OhioBWC - Basics: (Policy library) - File

Policy and Procedure Name:


Policy #:


Code/Rule Reference:

R.C. 4123.93, 4123.931, 4121, 4127, 4131

Effective Date:



Ann M. Shannon, Chief of Claims Policy and Support


Claims Policy


Policy # CP-19-04, effective 12/21/17


Previous versions of this policy are available upon request


Table of Contents






A.          Requirements for Subrogation and Statutory Effective Date

B.          BWC Independent Right of Recovery & Responsibility


A.          General Claim Note and Documentation Requirements

B.          Identifying Potential Subrogation

C.         Subrogation Information Gathering Checklist

D.         Investigation and Gathering Evidence for Subrogation

E.          Handling IW Request for Legal Advice

F.          Subrogation Referral to BWC Legal Division

G.         Subrogation Recovery

H.         Subrogation and Lump Sum Settlements

I.           Self-Insured (SI) Employers






The purpose of this policy is to ensure that claims services staff can identify potential subrogation issues and make referrals to the Subrogation Department so that BWC may recover the costs of applicable workers’ compensation benefits from a third party in accordance with Ohio law.




This policy applies to BWC Claims Services staff, BWC Legal Division’s Subrogation Department, and BWC Actuarial Division.




Administrative designee process:  an alternative dispute resolution process for pre-litigation settlements which have reached an impasse during negotiations.


Insurance Service Office: a proprietary database that contains bodily injury claims information pertaining to automobile, workers’ compensation, homeowners, general liability, product liability and disability insurance injury claims for the last ten years on a particular individual. This system is also referred to as ISO.


Third party:  defined in Ohio Revised Code section 4123.93 C) as “an individual, private insurer, public or private entity, or public or private program that is or may be liable to make payments to a person without regard to any statutory duty contained in this chapter or Chapter 4121., 4127., or 4131. of the Revised Code.”





A.     Requirements for Subrogation and Statutory Effective Date

1.     It is the policy of BWC to actively pursue recoupment of claims costs caused by the actions of a third party by identifying subrogation indicators and pursuing legal recourse as outlined in R. C. 4123.93, et seq.. With a few exceptions, subrogation is pursued in claims with a date of injury on or after April 9, 2003.

2.     A third party must be the cause or a contributing factor in the accident or injury. BWC has a statutory right to pursue collection of workers’ compensation payments if the subrogation interest is projected to be greater than zero. The subrogation interest is defined in Ohio Revised Code section 4123.93 (D) as the following: “past, present, and estimated future payments of compensation, medical benefits, rehabilitation costs, or death benefits, and any other costs or expenses paid to or on behalf of the claimant by the statutory subrogee pursuant to this chapter or Chapter 4121., 4127., or 4131. of the Revised Code.”


B.     BWC Independent Right of Recovery & Responsibility

1.     BWC has the right to initiate subrogation action independently without the involvement or approval of an injured worker.

2.     It is the responsibility of the BWC’s Subrogation Department to protect the State Insurance Fund by collecting subrogation liens and crediting the risk of employers. The subrogation recovery is calculated utilizing the formula provided in Section 4123.931 of the Ohio Revised Code.




A.     General Claim Note and Documentation Requirements

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.


B.     Identifying Potential Subrogation

1.     During the initial investigation of a claim, claims services staff shall review the claim for potential third party involvement by reviewing the injury description and identifying whether or not a third party may be responsible for the injury.

2.     Claims services staff shall gather information during their intial contact with the IW to identify the following:

a.     If a third party was involved in the accident; or

b.     If the IW is involved in a personal injury claim or has a pending settlement with any insurance company related to their workplace accident.

3.     In the event that claims services staff determines that the IW is involved in a personal injury claim or pending settlement with any insurance company, claims services staff shall obtain as much contact information as possible regarding the parties of the personal injury claim or pending settlement. This information should be added in notes and in the subrogation application when making the referral. Claims services staff may email the Subrogation Department when additional assistance is needed.

4.     Common causes of third party accidents that claims service staff shall look and listen for include the following (list is not all inclusive):

a.     Third party motor vehicle involvement (e.g., motor vehicle accident, pedestrian struck, injury while riding in a motor vehicle);

b.     Malfunctioning product (e.g., exploding aerosol container);

c.      Medical malpractice (e.g., a slip of the surgical knife, operating on the incorrect body part, prescribing incorrect medication);

d.     Defective or faulty design (e.g., malfunctioning air bag or protective cover for a machine, brakes not working properly, safety harness not holding specified product weight);

e.     Failure to provide adequate warning of dangerous condition or equipment (e.g., lack of signs that warn of wet floor in public building, inadequate warning on cleaning solutions);

f.       Failure of or failure to provide safety device features (e.g., seatbelts not working, company not supplying lockout devices);

g.     Failure of someone or something to perform a job or maintain an environment which is free of hazards to others (e.g., outside contractor sets up welding, pouring concrete, etc.);

h.     Exposure to toxic fumes, chemicals, or dust (e.g., smoke or vapor inhalation);

i.       Animal bites or attack;

j.       Construction site accidents (e.g., equipment malfunction, machinery or equipment falls on individual);

k.      Premises liability (e.g., slips and falls, struck by fallen object, assault);

l.       Explosions or fires; and

m.    Machinery accidents due to inadequate or improper maintenance.


C.    Subrogation Information Gathering Checklist

1.     If the facts of the claim reveal possible third-party involvement, claims services staff shall use the “Subrogation Information Gathering Checklist” to establish any needed documentation and the parties from whom it should be requested. The checklist can be found on the Subrogation policy page on Claims Online Resources (COR) under Tips and Tools.

a.     Request the needed information by telephone and/or mail, document in claim notes, and set a 7-day work item.

b.     If updated subrogation information is received claims services staff shall:

i.       Save the documents in the imaging system;

ii.      Update claim notes documenting the information received;

iii.     Email the Subrogation Department regarding the newly available information;

iv.    Delete the subrogation task from the worklist.


D.    Investigation and Gathering Evidence for Subrogation

1.     If the facts of the claim reveal possible third-party involvement during the initial review of the claim, claims services staff shall:

a.     Verify the cause of the accident with the IW/IW representative and employer/employer representative while making initial contacts.

b.     Determine who/what caused the accident.

i.       If the IW caused the accident, then claims services staff no longer needs to consider subrogation.

ii.      If a third party was cited for being at fault or appears to be responsible for the injury, claims services staff shall move forward with an investigation. 

2.     Check with the employer, IW, or employer services specialist (ESS) to determine if an onsite safety report or Occupational Safety and Health Administration (OSHA) report was completed.  If so, document in claim notes that a copy of the report has been requested.

3.     During initial contact, claims services staff may find that the IW has already settled a personal injury claim against the responsible party (and/or any insurance company) that caused or is responsible for injuries that are part of, the workers’ compensation claim.  When this occurs, claims services staff shall attempt to obtain the following information and then refer the claim to the Subrogation Department.

a.     Was a lawsuit or an insurance claim filed?

b.     Did the IW receive a judgment or settlement?  If yes, how much and when?

c.      Who did the IW settle the injury claim with?  If it was an insurance company, obtain the insurance company name, claim number, address and phone number of the adjuster.

d.     Obtain the name and phone number of the IW’s personal injury attorney.

4.     Review the existing Insurance Service Office report in the claims management system.

a.     If a match exists, claims services staff shall review all claims data for bodily injuries for the last five years.

b.     Claims services staff shall review the Index System reports to identify a potential for subrogation and make a referral to the Subrogation Department if appropriate.

5.     Contact witnesses and obtain statements in writing if possible, or document a summary of the statement and who provided it in the claim notes.

6.     Obtain/order a copy of the police report if one was completed.

a.     Check with the IW or employer to obtain a copy of the report or contact the appropriate police department.

b.     Some law enforcement agencies require claims services staff to complete a request form when ordering an accident report and may require a fee for the service. This fee can be paid through miscellaneous payments using code 94000.

c.      If the claim is referred to the Subrogation Department before claims services staff receives the report, document in claim notes that the report has been ordered, image the report into the claim and immediately notify the Subrogation Department when it is received.


E.     Handling IW Request for Legal Advice

1.     Claims services staff shall not offer advice regarding whether or not an IW needs an attorney to handle their workers’ compensation or bodily injury claim. If an IW asks for legal advice, claims services staff shall respond as follows: “I am not qualified to offer legal advice. If you have legal questions, you must consult your own attorney for his/her opinion.”

2.     Claims services staff should never ask the IW if he/she is going to sue the third party, or offer advice on whether or not an attorney should be hired.


F.     Subrogation Referral to BWC Legal Division

1.     Claims service staff shall make a subrogation referral as early as potential subrogation is identified so the Subrogation Department has the earliest  opportunity to assert BWC’s right of recovery prior to any third party settlements taking place.

2.     A valid subrogation referral includes:

a.     A description of the type of accident; and

b.     Documentation to establish that a third party may be responsible for the accident.

3.     If claims services staff has any questions about whether a referral should be made, he/she will staff with his/her supervisor or service office Subrogation Coordinator. The Subrogation Department may be contacted to review the facts of the claim and may determine that a referral is appropriate or the claim does not have subrogation potential. When in doubt, a referral should be made so the Subrogation Department can review the claim.

4.     Claims services staff shall input the names and addresses of all parties associated with the subrogation claim (insurance companies, attorneys, etc.) representing any party in a third party action into the Subrogation Information Window.

5.     Claims services staff shall complete the referral to the Subrogation  Department so that the Subrogation Department is notified of the referral.

a.     If the Subrogation Department reviews the referred claim and determines that the referral is invalid, the Subrogation Department will close the referral and enter a note in the claim.

b.     If the referral is incomplete, the Subrogation Department may request additional information regarding the claim from claims services staff who shall partner with the Subrogation Department to obtain any additional information pertaining to the possible subrogation claim. 

6.     The Subrogation Department is responsible for pursuing subrogation collections in accordance with Ohio Revised Code section 4123.93 et seq. and is responsible for third-party notifications.

7.     When BWC has a subrogation right against a third party for causing injuries or damages to the injured worker, the Subrogation Department will send an assertion letter to the responsible party(ies) asserting the rights of BWC to collect benefits paid out in the claim. This letter will appear on claims services staff’s work item list for that claim and serve as notification that the referral was accepted.

8.     Previous subrogation tasks may be closed when:

a.     Requested documentation arrives and the Subrogation Department is notified; or

b.     An Insurance Service Office match occurs and the Subrogation Department is notified.


G.    Subrogation Recovery

1.     The BWC Subrogation Department collects funds pursuant to Ohio Revised Code section 4123.93 and 4123.931. BWC may refer claims to the Ohio Attorney General’s Collections Enforcement Division anytime and for any reason BWC feels representation is needed.

2.     When a subrogation collection is successful, the Subrogation Department will send notification via letter to the employer notifying them of the recovery.

3.     The Actuarial Department will make appropriate recovery adjustments to the employer’s risk at the time of recovery. Any questions from employers regarding this credit should be directed to the Actuarial Department.


H.    Subrogation and Lump Sum Settlements

1.     Claims services staff shall contact the Subrogation Department if he/she receives a Lump Sum Settlement application or request in a claim that has an open subrogation case.

2.     When claims services staff makes contact with the Subrogation Department, the Subrogation Department will add the LSS override in the subrogation application so the LSS can be paid.

3.     When workers’ compensation settlements and subrogation happen at the same time, two checks are received. BWC pays the IW for the settlement and they write a check back to BWC for subrogation to ensure that the employer’s risk account is properly credited with the subrogation recovery.

4.     Claims services staff should never agree to settle the workers’ compensation claim without consulting the Subrogation Department to see if there is an active working subrogation case.


I.       Self-Insured (SI) Employers

1.     SI employers are responsible for recovering their own subrogation lien unless the SI employer is bankrupt, and the claim has been reverted back to BWC to handle the claim. An exception to this rule is if BWC has paid for a prosthetic device in a claim. In those situations both the self insuring employer and the BWC would be statutory subrogees.

2.     SI employers may utilize the Administrative Designee Process.