When an insurance carrier believes that it was improperly denied reimbursement for a War Hazards Compensation Act (“WHCA”) claim or expense, what can it do? It can appeal…but not to a court. The appeal is “in-house” at the Division of Federal Employees Compensation (“DFEC”). Essentially, the higher-ups in the same agency that denied the initial request for reimbursement will review the evidence and determine whether the denial was appropriate. The regulatory authority for a WHCA appeal is at 20 C.F.R. § 61.102(d), which states:
The Office shall advise the carrier of the amount approved for reimbursement. If the reimbursement request has been denied in whole or in part, the Office shall provide the carrier an explanation of the action taken and the reasons for the action. A carrier within the United States may file objections with the Associate Director for Federal Employees’ Compensation to the disallowance or reduction of a claim within 60 days of the Office’s decision. A carrier outside the United States has six months within which to file objections with the Associate Director. The Office may consider objections filed beyond the time limits under unusual circumstances or when reasonable cause has been shown for the delay. A determination by the Office is final.
Recently, I was asked about the scope of a WHCA appeal. Are appeals available only when DFEC disapproves a claim for reimbursement–such as when DFEC determines that a particular injurious event was not a “war-risk hazard” and that the WHCA does not apply? Or, can a carrier also appeal specific line-item deductions–like a deduction of a particular payment to a doctor or an expert?
I think the answer is clear: carriers can appeal any denial, even small line-item deductions. The regulation allows an appeal when a “reimbursement request has been denied in whole or in part.” Further, the regulation allows carriers to file objections to the “disallowance or reduction of a claim” for War Hazards Compensation Act reimbursement.
If appeals were only allowed for denials that focused on the applicability of the WHCA (i.e., denials of an entire reimbursement request), then there would not have been a need for the Secretary of Labor to promulgate a regulation referencing partially reduced reimbursement requests or reductions. The fact that the Secretary included language addressing reductions and denials in part confirms that a WHCA appeal can be taken from specific line-item deductions.