What Now? Strategies for Closing Workers’ Compensation Claims
By: Mallory E. Lidaka
When a workers’ compensation claim is nearing an end, the situation is often similar - a claimant has reached maximum medical improvement, has been released to return to work either with or without restrictions, and is either back to work for the insured, for another employer, or remains out of work altogether. When carriers reach this critical point in a claim, the questions are often “What is the next step?”, “What Industrial Commission Forms do I file?”, and “Is settlement an option?”. Below, we will explore options which exist for seeking to close out a workers’ compensation claim.
In a first scenario, a claimant has reached maximum medical improvement, has been released to return to work, and has actually returned to work for the insured. In such a situation (which is likely the ideal situation in most claims), indemnity benefits have been terminated and no further medical treatment has been recommended or is pending authorization. The best way to close out a claim with these facts is dependent upon whether a permanency rating has been assigned. If a permanency rating has not been assigned, meaning a 0% rating has been assigned or the physician has indicated that the claimant suffered no permanent impairment, a carrier can simply file a Form 28B, detailing the total amount of medical and indemnity benefits paid, with the Industrial Commission and close its file. In such a case, the claimant will still have two (2) years to pursue a claim for additional benefits, but this is the most straight forward and easiest way to close out a claim.
If, however, permanency has been assigned, to close out the claim and ensure that the two (2) year statute of limitations begins to run, it is often best to proceed with compensating the claimant for any permanency assigned through the Form 26A process. A Form 26A details the amount of permanency owed to a claimant, less any overpayments which may have accrued prior to that point in the claim, which both parties are required to sign, and the Industrial Commission must approve. Once approved, the carrier can compensate the claimant as approved on the Form 26A and then file a Form 28B to close out the claim. The claimant retains the right to pursue a claim for additional benefits within a two (2) year period after the last date that medical compensation is paid. However, once two (2) years has passed since the final payment of permanency, the claimant is barred from asserting a change of condition claim. This time limitation on change of condition claims serves as another benefit to the Form 26A option. While the Form 26A process is a relatively straight forward procedure, it does require the carrier to refer the file to defense counsel pursuant to relatively recent changes to Industrial Commission Rules.
What if you have a situation that is less straight forward – the claimant has not returned to work, or the claimant has returned to work but there is a high risk of re-injury given the nature of injury and/or the nature of the claimant’s job position? In such a case, payment of permanency, which will trigger the two (2) year deadline for a claim for additional medical benefits, comes with a risk (and sometimes a significant risk) of future exposure. Therefore, in a case such as this, it may be best to consider a full and final settlement of the claim with the claimant either resigning from their employment position with the insured or executing a Release Agreement in favor of the insured as a part of any settlement. A full and final settlement under these circumstances would eradicate defendants’ exposure for future benefits and provide the insured with closure as it relates to the claimant’s employment status. This is also likely a better option to pursue before expending significant resources on vocational rehabilitation efforts as a return of a claimant to work for another employer comes with its challenges as well and does not always ensure indemnity exposure will not accrue.
As in all claims, the best option for proceeding once a claimant has reached maximum medical improvement will be dependent on the specific facts of that case. Lewis & Roberts’ highly skilled attorneys would be happy to talk through your specific facts to determine the best strategy for closing out your claim. Please do not hesitate to give us a call if we can help!