Mediation is frequently used in workers’ compensation cases to settle claims and avoid the uncertainties of litigation.  This is because it allows all interested stakeholders to be involved in the process and allows for outcomes not otherwise attainable in court.  When preparing for a mediation session, it is important for those involved to prepare and assist the neutral third party in better understanding the case.  One tool to accomplish this goal is to prepare a confidential mediation statement.  It not only helps the mediator but allows those involved to reflect and understand their claim.

Getting the Process Started – Agreeing to Mediate

Mediation can be a formal or informal process to settle a workers’ compensation case.  The structure involves a neutral third party who understands the process and controlling statute to help the parties evaluate their position and move a case toward settlement.  Selection of a neutral third-party requires cooperation between the defense and employee interests.

In very few instances is mediation “required” as part of the workers’ compensation claims process.  However, this should never prevent parties to a workers’ compensation case to use it as a means to settle a dispute.

We’re Going to Mediate – Now What?

Mediating a workers’ compensation case must be taken seriously.  It requires preparation and evaluation by all parties.  In many instances, the selected mediator will request the parties to prepare a mediation statement.  This is a letter prepared by the respective parties and should be kept confidential.  It should be factual, so the third-party assisting in the settlement can help.  It can also contain other important documents relevant to the case that outline a party’s position.

There is no one right way to draft a mediation statement.  Important elements to consider should include the following:

• Defining the claim: When both parties outline the claim, it will allow the mediator to ensure both sides are beginning from the same starting point.  A classic example of this is a determination of the average weekly wage (AWW).  Because most indemnity benefits are based on this number, the value of a claim can hinge on the AWW.  It is also important to outline defenses to a claim.  This has a huge impact on the potential recovery and future exposures.

• Procedural posture and prior negotiations: Providing this background information allows the neutral third-party to understand a case’s starting point and what the ultimate objectives of the parties include.  It will also allow the mediator to understand other important case dynamics.

• Honest assessment cases strengths/weaknesses: This is especially important in instances where there is a denial of primary liability or the reasonableness/necessity of medical care and treatment.  Honestly going through the process allows all attorneys and members of the claims management team to understand the claim better and set realistic expectations.

• Pertinent medical and vocational reports: These documents include IMEs, IVEs, FCEs and narrative reports from the employee’s treating doctor.  These reports and documents typically provide a good summary of the claim and help the mediator better understand the case.  It also allows the parties to understand the strengths and weaknesses of a claim.

Other Things to Consider

A mediation statement is also a great tool to inform the mediator about the case intangibles and dynamics.  It is important for a mediator to know information such as the special needs of a client and issues that are a “must-have” in any settlement.  This often includes a global settlement and voluntary resignation of the employee as part of the settlement.

Get Help Planning & Preparing for Mediation – For No Cost

With many aspects involved in a successful settlement, interested stakeholders can benefit greatly from professional settlement assistance. A settlement consultant comes at no cost and is a settlement expert with knowledge and access to various settlement tools to address the most challenging workers’ compensation claim issues. These experts can be brought into the process early on, so the settlement is set up appropriately.

Rather than just running quotes, the settlement consultant should act as the general contractor in identifying, bringing and managing the best experts to the table to address the issues preventing a positive outcome for all parties in the case.

Conclusions

The use of mediation in workers’ compensation is growing in popularity given its practical uses in settlement.  When preparing for mediation, it is important for all parties to prepare.  Part of this includes the use of a confidential meditation statement to provide a background to the neutral third-party and help the parties better evaluate their case.  It also serves as a means to make efficient use of time and reduce costs.

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 .

Contact: mstack@reduceyourworkerscomp.com.

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

©2019 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.

Settling workers’ compensation cases is an important part of being a proactive and effective member of the claims management team.  It also allows interested stakeholders to concentrate their efforts on other more burdensome cases.  Most importantly, it reduces unnecessary costs to a program’s bottom line. Working with an experienced workers’ compensation attorney can ensure you get the best agreement for both the employer and the injured worker.

What is the Claims Management Toolbox?

Having a “toolbox” at one’s disposal is important to being a great claims handler.  Like a toolbox a mechanic uses to practice their trade, claim handlers need one as well to fix, accomplish or avoid a number of issues.  Caution – use these tools with care and only when necessary.

Limited Compromise Settlements

All members of the claims management team will agree, the only good file is a closed file.  In some instances, this is not possible given the interests of the claimant or on advice of their attorney.  In cases that cannot completely settle, a claims handler should examine whether the claim presents an opportunity for a limited compromise settlement.

Under this type of settlement, indemnity benefits such as TTD, TPD, PPD and PTD are closed out.  The only benefits available to the employee include past and/or future medical benefits.

Limited Compromise Settlements have some advantages:

• Reduces costly exposures that may be present on a claim. This is especially the case when an employee is not incurring much in terms of ongoing medical benefits, but is struggling with return to work issues; and

• Studies indicate claimants in workers’ compensation claims tend to reduce the frequency of their medical care and treatment after closing out indemnity benefits. Limited compromise settlements that leave open future medical benefits can also be helpful in instances where the parties may want to consider a Medicare Set-aside, but the cost and/or future medicals that are reasonable is astronomical.

Effective use of Hold Harmless Agreements

A “hold harmless” agreement is another tool members of the claims management team can use to settle cases.  When using such agreements, the parties to a settlement are creating a contract where one party agrees to release another from all legal claims.  In the context of workers’ compensation claims, this is mainly used when it comes to the reimbursement of past or future medical expenses and liens.

Such agreements can be used in many instances to expatiate settlements.  This includes:

• Delay in the receipt of medical bills related to a claim where the amount is either known, or reasonably expected to be known; and

• One party to a claim has the ability to extinguish the interests or potential intervention rights of a known third-party.

Hold harmless agreements should be used with caution.  While such agreements “require” cooperation from the party receiving protection, it might not necessarily be the case if litigation occurs.  In fact, the indemnified party (the party receiving protection) may need to engage in litigation in order to secure cooperation.

Hold harmless agreements should also be avoided in instances where Medicare and Medicaid have an interest in a claim.  The statutory framework establishing these federal programs does not prevent the applicable government agency from enforcing their rights against any party to a workers’ compensation claim.  This rationale has been affirmed by a long line of case law interpretations.

Other Tools for Effective Claim Resolution

Settling workers’ compensation claims requires members of the claims management team to take affirmative steps to remove barriers to settlement by using their toolbox.

• Develop strategies on their teams to identify cases ripe for settlement and take steps to close files. This sometimes includes picking up the telephone and making a settlement inquiry or offer. Once identified, these cases can be submitted to a competent structured settlement consultant who may be in the best position to determine the likelihood and course for settlement;

• Using mediation and promoting the use of settlement conferences to move claims toward a timely resolution. Be prepared for these events.  One may also want to consider bringing a laptop computer and printer to these sessions.  This allows for the drafting of the settlement agreement on the spot and avoid delays in final execution; and

• Implement effective medical management programs to lower prescription drug costs on all files.

Conclusions

The development of a claims “toolbox” is one step interested stakeholders can use to reduce workers’ compensation costs.  This is accomplished by promoting the closure of files, or at a minimum resolving some issues on a file to narrow the issues in dispute.

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.

Contact: mstack@reduceyourworkerscomp.com.

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

©2019 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.

Mediation is frequently used in workers’ compensation cases to settle claims and avoid the uncertainties of litigation.  This is because it allows all interested stakeholders to be involved in the process and allows for outcomes not otherwise attainable in court.  When preparing for a mediation session, it is important for those involved to prepare and assist the neutral third party in better understanding the case.  One tool to accomplish this goal is to prepare a confidential mediation statement.  It not only helps the mediator but allows those involved to reflect and understand their claim.

Getting the Process Started – Agreeing to Mediate

Mediation can be a formal or informal process to settle a workers’ compensation case.  The structure involves a neutral third party who understands the process and controlling statute to help the parties evaluate their position and move a case toward settlement.  Selection of a neutral third-party requires cooperation between the defense and employee interests.

In very few instances is mediation “required” as part of the workers’ compensation claims process.  However, this should never prevent parties to a workers’ compensation case to use it as a means to settle a dispute.

We’re Going to Mediate – Now What?

Mediating a workers’ compensation case must be taken seriously.  It requires preparation and evaluation by all parties.  In many instances, the selected mediator will request the parties to prepare a mediation statement.  This is a letter prepared by the respective parties and should be kept confidential.  It should be factual so the third-party assisting in the settlement can help.  It can also contain other important documents relevant to the case that outline a party’s position.

There is no one right way to draft a mediation statement.  Important elements to consider should include the following:

• Defining the claim: When both parties outline the claim, it will allow the mediator to ensure both sides are beginning from the same starting point.  A classic example of this is a determination of the average weekly wage (AWW).  Because most indemnity benefits are based on this number, the value of a claim can hinge on the AWW.  It is also important to outline defenses to a claim.  This has a huge impact on potential recovery and future exposures.

• Procedural posture and prior negotiations: Providing this background information allows the neutral third-party to understand a case’s starting point and what the ultimate objectives of the parties include.  It will also allow the mediator to understand other important case dynamics.

• Honest assessment cases strengths/weaknesses: This is especially important in instances where there is a denial of primary liability or the reasonableness/necessity of medical care and treatment.  Going through the process in an honest manner allows all attorneys and members of the claims management team to better understand the claim and set realistic expectations.

• Pertinent medical and vocational reports: These documents include IMEs, IVEs, FCEs and narrative reports from the employee’s treating doctor.  These reports and documents typically provide a good summary of the claim and help the mediator better understand the case.  It also allows the parties to understand the strengths and weaknesses of a claim.

Other Things to Consider

A mediation statement is also a great tool to inform the mediator about the case intangibles and dynamics.  It is important for a mediator to know information such as the special needs of a client and issues that are a “must have” in any settlement.  This often includes a global settlement and voluntary resignation of the employee as part of settlement.

Conclusions

The use of mediation in workers’ compensation is growing in popularity given its practical uses in settlement.  When preparing for mediation, it is important for all parties to prepare.  Part of this includes the use of a confidential mediation statement to provide a background to the neutral third-party and help the parties better evaluate their case.  It also serves as a means to make efficient use of time and reduce costs.

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.

Contact: mstack@reduceyourworkerscomp.com.

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

©2019 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.

The only good file is a closed file!  In workers’ compensation, this is accomplished by settling with the injured employee via a Stipulation for Settlement or Release.  While this may “close-out” a claim, employee’s in many jurisdictions are able to re-open it by vacating the matter and pursuing additional workers’ compensation benefits.  This possibility should prompt members of the claim management team to make their settlement agreements as ironclad as possible.

Issues to Consider When a Petition to Vacate Has Been Made

The standard to reopen a settled workers’ compensation claim varies in each jurisdiction.  There are common themes that members of the claim management team should consider when working with defense counsel on these matters.

• Mistake of Fact: This can occur in several different instances: Mutual mistake of fact, which involves an unforeseen consequence of foreclosing an employee’s then unrecognized right to various workers’ compensation benefits; Unilateral mistake of fact, which occurs when a party or their attorney lacks knowledge of a material fact that would unquestionably have caused them to not settle the workers’ compensation claim; Mistake of law; Misunderstanding; or Lack of counsel;

• Newly Discovered Evidence: This is generally limited to cases where the evidence is in existence at the time of the settlement agreement, but was not discoverable through a diligent investigation. Examples of this include medical records that were not made available but requested by a party.  Courts have not allowed medical and other evidence that was available or could have been available, but efforts were not made to discover them;

• Fraud: This occurs when there is a false representation of a material fact, the fact must be of suspectable knowledge, the representing party must know the fact is false, the representing party must intend for another to be induced to act based on the false representation, the other party must have acted on the false representation, and the misrepresentation must be a proximate cause of actual damages (g., a settlement closing out various workers’ compensation benefits);

• Substantial Change in Condition: This includes a number of different medical factors.  It can include a change in diagnosis, change in the employee’s ability to work, additional permanent partial disability, the need for more costly and/or extensive medical care (g. – the need for in-home nursing services), and a worsening of the employee’s condition that was not anticipated at the time of settlement; and

• Null and Void: This comes down to questions of “competency,” and whether the employee who enters into the settlement can understand the significance of it. Factors to consider can include the age of the injured employee or their mental capacity.

Making the Settlement Final

It is important to understand that the workers’ compensation settlement is like a contract – it is only as good as the person who drafts it.  Basic rules of contract construction are taken into consideration.  The chief concern from a claim handler’s perspective is it being constructed against the party who drafts it.  Steps that can be taken into consideration include:

• Make sure the nature of the dispute is clearly stated in the settlement agreement. This includes outlining in detail the claims and contentions of each party;

• Outline the terms of settlement in a clear and concise manner. Correctly state the nature and extent of the work injury – and make sure all work injuries being closed out are listed in the agreement; and

• State with certainty what the terms of settlement and benefits being closed out under the agreement. Consider highlighting and underlining these material terms.

If allowed, have the injured employee acknowledge they have read the entire agreement and had it explained to them by an attorney. They should understand their condition might change in the future or become substantially worse, and that if the condition, unfortunately, becomes worse in the future, it could involve a very large amount of medical or surgical expense and disability of a very serious and prolonged nature.  If the employee is not represented, they should also acknowledge in the agreement they had the right to be represented by an attorney but decided to forego this right.

Obtain Help Drafting Settlement Agreements

A settlement agreement is a legal document which should be drafted and reviewed by skilled professionals.  These professionals include the use of an attorney, as well as settlement consultant for the planning and negotiation of the agreement.

Conclusions

Settlement of a workers’ compensation claim should include finality and peace of mind.  While this might not always be the case, effects can be made to make the settlement agreement as ironclad as possible to avoid it being vacated and incurring additional litigation expenses.

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 .

Contact: mstack@reduceyourworkerscomp.com.

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

©2019 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.

Workers’ comp mediation and other alternative dispute resolution methods can be effective in the settlement of workers’ compensation cases.  It also helps promote program efficiency that frees up funds set in reserve, which in turn can be used to settle other claims.  Notwithstanding the benefits of using dispute resolution mechanisms, it is important for members of the claim management team and other interested stakeholders to prepare.  Failure to do so can waste everyone’s time and energy.

Selecting the Right Mediator

In most jurisdictions, there are no specific requirements or training someone needs to have to serve as a mediator.  The result is the parties to the workers’ comp mediation have the unfettered right to select the person to serve as the neutral.  With this in mind, it is important to note every mediator brings a unique skill set to the table.  This should include someone knowledgeable in a particular workers’ compensation act, and have a reputation for being able to cut through the smoke and mirrors of contentious litigation and get everyone to “YES!”

Preparing for a Successful Workers’ Comp Mediation

A mediator may often ask that parties submit a confidential mediation statement in advance.  This document can serve as the framework for reaching a favorable settlement and avoid wasting time.  Each mediator may have their own preference as to what is covered in the mediation statement.  Common points that should be considered can include:

• An itemization of the benefits claims/defenses and potential recovery/exposure: The value of a workers’ compensation case is the starting point for settlement.  This often includes calculations for the employee’s average weekly wage (AWW), exposure for various indemnity benefits (TTD, TPD, PPD, and PTD) and medical benefits.  Other items to consider include the need for vocational rehabilitation services and the possibility of retraining.  All parties should consider the strengths and weaknesses of defenses such as causation issues, the reasonableness/necessity of medical care.

• Expectations regarding a reasonable settlement range: The goal of mediating a case is to find common ground.  This requires compromise on the part of the defense interests and injured employee.  Attorneys, settlement consultants, and other interested stakeholders need to evaluate their cases and have an understanding as to where this case may settle.  This will allow the mediator to work with all sides in reaching an agreement.

• The status of any prior negotiations, offers, and demands: Any settlement needs to start with a settlement demand.  This information should be communicated by the employee or their attorney to the employer/insurer before mediation takes place.  In the same regard, the defense interests should obtain reasonable settlement authority.  A claim handler ideally will be physically present at the mediation and able to get additional authority if necessary.

• An honest assessment of your cases that includes its strengths and weaknesses: All parties needs to be honest about settlement and participate in good faith.  Attending a mediation just to see how the other side views the case can be unproductive and delay settlement on other cases.  A good mediator will challenge the parties if there is a sense they are not negotiating in good faith.

• Confirmation that all intervenors and/or interested parties have received proper notice. It is important that all interested medical providers, private insurance carriers, and government agencies such as Medicare or Medicaid be made aware of their potential right of recovery.  This should be completed well in advance of settlement negotiations so they can provide all parties with an updated benefit resume.

Conclusions

Reaching a settlement on every case is not practical given the contentious nature of workers’ compensation litigation.  Notwithstanding these barriers, all parties should consider workers’ comp mediation as a tool to resolve cases.   It can also deliver the “win” all parties are looking for as they work hard in resolving disputes.

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.

Contact: mstack@reduceyourworkerscomp.com.

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

©2019 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.

Running an effective workers’ compensation program revolves around managing risk and reducing it when necessary.  In some workers’ compensation cases, this includes the demand the employee voluntarily resigns their employment from the employer and agree to never work for them again, also known as an employment release and resignation.  Before making such demands, it is important to understand the numerous pitfalls associated with an employment release and resignation and how to use it in an effective manner.

Understanding an Employment Release

A voluntary resignation and release of any and all employment claims by the employee are outside the scope of the workers’ compensation insurance policy.  It is important for all defense interests to coordinate via their defense counsel.  The Release must be found in a document separate from the settlement of the workers’ compensation claim and the consideration (money paid to the employee) must be paid by the employer.

An effective Employment Release should be written with the interests of the employee and their employer in mind.  Given the numerous legal issues, attorneys representing the employer/insurer are often hesitant to draft such a document as it is outside the scope of their representation.  Retaining separate counsel who understands employment law issues may be something to consider.

It is also important that the employee understands what they are giving up under the terms of an Employment Release.  Points of contention include:

• The inability of the employee to make a claim against the employer for future unemployment compensation benefits;

• The inability of the employee to make an application for employment with the employer at any point in the future; and

• The inability of the employee to make any employment claims against the employer such as age, gender, and race discrimination, along with claims for interference with and/or retaliation for making a workers’ compensation claim.

Essential Terms to Include in an Employment Release

Any Employment Release that is included in a workers’ compensation claim should be either drafted by and/or reviewed by an attorney specializing in employment law matters.  They should also know and understand all applicable state-specific and federal laws governing employment law matters.

Common terms found in such an Employment Release include the following:

• Discrimination: Prominent federal laws in the area of employment prohibit employers from discriminating against employees on the basis of race, color, religion, sex, or national origin.  These provisions are found under Title VII of the Civil Rights Act of 1964.  Other important federal laws include the Americans with Disabilities Act and equal pay laws.  State laws typically mirror federal standards, but can also exceed the minimum thresholds or include other classes (g. – sexual orientation, marital status, economic status/receipt of public assistance) of employees.

• Retaliation: Most states have anti-retaliation provisions in their workers’ compensation laws that create a civil cause of action against employers who harass or intimate employees who file claims.  Case law in many states has extended legal protections to all employees, including those not legally authorized to work inside the United States.

• Sexual Harassment and Emotional Distress: The #MeToo Movement has given rise to a renewed national consciousness regarding sexual harassment and assault in the workplace.  Claims can include the intentional or negligent infliction of emotional distress under tort law.

• Contract Claims and Breach of Contract: Employees can also allege their employers violated the terms of a workplace contract.  This is often the case in dealing with employee’s subject to a collective bargaining agreement. While employees are generally considered “at will,” claims can be made for implied or express contracts.

• Payment of Wages: Wage disputes are common for employee’s subject to overtime pay.  The non-payment of a bonus can also be an issue when an employee is subject to termination at the end of a quarter or year-end.

It is important to avoid using forms.  Failure to fully understand the law may prove catastrophic for all defense interests involved in a workers’ compensation claim.

Conclusions

Members of the claim management team need to seek opportunities to reduce risk and maximize the effectiveness of a workers’ compensation settlement.  One such option is to seek a global settlement where the employee agrees to voluntarily resign their employment from the employer.  It is important that the claim management team, employer and defense counsel discuss these issues and coordinate in an effective manner.

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.

Contact: mstack@reduceyourworkerscomp.com.

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

©2019 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.

Many injured workers who settle their workers’ compensation claims struggle with how to ensure they’ll have enough money throughout their lives. There are many issues to consider in addition to continuing medical care – paying monthly bills, funding a child’s education, and unexpected expenses that may arise. There may also be concerns about complying with various government programs, such as Medicare and future tax implications.

Partnering with an expert settlement consultant is a must for any injured worker thinking of settling his workers’ compensation claim. There are many issues to consider and personal decisions to be made. A competent, experienced professional who spends time getting to know the injured worker and his loved ones can provide invaluable insight and guidance in the process.

Decisions, Decisions

Many people expecting a large sum of money opt for a large cash windfall over a long-term plan.  Sadly, despite their best efforts to preserve it, many of these individuals find the money is soon depleted. Statistics show this happens all too often.

Injured workers who settle their workers’ compensation claims are no different. But those who have the benefit of working with an expert can realize the myriad options involved in a settlement regarding how, when and what amount of money they can collect to meet their specific needs.

As an example, we’ll take a hypothetical case.

John is 57 years old and has been receiving workers’ compensation benefits for 7 years after being severely injured in a work-related accident. John is tired and frustrated with the workers’ compensation system and would like more control over his medical decisions. However, he has significant worries about the settlement amount. He doesn’t know how much would be appropriate to cover his lifetime medical costs and is concerned that he will run out of money too soon. He also has several outstanding debts that must be repaid soon. And he has a family and is worried he won’t have money to address their needs, now and in the future.

Finally, there is the issue of Medicare. He’s been told his medical care would need to be funded through a special fund to ensure Medicare is not forced to pay for treatment that should be covered through workers’ compensation. He doesn’t quite understand that or what his obligations would be.

The Solution

John and injured workers like him could have much improved, empowered lives — if they had an experienced, capable settlement consultant available to help. Such an expert could spend time with John and his family and sort out their various needs:

• Money to pay off immediate expenses
• Medicare and its requirements
• College education funding for his children
• Wedding expenses for his eldest daughter and her boyfriend
• Funds to eventually help care for his aging parents

What John and many others may not understand are the various legal changes over the years that have made a long-term settlement plan much more appealing. For example, the government allows structured settlement payments to be income tax-free if they are the result of a physical injury, sickness or wrongful death. Congress has established specialized annuity contracts to meet the special needs of injured people, and to address the concern that too many people spend their money quickly. The idea is to incentivize injured workers and their families to take their settlement money in a series of guaranteed future payments.

Contrary to what some may believe, there is also the option to take some of the money upfront, and/or as a future lump sum payment. There are no constraints on how the money is paid. For example, it can be

• Monthly
• Quarterly
• Semi-annually
• Annually
• Any combination

The amount paid is also adjustable. There could be a set amount for a few years, then increasing payments to handle anticipated future needs. The money can also be paid out over the person’s lifetime, or set up to continue being paid to heirs upon the person’s death.

In the case of ‘John,’ the settlement could be set up to receive money upfront to pay off his debts, then a stream of steady payments and influxes of larger sums at various points in the future to take care of his family’s needs. A competent settlement consultant can also put John in touch with other professionals such as:

• Lifetime medical care management.
• Lien resolution
• Financial planning.
• Tax consequences.
• Government benefit programs.
• Legal issues.
• Retirement planning.
• Insurance concerns.

Summary

Life is complicated and planning for a lifetime of medical management and financial stewardship from a workers’ compensation settlement is overwhelming and difficult. Working with a settlement consultant who understands the fears, needs, and concerns of the injured worker can both save significant settlement costs and bring peace of mind that lasts a lifetime.

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.

Contact: mstack@reduceyourworkerscomp.com.

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

©2018 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.

The only good file is a closed file! That is the mantra of any seasoned workers’ compensation claims professional.  Getting to the state of happiness requires skill, some luck and a lot of exceptional legal drafting when memorializing any settlement agreement.  Failure to do this can result in delay and added costs to a workers’ compensation program.

Outlining the Nature of the Dispute

The requirements for workers’ compensation settlement agreements vary in each jurisdiction.  Never forget to understand the essential requirements and include them in your settlement agreement.  Failure to do so will only cause future problems.  A general survey of state workers’ compensation laws note the following basic requirements:

• Materials Facts: Any settlement agreement should have a statement of admitted material facts.

• Matters in Dispute: The disagreements between the parties should also be stated.  It is important to allow the compensation judge or commissioner reviewing the document to know what matters are to be decided by the settlement agreement.

• Positions of All Interested Parties: The claims and contentions of each party must be stated in the settlement document.  These statements outline what is in

A settlement agreement should also specifically outline what is being settled and how the issues are resolved.  The main item in this area is a lump sum or annuity payment to an injured worker and various agreements regarding medical providers and other interested parties. A settlement consultant should be brought in to explain the options and benefits of receiving the money via periodic payments compared to a single lump sum.

If any issues remain in dispute, it is important to detail those matters. Statute or rule also govern payments under a settlement agreement.  Failure to make timely payments can result in an assessment of penalties.

Types of Settlement Agreements

The types of settlements available under a workers’ compensation system vary in each jurisdiction.  In some instances, the parties are not able to close out future medicals.  In other instances, this is the norm.

• Full, Final and Complete – Including Future Medicals: Under this type of settlement, all workers’ compensation benefits are forever closed out.  If you want something closed out, be sure it is clearly stated in the settlement document.

• Full, Final and Complete – Future Medicals Open: This is a settlement where all indemnity benefits (TTD, TPD, PPD, and PTD) are closed out. Medical benefits are typically only closed out through the date of settlement or some other specified period of time.  The employee remains eligible for future medical care and treatment provided it is reasonable, necessary and causally related to the work injury.

• Partial or “To-date” Settlements: This is a type of settlement where only certain benefits are closed out, or all workers’ compensation claims are resolved through the date of settlement.  Again, it is important to specify with precision what benefits are being closed out and through what date of the closure.

A competent workers’ compensation attorney should be part of this conversation.

Never Forget the Basics!

Regardless of jurisdiction, there are several guiding principles to keep in mind:

• A workers’ compensation settlement may never really be final. Most workers’ compensation acts allow for rescission of the settlement or for it to be vacated should it be determined there was a mutual mistake of fact, fraud or significant unanticipated change in the employee’s medical condition.

• All settlements are presumed to be fair, reasonable and in conformity with the workers’ compensation act. Extra scrutiny can apply in instances where the employee is not represented by an attorney.

• A workers’ compensation settlement must be memorialized in writing and approved by a compensation judge or industrial commission. Failing to receive this stamp of approval can render your settlement agreement meaningless.

Conclusions

Like any legal document, a settlement agreement needs to be carefully drafted and written with precision.  Failure to do so can cause unnecessary (and unanticipated) future expenses.

“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.”  Paluch v. UPS, 2014 Ill. App. LEXIS 283 (Ill. Ct. App. 1st 2014)

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 .

Contact: mstack@reduceyourworkerscomp.com.

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

©2018 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.

Using mediation as a tool to reduce workers’ compensation program costs is a growing trend across the country.  There are a number of reasons for its increased use.  This includes the fact it involves all parties, allows the employer and employee to have a voice in claim settlement and for creative remedies that would otherwise not be available in a judicial setting.

How Does Mediation Work?

There is no set formula for a successful mediation.  It will typically involve an agreed upon neutral third-party who evaluates the case and moves the adverse parties toward settlement.  More successful mediations are held in-person and can include a mix of joint sessions or when the parties are separated into different private rooms.  Whenever a mediation is conducted, it is important for all interested parties to be present and free from distractions.

Preparing for Successful Mediation

There are a number of steps that parties interested in settlement should take in order to prepare for mediation.  Important steps should include:

• Accurately review the claim to determine exposures and properly set reserves. Obtaining proper settlement authority and discussing settlement options is a must for defense counsel;

• Determine if the case is ready for mediation and whether settlement could include bigger issues such as the closure of all future medicals;

• Identify all potential intervention interests and place them on notice, if necessary. Failure to include a necessary party may be fatal to an otherwise great settlement;

• Have realistic settlement expectations – and also understand what the expectations of the other party might be.

Securing the expertise of a settlement consultant can be a valuable tool prior to mediation. Prior to settlement, they can work closely with the injured worker to gain deep insight into his needs and desires and help all parties attain a successful settlement.

It is also important to prepare a confidential case analysis letter for the mediator.  This is an opportunity to help the neutral third-party understand not only the strengths and weaknesses of your case, but how you view the claims of the employee.  This correspondence should also include expert medical and vocational reports.  By providing this information to the mediator in advance, you can spend less time providing background information while actually at the mediation and more time moving the case toward settlement.

Information provided to the mediator directly related to the mediation and settlement of a claim is generally considered confidential and not admissible in court at a later date.  Be sure to fully understand the confidentially rules applicable to your jurisdiction before submitting information.

Getting to Yes: Tips for Settlements

It is important to keep an open mind when preparing for a workers’ compensation mediation.  Failing to do so will only lead to further frustration and lack of settlement.  Here are some tips to reach a settlement at mediation:

• Prepare a Strategy: This includes playing “devil’s advocate” and discussing the pros and cons of various defenses.  A complete case evaluation should also take place and have a firm understanding of what the opening offer should be, likely counter-offers and the bottom line.

• Keep Interested Parties Posted: In many instances, cases fail to settle at mediation because the parties have not placed interested medical providers on notice of their potential intervention claims.

• Come Prepared for Settlement: Cases often settle at mediation and then languish as defense counsel and the attorney for the injured party exchange multiple drafts of settlement agreements. Proactive stakeholders should bring a laptop computer and portable printer, if available.  This allows the attorneys to have a copy of the settlement documents in hand, ready to review and reach a true final settlement.

Conclusions

Stakeholders interested in reducing workers’ compensation costs should examine the use of mediation as an opportunity to make their programs effective and efficient.  This can include the use of mediation as a tool to streamline the settlement process.

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 .

Contact: mstack@reduceyourworkerscomp.com.

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

©2018 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.

Which unappealing situation would you prefer?

A. You must seek permission to see any medical provider; then, you may have to wait and/or travel far distances to visit the physician. Any medications, surgeries, or procedures must first be approved, and there’s a good chance some will be denied.

B. You have to navigate a complex healthcare system yourself — meaning you’re on your own to find the right specialists and ensure they charge according to your state’s ‘fee schedule.’ You pay full retail prices for doctor visits and all medications and treatments. You must fully comply with the myriad Medicare requirements or risk ultimately losing that benefit. You are extremely worried you won’t have enough money to pay for your medical care, your mortgage and send your child to college. Short of paying excessive fees for expert advice, there is no one to guide you.

Complex Issues Can Prevent Settlement

Neither scenario is appealing; yet, those are the choices facing many injured workers with long-standing, complex workers’ compensation claims. While many would like to settle and finally leave the workers’ comp system; issues such as lien resolution, financial planning, legal issues, and insurance concerns are just some of the challenging hurdles which are seemingly too difficult to overcome.

Fortunately, a solution to these challenges can often be found that meets the injured worker’s unique needs, along with those of the attorneys, employer, payers, and others involved.  Finding the right people to work with can get claims off payers’ books and ensure the injured worker’s financial and medical needs are taken care of throughout his lifetime.

The Settlement Consultant

A settlement consultant is a settlement expert with knowledge and access to various settlement tools to address the most challenging workers’ compensation claim issues. For example, a consultant that works with insurance planners can provide comparative information on insurance products, such as disability or long-term care insurance. Having the benefit of an expert in Medicare Set-Asides available can ensure compliance and reporting issues are addressed, so future benefits are not put at risk.

These experts can be brought into the process early on, so the settlement is set up appropriately. Rather than just running quotes, the settlement consultant should act as the general contractor in identifying, bringing and managing the best experts to the table to address the issues preventing a positive outcome for all parties in the case.

Settlement Consultant as General Contractor

If you were building a house, you would need workers to lay the foundation and put up the walls, electrical and plumbing specialists, roofers, and HVAC professionals. You might want a home theater with the latest equipment and would need an expert for consultation and installation. Maybe you’d opt for a decorative pond on the property, and would need someone experienced in grading the land.

You would want a general contractor to oversee the entire project and make sure things were done according to your specifications and timeframe.

A settlement consultant should function as a general contractor who coordinates all the moving parts to the settlement. Just like the best general contractors, a settlement consultant should be able to identify and coordinate all the right players needed to create a truly win-win settlement.

Among the qualifications of the best settlement consultants are:

1. Vast experience and deep connections. The best settlement consultants have vast experience and deep connections with many vendors. They can find the right ones for each injured worker.

2. Whole-person approach. Superior consultants look beyond the amount of the settlement. They work closely with the injured worker, to ascertain not only his medical needs, but other considerations; such as unique legal issues to be resolved, insurance concerns; retirement needs, and college funding for children or grandchildren.

3. Ability to uncover lifetime needs. The most qualified settlement consultants spend time getting to know the injured worker and identifying his needs; then bringing in experts to address them.

4. No cost to the injured worker. The consultant’s services should also be completely fee transparent, and come at no cost to the injured worker.

Use Settlement Consultant Early

A settlement consultant should be brought into the case as early as possible, even before the worker has agreed to settle the claim. By forming a relationship with the injured worker and understanding his needs, the consultant can present a variety of customized solutions to focus on his particular situation and help reach an optimal settlement

Conclusion

Settling a workers’ compensation claim can be a nerve-wracking experience for an injured worker, especially one who has been in the system for an extended period of time. Working with a truly qualified settlement consultant can help settle the claim and empower the injured worker to lead the life they deserve.

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 .

Contact: mstack@reduceyourworkerscomp.com.

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

©2018 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.