Morgan’s Tip of the Week- Important new 120-day rule letter case

Greetings, last week the 1st DCA issued a ruling regarding the 120-day rule and the necessity of sending the “120-day letter” in the link below is the case of Churchill v. DBI Services (1D21-3199).

The “initial provision of compensation or benefits” starts a Carrier’s 14- day clock to “pay, pay and investigate, or deny”  and this “remains an accurate description of an adjuster’s potential choices when faced with a request for benefits.”

However, since the Checkers case in 2006, the law had been fairly settled that the Employer/Carrier had the option to utilize the 120-day rule  “pay and investigate” regardless of whether the 120-day letter to the claimant had been sent or not.   Well, last week in Churchill the 1st DCAsaid that they were not bound by the dicta in the  Checkers case.

The 1st DCA has now ruled that the 120-day letter MUST be sent to the claimant or the Carrier accepts the claim as compensable.  The letter does not need to be sent with the first payment/provision of a medical benefit, but it needs to be sent “as soon thereafter as reasonably practicable”.  In the Churchill case, they felt that 59 days after the initial provision of benefits was too long to wait to send the 120-day letter and therefore the claim was “accepted” as compensable.

Here are some key quotes from the DCA on the issue and their rationale:

“Uncertain carriers have yet another statutory obligation under subsection 440.20(4): to send a so-called “120-day letter.” Without that letter, a claimant would not know to preserve evidence for potential litigation of entitlement to benefits, litigation which the Legislature intended to eliminate.”

“Without a pay and investigate letter, then, the E/Cs who have furnished benefits are “deemed to have accepted the employee’s injuries as compensable” or to have “waive[d] the right to deny compensability unless [they] can establish material facts relevant to the issue of compensability that [they] could not have discovered through reasonable investigation within the 120-day period.”

“We hold that an E/C’s election to delay their decision about compensability by “paying and investigating” requires written notice per subsection 440.20(4). The letter does not start the 120-day period, “initial provision of compensation or benefits” does. See § 440.20(4), Fla. Stat. But only the letter invokes the right to rely on the “pay and investigate” statutory mechanism. And only a timely letter will suffice. Section 440.20 again sets the schedule: the letter is due “[u]pon commencement of payment.” § 440.20(4), Fla. Stat. Although “upon” is not defined in chapter 440, we understand this to mean either at the time of making the payment or as soon thereafter as reasonably practicable. “

“Thus, to show that their provision of benefits was not a wholesale acceptance of compensability, the E/C have the burden to prove that they gave the injured worker written notice in accordance with statute.”

This case creates a major dilemma in claim’s handling.   If the 120-day letter is automatically sent at the very onset of the claim, that means you are agreeing to pay for everything up until you make the decision to deny within 120 days.   That could include costly hospital bills that could have otherwise been denied before 14 days.  Sending anytime before 14 days after the provision of the first benefit  may be reasonable, but it may have to be a case by case basis.

And what does this mean for all the open claims where you are in the 120 period now but no 120-day letter has been sent yet.   It is very possible that the Churchill case would apply to all open cases, so perhaps sending the letter now may be the best and only option to continue your 120-day investigation.


Morgan Indek | Managing Partner