State News : Pennsylvania

In Fegley, as Ex'x of the Est. of Paul Sheetz, v. Firestone Tire & Rubber (WCAB), _ A.3d _ (Pa. Cmwlth. 2023) and Edward Appel v. GWC Warranty Corp. (WCAB), _ A.3d _ (Pa. Cmwlth. 2023), the Commonwealth Court held that workers’ compensation insurers must reimburse injured workers for medical marijuana where it has been determined that such treatment is related to the work injury and is reasonable and necessary.  The Court reversed the denial of the claimant’s penalty petition in spite of the employer’s objections that the Pennsylvania Medical Marijuana Act prohibited an insurer from covering the expenses for medical marijuana treatment and that marijuana is still an illegal, controlled substance under federal law.

As for the actual language of Section 2102 of the Medical Marijuana Act (MMA), the Court ruled that coverage is different and distinct from reimbursement and while the plain language of Section 2102 of the MMA states that insurers cannot be required to provide coverage for medical marijuana, there is no statutory language which prohibits insurers from reimbursing claimants who lawfully use medical marijuana to treat an accepted work injury when such treatment is medically reasonable and necessary.  So, carriers may not have to cover medical marijuana, but there is no language prohibiting them from reimbursing for medical marijuana.

As to the issue of the potential violation of federal law, the Court noted that Section 2013 of the MMA says that nothing in the MMA shall require an employer to commit any act that would put the employer or any person acting on its behalf (workers’ compensation carriers) in violation of federal law.  Under the Federal Drug Act, it is unlawful to “manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance.”  Despite this plain language of the statute, the Commonwealth Court reasoned that reimbursing an injured worker his out-of-pocket expenses for medical marijuana does not require a workers’ compensation carrier to do any of these prohibited activities. Apparently, the long-stated legal maxim of “One cannot do indirectly what one cannot do directly” did not bother the court.

While the Court has split hairs relative to the issue of “coverage” versus “reimbursement” so as to provide a potential pathway for the payment of medical marijuana, these decisions did not address a multitude of other issues that do not appear to have been raised in the litigation and which still need to be addressed.  Many employers and carriers, especially those public entities and health carriers that obtain federal funding may be cautious to even reimburse medical marijuana given it may lead to them facing issues with receiving federal funding.  When Ohio enacted its medical marijuana statute, it required university studies to be conducted but faced reluctance in Universities wanting to get involved with studying medical marijuana for fear it may lead to issues with their receiving federal funding. 

As for the other issues not addressed by the decisions, the payment for or reimbursement of medical marijuana is problematic in that such reimbursement would totally circumvent the Medical Cost Containment Regulations.  First, there obviously is no re-pricing mechanism for the payment of marijuana.  Thus, this may fall under the 80% provision for reimbursement.  However, the bigger issue is whether this is actually medical treatment.  There must be a medical provider who certifies that the Claimant meets the requirement of the Medical Marijuana Act to be certified to obtain a Medical Marijuana card to obtain the treatment.  However, there is no actual medical provider who actually prescribes any medical marijuana product, such as form, strain and amount.  When a medical provider prescribes narcotics for a patient, they provide the specific medication, dosage, frequency, and amount.  With medical marijuana, once the claimant is certified, they can go to a dispensary and essentially work with a salesperson to determine what form (leaf, vape, etc.), strain, amount, etc. to obtain.  There also is no re-pricing mechanism given medical marijuana is not payable under Medicare.  Thus, the reimbursement is most likely under the provision that provides for payment at 80% of the usual and customary charge for treatment provided for in 34 Pa. Code § 127.102.  However, there most likely are not sufficient reporting data available for carriers to determine what is the “usual and customary” charge such that the payment would be at 80% of the actual charge.  If the dispensary inflates the amount they are charging for the produce they are distributing, that may me carriers are paying more than they should for this “treatment.” 

Further, there is no medical provider upon which a Utilization Review can be filed.  If filed upon the certifying physician, the issue would be whether it was reasonable and necessary treatment for the Claimant to be certified for medical marijuana.  There is no peer that can conduct a review when the “medical provider” is a salesperson or a medical marijuana “pharmacist.”  Thus, the Employer/Carrier is denied the ability to conduct a Utilization Review.  These are issues that are going to eventually need to be addressed in litigation.  Until they are, there are going to be arguments against whether medical marijuana is to be reimbursed other than simply that the MMA does not require insurance “coverage” for payment of the same.

Bradley R. Andreen, Esq.

Rulis & Bochicchio, LLC

VNA of St. Luke’s Home/Hospice, Inc., v. Ortiz (WCAB) A.3d. No. 1312 and 1362 C.D. 2022 (Pa Cmwlth. 7/23/2024)

Holding- Under Section 413(a) of the Pennsylvania Workers Compensation Act, an employer who initially agrees to a Stipulation of Facts can set aside the Stipulation if it is shown that the Claimant/employee falsely provided information material to the Stipulation. Claimant, Elizabeth Ortiz was an administrative assistant who initially claimed a November 2017 work injury in the form of a left shoulder strain alleging that she fell while attempting to sit on a chair and injured her shoulder. In May of 2018, the Employer issued a notice of temporary compensation payable (NTCP) accepting a left shoulder strain. In June 2019, the Claimant filed a claim petition seeking to expand the work injury to a left shoulder rotator cuff tear and biceps tendon injury. In September 2019, the parties entered into a Stipulation of Fact, approved by the trial judge, for additional injuries, specifically a full thickness tear and a biceps tenodesis of the left shoulder. While Claimant was being paid total disability benefits in October 2020 and January 2021 the employer filed two Modification petitions asserting that Claimant had failed to respond to modified-duty job offers that would have paid her wages less than her average weekly wage. In the course of litigating the Modification petitions, newly discovered medical records disclosed to the Employer revealed that a left shoulder rotator cuff tear and biceps tendon injury pre-existed the November 2017 work accident. The Employer sought to set-aside the Stipulation of Facts accepting the expanded injury description based on the newly uncovered medical records. The WCJ had found that the Claimant repeatedly under oath falsely denied having suffered and being treated for the stipulated before the work accident. The Judge ruled that, inter alia, Employer’s request to set aside the September 2019 stipulation of facts was denied for lack of sufficient competent evidence. The Employer appealed to the WCAB, but the Board affirmed the WCJ’s refusal to set aside the stipulation. The Board treated the matter as a legal issue, as one of waiver, determining that there was no indication that the Employer lacked the opportunity to fully investigate the challenged finding before entering into the stipulation and that it failed to act properly in seeking relief. The Employer appealed to the Commonwealth Court who noted that this case boils down to how much an employer is expected to do by way of investigation and within what timeframe when a claimant misrepresents her condition and/or existence of prior injuries. The Court in an opinion written by Judge Leadbetter noted “turning to the extent to which Employer should have conducted a more rigorous investigation before entering the stipulation, it bears repeating that Claimant time and again misled Employer, her own surgeon, and the workers compensation tribunal as to pre-existing left shoulder issues. It was noted that the Employer was not seeking to set aside its original acceptance of the work injury (left shoulder strain). It was disingenuous for the Claimant to attempt to shift blame for her repeated misrepresentations when such false statements had the practical effect of complicating the proceedings. The Court reversed the Board in deciding that the stipulation could be set aside based on the false statements by the employee.

Paul C. Cipriano Jr., Esquire

Rulis & Bochicchio, LLC 

Notice Issue- Section 311 Business owned by Claimant.

Erie Insurance Property & Casualty v. Heater, No. 148 C.D. (2023)  (Pa Cwmlth -05/29/2024)

Where the Claimant is both the injured employee and employer/sole proprietor, the employer to whom the Claimant must provide notice of a work related injury  for compliance with Section 311 of the PA Workers Compensation Act, is the insurance company that bears the ultimate responsibility for the claim, which allows the insurer to complete a prompt and thorough investigation into the alleged work injury which would normally be performed by the employer. Claimant, David Heater, filed a work injury claim against his company, David W. Heater, a sole proprietorship for which he was employed. The WCJ granted his claim petition finding that he gave timely notice of his injury and that he was injured in the course and scope of his employment. Erie Insurance appealed to the Board which upheld the judge’s decision. Insurer then appealed to the PA Commonwealth Court arguing that Claimant should have been required to give notice to Insurer within 120 days of the injury and the judge’s finding that Claimant’s notice of the injury on himself, as Employer, was sufficient is inconsistent with the purpose of Section 311 of the Act, prejudicial to the Insurer and a violation of Insurer’s due process rights. Claimant responded that the Board did not err in affirming the WCJ’s decision because neither Section 311 of the Act, nor precedent interpreting that provision, required him to provide notice to the Insurer as the Employer received timely notice of the injury. The Commonwealth Court reversed the Appeal Board holding that under these circumstances where a claimant is both the injured employee and the sole proprietor/.employer, the “employer” to whom the claimant must notify of a work-related injury for the purposes of Section 311 in the insurer that bears the ultimate liability for the claim. This allows the insurer to ensure that prompt and complete investigation into the claimed injury, that would normally be performed by a disinterested employer, can be performed to protect stale claims, thereby meeting the purpose of Section 311. Because Claimant did not provide timely notice to Insurer under Section 311, “no compensation shall be allowed” and Claimant’s Claim petition is barred. 23-page decision by Hon. Renee Chon Jubelirer, President Judge.

Paul C. Cipriano Jr., Esquire

Rulis & Bochicchio, LLC

On January 27, 2023, the Commonwealth Court issued a memorandum opinion in City of Pittsburgh v. Ronald Dobbs (Workers’ Compensation Appeal Board), in which it expandedthe application of impairment rating evaluations to all injuries, including injuries that occurred prior to the enactment of Act 57.  The Court noted that Act 57, in which the impairment rating evaluation (IRE) process was initiated, limited its application to injuries sustained prior to its enactment on June 24, 1996.  Subsequently, however, the IRE process was declared null and void by the Pennsylvania Supreme Court in Protz v. Workers’ Compensation Appeal Board (Derry Area School District).  In striking down the entirety of Section 306(a.2), the Supreme Court held that the IRE process of Act 57 violated the nondelegation doctrine of the Pennsylvania Constitution.  The Pennsylvania General Assembly responded, and enacted the Act 111 Amendments to the Workers’ Compensation Act in 2018.  However, unlike Act 57, there was no specific provision in Act 111 that limited it application to injuries suffered prior to a specific date.  In Dobbs, the Court noted that Act 111 has since withstood several Constitutional challenges, and held that in the absence of any language within Act 111 limiting the date of injury, its application was extended to all injuries, including those injuries occurring prior to June 24, 1996.

Author: Melissa C. Petersen, Esquire

On January 2, 2024, the Pennsylvania Commonwealth Court issued what may be a decision that has significant effect upon workers’ compensation liability for insurers and self-insured employers, the pharmaceutical industry and may for injured workers as a consequence of the Decision.  In Federated Insurance v. Summit Pharmacy, the Court set aside the Bureau of Workers’ Compensation’s regulatory adoption and use of Red Book values as setting the Average Wholesale Price (AWP) to resolve payment disputes for pharmaceuticals.  It noted that doing so was inconsistent with the phrase AWP as utilized in Section 306(f.1)(3)(vi)(A) as has been interpreted by the Court.  If an agency’s regulations are inconsistent with the legislative intent of the statutory provisions, the regulations are invalid.  Thus, the Court invalidated utilizing Red Book values as to AWP when determining what amount needs to be paid under the Pennsylvania Workers’ Compensation Act and corresponding Medical Cost Containment Regulations when remitting payment for prescription medications.  The Court ordered the Bureau to promptly identify a “Nationally recognized schedule” of AWP which is to be utilized as being the basis of payment for prescriptions. 

This case had its genesis in a dispute over an alleged underpayment of approximately $72,500.00 for prescription medications.  The prescription bills submitted from 04/15/21 – 09/08/22 totaled $74,011.81 and payment was made by the carrier using the AWP of the drugs are reported in the National Average Drug Acquisition Cost Index (NADAC), which totaled $1,511.93.  The Bureau’s Fee Review Section issued determinations apply the costs per Red Book, based upon the cost containment regulations promulgated under the Act.  See 34 Pa. Code §§127.1 – 127.755; see also Section 306(f.1)(3)(vi)(A) of the Act, 77 P.S. §531(3)(vi)(A), which limits reimbursement for drugs and professional pharmaceutical services to “one hundred ten per centum of the … [AWP] of the produce, calculated on a per unit basis, as of the date of dispensing.” 

The Carrier argued that Red Book pricing was artificially inflated and did not accurately represent the actual AWP, which is what the Act required to determine pricing for pharmaceuticals.  It was noted that Red Book is a privately published, electronic compendium of pharmaceutical and over-the-counter “AWPs” available online.  The publisher of Red Book is IBM Watson, which has changed over the years.  It the statement policy, even IBM Watson indicated that, in most cases, the manufacturer’s AWP does not reflect the actual AWP charged by the wholesaler.  The values used in Red Book were what was reported by the manufacturer and IBM Watson did not independently analyze the data to ascertain the amounts paid by pharmacies to wholesalers.  Accordingly, it was asserted that Red Book values were inconsistent with the Act and cost containment provisions.  The Court looked to prior case law, Indem. Ins. Co. of N. Am. v. Bureau of Workers’ Comp. Fee Rev. Hearing Off. (Insight Pharm.) 245 A.3d 1158 (Pa. Cmwlth. 2021) to conclude that the plain meaning of AWP is a price which is an industry average and not one “charged by a single manufacturer,” and “is a number derived by averaging the wholesale prices of all manufacturers or wholesalers.”

While the Bureau adopted Red Book as AWP to be used in payment disputes, it was noted that an insurer may introduce evidence challenging the “accuracy” of the Red Book pricing.  Here the carrier challenged the use of Red Book on the basis that its values can never reflect an accurate AWP.  It was noted that NADAC pricing was based on the aggregated and averaged prices pharmacies typically pay for a drug at wholesale nationally. Whereas, Red Book pricing was chosen unilaterally by a drug’s manufacturer and was not a mathematical average.  It was not based upon an prices in actual wholesale transactions.  The prices under Red Book and NADAC differed considerably, especially for generic drugs.  An example was the acquisition price of a bottle of Prozac, which was $9.00.  The Red Book price for reimbursement was $2,000.00.  Thus, at payment of 110% of AWP, the carrier’s payment could be $2,200 under Red Book or $9.90 under NADAC. 

The Court agreed that the Bureau’s regulatory adoption of Red Book’s values as to AWP to resolve payment disputes was inconsistent with the phrase AWP as used in the Act and that an administrative agency’s regulations cannot conflict with the statutory intent.  Thus, they held as a matter of law that Red Book’s values could not be used as to AWP because they are inconsistent with the Act.  The Court however, did not indicate that NADAC is to be utilized.  Instead, it remanded and directed the Bureau to “promptly identify and publish” in the Pennsylvania Bulletin a “National recognized schedule to determine the AWP of prescription drugs” to be used to resolve payment disputes.

Thus, we are now left with a situation in which there is uncertainty as to what amount is payable for any prescription submitted for reimbursement.  It is uncertain as to when the Bureau may publish a new National recognized schedule.  Does this excuse or toll the payments to now be issued for prescription medications for which bills are submitted.  If payment is not made within 30 days of receipt of the bills, typically statutory interest is to start to accrue on the payment to be issued.  Should carriers now start to pay under NADAC and then if a different schedule is implemented, pay any difference in the amount payable along with interest on the additional payment.  The Bureau may well adopt NADAC.  However, it is not bound to do so.  It should be noted that with the drastic difference in the amount payable, pharmacies may elect to not fill some drugs for workers’ compensation claims.  In the Decision, the expert for the pharmacy indicated that the cost to fill a prescription is $12.50 per prescription such that the pharmacy would be losing money any time they fill a script for a mediation that has an AWP that does not provide for payment above this amount.  This could be problematic for injured workers if they are no longer able to secure certain mediations if pharmacies do not find it cost effective to provide.   However, with how inflated Red Book values are, it is obvious that pharmacies have been significantly profiting to the detriment of insurers and self-insured employers for years relative to the cost of prescription medications.  More likely than not there will be more comment and discussion about how to come up with a schedule that makes sense for all stakeholders.

The Medical Cost Containment Regulations were enacted back in 1994.  They may no longer be adequate in a number of ways in terms of addressing issues that arise in the workers’ compensation and fee review forums.  It may be time for the General Assembly of Pennsylvania to revisit the regulations, seek commentary from all stakeholders and to address any and all deficiencies that are arising either from the regulations not accurately reflecting the times as to payment for medical treatment and pharmaceuticals as well as addressing cases that have been rendered over time that appear inconsistent with the Act and regulations that have led to even further confusion over implementation and interpretation of the Act and Regulations.  This case is most likely going to have a significant financial impact upon carriers in Pennsylvania as well as pharmacies and injured workers’ may also feel the fallout.  However, other than simply forms the basis for determining the cost of prescription mediations moving forward, perhaps, it will provide the impetus for even more broad and sweeping changes regarding the payment of medical treatment under the Pennsylvania Workers’ Compensation Act.  

The Pennsylvania Supreme Court has issued two decisions recently impacting workers’ compensation in Pennsylvania.  In actuality, these cases actually deal with civil actions but involve interplay with the Pennsylvania Workers’ Compensation Act (“Act”). 

The first case, Franczyk v. The Home Depot, Inc., No. 11 WAP 2022, 2023 WL 2992700 (Pa. April 19, 2023), dealt with the Court finding that a claim for negligent investigation of an accident was barred by the exclusivity provision of the Act.  The Claimant was working at Home Depot when a customer brought a dog into the store, which bit the Claimant, who was ultimately diagnosed with cubital tunnel syndrome for which she underwent surgery. The claim was accepted as a compensable work injury.

The Employer did not allow the claimant to have any contact with the dog owner or witnesses and it did not obtain contact information from anyone. Accordingly, the Claimant could not bring a third-party action against the dog owner.  Thus, Home Depot was sued on the basis that its negligent investigation deprived her of the ability to pursue a third-party action.  Home Depot asserted immunity under the exclusivity provision of the Act. 

Summary judgement was survived at the trial court level and the Superior Court affirmed.  It felt the injury that was the basis of the lawsuit was separate from the incident which caused the work injury, which was the actual dog bite.  The Pennsylvania Supreme Court has now reversed and barred the suit based upon the exclusivity provision of the Act. 

The Court noted that even intentional misconduct by an employer does not trigger an exemption from the exclusivity provision. Poyser v. Newman & Co. (employer willfully ignored safety protcols); Kuney v. PMA (alleged bad faith in carrier handling claim caused emotional harm); and Santiago v. Pennsylvania National Mutual Ins. Co. (bad faith in settlement negotiations causing psychological harm).  The Claimant relied upon Martin v. Lancaster Battery Co., in which the Pennsylvania Supreme Court allowed a separate civil action where the employer withheld or altered blood toxicity testing results for the employees who dealt with lead.  This resulted in a deterioration of the claimant’s condition.  In that matter, the Court allowed a tort claim for fraudulent misrepresentation given the separate “aggravation” by withholding the information was an “injury unto itself” which was distinct and preventable.

The Court focused on whether there was “truly a separable injury” which they felt was not present here.  The ability to bring a third party suit was “inextricably intertwined” with the dog bite which caused the work injury. The Court noted that the Employer would need to defend the dog owner, in absentia, which is what the exclusivity provision is designed to prevent. 

Separately, in Alpini v. WCAB (Tinicum Township), No. 2 MAP 2022 (Pa. May 16, 2023), the Pennsylvania Supreme Court held that there was no workers’ compensation lien or subrogation where a dram shop claim arose from a motor vehicle accident. 

This case was not based solely upon the Act but rather was a case where the injured worker was also entitled to the payment of full salary continuation benefits concurrently under the Heart and Lung Act, which provides for the payment of full salary benefits to police officers and firefighters who are injured in the performance of their job duties.  The municipality also had a carrier who paid workers’ compensation benefits on account of the work injury.  In practice what typically occurs is the worker’ compensation check received by the Claimant is then reimbursed back to the municipality for any period of time that the Claimant receives the payment of full salary continuation benefits from the municipality under the Heart and Lung Act. 

Even though the carrier made payments under the Act, and there is a right to subrogation pursuant to Section 319 of the Act, 77 P.S. § 671, the carrier was denied subrogation on account of the Claimant’s receipt of benefits under the Heart and Lung Act.  This is due to the Court’s prior interpretations of a separate statute, the Motor Vehicle Financial Responsibility Law (MVFRL), specifically Section 1720 of this statue, which precludes subrogation against a third party recovery for a motor vehicle accident.  This law was changed by Act 44, which once again allowed for subrogation against motor vehicle accidents under the Act.  However, as this new statute did not specifically indicate it was repealing the anti-subrogation provision for Heart and Lung Benefits, this prohibition remained for such benefits, even though the MVFRL did not specifically indicate it applied to Heart and Lung Benefits. 

The Claimant was police officer who was injured on 04/17/11 when a drunk driver struck his patrol car.  In addition to suing the drunk driver, the Claimant also sued two tavern owners for violating the Dram Shop Act by serving a visibly intoxicated person. These third party actions settled and the carrier filed to seek subrogation, which was granted by the Workers’ Compensation Judge, which was affirmed by the Board, which remanded for calculation of the lien and how it was to be paid, and this was also affirmed by the Commonwealth Court.  However, the Pennsylvania Supreme Court has reversed in a majority opinion. 

The Court considered the statutory construction of Section 1720 of the MVFRL, which provides “[i]n actions arising out of the maintenance or use of a motor vehicle, there shall be no right of subrogation or reimbursement from a claimant’s tort recovery with respect to…benefits paid or payable by a program, group contract or other arrangement whether primary or excess under section 1719[.]” It determined that the lower court improperly conflated the phrase “arising out of” with the much narrower phrase “arising under.” The Supreme Court interpreted the statute to provide that an “action arises out of the maintenance or use of a motor vehicle” if the claimant’s judicial proceeding originates, stems, or results from the maintenance or use of a motor vehicle. Accordingly, the Court precluded subrogation. A request was filed for reconsideration, which was denied, so as to address the payment of medical benefits since the original decision tended to focus on the payment of wage loss and how the Claimant did not retain the workers’ compensation payment. 

When now Justice Brobson was on the Commonwealth Court, he authored a dissent in City of Philadelphia v. Hargraves/Frazier in which he noted that the anti-subrogation provision relative to Heart and Lung Benefits is based upon language in Section 1719(b) of the MVFRL.  However, when reviewing that particular language, which deals with “program, group contract or other arrangement”, he noted that this section appeared to be geared toward what are colloquially referred to as Blue Cross/Blue Shield health insurance plans and would not be applicable to benefits paid under the Heart and Lung Act.  The Supreme Court did not review this language and rather simply continued to apply the holdings of Bushta and Stemel, without getting into the issue of whether such cases were properly decided.

What hopefully will result in some change is Justice Wecht’s dissent in which he noted that the Court’s holding in Bushta should not be mechanically applied to simply find that Heart and Lung Benefits subsume workers’ compensation benefits. The Majority in Alpini appears to focus on the payments received simply from the Claimant’s perspective and finds that the workers’ compensation payments are “legally immaterial” apparently in terms of what the Claimant “receives.”  However, Justice Wecht  correctly noted that the legal fiction created that there is no compensation payable under the Workers’ Compensation Act is not the reality to the Workers’ Compensation Insurer who is making a payment of benefits on account of there being liability under the Workers’ Compensation Act.

He would treat municipalities that are insured for the purpose of workers’ compensation differently than those who are not.  However, this is really a distinction without a difference.  If there is a work-related injury, the Workers’ Compensation Act provides for the payment of “compensation payable” and Section 319 allows for subrogation to the extent of the compensation payable under Article III of the Act.  Justice Wecht points out that the statutory treatment relative to the interplay of the Workers’ Compensation Act, the Heart and Lung Act and the Motor Vehicle Financial Responsibility Law leads to all manner of confusion and warrants legislative correction. Presently, there is confusion as to whether the Claimant in a third party action is able to board damages in terms of the payment of benefits under the Workers’ Compensation Act or Heart and Lung Act.  While the anti-subrogation provision was created to keep down costs of auto insurance for drivers, now it may actually provide a benefit to the auto insurer by driving down the value of a recovery based upon a motor vehicle accident based upon there not being a right to subrogation. 

Hopefully this is a matter where the General Assembly can get involved and hear from both sides and try to come up with a solution that makes sense for everyone relative to the interplay of benefits under these Acts and specifies what are damages that can be plead and what subrogation rights exist relative to benefits paid under the Workers’ Compensation Act and Heart and Lung Act.

Medical Marijuana:

Recent Pennsylvania Commonwealth Court Decisions.

Fegley, as Executrix of Estate of Paul Sheetz v. WCAB(Firestone Tire & Rubber), ___ A.3d ___ (Pa.Cmwlth. 2023) and Edward Appel v. WCAB (GWC Warranty Corporation), ___ A.3d ___ (Pa.Cmwlth. 2023).

In Fegley the Commonwealth Court found that Section 2102 of Pennsylvania’s Medical Marijuana Act (“MMA”) which provides that, “[n]othing in this act shall be construed to require an insurer or health plan, whether paid for by Commonwealth funds or private funds, to provide coverage for medical marijuana.” did not prohibit reimbursement of out-of-pocket payments by claimants for medical marijuana. It held that the Pennsylvania Worker’s Compensation Act mandates workers’ compensation carriers to reimburse claimants for out-of-pocket costs of medical treatments that have been found to be reasonable and necessary for work-related injuries and this included medical marijuana.

The court also addressed Section 2103 of the MMA which indicates that nothing in the MMA “shall require an employer to commit any act that would put the employer or any person acting on its behalf in violation of Federal law.” In addressing   Section 841(a) of the Federal Drug Act which provides that it is “unlawful for any person knowingly of intentionally … to manufacture, distribute, or dispense … a controlled substance.” 21 U.S.C. § 841(a),the court held that reimbursement of out-of-pocket expenses for medical marijuana by a workers’ compensation carrier was not a violation of federal law as reimbursement is not the manufacturing, distribution, or dispensing of medical marijuana.

Following its Opinion in Fegley, the Commonwealth Court in Appel held that while the MMA did not require an employer/carrier to provide coverage for medical marijuana, coverage is “different and distinct from reimbursement,” and there is no statutory language which prohibited the reimbursement to a Claimant for costs incurred for the lawful use of medical marijuana. 

Thus, the denial of reimbursement costs incurred for lawful use of medical marijuana which has been found to be reasonable and necessary treatment of a compensable work injury can be found to constitute a violation of the Workers’ Compensation Act. Provided that medical marijuana is reasonable and necessary for a work injury and a Claimant is lawfully using the drug under the MMA, failure to make payment could now subject an employer/carrier to penalties under the Workers’ Compensation Act. 

Both decisions, based the rationale applied differentiating between coverage and reimbursement given the potential significant impact upon the defense industry,  will most likely be appealed to the Pennsylvania Supreme Court.  It should be noted that there was a well written and reasoned dissent filed in Fegley which noted that there should not be reimbursement made by a carrier if there is no coverage for the item that is requested to be reimbursed.  Further, it was posited that if the doctor is contributing to the dispensing of marijuana, which is still prohibited by Federal Law, the treatment may not be reasonable and necessary treatment.

It should be noted that there may be other arguments that could be advanced against the payment and/or reimbursement of medical marijuana.  Such argument may require the initiation of litigation.  Should a request be received for reimbursement for medical marijuana, it may be advisable to seek legal counsel as failure to take action or issue payment within thirty (30) days may now lead to the filing of a Petition for Penalties by the claimant’s bar as well as a request for the imposition of Lorino fees for the time expended by counsel in seeking reimbursement for such invoices.    

The Pennsylvania appellate courts continue to compound an apparent misunderstanding of how review of medical treatment is to be addressed under the Pennsylvania Workers’ Compensation Act and corresponding Medical Cost Containment Regulations.  Further, the Court continues to interpret the Act in the light most favorable to the Claimant’s bar as is reflected in a recent decision addressing reimbursement of costs.

In UPMC Benefit Management Services, Inc. v. United Pharmacy Services (BWC Fee Review Hearing Office), No. 558 C.D. 2021 (Pa.Cmwlth. December 15, 2022) and State Workers’ Insurance Fund v. Harburg Medical Sales Co., Inc. (BWC Fee Review Hearing Office), No. 712 C.D. 2021 (Pa.Cmwlth. December 15, 2022), the Commonwealth court has essentially indicted that liability for a claimant’s prescribed treatment may only be disputed through a utilization review.  If there is an open Notice of Compensation Payable or other document/decision establishing liability for a work-related injury, the Courts appear to be of the belief that this will foreclose the possibility to render a Fee Review premature under 34 Pa. Code 127.256.  This section reflects that a Fee Review will be returned as being prematurely filed by the provider when 1) the insurer denies liability for the alleged work injury; 2) utilization review has been filed or 3) the 30 day period allowed for paying a bill has not elapsed.  

According to the Court, when an employer or insurer seeks to render a provider’s fee review application premature, a dispute regarding the causal connection between the prescribed treatment and the underlying work injury apparently must be reframed as a challenge to the reasonableness and necessity of the treatment through the utilization review process. 

These Decisions compound the original error by the Court in its Decision in Omni Pharmacy Services, LLC v. Bureau of Workers’ Compensation Fee Review Hearing Office (American Interstate Insurance Company) where the Court required a Utilization Review be filed so as to challenge treatment on the basis of causation, despite the regulation governing such actions specifically forbidding a Utilization Review from addressing causation.  See 34 Pa. Code § 127.406(b)(1), which provides that a Utilization Review may not decide “the causal relationship between the treatment under review and the employee’s work-related injury.”  These cases place the Workers’ Compensation Judge adjudicating such a matter in a difficult position of applying this clearly erroneous precedent or the law as has been applied for years in the practice of workers’ compensation.

These holdings would appear to be contrary to Listano v. WCAB (INA Life Ins. Co.), 659 A.2d 45 (Pa. Cmwlth. 1995); Delarosa v. WCAB (Masonic Homes), 934 A.2d 165 (Pa. Cmwlth. 2007)(providing that should an employer or carrier unilaterally deny treatment on the basis of causation, they may be subject to penalties, at the discretion of the WCJ, if it is found that the medical bills are causally related to the work injury).  The Court did not previously attempt to impose this requirement on employers and carriers to challenge causation through the utilization review process.  However, now it appears the Court conflates the issue of reasonableness and necessary with causation by indicating if treatment is not causally related to an accepted work injury, it is not reasonable and necessary treatment.  However, if the Utilization Review is precluded from deciding issues of causation, the reviewer is in a catch 22 as to how to address this issue.

In the United Pharmacy case, the issue was one where the carrier was arguing that the treatment in the nature of use of compound creams, 3 fills at $2,249.98 per tube, were not related to the low back strain injury.  In the Harrburg Medical Supply case, the carrier paid for $1,725.00 worth of the bills for multiple injuries but denied on the basis of causation the $2,199.95 memory foam mattress overlay as not being related to the work injury. Thus, in both of these situations, the treatment may have been provided for the accepted body part.  Hopefully that is the driving force in these decisions.  However, with the language utilized by the Court, there can be arguments that treatment clearly unrelated to the accepted injury now has to be subject to Utilization Review when the dispute is clearly on causation. 

If, hypothetically, a Notice of Compensation Payable is issued accepting a shoulder injury and.   Claimant starts to treat for a different/unaccepted body part, must the carrier now file for Utilization Review despite the holding of Listano in such situations?  Can the Claimant simply treat workers’ compensation like private health insurance to cover any conditions that they allege may be related to the work injury even if there is no obvious causal relationship to what was originally reported as being the injury?  Already there is the potential for abuse with charges for non-medical items like a foam mattress overlay and the language of these decisions seems to provide open the door to the potential for additional future abuses.  

If the carrier needs to file for Utilization Review that is typically a fixed cost of $1,500 to $2,000, is it worth the cost of filing for Utilization Review and then potentially the costs of litigation to avoid a charges like these in these matters?  When the carrier can deny on the basis of causation for treatment that is not obviously related to the work injury, like a memory foam mattress, that would dissuade medical providers from trying to take advantage of the system.

As it stands now, carriers may need to be more proactive in terms of filing a Petition to Review Medical Treatment and/or Billing, which is a Petition that can also bring the issue of medical causation before a Workers’ Compensation Judge.  However, the medical provider may still need to be paid for the treatment with there being a potential for reimbursement from the Supersedeas Fund if the carrier ultimately prevails.  Of course, there are the litigation costs and most likely the cost associated with obtaining a medical opinion whether through Independent Medical Evaluation or record review, associated with taking such action.  As it stands, the Medical Cost Containment Regulations are now approximately 30 years old and are in need of review and potential revamping.       

In Lawhorne v. Lutron Electronics Co., Inc. (WCAB), No. 1132 C.D. 2021 (Pa.Cmwlth. October 18, 2022), the Court once again looked into Section 440(a), like it did the year prior with Lorino v. WCAB (Commonwealth of PA/Penn Dot), 266 A.3d 487 (Pa. 2021).  In Lorino, the Court found that payment of counsel fees by the Employer/Insurer/Carrier was mandatory if the Claimant prevailed but could be excluded by the Judge in the event of a reasonable contest.  In Lawhorne, the Court once again review 440(a) of the Workers' Compensation Act, 77 P.S. §996(a), and determined that a claimant must be awarded reasonable litigation costs should the claimant prevails in part or whole, even if the costs incurred did not directly contribute to the success of the matter at issue.

Once again, the Courts looked at the language as being mandatory despite the Workers’ Compensation Judge having specifically concluded that the testimony offered by the Claimant’s medical expert was not credible and did not aide in the determination by the Judge that the Employer did not prevail on its Petition to Terminate Compensation Benefits.  In the past, these costs would have properly been excluded.  At least there was a dissent in Lawhorn, as it was noted that the Claimant could present with a number of medical experts who are not credible or even may not be contemptuous.  The dissent focused on the language “reasonable” cost and noted that this should allow discretion in the Workers’ Compensation Judge to determine whether the costs incurred are those that should be reimbursed.  I would think that the defense bar should continue to focus on the language in the dissent moving forward to argue for the Judge to be able to apply discretion to what costs are to be reimbursed as opposed to applying a standard that should the Claimant prevail, even if only in part, then all costs are required to be reimbursed.  

The Commonwealth Court of Pennsylvania revisited the voluntary withdrawal from the workforce argument in a recent decision, Hi Tech Flooring, Inc. v. WCAB (Santucci), issued on 08/09/22.  This case dealt with a work injury of 08/28/14, which was recognized as a right knee contusion.  A subsequent decision on a termination petition found the Claimant injury led to progressive degenerative changes of the knee.  In a 12/10/18 Decision, the workers’ compensation judge denied a subsequent petition to terminate compensation benefits but granted a suspension of benefits based upon a voluntary withdrawal from the workforce.  The WCAB reversed this decision via opinion circulated 12/03/19. 

The primary facts that led to the Judge’s decision were that the Claimant had been receiving a disability pension since 10/01/17 and social security disability benefits effective 10/07/15, was found capable of working and had not sought any work.  Accordingly, the Judge found the Claimant was withdrawn from the workforce. It should be noted that the Claimant receipt of these other benefits was for conditions beyond the work injury.  His pension application listed the conditions of right shoulder pain, neck pain and right facet arthropathy.  His SSD award was for herniated discs with constant pain – cervical; lumbar spine condition with constant pain; prior right knee surgery with remaining pain; left knee impingement undiagnosed; arthritis of both ankles; numbness of the left arm; carpal tunnel; gout; high blood pressure; and high cholesterol” as well as “lumbar and cervical disc disease, status post C5- 6 cervical discectomy and fusion; bilateral knee degenerative osteoarthritis, status post bilateral arthroscopic procedures; right hip degenerative joint disease; and status post total hip replacement.”

The Court applied the leading precent, City of Pittsburgh v. Workers’ Compensation Appeal Board (Robinson) (Robinson II), 67 A.3d 1194 (Pa. 2013), noting that an employer may seek a suspension of benefits if the employer can establish, by the totality of the circumstances, that the claimant has chosen to not return to the workforce, but that “[t]here is no presumption of retirement arising from the fact that a claimant seeks or accepts a pension[;] rather, the acceptance of a pension” only creates a permissive inference of such.  The Court found with the Board that these circumstance, with there being not Notice of Ability to Return to Work having been issued or job referrals made, did not arise to a voluntary withdraw under the totality of these circumstances. Simply receiving SSD and a disability pension and not looking for work, when those other benefits were based, in part, on the work injury, did not rise to a voluntary withdrawal from the workforce.  

While this decision seems to limit the voluntary withdrawal from the workforce argument, it also shows that this can be a viable means to get a case into litigation and to actually prevail, as was done before the Workers’ Compensation Judge.  This can create leverage to obtain a favorable resolution.  However, more is most likely needed than just evidence of retirement, ability to work and lack of following through on job offers. We typically recommend combining this argument with a labor market survey/earning power assessment as then the Claimant is provided with a Notice of Ability to Return to Work explaining he may have an obligation to look for work.  The EPA/LMS provides the Claimant with positions that are open and available within his/her physical and vocational capabilities, to which they typically do not apply.  Of course, should they apply, that may prove detrimental to the bringing of such an argument. However, combining such additional evidence hopefully will be found to demonstrate a voluntary withdrawal from the workforce under these totality of circumstances and may provide for a suspension of benefits rather than just a modification that could occur based upon the LMS/EPA, depending upon the amount of wages the located positions may pay.   

Dear Clients:

             We are continuing to monitor the Corona Virus (COVID-19) outbreak, and we want to take a moment to reach out and let you know that we are handling this developing situation at ConnorsO’Dell, as responsibly as possible, noting that our main priority is to insure the health and safety of our staff and our clients.

             Safety being our top priority, we are implementing the following:

 ·         We are taking every precaution possible, to include conducting extra cleanings of our offices, and frequently touched surfaces.

·         We have implemented screening measures to insure the safety of our staff and clients, and we have postponed most in-person appointments, and, to the extent available, are engaging in remote consultations and appointments.

·         We have instructed our staff that if they are not feeling well or are still recovering from illness, we have asked them to self-isolate, for the protection of all.

·         As of 3/16/20, we will also be working remotely for safety.

In reliance upon CDC recommendations, we suggest the following:

 ·         Wash your hands often with soap and water for at least 20 seconds.

·         Always cover your mouth when coughing and sneezing.

·         Maintain social distancing of 3 feet or more between yourself and other persons.

·         Avoid touching your eyes, nose and mouth with unwashed hands.

·         Clean and disinfect frequently used surfaces.

·         Get medical attention early if you have a fever, cough, or difficulty breathing.

·         Mild symptoms should seek medical care and stay home until recovered, if possible.

Please reference the CDC website for the latest updates about the Corona Virus (COVID-19).

We remain vigilant in representing the interests of our clients in this challenging situation facing our communities.