(a) Except as provided in subsection (b) of this section, upon receipt of written notice of injury as provided in §124.1 of this title (relating to Notice of Injury) the carrier shall conduct an investigation relating to the compensability of the injury, the carrier's liability for the injury, and the accrual of benefits. If the carrier believes that it is not liable for the injury or that the injury was not compensable, the carrier shall file the notice of denial of a claim (notice of denial) in the form and manner required by §124.2 of this title (relating to Carrier Reporting and Notification Requirements).   (1) If the carrier does not file a notice of denial by the 15th day after receipt of the written notice of injury, the carrier is liable for any benefits that accrue and shall initiate benefits in accordance with this section.   (2) If the carrier files a notice of denial after the 15th day but on or before the 60th day after receipt of written notice of the injury:     (A) The insurance carrier is liable for and shall pay all income benefits that had accrued and were payable prior to the date the carrier filed the notice of denial and only then is it permitted to suspend payment of benefits; and     (B) The insurance carrier is liable for and shall pay for all medical services, in accordance with the Act and rules, provided prior to the filing of the notice of denial.   (3) The carrier shall not file notice with the commission that benefits will be paid as and when they accrue. A carrier's failure to file a notice of denial of a claim by the 15th day after it receives written notice of an injury constitutes the carrier's acceptance of the claim as a compensable injury, subject to the carrier's ability to contest compensability on or before the 60th day after receipt of written notice of the injury.   (4) The carrier commits a violation if, not later than the 15th day after it receives written notice of the injury, it does not begin to pay benefits as required or file a notice of denial of the compensability of a claim in the form and manner required by §124.2.     (A) An administrative penalty under this subsection shall be assessed at:       (i) $500 if the carrier initiates compensation or files a notice of refusal within five working days of the date required by subsection (a);       (ii) $1,500 if the carrier initiates compensation or files a notice of refusal more than five and less than 16 working days of the date required by subsection (a);       (iii) $2,500 if the carrier initiates compensation or files a notice of refusal more than 15 and less than 31 working days of the date required by subsection (a); or       (iv) $5,000 if the carrier initiates compensation or files a notice of refusal more than 30 working days after the date required by subsection (a).     (B) The administrative penalties provided for in this subsection are not cumulative and a violation occurs only with respect to the initial late payment of benefits.     (C) The commission will send periodic notifications to all carriers regarding the amount of penalties owed and the proper way to submit and document the payments. (b) Except as provided by subsection (c), the carrier waives the right to contest compensability of or liability for the injury, if it does not contest compensability on or before the 60th day after the date on which the insurance carrier receives written notice of the injury. (c) If the carrier wants to deny compensability of or liability for the injury after the 60th day after it received written notice of the injury:   (1) the carrier must establish that it is basing its denial on evidence that could not have reasonably been discovered earlier; and   (2) the carrier is liable for and shall pay all benefits that were payable prior to and after filing the notice of denial until the Commission has made a finding that the evidence could not have been reasonably discovered earlier. (d) If the claim involves the death of an injured employee, investigations, denials of compensability or liability, and disputes of the eligibility of a potential beneficiary to receive death benefits are governed by §132.17 of this title (relating to Denial, Dispute, and Payment of Death Benefits). (e) Texas Labor Code, §409.021 and subsection (a) of this section do not apply to disputes of extent of injury. If a carrier receives a medical bill that involves treatment(s) or service(s) that the carrier believes is not related to the compensable injury, the carrier shall file a notice of dispute of extent of injury (notice of dispute). The notice of dispute shall be filed in accordance with §124.2 of this title (relating to Carrier Reporting and Notification Requirements) and be filed not later than the earlier of:   (1) the date the carrier denied the medical bill; or   (2) the due date for the carrier to pay or deny the medical bill as provided in Chapter 133 of this title (relating to General Medical Provisions). (f) The 15-day time frame provided for in subsection (a) and the administrative penalty provisions of subsection (a)(4) apply to a claim for benefits based on a compensable injury occurring on or after September 1, 2003. For claims based on a compensable injury occurring prior to September 1, 2003, the applicable time frame is seven days and the administrative penalty provisions of subsection (a)(4) are inapplicable.

Source Note: The provisions of this §124.3 adopted to be effective March 13, 2000, 25 TexReg 2096; amended to be effective March 14, 2004, 29 TexReg 2322