There are many issues to consider when seeking to settle a workers’ compensation claim. These are issues that claim handlers need to examine to determine what claims are prime for settlement. When done properly, there can be a reduction in the costs spent on claims. It also frees up reserves, which allow programs to settle more cases. Now is the time to understand how to identify cases ready for settlement.
Creating an Action Plan to Settle Cases
The old saying, “the file that collects dust causes the most problems,” applies to claim handlers. Every member of the claim management team needs to make sure their files do not collect dust – touching their files and determining what needs to be done next to move it toward settlement.
In order to resolve files, it is important to create an action plan that is geared toward settling claims quickly and efficiently while at the same time acting ethically.
- Value the Claim: It is important to value all claims realistically. Factors to consider include the nature and extent of the injury, the ability of the employee to return to work (without a wage loss), and exposures related to future medical care and vocational rehabilitation.
- Review Treatment Records: While the opinions of all medical experts are given equal footing, it is essential to remember the findings and opinions of the treating doctor are often given greater weight and credibility. It is crucial to evaluate the claim based on treatment received, the time frames one work expect related to an injury, and other related factors related to standards of care.
- Jurisdictional Issues: Some states have workers’ compensation systems with benefit systems that are more “employee-oriented.” It is essential to understand the nature of the system in which the location in a venue impacts the ability to settle a claim.
Working with Your Settlement Team
Workers’ compensation stakeholders are not looking for more tasks to complete in the claims management process. Building out and defining responsibilities of each settlement team member will allow each individual to accomplish more in less time. Settlement team members include:
- Claims Adjuster
- Settlement Advisor
- Medicare Set-Aside Partner
- Professional Administrator
- Defense Attorney
- Medical Advisor
Claim handlers can resolve some of these issues with a properly timed independent medical examination and/or functional capacity evaluation and use of an independent vocational expert. These experts can address the nature and extent of the injury, the need for future medical care, restrictions on activity, and permanent partial disability ratings. Other factors can include evaluating an employee’s job search activities, transferable job skills, and need for ongoing services such as retraining.
Setting a reasonable value on a claim allows a claim handler to prioritize matters and reach timely settlements. Now is the time to properly evaluate and value your claims.
Other Factors to Consider
Other items need to be considered when settling a workers’ compensation case that changes in state and federal laws have complicated. Some of these factors include:
- Employment Discrimination: Employer and insurer representatives need to be aware of the myriad of state and federal laws concerning employment discrimination. This includes potential interference with workers’ compensation benefits, along with possible claims of age, race, sex, and other protected classifications. A settlement may necessitate an employment release.
- Medicare Secondary Payer Issues: The closure of future Medicare items and services in a workers’ compensation settlement has caused many sleepless nights by injured employees, attorneys, and members of the claim management team. Considerations related to Medicare include conditional payments (including those made by a Medicare Advantage Plan) and future medicals in the form of a Medicare Set-aside. These fears can be resolved by working with a knowledgeable services provider in this area.
- Loss of Income: Employees are often hesitant to settle workers’ compensation claims because they lose their ability to receive ongoing income. This includes instances where someone is receiving a significant settlement. Parties should consider the use of structured settlements that provide a “win-win” for all parties to a dispute. There is also the benefit of working with a structured settlement consultant who provides “free” advice as their commission is paid by the insurance carrier from whom the annuity is purchased.
Facing these challenges head-on allows claim handlers to properly handle files, pay all benefits and injured employee is entitled to receive, and settle claims promptly.
Now is the time for all members of the claims management team to move claims forward toward settlement. This requires the claim handler to avoid letting dust settlement on the file – create a plan and work it. When doing so, it is important to remember the unique characteristics of a file that prevent resolution. Now is the time to get started without delay.
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 the founder & lead trainer of Amaxx Workers’ Comp Training Center, which offers the Certified Master of Workers’ Compensation national designation.
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