Workers’ Comp: How to Deny a Claim and Make it Stick 

By T. Joseph Lynch

The Workers’ Compensation system in the state of Tennessee is often frustrating and difficult to navigate for Tennesee employers.  Often employers are confronted with situations in which an employee’s claim is either fraudulent or at least exaggerated with regard to its severity.  In general the Tennesee Workers’ Compensation system and the Court tend to favor employees with regard to compensability determinations.  That being said the 2014 legislative changes mitigated this somewhat.  Prior to 2014, Courts gave deference to the employees in close questions of law or fact.  This was done away with with the establishment of the new Bureaus of Workers’ Compensation Claims and the Court of Workers’ Compensation Claims in 2014.  Nevertheless, the fact remains that employers are usually fighting an uphill battle when contesting medical causation and issues of whether an injury occurred in the course and scope of employment.

The denial of a claim can have significant repercussions.  An employer or insurance carrier can utilize a Form C23 to deny a claim.  This effectively stops both medical and indemnity benefits.  However, if it is determined that a claim is wrongfully denied, the consequences can be somewhat severe.  These consequences can include penalties from the Bureau of Workers’ Compensation Claims as well as the requirement that an attorney for the employee be reimbursed.  Furthermore, if a claim is denied early, typically the medical treatment will be in the hands of the employee instead of the employer and the state of Tennessee has the right to provide a panel of physicians from which an employee can choose to treat.  An early denial of a case can result in the employee having the freedom to choose their own physicians and the employer will essentially lose the right to control the medical treatment.  This is important due to the fact that an authorized treating physician selected from a panel is presumed correct on a number of legal issues.  This presumption applies to medical causation and impairment.

As such, it’s imparitive that if an employer and/or insurance carrier choose to deny a claim, that they assess whether or not a full and sufficient investigation of the facts and circumstances of the claim have been conducted.  Furthermore, the Courts frown upon an employer or insurance carrier making a determination to deny a case based upon medical causation when there is an absence of medical proof.  The Court would prefer an employer or insurance carrier when in doubt of the compensibility of a claim for medical causation reasons, to provide a panel of physicians and then posit a series of causation questions to the authorized treating physician.  Then the employer can make a denial determination based upon that physician’s conclusions and determinations regarding medical causation.  Employers and insurance carriers are on a firmer footing if instead of a medical causation determination they are making a determination based upon an affirmative defense.   Affirmative defenses in Tennessee include things like notice, statute of limitations, willfull misconduct, etc.  Again the court will scrutinize the facts and circumstances upon which the affirmative defense is based and ultimately there could be consequences in the way of penalties and reimbursement of attorney’s fees if a claim is wrongfully denied.

As such, it is always recommended that if an employer is seeking to deny a claim that they consult with a legal expert.

Another frustration that is common to Worker’s Compensation cases is the changing landscape of medical causation testimony.  Oftentimes doctors will respond to causation letters but later in deposition testimony will change or alter the nature of their medical opinions.  Also additional independent physicians can be retained whose opinions can change the landscape of a case.  The Courts are placed in an unenviable position of having to choose between which medical professional is more credible or believable. Judges are not medically trained and so it’s quite a challenge for the court system to navigate these waters. 

Statistically 99% of Workers’ Compensation cases in Tennessee, legitimate or otherwise, settle.  A valuable tool to resolve cases that are either fraudulent or questionable in nature and extent of disability can be resolved on what is called a “doubtful and disputed bases”.  This is a resolution in which the parties simply agree to pay money and to refuse to acknowledge whether or not the claim is in fact compensable.  This allows for a dispute resolution and the closure of all future medical treatment without the necessity of going through a long, protracted, and expensive process of litigation.

An employer’s relationship with their insurance carrier can be of great value.  Typically employers will either be fully insured and employ an insurance company to function as a third-party administrator or they will rely entirely on an insurance carrier to not only handle a claim but also provide medical and imdenity benefits.  Typically a successful denial of a claim will depend upon the information that is provided to the insurance carrier or TPA from the employer.  As such, cooperation and communication between an employer and an insurance carrier can be invaluable in making a denial stick.

In conclusion, employers are encouraged to work closely and report regularly to their insurance carrier and defense counsel in order to properly navigate the waters of a C23 Notice of Denial.  Given the potential consequences, it is important to weigh all the pros and cons priot to deniying a claim.  Sometimes emotions can be  high with regard to an employee’s behavior and the decision to deny a case should be based not on emotions but on logic, facts and applicable laws and regulations.