July 22, 2005 - Pennsylvania Workers' Compensation Update - 2nd Quarter '05
SUPREME COURT CASES
Jeanes Hospital v. WCAB (Hass), No. 231 MAP 2003 (Filed April 14, 2005)
ISSUE: Whether a claimant who develops a subsequent physical or psychological condition is required to file a Claim Petition or a Review Petition?
ANSWER: A Petition to Review Notice of Compensation Payable is the appropriate pleading.
ANALYSIS: The Supreme Court specifically took up the issue because the decisions from the Commonwealth Court had been inconsistent as to the appropriate petition to utilize in seeking to expand an NCP for a condition that developed months or years after the original injury. The Court noted that an employer is responsible not only for the direct and immediate consequences of a work-related injury, but also for any work related physical or psychological conditions that develop subsequent to the work injury. The Supreme Court indicated that modification of the NCP is governed by Section 413(a) of the Act which allows a WCJ to amend an NCP if it is materially incorrect or the claimant's disability status has changed. The Court went on to point out that any petition filed pursuant to Section 413(a) is required by the language of the Act to be treated as if it were an original claim petition. This has the effect of imposing the same burdens of proof on the respective parties as they would bear in an original claim petition, namely that claimant retains the burden of proving all elements to support the claim for benefits. As a result, because the WCJ must treat a review petition alleging additional injuries as if it were a claim petition, there is no need for a claimant to file a new claim petition.
CONCLUSION: The upshot of this ruling is that a claimant seeking to expand the NCP will still bear the burden to establish all elements of the claim, despite the fact that the petition is not an original claim petition. Unfortunately, this is still potentially prejudicial to the employer as claimants can and will seek to expand the NCP to include additional injuries years after the fact.
COMMONWEALTH COURT CASES
Wieczorkowksi v. WCAB (LTV Steel), No. 2228 C.D. 2003 (Filed April 7, 2005).
ISSUE: Whether an employer is precluded from seeking to terminate benefits because the parties previously executed a supplemental agreement and stipulation providing that claimant's disability had resolved into a permanent partial disability and that the employer remained responsible for all causally related medical expenses?
ANSWER: No.
ANALYSIS: In 1984, Claimant sustained a work related injury accepted via NCP as a right knee strain. During subsequent commutation of his claim in 1997 for a lump sum payment which represented all future partial disability benefits, the parties entered into a supplemental agreement which provided that Claimant's work injury had resolved into permanent partial disability and that the employer remained responsible for payment of all causally related medical expenses. The employer filed a termination petition in March 2001, alleging that Claimant's disability related to the work injury had ceased. The WCJ found based on credible medical evidence that Claimant had fully recovered from his work injury as of March 2001, and granted the termination petition. The WCAB affirmed on appeal, and specifically noted that the supplemental agreement did not bar the employer from seeking a termination. Claimant appealed to the Commonwealth Court, arguing that the 1997 supplemental agreement which deemed him permanently partially disabled precluded the employer from ever asserting a full recovery. The Court noted that the plain language of Section 413(a) expressly permits termination of benefits recognized in a supplemental agreement at any time when there is proof that a claimant's work related disability has temporarily or finally ceased. The Court noted that the case of Hebden only precluded such a challenge where a claimant's condition is clearly irreversible. Indeed, the Court pointed out that they relied on Hebden in their ruling in City of Pittsburgh which held that similar supplemental agreements did not give a claimant a res judicata defense and could not prevent an employer from litigating the status of a claimant's disability. Their rationale was that any such supplemental agreements between parties are based only on the current best assessment of the claimant's injury and disability status and prognosis at the time, which can turn out to be wrong. In the event the original assumptions are incorrect, either party can seek to demonstrate that what was expected to be a permanent partial disability has changed either by resolving or even on the flipside by worsening into total disability.
CONCLUSION: This ruling permits employers to revisit their previous claims and challenge claimant's disability status in an effort to limit their liability for medical treatment, despite the existence of supplemental agreements which deem Claimants to be permanently partially disabled. As such, it establishes the viability of the termination petition as a tool for employers and carriers to use in managing their exposures on older claims which are open for medical only as long as claimant's condition is not and was not deemed to be irreversible.
Brandywine Mazda Suzuki and Inservco v. WCAB (Asman), No. 1869 C.D. 2004 (Filed April 13, 2005).
ISSUE: Whether an employer must still demonstrate job availability when a claimant has been terminated for pre-injury misconduct once that claimant has recovered sufficiently to return to work?
ANSWER: Yes.
ANALYSIS: Claimant filed a Claim Petition for injuries to his buttocks and shoulders in a slip fall at work on July 13, 2001. Claimant was subsequently fired on July 24, 2001, for job performance problems that occurred before the work injury date. The WCJ found that claimant had sustained a compensable work injury but had sufficiently recovered from that injury so as to be able to return to work as of November 19, 2001. The WCJ then awarded only a closed period of benefits from July 13, 2001 through November 19, 2001, and suspended claimant's benefits thereafter, reasoning that his loss of earnings after that date was no longer due to the work injury. The Commonwealth Court began the analysis by noting the well established rule that an employer seeking modification or suspension of benefits based on claimant's recovery and ability to return to work bears the burden of proving job availability through an actual job offer or through proof of earning capacity. The Court then reaffirmed UPS v. WCAB (Portanova) which held that in instances where the claimant has been fired because of misconduct which occurred before the work injury and prior to payment of benefits, the employer still bears the burden to show availability of work. The rule is that pre-injury grounds for firing a claimant will not act as a superseding cause of claimant's loss of earnings, and the employer is not relieved of demonstrating job availability and cannot secure a suspension absent proof of available work.
CONCLUSION: When in the delicate situation of firing an employee after a work injury, employers must carefully establish that the termination of that injured worker was the result of misconduct that occurred after the work injury or before and after the work injury in order to be entitled to a suspension of benefits without a demonstration of job availability once claimant has recovered sufficiently to return to work. If a claimant is fired for conduct that occurred only prior to the work injury, the employer will still have to establish job availability through an actual job offer or an earning power assessment before a suspension may be obtained.
County of Allegheny (Dept. of Public Works) v. WCAB (Weis), No. 1478 C.D. 2004 (Filed April 15, 2005).
ISSUE: Whether a claimant who retires because he is incapable of performing his pre-injury job must also demonstrate that he was forced out of the entire labor market in order to avoid suspension of his benefits?
ANSWER: Yes.
ANALYSIS: Claimant sustained a work related left knee injury in 1981 and remained off work for the next twenty years. The employer filed a Suspension Petition in 2001, alleging claimant voluntarily withdrew from the work force. Claimant acknowledged that he never sought work after his retirement. The WCJ found that Claimant was incapable of returning to his pre-injury position, and that the employer had failed to establish that work was available to claimant which was within his restrictions, and as such denied the Suspension Petition. The WCAB affirmed, concluding that Claimant retired because he could not perform his pre-injury position, and he met his burden of proving he was forced into retirement by his work injury. On appeal, the Commonwealth Court noted that although the general rule is that an employer seeking a suspension must demonstrate job availability, the Supreme Court has made that rule inapplicable when the claimant has actually retired. The Supreme Court in SEPTA v. WCAB (Henderson) held that benefits may be suspended when an injured worker voluntarily leaves the labor market via retirement. That Court further held that as it would be prohibitive to require employers to establish that a claimant does not intend to return to work, the burden then shifts to the Claimant to demonstrate he is seeking work after retirement or that he was forced into retirement by the work injury. Significantly, a mere demonstration that Claimant can no longer perform his pre-injury job will be inadequate to meet this burden when claimant has retired, as a claimant in that instance must prove that he was forced out of the entire labor market.
CONCLUSION: This case confirms the rule that if a Claimant retires and does not seek other employment, he has the burden of demonstrating that he was forced out of the entire labor market and not just his pre-injury position in order to avoid a suspension of benefits.
County of Allegheny (John J. Kane Center-Ross) and UPMC-Work Partners v. WCAB (Geisler), No. 1866 C.D. 2004 (Filed June 6, 2005).
ISSUE: Whether the WCJ has authority to consider a Claimant's Petition to Review Utilization Review Determination when the medical provider under review failed to provide records to the Utilization Review Organization?
ANSWER: No.
ANALYSIS: The Commonwealth Court addressed the issue of whether a WCJ has jurisdiction to hear a Petition to Review Utilization Review Determination when the provider under review failed to provide the medical records necessary for assignment of a reviewer and preparation of a report by the Utilization Review Organization. The Court first explained that the Utilization Review procedure under Act 44 was intended as a prompt, fair and efficient procedure that allowed employers to seek peer review of medical treatment and allow the provider to defend that treatment. The Court then cited to prior decisions establishing that the utilization review process is the exclusive method for challenging medical bills that the parties my not bypass, even by stipulation. The Court then cited to the Act that requires that the WCJ consider, and make a part of the record, the utilization review organization report generated in conjunction with the utilization review process.
CONCLUSION: The Court applied the rationale that permitting medical providers to seek WCJ review of the utilization review determination when the provider had failed to produce the records necessary for an efficient utilization review determination would deter providers from undergoing utilization review of their peers as required by the Act. The Court's ruling is a clear statement to providers that they must comply with the Act 44 utilization review procedures. It is unclear how strictly the WCAB and WCJs will enforce this decision relative to utilization review determinations issued prior to the date of the decision. It is a potential devastating decision for Claimants who, through no fault of their own, may not be able to get treatment because their own doctor failed to submit records.
Superior Lawn Care and State Workers' Insurance Fund v. WCAB (Hoffer), No. 93 C.D. 2005, (Filed June 17, 2005).
ISSUE: Whether the Doctrine of Laches may be applied to preclude an employer form asserting a subrogation lien against a third party recovery obtained years prior with the employer's knowledge?
ANSWER: No.
ANALYSIS: In this matter the Court addressed whether the employer could successfully assert a subrogation lien against a third party recovery which it had been made aware of a decade prior to the petition. The Court cited the Supreme Court's decision in Thompson which held that Section 319 of the Act establishes an employer's absolute right to subrogation when the employee recovers from a third party for injuries for which he received benefits under the Act. As explained in Thompson, the right to subrogation in Workers' Compensation is not based upon equitable principles but is statutorily mandated. Subrogation is a right that the employer bargained for in a system where it is held liable for injuries sustained by employees without regard to fault. Absent a finding of deliberate, bad faith conduct on the part of an employer, the right to subrogation is absolute.
CONCLUSION: The Court applied Thompson in holding that absent a finding that an employer engaged in deliberate bad faith conduct, the doctrine of laches will not preclude the employer from asserting a subrogation interest in the employee's third party recovery. Like the Thompson Court, this Court has failed to define what constitutes deliberate bad faith conduct on the part of an employer asserting a subrogation interest. However, it is clear that an employer's failure to timely assert a subrogation interest is not sufficient to defeat the subrogation interest even if the Claimant has arguably been prejudiced by the delay.
Bates v. WCAB (Titan Construction Staffing Co.), 934 C.D. (Filed June 29, 2005).
ISSUE: Whether an employer's contest of a penalty petition is per se unreasonable when the WCJ finds that the Employer violated the Act?
ANSWER: No.
ANALYSIS: The Court addressed whether an employer's contest of a penalty petition may ever be reasonable once it has been determined that the employer violated the Act. The Court first noted that the reasonableness of an employer's contest depends on whether the contest was prompted by a genuinely disputed issue or merely to harass the Claimant. The Court further noted that the violations found could be of a relatively minor nature that the WCJ would reduce the amount of penalties requested, thereby creating a situation where the Claimant would only be successful in part in the penalty petition. The Court further noted that a per se unreasonable contest finding would nullify the language of Section 440(a) permitting the exclusion of attorney's fees for reasonable contests of penalty petitions. Finally, the Court noted that a per se rule would deprive the employer of the right to explain its actions and contest the amount of the penalties requested.
CONCLUSION: The Court applied Section 440(a) of the Act to decline a per se rule that any contest of a Penalty Petition becomes unreasonable once it is determined that a employer violated the Act. In reaching this decision the Court relied on a series of prior decisions in which employers were found to have engaged in an unreasonable contest of penalty petitions involving serious violations of the Act for which no explanation could be espoused. In reaching its decision the Court's emphasis was on the gravity of the underlying violation rather than the employer's espoused reasons for contesting the penalty petition.