Alabama Workers’ Compensation Goes Digital: What You Need to Know About EDI
By: Carson Campbell
In July of 2021, the Alabama Department of Labor initiated the transition to Electronic Data Interchange, better known as “EDI.” As of January 1, 2023, all state workers' compensation forms must be submitted via EDI, representing a significant shift for the traditionally, non-form-intensive Alabama Worker’s Compensation system. With this transition, Alabama follows in the footsteps of many other states that have fully tested and adopted EDI.
According to the Alabama Department of Labor, EDI will allow all paper forms to be replaced by automated, electronic transactions that are more efficient, minimize errors and eliminate mailing costs. Ultimately, the new process serves to streamline the system while ensuring consistency. Excluding peculiarities and/or additional information, the Alabama Department of Labor will use the electronic standards developed by the International Association of Industrial Accident Boards and Commissions, an organization representing workers' compensation administrators and officials since 1914.
The following is a discussion of critical takeaways from the recent Department of Labor seminars regarding the new EDI system for smooth implementation.
The 00 Report replaces the former First Report of Injury, serving as the initial claim submission with the Department of Labor and triggering automatic follow-ups for subsequent filings. In compliance with Ala. Code § 25-5-4, all 00 Reports should be filed with the Department of Labor within 15 days of the accident or notice to the employer only if lost time exceeds three days. It is important to note that the 00 Report is only filed on compensable lost time claims. The Department of Labor discourages filing a 00 Report for medical-only claims, denied claims or claims still under investigation. However, if one was inadvertently filed with no indemnity benefits being paid, a subsequent filing of either a Medical Only (M) Form, Under Investigation (UI) Form or Denial (04) Form should notify the state. All 00 Reports must include a disability date and the employee’s full Social Security number. This poses an issue for undocumented workers or employees without a Social Security number. In this case, per the Department of Labor, a Social Security number should be created and used consistently across all forms. Any proposed Social Security number will suffice, with the exception of two: 000-00-0000 and 999-99-9999.
Next, the Initial Payment (IP) Report replaces the Supplementary Report and is filed solely to reflect the initiation of indemnity benefits. In compliance with Ala. Code § 25-5-7, the IP Report should be filed within 10 days of the initiation of benefits, with the “date of disability” being the first day of the three-day waiting period, unless the employee was not paid on the day of the accident, which then becomes the “date of disability.” If the employee continues to receive her full salary in lieu of compensation, an Employer Paid (EP) Report should be filed. Revisions to the IP Report should be submitted promptly on the correct form identifying the change. For example, a revision to the information contained within the IP report should be filed with a 02 Change Form; a revision to the type of benefits being paid should be filed as a Change in Benefit Type (CB) Form; while a revision to the amount of benefits being paid should be filed as a Change in Benefit Amount (CA) Form. A Sub-Annual (SA) Form is later filed if indemnity benefits continue to be paid after six months. Finally, if benefits were suspended for any reason and need to be reinstated, a Reinstatement of Benefits (RB) Form should be filed, with the “date of disability” being the first day of reinstatement.
Several new “Suspension Reports” replace the old Claims Summary Form, depending on the reason and circumstances surrounding the suspension. An S1 Form should be filed to reflect the suspension of benefits within 10 days following the suspension. The “return to work” date should be the day after the last date compensation was paid/end date, regardless of the day of the week. Therefore, the number of weeks and days between the date disability began to the end date must reconcile with the amount of money paid to the employee. If the system recognizes an underpayment in compensation benefits, the S1 Form will be rejected. The other Suspension Reports include the S2 Form for suspension due to medical non-compliance; the S4 Form for suspension due to the employee’s death; and the S8 Form for suspension due to jurisdictional change. No information regarding the amount of medical benefits paid or the amount of fees and expenses paid is required on any suspension form.
Once a settlement has been reached and approved via Ombudsman or a trial court judge, it should be reported via the S1 Suspension Report, Payment (PY) Report or Final (FN) Report. Please note that if a settlement is reached in a medical-only or disputed claim, a 00 Report must be filed prior to the acceptance of a settlement form.
Navigating this new complex system will certainly require trial and error. Fortunately, Alabama is not a penalty state, meaning there are generally no penalties or repercussions for incorrect or delayed filings. However, it is important to learn and understand the new EDI system to expedite uniformity and avoid undue delays or additional paperwork. Filing these forms creates a document trail available to opposing counsel and may be worth discussing with your attorney first, especially for highly contested claims or those where litigation may likely follow.
Attorney Contact Info
Carson Campbell
carson.campbell@swiftcurrie.com
205.314.2411