Teddy Snyder

Category: Negotiation

  • 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.

  • How Did You Get To That Number?

    Case evaluation is part art and a lot of math. We’re not talking calculus; we’re talking arithmetic.

    A surprisingly large number of lawyers tell me they’re bad at math. They’re not alone. CNN anchor Chris Cuomo recently got his math corrected by his co-anchor Michaela Pereira while discussing Powerball lottery numbers.
     

    You can’t come up with a realistic evaluation of a Workers Compensation claim if you can’t quantify the component parts: Permanent Disability, Life Pension, and Medicare-eligible and non-Medicare-eligible Future Medical.

    In mediation caucus, when parties give me their offer or demand I often ask, “How did you come up with that number?” I want their best argument that will convince the other side. The first answer I get is often vague, like “We thought it would settle the case.” Workers compensation professionals often neglect running the numbers. Getting parties to see the same numbers moves them to settlement.

    I recently got a call about an offer in a personal injury case. I questioned the plaintiff’s attorney about what he thought this number represented. It didn’t sound right to me. “Did you ask them how they came up with that number?” No, he hadn’t. I suggested the attorney ask opposing counsel that question to allow movement forward toward settlement.

    Random demands and offers are unlikely to settle a claim. Before you assume the other side is being unreasonable or you respond, ask: How Did You Get To That Number?

  • ‘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.

  • Understanding Insurance Reserves

     

    Understanding insurance reserves can help settle a claim. A reserve is a pot of money set aside to pay for a specific expense category. Typically, there are separate pots for indemnity, medical and med-legal expenses.

    Sometimes a negotiator finds that a claim can be closed for an amount more than remains in the indemnity and medical reserves. However, part of the settlement can be classified as a med-legal expense. By spending the money from the med-legal reserve, settlement can be achieved while staying within current reserve limits.

  • Ghosts, Goblins and Mediators

    Halloween is just around the corner, a time when people love to be scared. It’s fun, because everyone knows there’s really nothing scary at all.

    Mediation isn’t scary. Yet some claim and legal professionals fear it.

    Fear of losing control
    Adjusters and attorneys know their jobs. They may bristle at the idea of someone else getting involved in the settlement process. Yet, they don’t hesitate to call in other experts.

    Claim and legal professionals retain control in mediation. Only the parties can choose an outcome. The mediator cannot order anyone to take any action. What the mediator can do is help parties define issues, resolve differences, and see new routes to settlement.

    Fear of looking bad
    Some professionals worry that calling in a mediator makes them look like they couldn’t do their job. On the contrary, professionals who use every tool in their arsenal look smart. Referring a claim for mediation can short-cut litigation, saving time and money. This makes you look like someone who knows how to get things done.

    What are you scared of?
    You don’t need a costume, and you don’t need a candy bucket to get started.  Treat yourself to mediation to move that difficult case forward.  Mediation can benefit all parties, and that’s no Halloween trick.