May 09, 2007 - Pennsylvania Workers' Compensation Update - 1st Quarter '07
Commonwealth Court Cases
Wood v. WCAB (Country Care Private Nursing), No. 1272 C.D. 2005, (Filed January 10, 2007).
Issue: Whether the employer engaged in a reasonable contest where it challenged claimant's reinstatement petition, but did not produce its own evidence?
Answer: Employer's failure to present any evidence, either contrary to claimant's medical evidence or from which a contrary inference could be drawn, constitutes an unreasonable contest.
Analysis: In June 1998, claimant sustained a work-related "lower back strain" while working as a home health aide. In March 2000, claimant began work for a different employer, which eventually resulted in a modification of benefits. Claimant then obtained employment as a telemarketer in February 2003, but was discharged two months later for unsatisfactory job performance. The employer subsequently filed a notification of modification to reflect claimant's increased earnings. Thereafter, claimant filed the reinstatement petition at issue, alleging that she was again totally disabled as a result of the June 1998 work-related injury.
In litigation of the reinstatement petition, claimant testified and presented the deposition testimony of her family physician and the medical records and reports of her surgeon relative to September 2003 multiple back procedures. Employer, meanwhile, introduced no evidence. Employer did, however, object to the deposition testimony of claimant's family physician, contending that this witness was not qualified to render an opinion as to whether claimant's surgeries were related to the work injury. The WCJ overruled this objection.
In adjudicating the reinstatement petition, the WCJ found credible the deposition testimony of claimant's family physician, including her opinion that the surgeries performed were related to the original injury because "[i]t's the same area and there was no other injuries reported." Based on this testimony, as well as on the medical records found to be credible, the WCJ determined that claimant's surgeries and subsequent problems were related to the June 1998 work injury. Accordingly, the WCJ granted claimant's reinstatement petition.
The WCJ did, however, deny claimant's request for attorney's fees, finding that the employer had a reasonable basis for the contest. In particular, the WCJ concluded that "[an] issue existed as to whether claimant's...surgeries were related to the...work injury since the claimant did not produce testimony of her treating surgeon." Claimant appealed the denial of attorney's fees to the Board, which subsequently affirmed that the contest was reasonable. Claimant then appealed to the Commonwealth Court.
On appeal, claimant argued that employer's contest was unreasonable because it never presented its own evidence, but, instead, relied upon the cross-examination of claimant's medical expert to refute claimant's allegations. Claimant further asserted that since the employer offered no contradictory evidence and could point to no evidence of any other cause of claimant's injury, employer's contest of the petition was not reasonable.
The employer, meanwhile, argued that it made a reasonable contest because it believed the WCJ would not find claimant's family physician qualified to render an opinion on the complex medical questions regarding the surgeries. Additionally, the employer contended that given the passage of time from the original injury in 1998 and the claim for reinstatement in 2003, it was reasonable for it to contest the causal relationship issue.
The Court concluded that while the initial burden was on the claimant in her reinstatement petition to prove her work-related disability continued, once successful, the burden then shifted to the employer to prove a reasonable contest. This burden requires the employer to establish that a conflict in the evidence existed or that contrary inferences could be drawn from the evidence. Instead, the employer chose to argue only that a negative inference should have been made against the claimant, as she did not present the treating surgeon. The Court determined, that making such an inference was improper, further stating that "[n]o case law or statute required [c]laimant to produce testimony of her treating surgeon to meet her burden in the reinstatement proceeding." Accordingly, the Court concluded that the employer's contest was not reasonable and reversed and remanded to the Board for the calculation of legal fees.
Conclusion: This ruling reinforces the policy of Section 440 of the Act to presume that a claimant is entitled to legal fees unless the record adequately supports a conclusion that the employer had a reasonable basis for contesting liability. The problem in the instant matter was that employer chose not to produce any evidence. In failing to present any evidence, the employer did not satisfy its burden of proving a reasonable contest.
Ragno v. WCAB (City of Philadelphia), No. 924 C.D. 2006, (Filed January 16, 2007).
Issue: Whether a Petition for Reinstatement is barred by collateral estoppel if it follows a prior determination that a claimant had voluntarily left the labor market?
Answer: The claimant was barred by the principle of collateral estoppel from relitigating any issues regarding retirement.
Analysis: Claimant, who worked as a firefighter for the City of Philadelphia, suffered a work-related back injury in August 1986. Many years later, the WCJ granted Defendant's Petition for Suspension effective August 28, 1997, the date on which the claimant voluntarily removed himself from the workforce.
Claimant later filed a Petition to Reinstate benefits as of January 1, 2002, contending his work-related injury caused decreased earning power. The WCJ granted the Reinstatement Petition, accepting claimant's testimony that he continued to search for employment despite the finding in the prior litigation that he voluntarily retired from employment as of August 28, 1997. Employer appealed to the Board, which reversed, specifically finding that claimant's contention that he had continued to look for work was an attempt to relitigate a prior determination.
Claimant appealed to the Commonwealth Court, contending that the Board had effectively determined that a voluntary retirement may never be undone, even where a claimant is actively looking for work. The Court, however, determined that it first must address whether the issue of claimant's retirement was previously litigated in the earlier proceeding and, thus, barred by the doctrine of collateral estoppel.
As is well-settled, collateral estoppel applies when:
- the issue decided in the earlier case is identical to the one presented in the later action;
- there was a final judgment on the merits in the earlier action;
- the party against whom the plea is asserted was a party, or in privity with a party to an earlier adjudication;
- the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior action; and
- the determination in the prior proceeding was essential to the judgment. Cohn v. WCAB (City of Philadelphia), 909 A.2d 1261, 1264(Pa. 2006).
In this case, the Court determined that each of the criteria was met in order to satisfy the requirements for the application of collateral estoppel. While the Court acknowledged that benefits may continue following retirement, a claimant must show that he is seeking employment after retirement or that he was forced into retirement because of his work-related injury. SEPTA v. WCAB(Henderson), 669 A.2d 911(Pa. 1995). Here, Claimant had the opportunity to prove in the modification/suspension proceeding that he was forced out of the entire labor market, as required by County of Allegheny Department of Public Works v. WCAB(Weis), 872 A.2d 263(Pa.Cmwth. 2005), but he failed to do so. Therefore, the Court found that collateral estoppel precluded the claimant from relitigating the issue of voluntary retirement and affirmed the decision of the Board on appeal.
Conclusion: Where there has been a judicial determination that a claimant has voluntarily left the labor market, such a finding prevents a claimant from later contending otherwise in subsequent litigation.
Bucks County Community College v. WCAB (Nemes, Jr.), No. 950 C.D. 2006 (Filed February 12, 2007).
Issue: Whether a Utilization Review Determination is rendered invalid if the Report discusses the treatment provided by another physician associated with the same medical practice as the provider identified in the employer's Utilization Review Request Form?
Answer: Yes.
Analysis: Claimant suffered a work injury to his neck and back on August 17, 2001. In September 2004, Employer filed a Utilization Review request seeking a review of the reasonableness and necessity of all medical treatment provided to Claimant by Daniel Files, D.O. with the following notation: "and all other providers under the same license & specialty." The URO reviewer, Andrew A. Badulak, D.O., submitted a Report noting that the records from Dr. Files included an October 1, 2001 transcribed narrative report and handwritten notes from Dr. Files' colleague, Dr. Thomas Mercora from July 16, 2004 through October 22, 2004. Dr. Badulak confirmed via telephone that all of Claimant's care since July 16, 2004 had been provided by Dr Mercora. Dr. Badulak determined that Claimant's treatment from that date was unreasonable and unnecessary in part. Thereafter, Claimant filed a Petition to Review the UR Determination.
The WCJ found that Employer had sought review of Dr. Files' treatment and that the UR did not discuss such treatment; therefore, the UR Determination was invalid and irrelevant. Because the Determination was invalid, Employer could not meet its burden on the Petition to Review UR. Employer appealed to the WCAB, alleging that Mr. Mercora's treatment was properly reviewed because he was a provider of the same license and specialty, and in fact, was in the same practice as Dr. Files. The WCAB rejected Employer's argument, citing the Bureau UR Request Form, which specifically states that the provider under review must be an individual, not a hospital, corporation or group.
The Commonwealth Court affirmed the WCAB's decision. Despite the fact that Dr. Files and Dr. Mercora were in the same medical practice, that they both treated Claimant, and that they specialize in the same area of medicine, the Court cited the humanitarian nature of the Act and the fact that the UR Provider "under review" had to be an individual and not a group.
Conclusion: In essence, the Court is citing interpretive principles and using strict construction of the Form's language to avoid expanding the "Provider Under Review" section beyond an individual doctor. All claims professionals should be careful to list the specific provider under review.
Lori Newhart Costello & Joseph Costello (Dec'd) v. WCAB (Kinsley Construction, Inc.), No. 831 C.D. 2006 (Filed February 13, 2007).
Issue: In light of contradicting case law and legislative directives, on what date are common law marriages within the Commonwealth abolished for purposes of a Workers' Compensation Claim?
Answer: Marriages entered into after January 1, 2005.
Analysis: Claimant's common-law husband died in a June 28, 2004 work accident, which resulted in the instant Fatal Claim Petition. The evidence established that Claimant and her husband created an otherwise valid common law marriage on November 26, 2003. Common Law marriage had been presumably judicially abolished in PNC Bank v. WCAB (Stamos), 831 A.2d 1269 (Pa.Cmwlth. 2003), which stated that marriages entered into after September 17, 2003 were invalid. However, the Pennsylvania Supreme Court had addressed the issue five (5) years earlier in Staudenmayer v. Staudenmayer, 552 Pa. 253, 714 A.2d 1016 (1998), and had expressly declined to abolish common law marriage. On November 24, 2004, the Legislature enacted Act 144, amending Section 1103 of the Marriage Law to provide that no common law marriages contracted after January 1, 2005 were valid. The statute noted, "Nothing in this part shall be deemed or taken to render any common law marriage otherwise lawful and contracted on or before January 1, 2005, invalid."
Employer's position was that the language "otherwise lawful" was intended to reference the Commonwealth Court's decision in PNC Bank, holding all marriages after September 17, 2003 invalid. The Court disagreed, noting that the Legislature was aware of the Court's decision in PNC Bank, yet chose to defer the date of abolition to January 1, 2005 to provide sufficient notice. The Court notes that where language of a statutory amendment is clear and explicit such law superceded inconsistence common law (i.e. the conflicting opinions of PNC Bank and Staudenmayer).
Conclusion: The Commonwealth Court clarified what had been an otherwise gray area in the realm of common law marriage. Prior to this decision, common law marriages contracted between September 17, 2003 and January 1, 2005 could be argued effectively as either valid or invalid. The Court expressly endorsed Act 144 as superseding PNC Bank, setting a date certain of January 1, 2005 as the effective date for the abolishment of common law marriage.
William Miller v. W.C.A.B. (Pavek, Inc.), No. 758 C.D. 2006 (Filed March 7, 2007).
Issue: Whether claimant established he had a protected property right to medical benefits when the URO determined medical benefits were unreasonable and unnecessary based on the medical provider's failure to provide requested medical records?
Answer: No.
Analysis: The claimant asserted that the application of the holding in County of Allegheny v. W.C.A.B. (Geisler), 875 A.2d 1222, 1228 (Pa. Cmwlth. 2005), violated his due process rights because it deprived him of a protected property interest. Geisler held that if a treatment is deemed to be unreasonable and unnecessary because the provider fails to provide the requested medical records, then the WCJ lacks jurisdiction to determine the reasonableness and necessity of medical treatment.
Here, the employer requested the Bureau to assign an authorized URO to review the reasonableness and necessity of all treatment provided to claimant by William A. Rolle, M.D. and all similar providers in his practice. The Bureau assigned KVS Consulting Services as the URO, who determined the medical care was not reasonable and necessary based on the provider's failure to supply the medical records. The WCJ relied on Geisler and denied claimant's petition. However, the WCJ also commented that the holding in Geisler was contrary to the Due Process Clause of the 14th Amendment, but that he lacked authority to issue a contrary ruling. The Board affirmed the WCJ's Decision.
The Commonwealth Court determined that claimant was not deprived of a protected property interest, because he was only entitled to medical benefits for reasonable and necessary medical treatment. Although the Court dismissed claimant's due process claim since he could not establish a property right in this case, the Court did not reach the question of whether the decision in Geisler deprived claimant of a protected interest, or whether the alleged deprivation occurred with due process of law.
Conclusion: In order for claimant to be entitled to a protected Workers' Compensation property interest, he must not only establish the employer's liability, but also the employer's obligation to pay reasonable and necessary medical benefits. Claimant could not establish the reasonableness and necessity in this case, but the Commonwealth Court left open the question of whether claimant was deprived of his due process of law under the Geisler ruling.
G. Jordan v. W.C.A.B. (Phila. Newspapers, Inc.), No. 340 and 420 C.D. 2006 (Filed March 28, 2007).
Issue: Whether an insurer who utilizes a Notice of Compensation Denial (NCD) instead of a Medical Only Notice of Compensation Payable (NCP) form, although recognizing claimant sustained a work-related injury, can be penalized?
Answer: Yes, but this case did not involve a medical only claim, so the issue is still uncertain.
Analysis: In this case, claimant filed a Penalty Petition alleging the employer violated the Act when it failed to issue an NCP within 21 days of claimant's injury, since the employer admitted in the NCD that claimant sustained a work injury. Claimant's injuries were initially accepted through the issuance of a Temporary Notice of Compensation Payable (TNCP). A month later, the employer issued an NCD, with a Notice Stopping Compensation Payable admitting claimant sustained a work injury (without a description of injury) from 5/22/03 through 7/11/03, however, checked Box 6 on the form which stated denial of compensation for other good cause. The reason stated was that the employer continued to pay claimant his salary during that time period, so no Workers' Compensation benefits were technically paid. On or about 9/24/03, claimant went out of work, and claimant requested a reinstatement of benefits along with a request for penalties and unreasonable contest.
The Court granted claimant's Petition for Penalties, opining that although claimant received a salary continuation, he still sustained a work injury. The Court determined that Section 406.1(a) of the Act, 77 P.S. §717.1(a), applies not only to disabled employees who have suffered loss of earning power due to a work-related injury, but also to injured employees. Under the Court's rationale, an injury was accepted by the employer and the only reason the injury did not result in disability was claimant's use of his salary continuation benefits. Therefore, the Court penalized the employer because the employer failed to issue an NCP, resulting in a significant delay before claimant's work-injury was recognized, claimant was forced to file a claim petition, rather than defend a termination or suspension petition. The Court stated that the employer should have filed an NCP with a Notice of Suspension (somewhat strange commentary since the simultaneous filing of these documents is usually rejected by the Bureau). Also, the Court affirmed the granting of unreasonable contest attorneys fees, reasoning that under Waldemeer Park, Inc. v. W.C.A.B. (Morrison), 819 A.2d 164 (Pa. Cmwlth. 2003), where there was a medical claim only and the employer did not issue an NCP although aware of the work injury, the claimant had to undergo unreasonable additional litigation.
Conclusion: The problem with this case, is that although the case is not a medical only claim, the Court awarded penalties and used language which arguably suggests that a Medical Only NCP should be filed rather than an NCD, in a medical only claim. How to handle these claims continues to be a business decision, but there is at least the possibility for a penalty if a Medical Only NCP is not utilized. Unfortunately, in this case, the Court did not address the question about what happens to medical only claims that become lost time claims as we have always feared the potential different treatment of these claims depending on whether an NCD or NCP was utilized. Keep in mind that if your company decides to continue to use NCDs for medical only claims, make sure to check box #s 4 and 6 and describe the accepted injury in box #6. Importantly, this case also confirms that TNCPs can be utilized for compensable injuries, something that some Judges have frowned upon. The Court suggests an NCP with a Notice of Suspension, and perhaps in light of this case, the Bureau will now stop rejecting these documents when simultaneously filed. The employer here has filed for re-argument before the Commonwealth Court on April 6, 2007, however, the Court has not ruled on the Motion.