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Structured Settlements and
Mediation


By Steve Chapman

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Steve Chapman specializes in structured settlements of workers’ compensation cases. In the last issue he debunked myths about Medicare Set-Asides; in this article he discusses the role of the structure settlement specialist in the mediation process.

For more information on structured settlements and the structure broker’s role, see:

Understanding the Basics so you can deal with the Unique Or How to Effectuate Structured Settlements
Presented by Steven F. Chapman at CAAA Winter Convention 2007

Getting Your Cases Settled and Your Cash Flowing
Presented by Steven F. Chapman at CAAA Winter Convention 2007

Structured Settlements: Tips from a Structure Specialist

Structured Settlements: More Tips from a Structure Specialist

Structured Settlements: Why a Structure Specialist Reviews
Subpoenaed Record


Structured Settlements: The Whole Truth about the "Doughnut Hole"
 
 
As Judge Siemers discusses in this issue, mediation is a tool that can be utilized in attempting to resolve catastrophic and complex workers’ compensation cases. The structured settlement specialist can play an important role, both in the time leading up to mediation and during the actual mediation process.

 
The structured settlement specialist can play an important role, both in the time leading up to mediation and during the actual mediation process.
 
One of the most important roles the applicant’s structured settlement specialist can play is to assist in the initiation of the mediation process. All applicant attorneys are familiar with the situation where defense counsel is too busy to focus on the case, is not being responsive to the letters or calls, or is inexperienced in complex and catastrophic cases, etc. The structure specialist for applicant’s counsel can contact a structure specialist who works for the comp carrier in an attempt to explore the possibility of mediation. The defendant’s structure person usually has a direct connection to the claims department and the examiner in particular. This “back door” communication has proven to be quite successful over the years, resulting in a mediation date being set shortly after initial contact between the two structure people.

 
The structure specialist for applicant’s counsel can contact a structure specialist who works for the comp carrier in an attempt to explore the possibility of mediation.
 
Once a mediation date has been set, the structured settlement specialist can begin to work on analyzing the present values of future medical treatment and the indemnity components of the case. One of the most important documents necessary for there to be a meaningful mediation is a current Medicare Set-Aside analysis. If the applicant is on Medicare or if there is a reasonable expectation that the applicant will be entitled to Medicare within the next 30 months and the settlement is over $250,000, then a Medicare Set-Aside will need to be created and eventually submitted to CMS for approval. Without a proposed Medicare Set-Aside available at the mediation, it becomes virtually impossible to determine if the settlement amounts being offered are adequate. The structured settlement specialist can work with the parties to ensure that the MSA is prepared prior to the mediation date. It is important that the necessary releases are executed and “rated ages” are obtained for presentation to the MSA vendor. The rated ages are crucial so that the MSA is prepared with an accurate life expectancy. In addition to the rated age, the structure specialist can help to ensure that the MSA is broken into seed and annual payments allowing for the structure of the MSA in the appropriate circumstances. These responsibilities and others often fall under the domain of the structured settlement specialist. If each side is retaining a structure person of their own, then two individuals can work together to accomplish these necessary tasks.

 
Once a mediation date has been set, the structured settlement specialist can begin to work on analyzing the present values of future medical treatment and the indemnity components of the case.
 
Once the MSA is on the path towards completion, the structured settlement specialist can assist applicant’s counsel in determining the present value of any and all non-Medicare medical components. The primary and most costly of the non-Medicare components are: home care, transportation, home modifications, co-pays and donut holes. The structure specialist can review medical benefit print-outs, discuss current medical treatment with the applicant, and review current medical inflation factors in an attempt to find a fair value for this aspect of the case.

 
The structured settlement specialist can assist applicant’s counsel in determining the present value of any and all non-Medicare medical components.
 
 
In the period before the mediation, I have found it very important for applicant’s structure specialist and the applicant’s attorney to meet with the applicant to explain how the MSA works and how their future medical treatment will be handled through Medicare, etc. At the mediation, there may not be sufficient time to answer all of the questions an applicant may have about the settlement of their future medical treatment, and there will definitely not be ample time for the injured worker to digest all the nuances. By addressing the MSA issues and the workings of Medicare with all decision makers prior to the mediation, the focus of the attorney and the structure specialist can be on obtaining the best settlement possible. In addition to the future medical component, the structure specialist can run various indemnity figures. By providing a range of figures for the indemnity which include best and worst case scenarios, the applicant’s attorney can assist the applicant in making an informed decision, and will be able to assess the adequacy of offers being made.

 
By addressing the MSA issues and the workings of Medicare with all decision makers prior to the mediation, the focus of the attorney and the structure specialist can be on obtaining the best settlement possible.
 
 
The structured settlement specialist can perform a variety of duties at the actual mediation. As offers are made, and the need for counter demands arises, the structure specialist can provide figures for the applicant’s attorney and be able to explain to the defendant and to the mediator how the figures were calculated. It is the ability to keep the process moving forward that allows the mediator to do their job. The whole process can come to a grinding halt unless there are experts present who can recalculate present values as new information is presented during the process. Additionally, there are times in mediation where the mediator senses an impasse and needs to have the structure expert run figures for their own edification, in an effort to keep the negotiation from falling apart. When each side has there own structured settlement expert, the mediator can have the two specialists work together in an effort to find a compromise. The presence of structure people at the mediation provides additional tools for the mediator to utilize all available resources in attempting to find a mutually agreeable settlement. Thus, the structured settlement specialist not only can play a key role in preparing for the mediation but can assist all parties to reach the desired conclusion at the actual mediation.

 
At the mediation, the structure specialist can provide figures for the applicant’s attorney and be able to explain to the defendant and to the mediator how the figures were calculated.
 
Steve Chapman has been a structured settlement specialist for more than 24 years. For the past 17 years, he has specialized in workers’ compensation structured settlements. He has appeared at every Appeals Board throughout California .

Steve Chapman strives to remain current on all issues affecting the settlement of the case, including Medicare set-aside allocations, life care plans, medical cost trends, Long Term Disability, and Social Security issues.

To contact Steve Chapman:
Steven F. Chapman
National Settlement Consultants
12039 Jefferson Blvd.
Culver City, CA 90230
Phone: 800-845-2969
Fax: 310-450-3132
Cell: 310-480-5742
Email: SettleMan@aol.com