With the ongoing budget crisis, both the State and Federal government are becoming more and more difficult to deal with when it comes to getting your Compromise and Release approved. By being aware of their participation and planning ahead, you can minimize the inconveniences that these entities can cause.

The most common one that comes into play is the Employment Development Department. With the current State budget crisis, they have become very aggressive in following up on their liens and not only obtaining payment but interest as well for any delayed payments. In order to minimize this, the defense practitioner needs to be aware of any gaps in workers’ compensation payments. We need to be investigating as to what, if any, benefits the applicant received during that period of time. Were they working? Were they collecting State Disability? Were they collecting long-term disability from a private policy? Were they collecting unemployment benefits? By doing so, you can identify the possibility of duplicate payments or having a lien filed when you are not expecting it.

Also, we need to be very careful in watching the Employment Development Department because there are instances where they have paid at a low rate which everyone assumes is just a differential rate not subject to reimbursement. However, sometimes this lower rate was, in fact, their full rate and they expected full repayment from a party. This can make settlement difficult when all of a sudden one of the parties has to cough up a five figure amount.

Also, identifying the EDD lien early on can reduce the interest payments. You can issue payment to EDD at any time. You do not have to wait until the case settles.

Additionally, EDD has been referring you to the Unemployment Insurance Board on occasions where the applicant may have received unemployment benefits. Thankfully those seem to be few and far between.

The Federal government now is becoming more and more involved in our workers’ compensation settlements. They are no longer allowing workers’ compensation Compromise and Releases to go through which in essence shifts the burden of medical care to Medicare. Therefore, in order to make sure that the Federal government does not foul up your carefully crafted Compromise and Release, you need to plan ahead.

When I say plan ahead, you need to control the costs that are going to go into this Medicare Set-Aside. Many times now the medication costs are prohibitive. I am seeing several in the $200,000.00 and $300,00.00 projections over the lifetime of an applicant because we have allowed a treating physician to prescribe multiple different medications.

Also, you need to get the discovery process completed so you know what medications are simply for the industrial injury as opposed to a pre-existing condition. Make sure that you get the primary treating physician involved and get his comments on what medications are due for the industrial injury.

Also, if it appears that your applicant is likely to be on Medicare, plan ahead. Get the HIPPA releases signed and have your vendor ready to get the MSA. Also, use a trusted vendor who has experience in dealing with these matters as many of them seem to over compensate to avoid having their MSAs sent back by CMS.

Also, since we are now dealing with at least six month delays in CMS approving the settlements, make sure you plan ahead and try to allow sufficient time to get your documents dealt with. Sometimes you can even get these approved ahead of settlement time so that you have an ironclad amount to deal with the applicant.

We also have to consider who was paying for the administration of this Medicare Set-Aside. Make sure that is clear and you’re not just dumping a load of money on someone who has no idea how to manage it. Additionally, be prepared to structure this settlement and have a broker available to deal with that. Also, bear in mind that since you are shifting medical care from one entity to the other, you may need to have an incentive to the injured worker to do that. Make sure you budget that into your settlement negotiations as well.

In summary, make sure that all of these items are considered when you are dealing with somebody who is likely to be receiving Medicare benefits. By following some of these ideas, you can avoid having your carefully planned Compromise and Release blown up by either the State or Federal governments.