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Policy and Procedure Name:
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Lump Sum Settlement
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Policy #:
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CP-12-01
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Code/Rule Reference:
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R.C.
4123.512; R.C.4123.65; R.C. 4123.88; O.A.C.
4123-3-34
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Effective Date:
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08/25/2023
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Approved:
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Shawn Crosby, Chief Operating
Officer
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Origin:
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Claims Policy
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Supersedes:
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All Injury Management policies,
procedures, directives and memos regarding Lump Sum Settlement that predate
the effective date of this policy and procedure.
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History:
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Previous versions of this policy
are available upon request
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The
purpose of this policy is to ensure that administrative lump sum settlements
and court settlements are processed consistently, timely and equitably, in
accordance with all applicable rules and law.
This
policy applies to BWC staff who process lump sum settlement applications.
Administrative
Settlement: A settlement of the
medical and/or indemnity portion(s) of a workers’ compensation claim(s)
pursuant to R.C. 4123.65.
Claimant: For purposes of this policy, one who seeks the lump sum
settlement of medical and/or indemnity benefits - typically the injured worker
or a dependent receiving death benefits.
Court
Settlement: A settlement of a BWC
claim(s) related lawsuit, which is approved by the court in which the lawsuit
is filed.
Conditional
Payment Letter (CPL): A notification
from Medicare indicating the amounts Medicare has paid to the IW for treatment
that may relate to the conditions in the claim.
Death
Benefits: Benefits payable pursuant
to R.C. 4123.59 and R.C. 4123.60 to a dependent of an injured worker who has
died as a result of an injury or occupational disease received in the course
of, and arising out of, the injured worker’s employment.
Disabled Workers’ Relief Fund (DWRF): A special fund that supplements the benefits received
by permanently and totally disabled injured workers whose benefits fall below a
threshold amount determined annually, based on the cost of living index.
Indemnity-only
Settlement: A settlement that includes
only the compensation portion of a claim (e.g., temporary total disability,
permanent total disability).
Lump
Sum Settlement: A written agreement
that results in closure of a claim(s), or part of a claim(s), as defined by the
terms of the settlement agreement. A lump sum settlement agreement may be
entered into at the administrative or court level.
Net Present Value (NPV): The present value of a monetary award, as opposed to
what the award would be worth if spread out over a period of time (i.e., the
time value of money).
Partial
Settlement: Settlement of only part
of a claim or claims, leaving certain conditions, compensation and/or benefits,
or combinations of conditions, compensation and/or benefits open for future
use.
Parties to a claim:
The injured worker (IW) or IW’s dependent, the employer and BWC.
1.
At any time during the life of the
claim; or
2.
Pursuant to R.C. 4123.512, with the
filing of a notice of intent to settle.
1.
It is the policy of the BWC, that
notices of intent to settle pursuant to R.C. 4123.512 must be filed on a Notice
of Intent to Settle (C-512) form.
a.
The C-512 must be faxed to BWC Legal at
(614) 621-3395 or mailed to the address provided on the form.
b.
If the notice of intent to settle is
not submitted on the C-512 form, BWC staff may contact the filing party and
request that a C-512 be completed and submitted within the statutory timeframes
of R.C. 4123.512.
2.
It is the policy of BWC that BWC Legal
will handle all settlement negotiations and obtain all necessary forms or
documents for settlements initiated pursuant to this provision.
a.
If a tentative agreement is reached,
the terms of the settlement shall be set forth on an Agreement and
Application for Approval of Settlement Agreement (C-240).
b.
The party who filed the notice of
intent to settle shall have 14 days from the date the tentative agreement was
reached to submit the C-240 with the appropriate signatures.
3.
It is the policy of the BWC that
settlements initiated pursuant to R.C. 4123.512 must be completed and paid (if
applicable) prior to expiration of the extended statutory timeframe provided by
R.C. 4123.512 for appeal.
1.
It is the policy of BWC, to avoid
delays in processing or the possibility of disapproval, a C-240 (whether filed
to initiate the settlement or following the filing of a C-512):
a.
Must be submitted to BWC on the most
recent version;
b.
Must be completed in its entirety
including a statement indicating why the proposed settlement is deemed
desirable; and
c.
Include supplemental forms and/or
documentation as indicated on the C-240.
2.
BWC will
notify the claimant or the claimant’s attorney if there is any required
information and/or documentation missing. BWC will disapprove a settlement
request if the required information or documentation is not received within
fourteen (14) days after notification by BWC.
3.
An employer is prohibited from denying
or withdrawing consent to a settlement application if:
a.
The claim is no longer within the
employer’s experience for impacting its future premiums, and;
b.
The employee is no longer employed by
the employer.
4.
It is the policy of BWC, in order to
maintain proper confidentiality, that a C-240 shall only contain the name and
related claims of one employer. If the settlement agreement is seeking to
settle claims involving different employers, a separate C-240 must be submitted
for each employer.
1.
The claimant or the claimant’s attorney
must sign the C-240.
a.
If the claimant’s attorney signs the
C-240 on behalf of the claimant, the claimant must sign and file an Amended
Settlement Agreement and Release (C-241). The claimant’s signature
must be on either the C-240 or a C-241.
b.
If the claimant has assigned power of
attorney (POA) to another, or has an appointed guardian, legally sufficient
documentation must be submitted verifying the POA or guardianship. (See Custody,
Guardianship and Power of Attorney policy).
c.
A custodial parent will be presumed to
be the legal guardian and no further documentation will be required unless BWC
receives evidence suggesting the presumption is erroneous.
2.
The employer or the employer’s attorney
must sign the C-240 unless one of the following exceptions apply, pursuant to
R.C. 4123.65(A):
a.
The employer is no longer doing
business in Ohio;
b.
The claim is no longer in the
employer's industrial accident or occupational disease experience as provided
in R.C. 4123.34(B) and the
claimant is no longer employed by that employer; or
c.
The employer has failed to comply with
R.C. 4123.35.
3.
If the
employer’s signature is required, but missing, BWC will send the employer
notification of the filing of the C-240 and provide the employer the
opportunity to respond within 14 days. If the employer does not respond, BWC
will disapprove the settlement application.
4.
If the employer’s signature is not
required, but the employer is still doing business in Ohio, BWC will send the
employer notice of the filing of the C-240 and provide the employer 30 days to
respond.
a.
If the employer does not respond within
30 days, BWC will process the settlement application without the employer’s
signature.
b.
If the employer responds and objects in
writing to the settlement application, BWC will contact the employer to
determine if the IW is currently working for the employer. If they are, BWC
will disapprove the settlement application. If they no longer work for the
employer the employer will be advised they cannot object per HB81.
5.
When DWRF benefits are paid as part of
the settlement, the employer’s signature is required on a C-240 if the
employer’s policy has been combined and the employer is now self-insured. BWC
will pay and bill self-insuring employers for any DWRF benefits allocated in a
settlement.
6.
All signatures required on the C-240
must be dated no more than 18 months prior to the date of filing.
1.
BWC approval is required before any
administrative settlement becomes final.
2.
It is the policy of BWC to
independently evaluate and determine a fair settlement value and attempt, as
appropriate, to facilitate agreement between the parties.
3.
When a settlement has been initiated
with the filing of a C-240 (as opposed to the filing of a notice of intent to
settle), and the employer has indicated, by checking “Box A” on the C-240, that
it is supportive and agreeable to the settlement up to the amount listed on the
C-240, BWC may re-negotiate the agreed settlement amount, considering the
following:
a.
Is the agreed upon settlement amount more
than BWC’s calculated value of the claim, and are the parties willing to permit
BWC to negotiate a lesser amount on their behalf;
b.
Does an “arm’s-length” relationship
exist between the parties so the settlement outcome is not unfairly influenced
(e.g., the injured worker is not a relative or a partner/proprietor in the
company);
c.
Is the employer experience rated and is
the claim within the policy year experience period;
d.
Does the settlement exceed the claim’s
maximum value as determined by BWC; and
e.
Can the settlement be reasonably
justified?
1.
It is the policy of the BWC to
disapprove a settlement request when:
a.
BWC has
determined that the settlement agreement is not equitable or in the best
interests of a party and/or BWC;
b.
A party
does not agree to settle;
c.
The Special
Investigations Unit (SIU) or the Subrogation Department has requested
disapproval, and a BWC settlement attorney has agreed to the disapproval; or
d.
BWC has requested information, but a
party has not timely submitted the requested information.
1.
Prior to approving a settlement
agreement, BWC will require an IW/claimant to establish a Medicare Set-Aside
and provide BWC a signed “Medicare Secondary
Payer Act Letter” (MSPA letter) when:
a.
A full and final settlement is valued
at $10,000 or greater and the IW/claimant is on Medicare or has a reasonable
expectation of receiving Medicare within thirty (30) months because the IW:
i.
Is on Social Security Disability (SSD);
ii.
Is age 62 ½ or older;
iii.
Has applied for SSD;
iv. Has had an adverse decision regarding SSD but has appealed
the denial; or
v.
Suffers from end-stage renal failure.
b.
A full and final settlement is valued
at $100,000 or greater, even if the IW/claimant is not on Medicare and does not
have a reasonable expectation of receiving Medicare within 30 months.
2.
The MSPA letter must:
a.
Contain the signature of the IW/claimant;
b.
Require the IW/claimant to acknowledge
and agree that a Medicare set-aside trust fund will be established for all
claim-related benefits; and
c.
Provide the name of the bank or
financial institution where the account will be located.
3.
The BWC will disapprove the settlement
application if the MSPA letter is not provided within the requested timeframe
(typically 14 days from the date of the request).
1.
It is the policy of the BWC that
parties to an administrative settlement must execute an Amended Settlement
Agreement and Release (C-241) when any of the following apply:
a.
The C-240 filed was not the most recent
version and the BWC did not request a new C-240 to be filed; or
b.
A change is made to the originally
requested settlement amount, terms or conditions as submitted on the C-240; or
2.
Claims services staff shall staff any
variation or exceptions with the above list with their supervisor and/or the
legal department.
1.
It is the policy of the BWC to send a
letter notifying all parties of BWC’s approval of a settlement application.
a.
The day after the approval letter is
sent is counted as day one of the 30-day waiting period.
b.
The waiting period cannot be waived by
any party for any reason.
c.
On-going compensation and medical
benefits are suspended effective the mailing date of the approval letter.
2.
Withdrawal from Settlement
a.
Any party may withdraw from a
settlement prior to the expiration of the 30-day waiting period.
b.
The withdrawal must be in writing and
sent to all other parties to the settlement.
c.
The BWC must receive the withdrawal
request prior to the expiration of the 30-day waiting period, regardless of the
date the withdrawal is mailed or sent.
3.
IC Review of Settlements
a.
The BWC must send all administrative settlements to the IC for review.
b.
If the IC finds a “gross miscarriage of
justice” or finds the settlement terms “clearly unfair” during the 30-day
waiting period, the IC may disapprove the settlement.
c.
If the IC does not disapprove a
settlement within the 30-day waiting period, the settlement is approved by
operation of law.
1.
If the claimant dies prior to BWC
approval of the settlement, the BWC will disallow the settlement as abated by
death.
2.
If the claimant dies during the 30-day
waiting period:
a.
Any party may void the settlement for
good cause shown; and
b.
If the BWC determines that good cause
does not exist to void the settlement, the settlement will be reinstated and
paid to the estate of the deceased claimant upon receipt of necessary
documentation. Necessary documentation to complete the settlement includes, but
is not limited to:
i.
Probate estate documents from a Probate
Court naming an Administrator Executrix or Executor of the claimant’s estate;
ii.
An updated R-2 and C-230 from the
claimant’s counsel indicating they represent the estate of the claimant;
iii.
The claimant’s death certificate; and
iv. Medical records surrounding the time of death.
3.
If the claimant dies after the 30-day
waiting period, the settlement becomes final.
a.
If the warrant has been issued but not
yet endorsed at the time of the claimant’s death, the BWC will seek to have the
warrant returned; and
b.
If the warrant is returned, the BWC
will reissue the warrant payable to the estate of the claimant upon receipt of
necessary documentation. Necessary documentation to complete the settlement
includes, but is not limited to:
i.
Probate estate documents from a Probate
Court naming an Administrator Executrix or Executor of the claimant’s estate;
ii.
An updated R-2 and C-230 from the
claimant’s counsel indicating they represent the estate of the claimant;
iii.
The claimant’s death certificate; and
iv. Medical records surrounding the time of death.
4.
In order for the claimant’s legal
representative to receive the LSS warrant, the claimant must:
a.
File an Authorization to Receive
Workers’ Compensation Check (C-230) form; or
b.
Provide authorization on the C-240.
1.
Any LSS amount the BWC pays is a final
release that is subject to valid court-ordered family support, even if the
family support amount is for the entire amount of the LSS.
2.
The BWC’s subrogation recovery rights
are not impaired by an LSS.
3.
A finding of fraud at any time permits
the BWC to rescind the LSS agreement, seek and recoup administrative
overpayments due to the finding of fraud, and refer the claimant for criminal
prosecution, if and when appropriate.
1.
Settlements with a self-insuring
employer must be filed on the Self-Insured Joint Settlement Agreement and
Release (SI-42) form.
2.
The SI employer will process the
settlement request for LSS.
3.
The IC will review and approve or
disapprove SI settlement agreements.
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.
3.
Claims services staff shall recognize
that “claimant” as referenced in this procedure may refer to an injured worker
(IW) or if the IW is deceased, to a dependent or an estate. Some steps will
only apply if the claimant is the IW; in these circumstances, the term
“IW/claimant” is specifically used.
4.
Claims services staff shall utilize and
maintain the “Settlement Workbook” as required by Claims Operations management
and as instructed in this procedure.
B.
When the regional settlement supervisor
receives a task in the claims management system, indicating the filing of an Application
for Settlement Agreement and Application for Approval of Settlement Agreement
(C-240):
1.
The regional settlement supervisor
shall:
a.
Review the C-240; and
b.
Assign the C-240 to the appropriate
lump sum settlement (LSS) region as needed (regions are determined by Claims
Operations management).
2.
The regional settlement supervisor in
receipt of the C-240 shall assign the C-240 to an LSS claims service specialist
(CSS).
3.
Ensure a copy of the C-240 is imaged
into each claim.
1.
Ensure the C-240 filed is the most
recent version.
a.
If the claimant has not filed the most
recent version of the C-240 the LSS CSS shall determine if all the information
and documentation required has been submitted.
i.
If any required information or
documentation is missing, the LSS CSS shall notify the claimant and request the
required documentation/information.
ii.
If the required documentation/information
is not received within fourteen (14) days the LSS CSS will review with their
supervisor for possible disapproval.
b.
The LSS CSS may request the claimant re-submit the settlement request using
the most recent C-240, if doing so is more efficient than requesting the
claimant to submit missing information or documentation separately.
2.
Any information additionally requested
by the BWC (e.g. court records, medical documents, business licensure, marriage
records, etc.) or submitted to the BWC and related to the calculation of the
claimant’s life expectancy, should be imaged by BWC in a confidential folder.
3.
Notify the disability management
coordinator (DMC), if the IW/claimant is participating in a vocational
rehabilitation program;
4.
Ensure a
separate C-240 is filed for each employer with claims being included in the
settlement agreement (a single C-240 shall not include claim number(s)
involving another employer or the employer’s name(s);
5.
Review whether the
claim is no longer within the employer’s experience for impacting its future
premiums and if the employee is no longer employed by the employer.
6.
Review the
claims for pending applications.
a.
Other than as provided in section
IV.B.4.b below, the status of pending applications shall be changed to
“Suspend”.
i.
Suspended applications include, but are
not limited to:
a)
Requests for additional conditions;
b)
New requests for compensation;
c)
Requests for scheduled loss
compensation, and
d)
Any pending Application for
Determination of Percentage of Permanent Partial Disability or Increase of
Permanent Partial Disability (C-92).
ii.
If there is a pending C-92, the LSS CSS
shall also contact the C-92 team to stop processing the application.
iii.
When an exam is scheduled, the LSS CSS
shall also contact the exam scheduling region to suspend the exam, unless it is
related to temporary total disability (TT).
b.
Continue to process:
i.
Permanent total disability (PTD);
ii.
TT for extension of benefits only;
iii.
Wage loss (WL) cases for extensions of
benefits only;
iv. Alternative dispute resolutions (ADR);
v.
Requests for medical treatment;
vi. Actions related to determining maximum medical improvement
(MMI); and
vii. Any other application or issue whose processing, the IMS or
settlement attorney determines may impact the advisability or value of the
settlement.
c.
If a new application or request is
received following the filing of the C-240 the LSS CSS shall create a new case
for the application and place it in “Suspend” status;
i.
Create a “Legal” case in all claims
included on the C-240 and any subsequent claims included in the settlement:
a)
Identify the issue in the case as
either an “administrative” settlement, “512 Intent” settlement or “court”
settlement;
b)
Update to the appropriate issue status,
including the thirty (30) day hold when appropriate;
c)
Add the appropriate activity to the
case and fully update it once the settlement is complete.
1.
The LSS CSS shall research for all
claims filed by the IW/claimant to ensure there are no pending court appeals.
a.
Indicators of court appeals are
documents titled “AG referral”, “court appeal”, or “court document”.
b.
The LSS CSS may consult with the BWC
settlement attorney if the status of an appeal is unclear.
2.
If there appears to be an outstanding
court appeal, the LSS CSS shall:
a.
Notify the claimant or the claimant’s
attorney; and
b.
Advise the claimant or claimant’s
attorney that the claimant may choose to pursue either the administrative
settlement or the court case, but not both;
i.
If the claimant chooses to pursue the
court case, the LSS CSS shall issue an “LSS Disapproval” letter and include the
following language: “The application is denied. All parties do not agree
with the settlement terms. This claim is currently pending a court proceeding.
You may pursue settlement through the Attorney General’s Office.”
ii.
If the claimant chooses to pursue the
administrative settlement, the LSS CSS shall request from the claimant a
date-stamped dismissal entry from the court.
iii.
If a dismissal entry is not received
within 14 days of a request, the LSS CSS may disapprove the C-240.
1.
The LSS CSS shall review all claims to
be included in the settlement for any open subrogation case(s).
2.
If there is an open subrogation case,
the LSS CSS shall notify the BWC subrogation contact assigned to the service
office and ask whether the settlement can proceed.
3.
The subrogation contact shall update
the claims management system to reflect whether the settlement may proceed.
a.
If the subrogation contact indicates
that the settlement should not proceed, the LSS CSS shall:
i.
Notify the parties that all parties do
not agree to the settlement. The claimant or the claimant’s attorney shall be
contacted; and
ii.
Disapprove the settlement, indicating
that all parties do not agree to the settlement.
b.
If the subrogation contact indicates
that the settlement may proceed, the LSS CSS shall keep the subrogation contact
informed of the status of the settlement.
4.
The LSS CSS shall reference the
Subrogation policy for further information.
1.
The LSS CSS shall review all claims to
determine if there is a pending VSSR application. If there is a pending VSSR
application, the LSS CSS shall follow the procedures in the VSSR procedural
section of this document.
1.
The LSS CSS shall ensure that the C-240
contains the signature of the claimant or the claimant’s attorney and the
signature of the employer or employer’s attorney, unless an exception applies.
a.
Dates of Signature: All signatures
required on the C-240 must be dated no more than eighteen (18) months before
the settlement application date.
b.
Power of Attorney (POA) and Guardian:
If the settlement involves a claimant that assigned power of attorney to
another individual or the claimant has a guardian, the LSS CSS shall ensure:
i.
The claim file contains legal
documentation, including a copy of the POA, verifying the POA or guardian
status of the individual claiming such status, except in the case of a minor
child, BWC shall presume the custodial parent is the legal guardian;
ii.
The POA or guardian signs his or her
own name on the C-240 and includes “POA” or “guardian” by the signature; and
iii.
There is compliance with any other
applicable provision of the Custody, Guardianship, Power of Attorney and
Incapacitation policy and procedure.
c.
Multiple Claims and Employers: If there
are multiple claims being settled with more than one employer, each employer
must sign the C-240 that contains the claims
involving that employer (unless an employer signature exception applies).
d.
Rehabilitation Injury Claim: If the IW/claimant was injured while participating in a
vocational rehabilitation plan through the BWC, a specified BWC designee shall
serve as the employer designee for signing the C-240.
e.
Disabled Workers’ Relief Fund (DWRF):
When DWRF benefits are paid as part of the settlement, the employer’s signature
is required on a C-240 if the employer’s policy has been combined and the
employer is now self-insured (SI).
f.
SI employer in final-cancel status but
still in business: If the SI employer’s policy is in final-cancel status, but
the employer is still in business, the employer must sign.
g.
Employer’s business sold: If an
employer’s business has been sold, the LSS CSS shall contact the BWC Employer
Services Division to determine if liability has been transferred to the
acquiring employer.
i.
If BWC has transferred liability, the
acquiring (combined-risk) employer’s signature on the application is required.
ii.
If BWC has not transferred liability to
the acquiring employer, the employer’s signature is not required.
2.
Exceptions to Employer Signature
Requirement
a.
Employer no longer doing business in
Ohio: The LSS CSS shall not require the employer’s signature if the employer is
no longer doing business in Ohio. If it appears the employer is no longer doing
business in Ohio, but the employer’s policy is not in final-cancel status, the
LSS CSS may consider an employer out of business if all of the following are
true:
i.
The employer’s policy been lapsed for
more than one year;
ii.
The employer’s mail has been returned
to BWC;
iii.
All the identified employer phone
numbers are non-working; and
iv. The Secretary of State’s website indicates the employer is
out of business.
b.
An employer’s signature is not required
in cases which the employer is prohibited from denying or withdrawing consent
to a settlement application. To meet this condition, claims services staff
shall verify:
i.
The claim is no longer within the
employer’s experience for impacting its future premiums, and;
ii.
The employee is no longer employed by
the employer.
c.
Employer doing business In Ohio: The
LSS CSS shall not require a signature from an employer still doing business in
Ohio when the LSS CSS has mailed the employer an “Employer 30-day letter for
Lump Sum Settlement”, did not receive a response within 30 days and one of the
following apply:
i.
The IW/claimant is no longer employed
by that employer and the claim is outside the employer’s experience.
a)
In general, claims do not go out of a
state agency employer’s experience.
b)
A retrospectively rated employer has a
ten-year experience period; or
ii.
The employer is not in compliance with
R.C. 4121.35 because of one of the following:
a)
A lapsed risk;
b)
A cancelled risk;
c)
No coverage on the date of injury.
3.
Obtaining Signatures
a.
If the claimant’s (or claimant’s
attorney’s) signature is missing, the LSS CSS shall contact the claimant or the
claimant’s attorney, by phone or letter (using the “LSS-IW Signature Letter”),
and set a task for 14 days from the date of the telephone call or letter to
determine if the required signature has been provided.
i.
If the required signature is provided,
the LSS CSS shall continue to process the settlement application.
ii.
If the claimant does not submit the
required signature, the LSS CSS will review with their
supervisor for possible disapproval and use the “LSS Disapproval” letter.
b.
If the employer (or the employer’s
attorney’s) signature is missing:
i.
The LSS CSS shall send the “Employer
Signature Letter for C-240” to the employer, requesting that the signature be
provided within 14 days of the mailing date.
ii.
The LSS CSS shall set a 14-day task
from the date of the letter to follow up.
iii.
If the employer does not submit the
required signature, the LSS CSS shall disapprove the settlement using the “LSS
Disapproval Letter”.
c.
If one of the employer signature
exceptions applies and the employer signature has not been provided, but the
employer is still doing business in Ohio, the LSS CSS shall send the employer
the “Employer 30 Day Letter for Lump Sum Settlement”.
d.
If the employer does not respond within
30 days of the date of the letter, the LSS CSS shall process the settlement
application without the employer’s signature.
1.
The LSS CSS shall ensure that the C-240
includes a statement or a separately provided written statement, which provides
a description of the circumstances of the settlement and why the proposed
settlement is deemed desirable.
a.
The LSS CSS shall ensure the statement
provided does not waive claimant liability for fraud, overpayment or
subrogation, or otherwise change the terms of the settlement agreement.
b.
If the sufficiency of the required
language is unclear, the LSS CSS shall staff the issue with the BWC settlement
attorney.
2.
If the LSS IMS or Settlement Attorney determines
that the statement is not acceptable, the LSS CSS shall advise the claimant to
submit a new C-240.
a.
The LSS CSS shall set a diary/task for
14 days from the date of the request to determine if the new C-240 has been
received.
b.
If the claimant returns an adequate,
new C-240, the LSS CSS shall process the settlement.
c.
If the claimant does not return the new
C-240, the LSS CSS shall disapprove the settlement application.
1.
If the LSS CSS is aware that an
attorney represents the claimant, the LSS CSS shall ensure that the claimant
properly signed the authorization on the C-240 or that the claim contains a
valid Authorization to Receive Workers’ Compensation Payment (C-230).
2.
If the claimant has not signed the
authorization, (the attorney is not authorized to sign on the claimant’s
behalf) and there is not a valid C-230 on file, the LSS CSS shall contact the
claimant or the claimant’s attorney to determine the claimant’s intention
regarding distribution of any potential payment.
1.
The LSS CSS shall identify all open
claims filed by the IW/claimant.
2.
The LSS CSS shall encourage, but cannot
require, the claimant to include all claims in the settlement.
3.
BWC may deny the settlement application
or reduce the settlement amount when:
a.
It is not in BWC’s interest to exclude
claims from the settlement, or
b.
The LSS CSS finds that the costs for
the claim being settled could shift to another claim not included in the
settlement.
4.
The LSS CSS shall document in the
Settlement Workbook the reason the LSS CSS excluded any claims from the
settlement.
1.
Incarceration
a.
If there is evidence in the claim
indicating the claimant may be incarcerated, the LSS CSS shall investigate
further to verify the claimant’s status. The LSS CSS shall disapprove the
settlement application if:
i.
The date of injury is on or after
August 22, 1986; and
ii.
The claimant is incarcerated in a state
or federal correctional institution, or in any county jail in lieu of
incarceration in a state or federal correctional institution (in this or any
other state), for the conviction of a state or federal crime.
b.
If the date of injury is before August
22, 1986, the LSS CSS shall consult with a BWC settlement attorney to determine
if the settlement is in the best interest of BWC.
1.
The LSS CSS shall review the claim to
determine if there is an outstanding overpayment in any of the IW/claimant’s
claims.
2.
If there is an overpayment, declared or
in dispute, the LSS CSS shall recoup one hundred percent (100%) of the
overpayment from the settlement amount, unless a BWC settlement attorney
approves an adjustment or waiver in writing.
3.
The LSS CSS shall ensure that the C-240
or C-241 and the “Approval of Settlement Agreement” letter (hereinafter
“approval letter”), as applicable, address all overpayments, specifically
including the amount of the overpayment.
4.
The LSS CSS shall only recoup DWRF
overpayments from DWRF awards. Any DWRF overpayments shall be identified on the
C-240 or C-241. DWRF Overpayments can be moved to a regular overpayment in the
system if the settlement is an AG settlement or DWRF was allowed, paid and
later overturned and denied.
5.
The LSS CSS may declare a claimant
overpaid if the overpayment is the result of continued payments after the
effective settlement date.
a.
The LSS CSS shall issue an “Overpayment
Created after Settlement” letter to declare the overpayment.
b.
A BWC order shall not be issued for an
overpayment in these circumstances.
6.
Waiver of Overpayment
a.
If there is a waiver of an overpayment
in writing from the Legal Department or AG Order, and the source claim of the
overpayment is settled, then the LSS CSS shall request Customer Service Support
remove the overpayment from the system.
b.
If the source claim of the overpayment
is not settled, BWC may either recoup the overpayment from the settlement
amount or allow the overpayment to remain. The LSS CSS shall leave the
overpayment on the claims management system for recoupment at a later date,
unless otherwise instructed.
1.
The LSS CSS shall offset any settlement
award by previous lump sum advancements that are outstanding at the time of
settlement. See the Lump Sum Advancement policy and procedure for
instructions on calculating a lump sum advancement.
2.
The LSS CSS may staff these issues with
their supervisor or the Legal Department.
1.
The LSS CSS shall identify if the IW/claimant
is also the employer of record (EOR). If so, the LSS CSS shall staff with
Employer Services to determine if the IW/claimant/EOR owes premiums and the
amount.
2.
If unpaid premiums are identified, the
LSS CSS shall contact the IW/claimant/EOR before or while processing the
settlement to determine if the parties can reach agreement on deducting the
entire unpaid premium amount from the proposed settlement amount.
3.
If the IW/claimant/EOR does not agree,
the LSS CSS shall disapprove the settlement as not in the best interest of the
parties.
4.
If the IW/claimant/EOR agrees, the
C-241 shall reflect the agreement and the LSS CSS shall continue to process the
settlement application.
1.
The LSS CSS may request an ISO report
whenever the LSS CSS determines it may be useful in valuing and negotiating the
settlement agreement.
2.
The LSS CSS shall make the BWC
settlement attorney aware of any “hits” when an ISO report has been obtained.
1.
If the LSS CSS suspects fraud in a
claim at any point in the settlement process, the LSS CSS shall notify the
Special Investigations Unit (SIU).
2.
SIU will review and ask the LSS CSS to
either disapprove the settlement application or proceed with the settlement
application with consideration of a potential fraud overpayment.
a.
If SIU determines that the settlement
should be disapproved, the LSS CSS shall notify the BWC settlement attorney.
b.
If SIU agrees to the settlement process
proceeding, the LSS CSS shall ensure that the BWC settlement attorney and SIU
are kept informed of the status of the settlement.
1.
Net Present Value Factors (NPV)
a.
The LSS CSS shall reference the current
year’s NPV chart available on COR, to calculate NPV when PTD or death benefits
are being considered.
i.
If the PTD value is based on an injury,
as opposed to an occupational disease (OD), The “PTD non-OD” category shall be
used to determine the NPV factor.
ii.
If the PTD value is based on an OD
claim that is not a lung disease, the LSS CSS shall use the “PTD-OD-Non-Lung”
category.
iii.
If the PTD value is based on an OD
claim that is related to a lung disease, the LSS CSS shall use the “PTD-OD
Lung” category.
iv. When evaluating death claims, the LSS CSS shall use the
“Survivor” category.
2.
All NPV totals are subject to
probability factors.
3.
The LSS CSS shall not reduce medical
benefits to net present value, unless after staffing with the supervisor and
BWC settlement attorney it is agreed unusual circumstances exist justifying
such a reduction.
1.
The LSS CSS shall use probability
factors to:
a.
Assess indemnity or medical costs
projected to start sometime in the future, such as the likelihood of a surgery
or other major treatment and associated TT or percentage permanent partial
(%PP) disability compensation; and/or
b.
In the case of an allowed PTD, death,
or pre-PTD claim, to estimate the likelihood of the claimant reaching full life
expectancy and, for a pre-PTD claim, the
likelihood that PTD will be awarded.
1.
The LSS CSS shall consider IW/claimant
lifestyle, co-morbidities, prognoses and aging when projecting future treatment
types and frequency. A probability factor shall be used to estimate likelihood
of the IW/claimant obtaining a particular type of medical service in the
future.
2.
The LSS CSS shall ensure that projected
medical services and costs are reasonably supported by appropriate
documentation indicating that such services are likely to be required in the
future.
1.
Temporary Total Disability (TT)
a.
The LSS CSS shall ensure that all
projected periods of compensation are supported by medical documentation.
b.
TT shall not be factored into the LSS
value in claims with a date of injury prior to 11/15/1973 if the IW/claimant
has received the maximum amount of TT.
c.
The LSS CSS shall consider the
following when determining the amount of expected TT compensation:
i.
The TT the IW/claimant is entitled to,
but is not yet paid; and
ii.
The likelihood of TT being awarded in
the future.
2.
Permanent Total Disability
a.
Medical History and Disclosure and
Medical Records
i.
The LSS CSS shall ensure that a Medical
History and Disclosure (C-242), a PTD-Death Settlement Acknowledgement
and Waiver Full and Final Settlement (C-243) and the two most recent years
of medical records are submitted.
ii.
If the C-242, C-243 and medical records
are not submitted with the C-240, the LSS CSS may, after staffing with IMS
disallow the C-240.
iii.
The C-242 must be signed by both the
IW/claimant and the IW/claimant’s attorney, if the IW/claimant is represented.
iv.
The LSS CSS shall staff any questions
regarding the extent of medical records required with the BWC settlement
attorney.
b.
Evaluating the Likelihood, the
IW/Claimant Will Be Granted PTD (Pre-PTD):
i.
The LSS CSS shall consider the
following factors when evaluating the likelihood of the IW/claimant being
granted PTD:
a)
Claim history that impacts the
IW/claimant’s ability to return to work;
b)
Medical history and current treatment
indicating the status of the IW/claimant’s allowed conditions;
c)
Vocational rehabilitation history;
d)
The filed Application for
Compensation for Permanent Total Disability (IC-2);
e)
Medical reports submitted in
association with the PTD application;
f)
Non-medical PTD factors, including:
i)
Educational level;
ii)
Work history;
iii)
Literacy skills;
iv) Other factors such as learning disabilities, English as a
second language, supervisory skills or special training.
ii.
Any other factors that impact ability
and likelihood of the IW/claimant’s returning to work.
c.
Applying Probability Factors and NPV
i.
PTD: The LSS CSS shall review the C-242
and the medical records submitted and on file to identify any co-morbidities or
lifestyle factors (e.g., smoking, alcohol or drug abuse). The LSS CSS shall
then apply a probability factor that reflects the impact of these conditions on
the present value of a PTD settlement. Example of a PTD calculation:
a)
The IW/claimant is 65 years old, with
several co-morbidities indicating a 70% likelihood of the IW/claimant living to
full life expectancy. The PTD rate is $400.
b)
The NPV factor for a 65-year-old is
528.
c)
$400 × 528 × .70 = $147,840. This is
the PTD value.
ii.
When PTD Has Not Been Previously
Granted (Pre-PTD): The LSS CSS shall apply the appropriate NPV factor relative
to the IW/claimant’s co-morbidities, along with the probability that the
IW/claimant will obtain PTD. Example of a pre-PTD valuation:
a)
100% net present value of the PTD is
$211,200.00 (assuming a PTD rate of $400 x 528 as the NPV factor);
b)
Due to co-morbidities, the LSS CSS
estimates the IW/claimant has a 70% chance of living to his life expectancy.
c)
The LSS CSS also finds that the
IW/claimant has a 50% chance of receiving PTD.
d)
The calculation is $211,200 ×.70 (life
expectancy) × .50 (PTD probability) = $73,920.00 (value of PTD);
d.
Disabled Workers’ Relief Fund (DWRF)
i.
Where potential DWRF is involved in a
PTD settlement, the LSS CSS shall complete and attach a DWRF worksheet to the
Settlement Workbook.
ii.
Unless otherwise approved by the BWC
settlement attorney, the LSS CSS shall adjust the DWRF calculation based on the
same probability factors that are used for the overall PTD calculation.
iii.
The LSS CSS shall only deduct DWRF
overpayments from the DWRF portion of a settlement.
iv. The LSS CSS shall identify and detail DWRF overpayments in
the “Settlement Justification” section of the Settlement Workbook separately
from other compensation overpayments.
e.
VSSR
The LSS
CSS may determine if the employer has settled its VSSR liability by reviewing
the employer claim information or searching the “Adjsettlement” folder in the
Universal Document Server.
i.
Settling VSSR when employer is still in
business VSSR has been awarded
a)
If the employer has not separately
settled its VSSR liability with BWC:
i)
BWC may settle the underlying claim
after the VSSR is settled or disapproved; or
ii)
If the parties request that the VSSR be
settled along with the underlying claim:
a.
The LSS CSS shall evaluate the claim
without consideration of the VSSR, which will be paid by the employer.
b.
The LSS CSS shall obtain authority and
tentatively negotiate the settlement with the understanding that the employer
will pay the VSSR portion of the settlement pursuant to separate agreement with
the claimant.
c.
Before the LSS CSS issues the BWC LSS
approval letter, the claimant and employer must file with and receive approval
from the IC of a separate VSSR settlement application.
d.
If the parties do not wish to settle
the VSSR along with the underlying claim, the LSS CSS shall disapprove the
C-240.
ii.
If the employer’s liability for the
VSSR has been settled through BWC’s adjudicating committee, the LSS CSS shall
evaluate and negotiate the VSSR component of the settlement as if the employer
is out of business.
iii.
The LSS CSS shall document the
settlement of employer liability regarding the VSSR as part of the settlement
justification.
iv. Settling VSSR Settling VSSR when employer is still in
business and VSSR has not been awarded:
a)
The employer is responsible for the
settlement and payment of the VSSR.
b)
The LSS CSS shall disapprove the C-240
pending resolution of the VSSR, unless the parties request that the VSSR be
settled along with the underlying claim.
c)
If the parties request that the VSSR be
settled along with the underlying claim:
i)
The LSS CSS will evaluate the claim
without consideration of the VSSR, which will be paid by the employer.
ii)
The LSS CSS will obtain authority and
tentatively negotiate the settlement with the understanding that the employer
will pay the VSSR portion of the settlement separately.
iii)
A separate VSSR settlement application
will be filed with the IC by the claimant and employer and must be approved by
the IC before the approval letter is mailed.
i.
Settling VSSR when the employer is out
of business and VSSR has been awarded:
a)
The LSS CSS shall confirm with his or
her supervisor that the employer is out of business. Even if inactive a sole
proprietor, i.e. an unincorporated business with a single owner, is always in
business for the purpose of VSSR settlement.
b)
The LSS CSS will use the VSSR
Evaluation Worksheet to calculate future VSSR amounts.
i)
BWC may settle the underlying claim
along with the VSSR.
ii)
The settlement will be referred to the
IC for approval in the standard manner; the IC need not separately approve the
VSSR portion of the settlement.
ii.
Settling VSSR when an employer is out
of business and VSSR has not yet been awarded:
a)
The LSS CSS shall staff with a BWC VSSR
attorney.
b)
Upon the request of the VSSR attorney,
the LSS CSS shall provide an evaluation of future indemnity in order to assist
in negotiation of the pending VSSR.
c)
The LSS CSS may proceed with settlement
of the underlying claim once the VSSR settlement is approved by the IC.
iii.
Employer settles the VSSR, then goes
out of business before VSSR is paid:
a)
The LSS CSS shall staff with the BWC
VSSR attorney.
b)
BWC may request that the VSSR
settlement be vacated and the VSSR application to be reopened by the IC.
iv. Calculation of VSSR Settlements
a)
The LSS CSS shall calculate each
compensation type separately, excluding DWRF, using the appropriate NPV factor
and using maximum rates from the year of the injury. Example with a 1997 Date
of Injury:
i)
52 (TT weeks) x $521 (TT max for 1997)
= $27,092 x 20% VSSR = $5,418.40 x .9412 NPV = $5,099.80
ii)
52 (26% PP award) x $173.67 (%PP max
for 1997) = $9,030.84 x 20% VSSR = $1,806.17 x .9412 NPV = $1,699.97
iii)
Once all the compensation types are
calculated, add them together for the total VSSR.
iv) $5,099.80 + $1,699.97 = $6,799.77
f.
Wage Loss and Living Maintenance Wage
Loss
i.
The LSS CSS shall only factor wage loss
(WL) and/or living maintenance wage loss (LMWL) into future indemnity if the
IW/claimant is likely to be eligible for WL or LMWL in the future and has not
already received the maximum number of weeks for WL or LMWL.
a)
The LSS CSS shall reference the Wage
Loss Compensation and/or Living Maintenance Wage Loss procedures and
respective tips and tools available on COR to determine if the IW/claimant has
received the maximum number of weeks.
b)
The LSS CSS may also email the “BWC
Claims Policy Field Techs” email box regarding calculation issues for WL and
LMWL.
g.
Percentage of Permanent Partial
Disability
i.
LSS CSS shall consider percentage of
permanent partial disability (%PP) if the IW/claimant has not yet received a
%PP award, or if the LSS CSS determines that an additional %PP award is likely.
ii.
The LSS CSS shall ensure that the
combined value of any prior %PP awarded and the %PP being factored into the LSS
appears reasonable based on the allowed conditions or conditions likely to be
added to the claim.
iii.
The LSS CSS shall consider if there is
evidence of on-going or recent medical services indicating a change in the
condition(s).
iv. The LSS CSS shall not update the claims management system
to reflect the amount of %PP allocated to a settlement.
v.
If the LSS CSS finds that it is
substantially likely that an award of 90% or greater will ultimately be
awarded, the LSS CSS may include the extra percentage in the settlement value.
h.
Temporary Partial
i.
The LSS CSS shall only factor in a
value for temporary partial (TP) in claims with a date of injury prior to
8/22/86, and only when the IW/claimant has suffered or will suffer impairment
in earning capacity.
ii.
The LSS CSS shall not factor TP if the
IW/claimant has received the maximum TP award for the date of injury.
iii.
When the IW/claimant is receiving TP,
the LSS CSS shall:
a)
Determine what TP has been paid to date
and include the total dollars and number of weeks paid;
b)
Determine if the IW/claimant will
continue to suffer an impairment in earning capacity; and
c)
Estimate the expected TP indemnity
costs that are probable for the claim.
i.
Death Benefits
i.
The LSS CSS shall ensure that a C-242,
a C-243, and the two most recent years of medical records are submitted from
the surviving spouse and each adult dependent included in the valuation of the
claim.
ii.
If the C-242, C-243 and the two most
recent years of medical records are not submitted with the C-240, the LSS CSS
shall disapprove the C-240.
iii.
The LSS CSS shall consider and apply a
probability factor that addresses co-morbidities (e.g., diabetes or cancer) or
lifestyle factors, (e.g., smoking).
iv. The LSS CSS shall consider the surviving spouse’s age,
number of children, length of marriage, length of widowhood, and other factors
indicating the likelihood of the surviving spouse remarrying.
v.
The LSS CSS shall offset any settlement
award by previous lump sum advancements made in the death claim that are
outstanding at the time of settlement. See the Lump Sum Advancement
procedure for instructions on calculating a lump sum advancement.
vi. The LSS CSS shall consider the entitlement period for any
dependent child to be age 18 unless the LSS CSS finds, based on evidence on
file or submitted by the parent/legal guardian, there is a likelihood that:
a)
The child will enroll or continue to be
enrolled in an accredited educational program up to the age of 25;
b)
The child is, or is likely to be,
physically or mentally incapacitated from earning beyond the age of 18; or
c)
The child has co-morbidities that are
likely to reduce the benefit entitlement period.
vii. The LSS CSS may reference the Death Claims policy
and procedures for further explanation of dependency status and benefit
periods.
viii. The LSS CSS shall staff all settlement requests involving
dependent children with the BWC settlement attorney.
ix. The LSS CSS shall document all projected death benefits by
recipient, including spousal, adult dependent and dependent minor child
benefits.
j.
Indemnity Only
i.
The LSS CSS shall ensure documentation
addresses medical treatment relevant to the potential indemnity award (i.e.,
for a pre-PTD, the IW/claimant’s surgical and recent medical history, as well
as medical evidence submitted in the PTD process).
ii.
The LSS CSS shall value the
indemnity-only settlement following the procedures for a full settlement, and
then apply an appropriate indemnity-only discount based on the estimated future
medical costs.
k.
Medical Settlement Only
i.
The LSS CSS shall staff any C-240
seeking to settle only the medical portion of a claim(s) with the BWC
settlement attorney.
DWRF Only Settlement
i.
The LSS CSS shall staff any C-240
seeking to settle only the DWRF portion of a claim(s) with the BWC settlement
attorney.
m. Claims with Negligible Value
i.
If a settlement agreement includes
claims of negligible value, the LSS CSS shall reflect in the settlement
agreement the value of those negligible-value claims at $0.
n.
Requesting Additional Medical
Documentation
i.
For claims where a C-242 and additional
medical is not already required, if the IMS, or BWC settlement attorney
determine that additional medical is needed, the LSS CSS shall request that the
IW/claimant complete and submit a C-242 and submit the most recent two years of
unrelated medical documentation.
ii.
The LSS CSS shall set a diary/task for
30 days from the date of the request for the C-242 and required documentation.
iii.
If the form and required documentation
is not provided within 30 days, the LSS CSS shall staff with the IMS/SA for
disapproval of the C-240 or determine if reduced probabilities would be
appropriate.
1.
The LSS CSS has the authority to, and
may approve settlements valued $25,000 or less, subject to the exceptions
listed in VII.B. The LSS CSS shall obtain settlement authority for recommended
settlement amounts above $25,000 as follows:
Amount Authorizing
Individual
$25,001 to $150,000 IMS or BWC
Settlement Attorney
$150,001 to $250,000 Executive Round
Table
$250,001 and above Administrator or
designee
2.
The Executive Roundtable (ERT) is a
group of senior BWC Management whose role is to review all settlements
exceeding a specific threshold for accuracy, compliance with BWC Law, Rules and
Policy and consideration of new/complex issues they wish to review.
a.
The members of the ERT shall be the
Chief Operating Officer, the Chief of Claims, and the Chief Legal Officer or
their designee. A backup from Claims and Legal Services shall be designated.
b.
An ERT meeting will be scheduled on a
bi-weekly basis when all members will meet as a collective. When circumstances
warrant, individual reviews may occur.
c.
All settlements received in the Legal
Department within one week of the next ERT meeting will be presented at the
next roundtable.
d.
BWC Settlement Attorneys shall present
proposed settlements to the members.
e.
The ERT will review each settlement and
have one of 3 options: reject, authorize or request clarification/corrections
to the proposed settlement.
f.
The ERT may occur virtually or in
person, and the members will indicate their rejection, authorization,
clarification or corrections of any proposed settlement within seven (7) days
of the workflow being initiated. If the ERT requests clarification or
corrections regarding the proposed settlement, it should be provided within a
reasonable period of time not to exceed five (5) days.
g.
Resubmissions for clarifications/corrections
or a change in settlement terms may be presented to the ERT with approval by
the IMS or SA. Resubmissions should be limited, especially when the sole reason
for return is to increase the settlement amount without a mistake in
calculations, new justification or evidence.
3.
The LSS CSS shall staff with the BWC
Injury Management Supervisor the following:
a.
Settlements that include the following
types of claims:
i.
Disallowed or undetermined claims;
ii.
Respiratory occupational disease
claims;
iii.
A sole proprietorship, partnership, or
any other situation in which an arm’s length position or relationship may not
exist;
iv. Claims with ISO hits;
v.
Claims that arise while an IW/claimant
is participating in a vocational rehabilitation program;
vi. Claims containing overpayments where waiver is requested;
vii. Death benefits claims;
viii. PTD and Pre-PTD claims;
ix. VSSR (where BWC is settling);
b.
Indemnity-only settlements (including
DWRF only settlements);
c.
Medical only settlements;
d.
Settlements with issues that cannot be resolved
by the LSS CSS;
e.
Any settlement where a guardian or an
individual with POA is signing on behalf of the claimant; and
f.
Any other settlements with unusual
circumstances.
g.
Injury Management Supervisors may also
staff any of the above with a BWC settlement attorney.
4.
Deference to a Previously Negotiated
Agreement
a.
The LSS CSS shall independently
evaluate settlement value based on the merits of the claim and the employer’s
risk exposure even when the employer is agreeable to the settlement up to the
amount listed in box A on the C-240.
b.
The LSS CSS may defer to the employer’s
box A preference when all the following are true:
i.
The agreed settlement amount is greater
than the LSS CSS’s calculated value of the claim, and the parties are unwilling
to permit the LSS CSS to negotiate a lesser amount on the employer’s behalf;
ii.
An arm’s length relationship exists
between the parties (e.g., the IW/claimant is not a relative of the employer or
a partner/shareholder in the company);
iii.
The employer is experience-rated, and
the claim is within the policy year experience period;
iv. The settlement will not exceed the claim’s maximum value;
and
v.
The settlement can be reasonably
justified.
5.
Preparing the Settlement Offer
a.
The LSS CSS shall review the settlement
demand.
i.
Identification of common ground between
the parties, such as projections of benefits or treatment that both parties can
agree upon; and
ii.
Determination of an appropriate initial
offer based upon the LSS CSS’s professional experience and knowledge.
6.
Presentation of the Settlement Offer
a.
The LSS CSS may consult with the LSS
IMS or settlement attorney in advance to determine a baseline settlement
negotiation strategy.
b.
The LSS CSS shall present the offer
verbally to the claimant or the claimant’s attorney who has settlement
authority.
c.
The LSS CSS’s initial offer shall be
designed to allow the parties to reach agreement within the authorized
settlement amount.
d.
The LSS CSS shall request and obtain a counteroffer
before increasing the BWC’s settlement offer.
e.
The LSS CSS shall document and track
negotiations/offers and counteroffers in the LSS Case Activities Tab.
7.
Discussing the Settlement Terms with
the Parties
a.
Regardless of the amount or type of
settlement, the LSS CSS shall be the primary point of contact between the
parties regarding settlement negotiations.
b.
If for any reason the LSS CSS’s
supervisor or the BWC settlement attorney discusses the settlement with the
parties, he or she shall promptly inform the CSS and the discussion should be
documented in claim notes.
c.
The LSS CSS shall refer the claimant to
their attorney regarding questions the claimant may have about the settlement
negotiations.
d.
The LSS CSS shall ensure the parties
are aware of any family support orders or overpayments that will affect the
final settlement amount.
e.
The LSS CSS shall seek direction from
his or her supervisor or the BWC settlement attorney any time it becomes
apparent that the best interests of any party are not being protected, at which
time the settlement process may be stopped.
f.
The LSS CSS shall discuss any changes
to the original C-240 with the appropriate parties and document them on the
C-241 and approval letter.
1.
Medicare Secondary Payer Act
(MSPA)/C-241
a.
The LSS CSS shall send a “Medicare
Secondary Payer Act Letter” (MSPA letter) to the claimant or the claimant’s
attorney in the following situations:
i.
All full and final settlements over $100,000;
ii.
All full and final settlements over
$10,000 when the IW/claimant is on Medicare or has a reasonable expectation of
receiving Medicare within thirty (30) months, which may occur when the
claimant:
a)
Is on Social Security Disability (SSD);
b)
Is age 62 ½;
c)
Has been diagnosed with end-stage renal
disease;
d)
Has applied for SSD; or
e)
Has had an adverse decision regarding
SSD and has appealed the denial.
b.
When multiple claims are settled, the
LSS CSS shall send an MSPA letter if the aggregate value of all claims included
in the settlement is over $10,000.
c.
The LSS CSS shall ensure that the
IW/claimant has signed and returned the MSPA letter within 14 days of the
request. The letter:
i.
Must be signed by the IW/claimant; not
the IW/claimant’s attorney;
ii.
Confirms that the IW/claimant will
establish a Medicare set-aside trust;
iii.
States the IW/claimant will not seek
treatment under Medicare for any medical services which would have been covered
under the workers’ compensation claim being settled, until the settlement funds
in the Medicare set-aside trust are exhausted; and
iv. Indicates the name of the financial institution in which
the set-aside funds will be placed.
d.
The LSS CSS shall ensure the complete MSPA
letter is imaged into the claim (not just the signature page).
e.
If the LSS CSS does not receive the MSPA
letter within 14 days of the request, the LSS CSS shall contact the IW/claimant
or the IW/claimant’s attorney to follow-up. The IW/claimant may be given up to
seven (7) additional days to return the C-241.
f.
If the MSPA letter is still not
returned, the LSS CSS shall review with their supervisor for possible
disapproval of the C-240.
g.
The LSS CSS shall reinstate the
settlement if the MSPA letter is received within thirty (30) days of the
disapproval.
h.
If the MSPA letter is received later
than thirty (30) days of disapproval, the LSS CSS shall staff with their
supervisor.
2.
VSSR and Subrogation
a.
The LSS CSS shall ensure any issues
related to a VSSR are addressed.
b.
The LSS CSS shall ensure any issues
related to Subrogation are addressed.
3.
Amended Settlement Agreement and
Release (C-241)
a.
The LSS CSS shall request a C-241 when
any of the following applies:
i.
A non-current version of the C-240 was
filed and has not been replaced with a current version; or
ii.
A change is made to the originally
requested settlement amount, terms, or conditions.
b.
The LSS CSS shall set a task for 14
days from the request. If the C-241 has not been provided, the LSS CSS shall
contact the IW/claimant or claimant’s attorney to advise them that the C-240 is
going to be disapproved. The LSS CSS shall review the settlement with their
supervisor prior to disapproval.
c.
The LSS CSS shall reinstate the
settlement if the required C-241 is received within thirty (30) days of the
disapproval.
d.
If the required C-241 is received later
than thirty (30) days after disapproval, the LSS CSS shall staff the claim with
a LSS IMS or BWC settlement attorney.
4.
Disapproving the Settlement
a.
The LSS CSS shall disapprove the
settlement, with their supervisor’s consent, when:
i.
Any party to the settlement does not
agree or fails to provide any required information or documentation;
ii.
A member of the SIU or Subrogation
department requests disapproval; or
iii.
In the case of the claimant’s death.
b.
The LSS CSS shall notify the parties of
the disapproval.
c.
The LSS CSS shall publish an “LSS
Disapproval Letter”. After issuing the letter, the LSS CSS shall ensure:
i.
All included claims are updated with a
copy of the “LSS Disapproval Letter”;
ii.
The case issue is updated in the claims
management system to “Denied by BWC” and the case is closed; and
iii.
All suspended actions are reinstated.
d.
In cases which the LSS CSS reinstates
the C-240 following the disapproval without the filing of a new application,
the LSS CSS shall record the current date as the new filing date and update the
case status.
5.
Approving the Settlement and Building
the Plan
a.
To approve the settlement, the LSS CSS
shall publish the approval letter, print it locally and mail it the same day.
b.
When the claim has been settled for all
indemnity and/or all medical, the LSS CSS shall update the claims management
system under “Claims Management” and:
i.
Go to “Claims Dates>Other Claim
Dates” and select from the drop-down menu:
a)
Pending Settled/Both;
b)
Pending Settled/Indemnity; or
c)
Pending Settled/Medical.
ii.
Go to “Claim Type” and select from the
drop-down menu:
a)
Pending Settled/Both;
b)
Pending Settled/Indemnity; or
c)
Pending Settled/Medical.
c.
When the claim is settled for indemnity
and/or medical related to a specific condition only, the LSS CSS shall update
the claims management system under “Claim maintenance>ICD status” and select
from the drop-down menu:
i.
Pending Settled/Both;
ii.
Pending Settled/Indemnity; or
iii.
Pending Settled/Medical.
d.
In all claims the LSS CSS shall update
the claim status by going to “Status”, select the “Change Status Reason” and
from the drop-down menu select:
i.
Pending Settled/Both;
ii.
Pending Settled/Indemnity; or
iii.
Pending Settled/Medical.
e.
The LSS CSS shall update the case to
“Thirty Day Hold”.
f.
If the employer was previously in the
state fund but is now SI, and a DWRF value is placed in the settlement, the LSS
CSS shall include language in the approval letter stating that the SI employer
is responsible to pay the DWRF portion of the settlement.
g.
If Social Security apportionment
language is submitted with a C-240 or C-241, or is requested during
negotiations, the LSS CSS shall include the following language on the approval
letter:
Social
Security apportionment language was submitted as an attachment to the C-240 or
C-241 and is incorporated herein. A copy is attached.
h.
When the settlement includes multiple
employers, the LSS CSS shall send an approval letter to each employer detailing
settlement terms pertinent only to claims in which that employer is a party.
i.
When the settlement involves only one
employer and multiple claims:
i.
If only one claim has money allocated
to it, the LSS CSS shall send one approval letter for all claims.
ii.
If more than one claim has money
allocated to it, the LSS CSS shall send a separate approval letter for each
claim.
6.
Sending to IC for Review
a.
Within five (5) days of sending the
“Approval of Settlement Agreement“ letter(s), the LSS CSS shall ensure that the
following information, as applicable, is referred electronically as the
“LSSPAC” to the IC for review:
i.
Settlement Workbook Claim Demographic
page(s);
ii.
The approval letter; and
iii.
C-240 and C-241.
b.
The LSS CSS shall set a task for five
(5) days to ensure the IC referral has been made.
1.
For purposes of tracking the thirty-day
waiting period, the LSS CSS shall count the day after the approval letter is
mailed as day one.
2.
If the 30th day is a weekend
or holiday the LSS CSS shall consider the next business day as the 30th
day of the waiting period and payment of the settlement shall be made the
following business day.
3.
For purposes of determining overpaid
compensation and payment of medical services, field staff shall consider the
day the approval letter is mailed as the effective date of the LSS.
4.
The day the approval letter is mailed
the LSS CSS shall update the claim to a “settled-pending” status.
5.
The claims management system shall
automatically generate notice to the managed care organization (MCO).
6.
The LSS CSS shall not accept waivers of
the 30-day waiting period.
7.
LSS CSS shall staff any request for
action regarding the settlement after the expiration of the 30-day waiting
period with the BWC settlement attorney.
1.
If the claimant dies prior to the LSS
CSS issuing the approval letter, the claim abates. The LSS CSS shall issue a
“LSS Disapproval Letter” due to claim abatement.
2.
If the claimant dies within the 30-day
waiting period, any party may void the settlement for good cause shown.
3.
When the LSS CSS receives notice of the
death of a claimant, the LSS CSS shall:
a.
Verify the death by obtaining a copy of
the death certificate and related medical records around the time of death (3
months) to confirm the cause of death and whether BWC has good cause to
withdraw from the settlement;
b.
Ensure any substituted claimant has
filed a Claimant Authorized Representative (R-2) form and a new
authorization to receive payment, indicating the claimant’s former
representative, or new representative, represents the estate and
c.
Obtain legal documentation from the
probate court naming an administrator, executor, or executrix of the estate.
4.
If the LSS CSS discovers the death
prior to the expiration of the 30-day waiting period, the LSS CSS shall:
a.
Staff the settlement with the BWC
settlement attorney; and
b.
If the decision is made to withdraw
from the settlement agreement, issue an “LSS Withdrawn Notice”.
5.
If the LSS CSS discovers the death of
the claimant following the expiration of the 30-day waiting period, but before
issuance of the warrant, the LSS CSS shall:
a.
Staff the settlement with the BWC
settlement attorney; and
b.
As recommended by the BWC settlement
attorney, either void the settlement for good cause or issue the warrant
payable to the estate of the deceased claimant.
6.
If the LSS CSS discovers the death
following the expiration of the 30-day waiting period and issuance of the
warrant, but before the warrant is cashed, the LSS CSS shall:
a.
Request return of the warrant from the
claimant or claimant’s attorney;
b.
Staff the settlement with the BWC
settlement attorney; and
c.
As recommended by the BWC settlement
attorney, either void the settlement for good cause or issue the warrant
payable to the estate of the deceased claimant.
7.
If the LSS CSS discovers the death
following the expiration of the 30-day waiting period and after issuance of the
warrant, and the warrant has been cashed, the LSS CSS shall staff with the BWC
settlement attorney.
1.
If potential fraud is identified after
the approval letter is issued, but before the expiration of the 30-day waiting
period, the LSS CSS shall immediately:
a.
Notify the BWC settlement attorney; and
b.
Issue a “LSS Disapproval” letter to all
parties, using general language without reference to potential fraud.
1.
If a party to the settlement submits a
request in writing to withdraw from the settlement prior to the settlement
becoming final, the LSS CSS shall confirm that the request was sent to all
parties to the settlement.
2.
If all parties were notified of the
withdrawal, the LSS CSS shall:
a.
Issue a “LSS Withdrawn Notice”; and
b.
On the “LSS Withdrawn Notice”, list the
reason for the withdrawal (e.g., written notice from one of the parties;
parties no longer in agreement).
1.
If the IC does not disapprove the
settlement within the 30-day waiting period, the settlement is approved by
operation of law, as long as the IC was given the opportunity to review the
settlement.
2.
If the 30-day waiting period expires
without the issuance of an IC approval or disapproval, the LSS CSS shall:
a.
Check to make sure the IC referral was
made;
b.
Wait one additional business day to
make sure that a disapproval was not timely issued by the IC, but failed to
attach to the claim; and
c.
Proceed with the settlement, if the
referral was properly made and there is no IC disapproval.
3.
When the LSS CSS becomes aware during
the 30-day waiting period that the IC has disapproved a settlement as being a
gross miscarriage of justice or clearly unfair, the LSS CSS shall immediately
notify the LSS IMS or BWC settlement attorney.
1.
Update the claim status to the
appropriate settled status (“settled/both”, “settled/indemnity”,
“settled/medical”);
2.
Update any cases that are still open or
in a suspended status to the appropriate closed status, including updating the
issue and closing the case; release payment.
1.
Family Support: If there is a family
support order in the claim, the LSS CSS shall follow the procedures set forth
in the Family Support Orders and Attorney Fees Paid Pursuant to Deductions
of Child Support from Lump Sum Payments procedure.
2.
DWRF Payment: The LSS CSS shall issue
payment for the DWRF portion of a settlement by a separate warrant, and charge
that portion to the DWRF fund using the DWRF Lump Sum Settlement benefit plan
in the claims management system.
3.
When the claimant has died, the LSS CSS
shall staff with the BWC settlement attorney to determine how payment is made
and what documentation is required.
1.
The LSS CSS shall issue settlement
approval letters for SI rehabilitation claims offline from the claims
management system.
2.
Payment for SI rehabilitation claims
shall be issued in the claims management system “Miscellaneous Payment” window
at the end of the thirty (30) day waiting period.
3.
The LSS CSS shall ensure that the
rehabilitation injury claim is assigned to the correct policy number.
4.
The employer’s type of coverage at the
time of the original injury, whether the employer paid into the Surplus Fund or
not, will indicate if the employer or the Surplus Fund will be charged for the
injury in rehabilitation plan claim costs.
5.
Employers who paid into the Surplus
Fund at the time of the original allowed claim have coverage for vocational
rehabilitation costs, including claim costs for injuries in rehabilitation
plans
6.
Employers who did not pay into the
Surplus Fund at the time of the original allowed claim are responsible for
their own vocational rehabilitation costs. This includes rehabilitation costs
associated with injuries sustained during that claim’s original rehabilitation
plan
7.
The employer’s Surplus Fund status at
the time of the original allowed claim date. dictates the policy number to
which the rehabilitation injury costs are charged:
Employer Type Surplus
Fund Policy Number
State Fund Yes 9999-0
Self-Insured (opted in) Yes 20000999-0
Self-Insured (opted out) No Regular
policy numbers used
PEC* Yes 30099901-0
PES** No Most
use own policy number
*Public Employer
County/city: Includes the county auditor and every taxing district in the
county (such as townships, villages, cities, public school districts,
libraries, some hospitals, cemeteries and fire departments).
**Public Employer
State Agency: Does not pay into the Surplus Fund. PES employer charges
rehabilitation injury claims to their regular policy number and do not use
surplus fund dollars.
1.
The following BWC staff may authorize a
court settlement, up to the amounts indicated:
Amount Authorizing
Individual
up to
$75,000 BWC Field Attorneys
$75,001
to $150,000 BWC Settlement Attorneys
$150,001 and above Executive Round
Table, with Administrator sign off
2.
The assigned lost time service office will process court ordered settlements for medical only claims, as well as lost time
claims. This includes court ordered settlements for a single medical only claim
or a medical only reference claim with a lost time claim.
3.
Processing the Settlement
a.
The Legal Division will be notified via
email by the Attorney General's Office (AG) of a court settlement agreement
being reached.
b.
The Legal Division will forward the
email it received from the AG with the subject line “Court Settlement
Notification” to the BWC Claims Services AG LSS email box for processing the
settlement.
c.
LSS Support Staff shall do the
following upon receipt of the email from the Legal Division:
i.
Check the LSS email box daily for
notifications and final paperwork packets.
ii.
Create a coversheet in the Regional AG
Settlement Work List tab on LSS Dashboard and assign based on the AG
Notification Tracker rotation list; and
iii.
Add a note in the claim to indicate
receipt of the court settlement notification.
4.
LSS Staff shall do the following upon
receipt of the email from the Legal Division:
a.
Reassign all the included claims to
themselves;
b.
Update the Claim Maintenance tabs with
appropriate dates indicated in the claim note (the effective settlement date);
c.
If exclusions exist, do a claims search
by the claimant’s social security number to ensure all claims are identified;
d.
If the claimant has multiple active
claims, ensure all claims have a settlement notification note. This will not be
done for any claims that are listed in the AG email as excluded from the court
settlement;
e.
Set a work item to review for receipt
of the signed court documents from the AG's office;
f.
Ensure that ongoing compensation
payments (e.g., temporary total disability, permanent total disability)
continue until receipt of the AG paperwork and the claim is placed in the
appropriate settled status.
g.
Ensure any compensation paid after the
effective settlement date is declared an overpayment, including any payment for
permanent partial disability unless specifically excluded in the AG email.
5.
Upon receipt of the AG closing
documents in the LSS mailbox; LSS Support staff shall:
a.
Forward the email containing the AG
closing documents to the assigned LSS CSS;
b.
Ensure AG closing documents are
indexed/imaged into the claim.
6.
Upon receipt of the email containing AG
closing documents the LSS staff shall:
a.
Read the settlement agreement for
special findings (i.e., confirm claims that are excluded or settlement of
indemnity/medical/condition only);
b.
If there are no exclusions, include all
State Fund claims in the settlement;
c.
Ensure that medical-only claims are
reassigned, as appropriate;
d.
Complete and mail a "Court Ordered
Settlement-BWC Findings of Fact" to all the parties and their
representatives to document how BWC is perfecting the court settlement;
e.
Image a copy of the “Court Ordered
Settlement-BWC Findings of Fact” notice and the settlement agreement in each of
the claimant’s files that is being settled. When there are multiple employers,
a copy shall be imaged in each claim included in the settlement;
f.
Update medical and indemnity claim
settled dates, as appropriate. Injury status codes shall not be updated to
“deny or “disallowed” or the status of the claim changed to “disallowed” if
previously allowed;
g.
If the settled claim had been
disallowed, charge the settlement payment to the State Fund unless the court
ordered settlement agreement states to charge it to Surplus Fund, or other
specific terms are described;
h.
If to be charged to Surplus Fund,
notify the employer adjustment unit by creating a user-generated work item,
include details regarding the court ordered settlement and request the
settlement be charged to the Surplus Fund.
i.
Enter the “from and to” dates in the
payment plan as the date of settlement on the court order;
j.
Ensure the notes in all claims are
updated to reflect the settlement is a court settlement; and
k.
Staff with the BWC attorney any request
by the claimant to terminate his or her legal representative, cancel an
authorization to receive payment and/or any other request to not send payment
to the legal representative.
7.
The LSS CSS shall recoup from the
settlement amount any payments of compensation made after the effective date of
settlement.
8.
The LSS CSS shall update any pending
cases as appropriate.
9.
The LSS CSS shall deny any new requests
for compensation in the claims included in the settlement.
10. The LSS CSS shall follow the procedures in Lump Sum
Settlements procedure CP-12-01.PR.1 for overpayments.
11. If the LSS CSS discovers the death of the claimant prior to
the issuance of the warrant, or after the issuance of the warrant but before
the warrant is cashed, the LSS CSS shall staff with the BWC settlement
attorney.