Late Issuance of NSTC After Last Workers’ Compensation Check Does Not Convert NTCP to NCP

This blog does not address Coronavirus (COVID-19) and how it relates to PA workers’ compensation.  Which is good, because I think we are all tired of seeing the words “Coronavirus” or “COVID-19.”

Instead, we are looking at a recent decision from the Commonwealth Court of Pennsylvania, wherein the Court looked at the effect of a workers’ compensation insurance carrier issuing a Notice Stopping Temporary Compensation (NSTC) more than five days after the last payment of workers’ comp benefits under a Notice of Temporary Compensation Payable (NTCP).  The short answer is there is not much consequence to the insurance company.

When a workers’ comp insurance carrier is not sure whether a work injury claim in PA is compensable, the insurer has the option of issuing an NTCP, which allows the payment of workers’ compensation of benefits to start, while still allowing the insurer to complete its investigation and still have the option to deny the claim.  In theory, the NTCP is a win-win proposition.  In theory.

Under the Pennsylvania Workers’ Compensation Act (Act), if the NTCP is not revoked (by the issuance of an NSTC) within 90 days, the document converts to a regular Notice of Compensation Payable (NCP), which cannot be withdrawn (so, ordinarily, a reduction or stoppage of the benefits then can only be obtained by order of a Workers’ Compensation Judge).

According to Section 406.1(d)(5) of the Act:
“(5) (i) If the employer ceases making payments pursuant to a notice of temporary compensation payable, a notice in the form prescribed by the department shall be sent to the claimant and a copy filed with the department, but in no event shall this notice be sent or filed later than five (5) days after the last payment.”

So, now that we’ve looked at the law, let’s look at the facts of the case.  In Communication Test Design v. WCAB (Simpson), the employee was hurt on December 5, 2016.  A medical-only NTCP was issued on December 20, 2016.  A regular NTCP was issued on January 4, 2017 (and the payment of benefits began).  On February 7, 2017, the workers’ compensation insurer issued an NSTC, and Notice of Denial (NCD), denying the claim, as of January 19, 2017.  The injured worker filed a Claim Petition, then also Reinstatement and Penalty Petitions.  It was the argument of the injured worker that the NSTC was invalid since it was not issued within five days of the last payment of compensation.

After hearing the evidence, the WCJ granted the Reinstatement and Penalty Petitions, finding that the last payment of compensation was January 19, 2017 and the NSTC was not filed with five days of that date, so the NTCP converted into an NCP, and payments were improperly stopped (the WCJ also terminated benefits, but that is not critical to our analysis here).  This was affirmed (in relevant part) by the Workers’ Compensation Appeal Board (WCAB).

Upon appeal, the Commonwealth Court of Pennsylvania reversed the decision of the WCJ.  The Court determined that there was no punishment stated in Section 406(d)(5) for a late issuance of the NSTC.  The Court felt the Act only asked that the NSTC be issued within 90 days to be effective.

While we understand the view taken by the Court, we question the decision to completely render the language regarding the five day period moot.  That language was specifically placed into the Act by the legislature, and we believe it should have been given effect.  Since the NSTC was not issued as REQUIRED by the Act (ie: it was untimely, beyond the five days), the NSTC was simply not properly filed.  As such, we believe the WCJ had been correct – the legal effect of a failure to PROPERLY issue the NSTC was that the NTCP would simply convert into an NCP.