Articles Posted in Workers Compensation Settlements

There are many factors which have to be considered when an injured worker wants to settle his or her workers’ comp case in PA. Even aside from the primary things people think about, such as how much money will be involved, one has to determine if approval from the Centers for Medicare Services (CMS) will be required.

Under Federal Law, known as the Medicare Secondary Payer Act, all parties to workers’ compensation settlements in Pennsylvania must “consider the interests of Medicare” with regard to the settlement. This is regardless of whether the injured worker is entitled to Medicare or not. CMS does not want the burden of future medical treatment for the injured worker to simply be shifted from the workers’ compensation insurance carrier to Medicare.

CMS has certain guidelines for when their approval is needed. When a workers’ compensation settlement is more than $25,000.00 and the injured worker is entitled to Medicare, CMS must actually approve the terms of the settlement. Additionally, if the workers’ compensation settlement is over $250,000.00 (it is extremely rare for a workers’ comp settlement in PA to be more than $250,000.00) and the injured worker has a “reasonable expectation” that he or she will be entitled to Medicare within 30 months of the date of the workers’ compensation settlement, again, CMS must approve the settlement. In particular, CMS will want to approve the amount of the settlement which is allocated to future medical treatment.

On November 9, 2006, the most recent amendment to the Pennsylvania Workers’ Compensation Act, known as Act 147 of 2006, was signed into law. Several of the provisions of Act 147 were designed to quicken the litigation process in PA workers’ comp. One of those provisions created what is known as “Mandatory Mediation.”

Mediation, generally speaking, is a process where an independent person meets with the parties to a dispute and helps the parties reach a resolution to their quarrel. This is a process used in all types of litigation, and even in disputes outside of litigation. Usually, this is a very informal process. The mediator will meet with the parties separate and together, working to try and bring them together on common ground. There is no court reporter present, and things said in mediation are not admissible in the litigation (encouraging the parties to be honest about the strengths and weaknesses of their position).

Mediation has been used in Pennsylvania workers’ compensation matters as long as I can recall. In the past, mediation only happened in PA workers’ comp when the parties so requested. The process was entirely voluntary, and did not occur that often.

An injured worker in PA can settle both the wage loss and medical parts of his or her case by entering into a Compromise & Release Agreement. This is something which can only be done when both the injured worker and the workers’ comp insurance company agree to settle the case. Neither side can force the other to settle a case. Once the parties agree to the terms of a settlement, a Compromise & Release Agreement must be prepared, detailing the terms of the settlement. Then, before the settlement is final, a hearing must be held before a Workers’ Compensation Judge, who must be satisfied that the injured worker understands the terms and conditions of the settlement.

Recently, the Commonwealth Court of Pennsylvania decided that a Compromise & Release Agreement could not be approved because the injured worker had died before a hearing to approve the settlement could be accomplished. This case, Miller v. W.C.A.B. (Electrolux), was decided on January 4, 2008.

Understand that settling a workers’ compensation case in Pennsylvania is a very complicated process. It is very important that you have an experienced workers’ compensation lawyer working for you, to make sure that you receive the maximum recovery possible, and that your rights be properly protected.