State News : Pennsylvania

SEDGWICK CMS, INC. v. BUREAU OF WORKERS’ COMPENSATION,

FEE REVIEW HEARING OFFICE (PISZEL AND BUCKS COUNTY PAIN CENTER)

1033 C.D. 2017 – Filed April 11, 2018

By Jeffrey D. Snyder, Esquire

The Commonwealth Court, referring to the matter as an issue of first impression, framed the issue here as “… what constitutes ‘a significant and separately identifiable service performed in addition to the other procedure’ under Workers’ Compensation Medical Costs Containment Regulation 34 Pa. Code §127.105(e), for which a chiropractor is entitled to payment for an office visit in addition to his charges for the treatment provided at the same visit”.  The Commonwealth Court remanded the case to the Bureau of Fee Review Hearing Office on this mixed question of fact and law to determine whether the office visit charges in question were for routine examinations involving a known medical condition, change in medical condition, or other circumstances that required an examination and assessment above and beyond the usual examination and evaluation for the treatment performed on that date.

The Claimant sustained a work injury on February 28, 2005 and thereafter entered into a Compromise and Release Agreement that left medical expense open with the Employer thus obligated to pay reasonable and necessary medical expenses for the work injury, described as right shoulder partial thickness tear and superior labrum tear with post-operative scarring, rotator cuff inflammation and left shoulder overuse rotator cuff inflammation.

The Claimant received chiropractic treatment for shoulder and neck pain approximately three times a week.  The chiropractic billed Sedgwick $78.00 per visit for office visits on dates in which the Claimant was the recipient of chiropractic treatment that was billed.  Sedgwick denied payment for the offices visit charges, but paid Provider for other treatments that were provided on the subject dates.  The Provider filed a Fee Review.

The Bureau administratively determined that the Provider’s claim for the office visit charges were to be denied.  The Provider filed a Request for Hearing before a Hearing Officer.  The chiropractor argued that: “Each time I treat Claimant, I perform a physical exam, I take a history of his subjective complaints, identified the objective findings on my exam, assess his conditions and treatment recommendations, and give a plan”.  The chiropractor further asserted that these examinations were not included in the value of another procedure.

On July 5, 2017, the Hearing Officer issued a Decision ordering Sedgwick to pay all of the presented office visit charges.  The Hearing Officer recognized that payment for office visits on the same day that another procedure is performed is permitted only when the office visit represents a significant and separately identifiable service performed in addition to the other procedures.  The Commonwealth Court noted, however, that the Hearing Officer made no factual findings as to the nature of any of the examinations and evaluations for which an office visit charge was billed, and made no findings as to whether any of them were non-routine or involved new medical conditions, or evaluations for new or different treatments.  Sedgwick argued that §127.105 of the Medical Cost Containment Regulations prohibit payment of office visit charges for routine physical examinations and evaluations on the same day as other treatment is performed where there is no new medical condition and that all of Provider’s office visit charges were for routine examinations for the same medical conditions.  The Commonwealth Court cited to the Workers’ Compensation Act, as well as to Medicare procedure codes.  The Court noted that the burden was on Sedgwick to prove by a preponderance of the evidence that it fully paid Provider the amounts to which Provider was entitled, citing the 34 Pa. Code §127.259(f).  The Commonwealth Court observed that the meaning of the phrase “significant and separately identifiable service” performed in addition to the other procedures in §127.105(e) is a question of law, not an issue of fact, citing Commonwealth v. Kerstetter, 62 A.3d 1065, 1068, note 4 (Pa. Cmwlth. Ct., 2013),affirmed, 94 A.3d 991 (Pa. 2014).  The Court noted that the Medical Cost Containment Regulations do not define any of the terms at issue and that no Court in the Commonwealth has interpreted §127.105(e) as to the phrase “significant and separately identifiable service”. 

Interpreting the regulations, the Court noted that the rules of statutory construction apply to administrative regulations and that no words of a regulation are to be treated as mere surplusage.  Federal decisions and regulatory interpretations addressing the same issue may be considered as well.  Federal Medicare case law suggests that an examination or evaluation on the same date as another procedure does not constitute a “significant and separately identifiable service” unless it is above and beyond the usual evaluation performed in conjunction with that procedure, or is unrelated to the procedure that was performed on the same day, citing toUnited States v. Chen (USD Nevada No. 2:04 C.V. 00859, PMPPAL, filed May 30, 2006).

The Center for Medicare and Medicaid Services has stated with respect to chiropractors that chiropractors should not bill for an examination every time they treat a patient. MLN Matters No. SE0514, a CMS Publication.  The Commonwealth Court observed that Federal law shows a clear intent to make payment for same day examination the exception, not the rule. 

The take away here is that physical examinations billed separately for dates of treatment where other treatment/procedures are billed for the same day should be carefully reviewed in context to analyze whether payment for those examinations should be made or refused.

ConnorsO’Dell LLP

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

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

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

YOU WANT ME TO PARK WHERE;

A RECENT PA. WORKERS’ COMPENSATION

 PARKING LOT COMPENSATION CLAIM

By:  Jeffrey D. Snyder, Esquire

            The Commonwealth Court of Pennsylvania reviews the law – a parking lot case.

             In US Airways, Inc., v. WCAB (Bockelman), 612 C.D. 2017, filed February 22, 2018, in an Opinion authored by Judge Brobson, the Court affirmed the granting of a Claim Petition, finding that the Claimant was in the course of employment at the time she was injured by a fall down incident on an airport shuttle bus returning her to one of two employee parking lots after work. 

            The Court reviewed the facts.  The Claimant was employed as a Philadelphia based flight attendant for US Airways, Inc.  In order to get to work, she drove her own vehicle to the airport and parked in one of two designated employee parking lots that were both owned, operated and maintained by the City of Philadelphia/Division of Aviation for the use of all airport employees, not just those employees of US Airways, Inc. 

            In order to park in one of these two lots, employees were required to get a secured identification display area badge issued by the Department of Aviation and paid for by the Employer.  After an employee parks in one of these lots, a shuttle bus transports the employee from the employee parking lot to the airport terminal and the reverse on the return at the end of the workday.  Employer does not own or exercise control over the shuttle buses and did not require its employees to use the airport employee parking lots.  The Employer maintained that it gave its employees no directive whatsoever in terms of how they should commute to work. There is a train from Center City Philadelphia to the airport, with no contentions regarding that alternate means of transportation by either the Claimant or the Employer in this Appeal based on the language in the Opinion.

            The incident in question occurred on January 23, 2015.  The Claimant was returning from a one day and back trip to Miami late in the evening about 9:47 p.m.  She boarded the shuttle bus and attempted to lift her suitcase onto the luggage racks and while doing so stepped in water on the floor causing her right foot to slip out from underneath her.  Her left knee buckled causing her to fall backwards, crushing her left foot under her.  She needed assistance. 

            The Claimant subsequently filed a Claim Petition for injuries to the left foot from this slip and fall incident.  The Answer to the Claim Petition denied that the Claimant was in the scope of employment at the time of the injury. 

            In a Decision circulated April 27, 2016, the Workers’ Compensation Judge granted compensability concluding that the injury occurred on the Employer’s premises, that the Claimant’s presence on the shuttle bus was required by the nature of her employment, and that the injury was caused by the condition of the premises.  The Board affirmed. 

            On Appeal to the Commonwealth Court of Pennsylvania, the Employer was arguing that the Claimant was not injured on the Employer’s premises because the Employer did not own, lease or control the shuttle bus and parking lot, and they were not integral to the Employer’s business.  The Employer asserted further error in the conclusion that the Claimant’s presence on the bus was required due to her employment status because Employer never required Claimant to use the shuttle bus. 

            The Commonwealth Court observed that injuries may arise during the course of employment in two distinct situations.  First, the course of employment may be established by showing that the employee is injured on or off the Employer’s premises, while actually engaged in furtherance of the Employer’s business or affairs.  This was not shown in the case. 

            Alternatively, to establish a course of employment, an employee can show that although not actually engaged in the furtherance of the Employer’s business or affairs, the Claimant is on the premises occupied or under the control of the Employer, or upon which the Employer’s business or affairs are being carried on, and is required by the nature of employment to be present on the Employer’s premises, and sustains injuries caused by the condition of the premises or by operation of the Employer’s business or affairs thereon, further citing to WCAB (Slaugenhaupt v. United States Steel Corporation, 376 A.2d 271 273 (Pa. Cmwlth., 1977).  

            The third prong, the condition of the premises, was undisputedly met, so the Court focused on the first two factors, premises and required by the nature of employment to be present on these premises.            

            In terms of whether the Claimant was on the Employer’s premises, noting the Employer did not own, lease, maintain or control the shuttle bus, the Court observed that Section 301(c)(1) of the Workers’ Compensation Act presents the issue as determinative on the establishment of the site of the accident being so connected to Employer’s business as to form an integral part of that business, citing toEpler v. North American Rockwell Corporation. 393 A.2d 1163 (Pa. 1978).  

            The critical factor is not the Employer’s title or control over the area, but rather the fact that the Employer had caused the area to be used by employees in performance of their assigned tasks.  The Commonwealth Court observed that reasonable means of access to the work place is considered an integral part of the Employer’s business and, therefore, part of the Employer’s premises, citing toNew House v. WCAB (Harris Cleaning Services, Inc.), 530 A.2d 545 (Pa. Cmwlth., 1987),appeal denied, 538 A.2d 879 (Pa. 1988).  Property becomes integral to an Employer’s business when the Employer causes employees to be in the area, citing toEpler, supra.  The Court quoted from the Opinion in Interstate United Corp., 424 A.2d 1015 (Pa. Cmwlth., 1981): 

“[T]he record shows that [Employer’s] cafeteria was located in the interior of the …plan, that employees customarily crossed the foot bridge that Claimant was injured on to enter and exit the cafeteria area, and that [Employer] was aware of this fact.  In numerous cases, Pennsylvania Courts have held that a reasonable means of access to the situs of an Employer’s business operation is such an integral part of an Employer’s business has to be encompassed within the definition of “premises” as determined to be used in Section 301(c)(1) of the Pennsylvania Workers’ Compensation Act.” 

            The Court noted with approval the analysis in Fashion Hosiery Shops v. WCAB, 423 A.2d 792 (Pa. Cmwlth., 1980), where a Claimant sustained injury while approaching an entrance to her workplace.  That Employer had three separate points of entry and indicated no preference to which point an employee should utilize.  That Employer did not own, lease or control the walkway upon which that Claimant fell.  The fact that the Employer inFashion Hosiery Shops did not require any particular point of entry to be utilized, was not found to be significant in the course determination of the premises issue there.  The Court observed that in that case ofFashion Hoisery Shops, supra.: 

“Given the relational nature of the area in question to the Employer’s place of business, it must be concluded that the Claimant was injured on an entranceway that was available and intended for use; and as such, a constituted part of the Employer’s premises, regardless of it not being owned or controlled by the Employer.  Nor does the availability of alternative entrances nullify that conclusion.  Each of the three available and intended ways of ingress to Fashion’s shop was a part of Fashion’s “premises” for purposes of Section 301(c) of the Workers’ Compensation Act.” 

            Turning to the instant case involving Ms. Bockelman, the Commonwealth Court of Pennsylvania observed that Ms. Bockelman used the airport parking lot and shuttle bus to enter and exit the workplace.  She used her vehicle as her means of transportation to work and the airport provided employees who work at the airport, which included Ms. Bockelman, no cost parking in employee parking lots designated by the airport.  Ms. Bockelman rode the shuttle bus in order to get to her workplace.  The Employer, US Airways, knew that as to employees who drove to work, they would need to board the shuttle bus after commuting to the airport and the same for the return trip.  “Accordingly, the shuttle bus is such an integral part of Employer’s business and has to be part of the premises, in addition to being a customary means of ingress and egress, and the WCJ correctly concluded as such.” 

            The Commonwealth Court of Pennsylvania then turned to the next prong of theSlaugenhaupt test, that is whether the nature of Claimant’s employment required her to be on Employer’s premises where she was injured.  The Employer argued that the Claimant’s presence on the shuttle bus was not required, as Employer gave no directive on where to park and hence did not require the Claimant to board the shuttle bus.  

            The Court noted the case of ICT Group v. WCAB (Churchray-Woytunick), 995 A.2d 927 (Pa. Cmwlth., 2010), where a Claimant who slipped on ice on the Employer’s premises while leaving for her lunch break was found to be in the course of employment, the Court pledged no significance on the fact that the Claimant inICT Group independently decided to leave the building during her lunch break, since the Claimant’s presence was required by the nature of her employment.  

            Injuries that occurred reasonably proximate to work hours are compensable, as justified by the observation that once an employee is on the Employer’s premises, actually getting to or leaving the Employer’s work station is a necessary part of an employee’s employment.  Reasonable time is a concept discussed in the case ofHeverly v. WCAB (Ship N’ Shore), 578 A.2d 575 (Pa. Cmwlth., 1990), where the Claimant returned to work after initially leaving because she wanted to retrieve her eyeglasses. 

            The Commonwealth Court of Pennsylvania concluded that in this case, the Claimant’s presence on the shuttle bus was a necessary part of her employment, because it was the means by which he traversed between her work station, which was a terminal, and the parking lot designated for airport employees. The Court considered the Claimant’s presence on the shuttle bus “so connected to her employment relationship” that it was required by the nature of that relationship. 

            This Opinion of the Commonwealth Court illustrates the complexity of parking lot cases that can turn on a nuance.  These cases are highly fact sensitive and suggest that exposures can be somewhat mitigated by advance planning regarding directives to employees as to commuting and the lack of such directives.

                                                                       ConnorsO'Dell LLC

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

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

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

Dennis Smith v. WCAB (SuperValu Holdings PA),

 No. 796 C.D. 2016 (Pa. Cmwlth. Ct., 2018)

             In an Opinion filed January 5, 2018, close in time to its prior Opinion in the case ofValenta v. WCAB (Abington Manor Nursing Home and Rehab and Liberty Insurance Company), No. 1302 C.D. 2016, (filed December 7, 2017), addressing the issue, the burden of proof in a vocationally based case involving an Earning Capacity Assessment is further explored and clarified by the Pennsylvania Commonwealth Court.

            This was a Claimant’s Appeal from the grant of a Petition to Modify by a Workers’ Compensation Judge based on a Labor Market Survey reflecting five (5) available jobs with an average wage of $456.00 a week.  The WCAB affirmed, noting that in its view there was compliance with the directives of the Pennsylvania Supreme Court set forth in the case ofPhoenixville Hospital v. WCAB (Shoab), No. 32 EAP 2011 (Supreme Court of Pennsylvania, November 21, 2013).  The Commonwealth Court affirmed the WCAB, other than for a small change in the applicable weekly benefit rate. 

            The Claimant, Mr. Smith, sustained a work injury in February 2011 involving his head and neck when a case of product fell on him.  A Notice of Temporary Compensation Payable, later converted, recognized the injury as a cervical strain/sprain with a temporary total disability rate of $661.67, based on an average weekly wage of $992.50.  The subject Petition to Modify was filed in November 2013, alleging earning power of $440.00 a week, which would reduce the Claimant’s weekly rate to $368.33.  The Claimant filed an Answer denying the allegations of the Petition to Modify.  The Employer’s Request for Supersedeas was denied. 

            An Expert Vocational Interview reflected various transferable skills and five (5) employment positions in the Claimant’s geographic area, open and available, including jobs as a dispatcher, alarm dispatcher operator, dispatcher, and two (2) security guard positions.  The pay for the jobs ranged from $360.00 to $440.00 a week.

             The Claimant was post-surgical.  A post-surgical complication in the nature of a failed fusion was noted in the record. 

            Mr. Smith agreed he met with the defense vocational expert and further stated that he applied for the five (5) identified positions.  He was not offered employment.  He also conducted a job search on his own but was not interviewed or offered employment based thereon.

             The Workers’ Compensation Judge accepted the expert vocational testimony as credible and persuasive, notwithstanding that the Claimant applied for the five (5) positions identified therein via the Labor Market Survey, noting that there was no evidence of record suggesting that the five (5) positions were not open and available at the time of application or that the jobs were already filled at that time and did not exist.  The Workers’ Compensation Judge therefore modified wage loss benefits. 

            Both parties appealed to the WCAB which as noted affirmed.  The WCAB noted that the identified jobs were consistent with the Claimant’s transferrable skills and were in a suitable geographic area in terms of the applicable labor market. 

            The Claimant argued that the WCAB improperly shifted the burden of proof to him to establish that the positions in question were not open and available, and thereby improperly applying thePhoenixville case.

            The Commonwealth Court noted that the testimony of the vocational expert was that the identified positions were open at the time of the Survey and further noted that the Claimant applied the positions which apparently remained open - and there was no indication that any evidence was presented that the positions were not open as of the time of the Survey.  In the view of the WCAB, the opinion inPhoenixville provides the Claimant with the opportunity to present evidence that he applied for the indicated positions but that none were open.  The WCAB then observed that the WCJ found there was nothing in the record to indicate the five (5) positions were not open and available at the time of Claimant’s application.  That is, although the Claimant contended that the positions were not open and available, he presented no satisfactory proof to that effect.  The WCAB saw no error in that the Claimant’s record evidence did not establish his contention that the positions were not open and available. 

            The Claimant further argued to the Commonwealth Court that the vocational expert did not establish that the identified positions were located through a transferrable skills analysis. 

            The Claimant also asserted that it was error not to consider his own independent job search in the credibility process.  The Employer argued that the Decision of the WCJ and the WCAB was supported by substantially competent evidence.  It was noted that the vocational expert had testified that the identified positions were “just an example” [of jobs in the labor market].  It was noted that the vocational expert described the suitability of the jobs, noting that they required only a High School Diploma and that each employer was willing to train as necessary. 

            The Commonwealth Court noted that in the Phoenixville case it was required that jobs remain open for a reasonable amount of time to allow for a Claimant to apply for the jobs.  To this end, a Claimant was to be given the opportunity to submit evidence regarding his or her experience in pursuing the jobs identified in the Labor Market Survey, but it was not the Claimant’s burden to do so. 

            The Commonwealth Court noted that in the recent case of Valenta v. WCAB (Abington Manor Nursing Home and Rehab and Liberty Insurance Company), No. 1302 C.D. 2016, filed December 7, 2017,the employer did not offer evidence of the jobs remaining open past the discovery of those jobs, but likewise the Claimant offered no evidence that the jobs were not open and available when she applied for some of them but received no offer of employment. 

             Pointing to Valenta, the Commonwealth Court indicated that it was indeed the employer’s burden of proof to show that the jobs were open and available, but the Claimant could present evidence to the contrary.  The Court held that “if a Claimant offers evidence about her experience in pursuing the jobs identified in a Labor Market Survey, the evidence can be considered against her in the overall evaluation of the availability of the jobs”.  “Based onPhoenixville and Valenta, we hold that a modification of benefits based on proof of earning power associated with specific positions cannot be granted without evidence in the record that the specific positions remain open until such time as a Claimant is afforded a reasonable opportunity to apply for them.  In the absence of such evidence, earning power associated with specific positions cannot be used in the calculation of earning power under §306(b).”  The Commonwealth Court emphasized that the Employer bore the burden of proof of establishing all facts entitling it to a modification of benefits, including the continued availability of the jobs identified as proof of earning power.  If the Claimant presented evidence of pursuant of the jobs identified in the Labor Market Survey, that evidence can be considered on the issue and could be considered against a Claimant in an overall evaluation of the availability of the jobs. 

            The Commonwealth Court then discussed the concept of substantial evidence in the realm of establishing the open and available nature of the jobs identified in the Labor Market Survey.  The Court stated that where there is an in-person application where information is exchanged, evidence of follow-up communications between the Claimant and a prospective employer which prompts acts or inaction by a Claimant, or evidence relating to an interview, such might constitute substantially competent evidence to establish that the jobs identified in the Labor Market Survey remained open and available through that time period.  The Commonwealth Court emphasized that there must be evidence beyond mere application.  Importantly, the Commonwealth Court stated that “consequently, we note the Board’s observation that Claimant only received an interview for the two (2) security guard positions with Am-Guard.  Therefore, we are constrained to hold that only those two (2) positions remained opened and available underPhoenixville.  It was on this basis that the Court affirmed the modification with a slight change in the partial rate.  A concurring opinion by Judge McCullough joined by Judge Leavitt concurred in the result but did not considerPhoenixville Hospital to allow a Claimant’s employment applications to be used against him or her on the question of the open and available nature of the jobs.  There was a dissent by Judge Cosgrove, again citing disagreement with the holding in Valenta to the extent of using the application process against the Claimant.  Judge Cosgrove was of the view thatPhoenixville Hospital was being misinterpreted and considered the misapplication a taint requiring the dissent.

By: Jeffrey D. Snyder  Valenta v. WCAB (Abington Manor Nursing Home and Rehab and Liberty Insurance Company), 1302 C.D. 2016 – Filed December 7, 2017, Pennsylvania Commonwealth Court

            In this case of first impression, the Commonwealth Court affirmed the Decision of a Workers’ Compensation Judge which modified benefits based on an Earning Capacity Assessment.

            The work injury in question was sustained on October 2, 2010 in the nature of aggravation of a pre-existing calcific tendonitis with chronic tendopathy of the left shoulder, disc herniations at C5-6 and C6-7 with radiculopathy, a left trapezius strain, left medial scapula strain, and a left posterior shoulder strain. 

           The noted Earning Capacity Assessment identified six jobs and via the Assessment provided notice of those jobs to the claimant/attorney. The Court described the jobs in some detail, noting that per the Claimant, she attempted to apply for all six (6) positions but was not offered any of them.  The claimant took issue as well regarding the suitability of the jobs – there was expert medical and expert vocational testimony on both sides.

         The Workers’ Compensation Judge made credibility determinations that accepted the testimony of the defense medical expert as well as that of the defense vocational expert.  The Claimant appealed to the Workers’ Compensation Appeal Board, arguing that the six (6) jobs should not be considered actually open and available if the Claimant tried to apply for them and was unsuccessful in receiving a job offer.  The Appeal Board rejected that argument, pursuant toPhoenixville Hospital v. WCAB (Shoap), 81 A.3d 830 (Pa., 2013) which essentially requires that identified jobs be open and available at the time of the issuance of an Earning Capacity Assessment.  The Claimant argued on Appeal to the Commonwealth Court that the jobs were not actually open to her, the Claimant, when she applied for the jobs and therefore the Workers’ Compensation Judge should not have used the standard set-forth in Phoenixville Hospital.

            The Commonwealth Court considered this  a case of first impression regarding the rights of Claimants and Employers under §306(b) of the Act after the Pennsylvania Supreme Court’s Decision inPhoenixville Hospital.  The Claimant was argued that if she applied for a position listed on the Earning Capacity Assessment but did not get the job, the Employer had not proven earning capacity and so modification must be denied.  The Employer argued that a Claimant’s testimony that she applied unsuccessfully to the position is relevant but not dispositive, that is that the Workers’ Compensation Judge could accept evidence of the Claimant’s unsuccessful application but was not bound by such evidence to reject the earning capacity found in the Earning Capacity Assessment. 

            The Commonwealth Court noted that §306(b) of the Act does not require that the Claimant be offered a job, merely that the Employer prove the existence of meaningful employment opportunities and not a simple identification of jobs found in want ads or employment listings.  The Court viewed this matter as one of credibility, not sufficiency of the evidence.  The Court noted that one possible exception to the credibility process might be such where a job was filled before notice of it was given to a Claimant via an Earning Capacity Assessment - in that case it would not “exist”.  In other words, the jobs must be open and available at the time of the issuance of the Labor Market Survey/Earning Capacity Assessment to the Claimant/counsel: “We reject Claimant’s argument that the mere presentation of evidence of unsuccessful application to jobs listed in a LMS/EPA mandated a finding that the positions were not open and available and that she lacked any earning capacity.  Rather, as our Supreme Court stated inPhoenixville Hospital, such evidence from Claimant was ‘relevant’ but not ‘dispositive’ with regard to the earning power inquiry, 81 A.3^rd at 846.” 

            The take away from this case of  “first impression” is that the Claimant’s application and failure to secure employment relative to jobs identified in the Earning Capacity Assessment is simply one facet of multi-faceted litigation that includes broad discretion as to findings of credibility in Earning Capacity Assessment cases.

“RIPE FOR CORRUPTION”

By Kevin L. Connors, Esquire

Not our words!

It is a direct quote from the front page banner headline of the Philadelphia Inquirer on September 24, 2017, with the headline being (Inquirer Investigation/Workers’ Comp, Pharmacies’ alliance:  “Ripe for Corruption.”)

For those who did not pick up a copy of the Sunday Philadelphia Inquirer, the hyperlink can be found by googling “Ripe for Corruption.”

For anyone involved in the administration or defense of Pennsylvania workers’ compensation claims, this article is a “must read,” as it investigates the ethical boundaries surrounding Attorney ownership and investment in pharmacies prescribing medications for workers’ compensation Claimants, as the Inquire investigated pharmacies owned by Pond Lehocky, a Philadelphia law firm almost exclusively representing Claimants either receiving or seeking workers’ compensation benefits, with the firm having written referral “arrangements” with physicians prescribing medications for persons receiving or seeking workers’ compensation benefits, to utilize Pond Lehocky-owned pharmacies to fill doctor-prescribed prescriptions.

Yes, the article accurately sets forth that Pond Lehocky secured approval from the Pennsylvania State Licensing Administration, to establish the pharmacy, also having sought legal Counsel as to the ethics of pharmacy ownership, with the question left unanswered as to whether ethical boundaries limit Attorneys profiting from the medical outcomes of Clients through this type of arrangement without full disclosure to either Patient/Client, and/or Party responsible for paying.

However certain that Pond Lehocky and his Partners might be that their “arrangement” was ethically and legally sound, the “arrangement” was apparently outlined by Sam Pond, a legend unto himself, which Sam had emailed referral doctors:  “For all Patients that you may see with a workers’ compensation claim, referred to you from our office or elsewhere, we ask that you have our pharmacy, Workers First Pharmacy Services, fill these scripts.”

Apparently, Workers First Pharmacy received State approval to open its pharmacy in October of 2016, with the application submitted by Pond Lehocky indicating that no medical practitioners had a proprietary interest in the pharmacy, although, in fact, several doctors are part-owners, as evidenced by the Inquirer’s investigation into the pharmacy.

The “arrangement” has been questioned by legal and medical ethicists, on grounds that it may potentially lead to conflicts of interest, and to create a financial incentive to prescribe the costliest drugs, whether or not medically appropriate, in order to prolong workers’ compensation legal disputes, to boost legal fees and legal recoveries.

Citing to Pond Lehocky’s website, it makes a vague reference to its relationship with Workers First, noting that the firm is “partnering” with the pharmacy to help Clients get the best pharmaceutical care.

However, Clients can click right through Pond Lehocky’s website, to the pharmacies’ website, without being apprised of the law firm’s financial interest in the pharmacy and any medication scripts that it might fill.

The Inquirer article cites to numerous references of Workers First charging what some are calling “inflated” prices for medications, particularly for high-cost compounded pain cream.

Of course, Pond Lehocky takes the position that Workers First Pharmacy is an attempt to “stand up” to “diabolical people” and insurance companies, who frequently deny medications to Pond Lehocky’s Clients, in order to boost insurance company profits.

Pond’s quote is:  “You ever have an insurance claim?  You ever go up against these bastards?”

Pond Lehocky apparently denies that the email/letter that it sent to doctors, asking doctors to use Workers First for their workers’ compensation Patients, does not constitute aquid pro quo, nor does the firm believe that doctors might feel pressured to use the firm’s pharmacy, in order to continue receiving Patient referrals from Pond Lehocky, noted in theInquirer as a major pipeline for new Patients.

Conveniently, Pond says “I would be outraged--if I heard that.”

According to Workers First Board of Pharmacy application, 65% of the firm is owned by Sam Pond, and his two law Partners, Jerry Lehocky and David Stern, as well as law firm CFO, Bryan Riley.

The remaining 35% of the pharmacy is owned by six other doctors.

No less interesting is the fact that Pond Lehocky has been a strong advocate in opposition to House Bill 18, which was introduced in February of 2017 in an attempt to address the over-prescription of opioids and other painkillers, attempting to create a list of approved drugs, a set duration for treatment, and established dosage amounts for workers injured on the job.

In essence, House Bill 18 would create a pre-approved list, or “formulary” of opioids and other drugs for injured Employees requiring medical care and financial assistance for lost wages under the Workers’ Compensation Act.

With Pennsylvania ranking third in a recent 25 State study of the amount of opioids prescribed to injured workers, Bill supporters advocate that House Bill 18 is necessary to protect workers from the effects of being over-prescribed opioids, potentially resulting in other health conditions and extending recovery phases.

In response, Pond Lehocky, in advertisements that it had raised in response to House Bill 18 criticized the proposed legislation as catering to the insurance company, potentially leaving injured workers without proper treatment, as well as being a wedge between Patients and their doctors.  Pond claims that Workers First is a “mail delivery pharmacy” serving as a “counter to insurance companies warranting capricious denial of medical care to people who are recovering from injuries sustained while on the job.”

The opposition to House Bill 18 has been intensive, and no less expensive with close to $4,000,000.00 being spent by “legal professional” lobbyists, opposing the legislation.

True, more dollars were spent by “liability reform” lobbyists, although it is unclear how much of the “liability reform” dollars were spent on workers’ compensation issues.

The September 24, 2017 article by The Philadelphia Inquirer raises very serious issues with respect to conflicts of issue, as well as the potential for abuse and overreach, while, no doubt, advocates, like Pond Lehocky, will claim that their efforts are geared towards reducing worker suffering, as opposed to prolonging the shelf life of workers’ compensation claims, and eventual recoveries predicated on the length and duration of claims remaining open.

However you might look at this issue and whatever your orientation might be, there would still seem to be an unholy alliance in “investing” in the medical outcomes of Clients.

In the final analysis, the Inquirer’s banner headline poses the essential question, being whether this “arrangement” is, in fact, “ripe for corruption?”

ConnorsO’Dell LLP

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

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

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

                               Hartford Insurance Group v. Kamara et. al. 976 EDA 2016 (Pa. Super., 2017)

By Jeffrey D. Snyder, Esquire

The Supreme Court of Pennsylvania has accepted allocatur of the above captioned case, which considers whether an insurance carrier can independently pursue a third-party case “on behalf of” a claimant.

The Superior Court was faced with Preliminary Objections to Hartford’s Complaint, it being argued that Hartford did not have standing to file a Complaint because the Complaint was not verified by someone with personal knowledge, because the claimant had not assigned a cause of action to Hartford, and because the claimant was not a party to the lawsuit. 

As background, the claimant Chen was standing in a parking lot of a Thrifty Car Rental location when she was struck by a rental car operated by defendant Kamara.  The Complaint against Kamara et. al. averred that Chen was in the employ of Alliance Sourcing Inc., with Hartford  paying funds in both medical and wage loss benefits to Chen under a workers’ compensation policy maintained by Alliance Sourcing Inc. 

There were two counts of negligence in the Complaint. 

Responding to the Preliminary Objections, Hartford asserted that the Supreme Court of Pennsylvania’s holding inDomtar Paper (Liberty Mutual Insurance Co. as subrogee of Lawrence v. Domtar Paper Co. e. al., No. 19 WAP 2014 (Pa., 2015) denying standing to sue was inapplicable because inDomtar the suit was brought “as subrogee of” while in this case suit was brought “on behalf of Chunli Chen”.  It was further asserted that the verification to the Complaint was proper because the Hartford employee signing it had knowledge of the facts through her work on the claim.

The trial court dismissed Hartford’s Complaint with prejudice, in reliance on its interpretation of the law asserted as applicable by the defendants, notably that the case was controlled by the Supreme Court’s Opinion inDomtar Paper and because the trial court did not consider the Complaint properly verified.  The trial court further stated that it did not grant leave to amend the verification because Hartford had failed to assert a legally cognizable cause of action against the defendants, thus granting leave to attach a sufficient verification would have been futile.

On appeal to the Superior Court, Hartford raised two issues.  First, did the trial court misapplyDomtar given that Hartford had filed suit “on behalf of” and not as “subrogee of” and, second, whether the trial court improperly characterized the verification as faulty when it was signed by a representative of Hartford with knowledge of the claim - or in the alternative whether the Court should have allowed an amended verification.

The Superior Court agreed that Domtar Paper was inapplicable because Hartford filed suit “on behalf of Chen” and was attempting to establish the liability of third party tortfeasor to Chen.  The Court, relying on prior case law, considered that either joining the employer as a party plaintiff or as a use plaintiff would operate to secure the employer’s interest in its recovery of its subrogation lien.   “We therefore hold that Section 319 is an exclusive remedy and that for an employer or its insurer to enforce its subrogation rights, it must proceed in an action brought on behalf of the injured employee in order to determine the liability of the third party to the employee.  If such liability is determined, then the employer or its insurer may recover, out of an award to the injured employee, the amount that is paid in workers’ compensation benefits”.  The Superior Court then stated: “Hartford is not attempting to ‘pursue a subrogation claim directly against a third-party tortfeasor’, is not seeking to recover only the amount that it paid to Chen in workers’ compensation benefits, and is not splitting Chen’s cause of action”.  The Court observed that Hartford had otherwise brought a single action against the third-party tortfeasors in the name of the injured employee and was trying to recover the entire amount to which Chen might be entitled.

The Superior Court also noted that because the suit was filed in Hartford’s name it was a party in the litigation and therefore its representative could verify the Complaint as a representative of “one or more of the parties filing the pleading”, remanding for further proceedings.

Ultimately, the Supreme Court of Pennsylvania, Eastern District, at No. 205 EAL 2017, granted a Petition for Allowance of Appeal, which raises three specific questions:

(a)       Can a workers’ compensation lienholder bring a third party action on behalf of the injured worker to recoup amounts paid to the injured worker from the alleged tortfeasor to the standard set inLiberty Mutual Insurance Company v. Domtar Paper Company [citation omitted]?

(b)       Did the Superior Court fail to see that the failure to attach the verification of Chunli Chen to plaintiff’s Complaint and decision to attach the verification of the insurance adjuster with knowledge of the lien, supports the argument of [Petitioners] that this lawsuit was brought without the cooperation of Chunli Chen and solely on behalf of the insurance company in an attempt to subrogate its lien in direct contradiction of the standard set inLiberty Mutual Insurance Company v. Domtar Paper Company [citation omitted]?

(c)       Is the caption, and effect of the caption, “The Hartford Insurance Group on behalf of Chunli Chen” synonymous with “Liberty Mutual Insurance Company, as subrogee of George Lawrence” as it appears inLiberty Mutual Insurance Company v. Domtar Paper Company [citation omitted]?

ConnorsO’Dell LLP

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

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

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

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

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

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

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

CONSTRUCTION WORKPLACE MISCLASSIFICATION ACT

TO BE STRICTLY CONSTRUED TO FIND INDEPENDENT CONTRACTOR STATUS

By Jeffrey D. Snyder, Esquire

In an on En Banc Opinion, the Commonwealth Court of Pennsylvania, in D&R Construction v. WCAB (Suarez) and in Department of Labor and Industry v. WCAB (Suarez),Nos. 1558 C.D. 2016, 1578 C.D. 2016, 1574 C.D. 2016, and 1575 C.D. 2016, has held that, in a construction workplace, the common law analysis of employee versus independent contractor centering on the right of control is now abrogated by the Construction Workplace Misclassification Act (CWMA) by which all the Act’s requirements must be satisfied in order for a given individual to be classified as an independent contractor. 

By way of background, in a persuasive but not binding Opinion of the Workers’ Compensation Appeal Board (Board),Cassatt v. Venue, Inc., 2015 W.L. 7422308 (WCAB, October 22, 2015), the Board held that despite the fact that there was not a written agreement between the parties, the totality of the circumstances supported independent contractor status in the construction workplace and on that basis the Board found that overall the requirements of the CWMA were satisfied.  This Cassatt Opinion was not adopted elsewhere and is strongly counter-veiled by other appellate cases of earlier and more recent vintage but still leaving doubt about the state of common law analysis in a construction workplace.

In the case of (Suarez), on October 26, 2010 the Claimant filed a Claim Petition against D&R, alleging injury during the course of employment on August 28, 2010.  D&R filed an Answer in part asserting that the Claimant was an independent contractor and not an employee of D&R.  There was then a Claim Petition against the Uninsured Employer Guaranty Fund.  The issue of independent contractor versus employee was bifurcated.

The WCJ denied the Claim Petition relative to the bifurcated issue, concluding that the Claimant was an independent contractor and not an employee of D&R on the date of injury.  The Claimant appealed to the Board.  The Board reversed the WCJ and remanded the matter for further proceedings.  In doing so, the Board concluded that the Claimant was not an independent contractor but rather an employee of D&R at the time of injury, relying on the CWMA with factors the Board considered “instructive”. 

Noting that the matter was bifurcated on the issue of independent contractor versus employee, with the litigation not yet completed on the entire case before the Workers’ Compensation Judge, D&R and the Fund asked the Board to issue a statement pursuant to §702(b) of the Judicial Code allowing for an immediate Appeal from what was in essence an Interlocutory Order on employment relationship.  That request was denied by the Board, followed by Petition for Review with the Commonwealth Court, alleging an abuse of discretion in denying the request for immediate Appeal.  The Commonwealth Court accepted the Appeal via the Petitions for Review, limiting the issues to whether the Board erred in retroactively applying the CWMA to determine whether the Claimant was an independent contractor and whether the Board erred by considering the CWMA as guidance for the application of the common law analysis to determine who qualifies as an independent contractor.

First, D&R and the Fund argued that the Board erred in retroactively applying the CWMA.  The Commonwealth Court concluded that the CWMA was not intended to be applied retroactively, this particular injury occurring before the enactment of the CWMA.

The Commonwealth Court, then dealing with the substantive application of the criteria of the CWMA held that the criteria in the CWMA must be established in order for an individual in the construction industry to be deemed an independent contractor and not an employee for purposes of Workers’ Compensation.  “The absence of a single criterion will negate the independent contractor’s status, and the individual will be deemed an employee”.  There was to be no weighing test – each criterion appearing in the CWMA must be met, different than the common law test of focusing on the right of control with consideration of the totality of the circumstances.  In other words, the criteria in the CWMA are not guidelines, they are requirements that must each be satisfied in total to find independent contractor status. 

“We conclude that the CWMA is not a clarification of the traditional test [under common law].” The Court observed that under the Workers’ Compensation Act, there was no bright line rule for determining whether a particular relationship is that of an employer-employee or owner-independent contractor.  Various consideration for that status and against it were then discussed by the Court.  “Thus, in sum, under the common law, there are no mandatory factors, but rather there is weighing of factors, with control being a primary factor.”  “In contrast, under the CWMA, unless certain criteria are met, an individual in the construction industry will be deemed to be an employee and not an independent contractor.  These criteria are mandatory, and the absence of any one criterion will negate the independent contractor status, and the individual will be deemed an employee.”  “Thus, each criterion has equal weight”.  The Court noted that under the CWMA, there are requirements for a written contract for the services, the maintenance of a business location separate from the location of the person for whom services are being performed by the individual and maintenance of liability insurance during the term of the contract of at least $50,000.00.  The CWMA was noted to exclude consideration of the failure to withhold federal or state income taxes or to pay Workers’ Compensation premiums.  “Thus, while some of the requirements set forth in the CWMA may be similar to some of the traditional factors, the CWMA does not clarify the common law, particularly given the aforementioned differences.”  In conclusion, the Court discussed the various other elements under the CWMA that must be strictly met in order to find an independent contractor relationship.  Ultimately, the Commonwealth Court reversed on the basis that the Board had intermingled the common law test with the test under the CWMA in the case where the date of injury predated the effective date of the CWMA and involving substantive change was not to be retroactive.  The Court noted that the CWMA was not meant to apply to other industries or professions and that mixing that CWMA test with the common law test would create a new (hybrid) analytical framework for independent contractor versus employee status that was not the intention of the CWMA.  “Therefore, we hold that the Construction Workplace Misclassification Act may not be used as guidance for the application of the traditional factors under the common law to determine whether an employment relationship existed.”  The Court remanded the case to the Board to consider whether the Claimant sustained his burden of proof of showing an employer-employee relationship solely under the traditional factors as set forth in the common law.

ConnorsO’Dell LLP

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

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

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

PROTZ ENTOMBS IREs IN PENNSYLVANIA

By Kevin L. Connors, Esquire

Ever have one of those days where you just wonder, why bother?

Today might be one of those days.

In a Homer Simpsonesque Decision, the Pennsylvania Supreme Court in Protz v. WCAB (Derry Area School District), decided on June 20, 2017, recently eviscerated the IRE (Impairment Rating Examination) provisions of Act 57, enacted in 1996, embodying the legal standard by which almost all Pennsylvania Workers’ Compensation claims have been administered and adjudicated since Act 57 became law on June 24, 1996.

Yes, your general knowledge of IREs is correct, that is that Act 57, under Section 306 (a.2) empowered insurance companies, after an injured Employee/Claimant had received 104 weeks of temporary total disability benefits, to request that the injured Employee/Claimant undergo an Impairment Rating Examination, applying standards adopted by the American Medical Association inGuides to the Evaluation of Permanent Impairment, for purposes determining whether the injured Employee/Claimant had an Impairment Rating of the work-related injury, applying a whole person standard, of less than 50%, which, if so, would then allow the insurance company to convert the injured Employee/Claimant’s temporary total disability benefits into temporary partial disability benefits, which, under Section 306 (b) of the Act, were then only payable for 500 weeks, not inclusive of the 104 weeks already paid, such that an injured Employee/Claimant with an IRE rating of less than 50% would, statutorily, still be entitled to receive 104 weeks of temporary total disability benefits, followed by 500 weeks of temporary partial disability benefits, without reduction of the weekly compensation benefit being paid, absent evidence of “earning power” which, if proved, could reduce the weekly compensation benefit being paid based upon a continuing wage loss to be calculated by incorporating the “earning power” of the temporary partial disability benefit rate that might continue to be owed to the injured Employee/Claimant.

Awaking on June 20, 2017, after having recently attended the Department of Labor Industries’ Bureau of Workers’ Compensation Conference in Hershey, Pennsylvania, on June 12, 2017 and June 13, 2017, I was not intellectually prepared for the massive headache that would be created by the Pennsylvania Supreme Court ruling in Protz that Section 306 (a.2) of the Act, the provision dealing with IREs, was unconstitutional, effectively eviscerating a procedure that has been utilized by Insurance Carriers, Third-Party Administrators, and Employers since 1996.

The first question, what does this mean for all workers’ compensation stakeholders?

Well, if you are an injured Employee/Claimant, or an Attorney representing one, you are likely toasting the Pennsylvania Supreme Court’s June 20, 2017 ruling inProtz v. WCAB (Derry Area School District).

However, if you are an Insurance Carrier, Third-Party Administrator, or Employer, you are scratching your head and going “WTF?,” wondering how a Statutory Provision that was more effective in facilitating settlements and reducing reserves than actually changing an injured Employee/Claimant’s compensation benefit rate, and that had been used without constitutional challenges, before Protz filed her initial challenge to her IRE Determination in 2011, as all IREs performed under Section 306 (a.2) of Act 57 are now null and void, having no legal consequence or validation under the Pennsylvania Workers’ Compensation Act on the Supreme Court’s June 20, 2017 Decision inProtz.

 At this juncture, under Protz, IREs simply now have no validity under the Pennsylvania Workers’ Compensation Act, and their utilization, absent legislative action by the Pennsylvania General Assembly, is now an administrative and litigation black hole.

If you are feeling like you forgot to get dressed today, you are not alone.

Yes, true, there will also be an economic impact as the litigation mechanism for modifying compensation benefits will revert back to requiring proof that an injured Employee/Claimant has sufficiently recovered from a work injury to be able to return to available work, being actually available or available under a “earning power” analysis in the form of a Labor Market Survey, potentially not only extending the shelf life of workers’ compensation claims, but also potentially driving Claimant’s settlement values for Compromises and Releases even higher.

Moreover, Protz’ evisceration of IREs potentially will set in motion a chain of Reinstatement Petitions being filed for injured Employees/Claimants whose compensation benefits had been modified to temporary partial disability benefits under, what was then regarded as statutorily legal, IREs, after which the injured Employee/Claimant had exhausted the 104 weeks of temporary total disability benefits, paid before the IRE was requested, as well as the 500 weeks of temporary partial disability benefits, paid at the temporary total disability benefit rate, after the IRE evidencing an impairment of less than 50% was secured, and the injured Employee/Claimant’s compensation benefits were modified/reduced.

Query:  What will the effect of Protz be upon claims subject to IREs of a less than 50% Impairment Rating, where 604 weeks of compensation benefits have been paid, and the injured Employee/Claimant files to reinstate his/her workers’ compensation benefits as temporary total disability benefits, alleging that the administrative process used to suspend their weekly compensation benefits at 604 weeks has now been ruled unconstitutional, such that the injured Employee/Claimant now claims that there is no administrative or adjudicated form or Decision that bars them from seeking to reinstate their compensation benefits to temporary total disability benefits.

First, if the issue of the IRE rating was litigated, and a Workers’ Compensation Judge modified the injured Employee/Claimant’s workers’ compensation benefits from temporary total to temporary partial disability benefits in reliance upon an IRE rating with a less than 50% Impairment Rating, and the injured Employee/Claimant did not file an Appeal, it is our impression that the injured Employee/Claimant has waived the right to seek to re-open their workers’ compensation claim, in order to strike/remove the suspension of their workers’ compensation benefits, as they have not properly preserved that issue under the Pennsylvania Workers’ Compensation Act, and the Bureau’s regulations.

The same answer would be given if an injured Employee/Claimant had stipulated to the conversion of temporary total disability benefits to temporary partial disability benefits in reliance upon an IRE with a less than 50% Impairment Rating, particularly true, since the Stipulation would then have been adopted by a Workers’ Compensation Judge in a Bureau-circulated Decision, presumably never appealed.

Again, that would bring finality to the constitutional issue, and could be argued as a waiver of Section 306 (a.2) being challenged on constitutionality grounds.

Potentially more problematic, although there are probably much fewer claims like this, would be claims where the IRE was a basis for filing a Notice of Change, converting temporary total disability benefits to temporary partial disability benefits, with no Petition challenging the change ever being filed or litigated by the injured Employee/Claimant.  The concern with those claims would beProtz’ evisceration of the Statutory Provision empowering the change of benefits from temporary total disability to temporary partial disability, potentially opening the “what if” door which, as we all well know, has pretty squeaky hinges, greased with the sweat of humanitarianism.

No question, Protz is a life-altering Decision by the Pennsylvania Supreme Court, for anyone involved with Pennsylvania workers’ compensation claims.

Like you, we are less concerned with how the Supreme Court arrived at its ruling, than we are with the consequences of this Decision, which we will all now be dealing with its holding through retirement.

In answer to the obvious question as to why an issue this important, with the potential risks associated therewith was not settled by the parties prior to its eventual resolution by the Pennsylvania Supreme Court, one can only assume, based upon the involvement of the Pennsylvania Association of Justice (PA Trial Lawyers Bar), which has been salivating at the constitutional challenge to IREs since 1996, that the claim might have been over-valued for settlement, in an attempt to defeat claim resolution prior to Supreme Court determination.

This is not the time to point fingers.

We can hear war drums beating in the offices of Claimant Attorneys statewide; time to circle the legislative wagons and seek amendment of the Workers’ Compensation Act to insure a cap in compensation benefits.

ConnorsO’Dell LLP

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

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

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

ANNOUNCEMENT

By Kevin L. Connors, Esquire

It is with both congratulations and regrets that we announce that Kate O’Dell, a Partner in our firm, and Co-Chair of our Workers’ Compensation Practice Group, has elected to trade the outrageous slings and arrows of compensation claims for the tranquility and joyous personal redemption of semi-retirement, as Kate transitions from being a founding Partner to assuming the role “of Counsel” with our firm, allowing Kate to re-assign workers’ compensation cases that she was handling for our firm, and defending for our Clients, to other firm Partners in our Workers’ Compensation Practice Group, while Kate has graciously agreed to serve as “of Counsel” to the firm, as coverage needs and her personal schedule might dictate.

Having had the honor and privilege of being Kate’s Partner for 17 years, there is no question but that I will personally feel the deep sense of loss without her delicious wisdom and wit being available on a daily basis in our office.

Her intelligence and integrity to detail will also be sorely missed.

She has been, and remains, a dear friend, both to me, and to our firm.

Throughout her storied career with our firm, she has attained national and regional honors for her knowledge and professionalism in the defense of workers’ compensation claims.

Honoring her years of service to our firm, we will continue to strive, as a firm, to achieve and maintain the high idea and professionalism that Kate exhibited every day since her 1985 graduation from Law School.

ConnorsO’Dell LLP

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

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

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