Terminating Active Medical Care and Temporary Compensation in Arizona's Workers' Compensation System

Arizona's workers' compensation system provides crucial support to employees injured at work, covering medical expenses and lost wages during their recovery. Two primary benefits are active medical care and temporary compensation, aimed at restoring the injured worker to their pre-injury health and earning capacity.

At some point, however, the worker's condition will stabilize, marking a transition in their recovery. This post outlines the requirements for insurance carriers to terminate active medical care and temporary compensation in Arizona.

Termination of Active Medical Care

The termination of active medical care signifies that the injured worker has reached a point of Maximum Medical Improvement (MMI). This means the worker's condition has stabilized, and further active medical treatment is unlikely to produce significant improvement.

Requirements for Termination:

• Medical Discharge Report: The carrier must have a final signed report from the treating physician stating that the worker is medically stationary and has reached MMI. This report should clearly indicate the date of discharge from active care.

• Impairment Evaluation:  When discharging the worker from active care, the treating physician must also determine whether the worker has sustained any permanent impairment due to the industrial injury. If so, the physician should rate the percentage of impairment using the most recent edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment (AMA Guides).

• Notice of Claim Status (Form 104): Once the carrier receives the medical discharge report, they must issue a Notice of Claim Status (Form 104) to the worker and the Industrial Commission of Arizona (ICA), indicating the termination of active medical treatment. The Form 104 should specify the date of discharge from treatment and note whether the injury resulted in permanent impairment.

It's important to note that the carrier cannot interrupt or suspend temporary disability benefits solely because the physician fails to comply with the reporting requirements. However, the carrier can withhold payment to the physician for services rendered until they provide the necessary reports.

Termination of Temporary Compensation

Temporary compensation, either Temporary Total Disability (TTD) or Temporary Partial Disability (TPD), is paid to replace a worker's lost wages while they are unable to work or have reduced earning capacity due to the work-related injury.

Termination of temporary compensation is usually linked to the worker's return to work. This could be a full return to their pre-injury job or a modified duty position offered by the employer.

Requirements for Termination:

• Medical Release to Work:  The carrier must have a medical report from the treating physician indicating the date the worker is released to return to work, either to regular duty or modified duty with restrictions.

• Notice of Claim Status (Form 104): The carrier issues a Form 104 to the worker and the ICA, indicating the date of return to work and the termination of temporary compensation.

• Timely Issuance of Notices: Any Notice of Claim Status that changes a claimant's entitlement to benefits cannot have a retroactive effect for more than 30 days from the date the carrier issues the notice.

Transition to Permanent Disability Benefits

When active medical care is terminated, and if the physician has determined there is permanent impairment, the claim shifts focus to assessing the worker's entitlement to permanent disability benefits. The type of permanent disability benefits will depend on whether the impairment is classified as scheduled (involving specific body parts listed in the statute) or unscheduled (impairments not listed in the statute).

The termination of active medical care and temporary compensation marks a significant milestone in the workers' compensation process. It signals the transition to addressing the potential long-term impact of the injury on the worker's earning capacity. By understanding these requirements and best practices, insurance carriers can ensure that the transition is handled fairly and in accordance with Arizona law.