EEOICPA BULLETIN NO.04-08
Subject: Revised procedures for deducting judgment or settlement payments.
Background: The Energy Employees Occupational Illness Compensation Program Act of 2000, as amended (EEOICPA), 42 U.S.C. § 7384 et seq., requires OWCP to “offset” or reduce the amount of EEOICPA benefits it pays to a claimant by the amount of any payment received from either a final judgment or a settlement in a lawsuit (except a lawsuit for workers’ compensation) seeking damages for any covered illness. If the evidence in the file suggests that this type of payment may have been received, the Claims Examiner (CE) designated in each district office to handle these matters must develop this aspect of the case further to determine if EEOICPA benefits that are payable to the claimant(s) must be reduced, and if so, by how much. Attachment 1 is the updated “EEOICPA Benefits Offset Worksheet” and provides step-by-step instructions to assist the designated CE to make these calculations.
All claimants are asked to state if they have received a payment from either a final judgment or a settlement in a lawsuit seeking damages for an occupational illness covered by the EEOICPA. For older claims, this question was asked on the obsolete Form EE/EN-15; for more recent claims, the question is asked on the current version of Forms EE-1 and EE-2. All claimants certify that they have reported these matters to OWCP when they sign the EN-20 to accept payment of EEOICPA benefits.
This Bulletin changes the policy regarding contingency settlements and certain settlements received by an employee’s spouse. Contingency settlements no longer require National Office review, and are automatically assigned a zero dollar value by the CE. Settlements where both the employee and the employee’s spouse sign a release, but all the settlement money is going to the spouse are now treated as separate settlements with the spouse only. Previously a settlement of that nature was considered a joint settlement. This Bulletin now makes it necessary for both the employee and the spouse to receive money in such a situation before the settlement will be considered a joint settlement.
References: 42 U.S.C. § 7385 and 20 C.F.R. § 30.505(b).
Purpose: To provide modified procedures and an updated Worksheet for making the required reduction of EEOICPA benefits.
Applicability: All staff.
1. When the case file suggests that this type of payment has been received by someone (not just the employee or a deceased employee’s survivor), a letter must be sent to the claimant asking for copies of documents in his or her possession relating to the lawsuit, such as any complaint (whether or not it was filed in court), any settlement agreement, and any itemized list of expenses submitted with an attorney’s bill. The claimant should be asked to contact the attorney who brought the lawsuit to obtain copies of these documents if the claimant does not have them. The CE may also need to ask for more evidence or explanations before determining the actual dollar amount of the payment(s) made for the occupational illness covered by the EEOICPA, and to whom the payment(s) was made.
2. Attachment 1 consists of the updated “EEOICPA Benefits Offset Worksheet.” This Worksheet is to be used by the CE to make the calculations necessary to determine how much to reduce or “offset” a claimant’s EEOICPA benefits to reflect a payment received from a final judgment or a settlement in a lawsuit that sought damages for a covered illness. The Worksheet includes detailed instructions on how to compute the different figures that are entered on the Worksheet and used to calculate the amount of any required offset. After completing the Worksheet, the designated CE files it in the claimant’s case record.
3. If the amount of the lump-sum payment to which the claimant is entitled is MORE than the offset, the balance due the claimant is listed on Line 7b of the Worksheet. This is the amount of the lump-sum payment that must be referenced in the recommended decision, together with an explanation of how this figure was calculated.
4. If the lump-sum payment is LESS than the offset, or a claimant awarded beryllium sensitivity monitoring has already received a settlement from another source to cover such monitoring and such settlement must be absorbed prior to any payout under the EEOICPA, the amount of the “surplus” is listed on Line 7c of the Worksheet. Because a “surplus” can only be absorbed from payments due an employee for ongoing medical treatment payable in the future, no further action is required for a survivor claim. If there is a “surplus” to be absorbed in an employee’s 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 (either directly to a medical provider, or to reimburse an employee for ongoing medical treatment) to the remaining surplus until it is exhausted.
5. In situations involving a medical 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. The award letter explains that an offset will be taken from medical benefits under EEOICPA until the surplus has been completely exhausted. The award letter further instructs the claimant to submit proof of payment of medical bills to the district office until notice is received that the surplus is exhausted. Additionally, claimants are instructed to advise medical providers to submit proof of payment of medical bills to the district office during this time.
6. In the case of a medical surplus as described 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 entitled to compensation.
The ECMS process is as follows:
Offset for a Living Employee: For any medical condition(s) that will be affected by a medical surplus, the FAB representative:
a) Updates the condition status field for the medical condition(s) from “A” (Accepted, entered by the district office) to “O” (Offset) on the Employee Medical Condition screen
b) Confirms that the corresponding medical status effective date is equal to the Employee’s claim filing date
c) Confirms that the corresponding data for the medical condition(s) is correct (condition type, ICD-9 code and diagnosis date)
Offset for a Deceased Employee: For any medical condition(s) that will be affected by a medical surplus, the FAB representative:
a) 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
b) 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
c) Updates through the Employee’s claim, the condition status field for the medical condition(s) to “O” (Offset) on the Employee Medical Condition screen
d) Updates or confirms that the corresponding medical status effective date is equal to the Employee’s claim filing date
e) Updates or confirms that the corresponding data for the medical condition(s) is correct (condition type, ICD-9 code and diagnosis date)
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 deleted 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 medical surplus file to the claimant or the billing provider indicating that the bill can not be paid at this time due to a medical surplus.
7. During the time in which a medical surplus is in effect, the district office 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. 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 medical surplus. 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 medical surplus amount. Once the proofs of payment monitored by the offset POC equal the medical surplus amount, all future medical bills in excess of the surplus amount will be paid under the EEOICPA.
8. Once the medical surplus is exhausted, the DO offset POC updates the medical condition(s) of the Employee’s claim in ECMS to reflect that the offset(s) is complete. The POC will change the “O” (Offset) in the status field and replace it with an “A” (Accepted) code. 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. The POC then enters a comment into ECMS case notes indicating that the surplus is exhausted and that all future medical bills will be paid under the EEOICPA. Once the “A” code is entered into the Medical Condition Status screen in ECMS, the payment eligibility file will become active. The POC confirms that the status effective date is the Employee’s claim filing date. Upon entering the “A” code into ECMS, the offset POC will send a letter advising the claimant that the surplus is exhausted. 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. 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 duplicate payment of bills.
9. During any period when medical benefits are not being paid because of the required reduction of EEOICPA benefits, 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 covered employee will be reimbursed without being added to the surplus. Therefore, the offset will not apply to any prior approval medical conditions in ECMS, coded with a medical condition type of “PA.” 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 second opinion. The CE must follow the procedures outlined in EEOICPA Bulletin 03-01 for the processing of bills related to a second opinion as outlined above.
Disposition: Retain until incorporated in the Federal (EEOICPA) Procedure Manual
PETER M. TURCIC
Director, Division of Energy Employees
Occupational Illness Compensation
Distribution List No. 1: Claims Examiners, Supervisory Claims Examiners, Technical Assistants, Customer Service Representatives, Fiscal Officers, FAB District Managers, Operation Chiefs, Hearing Representatives, District Office Mail & File Sections