Table of
Contents
I. POLICY PURPOSE
II. APPLICABILITY
III. DEFINITIONS
Claimant
Good Faith
IV. POLICY
A. Adjusting
Compensation
B. Overpayments
C. Collecting
Overpayments
D. Travel
Expenses
V. PROCEDURE
A. General
Claim Note and Documentation Requirements
B. Adjustment
of Compensation Previously Paid
C. Non-Collection
of Previously Paid Compensation
D. Absorption
Rates for Overpayments
E. Appeals
to Court
F. Issuing
a “BWC Overpayment Reduction Notice”
G. Recouping
an Overpayment from Living Maintenance (LM) and Living Maintenance Wage Loss
(LMWL)
H. Collecting
Overpayments
I. Manual
Adjustments to Overpaid Compensation in the Claims Management System
The purpose of this policy is to ensure that
compensation is entered and adjusted correctly in the claims management system
when compensation is overpaid, and that overpayments are collected according to
Ohio law and applicable case law.
This policy applies to BWC claims services staff and the BWC
Special Investigations Unit.
Claimant:
The individual seeking workers’ compensation benefits, typically the
injured worker (IW) or a dependent of a deceased IW.
Good Faith:
For purposes of this policy, when the claimant, employer, and BWC take action
on a compensation decision in the claim based on the belief that all relevant
and necessary information was available at the time the decision was made, and
all parties were acting reasonably and with an honest belief that compensation
was lawfully due.
1.
BWC will adjust compensation when:
a.
A claimant’s full weekly wage (FWW) and/or average weekly wage (AWW) are
reset; and
b. A
claimant receives compensation they are no longer entitled to receive.
2.
Also see Section V.B.1 below.
1.
It is BWC’s policy to adjust payment of compensation and, if applicable,
collect an overpayment from any past, present, or future workers’ compensation
claims according to Ohio law, unless:
a.
The claim meets the criteria for non-collection, as outlined in this
policy;
b. The
overpayment is waived in a lump sum settlement agreement; or
c.
The Ohio Industrial Commission (IC) has directed otherwise.
2.
BWC may choose not to collect an overpayment when claims services staff,
in consultation with a BWC attorney, determines that the claimant, employer,
and BWC all believed, in good faith, at the time the payments were made, that
compensation was lawfully due. (See Section V.C.1-7 for examples).
1.
BWC will apply the recoupment schedule outlined in R.C. 4123.511(K) to
an overpayment, even when that overpayment was created by circumstances other
than a reversal of an order to pay compensation. For example, BWC would
apply the recoupment schedule outlined in R.C. 4123.511(K) when a duplicate
payment is made in error.
2.
It is BWC’s policy to collect:
a.
Overpayments according to the percentages listed in the Absorption
Rates for Overpayments Chart; and
b. An
overpayment from any amount of compensation the claimant may receive in any
past, present, or future claim in accordance with Ohio law, even if the claimant
is making payments to reduce the overpayment.
3.
BWC will not absorb an overpayment from the first 12 weeks of payment of
temporary total compensation (TT), except when the overpayment is due to a
finding of fraud but will absorb the overpayment following payment of the first
12 weeks of TT.
4.
Refer to the Overpayment
of Compensation policy and procedure for more information regarding
overpayments.
1.
Reimbursement of travel expenses is a reimbursement of previously paid
expenses, not a form of compensation. Therefore, BWC will not collect
overpayments of compensation from travel expense reimbursement.
2.
Refer to the Travel
Reimbursement policy and procedure for more information regarding
reimbursement of travel expenses.
1.
BWC staff will refer to the Standard
Claim File Documentation and Altered Documents policy and procedure for
claim note and documentation requirements; and
2.
Must follow any other specific instructions for claim notes and
documentation included in this procedure.
1.
Claims services staff will adjust compensation when:
a.
A claimant received compensation they were not entitled to receive;
b. There
is a declared overpayment;
c.
A claimant’s FWW and/or AWW are reset (refer to the Wages
policy and procedure for more information regarding adjusting previously
paid compensation); or
d. There
is a change in the IW’s eligibility to receive compensation, including, but not
limited to, the following:
i.
Return to work;
ii.
Maximum medical improvement;
iii. Death of
the IW;
iv. The
allowance of the claim is overturned; or
v.
A claimant is receiving Social Security Retirement while receiving TT.
2.
Prior to making any adjustment to previously paid compensation, claims
services staff will:
a.
Review the claim; and
b. Note
the amount of any existing overpayment to ensure:
i.
Any existing overpayment(s) has been appropriately declared by BWC/IC order;
ii.
The result of the adjustment has the intended impact on any overpayment
that already exists in the claim; and
iii. Claims
services staff issues a BWC subsequent decision order for only the newly
overpaid amount when a declared overpayment already exists in the claim.
3.
When the IW is overpaid, claims services staff will:
a.
Complete an Overpayment Worksheet;
b. Complete
an Overpayment Checklist;
c.
Issue:
i.
A BWC subsequent decision order when BWC is declaring the overpayment;
or
ii.
An “Initial Notification of IC Declared Overpayment” letter when the IC
issued an order with a specific finding of overpayment and the IC decision is
final;
d. Place
the newly declared overpayment in Dispute in the claims management system until
the issue is fully adjudicated;
e.
Refer to the Overpayment
of Compensation policy and procedure for more information regarding
overpayments; and
f.
Refer to the Wages
policy and procedure for details regarding adjusting previously paid
compensation when the IW is overpaid due to a change in wages.
4.
When the BWC subsequent decision order is appealed, claims services
staff will obtain:
a.
Copies of cashed warrants;
i.
Claims services staff will obtain copies of cashed warrants by sending
an email to the BWC
EFT box. The email must include:
a) The
warrant number;
b) The
warrant amount; and
c)
The date the warrant was issued.
ii.
Claims services staff will image copies of the cashed warrants into the
claim.
iii. Claims
services staff will request copies of cashed warrants sent to a third party by
following the steps listed above when an overpayment was created by a payment
and a third party was reimbursed for that same payment. Examples of third-party
payees include:
a) Ohio
Department of Job and Family Services;
b) Lump
sum advancement to third parties; and
c)
Employers for wage agreements.
b.
Warrant History Report from Data Warehouse. The report:
i.
Includes payments made by paper warrants as well as electronic benefits
transfer/electronic funds transfer (EBT/EFT);
ii.
Is used by claims services staff, Special Investigations Unit (SIU), and
an IC Hearing Officer as a checklist against the actual copies of the cashed
warrants to verify issuance and receipt of warrants; and
iii. Is used to
identify and verify EFT/EBT payments, except for reclaimed or reversed EFT/EBT
payments because in Data Warehouse, the warrant status for electronic payments
will always display as “cashed,” even if the funds were reclaimed or the
transaction reversed. To determine if a reclaim or reversal has been made,
claims services staff will review:
a) The
information found on the Warrant History Report;
b) The
Compensation Payment History found on BWC’s website;
and
c)
CoreSuite financials.
1.
Claims services staff may choose not to collect previously paid
compensation to which the claimant was not entitled when payment was made in
good faith and was lawfully due.
2.
When claims services staff believes a good faith exception may have
occurred, staff must review the claim with a BWC attorney to review the
decision regarding non-collection of previously paid compensation. Examples of
good faith exceptions may include:
a.
Example:
i.
The decedent had been married twice, but never legally divorced his
first wife. Upon his death, BWC paid death benefits to his second wife, who was
not his legal wife.
ii.
These facts were unknown to the woman who was paid death benefits, BWC,
and the employer at the time payment was made.
iii. Therefore,
the previously paid compensation that was made in good faith should not be
collected.
b. Example:
i.
The IW, employer and BWC believed all available information was
presented at the time the decision was made to pay Disabled Workers’ Relief
Fund benefits to the IW. However, it was later discovered that receipt of social
security disability benefits affected Disabled Workers’ Relief Fund
eligibility.
ii.
The Court determined the IW, employer, and BWC believed, in good faith,
that entitlement was established at the time the Disabled Workers’ Relief Fund
payments were made.
iii. Therefore,
the previously paid compensation that was made in good faith should not be
collected.
3.
Following the staffing, claims services staff will:
a.
Document the amount of any existing overpayment to ensure the
appropriate amount remains on the claimant’s overpaid balance in the claims
management system; and
b. Make
the appropriate adjustments in the claims management system to correct the
previous compensation payments that will not be collected and to ensure correct
future payment.
4.
Claims services staff will complete the Overpayment Worksheet to support
the amount of the previously paid compensation that will not be collected.
5.
Claims services staff will send a BWC subsequent decision order to the
claimant, employer, and the authorized representative(s) to address the matter
causing inappropriate payment to the claimant and issue a decision regarding
previously paid compensation that will not be collected.
6.
Claims services staff will use the following language in the order to
notify the claimant, employer, and their authorized representative(s) that BWC
will not seek reimbursement of compensation previously paid in error: As
outlined in this order, BWC will not seek reimbursement of any compensation
previously paid in error to the claimant.
7.
Once a final decision has determined that previously paid compensation
will not be collected, claims services staff will seek approval from the
supervisor for manual adjustment of the claimant’s overpaid balance.
a.
Once supervisor approval has been received, claims services staff will send
an email to the BWC Service Desk who will forward to the Business
Transformation Team to remove the amount of the previously paid compensation
that will not be collected from the claimant’s overpaid balance on the claims
management system. The claimant may have an existing overpaid balance;
therefore, it is especially important to remove only the amount of the
previously paid compensation that will not be collected, and not the entire
overpaid balance.
b. The
email must contain the same information as the claim note entered to support
non-collection of the previously paid compensation, as well as other
information in this procedure and related policy pertaining to manual
adjustment of an overpaid balance.
1.
Claims services staff will collect overpayments according to the
percentages listed in the Absorption
Rates for Overpayments Chart.
2.
Claims services staff will collect an overpayment from future
compensation, in accordance with Ohio law, even if the claimant is making
payments to reduce the overpayment.
a.
A check(s) or money order(s) must be payable to Ohio Bureau of Workers'
Compensation or BWC.
b. Payment
for non-fraud collections are to be sent to the local claims office and claims
services staff will complete an Accounting General Deposit Slip (A-31b).
See Section H.2.b below for instructions to complete an A-31b.
c.
Fraud collections must:
i.
Include the claim number;
ii.
Note that payment is for fraud/restitution; and
iii. Be sent
to:
Ohio Bureau of
Workers' Compensation
Attention: Fraud
Collections
P. O. Box 15187
Columbus, OH
43215
3.
Temporary Total (TT) Compensation: For information regarding adjustment
of compensation during and after the first 12 weeks of payment of TT, claims
services staff may refer to the relevant CoreSuite job aid.
4.
When the Court of Common Pleas issues a decision that reverses a
previous BWC or IC claim allowance or compensation payment decision, claims
services staff:
a.
Will set the IW up overpaid; and
b. May
refer to the:
i.
Orders,
Waivers, Appeals, and Hearings policy and procedure for information
pertaining to issuing a BWC order; and
ii.
Overpayment
of Compensation policy and procedure for information regarding setting
up an overpayment.
1.
Court of Common Pleas
a.
When an appeal is filed and the Court of Common Pleas reverses the
allowance of the claim or payment of compensation, claims services staff will seek
recovery of any compensation paid (set the IW up overpaid.)
b. Claims
services staff will:
i.
Ensure that the overpayment resulting from the reversal of the allowance
decision is charged to the Surplus Fund by placing the state-fund claim in
disallowed status; or
ii.
Collect the overpayment from the IW (an “Overpayment Worksheet” will be
completed), if specified to do so by the court; and
2.
Court of Appeals or the Supreme Court
a.
When an appeal is filed and the Court of Appeals or the Supreme Court
reverses the appealed decision, claims services staff will not seek recovery of
any compensation paid (IW is not set up overpaid), except for claims assigned
to a public employer-state (PES).
b. For
claims not assigned to a PES employer, claims services staff will:
i.
Determine if the employer’s risk needs adjusted.
a) The
employer’s risk will be adjusted if compensation has been paid; and
b) Any
overpayment that occurs due to the reversal of the claim allowance or
compensation payment will be charged to the Surplus Fund.
c.
For claims assigned to a PES employer:
i.
The employer’s risk will not be adjusted; and
ii.
Any overpayment that occurs due to the reversal of the claim allowance
or compensation payment will not be charged to the Surplus Fund.
3.
Claims services staff may refer to “When to Contact Employer Risk Adj” on
COR for more information about adjusting overpaid compensation.
4.
Claims services staff may refer to the Orders,
Waivers, Appeals, and Hearings policy and procedure for more
information regarding appeals to court.
1.
The reduction notice is generated by the claims management system:
a.
Annually, when the IW/surviving dependent is receiving ongoing
compensation (e.g., permanent total disability, death benefits); and
b. When
the overpayment has been completely collected.
2.
Claims services staff will:
a.
Send a “BWC Overpayment Reduction Notice” when any subsequent reductions
are made to a declared overpaid balance due to:
i.
Receipt of a personal check;
ii.
Receipt of a returned warrant; or
iii. Issuance
of an award for a new period of compensation.
b. Generate
an ad hoc letter to send to the parties to the claim when a situation arises
that the “Overpayment Reduction Notice” does not sufficiently address.
c.
Include the following in the reduction notice:
i.
Overpaid balance;
ii.
Amount of reduction; and
iii. New
balance of the overpayment.
3.
Claims services staff may send the “Overpayment Reduction Notice” when
the overpayment has been completely collected.
1.
Claims services staff will recoup overpayments of compensation from LM
and LMWL as follows:
a.
No overpayment deductions will be taken from LM, except for fraud;
b. Non-fraud
overpayment deductions will be taken from LMWL at 40%; and
c.
Overpayments caused by the fraudulent receipt of any compensation will
be collected from LM and LMWL at 100%.
2.
When TT payments change to LM, claims services staff will absorb the LM
at 100% only for the duplicate periods paid in TT. This is considered an even
adjustment.
a.
Claims services staff will not issue a BWC order when this situation
arises.
b. For
additional information, claims services staff may refer to the “TT/LM Even
Adjustment” CoreSuite Job Aid.
1.
To reduce an IW’s overpayment, claims services staff may receive a
check, money order, or returned warrant in a local claims office or the William
Green Building.
2.
When a check or money order is received in a claims office, excluding a
department or claims office in the William Green Building, as payment for any
overpayment that is recorded in the claims management system and transmitted to
Accounts Receivable, claims services staff will:
a.
Track the receipt of payment through the Payment Transaction Tracker
(see payment transaction tracker designee in the claims office to enter payment
in the tracker); and
b. Complete
an A-31b as follows:
i.
Enter the claim number on the line next to “BWC Customer Number”;
ii.
Enter the name of the individual writing the check on the line beside
“Name” (if the IW’s name is different than the name of the individual writing
the check, enter the IW’s name on the line beside “Address”);
iii. Enter the
payor address from the check on the second “Address” line;
iv. In
the “Payment Type (BWC Use Only)” section, place an X in the “Overpaid
Compensation” box and mark the appropriate sub box;
v.
Write the check(s) or money order(s) amount in the “Amount Paid to BWC
$” line;
vi. Endorse
the check(s) or money order(s) with the BWC timestamp; and
vii. Place the check(s) or
money order(s) and the A-31b in an envelope and send them to the following
address: Ohio Bureau of Workers’ Compensation; P. O. Box 89492; Cleveland, OH
44101-6492. Pre-printed envelopes may be ordered from Office Services.
3.
If the check(s) or money order(s) is received by the customer service
office located on Level 1 in the William Green Building, claims services staff will:
a.
Complete the A-31b as noted above; and
b. Send
the check(s) or money order(s) to Cash Control on Level 24 of the William Green
Building.
4.
When the check(s) or money order(s) received (in the local claims office
or the William Green Building) is for a fraud overpayment, claims services
staff will:
a.
Enter the payment into the Payment Transaction Tracker; and
b. Complete
the A-31b by:
i.
Checking the Fraud box in the “Payment Type (BWC Use Only)” section; and
ii.
Entering “Fraud” and the claim number on the BWC customer number line.
c.
Forward the check(s) or money order(s) to the Fraud Analyst in the
Special Investigations Unit within the claim’s office.
5.
BWC’s Cash Control Unit will update the IW’s account on the Accounts
Receivable system and the claims management system will systematically update
overnight. An Accounts Receivable update will post to claims services staff’s
work list.
6.
When a benefit recipient returns a check, claims services staff will:
a.
Write VOID on the check;
b. Return
the voided check to Benefits Payable.
i.
For immediate action, claims services staff will fax a copy of the
voided check to Benefits Payable at 614-621-1140.
ii.
The original check must be returned to Benefits Payable at Benefits
Payable Department; 30 W. Spring St. L-24; Columbus, OH 43215-2256.
1.
In most situations, overpaid balances in the claims management system
are automatically recalculated when claim services staff adjusts the claimant’s
benefit plan. However, the following situations are examples of when claims
services staff will manually increase or decrease the overpaid balance for a
claimant:
a.
An IW has been granted a bankruptcy discharge or is in a bankruptcy
proceeding and the Law Department notifies claims services staff that the
overpayment has been discharged or ordered collected at a different rate; or
b. A
check is set to be issued for a few cents due to a rounding error.
2.
Claims services staff will not request a manual adjustment to an
overpaid balance in the claims management system in the following situations
(not all-inclusive):
a.
A claim has been vacated and rebuilt, and an overpayment remains because
the overnight batch process has not run;
b. A
District Hearing Officer (DHO) reverses a decision on maximum medical
improvement (MMI) and states the IW is not overpaid.
i.
In this situation, claims services staff will rebuild the compensation
because it has been determined the IW was due compensation for a previously
vacated period that was actually paid to the IW.
ii.
Claims services staff will execute this as an even adjustment.
c.
A check has been received from the claimant and forwarded to BWC’s bank.
i.
Claims services staff will not submit a request to have the overpaid
balance reduced.
ii.
Once the check clears the bank, BWC Cash Control will apply the check to
the IW’s overpaid account and the overpayment in the claims management system
will be reduced through a nightly interface.
iii. Claims
services staff will set a work item for 10-14 days.
iv. If
the payment is not reduced, claims services staff will contact Cash Control by
email.
v.
When the adjustment occurs, claims services staff will be notified by a
security work item.
d. A
check is returned and will reduce a claimant’s overpaid balance.
i.
Claims services staff will write “Void” on the check and forward it to
Benefits Payable by:
a) Inter-office
mail; or
b) U.
S. mail at:
P.
O. Box 15429
Columbus,
OH 43215
ii.
Claims services staff may also submit a C-170 to stop payment. If a
C-170 is submitted, it is also necessary to forward the check to Benefits
Payable as noted above.
3.
When manually adjusting an overpaid balance, claims services staff will verify
the overpayment is not from another claim for the IW by checking the IW’s
overpayment balance in the claims management system at Participant - IW/Claims.
Overpayments appear at the IW level, not just at the claim level.
a.
To help determine if an overpayment needs to be adjusted, claims
services staff may review what compensation the IW was entitled to and what was
paid.
b. Claims
services staff will enter a claim note explaining why the overpayment is being
changed. Specific dollar amounts must be included in the note. For example: “The
IW’s current overpaid balance is $500.00. However, the IW has been granted
bankruptcy and the overpayment is to be forgiven. Requesting to adjust the
overpaid balance to $0.00.”
c.
Claims services staff must contact the BWC Service Desk to request a
manual adjustment to an overpaid balance.
i.
Before sending an email to the Service Desk to request an adjustment,
claims services staff will send an email to a claims supervisor to request
review and approval of the adjustment to the overpayment. The email must include
the following information:
a) Claim
number(s) (more than one claim number may be listed);
b) IW’s
name;
c)
Current overpaid amount on the claims management system;
d) Amount
to adjust the overpayment and if it should be increased or decreased (e.g., overpayment
should be decreased by $700.);
e) Overpaid
balance that should display on the claims management system after adjustment
(e.g., overpaid balance should be $300.);
f)
Confirmation that a claim note was entered and the date it was entered (e.g.,
Claim note entered on 11/12/13.)
ii.
Review and approval of the adjustment is not necessary for a “penny
rounding error.”
iii. After
reviewing the information pertaining to the adjustment, the supervisor will respond
to claims services staff stating whether the adjustment is approved or denied.
a) If
the request is denied, the supervisor will contact claims services staff to
discuss the appropriate course of action staff must execute to obtain approval
of the adjustment.
b) If
the request is approved, claims services staff will send the request for manual
adjustment to the IW’s overpaid balance to the BWC Service Desk.
i)
The subject of the email to the BWC Service Desk must include the claim
number(s) and “overpayment adjustment.”
a.
If the overpayment needs to be increased/decreased before a payment can
be released, claims services staff will also include “overpayment
increase/decrease” in the subject line of the email; and
b. Claims
services staff will send the email with a high priority flag.
ii) Claims
services staff will send the BWC Service Desk the same information that was
included in the email to the supervisor. The email does not go to Accounting or
Benefits Payable.
iii) Claims
services staff may choose to request a return receipt on Outlook so that the
issue may be tracked.
iv) Claims
services staff will request an immediate adjustment only if it is necessary
(compensation cannot be paid until the adjustment is done) and will not wait
until the end of the day to request a critical adjustment.
c)
The BWC Service Desk will forward the matter to the Business
Transformation Team, who will review the request and notify the requester/claims
services staff if the team does not agree with the request for the manual
adjustment or if the request is missing required information.
d) The
Business Transformation Team may ask staff to provide information about the
following:
i)
What periods and types of compensation the IW was entitled to;
ii) What
has been paid; and
iii) Why the
overpayment should be something other than the difference between the two
amounts.
e) The
Business Transformation Team will enter a claim note indicating the adjustment
has been completed and close the Service Desk ticket.
i)
The claim note and closed ticket serve as notice to claims services
staff that the adjustment is complete, and the IW’s adjusted overpaid balance
is viewable on the claims management system.
ii) Accounts
Receivable receives the adjustment to the overpayment in the overnight
interface.