Friday, February 27, 2009

Audit of MN Work Comp System Reveals Underpayment by Insurance Companies

A new report released by the Minnesota Office of the Legislative Auditor reveals the results of a recent audit of the Minnesota workers' compensation system. Among other things, the report reveals that insurance companies underpaid work comp claims by over $3 million in each of the last few fiscal years. While those of us who practice workers' compensation frequently see underpayments by insurance companies or questionable denials of claims, unfortunately, errors in calculating benefits even when there is literally no question as to an employee's entitlement to certain benefits occurs more often than it should.

The reported underpayments represent less than 1% of the total amount of indemnity payments made each year. However, the underpayments reported in the audit represented only those underpayments caught when a claim was reviewed by staff at the Department of Labor and Industry. Not every case is audited, and not every error is caught. Moreover, the amount of underpayments does not include instances where there is a dispute over the amount of the benefit the injured workers is entitled to.

Benefit calculation errors often occur when an adjuster is unfamiliar with Minnesota Workers' Compensation rules and calculation methods, when someone makes a careless calculation error, or when an insurance company simply fails to recognize an employee's entitlement to a particular benefit.

The vast majority of underpayments occurred as the result of errors in calculating the amount of permanent partial disability (PPD) benefits owed to an injured worker. The next most common error was in miscalculating the number of weeks of wage loss benefits due to an injured worker. In our practice, errors in determining the amount of permanent partial disability benefits available to an injured worker occur very frequently, even when there is no dispute over the extent of an employee's injuries. Where there is a dispute over the extent of an employee's injuries, an insurer will almost never voluntarily pay the full extent of permanent partial disability benefits potentially available to the employee.

If there is a dispute regarding the extent of the benefits to which you are entitled, it is a good idea to consult with a workers' compensation attorney. Even if there is no dispute regarding your entitlement to benefits, keep in mind that insurance companies frequently make errors in calculating your entitlement to benefits. We're happy to provide a free evaluation of your case to determine if you are entitled to additional benefits. Call us today at 877-746-5680 or click here to send us an email.

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