It sounds like you have already received either a Findings and Award, or an Award based on Stipulations with Request for Award. You prior attorney may have taken part in that activity. If this is the case, then it sounds like you have already been paid for your permanent disability. If you have not been paid for your permanent disability, then $35,000 may be far from appropriate.
Another important consideration is whether you are getting social security disability benefits. If you are receiving those benefits, you are Medicare eligible. You may even be already on Medicare. In such a case, it should be an easy matter to have the claims administrator get a Medicare Set-Aside (MSA) analysis of your case. That MSA should then be submitted to CMS (Medicare) for approval. This approach will likely give you the most protection in terms of a payment that is reasonably sufficient to buy out your right to a life-time of medical access, including the total knee replacement, related physical therapy and medications, as well as follow up care. Also, depending on your age, you may need yet a second total knee replacement, and possible care to the other knee as a consequence of your presently injured knee. This may include a total knee replacement of the other knee.
The $35,000 offer sounds far too low. It is hardly sufficient to pay just for one total knee replacement and the related physical therapy. You can confirm that with your present orthopedic treating physician in your case. You may well be better served to either get your original attorney back on the case for an appropriate analysis of the value of settling your case, or if he or she is not available, you should retain another workers' compensation attorney (preferably a certified specialist). The State Bar website can help you identify a certified specialist in workers' compensation law near you. Good luck.
Any person who makes or causes to be made any knowingly false or fraudeulent material statement or material represetation for the purpose of objtaining or denying wokres' compensation benefits or payments is guilty of a felony.
Negotiating a buy-out of your medical care is as much art as it is science. Experience in negotiating this type of thing helps. You might start by talking to your doctor about the cost of the surgery, physicians, physical therapy, hospital, medications, etc. Cost of a re-do if anything goes wrong, etc. How many times over your life-time he expects to have to replace the knee. Figure in present cost of money and that will help give you a starting point.
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I agree with Mr. Borah's answer. Your question states, "I no longer had an attorney, so I just disregarded the offer." Iwill only add that the attorney who handled your stipulated award would probably be happey to assist you in the C&R negotiations too.