Tag Archive for: negotiation

Heartsink Patients

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“Heartsink” is the term for how the treater feels when it is difficult if not impossible to help patients with chronic pain and disability. A 1989 Toronto Star editorial placed these patients into four categories: dependent clingers, entitled demanders, manipulative help-rejecters, and self-destructive deniers.
You know these injured workers. They are the ones whose life is wrapped up in their claim. The only way they will give up that obsession is to replace it with a plan for life after claim closure.Injured workers need to feel that a settlement is the just result. They need adequate compensation to create a safety net for future medical care. A WCAB hearing is often just a prelude to more conflict.

Mediation can provide the forum to help the injured worker create a plan for life without an ongoing claim.

 

How Minimum Wage Laws Affect Indemnity Payments

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SAWW is going up. The California State Average Weekly Wage determines the annual adjustment of the minimum and maximum payments to persons receiving temporary disability benefits per Labor Code 4453(a)(10). The State Average Weekly Wage also determines the adjustment to payments to persons receiving a life pension or total permanent disability indemnity per Labor Code 4659(c).

In June, the Department of Industrial Relations Division of Workers Compensation announced an increase for payments starting January 1, 2017. The minimum TTD rate will increase from $169.26 to $175.88 and the maximum TTD rate will increase from $1,128.43 to $1,172.57 per week.

In a separate development, a new rule gradually raising the minimum hourly wage to $15 by January 1, 2023 was signed into law in April. A rising minimum hourly rate will increase the State Average Weekly Wage over the next seven years and in consequence some workers compensation indemnity benefits.But there’s a safety valve. After January 1, 2017, the governor can delay any scheduled increase for one year if certain economic or budget conditions exist. The economy has been expanding. Some experts predict a collapse.

Effect on Settlements
When evaluating claims for settlement, parties may have to consider how the expected SAWW increases will affect the value of future indemnity benefits. The minimum hourly wage increases are small, 50 cents the first two years and a dollar a year thereafter. Is this enough to affect the historic rate of increase we have seen for life pensions? Claims subject to minimum and maximum TD increases are most likely to be affected. An across-the-board increase in claim value will also increase attorney compensation.

Predicting is hard.  Settling sooner rather than later avoids uncertainty.

THE ONE THING TO DO TO MAXIMIZE MEDIATION SUCCESS

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Preparing a mediation brief is the one thing you can do to maximize the likelihood of a successful mediation. The goal in mediation is to define issues and resolve them. You can get a head start by alerting your mediator to the issues and suggesting why those issues tilt in your favor.

Lack of a brief unnecessarily lengthens the mediation. Your mediator is probably being paid according to how much time is spent in mediation. Effective resource management dictates you don’t want the mediator to have to spend the first hour—or two or three—digging out the issues.

Mediation can be an exhausting process. People get cantankerous which makes negotiation more difficult. Short-cutting the mediation by defining issues in advance can keep participants at their best.

The brief need not be formal. A letter may be adequate. If you are in doubt about how formal your brief must be, contact the mediator and ask.

A party who does not brief the issues may be allowing the other side to define the discourse. Send your brief to the mediator far enough ahead of the mediation so the mediator has adequate time to review it.

The mediation brief you send the mediator is confidential. You decide whether to share it with the opposing party. Information disclosed to the mediator during mediation is not discoverable. The mediator cannot be subpoenaed. This allows you to control when to disclose your “smoking gun”—maybe not until trial.

Some parties prepare two briefs: one for the opposing party and one for the mediator. More commonly, a party prepares just one, but may decide to waive confidentiality of the brief during mediation.

What You Forgot To Tell Your TPA

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Many self-insureds and carriers use Third Party Administrators as their front-line adjusters. A set of instructions or guidelines from the actual check-writer is supposed to regulate the TPA’s procedures. Anticipating every permutation of every possible situation is impossible, but every set of instructions should include guidance on when and how to use mediation.

Recently I had the opportunity to review a set of TPA instructions. The TPA was directed to “negotiate settlements of covered claims pursuant to the authority granted by” the contracting party. No further details were provided.  However, another section of the agreement spelled out in minute detail a procedure for mediation should a dispute arise between the TPA and its client. The client knew mediation was an important tool for resolving its own disputes, but provided no direction about how to use it to resolve covered claims.

The regional risk manager of one national account tried to get their local team of TPA workers compensation adjusters to try new dispute resolution techniques, but the adjusters refused. “If they want us to do that, they need to include it in their instructions.”

What Should TPA Instructions Say About Mediation?
“At appropriate milestones in the life of a claim, adjusters and attorneys should take active steps to initiate mediation and report on the results.

“These milestones include:

-Upcoming trial date
-IW has reached permanent & stationery status
-IW has reached age 61
-70% of indemnity reserve has been paid
-4 reserve changes within 2 years
-Case is more than 4 years old

“Additionally, claims handlers should attempt to close claims with mediation in:

-Death cases
-when the IW is acting in pro per

“Adjusters and attorneys are expected to participate in mediations with a good faith intention to negotiate and resolve pivotal issues.”

Shuttle Diplomacy

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Some parties refuse to meet with the other side. For whatever reason, they do not trust them. When an Applicant’s Attorney told me, “She refuses to meet with them,” my response was “She doesn’t have to.”

Overcoming mistrust
Most of my mediations start with a joint session with all the participants in one room. But it doesn’t have to be that way. When mistrust prevents parties from defining and resolving issues, I meet with parties separately, a process called “caucusing.” We use separate rooms when space permits, or parties alternately enter and exit the mediation room. While in caucus, parties can lay out their concerns in confidence. I do not disclose what anyone said without permission. One of the cornerstones of mediation is confidentiality.

Shuttle Diplomacy
The term “shuttle diplomacy” was first applied in 1973 to Secretary of State Henry Kissinger’s separate meetings with leaders of Israel and Arab nations. Now we use the term generally when a mediator  keeps a negotiation going by moving between parties who will not meet with each other directly. To parties engaged in workers compensation litigation, their conflict has the same personal importance as an international dispute.
Shuttle diplomacy is a proven technique for achieving settlement even after the parties have lost all hope.

Making Sure Your C&R Is Approved: Itemize Offers to Assure Adequacy

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“Let’s see,” I said to the employer’s representative. “After deducting PDAs, the MSA, and attorney fees from this offer, the injured worker will end up owing you money.”

It happens more often than you might imagine. Usually it’s because the defense has forgotten the attorney’s fee. Then they wonder why the offer was rejected. Unless parties are in mediation, negotiation often stops.

Why You Need Adequacy
A settlement must be adequate. A recent case on the issue of settlement adequacy, Alvarenga v. Scope Industries, caught some workers compensation professionals off-guard. The court reversed approval of the settlement because after allowing for attorney fees it was inadequate to fund the MSA. Whether CMS approval of the MSA was sought was irrelevant.

California regulations mandate adequacy:
“The Workers’ Compensation Appeals Board shall inquire into the adequacy of all compromise and release agreements and stipulations with request for award, and may set the matter for hearing to take evidence when necessary to determine whether the agreement should be approved or disapproved, or issue findings and awards.”
8 CCR § 10882 Action on Settlement Agreement

Written Itemization Promotes Settlement
Itemized offers and demands help settle cases. When the PDAs, MSA and attorney fees are itemized in an offer, everyone can see how funds will be disbursed.California law favors written settlement offers. Attorneys must show clients written settlement offers and demands, California Rule of Professional Conduct For Attorneys 3-510, but need only convey oral offers if the attorney thinks the offer is “significant.” Written offers let the recipient easily and accurately convey the information to the ultimate decision-maker.Preparing an offer or demand requires review of indemnity issues, Medicare-eligible expenses, and non-Medicare-eligible expenses. Calculating the settlement parts separately can be an eye-opening exercise. Itemizing can show why the offer or demand is reasonable.

5 Best Benefits of Workers Compensation Mediation

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1) Mediation Works.  In one study, 61 percent of workers compensation mediations resulted in total resolution of the disputed issues.

2) Mediation is fast- no waiting for a hearing date on an overcrowded court schedule.

3) Take as much time as you need- no rush to finish within a half-day window at the WCAB.

4) Mediation saves time and money compared to numerous, futile court appearances.

5) Presence of the neutral can help preserve the attorney-client relationship and inject a dose of reality.

Cannibal Negotiation

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Cannibal negotiation refers to a deal where parties figure out how to get money from an entity not at the table.

The term originates from an arrangement where OldCo paid NewCo to keep NewCo’s cheaper, competing product off the market. NewCo is paid for not selling anything. The buyers who need that product have to pay OldCo’s high price. The buyers are being cannibalized.

Honest disagreement can thwart parties’ good intentions to reach a workers compensation settlement. Cannibal negotiations can ethically resolve disputes over the value of future medical benefits.

The first place a true cannibal negotiator should turn is Medi-Cal. Medi-Cal can fill the gap between parties’ valuations and provide a safety net to pay for the injured worker’s health care at no cost to any party. A special needs trust or structured settlement may be needed to keep an applicant eligible for traditional Medi-Cal. Under expanded Medi-Cal, the applicant can receive a settlement of any size without losing eligibility so long as Modified Adjusted Gross Income is under the limit. Caution: home health care and non-emergency medical transportation are not included in expanded Medi-Cal. 

Medicare is the next source a cannibal should think of for a funding entity not at the negotiating table. Medicare is different from Medi-Cal in that the injured worker had to contribute the required number of quarters to achieve eligibility. Also, a Medicare Set-Aside must be depleted before additional funds can be tapped to pay for a claim-related Medicare-eligible expense.

Lastly, the parties may be able to use part of the settlement to fund health insurance premiums for the injured worker. A health insurance agent can provide a quote for Affordable Care Act coverage regardless of the injured worker’s pre-existing condition. A (cannibalized) subsidy may indeed keep the premium cost affordable.

Cannibal negotiators can “prey” on more than one source. Some applicants are “Medi-Medi”, enrolled in both Medicare and Medi-Cal. MSAs should not be tapped until the applicant is eligible for Medicare; for the period up to 30 months before then, Affordable Care Act insurance can provide coverage.

‘Twas the Night before Mediation

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(c) Teddy Snyder SnyderMediations.com

‘Twas the night before mediation
And all through the firm
Not a creature was stirring,
Not even a worm

But then one lawyer
Asleep on a couch
Shot up, hit his head
And said with an “Ouch”

Oh my, I’ve got
That mediation tomorrow
I didn’t do a brief
Much, much to my sorrow

Then what to his exhausted eyes should appear
But Mediator Snyder with news of good cheer

You don’t need it fancy
You don’t need it long
Just give me some clues
So the time’s not spent wrong

Just send me an “e”
It’s all confidential
Tell me the issues
What’s the dollar potential?

With that she was gone
The lawyer banged out a brief
He’d be ready tomorrow
Oh what a relief.

This holiday season
When your time seems too short
Turn to mediation
And stay out of court.

Happy Holidays!

 

Tactics vs. Strategy

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Tactics are steps you take to win short term goals on the way to achieving your strategic objective. Sometimes tactical skirmishes distract workers compensation professionals from pursuit of their strategic goal. On the other hand, you can’t reach your strategic objective without well-thought-out tactics.

The Disputed Doctor’s Deposition
Take the case where an attorney insisted that the deposition of the doctor who provided the most recent report had to precede settlement discussions. The problem was that by the time that could happen, all the permanent disability would be paid out. After providing for future medical expense, that would leave no cash for the applicant or the attorney fees, jeopardizing the chance of a future Compromise & Release. When I pointed this out, the parties realized that a tactical victory could prevent achieving the strategic goal. The case C&R’d.

The Tale of the Two Interpreters
I arrived at a recent mediation to find the attorneys at loggerheads because both had ordered an interpreter. Both interpreters were court-certified. I convinced one of the attorneys that agreeing to dismiss the interpreter that attorney’s office had ordered would create a negotiating advantage. In the give-and-take of negotiation, opposing counsel might well feel beholden to make the next concession. Conceding the interpreter battle demonstrated the attorney’s reasonableness and set the stage for a productive mediation. The case C&R’d.

A litigation plan should be more than a checklist. Every tactic should further the effort to achieve the strategic goal.