September 27, 2007

Commonwealth Court
Validates Use of NCD
in “Medical Only” Claims

Suffering the slings and arrows of outrageous compensation, with apologies to Hamlet, the Commonwealth Court, in an all-too-infrequent fit of appellate sanity, validated the statutory and precendential formalities of utilizing a Notice of Compensation Denial for purposes of admitting the occurrence of a “medical only” injury.

The Court did not fall prey to the administrative temptation to be teased and tantalized by the bitter-tasting forbidden fruit of the “medical only” Notice of Compensation Payable, the utilization of which, in contravention of original sin, actually infuses an injury with claim immortality, subject, of course, to compensation liability for the injury expiring with an injured Claimant’s death by natural causes.

Biblical and Shakespearean references aside, the Courts, and, for that matter, the Bureau had been in a state of perpetual flux as to the “statutory” obligation of an employer/insurer to formally recognize, with the filing of some Bureau-approved form, the occurrence of a work-related injury which requires medical treatment but does not result in immediate disability or loss of wages, these being synonymous under the Pennsylvania Workers’ Compensation Act as a "medical only" claim notwithstanding the Commonwealth Court's landmark 1999 decision in Lemanski, a ruling that has spawned several stillborn progeny in a line of cases, known to all, but understood by few, including what we, bemused compensation practitioners that we are, generally think of as the oracle of compensation wisdom, being the Bureau itself.

Historically, neither the Act nor the Bureau ever required the filing of a Bureau-approved form in order to recognize the occurrence of a “medical only” workers’ compensation injury that did not result in actual lost time from work, meaning time that would obligate the employer or insurer to pay indemnity compensation benefits to an injured employee. That fact seems true, in the absence of any statutory or regulatory provision requiring the filing of a Bureau form for the classic “medical only” injury claim.

In 1999, that practice was neatly turned on his head by Commonwealth Court in its landmark Lemanski decision, which questioned an employer’s failure to issue and to file any Bureau form in a “medical only” claim.

In 1999, that practice, honored both by history and legislative silence, was neatly turned on its head by Commonwealth Court in its landmark Lemanski decision, which questioned an employer’s failure to issue and to file any Bureau form in a “medical only” claim, where the injured employee was eventually forced to file a petition, in the course of which the Claimant had to present evidence proving the occurrence and causation of an injury that the employer seemingly knew was work-related. The Commonwealth Court held that the injured employee should not have been forced to litigate the petition, and that the injury should have been recognized by the employer in order to allow the injured employee to seek reasonable, necessary and casually related medical treatment.

Eight years later, most compensation practitioners regard Lemanski as the aberrant step child of a “deer in the head lights” failure to recognize what is otherwise blindingly all-too-obvious, being that the Lemanski decision could have been short-circuited through a stipulated acceptance of the injury, and a disclaimer that the injury resulted in disability. Sure enough, the employer/insurer in Lemanski held fast to a literal interpretation of Act and the Bureau Regulations, with the Lemanski Court apparently reading into the Act what had never been there before, being that an employer/insurer was required to either issue an NCP or NCD within 21 days of the Notice of an Injury, irrespective of whether the injury resulted in disability.

Lemanski spawned an equally confusing ruling in Waldameer Park, with the general preamble being that a Bureau form had to be issued for every reported work injury, irrespective of whether the work injury resulted in disability, and notwithstanding the Bureau lacking the administrative capabilities of filing the forms which were now being required to be filed by the Commonwealth Court. Without any grounding in either statutory or regulatory authority, the Bureau, in a timelessly ineffective overreaction, developed a “medical only” Notice of Compensation Payable, with the new form intended to fill the administrative form void created by the bright line stretching from Lemanski to Waldameer Park.

It was, and remains, our opinion that the “medical only” NCP, devised by the Bureau, in the choppy wake of Waldameer Park, was/is defective on its face, as it has never been authorized by statute or regulation, and it has, therefore, no direct or indirect reference in either the Act or the Bureau’s Regulations, with the form, when filed, becoming an open award, under which the employer/insurer remains indefinitely liable for medical treatment and expenses. There is seemingly no advantage to the employer/insurer’s utilization of the form, other than a grateful wink from the Bureau’s Sauron-like eye, and, to be fair, the eternal gratitude of injured employees saved from the time, inconvenience, and expense of retaining Claimant compensation attorneys to litigate Lemanski petitions for medical benefits.

If you are still with us, we never liked, and never will, the Bureau’s not-ready-for-prime-time “medical only” NCP, which launched into the compensation matrix in 2005.

We have long recommended using a Notice of Compensation Denial, with the occurrence of an injury being admitted, the injury being diagnostically described, and with the NCD indicating that reasonable, necessary and related medical expenses would be paid.

Awash in the debate over the form’s practicality and inviolate liability, we have long recommended against its utilization, championing instead the utilization of a Notice of Compensation Denial, with the occurrence of an injury being admitted, the injury being diagnostically described, and with the NCD indicating that reasonable, necessary and related medical expenses would be paid for treatment of the work injury, with there being no compensable disability, thereby satisfying the overly-literal, or ab literati, string of Commonwealth Court decisions in Lemanski, and Waldameer Park.

Neatly severing its reliance on string theory, the Commonwealth Court has finally, eight years into this masquerade ball of “who’s on first,” ruled in Nathan Armstrong v. WCAB (8/27/07) that an employer/insurer can utilize an NCD to acknowledge and accept a work-related injury, the issuance of which would further permit the employer/insurer to seek utilization review as to the reasonableness and necessity of medical treatment and care.

In Armstrong, the Claimant injured his left arm and left shoulder in December of 2004. The Claimant’s injuries were then described on a Notice of Temporary Compensation Payable that was issued by the employer’s insurer.

The insurer then issued a Notice Stopping Temporary Compensation, and a Notice of Compensation Denial, under which it was admitted that the Claimant had sustained a work-related injury, but that there was no compensable disability related to the injury. Seduced by the dark forces of compensationitis, the Claimant filed a Claim Petition, alleging that his injuries were disabling, and that he was entitled to workers’ compensation benefits.

During the pendency of the Claim Petition Litigation, the employer/insurer filed a Utilization Review Request, challenging the reasonableness and necessity of chiropractic treatments being provided to the Claimant. The URO resulted in a determination that the treatment was not reasonable or necessary, as the providers’ documentation failed to demonstrate any “sustained improvement” with a “continuation of treatment.” Not surprisingly, that determination was challenged by the provider.

For whatever reason, the Claim and Review Petitions were never consolidated, with the workers’ compensation judge granting the Claim Petition, finding that the Claimant had proven that he was disabled by his injury, although the Review Petition was “denied” against the provider, irrespective of the correct denotation as to that ruling being that the employer/insurer, as moving parties, were successful in securing an affirmance of their initial Utilization Review Request Determination.

Challenging the “denial” of the Utilization Review, the Claimant appealed the judge’s decision to the Appeal Board, with the Board concluding that the employer was entitled to seek Utilization Review of the Claimant’s medical treatment, as the employer had admitted the occurrence of the injury, notwithstanding its disability denial.

Appealing the Appeal Board, the Claimant petitioned the Commonwealth Court, with the Claimant’s preemptive strike being his argument that the filing of an NCD did not operate to acknowledge the occurrence of work-related injuries, with the Claimant secondarily arguing that the employer was precluded from seeking Utilization Review since he had not filed a “medical only” NCP.

The Court's breakthrough holding seems, on its face, in conflict with Waldameer Park,

The Armstrong Court held that “an employer can properly file an NCD when, although it acknowledges that a work-related injury has occurred, there is a dispute regarding the Claimant’s disability,” citing to its’ Johnstown Housing Authority and Darral decisions. This a breakthrough holding that seems, on its face, in conflict with Waldameer Park, in which the Commonwealth Court had held that employers/insurers had to use an NCP for “medical only” claims, resulting in the Bureau promulgating the “medical only” NCP form.

Under Armstrong, an employer that is uncertain as to whether a claim is compensable, or is uncertain of the extent of its liability under the Act, can initiate temporary compensation payments, without prejudice and without admitting liability, by issuing an NTCP. Issuing the NTCP formally “acknowledges” the work-related injury, although it does not admit compensation liability for the injury, either in terms of ongoing indemnity or medical compensation benefits, absent the NTCP “converting” to an NCP, in the event that the employer/insurer either fails, or chooses not to, issue both a Notice Stopping Temporary Compensation (NSTC) and an NCD.

In Armstrong, the employer issued both a NSTC and an NCD, with the length and extent of disability being disputed under the NCD.

Since the Armstrong Court held that the employer’s issuance of the NCD “acknowledged” the work injury, the Court further held, in reliance upon Section 127.405 of the Bureau’s Regulations, that the employer was permitted to request Utilization Review, as the employer had acknowledged and “described” the work injury. Since the NCD provided a full description of the work injury, which description had not been available to the Court in its prior rulings in Lemanski, Orenich, and Waldameer Park, the Court found that the employer’s procedure in Armstrong was “in accord with the Act,” as it had “served to put Claimant on notice” of the employer’s acceptance of the work injury, thereby satisfying the concerns raised in the Orenich decision. For that reason, the Armstrong Court held that the employer was entitled to seek Utilization Review.

Armstrong Court has described its NTCP as being the formal predicate acknowledgement by the employer of the work-related injury.

A footnote by the Court at the end of the Armstrong decision requires some brief discussion. The Court indicated: “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 the employer would not be entitled to a request of Utilization Review.”

Does that footnote mean that the procedure adopted by the Armstrong Court would be eviscerated if the NCD is not married to an NTCP? The Armstrong Court has described its NTCP as being the formal predicate acknowledgement by the employer of the work-related injury, begging the question that if an NTCP is not used, because the claim is truly a “medical only”, with no temporary compensation benefits paid, and no NTCP issued, can an NCD, flying solo, accomplish the same end result, being the formal “acknowledgement,” sufficient to provide “notice” to the Claimant with a description of injury adequate enough to obviate the need for litigation over the occurrence and description of the injury.

In our view, a properly-drafted NCD would nullify any concerns raised by the Orenich Court, and could, under Armstrong be used as the formal “notice” under which the injury is “acknowledged."

In our view, there can be but one answer to that question, being that a properly-drafted NCD would nullify any concerns raised by the Orenich Court, and could, under Armstrong, be utilized as the formal “notice” under which the injury is “acknowledged” with a description of injury that is both clear and factual, thereby “accepting liability for the medical component of the work injury.”

In our view, the NCD is a completely appropriate Bureau form for “acknowledging” a “medical only” injury, so long as the NCD admits and “acknowledges” the injury as being work-related, with there being a clear and full description of the injury.

Practical Tips

Since Lemanski, we continue to recommend that “medical only” injuries can be “acknowledged” with the issuance of a NCD, so long as five facts are admitted in the NCD.

It is also recommended that the employer set out in the Remarks section on the NCD that the injury has not produced work-related disability.

1. The NCD must indicate, with box number 4 being checked, that “an injury has occurred”, although there is no compensable wage loss requiring the payment of disability compensation benefits.
   
   After checking box number 4, box number 6 should be checked, which is the Remarks box on the NCD.
   
   Four facts must then be “declared” in the Comment/Remarks section under box number 6.
2. It must be admitted that an injury occurred, with the form itself containing the date of injury. This admission is critical, as it admits liability for the “medical component” of the claim.
3. Next, it is also critical that the injury be clearly and fully described, utilizing an appropriate diagnosis, or diagnoses, with reliance on generic body parts, as the described work injury, ALWAYS being avoided, as generic body part descriptions are overly expansive, ambiguous, and are an open invitation to a full course of future litigation.
   
   If the injury involves the “low back”, it is then best to use the specific diagnosis, which, at that point, would have been given by a panel provider, with a lumbar sprain and strain being a clear and full description of a work-related injury, in the absence of any clinical or diagnostic evidence indicating a more serious injury to the low back.
4. With an admission that the injury was “work-related”, and a clear and full description of the diagnosed injury, it is also recommended that the employer admit on the NCD that “reasonable, necessary, and related” medical treatment will be paid for by the employer/insurer, subject to repricing and fee schedules and procedures.
5. In avoidance of potential Claimant confusion over the above “admissions” and “acknowledgments,” it is also recommended that the employer set out in the Remarks section on the NCD that the injury has not produced work-related disability. This “acknowledgment” is critical to establishing that the NCD is a “medical only” acknowledgment, so that there is no expectation, either by Claimants or by the Bureau, that wage loss disability benefits are being paid as a result of the work injury.
   
   The specific disability disclaimer language that we have been recommending to our clients, be they employers, insurers, or third-party administrators, is as follows:

“It is agreed that the Claimant sustained a work-related injury. It is agreed that the injury is described as (give description/diagnosis) and that the injury occurred (give occurrence/mechanism). It is agreed that the employer remains responsible for reasonable, necessary and causally related medical treatment for the work injury. This denial is being issued as to “disability” only, as the employer denies that the employee was disabled beyond the 7 day initial waiting period and affirms that work is/was available within the Claimant’s physical capacities.”

All of the above admissions are intended to place the Claimant on “notice” that the injury is not disputed, that its description is clear, and that treatment for it will be provided by the employer.

Conclusion

Whether ‘tis nobler to suffer the slings and arrows of outrageous compensation litigation, or to take arms against a sea of petitions, and by opposing, reducing liability, or, to sleep and end the heart-ache and thousand natural shocks associated with the daily adjusting of workers’ compensation claims that we are heir to, that remains the question, perchance to dream of one final denial, as we shuffle in this mortal coil, giving pause as we bear the whips and scorn of rulings adrift from reason.

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