By: Gina Case, Associate, Sarasota 

On May 1, 2015, the First DCA issued an opinion in Babahmetovic v. Scan Design, 40 Fla. L. Weekly D 1030 (Fla. 1^st DCA 2015) that appeared to stand for the proposition that an employer/carrier must actually elect the 120-day investigative period found in FS 440.20(4) by issuing a “120-day letter” in order to avail itself of the right to deny compensability of a claim within the prescribed time period.  In the weeks following the Babahmetovic decision, case law updates and seminars equated the opinion with a new requirement that an E/C must issue a letter to the claimant electing to pay and investigate in order to rely upon the 120 day rule.

Subsequently, the E/C in Babahmetovic filed a Motion for Re-Hearing, which was granted by the First DCA.  A second opinion was issued in this regard on October 8, 2015 (Babahmetovic v. Scan Design, 176 So.3d 1006 (Fla. 1^st DCA 2015)) and substituted for the opinion issued on May 1, 2015.  In the revised Babahmetovic opinion, the First DCA declined to address FS 440.20(4) at all, instead relying on a distinction between major contributing cause of the initial accident versus major contributing cause of a subsequent need for care when a compensable injury combines with a pre-existing condition pursuant to FS 440.09(1)(b).  Thereafter, carriers questioned whether the absence of the 120-day discussion in the subsequent opinion effectively abolished the requirement of issuing a “120-day letter” to the claimant in order to elect to investigate a claim pursuant to FS 440.20(4). 

To interpret the new opinion in Babahmetovic, however, as an abrogation of the requirements of FS 440.20(4) is to misunderstand the real issue before the First DCA in rendering its opinion.  The issue in Babahmetovic is not whether failure to issue a “120-day letter” defeats an E/C’s right to deny compensability of a claim, but whether the E/C properly denied a request for a one-time change of physician based on major contributing cause.

In the underlying case, the Employer/Carrier denied compensability of the claim based on a medical opinion from an authorized treating physician that the claimant suffered from both a sprain and pre-existing degenerative disc disease, and the sprain was less than 50% the cause of the claimant’s current condition.  A Notice of Denial was filed in this regard almost two (2) months following the date of accident indicating that the industrial accident is not the major contributing cause of the need for treatment.  Both parties at hearing before the JCC, however, agreed that the Division filing was intended to be a statement that there was never a compensable injury.  The JCC, in denying the claimant’s request for a one-time change, agreed with the E/C that there was no compensable injury based on the authorized doctor’s opinion that the “sprain” was less than half the cause of the injury and need for care. 

The First DCA, however, opined that the JCC utilized the wrong major contributing cause analysis in finding that there was no compensable injury.  The evidence presented at hearing established that the claimant did, in fact, sustain a “sprain” on the date of accident.  Thus, the appropriate major contributing cause analysis was whether the need for treatment was related to the “sprain” versus the pre-existing degenerative disc disease.  In essence, the First DCA found that E/C failed to present evidence that the “sprain” was caused by the degenerative disc disease and therefore not an injury that occurred within the course and scope of employment.  As the only evidence presented at hearing was that the claimant sustained a “sprain” on the date of accident, the claimant established that there was a compensable injury and he was therefore entitled to a one-time change of physician.  Of note, in order to reach its holding, the First DCA was not required to address the 120-day provision found in FS 440.20(4).

Based on this misunderstanding of the ultimate holding of the Babahmetovic decision, E/Cs are now questioning the current state of the 120-day pay and investigate provision.  The answer, in this author’s opinion, is that there simply has been no change in the requirements of FS 440.20(4).  Such statutory provision provides that “Upon commencement of payment as required under subsection (2) or s. 440.192(8), the carrier shall provide written notice to the employee that it has elected to pay the claim pending further investigation…”  Thus, there has always been a requirement that carriers notify claimants of their intention to invoke the 120-day pay and investigate period.

While the effect of not issuing a 120-day letter is debatable, it is important to keep in mind the purpose of the 120-day investigative period.  Once an Employer/Carrier becomes aware of an alleged work related incident, it has 14 days to either deny the claim in its entirety or begin paying benefits.  The 120-day provision was therefore intended to protect carriers from making hasty decisions regarding compensability by providing a third option (“pay and investigate”).  Thus, it is within the carrier’s best interests to make its intentions clear from the outset to avoid unnecessary litigation over compensability of a claim.  By not issuing a 120-day letter, an E/C risks a finding that there was no election to “pay and investigate,” thus equating payment of benefits with acceptance of the claim as compensable.