DISPUTING CLAIMS: NOTICES OF CONTROVERSY AND THE 14-DAY RULE

DISPUTING CLAIMS: NOTICES OF CONTROVERSY AND THE 14-DAY RULE

Benefit payment procedures established by the 1992 Act are applicable to all dates of injury. Section 201(5) outlines when payments are due, and the Board's Rules (Chapter 1) clarify what an employer must do when it receives notice of a lost time claim. Specifically, within 14 days after notice or knowledge of a claim, an employer must take one of three steps: pay the claim on an "accepted" basis (file a Memorandum of Payment with "accepted" checked in Box 18); pay "without prejudice" (file a Memorandum of Payment with "voluntary payment pending investigation" checked in box 18); or controvert (file a Notice of Controversy). Failure to file forms in a timely manner is a reporting violation and subject to penalties.

Section 205 provides that payment of compensation for total or partial incapacity is due and payable "within 14 days after the employer has notice or knowledge of the injury or death ..." This requirement means that payments must be made (or a claim controverted) within 14 days of the date of injury, or the date when the employee asserts a claim for benefits. However, the Rules make clear that an employer is penalized for failure to pay or controvert only if no action is taken within 14 days "of notice or knowledge of a claim for incapacity or death benefits for a work-related injury." According to Chapter 1 §1, if no Notice of Controversy is filed within 14 days of notice or knowledge of a claim for lost time, the employer must pay the employee total incapacity benefits with a credit for earnings or other statutory offsets. The employer or carrier must pay this penalty of accrued benefits and file a NOC before the requirement of paying the claimed benefits ceases. However, the failure to file a timely NOC does not mean that the employer has accepted the claim; the penalty payments made pursuant to Chapter 1 are made "without prejudice."

A NOC or MOP should be filed for each new period of incapacity claimed. The filing of a NOC will trigger a mediation.

The treatment of medical bills is different, as they do not have to be paid until 30 days after "notice of nonpayment" by certified mail. (39-A M.R.S.A. §205(4)) (see MEDICAL FEE PAYMENT). The Board has advised employers and insurance carriers, however, that they should file a Notice of Controversy with respect to medical bills under all circumstances, even if the employer or carrier has already filed an initial NOC with respect to medical treatment.

In addition to the requirement to pay accrued benefits for a 14-day violation, the employer may incur a penalty if claimed benefits are not paid within 30 days after they are "due and payable" unless there is an "ongoing dispute." Rule 1.5 (see INTEREST AND PENALTIES).