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Timely Filing of the 21 to Maximize Credit for Overpayment

E. Courtney Gruber

S.C. Code Ann. Section 42-9-260 requires that temporary total compensation payments must be continued until either the claimant consents in writing to the termination of such benefits or an evidentiary hearing is held.  There is no requirement in the Workers’ Compensation Act or the Regulations for the employer/carrier to actively pursue resolution by requesting either an informal conference or an evidentiary hearing to terminate temporary benefits once MMI has been reached.

S.C. Code Ann. Section 42-9-210 provides for deduction of compensation of payment made when not due and payable.

S.C. Regulation 67-506 provides the procedure for termination of temporary total compensation and is consistent with 42-9-260.  There are three separate instances in which the employer’s “representative” is permitted to request a hearing to terminate temporary total compensation:  after MMI the authorized healthcare provider finds that the claimant has reached MMI; after the authorized healthcare provider reports that the claimant may return to work and such job has been offered by the employer; or after the authorized health-care provider assigns an impairment rating and reports the claimant is unable to return to work at the same or other suitable job.

Maximum medical improvement has been defined as the date on which a person has reached such a plateau that in the physician’s opinion, rendered to a reasonable degree of medical certainty, no additional medical treatment will tend to lessen the claimant’s period of disability.  Dodge v. Bruccoli, Clark, Layman, Inc., 334 S.C. 574, 514 S.E.2d 593 (S.C. Ct. App. 1999).

The issue of the credit for overpayment of temporary total compensation was addressed by the South Carolina Court of Appeals in Hendricks v. Pickens County, 335 S.C. 405, 517 S.E.2d 698 (1999).  Hendricks held that workers’ compensation benefits accrue along a time continuum.  Temporary total disability benefits are available from the date of injury through the date of maximum medical improvement.  Permanent disability benefits begin after the date of maximum medical improvement.  Temporary disability benefits cannot be paid at the same time as permanent disability benefits.

The issue of credit for overpayment of temporary benefits after MMI was also addressed by the South Carolina Court of Appeals in Sanders v. MeadWestvaco Corporation, 371 S.C. 284, 638 S.E.2d 66 (2006).  In Sanders, the Court found the Commission in error when it ruled MMI to have occurred the day before the evidentiary hearing, in spite of the fact that there was no medical evidence to support that date and, in fact, there was medical evidence that MMI had been reached on earlier dates.  The Court held that when the Commission finds that MMI has been reached, it is appropriate to terminate temporary total benefits in favor of either permanent partial or permanent total disability benefits.

Sanders cited the South Carolina Supreme Court decision of Smith v. S.C. Dept. of Mental Health, 335 S.C. 396, 399, 517 S.E.2d 694, 696 (1999), which it quoted as follows:  “The rationale for ceasing temporary benefits upon finding of MMI is to permit entry of a permanent award.  Clearly, if an employee has reached MMI and remains disabled, then his injury is permanent…  This is precisely the reason to terminate temporary benefits in favor of permanent benefits upon a finding of MMI.  Although this Court has not specifically addressed the issue, the Court of Appeals had repeatedly held once the Commission affirms a finding of MMI, it is appropriate to terminate temporary benefits in favor of permanent disability benefits, if warranted by the evidence.  Morgan v. JPS Automotives, 321 S.C. 2012, 467 S.E.2d 457 (Ct. App. 1996) (benefits properly terminated on showing employee reached MMI; employer not required to show employee had returned to work or was able to work), cert. dismissed as improvidently granted, 326 S.C. 261, 486 S.E.2d 263 (1997); O’Banner v. Westinghouse, 319 S.C. 24, 459 S.E.2d 324 (Ct. App. 1995) (regulation unambiguously allows employer to attach only a medical certificate stating claimant has reached MMI to support stop payment application); Brown v. Owen Steel Co., 316 S.C. 278, 450 S.E.2d 57 (Ct. App. 1994) (temporary total disability is properly terminated when employer provides one of the four certificates required in Regulation 67–507(C)(3) without regard to employee’s work status), cert. denied 95–OR–590 (S.C. Sup. Ct. *400 May 18, 1995).  Further, this Court has implicitly recognized, without discussion, that temporary benefits may be terminated upon a showing of MMI.  Gilliam v. Woodside Mills, 319 S.C. 385, 461 S.E.2d 818 (1995) (recognizing termination of temporary benefits and replacement with permanent benefits is proper upon finding of MMI).”

According to the applicable case law, the award of credit for temporary benefits after MMI is discretionary if MMI has been reached, however be aware that the commissioners do not consider themselves bound by the case law if they believe there has  been an unreasonable delay between the date of MMI and the filing of the Form 21.    There is no written requirement in the Act or the Regulations that the Form 21 be filed within a certain time period to preserve the credit for overpayment, however, commissioners are imposing their own de facto limitation on credit for overpayment based on the date the Form 21 is filed.  This can result in forfeiture of credit for overpayment of temporary benefits if the hearing commissioner believes too much time was allowed to pass between the date of MMI and the filing of the Form 21.

It is crucial that medical treatment be closely monitored and that a Form 21 be filed as soon as possible after MMI has been reached.  It is not advisable to simply send the Form 21 to the Claimant or his or her attorney and wait and see if the 17 will be signed or the case can be settled unless a calendar entry is made to file the 21 very shortly after the Form 17 has been sent.  The Commission has imposed a duty upon employer representatives to diligently pursue evidentiary hearings as soon as possible to avoid a large deduction from the permanency award to the claimant.