In March, we explained a cost containment strategy called handicap reimbursement. This month we offer information about another cost inhibitor we have in our arsenal, which is a lump sum settlement (LSS). An LSS is an agreement between the employer, injured worker, and the BWC for a lump sum payment to settle one or more workers’ comp claims. Settling a claim prevents future costs being added the claim, fixes the current costs (note that the settlement amount is added to the current costs), and removes the reserve.
Generally, in a settlement we will want to consider the following:
Is the injured worker is still employed, working, able to work, or disabled?
What future medical costs will be accrued?
Will settlement of the claim create a positive financial outcome for your company’s risk experience?
Should it be a full (settling all medical and compensation) or partial settlement (settling only certain conditions in the claim)?
It’s our job as your TPA to look for claims where settlement may be a good path to take. When we find a claim that may be ripe for settlement we’ll discuss the potential with you, and what range of settlement to offer the injured worker. It depends on the circumstances and we look at each case individually. If you have any questions about our philosophy towards different cost containment measures, feel free to ask.