VWCC Changing Awards Process

Published on: 5/13/2008

Virginia Commission Considers Changes to Worker's Compensation Regulations

Analysis by:

Mike Goff
Michael L. Goff, Esq.		 Chris Lambert
Christopher  B. Lambert, Esq.

In an effort to improve overall efficiency, the Commission recently proposed significant changes to the Award process and Award termination process. The changes include implementing the Electronic Data Interchange (EDI). The EDI is a system used to submit claims electronically.

The proposed changes will apply to claims made after October 1, 2008. The timeline for carrier compliance will roll out from that date on a staggered basis determined by the carrier’s claim volume, with the heaviest volume Carriers or Third Party Administrators (TPA) required to comply first. The Commission does not intend to hold a public hearing on the proposed action.

Initial Denial

The regulations require the carrier to file a First Report of Injury (FROI) with the Commission. The carrier then has the option to deny the claim. If the carrier denies the claim it must submit a denial letter to the Commission.

Award Entry

If the carrier does not deny the claim, the Commission will not review the claim for 13 weeks. After 13 weeks, if the carrier started and stopped payment, the Commission will review the payments made by the carrier and enter an Award based on benefits paid. The Commission refers to this as a “look back” Award. Both parties then have an opportunity to object to or move to vacate entry of the “look back” Award within 20 days. The Award entered by the Commission will not explicitly state the nature of the injury. It is unclear how this procedural change will affect potential medical causation defenses.

After 13 weeks, if payments are continuing, the Commission will seek to enter an ongoing Award. The carrier can agree or disagree with entry of the ongoing Award after receipt of notice from the Commission. If the carrier does not consent, the case will proceed to hearing.

Please note that if a claim is accepted, agreement forms are no longer necessary. The Commission will take the initiative to enter the Award after receipt of consent from the carrier. If a carrier is paying on a claim it is required to submit a Supplemental Report of Injury (SROI) indicating the amount of medical and indemnity benefits paid to the claimant, presumably on a quarterly basis.

Award Termination

The new system also eliminates the need for termination forms. If the claimant returns to work, the carrier can stop making payments and does not need to file anything with the Commission other than the SROI indicating the claimant returned to work. If the claimant is released to return to work, the carrier can stop making payments but must file documents supporting the alleged release with its SROI. The claimant can object to termination in either of these cases. If the carrier seeks to terminate the claimant’s Award on any other basis it must file an Employer’s Application. The process for Employer's Applications will remain unchanged for these other scenarios.

Expected Effects and Changes

We expect the proposed changes to result in an increase in litigation at the outset of a claim or after the first quarter in an effort by the carrier to avoid the entry of an Award.

The changes will likely decrease the litigation necessary to close an Award. The regulations will eliminate the need for 20 Day Orders. Of course, the changes are designed to and will likely reduce the amount of forms required for submission by carriers with regard to both Award entry and termination. However, it is currently unclear how the Commission will determine the nature of the accepted injury as no forms will specifically address this.

The changes are expected to eliminate confusion with situations currently resulting in de facto Awards. Additionally, the changes will likely eliminate many current statute of limitations arguments that carriers are currently able to assert due to automatic Award entry. The additional burden on the carrier appears to be the required filing of quarterly SROI reports. The initial FROI report will take the place of the current Employer's Accident Report.

Helpful links regarding changes:

Notification of the proposed regulations can be found at the following link:

If you would like more information about the implications of these changes or about any other rules and regulations of the Virginia Workers' Compensation Commission, you are invited to contact Mike Goff (MGoff@SandsAnderson.com; 540-4453-9826) or Chris Lambert (CLambert@SandsAnderson.com; 540-443-9813), or any member of our Worker's Compensation practice group.