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Advisory 97-02


Because of the number of improper submissions, Advisory 96-05 was issued on April 5, 1996 to clarify carrier responsibilities relating to the filing of TWCC-21 forms (Payment of Compensation or Notice of Refused or Disputed Claim). That Advisory attempted to clarify when a carrier was and was not required to file this form and gave specific examples as to when a carrier should not file. The purpose of this Advisory is to clarify an item from Advisory 96-05 and to discuss issues relating to disputes of disability.

Definition of a Disability Dispute

A disability dispute occurs when the insurance carrier accepts the claim as compensable but disputes that the injured worker's inability to work is attributable to the compensable injury. A disability dispute is not the same as a compensability dispute, which is generally filed if the insurance carrier believes that it is not liable for the claim or that the injury is not compensable under the Texas Workers' Compensation Act, and that neither medical nor income benefits are owed.

Filing TWCC-21s

In part, Advisory 96-05 stated that "carriers shall not file a TWCC-21 when compensability is not in dispute, but the carrier disputes the existence of disability." This statement was intended to address the situation where a carrier accepts compensability of the injury and verifies with the injured worker that there is no lost time/wages. In this situation the carrier should not file a TWCC-21. If the injured worker is not losing time or wages and does not claim disability, the carrier has no duty to file a TWCC-21 affirming its intention to pay benefits as they accrue or to deny disability if it was not being claimed.

Some carriers have interpreted Advisory 96-05 to mean that a carrier should never file a disability dispute with the Commission if compensability is accepted. This is not the case. If an injured worker is claiming lost time/wages as a result of an injury or the employer is reporting lost time/wages, the carrier must either pay the benefits or file a TWCC-21 stating the reasons why benefits are not being paid. The TWCC-21 must be filed with the injured worker and electronically filed with the Commission.

When to File a Disability Dispute

A disability dispute may be filed at any time prior to Maximum Medical Improvement (MMI). However, per Rule 124.7, carrier must either pay benefits within 7 days or benefit accrual or file a dispute in accordance with Rule 124.6. (As indicated in the preamble to Rule 124.7, carriers are expected to monitor the claims for benefit accrual and verify disability.) If an injured worker claims disability that results in benefit accrual, and the carrier fails to timely dispute the disability (i.e. no later than the 7th day after benefit accrual), the carrier may be in violation of the Act for failing to pay benefits up to the day the carrier eventually disputes the disability. (Note that this is also the case in a compensability dispute; if a carrier fails to timely dispute compensability of a claim and fails to initiate benefits, the carrier may be in violation of the Act for failing to pay benefits up to the day it eventually disputes the claim.) If a carrier initiates benefits and later disputes disability, the carrier may not suspend benefits without providing the claimant with sufficient substantive information to enable the claimant to understand the carrier's position, as required by Rule 124.4. Further, Texas Labor Code, Section 409.024 provides that a carrier commits an administrative violation if it does not have reasonable grounds to terminate benefits. Examples of reasonable grounds my include, but are not limited to, a doctor's return to work release, evidence showing return to work at preinjury earnings, a TWCC-69 from the treating doctor or designated doctor certifying MMI, reaching statutory MMI, or an agreement with the injured worker.

Grounds for Disputes

Rule 124.6(a) begins with the statement "A carrier that refuses to begin paying temporary income, lifetime income, or death benefits shall notify the commission and the claimant or representative, on a form TWCC-21 and in the manner prescribed by the commission." This statement applies to both compensability disputes and disability disputes. Therefore, a disability dispute must contain a full and complete statement of the grounds for the carrier's refusal to initiate benefits in accordance with Rule 124.6(a)(9) instead of conclusory statements such as "no medical evidence received to support disability' or similar phrase (see Rule 124.6(a)(9) for other examples). The proper grounds for disputing disability should be based on the specific facts of the claim and the definition of disability under the Texas Workers' Compensation Act.

Disability and Lack of a Doctor's Recommendation

Failure to immediately see a doctor or failure to be explicitly taken off work by a doctor is not conclusive proof that an injured worker does not have disability. A claimant's testimony alone can establish disability. An injured worker who does not see a doctor for several days may have had disability prior to the doctor's examination, even if the off-work slip does not indicate this. If an injured worker claims disability in the absence of a doctor's recommendation, carriers must evaluate the nature of the injury, the facts of the claim, and the injured worker's condition in order to determine whether or not the injured worker is experiencing disability, and either pay or dispute the benefits appropriately. In order to determine whether or not the injured worker is experiencing disability, carriers must evaluate the injured workers' condition and work status to determine whether the definition of disability has been met. Per Section 401.011(16) of the Texas Labor Code, disability "means the inability because of a compensable injury to obtain and retain employment at wages equivalent to the preinjury wage."

Prospective Disputes of Disability

Some carriers have begun filing TWCC-21 forms disputing all future disability when an injured worker has not lost time or has returned to work. Just as MMI cannot be set prospectively, disability that has not occurred cannot be disputed. Disputes must be filed based on the facts of a case. Prospective disability disputes, filed before any claim of disability is made, are not based on actual facts but rather on what the carrier believes may happen. There is no way for the carrier to predict that the injured workers is not going to have future disability. Therefore such a dispute would not be valid because it would not be based on the facts of the case. These prospective disability disputes are exactly the type of dispute that Advisory 96-05 prohibits. Prospective disability disputes filed despite this Advisory and Advisory 96-05 will be considered invalid. If an injured worker claims disability that results in benefit accrual, and the carrier does not timely file a valid dispute, the carrier may be in violation of the Act for failing to pay benefits up to the day the carrier correctly disputed the disability.

Signed July 18, 1997

Todd K. Brown, Executive Director