1. Q: When and how long can an employee collect indemnity benefits?
A: As long as the employee is medically unable to work, with limitations in some states on the maximum number of weeks.
2. Q: The employee is in jail (not related to the workers comp claim), can s/he still collect indemnity benefits?
A: It varies by jurisdiction, but in most cases if the employee can still receive the necessary medical treatment to recover from his injury, he can still collect benefits while in jail until he is medically able to return to work. (WCxKit)
3. Q: The employee is taking his/her family on vacation, can s/he do that while drawing indemnity benefits?
A: As long as the employee does not engage in any activity on vacation that will interfere with his medical recovery, and as long as the employee will not miss any medical appointments, then he can go on vacation in most jurisdictions.
4. Q: The employee is out of the country, can s/he still collect indemnity benefits?
A: If the employee is not treating for his/her medical condition, the workers comp adjuster should take the necessary steps to suspend temporary indemnity benefits until the employee returns to the country and resumes medical care. WCxKit If the employee has already reached maximum medical improvement, the permanent indemnity benefits would continue in most jurisdictions while the employee is out of the country.
5. Q: The employee is working another job while collecting indemnity benefits from us, can s/he do that?
A: No. If the employee is able to do similar work for another employer, s/he is no longer medically unable to work WCxKit and temporary indemnity benefits should cease immediately. A possible exception to this would be for PPD benefits where the employee is unable to resume a manual labor position with your company, but locates less strenuous employment with another company.
\Author Rebecca Shafer, J.D., President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: Info@ReduceYourWorkersComp.com or 860-553-6604.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Increasing co-operation between employees and management is critical in difficult economic times, a major safety conference in Glasgow heard recently.
The RoSPA Scotland Occupational Safety and Health at Work Congress learned how businesses that involve their workers in health and safety decision making will reap dividends in terms of fewer incidents and injuries and cost savings.(WCxKit)
Delegates heard about an investigation into current practices in workplaces across Scotland.
The Royal Society for the Prevention of Accidents was commissioned by the Health and Safety Executive to investigate worker involvement in health and safety (WISH) within non-unionized workplaces in Scotland. The initiative built on evidence that organizations with “properly involved” unionized safety representatives achieved better health and safety performance than those without such representation.
The investigation found the concept of worker involvement was low on the agendas of most employers and there was an unwillingness to invest money and resources in the issue. Despite this, most businesses interviewed by RoSPA involved workers in day-to-day activities, although often this was not thought of as “involvement”.
It found that positive worker involvement was feasible, and happened in some non-unionized workplaces – but was likely to follow an employer’s agenda and be confined to practical consultation rather than anything approaching joint decision making.
It also discovered that effective WISH needed the support of the managing director, or a senior director, and so top management must be convinced of its worth.
Karen McDonnell, head of RoSPA Scotland, who presented the findings with researcher Howard Fidderman, noted, “Businesses that want to improve the way they manage health and safety are often failing to make use of their single biggest asset, namely the people they employ.
“Unless they involve their workers in day-to-day decision making about health and safety issues or about longer term plans, they will not be able to benefit from employees’ suggestions or tap into their knowledge of what actually goes on in the workplace. And unless they actively seek employees’ views on options to improve safety and health they may face difficulty in getting their buy-in later on. Openness and involvement will build trust on both sides.
“Involvement can take time, skill and patience but it pays massive dividends in firms both large and small. And it really can save lives and reduce injuries.”
The research comprised telephone interviews, interactive workshops and case study development. (WCxKit)
Although organizations reported different barriers to worker involvement, the most commonly cited were lack of resources, knowledge, time and imperative. Other barriers mentioned by a significant number of participants were: fear of managers; lack of respect shown by managers; transient workforces; remote and peripatetic workers; and cultural attitudes within the workplace, local communities and wider society.
The report includes several hints and tips for businesses wanting to begin a program of worker involvement, including: patience – engaging workers takes time; ensuring senior management is visibly supportive of involvement; explaining what you are doing; and running an opinion survey and being seen to act rapidly on some suggestions.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: Info@ReduceYourWorkersComp.com or 860-553-6604.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
Approximately half of all the dollars spent on workers compensation claims are used to pay indemnity benefits. These are the benefits paid to an injured worker to replace part of the worker’s lost income. The indemnity benefits vary in name among the various workers compensation jurisdictions, but can be separated into two basic types — temporary benefits and permanent benefits.
Temporary Benefits
Temporary benefits are further divided into two types – temporary total disability (TTD) and temporary partial disability (TPD) [with different names for the temporary indemnity benefits in different states]. TTD is paid to the injured employee when the employee is unable to return to work of any type while recovering from the injury. WCxKit When the employee is partially recovered from an injury, but not fully recovered, the medical provider may allow the employee to return to work part time. The employee is paid regular wages for the hours does worked and TPD is paid to the employee to cover the hours each day the employee is unable to work.
Permanent Benefits
Permanent benefits are also divided into two types — permanent total disability (PTD) and permanent partial disability (PPD) [with different names for the permanent indemnity benefits in different states]. When the employee reaches maximum medical improvement, the medical provider evaluates the employee's ability to return to work. If the medical providers (the treating physician and an independent medical evaluator) both agree that the employee is unable to return to any type of employment, the employee is consider PTD and paid PTD benefits per the limitations in the state workers comp statutes. If the medical providers agree the employee has recovered enough to return to some type of employment but will always be partially disabled, the employee is classified as PPD and is paid PPD benefits per the state statutes.
Indemnity Benefits Calculation
The amount of the employee's indemnity benefit is based on the employee's prior pay history and the average weekly wage (AWW) earned by the employee. Most jurisdictions use two-thirds (66.67%) of the gross AWW as the amount to pay in indemnity benefits, but a few jurisdictions use 70% of the gross AWW. Also, a few jurisdictions use 75% or 80% of the employee's net wages after taxes to calculate indemnity benefits. WCxKit
The jurisdictions vary in the time frame used to calculate the AWW. Most jurisdictions use the previous 52 weeks as a time frame, but some states use the prior 13 weeks or the prior 26 weeks as the time frame.
An example using the AWW to calculate the TTD: The employee made $52,000 in the 52 weeks prior to the injury causing the disability. The AWW would be $1,000 with the TTD rate being $666.67 (two-thirds X $1,000).
An employee's AWW in most jurisdictions includes all compensation, not just the wage or salary. The adjuster includes overtime pay, bonuses, commissions or any other form of compensation in determining the AWW. Also, some jurisdictions include the value of benefits if the employer suspends paying for those benefits during the time the employee is off work.
The amount of TTD has an upper limit cap and a minimum amount. The jurisdictions vary in the dollar amount for the upper limit and the lower limit. A jurisdiction might by statute state the maximum amount of TTD is $800.00 per week and the minimum amount of TTD is $100. 00 per week. An executive making $2,000.00 per week would not receive two thirds of his AWW of $2,000.00, or $1,333.34. The executive's TTD would be capped at $800.00 per week. A part-time fast food worker making $120.00 would not be limited two-thirds of his AWW, or $80.00. His TTD rate would be the state minimum rate of $100.00. WCxKit
When Paid
The states vary in their requirements as to when indemnity benefits are paid. Some states require the payment of weekly indemnity benefits while other states require the indemnity benefits to be paid every two weeks. Some states require the first indemnity check to be issued on the 15th day after the injury (if the compensability of the claim is not being disputed) and subsequent checks to be issued on the same day of each of the following weeks as long as the employee is unable to work. Other states allow the insurer to determine what day the initial indemnity benefit check will be issued, with subsequent checks following weekly or every other week.
Issuance of the Indemnity Check
At most insurance companies and third party administrators, after the adjuster determines the amount of the weekly or bi-weekly indemnity check, the actual issuance of the check becomes a clerical function. The clerical person enters the information into the company computer for the first indemnity check to be issued. Most claim management systems are now automated to the point that the computer system takes over issuing and printing the subsequent indemnity checks until the computer is told to stop.
Delivery of the Indemnity Check
The two primary ways the indemnity checks reach the employee is the U.S. Mail or through direct deposit into the employee's checking account. Some insurance companies have started the practice of putting a fraud notice on the back of indemnity check which states the check is for the payment of disability benefits and anyone cashing the check who is not disable is committing an act of fraud. This is of value only if the indemnity benefits check is mailed to the employee, requiring their endorsement. It is of no value if the check is being direct deposited into the employee's checking account. WCxKit
In a recent audit of a large self-insured Midwestern university, a third way of delivering the indemnity check to the employee was used. Unless the employee was hospitalized, the employee was required to come to the claims office each week to pick up the check. This allowed the workers comp adjuster to make personal contact with the employee weekly and allowed the claims department to visually evaluate the employee's physical condition.
Account Instructions
The client instructions for most self-insured programs are silent on the requirements for the TPA when it comes to issuing indemnity payments. If the employer has had any issues with the TPA over the payment of indemnity benefits, the client instructions should be amended to include directions on when and how indemnity benefits will be paid. (WCxKit)
For More Information
This brief synopsis does not cover all the information you may need to know about indemnity benefits. The websites of most
state bureaus of workers compensation or industrial commissions will often have a discussion of
indemnity benefits for their state. Another excellent source of information is the annual
Analysis of Workers Compensation Laws guide published by the U.S. Chamber of Commerce. Of course, we are always glad to answer your questions about workers compensation. Please contact us for more information.
\
Author Rebecca Shafer, J.D. President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: Info@ReduceYourWorkersComp.com
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Alberta Employment and Immigration (AE&I) is now posting annual performance information about Alberta employers. (WCxKit)
The first report includes data from 2005 to 2009, and includes occupational fatality numbers, the lost-time claim numbers, and lost-time claim rates for employers in Alberta who are required to have a WCB-Alberta account.
A lost-time claim rate can serve as an indicator of a company’s safety performance but it is not a conclusive measure by itself.
WCB-Alberta provides AE&I with data collected as part of its administration of the Workers Compensation Act.
For the purposes of the new employer performance reports, WCB-Alberta provides the following data as of March 31 for each year:
- Industry codes
- Number of claims accepted
- Number of fatality claims
- Insurable earnings for the year (payroll)
This is point-in-time information. If changes are made to claims status, industry codes, or insurable earnings after March 31, the data in WCB-Alberta’s records may differ from the published reports.
The workers comp system is a no-fault mutual insurance system, so the data collected does not attribute fault.
The number of lost-time claims shown on the current report has been accepted by WCB-Alberta as of March 31, 2010. Claims can be registered by an employer, an injured worker, or a health care provider within two years of the incident, so these numbers may change slightly over time.
WCB-Alberta regularly audits employers to ensure they are reporting claims properly. Insurable earnings figures can change if employers modify the figures they have reported to WCB-Alberta, or if WCB-Alberta conducts an audit. Industry codes may also change as a result of employers changing their operations.
The number of fatalities shown on the report has been accepted by WCB-Alberta as of March 31 of each year. The fatalities are shown in the year they were accepted, not by the year that they occurred.
AE&I uses WCB-Alberta data to calculate the person-years estimate and lost-time claim rates for employers.
AE&I and WCB-Alberta have different business reporting requirements, so the statistics released by AE&I and by WCB-Alberta are not expected to be identical.
For questions about the five-year employer lost-time claims and fatality reports, employers should contact AE&I at 1-866-415-8690.
AE&I can supply details about this information, including claims, what the insurable earnings figures are and how the person years were determined. (WCxKit)
WCB-Alberta will help explain the published data by answering questions about industry codes, lost-time claims, insurable earnings, and fatality numbers.
An employer can get up-to-date performance information from WCB-Alberta by accessing the Loss Control Reporting (LCR) online service through WCB-Alberta’s Web site at: http://www.wcb.ab.ca/
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
The question: Do workers compensation laws need to be revised to exclude people who cause injury to themselves and others when driving distracted?
According to AOL News (10-4) an Illinois state trooper killed two teenage sisters in a high-speed, head-on collision. Ex-trooper Matt Mitchell filed a workers compensation claim for injuries he sustained in the fatal crash because he was on duty at the time. (WCxKit)
Allegedly Mitchell was e-mailing and talking to his girlfriend on his cell phone when he lost control of his patrol car on his way to an emergency, traveling at 126 mph, jumped a median, and collided head-on into a car on the other side of the highway, killing Kelli Uhl, 18, and Jessica Uhl, 13. He pleaded guilty to reckless homicide and reckless driving.
Mitchell was on paid leave for two years until he resigned from the force after pleading guilty in criminal court. But during a civil suit, the former trooper denied any guilt.
Kimberly Schlau, mother of the dead teens, said "My daughters were killed by someone who was sworn to protect and serve them."
"This man has no character," Thomas Keefe, attorney for the parents of Kelli and Jessica Uhl, told AOL News today. Keefe said he was disgusted but not surprised that Matt Mitchell wanted money from the state. "To this day he has never said he's sorry. Not once. So what would you expect of such a person?"
"When [Mitchell] filed for benefits, I thought well, that's exactly what I would expect from a person who sat up on that stand and looked at that family and said, 'I'm not responsible for the death of your children,'" Keefe said. The attorney thinks it's likely that Mitchell will win the workers' compensation, since he was on the job at the time of the crash.
Attorney Ed Herman, spokesman for Mitchell, declined to comment specifically about the case. "The state of Illinois has a process for these claims, and we need to let the process play itself out without outside influence," he said.
Schlau has spent the past three years advocating for safer driving laws. She sometimes speaks to newly inducted state troopers about highway safety telling them about her daughters and asking them to remember their faces while they're driving and doing their jobs to make sure no other family has to go through what she and their father (Brian Uhl) have gone through. (WCxKit)
She said the law on workers' compensation may need to be changed as "It's just one more policy that's been pointed out to us that we might want to look at changing."
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: RShafer@ReduceYourWorkersComp.com
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
A very interesting viewpoint was recently presented to us. What happens to employees permanently disabled by an injury at work? Obviously, they are not candidates for a
return-to-work program. That is to say, they reside in nursing homes or receive lifetime medical care at home due to the nature of their workplace injury.
While an employer has an interest in controlling these medical costs, providing care management services supports the injured employee and offers the family peace of mind. (WCxKit)
What "Care Managers" Do
It is very challenging to work with and protect the interests of chronically ill or disabled persons. A care manager
works with clients to:
1. Evaluate current and future needs.
2. Act as an advocate within the healthcare and social services system.
3. Coordinate care while protecting assets.
5. Be available when family cannot.
6. Speak with the client about subjects the family finds difficult to discuss.
7. Listen to the person’s plans, wants and needs.
8. Help them with unbiased recommendations so they may make informed decisions.
9. Has the skills and knowledge to properly determine problems and come up with solutions.
10. Has sizable resource they can call upon.
Quality Care Managers
Well-qualified care managers are registered nurses, master’s level social workers or vocational counselors with a background in the special needs of workers with semi- or permanent workplace disabilities from a workplace injury. They have a thorough knowledge of the workers compensation system, Medicare set-asides, and understand the intricacies of the social services and healthcare delivery system.
They have the skills to assess needs and interests, locate resources and oversee the best solutions from the most cost-effective resources.
Care Managers are usually employed by an established care management service company (like
Broadspire, a third-party administrator). As such they are extensively trained and supervised.
The services of a care management service company are not attached to any home health agency, insurance carrier or facility, so care managers are free to offer a totally objective assessment of every issue. The only objective is the happiness and well-being of the clients and their families.
Care managers perform an assessment on the client’s functional, physical and cognitive status, as well as their environment and financial/legal situation. Following the evaluation, they provide a detailed analysis of the client’s status and recommend cost-effective solutions.
Complete Care Coordination
As advocates, medical advisors and surrogate family members, care managers take on many roles. They interview and screen in-home caregivers or hire contractors for home modification; attend doctor office visits, plan outings and visit clients to celebrate special occasions..
If placement in a nursing home or extended care facility is needed, the care manager locates appropriate options, checks all credentials and tours the facility with the client. They also determine suitable payment options and coordinate all paperwork.
Ongoing Care
Your care manager maintains the relationship for as long as you wish. They will:
1. Be an advocate during hospital stays.
2. Help arrange social activities.
3. Coordinate benefits and audit medical bills.
4. Help with moves or transitions.
5. Supervise aspects of in-home and facility services.
Legal and Financial Assistance
It can be quite a challenge to successfully manage disbursements from trust funds, protect the beneficiary’s eligibility for government-provided care. Fiduciary and legal representatives serve as healthcare representatives, evaluating the client’s health, needs and benefits, coordinate healthcare, and protect everyone involved against legal liability arising from misuse of funds.
Fiduciary and Legal Representatives provide:
1. Coordinated resources, equipment, medical and social services.
2. Transition coaching to a more independent, productive life.
3. An evaluation of appropriateness for trust funds disbursements.
4. Assessments of medical needs with healthcare professionals.
5. An appropriate environment to reduce risk.
6. Identification of community services to supplement existing care.
7. Alternatives for care.
8. Assistance with Independent Education Plan (IEP) meetings.
Navigating the Healthcare and Social Services Systems
Working within a bureaucracy to help special needs individuals is complex and often overwhelming. Some states even require attendance at court appearances. Understanding the required documentation is often intimidating. (WCxKit)
Care managers have the expertise to organize the information needed, complete the required forms and even attend hearings for the client, thus avoiding missteps that could take months or even years to clear up. A care management service relieves the burden of staying compliant with the system’s guidelines.
Contributor: Broadspire provides workers compensation claims adjusting services and third-party administrative services. This service is available unbundled and bundled for Broadspire clients and companies that are not currently clients. For information contact 1-866-625-1662 or Broadspire_Info@choosebroadspire.com or www.ChooseBroadspire.com
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
One of the best ways to lower reserves is to how a strong
safety program that prevents the accident from happening, but there are additional ways also. But what do you do to control reserves if despite your best efforts you have a serious injury to an employee?
1- If you have ever looked at your monthly lost run and gasped when you saw the dollar amount of reserves the workers' compensation adjuster has posted on a severe claim – you will understand the need to control the reserves and to try to lower the reserves. (WCxKit)
The adjuster has a fiduciary responsibility to post the most accurate reserve possible on each and every claim. The amount of the reserves posted will be based on the adjuster's evaluation of the employee's medical condition, the anticipated time the employee will be off work, the anticipated permanency rating for the injury the employee received, the anticipated cost of medical care, and the anticipated cost of associated expenses from nurse case management to vocational rehabilitation to attorney fees.
EXAMPLE: Let's look at a hypothetical example of a work comp claim. The employee severely injured his back trying to a heavy weight. The doctor's diagnostic test reveals two severe disc herniations, at L4-5, and L5-S1. The doctor recommends an anterior lumbar fusion of L4-S1.The adjuster has posted $100,000 indemnity reserve, $100,000 medical reserve and a $50,000 expense reserve. If you are self insured, this is $250,000 that needs to be set aside in reserves to pay this claim. If you have insurance with a work comp insurance carrier, this is a claim that is going to affect your experience modification factor. Either way, you would like to see the claim reserves lowered.
A very simple step employers can take to control the cost of their work comp claims, and hence allow the reserves to be adjusted downward, is maintaining contact with the employee after the employee is injured. Most employers do not stay in touch with the employee who has a severe injury. This gives the employee the opinion that the employer does not care about their welfare or their injury. When the employer shows the employee they care about the injury and their recovery, the employee is more inclined to cooperate with the prescribed medical treatment..
The employee with a back fusion is likely to hire an attorney to represent them in the work comp claim if the employee feels the employer does not care about them. When an attorney is brought into the claim, it normally delays the employee's recovery as the attorney (who is working on a percentage of the employee's indemnity compensation) will attempt to delay the employee's return to work in order to increase the attorney's fee. The attorney will also attempt to increase the disability rating by having a plaintiff's attorney friendly doctor give a higher disability rating and hence a higher permanent partial disability award. By keeping the employee away from an attorney, the adjuster can eliminate the reserves necessary for legal expense.
2-There are some legitimate approaches you can take to lower your reserves on this hypothetical claim. The first thing you can do to lower the reserve is something we constantly promote – have an effective transitional duty/light duty program available. Until the employee has the surgery, the employee can do desk work (he made need to be allowed to occasionally walk around to relieve the pressure on his back from sitting). After the surgery, as soon as the treating physician will allow the employee to return to work light duty, the employer should have light duty work available for the employee. Instead of the adjuster having to pay the employee 6 months of temporary total disability (TTD) benefits, the amount of TTD benefits can be cut in half to 3 months. The indemnity reserve can then be lowered the equivalent of 3 months of TTD.
3-The transitional duty program will also assist the employee in recovering from the surgery. Employees who stay active after surgery have a faster recovery and normally recover with a lower amount of disability. The reduction in the healing time means fewer medical visits (and associated cost) and the lower disability rating means less money that needs to be in the reserves to pay for the permanent partial disability.
4-In addition to the transitional duty program, the reserves can be lowered by having an active medical management program. A nurse case manager (NCM) should be assigned to any claim this severe. The NCM can manage and direct the medical care to insure the employee receives the appropriate medical care but not superfluous medical treatment. The NCM by keeping the employee on schedule for physical therapy and doctor visits minimizes the time off work. By the NCM controlling the medical care, the adjuster is able to re-evaluate the anticipated future cost of medical care, which allows the adjuster to lower the reserve when it is justified. Also, the NCM involvement will reduce the likelihood of incurring vocational rehabilitation expenses on the claim. (WCxKit)
5-The employer who stays actively involved in the claim process will have the most success in lowering the reserves set on a claim. By keeping in touch with the employee and maintaining rapport with the employee, by having a modified duty or transitional duty program and through medical case management, the employer can have an impact on the amount of indemnity, medical and expense reserves on the work comp claim. These are the best ways for the employer to lower the reserves on a claim.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: RShafer@ReduceYourWorkersComp.com .
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
Efforts are on going to make sure all employers in the state play by the rules, Lawrence Rebman, director of the Missouri Department of Labor and Industrial Relations, noted in his July 2010 Director’s Spotlight column.
“In every industry – not just those thought of as high-hazard – there are certain risks at the workplace. And an injury that renders a worker unable to do his or her job presents a serious financial strain on Missouri families. Missouri law recognizes this, and requires that injured employees be adequately compensated. This is the role of workers compensation insurance — to provide that important safety net for Missouri’s workforce.
“Missouri law also requires every employer in the state with five or more employees to carry workers compensation coverage. And employers in the construction field must carry this coverage if they have one or more employees. (WCxKit)
“The vast majority of Missouri employers follow the workers compensation law: they pay their premiums and keep their coverage up to date. But there are exceptions. Employers who do not comply with the law leave their employees in the cold when an accident occurs. This is wrong and illegal, and the Labor Department’s Division of Workers Compensation (DWC) is taking action.
“So far this year, the DWC has referred 184 cases to the Attorney General’s Office, 80 more than last year at this time. These cases involved employers who either did not provide coverage or did not report the worker’s injury to the DWC. This reporting is required by law so that injured workers can be made aware of their rights. In 2009, 2,669 work-related injuries were never (WCxKitz) reported by an employer or insurer to the DWC; so far in 2010, this has happened 1,369 times.
“In an attempt to stamp out this mistreatment of workers, the Labor Department has begun new efforts to make the workers compensation system more transparent and accountable.
“First, we have created a new “Are You Covered?” online tool for our newly developed website at www.labor.mo.gov. This user-friendly tool allows users to access our workers compensation databases and check whether their employer carries coverage, and the effective dates of their policy.
“Second, we have modified our website to give the public an enhanced ability to report workers compensation fraud and noncompliance. The new feature on the website explains the various types of illegal conduct and allows users to report violators with the click of a mouse. (WCxKit)
“We owe it to all workers in Missouri, as well as all of the good employers who play by the rules and cover their workers, to catch those who cheat the system.”
\Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: Info@ReduceYourWorkersComp.com or 860-553-6604.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
For the second time in two weeks the Los Angeles Police Department has taken into custody one of its own on suspicions of workers compensation fraud, this time a 15-year veteran of the force.(WCxKit)
According to the Los Angeles Times, Det. John X. Vach Jr., who was most recently assigned to the major crimes division, surrendered after an arrest warrant was issued alleging seven felony counts of workers comp fraud, perjury and attempted grand theft.
Prosecutors charged Vach with four counts of insurance fraud and one count each of perjury by declaration, attempted perjury under oath and attempted grand theft. The detective, who was released after posting $120,000 bond.
According to prosecutors, Vach operated a pair of private businesses while out on a disability claim for job-related stress.
They allege he also sought a lifetime disability pension.(WCxKit)
If convicted on all counts, the detective faces a maximum state prison term of eight years, 10 months and a fine of up to $240,000.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: Info@ReduceYourWorkersComp.com or 860-553-6604.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
The Centers for Medicare & Medicaid Services (CMS) has stepped up their efforts to enforce compliance with the Medicare Secondary Payor (MSP) statute. The MSP statute states CMS can recover damages from any entity [insurer, employer, employee, medical provider, plaintiff attorney or defense attorney] that attempts to shift the burden for workers' compensation medical cost to Medicare.
The MSP statute states that Medicare does not pay for any medical expense that can reasonably be expected to be paid promptly under workers' compensation law (or other types of insurance). Workers' compensation is considered the primary insurer and CMS is considered the secondary insurer. (WCxKit)
The MSP statute provides that CMS will not pursue recover from a work comp insurer who has their settlement of future medical benefits approved by CMS. In order to obtain CMS approval, the work comp insurer must provide a Medicare Set-Aside Arrangement (MSA) for CMS to approve before the claim is settled. The MSA states how many dollars of the total settlement is allocated to cover the cost of future medical care. The specified amount has to be “set-aside” in a trust arrangement to cover future medical bills. The MSA can be professionally managed (and should be if the amount is significant) or the employee/claimant can be both the trust manager and beneficiary.
If CMS makes a payment and it is then determined that work comp should have paid, CMS will seek to recover the amount they have paid. The MSP statute gives CMS the right to recover the amount from the employee/claimant, but it also gives CMS the right to recover the amount they paid from the workers' compensation insurer. If they have to bring suit to recover the amount they have paid, they can recover double damages from the work comp insurer for not making prompt reimbursement to them.
If the work comp insurer settled the claim without an approved MSA, the work comp insurer is still liable to CMS for CMS paid benefits for the work related injury even though the insurer has already paid the employee/claimant for those future medical benefits. If CMS pays medical benefits for the work related injury and the MSA was not approved, they can still recover the amount paid for medical benefits from the work comp insurer. [Yes, they should recover from the employee/claimant, but more than likely the employee/claimant has already spent the medical settlement on a new car, a new house, or whatever, and the insurer has assets that are much easier for CMS to recover from].
There is no time limit on when CMS can pursue recovery. If in 2010 they are making payments to a Medicare beneficiary and learn that in 1998 the employee/claimant had a work comp claim (that met the criteria for reporting to CMS) which is the original cause of the medical problems, CMS can demand immediate payment from the work comp insurer. If the work comp insurer put their paper file in storage ten years ago, they will need to retrieve it promptly, review it immediately and issue payment to CMS if justified, or face paying double damages after CMS has filed suit for recovery.
The question then becomes which work comp claims do the insurer (or the employer!) have to worry about? If you are leaving the medical benefits open when the indemnity benefits are closed, then you do not need to be concerned about CMS compliance. If you are buying out the future medical benefits at the time of the work comp settlement, then the answer is you need an approved MSA on any claims where:
The employee/claimant is already Medicare eligible, including:
1. Anybody already 65 years of age or older
2 Anybody already collecting social security disability benefits for 24 months or longer
3. Anyone already eligible for Medicare or Medicaid and the total settlement is greater than $25,000
4. Anybody with End Stage Renal Disorder,
OR
The employee/claimant has a “reasonable expectation” of becoming a Medicare beneficiary within 30 months of the date of the settlement and the settlement is greater than $250,000 including the indemnity portion of the settlement
“Reasonable expectation” is defined as:
- Anyone age sixty-two years and six months, or older, at the time of settlement
- Anyone under age 65 with permanent disabilities
- The claimant has applied for Social Security Disability Benefits
- The claimant has been denied Social Security Disability Benefits but anticipates appealing the denial decision
- The claimant has already file an appeal of Social Security Disability Benefits denial
- Anyone with end stage renal failure that has not yet qualified for Medicare benefits
The difficult part of “reasonable expectations” is it covers any employee/claimant who receives a disability rating. If the medical provider gives the employee a ten percent (10%) rating to the body as a whole, with a total settlement of $260,000 with $250,000 for the indemnity benefit, does the insurance company need to go through the process and cost of obtaining CMS approval of a MSA? The decision whether to obtain CMS approval or not has to be made on a claim-by-claim basis. If the decision is the cost of the MSA and time for getting it approve is not worth the effort, keep in mind all responsible entities – the insurer/employer/employee/medical providers, plaintiff attorney and defense attorney – remain responsible for any future cost paid by Medicare on the work related injury. In essence, you are leaving the future medical expense open, regardless of what your settlement agreement states.
The only sure way to avoid having exposure for future medical care on a claim where the employee/claimant meets the Medicare eligible definition or there is a “ reasonable expectation of the employee becoming a Medicare beneficiary, is to obtain the CMS approval of the MSA. Please note: Having a MSA as a part of the settlement but never obtaining CMS approval of the MSA is the same as never having a MSA.
For a MSA to be approved by CMS, it has to contain all the information the reviewer at CMS will need to make a decision. Unfortunately, there is no formula which will tell you if the MSA will be approved by CMS. This information that has to be supplied to CMS includes:
- All medical records
- The nature and severity of the injury
- Whether the employee/claimant has had a full recovery or partial recovery
- If the employee/claimant not had a full or partial recovery, what time frame is there before there will be a recovery
- The date the employee/claimant is entitled to Medicare or will become entitled to Medicare
- Whether the employee/claimant's condition is stable or is there a possibility the employee/claimant's condition will worsen
- Whether the employee is classified as permanent partial disabled (and what percentage disability rating) or is the employee/claimant permanent total disabled (100% disability rating)
- Whether or not the employee/claimant is a paraplegic or quadriplegic or amputee as the result of the accident
- Where the employee/claimant is living – at home, in an assisted living facility or nursing home
- The amount of medical cost already paid by the work comp insurer
- The dollar amount of a structured settlement or lump sum settlement
- The age of the employee/claimant
- The anticipated future cost of medical care for the employee/claimant(WCxKit)
As it currently stands, all insurers must be able to electronically report all their workers' comp claims to CMS by January 1, 2011. The CMS computers will be able to match any Medicare beneficiary to the work comp claim by their social security number. For the insurer (or self-insured employer) to protect themselves from future claims from CMS, they must make sure they abide by the MSP requirements, including having CMS approval of a MSA.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: RShafer@ReduceYourWorkersComp.com.
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