Greetings, by special request, here is an updated Tip on the 120-day rule. See below for my original Tip on the Churchill case from 2023 that really changed how we handle the 120.
Within 14 days of the initial provision of benefits, the E/C has 3 choices: accept the claim, deny the claim or invoke the 120-day rule and pay while investigating compensability. The Churchill case established that the E/C must send the claimant the 120-day letter on or around the 14th day or “as soon thereafter as reasonably practicable”. If you wait too long to send the letter, you are deemed to have accepted the claim. (Churchill was 59 days after the initial provision of benefits, too late per the 1st DCA.)
So the question posed, was when/how do carriers decide to send the 120-day versus deny immediately? It is unfortunately case-by-case but I always caution do not send the letter when very little is known about the claim or the accident and there is an extended hospital stay at the onset of the claim. If you send the 120-day letter, that means you have agreed to pay for that hospital stay and all other benefits up until you decide to file a notice of denial (or 120 days goes by and it is accepted). That means you could wind up paying for a hundreds of thousands of dollar totally unrelated and non-compensable hospital stay because the letter was sent. It says you will “pay and investigate”.
The 120 comes into play even after we accept a claim as compensable, when new conditions arise that may or may not be compensable. Some great examples of this would be a referral to a psychiatrist, treatment for arthritis, etc…You really have to watch the narrative notes for any changes in the diagnosis.
If a new condition arises more than 120 days after the accident, are we stuck with it because the claim is compensable under the 120-day rule?
The answer is no, and you actually can assert another 120-day pay and investigate period on the new condition. As the Churchill case spelled out, we do however have a duty to send the 120-day letter so the claimant is aware we are invoking the right to pay and investigate. The letter does not need to be sent with the first provision of treatment for that new condition, but it needs to be sent “as soon thereafter as reasonably practicable.” The clock would start with the first treatment for that new condition. To be safe, you could even send the 120-day letter to the claimant with the appointment letter. The letter doesn’t start the clock, it would still be that first appointment.
21001581_291_06142023_12301757.pdf
As always, please let me know if you have any questions.
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Sincerely,
Morgan Indek | Managing Partner