Christa A. Dotson
cad@jenkinsfenstermaker.com

New Procedure for Resolving Workers' Compensation Coverage Disputes

The West Virginia Workers’ Compensation market opened to insurers wishing to provide coverage to employers in the state beginning July 1, 2008. With multiple carriers now providing Workers’ Compensation coverage, there are sure to be circumstances in which a carrier denies coverage for a claim on the grounds that the claimant filed the claim with the incorrect carrier because it should have been filed with a prior insurer for the employer.

A new procedural rule has been enacted in West Virginia to address these types of situations, and became effective July 1, 2008. The Office of Judges’ Procedural Rules are found at Title 93 of the Code of State Rules. 93 C.S.R. Section 1-20 provides a new mechanism for resolving disputes between carriers in which the only matter in dispute is whether the claim should be compensable as a new claim or as a reopening of a prior claim insured by a previous carrier.

The new regulation emphasizes the importance of resolving disputes between carriers without prejudicing the claimant’s right to prompt Workers’ Compensation benefits, so long as the claim is otherwise compensable but for the coverage dispute.

When a carrier or claim administrator receives a claim and determines that the claim should be rejected because the claim was filed with the incorrect carrier or claim administrator, the carrier or claim administrator should deny benefits, providing the claimant a right to object, also known as “protest.”

If the claimant does file a protest, the new carrier or claim administrator is required to begin conditional payment of benefits within 15 working days of receipt of notice of the claimant’s protest. These payments must continue to be made to the claimant, as indicated by proper medical evidence, until a final decision is rendered by the Office of Judges.

The new carrier or claim administrator is to notify the Office of Judges that another “identifiable person” may be liable for the claim. The new carrier or claim administrator bears the burden of providing sufficient information regarding the previous claim or other carrier/administrator for the Office of Judges to determine that another carrier or claim administrator is potentially chargeable. Assuming such information is provided, the Office of Judges will issue an order joining the other potentially chargeable carrier or claim administrator, providing notice to the other entity. The other carrier or claim administrator will have the opportunity to offer its own defenses and will be provided a reasonable time to investigate the circumstances of the claim.

Under the new regulation, the Administrative Law Judge (“ALJ”) will address any defenses to the claim raised by either potentially chargeable party, but if the ALJ determines that benefits are properly payable to the claimant, then he or she shall decide which carrier is chargeable. If the carrier or administrator which made conditional payments to the claimant is not ultimately held chargeable for the claim, then the ALJ will direct appropriate reimbursement or monetary adjustment. The chargeable carrier or claim administrator will have the right to appeal the ALJ’s decision to the Workers’ Compensation Board of Review both as to the merits of the claim and any defenses, as well as the chargeability determination.

If you have any questions regarding this new Workers’ Compensation litigation procedure for resolving disputes regarding the properly chargeable carrier or claim administrator, please contact us at 304.523.2100.