Teddy Snyder

Tag: settlement

  • 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.

  • 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?

  • 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.

  • 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.

  • Get “In Pro Per” Claims Off The Books

    You know the claims I’m talking about: the really old claims where the Injured Worker is representing himself/herself. Let’s call them “in pro per”s.  Active in pro pers file one court paper after another, causing the insurer or self-insured employer to fund what seems like a never-ending stream of money to send a representative to the Board. The in pro per’s papers may not state a recognizable claim. Pressed for time, the Information and Assistance officer may give the in pro per short shrift.  Defense attorneys with varying degrees of patience usually do, too.

    But what if what the parties really need is a sort of an interpreter, a mediator.

    Mediating an in pro per’s claim demonstrates respect for the in pro per.  The feeling of lack of respect and inability to get heard is often what drives the in pro per to keep summoning the employer to court.

    “Why would I waste time and money on a worthless claim?” you may ask. Because you’re spending time and money now, and mediation is a way to end that endless cycle.

    Sometimes the in pro per has a bona fide complaint, but without professional assistance has not been able to communicate it. The neutral mediator is often able to re-state the concern in a way the parties can address and put past them. The mediator can help each party see the other side’s point of view.

  • Are You A Rule-Breaker?

    Workers Compensation professionals have to know a lot: the California Labor Code, Title 8 regulations, state and federal rules governing health care entitlements. To make things even harder, the rules of this highly-governed road keep changing. Workers Compensation may be the most intricate, heavily regulated area of practice. These rules can constrain the parties’ ability to negotiate satisfactory settlements.

    You only have to know one rule about mediation: everything that happens within the mediation, including pre-mediation and follow-up communication, is confidential.  You don’t have to share your mediation brief with the other side if you don’t want to. In mediation, in contrast to WCAB practice or arbitration, you can get creative. You can break the rules.

     Mediated agreements can include provisions a WCJ could never order, such as agreements relating to actions in other forums.  You can settle claims which haven’t been made yet.  Parties can use creative solutions like structured settlements and medical care trusts. The mediator can help you brainstorm.

    As mediator, I help parties settle cases.  There are no rulings in mediation, so no one loses.  Go ahead, let’s break some rules– and settle the case.

  • HOW POLITICS DRIVES UP THE COST OF YOUR MSA

    For President George W. Bush and Congress to get Medicare Part D drug coverage passed in 2003, they had to make significant concessions to big business, including the drug industry. One of the law’s provisions forbids the government from setting rules for negotiating better drug prices. The “noninterference” section says:

    In order to promote competition . . . the Secretary [of Health and Human Services]:
    (1) may not interfere with the negotiations between drug manufacturers and pharmacies and PDP [Prescription Drug Plan] sponsors; and
    (2) may not require a particular formulary or institute a price structure for the reimbursement of covered part D drugs.
    42 USC 1395w-111(i)

    The result according to a new policy brief from the Carlton University School of Public Policy and Administration is that Medicare Part D plans pay on average 73% more than Medicaid and 80% more than the Veterans Health Administration for brand-name drugs. If Part D plans could negotiate drug costs the way Medicaid and the VA do, savings could reach $16 billion a year.

    The study shows that the average per capita expenditure by Americans for pharmaceuticals is more than double the average of 32 other industrialized nations. Contrary to their publicity, American drug companies do not devote the wealth gained from Part D on new research initiatives. Half of new medical research initiatives come from non-profit entities such as universities. Rather, drug companies have spent their millions in recent years on increased lobbying. If drugs costs decreased, Medicare beneficiaries could expect Part D premiums to also decrease.

    Although private insurers pay Part D medical expenses, workers compensation professionals are painfully aware that anticipated Part D-covered expenses must be included in a Medicare Set-Aside. The increased use and rising cost of pharmaceuticals has torpedoed many a proposed workers compensation buy-out. If the purpose of an MSA is to protect Medicare, why are Part D expenses which are paid by private insurers included in the allocation anyway?

    Casualty insurance companies and the American Association for Justice are big political players. With the 2016 election cycle coming up, now would seem to be the time for their lobbyists to twist some arms to modify the noninterference provision for the benefit of all Americans.