Tag Archive for: workers compensation

Get “In Pro Per” Claims Off The Books

You know the claims I’m talking about: the really old claims where the Injured Worker is representing himself/herself. Let’s call them “in pro per”s.  Active in pro pers file one court paper after another, causing the insurer or self-insured employer to fund what seems like a never-ending stream of money to send a representative to the Board. The in pro per’s papers may not state a recognizable claim. Pressed for time, the Information and Assistance officer may give the in pro per short shrift.  Defense attorneys with varying degrees of patience usually do, too.

But what if what the parties really need is a sort of an interpreter, a mediator.

Mediating an in pro per’s claim demonstrates respect for the in pro per.  The feeling of lack of respect and inability to get heard is often what drives the in pro per to keep summoning the employer to court.

“Why would I waste time and money on a worthless claim?” you may ask. Because you’re spending time and money now, and mediation is a way to end that endless cycle.

Sometimes the in pro per has a bona fide complaint, but without professional assistance has not been able to communicate it. The neutral mediator is often able to re-state the concern in a way the parties can address and put past them. The mediator can help each party see the other side’s point of view.

HOW POLITICS DRIVES UP THE COST OF YOUR MSA

For President George W. Bush and Congress to get Medicare Part D drug coverage passed in 2003, they had to make significant concessions to big business, including the drug industry. One of the law’s provisions forbids the government from setting rules for negotiating better drug prices. The “noninterference” section says:

In order to promote competition . . . the Secretary [of Health and Human Services]:
(1) may not interfere with the negotiations between drug manufacturers and pharmacies and PDP [Prescription Drug Plan] sponsors; and
(2) may not require a particular formulary or institute a price structure for the reimbursement of covered part D drugs.
42 USC 1395w-111(i)

The result according to a new policy brief from the Carlton University School of Public Policy and Administration is that Medicare Part D plans pay on average 73% more than Medicaid and 80% more than the Veterans Health Administration for brand-name drugs. If Part D plans could negotiate drug costs the way Medicaid and the VA do, savings could reach $16 billion a year.

The study shows that the average per capita expenditure by Americans for pharmaceuticals is more than double the average of 32 other industrialized nations. Contrary to their publicity, American drug companies do not devote the wealth gained from Part D on new research initiatives. Half of new medical research initiatives come from non-profit entities such as universities. Rather, drug companies have spent their millions in recent years on increased lobbying. If drugs costs decreased, Medicare beneficiaries could expect Part D premiums to also decrease.

Although private insurers pay Part D medical expenses, workers compensation professionals are painfully aware that anticipated Part D-covered expenses must be included in a Medicare Set-Aside. The increased use and rising cost of pharmaceuticals has torpedoed many a proposed workers compensation buy-out. If the purpose of an MSA is to protect Medicare, why are Part D expenses which are paid by private insurers included in the allocation anyway?

Casualty insurance companies and the American Association for Justice are big political players. With the 2016 election cycle coming up, now would seem to be the time for their lobbyists to twist some arms to modify the noninterference provision for the benefit of all Americans.

If you like it, then you have to put a ring on it.

If you like it, then you have to put a ring on it. In the mediation context, that means documenting your agreement.


It’s a good idea to bring a partially completed Compromise & Release form to the mediation.  The document can be completed and signed on the spot. This is efficient and forestalls buyer’s/seller’s remorse (subject to WCAB approval). This would be true for a Stipulation as well.

Sometimes the parties’ agreement is more limited. Mediations can address narrow issues, such as whether a body part will be considered part of the industrial injury or what was the Average Weekly Wage.  Document that agreement with a Memorandum of Understanding. The mediator can help you make sure to cover all the issues.

Why Mediations Are Like Diamonds

Anyone shopping for a diamond quickly learns diamonds have four characteristics known as the four C’s:

Like a diamond, mediation is incredibly valuable and has its own 4 C’s:
Confidentiality
Candor
Creativity
Collaboration

Confidentiality
Confidentiality is what makes mediation work. Anything said in mediation cannot later be used in a court. If the parties do not settle, the court will never hear that the defense made a settlement offer of a certain amount or that Applicant was willing to accept certain settlement terms. Similarly, documents created solely for the mediation cannot be used in court.

Typically, the mediator will ask all participants (not just parties) to sign a confidentiality agreement at the beginning of the mediation. But confidentiality doesn’t start or end on mediation day. Any communications prepatory to the mediation or following up the mediation are also confidential.

Candor
Confidentiality promotes candor. Because disclosures in mediation cannot be used against a party, parties can be more forthright in discussing the weaknesses of their case. This usually happens in caucus, when parties are with the mediator, and the other side is in another room. Parties must give permission for the mediator to convey information to the other side. Candid discussions in mediation are more likely to lead to settlement compared to the posturing that often happens in litigation.

Creativity
When parties get down to the real work of negotiation, discussions with the mediator can lead to new ideas about how to resolve the issues. This can include non-monetary benefits or utilizing third-party resources, such as public health benefits. Often these are options the parties had not previously considered.

Collaboration
Settlements result when both sides buy in to new ways of looking at the issues. Parties are at their most collaborative and creativity can really explode when parties re-convene for a brainstorming session. That’s the time to come up with a range of possible solutions and hammer out the best one.

WHY YOUR WORKERS COMP CLAIM EVALUATION IS WRONG

Contradictory dynamics involving life expectancy affect your large-exposure workers compensation claim evaluations. The industrial injury plus co-morbidities may decrease the injured worker’s life expectancy. But medical advances and heredity may mean your estimate of the injured worker’s life expectancy is too low.
The Mortality Table Isn’t the Whole Story
Parties typically use a mortality table to compute the likely cost of future medical care over an injured worker’s lifetime. Several entities publish summaries of life expectancy data. The longer a person lives, the longer their life expectancy. A table might predict that the average 35-year old black male will not live past his 72nd birthday. But once that same man survives to his 55th birthday, the table extends that prediction to 76. The life expectancy prediction is a moving target, growing longer as the injured worker ages. Workers compensation professionals who rely solely on a mortality table to project life expectancy may be making a mistake.Why the Life Expectancy Estimate Is Too Low
Many circumstances can affect how an individual’s life expectancy compares to the average. An important factor is heredity, but many workers compensation professionals do not ask about this issue. How old are the injured worker’s parents, or how old were they when they died? 

Then there’s this interesting phenomenon. A study showed that for adults over 40 years old, receipt of a periodic payment such as a bi-weekly disability check increased their life expectancy. People literally lived for the check. An injured worker may be on the long end of the life expectancy bell-shaped curve.

Add to all of this advances in medical science. People are living longer, and some mortality tables are out-of-date.

These factors require workers compensation professionals to think twice before assuming the injured worker’s life expectancy is shorter than normal. To avoid stair-step reserving, one needs to approach the issue cautiously.

Why the Life Expectancy Estimate Is Too High
On the other hand, an injured worker by definition has some disability, and it might shorten life expectancy. An orthopedic injury in itself may not shorten life expectancy, but pain medication can. A holistic evaluation of lifetime medical care should consider co-morbidities as well as the industrial injury.

One More Thing to Talk About
In settlement negotiations parties may differ about how an injured worker’s life expectancy projection affects case evaluation. Add this to the list of issues to be discussed at mediation.

WHAT TO EXPECT AT MEDIATION

Mediation remains unfamiliar to most California Workers Compensation professionals. To succeed, you– and your client– need to know what to expect. While all mediations share some similarities, each mediator has a unique style. Here’s what you can expect at one of my mediations.
We usually start in joint session. The discussion might be limited to the logistical: introductions, bathrooms, lunch, etc.  People get to look each other in the eye.The first real step will be for the Applicant to tell how the injury happened and how things are going now. The purpose of this is to allow catharsis and to build empathy and trust between the injured worker and the mediator. Usually this is in a separate session known as a “caucus,” but if the defense needs to hear this information or wants to ask questions, it might happen while the parties are still in joint session. If the defense has heard the Applicant’s story many times, I may have Applicant do the venting in caucus.

I usually start negotiations with the Applicant’s side. If there were prior offers and demands, I will review those to make sure we are all at the same starting point. Then comes exploring the positions which support those offers and demands. The parties’ briefs should explain the issues; the more complicated the case, the more important the briefs. Defining issues for the mediator in the brief makes for a more efficient mediation. But the briefs do not limit the number of issues; sometimes new issues emerge in mediation.

I might speak with one or more attorneys outside the hearing of their clients, for example, to discuss a point of law.  All parties might reconvene to brainstorm solutions to an issue.  If parties are disrespectful of one another, I will stop a joint session.
In the give and take of numbers, issues will be discussed and swapped.  Cases do not settle without compromise.  Parties should expect give and take to finalize the settlement terms.
Participants may be surprised by the amount of time spent in caucus with the other side.  As mediator, my job is to give all parties adequate time to express their concerns.   While there are certainly exceptions, a typical workers compensation mediation lasts three to five hours.

5 BEST BENEFITS OF WORKERS COMPENSATION MEDIATION

venn settlement colors
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.

Why Mediation Is Like Sex

YOU THOUGHT MEDIATION AND SEX HAD NOTHING IN COMMON?
NOT SO!

Both mediation and sex should:

Happen between persons committed to the process as an essential part of the big picture

Occur with appropriate frequency

Stimulate participants to contribute their best selves

Continue until mutual satisfaction

Make participants feel better at conclusion

Empower parties to turn to other areas of life with renewed vitality and creativity.

Six Biggest Mediation Misconceptions

The Mediator might rule against me.

Mediators do not make any rulings. The role of the mediator is to help the parties resolve the issues.

If I go to mediation, I will have to give up something.
Negotiation is about compromise. Each side usually gives up something. You won’t give up anything unless you, and only you, make the choice to negotiate a deal.
 
Mediation is too expensive.
Mediation is cheaper than litigation. It is efficient and eliminates other procedures which use up time and money.
 
Mediation is a waste of time.
Mediation has been shown repeatedly to be effective in resolving all issues. But even if you don’t conclude your case at the mediation, mediation typically allows parties to learn more about their opponent’s case—and their own. Issues are narrowed, setting the stage for further negotiation or more efficient litigation.
 
There is no reason to mediate—our case is a sure winner.
Mediation might be a place to test that hypothesis—or convince the other side. Presumably you wouldn’t be in litigation if there weren’t two sides to the story. If there is counsel on both sides, your opponent is spending time, money and effort for a reason. Applicants representing themselves might just need a forum to tell their story. Litigation is always uncertain. Settlement is the only way to retain control over the outcome, rather than let a judge impose a resolution on you.

We look like push-overs by suggesting mediation.
Mediation is the rule rather than the exception in most areas of law in the United States. The fact is that most cases settle at some point. Smart claims professionals and lawyers use every tool at their disposal to conclude cases as early as possible.

Do You Speak MSA?

“MSA” stands for Medicare Set-Aside.  Settling a Workers Compensation claim often calls for consideration of Medicare’s interests.  MSA-speak has its own language.  The problem is that the term “MSA” is used to mean different things.  Understanding the 4 different items which may be referred to as “MSA” is critical to success in this area:

MSA Report

MSA Allocation

MSA Approval

MSA Account

The MSA Report is prepared by an MSA allocation company.  It is an analysis of medical reports and paid medical benefits resulting in a recommendation for an MSA allocation.  The report typically provides both lump sum and annuitized funding options.   The report is not “the MSA”.  Multiple versions of a report may be prepared during evaluation and negotiation.  Nothing has been “set aside” just because there is a report.

The MSA Allocation must be in good faith.  The parties can agree on an allocation without a report, though this is usually limited to cases brought by Medicare beneficiaries which settle for less than $25,000 and denied cases where the settlement is unrelated to medical expenses.  An allocation in a settlement document can be as simple as “The parties have taken Medicare’s interests into account and set aside $800 for future Medicare-eligible claim-related expenses.”

Parties can choose to seek from the Centers for Medicare and Medicaid Services (“CMS”) Approval of an MSA allocation.  Seeking approval is optional.  Only the two classes of cases which meet CMS “review thresholds” can be submitted.   Class One includes all cases brought by Medicare beneficiaries settling for at least $25,000.  Class Two includes cases where the settlement is at least $250,000 and the worker is likely to be eligible for Medicare within 30 months.  If CMS approves the allocation, it cannot seek more than the approved amount later.

Upon conclusion of the settlement, the worker will open an MSA Account.  This must be a separate account solely for MSA funds.   It is supposed to be interest bearing, though it may be difficult to find an institution that would pay interest on smaller accounts.  If any of these concepts can be called simply “the MSA”, it is the account.  Money has in fact been set aside, separate from the rest of the settlement and separate from the worker’s other assets.  Note that the correct term is “account”, not trust.  MSA Accounts can be custodial or non-custodial.

“Do we need an MSA?” may be appropriate in referring to the entire process.  And there are plenty of times you want to use a verbal shortcut.  But vague references as to whether the subject is a report, allocation, approval or account can sometimes lead to misunderstandings.