October 30, 2006 - Pennsylvania Workers' Compensation Update - 3rd Quarter '06
LEGISLATIVE UPDATE
The House has just passed Senate Bill 2738. The full context is in the link below.
The highlights are as follows:
- Workers' Compensation Judges must set forth a mandatory trial schedule at the first hearing. No party will be excused from honoring the schedule absent good cause shown;
- Every trial schedule will include a specific date and time for a mediation conference which will take place no later than thirty days prior to the date set for filing proposed findings of fact, conclusions of law, and briefs, unless the WCJ determines that mediation would be futile;
- All compromise and release hearings must be held within fourteen (14) days of the Bureau's circulation of the Notice of Assignment of a Compromise and Release Petition;
- Workers' Compensation Judges must issue Decisions within five (5) business days of the Compromise and Release Hearing;
- Special new general rules for the Workers' Compensation Appeal Board, but not very relevant to the adjudication process;
- No Judge in any particular county can have more than 75% of the petitions in that county;
- An uninsured employer's guaranteed fund has been created. Presently, there is a guaranteed fund for insolvent insurance companies and insolvent self-insurers but not for insolvent employers. The House Bill transfers one million dollars from the administration fund and then assesses insurers and self-insured employers as necessary to provide an amount sufficient to pay outstanding claims.
Since the Bill has been passed in the House, this Bill now goes to the Senate for vote. We will keep you advised.
COMMONWEALTH COURT CASES
McGaffin v. WCAB (Manatron, Inc.), No. 2168 C.D. 2005 (Decided July 19, 2006)
ISSUE: Whether an impairment rating of 26% precludes a subsequent Termination Petition?
ANSWER: Unclear from this decision, but clarified by recent case (see below). Because claimant failed to raise the issue properly before the Workers' Compensation Appeal Board, the Commonwealth Court did not address the issue.
ANALYSIS: This is an issue that has come up many times before Workers' Compensation Judges but was not decided by the Commonwealth Court in Pennsylvania until last week. In addition, it is an issue frequently discussed among claims professionals and attorneys; that is, whether to obtain an impairment rating evaluation at the 104 week window when there is a possibility of full recovery. The Commonwealth Court in McGaffin was faced with this issue but opted not to address it because claimant failed to preserve the issue on appeal.
Importantly, on October 12, 2006, this issue was decided in Schachter v. WCAB (EPS Technologies), No. 320 C.D. 2006 (Decided October 12, 2006). In Schachter, the Commonwealth Court was confronted with the very issue that it opted not to decide in McGaffin. In Schachter, the employer obtained a 6% impairment rating, filed a Notice of Change of Workers' Compensation Disability Status, and the character of claimant's benefits shifted from total to partial. Thereafter, employer filed a Petition for Termination alleging the claimant had fully recovered. The claimant ultimately won and defeated the employer's Termination Petition, however, neither the Workers' Compensation Appeal Board nor the Commonwealth Court would uphold the award of counsel fees as found by the Workers' Compensation Judge.
CONCLUSION: The Schachter case, which decided the issue which was left undecided in McGaffin, is an important one as it permits the litigation of a Termination Petition even in the face of a prior impairment rating. We must keep in mind that a Termination Petition in the face of the prior impairment rating will most likely be denied but the leverage of filing a Petition for Termination can be helpful in the settlement process and the ability to avoid counsel fees is an important component in this analysis.
Pries v. WCAB (Verizon Pennsylvania), No. 1870 C.D. 2005 (Decided July 25, 2006).
ISSUE: If a claimant has retired, what does claimant have to show in order to continue to receive workers' compensation indemnity benefits?
ANSWER: Claimant must show that he is either seeking employment post-retirement or that he was forced into retirement because of his injury. Retirement from the pre-injury job is insufficient as claimant must show that the injury forced him into retirement from the work force.
ANALYSIS: Claimant suffered a work-related back injury in 1989. The facts were somewhat disputed but in August, 2001, claimant received a $60,000.00 retirement package from his employer. (Because this was a pre-Act 57 case, there was no pension offset). At the time of the receipt of the retirement package, claimant had been released to return to work light duty. Claimant did not present any evidence that he was looking for work post-retirement. The Workers' Compensation Judge denied Defendant's Suspension Petition and cited the seminal Pennsylvania Supreme Court Decision in SEPTA v. WCAB (Henderson), 669 A.2d 911 (Pa. 1995). The WCJ found that it was claimant's burden of proving that he was either seeking employment post-retirement or that he was forced into retirement because of the work injury. Citing Henderson, the WCJ concluded that because claimant was only able to work light duty, he was forced to retire from his pre-injury job because of the work injury.
The WCAB reversed. Citing County of Allegheny (Dept. of Public Works) v. WCAB (Weis), 872 A.2d 263 (Pa. Cmwlth. 2005), the Workers' Compensation Appeal Board correctly pointed out that claimant's burden is not just to show that he was forced to retire from his pre-injury job but rather that he was forced to retire from the workforce because of his injury. Because claimant did not testify that he was looking for any work post-retirement even though he had been released to return to work light duty, the Workers' Compensation Appeal Board reversed. Claimant appealed to the Commonwealth Court and the Commonwealth Court affirmed. The Commonwealth Court was unwilling to overturn the Weis case and determined that the Workers' Compensation Appeal Board had applied the law properly.
Importantly, the Pennsylvania Trial Lawyers Association (PATLA) filed an amicus brief, claiming that the Henderson and Weis cases have placed an unfair burden on employees. The Commonwealth Court was not impressed with this argument and, per the above, affirmed the employer's entitlement to a suspension.
CONCLUSION: This is a very "hot button" issue for claimants' attorneys. They feel that the Henderson and Weis cases were incorrectly decided and feel that these cases place an unfair burden of proof on the claimant. The reality is, however, that all claimant needs to do is show that he is looking for work post-retirement from his pre-injury job in order to overcome a Petition for Suspension based on the allegation that claimant has removed himself from the work force. This is easily accomplished through litigation and efforts should be made to obtain a statement from claimant at the time of retirement that he is retiring and not looking for work. This could be very helpful in litigation.
Knechtel v. WCAB (Marriott Corporation), No. 140 C.D. 2006 (Decided August 24, 2006).
ISSUES: Whether claimant's health care provider is permitted to actively participate in an examination by the employer's medical expert?
ANSWER: No. The health care provider may observe, take notes, request brief recesses during the evaluation, but is not allowed to ask questions or comment on the employer's medical expert's questions.
ANALYSIS: Claimant argued that his psychiatrist should be allowed to not only attend the employer's medical expert's examination of claimant, but should also be allowed to ask questions, tape record the examination, make comments, and otherwise assist the claimant. Claimant argued that the term "participate" in Section 314(b) of the Act connoted permission for active involvement by his doctor. The WCJ rejected claimant's contention, and specifically ordered that claimant's doctor could take notes and request a recess to confer with claimant but could neither ask questions of the employer's expert nor comment on the expert's questions.
Claimant appealed to the WCAB arguing that the WCJ's order prohibited claimant's doctor from "participating" in the examination. The WCAB reasoned that allowing claimant's doctor to take an active role would turn the examination into an adversarial process. Under those circumstances a reasonable medical examination could not take place. Moreover, the WCAB noted that claimant's doctor could offer rebuttal testimony regarding his observations at the examination. The WCAB concluded that it did not believe that active participation by claimant's health care provider was necessary to protect claimant's interests.
On appeal to the Commonwealth Court, claimant asserted that the WCJ and WCAB erred in that they improperly interpreted the word "participate". The Court observed that neither the Act nor Bureau regulations defined the term "participate". Instead it turned to the dictionary meaning, finding that participate means "to take part in something". Webster's Third New International Dictionary 1646 (1993). The Court reasoned that an examination is conducted by careful observation of the examinee's responses to questions or physical or psychological testing, and that the opportunity to attend and observe constitutes a significant degree of participation in the examination process. The majority would not conclude that the legislature intended for claimant's doctor to participate to the extent that the examination would be disrupted by questions and disagreements that are adversarial in nature. Interestingly, Judge Friedman dissented and believes that active participation was permissible.
CONCLUSION: Claimant's health care provider may only attend and observe the employer's medical expert's examination. To allow more active participation would create a disruptive, adversarial environment which is not conducive to examination. It may be wise to alert the IME physician of this case to prevent any uncertainty or confusion.
Agnello v. W.C.A.B. (Owens-Illinois), No. 629 C.D. 2006 (Decided September 14, 2006).
ISSUE: Whether a Workers' Compensation Judge, when reviewing disfigurement cases involving teeth, needs to evaluate the claimant without his or her prosthesis?
ANSWER: Yes. A Workers' Compensation Judge must evaluate the claimant without his or her prosthesis in disfigurement cases involving teeth.
ANALYSIS: In November of 2004, the claimant filed a Claim Petition seeking an award for permanent disfigurement related to the loss of two of her three lower front teeth. Claimant presented the Workers' Compensation Judge with a picture of herself exhibiting a pre-injury "large toothy grin." Claimant then testified before the Judge that as a result of her injury, she lost three lower teeth in the front of her mouth. At the hearing she wore a full lower plate in her mouth/denture, which she removed on a daily basis.
The Workers' Compensation Judge ultimately denied the claimant's petition based on his observations because he was unable to find that the claimant had a serious and permanent disfigurement of the head, neck, or face which produced an unsightly appearance from her injury.
While the WCAB Court affirmed the WCJ's denial of the Claim Petition, the Board affirmed stating that "because the claimant had a lower denture, the absence of the three teeth at issue is not noticeable."
Under Section 306 of the Workers' Compensation Act, an award of benefits is owing to the claimant if she sustains a serious and permanent disfigurement of the head, neck, or face that produces an unsightly appearance. The Commonwealth Court reversed the ruling of the WCAB and WCJ, noting that, in fact, when reviewing disfigurement cases involving teeth, the WCJ needs to evaluate the claimant without his or her prosthesis. Only when the claimant is not wearing the prosthesis, according to the Commonwealth Court, can the WCJ get a true idea of the damage that has been done and the possible existence of an "unsightly appearance."
CONCLUSION: The Commonwealth Court has concluded that in disfigurement cases involving teeth, the WCJ must always view the claimant without any prosthetic device that he or she may ordinarily use. We disagree with this ruling because the dental work, by definition, removes the unsightly appearance, even if on a temporary basis. In these rare cases, some consideration should be given to paying for a permanent bridge as a WCJ may not have the same sympathy if the dental work precludes (rather than temporarily covers up) an unsightly appearance.
SPS Technologies v. W.C.A.B. (Marko), No. 2486 C.D. 2005 (Decided September 7, 2006).
ISSUE: Whether the Commonwealth Court will honor a timely filed appeal with the WCAB when the appeal should have been filed with the Commonwealth Court?
ANSWER: No. If employer inadvertently files a Petition for Review with the WCAB, the Commonwealth Court will not honor the original filing date.
ANALYSIS: SPS Technologies filed a Petition For Review to the Commonwealth Court from an Order of the WCAB which affirmed the WCJ's granting of claimant's Review Petition. Employer mistakenly filed this paperwork with the WCAB. By the time it recognized its error, the 30-day time deadline had run. Claimant filed a Motion To Quash, arguing that the appeal was not timely filed. In arguing that it should be allowed to file the appeal, the employer pointed to 42 Pa. C.S. § 5103, which states that "if an appeal or other matter is taken or brought in a Court ... of this Commonwealth which does not have jurisdiction of the appeal or other matter, the Court ... shall not quash such appeal or dismiss the matter, but shall transfer the record thereof to the proper tribunal of the Commonwealth ...
The Commonwealth Court found that this statute does not apply to the instant facts in that it noted the Board is not a tribunal as defined under 42 Pa. C.S. § 5103. It found that employer's Petition For Review was time barred.
CONCLUSION: This case makes clear that there is little room for error in filing an appeal to the Commonwealth Court. As the Board is not found to fall within the definition of a tribunal under the code, there will be no leniency for improvidently filed Petitions For Review.
Constructo Temps., Inc. v. W.C.A.B. (Tennant), No. 1562 C.D. 2005 (Decided September 8, 2006).
ISSUE: Whether penalties may be awarded against the Security Fund and/or the employer where the employer's prior workers' compensation carrier is liquidated?
ANSWER: Penalties may be awarded against neither the Security Fund nor an employer because the Security Fund is not defined as an "insurer" under the Act, and because the employer discharged their liability in contracting for workers' compensation insurance.
ANALYSIS: The Commonwealth Court of Pennsylvania addressed the issue of whether a penalty may be awarded against the Security Fund or the employer when the employer's workers' compensation carrier enters into liquidation status.
Claimant was awarded benefits for an injury sustained on March 6, 2000. A Termination Petition was filed, followed by a Penalty Petition for non-payment of medical bills. The Termination Petition was denied and the Penalty Petition was granted. However, employer's insurer, Reliance Insurance Company, entered into liquidation status. Accordingly, the issue then presented was whether the penalty was to be paid by either the Security Fund or the employer.
With regard to the Security Fund, the Commonwealth Court found that the Security Fund is not an "insurer" as defined under the Act. In finding that the Security Fund is a security blanket for benefit payments only, the Commonwealth Court pointed to the Decision in Luvine v. W.C.A.B. (Erisco Industries), 881 A.2d 72 (Pa. Cmwlth. 2005). In Luvine, the Court noted the Security Fund is not specifically identified as an insurer under the Act.
With regard to whether the employer should pay directly, the Commonwealth Court found that the carrier assumes the employer's liability when workers' compensation insurance is attained.
CONCLUSION: This case makes clear that penalties may neither be awarded against the Workers' Compensation Security Fund nor the insolvent employer because the Fund is not defined as an insurer under the Act, and because the employer has discharged its duties in attaining insurance coverage.