Settling claims in unsettling times

By Sid Wong, J.D., Brian Cowan, J.D., Shawn Johnson, J.D.

March 30, 2020 / 9 min read

In a time of social distancing and uncertainty, many are left wondering how our current working and social paradigm will impact workers’ compensation claims handling – especially the ability of parties to bring claims to closure.

As we continue to adjust to a new normal, one thing seems clear: the workers’ compensation courts and others are adjusting and embracing technology to move claims to settlement. In conjunction with these changes, there are also several strategies to consider that may help bring current claims to a resolution during this uncertain time. Each of these will impact how claims settle during this crisis, and as we look to the future, a few of them may be here to stay.

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The following provides an overview of some interesting developments as the industry continues to feel the impact of the COVID-19 crisis and various considerations to keep settling efforts alive during these tumultuous times:

Workers’ compensation courts are finding ways to keep claims moving

Our survey of select workers’ compensation courts and boards (WC courts or the WC court) around the country reveals that WC courts are addressing the impact of COVID-19 in different ways at the moment. For example, the WC court in Florida and Nebraska remain open as of the date of this article and only plan on adjusting their process and handling should participants be ill.[1] Other WC courts such as Pennsylvania and New York are continuing to handle claims, but are moving to telephonic hearings; while the Mississippi WC court allowing for limited hearings in person.[2] Meanwhile, the New Jersey WC court is closed except for emergency hearings that will be held to the extent possible including video and telephonic technologies.[3] At the other end of the spectrum, WC courts in states such as Massachusetts, Michigan, and Louisiana have decided to close entirely.[4] Regarding Massachusetts, the WC court is currently scheduling matters for later dates,[5] which is similar to what Louisiana is doing.[6]

While WC courts are taking different approaches, one common theme detected is an increased willingness to adapt to social distancing policies and holding hearings either telephonically or utilizing videoconferencing. For example, in Vermont, the WC court allowing filings via email utilizing a “/s/” signature, unless they need to be notarized by statute. The increased use of technology is allowing the WC courts to keep claims moving and ultimately allowing parties to settle.

CMS does not expect an interruption of its MSP operations

Another key part of the workers’ compensation settlement process for certain cases is Medicare Secondary Payer compliance. With many states now ordering non-essential workers and businesses to stay at home or shelter in place, the question of how the Centers for Medicare and Medicaid Services (CMS) operations would be impacted arises.

The good news here is it doesn’t currently appear that CMS expects an operational impact to their MSP and recovery process. Each of CMS’ MSP contractors – the Workers’ Compensation Review Contractor (WCRC), the Commercial Repayment Center (CRC), and the Benefits Coordination Recovery Center (BCRC) have all transitioned to working remotely. Should circumstances change and either CMS or its contractors expect performance issues, CMS has indicated it will post an industry update on its website.[7]

One MSP compliance area we are monitoring particularly closely is conditional payment recovery. Since conditional payment recovery still heavily relies on the CMS contractor’s issuance of physical letters, there is a potential for delay if the CMS contractors are unable to process and send letters or if U.S. mail handlers reduce delivery. Unfortunately, while there is functionality within the Medicare Secondary Payer Recovery Portal (MSPRP) for electronic mail delivery, it is contingent upon having access to the case through a proper authorization form, and there is still currently a significant gap in proactively linking a case file to the appropriate MSPRP account. If there is an interruption of mail, the primary concern is whether debtors can meet the deadlines for response. Currently, debtors have 30 days to dispute a conditional payment notice before a demand issue, 60 days to respond to a demand before interest accrues, and 180 days to pay a conditional payment debt before it is forwarded to the U.S. Department of Treasury for collection. If debtors begin to miss response times because of late mail processing, we hope CMS would implement steps to mitigate this impact. As long as parties can obtain the required release for BCRC claims, they should be able to obtain the conditional payment information they need to bring a claim to settlement.

As for other MSP compliance areas, both the Section 111 reporting and the Workers’ Compensation Medicare Set-Aside (WCMSA) submission process rely less on mail communications, and as a result, we do not anticipate significant disruption unless there is a reduction in the BCRC or WCRC personnel. Of course, all this may be subject to change as the impact of COVID-19 evolves, and we will continue to monitor the response time, mail volume, and availability of CMS and its contractors to handle MSP operations.

Social Security Administration – operational impact

While no interruption is expected to CMS’s MSP operations, we have learned the Social Security Administration (SSA) remains functional but it has closed its field offices due to the COVID-19 pandemic. From a review of the SSA’s website, the closings will have varying degrees of impact on the SSA’s activities. For example, Social Security Benefits and Supplemental Security Income payments will reportedly continue to be paid monthly. However, the SSA is not currently processing social security disability insurance (SSDI) status requests from third parties which are commonly used to help determine potential WCMSA applicability in certain cases.[8] Notwithstanding, it is noted the claimant still can obtain a “Social Security Benefit Verification Letter” online through the SSA website and provide it to the workers’ compensation carrier. This letter provides information regarding the claimant’s SSDI, SSI, and Medicare benefits statuses. See our companion article to learn more about these SSA related issues.

Using Technology to Connect for Settlement

Given the current circumstances, there are some tools to consider that will allow parties to bring claims to settlement during this time:

Telephonic Hearings: Where available utilize technology to hold hearings, client meetings, depositions or negotiation sessions. As noted above, many WC courts have either relaxed rules that once restricted holding hearings either telephonically or using video calls or moved to require that hearings be held telephonically. This will likely increase efficiencies as well as make it easier for all parties to participate while helping to reduce the potential exposure to or spread of COVID-19.
Telephonic Depositions/Meetings/Negotiations: Similarly, using telephonic and videoconferencing technology for meetings, negotiation settings, or depositions can allow claims to continue to proceed. They are also an opportunity to allow face-to-face meetings, albeit virtually, that may otherwise not be possible. At the same time, virtual meetings can be more efficient as parties can eliminate the required travel time.
Electronic Filing: Many WC courts have also moved to, or now made available, electronic filing, so parties can file pleadings or other documents without having to physically deliver them to the court. Many of these systems also allow electronic service on opposing parties. Utilizing this technology may not only help reduce the risks of COVID-19, but it may also speed up the claims process by delivering pleading quicker to all involved. Of a similar nature, where the WC courts allow for it, parties can also consider utilizing electronic signatures to alleviate the need to have parties gather for signatures or having to mail copies for signatures.
Optimize your time: Finally, as many parties are finding themselves with more time, it can be a good time to try and settle stagnant claims. COVID-19 has brought many activities to a halt, so some people are finding an increasing amount of free time. By utilizing that available time, parties may be able to bring claims to a resolution they have not had time to work on for a while.

Each case is unique and not every court will allow for every option, but there are some different options available to parties as they try to bring claims to a resolution during the current crisis. ISO Claims Partners is also here as a resource to help you plan strategies for bringing claims to settlement. We would be happy to set a call to help chart settlement strategies or direct you to our vast library of timely articles and on-demand webinars.

What’s in store for the future?

Moving beyond the immediate situation, one question worth considering is what the longer-term impacts of COVID-19 may be on workers’ compensation claims and settlement practice. One area ripe for consideration involves the likely increase in workers’ compensation claims from workers who contract COVID-19 from their jobs, such as individuals employed in the medical field or first responders. From more of a process and practice angle, as noted above, as the use of technology for hearings, meetings, negotiation, and document filings become the new normal, it is not unreasonable to think that people may start to adjust to this and prefer not to return to the old way of doing business. This may mean more workers work remotely, or WC courts elect to continue using telephonic hearings. When the dust settles, this all could increase efficiency after we move past COVID-19.

Conclusion

As efforts to contain the spread of COVID-19 continue, the future in many respects remains unknown, and much could change in the hours, days, weeks, and months ahead. However, throughout this process, we are all adapting, and many WC courts have as well by adopting new processes and technology to enable parties to safely continue to handle and settle claims. So far, Medicare continues to be processing all elements of Medicare compliance from Section 111 reporting to conditional payments and Medicare Set-asides, which means Medicare compliance should not be a hindrance to settling claims. Where movement is limited or WC courts are closed, there are some slowdowns, but there are solutions out there that can help keep claims moving. The key here is to realize these unusual times still present opportunities to advance claims toward settlement and closure through the use of available technologies and other resources.

[1] Florida: https://www.jcc.state.fl.us/JCC/AdminOrders/2020/AODOAH20-02.pdf; Nebraska: https://www.WCc.ne.gov/home/court-news/2020-2-news

[2] Pennsylvania: https://www.WCais.pa.gov/OL/AM/PUB/Login.aspx; New York: http://www.WCb.ny.gov/content/main/TheBoard/WCB-Response-COVID-19.jsp; Mississippi: https://mWCc.ms.gov/pdf/AttorneyCommunication.pdf

[3] New Jersey: https://www.nj.gov/labor/WC/content/notices.html#covid19_closure

[4] Massachusetts: https://www.mass.gov/alerts/effective-wednesday-march-18th-the-dia-will-suspend-all-in-person-proceedings-and-meetings#undefined; Michigan: https://www.michigan.gov/leo/0,5863,7-336-78421_95508---,00.html; Louisiana: http://www.laworks.net/PublicRelations/COVID_19_Information.asp

[5] https://www.mass.gov/alerts/effective-wednesday-march-18th-the-dia-will-suspend-all-in-person-proceedings-and-meetings#undefined

[6] http://www.laworks.net/PublicRelations/COVID_19_Information.asp

[7] This information is per contact with CMS on March 23, 2020.

[8] https://www.ssa.gov/coronavirus/