Adjustment of Overpaid Compensation 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 overpayments are collected according to Ohio law
and applicable case law.
This policy applies to BWC’s Claims Services staff and
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 shall
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 that he/she is no longer entitled to receive.
2. Also see
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
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 V.C.1-7 for examples.)
1. It is BWC
policy to 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 chart
titled “Absorption
Rates for Overpayments”; and
i. Internal
and external customers may refer to the chart
on BWC’s website.
ii. Internal
customers will find the chart on Claims Online Resources (COR)/Adjustment of
Overpaid Compensation/Tips and Tools.
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 compensation overpayments from
travel expense reimbursement.
2. Refer to
the Travel
Reimbursement policy and procedure for more information regarding
reimbursement of travel expenses.
1. BWC staff
shall refer to the Standard
Claim File Documentation and Altered Documents policy and procedure for
claim note and documentation requirements; and
2. Shall
follow any other specific instructions for claim notes and documentation
included in this procedure.
1.
Claims services staff shall adjust compensation when:
a.
A claimant received compensation he or she was 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); and
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; and
v. A
claimant is receiving Social Security Retirement while receiving TT.
2.
Prior to making any adjustment to previously paid compensation, claims
services staff shall:
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 shall:
a.
Complete an Overpaid Compensation Worksheet;
b.
Complete an Overpayment Checklist;
c.
Issue:
i. A
“BWC Subsequent Decision Order”, only 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
shall obtain:
a.
Copies of cashed warrants; and
i.
Claims services staff shall obtain copies of cashed warrants by sending
an e-mail to the BWC EFT e-mail box. The e-mail shall include:
a) The
warrant number;
b) The
warrant amount; and
c) The date
the warrant was issued.
ii.
Claims services staff shall image copies of the cashed warrants into the
claim.
iii.
Claims services staff shall 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 the 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 shall review:
a) The
information found on the Warrant History Report;
b) The
Compensation Payment History window found on www.ohio.bwc.gov; or
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 shall
review the claim with a BWC field attorney to review the decision regarding
non-collection of previously paid compensation. Examples of good faith/good
faith exceptions may include:
a.
Example #1 - 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. These facts were unknown to the woman who
was paid death benefits, BWC, and the employer at the time payment was made;
therefore, the previously paid compensation that was made in good faith should
not be collected.
b.
Example #2 - The IW, employer and BWC believed all available information
was presented at the time the decision was made to pay Disabled Workers’ Relief
Fund (DWRF) benefits to the IW. However, it was later discovered that receipt
of Social Security disability benefits affected DWRF eligibility. The Court
determined the IW, employer, and BWC believed, in good faith, that entitlement
was established at the time the DWRF payments were made. Therefore, the
previously paid compensation that was made in good faith should not be
collected.
3. Following
the staffing, claims services staff shall 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. Prior to making
any adjustments to previously paid compensation that will not be collected, claims
services staff shall document the amount of any existing overpayment to ensure
the appropriate amount remains on the claimant’s overpaid balance in the claims
management system.
4. Claims
services staff shall complete the Overpaid Compensation Worksheet to support
the amount of the previously paid compensation that will not be collected.
5. Claims
services staff shall 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 shall 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 shall seek approval from the supervisor for
manual adjustment of the claimant’s overpaid balance.
a.
Once supervisor approval has been received, claims services staff shall
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, not the entire
overpaid balance.
b.
The email shall 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 shall collect overpayments according to the percentages listed
in the chart
on Claims Online Resources (COR) titled “Absorption
Rates for Overpayments” (See Adjustment of Overpaid Compensation/Tips and
Tools).
2. Claims
services staff shall 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 shall complete an Accounting General Deposit Slip (A-31b). See
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
shall refer to COR/Adjustment of Overpaid Compensation/CoreSuite Job Aids.
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.
Shall set the IW up overpaid; and
b.
May refer to the Orders,
Waivers, Appeals, and Hearings policy and procedure for information pertaining
to issuing a BWC Order and the Overpayment
of Compensation policy and procedure for information regarding setting
up an overpayment.
1. Court of
Common Pleas: when an appeal is filed and the Court of Common Pleas reverses the
allowance of the claim or payment of compensation, claims services staff shall
seek recovery of any compensation paid (set the IW up overpaid.) Claims
services staff shall:
a. 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
b. Collect
the overpayment from the IW (an Overpaid Compensation Worksheet shall be
completed), if specified to do so by the court; and
2. Court of
Appeals or the Supreme Court: 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). Claims services staff
shall:
a. Determine
if the employer’s risk needs adjusted
i. The
employer’s risk will be adjusted if compensation has been paid; and
ii. Any
overpayment that occurs due to the reversal of the claim allowance or
compensation payment will be charged to the Surplus Fund.
b. 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” under Tips and
Tools on the Adjustment of Overpaid Compensation page on COR for more
information regarding adjusting overpaid compensation.
4. 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 shall:
a. Send a “BWC
Overpayment Reduction Notice” when any subsequent reductions are made to a
declared overpaid balance due to one of the following:
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 shall 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 shall absorb the LM at 100% only for the
duplicate periods paid in TT. This is considered an even adjustment.
a. Claims
services staff shall not issue a BWC Order when this situation arises.
b. For
additional information, refer to the TT/LM Even Adjustment job aid on
COR/Adjustment of Overpaid Compensation/CoreSuite Job Aids.
E.
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 shall:
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 Accounting General Deposit Slip (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.
c. 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 shall
complete the A-31b as noted above and shall send the check(s) or money order(s)
to Cash Control on Level 24 of the William Green Building.
d. 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 shall:
i. Enter
the payment into the Payment Transaction Tracker; and
ii. Complete
the A-31b by:
a) Checking
the Fraud box in the “Payment Type (BWC Use Only)” section; and
b) Entering “Fraud”
and the claim number on the BWC customer number line.
iii. Forward
the check(s) or money order(s) to the Fraud Analyst in the Special
Investigations Unit within the claim’s office.
iv. 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.
e. When a
benefit recipient returns a warrant, claims services staff shall:
i. Write
VOID on the warrant;
ii. Return
the voided warrant to Benefits Payable.
a) For
immediate action, claims services staff shall fax a copy of the voided warrant
to Benefits Payable at 614-621-1140.
b) The original
warrant 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
shall 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; and
b. A check is set to be
issued for a few cents due to a rounding error.
2. Claims
services staff shall 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 shall 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 shall 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 shall not submit a request to have the overpaid balance reduced.
ii. Once
the check clears the bank, the Cash Control Unit 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 shall set a work item for 10-14 days.
iv. If the payment
is not reduced, claims services staff shall contact Cash Control by email.
v. When
the adjustment occurs, claims services staff shall be notified by a security
work item.
i. A
warrant is returned and will reduce a claimant’s overpaid balance. Claims
services staff may: Write “Void” on the warrant and forward it to Benefits
Payable by:
a) Inter-office
mail; or
b) U. S. mail
at P. O. Box 15429; Columbus, OH 43215; or
ii. Submit
a C-170 to stop payment. If a C-170 is submitted, it is also necessary to
forward the warrant to Benefits Payable as noted above in I.2.d.i. a)-b).
3.
When manually adjusting an overpaid balance, claims services staff shall
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 shall enter a claim note explaining why the overpayment is being
changed. Specific dollar amounts are to be included in the note. 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. The BWC
Service Desk must be contacted 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 shall send an email to a claims supervisor to request review and approval
of the adjustment to the overpayment. The email shall include the following
information:
a) Claim
number(s) (more than one claim number may be listed);
b) Injured
worker’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 shall
respond to claims services staff stating whether the adjustment is approved or
denied.
a) If the
request is denied, the supervisor shall 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 shall 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 shall be 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 shall include “overpayment increase/decrease” in the subject
line of the email; and
b. Claims
services staff shall set a high priority flag.
ii) Claims
services staff shall 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
shall request an immediate adjustment only if it is necessary (compensation
cannot be paid until the adjustment is done) and shall 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.