Table of
Contents
I. POLICY PURPOSE
II. APPLICABILITY
III. DEFINITIONS
Claimant
Overpayment of Compensation
IV. POLICY
A. Identifying
an Overpayment
B. Recouping
or Not Recouping an Overpayment
V. PROCEDURE
A. General
Claim Note and Documentation Requirements
B. Investigation
and Processing
C. Miscellaneous
Overpayment Issues
The purpose of this policy is to ensure that BWC
appropriately declares an overpayment when a claimant receives compensation
that they are not entitled to receive.
This policy applies to BWC claims services staff.
Claimant:
The individual seeking workers’ compensation benefits, typically the injured
worker (IW) or a dependent of a deceased IW.
Overpayment of Compensation:
A final administrative or judicial determination holding that the claimant
received compensation to which they were not entitled, and which entitles BWC
or a self-insuring employer to withhold a percentage amount of compensation
from any claims, past, present, or future, to which the claimant becomes
entitled.
1. An
overpayment of compensation may include BWC payments made directly to a
claimant; and/or
2. BWC
payments made to another entity on the claimant’s behalf, including, but not
limited to, payments to:
a. A
child support enforcement agency;
b. The
Ohio Department of Job and Family Services.
1. Except
as noted in Section IV.B.3. below, it is BWC’s policy to:
a. Seek
recoupment of an overpayment of compensation until BWC recovers the total
amount of the overpayment, regardless of the amount of overpayment and/or time
that has passed since the overpayment occurred; and
b. Recoup
the overpayment from any amount of compensation to which the claimant becomes
entitled in a past, present or future claim, except for the following:
i.
A lump sum advancement for attorney fees;
ii. Disabled
Workers’ Relief Fund payments;
iii. Living
maintenance payments, except for fraud, but not to include living maintenance
wage loss payments; or
iv. The first
12 weeks of temporary total compensation (TT), except for fraud overpayments.
2. BWC will
provide notice of its intent to recoup an overpayment via:
a. A
BWC order; or
b. An
“Initial Notification of IC Declared Overpayment Letter.”
3. BWC will
not seek recoupment of any overpayment when:
a. The
IW received compensation in a claim that is subsequently disallowed by the
Court of Appeals or Supreme Court;
b. Absent
an indication of fraud, a new dependent is identified as being eligible for a
portion of the previously paid death benefits and there
is evidence that the original dependents accepted benefits in good faith
without knowledge of the other dependents;
c. The
overpayment is caused by a court subsequently overturning an IC violation of
specific safety regulation (VSSR) award; or
d. The statute
of limitations on the claim in which the overpayment occurred expired prior to
declaration of the overpayment.
1. BWC
staff will refer to the Standard
Claim File Documentation and Altered Documents policy and procedure for
claim note and documentation requirements; and
2. Must
follow any other specific instructions for claim notes and documentation
included in this procedure.
1. Claims
services staff may identify an overpayment arising from:
a. An
IC order;
b. A
court order that impacts compensation;
c. Changes
to any of the following, but not limited to:
i.
Compensation period;
ii. Full
weekly wage (FWW) or average weekly wage (AWW);
iii. Date of injury;
iv. Allowed
conditions;
v. Return
to work information;
vi. Rehabilitation
case closure;
vii. Date of death; or
viii. Status of a dependent receiving
death benefits.
2. When
investigating whether the claimant has incurred an overpayment, claims services
staff will gather relevant information.
3. When
an overpayment is identified:
a. If
it is based on an underlying issue for which a BWC or IC order was issued,
claims services staff will not issue an order or send a Notice of Referral to
the IC until the decision relating to the underlying order is final.
b. If
there is an indicator of potential fraud, claims services staff will:
i.
Discuss the investigation with the supervisor; and
ii. Follow
the referral process in the Fraud/Special
Investigations policy and procedure.
c. If
it appears that all parties believed the payments were made correctly at the
time of the payment, but the payments were made in error, claims services staff
will discuss the situation with their supervisor and BWC attorney to determine
appropriate next steps.
d. Claims
services staff will complete the “Overpayment Worksheet.” However, the
worksheet may not be necessary when the overpayment can be explained using the
available order inserts. If family support is part of the compensation being
declared overpaid, refer to the CoreSuite job aid titled, “Overpayment
Involving Child Support.”
i.
The worksheet will list:
a) The
compensation type;
b) The period
for which compensation was paid;
c) The
amount that BWC paid to the claimant; and
d) The
warrant number and status (cashed or uncashed).
ii. Claims
services staff will enter the information as follows:
a) If
BWC issued 5 or fewer payments and a worksheet is needed, claims services staff
will:
i)
Manually enter the compensation and warrant information using
information in the claims management system;
ii) Print
a copy of the worksheet; and
iii) Image the
worksheet to the claim.
b) If BWC
issued more than five payments and a worksheet is needed, claims services staff
will:
i)
Request the payment history from 55 – Overpayment Merge on Cognos. Any
compensation payments made prior to 1993 will not appear on the report and must
be obtained directly from the Financials page on the claims management system;
ii) Print
a copy of the worksheet; and
iii) Image the
worksheet to the claim.
e. Once
it has been determined that an IW is overpaid and BWC is preparing to issue
notification of the overpayment, claims services staff will complete the
Overpayment Checklist and image it into the claim.
f.
Claims services staff must:
i.
Ensure the worksheet, Overpayment Checklist, and all supporting evidence
are imaged into the claim;
ii. Enter
a claim note that includes:
a) An
explanation of the overpayment; and
b) Actions
taken to address the overpayment.
iii. Create a work
item for any necessary follow-up actions.
iv. Refer to
“When to Contact Employer Risk Adj.” on COR to determine if an employer rate
adjustment is required. If yes, send an email to BWC Emp
Rate Adj and include the following information:
a) The
amount of the overpayment; and
b) The period
(date range) the overpayment covered.
v. Issue
a BWC order, if one of the following apply:
a) The
overpayment is based on an underlying issue for which a BWC order was required;
or
b) The IC
issued an order impacting compensation without a specific finding of
overpayment.
i)
Example: The IC finds the claimant was not entitled to TT already
received but is silent regarding the overpayment.
ii) Example:
The IC finds the claimant has reached maximum medical improvement (MMI) on a
specific date but does not address the fact that the claimant received TT after
the MMI date and is overpaid.
vi. Issue an
“Initial Notification of IC Declared Overpayment” letter once the IC decision
is final if the IC issued an order with a specific finding of overpayment; and
vii. Include a copy of the
worksheet with the order or initial notification letter when a worksheet has
been completed.
1. Death
a. If
accrued compensation is requested and granted following the death of an IW or
claimant and the claim does not contain a final order establishing an
overpayment or an “Initial Notification of IC Declared Overpayment” letter,
claims services staff will:
i.
Discuss the claim issues with their supervisor and BWC attorney to
determine the appropriate next steps; and
ii. If a
decision is made to collect the overpayment:
a) Deduct
the overpayment from the accrued compensation award, according to RC 4123.511(K);
and
b) Specifically
note the overpayment deduction in the order for accrued compensation.
b. If
an overpayment occurs because compensation continues to be deposited via
electronic fund transfers/electronic benefit transfers (EFT/EBT) following the
IW’s death:
i.
Claims services staff will adjust the compensation plan based on the
date of death.
a) All
compensation will be adjusted prior to entering a date of death.
b) Adding the
date of death will cause a report to be sent to Benefits Payable requesting
reclamation of the payments by Benefits Payable.
c) Benefits
Payable will seek recoupment of the funds based on the date of death and will
note in the claims management system if recoupment efforts fail. If recoupment
efforts fail and:
i)
There is an indication of fraudulent activity, claims services staff must
follow the referral process in the Fraud/Special
Investigations policy and procedure.
ii) There
is no evidence of fraudulent activity, claims services staff will deduct any
uncollected overpayment from a request for accrued compensation, if any, noting
the overpayment deduction in the order for accrued compensation.
ii. Claims
services staff will not collect the deceased IW’s
overpayment from a death benefit award, absent a finding of fraud against the
death benefits recipient.
iii. Once the time
frame for filing for accrued compensation has expired, claims services staff
may consult with their supervisor and determine whether to write off any
remaining overpayment balance.
c. If
an additional dependent is added to an existing death benefit award resulting
in overpayment to an existing dependent(s) and there is evidence that the
existing dependent(s) accepted benefits in good faith without knowledge of the
other dependent(s), claims services staff will:
i.
Follow procedures for reapportionment set forth in the Death
Claims procedure;
ii. Not
declare the original dependent(s) overpaid when issuing the order with
reapportionment rates; and
iii. Follow the
referral process in the Fraud/Special
Investigations policy and procedure if there is an indication of
fraud.
d. If
the status of a dependent receiving death benefits changes, or any other
circumstances occur resulting in overpayment to the dependent, claims services
staff will:
i.
Follow the investigation steps set forth in Section V.B. above; and
ii. Collect
the overpayment from:
a) The
dependent’s death benefit claim if funds are available; and/or
b) Current or
future claims filed by the dependent.
2. Bankruptcy
a. If
an “IW Bankruptcy Notice” is present in the claims management system when
processing an overpayment, claims services staff will:
i.
Immediately discontinue collecting the overpayment;
ii. Send
an e-mail to BWC Legal Division with claim information to:
a) Determine
if the overpayment was discharged in the bankruptcy proceeding; and
b) Request
overpayment processing instructions.
iii. Claims services
staff will take action based on the direction provided by the Legal Division.
a) If
the overpayment was included in the bankruptcy:
i)
Claims services staff will enter a claim note stating: “Injured worker
filed bankruptcy <<insert date>>, Case no. <<insert case
number>>. Do not recoup the overpayment from any future awards. Overpayment
of $_____ was discharged in the bankruptcy.”
ii)
Claims services staff will then send a request to the BWC Service Desk
requesting that the overpayment be eliminated. The Service Desk will assign the
issue to a CoreSuite team member for resolution (see Adjustment
of Overpaid Compensation policy and procedure for instructions on
manual adjustment of a claim).
b) If the
overpayment was not included in the bankruptcy:
i)
Claims services staff will enter a claim note stating: “Injured worker
filed bankruptcy <<insert date>>, Case no. <<insert case
number>>. Recoupment of the overpayment should be deducted from future
awards. Overpayment of $_____ was not discharged in the bankruptcy.”
ii) Claims
services staff will follow the overpayment processing steps set forth in Section
V.B. of this procedure.
c) If
the overpayment is due to fraud, and the bankruptcy does not prevent
collection:
i)
Claims services staff will enter a claim note stating: “Injured worker
filed bankruptcy <<insert date>>, Case no. <<insert case
number>>. BWC may proceed with any available collection method.”
ii) Claims
services staff will follow the overpayment processing steps set forth in Section
V.B. of this procedure and the referral process in the Fraud/Special
Investigations policy and procedure.
b. If
claims services staff receive an IW bankruptcy notice while processing an
overpayment, claims services staff will:
i.
Image a copy of the notice into the claims management system;
ii. Enter
a claim note titled “IW Bankruptcy Notice;”
iii. Forward a copy
of the notice to the BWC Legal Division; and
iv. Follow the
direction of the Legal Division.
3. Federal
Black Lung Claims: For information regarding an overpayment in a Federal Black
Lung claim, refer to the Federal
Black Lung Claims policy and procedure.
4. Longshore
and Harbor Workers (Marine Industry Fund): For information regarding an
overpayment in a Longshore and Harbor Workers claim, refer to the Longshore
and Harbor Workers’ Compensation Claims procedure.
5. Lump
Sum Settlement: When an overpayment exists in a claim being reviewed for a lump
sum settlement, refer to the Lump
Sum Settlement policy and procedure for processing steps.
6. Lump
Sum Advancement (LSA)
a. If a
LSA is requested in a claim with an outstanding overpayment balance, claims
services staff must notify the claimant or the authorized representative of the
existing overpayment to be collected from the LSA.
i.
If, following receipt of the notice, the claimant no longer wants to
proceed with the LSA, claims services staff will dismiss the request by BWC miscellaneous
order.
ii. If
the claimant wants to proceed with the LSA request, claims services staff will
deduct the overpayment at the recoupment rate provided for the type of
compensation being advanced.
b. If
overpayment recoupment, along with all reductions to an advancement (excluding
attorney fees) exceeds 1/3 of the biweekly rate of compensation for death benefits
or permanent total disability, claims services staff will deny the request for
LSA. The 1/3 reduction limitation does not apply to awards of scheduled loss compensation
or percentage of permanent partial disability.
7. Family
Support: If there has been an overpayment of family support, refer to the Family
Support and Attorney Fees policy and procedure.