State News

PENNSYLVANIA MEDICAL ONLY WORKERS’ COMPENSATION CLAIMS

By

Kevin L. Connors, Esquire

Recently, the Pennsylvania Commonwealth Court issued two decisions in October of 2015, addressing the procedural issues that arise in the context of what is the appropriate petition to file, when a Claimant whose workers’ compensation claim has been accepted as a “medical only” claim, with the issuance of a Medical Only Notice of  Compensation Payable, thereafter alleges that the workers’ compensation claim has resulted in allegedly compensable wage loss, with the procedural debate being whether the Claimant must file a Claim Petition, or, alternatively, should file a Reinstatement Petition.

The two Commonwealth Court decisions are Sandra Sloane v. WCAB (Children’s Hospital of Philadelphia), decided on October 1, 2015, andAlex Ingrassia v. WCAB (Universal Health Services), decided on October 26, 2015.

In Sloane, the Commonwealth Court determined that the Claimant’s medical treatment was compensable, but that the Claimant was not entitled to an award of temporary total disability benefits, for reasons that we will explain.

In Ingrassia, the Commonwealth Court vacated the decisions of the Workers’ Compensation Appeal Board and WCJ, denying the Claimant’s claim for disability benefits, with the case remanded back to the Appeal Board and WCJ, to render additional findings of fact and conclusions of law on the issue of the alleged Sloane wage loss disability.

Sloane

Turning first to Sloane, Sloane was injured while working for the Children’s Hospital of Philadelphia on April 20, 2004.  Her injury was an injury to her right elbow, in the course of moving cervical traction weights for a patient.

Her claim was then accepted under a Notice of Compensation Payable, with the claim being accepted both for the description of injury as well as for associated wage loss disability.

The described injury was lateral epicondylitis of the right elbow.

Subsequent to the acceptance of the claim, the Claimant began receiving partial disability benefits, under a series of Supplemental Agreements, reflecting that the Claimant was working in a light-duty position with reduced wages.

She then suffered a second work injury, on December 3, 2006, while she was attempting to restrain a patient.  That injury involved the Claimant injuring her right elbow and right knee.

The 2006 claim was accepted as compensable under a Medical Only Notice of Compensation Payable, with the NCP not recognizing any compensation for alleged wage loss.

The 2006 injury was described as an “exacerbation of right elbow epicondylitis and flare up of pre-existing (degenerative joint disease) in her right knee”.

Following that injury, the Claimant did return to light duty work, and continued receiving temporary partial disability benefits for her 2004 injury, until November 16, 2007, when she stopped working in anticipation of a right knee replacement surgery for the 2006 injuries.

Following the right knee replacement surgery, the Claimant did not return to work.

She then filed a Reinstatement Petition on May 31, 2011, seeking temporary total disability benefits as of November 1, 2007 for her right knee injury.

In a Decision issued by the WCJ on May 15, 2012, the WCJ granted the Claimant’s Reinstatement Petition, finding that the Claimant was totally disabled as of November 17, 2007, predicating the disability on her two injuries from 2004 and 2006.

The WCJ further required the employer to pay medical bills for treatment of the Claimant’s 2004 and 2006 work injuries, as well as to pay for the 2007 right knee replacement and subsequent post-surgical treatment.

The Judge’s Decision was then appealed to the Appeal Board by the employer, with the Appeal Board reversing the Judge’s Decision granting total disability benefits based upon the 2006 work injury, concluding that the Claimant had been required to comply with the three year statute of limitations period under Section 413(a) of the Act, as opposed to the 500 week period for reinstatement of suspended partial disability benefits under Section 302(b).

Since the Claimant did not file her petition within three years of the issuance of the 2006 NCP, the Appeal Board held that the Claimant was time-barred from receiving temporary total disability benefits for the 2006 injury.

However, the Appeal Board did conclude that the Claimant’s petition was timely filed with respect for her 2004 injury, as she was continuing to receive partial disability benefits for that injury through the date that she filed her Reinstatement Petition.

In concluding that the Claimant was still entitled to receive temporary partial disability benefits for the 2004 injury, the Board nevertheless determined that the Claimant had failed to prove, through credible and substantial medical evidence, that she was totally disabled as a result of the 2004 injury, such that the Appeal Board denied her claim for temporary total disability benefits for that injury.

Not surprisingly, both parties then appealed to the Commonwealth Court.

Before the Commonwealth Court, the Claimant argued that the Board had erred in barring her wage loss and medical benefits for her 2006 injury, in reliance upon a three year statute of limitations, as she claimed the issuance of the Medical Only NCP for her 2006 injury resulted in her “disability” being placed in a suspended status, which should have allowed her to seek reinstatement of compensation within 500 weeks of the issuance of the 2006 NCP. 

She also claimed that she was totally disabled from her 2004 work injury as of 2007.

Opposing Claimant’s appeal, the employer argued that it was not liable for the Claimant’s 2007 right knee replacement surgery, nor for medical expenses related to the 2006 injury, based on the Claimant having presented insufficient medical evidence to sustain her burden of proving either fact.

Addressing the timeliness of the Claimant’s petition, the Commonwealth Court, in an Opinion authored by Sr. Judge Colins, held that while Section 413(a) of the Act empowers a WCJ with broad discretion to amend an award of benefits, to include amending an NCP or an agreement of the parties, this Section of the Act also requires that the petition seeking to review, modify, or reinstatement benefits must be filed “within 3 years after the date of the most recent payment of compensation made prior to the filing of such a petition.”, in reliance upon Fitzgibbons v. WCAB (City of Philadelphia), 999 A.2d 659 (Pa. Cmwlth. 2010). 

Citing to the Pennsylvania Supreme Court’s ruling in Cozzone v. WCAB, 73 A.3d 526 (Pa. 2013), theSloane Court held that Section 413(a) of the Act is intended to act as a statute of repose, cutting off any entitlement to the reinstatement of disability benefits that have been partially or totally suspended at the expiration of the 500 weeks under which partial disability benefits are payable pursuant to Section 306(b)(1) of the Act.

Holding that the 500 week and 3 year statute of limitations periods under Section 413(a) of the Act must be construed together, with both being given affect to allow a Claimant whose benefits were suspended or reduced prior to the expiration of the 500 week period, to seek a reinstatement of total disability benefits within 3 years of the last payment of benefits, or the maximum 500 weeks allowed for partial disability, whichever occurs later.

As the Commonwealth Court explained, citing to City of Philadelphia v. WCAB, 24 A.3d 1120 (Pa. Cmwlth. 2011); Forbes Road CTC v. WCAB, 999 A.2d 627 (Pa. Cmwlth. 2010), the medical-only option for an NCP was created to allow an employer to accept liability for an injury, allowing for the payment of medical expenses, without being construed as an admission of liability with respect to the claim of loss of earning power.

Since the employer had never recognized or accepted the Claimant’s claim of alleged wage loss disability inSloane, disability wage loss benefits were never suspended when the 2006 NCP was issued, and the Claimant could not, therefore seek to have her disability benefits reinstated, as the 500 week period for reinstatement of benefits did not apply in Sloane absent an acceptance of liability as to wage loss.

Concluding that the 500 week period was inapplicable to the filing of the Claimant’s petition, the Commonwealth Court then sought to determine whether the Appeal Board had correctly determined that the Claimant’s petition was untimely, in terms of a 3 year statute of limitations, to the extent that it sought disability benefits for her 2006 injuries, noting that the issue was apparently one offirst impression.

Holding that the fact that no disability compensation had ever been paid for the Claimant’s 2006 injuries, theSloane Court held that the Claimant was required to establish entitlement to the disability benefits that she was seeking by filing a petition within 3 years of the date of her alleged injuries; although, inSloane, the Claimant’s petition was filed on December 31, 2011, and sought wage loss benefits for alleged injuries that had occurred on December 3, 2006, more than 5 years prior.

As for the Claimant’s attempt to reinstate total disability benefits for her 2004 injury, the Sloane Court held that the Claimant’s petition only sought benefits for her 2006 injury, not for the 2004 injury, with the parties having agreed, during the petition litigation, that the parties expressly stipulated that the 2004 injury would not be part of the current proceeding, such that neither party presented medical evidence on the issue of whether the 2004 injury totally disabled the Claimant from being able to work.

The take away from Sloane, in the context of what is the proper petition to file in the course of seeking temporary total disability benefits for injuries that the employer/insurer has accepted as “medical only”, is that a Claim Petition must be filed within 3 years of the injury, pursuant to Section 315 of the Act, to preserve any claim for wage loss benefits related to a “medical only” injury claim.

Ingrassia

In Ingrassia, the WCJ’s denial of disability benefits, affirmed by the Appeal Board, was vacated by the Commonwealth Court, with the case being remanded back to the Board and WCJ, to render findings of fact and conclusions of law on the issue of whether the Claimant was entitled to wage loss disability compensation benefits.

Ingrassia worked for Universal Health Services as a full-time transportation van driver, shuttling children to and from appointments.

While sitting at a red light, the Claimant’s van was rear-ended on June 16, 2011.

The Claimant immediately sought medical treatment with the employer’s panel doctor, with the Claimant being released to return to work.

A medical only NCP was then issued, describing the injury as a strain/sprain of the Claimant’s cervical and lumbar spine, with the Claimant’s medical treatment and expenses being accepted as compensable.

The day after the Claimant’s accident, the Claimant came into work, but left early, claiming that he had a headache and was dizzy.

The Claimant never returned to work for Universal Health.

Two months later, the Claimant filed a Claim Petition, alleging that he had suffered injuries to his neck and back, as well as to his head and left arm, with the Claimant alleging that he became totally disabled by his work injuries the day after the June 16, 2011 accident.

In the course of litigating the Claim Petition, both parties presented evidence, with the Claimant also amending his Claim Petition to a Reinstatement Petition, based upon the employer having already recognized that a work injury had occurred.

In 2012, the Claimant testified before the WCJ that he had started a new job, driving a customer shuttle van for a different employer, in June of 2012. 

Questioned whether the Claimant would have been able to return to his pre-injury job with the employer, the Claimant testified that he had resumed driving in December of 2011, and that “I would say I could, sure,”, but that the Claimant found his new job simply easier to perform.

Accepting the Claimant’s testimony as being credible, except for any testimony that the Claimant had offered that his pre-injury job was too difficult to perform as of July of 2012, when the Claimant had begun working for the other employer, the WCJ concluded that the Claimant had failed to offer credible medical evidence that his work injury disabled him from being able to perform his pre-injury job.

Appealing the WCJ’s Decision, the Claimant was unsuccessful in convincing the Appeal Board to vacate, with the Appeal Board concluding that the Claimant’s expert medical witness, Dr. Yang, had offered testimony that was speculative as to the Claimant’s alleged disability, because the doctor lacked a factual basis for that opinion.

Appealing to the Commonwealth Court, the Claimant argued that the WCJ and Board had applied the wrong burden of proof, claiming that the issuance of the medical only NCP should have characterized his compensation benefits as being in a suspended status, such that the Claimant would have then carried the burden of proof that would be applicable to a Reinstatement Petition, a burden very different than that carried by a Claimant litigating a Claim Petition.

Under a Reinstatement Petition, the Claimant need not present medical evidence, as the Claimant’s testimony alone can support a reinstatement of compensation, that the originally-accepted disability, being the incapacity to perform the pre-injury job, has recurred, such that the Claimant again has a loss of compensable earnings.

Under a Reinstatement Petition, the burden of proof would then shift to the employer, requiring the employer to prove that the alleged disability is unrelated to the accepted work injury.

Holding that a Claimant, whose injuries have been accepted under a medical only NCP, who is seeking wage loss benefits for the accepted work injuries,Ingrassia held that the Claimant must file a Claim Petition, under which the Claimant would then carry the burden of proving that the work injury is causing a loss of earning power underOrenich v. WCAB, 863 A.2 165 (Pa. Cmwlth. 2004).

Under a medical only NCP, the Ingrassia Court held that there are no disability benefits to suspend or reinstate, since there had never been an acceptance or establishment of a loss of earning power resulting from the work injury.  Since the Claimant in Ingrassia had properly filed a Claim Petition, the Claimant continued to carry the burden of proving, through competent medical evidence, that the work injury resulted in wage loss disability.

In this context, the Ingrassia Court held that the WCJ and Board had correctly applied the burden of proof applicable to a Claim Petition, as opposed to the lesser burden of proof that would otherwise arise in the context of a Reinstatement Petition.

The take away from Ingrassia, no different than Sloane, is that the employer’s issuance of a medical only NCP does not result in a suspension of the entitlement to wage loss compensation benefits, as the medical only NCP only constitutes an acceptance of liability with respect to medical compensation benefits, such that it does not toll any timeline for seeking wage loss compensation benefits under either Section 413(a) or Section 315 of the Act, requiring a Claimant seeking wage loss compensation benefits for injuries that have been accepted under a medical only NCP to file a Claim Petition within 3 years of the date of injury, in order to preserve the alleged entitlement to wage loss compensation benefits under Section 306 of the Act.

Clear as a bell!

Well, the issue was one of first impression, in both cases, such that procedural clarification was necessary, in order that all parties understand not simply which petition is relevant, be it claim or reinstatement to the attempt to secure wage loss compensation benefits for injuries accepted under a medical only NCP, but that the characterization of the petitionalso determines the appropriate burden of proof, which, as we all know, is completely different under Claim and Reinstatement Petitions, as the Claimant carries almost no burden of proof under a Reinstatement Petition, a petition that seemingly can be granted by a WCJ with breathless testimony from a Claimant that the originally-accepted disability has recurred, and that the Claimant cannot, therefore, work, as opposed to the burden under a Claim Petition, requiring proof of several elements, to include employment, notice, causation, and disability, burdens which are continuing for a Claimant underInglis House v. WCAB, 634 A.2d 592 (Pa. 1993).

Conclusion

To close, the correct petition to litigate following issuance of a medical only NCP is a Claim Petition, and not a Reinstatement Petition, as wage loss disability has never been accepted by the employer/insurer, under a medical only NCP, and any claim for wage loss compensation benefits related to injuries accepted under a medical only NCP now clearly carries a 3 year burden of proof for the filing of a Claim Petition for wage loss compensation.

ConnorsO’Dell LLP

Trust us, we just get it!  It is trust well spent!

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout  Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

The Medicaid Secondary Payer Act will take effect on October 1, 2016. The new law substantially expands state Medicaid recovery rights, and these changes will affect settlements of workers’ compensation and liability claims involving Medicaid beneficiaries.

The Medicaid Secondary Payer Act represents the federal government’s response to the problems facing state Medicaid programs in their recovery efforts. The Affordable Care Act expanded the scope of persons eligible for Medicaid coverage, and at the same time, a state’s recovery efforts remained inhibited by court decisions and anti-lien provisions. In other words, the number of persons covered became disproportionate to the amount of money being recovered. The Medicaid Secondary Payer Act would seemingly strike a balance.

Under current law, a state’s Medicaid reimbursement rights are limited to portions of a settlement designated as medical expenses. In contrast, the Medicaid Secondary Payer provision allows states to recover from the entire settlement amount. More specifically, this provision eliminates the statutory language the Supreme Court relied on in Arkansas Department of Human Services v. Ahlborn, which limited Medicaid reimbursement rights to portions of the settlement or judgment related to “health care items or services.” The new language allows recovery against “any payments.” As a result, Medicaid will be able to claim 100 percent of its lien from settlements with its beneficiaries.

Whether you are attempting to settle a workers compensation claim or simply protecting your subrogation lien in a third party settlement, it will soon be more important than ever to determine the existence and extent of any Medicaid liens.

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About the Authors

This blog submission was prepared by Mike Fish and Ashleigh Hunnicutt.  Both are attorneys with Fish, Nelson & Holden, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Fish Nelson & Holden is a member of the National Workers’ Compensation Defense Network. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Fish or Hunnicutt by e-mailing then at mfish@fishnelson.com  or ahunnicutt@fishnelson.com or by calling them at 205-332-1448.

The widow and son of a deceased employee receiving workers’ compensation death benefits from
Texas Mutual recovered a settlement from a third-party. Texas Mutual asserted its statutory
subrogation rights and suspended benefits based on its future credit. The widow and son brought
bad faith claims against Texas Mutual. Texas Mutual filed a motion to dismiss on the grounds that
the plaintiffs’ claims fall within the exclusive jurisdiction of the Division of Workers’
Compensation. The trial court denied Texas Mutual’s motion to dismiss. Texas Mutual filed a
petition for writ of mandamus against the trial court judge which the El Paso Court of Appeals
conditionally granted. Citing the Texas Supreme Court cases of Ruttiger, Morris, and most recently,
In re Crawford, the court of appeals stated that the Division has exclusive jurisdiction over any
cause of action or claim which arises from the investigation, handling, or settlement of a workers’
compensation claim. The court noted that in deciding whether a cause of action falls within the
exclusive jurisdiction of the Division, it must look at the substance of the claim rather than the label
assigned to it by the plaintiffs. Here, plaintiffs’ claims, no matter how artfully pled, arose from
Texas Mutual’s assertion of its subrogation interest and suspension of benefits, issues over which
the Division has exclusive jurisdiction.
In re Texas Mutual Insurance Co., No. 08–15–00343–CV, 2016 WL 921317 (Tex. App.--El Paso
Mar. 9, 2016, no pet. h.).

Ronald Santorsola signed an employment agreement which required arbitration of claims alleging
workers' compensation retaliation. He reported an injury two months after he was hired and filed
a workers' compensation claim. A month later, he was terminated. He sued his former employer
under section 451.001 of the Texas Labor Code, alleging that he was terminated for filing a workers'
compensation claim. His employer sought to enforce the arbitration agreement. Mr. Santorsola
argued the agreement was unconscionable and unenforceable because it contained an agreement
requiring him to split the arbitrator's fee with his former employer that would deter him from
arbitrating his claim because he would not be able to afford it. The trial court agreed with Mr.
Santorsola ruling that the agreement was unconscionable and unenforceable. The Corpus Christi
Court of Appeals held that the trial court did not abuse its discretion in so ruling because the
fee-splitting agreement contained no cap on the amount the employee would be required to pay and
no provision allowing the arbitrator to modify the terms of payment.
AOF Services, LLC, v. Santorsola, No. 13–14–00641–CV, 2016 WL 1165829 (Tex. App.--Corpus
Christi Mar. 24, 2016, no pet. h.).

Marisa Lopez-Wagley has been named Deputy Commissioner of Enforcement. The Division’s
enforcement section which was managed by TDI will once again be managed by the Division.
Nick Canaday has been hired as the Division’s General Counsel to replace Dirk Johnson. Mr.
Canaday represented the Division while at the Office of the Attorney General and has many years
of workers’ compensation experience in private practice. He also has the rare distinction of having
successfully argued a case to the United States Supreme Court.

The Division is seeking input on the development of a new Compound Medications Plan-Based
Audit for physicians that prescribe compound drugs.
Many of you are probably familiar with the recent increase in the number of compound drugs being
prescribed by some physicians. By far, the most common type of compound drug being prescribed
is topical creams. These are usually pain creams or scar creams. These creams are often billed at
astronomical sums, sometimes over $10,000.00 for a one month supply. These creams often contain
common, inexpensive ingredients and have no proven efficacy over FDA approved drugs.
CBS News ran a national story last year on insurance companies receiving outrageous billing for
unwanted prescription creams. The story reported on a Dallas compounding pharmacy under federal
investigation for its practices.
The ODG Treatment Guidelines do not recommend compound drugs as a first line therapy. Rather,
commercially available, FDA-approved drugs should be given an adequate trial. The ODG also
notes,
Recently, some pharmacies have been making and marketing stock compound drugs
for the WC patient population. Among the FDA “Red Flags” for Enforcement Action
on Compounded Drugs is: "Compounding drugs in anticipation of receiving
prescriptions, except in very limited quantities in relation to amounts compounded
after receiving valid prescriptions."
One has to wonder whether the physicians prescribing these compound creams have some
motivation for doing so other than the patient’s best interests. These physicians should keep in mind
that if they have a compensation arrangement with or financial interest in the pharmacy, they are
required to disclose it in accordance with DWC Rule 180.24.

The Division adopted amendments to rule 132.7, regarding duration of death benefits for eligible
spouses, and rule 132.13, regarding burial benefits, to conform the rules to 2015 legislative changes.
The changes allow spouses of first responders to remarry and continue to receive death benefits.
The changes do not apply to non-first responder spouses so they should not remarry if they want to
continue to receive death benefits. The changes also increase the maximum burial benefit from
$6,000 to $10,000 for injuries occurring on or after September 1, 2015.

The revised DWC Form-042 Claim for Workers’ Compensation Death Benefits restructures the
form to increase readability, highlight additional required documentation, and revise the title to
Claim for Workers’ Compensation Death Benefits.
The all-new DWC Form-154 Workers’ Compensation Complaint form provides a simple,
standardized form for filing workers’ compensation complaints. The Division notes that a person
does not have to use the form and a complaint may also be submitted through its website, email, fax,
written correspondence, or even in person.
The form defines a complaint as a “written allegation that a system participant has violated Title 5,
Subtitle A, of the Texas Labor Code or Texas Department of Insurance, Division of Workers’
Compensation (TDI-DWC) rules.”

On March 15, 2016, the Centers for Disease Control and Prevention published its guidelines for
prescribing opioids for chronic pain to address the country’s prescription drug abuse epidemic.
Among the recommendations are that opioids should not be first-line therapy for chronic pain. The
recommendations states, “Nonpharmacologic therapy and nonopioid pharmacologic therapy are
preferred for chronic pain. Clinicians should consider opioid therapy only if expected benefits for
both pain and function are anticipated to outweigh risks to the patient.”
The recommendations also recommend a low starting dosage: “When opioids are started, clinicians
should prescribe the lowest effective dosage. Clinicians should use caution when prescribing opioids
at any dosage, should carefully reassess evidence of individual benefits and risks when considering
increasing dosage to =50 morphine milligram equivalents (MME)/day, and should avoid increasing
dosage to =90 MME/day or carefully justify a decision to titrate dosage to =90 MME/day.”
In a related development, the FDA has announced plans to add a boxed warning - its most serious
type - to all immediate-release opioid painkillers. The label will specify that the drugs should only
be used when other medications alternative therapies cannot control patients’ pain.

In an interview with NPR, United States Department of Labor Secretary Thomas Perez called laws
in Texas and Oklahoma that allow employers to opt out of providing traditional workers’
compensation insurance a “pathway to poverty” for people who get injured on the job.
Mr. Perez said the Labor Department is commissioning a report about the opt-out trend and cutbacks
in workers' comp benefits “to document the precise nature of this problem across the country.” It’s
also been reported that the Labor Department is currently investigating a large provider of opt-out
plans in Texas to determine “whether the company's plans or models contain provisions that
interfere with or prevent the exercise of ERISA rights by covered employees.”
On March 18th, Stanford law professor Alison Morantz released her study of the impact of nonsubscription
on 15 large companies that provided their Texas employees with a workers’
compensation alternative. She found that the costs per worker fell by about 44 percent.
Ms. Morantz did not examine whether workers were better off with the alternative plans or whether
the savings came at their expense. However, she concluded her “findings suggest an urgent need
for policymakers to examine the economic and distributional effects of converting workers’
compensation from a cornerstone of the social welfare state into an optional program that exists
alongside privately-provided forms of occupational injury insurance.”
Last month, we reported that the Oklahoma Workers’ Compensation Commission declared
unconstitutional the recently enacted state law allowing employers to opt-out of the state-regulated
workers’ compensation system, i.e., become non-subscribers, as they are referred to in Texas.