Statutory Acceptance of Claims and How Best to Avoid this Dreadful Outcome
By: Paul McCoy & Ashton Harrell
We’ve all seen it before. An employee comes to his supervisor and says that he has been injured on the job. After all is said and done, the employer reports the claim to their workers’ compensation carrier.
Based on the information obtained by the employer, the carrier starts paying benefits, both indemnity and medical. They send out TTD checks and make payments to the employee’s medical providers. However, the employee never files a Form 18. And, since a Form 18 wasn’t filed, the carrier elects not to file a form taking a position on compensability. If there’s no claim, then there’s no reason to accept or deny it, right?
Unfortunately, the Workers’ Compensation Act and the Industrial Commission say otherwise. An employer or carrier subject to N.C. Gen. Stat. § 97-18 has a statutory obligation to file an appropriate form with the Industrial Commission upon the initiation of disability compensation, whether that is an acceptance in full or an agreement to pay without prejudice. N.C. Gen. Stat. § 97-18(d), which relates to a Form 63, states, in part, “[t]he initial payment shall be accompanied by a form prescribed by and filed with the Commission.”
If the carrier initiates payment of indemnity benefits and more than 90 days lapse after the employer had notice of the injury, the employer and carrier will be deemed to have statutorily accepted the claim regardless of whether a formal Form 18 or a formal Form 63 is filed. If the carrier later receives information calling the validity of plaintiff’s claim into question, the Commission will likely determine that a Form 61 filed more than 90 days after the injury is inappropriate and order defendants to pay benefits.
As in many cases, the nature and extent of an employee’s workplace injury is sometimes unclear at the outset of a claim. As such, the Commission allows a 90-day period to contest the claim which runs from the date the employer has written or actual notice of the injury. A Form 63 should be filed in this instance if indemnity benefits are initiated so that carriers can comply with N.C. Gen. Stat. § 97-18(d). If, within that 90-day period, facts arise which cause the employer and carrier to question the employee’s claim, the carrier may suspend payment of any compensation by a form prescribed by the Commission (viz., Form 61). If, however, the employer or carrier fails to deny the claim within the 90-day investigatory period, the carrier is deemed to have accepted the claim in full and has lost the power to unilaterally terminate indemnity benefits. At that point, the sole remaining remedy is to file a Form 24 to terminate benefits, assuming plaintiff has not otherwise returned to work.
The impact of this situation stretches beyond a potential Form 24 posture. It is well-settled that an employer’s admission of compensability and the remittance of indemnity benefits gives rise to an ongoing presumption that the employee is entitled to same. Therefore, an employer or carrier that wishes to terminate these payments must proffer evidence that plaintiff can no longer establish ongoing disability. Harrington v. Adams-Robinson Enterprises, 128 N.C. App. 496, 495 S.E.2d 377, rev’d per curiam, 349 N.C. 218, 508 S.E.2d 786 (1998).
Additionally, for conditions that have been accepted by the carrier, whether by a Form 63 after the 90-day period or a Form 60, there is a rebuttable presumption that any future medical treatment is related to the accepted conditions. Parsons v. Pantry, Inc., 126 N.C. App. 540, 485 S.E.2d 867 (1997); Gonzalez v. Tidy Maids, Inc., 239 N.C. App. 469, 768 S.E.2d 886 (2015). The Parsons presumption is a rebuttable presumption, and in an accepted claim (or one deemed to be), the employer has the burden of producing evidence showing the additional treatment sought by the claimant is not directly related to the compensable injury.
Accordingly, initiating indemnity and medical benefits without following the proper statutory procedures can put the carrier in the unwanted position of being deemed to have statutorily accepted a claim by virtue of the initiation of benefits even though a formal claim has not been filed.
PRACTICE TIP: If facts surrounding an employee’s alleged workplace injury raise questions regarding its legitimacy, it is advisable to file a Form 63 upon initiation of any benefits. Additionally, and most importantly, be sure to docket 90 days from the date of notice of the injury for a potential filing of a Form 61, or to request that the Commission allow an additional 30 days to investigate the claim without prejudice to later deny it within the 30-day extension period. Failure to do so will result in an accepted claim. We also recommend retaining counsel or seeking an opinion of counsel regarding the potential for a good-faith denial before the expiration of the 90-day period. As always, should you have any questions regarding issues you encounter in handling claims, please be sure to reach out to the workers’ compensation professionals at Lewis & Roberts, PLLC for additional guidance.