§ 406.1 does not sanction conversion of an NTCP to an NCP for failing to file an NSTC within five days of stopping payment.

The Commonwealth Court holds that § 406.1 of the Act does not sanction conversion of a Notice of Temporary Compensation Payable to a Notice of Compensation Payable for failure to file a Notice Stopping Temporary Compensation within five days of stopping payment of temporary compensation.

Communication Test Design v. WCAB (Simpson); 1196 C.D. 2019; filed Apr. 22, 2020; Judge Covey

The claimant allegedly sustained work injuries on December 5, 2016. On January 4, 2017, the employer issued an amended Notice of Temporary Compensation Payable (NTCP), paying the claimant disability benefits. On February 7, 2017, the employer issued a Notice Stopping Temporary Compensation Payable (NSTC), indicating that it ceased paying compensation as of January 19, 2017. A Notice of Compensation Denial (NCD) was also issued.

The claimant then filed a claim petition, as well as reinstatement and penalty petitions. In connection with the reinstatement and penalty petitions, the claimant argued that, because the employer failed to issue an NSTC within five days after the last payment of temporary compensation, under § 406.1 of the Act, the NTCP converted to an NCP and, therefore, wage loss benefits should be reinstated. The judge agreed and granted the claimant’s reinstatement and penalty petitions. In doing so, the judge concluded that a conversion of the amended NTCP to an NCP occurred by operation of law since the employer failed to timely file an NTSC and NCD. The employer appealed, but the Workers’ Compensation Appeal Board affirmed.

The employer appealed to the Commonwealth Court, which held that § 406.1 of the Act does not sanction conversion of an NTCP to an NCP for failure to file an NSTC within five days of stopping payment. According to the court, no such remedy is included in § 406.1(d)(5). It pointed out that § 406.1(d)(5) states that if an employer does not file an NSTC within the 90-day period during which temporary compensation is paid or payable, the employer shall be deemed to have admitted liability and the NTCP converts to an NCP. The court noted that the employer filed its NTSC within 90 days from the date of its NTCP; therefore, the NTCP could not convert by operation of law.

The court further reversed the judge’s decision granting a penalty petition since there was no evidence presented that the employer violated the Act.

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