February 24, 2020

What Are the Factors Used in Evaluating a Catastrophic Injury Case for Settlement?

I have been classified Catostrophic by GBWC and am totally disabled. Everyone concerned has no objections. My insurance Co. has said that they may want to settle. Medicare setaside has already benn set. What should I be looking for in a settlement. Is there an amount that I should be looking for . I am 55 and will not be able to work again. My claim is covered by the SITF. , but my Ins. Co. is in rehab. Thanks I look forward to your answers.

Jodi Ginsberg responds:  James, thank you for your email.   Here are my thoughts.

I look at a number of issues when settling a catastrophic workers’ compensation claim.  By the way, since some of those reading this blog entry may not be familiar with the term "catastrophic injury," I would like to briefly define the term.  Under Georgia workers’ compensation law, the State Board has the power to designate a claimant’s injuries as catastrophic.   This means that the Board recognizes that a claimant like James will not likely be able to return to work because of the severity of his injuries. 

Most importantly, once a claim has been deemed catastrophic, the 400 week cap on benefits does not apply.  In theory a catastrophic claimant could collect temporary total benefits for the rest of his life, as opposed to a maximum of 400 weeks for a non-catastrophic claim.  Note, however, that just because a claim has been deemed catastrophic, there is no automatic right to 400 weeks.  In theory a treating doctor could return a catastrophic claimant back to work.

That being said, catastrophic claims have a higher value for settlement purposes since the employer/insurer’s exposure is unlimited.  Also, when a case is deemed catastrophic, a "rehabilitation supplier" is assigned to your case – these case workers are neutral in theory, but usually their interests lie more with the insurer.

Now, back to James’ question.   I go through a checklist to evaluate the value of a catastrophic claim.  My checklist includes factors like:

  • what is the insurance company’s exposure for future temporary total disability – what do the actuarial tables say about your projected lifespan?

  • how much future medical care will you require?

  • what is the likelihood of needing future surgeries?

  • will home modifications be required because of your injuries

  • will vehicle modifications or a vehicle purchase be required

  • will home health care services be needed?

  • what are the provisions of the Medicare Set Aside

  • since the Subsequent Injury Trust Fund (SITF) is involved, and your because the insurer is not fully solvent (the Insolvency pool is involved), timing would be an issue.  My experience has been that the SITF complicates matters because there are layers of bureaucracy involved in getting an SITF case settled

  • what future benefits will Social Security provide for post-settlement living costs

  • would a structure settlement be in your best interest?

  • should you settle in the first place? – sometimes your best bet is to maintain the status quo and continue to receive benefits for a period of months or years

These factors are among the ones that I consider when looking at a catastrophic case.  I can’t really comment more without  knowing about your specific case, but I think you get the idea.  If I can be of service to you, please do not hesitate to call me.

[tags] catastrophic injury and georgia workers compensation, subsequent injury trust fund, medicare set aside, settling a catastrophic georgia workers’ compensation case [/tags]


Medicare Set Aside Explained

North Carolina trial lawyer Chris Nichols has written a very useful description of how the Medicare Set Aside rules work in workers’ compensation cases.   He also notes that federal law also permits Medicare to pursue Set Asides in liability cases (although Medicare has not yet done this).

Chris describes the concept of a Set Aside as follows:

The concept of the law is that Medicare is a "secondary payer" when any other form of insurance exists to pay claims.  Before 2001, that meant traditional health insurance, but starting in 2001 Medicare began to interpret that to mean that even third party insurance, specifically Worker’s compensation settlements that "cut off" future medical benefits (clinchers), would be subject to the Medicare Secondary Payer regulations. This meant that any Workers Compensation clincher that resaonably cut off future workers compensation benefits would have to be reviewed by CMS to determine if there should be an MSA "allocation."  Accordingly, Medicare would look at the case and decide what the future medical costs for the injury would be.  The future costs would be placed in a MSA trust for the payment of medical services related to that claim.

We frequently have to deal with Medicare in large settlements, and often the Set Aside negotiations can add time and aggrevation to a settlement.  However, Medicare Set Asides are often a fact of life that we must be aware of prior to entering settlement negotiations.

[tags] Medicare Set Aside, Medicare Secondary Payer, Georgia Workers’ Compensation, Workers compensation settlements, Medicare lien [/tags]