Termination of Benefits in Louisiana Workers Compensation

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How Benefits Can be Terminated in Louisiana Workers Compensation

Unfortunately, in Louisiana workers compensation, the workers compensation insurance company can lawfully terminate workers compensation benefits - both medical benefits and lost wage (indemnity) benefits - without any approval from the Louisiana Office of Workers Compensation.

And, the workers compensation insurance company can terminate an employee's workers compensation benefits while the injured employee is still under active medical care.

Typical reasons that the workers compensation insurance company tries to terminate workers compensation benefits are:

    1. The employee's updated medical status; and
    2. Misconduct by the employee that is unrelated to the claim.

For example, Louisiana law holds that Temporary Total Disability benefits can be terminated when the employee's physical condition has resolved to the point that a reasonable and reliable determination of the extent of disability may be made, and the condition has improved to the point that continued, regular treatment by a physician is not required.

The workers compensation insurance company can also terminate an employee's workers compensation benefits if the employee refuses to undergo reasonable treatment, because the employee must make every effort to get better so that the employee can return to work.

And, the workers compensation insurance company will frequently terminate an employee's workers compensation benefits following a Second Medical Opinion (SMO), which is an examination by the workers compensation insurance company's own doctor.  

In fact, the workers compensation insurance company will terminate an employee's workers compensation benefits if the Second Medical Opinion report of the insurance company's doctor states that the employee can go back to work, even if the employee's own treating physician states that the employee cannot go back to work.

However, the workers compensation insurance company does need to obtain the approval of the Louisiana Office of Workers' Compensation prior to terminating an injured employee's workers compensation benefits if the only basis for the termination of benefits is that the employee refuses to submit to an examination by the insurance company's own doctor.

Also, the workers compensation insurance company cannot terminate the workers compensation benefits of an injured employee just because the injured employee misses a medical appointment.

What To Do if Benefits are Terminated in Louisiana Workers Compensation

First of all, the best thing that an injured employee can do to deal with a termination of workers compensation benefits is to prevent the benefits from even being terminated in the first place.

And the best way to prevent a termination of workers compensation benefits is to hire a qualified experienced Louisiana workers compensation attorney before the termination of benefits occurs.

Not only are there a number of steps an attorney can take to avoid a termination of benefits, but typically the workers compensation insurance company will think twice before terminating an employee's workers compensation benefits if that employee is represented by a hands-on Louisiana workers compensation attorney.

Nonetheless, if the injured employee's workers compensation benefits are in fact terminated, the employee can:

    1. Negotiate with the workers compensation insurance company for a reinstatement of the benefits;
    2. Request an Independent Medical Examination (IME) which is an examination by a third doctor, usually chosen by the court;
    3. File a Disputed Claim for Compensation (Form 1008) with the Office of Workers' Compensation, in order to go to court;
    4. Return to work in a restricted capacity, such as light duty; and
    5. Gather additional medical evidence in order to convince the workers compensation insurance company to reverse its position.

An employee's best course of action following a termination of benefits will depend on the specific reasons why the benefits were terminated in the first place.

And the best way to choose the right course of action following a termination of workers compensation benefits is to be represented by an experienced Louisiana workers compensation attorney.

The Safe Harbor Provisions in Louisiana Workers Compensation

Under Louisiana workers compensation law, a workers compensation insurance company which terminates all benefits must inform the injured employee by sending a Form 1003 Stop Payment Form.  

But also, a workers compensation insurance company which terminates an employee's benefits must complete a Form LWC-WC 1002 (Notice of Payment, Modification, Suspension, Termination, or Controversion of Compensation or Medical Benefits/Notice of Disagreement), and send the completed form to the injured employee by certified mail and to the employee's attorney by facsimile.

In fact, the insurance company must complete and forward a Form 1002 at the same time as the initial payment of indemnity benefits is made to the employee, or on or prior to the effective date of any modification (including a change from TTD to SEB benefits), suspension, termination, or controversion of indemnity or medical benefits.

Unfortunately, this Form 1002 creates a "safe harbor" that protects the workers compensation insurance company from claims by the employee for penalties and attorney's fees. 

That is, if the workers compensation insurance company properly completes and forwards the Form 1002 on time, the employee will not be able to recover penalties and attorney's fees, even if the workers compensation Judge ultimately finds that the denial or discontinuance of benefits was improper.

The employee must follow the following procedures if the employee disagrees with the workers compensation insurance company's action and wants the workers compensation Judge to resolve the dispute: 

    1. Once the injured employee (or ideally the employee's attorney) receives the Form 1002 from the workers compensation insurance company, the employee must complete the Notice of Disagreement portion of the Form 1002 (or a Letter of Amicable Demand) and return it with the original Form 1002 to the insurance company by mail or facsimile.
    2. In the Notice of Disagreement portion of the Form 1002, the injured employee must notify the workers compensation insurance company of the basis for disagreement by stating the type and amount of workers compensation benefits that the employee should be receiving.
    3. Once the workers compensation insurance company receives the Notice of Disagreement portion of the Form 1002 from the injured employee, the insurance company has 7 days in which to agree to pay the benefits that the employee claims in the Notice of Disagreement portion of the Form 1002 that the employee is owed.
    4. If the workers compensation insurance company fails to pay within 7 days all the benefits that the employee claims in the Notice of Disagreement portion of the Form 1002 that the employee is owed, then the employee may file a new Disputed Claim for Compensation (Form 1008) or amend a pending disputed claim with the Louisiana Office of Workers Compensation court.
    5. Once the Disputed Claim for Compensation (Form 1008) is filed by the employee, then the workers compensation insurance company may in its answer request a preliminary determination hearing with the workers compensation Judge, which is a non-binding mini-trial that forecasts how the Judge will rule at an actual full trial on the merits.
    6. If the workers compensation insurance company fails to request a preliminary determination in its answer, then the disputed claim will be scheduled for a workers compensation trial.
    7. If the workers compensation insurance company does request a preliminary determination in its answer, then the disputed claim will be scheduled for a preliminary determination (and shall be held no later than 90 days from the telephone scheduling conference that sets the date for the preliminary determination).
    8. If held, the preliminary determination will be a contradictory hearing in which all parties can introduce evidence, including medical records, physician depositions, and witness testimony.
    9. Once the preliminary determination has been completed, the workers compensation Judge has 30 days to issue a recommendation.
    10. After the workers compensation Judge issues a recommendation, the workers compensation insurance company has 10 days to either: (1) notify the injured employee or his representative in writing that the employer does not accept the determination, or (2) accept and comply with the preliminary determination recommendation, and mail a revised Form 1002 to the injured employee along with the payments due. If the workers compensation insurance company accepts and complies within 10 days of the preliminary determination, it shall not be subject to any penalties or attorney fees.
    11. If the workers compensation insurance company does not accept and comply with the preliminary determination, then the disputed claim will be scheduled for a workers compensation trial.

But again, even if the workers compensation Judge finds at the trial that the denial or discontinuance of benefits was improper, this Form 1002 process initiated by the workers compensation insurance company creates a "safe harbor" that prevents the employee from recovering penalties and attorney's fees. 

The Louisiana Statute for Termination of Benefits in Louisiana Workers Compensation

The primary Louisiana statute regarding termination of benefits is La. R.S. 23:1201.1, which reads as follows:

§1201.1. Controversion of compensation and medical benefits

A. Upon the first payment of compensation or upon any modification, suspension, termination, or controversion of compensation or medical benefits for any reason, including but not limited to issues of medical causation, compensability of the claim, or issues arising out of R.S. 23:1121, 1124, 1208, and 1226, the employer or payor who has been notified of the claim, shall do all of the following:

(1) Prepare a "Notice of Modification, Suspension, Termination, or Controversion of Compensation and/or Medical Benefits".

(2) Send the notice of the initial indemnity payment to the injured employee on the same day as the first payment of compensation is made by the payor after the payor has received notice of the claim from the employer.

(3) Send a copy of the notice of the initial payment of indemnity to the office within ten days from the date the original notice was sent to the injured employee or by facsimile to the injured employee's representative.

(4) Send the "Notice of Payment, Modification, Suspension, Termination, or Controversion of Compensation and/or Medical Benefits" to the injured employee by certified mail, to the address at which the employee is receiving payments of compensation, on or before the effective date of a modification, suspension, termination, or controversion.

(5) Send a copy of the "Notice of Payment, Modification, Suspension, Termination, or Controversion of Compensation and/or Medical Benefits" to the office on the same business day as sent to the employee or to his representative.

B. The form of the "Notice of Payment, Modification, Suspension, Termination, or Controversion of Compensation and/or Medical Benefits" shall be promulgated by the office.

C. The assistant secretary shall make the notice available upon request by the employee and the employee's representative.

D. If the injured employee is represented by an attorney, the notice shall also be provided to the employee's representative by facsimile. Proof that the notice was sent to the employee's representative by facsimile shall be prima facie evidence of compliance with Subsection A of this Section.

E. The provisions of this Section shall not apply to questions of medical necessity as provided by R.S. 23:1203.1.

F.(1) Any injured employee or his representative who disagrees with any information provided on the notice form sent by the employer or payor, shall notify the employer or payor of the basis for disagreement by returning the form to the employer or payor as provided on the form, or by letter of amicable demand, and provide any amounts of compensation he believes appropriate.

(2) No disputed claim shall be filed regarding any such disagreement unless the notice required by this Section has been sent to the employer or payor who initially sent the notice.

G.(1) If the employer or the payor provides the benefit that the employee claims is due, including any arrearage, on the returned form or letter of amicable demand within seven business days of receipt of the employee's demand, the employer or payor shall not be subject to any claim for any penalties or attorney fees arising from the disputed payment, modification, suspension, termination, or controversion.

(2) If the employer or payor does not provide the benefit that the employee claims is due, the employee may file a disputed claim for benefit provided it is filed within the prescriptive period established under R.S. 23:1209. If the prescription date of the claim occurs within the seven-day waiting period, the employee will be allowed to file a disputed claim without waiting the seven business days as provided in Paragraph (1) of this Subsection. However, the employer or payor shall still be allowed seven business days to provide the benefit that the employee claims is due, and if the employer does provide the benefit, the disputed claim will be moot regarding the issues arising out of the payment, suspension, modification, termination, or controversion of benefits. All other issues alleged in the disputed claim will be unaffected by the payment.

H. The employer or the payor who wishes to have a preliminary determination hearing shall request the hearing in his answer to the disputed claim arising from the notice of initial payment or any subsequent modification, suspension, termination, or notice of controversion. In cases where a disputed claim is already pending when an issue arises from a subsequent notice of payment, modification, suspension, termination, or controversion of benefits, such request shall be made in an amended pleading filed within fifteen days of the expiration of the seven-day period set forth in Paragraph (G)(1) of this Section.

I.(1) An employer or payor who has not complied with the requirements set forth in Subsection A through E of this Section or has not initially accepted the claim as compensable, subject to further investigation and subsequent controversion shall not be entitled to a preliminary determination. An employer or payor who is not entitled to a preliminary determination or who is so entitled but fails to request a preliminary determination may be subject to penalties and attorney fees pursuant to R.S. 23:1201 at a trial on the merits or hearing held pursuant to Paragraph (K)(8) of this Section.

(2) If disputed by the parties, upon a rule to show cause held prior to the preliminary determination or any hearing held pursuant to this Section, the workers' compensation judge shall determine whether the employer is in compliance.

J.(1) Upon the filing of the request for a preliminary determination hearing, the workers' compensation judge shall initiate a telephone status conference with the parties to schedule the discovery deadlines and to facilitate the exchange of documents. The scope of the discovery will be limited to the issues raised in the disputed payment, suspension, modification, termination, or controversion of benefits. The preliminary determination hearing shall be a contradictory hearing at which all parties shall have the opportunity to introduce evidence.

(2) The testimony of physicians may be introduced by certified records or deposition. The parties may agree to allow uncertified medical records and physician reports to be introduced into evidence. Witnesses may testify at the hearing or, if agreed on by the parties, may offer testimony by introduction of a deposition.

(3) The preliminary determination hearing shall be held no later than ninety days from the scheduling conference. However, upon a showing of good cause, one extension of an additional thirty days is permitted upon approval by the workers' compensation judge. The workers' compensation judge shall issue a preliminary determination no later than thirty days after the hearing.

(4) Any employer or payor requesting a preliminary determination hearing shall produce all documentation relied on by the employer or payor in calculating, modifying, suspending, terminating, or controverting the employee's benefits. These documents shall be disclosed to the employee or the employee's representative within ten days of the request for the preliminary determination hearing.

K.(1) The employer or payor shall, within ten calendar days of the mailing of the determination from the workers' compensation judge, do either of the following:

(a) Accept and comply with preliminary determination of the workers' compensation judge regarding the payment, suspension, modification, termination, or controversion of benefits and mail a revised "Notice of Modification, Suspension, Termination, or Controversion of Compensation and/or Medical Benefits" to the injured employee or employee's representative, along with any payment amount determined, and any arrearage due.

(b) Notify the injured employee or his representative in writing that the employer or payor does not accept the determination.

(2) Any employer or payor who accepts and complies with the workers' compensation judge's determination within ten calendar days, shall not be subject to any penalty or attorney fees arising out of the original notice which was the subject of the preliminary hearing.

(3) Any employer or payor who accepts and complies with the workers' compensation judge's determination, but who disagrees with such preliminary determination, shall notify the court within ten days of receipt of the preliminary determination of his desire to proceed to a trial on the merits of the matters that were the subject of the preliminary hearing.

(4) Any employer or payor who does not accept the workers' compensation judge's determination or fails to comply with the determination within ten calendar days, may, at the trial on the merits, be subject to penalties and attorney fees pursuant to R.S. 23:1201, arising out of the issues raised in the original notice of payment, modification, suspension, termination, or controversion of benefits, which was the subject of the preliminary hearing.

(5) Any injured employee who disagrees with the preliminary determination shall notify the court within ten days of the receipt of such preliminary determination of his desire to proceed to a trial on the merits of the matters that were the subject of the preliminary hearing. If the employer or payor has accepted and complied with the preliminary hearing determination, the employer or payor shall also be entitled to litigate all issues including those issues presented at the preliminary determination hearing.

(6) Any employer or payor who accepts and complies with the determination of the workers' compensation judge, and who does not request to proceed to trial on the merits of the matters that were the subject of the preliminary hearing, shall retain the right to further controvert future matters. The workers' compensation judge's determination shall not be considered an order concerning benefits due requiring modification, nor shall the determination be considered res judicata of any matters which were the subject of the preliminary hearing. The acceptance of the preliminary determination by the employer or payor shall not be considered an admission.

(7) In matters where the employee has filed a disputed claim and the employer or payor is not entitled to a preliminary determination, the matter shall proceed to trial on the merits.

(8)(a) Upon motion of either party, whether or not the employer or payor is entitled to a preliminary determination, the workers' compensation judge's ruling in a hearing shall be conducted as an expedited summary proceeding and shall be considered an order of the court and not requiring a further trial on the merits, if it concerns any of the following matters:

(i) The employee has sought choice of physician pursuant to R.S. 23:1121(B)(1).

(ii) The employee has filed a claim pursuant to R.S. 23:1226(B)(3)(a).

(iii) The employer or payor seeks to compel the employee to sign the choice of physician form pursuant to R.S. 23:1121(B)(5).

(iv) The employer or payor seeks to compel the employee's submission to a medical examination pursuant to R.S. 23:1124.

(v) The employer seeks to require the employee to return form LWC-1025 or LWC-1020.

(vi) The employee seeks to have a suspension of benefits for failure to comply with R.S. 23:1121(B)(1) lifted.

(vii) The employee seeks to have a suspension of benefits for failure to submit to a medical examination lifted.

(viii) The employee seeks to have a suspension of benefits for failure to comply with R.S. 23:1208(H) lifted.

(ix) The employee seeks to have a reduction in benefits for failure to cooperate with vocational rehabilitation lifted.

(b)(i) The workers' compensation judge shall set the expedited summary proceeding hearing date pursuant to Items (a)(iii), (iv), and (v) of this Paragraph within three days of receiving the employer's motion for the expedited hearing. The hearing shall be held not less than ten nor more than thirty days after the motion has been filed.

(ii) The workers' compensation judge shall provide the notice of the hearing date to the employee or his attorney at the same time and in the same manner that the notice of the hearing date is provided to the employer or payor.

(iii) For the purposes of this Section, the party seeking an expedited hearing shall not be required to submit the dispute to mediation or go through a pretrial conference before obtaining a hearing. The hearing shall be conducted as a rule to show cause.

(c) The workers' compensation judge shall order the employee to sign the choice of physician form, enforce the employee's submission to the medical examination, or provide the LWC-1020 or LWC-1025 form as applicable unless the employee can show good cause for his refusal.

(d) If the employee seeking relief pursuant to this Paragraph can show good cause for his refusal, the workers' compensation judge shall order the suspension or reduction in benefits lifted and the payment of any arrearage due. If the employee fails to show good cause for refusal, the workers' compensation judge shall order the suspension or reduction in benefits to continue until the employee complies.

(e) An employer or payor who is entitled to a preliminary determination and who complies with an order of the court issued pursuant to a hearing held in accordance with this Paragraph within ten calendar days shall not be subject to any penalty or attorney fees arising out of the original notice which was the subject of the hearing.

L. Notwithstanding any provision in this Section to the contrary, the failure to comply with any provision of this Section shall not itself be considered a failure to reasonably controvert benefits; however, failure of the employer or payor to comply shall result in loss of penalty and attorney fee protections provided in this Section.

Acts 2013, No. 337, §1.

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