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Recent Changes to the Workers’ Compensation Rules of Procedure

On January 21, 2014, the Director of the Division of Workers’ Compensation adopted changes to Rule 5-5 (admissions of liability) and Rule 7. To see the new changes to both Rules, click here. The amendments are effective on March 17, 2014.

You may remember that the legislature recently amended Section 8-42-107.2(4)(c) to require the Division IME Unit to issue a notice to all parties that it has received the Division IME phsyician’s report, and that said notice triggers the twenty-day deadline to either admit liability consistent the Division IME physician’s report or file an application for hearing. Inexplicably, the Division amended Rule 5-5 (F) to change only the amount of time (from thirty days to twenty days) after the date of mailing of the Division IME physician’s report to either admit liability consistent with such report or file an application for hearing, thus ignoring the  triggering event in the statute (the notice from the Division that it has received the Division IME physician’s report).  The amendment, therefore, creates an inconsistency between the rule and the statute and, therefore, uncertainty as to when the deadline starts for taking action on a Division IME physician’s report (which was primary goal behind the legislature’s amendment of Section 8-42-107.2(4)(c) in the first place – to create an easily ascertainable triggering event upon which an insurer could calculate the deadline for taking action on a Division IME physician’s report).  While it is it is advisable to err on the side of caution and calendar the deadline to file a response to the Division IME physician’s report within twenty (20) days of the date the Division IME physician mails the report, the Division’s amended Rule 5-5(F) still creates a problem because many physicians’ reports are dated when dictated, so the mailing date is unknown.

Rule 7-1 has been amended to clarify the procedure for obtaining closure of a claim based on abandonment of the claim and for failure to prosecute a claim. Rule 7-2 has been amended to change the filing requirements for settlement agreements.

Rule 7-1(B) now states that the insurer’s letter to the claimant and claimant’s attorney advising that the claim will be closed for failure to respond to the letter must be sent after the second missed medical appointment (which was implied by the former rule, but not stated explicitly). The previous rule provided that if the claimant timely responded to the letter from the insurer, the insurer may not file a final admission of liability. The amendment to the rule clarifies that the prohibition to filing a final admission of liability applies only if the claimant timely responds to the letter and objects to closure. Thus, if the claimant timely responds to the letter but does not object to closure, the insurer may file a final admission of liability under the rule.

Rule 7-1(C) has been amended to clarify that the Director is not required to enter an order upon receipt of a claimant’s response to an Order to Show Cause why a claim should not be closed (which the Director normally issues upon receiving a Petition to Close Claim for failure to prosecute).  The amendment also contains an advisory statement that an application for hearing or for a Division IME without further action (i.e., setting and attending a hearing or a Division IME) does not automatically constitute prosecution.

The amendment adds three new subsections to Rule 7-1. Subsection (D) provides that closure of a claim pursuant to Rule 7-1(c) (failure to prosecute) does not terminate entitlement to maintenance medical benefits previously admitted and/or ordered or permanent medical impairment benefits previously admitted and/or ordered which have not yet been paid. Subsection (E) provides that an insurer may file a final admission of liability based on the claimant’s voluntary abandonment of a claim if the claimant: (1) is not receiving temporary disability benefits; (2) provides written notice (in a forthcoming Division form) that the claimant is abandoning current and future medical care related to the claim; and (3) receives written notification of the reopening provisions of §8-43-303.  Consistent with the Division’s insistence on protecting people from taking responsibility for their own decisions, subsection (F) permits a claimant to object to the final admission of liability filed by the insurer (which itself was based on the claimant’s previous decision to close the claim).

Rule 7-2(B) now requires that the parties file only one set of settlement documents with the Division.  The rule no longer makes any mention of the prior requirement to file “the original” settlement agreement “with all original signatures.”

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