In the following example, the commutation order does not provide a specified rate
based on the commuted value. Therefore, the proration rate is derived using the remaining
timeframe and commutation amount. The commuted WC amount (and offset computation)
are spread out over the entire period specified.
EXAMPLE:
The NH receives a letter dated 09/25/2005 and it shows the following:

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Date of Maximum Medical Improvement: 04/24/2005

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Period of Award: 04/24/2005 to 04/14/2009

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Number of Weeks of Compensation: 207.36

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Weekly Compensation Rate = $282.28

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Effective Date of Pay Rate: 11/01/2003

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After cost of living adjustments (COLAs), weekly compensation: $289.00

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First payment and the period covered: $5,614.86 for the period 04/24/2005 through
09/06/2005

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Continuing Payment every four weeks: $1156
The letter also states the NH has the option to an LS of $49,995.67 in payment of
compensation representing a commuted value of future payments due for the remainder
of the award payable from 10/05/2005 to 04/14/2009. If the NH did not opt for the
commuted value, the remaining value of his original WC award is $53,156.18, as follows:
$59,927.04 = $289.00 x 207.36 weeks
 5,614.86 (paid 04/24/05 through 09/06/2005)
 $1,156.00 (paid 09/07/05 through 10/04/2005)
$53,156.18 (balance to be paid by 04/14/2009)
The difference between the $53,156.18 remaining balance of the original WC settlement
amount and the commuted value of $49,995.67 for future payments is $3,160.51.
This commutation award specifies a total commuted amount and the timeframe it represents,
but there is no rate specified in the commutation order. Therefore, we must prorate
the commuted value ($49,995.67) over the entire period remaining in the award (10/05/05
to 04/14/09) to determine the appropriate periodic rate.
NOTE: The alternative of using the previous weekly periodic rate of $289.00 against the
commuted figure would cause the proration to end approximately 11 weeks earlier than
the 04/14/2009 end date specified and, therefore, would not conform to the specified
period of the award.
The following calculations are required to determine the weekly rate of the commuted
$49,995.67 amount:

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Determine the number of days from 10/05/2005 through 04/14/2009 (1288)

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Divide the commuted value of $49,995.67 by the number of days remaining in the specified
period (compute to 3 decimal places and round to the nearest penny):

$49,995.67 divided by 1288 = $38.817 daily rate

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Multiply the resulting figure by 7 to determine the weekly rate: $38.817 X 7 = $271.719
rounded to the nearest penny = $271.72

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$271.72 is the weekly rate used to compute offset for $49995.67 over the 10/05/200504/14/2009
timeframe specified in the commutation award.