An employer/carrier is faced with a decision when a workers’ compensation claim is reported in Florida.  It can 1) pay benefits 2) deny the claim or 3) pay benefits while investigating and reserve its right to deny the claim within 120 days without prejudice and without admitting liability pursuant to Florida Statute 440.20(4).  This article will focus on what triggers the 120 period, how certain actions or inactions impact the employer/carriers’ rights, and what to do if you make a mistake.

The first two options are pretty clear, an adjuster can commence payment of benefits when a claim is reported or deny the claim.  However, not all cases present with a clear beacon as to how to proceed. When the claims handler is unclear about the claimant’s entitlement to benefits Florida Statute 440.20(4) provides a road map.  The statute reads as follows:

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).

When does the 120-day period start?

The statute seems clear that the 120-day period starts with the initial payment of benefits.  Case law supports this reading.  The seminal case on the topic is Checkers Restaurant and Specialty Risk Services, Inc. v. Wiethoff, 925 So.2d 348 (Fla. 1st DCA 2006).  It is the initial provision of benefits that triggers the commencement of the period.  Payment of indemnity benefits to the claimant is an easily calculable date, however, the statute references “payment” of benefits which leads to the question of what date applies when a medical appointment occurs?  Is it the date of the visit or the date of the payment?  This question is not directly answered by case law in the context of the 120-day provision.  

There is case law that addresses it in the context of the Statute of Limitations running.  In that context the Court has held that the date of payment is the date that starts the limitations period.  In that context the payment date is more favorable to the claimant.  Therefore, it seems wise, without specific guidance from the Court to use the date of the office visit as the start of the 120-day period.  This date would be more favorable to the claimant and would more likely be interpreted as the initial “provision of benefits.”  Furthermore, the statute references the provision of benefits “to be paid” as the triggering event.

Notice to the claimant regarding the “120-day pay and investigate” period

The statute requires that “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.” However, there are four potential scenarios that could arise: 1) no letter is sent and no benefits are provided; 2) no letter is sent and benefits are provided; 3) a letter is sent and no benefits are provided; and 4) a letter is sent and benefits are provided.  All of these scenarios will be considered in the context of a timely denial which is would be issued within 120 days of the provision of the initial benefit.

If no letter is sent and no benefits are provided the case is deemed denied.  There is no possible argument the claimant can make that the employer/carrier is estopped from denying the case based on 440.20(4).  Case law exists that holds that doing nothing is considered a denial in the context of litigation.

There is no case law that holds that a carrier is prejudiced by not sending the “120-day letter.”  If a carrier opts to pay benefits and then denies compensability within 120 days of the provision of benefits the denial should not be successfully challenged based upon 440.20(4).

A carrier is likewise okay if it sends a 120 day letter but does not provide any benefits.  In this case the carrier is deemed to be in the same position as if it had done nothing.  See, Begley’s Cleaning Service and Nationwide Insurance Company, 913 So.2d 1244 (Fla. 1st DCA 2005).  The failure to provide any benefits also fails to trigger the “pay and investigate” period so the claimant cannot successfully argue that the carrier is estopped from denying benefits.  Under this scenario, the carrier’s denial can still fall beyond 120 days from the date the letter was sent because no benefits have been provided.

Finally, when the carrier sends the 120 day letter and provides benefits as outlined in the statute, the carrier must deny compensability within 120 days of the provision of the first benefit or it is estopped from denying compensability. 
Mistakes happen…

In Cole v. Fairfield Communities and RSKCO, 908 So.2d 1105 (Fla. 1st DCA 2005), the carrier made one payment to a chiropractor that was treating the claimant both before and after the industrial accident for an unrelated condition.  The evidence presented established that the carrier never intended to accept the body part the chiropractor was treating as compensable.  Furthermore, the adjuster testified that payment of the bill was a mistake and that he called the chiropractor’s office to convey that they were not authorized to treat the claimant for the workers’ compensation accident.  The chiropractor’s records reflected that the claimant was the only party that told the chiropractor he was authorized.  The Court held that facts of the case supported the JCC’s finding that the employer/carrier was not estopped from denying the case based on 440.20(4).

Invariably the claimant will bring up a “new” body part that was not reported initially.  Examples include the altered gait back pain, the opposite extremity problems from “over use” and the shoulder complaints from using a cane or crutch.  When does the clock start on these injuries?  The Court held in Bynum Transport, Inc. and Liberty Mutual Insurance Company v. Snyder, 765 So.2d 752 (Fla. 1St DCA 2000), that the clock starts to run when the employer/carrier discovered or should have discovered the alleged connection between the new injury or condition and the industrial accident.   In Bynum the claimant was diagnosed with hepatitis C.  The condition was brought to the attention of the employer/carrier approximately 6 weeks after the industrial accident by the treating physician who indicated that he could not determine if the condition was caused by the claimant’s tattoos, prior contact with hepatitis C or open wounds from the accident coming in contact with mud at the accident scene.  The carrier failed to deny the condition within 120 days of the physicians report and was therefore estopped from denying compensability.  The Court held that “when an E/C becomes aware that a claimant has medical needs, it should either pay for them, pay and investigate under section 440.20(4), or deny compensability.”  The carrier could not escape its duty to deny compensability by simply not paying the bills.  It needed to take the affirmative step of issuing a denial within 120 days of notice of the condition.

Conclusion

The 120 day provision requires action by the carrier if benefits are provided.  The carrier should issue a denial within 120 days of the first benefit provided or it will be estopped from denying compensability of a condition.  Fortunately, other defenses to providing benefits still exist, such as the accident in not the major contributing cause of the condition or that there was a subsequent intervening event that caused the condition.  However, it is certainly an unenviable position to be estopped from denying a condition that is otherwise unrelated to the industrial accident because of an untimely denial.