Table of Contents. . . . . . . . 09/05 05/04
1
Purpose
and Scope. . . . . . . . 09/05 05/04
2 Authority. . . . . . . . . . . . 09/05 05/04
3 State
Workers’ Compensation. . . 09/05 05/04
4 When
a Reduction is Required . . 09/05 05/04
5 Exceptions
. . . . . . . . . . . 09/05 05/04
6 Verifying
SWC Claims . . . . . . 09/05 05/04
7 Calculate
Amount of Reduction. . 09/05 05/04
8 ECMS
Coding. . . . . . . . . . . 09/05 05/04
9 Contact with State Workers’
Compensation Office. . . . . . . 09/05 05/04
Exhibits
1
EEOICPA/SWC
Coordination of Benefits Worksheet
1. Purpose and Scope. This chapter describes procedures for
coordinating Part E benefits with state workers’ compensation benefits. “Coordination of benefits” occurs when the
compensation payable under Part E of the Act is reduced to reflect certain
benefits previously received by the beneficiary under a state workers’
compensation program for the same covered illness.
2. Authority. 42 U.S.C. § 7385s-11 requires OWCP to reduce
the Part E monetary award(s) by the amount of the benefits received from a
state workers’ compensation program for the same covered illness, after
deducting the reasonable costs incurred by the claimant in obtaining those
benefits.
3. State Workers’ Compensation Benefits. State workers’ compensation programs are no
fault systems designed to provide injured workers benefits for work-related
injuries or illnesses without having to sue their employers. Benefits from the state commonly include
payments for medical services, cash payments to the injured worker for wage
loss or reduction in earning capacity, as well as death and funeral benefits to
the worker’s survivor(s). The laws creating these systems differ by state, but
the cash benefits (whether for temporary total disability, permanent total
disability, permanent partial disability, or death of a worker) are typically a
calculated percentage of the injured worker’s weekly earnings for a set number
of weeks. State workers’ compensation
benefits can be administered directly by a state commission (as in
4. When a reduction is required. A reduction of Part E benefits is required if
the covered Part E employee, or the covered Part E survivor received benefits
through a state workers’ compensation program only for the same covered
illness for which that employee or claimant is eligible to receive benefits
under Part E. This means the CE first determines the employee/claimant’s eligibility
to Part E benefits then determines the beneficiary of the state workers’ compensation
benefits before determining whether a reduction is required. For example, if the employee settles a state
workers’ compensation claim for asbestosis and the accepted covered illness for
which the employee is entitled to Part E benefits is also asbestosis, a
reduction of the Part E monetary award is required to reflect the amount of
state workers’ compensation benefits the employee has received. However, if the employee settles a
state workers’ compensation claim for asbestosis and the accepted covered
illness for which the spouse is entitled to Part E benefits is also
asbestosis, the CE will not consider this claim for a reduction (unless that
spouse also received some form of state workers’ compensation benefits for
asbestosis, such as death benefits).
5. Exceptions. The following are exceptions to the reduction
requirement rule.
a. Multiple illness(s). If the beneficiary under a state workers’
compensation program receives state workers’ compensation benefits for a
different illness, or for both a covered and a non-covered illness arising out
of and in the course of the same work-related exposure, the CE does not reduce
the Part E award. For example, if the
employee/claimant settles a state workers’ compensation claim for asbestosis
and silicosis, and the accepted covered illness for which the employee/claimant
is entitled to Part E benefits is only asbestosis, a reduction of the Part E
benefits is not required.
b. Waivers. OWCP may waive the requirement to coordinate
Part E benefits with benefits paid under a state workers’ compensation program,
if it determines that the administrative costs and burdens of coordinating Part
E benefits in a particular case or class of cases justifies the waiver. A waiver should be automatically granted if
the total amount of state workers’ compensation benefits the
employee/claimant received is under $200.
If a waiver is to be granted,the
CE prepares a memo to file, approved by the District Director, explaining that
the requirement to coordinate the benefits is waived due to the dollar amount
associated with the state workers’ compensation benefits the employee/claimant
received.
c.
Pending
State Workers’ Compensation Payment.
Coordination of benefits is tied to the dollar value of what the
employee/claimant received from the state in workers’ compensation benefits for
the same illness. Therefore, the requirement
to reduce benefits does not apply if the employee/claimant has not received
state workers’ compensation benefits as of the time of the Part E payment. If the employee/claimant has filed a state
claim for the same covered illness, but payment of the state workers’
compensation benefits is pending at the time of the Part E payment, the CE does
not defer issuing the RD. The CE issues
the RD without a reduction since the employee/claimant did not actually receive
state workers’ compensation benefits.
However, if the employee/claimant receives payment on the
pending state workers’ compensation claim at any time after issuing the
recommended or final decision(s), but before the issuance of the Part E
payment, the Part E payment cannot be issued until further actions are taken.
(1) Claims Pending at the DO. If the employee/claimant filed a state claim
for the same covered illness, but payment of the state workers’ compensation
benefits is pending at the time of the RD, the CE issues the RD without a
reduction. However, the CE states in the
recommended decision’s cover letter that if the employee/claimant receives
state workers’ compensation benefits after the issuance of the RD, but before
issuance of the final decision (FD) the claim will be remanded by the FAB for coordination.
(2) Claims Pending at the FAB. If the employee/claimant filed a state claim
for the same covered illness, but payment of the
state workers’ compensation benefits is pending at the time of the FD, the FAB
CE issues the FD without a reduction.
However, the FAB CE states in the final decision’s cover letter that if
the employee/claimant receives state workers’ compensation benefits after the
issuance of the FD, but before issuance of the Part E payment the final
decision authorizing the payment will be vacated by the program’s
Director.
(3) Claims pending at the time of payment. Before issuing the Part E payment, the DO
calls the employee/claimant to verify that payment of the state workers’
compensation benefits is still pending.
If the employee/claimant receives payment of state workers’ compensation
benefits after issuance of the FD, but before issuance of the Part E payment,
the DO forwards the claim to the National Office for a reopening.
d. Medical or Vocational
Benefits Only Claims. Medical or vocational benefits paid by a state
workers’ compensation program do not require any “coordination of
benefits”. If the employee/claimant received only medical or
vocational benefits under a state workers’ compensation program, the CE does
not reduce the Part E award. The CE treats this as a pending claim (as
instructed above) and issues the RD without a reduction.
6. Verifying State Workers’ Compensation
Claims. To verify the existence of a
state workers’ compensation claim, all applicants filing a claim under the
EEOICPA provide an affidavit (the EE-1/EE-2 forms) reporting whether the
employee/claimant filed a state workers’ compensation claim. If the employee/claimant identifies on the
EE-1/EE-2 form that he/she filed a state workers’ compensation claim, the CE
develops for verification of the illness, and state workers’ compensation
benefits received, but only after the CE determines Part E eligibility.
Once the DO
determines that there is qualifying employment, accepted covered illness, and a
state workers’ compensation claim for the same illness, the CE sends the
covered Part E employee, or each eligible surviving beneficiary, development
letters. The development letter states
that a decision under the EEOICPA cannot be rendered until the
employee/claimant provides a written statement from the state commission,
board, or payment-issuing agency verifying the total amount and type of state
workers’ compensation benefits paid to date.
a. Benefit categories. The CE requests in the development letters
that the confirmation from the state commission, board, or payment-issuing
agency specify the total amount in benefits the employee/claimant received to
date (as of the date of the reply) and an itemized account of the benefits paid
for each benefit category. The
verification should detail the total amount paid to the employee/claimant in
every applicable category such as: medical benefits; disability benefits; death
benefits; settlement amount; attorney fees; vocational rehabilitation; and the
amount of any disability payment issued during vocational rehabilitation
training.
b. If the claimant
does not respond to the requests or if the material submitted does not meet the
requirements to coordinate benefits, the claim is administratively closed
and the claimant is advised that no additional action will be taken until the
required documentation is provided.
7. Calculate Amount of Reduction. Once the CE receives the documentation which verifies
the amount of state workers’ compensation benefits the employee/claimant
received for the same covered illness, the CE completes Exhibit 1 which
consists of the “EEOICPA/SWC Coordination of Benefits Worksheet”. This Worksheet is to be used by the CE to
make the calculations necessary to determine how much to “coordinate” (reduce)
a claimant’s EEOICPA Part E benefits to reflect benefits received from a state
workers’ compensation program for a covered illness compensable under Part
E. The Worksheet includes detailed
instructions on how to compute the different figures that the CE enters on the
Worksheet and are used to calculate the amount of any coordination of SWC with
Part E benefits. After completing the
Worksheet, the CE files it in the claimant’s case record.
a. If the amount of EEOICPA Part E benefits
(which may consist of lump-sum payments and/or post-filing and ongoing medical
benefits) to which the claimant is currently entitled is MORE than the amount
of the SWC requiring coordination, the balance due the claimant (i.e. a
positive amount) will be listed on Line 7 of the Worksheet. This is the amount of EEOICPA Part E benefits
that must be referenced in the recommended decision, together with an
explanation of how this amount was calculated.
b. If the amount of EEOICPA Part E benefits
is LESS than the amount of the SWC requiring coordination, the amount of
the “surplus” (i.e. a negative amount) is listed on Line 7 of the
Worksheet. Because a surplus can only be
absorbed from EEOICPA Part E benefits due an employee currently or in the
future, no further action is required for a survivor claim. If there is a surplus to be absorbed in an
employee’s Part E claim, this must be noted in the recommended decision, along
with an explanation that OWCP will not pay medical benefits and will apply the
amount it would otherwise pay (directly to a medical provider, or to reimburse
an employee for ongoing medical treatment) to the remaining surplus until it is
absorbed. In addition an explanation
that OWCP will not pay any further lump-sum payments for wage-loss and/or
impairment due in the future until the surplus is absorbed must also be noted
in the recommended decision.
(1) In situations involving a surplus, the FAB
issues an award letter to the claimant containing special language. The FAB
award letter accompanies the final decision and advises the claimant of the
exact amount of the surplus.
(a) The award letter explains that the
surplus will be absorbed out of medical benefits payable and further lump-sum
payments due in the future (i.e. wage loss and impairment) under Part E of the EEOICPA.
(b) The award letter further instructs the
claimant to submit proof of payment of medical bills to the DO until notice is
received that the surplus has been absorbed.
(c) In addition, the award letter instructs
the claimant to advise medical providers to submit proof of payment of medical
bills to the DO during this time.
(2) DO Offset Point of Contact (POC) Role. Each District Director appoints a qualified
individual to serve as the POC for all offsets.
The POC monitors surplus situations for both tort settlements and SWC
benefits. Tort settlement and SWC
benefit surpluses are absorbed until the surplus is exhausted and EEOICPA
benefit disbursement can commence. The
POC tabulates the amounts of proofs of payment until they equal or exceed the
surplus amount.
(a) Red Jacketed Files. While the surplus is being absorbed, the DO
offset POC temporarily places the affected case file in a red jacket denoting
that a surplus exists. All case file
contents are maintained in the red jacket throughout the process of surplus depletion.
(i) No further
lump-sum payments are made on any case file contained in a red jacket.
(ii) Once the surplus is completely absorbed
and EEOICPA benefits may commence, the DO offset POC removes the temporary red
jacket and returns the case contents to the original file jacket. Removal of the red jacket signifies that
future lump sum payments may be made on the case.
8. ECMS Coding.
a. State
Workers’ Compensation (SWC) Indicator:
(1)
Case
Create: For the
question “Have you filed any workers’ compensation claims in
connection with the above claimed condition(s)?” the CCC selects the appropriate
option below. If neither box is checked, the CCC leaves the indicator blank.
The following are entered directly from the EE-1 or EE-2:
(a) “Y - SWC Checked Yes on Claim” – The claimant
checked the Yes box on the EE-1/2, indicating that the employee/claimant
filed a state workers’ compensation claim.
(b) “N - SWC Checked No on Claim” – The claimant
checked the No box on the EE-1/2, indicating that the employee/claimant has not
filed a state workers’ compensation claim.
(2) CE/Hearing Rep: During the development process, the
CE/Hearing Rep updates this field to reflect the current status of the employee/claimant’s
state workers’ compensation claim. The State Workers’ Compensation
Indicator must be entered on all Part E cases, even if no state workers’
compensation claim was filed, as noted below.
If the case has been properly created in Part B only (based on medical
condition) and the claimant marks the SWC section of the form, the CE enters
the information into Part B.
(a) “X – Confirmed no SWC claim” – To be used when
the employee/claimant is determined to have not filed a state workers’
compensation claim.
(b) “R – Benefits rec’d; Reduce comp” – To be used
when the employee/claimant is determined to have received benefits from state
workers’ compensation for an accepted Part E medical condition wherein
compensation benefits must be reduced.
(c) “S – SWC; No Reduce comp”
– To be used when the employee/claimant is determined to have state workers’
compensation, but there is no reduction in benefits required. This code is also
used in the case of a denied SWC claim where the employee received no benefits.
(d) “P – SWC Pending” – To be used when the
employee/claimant is determined to have a state workers’ compensation claim
that is currently pending.
(3) “
b.
Condition
Status Field:
(1) In
all claims described in section 7b above, upon issuance of the final
decision the FAB representative will update ECMS in the condition status field
with the “O” (Offset) code for the affected medical condition(s) on the
medical condition screen for the Employee’s claim. The offset will only apply to the Employee’s
claim, even in the event that the Employee died prior to adjudication of the
case, and the survivor is
(a) Offset for a Living Employee: For any medical condition(s) that will be
affected by a surplus, the FAB representative:
(i) Updates the condition status field
for the medical condition(s) from “A” (Accepted, entered by the DO) to “O”
(Offset) on the Employee Medical Condition screen;
(ii) Confirms that the corresponding medical
status effective date is equal to the Employee’s claim filing date; and
(iii) Confirms that the corresponding data
for the medical condition(s) is correct (condition type, ICD-9 code and
diagnosis date).
(b) Offset for a Deceased Employee: For any medical condition(s) that will be affected
by a surplus, the FAB representative:
(i) Confirms the “C3”
claim status code was entered in the Employee’s claim status history
screen, with a status effective date of the date stamp of receipt of
notification of the Employee’s death;
(ii) Adds or updates the actual date of the
Employee’s death in the DOD (Date of Death) field in the Employee Census
Information box of the case screen;
(iii) Updates through the Employee’s claim,
the condition status field for the medical condition(s) to “O” (Offset)
on the Employee Medical Condition screen;
(iv) Updates or confirms that the corresponding medical status
effective date is equal to the Employee’s claim filing date; and
(v) Updates or confirms that the
corresponding data for the medical condition(s) is correct (condition type,
ICD-9
code and diagnosis date).
(2) As an award automatically generates an eligibility
file at the medical bill processing center, the “O” code acts as a “suspend”
code and will not permit medical bill payment until the surplus is absorbed and
the “O” code is removed
from the
condition status screen. During the time
in which the “O” code remains in the medical condition status screen,
the medical bill processing center will return all bills received on a surplus
file to the claimant or the billing provider indicating that the bill can not
be paid at this time due to a surplus.
(3) As noted above, during the time in which a
surplus is in effect, the DO offset point of contact (POC) will be
responsible for tracking surplus depletion.
The FAB award letter will inform the claimant and medical providers to
send all proofs of payment of medical bills to the offset POC.
(a) Should an unpaid bill be submitted to
the offset POC during the surplus period, it will be returned to the claimant
or the billing provider indicating that it can not be paid at that time due to
the existence of a surplus.
(b) During the time in which the surplus is
being monitored for depletion, the POC will tabulate the amounts of the proofs
of payment until they equal or exceed the surplus amount.
(c) Once the proofs of payment monitored by
the offset POC equal the surplus amount, all future medical bills in excess of
the surplus amount will be paid under Part E of the EEOICPA.
(4) Once the surplus is absorbed, the DO
offset POC updates the medical condition(s) of the Employee’s claim in ECMS
to reflect that the offset(s) is complete.
(a) The POC will change the “O”
(Offset) in the status field and replace it with an “A”
(Accepted) code.
(i) If the Employee is deceased, the POC
will confirm that the eligibility end date is equal to the actual date
of the Employee’s death.
(b) The POC then enters a comment into ECMS
case notes indicating that the surplus has been absorbed and that all future
medical bills will be paid under Part E of the EEOICPA.
(5) Once the “A” code is entered into
the Medical Condition Status screen in ECMS, the payment eligibility file will
become active.
(a) The POC confirms that the status
effective date is the Employee’s claim filing date.
(b) Upon
entering the “A” code into ECMS, the offset POC will send a letter
advising the claimant that the surplus is
absorbed.
(i) The letter
will provide the claimant with the address of the medical bill processing
center and instruct him or her to submit all future unpaid medical bills to
that address for review and payment.
(c) At that point, the offset POC will send
a copy of all proofs of payment received during the time in which the surplus
was in force to the medical bill processing center. The medical bill processing center will
maintain a record of these proofs of payment to guard against payment of these
previously rejected or otherwise unprocessed bills.
c. During any period when medical benefits
are not being paid because of the required coordination of Part E benefits
under the EEOICPA, if the CE finds it necessary in the course of normal case management
to obtain a second opinion examination, a referee examination, or a medical
file review, the costs for these procedures will be directly paid by OWCP and
any reasonable expenses incurred by the employee will be reimbursed without
being added to the surplus. Therefore,
the coordination of benefits will not apply to any prior approval medical
conditions in ECMS, coded with a medical condition type of “PA.”
(1) In such situations, the CE will enter a comment into ECMS case notes authorizing the medical bill processing center to pay all bills related to the directed medical examination or medical file review. The CE must follow the procedures outlined in EEOICPA Bulletin No. 03-01 for the processing of bills related to these matters.
9. Contact with a State
Workers’ Compensation Office. Due to privacy and disclosure regulations,
the CE can not disclose any information regarding a claim filed by an employee
or survivor to a State Workers’ Compensation Office unless:
a. CE requires information from the State.
If the CE requires information from a State workers’ compensation office in
order to process a claimant’s EEOICPA claim, the CE can disclose to that State
office only that the claimant filed for benefits under the EEOICPA; no further
details can be provided.
b. The State office requests evidence to
establish that the EEOICPA claimant should not receive benefits from the
state. An example of such evidence might include documentation disclosing
previous EEOICPA payments to the claimant for the same condition filed for
under the state workers’ compensation system. If such information is
requested, the request should be submitted to the National Office for review.
Instructions on how to respond to the State request will be provided after all
information is completely reviewed.
The CE will
not proactively notify any State workers’ compensation office that a payment is
pending under the EEOICPA.