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Policy and Procedure Name:
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Self-Insured Bankrupt
Claims
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Policy #:
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CP-19-07
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Code/Rule Reference:
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R.C. 4123.351; R.C. 4123.75
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Effective Date:
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2/27/2020
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Approved:
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Ann M. Shannon, Chief of Claims Operations & Support
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Origin:
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Claims Policy
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Supersedes:
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Policy # CP-19-07, effective 06/27/14
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History:
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Previous versions of this policy
are available upon request.
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Self-Insured Bankrupt Claims Policy and Procedure Table
of Contents
I. POLICY
PURPOSE
II.
APPLICABILITY
III.
DEFINITIONS
Self-insuring
employer
Default
Self-insuring
employers guaranty fund
Self-Insured
Bankrupt Team
Self-Insured
Department
Third-party
administrator
IV. POLICY
A. It
is the policy of BWC to transfer management of workers’ compensation claims in
a timely and efficient manner to BWC from a self-insuring employer in default.
B. It
is the policy of BWC to pay compensation and benefits from the guaranty fund
for claims transferred to BWC when a self-insuring employer defaults.
V. PROCEDURE
A. Standard
Claim File Documentation
B. Self-Insured
(SI) Employer Default
C. Receipt
of the Claim File
D. Ongoing
and/or Subsequent Compensation/Indemnity Benefits
E. Ongoing
and/or Subsequent Compensation/Percentage of Permanent Partial Disability (%PP)
F. Medical-Only
Claims
The purpose of this policy is to ensure that the management
of workers’ compensation claims is properly transferred from a self-insuring
employer that defaults to the BWC Self-Insured Bankrupt team.
This policy applies to BWC claims service staff,
specifically members of the Self-Insured Bankrupt team.
Self-insuring
employer: An employer granted the privilege by BWC of administering
its own workers’ compensation program and who pays compensation and benefits
directly to the injured worker (IW).
Default:
For purposes of this policy, when a self-insuring employer notifies BWC that it
is no longer willing to administer a self-insured program or when it fails to
pay compensation and/or benefits on an allowed workers’ compensation claim.
Self-insuring
employers guaranty fund: The fund established pursuant to R.C.
4123.351 through contributions from self-insuring employers, used to guarantee
the payment of claims of a self-insuring employer in default.
Self-Insured
Bankrupt Team: The BWC Field Operations team responsible for
management of claims transferred to BWC from a self-insuring employer in
default.
Self-Insured
Department: The BWC section that provides oversight and services to
self-insuring employers, including underwriting of applications for
self-insurance, self-insured claims audit, and consulting services.
Third-party
administrator: An organization that processes workers’ compensation
claim on an employer’s behalf.
1. BWC staff
shall refer to the Standard
Claim File Documentation and Altered Documents policy and
procedure for claim note requirements; and
2. Shall
follow any other specific instructions for claim notes included in this
procedure.
a. Update the
employer’s policy status to “Cancelled” and the status reason to “SI Default’
or “SI-Bankrupt” for all policies associated with the defaulted policy, which
will cause the claim management system to:
i. Update
the employers claims; and
ii. Assign
the claims to the SI Bankrupt team.
b. Send
notice to the:
i. SI
Bankrupt Team;
ii. Field
Operations;
iii. Legal
Division;
iv. Accounting
Department;
v. Fiscal
Operations Department
vi. Industrial
Commission;
vii. Ombuds Office; and
viii. MCO Business & Reporting Unit;
a) The MCO Business
& Reporting Unit will recommend an MCO assignment to the Employer
Management Services Section and the SI Department;
b) The
Employer Management Services Section will assign a managed care organization
(MCO);
c) The MCO is
notified of the policy assignment via an 816 electronic interface and of the
associated claims via a 148 electronic data interface (EDI).
a. Contact
the SI employer and third-party administrator (TPA) to:
i. Make
arrangements for pick-up or delivery of hard-copy and/or electronic claim
files; and
ii. Get
a list of active and inactive claims and request a “loss run” report, which
includes:
a) Injured
worker demographic information (name, claim number, social security number,
address, phone number);
b) Wage
calculations for the full weekly wage (FWW) and average weekly age (AWW), if
calculated;
c) Compensation
payment history, if any;
d) Last
compensation and/or medical paid dates;
e) Claim
allowances; and
f) Any
outstanding issues.
3. Notify the
SI Bankrupt supervisor and team of the incoming claims, the status and specific
compensation issues of the claims, and any other special instructions.
1. Upon
receipt of the claim file, the CSS shall review and update the claim to ensure
inclusion of all pertinent information and documents;
2. Set up
active compensation plan history, as needed; and
3. Begin
ongoing claim management consistent with BWC policies and procedures, with the
exception that “SI-BWC Pay” claims do not have an employer-party
1. Except for
percentage of permanent partial compensation (see section II.E), when an SI-BWC
Pay claim has ongoing compensation or a subsequent request for compensation is
made, the CSS shall:
a. Build
indemnity benefit periods paid by the SI employer as the Benefit Type
“SI-Historical Pymts”; and
b. Identify
the Reporting Benefit Type as the specific type of compensation, e.g.,
“Temporary Total Disability – AWW”.
2. The CSS
shall build subsequent indemnity benefit periods payable by BWC, in the manner
appropriate for the benefit type.
a. Example 1:
The SI employer paid the first six (6) weeks of temporary total at the full
weekly wage (TT – FWW).
i. The
CSS shall build the first 6 week period as the Benefit Type “SI-Historical
Pymts” and the Reporting Type as “Temporary Total Disability – FWW”.
ii. If
the IW continues eligibility for TT, the CSS shall build the next 6 weeks, payable
by BWC, as Benefit Type “Temporary Total Disability – FWW”.
iii. After a
total of twelve (12) weeks of benefits at FWW (6 weeks paid by the SI employer
and 6 weeks paid by BWC), the CSS shall build any ongoing TT paid at the
average weekly wage (AWW) as the benefit type “Temporary Total Disability –
AWW”.
b. Example 2:
The SI employer paid the first 12 weeks of TT – FWW.
i. The
CSS shall build the first twelve (12) weeks as the Benefit Type “SI –
Historical Pymts” and Benefit Type as “Temporary Total Disability – FWW”.
c. Example
3: The SI employer paid the first 12 weeks of TT – FWW and ten (10) weeks of TT
– AWW.
i. The
CSS shall build the first 12 weeks as the Benefit Type “SI Historical Pymts”
and the Reporting Benefit Type as “Temporary Total Disability – FWW”.
ii. The CSS
shall build the next 10 weeks as the Benefit Type “SI – Historical Pymts” and
the Reporting Benefit Type as “Temporary Total Disability – AWW”.
iii. If the IW
continues eligibility for TT, the CSS shall build the ongoing weeks payable by
BWC, as Benefit Type “Temporary Total Disability – AWW”.
d. Example 4:
The SI employer paid the first 12 weeks of TT – FWW. The claim then transferred
to BWC, at which point the IW had returned to work and was not receiving
indemnity benefits. Five weeks after the claim transferred to BWC the IW
requests compensation.
i. Upon
receipt of the claim the CSS does not build any indemnity benefit periods
because there is no compensation to be paid.
ii. Upon
receipt of the compensation request, the CSS shall build the SI employer paid
indemnity benefit periods as the Benefit Type “SI – Historical Pymts” and the
Reporting Benefit Type as “Temporary Total Disability – FWW”.
iii. If the
compensation request is allowed the CSS shall build the indemnity benefit type
using the appropriate benefit type.
1. When an
SI-BWC Pay claim has ongoing %PP or a subsequent request for %PP or an increase
%PP is made, field staff shall reflect the SI employer paid benefit periods by
building the %PP plan.
2. Claims
service staff shall identify the indemnity benefit periods paid by the SI
employer as the Benefit Type “% Permanent Partial” or as applicable, “%
Permanent Partial – Pain” and identify the Reporting Benefit Type as “% Permanent
Partial”.
3. Claims
service staff shall not schedule payment for these SI employer paid benefit
periods.
a. Obtain the
First Report of an Injury, Occupational Disease or Death (FROI) or
obtain the necessary information from the employer’s accident report records,
including certified conditions or conditions recognized by the employer as
compensable; and
b. Create the
claim in the claims management system.