“120-Day Pay and Investigate Provision” A Sword and a Shield

1. “120-Day Pay and Investigate Provision”A Sword and a Shield

2. Today’s Discussion Statutory basis for “120-Pay and Investigate” provision How the “120-Day Pay and Investigate” provision operates The Pros and Cons - When should E/C to raise the “120-Day Pay & Investigate” provision? Making the decision whether to accept or deny

3. Weighing E/C’s Options The E/C must either begin providing benefits to the claimant, or deny benefits, no later than the 14th day after receiving notice of the claimant’s injury or death. § 440.20(2), Fla. Stat. The E/C has 3 options Accept compensability Deny compensability “Pay and Investigate” without admitting liability subject to a 120-day investigation reserving the right to deny compensability

4. What is the “120-Day Pay and Investigate” Provision? Florida Statute 440.20(4) allows an employer to provide benefits to an injured worker for up to 120 days from the initial provision of benefits without prejudice to its ability to later deny compensability The 120-day deadline applies to any claim for compensability of an injury following the date of accident, and not just the first claim. Bynum Transport, Inc. v. Snyder, 765 So.2d 752 (Fla. 1st DCA 2000)

5. Statutory Basis for “120-Day Provision” If the carrier is uncertain of its obligation to provide all benefits or compensation, the carrier shall immediately and in good faith commence investigation of the employee’s entitlement to benefits under this chapter and shall admit or deny compensability within 120 days after the initial provision of compensation or benefits as required under subsection (2) or s. 440.192(8). Additionally, the carrier shall initiate payment and continue the provision of all benefits and compensation as if the claim had been accepted as compensable, without prejudice and without admitting liability. Upon commencement of payment as required under subsection (2) or s. 440.192(8), the carrier shall provide written notice to the employee that it has elected to pay the claim pending further investigation, and that it will advise the employee of claim acceptance or denial within 120 days. A carrier that fails to deny compensability within 120 days after the initial provision of benefits or payment of compensation as required under subsection (2) or s. 440.192(8) waives the right to deny compensability, unless the carrier can establish material facts relevant to the issue of compensability that it could not have discovered through reasonable investigation within the 120-day period. The initial provision of compensation or benefits, for purposes of this subsection, means the first installment of compensation or benefits to be paid by the carrier under subsection (2) or pursuant to a petition for benefits under s. 440.192(8).

6. “120-Day Provision” A Shield for E/C Allows E/C to defer on making a decision regarding claim acceptance or denial during investigation period. Allows E/C to investigate the nature and extent of the injuries (including documentation of MMI, work status, etc.) To direct the IW’s care. Assist in goal of returning IW to work. Allows E/C to avoid potential fee exposure during investigation period

7. “120-Day Provision” A Sword for Claimant Failure to raise the ”pay and investigate” provision upon initiating payment of benefits waives the right to later deny compensability If utilizing the “Pay and Investigate” provision, failure to deny within 120 days could operate as a wavier of compensability

8. How the 120-Day Provision Operates E/C’s gives written notice to the claimant of its decision to invoke the “pay and investigate” before the initial provision of benefits The E/C establishes its deadline for claim acceptance or denial of compensability The E/C conducts a good faith investigation The E/C makes a decision regarding acceptance or denial of compensability before 120-day deadline

9. Written Notice Written notice E/C’s election to “pay and investigate” must be given to the claimant at or before the commencement of payment of benefits Lost Time Claim: Notice must be given before the initial payment of indemnity becomes due under s. 440.20(2)(a). Medical Only: Notice should be given before the initial payment for medical as provided under 440.20(2)(b). The Mailbox Rule

10. The 120-Day Deadline The 120 deadline will begin to run from the initial payment of indemnity or the initial claimant’s initial visit with an authorized physician. Oceola County v. Arace, 884 So. 2d 1003 (Fla. 1st DCA 2004). Lost Time Claim: The 120 day period begins to run on the initial payment of indemnity. Medical Only: The 120 day period will begin on the initial authorized visit. You may have overlap between the two

11. The 120-Day Deadlines 1/1/16 : D/A: 1/15/16: Initial indemnity benefit becomes due if disability has been continuous. Notice of the 120 day investigation is provided this day before payment is issued. 5/14/16 : deadline for claim acceptance or denial Timeline: Lost Time Claim

12. The 120-Day Deadlines 1/1/16: Date of alleged accident. 1/20/16: Claimant fails to attend appointment 6/19/16: Deadline for claim acceptance or denial 2/1/16: E/C provides CL notice of 120 day investigation 2/20/16: Claimant attends initial doctors visit Timeline: Medical Only Claim

13. The 120-Day Deadlines 1/1/16: Date of alleged accident. 1/15/16: Initial indemnity payment due. Deadline for claim acceptance or denial??? 2/1/16: Initial payment of indemnity paid retroactive to 1/15/16 with penalties and interest 2/20/16: Claimant attends initial doctors visit Timeline: Variation

14. Good Faith Investigation A good faith investigation merely requires that the E/C be prepared to decide within 120 days what position they wish to take on a given claim and be accountable for that decision The E/C should use due diligence and its best efforts

15. Focus of Investigation Compensability  “Injury” (e.g., idiopathic and/or pre-existing conditions) “By accident” (e.g., repetitive trauma) “Arising out of” (e.g., positive drug screen , horseplay, unexplained fall at work place) “Course of employment” (e.g., coming and going, statutory employer) Avoidances and Other Defenses Notice Fraud/Misrepresentation

16. Time to Make the Decision: Risk of Waiver Must file a denial within the 120-Days investigation or the claim may be deemed compensable No need to file an acceptance if you wish to accept the claim The employer may avoid the waiver argument if material facts were not discoverable through a reasonable investigation during the course of the 120-days. Franklin v. Northwest Airlines, 778 So. 2d 418, 422 (Fla. 1st DCA 2001) (when a claimant belatedly reported her injury on April 1, and the carrier's claims adjuster began doubting the compensability of the claim eight days later due to a pre-existing condition, the carrier waived its right to deny the claim by providing 168 days of benefits. The belated reporting of the claim, and the knowledge of a pre-existing condition, were a “red flag” to trigger the carrier's duty of “reasonable investigation” during the 120 days). Dunvely v. Seminole County Dept. of Public Safety, 792 So 2d. 592 (Fla. 1st DCA 2001) (holding that E/C did not waive its right to deny compensability when it found out a year after the accident that the accident was the result of playful wrestling with a co-worker, or purported horseplay. The Court held that the employer had questioned the employee during the 120 day period and was entitled to rely on the claimant’s account of the accident although it later was shown to be inconsistent).

17. Babahmetovic v. Scan Design, Inc./Zenith The employer or its carrier must give written notice to the IW that it is relying on the “pay and investigate” provision at or before “commencement of payment.” Importance of making distinction between MCC of the injury [at determination of compensability] versus MCC of the need for treatment [after determination of compensability]

18. Other Notable Decisions Checkers Restaurant v. Wiethoff, 925 So. 2d 348 (Fla. 1st DCA 2006) articulates the difference between 440.192(8) vs. 440.20(4) and clarifies that the 120 day period starts from the initial provision of benefits. Bynum Transportation v. Snyder, the 120 day provision may be raised to dispute compensability of a new injury or condition following the initial determination of compensability. 765 So. 2d 752 (Fla. Dist. Ct. App. 2000).

19. The Pros of Electing the “120-Day Pay and Investigate” Provision Ability to direct care pending investigation To determine the nature and extent of the injuries Potentially establishing documentation of MMI/PIR/Restrictions Avoiding the pitfalls of Parodi Avoid exposure for attorney’s fees, penalties and interest, etc. 

20. Cons of Electing the “120-Day Pay and Investigate Provision Employer will be responsible for payment of all bills as if the claim was compensable (subject to limitations under the Act) Incurring the expense pending investigation Claimant may be entitled to exercise right to one-time-change. See Providence

21. Weighing the Pros and Cons“120-Day Pay and Investigate” Option The 120 day investigation is not right for every case Common examples include Idiopathic and or unexplained falls, Un-witnessed accidents, questionable heart/lung claims The decision to elect the 120 day investigation should be determined on a case by case basis Some cases should be denied without a 120 day pay and investigate election Weigh the pros and cons

22. Conclusion: 120-Day Investigation