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ISSUANCE OF A PROPERLY WORKED NOTICE OF COMPENSATION DENIAL PERMITS THE DEFENDANT TO FILE A UTILIZATION REVIEW CHALLENGING THE CLAIMANT’S ONGOING MEDICAL AND/OR CHIROPRACTIC TREATMENT

Defendant/employer need not file a medical-only Notice of Compensation Payable in order t o properly acknowledge a claimant’s work-related injuries as being of a medical-only nature. Furthermore, a defendant/employer need not issue a medical-only Notice of Compensation Payable in order to challenge a claimant’s medical or chiropractic treatment pursuant to the Utilization Review.

See: Nathan Armstrong vs. W.C.A.B. (Haines & Kibble House, Inc.), 931 A.2d 827 (Pa.Cmwlth. 2007)

In this particular case, the defendant/employer issued a Notice of Temporary Compensation Payable (TNCP), acknowledging that the claimant sustained a December 7, 2004 work injury in the form of "left distal radius facture; left shoulder tendonitis, bursitis, partial tears, subscap." Thereafter, the defendant/employer issued a timely Notice Stopping Temporary Compensation Payable and a Notice of Compensation Denial (NCD). In the NCD form, the defendant/employer formally acknowledged that an injury took place but also noted that the claimant was not disabled as a result of the injury pursuant to the terms of the Act.

The claimant thereafter filed a Claim Petition alleging that he sustained disabling injuries to his left shoulder, left hip, left wrist, left leg, neck, back and left foot on December 7, 2004. While this petition was pending the defendant/employer subsequently filed a Utilization Review Petition challenging the claimant’s ongoing chiropractic treatments. The defendant prevailed surrounding its Utilization Review Request, and the chiropractic provider thereafter filed a Review Petition with the Bureau that was assigned to the same Workers’ Compensation Judge (WCJ) who was presiding over the Claim Petition. The Claim Petition and the provider’s Petition for Review were not consolidated for hearing purposes.

The Claim Petition was later granted by the WCJ through a Decision dated April 4, 2006. In this Decision, the WCJ found that the claimant sustained compensable injuries to his left wrist, left shoulder, neck and low back. Ongoing total disability benefits were awarded to the claimant. Through a later Decision dated July 6, 2006, the WCJ denied the provider’s Petition for Review finding that the past and ongoing chiropractic treatments were not reasonable or medically-necessary.

The claimant subsequently filed an appeal to the WCAB challenging this Decision on the provider’s Petition for Review. The claimant specifically argued that the defendant/employer was not permitted to seek utilization review of the claimant’s chiropractic treatment while denying compensability for the work injury as a whole. The WCAB determined that the defendant/employer properly requested utilization review. Specifically, the WCAB found that the defendant/employer’s NCD form properly acknowledged that the claimant sustained a work-related injury while also noting its contest of the claimant’s alleged disability status. Under the circumstances, the WCAB affirmed the WCJ’s Decision below.

The Commonwealth Court ultimately upheld both the WCJ and WCAB in its final decision. Specifically, the Armstrong Court found that the filing of a properly-worded Notice of Compensation Denial formally operates to acknowledge a claimant’s work-related injury to the extent that it allows for the filing of a subsequent Utilization Review by a defendant/employer challenging the claimant’s ongoing treatment. The Commonwealth Court concluded that it was not necessary for a defendant/employer to issue a Medical-Only Notice of Compensation Payable through the Bureau in order to both acknowledge a non-disabling injury and also to challenge any future treatment that the claimant may receive for such an injury.

In its Decision, the Commonwealth Court specifically noted that the NCD form created by the Bureau, specifically the LIBC-496 form, clearly gives the defendant an option of acknowledging that a work-related injury occurred that was not disabling within the terms of the Act. The Armstrong Court also found that the Utilization Review can be filed once an injury has been accepted by an employer or after the insurer has commenced payment for medical and/or chiropractic treatments. The Court reasoned that if insurers were unable to use the Utilization Review process, they would be less inclined to voluntarily pay for medical treatment. This in turn, would presumably cause "more litigation." This Court specifically highlighted that the defendant/employer did not issue a Medical-Only Notice of Compensation Payable.

Interestingly, in footnote #7 to the Decision, the Armstrong Court specifically notes that "Had Employer not issued an NTCP, we would agree that the nature of the Claimant’s work injury was not established by the NCD, and therefore, Employer would not be entitled to a request of Utilization Review." Based on a reading of the Court’s Decision, it does not appear that the defendant described the claimant’s work injury on the timely issued NCD form. Rather, it appears that the defendant/employer merely acknowledged that the claimant was not disabled as a result of his work injury on the NCD form.

Practice Pointer: It is always recommended that Medical-Only Notice of Compensation Payable forms be avoided if at all possible. The obvious rationale behind this recommendation is to avoid the issuance of a Bureau form which formally acknowledges a work injury and an indefinite obligation to pay medical benefits. A properly-worded Notice of Compensation Denial form, on the other hand, only potentially obligates a defendant/insurer to pay medical bills for a shorter time period without formal acknowledgment of an injury per se. Under controlling Pennsylvania case law, the defendant/employer is only obligated to pay reasonable, medically-necessary and causally related medical expenses for a period not to exceed three (3) years following payment of the last work-related medical and/or chiropractic expense.

Based on this particular case, it is recommended that the carrier issue a Notice of Compensation Denial, and that great care be exercised in preparing the NCD form. Specifically, the claims examiner must indicate on box #4 that "an injury has occurred" although there would be no wage loss involved. It is recommend that box #6 be checked as well to add additional "Comments/Remarks." Specifically, it is recommended that the recognized injury be described as specifically as possible. It is also recommended that the defendant/employer admit an obligation to pay for reasonable, medically-necessary and causally related health care treatment surrounding the work injury in question subject to Act 44 repricing and procedures. As an added safety precaution, the Claims Examiner should also note again in the "Comments/Remarks" section that the claimant did not sustain any work-related disability, and thus, that no indemnity benefits will be paid to the claimant.

In spite of footnote #7 of this Decision, it is not recommended that a TNCP be issued in all medical-only claims. The crucial distinction in this particular case appears to be the defendant/insurer’s failure to properly describe the claimant’s work injury in the issued NCD form. If the Claims Examiner follows the recommended usage of the NCD form set forth above, it appears that this form will pass muster to allow for challenging medical or chiropractic expenses through the Utilization Review process. It also appears that the issuance of such an NCD form will allow for compliance with the terms and provisions of the Act in order to avoid any future claimant Penalty Petitions.