Claim Denials in California workers’ compensation
In the last few years the landscape in California workers compensation has changed. Nowadays denials are so common in a workers compensation case that they hardly raise an eyebrow. However, they should. From my experience as both an applicant and defense attorney I estimate that somewhere between 25-40% of all denials are done in bad faith. By this I mean that even though the facts are such that everyone should agree there was or is an injury, and the employer unusually agrees, the insurance carrier still denies the claim. There are several reasons for such denials, but most importantly Labor Code Section 5402.
When a worker sustains an injury, the employer is supposed to provide a DWC-1 claim form. If you have filed a claim for injury, or are thinking about filing a claim, I strongly recommend you visit the Department of Industrial relations website and obtain a DWC-1 form. (Workers Compensation claim form) Under Labor Code Section 5402(b) once the claim form is submitted the employer has ninety (90) days to conduct discovery and either accept or deny the claim. If the employer/carrier does not deny the case within ninety (90) days, the injury is presumed industrial. Case law is very specific, notice must be provided to the employer on form DWC-1 for the presumption to apply. In order to make certain there is no presumption of injury, if the employee is informed enough to have submitted a DWC-1, the carrier will deny the claim within ninety (90) days regardless of the merits. See Melissa Williams vs. WCAB (1999) 74 Cal. App 4th 1260, 64 Cal Comp Cases 995. When the court found defendants paid benefits (medical treatment) within ninety days of receiving the claim form and denied liability after paying medical benefits for almost two years, at trial the court found the presumption of compensability applied and awarded Temporary Disability mainly due to defendants failure to investigate whether or not benefits were owed within the ninety (90) day period.
Williams vs WCAB is a rather extreme example. In most cases the carrier delays providing benefits until some rudimentary discovery is conducted. In fact, the carrier may even issue a delay letter saying that it is conducting discovery to determine if it will provide benefits. If such is the case, then the employee is entitled to treat within a carrier’s MPN and obtain up to $10,000 in medical treatment. If the claim is subsequently denied, the employee will usually be forced out of the MPN and unable to get medical treatment except on a lien basis. At a minimum when the case is denied by the carrier the employee should file a claim for State Disability Insurance benefits with EDD immediately to prevent a lapse in income while pursuing a claim for workers compensation benefits.
In conclusion, carries routinely deny cases as a business practice. Protect yourself by filing a DWC-1 claim form and apply for state disability benefits immediately to prevent any loss of income. If the carrier does pick up the claim, state disability can be put on hold until such time as regular benefits lapse.
Labor Code Section 5402
- (a) Knowledge of an injury, obtained from any source, on the
part of an employer, his or her managing agent, superintendent,
foreman, or other person in authority, or knowledge of the assertion
of a claim of injury sufficient to afford opportunity to the employer
to make an investigation into the facts, is equivalent to service
under Section 5400.
(b) If liability is not rejected within 90 days after the date the
claim form is filed under Section 5401, the injury shall be presumed
compensable under this division. The presumption of this subdivision
is rebuttable only by evidence discovered subsequent to the 90-day
(c) Within one working day after an employee files a claim form
under Section 5401, the employer shall authorize the provision of all
treatment, consistent with Section 5307.27, for the alleged injury
and shall continue to provide the treatment until the date that
liability for the claim is accepted or rejected. Until the date the
claim is accepted or rejected, liability for medical treatment shall
be limited to ten thousand dollars ($10,000).
(d) Treatment provided under subdivision (c) shall not give rise
to a presumption of liability on the part of the employer.