Case Study : Workers' Compensation

Do State Claims Get Denied More Frequently?

State Employee Has Trouble With Corvel

Maria was a surveyor for the Department of Transportation. She was staking out an area for roadwork when she slipped and fell down the embankment. She immediately felt awful pain in her left knee. Sure enough, she tore a ligament – the anterior cruciate ligament – and needed surgery.

After the surgery Maria couldn’t return to her old job as a surveyor right away but was able to do some office work for the DOT. Unfortunately her knee often gave away causing her to fall. One day she walked into her garage, went to get in the car, and her knee gave way. Instinctively she caught herself with her arm that was touching the car. This was not enough to break her fall – in fact Maria tore her rotator cuff in that shoulder on the way down.

Maria went to her doctor immediately and explained to him what had happened. It all seemed pretty straightforward. Until Corvel got involved.

In order to explain this better it is important to understand that most government agencies or departments are self-insured for both workers’ compensation and major medical insurance. So if you work for the Department of Corrections, or a school system, or some other state agency there is a good likelihood that your health insurance is through Blue Cross/Blue Shield and that your workers’ compensation adjuster is with Corvel. But it is all the State of North Carolina’s money. The state simply hires BCBS or Corvel to take care of all the paperwork and handling of claims.

Whether it is intentional or not we have seen Corvel being pretty aggressive in denying claims. While we cannot prove it our impression is that they don’t believe they are at great risk even if they lose the case (which, peeking ahead in Maria’s story, they did). Ordinarily an insurance company has to weigh the odds in denying a claim. If they lose at the Industrial Commission then they have a lot of exposure – they are exposed to the risk of paying out a lot of money in medical treatment, often more than they would have if they accepted the claim in the first place. That is not true with State of North Carolina agency claims. Because the State is already paying the medicals bills – through BCBS – Corvel seems to be a little more free and easy in denying claims.

It would have been easy for Maria to just shrug it off, but that’s not her style. She doesn’t like being taken advantage of. So Maria came to us seeking help.

We filed for a hearing, had Maria explain her story, and went to talk to the doctor. The doctor backed up Maria because there was documentation that her knee had been giving way and because she promptly reported the events to him. Plus she consistently described the events the same way every time. Maria was believable. The Industrial Commission believed her to and we won the case.

The Industrial Commission ordered Corvel to pay Maria weekly checks for the period of time that she was out of work for her shoulder surgery, received a reimbursement of her co-pays and deductibles, and her employer was required to accommodate her restrictions.

Unbelievably, Corvel appealed. We scratched our heads over this and it turns out we were not the only ones confused by it. When the attorneys appeared before the Full Commission to argue their clients position panel at the Full Commission grilled Corvel’s attorney. Did Corvel dispute Maria’s story? No. Did Corvel dispute what the doctor said about the rotator cuff being torn in the fall? No. What was the legal basis of Corvel’s denial and appeal of the claim? Silence. The defense attorney hemmed and hawed and finally said “My clients just don’t think they should have to pay for it.”

Do State claims get denied more frequently than other claims? Does it make a difference if your employer is self-insured for both workers’ compensation and for major medical insurance? What happens when the first injury causes another injury? Do adjusters always have solid grounds for denying claims or filing appeals?

lessons to be Applied…

  • Corvel, when handling claims for State employees, is often aggressive in denying claims.
  • When an employer is self-insured for both workers’ compensation and also health insurance they may be more aggressive in denying claims.
  • When the original workers compensation injury leads to another injury the second injury is supposed to be covered as well.
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