What to Look For in a Structured Settlement Company

 

The use of structured settlements in large and catastrophic workers’ compensation claims is well recognized as a way to reduce the overall settlement cost while at the same time providing the injured employee with a fair claim settlement.  However, a factor often overlooked in structured settlements is the identification and selection of the best structured settlement company.

 

There are several characteristics and qualities that should be considered in the selection of the structured settlement company.  They are:

 

  1. Experience.

You want a structured settlement company that has a track record.  A structured settlement company that has been around for decades has more resources to draw from then a structured settlement company that has been in business for a few months.  The more structured settlements the company has completed in the past, the greater likelihood that they know how to deal with every possible scenario that could interrupt or prevent a structured settlement from occurring.

 

 

  1. Ability to Design Settlements.

The structured settlement company must have the ability to taken into consideration the needs of everyone including the injured employee and employee’s family, the attorney for the employee, the employer and the employer’s workers’ compensation insurer.  The structured settlement has to be designed to be flexible to address the needs of the employee while maintaining control of the settlement cost for the insurer.

 

The structured settlement company consultant must have an in-depth knowledge of sophisticated damage analysis and life care plans, along with the different types of trusts that can be included in a structured settlement.  By understanding the injured employee’s future financial needs and future medical care, the structured settlement consultant can design a creative solution that benefits all parties involved in the workers’ compensation claim.

 

 

  1. Resources.

A structured settlement is basically an annuity (or annuities) purchased from a life insurance company.  It is therefore essential for the structured settlement company to have several top rated life insurance companies available to provide the annuity/annuities.  By having several highly rated insurance companies available, the consultant can shop the settlement package with the different insurers to obtain the lowest overall cost for the structured settlement.

 

 

  1. Reputation.

There are structured settlement companies that work only with the plaintiff attorneys and there are structured settlement companies that specialize in working only with the defense attorneys.  These companies are well known to both the sides of the legal aisle, and are often mistrusted by the other side.  A structured settlement company that works with both plaintiff attorneys and defense attorneys must maintain a reputation of being unbiased and fair in all their dealings.  By selecting a structured settlement company that has the trust and extensive experience working with both sides of the legal aisle, the mistrust that hampers and prevents some structured settlements from occurring is removed.

 

 

  1. Geographical spread.

The structured settlement company should be somewhat local.  If the structured settlement company has only one office or even several offices in another part of the country, it is difficult for the structured settlement consultant to meet with the various parties involved in the injury claim. An example – if the structured settlement company is located in Florida and the injured party is in California, the structured settlement company will be less effective.  The structured settlement company that has a complete geographical spread and can provide a local consultant whether the injured employee is in Maine, Hawaii or somewhere in between will be able to provide the best service.

 

The proper selection of the structured settlement company can have a significant impact on the cost of the structured settlement.  For assistance in identifying and locating the best possible structured settlement company, please contact us.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

 

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

 

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

How to Plan, Prepare, and Negotiate Claim Settlement

 

Claim Resolution Should Start Immediately

 

Self-insured employers who utilize their own in-house adjusters often ask questions about how to arrive at a fair and equitable settlement of the workers’ compensation claims, especially claims where the employee is represented by an attorney.  The reasonable resolution of a workers’ compensation claims does not start when the employee’s attorney sends a demand letter toward the end of the claim, the proper resolution of the claim starts immediately upon notice the employee has been injured in an accident.

 

The first thing an employer can do to move a workers’ compensation claim toward a fair settlement is to provide immediate medical care following an injury.  In the states where the employer selects the medical provider, the employee should be directed to the nearby industrial clinic previously chosen (with the name/address of the industrial clinic posted on the employee’s bulletin board).  In the states where the employer cannot mandate the medical provider, a short listed of recommended doctors should be posted on the bulletin board.

 

The first phone call the employer should make following an injury is to the medical provider’s office notifying them that the injury just occurred and advising them the employee is on the way to their office.  This will streamline the admittance process for the injured employee and will reduce the amount of time between injury and medical treatment.  When the injury to the employee does not appear to be severe, the initial phone call to the medical provider will also allow you to remind the medical provider of your company’s light duty program for injured employees.

 

The second phone call immediately following the first phone call should be to the claims office/adjuster advising of the new workers’ compensation claim.  The protocol for your in-house adjusters should be to contact their fellow employee the same day to discuss their injury and the claim handling process.  By taking control of the workers’ compensation claim the first day, you start laying the ground work for the claim settlement.

 

 

On-Going Contact is Essential

 

During the course of the employee’s recovery is essential to have on-going contact with the injured employee by the employee’s supervisor or department manager or workers’ compensation coordinator or adjuster (whoever is delegated the responsibility).  By simply asking the employee to keep you abreast after each doctor’s visit of what the doctor had to say, will keep the lines of communication open and assist in getting the employee back to work on modified duty sooner.  It will also make settling the claim easier as the employee sees the employer less as ‘the other side’ and more as a partner in the recovery process.

 

In states where the employee selects his own medical provider, often the employee’s attorney will send the employee to a doctor the attorney knows will keep the employee off work for as long as the plaintiff attorney wants the employee to be off work. [In these cases the employee’s release from medical care will coincidentally occur when the employee begins to complain to the plaintiff attorney that they are having financial issues, as they have not adjusted their life style to live on the workers’ compensation disability payments].  When the medical provider is non-cooperative about returning the employee to modified duty work, the in-house adjuster can arrange for a peer review of the medical treatment being provided or arrange for an independent medical examination to show the employee is capable of modified duty work.

 

If the injury is severe, a nurse case manager should be assigned to the claim to manage and direct the medical care as much as possible.  By facilitating the medical care through a nurse case manager, the employee will make a quicker and better recovery with a lower overall impairment rating.  This will impact the settlement negotiations favorably.

 

 

Seek Settlement When Reach Maximum Medical Improvement

 

As soon as the medical provider indicates the employee has reached maximum medical improvement, an effort should be made to immediately move forward with settling any compensation owed for a permanent partial impairment. A few states still use the impairment rating combined with the employee’s disability compensation rate to establish the claim’s settlement value.  Most states however have gone to what amounts to a negotiated settlement of the workers’ compensation claim.

 

All the steps above are designed to manage and control the claim resulting in a lower initial settlement demand by the employee or the employee’s attorney.

 

Once the employee has reached maximum medical improvement and has been assigned an impairment rating, the in-house adjuster should thoroughly review the file and the medical facts of the injury to establish a settlement range for the claim. Once the settlement range has been determined, the adjuster should develop a negotiations strategy on how the adjuster plans to reach a value within the settlement range.

 

If any part of the settlement range exceeds the adjuster’s settlement authority, the adjuster should contact the person who can grant additional settlement authority with a detailed explanation as to why settlement authority over the adjuster’s settlement authority level is needed.

 

 

Employee Attorney Should Make Initial Offer

 

The in-house adjuster should not make the initial settlement offer until after the employee’s attorney has made their initial settlement demand.  If the adjuster makes the initial offer, the employee’s attorney will negotiate up from that point.  Better results are normally obtained by letting the employee’s attorney make the initial demand and negotiating down from the attorney’s settlement demand.

 

Once the adjuster has the demand from the employee’s attorney, the adjuster should review the attorney’s demand to determine how reasonable, or unreasonable, it is.  The adjuster should evaluate the key points the attorney uses to support his/her demand and determine if there is any justifiable reason to reevaluate the adjuster’s settlement range.

 

The adjuster’s initial offer to settle the claim should be as far below the mid-point of the adjuster’s settlement range as the employee’s attorney initial demand is above the mid-point of the adjuster’s settlement range.  The adjuster’s initial offer should include some of the key points on which the adjuster based the settlement range.

 

When the employee’s attorney makes a jester toward settling the claim by lowering their demand, the adjuster can mirror the attorney’s step toward claim settlement by raising the settlement offer a similar amount.  By mirroring the attorney’s settlement demand reduction with an increase in the settlement offer of the same size, the adjuster signals to the plaintiff attorney what the settlement amount will be without committing to anything.

 

 

Be Aware of Attorney Negotiating Tactics

 

A favor ploy of plaintiff attorney’s is to stop negotiating and state they have reached their bottom line.  This is an effort on the attorney’s part to get the adjuster to bid against him/herself and to raise the settlement offer multiple times without the attorney lowering the settlement demand any.  This pushes the adjuster to the high end of the settlement range if the adjuster falls for the ploy.  It also creates a situation where the adjuster will have to overpay to settle the claim, or enter into an extended defense of the claim.  The adjuster’s best response to the attorney stating they have reached their bottom line, is a simple, “yeah, me too.  I was hoping to settle the claim, but I have reached my settlement authority.  If your client decides to lower their demand any, please let me know and I will pass it along to the higher ups”.

 

A tactic used by some attorneys to try to force a higher than justifiable settlement is to claim the employee has had a relapse.  The attorney tells the employee to go back to the doctor and emphasis how much pain they are having, the difficulties they are incurring due to their impairment, and to start treatment with the doctor in an effort to get a higher impairment rating.  This tactic should be countered with an independent medical evaluation to verify or disprove the worsening of condition claim.

 

By preparing for settlement negotiations from the start of the claim, and by planning and managing the settlement negotiations, the in-house adjuster can obtain a fair and reasonable settlement.  While it takes a level of high quality claims handling to obtain an equitable settlement of the workers’ compensation claim, it is well worth the effort to obtain a proper negotiated settlement.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

 

©2012 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

Is Your Adjuster Playing Favorites With Your Claims

Adjuster Will See Thousands of Claims

 

Throughout the course of an adjuster’s career they will handle hundreds if not thousands of claims.  Most of these claims will be audited for company and state compliance, and plans of action will be discussed on all of them.  Whether to deny or accept claims can be based on a multitude of factors using the comp statues and company policies as guidelines.

 

There are no two claims that are exactly alike, the same way that there are no two adjusters that are identical.  There is room for interpretation in this field of workers compensation.  Adjusters will review the details of a claim and make a decision on the compensability based on their investigation.  But not all of these factors are based purely on law alone.  There are plenty of personality factors that are taken into account, especially when dealing with subjective claims where the claim is questionable.  But why would one person’s claim be accepted, when another person with similar circumstances could be denied?

 

 

Reputation of the injured worker

 

One of the questions a claims adjuster will ask the employer is if this claimant is a credible worker.  Since the employer deals with this worker day in and day out, they get to know whether this worker is a “troublemaker” or “dramatic” over the course of time. Some workers are known for being drama kings and queens, where they can complain about every little thing.  Other workers are workhorses, complaining little if at all about the work and just putting their nose to the grindstone and getting the job done day after day.  When it comes to subjective injury, especially one that is not witnessed, the claims adjuster will hold a lot of weight on the worker’s credibility. Sometimes this fact alone can determine whether or not a claim is accepted or denied, where the adjuster will lean towards denial of the claim based on credibility of the worker alone.  This is by no means applicable to all cases, but it can come up in the minor ones.  This fact can be very true if the worker has a history of reporting injuries about every little nick or strain.

 

On the other hand, if a “good” worker has a subjective injury, and little to no injury history, then you can bet that the employer will pass that on to the adjuster. Chances are that this claim would be accepted just based on the fact that this particular worker is never hurt, a good worker, and because they reported an injury means that they are probably in need of some medical assistance to recover.  Whether this is considered ethical or not is in the eyes of the beholder, but it is a reality.

 

It can be viewed as negative in the eyes of an adjuster if the worker was recently moved, assigned a different job, suffered a wage decrease, or was recently disciplined.  It can be seen as “getting back” at the employer if one of these events happens and all of the sudden a worker claims an unwitnessed subjective strain injury.  Whether it was warranted or not, employees can harbor some resentment towards their employer for whatever “wrong” was committed.  A lot of workers see filing an injury as a way to get back at their employer.  But just because they file an injury doesn’t mean that it will be accepted. This will come down to the investigation of the adjuster on the aspects of the claim.  Sure an injury was reported, but if it was not witnessed and the doctor cannot find anything wrong with them, did an injury actually occur?

 

 

 

90% of Claims Are Accepted

 

Keep in mind that for the most part, approximately 90% of claims are accepted.  The adjuster sees payment of a few medical bills as less costly than if they deny the claim and the worker files a lawsuit for comp benefits.  If this were to happen, the adjuster is now faced with legal fees which would probably be triple what the claim would cost if they had just accepted it, so they may accept it based on that fact alone. It will depend on the facts of the case, the reputation of the employee, and the medical details.  If nothing seems to add up, then you can bet the claim will be denied or disputed. The burden of proof is always on the injured worker.

 

 

Rapport Between Adjuster and Injured Worker

 

Maybe the most important factor in claims such as these will be the rapport between the adjuster and the injured worker.  Sometimes the relationship is like oil and water.  If this is the case, the adjuster may default to questioning everything, and making the claimant do everything by the book exactly.  If the relationship is rocky the adjuster leans toward an overall denial versus acceptance.  Especially true will be those claimants that call the adjuster over and over and over again, but not in a positive way. Saying that the “squeaky wheel gets the grease” is not always true. Sure it is common for someone to have questions about their claim, but when it turns negative in nature, adjusters are taught to notice that something may be up. That will make them take another look at the claim to make sure everything adds up.

 

On the other side of the coin, let’s say the adjuster and the injured worker click for whatever reason.  The employer sees the worker as a “good guy” and the investigation doesn’t turn up anything to go crazy about.  In this scenario, adjusters are likely to give an injured worker the benefit of the doubt.  This adjuster can let a few things slide and can push the claim towards compensability versus a denial, based on their relationship alone.

 

 

Is This Ethical?  Not Really.

 

So is this ethical?  Just because two people do not seem to see eye to eye, does that mean that their claim should be denied due to a personality conflict?  The answer depends. Ethical adjusters can look past any personality flaws and focus purely on the facts of the case, and they can make their decision on compensability based on that alone.  For all intents and purposes that is the proper way that adjusters should conduct themselves.  However, this is not reality.

 

This is where managers and audits should come in to play.  Even if everyone on Earth did not like said claimant, that should not mean that this worker cannot get their fair shake when they file for a work injury. This point should be taught to newer adjusters, and the veteran adjusters should be reminded of this from time to time.  This is the proper and professional way to conduct the determination of claims, day in and day out, no matter how little or how often you have to argue with a claimant.  Personal feelings and attitudes need to be left in your car in the parking lot when you come in to work. They should not influence if a claim is accepted or denied.

 

 

Summary

 

Adjusters will get along with some people, and they will have conflict with some people.  That is the nature of the business.  But professional adjusters can leave their personal opinions outside of the workplace, and handle claims based on the merits of their investigation.  If the employer does not see this happening, then something needs to be said to the adjuster.  Everyone deserves the right for a fair, non-biased claim investigation and determination.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR: www.LowerWC.com/transitional-duty-cost-calculator.php

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

Quite Possibily The Worst Workers Comp Claim Handling Ever

 

Candidate for the Worst Claim Handling Ever

 

A leading candidate for the worst claim handling everturned up in a workers compensation claim file audit.  A third party administrator (TPA) was handling claims for a statewide government self-insurance pool. And yes, all of the following mistakes were on one file!

 

 

Coverage

 

The TPA adjuster, upon receiving the claim, went to verify coverage.   The coverage had expired twelve days before the claim was reported. The date of loss was five days after the coverage expired. The adjuster wrote in the file notes that he would confirm coverage before making any payments.” However, before the adjuster had done so, the TPA switched adjusters and the coverage question was forgotten.

 

Mistake #1. Handling the claim before coverage was verified.

 

 

The lack of coverage wasn’t addressed again until the pool’s executive director contacted the adjuster over a year later. By then over $65,000 had been paid on medical and indemnity by the TPA from the pool’s trust fund. There was no coverage but the pool was in an estoppel situation, so the TPA continued to cover the claim.

 

Mistake #2. The second adjuster not reading the first adjuster’s file notes.(WCx)

 

 

 

Contacts

 

Best Practices for a TPA include making contact with the employer, the employee and the medical provider within 24 hours. The TPA had overloaded its workers comp adjusters with over 200 files each. The government pool’s contract did not contain any provision for the maximum number of claims to be assigned to an adjuster.   The second adjuster on the file never even saw the claim during the first three months it was assigned.

 

Mistake #3. Not reviewing the file when it was assigned.

 

Mistake #4. Timely contacts with the involved parties were not made.

 

Self Insured Mistake: Not having a contract stipulation on how many files could be assigned to one adjuster. 

 

 

 

Investigation

 

Since the second adjuster never contacted the insured, the claimant or the medical provider, there was no investigation of the claim. The Employer’s First Report of Injury reflected that “the employee (a painter) hurt her lower back when she tried to move a five-gallon bucket of paint.”

 

Mistake #5. No investigation of the claim.

 

 

Medical Handling

 

File note entries read “Received medical bill” or “Paid medical bill” with the name of the medical provider and the bill amount. One medical report summarized in the file notes stated, “employee continues to work with her low back pain and wrist pain.”   Three months into the claim a medical report stated “will need to do bilateral CTS (carpal tunnel syndrome) surgery.”

 

Mistake#6.  Not comparing medical reports with the reported injury on the claim.

 

 

The employee was an obese woman with diabetes – two factors that can bring on CTS without an injury. Even though the claim was reported as a back injury, at no time did the adjuster question the carpal tunnel syndrome treatment.

 

Mistake #7. Failure to separate a covered injury from other medical conditions of the employee.

 

Mistake #. Lack of medical knowledge that CTS is not always injury related.

 

Mistake #9. Failure to get a medical termination based on whether the CTS was work related. If it was it should have been handled as a separate claim.

 

 

Indemnity Handling

 

The first contact with the employee occurred over four months into the claim when the employee called the adjuster inquiring about when she would be paid for her Temporary Total Disability, as she was off work due to the right wrist Carpal Tunnel Syndrome surgery (the left wrist would be done a couple months later). The adjuster did not follow up on the Temporary Total Disability question and got another phone call from the employee. The first contact with the employer occurred almost five months into the claim when the adjuster asked the employer for a wage statement.

 

Mistake #10. No on-going contacts with the employee and the employer.

 

Mistake #11. Not obtaining the wage statement from the employer when it was first noted the employee was going to need CTS surgery.

 

 

The adjuster put the temporary total disability (TTD) checks on autopilot and forgot about them. After about six months, the employee returned to work. As the adjuster had not been in contact with the employee or the employer, the Temporary Total Disability checks just kept on going out. The adjuster did not know the employee was back to work until receiving medical reports stating that the employee was at maximum medical improvement on her wrists and had been given a 15% impairment rating for both wrists combined. The employee received an extra eight weeks of Temporary Total Disability after she was back at work. The adjuster stated in the claim file notes that the overpayment of Temporary Total Disability would be taken out of the permanent partial disability (PPD) settlement. However, it never was recovered.

 

Mistake #12.Not making any effort to get the employee back to work earlier or to return to work on light duty.

 

Mistake #13. Putting Temporary Total Disability checks on long-term automatic issue. (WCx)

 

 

Remember the low back pain?

 

The employee had only been back to work for two months when the adjuster contacted her about the overpayment of Temporary Total Disability and settlement of the Permanent Partial Disability claim. The employee advised the adjuster that her back still hurt and she needed to go to the doctor.   The doctor ordered an MRI of the low back. The employee had a herniated disc at L4-L5 and a partially herniated disc at L5-S1. The doctor scheduled surgery for the employee.

 

Mistake #15. Not having inquired about the lack of medical treatment on the low back for almost a year.

 

 

The adjusterfinally paying attention, refused to approve the surgery until an independent medical evaluation (IME) could be completed. The IME confirmed the need for the surgery. After the surgery, the employee was off work for another seven months before the doctor placed her at maximum medical improvement with a 25% rating.    

 

Mistake #16. Not making any effort to get the employee back to work earlier or to return to work on light duty.

 

 

Negotiations

 

The adjuster contacted the employee with an offer to settle both of her Permanent Partial Disability ratings based on her being 40% disabled. The employee argued that she should be considered 100% disabled as she was not able to go back to her job as a painter. The adjuster refused to consider the claimant as having permanent total disability (PTD). A week later, the adjuster received a letter of representation from the employee’s new attorney, who claimed the employee was PTD. The attorney requested an administrative law judge (ALJ) hearing. The ALJ reviewed all the medical records and agreed with the adjuster’s defense attorney. The employee’s attorney appealed. The Workers Comp Board (WCB) agreed with the defense attorney. The adjuster paid the 40% PPD rating.

 

 

Worsening of Condition

 

A year later the employee’s attorney contacted the claims office, but the second adjuster was no longer with the TPA. A third adjuster on the claim learned that the attorney filed a request for the WCB to consider a “worsening of condition.”

 

 

Index Search

 

The new (third) adjuster looks over the file and realized that an ISO Index had never been filed on the claim. Once the index was filed, it was discovered that the employee had a prior back injury claim eight years before this claim. The employee was represented by the same attorney for both claims. The prior insurance company already classified the employee as 10% Permanant Partial Disability for a non-operated herniated disc. The prior medical reports showed that the employee’s earlier claim was for an L4-L5 herniated disc – the same injury the claimant had surgery for in this claim.

 

Mistake #17. Failure to index the claimant resulted in the TPA/pool paying for a claim that should have never been paid.

 

 

Exacerbation vs. New Claim

 

It was now obvious that the present injury was not a new claim, but the exacerbation of an old claim. If the index had been done when the claim first was received, it could have been referred back to the prior insurance carrier. The defense attorney requested that the ALJ transfer the claim back to the original insurance company. This is after the TPA had already paid the employee a 40% award (15% wrist and 25% back) on top of the 10% award the employee had received for the earlier claim.

 

The ALJ stated that as the TPA had already accepted the injury as a new claim, it would not change it now. The WCB appeal was denied, so the current insurer was stuck paying for the claim although it was an exacerbation of a preexisting injury.

 

 

Back to the Medical

 

The employee’s disk fusion surgery had failed. The treating doctor recommended another surgery. The third adjuster was too inexperienced to be handling this type of claim.

 

Self Insured Mistake. Not having a stipulation in the contract requiring experienced adjusters to handle claims -especially high dollar ones.

 

 

The adjuster asked her supervisor what to do. The supervisor said to get another IME. The IME stated that the fusion had partially failed, but absolutely did not recommend another surgery.

 

 

Sympathy

 

The attorney gave the third adjuster a sad tale of how much pain the employee was in, that the employee’s marriage was falling apart due to her pain and she was desperate to have the surgery. The attorney played on the adjuster’s sympathy until the adjuster agreed to the surgery.

 

Mistake #18.  Allowing emotions instead of medical facts to make the determination on how to proceed on a claim.

 

 

The adjuster should have had denied the additional surgery and forced the employee’s attorney to have the ALJ or even the WCB make the determination.

 

 

Permanent Total Disability Granted

 

Following the second surgery, the employee’s attorney filed a petition for PTD.   The treating physician had given the employee a total 75% Permanent Partial Disability rating based on the bilateral CTS surgeries and the two back surgeries. The defense attorney arranged another IME and got a similar rating of 65% total. The ALJ looked at the total medical history and the employee’s 65% or 75% permanent partial disability rating following her two wrist surgeries and her two back surgeries. The ALJ gave the employee a PTD finding. The defense attorney appealed to the WCB.   The WCB agreed with the ALJ and the third adjuster paid the employee another 50% rating. (WCx)

 

 

Summary

 

The failure to do the simple things in the claim file handling resulted in the self-insured pool paying out over a half million dollars in medical, indemnity and legal expenses. Verification of coverage would have stopped this claim before any dollars were spent. A proper investigation at the start of the claim, including an index of the employee, would have shown that the low back claim was an exacerbation of a prior injury and would have eliminated that portion of the claim. The review of the medical reports would have resulted in a denial of the CTS or at least had it treated as a separate claim. Non-compliance with Best Practices changed what should have been zero dollars paid into a PTD claim.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact:  mstack@reduceyourworkerscomp.com.

 
WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

Do Lump Sum Settlements Aid or Detract from Employees Returning to Work

 

 
2,000 Injured Worked Studied for 4 years After Settlement
 
I recently read article from Risk & Insurance Online, where they state that the Boston-based Workers Compensation Research Institute looked at more than 2,000 workers injured in Michigan in 2004 who received lump sum settlements.  The researchers followed their employment experience for the next 4 years. The study found that:
 
  1. Three-quarters of the injured workers who received lump sum settlements did not change their employment status, “which means that many of those who were employed at the time of the lump sum stayed employed and those that were not employed remained unemployed”
 
  1. Of those who did change their employment status, nearly a third who were employed at the time of the settlement left work, and nearly a fifth of those who were not employed attained employment after the settlement.
 
  1. Average employment in the sample increased from 25% of workers at the time of the lump sum settlement to 32% of workers one year after a settlement. “The exception is older workers who experienced a decline in employment after a settlement.”
 
“This is an important study because we need to find out whether settlements discourage return to work for injured workers who want to return to work or assist them in closing this chapter of their life and moving on with their career” said Bogdan Savych, the author and a public policy analyst at the WCRI. [WCx]
 
 
Only small percentage of Employees Looking for an Early Retirement
 
The common consensus or stereotype among adjusters could be that workers trying to obtain a lump sum settlement are in it for the wrong reasons, looking for a way to fund an early retirement and remove themselves from the workforce forever.  Sure this could be true, but obviously this is for a small percentage of the injured workers looking for a lump sum settlement according to this study. 
 
There could be a ton of variables, including age of the worker, type of injury, severity of injury, post-injury medical and physical limitations that could hinder a gainful return to work in the occupation that the worker desires, overall economic reasons forcing a return to work, and so on.
 
Adjusters forget that a person’s life does not end after a settlement has been reached, rather it is just the end of the file for the adjuster.  Obviously younger workers could rarely sustain a prosperous life from the time of their settlement to their death, meaning that they would have to stretch those settlement monies over the course of their whole lifespan.  On the opposite side, and as the study shows, older workers nearing retirement would rarely return to full time gainful employment after a settlement, since they may not need to work anymore, but again this could vary on Pensions, 401ks, savings account amounts, and the like.  It is feasible to state that maybe older workers who wished to retire after a settlement still could not do so, based on their own personal economic needs. 
 
 
In General, People Return to Work After Receiving a Settlement
 
Looking at this from a general broad perspective, this study proves that people return to work after receiving a settlement for their comp injury.  The adjuster has incentive to attempt to resolve the case as soon as they can, because once the settlement is completed the case is off the books of the carrier, and the file is closed forever, if a full/final settlement is to be performed. Plus it ends the case for the injured worker and the employer, and everyone can move on with their life.
 
 
Not Considered in Study is Various Ways to Settle a Case
 
One thing this study did not look at which is important is the various ways to settle a case, including an indemnity-only settlement, which keeps medical open.  This is becoming more and more of a trend, just because it closes one of the expense doors, wage loss, and the adjuster can settle the medical exposure at a later date once a clamant slows down on treating and nears Maximum Medical Improvement.  Making this settlement more common is the involvement of Center for Medicaid and Medicare Services and the need for a Medicare Set Aside to resolve all aspects of a claim if a person’s injury is reportable to Center for Medicaid and Medicare Services because they are on Social Security.  If the worker is billing Medicare for their treatment in error, then there is a huge lien to address with Center for Medicaid and Medicare Services, and this can involve many headaches, and the many months of time that have to go by while the carrier negotiates with Medicare on what is their responsibility to pay, and what is the responsibility of Medicare.
 
Another option is a structured settlement, where an injured worker receives payment from a third party in excess of what a carrier pays to fund the structure, providing incentive to the injured worker to take this type of settlement because in the end they will net more monies than if they just took a check from the carrier to settle.  The downside for the worker is that they do not get all of the settlement money up front, but rather in monthly payments over a specific period of years, with interest attached.   [WCx]
 
 
Summary
 
Speaking generally, the study proves that a worker will indeed return to work after a settlement is obtained.  What the study fails to take into account is the several factors that go in to accepting a settlement, and then having to either return or not return to the workplace.  Making it more complicated is the varying types of settlements that are out there, and becoming more and more popular as conditions warrant.  I believe the most important thing to take away from this study is that when considering settlement; adjusters should not look at it as the worker looking for an early exit out of the workforce.  Instead look at it as a way of resolving the claim, so all parties can move forward. 
 
Sure, if adjusters are pessimistic and are viewing the settlement only as a way for the worker to obtain a lifelong vacation, this can hinder negotiation.  Instead adjusters should put themselves in the boots of their injured claimants. What would they do if they were faced with these options, and how can you make it be the most attractive as a way to end a claim?  Should it be lump sum, structured, indemnity-only, or anything else?  Is the claimant in need of lifelong medical care, or have they reached Maximum Medical Improvement and they are as good as they are ever going to be? And no matter what the answers are to these questions, what type of settlement would benefit all parties?  It is when we answer these questions, and place ourselves on the other side of the fence, that we can settle claims in a beneficial way to all parties, and move on to the next challenging claim that awaits us. 
 
 
 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

The Most Important Time in A Workers Comp Claim Settlement Is…

 

Best Settlements Start Day of Accident
 
A common mistake made by employers (and some workers’ compensation adjusters, too) is to believe that the settlement value of the claim is based on the actions taken when the employee has finished the medical treatment and has indicated he/she wants to settle their claim.  All the negotiations tactics and claim strategy when the employee has finished his/her medical treatment have an impact on the settlement value of a workers’ compensation claim, but are by no means the only factors in a claim settlement.  The best settlements don’t start at the end of the medical treatment; the best settlements start the day of the accident. [WCx]
 
Get to Work on Claim Immediately
 
One of the most important steps an employer and the workers’ compensation adjuster can take to optimize the settlement value of the claim is to start work on the claim immediately.  This entails the employer reporting the claim to the claims office within minutes (not hours or days) of the employee reporting the accident/injury.  The immediate reporting of the claim allows the work comp adjuster the opportunity to:
 
  • Make same day contact with the employee, employer and medical provider
  • Completely investigate the accident details
  • Determine if there are issues in regards to compensability
  • Establish the nature and extent of the injury to prevent the employee from later adding additional medical issues to the claim and increasing the eventual settlement value
  • ·Control the selection of the medical provider in those states where the employer/insurer select the medical provider
 
If there are issues with compensability, it is much easier to negotiate the settlement of the claim later, if the compensability issues have been properly evaluate and established at the start of the claim. 
 
Every Action Taken Impacts Settlement
 
The settlement value of the claim is not simply controlled by handling the claim in accordance to Best Practices at the start of the claim.  Every action the claims adjuster and the employer take between the initial investigation of the claim and the settlement negotiations will also impact the settlement value of the claim. 
 
This includes:
 
  • Maintaining on-going contact with the employee and the medical provider
  • Arranging for the employee to return to work light duty / modified duty as soon as the medical provider will permit
  • ntegration of the medical management into the claim handling activities
By continuing to manage the workers’ compensation claim in accordance to Best Practices, every step taken in handling the claim moves it closer to the appropriate settlement.  
 
Additional Factors to Consider
 
When the medical treatment has ended, or the employee or the employee’s attorney indicates the desire to settle the claim, there are numerous additional factors that come into play in establishing the settlement value and obtaining the best possible settlement.  The adjuster will consider:
 
  • The permanent impairment rating, if any (including an independent medical evaluation in some situations)
  • The jurisdictional requirements
  • The value of future medical treatment
  • The impact of preexisting medical conditions, where permitted
  • The employee’s indemnity rate (whether permanent partial disability or permanent total disability)
  • The exposure for future indemnity cost
  • The cost of litigation, if needed to resolve the claim
  • The cost of rehabilitation, if needed
  • The cost of vocational training, if needed
  • The value of death and funeral benefits, if applicable
  • The value of any offsets
  • Any other strengths and weaknesses of the both sides of the negotiations
When the employee’s injuries are complex or the value of the claim is disputed, the adjuster can utilize a reserve worksheet to assist in the establishment of the value.  On the reserve worksheet, each of the above factors is given a value.  The monetary values of all factors that are a part of the claim are combined to establish the settlement value.
 
When the employee has an attorney representing him/her, the employee’s attorney will follow a similar approach to establish the settlement value of the claim.  The attorney will attempt to maximize the settlement value of the claim in order to maximize the attorney’s own income.  However, the employee’s attorney will know the true value of the claim, regardless of what the employee’s attorney maintains the value is in the settlement negotiations. Most claims settle without lengthy litigation because when both parties have evaluate the same factors in the same manner, the estimated value of the claim will be similar, which allows for a negotiated settlement of the claim. [WCx]
 
The settlement value of a claim is influenced by the adjuster’s compliance with Best Practices throughout the course of the claim, from the day of the accident to the day the employee reaches the point where negotiation of the claim settlement can start.  The factors that impact the settlement can be evaluated individually and combined to determine the overall settlement value.
 
 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

To Replace or Not Replace that Shoulder

 

At one time or another as an employer you are going to experience work comp injuries.  Some of these injuries are minor in nature, while some can be severe and life-changing. 
 
Joint Replacement More Common – Very Difficult Claims
 
The nature of joint replacement can rear its ugly head from time to time.  In the past, joint replacement surgery was only thought to have occurred in older employees, with a lifetime of cumulative injury to the specific joint, be it the knee, hip, shoulder, or ankle.  But now Carriers are starting to see knee and shoulder replacement surgeries in younger to middle-aged employees.  This type of injury and subsequent surgery can lead to very difficult claims in the field of workers compensation. [Wcx]
 
In the past, Carriers were quick to deny surgeries such as these on the basis of the need for the surgery not being totally occupational in nature.  Once this replacement surgery is performed, it is seldom a “one-time” procedure.  The life span of prosthetic joints was said to be short, with it being a positive outcome if the prosthesis would last 3-5-7 years.
 
 
Advances Made in Surgery, Much Homework Still Needs to be Done
 
Recently over the course of the last handful of years several advancements have been made in the field of joint replacements, and several surgeons are getting quicker to recommend joint replacement surgery as a way to resolve ongoing pain and the need for opiate medication on a long-term basis.  Joint replacement has led to a better quality of life, and an increase in overall functionality in the right candidate.  But in the world of work comp, carriers are still very slow to accept these procedures without a lot of homework done beforehand. Let’s look at some of the pros and cons of these types of procedures:
 
 
PROS – Less Pain Meds, Decreased Long-Term Treatment
 
The first positive for getting joint replacement surgery is the decreased need for ongoing pain medication.  Expensive, and often addictive in nature, surgeons will point out that the prosthesis can lead to be a functional way of life without the need of strong pain-relievers, automatically positively impacting the overall expense of the work comp claim.  Decreased needs for physical therapy, diagnostic testing such as MRIs and EMGs, and decreased loss of work time after rehabilitation are all positive indicators that can mean less wasted claim dollars.
 
The technology involved in the actual lifespan of the prosthesis has improved as well over the last 10-20 years.  In the past, prosthetics were often drowned out in negativity, with insurers quick to point out that the lifespan is really an unknown.  In certain cases, the replacement could last 15 years whereas in others it could fail right out of the starting gate.  The price tag on these surgeries can hover well over $100,000 after all of the surgeries, diagnostics, physical therapy, medications, and so on, and that doesn’t include lost wages away from work and decreased productivity once the employee returns to gainful employment.  However, all of these are past stereotypes and research has shown more positive outcomes.  It varies from patient to patient, but, most injured workers have decreased pain levels, which can be the most important factor. 
 

Need Proper Evaluation to Determine if Surgery is Correct Answer
 
There may be no model for the perfect joint replacement candidate because everyone’s body varies.  Age, arthritis, functionality,pain tolerance, patience, activity level, job tasks, employer flexibility, job experience, and other pre-existing conditions need to be taken into careful account before a procedure like this is even considered.  I have seen some cases where the doctor will start off with a rotator cuff tear repair, only to end up recommending a total or partial shoulder replacement within 2-3 months post-surgery.  This may be quick to jump the gun considering the extent of the injury, however, the adjuster has to consider if the injured worker will fail a number of surgeries before finally considering joint replacement.
 
 
CONS – Fear of the Unknown, Will the Surgery Work?
 
I believe that the strongest con involved in these procedures is the factor of the unknown.  Carriers like to know facts, and have statistically-guaranteed outcomes.  Unfortunately with joint replacement procedures there is not a guarantee.  You can send the claimant for a few IMEs with different surgeons and get a feel for what they think will happen, but until that patient goes under the knife all bets are off. These claims and injuries have to be evaluated on a case-by-case basis.  Your risk drivers will help to determine if authorizing these procedures will lead to a best outcome.
 
The biggest unknown of them all is the actual claimant.  Psychologically, surgeries are not a magic bullet.  There can be months of pain and rehab ahead, and your injured worker may not be the most patient person in the world.  In my experience dealing with these procedures post-op, the most common complaint is they want to know when they will be better and able to function like they did prior to the injury.  The truth is, some people will never be the same.  They may never be able to pick up their kids or grandkids and toss them in the air as they did before.  They may not be able to lift 30lbs over chest level or they may never be able to squat down and garden in their front yard pain-free as they once did.  And this fear of the unknown can stop many people from even wanting to go through with a procedure with such unknown results.
 

Carriers Often Settle Early to Ensure End to Claim
 
The reality is that with these invasive surgeries is nobody knows the outcome. This can scare off adjusters from authorization and steer the claim into litigation for settlement, which could be just as costly.  Carriers calculate if the claim were to settle, they know the outcome and the associated costs.  If a claim such as this were to settle for $250,000 at least the Carrier can pay that, and be done with it.  Whereas if the carrier sinks $100,000+ into this procedure, who knows if this person will need another surgery in 5 or 7 years, and maybe that surgery is the one that will fail even worse than the first one. 
 
Carriers fear unknown future costs, and fear even more the potential for a claim to have to be re-opened with a higher expense in the future. Settlement leads to the end of the claim and guarantees that it is over. Your claimant receives a check, and you close the file knowing it cannot be reopen years down the road. Carriers have to hedge risk which can cost them greatly upfront in Court, but they get comfort knowing the claim is over.  This isn’t to say that the carrier doesn’t care; after all, the claimant has to be on board with settlement for it to go forward.  This maybe the best way for all parties to move forward with each satisfied with the outcome.  Of course, each case will vary greatly from one to another, which is the hardest part involving claim of this nature. [Wcx]
 
 
Summary
 
If a claimant has a recommendation for joint replacement surgery, your carrier has to do their homework.  Whether is it involving the knee, shoulder, hip, or ankle, I would be surprised if any carrier or adjuster accepted the need for a joint replacement surgery without taking the time to gather years’ worth of past medical records, get a few IMEs, and evaluate the case very carefully.  These procedures affect the claimant in one way or another, either positively or negatively.  It is only after the procedure that all parties know if it is worth it in the end or not.
 
 
 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

20 Factors Influencing Workers Comp Claim Settlements

A common mistake made by employers (and some workers compensation adjusters, too) is to believe that the settlement value of a claim is based on the actions taken when the employee has finished the medical treatment and has indicated he/she wants to settle the claim. While all these negotiations tactics and claim strategies do have an impact on the settlement value of a workers compensation claim, they are by no means the only factors in a claim settlement. The best settlements do not start at the end of the medical treatment; the best settlements start the day of the accident.
 
 
One of the most important steps an employer and the workers compensation adjuster can take to optimize the settlement value of the claim is to start work on the claim immediately. This entails the employer reporting the claim to the claims office within minutes (not hours or days) of the employee reporting the accident/injury. [WCx] Immediate reporting of the claim allows the workers comp adjuster the opportunity to:
 
1.    Make same day contact with the employee, employer, and medical provider.
2.    Completely investigate the accident details.
3.    Determine if there are issues in regards to compensability.
4.    Establish the nature and extent of the injury to prevent the employee from later adding additional medical issues to the claim and increasing the eventual settlement value.
5.    Control the selection of the medical provider in those states where the employer/insurer selects the medical provider.
 
 
If there are issues with compensability, it is much easier to negotiate settlement later, if the compensability issues have been properly evaluate and established at the start of the claim.
 
 
The settlement value of the claim is not simply controlled by handling the claim in accordance with best practices at the start of the claim. Every action the claims adjuster and the employer take between the initial investigation of the claim and the settlement negotiations also affects the settlement value of the claim. These include:
 
 
1.    Maintaining on-going contact with the employee and the medical provider.
2.    Arranging for the employee to return to work in light duty/modified duty as soon as the medical provider permits and the employee is able.
3.    Integration of medical management into the claim handling activities.
 
 
By continuing to manage the workers compensation claim in accordance to best practices, every step taken in handling the claim moves it closer to the appropriate settlement.
 
 
When the medical treatment has ended, or the employee or the employee’s attorney indicates a desire to settle the claim, there are numerous additional factors that come into play in establishing the settlement value and obtaining the best possible settlement. The adjuster will consider:
 
 
1.    The permanent impairment rating, if any (including an independent medical evaluation in some situations).
2.    The jurisdictional requirements.
3.    The value of future medical treatment.
4.    The impact of preexisting medical conditions, where permitted.
5.    The employee’s indemnity rate (whether permanent partial disability or permanent total disability).
6.    The exposure for future indemnity cost.
7.    The cost of litigation, if needed to resolve the claim.
8.    The cost of rehabilitation, if needed.
9.    The cost of vocational training, if needed.
10. The value of death and funeral benefits, if applicable.
11. The value of any offsets.
12. Any other strengths and weaknesses of the both sides of the negotiations.
 
 
When the employee’s injuries are complex or the value of the claim is disputed, the adjuster can utilize a reserve worksheet to assist in the establishment of the value. On the reserve worksheet, each of the above factors is given a value. The monetary values of all factors that are a part of the claim are combined to establish the settlement value.
 
 
When the employee has an attorney representation, the employee’s attorney follows a similar approach to establish the claim’s settlement value. The attorney attempts to maximize the settlement value of the claim in order to maximize the attorney’s fee. However, the employer’s attorney knows the true value of the claim, regardless of what the employee’s attorney maintains the value is in the settlement negotiations. Most claims settle without lengthy litigation because when both parties have evaluated the same factors in the same manner, the estimated value of the claim will be similar, which allows for a negotiated settlement of the claim. [WCx]
 
 
The settlement value of a claim is influenced by the adjuster’s compliance with best practices throughout the course of the claim, from the day of the accident to the day the employee reaches the point where negotiation of the claim settlement can start. Factors affecting the settlement can be evaluated individually and combined to determine the overall settlement value.
 
 
 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

How to Most Effectively Handle Workers Comp Claims

A common mistake made by employers (and some workers compensation adjusters) is to believe that the settlement value of the claim is based on the actions taken when the employee has finished the medical treatment and has indicated he/she wants to settle their claim. All the negotiations tactics and claim strategy when the employee has finished his/her medical treatment have an impact on the settlement value of a workers compensation claim, but are by no means the only factors in a claim settlement. The best settlements do not start at the end of the medical treatment; the best settlements start the day of the accident.

 
 
One of the most important steps an employer and the workers compensation adjuster can take to optimize the settlement value of the claim is to start work on the claim immediately. This entails the employer reporting the claim to the claims office within minutes (not hours or days) of the employee reporting the accident/injury. The immediate reporting of the claim allows the workers comp adjuster the opportunity to:[WCx]
 
-Make same day contact with the employee, employer and medical provider. For companies using nurse triage, the triage nurse will be the first point of contact. Ask the nurse to contact the injury coordinator;  the employer will also receive a daily triage report.
-Completely investigate the accident details, take photos and written statements.
-Have the employee detail IN WRITING what happened. Have employee circle the affected body part.
-Determine if there are issues in regards to compensability
-Establish the nature and extent of the injury to prevent the employee from later adding additional medical issues to the claim and increasing the eventual settlement value
-Control the selection of the medical provider in those states where the employer/insurer select the medical provider
 
 
If there are issues with compensability, it is much easier to negotiate the settlement of the claim later, if the compensability issues have been properly evaluated and established at the start of the claim. 
 
 
The settlement value of the claim is not simply controlled by handling the claim in accordance to Best Practices at the start of the claim. Every action the claims adjuster and the employer take between the initial investigation of the claim and the settlement negotiations will also impact the settlement value of the claim. This includes:
 
-Maintaining on-going contact with the employee and the medical provider
-Arranging for the employee to return to work light duty / modified duty as soon as the medical provider will permit
-Integration of the medical management into the claim handling activities
 
 
By continuing to manage the workers compensation claim in accordance to Best Practices, every step taken in handling the claim moves it closer to the appropriate settlement.  
 
 
When the medical treatment has ended, or the employee or the employee’s attorney indicates the desire to settle the claim, there are numerous additional factors that come into play in establishing the settlement value and obtaining the best possible settlement. The adjuster will consider:
 
-The permanent impairment rating, if any (including an independent medical evaluation in some situations). If the rating looks too high, have the TPA arrange for a peer-to-peer physician to review the file.
-The jurisdictional requirements
-The value of future medical treatment
-The value of life care planning needs, future medication and durable medical equipment
-The impact of preexisting medical conditions, where permitted
-The employee’s indemnity rate (whether permanent partial disability or permanent total disability)
-The exposure for future indemnity cost
-The cost of litigation, if needed to resolve the claim
-The cost of rehabilitation, if needed
-The cost of vocational training, if needed
-The value of death and funeral benefits, if applicable
-The value of any offsets
-Any other strengths and weaknesses of the both sides of the negotiations
 
 
When the employee’s injuries are complex or the value of the claim is disputed, the adjuster can utilize a reserve worksheet to assist in the establishment of the value. On the reserve worksheet, each of the above factors is given a value. The monetary values of all factors that are a part of the claim are combined to establish the settlement value. 
 
 
When the employee has an attorney representing him/her, the employee’s attorney will follow a similar approach to establish the settlement value of the claim. The attorney will attempt to maximize the settlement value of the claim in order to maximize the attorney’s own income. However, the employee’s attorney will know the true value of the claim, regardless of what the employee’s attorney maintains the value is in the settlement negotiations. Most claims settle without lengthy litigation because when both parties have evaluate the same factors in the same manner, the estimated value of the claim will be similar, which allows for a negotiated settlement of the claim.[WCx]
 
 
The settlement value of a claim is influenced by the adjuster’s compliance with Best Practices throughout the course of the claim, from the day of the accident to the day the employee reaches the point where negotiation of the claim settlement can start. The factors that impact the settlement can be evaluated individually and combined to determine the overall settlement value.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 

  
WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

5 Times to Just Settle That Workers Compensation Claim File

pic5There are times while engaged in a workers compensation file that you are better off just settling the file out, redeeming all costs for medical, wages, and future medical exposure. Some files will not necessarily call for a full settlement, maybe it is better to settle either wages or medical, or both, but it has to be done when the scenario calls for it. Some examples are below.Note: These are general examples, and all actual claim situtations should be reviewed by your legal counsel.

 

 

 

  1. The injured worker has been terminated by the employer

The cause of a good percentage of litigated files comes when the employer terminates employment with the claimant during the course of their injury and subsequent rehabilitation. The claimant feels they were terminated unfairly due to their injury, and this will send them directly to a plaintiff attorney. This will open up significant exposure for ongoing wage loss, and it will extend the life of a claim. (WCxKit)

 

 

On most occasions you are better off waiting to drop the axe on termination until the claimant has either reached their end of healing, or the end of the case. This way, if you want to settle the file, you can include the voluntary resignation of the claimant from the employment.Note: consult with legal counsel before settlement, having them review voluntary resignation to make sure it meets requirements of state law as “voluntary” and that it complies with all other requirements.

 

 

  1. The injured worker has no job to return to within their permanent medical restrictions

This scenario happens a lot when a major surgery or amputation is involved. The job the worker once did can no longer be done by that worker. You have the option of moving the employee to another department or position, but often with smaller companies the option is just not there.

 

 

This is a good time to settle the wage portion of a claim. If you know for sure the worker can no longer do the job they once did, and you do not want to spend the cost of vocational retraining or vocational job placement, then you should settle out the wage portion of their claim. Again it is best to wait until their medical situation stabilizes before you approach this topic. You do not want to pursue this too early, as the claimant may try to stretch out their medical recovery, further securing their wage loss benefits and adding to the cost of the claim’s wage loss.

 

 

Depending on the job, some claimants will know they have little to no hope of returning back to work at their old position. But not every injured worker is easy to deal with. Changing jobs or losing your job is a major roadblock in a claim, and it can be costly to settle out the wage portion of these claims. But in the long run, it is worth it. Vocational training and placement is not a guarantee, and you do not want to incur those costs and then also have to settle the wage portions out when you cannot find the injured worker a job.

 

 

  1. The injured worker still works for their employer, but their case is denied coverage under workers compensation

In this case you do not have to settle the wages and medical to include a voluntary resignation, unless you want to add it in. If the adjuster denied the case as being compensable, but the worker filed their claim under their disability coverage, and then filed for hearing after returning to work once released from medical care, this is a case to settle after all the exposure for wage loss and medical bills are gathered.

 

 

This case gives you the total exposure, since the lost wages are known, and the medical cost to full duty is known. This is known as a “closed period” settlement.

 

 

Typically the adjuster will have to negotiate a lien with the medical carrier, and a compromise will be made on the wage loss the worker incurred. Unless you have a fantastic denial and can take your defense all the way to trial, it is best to make the compromise and settle for a portion of the exposure. This is probably the most common litigation example in the world of workers compensation.

 

 

  1. The worker’s case was disputed by the comp board, and then they were laid off due to workforce reductions. The injured worker was paid unemployment, and their medical carrier paid the medical cost to full duty

Here we have an example of taking a wage loss offset, and negotiating a medical lien. This is a fairly simple case to settle. Most states will allow a claimant to get unemployment pay when they are laid off. Even when they are off on a medical leave. This is a “collateral source benefit” because the employee may be making more when not working than when working.

 

 

However, if this person files for litigation, the insurance company can offset what the full-wage loss would have been, so, in essence, they get a credit for the wage loss, and only have to deal with the medical lien from the carrier. These medical carriers are usually easy to negotiate with, and most liens can be settled for easily up to 50 percent of their cost.

 

 

Medical carriers will also get a better fee reduction than workers compensation insurance carriers, so not only does the workers compensation carrier get a credit for the unemployment pay the worker received, they also get cheaper medical cost for all the medical expenses the injured worker incurred during their treatment and recovery. These are also usually closed-period settlements, and can be redeemed for a relatively low legal cost.

 

 

 

  1. The injured worker files for an occupational injury claim, naming several employers as the defendants

Occupational injury claims are usually filed by seasoned workers who have spent their lives working for several employers.  When their shoulder or back finally gives out and they need surgical repair, if they seek out an opinion at a plaintiff attorney’s office. The counsel will usually file a hearing for an occupational injury claim, and they will list all of the claimant’s past employers, since they will assert that each period of employment lead to the accelerated degeneration of the worker’s body, which lead to the ultimate injury they incurred.

 

 

In this case, each employer will contribute an amount towards a global settlement. The exposure of each employer will depend on the duration of employment, types of jobs the claimant performed, and the associated risk involved in relation to the injury. The hardest part about these claims is figuring out how much each adjuster should have to contribute. Once the adjuster takes all the past employers and the exposure into consideration, they will nominate a general amount for the represented employer’s exposure, and once all parties agree on all the amounts the case can be settled. It can take some time for all carriers and adjusters to agree, but they eventually get there and the case can be resolved.(WCxKit)

 

 

Workers compensation claims are settled all the time, usually for one of the reasons outlined above. As you can see, you have a number of opportunities where a settlement is the best option, and you should discuss with your adjuster if this is the road you should explore, instead of incurring other costs to bring an injured worker back to work at your place of employment. This differs from my normal opinion of bringing every able employee back to work.


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. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.

 

 

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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.

 

©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

 

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