Allen & Gooch Blog

Workers' Compensation

Best Practices – Points to Remember When Settling a Claim Fully and Finally

There is more to settling a case than getting everyone to agree to a number that will settle the claim. Offering an amount that the other side will accept is only the start of the process. A lot of things go into reaching that perfect – and trouble free – settlement. Below are some specific tips and methods for settling a claim:


Employer Approval

You must get the approval of the employer prior to the settlement. Without the employer’s pre-approval of the settlement amount, there is no settlement. The court will not accept any settlement that does not have the employer’s written approval. An affidavit to that effect must be included in the settlement documents to the court, even if the settlement is within your desktop authority.

Handling of Involvement of the Center for Medicare Services (CMS)

If you are getting a Medicare Set-Aside (MSA) or structuring the payment of the MSA or future medical expenses, you need to ensure that the claimant knows, and accepts, the annuity numbers you provide. If you are getting an MSA or annuity, you must coordinate with the company preparing the MSA/annuity in advance to ensure there is no specific language or documents they need presented along with the settlement documents.

If there is specific language that must be included or forms that must be presented, these must be included or resolved promptly. [In a recent case, the carrier did not fund the MSA because certain forms were not completed in time for the first seed payment. The claimant sued for, and was awarded, LSA-R.S. 23:1201(G) penalties for late payment of the judgment.]

Handling of Statutory Liens

Any statutory liens (liens that are automatic according to statute and commonly referred to as “super liens”) – state funded hospitals, the Department of Veterans Affairs, Medicare, etc. – must be satisfied. These parties do not have to intervene into to the suit to protect their rights. You will need to ask the claimant if they were treated at any of these facilities or had these agencies pay any medical expenses. We will need written proof that this has been satisfied.

Handling of Non-Statutory Liens

Any non-statutory liens of which you have a lien must be satisfied. This type of lien includes liens from providers or from previous attorneys. If you have a non-statutory lien notice, it must be paid, but you do not have to go looking for non-statutory liens to pay. We will need written proof that this has been satisfied.

Handling of Child Support Payments/Orders

If you have a child-support order for which you are reducing the claimant’s benefits, you will have to coordinate with the child-support agency in question to ensure any outstanding balance is satisfied. Begin this process of early, as it is not as easy as it would appear. We will need written proof that this has been satisfied.

Handling Settlements with SIF Involvement

If you are receiving reimbursement under the Louisiana Second Injury Fund (“SIF”), you must seek approval from the SIF before the judge signs the settlement. Getting approval from SIF usually takes two to three months after the forms are submitted. If the judge signs the settlement without the SIF first giving approval, the SIF is relieved of any future payments. We will need a copy of the SIF letter accepting the settlement amount.

Handling of Conditional Payments

Conditional payments made by CMS (Medicare) must be satisfied. We will need written proof that this has been satisfied.

Payment of Medical Expenses

You will need to coordinate with the claimant, or his counsel, as to who will be responsible for payment of any outstanding medical bills/expenses. Absent some agreement to the contrary, you will always be responsible for payment under the Fee Schedule of reasonable and necessary medical expenses related to the accident incurred up to the date the settlement is signed by the judge.

Some claimant’s attorneys will want you to include an amount to cover those bills in the settlement, and they offer to pay them for you. You will need to let them know that their agreement to pay them will be included in the settlement documents, and they will have to agree to defend and indemnify you if they do not satisfy them.

You should probably agree to pay these bills – if you would have paid them anyway – to ensure they are paid and allow you close your file knowing that all bills are satisfied. Also, make sure that your file is properly reserved to satisfy any treatment that you know would be covered by this obligation, but for which you do not anticipate receiving the bill until after the settlement is concluded.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.