In University Physicians Associates v. Transport Drivers, Inc., A-3350-15T2 (App. Div. August 22, 2017), the Appellate Division considered an argument that Level I and II Trauma Centers should be given different treatment when it comes to billing along the lines that they receive under the fee schedule for No-Fault automobile policies.

The case stemmed from an accident that took place on October 10, 2012 when a pallet dropped from a forklift and seriously injured Manuel Bonilla, a Transport employee.  Bonilla was taken by ambulance to University Hospital, which is a Level 1 trauma center in Newark, N.J.  There Dr. David Livingston, a general surgeon, performed a hip relocation procedure under conscious sedation.  Two days later, Dr. Mark Adams, an orthopedic surgeon, performed an open reduction and internal fixation under general anesthesia to repair an acetabular fracture.  Dr. Livingston billed $10,343 for his services ($952 for a consultation and $9391 for the hip relocation), and Dr. Adams billed $71,374 for his services.

Respondent’s workers’ compensation carrier paid for $3,688.98 for the services of Dr. Livingston and $24,234.50 for the services of Dr. Adams.  The doctors had billed at the 95^th percentile (meaning that on a scale of 100, only five doctors billed more for charges which prevail in the same community).  The carrier reimbursed at the 75^th percentile, which means they paid at a level that was higher than 75 of 100 doctors for charges which prevail in the same community.

The litigation began in the Division of Workers’ Compensation with a Medical Claim Petition, but unlike 99% of such claims which normally settle, this case went to trial.  Dr. Livingston and the hospital CFO testified.  Respondent produced a Certified Coder on its behalf.  The Judge of Compensation, The Honorable Nilda Hernandez, found for the carrier and dismissed the claim petition.  University Physicians Associates appealed.

The Appellate Division noted that the Judge of Compensation expressed a valid rationale for her decision because respondent’s witness, Sandra Corradi, was the vice president of a bill review company retained by respondent’s insurer.  She was truly an expert in coding and said that the industry standard of reimbursement is paid at the seventy-fifth percentile as indexed by FAIR Health for New Jersey.  The Judge of Compensation noted that Dr. Livingston and the CEO were not expert coders.   They did not provide data on what they were paid by Medicare or other systems.

The Appellate Division found the expertise of the coder to be compelling but also addressed the central argument of the University Physicians Associates, namely that the Court should follow No-Fault regulations which exempt trauma services at Level I and II from its fee schedule.   One of the problems with this argument is that workers’ compensation has no fee schedule to begin with in New Jersey.   The Appellate Division also observed that even if the No-Fault law contains this exemption, all charges by Level 1 and II trauma hospitals must still be proven to be usual, customary and reasonable.

In this case, the Appellate Division affirmed the Judge of Compensation “[b]ecause the judge based her determination upon the usual fees and charges that prevail in New Jersey for similar physicians’ and surgeons’ services.”  The Appellate Division arguably did all parties a favor by so ruling, including hospitals.  To do otherwise would have discouraged the use of Level I and II trauma centers as there would be very little predictability on costs if employers and carriers had to devise a completely different repricing approach for such centers.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Last week Hurricane Harvey was predicted to cause significant damage to South Texas.  What we know now is that no one was prepared for the catastrophic devastation Harvey would leave in its wake.  It will, no doubt, be several months before we know the full extent of the damage.  We at SLS send our thoughts and prayers to our friends and colleagues impacted by the hurricane.  

Last week I wrote about how employers should not handle reopener claims, namely trying them on reports without expert testimony.  The case of Kalucki v. United Parcel Service, A-3486-15T3 (App. Div. August 15, 2017) demonstrates the winning strategy for employers to adopt in reopener claims.

The case involved an injury that took place many years ago to petitioner, who was a clerical worker for UPS.  The most recent reopener award took place on June 24, 2009.  Petitioner received two separate awards of disability.  In one claim he received an award of 40% permanent partial disability for the left shoulder and neck subject to a credit of 37.5% for a prior compensation award.  In the other claim petitioner received 17.5% of partial total for bilateral carpal tunnel syndrome subject to a credit of 15% for a prior carpal tunnel award.  The petitioner then reopened both awards seeking an increase in both cases.

Petitioner testified at trial that his left shoulder and neck were more restricted, and it was painful to move his neck from side to side.  He said he had problems laying on his left side.  He experienced shoulder aches and numbness.  He also said that he lost grip strength in his left hand.

Both parties brought in experts to testify.  Petitioner’s expert had examined him four times in the past.  This expert was not a board certified orthopedic physician.  The expert found tenderness and spasm in the left shoulder, limited range of motion, and tenderness in the wrists.  The expert increased his estimate by 25% of the right hand, 25% of the left hand, and 30% in the neck.  The overall disability estimates, when combined, exceeded 100%.

Respondent produced a board certified orthopedic physician who had examined petitioner once before in 2007.  Respondent’s physician actually ordered an x-ray of the shoulder and found no objective findings of any significant pathology in the shoulder or changes in the neck.  In fact, the orthopedist said that petitioner’s range of motion had improved from the time of the last exam.  Overall petitioner had no increased disability with respect to the shoulder, neck or bilateral carpal tunnel.  The expert did concede negative grip strength in the right hand, but he found no atrophy and no decreased sensation.

The Judge of Compensation ruled that there was no objective evidence of increased disability and dismissed the reopeners on the neck, shoulder and hands.  He noted that the only evidence petitioner produced was subjective complaints.  That did not meet the standard of Perez v. Pantasote, 95 N.J. 105 (1984).  Significantly, the Judge observed that petitioner had not seen a doctor or received any treatment since the time of the last award.  Further, petitioner was able to continue to perform his full-duty job without the need of any accommodations. Finally, the Judge stated that respondent’s expert was more qualified than petitioner’s expert.  The Judge was critical of the petitioner’s expert: “The Court finds that claimant’s expert’s finding of an over 100 percent disability when combined, does not ring true based on petitioner’s continued full-duty employment.”

Petitioner appealed the dismissal of the reopeners and argued that the Judge should not have given greater weight to respondent’s doctor based on credentials.  The Appellate Division disagreed and ruled that it was entirely appropriate for the Judge of Compensation to consider the added credentials of the respondent’s doctor, based on his Board Certification, as a factor in credibility of the experts.  The Appellate Division also commented that much of petitioner’s testimony at trial on this reopener was exactly the same as what he testified to at the time of the prior award. The Appellate Division said,  “As just one example, claimant’s expert testified that petitioner’s range of motion in his neck on examination in 2011 was limited by twenty degrees, as compared with a higher limitation of twenty-five percent revealed on examination in 2007.”  Finally, the Court commented that petitioner continued to work full-time and never even saw a physician for treatment since the time of the prior award, taking only over-the-counter medications since then.

For these reasons the Appellate Division affirmed the Judge of Compensation’s dismissal of these claims.  The case illustrates the proper way to handle a reopener claim.  Respondent did everything right here, retaining a board certified orthopedic physician, comparing the complaints with those at the time of the prior settlement, and emphasizing the lack of objective evidence produced by petitioner.   This case provides a textbook case on how reopener claims can be won by employers when handled wisely.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

The best defense against an occupational disease claim is often the statute of limitations.  That is how the employer won in Mara v. United Parcel Service, A-3691-15T4 (App. Div. August 4, 2017).

The case involved a package car driver named Craig Mara who began working for UPS in 1983.  He filed a claim petition in 2011 contending that his bilateral knee replacement surgery in 2010 was caused by decades of physical stressors on the job.  He argued that he did not realize his knee condition was work related until after he had his surgery, and since he filed within two years of the surgery date, he argued that his filing was timely.

UPS countered with evidence that Mara knew his condition was related to his work in 2006.  Mara had long-standing knee problems, including prior left knee surgery 10 years before he testified.  His personal chiropractor, Dr. Ruth, had been treating Mara for knee pain since 2003 and told him that his condition was work related in 2006.  He admitted in his testimony that he revealed to Dr. Ruth that driving at work and moving around at work caused him knee pain.  He also told Dr. Ruth that his right knee was hurting due to work activities.

The Judge of Compensation found that petitioner’s claim was not timely filed, and the Appellate Division affirmed.  The Court said, “Considerably more than two years prior to his 2011 petition, Mara was well aware that the problems in both his knees were work-related.  Long before the 2010 knee replacements, the problem with at least one knee was sufficiently severe as to require surgery to repair a torn meniscus.”

The Court also rejected petitioner’s alternative argument that his employer lulled him into believing that his knee condition was work related by having the surgery paid for by employer sponsored health insurance.  The Judge of Compensation correctly pointed out that the employer’s health insurance was separate and distinct from its workers’ compensation policy.

The case makes sense because it directly falls within the language of N.J.S.A. 34:15-34, which requires that a compensation petition must be filed “within 2 years after the date on which the claimant first knew the nature of the disability and its relation to the employment.”  The defense was able to show both elements:  that the petitioner knew the nature of his disability and thought the condition was work related.  UPS was able to prove the defense through prior medical records, particularly prior chiropractic records.  It is absolutely essential in occupational orthopedic claims that employers obtain prior chiropractic, family doctor and prior orthopedic treatment records because those records often build the entire defense to the claim, just as in this matter.

There is a cardinal rule in workers’ compensation trials that employers and defense counsel must follow: never try a case on reports unless the exposure is minimal.  To put it another way, where the exposure is significant, the employer must bring in a medical witness for testimony and cross examine the petitioner’s expert.  The employer in Roy v. Marsden & Sons Electric, A-1324-15T1 (App. Div. August 9, 2017) violated that rule by trying the case on medical reports alone and paid the price.

The case involved a reopener of an award of 22.5% permanent partial disability or $31,518.  The initial award for an accident on July 26, 2011 was described as being “for orthopedic and neurologic residuals of the lumbar spine for a compression fracture at L1 and L2 and for a bulging disc at L5-S1.”  The reopener was timely filed, and petitioner saw Dr. John Gaffney for petitioner and Dr. Francis Meeteer for respondent for reevaluations.

Dr. Gaffney noted in his reexam that petitioner had difficulty transferring positions from a supine to sitting to standing position due to spinal pain.  He found spasm and tenderness in the lumbar areas of the spine.  He also found sensory deficit with pinprick into the bilateral extremities.  He raised his estimate by 45% for residuals of a compression fracture of the superior endplate of L1, and compression fracture of the superior endplate of L2; new progressive lumbar disc injury with bulging discs at L3-4 and L4-L5, and a disc osteophyte complex at L5-S1; persistent and progressive lumbar radiculopathy; lumbar fibromyositis syndrome; and chronic pain in the lumbar spine.”   He related all of these findings to the original accident in 2011.

Dr. Meeteer for respondent had not seen petitioner originally.  There is no explanation in the appellate division decision on why respondent chose not to use the original physician.  Usually respondents return to the same physician on reopener exams.  Dr. Meeteer found no spasm, no tenderness, and clinical tests were generally negative. In other words, the two experts had completely different findings.  Dr. Meeteer estimated five percent permanent partial disability for a compression fracture at L1 and L5 and disc bulging of the low back.

Petitioner said at the initial 2012 hearing that he experienced a severe, stabbing pain in his back that radiated down to both feet lasting an hour.  In the reopener hearing in 2015 he said that the radicular pain was there constantly.  In 2012 the pain would awaken him from a night’s sleep occasionally.  By 2015 the pain woke him two or three times each night.   In 2012 he could walk three miles and lift objects up to 30 to 40 pounds.  In his 2015 testimony he could no longer walk long distances due to fear that he might not be able to walk back.  He said he used a long shoe horn to put his shoes on because he could no longer bend down to do so.  He seldom lifted objects weighing more than a grocery bag.

Petitioner did have treatment after the initial award. Dr. Joseph Zerbo prescribed a course of physical therapy and a work hardening program as well as an FCE which noted that petitioner could return to full-time work.  He underwent an MRI on January 8, 2015 which revealed “internal disc derangement at L4-5 and L5-S1 producing discogenic syndrome.”  Dr. Zerbo noted that the compression fractures had healed satisfactorily.   He recommended a lumbar fusion surgery which petitioner declined.

The Judge of Compensation explained that both counsel had agreed to allow her to decide the case by submitting medical reports without live testimony from any physicians or experts.  She noted that the sole issue before her was whether there was an increase in petitioner’s previous award and if so, in what degree.  She also noted that petitioner was in obvious distress.  She also observed that Dr. Gaffney saw petitioner in 2012 and that Dr. Meeteer had not seen him previously.  She found Dr. Gaffney to be more credible partly because he had seen petitioner twice.  She further noted that petitioner had seen Dr. Joseph Zerbo after the initial award for treatment.  The Judge of Compensation awarded petitioner another 20% for a total of 42.5% or an increase from $31,518 to $121,125 or approximately $89,607 in new money, almost four times the amount of the prior award.

Respondent appealed and argued principally that there were new findings on the MRI in 2015 that were not causally related to the original accident and that there was no credible medical evidence linking these findings to the original accident.  Respondent also argued that there was no support for an increase of 20%.  The Appellate Division flatly rejected these arguments precisely because respondent agreed to try the case on reports:

. . . Respondent is critical of petitioner’s expert’s reports because the reports’ explanations concerning the extent of petitioner’s increased disability and the causal relation of that increase to the original accident does not contain sufficient elaboration.  Yet, by agreeing to present the medical evidence in reports rather than by experts’ testimony, respondent now criticizes the JOC for doing precisely what the parties tasked her with doing; namely, reviewing the documentary evidence as a whole and determining the credibility of conflicting reports based on all the documentary evidence as well as petitioner’s testimony.  That is precisely what the JOC did, and her findings are amply supported by the documentary evidence and petitioner’s testimony.

In short, the Appellate Division said that if you say you waive live testimony from the experts, you cannot effectively argue causation issues at trial or on appeal.  You are limited to arguing whether there is evidence supporting additional disability.  You need expert testimony to assist the trier of fact when it comes to causation issues.  Judges are not doctors and cannot decide from paper evidence which findings are work related without live testimony on which to base their conclusion.  That has always been the rule.  It may cost one or two thousand dollars to produce a medical expert, but the benefit far outweighs the cost in almost every case.  In this case respondent apparently had some legitimate arguments to make on causation but failed to bring in the experts to make those arguments.

Here the potential exposure was very high because the prior award was not far from the 30% level where awards become much more expensive in New Jersey.  It turned out that the reopener award amounted to nearly four times as much money as the original award.  The case was unusual in that petitioner never had major surgery and was able to work full time but obtained an award of 42.5%. The lesson is clear:  if a case is worth trying, it is worth bringing in the medical experts to testify.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Permanency awards in the New Jersey Division of Workers’ Compensation can amount to very significant dollars.  An award of 40% partial permanent disability at 2017 rates amounts to $114,720 – tax free.  Furthermore, the case can be reopened within two years from the last date of payment for further permanency benefits.  If the employee reopens the case and obtains another 10% hiking the 40% award to 50%, the employee will collect an additional $64,680, again tax free.  Usually the employee in New Jersey is back doing the same job but is eligible for a substantial permanency award because New Jersey (unlike Pennsylvania and New York) is not a state where proof of lost wages or earning capacity is required for permanency benefits.  Rather, it is a loss of physical function state.

Many clients have asked what kind of evidence and testimony does a Judge of Compensation focus on to decide the appropriate percentage of disability.  The answer is two-fold:  first the judge will review the objective medical studies, i.e., MRI, CT scan, EMG, surgery records along with the medical IMEs from the opposing experts.  Next, the judge will focus on the testimony of the claimant in court regarding the effect of the accident on his or her non-work activities or work activities. The claimant needs both to get an award.  Assuming that the employee is back to work doing the very same job, the focus will exclusively be on the non-work activities that the employee can or cannot do.

So this is where employers can help themselves immensely.  Consider that the testimony of the claimant in court may be that the employee can no longer play basketball, or go to the gym, or garden in a crouched position due to back pain even after surgery has occurred.  Those are significant complaints to most judges.  They are given at the time of settlement.  Defense lawyers and adjusters do not know if these complaints are accurate.  Suppose, however, the employer is well aware that the employee is still playing basketball and going to the gym, and suppose the employer has communicated that valuable information to the carrier/TPA and defense counsel? That information becomes crucial on cross examination of the petitioner by defense counsel.  It raises issues of credibility and sharply reduces the value of the case because an award of permanent disability must be supported by proof of a material impact on work or non-work activities.  Without that, no award can be entered.

Now consider an even greater service that employers can provide for themselves which will lead to enormous savings.  As I have already indicated, there must be testimony by the claimant about proof of a material impact on non-work activities – or in rare cases, work activities.  The comparison is between the employee’s level of activity before the accident and the level of activity at the time of the settlement.  The logic is the employee gets paid money because he or she used to be able to enjoy many things in life, and do many things, that he or she cannot do as a result of the accident. But how can employers establish the level of activity before the accident?  If that could be established, wouldn’t it make a huge difference in cases?  Yes it would, and it is easy to establish the level of activity before an accident.

Here’s the answer:  employers can establish the pre-accident level of activity by use of an employee accident form, signed and filled out entirely by the employee, which asks the employee, among other questions, what recreational or social activities the employee has engaged in during the past few years.  The form is also used to ask how the accident occurred, whether there were witnesses and other pertinent information.  This form costs nothing at all but can save untold amounts of money for employers in negotiations and at settlement.

Suppose Claimant James Smith has a back injury on January 1, 2016 and fills out an employee accident form right away.  To the question about prior recreational and social activities, the claimant says “No sports at all.  No gym activities. I only watch television.”  At the time of settlement in August 2017, in order to support a substantial award, the employee testifies that he can no longer lift weights in the gym, play basketball or do mountain biking.  Those are his three main complaints.  The defense attorney, armed with the employee accident form, successfully cross examines the employee on his statement in the employee accident form filled out by the employee himself at the time of the injury! The lawyer enters that document into evidence to prove that this employee did not even play sports, did not belong to a gym, did not lift weights, and just watched TV by his own admission.  Defense counsel has attacked the employee’s credibility and now withdraws the settlement offer, arguing under Perez v. Pantasote, that there is no proof of a substantial impact on non-work activities.  As noted above, no judge can approve a settlement no matter how much surgery has taken place without establishing a substantial impact on work or non-work activities.

These are winning techniques that quite literally cost nothing and take almost no time, and they can save enormous sums of money for employers.  Whether your company has a carrier, or a TPA, or is self-insured, the message is simple:  communicate the information your company has to your defense attorney and adjuster about activities that the employee is engaged in: hobbies, sports, gym memberships, and anything else along these lines.  And use employee accident forms.  The undersigned has a good one for Capehart clients.  Unfortunately, most defense attorneys enter negotiations without having any idea what sports or recreational activities an employee engaged in pre-accident or engages in post-accident.  The best and most useful information is almost always contained in the workplace itself through co-employees and supervisors, and that information, if extended to defense counsel, can completely change the outcome of any comp case to the benefit of the employer.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Written by: Matt Marriott

If you have worked on the defense side of workers’ compensation claims for any period of time, the above headline likely sounds like a work of fiction. While we have all heard of the elaborate measures the NCIC Fraud Investigation Unit takes to prosecute employers who fail to maintain proper insurance coverage, the idea of them prosecuting a plaintiff for fraud has seemed about as likely as witnessing a pig fly, having a unicorn walk through your backyard, or capturing a Sasquatch.

While the above skepticism might be warranted based on past experiences, the Industrial Commission Fraud Unit made its presence felt on July 31, 2017 when it arrested Randolph County plaintiff, Nicole Ewing, on charges of endorsing weekly benefit checks while failing to disclose that she was simultaneously working for another employer. http://www.ic.nc.gov/080817NCICnewsrelease.pdf

As many of you know, N.C. Gen. Stat. § 97-88.2(a) makes it a crime when “[a]ny person . . . willfully makes a false statement or representation of a material fact for the purpose of obtaining . . . any benefit or payment . . .” under the North Carolina Workers’ Compensation Act.  If a plaintiff is found guilty under 97-88.2(a), it will be a Class 1 misdemeanor if the amount of benefits received due to the fraud was less than $1,000. If the amount in question is $1,000 or more, the plaintiff will be guilty of a Class H felony.

If you have evidence that a plaintiff is committing insurance fraud, you can contact the NCIC Fraud Investigation Unit at 1-888-891-4895.  Helpful pieces of evidence that defendants can obtain to show proof of fraud are the following:

• A copy of a weekly TTD check that has been endorsed by the plaintiff while he/she was working elsewhere;
• A Form 90 executed by the plaintiff and representing that he/she was not earning wages during the date range designated on the Form 90;
• Surveillance evidence showing that the plaintiff was, in fact, working during the date range identified on the Form 90;
• Plaintiff’s wage and attendance records from the alternative employer with whom the plaintiff was working while receiving TTD benefits (Contact a workers’ compensation defense attorney to assist in having these records subpoenaed if you do not have access to them).

PRACTICE TIP

While we all hope the Fraud Division’s actions will help cut down on future workers’ compensation insurance fraud, it is important to understand, as an employer or insurance adjuster, thatyou can never threaten a plaintiff with prosecution by the fraud division!

N.C. Gen. Stat. § 97-88.2(c) states:

“[a]ny person who threatens an employee with criminal prosecution under the provisions of subsection (a) of this section for the purpose of coercing or attempting to coerce the employee into agreeing to compensation or agreeing to forego compensation under this Article shall be guilty of a Class H felony.”

If you believe insurance fraud has occurred, simply turn the information over to the NCIC Fraud Investigation Unit.  Do not confront the plaintiff and try to convince him or her not to pursue workers’ compensation benefits by threatening a fraud prosecution.

If you have questions or concerns about the information contained in this article, please contact Matt Marriott, or a member of the workers’ compensation practice group.

South Dakota is a rural, expansive state with many smaller towns throughout. There are very few major health care providers within the state. There are also very few doctors that will perform independent medical examinations within the state. On occasion, we are forced to ask a claimant to travel outside his community to have the IME performed. The question then becomes what time and (more importantly) place are “reasonably convenient for the employee” to attend the IME. Unfortunately, there is no hard and fast rule and each claim must be reviewed independently.
SDCL 62-7-1 allows for compulsory medical examinations (a/k/a IMEs) at employer’s/insurer’s request. However, the IME must occur “at a time and place reasonably convenient for the employee.” Sometimes it will be necessary for a claimant to travel several hours or several hundred miles to attend the IME due to the location of the IME doctor. On occasion, a claimant will claim the distance is not “reasonably convenient” due to being in pain from sitting for long periods of time or simply unable to travel due to finances. The South Dakota Supreme Court has not interpreted what “reasonably convenient” means. However, the South Dakota Department of Labor has taken into consideration a Claimant’s pain when traveling for an IME and determined that sometimes traveling is the best of a bad situation. See, Dale L. Dobson vs. Homestake Mining Company, 1995 WL 529827, HF No. 87, 1994/95 (SD Dept. Labor). In these situations, it is best to calculate the approximate costs the claimant will incur to attend the IME (mileage, hotel, meals) and prepay those amounts. Sometimes it is worth allowing the claimant several days to travel to and from the IME in order to reduce the amount of time in a car or bus. On other occasions, it may be best to fly the claimant to the IME instead of making them drive. If these considerations are given to the employee, you have the best chance of convincing the Department of Labor the IME was at a time and place reasonably convenient to the employee if the claimant refuses to attend the IME.
As mentioned above, each claim is a different so determining what is reasonably convenient for the employee depends on that particular set of circumstances. If you have any questions on this topic, feel free to contact us.

POST-PROTZ; THE UNCONSTITUTIONAL PARADIGM

By Kevin L. Connors, Esquire

In the seemingly predictable universe of Pennsylvania Workers’ Compensation practice and procedure, June 20, 2017 would have been just like any other day with the routine reporting of allegedly work-related injuries, Insureds and Administrators initiating investigations that would invariably lead to claims Decisions that would bind their Employers to either accept, deny or continue to investigate reported injury claims, with Workers’ Compensation Judges and Attorney Practitioners throughout the Commonwealth attending compensation Hearings and depositions in the course of seeking to prove that an injury did or did not occur, was or was not disabling, warranted the awarding of or denying of a compensation claim, or, more simply, involved the respective Parties coming to agreed-upon terms in the course of resolving workers’ compensation claims under Compromise and Release Agreements, otherwise a normal day for Pennsylvania compensation stakeholders and practitioners, until the Pennsylvania Supreme Court posted its long-awaited Decision in Protz v. WCAB (Derry School District), 133 A.3d 733 (Pa. 2017) a ruling of tsunamic ramifications, eviscerating, as unconstitutional, Section 306(a.2)(1), of the Pennsylvania Workers’ Compensation Act, a Section that had allowed Employers, Insureds and Third-Party Administrators to ask injured Employees who had received 104 weeks of temporary total disability benefits to undergo an Impairment Rating Examination in reliance upon the AMA’s Guide to the Evaluation of Impairment, utilizing the Fourth Edition, which was the controlling Edition when Section 306(a.2)(1) was enacted by the Pennsylvania General Assembly in 1996.

We certainly hope that you took a few deep breaths as you tried to follow the syntactical gyrations and convolutions in the above sentence/paragraph, bespeaking a tendency towards grammatical self-indulgence.

Forgiving grammatical incoherence, all of us, whether Claimant or defense-oriented are struggling to come to grips with whatProtz actually means in the day-to-day practice of Pennsylvania Workers’ Compensation procedure.

First, without belaboring a formal analysis of the Protz Decision in and of itself, it seems pretty clear on its face that IREs have suffered the outrageous slings and arrows of this misfortune, and now are simply not available to Employers, Insurers, or Administrators as a backstop against a principle inherently embedded in the Pennsylvania Workers’ Compensation Act, being that there is no statutory end point, or termination, of temporary total disability benefits, once accepted or awarded, in the absence of one of the following occurring:

• The Claimant dies, and compensation benefits terminate by operation of both death and loss;

• The Claimant voluntarily returns to work in their pre-injury capacities, and there is no continuing wage loss post-return to work, such that the Claimant’s compensation benefits are suspended;

• The Claimant returns to work in a modified-duty capacity, with some reduction in return-to-work wages, such that the Claimant’s compensation benefits are modified, and temporary partial disability benefits are paid, subject to the 500 week limitation;

• The Claimant executes a Supplemental Agreement, perfecting either a termination, suspension, or modification of the Claimant’s workers’ compensation benefits;

• The Claimant signs a Final Receipt (almost never used), under which the Claimant agrees that all compensation benefits have been paid;

• The Claimant is deported by virtue of not being able to prove legal immigration status;

• The claim is settled under a Compromise and Release Agreement, perfecting some type of compromise of the indemnity and medical compensation benefits liability associated with the claim; and,

• The Claimant’s compensation benefits are terminated, modified, or suspended by order of a workers’ compensation judge, with the employer/insurer carrying the burden of proving the entitlement to a change in the Claimant’s benefit entitlement status.

   

  So what, if anything, did IREs extend to Employers, Insurers, and Administrators in the context of managing what might otherwise be a lifetime claim of entitlement to temporary total disability benefits, fully recognizing that few practitioners, in whatever context, have been witness to a 25 year old laborer, with a maximum compensation benefit rate, receiving lifetime temporary total disability benefits for a lumbar sprain or strain, let alone even for a lumbar surgical injury as the injured Employee then never received any cost of living increases in his/her’s compensation benefit rate, which in the hypothetical of a lifetime of receiving weekly temporary total disability benefits, can reap what some might call a significant income insult, but that risk, of an injured Employee living in a lifetime compensation vacuum, is the unspoken risk that drives insurance claims Underwriters and Representatives into Shakespearian fervor, as the potential risk elongates the balance sheet of a claim reserve that is both a prayer and a curse, as well as requiring that the shared risk of never-ending benefits be captured in an underwriting pool of necessarily-increasing premiums, to prevent the entire system from buckling under the weight of ill-defined exposures.

   

  Yes, a year from now, the cost of Protz will be quantified by any number of actuarial realities.

   

  Those actuarial realties will inseminate costs that all stakeholders will bear, to account for the following:

   

• Necessarily higher underwriting premiums charged to Employers;

• Spiraling reserves as a protection from unbridled exposures; and,

• Potential loss of enthusiasm for Employers to choose the Commonwealth as a place to do business, given what most businesses, in comparison to other jurisdictions employing some form of a permanency model for compensation benefits, regard as a high risk jurisdiction, not particularly worried about whether businesses are shifting expenditures from exposures and expanded employment opportunities, to risk awareness and newly-naked exposures.

So what does any of this mean and how has Protz changed Pennsylvania Workers’ Compensation practice and procedure?

Pushing aside the robo-calls being made by Claimant firms seeking to reopen workers’ compensation claims under Reinstatement, Review, and Penalty Petitions, there are/were very few workers’ compensation claims, although no one appears to have any clear statistics, where Claimants with IREs with a less than 50% impairment actually ended up receiving a total of 604 weeks of temporary total disability benefits, as Carriers and Employers invariably settled, if not all of those claims, a very high percentage of those claims, effectively seeking what a Claimant Attorney might perceive to be a statutory discount under Section 306(a.2)(1) of the Act. 

Are there current challenges being asserted under Claimant Petitions filed in reliance uponProtz?

According to the Bureau, in the two months post-Protz, approximately 2,000 Petitions have been filed, seeking some form of statutory relief from a conversion of temporary total disability benefits to temporary partial disability benefits that was based in reliance upon an IRE that established an Impairment Rating of less than 50% of the whole person.

Presumably, these Petitions seek relief from any conversion of temporary total disability to temporary partial disability that was based upon an IRE, and one would have to presume that a Workers’ Compensation Judge will reverse those conversions, whether automatic or Petition-based, absent guidance from either the Pennsylvania Supreme Court or the Commonwealth Court, as to the retroactive application ofProtz’ edict as to the unconstitutionality of IRE legislation under Act 57, the 1996 reforms to the Pennsylvania Workers’ Compensation Act, as an unconstitutional delegation of legislative authority from the Pennsylvania General Assembly to a Third Party, herein the AMA.

As predicted, there is actually a very recent Decision from the Pennsylvania Commonwealth Court, dated August 16, 2017, inThompson v. WCAB (Exelon Corporation), which resulted in the Commonwealth Court reversing prior Decisions by the Appeal Board and the WCJ, both of which had denied Claimant’s Review Petition, and Appeal therefrom, after the WCJ had modified the Claimant’s compensation benefits in reliance upon an IRE from 2005.

In so holding, the Commonwealth Court ruled “Thus, we are compelled to reverse the Board’s affirmance of the WCJ’s modification of the Claimant’s benefits, because under the Supreme Court’s recent Decision inProtz II, Section 306(a.2)(1) is stricken and no other provision of the Act allows for modification of benefits based on an IRE.”

Relying upon the implications of Protz, and the Commonwealth Court’s interpretation thereof inThompson, there is a fairly high probability that Workers’ Compensation Judges will strike Notices of Change filed by Carriers on behalf of their Employers to convert temporary total disability to temporary partial disability in reliance upon IREs with Impairment Ratings of less than 50%, the same being true at the Appeal Board and Commonwealth Court levels, such that Pennsylvania Carriers will have to rely on more traditional investigative and procedural mechanisms, to include:

• Surveillance;

• Activity Checks;

• Verification Forms;

• IMEs;

• Docket Searches;

• Vocational Intervention; and,

• Resolution strategies that would continue to attempt to settle workers’ compensation claims at traditional settlement value models, basing the analysis on the presumption that very few are incapable of doing any work, and that a medical release to perform restricted-duty work is the necessary seed for vocational intervention, a tool that might well find greater acceptance before Workers’ Compensation Judges, knowing that IREs are no longer a viable mechanism for claim resolution.

So, with Protz eviscerating IREs, under the PWCA, what are the procedural defenses to Claimants filing Reinstatement or Review Petitions, to re-open their workers’ compensation claims, in the event that their claims were suspended/modified in reliance upon an IRE?

First, if the claim, whether subject to an IRE or not, was settled under a Compromise and Release Agreement, any attempt to re-open the claim, to seek additional workers’ compensation benefits should be subject to the following defenses:

            Compromise and Release;

• Release and Satisfaction;

• Waiver of Appeal;

• Res judicata; and,

• Collateral estoppel.

In short, claims settled under a Compromise and Release Agreement whether settling the claim in reliance upon an IRE or not, should not be vulnerable to a Claimant-filed Petition to seek additional workers’ compensation benefits, particularly with there having been Claimant testimony before a Workers’ Compensation Judge, that the Claimant understood the “full legal significance” of entering into the Compromise and Release Agreement, and, specifically requesting that the Workers’ Compensation Judge approve the Compromise and Release Agreement, after fairly extensive cross-examination by the Workers’ Compensation Judge, that the Claimant understands/understood that he/she cannot come back for additional workers’ compensation benefits based upon the finality of the Compromise and Release Agreement.

Less certain are claims where the IRE established that the Impairment Rating was less than 50%, and the Employer filed a Notice of Change, converting the Claimant’s compensation benefits from temporary total to temporary partial disability benefits, and no constitutional challenge to that conversion was ever raised by the Claimant.

Whether the constitutionality of the IRE process was challenged by the Claimant or not, it is extremely likely that Pennsylvania Workers’ Compensation Judges will find thatProtz essentially removed the IRE process from the PWCA, and that a formal Claimant challenge as to its constitutionality did not have to be filed, when benefits were being converted.

For those types of claims, there is a fairly high degree of probability, that the claims will be re-opened, with compensation benefits being reinstated.

Another type of claim will involve claims where the Employer/Insurer did not secure an automatic conversion of compensation benefits under temporary total to temporary partial disability benefits in reliance upon an IRE, but sought to convert the benefits in reliance upon a Modification Petition, with a Workers’ Compensation Judge granting the Petition, in the course of which the Claimant did not raise a constitutional challenge to the IRE process, and also did not then appeal the WCJ’s granting of the Modification Petition to the Appeal Board, such that the WCJ’s Decision became final and non-appealable.

It is believed that there are very few of these types of cases that have arisen since the enactment of Act 57 in 1996, and/or that claims like this have been appealed by Claimants, with ultimate resolution, in some fashion, before the Appeal Board or the Commonwealth Court.

Presumably, if the ultimate modification of the Claimant’s compensation benefits in reliance upon an IRE survived appellate challenges by the Claimant, an open question may exist as to whether that workers’ compensation claim can be re-opened, subject, of course, to any potential Statute of Limitations issues that might exist, as a defense to an attempt to reinstate or review compensation benefits.

Two cases litigated before the Commonwealth Court, in Riley v. WCAB (Commonwealth of Pennsylvania), andGillespie v. WCAB (Aker Philadelphia Ship Yard) that stand for the proposition that if an IRE has been litigated to Decision and not appealed, that the injured Worker has then waived his/her right to challenge the IRE.

In Gillespie, the Commonwealth Court held that “a declaration that provision of a Statute’s unconstitutional does not void every Decision ever made in accordance therewith; only Parties still engaged in active litigation may take advantage of this change.”  In both Riley and Gillespie, the Commonwealth Court had held that the Claimants’ challenges to the IRE Determinations were untimely pursuant to Section A306(a.2)(2)(4).

In light of Protz, will Riley and Gillespie survive as support for the waiver of a constitutional challenge, or willProtz undermine via both Decisions?

Obviously, we anticipate additional litigation to arise over the retroactive application ofProtz to claims that were otherwise resolved in prior litigation.

With this background, what do we foresee in the future in terms of any attempt to revise a permanency standard under the PWCA?

 Since the Protz Decision, it is our understanding that there are several industry organizations actively lobbying the Pennsylvania General Assembly for a statutory provision reinstating an IRE process that would survive constitutional challenges.  It is believed that the Chamber of Commerce, Insurance Federation, Pennsylvania Self-Insurers Association, and other organizations are actively working to address this issue, as the Pennsylvania Compensation Ratings Bureau is already in the process of addressing ratings increases for job classifications that will result in premium increases across the board for Employers, and will also result in reserving increases for Insurance Carriers.

While the Claimant’s bar may hail this as a long-sought clean sweep of legislation that it characterized as a statutory anathema, the unforeseen consequence of higher premiums and higher reserves for Employers will be that doing business in Pennsylvania may now be less dynamic and beneficial, such that we will continue to witness a downward trend in newly-filed workers’ compensation Petitions will continue.

Rest assured that we will continue to monitor this issue, given that stakeholders and practitioners have been relying upon IREs as a statutory hedge against open liability for temporary total disability benefits under the PWCA.

The future is inevitably fast-approaching and likely to happen without the immediate probability of IREs being in our administrative forecast.  

ConnorsO’Dell LLP

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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.