Maureen "Morty" Cassidy of Pond Lehocky Stern Giordano. Maureen “Morty” Cassidy of Pond Lehocky Stern Giordano.

In September 2013, the WCAIS (workers’ compensation automation and integration system) went live in Pennsylvania implementing EDI (electronic data interchange) transactions between companies and the commonwealth. The idea was to permit the exchange of large volumes of accident and injury information from companies to the state in an expedited and more efficient form than on paper.

In 2016, the WCAIS was updated to include “forms solutions” to further streamline the filing of the heaviest volume forms: those establishing or denying compensation for a work injury. The Bureau of Workers’ Compensation states that four forms accounted for 45 percent of all filings in 2015: notice of compensation payable (NCP), notice of compensation denial (NCD), notice of temporary compensation payable (TNCP) and notice stopping temporary compensation. The new product was designed to eliminate paper filings, remove duplicate entries, save on postage, allow immediate regulatory filings and more information transferred to the bureau each day which would “result in more accurate filing and better claims handling.”

But does the new forms solutions for EDI workers’ compensation transactions act as a cost saving measure for more accurate and better claims handling, or does it fall short? The Department of Labor and Industry totes the forms solutions update, as a product that “will optimize the effectiveness and cost savings of the claims administration process.” But the process seems to fall short of complying with the Pennsylvania Workers’ Compensation Act.

Workers’ compensation practitioners are now seeing issues where the limitations of the new software create conflicts with the law. Perhaps the most glaring issue is the purported inability to properly stop temporary compensation.

Under the act, an employer or carrier may initiate compensation benefits for a period not exceeding 90 days without prejudice or without admitting liability where there is uncertainty regarding the compensability of a claim. Each claim has two aspects: wage loss and medical benefits. A carrier can accept a claim for both, deny the wage loss or outright deny the claim during the 90-day period under a TNCP. If the carrier chooses to accept the claim for medical purposes only, or outright deny the claim, they must first issue a notice stopping compensation, advising the injured worker of the status prior to issuing an MO NCP or NCD. If no notice stopping is issued, the TNCP automatically converts as a matter of law. The act very clearly explains how to stop a TNCP. These very specific procedures are outlined in Section 406.1 of the act of June 2, 1915, P.L. 736, as amended, 77 P.S. Section 717, which states the following: (5)(i) If the employer ceases making payments pursuant to a notice of temporary compensation payable, a notice in the form prescribed by the department shall be sent to the claimant and a copy filed with the department, but in no event shall this notice be sent or filed later than five days after the last payment. If the employer does not file a notice under paragraph five within the 90-day period during which temporary compensation is paid or payable, the employer shall be deemed to have admitted liability and the notice of temporary compensation payable shall be converted to a notice of compensation payable.

Unless a notice stopping is filed within the specific time requirements of the act, the TNCP automatically converts into an NCP, generating an ongoing obligation to pay a claimant properly owed wage loss and medical benefits on a timely basis.

Yet in the most recent forms solution update, the middle step is eliminated and no notice stopping is being issued when the carrier chooses to deny the wage loss but accept the claim for medical purposes, leaving injured workers with an illegal cessation of wage loss benefits and employers that refuse to reinstate those benefits without any legal basis. Apparently, when the EDI transaction occurs, no notice stopping is being physically created before the issuance of a MO NCP. A notice stopping is now only generated when the claim is being fully denied with the issuance of an NCD. Employers are claiming that because the WCAIS does not allow them to do it, their actions are somehow warranted, which has ensued a windfall of litigation. But the WCAIS is not the law.

The question now is how will the courts decide this issue? Does the thought process of the claims handler matter, if they intended to issue the notice stopping but did not? The answer is no.

The law is clear that the notice stopping is a mandatory requirement. A basic lesson in statutory construction tells one that the court must accomplish the intent of the General Assembly. The entire point of the notice stopping is to put an injured worker on notice that they may need to file a claim for benefits. What is the injured worker led to believe if they do not receive a notice stopping? The statutory language is clear and unambiguous and it cannot be disregarded under the law.

In an already confusing claims process, this is another step to discourage injured workers from receiving benefits that may be entitled, without notice. Even the Bureau of Workers’ Compensation on its website reminds e mployer’s that the EDI update does not eliminate the legal requirement of issuing, in writing, to both the bureau and the injured worker the notice stopping.

Allowing an employer to thwart a legal obligation to pay compensation on an open, converted NCP because of a technical default directly defies the humanitarian purposes of the act. These types of bureaucratic, cost-saving measures cannot be at the toll of an injured workers’ rights; rights which are grounded in our state constitution.

Maureen “Morty” Cassidy is an attorney at Pond Lehocky Stern Giordano. She focuses her practice on workers’ compensation. She earned her bachelor’s degree in telecommunications from Penn State University and her law degree from Widener University.