-92, the LSS CSS shall also contact the C-92 team to stop
processing the application.
iii. When an
exam is scheduled, the LSS CSS shall also contact the exam scheduling region to
suspend the exam, unless it is related to temporary total disability (TT).
b. Continue
to process:
i. Permanent
total disability (PTD);
ii. TT
for extension of benefits only;
iii. Wage loss
(WL) cases for extensions of benefits only;
iv. Alternative
dispute resolutions (ADR);
v. Requests
for medical treatment;
vi. Actions related
to determining maximum medical improvement (MMI); and
vii. Any other application
or issue whose processing, the IMS or settlement attorney determines may impact
the advisability or value of the settlement.
c. If a
new application or request is received following the filing of the C-240 the
LSS CSS shall create a new case for the application and place it in “Suspend”
status;
i. Create
a “Legal” case in all claims included on the C-240 and any subsequent claims
included in the settlement:
a) Identify
the issue in the case as either an “administrative” settlement, “512 Intent”
settlement or “court” settlement;
b) Update to
the appropriate issue status, including the thirty (30) day hold when
appropriate;
c) Add the
appropriate activity to the case and fully update it once the settlement is
complete.
1. The LSS
CSS shall research for all claims filed by the IW/claimant to ensure there are
no pending court appeals.
a. Indicators
of court appeals are documents titled “AG referral”, “court appeal”, or “court
document”.
b. The LSS
CSS may consult with the BWC settlement attorney if the status of an appeal is
unclear.
2. If there
appears to be an outstanding court appeal, the LSS CSS shall:
a. Notify the
claimant or the claimant’s attorney; and
b. Advise the
claimant or claimant’s attorney that the claimant may choose to pursue either
the administrative settlement or the court case, but not both;
i. If
the claimant chooses to pursue the court case, the LSS CSS shall 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. If
the claimant chooses to pursue the administrative settlement, the LSS CSS shall
request from the claimant a date-stamped dismissal entry from the court.
iii. If a
dismissal entry is not received within 14 days of a request, the LSS CSS may
disapprove the C-240.
1. The LSS
CSS shall 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 shall notify the BWC subrogation
contact assigned to the service office and ask whether the settlement can
proceed.
3. The
subrogation contact shall 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 shall:
i. Notify
the parties that all parties do not agree to the settlement. The claimant or
the claimant’s attorney shall be contacted; and
ii. Disapprove
the settlement, indicating that all parties do not agree to the settlement.
b. If the
subrogation contact indicates that the settlement may proceed, the LSS CSS
shall keep the subrogation contact informed of the status of the settlement.
4. The LSS
CSS shall reference the Subrogation policy for further information.
1. The LSS
CSS shall review all claims to determine if there is a pending VSSR
application. If there is a pending VSSR application, the LSS CSS shall follow
the procedures in the VSSR procedural section of this document.
1. The LSS
CSS shall ensure that the C-240 contains the signature of the claimant or the
claimant’s 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
eighteen (18) months before the settlement application date.
b. Power of
Attorney (POA) and Guardian: If the settlement involves a claimant that
assigned power of attorney to another individual or the claimant has a guardian,
the LSS CSS shall 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 shall presume the custodial parent is the legal
guardian;
ii.
The POA or guardian signs his or her own name on the C-240 and includes
“POA” or “guardian” by the signature; and
iii. There
is compliance with any other applicable provision of the Custody,
Guardianship, Power of Attorney and Incapacitation policy and procedure.
c. Multiple
Claims and Employers: If there are multiple claims being settled with more than
one employer, each employer must sign the C-240 that contains the claims
involving that employer (unless an employer signature exception applies).
d. Rehabilitation
Injury Claim: If the IW/claimant was injured while participating in a
vocational rehabilitation plan through the BWC, a specified BWC designee shall
serve as the employer designee for signing the C-240.
e. Disabled
Workers’ Relief Fund (DWRF): When DWRF 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 self-insured (SI).
f. SI
employer in final-cancel status but still in business: If the SI employer’s
policy is in final-cancel status, but the employer is still in business, the
employer must sign.
g. Employer’s
business sold: If an employer’s business has been sold, the LSS CSS shall
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.
2. Exceptions
to Employer Signature Requirement
a. Employer
no longer doing business in Ohio: The LSS CSS shall not require the employer’s
signature if the employer is no longer doing business in Ohio. If it appears
the employer is no longer doing business in Ohio, but the employer’s policy is
not in final-cancel status, the LSS CSS may consider an employer out of
business if all of the following are true:
i. The
employer’s policy been lapsed for more than one year;
ii. The
employer’s mail has been returned to BWC;
iii. All the
identified employer phone numbers are non-working; and
iv. The Secretary
of State’s website indicates the employer is out of business.
b. An
employer’s signature is not required in cases which the employer is prohibited
from denying or withdrawing consent to a settlement application. To meet this
condition, claims services staff shall 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.
c. Employer
doing business In Ohio: The LSS CSS shall 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/claimant is no longer employed by that employer and the claim is
outside the employer’s experience.
a) In
general, claims do not go out of a state agency employer’s experience.
b) A
retrospectively rated employer has a ten-year experience period; or
ii.
The employer is not in compliance with R.C. 4121.35 because of one of
the following:
a) A
lapsed risk;
b) A
cancelled risk;
c) No
coverage on the date of injury.
3. Obtaining
Signatures
a. If the
claimant’s (or claimant’s attorney’s) signature is missing, the LSS CSS shall
contact the claimant or the claimant’s 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 shall continue to process the
settlement application.
ii. If
the claimant does not submit the required signature, the LSS CSS will review with their supervisor for possible disapproval
and use the “LSS Disapproval” letter.
b. If the
employer (or the employer’s attorney’s) signature is missing:
i. The
LSS CSS shall send the “Employer Signature Letter for C-240” to the employer,
requesting that the signature be provided within 14 days of the mailing date.
ii. The
LSS CSS shall 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 shall disapprove
the settlement using the “LSS Disapproval Letter”.
c. If
one of the employer signature exceptions applies and the employer signature has
not been provided, but the employer is still doing business in Ohio, the LSS
CSS shall send the employer the “Employer 30 Day Letter for Lump Sum
Settlement”.
d. If the
employer does not respond within 30 days of the date of the letter, the LSS CSS
shall process the settlement application without the employer’s signature.
1. The LSS
CSS shall ensure that the C-240 includes a statement or a separately provided
written statement, which provides a description of the circumstances of the
settlement and why the proposed settlement is deemed desirable.
a. The LSS
CSS shall ensure the statement provided does not waive claimant liability for
fraud, 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 shall staff the
issue with the BWC settlement attorney.
2. If the LSS
IMS or Settlement Attorney determines that the statement is not acceptable, the
LSS CSS shall advise the claimant to submit a new C-240.
a. The LSS CSS
shall 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
claimant returns an adequate, new C-240, the LSS CSS shall process the
settlement.
c. If
the claimant does not return the new C-240, the LSS CSS shall disapprove the
settlement application.
1. If the LSS
CSS is aware that an attorney represents the claimant, the LSS CSS shall ensure
that the claimant properly signed the authorization on the C-240 or that the
claim contains a valid Authorization to Receive Workers’ Compensation
Payment (C-230).
2. If the
claimant has not signed the authorization, (the attorney is not authorized to
sign on the claimant’s behalf) and there is not a valid C-230 on file, the LSS
CSS shall contact the claimant or the claimant’s attorney to determine the
claimant’s intention regarding distribution of any potential payment.
1. The LSS
CSS shall identify all open claims filed by the IW/claimant.
2. The LSS
CSS shall encourage, but cannot require, the claimant to include all claims in
the settlement.
3. 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.
4. The LSS
CSS shall document in the Settlement Workbook the reason the LSS CSS excluded
any claims from the settlement.
1. Incarceration
a. If there
is evidence in the claim indicating the claimant may be incarcerated, the LSS
CSS shall investigate further to verify the claimant’s status.The LSS CSS shall
disapprove the settlement application if:
i. The
date of injury is on or after August 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 August 22, 1986, the LSS CSS shall consult with a BWC
settlement attorney to determine if the settlement is in the best interest of
BWC.
1. The LSS
CSS shall review the claim to determine if there is an outstanding overpayment
in any of the IW/claimant’s claims.
2. If there
is an overpayment, declared or in dispute, the LSS CSS shall recoup one-hundred
percent (100%) of the overpayment from the settlement amount, unless a BWC
settlement attorney approves an adjustment or waiver in writing.
3. The LSS
CSS shall 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.
4.
The LSS CSS shall only recoup DWRF overpayments from DWRF awards.
Any DWRF overpayments shall be identified on the C-240 or C-241. DWRF
Overpayments can be moved to a regular overpayment in the system if the
settlement is an AG settlement or DWRF was allowed, paid and later overturned
and denied.
5. The LSS
CSS may declare a claimant overpaid if the overpayment is the result of
continued payments after the effective settlement date.
a. The LSS
CSS shall issue an “Overpayment Created after Settlement” letter to declare the
overpayment.
b. A BWC
order shall not be issued for an overpayment in these circumstances.
6. Waiver of
Overpayment
a. If there
is a waiver of an overpayment in writing from the Legal Department or AG Order,
and the source claim of the overpayment is settled, then the LSS CSS shall
request Customer Service Support remove the overpayment 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 shall leave the overpayment on the claims management system for
recoupment at a later date, unless otherwise instructed.
1. The LSS
CSS shall offset any settlement award by previous lump sum advancements that
are outstanding at the time of settlement. See the Lump Sum Advancement
policy and procedure for instructions on calculating a lump sum advancement.
2. The LSS
CSS may staff these issues with their supervisor or the Legal Department.
1. The LSS
CSS shall identify if the IW/claimant is also the employer of record (EOR). If
so, the LSS CSS shall 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 shall 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 shall disapprove the settlement as
not in the best interest of the parties.
4. If the
IW/claimant/EOR agrees, the C-241 shall reflect the agreement and the LSS CSS
shall continue to process the settlement application.
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. The LSS
CSS shall make the BWC settlement attorney aware of any “hits” when an ISO
report has been obtained.
1. If the LSS
CSS suspects fraud in a claim at any point in the settlement process, the LSS
CSS shall notify the Special Investigations Unit (SIU).
2. SIU 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 SIU
determines that the settlement should be disapproved, the LSS CSS shall notify
the BWC settlement attorney.
b. If SIU
agrees to the settlement process proceeding, the LSS CSS shall ensure that the
BWC settlement attorney and SIU are kept informed of the status of the
settlement.
1. Net
Present Value Factors (NPV)
a. The LSS
CSS shall reference the current year’s NPV chart available on COR, to calculate
NPV when PTD or death benefits are being considered.
i. If
the PTD value is based on an injury, as opposed to an occupational disease
(OD), The “PTD non-OD” category shall 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
shall 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
shall use the “PTD-OD Lung” category.
iv. When evaluating
death claims, the LSS CSS shall use the “Survivor” category.
2. All NPV
totals are subject to probability factors.
3. The LSS
CSS shall not reduce medical benefits to net present value, unless after
staffing with the supervisor and BWC settlement attorney it is agreed unusual
circumstances exist justifying such a reduction.
1. The LSS
CSS shall use probability factors to:
a. 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 TT or
percentage permanent partial (%PP) disability compensation; and/or
b. In the
case of an allowed PTD, death, or pre-PTD claim, to estimate the likelihood of
the claimant reaching full life expectancy and, for a pre-PTD claim, the
likelihood that PTD will be awarded.
1. The LSS
CSS shall consider IW/claimant lifestyle, co-morbidities, prognoses and aging
when projecting future treatment types and frequency. A probability factor
shall be used to estimate likelihood of the IW/claimant obtaining a particular
type of medical service in the future.
2. The LSS
CSS shall ensure that 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 shall ensure that all projected periods of compensation are supported by
medical documentation.
b. TT shall
not be factored into the LSS value in claims with a date of injury prior to
11/15/1973 if the IW/claimant has received the maximum amount of TT.
c. The
LSS CSS shall consider the following when determining the amount of expected TT
compensation:
i. The
TT the IW/claimant 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 shall ensure that a Medical History and Disclosure
(C-242), a PTD-Death Settlement Acknowledgement and Waiver Full and Final
Settlement (C-243) and the two most recent years of medical records are
submitted.
ii.
If the C-242, C-243 and medical records are not submitted with the
C-240, the LSS CSS may, after staffing with IMS disallow the C-240.
iii. The
C-242 must be signed by both the IW/claimant and the IW/claimant’s attorney, if
the IW/claimant is represented.
iv. The
LSS CSS shall staff any questions regarding the extent of medical records
required with the BWC settlement attorney.
b. Evaluating
the Likelihood, the IW/Claimant Will Be Granted PTD (Pre-PTD):
i. The
LSS CSS shall consider the following factors when evaluating the likelihood of
the IW/claimant being granted PTD:
a) Claim
history that impacts the IW/claimant’s ability to return to work;
b) Medical
history and current treatment indicating the status of the IW/claimant’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.
ii. Any
other factors that impact ability and likelihood of the IW/claimant’s returning
to work.
c. Applying
Probability Factors and NPV
i. PTD:
The LSS CSS shall 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 shall then apply a probability factor that
reflects the impact of these conditions on the present value of a PTD
settlement. Example of a PTD calculation:
a) The
IW/claimant is 65 years old, with several co-morbidities indicating a 70%
likelihood of the IW/claimant living to full life expectancy. The PTD rate is
$400.
b) The NPV
factor for a 65 year old is 528.
c) $400 × 528
× .70 = $147,840. This is the PTD value.
ii. When
PTD Has Not Been Previously Granted (Pre-PTD): The LSS CSS shall apply the
appropriate NPV factor relative to the IW/claimant’s co-morbidities, along with
the probability that the IW/claimant will obtain PTD. Example of a pre-PTD
valuation:
a) 100% net
present value of the PTD is $211,200.00 (assuming a PTD rate of $400 x 528 as
the NPV factor);
b) Due to
co-morbidities, the LSS CSS estimates the IW/claimant has a 70% chance of
living to his life expectancy.
c) The LSS
CSS also finds that the IW/claimant has a 50% chance of receiving PTD.
d) The
calculation is $211,200 ×.70 (life expectancy) × .50 (PTD probability) =
$73,920.00 (value of PTD);
d. Disabled
Workers’ Relief Fund (DWRF)
i. Where
potential DWRF is involved in a PTD settlement, the LSS CSS shall complete and
attach a DWRF worksheet to the Settlement Workbook.
ii. Unless
otherwise approved by the BWC settlement attorney, the LSS CSS shall adjust the
DWRF calculation based on the same probability factors that are used for the
overall PTD calculation.
iii. The LSS
CSS shall only deduct DWRF overpayments from the DWRF portion of a settlement.
iv. The LSS CSS
shall identify and detail DWRF overpayments in the “Settlement Justification”
section of the Settlement Workbook separately from other compensation
overpayments.
e. VSSR
The LSS CSS may determine if the
employer has settled its VSSR liability by reviewing the employer claim
information or searching the “Adjsettlement” folder in the Universal Document
Server.
i. Settling
VSSR when employer is still in business VSSR has been awarded
a) 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 shall evaluate the claim without consideration of the VSSR, which will be
paid by the employer.
b. The LSS
CSS shall 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. Before
the LSS CSS issues the BWC LSS approval letter, the claimant and employer must
file with and receive approval from the IC of a separate VSSR settlement
application.
d. If the
parties do not wish to settle the VSSR along with the underlying claim, the LSS
CSS shall disapprove the C-240.
ii. If
the employer’s liability for the VSSR has been settled through BWC’s
adjudicating committee, the LSS CSS shall evaluate and negotiate the VSSR
component of the settlement as if the employer is out of business.
iii. The LSS
CSS shall document the settlement of employer liability regarding the VSSR as
part of the settlement justification.
iv. Settling VSSR
Settling VSSR when employer is still in business and VSSR has not been awarded:
a) The employer
is responsible for the settlement and payment of the VSSR.
b) The LSS
CSS shall disapprove the C-240 pending resolution of the VSSR, unless the
parties request that the VSSR be settled along with the underlying claim.
c) 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 will
be paid by the employer.
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
separately.
iii) A separate VSSR
settlement application will be filed with the IC by the claimant and employer
and must be approved by the IC before the approval letter is mailed.
i. Settling
VSSR when the employer is out of business and VSSR has been awarded:
a) The LSS
CSS shall confirm with his or her supervisor that the employer is out of
business. Even if inactive a sole proprietor, i.e. an unincorporated business
with a single owner, is always in business for the purpose of VSSR settlement.
b) The
LSS CSS will use the VSSR Evaluation Worksheet to calculate future VSSR
amounts.
i) BWC
may settle the underlying claim along with the VSSR.
ii) The
settlement will be referred to the IC for approval in the standard manner; the
IC need not separately approve the VSSR portion of the settlement.
ii. Settling
VSSR when an employer is out of business and VSSR has not yet been awarded:
a) The LSS
CSS shall staff with a BWC VSSR attorney.
b) Upon the
request of the VSSR attorney, the LSS CSS shall provide an evaluation of future
indemnity in order to assist in negotiation of the pending VSSR.
c) The LSS
CSS may proceed with settlement of the underlying claim once the VSSR
settlement is approved by the IC.
iii. Employer
settles the VSSR, then goes out of business before VSSR is paid:
a) The LSS
CSS shall staff with the BWC VSSR attorney.
b) BWC may
request that the VSSR settlement be vacated and the VSSR application to be
reopened by the IC.
iv. Calculation of
VSSR Settlements
a) The LSS
CSS shall calculate each compensation type separately, excluding DWRF, using
the appropriate NPV factor and using maximum rates from the year of the injury.
Example with a 1997 Date of Injury:
i) 52
(TT weeks) x $521 (TT max for 1997) = $27,092 x 20% VSSR = $5,418.40 x .9412
NPV = $5,099.80
ii) 52
(26% PP award) x $173.67 (%PP max for 1997) = $9,030.84 x 20% VSSR = $1,806.17
x .9412 NPV = $1,699.97
iii) Once all the
compensation types are calculated, add them together for the total VSSR.
iv) $5,099.80 +
$1,699.97 = $6,799.77
f. Wage
Loss and Living Maintenance Wage Loss
i. The
LSS CSS shall only factor wage loss (WL) and/or living maintenance wage loss
(LMWL) into future indemnity if the IW/claimant 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 shall reference the Wage Loss Compensation and/or Living
Maintenace Wage Loss procedures and respective tips and tools available on
COR to determine if the IW/claimant has received the maximum number of weeks.
b) The LSS
CSS may also email the “BWC Claims Policy Field Techs” email box regarding
calculation issues for WL and LMWL.
g. Percentage
of Permanent Partial Disability
i. LSS
CSS shall consider percentage of permanent partial disability (%PP) if the
IW/claimant has not yet received a %PP award, or if the LSS CSS determines that
an additional %PP award is likely.
ii. The
LSS CSS shall 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.
iii. The LSS
CSS shall consider if there is evidence of on-going or recent medical services
indicating a change in the condition(s).
iv. The LSS CSS
shall not update the claims management system to reflect the amount of %PP
allocated to a settlement.
v. If
the LSS CSS finds that it is substantially likely that an award of 90% or
greater will ultimately be awarded, the LSS CSS may include the extra
percentage in the settlement value.
h. Temporary
Partial
i. The
LSS CSS shall only factor in a value for temporary partial (TP) in claims with
a date of injury prior to 8/22/86, and only when the IW/claimant has suffered
or will suffer impairment in earning capacity.
ii. The
LSS CSS shall not factor TP if the IW/claimant has received the maximum TP
award for the date of injury.
iii. When the
IW/claimant is receiving TP, the LSS CSS shall:
a) Determine
what TP has been paid to date and include the total dollars and number of weeks
paid;
b) Determine
if the IW/claimant will continue to suffer an impairment in earning capacity;
and
c) Estimate
the expected TP indemnity costs that are probable for the claim.
i. Death
Benefits
i. The
LSS CSS shall 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.
ii. If
the C-242, C-243 and the two most recent years of medical records are not
submitted with the C-240, the LSS CSS shall disapprove the C-240.
iii. The LSS
CSS shall consider and apply a probability factor that addresses co-morbidities
(e.g., diabetes or cancer) or lifestyle factors, (e.g., smoking).
iv. The LSS CSS
shall 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.
v. The
LSS CSS shall offset any settlement award by previous lump sum advancements
made in the death claim that are outstanding at the time of settlement. See the
Lump Sum Advancement procedure for instructions on calculating a lump sum
advancement.
vi. The LSS CSS
shall 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:
a) The child
will enroll or continue to be enrolled in an accredited educational program up
to the age of 25;
b) The child
is, or is likely to be, physically or mentally incapacitated from earning
beyond the age of 18; or
c) The child
has co-morbidities that are likely to reduce the benefit entitlement period.
vii. The LSS CSS may
reference the Death Claims policy and procedures for further explanation
of dependency status and benefit periods.
viii. The LSS CSS shall staff all
settlement requests involving dependent children with the BWC settlement
attorney.
ix. The LSS CSS
shall document all projected death benefits by recipient, including spousal,
adult dependent and dependent minor child benefits.
j. Indemnity
Only
i. The
LSS CSS shall 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).
ii. The
LSS CSS shall 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.
k. Medical
Settlement Only
i. The
LSS CSS shall staff any C-240 seeking to settle only the medical portion of a
claim(s) with the BWC settlement attorney.
DWRF Only Settlement
i. The
LSS CSS shall staff any C-240 seeking to settle only the DWRF portion of a
claim(s) with the BWC settlement attorney.
m. Claims with
Negligible Value
i. If
a settlement agreement includes claims of negligible value, the LSS CSS shall
reflect in the settlement agreement the value of those negligible-value claims
at $0.
n. Requesting
Additional Medical Documentation
i. For
claims where a C-242 and additional medical is not already required, if the
IMS, or BWC settlement attorney determine that additional medical is needed,
the LSS CSS shall request that the IW/claimant complete and submit a C-242 and
submit the most recent two years of unrelated medical documentation.
ii. The
LSS CSS shall set a diary/task for 30 days from the date of the request for the
C-242 and required documentation.
iii. If the
form and required documentation is not provided within 30 days, the LSS CSS
shall staff with the IMS/SA for disapproval of the C-240 or determine if
reduced probabilities would be appropriate.
1.
The LSS CSS has the authority to, and
may approve settlements valued $25,000 or less, subject to the exceptions
listed in VII.B. The LSS CSS shall obtain settlement authority for recommended
settlement amounts above $25,000 as follows:
Amount Authorizing
Individual
$25,001 to $150,000 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 shall be the
Chief Operating Officer, the Chief of Claims, and the Chief Legal Officer or
their designee.
b.
An ERT meeting may be scheduled on a
bi-weekly basis where all members will generally meet as a collective. When
circumstances warrant individual reviews may occur.
c.
All settlements received in the Legal
Department within one week of the next ERT meeting will be presented at the
next roundtable.
d.
BWC Settlement Attorney’s
shall present proposed settlements to the members.
e.
The ERT will review each settlement and
have one of 3 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 (7) 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 of time not to exceed five (5) days.
g.
Resubmissions for clarifications/corrections
or a change in settlement terms may be presented to the ERT with approval by
the IMS or SA. 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 shall staff with the BWC
Injury Management Supervisor 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 DWRF only settlements);
c. Medical
only settlements;
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 claimant; and
f. Any
other settlements with unusual circumstances.
g. Injury
Management Supervisors may also staff any of the above with a BWC settlement
attorney.
4.
Deference to a Previously Negotiated
Agreement
a. The LSS
CSS shall independently evaluate settlement value based on the merits of the
claim and the employer’s risk exposure even when the employer is agreeable 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 shall 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.
6. Presentation
of the Settlement Offer
a. The LSS
CSS may consult with the LSS IMS or settlement attorney in advance to determine
a baseline settlement negotiation strategy.
b. The LSS
CSS shall present the offer verbally to the claimant or the claimant’s attorney
who has settlement authority.
c. The
LSS CSS’s initial offer shall be designed to allow the parties to reach
agreement within the authorized settlement amount.
d. The LSS CSS
shall request and obtain a counter offer before increasing the BWC’s settlement
offer.
e. The LSS
CSS shall document and track negotiations/offers and counteroffers in the LSS
Case Activities Tab.
7. Discussing
the Settlement Terms with the Parties
a. Regardless
of the amount or type of settlement, the LSS CSS shall be the primary point of
contact between the parties regarding settlement negotiations.
b. If for any
reason the LSS CSS’s supervisor or the BWC settlement attorney discusses the
settlement with the parties, he or she shall promptly inform the CSS and the
discussion should be documented in claim notes.
c. The
LSS CSS shall refer the claimant to their attorney regarding questions the
claimant may have about the settlement negotiations.
d. The LSS
CSS shall ensure the parties are aware of any family support orders or
overpayments that will affect the final settlement amount.
e. The LSS
CSS shall seek direction from his or her supervisor 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 shall discuss any changes to the original C-240 with the appropriate
parties and document them on the C-241 and approval letter.
1. Medicare
Secondary Payer Act (MSPA)/C-241
a. The LSS
CSS shall send a “Medicare Secondary Payer Act Letter” (MSPA letter) to the
claimant or the claimant’s attorney in the following situations:
i. All
full and final settlements over $100,000;
ii. All
full and final settlements over $10,000 when the IW/claimant is on Medicare or
has a reasonable expectation of receiving Medicare within thirty (30) months,
which may occur when the claimant:
a) Is on
Social Security Disability (SSD);
b) Is age 62
½;
c) Has been
diagnosed with end-stage renal disease;
d) Has
applied for SSD; or
e) Has had an
adverse decision regarding SSD and has appealed the denial.
b. When
multiple claims are settled, the LSS CSS shall send an MSPA letter if the
aggregate value of all claims included in the settlement is over $10,000.
c. The
LSS CSS shall ensure that the IW/claimant has signed and returned the MSPA
letter within 14 days of the request. The letter:
i. Must
be signed by the IW/claimant; not the IW/claimant’s attorney;
ii. Confirms
that the IW/claimant will establish a Medicare set-aside trust;
iii. States the
IW/claimant will not seek treatment under Medicare for any medical services
which would have been convered under the workers’ compensation claim being
settled, until the settlement funds in the Medicare set-aside trust are
exhausted; and
iv. Indicates the
name of the financial institution in which the set-aside funds will be placed.
d. The LSS
CSS shall ensure the complete MSPA letter is imaged in to the claim (not just
the signature page).
e. If the LSS
CSS does not receive the MSPA letter within 14 days of the request, the LSS CSS
shall contact the IW/claimant or the IW/claimant’s attorney to follow-up. The
IW/claimant may be given up to seven (7) additional days to return the C-241.
f. If
the MSPA letter is still not returned, the LSS CSS shall review with their
supervisor for possible disapproval of the C-240.
g. The LSS
CSS shall reinstate the settlement if the MSPA letter is received within thirty
(30) days of the disapproval.
h. If the MSPA
letter is received later than thirty (30) days of disapproval, the LSS CSS
shall staff with their supervisor.
2. VSSR and
Subrogation
a. The LSS
CSS shall ensure any issues related to a VSSR are addressed.
b. The LSS
CSS shall ensure any issues related to Subrogation are addressed.
3. Amended
Settlement Agreement and Release (C-241)
a. The LSS
CSS shall request a C-241 when any of the following applies:
i. A
non-current version of the C-240 was filed and has not been replaced with a
current version; or
ii. A
change is made to the originally requested settlement amount, terms, or
conditions.
b. The LSS
CSS shall set a task for 14 days from the request. If the C-241 has not been
provided, the LSS CSS shall contact the IW/claimant or claimant’s attorney to
advise them that the C-240 is going to be disapproved. The LSS CSS shall review
the settlement with their supervisor prior to disapproval.
c. The
LSS CSS shall reinstate the settlement if the required C-241 is received within
thirty (30) days of the disapproval.
d. If the
required C-241 is received later than thirty (30) days after disapproval, the
LSS CSS shall staff the claim with a LSS IMS or BWC settlement attorney.
4. Disapproving
the Settlement
a. The LSS
CSS shall disapprove the settlement, with their supervisors 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 SIU or Subrogation department requests disapproval; or
iii. In
the case of the claimant’s death.
b. The LSS
CSS shall notify the parties of the disapproval.
c. The
LSS CSS shall publish an “LSS Disapproval Letter”. After issuing the letter,
the LSS CSS shall 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
which the LSS CSS reinstates the C-240 following the disapproval without the
filing of a new application, the LSS CSS shall record the current date as the
new filing date and update the case status.
5. Approving
the Settlement and Building the Plan
a. To approve
the settlement, the LSS CSS shall publish the approval letter, print it locally
and mail it the same day.
b. When the
claim has been settled for all indemnity and/or all medical, the LSS CSS shall
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.
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.
c. When
the claim is settled for indemnity and/or medical related to a specific
condition only, the LSS CSS shall 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 shall 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.
e. The LSS
CSS shall update the case to “Thirty Day Hold”.
f. If
the employer was previously in the state fund but is now SI, and a DWRF value
is placed in the settlement, the LSS CSS shall include language in the approval
letter stating that the SI employer is responsible to pay the DWRF 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 shall 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. When the
settlement includes multiple employers, the LSS CSS shall send an approval
letter to each employer detailing settlement terms pertinent only to claims in
which that employer is a party.
i. When
the settlement involves only one employer and multiple claims:
i.
If only one claim has money allocated to it, the LSS CSS shall send one
approval letter for all claims.
ii.
If more than one claim has money allocated to it, the LSS CSS shall send
a separate approval letter for each claim.
6. Sending to
IC for Review
a. Within
five (5) days of sending the “Approval of Settlement Agreement“ letter(s), the
LSS CSS shall ensure that the following information, as applicable, is referred
electronically as the “LSSPAC” to the IC for review:
i.
Settlement Workbook Claim Demographic page(s);
ii.
The approval letter; and
iii.
C-240 and C-241.
b. The LSS
CSS shall set a task for five (5) days to ensure the IC referral has been made.
1. For
purposes of tracking the thirty-day waiting period, the LSS CSS shall count the
day after the approval letter is mailed as day one.
2. If the 30th
day is a weekend or holiday the LSS CSS shall consider the next business day as
the 30th day of the waiting period and payment of the settlement
shall be made the following business day.
3. For
purposes of determining overpaid compensation and payment of medical services,
field staff shall consider the day the approval letter is mailed as the
effective date of the LSS.
4. The day
the approval letter is mailed the LSS CSS shall update the claim to a
“settled-pending” status.
5. The claims
management system shall automatically generate notice to the managed care
organization (MCO).
6. The LSS
CSS shall not accept waivers of the 30-day waiting period.
7. LSS CSS
shall staff any request for action regarding the settlement after the
expiration of the 30-day waiting period with the BWC settlement attorney.
1. If the
claimant dies prior to the LSS CSS issuing the approval letter, the claim
abates. The LSS CSS shall issue a “LSS Disapproval Letter” due to claim
abatement.
2. If
the claimant dies within the 30-day waiting period, any party may void the
settlement for good cause shown.
3. When
the LSS CSS receives notice of the death of a claimant, the LSS CSS shall:
a. Verify the
death by obtaining a copy of the death certificate and related medical records
around the time of death (3 months) to confirm the cause of death and whether
BWC has good cause to withdraw from the settlement;
b. Ensure any
substituted claimant has filed a Claimant Authorized Representative
(R-2) form and a new authorization to receive payment, indicating the
claimant’s former representative, or new representative, represents the estate
and
c. Obtain
legal documentation from the probate court naming an administrator, executor,
or executrix of the estate.
4. If the LSS
CSS discovers the death prior to the expiration of the 30-day waiting period
the LSS CSS shall:
a. Staff the
settlement with the BWC settlement attorney; and
b. If the
decision is made to withdraw from the settlement agreement, issue an “LSS
Withdrawn Notice”.
5. If the LSS
CSS discovers the death of the claimant following the expiration of the 30-day
waiting period, but before issuance of the warrant, the LSS CSS shall:
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 warrant payable to the estate of the deceased claimant.
6. If the LSS
CSS discovers the death following the expiration of the 30-day waiting period
and issuance of the warrant, but before the warrant is cashed, the LSS CSS
shall:
a. Request
return of the warrant from the claimant or claimant’s attorney;
b. Staff the
settlement with the BWC settlement attorney; and
c. As
recommended by the BWC settlement attorney, either void the settlement for good
cause or issue the warrant payable to the estate of the deceased claimant.
7. If the LSS
CSS discovers the death following the expiration of the 30-day waiting period
and after issuance of the warrant, and the warrant has been cashed, the LSS CSS
shall staff with the BWC settlement attorney.
1. If
potential fraud is identified after the approval letter is issued, but before
the expiration of the 30-day waiting period, the LSS CSS shall immediately:
a. Notify the
BWC settlement attorney; and
b. Issue a
“LSS Disapproval” letter to all parties, using general language without
reference to potential fraud.
1. If a
party to the settlement submits a request in writing to withdraw from the
settlement prior to the settlement becoming final, the LSS CSS shall confirm
that the request was sent to all parties to the settlement.
2. If
all parties were notified of the withdrawal, the LSS CSS shall:
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).
1. If the IC
does not disapprove the settlement within the 30-day waiting period, the
settlement is approved by operation of law, as long as the IC was given the
opportunity to review the settlement.
2. If the
30-day waiting period expires without the issuance of an IC approval or
disapproval, the LSS CSS shall:
a. Check to
make sure the IC referral was made;
b. Wait one
additional business day to make sure that a disapproval was not timely issued
by the IC, but failed to attach to the claim; and
c. Proceed
with the settlement, if the referral was properly made and there is no IC
disapproval.
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 shall immediately notify the LSS IMS or BWC settlement attorney.
1.
Update the claim status to the appropriate settled status
(“settled/both”, “settled/indemnity”, “settled/medical”);
2. Update any
cases that are still open or in a suspended status to the appropriate closed
status, including updating the issue and closing the case;
3. Release
payment.
1. Family
Support: If there is a family support order in the claim, the LSS CSS shall
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. DWRF
Payment: The LSS CSS shall issue payment for the DWRF portion of a settlement
by a separate warrant, and charge that portion to the DWRF fund using the DWRF
Lump Sum Settlement benefit plan in the claims management system.
3. When the
claimant has died, the LSS CSS shall staff with the BWC settlement attorney to
determine how payment is made and what documentation is required.
1. The LSS
CSS shall issue settlement approval letters for SI rehabilitation claims
offline from the claims management system.
2. Payment
for SI rehabilitation claims shall be issued in the claims management system
“Miscellaneous Payment” window at the end of the thirty (30) day waiting
period.
3. The LSS
CSS shall ensure that the rehabilitation injury claim is assigned to the
correct policy number.
4. The
employer’s type of coverage at the time of the original injury, whether the
employer paid into the Surplus Fund or not, will indicate if the employer or
the Surplus Fund will be charged for the injury in rehabilitation plan claim
costs.
5. Employers
who paid into the Surplus Fund at the time of the original allowed claim have
coverage for vocational rehabilitation costs, including claim costs for
injuries in rehabilitation plans
6. Employers
who did not pay into the Surplus Fund at the time of the original allowed claim
are responsible for their own vocational rehabilitation costs. This includes
rehabilitation costs associated with injuries sustained during that claim’s
original rehabilitation plan
7. The
employer’s Surplus Fund status at the time of the original allowed claim date.
dictates the policy number to which the rehabilitation injury costs are
charged:
Employer
Type Surplus Fund Policy Number
State
Fund Yes 9999-0
Self-Insured
(opted in) Yes 20000999-0
Self-Insured
(opted out) No Regular policy numbers
used
PEC* Yes 30099901-0
PES** No Most
use own policy number
*Public Employer County/city: Includes the
county auditor and every taxing district in the county (such as townships,
villages, cities, public school districts, libraries, some hospitals,
cemeteries and fire departments).
**Public Employer State Agency: Does not
pay into the Surplus Fund. PES employer charges rehabilitation injury claims to
their regular policy number and do not use surplus fund dollars.
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, with Administrator sign off
2. The
assigned lost time service office will process court ordered settlements for
medical only claims, as well as lost time claims. This includes court ordered
settlements for a single medical only claim or a medical only reference claim
with a lost time claim.
3. 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
Support Staff shall 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 LSS Dashboard and
assign based on the AG Notification Tracker rotation list; and
iii. Add a note
in the claim to indicate receipt of the court settlement notification.
4. LSS Staff
shall do the following upon receipt of the email from the Legal Division:
a. Reassign
all the included claims to themselves;
b. Update the
Claim Maintenance tabs with appropriate dates indicated in the claim note (the
effective settlement date);
c. If
exclusions exist, do a claims search by the claimant’s social security number
to ensure all claims are identified;
d. 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;
e. Set a work
item to review for receipt of the signed court documents from the AG's office;
f. 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.
g. 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.
5. Upon
receipt of the AG closing documents in the LSS mailbox; LSS Support staff
shall:
a. Forward
the email containing the AG closing documents to the assigned LSS CSS;
b. Ensure AG
closing documents are indexed/imaged into the claim.
6. Upon
receipt of the email containing AG closing documents the LSS staff shall:
a. Read the
settlement agreement for special findings (i.e., confirm claims that are
excluded or settlement of indemnity/medical/condition only);
b. If there
are no exclusions, include all State Fund claims in the settlement;
c. Ensure
that medical-only claims are reassigned, as appropriate;
d. 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;
e. Image a
copy of the “Court Ordered Settlement-BWC Findings of Fact” notice and the
settlement agreement in each of the claimant’s files that is being settled.
When there are multiple employers, a copy shall be imaged in each claim
included in the settlement;
f. Update
medical and indemnity claim settled dates, as appropriate. Injury status codes
shall not be updated to “deny or “disallowed” or the status of the claim
changed to “disallowed” if previously allowed;
g. 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
Surplus Fund, or other specific terms are described;
h. If to be
charged to Surplus Fund, notify the employer adjustment unit by creating a user-generated
work item, include details regarding the court ordered settlement and request
the settlement be charged to the Surplus Fund.
i. Enter
the “from and to” dates in the payment plan as the date of settlement on the
court order;
j. Ensure
the notes in all claims are updated to reflect the settlement is a court
settlement; and
k. Staff
with the BWC attorney any request by the claimant to terminate his or her legal
representative, cancel an authorization to receive payment and/or any other
request to not send payment to the legal representative.
7. The LSS
CSS shall recoup from the settlement amount any payments of compensation made
after the effective date of settlement.
8. The LSS
CSS shall update any pending cases as appropriate.
9. The LSS
CSS shall deny any new requests for compensation in the claims included in the
settlement.
10. The LSS CSS shall follow the
procedures in Lump Sum Settlements procedure CP-12-01.PR.1 for
overpayments.
11. If the LSS CSS discovers the
death of the claimant prior to the issuance of the warrant, or after the
issuance of the warrant but before the warrant is cashed, the LSS CSS shall
staff with the BWC settlement attorney.