A Maine employer/carrier got dinged with a penalty of more than $140,000 for letting a claim fester after the examiner issued a notice of controversy one day late.
We reported in WorkCompCentral News this morning (High Court Upholds $140K Penalty for Notice Sent One Day Late: Top [2011-06-13]) the case of Doucette v. Hallsmith/Sysco Food Services, wherein the Maine Supreme Court said it has no flexibility in its decision to award nearly five years of incapacity benefits to claimant Matthew Doucette because of a rule that imposes penalties against employers and insurers that do not file a notice of controversy within 14 days after receiving a claim.
This brought to mind a conversation I had yesterday with Jon Gelman, who was visiting the West Coast on vacation (and I had the audacity to ring him up for lunch!). I commiserated that work comp in "the old days" was much more efficient, and easier, because it was much less complex.
In "the old days," I noted, each side would show up in court with their respective opposing expert opinions, sit down and work out a settlement and get the case moved out of the system. This benefited the employee because they could move on with their lives. This benefited the employer because the less time the claim was open the less impact there was on the experience modification factor (aka X-Mod).
Now, as I complained to Jon (who was nodding his head in agreement), work comp has become so complex with numerous statutes and regulations detailing every little aspect of a claim that it is much easier to get lost in litigation over minutiae and lose sight of the ultimate job - closing the claim!
It seems that, as opposed to "the old days," the technical details of the law now get in the way of closing the claim - trees are blocking the view of the forest!
As a result of the Supreme Court case the Maine Workers' Compensation Board is considering revising the rule that imposes the penalty because of this perceived "unfair result" - but the result would not have been unfair if the employer/carrier had paid attention to the claim and had seen the potential for such a penalty building. The employer/carrier over the course of the 5 years that this was pending should have seen the forest, but instead focused on the trees.
In my opinion, the result IS fair. It is a lesson that regardless of the technical nature of a claim, the ultimate goal is to get a claim closed. It is best for all involved.
The penalty is there for a reason, and unfortunately its deterrence against unreasonable behavior was ineffective for this particular claims administrator. I bet in the future the administrator (and others) will be more careful with their claims management and will be teaching examiners to keep an eye on the forest while chopping down trees.
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