"Viewpoint: Settlement Strategies for Workers’ Compensation Claims"

Alex Ficker and Sarah Luna authored an article published by Claims Journal exploring strategies for effectively settling workers’ compensation claims. “Knowing how to effectively negotiate and settle cases is essential when handling workers compensation claims,” they said. “To do this well, you need to know how to prepare and execute an action plan for settlement.”

Some first steps to developing this action plan are to identify the goals for a claim and make every attempt to include all the appropriate parties on your side. Additionally, as settlement does require some level of compromise, it is equally important to discern between the areas where it may make sense to dig in your heels and those areas where compromise to achieve your primary interests is worthwhile. From there, it is important to understand the posture of the claim and all associated issues, and then evaluate risk associated with potential defenses, mitigation risks and potential exposure. 

When evaluating potential exposure, parties to all workers’ comp settlements involving the closure of medical benefits are required to consider Medicare’s future interests (i.e. Medicare beneficiaries at age 65 or those with the reasonable expectation of becoming Medicare eligible within the next 30 months). “One of the most common ways to document the consideration of Medicare’s future interests and, the method ‘recommended’ by the Centers for Medicare and Medicaid Services, is the preparation of a Medicare Set Aside,” Ficker and Luna explained. “An MSA consists of an allocations report that considers the last two years of medical treatment and then projects future Medicare-reimbursable medical expenses related to the work-related injury.”

Additional considerations in settling workers’ comp claims are the possibility of conditional payments requested by CMS when Medicare covers a portion of medical costs that should have been covered by part of the claim. Outside exposure could also arise if the employee is asked to resign as part of the settlement.

For the full article, including a look at different manners and methods of settling once all risk is assessed, please click here.