Dirty Tricks in Workers’ Compensation: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

Nobody likes being fooled, especially when done maliciously. Although the Board will act to protect itself from being deemed a willing participant to a fraud, it is less likely to act when the victim is an employer, insurance company or a TPA. Therefore, please consider today’s blog as a public service announcement to warn our friends and clients of some “sharp” practices which have passed muster at the Board to the detriment to the employers.

1. In our first example an applicant settles a work comp claim via a stipulated award leaving future medical open. A year later applicant attorney writes to the administrator inquiring if they wish to resolve the applicant’s future medical entitlement via Compromise & Release. The parties thereafter agree on a lump sum where a C&R is submitted and approved. Afterwards, applicant’s attorney files a “Petition to Reopen for New and Further Disability” to which the administrator objects, asserting that the case settled by C&R. Applicant’s attorney responds by advising the judge, “I only inquired if the administrator was interested in settling ‘future medical.’ I never said anything about settling new and further disability.” As proof, AA submits a copy of the letter sent to the administrator inquiring about settlement of future medical. Applicant eventually prevails and is allowed to reopen for new and further disability.
2. To resolve a dispute over temporary disability entitlement, an Agreed Medical Examiner conducts an examination of an injured worker and determines that the IW is TD. The parties thereafter execute a stipulation drafted by applicant attorney stating, “Defendants agree to pay TD until applicant is MMI or returns to work.” Nothing is mentioned about terminating disability benefits after paying 104-weeks of TD. The defendants were found to have waived the 104-week rule, thus requiring disability payments to continue beyond the 104-week limit.
3. In another case like the example mentioned immediately above, the parties stipulated as follows: “The defendants agree to pay TD until the applicant is MMI, or released to return to work, or up until 104-weeks of TD has been paid.” Too bad there was no mention of taking credit against TD for 52 weeks of SDI benefits paid by EDD. Per the language of the stipulated agreement, the defendants were found liable to pay up to 104-weeks of TD over and beyond any sums paid by EDD, plus they were held liable for the EDD lien.
4. As part of a nominal $4,500 C&R involving a trivial injury, standard settlement language was used stating, “Defendants hold applicant harmless against all liens.” Unfortunately, the administrator failed to recognize a $65,000 child support lien on file, the existence of which was known to AA. Despite contemporaneous evidence that the defendants were entirely unaware of the child support lien, the Judge found the defendants liable for the entirety thereof, consistent with the hold harmless language in the C&R. No doubt that the subsequent discussion with the employer was . . . “awkward!”

The lesson to be learned here is the Board will not protect a defendant if tricked by opposing counsel. Be suspicious if applicant attorney offers to draft settlement papers. Take your time to thoroughly review all legal documents and stipulations to avoid being duped!