Attorney Lien Rules Of Note

Attorneys who represent injured workers sometimes file liens with the Department of Labor. This has prompted questions about what effect such a filing has on the employer/carrier.

Attorneys may request for acknowledgement of a lien to the commissioner at any time after the representation commences, if the following steps are taken:  (1) it must be in writing; (2) copied to the claimant; and (3) it must be accompanied by a copy of the written fee agreement executed by the claimant. Vermont Workers’ Compensation Rules, Rule 10.4010.  The Commissioner will acknowledge the lien and mail notice of the claim against future benefits to the employer/carrier and to the claimant.  Vermont Workers’ Compensation Rules, Rule 10.4011.

Once an employer/carrier has been provided notice by the commissioner of an acknowledged attorney’s lien, the carrier must reserve $15,000.00 or 20% of the amount of any permanent disability compensation due, and/or any lump sum payment of retroactive temporary total disability benefits, whichever is less.  Vermont Workers’ Compensation Rules, Rule 10.4012.  The carrier must also notify the claimant’s attorney prior to issuing payment to the claimant. Vermont Workers’ Compensation Rules, Rule 10.4012.  Failure to reserve the amounts from permanent disability compensation due, and/or any lump sum payment of retroactive temporary total disability benefits “shall make the employer/carrier liable, in the commissioner’s discretion, for payment to the attorney of the amount of an acknowledged lien.”  Vermont Workers’ Compensation Rules, Rule 10.4012. 

An attorney representing an injured worker may request enforcement of a lien but it must made prior to the date the benefits subject to the lien are due and payable, and it must be done in a timely fashion so as not to impede disbursement of benefits payments to the injured worker.  Vermont Workers’ Compensation Rules, Rule 10.4020, Rule 10.4021.  The request for enforcement should be in writing and include:  a copy of the fee agreement executed by the claimant; and an itemized statement detailing both the work performed and the hours billed. Vermont Workers’ Compensation Rules, Rule 10.4020. If approved, “the commissioner shall direct the employer/carrier to deduct the amount approved and advance it to the attorney against the end of any permanent disability compensation due, and/or against any lump sum payment of retroactive temporary disability benefits.”  Vermont Workers’ Compensation Rules, Rule 10.4030.

Legislative Changes Include Changes in Third Party Recovery, Recoverable Costs, Investigation of Fraud, Access to Workplace Safety Records and Promulgation of Rules

The economic development bill that was recently passed by the Vermont Legislature contains a number of provisions that will change certain aspects of workers’ compensation claims administration.  A summary of those changes is located at: http://vtcompbulletin.blogspot.com/2014/05/new-laws-place-limits-on-ime-increase.html.

However, there are other changes as well. They include: Reimbursement to the employer/carrier from the claimant’s third party recovery; Recoverable costs at hearing or trial; Investigation of Fraud; Employee access to workplace safety records; and The Commissioner must adopt rules for prescription of opiods and for promoting cost effective, early, return to work programs.  Assuming the Governor signs the legislation, these changes will be effective July 1, 2014.

Reimbursement from Third Party Recovery:

The legislature has changed the way an employer and workers’ compensation insurance carrier is reimbursed for benefits paid under the Workers’ Compensation Act.  If, after deducting expenses of recovery, the recovery is less than the full value of the claim, the reimbursement to the employer shall be limited to that portion of the recovery allocated for damages covered by the Act.  If the Court has not allocated the recovery or the parties have not agreed to an allocation, then either party may request that the Commissioner make an administrative decision as to the allocation. When a request is made, mediation shall be ordered and, if unsuccessful, the Commissioner may make a determination or order arbitration on the matter.  See 21 VSA §624(e).

Recoverable Costs:

The legislature has now included deposition fees, subpoena fees and expert witness fees as recoverable costs for prevailing claimants.  See 21 VSA §678(a). 

Investigation of Fraud:

The statute contains a provision requiring that any claim of fraud first be investigated by the employer, or carrier and shall then be submitted in a written report to the Department.  Once received by the Department the worker shall have 30 days to respond in person or in writing.  The Department shall issue a determination on the allegation to which any party may appeal.  See 21 VSA §663b(a). An employee found to have committed fraud in order to receive workers’ compensation shall be ordered to repay the compensation fraudulently received in addition to any other penalties.  See 21 VSA §663b(b).  The Department has been mandated to study and report by January 2015 on the best practices to detect and deter workers’ compensation fraud.

Employee and Commissioner Access to Workplace Safety Records:

It has been mandated that an employer shall post a notice advising employees of where they may review the employer’s record of workplace safety in accordance with rules to be adopted by the Commissioner.  These records shall be reviewable by the employees and the Commissioner but shall not otherwise be publicly available.  See 21 VSA §691a.

Rules for Prescribing Opiods:

The Legislature, intending to protect employees from the dangers of prescription drug abuse, and the Commissioner, in consultation with other state departments, agencies and boards, has been charged with adopting rules consistent with best practices for prescribing opiods to employees who have suffered work related injuries. The rules will include patient screening, drug screening and claims adjudication.   See 21 VSA §640c(a)(b).

Rules for Cost Effective, Early, Return to Work Programs:

In an attempt to return an injured employee to work as soon as possible within any limitations, the Commissioner shall adopt rules promoting the implementation and development of cost effective, early, return to work programs.  See 21 VSA §641.

It’s Almost July 1st, Remind Me Again: What Do I Have to Do?

As July 1st approaches, licensed Vermont workers' compensation adjusters need to:

Adjust the COLA

Any worker who has been receiving temporary total or temporary partial disability compensation for 26 or more weeks is entitled to a COLA. The new maximum for those injuries arising after June 30, 1986 is $1,166.00.  The new maximum for injuries prior to that date is $777.00.  The minimum in all cases is $389.00. The new Form 28(FY14) and the Form 28A(FY14) are now available and may be downloaded from the Vermont Department of Labor website located at: http://labor.vermont.gov/Default.aspx?tabid=170. 

Determine If Medicaid Has Paid Bills

Insurers must take reasonable steps to discover whether the Department of Vermont Health Access has paid medical bills associated with workers’ compensation claims. 33 V.S.A. §1910 (b)(2). The State of Vermont Human Service Agency has a lien against the insurer for monies paid for medical expenses on behalf of a person who has an injury, illness or disease and the person initiates a claim against an insurer for that injury, illness or disease. The Department has noted that “the claim file should contain documentation (electronic, recorded language, typed or handwritten) to support the insurer's actions.”  The procedure sets forth that reasonable steps to determine the existence of such a lien include: (1) Asking the claimant or claimant’s representative at the beginning of the process by telephone, letter or electronic mail if he or she was a Medicaid recipient at the time of the injury.  If the answer is yes then the insurer should contact the Department of Vermont Health Access and refrain from payment until the lien is determined.  If the answer is no then the insurer must continue to review bills to determine if there is evidence that the Department of Vermont Health Access has paid bills on the claimant’s behalf and if so the insurer should determine the amount of the lien.  If not the insurer may proceed to resolve the claim; (2) An insurer may contact the Department of Vermont Health Access at any time to determine if a lien exists by contacting  the Department at: DVHATPLTeam@state.vt.us; by telephone at 802-879-5646; or by fax at 802-879-5959. The outreach document prepared by the Department of Vermont Health Access is located here: http://dvha.vermont.gov/budget-legislative/insurer-procedure-medicaid-liens.pdf

Vermont Insurers Must Determine Existence of Medicaid Liens Starting July 1, 2013

 

Effective July 1, 2013, insurers shall take reasonable steps to discover whether the Department of Vermont Health Access has paid medical bills associated with workers’ compensation claims. 33 V.S.A. §1910 (b)(2). The legislation provides that the State of Vermont Human Service Agency has a lien against the insurer for monies paid for medical expenses on behalf of a person who has an injury, illness or disease and the person initiates a claim against an insurer for that injury, illness or disease. Additionally the legislation provides that “Payment to the recipient instead of the agency does not discharge the insurer from payment of the agency’s claim.” 33 V.S.A. §1910 (b)(2).  The statute is: http://www.leg.state.vt.us/statutes/fullsection.cfm?Title=33&Chapter=019&Section=01910

 

The Department of Vermont Health Access has written a memorandum on the insurer procedure for determining the existence of Medicaid Liens.  Most importantly the Department has noted that “the claim file should contain documentation (electronic, recorded language, typed or handwritten) to support the insurer's actions.”  The procedure sets forth that reasonable steps to determine the existence of such a lien include: (1) Asking the claimant or claimant’s representative at the beginning of the process by telephone, letter or electronic mail if he or she was a Medicaid recipient at the time of the injury.  If the answer is yes then the insurer should contact the Department of Vermont Health Access and refrain from payment until the lien is determined.  If the answer is no then the insurer must continue to review bills to determine if there is evidence that the Department of Vermont Health Access has paid bills on the claimant’s behalf and if so the insurer should determine the amount of the lien.  If not the insurer may proceed to resolve the claim; (2) An insurer may contact the Department of Vermont Health Access at any time to determine if a lien exists by contacting  the Department at: DVHATPLTeam@state.vt.us; by telephone at 802-879-5646; or by fax at 802-879-5959. The memorandum indicates that the insurer should document the claim files as to when and who was contacted at DVHA.  The memorandum concludes that if a lien exists the insurer must ensure reimbursement out of settlement proceeds by the claimant, the claimant’s representative, the insurer, or by naming Department of Vermont Health Access on monies paid to the claimant.  Then the claim may be closed and documentation of these actions protects the insurer from claims of bad faith or duplicate payment to the Department or the claimant.

The outreach document prepared by the Department of Vermont Health Access is located here: http://dvha.vermont.gov/budget-legislative/insurer-procedure-medicaid-liens.pdf