Q&A: Ceasing TTD or TPD During Fraud Investigations
Q: An applicant is not losing wages for an insured. However, he is losing wages from alleged wage loss at concurrent employment. Applicant claims he is unable to work at his concurrent employment due to restrictions. Multiple days of surveillance was obtained, which reflects applicant working for the concurrent employer. The file has been submitted and accepted by the California Department of Insurance for worker’s compensation fraud investigation. Applicant alleges being continuously unable to work for the concurrent employer.
Can temporary total and/or temporary partial disability be stopped based upon this information?
A: The above is a very good question. Both temporary total disability and temporary partial disability are “supposed to replace wage loss caused by the work injury” according to Workers’ Compensation Appeals Board training provided by Eric Ledger, Industrial Relations Counsel, California WCAB Office of the Commissioners, and also reflected in Labor Code sections 4654-4657. Thus, if there is no wage loss demonstrated, there is no temporary total disability or temporary partial disability liability for periods of wages earned without loss or reduction. Temporary total or partial disability may be ceased if the claims file documentation reflects earnings without loss due to the injury. Some circumstances require 10 day notice of termination of temporary total or partial disability, then the seeking Workers’ Compensation Appeals Board order terminating temporary total disability and/or temporary partial disability, but that is typically required following an Order of either or both. See Labor Code sections 4651.1-4651.3 before ceasing either benefit without notice and petition.
The question becomes “should temporary total or partial disability be ceased” after an fraud investigation is commenced upon knowledge of earned wages without wage loss during a period of alleged total or partial disability? I am generally of the opinion yes, it should and probably must.
If an insured must pay temporary total disability and or temporary partial disability, it is required to do so only upon demonstration of wage loss due to an injury. I would typically recommend cessation of temporary total disability and/or temporary partial disability once sufficient earnings without wage loss is evidenced by documentation reflecting the actual earned wages. The earnings should result in reduced temporary total disability and/or temporary partial disability at minimum based on proof of earnings.
If evidence of actual earnings is lacking, the answer is more complicated. I would not typically recommend cessation of the benefit until proof of earnings is received. Cessation is often considered based on the activities observed alone, but I recommend first providing a primary treating physician and/or medical-legal evaluator with the surveillance films first and requesting the evaluator comment on permanent and stationary status. I recommend obtaining this evidence of permanent and stationary status from the provider, so there is medical support for cessation under these circumstances before recommending cessation of the benefit payments.
Remember, earnings-without-wage-loss proof does not require a medical report to reduce or cease temporary total or partial disability benefits in my opinion, but lack of proof of earnings does require a permanent and stationary report.
One must have “genuine medical or legal doubt” to defend against both Labor Code section 4650 and 5814 penalties pursuant to Workers’ Compensation Appeals Board and court holdings in Kerley and other case opinions. (See, Kerley v. Workmen’s Comp. App. Bd., 4 Cal.3d 223). The above analysis will assist in properly answering this question on a case-by-case basis then ensuring the Kerley standard is met before cessation of benefits discussed above.