When approaching a workers compensation settlement, efficiency and accuracy are critical. While it is important to get the settlement right, speed is key to curbing the potential long-term sprawl of expenses related to medical treatment, potential surgeries and indemnification for carriers and businesses. For claimants, faster settlements provide the resources they need to find closure and start the next phase of their lives.
Unfortunately, a workers compensation settlement is historically seen as a lengthy, drawn-out and painful process. However, it does not have to be. Settling a case with the correct mindset can be a swift, easy and beneficial process for both your business and the injured party.
Often, one of the biggest barriers to negotiating a workers compensation settlement is a simple difference of opinion. The parties might debate whether the settlement is worthwhile to the injured worker, for example. Generally, risk management teams should trust their gut when it comes to estimating these settlements. Stand by your assessment of the facts and explain to the injured worker why you believe a settlement is the best option for them.
Getting to that settlement requires a thoughtful approach, and the following five best practices can help risk professionals settle workers compensation claims quickly and successfully:
Your team should dedicate itself to clear and consistent communication with everyone who touches a case, from risk managers and defense counselors to claims adjusters and injured workers.
If you are struggling with internal and external communication, commit to change. A great first step is to make it clear that your business will prioritize reaching a settlement. This will set expectations among every member of your team and allow your adjusters to start orienting workers compensation cases toward building fair offers from the start.
2. Find the “Why”
The biggest question in any settlement discussion is “why?” Getting quickly to the heart of some of the biggest whys of any workers comp case can make the settlement not only possible, but desirable to all parties. It also will help your organization develop a culture focused on seeking timely, reasonable settlements.
Why should a quick settlement be the goal? Closing more cases by way of settlement can help reduce the number of claims, curb costs and bring benefits to injured workers. Why should the worker consider a settlement? It provides funds needed for their care and recovery, as well as an opportunity to move on without unnecessary delay.
Spread the message organization-wide, from your risk management leadership team all the way through your frontline staff, and repeat the message constantly. At Jones Jones, for example, we made the conscious decision to create a culture of settlement. We adopted “always be closing” as our motto and reiterated it in meetings, on signage and across company communications. We turned our all-hands meetings into workshops where we could discuss settlement barriers, find solutions and share success stories. This led the firm’s attorneys to constantly think about ways they could encourage settlement at every deposition, every hearing, and every other time they sat across the table from an injured worker, helping to achieve optimal outcomes.
3. Find the Value
Claims professionals often will put control of an eventual settlement—and its value—into the hands of the injured party. Instead, encourage your team to assign a value to each case based on facts and data, and then to communicate that value to the injured worker along with a firm deadline. Instead of saying “Are you interested?” call and say, “We have valued your claim at $20,000. You have two weeks to accept the offer.”
As a claims professional, you should be able to assign a value to your case at any time, whether it is the day of the accident or 10 years after. Do not fall into the trap of delaying a valuation because you think you need the results of one more independent medical exam. Instead, take charge of the process, make an offer and set a deadline.
4. Push Forward
The first “no” you receive from an injured worker regarding a settlement should not stop the process. Instead, it is an opportunity to push forward by again asking “why?” It may sound obvious, but often no one asks their injured workers why they will not agree to a settlement. They just hear the word “no” and shut down.
The reality is that you have lots of tools that can be used to help overcome objections or reservations and get closer to a settlement. Claims professionals should find the leverage in the case and make it clear to an injured worker that settlement is their best option.
It is also helpful to identify the need for a medical set-aside (MSA) as early as possible. The faster you get consent from the Centers for Medicare and Medicaid Services (CMS), the quicker you will resolve the issue and settle your case. While you wait for the MSA and CMS approval, you can work out indemnity considerations, take testimony at depositions and perform all the other steps a case requires.
5. Display Empathy
Every workers compensation case is different because every injured worker is different. A seasoned employee with stress or pressure-related injuries who has undergone multiple surgeries is very different from a younger worker who slipped and twisted their ankle or broke their arm. As such, their settlements should not be approached the same way.
The best way to craft settlements that will meet the needs of each individual is to put yourself in their shoes. For example, say an injured worker has two school-age children who are taking college preparation courses. You might consider creating a settlement package that includes seed money and annuities to help them afford the cost of their children’s college tuition.
As recently as a decade ago, workers compensation was much more cutthroat. Today, the environment has changed. Each of us is human, and we all share personal similarities. Recognizing those similarities and acting with empathy will help you achieve a fair and fast settlement.
Bonus Tip: Challenge Assumptions
If you truly want to succeed at creating a settlement-focused culture, you will need to challenge long-held beliefs. For example, when we first started settlement programs at Jones Jones, we were told that if an injured worker was having surgery, we had to wait a full year before we settled a case. Now, we know otherwise. We learned that you could draft settlement papers prior to surgery, have an injured worker sign them, and then formalize them right after the settlement date to expedite cases.
The bottom line is that every roadblock to a settlement has a solution. Having a spirit of collaboration and a commitment to communication will help your team find creative solutions and create the type of results that will benefit all parties involved.