Claiming MMI early lands insurer in hot water

An insurer's final admission may be invalidated where it conflicts with the specific medical findings for maximum medical improvement, and the insurer may be subject to penalties.

Case name: Paint Connection Plus and Twin City Fire Insurance Co. v. Industrial Claim Appeals Office of the State of Colorado and Sinkey, No. 09CA0598 (Colo. Ct. App. 01/07/10).

Ruling: The Colorado Court of Appeals upheld the imposition of penalties against an insurer for filing an invalid final admission of liability.

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What it means: In Colorado, a final admission of liability must be consistent with the medical records it is based upon. If a worker has different injuries from the same work incident, with different dates of maximum medical improvement, the legally significant date is the date that the worker attained MMI from all the injuries sustained in the compensable accident. An insurer's final admission may be invalidated where it conflicts with the specific medical findings for MMI, and the insurer may be subject to penalties.

Summary: A worker with a shoulder injury was assigned an MMI date. He was sent to another physician for an impairment rating. The second doctor found that the worker had a different condition also related to the accident, for which he was not at MMI. The insurer filed its final admission of liability, asserting that the worker was at MMI, that the second condition was not part of the injury, and that it would not cover it. The Court of Appeals determined the admission was invalid and imposed penalties on the insurer. Not only did the insurer fail to attach the required medical documents, its MMI assertion was inconsistent with the rating physician's report. The insurer argued it could not admit liability for one body part without abandoning its challenge to the compensability of an injury to the second body part. The Court of Appeals rejected its argument, noting MMI cannot be parceled out. It explained that to allow partial MMI creates the possibility of simultaneous permanent and temporary disability awards for the same accident, which is inconsistent with the workers' compensation scheme.

Colorado's law requires final admissions of liability to be specific, including the amount of compensation to be paid, the person to whom the compensation will be paid, the period of payment, and the disability for which compensation will be paid. It also requires that the admission specify and describe the insurer's position on medical benefits after MMI and specifically reference the medical report by listing the physician's name and the date of the report. The court noted that these requirements put the worker on notice of the exact basis of the admitted or denied liability so that the worker can make an informed decision whether to accept or contest the final admission.

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March 1, 2010

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