• Menu
  • Skip to main content
  • Skip to secondary navigation
  • Skip to primary sidebar
  • Skip to footer

Before Header

  • About
  • Contact
  • Privacy
 
Ametros

Amaxx Workers Comp Blog

Reduce Workers Compensation Costs By 20-50%

Header Right

  • Home
    • Training Center
  • Search
    • Free Resources & Solutions
    • Subscribe to Free Newsletter
    • Create Free Training Center Account
    • Enroll in On-Demand Courses
    • Activate WC Mastery Membership
    • Request Strategic Coaching Session
    • Buy WC Guidebooks
  • Membership
    • Insider (free account)
    • WC Mastery
    • Teams & Managers Mastery
    • Training Partners
  • Products
    • On-Demand Courses
    • Specialty Courses
    • Certifications & Mastery Courses
    • Ultimate Guidebooks
    • Coaching
  • Blog
    • Video Blogs
    • COVID-19 / Coronavirus Pandemic
  • Login

Mobile Menu

  • Home
    • Training Center
  • Search
    • Free Resources & Solutions
    • Subscribe to Free Newsletter
    • Create Free Training Center Account
    • Enroll in On-Demand Courses
    • Activate WC Mastery Membership
    • Request Strategic Coaching Session
    • Buy WC Guidebooks
  • Membership
    • Insider (free account)
    • WC Mastery
    • Teams & Managers Mastery
    • Training Partners
  • Products
    • On-Demand Courses
    • Specialty Courses
    • Certifications & Mastery Courses
    • Ultimate Guidebooks
    • Coaching
  • Blog
    • Video Blogs
    • COVID-19 / Coronavirus Pandemic
  • Login
  • About
  • Contact
  • Privacy
You are here: Home / Claims Resolution and Settlement / Professional Administration / Avoid Legal Issues After Settling A Workers’ Comp Claim

Avoid Legal Issues After Settling A Workers’ Comp Claim

July 7, 2020 By //  by Michael B. Stack

Failure to draft a settlement document with precision can be costly, cause delays, and lead to unnecessary litigation.

You settled a workers’ compensation case with an injured employee. Now what?

This is a question members of the claims management team need to think about when they settle a workers’ compensation case. The main concerns are that the injured worker’s needs are appropriately taken care of, the settlement is reasonable for all involved, and all legal issues are properly addressed.

Most jurisdictions require the details be included in a written release or settlement agreement. This can be confusing for the injured worker who may need assistance. Otherwise, there can be delays, frustration, and either party backing out of the agreement. Understanding the process is key to reaching settlements that are truly a win-win for all concerned.

Having a professional administrator involved has been shown to bring about settlements acceptable to all. Organizations that provide professional administration are neutral in terms of the details of the agreement. Their role is to help the injured worker post-settlement, through guidance and, to an extent, managing the administration of the settlement funds.

Click Link to Access Free PDF Download

“8 ‘Think Outside the Box’ Tactics to Settle Workers’ Comp Claims”

Presumptions of Fairness

Settlements that involve attorneys are generally presumed to be “fair.” Issues often arise when a defense attorney or claim handler reaches a settlement with an unrepresented employee. When this is the case, the defense will generally be required to show a compensation judge or regulatory commission that the employee understands the agreement, and it conforms to the workers’ compensation act.

Taking the following steps can make the settlement process go smoothly:

  • Make sure the employee fully understands the settlement agreement — especially that future medicals are being closed out. Placing it in all caps/bold lettering helps ensure this is the case.
  • Let the injured employee know they can have the settlement agreement reviewed and explained to them by an attorney, if they do not have one. Some attorneys who represent injured employees will perform this service for a nominal, flat legal fee.
  • Have the employee make a written attestation in the body of the settlement agreement that they understand all future workers’ compensation benefits are closed out.
  • Ensure the employee understands any reporting requirements or post-settlement responsibilities. If the employee has a Medicare Set Aside (MSA), they will need to submit annual attestations to the Centers for Medicare and Medicare Services (CMS) each year. A professional administrator can help ensure the injured worker understands these responsibilities, and what services are available to help them comply with these guidelines.

Use Clear and Concise Language – Avoid Boilerplate

Workers’ compensation practices are often driven by form language. This includes using it for various items such as outlining the statutory authority for settlement, issues concerning the resolution of non-intervening medical interests and providers, and Social Security offset language. Notwithstanding these uses of form language, it is important the terms of settlement are clearly defined.

Failure to draft a settlement document with precision can be costly, cause delays, and lead to unnecessary litigation. An example of this comes from Paluch v. UPS, 2014 Ill. App. LEXIS 283 (Ill. Ct. App. 1st 2014), where a settlement agreement was challenged related to provisions concerning a MSA. In this case, the question related to whether a workers’ compensation settlement required the employer/insurer to pay the employee

$400,000, which included the MSA, or if it required payment of $400,000, plus an MSA. In sending the matter on for an evidentiary hearing, the court noted, “Sloppy, imprecise drafting can lead to legal wrangling. A single word in reciting the terms of a settlement, for example, can bring about intense litigation over interpretation. In drafting settlement agreements, lawyers should, quoting novelist Vladimir Nabokov’s advice to writers, ‘have the precision of a poet, leaving out the poet’s creativity, originality or artistic flourishes.’ Had the lawyers here been more studious and careful in choosing a single word (“plus”), this case undoubtedly would not have been necessary.”

In addition to using clear and concise language, the agreement should also meet the specific needs of the injured worker. For example, if a structured settlement is being used, the agreement should stipulate how and when monies will be available. Many such agreements include a monthly amount with additional funds allocated for specific times, such as when children may need college funding.

FREE DOWNLOAD: “8 ‘Think Outside the Box’ Tactics to Settle Workers’ Comp Claims”

Taking Care of All Intervenors

Many jurisdictions require parties in a workers’ compensation action to place all interested parties on notice. This includes either extinguishing their rights if they fail to intervene or settle their interests as part of any settlement. These parties include medical providers, medical insurers, other no-fault and liability insurance carriers, long- and short-term disability plans, and government disability and medical programs.

Often, professional administrators are involved to provide information about support and resources that are available to the employee after they settle their case. A major task of professional administrators is to help injured workers comply with the myriad of requirements the Centers for Medicare and Medicaid Services have in handling the MSA.

Placing these parties on notice requires cooperation between parties. This should be something asked about at the initiation of a claim, and through the discovery process. It also requires parties to update their inquiry as a claim moves toward mediation, hearing, or settlement. Failure to take these steps only causes delay, and frustration.

Conclusions

Members of the claim management team play an important part in settling workers’ compensation claims. It is important they take steps to ensure the settlement is consistent with the applicable Act. Other steps need to include proper drafting of a settlement agreement, and the resolution of all claims. Taking the proper steps will ensure a settlement is complete and resolved in a timely matter.

Michael Stack - Amaxx Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center , which offers the Certified Master of Workers’ Compensation national designation.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2020 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

FREE DOWNLOAD: “8 ‘Think Outside the Box’ Tactics to Settle Workers’ Comp Claims”

Filed Under: Professional Administration

Related Articles

Professional Administration Closes Workers’ Comp Claim Files

Professional Administration Closes Workers’ Comp Claim Files

Key to Settling Legacy Claims: The Family

Key to Settling Legacy Claims: The Family

Professional Administration Key Performance Indicators

Professional Administration Key Performance Indicators

Struggles & Risks in Self-Administering Workers’ Compensation Medicare Set Asides

Struggles & Risks in Self-Administering Workers’ Compensation Medicare Set Asides

Mental Health Services Before & After Settlement

Mental Health Services Before & After Settlement

CMS Revises Its Consent to Release Form – How Should The Industry Respond?

CMS Revises Its Consent to Release Form – How Should The Industry Respond?

Special Needs Trust Basics: What Should I Consider?

Special Needs Trust Basics: What Should I Consider?
professional administrator

5 Criteria to Choose the Right Professional Administrator

5 Criteria to Choose the Right Professional Administrator

Medicare is Issuing Denials

Medicare is Issuing Denials

Case Study: Double the Ongoing Medical Treatment From Injury Settlement

Case Study: Double the Ongoing Medical Treatment From Injury Settlement

5 Key Terms That Define Professional Administration Contracts

5 Key Terms That Define Professional Administration Contracts

Paul H. Sighinolfi Joins Ametros as Senior Managing Director

Paul H. Sighinolfi Joins Ametros as Senior Managing Director

Free Download

8 'Think Outside The Box' Tactics To Settle Workers' Comp Claims - FREE Download Click Here Now!

Train to Succeed

BECOME CERTIFIED IN WORKERS’ COMPENSATION

Proven Course Catalog & WC Toolbox Give You The Power To Achieve Lower Costs and Better Injured Worker Outcomes

VISIT WORKERS' COMP TRAINING CENTER

Previous Post: « Effective Mediation Tips for Claim Handlers
Next Post: 6 Tips for Successful Mediations by a Claim Handler »

Primary Sidebar

FREE DOWNLOAD

8 'Think Outside The Box' Tactics To Settle Workers' Comp Claims - FREE Download Click Here Now!

Our Sponsors

Post-Settlement Administration
 

ARCADIA - Enhancing Settlement Outcomes

The Structured Settlements Company
 

Catastrophic and Risk Solutions, Case Management Solutions, and Specialty Networks
 

Medcor

Injury Triage, Onsite Clinics

Read Our Award-Winning Blog

Blog Categories

Search Our Archive

Subscribe to Our FREE Newsletter

Return-to-Work Essentials

Footer

Search Our Archive

Search our continually growing archive of over 2500 articles about Workers' Comp issues.

Quiclinks

  • Calculators
  • Terms & Abbreviations
  • Glossary of WC Premium Terms
  • WC Resources
  • Best Practices
  • Industries
  • Return-to-Work Essentials

RSS Recent Blog Posts

  • Use a Medical Director to Reduce Workers’ Compensation Costs
  • Focus on the Workers’ Comp Fundamentals – Part 2
  • Focus on the Workers’ Comp Fundamentals – Part 1
SUBSCRIBE TO OUR FEE NEWSLETTER
Let Us Help You Stomp Down the High Cost of Workers' Comp!
Top of Page ↑
  • Home
  • Training Center
  • Search
  • Membership
  • Products
  • Blog
  • About
  • Contact
  • Subscribe
  • Login
Copyright © 2022 Amaxx, LLC. All Rights Reserved. · Privacy Policy / Legal Notice