April 27, 2021 Share
6 Key Points to Defend, Manage, and Settle Catastrophic Claims
By: Amy Siegel Oran.
I recently had the pleasure of presenting on the topic of defending, managing, and settling of catastrophic claims and believe that this information can be beneficial to many including human resource specialists, risk managers, and safety managers alike. Although I have been actively building this sub-practice of my business at Kelley Kronenberg, I can attest that this is truly a difficult topic in the sense that we never want to see anyone catastrophically injured; but it happens, and hopefully this blog will help with the situation, should it arise.
To prepare, I was forced to really sit down and think about how these claims differ from your standard WC matters. Obviously, the injuries are worse and costs are higher, but the differences in the investigation, the claim handling, and the requirements for settlement became clear.
For starters, we have to recognize there are three different types of catastrophic claims:
- Those resulting in seemingly minor injuries that grow and develop into a significant permanent disability,
- Those that are clearly disastrous from the moment of the accident, and
- Those that result in death.
Even amongst those subcategories there are variations on the discovery process, management process, and settlement process. There is an exorbitant amount of information, but it boils down to these six key points:
- The scope of discovery and investigation should be consistent with the nature and seriousness of the injury. Meaning, while we would not dig into someone’s personal medical history all that deeply if they sustained a broken finger, if they fell off a building, we would need to search the records for signs of narcolepsy, epilepsy, vestibular dysfunction, and any number of conditions that could cause someone to accidentally fall.
- We pay what we owe, but not a penny more. Our goal in all claims is to ensure we provide legitimately injured employees with the benefits to which they are entitled under the law; but, that we cut them off if the employees try to obtain more than is permitted. We always try to ensure we provide board certified well-respected physicians to treat our injured workers, but in these cases, we have to go the extra mile. If the injured worker needs in-patient care, we must make certain the facility meets or exceeds safety standards, is well-staffed by trained personnel, and has physicians available in case of emergency. If home modifications are done, we ensure the installer is qualified, licensed, and bonded before we rely upon him or her to make the house safe for the catastrophically injured patient.
- Empathy and sympathy factors play a role, so use them to your advantage. Defending a case is always a contentious position, but then dealing with injuries of this nature, we have to work extra-hard to diffuse the anger and hurt. We cannot allow a paralyzed man to take the witness stand and tell the Judge his boss never even called him after he broke his back on the job. As the lawyer, I have to ensure the transcript of a widow or widower’s deposition reflects I was comforting not attacking. It is unacceptable to look at these injuries as just a business issue, it is extremely personal to the person and the family whose life has been so fundamentally changed; big picture, if you go into a mediation with an angry injured worker it will be much more difficult that if you face an employee who feels it was an accident but that at least his boss and employer care about him.
- Don’t pay for the funeral; find another way to be the caring company. If an industrial accident leads to the death of an employee, one of the benefits available under Florida law is reimbursement of funeral benefits of up to $7,500.00. However, that is only due if the death was causally related to (more than 50% caused by) the job. If that benefit is provided before the investigation is completed, and it had not actually been due but had been paid, a Judge could find the employer and its carrier acquiesced to the compensability, and with that comes the open door to dependency benefits of $150,00.00. It’s OK to give money to help the children or even just generalized money to help the family, but not reimbursement or direct payment for funeral costs.
- Accidents are often worse than they first appear. Many catastrophic injuries will impact organs and other bodily functions beyond the core injury itself; spinal cord injuries are high on that list. When one is bed-bound, his or her skin deteriorates, is more susceptible to infections, and organs are unable to support all they need to. We are responsible for the secondary effects of the accident. Crazy but true example: if a paralyzed male employee has erectile dysfunction and cannot procreate, there are circumstances in which the employer/carrier will pay for the surgery to extract sperm and perform in vitro fertilization. It may be an extreme example, but in my practice, it is one I have seen many times.
- Settlement is almost always the goal, but it’s never easy. Like all WC cases, catastrophic claims are better when they’re closed. To accomplish that goal though your team has to deal with Medicare Set Asides, CMS approval, present value of PTD benefits, possible SS offset, and annuities, and potential guardianships. If your settlement is in the six or seven figure range, don’t come to the table unless you have a very experienced team handling your money.
To successfully handle a catastrophic claim, every member of the defense team must be fully committed: the adjuster, the employer and defense counsel. The costs and the risks are too great to assume someone else is handling it, a true team effort is required.
Somehow, these are just a few of my points; but, I could write so much more. It is my wish that you never have to face such a case, but if you do, I hope I’ve helped you prepare.
Contact Amy Siegel Oran at:
Phone: (800) 718-9865
DISCLAIMER: This article is provided as a courtesy and is intended for the general information of the matters discussed above and should not be relied upon as legal advice. Neither Kelley Kronenberg, nor its individual attorneys or staff, are responsible for errors, omissions and/or typographical errors – always seek competent legal counsel.