EEOICPA BULLETIN NO.07-10   

 

Issue Date:  February 21, 2007

___________________________________________________________

 

Effective Date:  February 21, 2007

___________________________________________________________

 

Expiration Date:  February 21, 2008

___________________________________________________________

 

NOTE:  This Bulletin replaces EEOICPA Bulletin No. 05-04, Procedures for deducting payments received for final judgments or settlements from EEOICPA benefits under Part B and/or new Part E.

 

Subject:  Procedures for deducting payments received for final judgments or settlements from EEOICPA benefits under Parts B and/or Part E.

 

Background:  Since Part E was added to the Energy Employees Occupational Illness Compensation Program Act (EEOICPA) on October 28, 2004, Claims Examiners (CEs) have experienced an upsurge in the number and variety of cases in which they must determine whether and how much to offset an award of EEOICPA benefits to reflect the amount of a settlement or final judgment payment for injuries resulting from exposure to the same toxic substance for which EEOICPA benefits are payable.  A number of important policy decisions involving offsets have been made to address common scenarios arising from multiple-defendant litigation with multiple settlement payments over time (usually involving asbestos exposure), earlier offsets and surpluses, and the satisfaction of workers’ compensation liens out of a settlement or final judgment payment.

 

Attachment 1 is the modified “EEOICPA Part B/E Benefits Offset Worksheet,” which has been updated to accommodate these policy decisions.  The accompanying step-by-step instructions for filling out the Worksheet have also been substantially rewritten and expanded.

 

References:  42 U.S.C. § 7385 and 20 C.F.R. § 30.505(b).

 

 

Purpose:  To provide updated procedures and a modified Worksheet for making the required reduction of EEOICPA benefits.

 

Applicability:  All staff.

 

Actions:

 

1.  When evidence in the case file suggests that a payment for injuries due to an exposure to the same toxic substance for which EEOICPA benefits are payable (whether alone or in combination with other non-occupational exposures) has been received by any person (it does not matter who) as a result of a tort suit (whether or not the suit was ever actually filed in a court), the CE must send a development letter to the claimant asking for copies of all documents in his or her possession relating to the suit, such as the complaint (whether or not it was ever filed in court), any settlement agreement(s), and any itemized lists of expenses submitted with an attorney’s bill.  The claimant should be asked to contact the attorney who filed the suit to obtain copies of these documents if the claimant does not have them.  The CE must obtain enough information to be able to determine the dollar amount of the payment(s), and when and to whom the payment(s) was paid. While the complaint must be obtained if the claimant disputes the necessity of the offset, the CE may proceed with the offset without the complaint if the claimant does not dispute that offset is necessary, and the CE has sufficient evidence to fill out the Worksheet. The CE may administratively close the file if no document relating to the suit is received after two development letters are issued. The development letter must advise the claimant of this action prior to the file being administratively closed. The status code in ECMS must be updated with the “C2” (Administrative Closure) code.

 

2.  Attachment 1 consists of the revised “EEOICPA Part B/E Benefits Offset Worksheet.”  After receipt of all relevant documents, the CE consults the instructions accompanying the Worksheet to determine whether an offset is needed, and if it is, selects the proper method to calculate the amount by which the claimant’s lump-sum or medical benefits must be “offset” (reduced).  The Worksheet includes detailed instructions on how to compute the different figures that the CE uses to calculate the amount of any offset.  After completing the Worksheet, the CE staples it to the inside left cover of the case file so the Final Adjudication Branch (FAB) reviewer can find it easily.

 

3.  If the amount of EEOICPA benefits to which the claimant is currently entitled is MORE than the offset, the balance due the claimant will be the amount appearing on Line 7b of the Worksheet.  This is the amount of EEOICPA benefits that must be referenced in the recommended decision, together with an explanation of how this amount was calculated.

 

4.  If the amount of EEOICPA benefits currently payable is LESS than the offset, the amount of the “surplus” payment still to be offset will appear on Line 7c of the Worksheet.  Since additional EEOICPA benefits must first become payable before a surplus payment can be absorbed, no further action to offset the surplus payment is required for a survivor’s Part B claim.  If there is a surplus payment to be absorbed in an employee’s Part B 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 surplus until it is absorbed.  If there is a surplus to be absorbed in an employee’s Part E claim, this same explanation must appear in the recommended decision, PLUS an explanation that OWCP will also not pay any benefits for wage-loss and/or impairment that may be due in the future until the surplus is absorbed.  If there is a surplus to be absorbed in a survivor’s Part E claim and further monetary  benefits may be payable based on the deceased employee’s calendar years of qualifying wage-loss, this must be noted in the recommended decision, along with an explanation that OWCP will absorb the remaining surplus out of those benefits if and when they become payable. All future EEOICPA benefit payments for the same exposure(s) that formed the basis for the tort suit are subject to the offset to absorb a surplus.

 

5.  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. The award letter explains that the surplus will be absorbed out of medical benefits payable under EEOICPA (and lump-sum payments due in the future in Part E claims).  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 has been absorbed.  In addition, claimants are instructed to advise medical providers to submit proof of payment of medical bills to the district office during this time.

 

6.  In all claims described in Item 5 above, upon issuance of the final decision the FAB reviewer 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 for Part B and Part E claims is as follows:

 

Offset for a Living Employee:  For any medical condition(s) that will be affected by a surplus, the FAB reviewer:

 

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; and

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 surplus, the FAB reviewer:

 

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); and

f) Updates or confirms that the employee’s date of death is entered in the eligibility end date field.

 

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 the pertinent 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.

 

7.  During the time in which a 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 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 surplus amount. 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 EEOICPA.

 

8.  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.  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 has been absorbed and that all future medical bills will be paid under 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 absorbed.  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 payment of these previously rejected or otherwise unprocessed 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 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 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.

 

Disposition: Retain until incorporated in the Federal

(EEOICPA) Procedure Manual.

 

 

 

 

PETER M. TURCIC

Director, Division of Energy Employees

Occupational Illness Compensation

 

 

Attachment 1

 

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