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ADVISORY 2002-15

SUBJECT: Status of Downs Decision - Final Update

On August 16, 2000, the 4 th Court of Appeals in San Antonio issued a revised decision in the case of Downs v. Continental Casualty Co., Cause No. 04-99-00111-CV. That decision held "a carrier waives its right to deny compensability if it fails to comply with section 409.021(a) of the Texas Labor Code by either agreeing to begin the payment of benefits or giving written notice of its refusal to pay within seven ('7') days after receiving written notice of an injury."

On June 6, 2002, the Texas Supreme Court affirmed the appellate court decision that Texas Labor Code 409.021 and 409.022 require an insurance carrier to begin benefit payment as required by the Texas Workers' Compensation Act or send a notice of refusal to pay benefits within seven days after it receives written notice of injury. The Court stated that a carrier that fails to take either action has not met the statutory requisite to later contest compensability.

A Motion for Rehearing filed by the insurance carrier in this case was denied by the Texas Supreme Court on August 30, 2002. As a result, the Downs decision, and the requirement to adhere to a 7 day "pay or dispute" provision, is now final. All previous Advisories issued by the Commission regarding this issue are superseded by this Advisory and the Supreme Court decision.

The Commission will continue to provide an acknowledgement of an insurance carrier's agreement to pay benefits as they accrue and are due. The insurance carrier must check the appropriate box in item number 1 on a TWCC-21 form (hereinafter referred to as "cert 21s") and forward the completed form to Texas Workers' Compensation Commission, 4000 S. IH-35, Cert 21s - MS 93A, Austin, Texas 78704. The acknowledged form will be returned to the insurance carrier via the insurance carrier's representative's box at TWCC's Central Office. Since the TWCC will not retain copies of these cert TWCC 21 forms, insurance carriers will be responsible for providing the TWCC acknowledged forms at any subsequent dispute.

As an alternative to filing the paper version of the cert 21s, the Commission will also continue to accept electronic submission of cert 21s via e-mail. The Commission has established the e-mail address of solely for the receipt of these filings. The Commission will provide an automated electronic acknowledgment of the receipt of the insurance carrier's submission of electronic cert 21s. Only cert 21s should be submitted to this address. Other forms filed at this address will not be considered filed with the Commission and no action will be taken on those forms. Claim information required to be filed with the Commission via Electronic Data Interchange (EDI) must still be filed in accordance with the accepted EDI standards and protocols.

Signed on this 12th day of September, 2002

Richard F. Reynolds, Executive Director

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