Generally, an employer must deny a claim within 90 days to avoid a presumption that it's compensable. Labor Code 5402(b)(1) states, "If liability is not rejected within 90 days after the date the claim form is filed under Section 5401, the injury shall be presumed compensable under this division." Once the presumption attaches, it can be rebutted only by evidence that could not have been obtained with the exercise of reasonable diligence within the 90-day period. (SCIF v. WCAB (Welcher) (1995) 60 CCC 717.)
In Rodriguez v. WCAB (1994) 59 CCC 857, however, the Court of Appeal held that an employer is not required to issue a denial letter within the 90-day period to effectively deny the claim. In Rodriguez, the employer sent a denial letter on the 89th day following the filing of a claim form, and the applicant did not receive it until the 96th day. The applicant asserted that the denial letter had to be received within the 90-day period to be a sufficient denial pursuant to LC 5402(b). The Court of Appeal rejected that argument.