Time Constraints and Penalty for Late Payment
Previously, the Florida Workers' Compensation Act required that carriers mail the first payment of compensation within 14 days after they have knowledge of the disability or within 14 days after receipt of a Petition for Benefits. The difficulty in this standard was in “whose” knowledge started the clock ticking…the employer’s or the carriers. This controversy, as silly as it sounds, caused all sorts of problems that resulted in litigation and delayed payment of benefits.
Beginning October 1, 2003, however, the payment deadline changes, depending on the nature of the disability. When disability is immediate and continuous for eight calendar days or more after the injury, the first payment is due within 14 calendar days after the employer receives notification of the injury. If the disability is delayed or nonconsecutive during the first seven days after the injury, the first installment of compensation is due on the sixth day after the first eight calendar days of disability.
Factors to Consider – The Strength of a Case
In a questionable case, the strength, and readiness, of one’s defense is critical to how an adjuster should handle the matter. When the basis for defense is rock-solid (i.e. witnesses are lined up, conflicts in medical evidence are resolved, and/or the injured worker is caught in a lie), then defending a case makes sense and is often the right thing to do. Yet this situation is most rare.
More often than not, litigation outcomes depend on credibility…the credibility of the injured worker, the credibility of the physician, the credibility of the employer or witnesses, and quite often, the credibility of the adjuster. Credibility is all about who the judge will believe. When uncertainties exist, an amicable compromise settlement is in everyone's best interest. Remember that both sides share doubt about the final outcome of such a controversy.
Begin Benefits – Continue to Investigate – Time to Respond
The carrier has 14 days after disability begins (or, more accurately, knowledge thereof) to issue the first indemnity payment. Additionally, carriers have 14 days to respond to a Petition for Benefits. Unfortunately, “knowledge” of disability by a workers’ supervisor, foreman, or the company’s Human Resources/Personnel Department is imputed to the carrier; thus, carriers rarely have a full two weeks to conduct a complete investigation because of delayed reporting by the employer (or any one of these “other” co-employees). Hasty denials, however, simply because you have not had enough time to adequately investigate a claim, too often results in large awards of attorneys' fees and unnecessary delays in providing benefits to injured workers. If the case involves a serious injury and large exposure, the more reasonable it is that the injured worker receives a full and unhurried investigation. In such cases, smart adjusters will are wise to begin benefits timely, but continue the investigation until all issues in question are resolved. This is especially true after January 1, 1994. Now, the parties may settle claims under a controverted basis even if the employer or carrier has provided benefits [§ 440.20(11)(a), Fla. Stat. (1994)].
120-Day Rule – Applying the Rule to Specific Claims
The court has held that this 120-day rule applies to any claim that may arise in a case, and not just to the initial claim following the injury. For example, Douglas Snyder injured his head, neck and back in a motor vehicle accident. Later he contracted hepatitis C and claim for medical treatment was made for this condition. Unfortunately, in a report dated 3/23/09, his doctor said that he could not determine whether Snyder contracted the disease from tattoos, prior blood contact, prior hepatitis C contact, or lying with open wounds after the accident in mud that might have been infected. The carrier paid some of the bills, but then stopped payment. It did not issue a denial or send a 120-day letter. It just stopped paying. Snyder filed a petition for benefits on 7/22/98 seeking a determination of compensability for the hepatitis C. The judge held that the claim was automatically compensable because the carrier had failed to deny the claim within 120 days after it first paid for treatment. The 1st DCA agreed.
The court held that § 440.20(4), Fla. Stat. (i.e. the 120-Day Rule) is not limited to just the initial claim, but applies to all claims that may arise following the accident. When the carrier becomes aware that a claimant has medical needs, said the court, it should either pay for them, pay and investigate under § 440.20(4), Fla. Stat., or deny compensability. By not denying compensability within 120 days from its initial provision of benefits, the carrier accepted compensability by operation of law [see Bynum Transp., Inc. v. Snyder, 765 So. 2d 752, 753-754 (Fla. 1st DCA 2000)].
Adjuster Ethics – General Principles
Adjusters should follow these guiding principles in their day-to-day claim handling:
1. Approach investigations, adjustments, and settlements with an unprejudiced and open mind.
2. Make truthful and unbiased reports of facts as they are found after making a complete investigation.
3. Handle every case with honesty and integrity, be fair and impartial, and accept no compensation except that to which you are legally entitled.
4. Always act with dispatch and due diligence to achieve a proper disposition of the claim.
Complete candor and full disclosure are, perhaps, the greatest defenses to ethics complaints. When an adjuster denies a benefit, he or she should fully explain the reason to the injured worker. Will most workers understand when the adjuster denies a claim because of the operation of some section of the Workers' Compensation Act? Adjusters should give the injured worker a chance to object or rebut. This will in turn give the adjuster a chance to correct any mistakes or misunderstandings. If the adjuster makes a full and fair disclosure and the injured worker does not object or rebut, there is likely an estoppel issue raised. If the injured worker has information that would help the carrier, that knowledge should put a duty on the injured worker or the injured worker's attorney to let the carrier know about such information.
© Copyright 2009 Matthew Bender & Company, Inc., a member of the LexisNexis Group. All rights reserved. This blog was excerpted from Dubreuil's Florida Workers' Compensation Handbook, 2009 Edition (to be published August 2009), Ch. 10, To Pay or Not to Pay and Adjuster Ethics (2009 updates by WCCP).