Claims Adjudication Tune-Up (CAT-U)
June 2025 Edition
Welcome to Self-Insurance’s (SI) Claims Adjudication Tune-Up (CAT-U) newsletter. This is where we share best practices and information, as well as highlight opportunities for improvement. The focus of this month’s CAT-U is Overpayments.
Revised Code of Washington (RCW) 51.32.240 – Erroneous payments
(1)(a) Whenever any payment of benefits under this title is made because of clerical error, mistake of identity, innocent misrepresentation by or on behalf of the recipient thereof mistakenly acted upon, or any other circumstance of a similar nature… the recipient thereof shall repay it and recoupment may be made from any future payments due to the recipient on any claim with the state fund or self-insurer, as the case may be. The department or self-insurer, as the case may be, must make claim for such repayment or
recoupment within one year of the making of any such payment or it will be deemed any claim therefor has been waived.
(3) Whenever the department issues an order rejecting a claim for benefits paid pursuant to RCW 51.32.190 or 51.32.210, after payment for temporary disability benefits has been paid by a self-insurer pursuant to RCW 51.32.190(3) or by the department pursuant to RCW 51.32.210, the recipient thereof shall repay such benefits and recoupment may be made from any future payments due to the recipient on any claim with the state fund or self-insurer, as the case may be....
What this means:
Subsection (1)(a) gives self-insured employers the authority to assess an overpayment up to one year after a payment is made, and then to collect that overpayment.
When calculating the overpayment period, the date of the actual payment is what counts, not the benefit dates the check covers.
For example, if the employer issued a time-loss payment on 05-30-2025 to cover time-loss from 04-15-2025 through 04-30-2025, an overpayment could be collected for that period anytime until 05-30-2026. The exception to this is benefits paid on a denied claim. Such provisional benefits can be recovered without a one-year limitation.
Subsection (3) says overpayments may be collected from future benefits including time-loss, loss of earning power (LEP), or permanent partial disability (PPD) payments.
If deductions are made, they should typically be no more than 25% of the benefit, and should be clearly explained to the worker in an accompanying explanation of payment.
The employer’s ability under this RCW to go back up to one year and collect overpayments requires timely notification to the worker of the overpayment.
Washington Administrative Code (WAC) 296-15-425says that a self-insured employer must notify the worker using an L&I-developed template within five days of knowledge of the overpayment.
The “Assessment of Overpayment” template (F207-222-000) can be found on L&I’s website, and is available in multiple languages. The template has all of the information needed to explain the overpayment to the worker:
- Start and end dates of the overpaid benefit period.
- The total amount of the overpayment.
- Citation of RCW 51.32.240 as the authority for the employer’s right to assess overpayments.
- L&I contact information if the worker disputes the notification.
The template also has a mandatory “free text” box. This must be filled out with an explanation of how the overpayment arose. For example:
“Activity Prescription form was received on 05-30-2025
releasing you to return to full duty effective 04-01-2025.
Time-loss payments were issued after 04-01-2025.”
“Wages were recalculated based on new information
received from your employer. This resulted in an
overpayment of benefits from 04-01-2025 through 05-
01-2025.”
“Time-loss benefits were paid while investigating
whether your claim was allowable. Since the claim was
denied, you were not entitled to those provisional
benefits.”
News You Can Use:
Overpayments can result from miscommunication between a self-insured employer and third-party administrator regarding a worker’s payroll resulting in a revision in initial date of injury wage calculations. Be clear in all requests for wage information.
Additionally, use the Lump Sum Matrix for Calculation of Date of Injury Wages to help determine if a lump sum payment (a payment not calculated by pay rate and hours) should be included as other compensation, a bonus, or not included in wages at all.
An overpayment order is not required to begin collecting reimbursement under the RCW and WAC above. They are issued when the claim is either closed or about to close.
L&I will likely withdraw the request if an overpayment request is received on an open claim without a request for denial or closure. A letter from L&I will explain that without a dispute from the worker, the order cannot be issued. This is consistent with the WAC above, which says that the department will not issue orders without a dispute from the worker.
Trainer Trivia:
Did you know that June was not always the six month of the year?
June used to be the fourth month of the year out of 10 months total. It had only 29 days until it was changed by Julius Caesar in 46 BC to 12 months. He added January and February with a 51-day gap at the end of the year.
Additional changes were made by Pope Gregory in 1582, resulting in the calendar we use today.
More reading/resources:
A new Overpayment Request Form has been developed to request an overpayment order from L&I. Its use is required starting July 1, 2025.
The new form includes spaces to state the start and end dates of the overpayment period, as well any amounts already recovered from the worker. If multiple periods were overpaid, list them in the ‘Provide specifics’ section. Also new is a checklist for wage order documentation on the back of the form. This is needed if the overpayment was the result of a wage miscalculation.
Self-Insurance Claim Adjudication Guidelines, Miscellaneous Chapter, “Overpayments” section starting on page 19.
Self-Insurance 2025 training: Take advantage of free training from L&I to learn new information and brush up on existing skills.
These are great opportunities to earn continuing education credits to maintain your Certified Claims Administrator license! Check out What’s New in Self-Insurance, and sign up for our email bulletins for registration reminders.
Reminders/tips from the SI teams:
Remember to send supporting documentation with your overpayment request. This includes:
- Payment ledger or ledgers covering all periods of overpayment requested.
- Loss of Earning Power (LEP) calculation worksheets if appropriate.
- A copy of the Overpayment Assessment Template sent to worker.
- Any relevant SIF-5A Date of Injury Wage Calculation forms.
- Any other supporting documentation (for example, an Activity Prescription Form releasing the worker for work).
For more information, email: SITrainerQuestions@lni.wa.gov
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