Written By: Charles Taylor Matthews
The Third Circuit Court of Appeal has led the way in awarding penalties and attorney fees at expedited choice of physician hearings, despite the unsettled question of whether such hearings constitute a “hearing on the merits;” however, they are not alone. The First Circuit Court of Appeal’s ruling in Nelson v. Windmill Nursery of Louisiana, L.L.C., seems to follow along the lines of the Third Circuit.
In Nelson, the Court imposed penalty and attorney fees on the employer for their failure to approve the claimant’s choice of physician. Although the employer had not been given the opportunity to investigate, contest, or establish the issue of causation prior to the expedited hearing ruling, the court determined that penalties and attorney fees were warranted, as the relevant issue for an award of penalty and attorney fees, at a choice of physician hearing, was whether the employer had a legal basis to deny treatment, regardless of the future findings of compensability. The court emphasized that awarding penalties and attorney fees for an employer’s failure to approve a claimant’s choice of physician serves as a deterrent against undue delays or denials, particularly in cases where causation remains undetermined.
Although there are inconsistencies between the Trial Courts and the Appellate Courts on this issue, the Third Circuit ironically provides an example for how employers can avoid penalty and attorney fees in scenarios where they have denied the claimant’s choice of physician. In Deloach v. FARA Ins. Servs., the court declined to award penalties and attorney fees after the employer presented evidence showing that the employee’s condition had resolved, and further treatment was unnecessary. The court acknowledged that if the employer can demonstrate “good cause” for the denial, such as medical or factual documentation evidencing a reasonable controversial of the claim, then penalty and attorney fees should not be imposed at the conclusion of the choice of physician hearing.
Ultimately, the potential for penalties and attorney fees in choice of physician hearings depends on the specific judge, district, and appellate circuit involved. As always, it is critical to consult with a defense attorney to navigate these complexities and develop a strategy that minimizes exposure to penalties. The right approach can help avoid the financial consequences of improperly denying an employee’s choice of physician.
