This case was recently litigated at the North Carolina Supreme Court. The issue before the Supreme Court was the Industrial Commission’s authority to create the “Medical Benefits Only” section of the Form 63 (Section 2). The Form 63, Section 2 allows an employer pay medical compensation only, rather than both medical compensation and indemnity compensation, without prejudice to later deny the compensability of an employee’s claim.
Plaintiff Richard O’Neal, an employee at Inline Fluid Power and Automotive Parts Co., was delivering boxes in May 2011 when he sustained an injury by accident arising out of, and in the course of his employment. Defendants filed a Form 63, Section 2, agreeing to pay medical benefits only without prejudice to later deny Plaintiff’s claim.
Plaintiff contended that the Industrial Commission acted beyond the scope of its authority by creating Section 2, the “Medical Benefits Only” section of the Form 63. Plaintiff argued that the Form 63 “Medical Benefits Only” section allowed the employer to escape the provisions of N.C. Gen. Stat. § 97-18(d), which provide that an employer waives its right to contest the compensability of a claim if not contested within 90 days from the date the employer receives notice of the injury.
In an unpublished opinion, the North Carolina Court of Appeals held that the Industrial Commission did not exceed its authority by creating the Form 63, Section 2. The Court of Appeals held that the legislature had always provided for two distinct components under the Workers’ Compensation Act: (1) payment of medical compensation, and (2) general compensation for financial loss other than medical expenses, which includes payment to compensate for an employee’s lost earning capacity. Form 63, Section 1 concerns the payment of “Compensation” as defined in N.C. Gen. Stat. § 97-2(11) and in accordance with N.C. Gen. Stat. § 97-18(d), while Section 2 concerns the payment of “medical compensation.” The Court stated that N.C. Gen. Stat. § 97-18(d) concerns claims for “compensation” and not claims for “medical compensation.”
The Court of Appeals held that the procedure reflected in Form 63, Section 2, is both permitted by statute and allows an injured employee an opportunity to expeditiously receive medical compensation payments. As a result, the Court of Appeals concluded that the Industrial Commission did not exceed its authority when it created Form 63, Section 2.
Plaintiff filed a Petition for Discretionary Review with the Supreme Court. The Supreme Court granted Plaintiff’s Petition for Discretionary Review on the Form 63 issue. Duane Jones of Hedrick, Gardner, Kincheloe & Garofalo, LLP filed an Amicus Curiae Brief on behalf of NCADA. Following the submission of briefs and oral arguments, the Supreme Court issued an Opinion on December 21, 2016, stating that Discretionary Review was improvidently granted. This was a favorable outcome for the defense bar in that it allows employers in certain claims to continue to pay medical benefits only without prejudice to later deny the compensability of the employee’s claim.
Submitted by Viral Mehta, McAngus Goudelock & Courie
