INVESTIGATING THE CLAIM
Index
Reports of Injury/Determining Compensability
Denials
OVERVIEW:
This section outlines the insurer’s obligations when a claim for compensation
has been filed, and discusses some problems involving denials. The adjuster
has an obligation to promptly investigate a claim to determine, within 21 days
of notice to the employer
, whether the claim is compensable and whether
benefits are due. The Department recommends that initial contact with an
injured worker be by letter. The Department has developed an outline (Initial
Contact Letter), which provides guidance that may make the investigation and
life of the claim run more smoothly. When a claim is denied, whether in whole
or in part, the adjuster must notify the injured worker and the Department via a
Form 2 denial and must attach evidence, such as medical records or other
evidence, providing reasonable support for its position..
REPORTS OF INJURY/DETERMINING COMPENSABILITY:
An employer is required to file an Employer’s First Report of Injury (Form
1) within 72 hours of receiving notice or knowledge of an injury (Sundays
and legal holidays excluded). First Reports of Injury must be filed via the
Electronic Data Initiative, as required by 21 VSA §660a
. The statute
specifies that all injuries that require medical attention
or cause an absence
from work of one day or more
must be reported [see 21 V.S.A §656(a)].
The Department will accept the report only from the employer’s insurer,
with the exception of first aid only injuries [21 VSA§640(e)
].
The filing of a First Report of Injury does not mean that the claim is accepted.
The employer should be reassured that the filing of the Form 1 is a statutory
obligation. The injured worker still has the burden of proof of establishing his
or her claim.
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An injury is defined as any harmful work-related change in the body,
whether occurring instantaneously or gradually. The term also includes
damage to and the cost of replacement of prosthetic devices, hearing aids
and eyeglasses when the damage or need for replacement results from an
incident arising out of and in the course of employment. The Department
has interpreted the term “personal injury” to include a mental injury. The
two types of mental injury claims recognized under Vermont’s Workers’
Compensation Act are “physical-mental” and “mental-mental” claims.
A physical-mental claim is a claim that one’s work-related physical
condition led to a psychological problem. It is an injured worker’s burden to
prove a causal connection between the two. Blais v. Church of Jesus Christ
of Latter Day Saints, Opinion No. 30-99WC (September 28 and July 30,
1999).
A mental-mental claim does not involve any work-related physical injury at
all. Instead the claim is that work-related stress or emotional injury arose
out of and in the course of employment. An injured worker must meet a
higher standard of proof in order for a mental-mental claim to be found
compensable by demonstrating the following:
A. Some condition of work created an actual stressful situation.
This need not be sudden or immediate but may take place over
a period of time (gradual onset); it cannot be a reaction to
normal employment events such as a job transfer, disciplinary
action or job termination; and the stressful situation must
actually exist and not merely be the injured worker’s subjective
impression or perception;
B. The work situation was the proximate cause of the mental
injury rather than some other stress in the injured worker’s life
(e.g., divorce, financial ruin, legal problems, family illness or
death, etc.); and
C. The stress created by the work situation was greater than the
day-to-day stress and tensions which all employees must
experience and/or greater than that experienced by employees
in a similar occupation.
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NOTE: Stress from bona fide personnel actions, such as transfers or
disciplinary action is not compensable. Wilson v. Quechee Landowners
Assoc., Opinion No. 9-87WC (November 4, 1987); Crosby v. City of
Burlington, Opinion No. 43-99WC (December 3, 1999).
If an employer fails or refuses to file a First Report of Injury, the injured
worker may file a Notice of Injury and Claim for Compensation (Form 5). The
filing of a Form 5 does not relieve the employer of its responsibility to file a
First Report of Injury (Form 1). Upon receipt of a Form 5, Department staff
will put all parties on notice of the injury in writing.
The injured worker making a claim for compensation must notify the employer
within six months of the date of injury. An injured worker who fails to give
notice or to make a claim within six months may still pursue a claim if
sufficient evidence is presented that the employer had knowledge of the injury
or that the employer is not prejudiced by the delay
. An injured worker cannot,
however, initiate a claim more than three years from the date of injury.
A personal injury need not be instantaneous to be compensable as a work-
related injury under Vermont’s Workers’ Compensation Act. It can be an
injury that occurs over a period of time. For example, consider a machinist
who has performed the same duties for several years with some pain and
numbness in his hands and wrists. The pain steadily worsens to the point that
he seeks medical treatment. The doctor takes a history and determines that the
symptoms are directly related to injured worker’s machinist duties. The “date
of injury” is “the point in time when the injury and its relationship to the
employment is reasonably discoverable and apparent.” In the above example,
the date of injury would be the date when the injured worker’s doctor first
determined that his symptoms were causally related to his work.
If the insurer commences payment of a claim on a voluntary without prejudice
basis (without accepting or denying the claim) the adjuster MUST
notify both
the Department and the injured worker in writing. If the claim is ultimately
discontinued, the injured worker may appeal the discontinuance and proceed
through the informal process.
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Notice of an injury begins with the employer: the adjuster has 21 days from
receipt of the notice of injury to accept or deny the claim. If within that 21-day
period the insurer, despite good faith efforts, cannot determine whether
compensation is due, an extension may be requested. The request for an
extension must be made to the Department in writing. In the request, the
adjuster must specify the reason(s) why the extension is needed. The request
must be copied to the injured worker and received by the Department prior to
the end of the 21-day limit. If the Department grants an extension it is
routinely for an additional 21-day period, unless stated otherwise.
Upon notice of a claim, the adjuster should immediately send out an initial
contact letter (see Initial Contact Letter
) to the injured worker with an
explanation of benefits. The adjuster should also request that the injured
worker provide a Workers’ Compensation Medical Authorization (Form 7) for
the release of all relevant medical records. Medical records relating to prior
injuries or pre-existing conditions may be requested if they are relevant to the
injury for which benefits are being claimed. If the injured worker refuses to
provide a medical authorization, the insurer may deny the claim for benefits.
NOTE:
We recommend that to the extent possible the insurer request that the
employer have the injured worker sign a Form 7 as soon as the injury is
reported to it. The employer can then fax or send the Form 7 to the insurer to
expedite the receipt of medical records.
Having received notice or knowledge of an injury, the employer must
promptly investigate and determine whether or not compensation is due. In
all cases in which the injured worker is alleged to have been disabled from
working for at least three calendar days as a result of his or her injury the
employer shall complete and file a Certificate of Dependency and
Concurrent Employment (Form 10) and a Wage Statement (Form 25) with
the Department. (For information on how to calculate an injured worker's
average weekly wage and compensation rate, see Rule. 15.0000).
A Wage Statement (Form 25) must be filed regardless of whether or not
the claim has been accepted.
If a lost time claim is determined to be compensable, an Agreement for
Temporary Compensation (Form 32) must be completed and signed by both
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parties (the injured worker and the adjuster). The adjuster then sends the Form
32 to the Department for review and approval. Compensation must be paid
pending review and approval by the Department.
DENIALS:
If the adjuster determines that no compensation is due, within the 21-day time
frame following notice of the injury to the employer he or she must notify both
the injured worker and the Department in writing. A Form 2 (Denial of
Workers’ Compensation Benefits by Employer or Insurer) must be submitted
when a claim is being denied, with evidence attached
that reasonably supports
the denial.
Form 2 Denial Examples:
1. A Form 2 denial from the insurer filed with NO EVIDENCE
attached will be rejected. A letter or explanation from the insurer
does not constitute evidence. The adjuster must provide
documentation and/or other evidence supporting the denial.
2. A Form 2 denial from the insurer stating that the injury did not
arise out of and in the course of employment. If the adjuster
denies a claim because the injury occurred at home and not at work,
the adjuster must submit proof supporting the denial. The proof may
consist of medical records documenting the injury at home or other
evidence. The denial must support the conclusion that the injury did
not “arise out of and in the course of employment.” Any evidence
that is relied upon for the denial must be attached.
3. A Form 2 denial from the insurer stating that there is no medical
evidence to support a work-related injury. A denial issued on this
basis requires further evidence and explanation. If the medical
records have been requested, but not yet received or if the injured
worker has not signed or returned the medical authorization the
adjuster must provide a copy of his or her letter documenting the
request. If the medical records that are available do not support the
claim, that medical evidence must be attached to the denial. If a
claim is denied on these grounds, the adjuster must revisit
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notify both the injured worker and the Department of his or her
decision.
4. A Form 2 denial from the insurer stating that the claim is denied
on the basis that the injured worker has a pre-existing, non-work
related condition. If an injury at work or a work condition has
accelerated or hastened the pre-existing condition, it will be found
compensable. In order to support a denial on this basis the insurer
must submit medical evidence that supports its position. Please
review the section in this manual on aggravation versus recurrence
for more information.
