How Is A Report Only WC Claim Handled In Montana
May 17, 2020 – Michael Marsh
Report Only Workers' Compensation Claims in Montana
Michael J. Marsh, RPA, CPIA, CIA, CIU
President – Midland Claims Service, Inc and Industrial Injury Claims®
Handling of Report Only (“RO”) or Notice Only (“NO”) claims presents challenges to self-funded or high deductible/SIR employers.
The following is an adjuster observation. We are not qualified for nor do we offer any legal advice. If you have a question about the information contained herein, please contact competent council immediately.
RO claims typically have a carve out in the TPA fee schedule. In many cases, the TPA makes a record of the “claim” in their RMIS system so that statistical data, and sometimes OSHA data, is captured for later use. These claims in many cases are NOT HANDLED by the TPA, not investigated, not reserved, not evaluated in any way for compensability. Corresponding to the grant by the employer/insurer of NO HANDLING to the TPA, there is no service or expense charge for the TPA’s service.
The challenge then becomes making a determination on the workers’ compensation claim filing if it rises to the level of a “claim”. This determination is typically made by an employer representative or a claims intake person in the TPA operation looking at comments such as “no medical treatment desired”, “no injury” or “refused to go to the doctor”. Frequently, those comments are determined by the intake staff as not rising to the level of a “claim” and are recorded as RO.
In the great majority of situations, the ROs are appropriately considered and after the initial FROI there is no further activity of any kind. However, in a few documented cases, the RO was required to be activated and turned into a reserved claim when the medical condition of the worker turned for the worse.
In Montana, workers’ compensation claims must be reported electronically to the State DOL&I / ERD within six (6) days of first notice to the “insurer”. In Montana, the definition of “insurer” includes a self-insured or high deductible/SIR employer AND any claim handling facilities involved in the administration of the program. Notice to employer in these cases by the worker triggers the six (6) day FROI filing requirement.
39-71-606 MCA describes the reporting requirement:
Insurer To Accept Or Deny Claim Within 30 Days Of Receipt -- Notice Of Benefits And Entitlements To Claimants -- Notice Of Denial -- Notice Of Reopening -- Notice To Employer -- Employer's Right To Loss Information
39-71-606. Insurer to accept or deny claim within 30 days of receipt -- notice of benefits and entitlements to claimants -- notice of denial -- notice of reopening -- notice to employer -- employer's right to loss information. (1) Each insurer under any plan for the payment of workers' compensation benefits shall, within 30 days of receipt of a claim for compensation signed by the claimant or the claimant's representative, either accept or deny the claim and, if denied, shall inform the claimant and the department in writing of the denial.
(2) The department shall make available to insurers for distribution to claimants sufficient copies of a document describing current benefits and entitlements available under Title 39, chapter 71. On receipt of a claim, each insurer shall promptly notify the claimant in writing of potential benefits and entitlements available by providing the claimant a copy of the document prepared by the department.
(3) Each insurer under plan No. 2 or No. 3 for the payment of workers' compensation benefits shall notify the employer of the reopening of the claim within 14 days after the reopening of a claim for the purpose of paying compensation benefits.
(4) (a) When requested by an employer that an insurer currently insures or has insured in the immediately preceding 5 years or when requested by the employer's designated insurance producer, an insurer shall provide the loss information listed in subsection (4)(b) within 10 days of the request.
(b) Loss information provided under this subsection (4) must include for the period requested:
(i) all date of injury or occupational disease data for the employer's claims;
(ii) payment data on the employer's closed claims; and
(iii) payment data and loss reserve amounts on the employer's open claims, including all compensation benefits that are ongoing and are being charged against that employer's account.
(c) The information provided under this subsection (4) is confidential insurance information. The information may be used by the employer for internal management purposes or for procuring insurance products but may not be disclosed for any other purpose without the express written consent of the insurer.
(5) Failure of an insurer to comply with the time limitations required in subsections (1) and (3) does not constitute an acceptance of a claim as a matter of law. However, an insurer who fails to comply with 39-71-608 or subsections (1) and (3) of this section may be assessed a penalty under 39-71-2907 if a claim is determined to be compensable by the workers' compensation court.
39-71-608 MCA and 39-71-615 MCA address claim filings where a notice of acceptance or denial cannot or is not provided by the insurer within thirty (30) days:
Payments Within 30 Days By Insurer Without Admission Of Liability Or Waiver Of Defense Authorized -- Notice -- Limitations On Payments Over 90 Days
39-71-608. Payments within 30 days by insurer without admission of liability or waiver of defense authorized -- notice -- limitations on payments over 90 days. (1) An insurer may, after written notice to the claimant and the department, make payment of compensation benefits within 30 days of receipt of a claim for compensation without the payments being construed as an admission of liability or a waiver of any right of defense.
(2) An insurer may not make payments pursuant to this section for more than 90 days without:
(a) written consent of the claimant; or
(b) approval of the department.
Payment Of Medical Claims Without Acceptance Of Liability
39-71-615. Payment of medical claims without acceptance of liability. (1) An insurer may pay a medical claim that is based upon the report of a nonwage loss injury or occupational disease without the payments being construed as an acceptance of liability for the claim.
(2) An insurer shall, within 10 days of making payment under subsection (1), notify the worker of the payment of the medical claim without acceptance of liability.
(3) Upon written request by a worker for the payment of indemnity benefits or for a determination of liability, the insurer shall investigate the claim to determine liability for the injury or occupational disease under 39-71-606 or 39-71-608.
39-71-606 MCA has been interpreted along with 608 and 615 (the ‘reservation of rights’ statutes) in the courts. The law has been longstanding since the 1995 Supreme Court ruling in Haag v Montana School Group (95-590) 1995. Quoting from the Supreme Court’s finding in the case:
“Additionally, 55 39-71-609 and 39-71-610,MCA, provide insurers with the means to subsequently deny liability for a claim after affirmatively accepting a claim under 539-71-606(l), MCA, or beginning payments with a reservation of rights under § 39-71-608, MCA. Thus, the Workers' Compensation Act clearly provides insurers with an alternative which is not unduly burdensome and which is, at the same time, entirely consistent with an insurer's clear obligation under 539-71-606(l), MCA. Accordingly, we hold that when an insurer fails to act on a claim for compensation within thirty days, either by accepting or denying liability pursuant to539-71-606(l), MCA, or by beginning payments with a reservation of rights under § 39-71-608,MCA, the claim is deemed accepted as a matter of law.”
One may be aware of the language in 606, which requires a FROI filing with the state within six (6) days of receipt of a claim for compensation signed by the claimant or the claimant's representative. Many, if not most, self-insured and high deductible/SIR employers utilize electronic reporting systems for the workers’ compensation claims. It is very rare that an employer actually obtains a signature on a state approved FROI form. A decision on a claim will rely in part upon the standard and practice of the employer / TPA / insurer. If signatures are NEVER obtained on the FROI or Claim For Compensation forms, lack of a signature-backed filing will not be accepted as a legal defense for not handling the claim in a time manner.
In summary, the risk management decision that must be made by the claims intake staff becomes very important. When the process is used to evaluate a “claim” for filing and handling by the in-state TPA / examiner as opposed to considering the claim filing a NO HANDLING RO or NO claim, the decision exposes the employer/insurer to liability perhaps not otherwise contemplated. If the claim is assigned to RO or NO status, the insurer, by not addressing compensability under 606, 608 or 615 within the first thirty (30) days of receipt, will likely be found to have the claim “deemed accepted” as a matter of law despite language in the statute inferring the opposite.