Commonwealth Court Holds that Issuance of Medical-Only Notice of Compensation Payable is Sufficient

On August 16, 2021, in a case of first impression, the Commonwealth Court of Pennsylvania issued an Opinion in Raymour & Flanagan v. WCAB (Obeid), holding that when a Medical-Only Notice of Compensation Payable is issued, it is not necessary to also issue a Notice Stopping Temporary Compensation Payable and a Notice of Compensation Denial following the initial issuance of a Notice of Temporary Compensation Payable to stop payment of indemnity benefits.

The facts of the case reveal that Claimant sustained an injury to her coccyx/sacrum when she slipped off a chair while attempting to sit down at work on September 14, 2018. The claims administrator issued a Notice of Temporary Compensation Payable on October 1, 2018 accepting the injury and providing total temporary disability benefits. Subsequently, on October 17, 2018, the claims administrator issued a Medical-Only Notice of Compensation Payable.

Claimant’s attorney filed a Penalty Petition alleging a violation of the Pennsylvania Workers’ Compensation Act and the Bureau’s Regulations. Claimant’s attorney argued that Employer was required to issue a Notice Stopping Compensation Payable and Notice of Compensation Denial prior to stopping payment of indemnity benefits.

The WCJ dismissed the Penalty Petition and held that there was no violation because the Employer issued a Medical-Only Notice of Compensation Payable during the temporary period. The Claimant appealed to the WCAB, which  reviewed Section 406.1(d)(5)(ii) of the PA WC Act and the Bureau Regulations, Section 121.17(d) and concluded that there was a violation, that indemnity benefits should be reinstated and that Employer should have issued both a Notice Stopping Temporary Compensation Payable and Notice of Compensation Denial.

The Employer filed a Petition to Review to the Commonwealth Court of Pennsylvania, which closely analyzed the statutory and regulatory language and held that Employer filed a version of a Notice of Compensation Payable – the Medical-Only Notice of Compensation Payable – which clearly complied with the Bureau’s Regulations. The Commonwealth Court reasoned that the Employer had acknowledged the injury and compensability was accomplished by the Medical-Only Notice of Compensation Payable. In the Court’s view, this satisfied Employer’s obligations under the PA WC Act to provide notice to the employee that the work injury had been acknowledged. The Commonwealth Court explained that the WCAB’s interpretation was erroneous and would lead to an absurd result. As such, the Commonwealth Court reversed the WCAB’s Order and provided that indemnity benefits be stopped effective the date of issuance of the Medical-Only Notice of Compensation Payable.

From a claims handling perspective moving forward, if an injury is accepted, but payment of indemnity benefits are denied after the initial filing of a Notice of Temporary Compensation Payable, claims adjusters are only obligated to file a Medical-Only Notice of Compensation Payable as long as it is done within the 90 day temporary payment period for stopping payment of indemnity benefits. The Commonwealth Court has clarified that it is no longer a requirement to file the Notice Stopping Temporary Compensation Payable and the Notice of Compensation Denial forms with the Bureau in this situation.

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