Teddy Snyder

Category: Mediation

  • Making Sure Your C&R Is Approved: Itemize Offers to Assure Adequacy

    “Let’s see,” I said to the employer’s representative. “After deducting PDAs, the MSA, and attorney fees from this offer, the injured worker will end up owing you money.”

    It happens more often than you might imagine. Usually it’s because the defense has forgotten the attorney’s fee. Then they wonder why the offer was rejected. Unless parties are in mediation, negotiation often stops.

    Why You Need Adequacy
    A settlement must be adequate. A recent case on the issue of settlement adequacy, Alvarenga v. Scope Industries, caught some workers compensation professionals off-guard. The court reversed approval of the settlement because after allowing for attorney fees it was inadequate to fund the MSA. Whether CMS approval of the MSA was sought was irrelevant.

    California regulations mandate adequacy:
    “The Workers’ Compensation Appeals Board shall inquire into the adequacy of all compromise and release agreements and stipulations with request for award, and may set the matter for hearing to take evidence when necessary to determine whether the agreement should be approved or disapproved, or issue findings and awards.”
    8 CCR § 10882 Action on Settlement Agreement

    Written Itemization Promotes Settlement
    Itemized offers and demands help settle cases. When the PDAs, MSA and attorney fees are itemized in an offer, everyone can see how funds will be disbursed.California law favors written settlement offers. Attorneys must show clients written settlement offers and demands, California Rule of Professional Conduct For Attorneys 3-510, but need only convey oral offers if the attorney thinks the offer is “significant.” Written offers let the recipient easily and accurately convey the information to the ultimate decision-maker.Preparing an offer or demand requires review of indemnity issues, Medicare-eligible expenses, and non-Medicare-eligible expenses. Calculating the settlement parts separately can be an eye-opening exercise. Itemizing can show why the offer or demand is reasonable.

  • YOU HAVE TO GET OUT OF B-E-D TO SETTLE

    Maybe being in BED- Blame, Excuses, Denial- is really what’s blocking your ability to close claims.
    Blame
    It’s easy to blame the other side. “The adjuster/ defense attorney/ applicant’s counsel isn’t paying attention.”  “They’re keeping the case going for the wrong reasons.” Whatever. The only person you can control is you. Without casting aspersions, start communicating anew keeping the end in sight. This might mean sending an email AND a letter, calling and maybe texting. Bring in your favored mediator AND file a DOR.
    Excuses
    Let go of the past. Maybe you made a mistake or missed an opportunity which would have set the claim on a better course. How much could you have settled that claim for 4 years ago? Resolve to start over today.

    Denial
    Get serious about evaluation. You can’t properly manage a claim if you shut your eyes to the true cost of keeping it open. In “old dog” cases, medical expenses almost always go up. Even when a drug is scheduled to go generic, a new, better, expensive drug becomes available. A settlement has to cover the injured worker’s future claim-related medical expense. Six percent is not a realistic discount rate. On the other hand, let’s be honest about what treatments the injured worker will actually use.

    Get Out of B-E-D Now
    Changing your attitude can change your results.

    Maybe you made a mistake or missed an opportunity which would have set the claim on a better course. How much could you have settled that claim for 4 years ago? Resolve to start over today.

  • 5 Best Benefits of Workers Compensation Mediation

    1) Mediation Works.  In one study, 61 percent of workers compensation mediations resulted in total resolution of the disputed issues.

    2) Mediation is fast- no waiting for a hearing date on an overcrowded court schedule.

    3) Take as much time as you need- no rush to finish within a half-day window at the WCAB.

    4) Mediation saves time and money compared to numerous, futile court appearances.

    5) Presence of the neutral can help preserve the attorney-client relationship and inject a dose of reality.

  • Cannibal Negotiation

    Cannibal negotiation refers to a deal where parties figure out how to get money from an entity not at the table.

    The term originates from an arrangement where OldCo paid NewCo to keep NewCo’s cheaper, competing product off the market. NewCo is paid for not selling anything. The buyers who need that product have to pay OldCo’s high price. The buyers are being cannibalized.

    Honest disagreement can thwart parties’ good intentions to reach a workers compensation settlement. Cannibal negotiations can ethically resolve disputes over the value of future medical benefits.

    The first place a true cannibal negotiator should turn is Medi-Cal. Medi-Cal can fill the gap between parties’ valuations and provide a safety net to pay for the injured worker’s health care at no cost to any party. A special needs trust or structured settlement may be needed to keep an applicant eligible for traditional Medi-Cal. Under expanded Medi-Cal, the applicant can receive a settlement of any size without losing eligibility so long as Modified Adjusted Gross Income is under the limit. Caution: home health care and non-emergency medical transportation are not included in expanded Medi-Cal. 

    Medicare is the next source a cannibal should think of for a funding entity not at the negotiating table. Medicare is different from Medi-Cal in that the injured worker had to contribute the required number of quarters to achieve eligibility. Also, a Medicare Set-Aside must be depleted before additional funds can be tapped to pay for a claim-related Medicare-eligible expense.

    Lastly, the parties may be able to use part of the settlement to fund health insurance premiums for the injured worker. A health insurance agent can provide a quote for Affordable Care Act coverage regardless of the injured worker’s pre-existing condition. A (cannibalized) subsidy may indeed keep the premium cost affordable.

    Cannibal negotiators can “prey” on more than one source. Some applicants are “Medi-Medi”, enrolled in both Medicare and Medi-Cal. MSAs should not be tapped until the applicant is eligible for Medicare; for the period up to 30 months before then, Affordable Care Act insurance can provide coverage.

  • Tricks of the Settlement Trade

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    Negotiations can founder when parties (and some mediators) don’t know the tricks that remove settlement obstacles.

    Structured Settlements

    Structured settlements are ideal for funding Medicare Set-Asides. Structured settlements provide tax-free periodic payments over a specified period of time, which can be for the life of the injured worker. The structure costs less than lump-sum funding, freeing up the balance of the employer’s authorized settlement amount for the injured worker’s other needs. What’s more, unlike with lump-sum funding, lifetime payments cannot be exhausted. The injured worker receives the amount paid by the employer plus income earned from professional investment management. This trick can help bridge a negotiation gap.

    From time to time I hear that a structured settlement broker was not called in order to avoid expense. This reflects a fundamental misunderstanding of how structures work. There is no cost to consult a structured settlement broker. The structured settlement life insurance company (not any party) pays the broker a commission if a structure is placed.

    A structured settlement is not the right choice for every case.  But workers compensation professionals should always investigate this no-risk option.

    Special Needs Trusts

    Many injured workers and their families rely on Medi-Cal for their non-industrial medical needs.  However, receipt of a large sum pursuant to a Compromise & Release can disqualify the injured worker’s entire family from receipt of these benefits until funds are spent down. Placing settlement funds in a Special Needs Trust allows the injured worker to retain public benefits and still C&R the claim.

    Pooled Special Needs Trusts are similar to an attorney trust account in that the trustee pays expenses from a fund holding money for many participants. Compared to a single-beneficiary trust, pooled special needs trusts are inexpensive and quick to set up and administer.

    Professional MSA Administration

    Did you know professional MSA administration which protects the injured worker’s continued access to Medicare benefits is available for little or no cost? One of the biggest faults of the Medicare Set-Aside system is its reliance on self-administration. Administration mistakes can jeopardize the injured worker’s continued access to Medicare.

    Injured workers are more often laborers than MBA’s.  Determining which expenses are Medicare-eligible is complicated and requires constant vigilance as policies change. To retain benefits, the MSA beneficiary must submit an annual report, a burden many injured workers cannot handle. Knowing who to call to obtain free or low-cost professional administration, including reporting, can mean the difference between an open claim and a Compromise & Release.

    Reversionary Trusts

    The reversionary trust is probably the least used settlement trick.  When parties disagree about future medical needs, a reversionary trust can satisfy both sides’ interests.  A reversionary trust can pay for claim-related medical expenses over a specified time.  If the money is not needed, at the conclusion of the trust the money reverts to the payer.

    Some adjusters object that there is no way to account for refunded amounts without leaving the claim open. Applicants may balk at the lack of unfettered access to trust funds. I had one case where the prospect of a reversionary trust caused the claimant to reduce the demand on condition the money was paid in cash now; the case promptly settled.

    With the right parties, a reversionary trust is a solution which allows everyone to be right. Or just raising the possibility can get parties to settle.

    There Are Many More Tricks

    Every workers compensation professional in the process from Notice of Injury to Compromise & Release has a distinct role. If you are considering closing the claim, it’s time to bring in the person whose focus is settlement, a knowledgeable mediator.

  • Does This Mediation Make Me Look Fat?

    Nobody wants to look bad. Turns out some workers compensation professionals think recommending mediation makes it look like they couldn’t get the claim settled themselves. Mediating a claim doesn’t make you look bad. It makes you look smart.
    Are You A Litigation Expert?
    Most claims settle. Mediation makes it happen sooner.Litigation experts realize that going to trial on an issue risks losing it all. It takes a long time to get to trial; meanwhile the claim gets expensive (how many medical exams do you really need?) Facts may become less favorable.Parties in mediation retain control of the outcome rather than surrender to an unpredictable result.  Often I help parties invent a solution they had never previously considered.

    A Safe Place for Bad News
    Attorneys may be hesitant to deliver bad news. One fear is that the client will get new counsel. Mediation provides a forum for a neutral person, the mediator, to deliver the message.  The attorney can commiserate with the client, look like a hero, and yet get the case settled.

    How Good Do you Want To Look?
    I have successfully helped parties settle even when negotiations stalled in prior informals.  With a mediator’s help, parties (even skeptical ones) who come to mediation willing to settle on acceptable terms generally do settle. The next time the professional who mediated comes up for evaluation, that person doesn’t look bad—that person looks great.

  • 3 Signals It’s Time to Close the Claim

    Some Workers Compensation Claims seem to have a life of their own. Before you know it, years have passed since the Date of Injury. Here are 3 signals telling you to take a hard look at settling now.
    The Injured Workers is 61 years old.
    Once an injured worker reaches age 62½, any buy-out of future medical care must include a Medicare Set-Aside. (Buy-out of medical benefits for an injured worker already on Medicare also requires a Medicare Set-Aside.) This adds extra work and delay. Sometimes the MSA evaluation changes the parties’ view of the case. Stories abound about how the MSA process has torpedoed a settlement.

    Check your case inventory. If the injured worker is 61 years old, take steps now to close the claim before Medicare becomes a party to the proceedings.

    Litigation has become a way of life
    You’re in court every month. The number of claimed body parts keeps increasing; every treatment request is denied. Everyone mistrusts everyone else, including their own lawyers. Take a deep breath. Step back. This claim has a settlement value. The parties just need help figuring out what it is.

    Trial is Imminent
    Nothing makes people think about settlement more than an upcoming trial date. You’ve lived with these facts for a long time; how can you be sure the judge will see things your way in the limited time available to put on the case?  Often, a judge’s order is just the gateway to even more litigation.

    Going to trial is a risk.  Most people are uncomfortable with the lack of control. They are happier with a negotiated settlement reached through compromise. You won’t get everything your way, but you won’t lose on every issue either. Most importantly, litigation can end.

    Take the First Step
    Approach the other side about scheduling a mediation.  If communication has broken down, contact the mediator first, and let her work on bringing the parties together.

  • ‘Twas the Night before Mediation

    (c) Teddy Snyder SnyderMediations.com

    ‘Twas the night before mediation
    And all through the firm
    Not a creature was stirring,
    Not even a worm

    But then one lawyer
    Asleep on a couch
    Shot up, hit his head
    And said with an “Ouch”

    Oh my, I’ve got
    That mediation tomorrow
    I didn’t do a brief
    Much, much to my sorrow

    Then what to his exhausted eyes should appear
    But Mediator Snyder with news of good cheer

    You don’t need it fancy
    You don’t need it long
    Just give me some clues
    So the time’s not spent wrong

    Just send me an “e”
    It’s all confidential
    Tell me the issues
    What’s the dollar potential?

    With that she was gone
    The lawyer banged out a brief
    He’d be ready tomorrow
    Oh what a relief.

    This holiday season
    When your time seems too short
    Turn to mediation
    And stay out of court.

    Happy Holidays!

     

  • Tactics vs. Strategy

    Tactics are steps you take to win short term goals on the way to achieving your strategic objective. Sometimes tactical skirmishes distract workers compensation professionals from pursuit of their strategic goal. On the other hand, you can’t reach your strategic objective without well-thought-out tactics.

    The Disputed Doctor’s Deposition
    Take the case where an attorney insisted that the deposition of the doctor who provided the most recent report had to precede settlement discussions. The problem was that by the time that could happen, all the permanent disability would be paid out. After providing for future medical expense, that would leave no cash for the applicant or the attorney fees, jeopardizing the chance of a future Compromise & Release. When I pointed this out, the parties realized that a tactical victory could prevent achieving the strategic goal. The case C&R’d.

    The Tale of the Two Interpreters
    I arrived at a recent mediation to find the attorneys at loggerheads because both had ordered an interpreter. Both interpreters were court-certified. I convinced one of the attorneys that agreeing to dismiss the interpreter that attorney’s office had ordered would create a negotiating advantage. In the give-and-take of negotiation, opposing counsel might well feel beholden to make the next concession. Conceding the interpreter battle demonstrated the attorney’s reasonableness and set the stage for a productive mediation. The case C&R’d.

    A litigation plan should be more than a checklist. Every tactic should further the effort to achieve the strategic goal.