Insurer prejudiced by department's interpretation of rule

In Tennessee, medical-only injuries are not required to be filed by first report of injury forms.

Case name: Liberty Mutual Insurance Co., et al. v. Tennessee Department of Labor and Workforce Development, No. M2010-02082-COA-R3-CV (Tenn. Ct. App. 01/03/12).

Ruling: The Tennessee Court of Appeals vacated the penalty assessed against an insurer for failing to file first reports of work injury forms.

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What it means: In Tennessee, medical-only injuries are not required to be filed by first report of injury forms.

Summary: A Tennessee Occupational Safety and Health Administration investigation revealed possible "reporting irregularities" in a trucking and shipping company's workers' compensation claims. The Department of Labor and Workforce Development discovered that its insurer had not filed first report of work injury forms. The Tennessee Workers' Compensation Division assessed a $59,050 penalty against the insurer for failing to file the forms. A regulation required the forms to be filed for "loss time" claims in which the injured worker would be entitled to disability benefits and medical benefits. A different form was required for "medical only" injuries. Later, the second form was phased out, and the department required employers and insurers to submit the first form for all workplace accidents that caused injuries. The insurer had refused to file the forms because the incidents were medical-only injuries. It sought judicial review. The Tennessee Court of Appeals vacated the penalty.

The department admitted that the insurer could not be penalized for failing to file the forms because when each of the injuries occurred, the first report of work injury forms were not required for the medical-only injuries. The court explained that the notice of potential claim filing violations and the penalty assessment both stated that the basis for the penalty was the failure to file the first report of injury form. The court concluded that the department failed to follow the notice procedure, and the insurer's rights were prejudiced.

The court also said that the department disregarded the rule by interpreting it in a manner that effectively rewrote the rule. The court noted that the department "exceeded its authority."

Read more at the WorkersComp Forum homepage.

February 22, 2012

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