August 06, 2008 - Pennsylvania Workers' Compensation Update - 2nd Quarter '08
DIEHL UPDATE
Diehl v. WCAB (IA Construction and Liberty Mutual Insurance), No. 1507 C.D. 2007 (Order June 24, 2008)
As reported by email on June 24, 2008, the Commonwealth Court has Vacated its Order of April 28, 2008 and granted re-argument. Modifications based upon IRE's requested after the sixty day period following claimant's receipt of 104 weeks of TTD may proceed without a showing of job availability. As previously reported, our firm has been retained to represent the Employer/Insurer in all future aspects of this case. Reargument has been scheduled for August 15, 2008.
COMMONWEALTH COURT CASES
Melmark Home v. WCAB (Rosenberg), No. 899 C.D. 2007, (filed April 2, 2008)
Issue: Whether the Notice of Ability to Return to Work must be issued within 30 days of when the employer receives medical evidence that claimant is capable of performing some work?
Answer: No.
Analysis: Claimant, a nurse, sustained a low back strain on November 13, 2004, recognized via NCP. On April 3, 2004 Employer filed a Modification Petition based upon a Labor Market Survey. In her answer, Claimant asserted that the Notice of Ability to Return to Work was not promptly issued.
At the first hearing, Claimant moved to dismiss on the basis that the Notice was not promptly issued. The Notice issued November 29, 2005 was based upon a June 16, 2005 medical report. The WCJ granted the Motion to Dismiss, holding that in order to be "prompt", the Notice must be issued within 30 days of receipt of medical evidence showing claimant is able to return to work.
Employer appealed and the Board Affirmed.
The Commonwealth Court reversed and remanded. The Court rejected the imposition of the thirty day requirement. Rather, the Court held that the Notice must be issued within a reasonable time after the medical evidence is received, and further that the employer must give the claimant a reasonable time after the issuance of the Notice before acting upon that information.
Conclusion: The key inquiry will be whether the timing of the issuance of the Notice prejudiced the claimant and this issue is to be determined on a case-by-case basis. This is a helpful decision since the imposition of a thirty day requirement would have been detrimental to the defense community.
City of Philadelphia v. WCAB (Calderazzo), No. 1817 C.C. 2007 (Filed April 15, 2008)
Issue: Whether an Employer can use a Utilization Review Determination finding prescriptions unreasonable and unnecessary at some point in the future to stop paying for those medications at a point beyond the time provided for in the Utilization Review Determination?
Answer: No.
Analysis: Employer was injured in December 1995 and although an NCP was not issued, Employer acknowledged the injury and paid workers' compensation benefits. In July 2000, Employer filed a UR request regarding the treatment of William J. Artz, DO for the period of May 22, 1996 to July 5, 2000. The UR Determination found the treatment reasonable for re-evaluations every 6 to 12 weeks with prescription renewals for a period of one year. Neither party appealed.
In July 2003 Employer ceased payment for prescriptions and Clamant filed a Petition to Review Medical Treatment in January 2004. Employer argued Claimant was estopped from seeking review of payment of the prescriptions since the prior UR Determination only found prescription renewals reasonable for one year. The WCJ granted the Petition, holding that the Claimant was not estopped. The WCJ found that the Employer continued paying for the prescriptions for a period of time beyond the expiration of the one year period and that the UR exceeded its authority in speculating as to the necessity of prescription medications twelve months into the future. The WCJ also noted that the scope of review of the UR was limited to the period of May 1996 through July 2000 and therefore the Employer was required to obtain a new UR to stop payment for prescriptions in 2003.
The Board Affirmed.
The Commonwealth Court affirmed noting that the UR Determination concerned only the reasonableness and necessity of prescriptions as of July 2000 whereas the Petition concerned the nonpayment of medical bills after July 2003.
Conclusion: The Commonwealth Court has concluded that in this case, the UR Determination that treatment will become not reasonable and not necessary at some point in the future was not sufficient to stop payment for that treatment. We suggest reviewing all UR Determinations carefully as sometimes future care may properly be denied. In our view, claimant should have filed an appeal of the WCJ's Decision if claimant felt aggrieved by the UR Determination.
City of Philadelphia v. WCAB (Andrews), No. 1915 C.D. 2007, (filed May 12, 2008)
Issue: Whether Employer is entitled to a pension offset when an injured worker begins receiving a service-connected disability pension for injuries post-Act 57?
Answer: Yes, if evidence of employer funding of the plan is sufficient.
Analysis: Prior to the effective date of Act 57, Employers were entitled to offset a claimant's workers' compensation if claimant received a service-connected disability pension. In order to receive this offset pre-Act 57, the Employer had to establish that the disability pension was an accrued entitlement that had been built up as a result of services for the employer, and that it represented deferred compensation, or payments in relief of inability to work.
However, Act 57 provides that a pension is credited against a workers' compensation award to the extent funded by the employer directly liable for the payment of compensation. Regulations were enacted to provide for offsets when dealing with defined-contribution plans and defined-benefit plans. For both plans, employer bears the burden of proving the extent it funded the pension plan in question. Therefore, the regulations and case law state that the Employer may take a credit for Claimant's receipt of pension benefits for either type of plan to the extent that it funded those benefits. The right to a credit no longer turns on whether the pension constitutes payments in lieu of compensation when dealing with an injury after Act 57 became effective.
In the instant case, the Employer failed to present evidence concerning the extent to which Employer funded Claimant's pension in order to determine the appropriate amount for an offset. Therefore, Employer was not entitled to a credit because it failed to present evidence concerning the funding of claimant's pension as dictated by Act 57 regulations.
Conclusion: For injuries sustained post Act 57, in order to receive a credit for pension benefits paid to Claimant, Employer must present evidence concerning the extent Employer funded the plan, regardless of whether the pension is a deferred benefit plan, a deferred contribution plan, or some form of service connected disability pension. Typically, actuarial testimony is required to meet this burden.
The Pennsylvania State University/The PMA Insurance Group v. WCAB (Hensal), No. 1942 C.D. 2007, (Filed May 19, 2008)
Issue: Whether a Claimant can defeat a Petition for Suspension based on voluntary removal from the workforce by testifying that he is searching the Internet and the newspaper for jobs?
Answer: No.
Analysis: Employer initially succeeded on a Modification Petition based upon work generally available to Claimant. Employer subsequently filed a Suspension Petition alleging that Claimant had voluntarily withdrawn from the workforce.
In opposition to this petition, Claimant testified that he was registered with Career Link, went to Career Link's website and other websites to search for jobs, and checked newspaper ads. Claimant admitted that he did not have any documentation to confirm that he was searching for employment or copies of any job applications that he submitted. Claimant indicated that he had inquired about a position with a local driver's license center two weeks prior to the hearing.
The Court held that in order to show that he was actively seeking employment, claimant had to show he was engaged in a good faith job search. The Court held that searching the Internet and newspaper ads, without more, does not constitute a good faith job search. The Court further held that in order to show a good faith effort, claimant has to show that he applied or sent applications for employment. Because claimant did not do this, Employer was entitled to a suspension of benefits.
Conclusion: In a Petition for Suspension where employer alleges that claimant has removed himself from the workforce, it is Claimant's burden to establish that he has made a good faith effort to seek employment by showing job applications or other indicia that he was actively applying for work.
Stout v. WCAB (Pennsbury Excavating, Inc.), No. 1969 C.D. 2007 (Filed May 22, 2008)
Issue: Whether employer/insurer is entitled to subrogation against claimant's third party recovery when claimant has filed a civil action alleging employer/insurer acted in bad faith in order to subvert claimant's third party recovery?
Answer: Yes. The mere filing of a civil abuse of process claim does not extinguish employer/insurer's right to subrogation.
Analysis: Claimant was injured when a large piece of concrete fell from a crusher's conveyor belt and struck him in the head. Employer accepted liability via NCP. Claimant subsequently filed a products liability action against the manufacturer of the crusher, an employment service, and the owner of the crusher. Claimant recovered against all defendants. Claimant subsequently filed an abuse of process action against Insurer and Employer.
Employer filed a Review Petition seeking to enforce its subrogation rights. The WCJ granted the petition finding no factual dispute that claimant received workers' compensation benefits and received a third party recovery for the same injury.
The Board affirmed.
The Commonwealth Court affirmed. In so doing, the Court made sweeping statements regarding the virtual absolute right to subrogation of an Employer. However, the Court noted that Claimant failed to introduce evidence of deliberate bad faith conduct by the Employer/Insurer.
Conclusion: Although the Employer's right to subrogation against a third party recovery is virtually absolute, clear evidence of bad faith conduct to subvert claimant's third party recovery can extinguish that right. Therefore, the Employer/Insurer should not assist the third party defendants and should provide lien information to the third party attorney when it is requested.
Jonel Witherspoon Watson v. WCAB (Special People in Northeast), No. 1924 C.D. 2007, (Filed May 30, 2008)
Issue: Whether Claimant's counsel is entitled reimbursement of litigation costs when the Claim Petition is granted as to the injury but not as to disability and the Employer acknowledged the injury but challenged disability?
Answer: No.
Analysis: Claimant filed her Claim Petition less than two weeks after the work injury, alleging ongoing disability from an incident where she was struck on the head by a chair. Employer, through counsel, filed an answer admitting Claimant suffered a head injury and agreed to pay medical benefits but denied that Claimant was disabled as a result of this injury.
The WCJ found that Claimant suffered a work injury and was capable of returning to work within three days. The WCJ awarded claimant's counsel reimbursement of his litigation costs because the WCJ granted the Claim Petition. It affirmed in all other respects.
Both parties appealed. The Board reversed on the award of litigation costs, finding that Claimant was not successful in any aspect of the Claim Petition. It affirmed in all other respects.
On appeal to the Commonwealth Court, Claimant, in an effort to get around the WCAB's determination that claimant did not succeed in any aspect of the claim, argued that he was successful in establishing Claimant's work injury was a head concussion rather than a head contusion and that therefore his costs should have been reimbursed. The Court rejected this argument, finding the medical evidence was indistinguishable, the treatment the same, and that Claimant received no financial benefit from the change of the injury description.
Conclusion: Employer's admission in its answer of a work injury and its acknowledgement of responsibility for medical expenses saved Employer the expense of litigation costs. This case highlights the importance of filing a proper answer. If counsel had filed a "general denial", claimant's counsel would have been successful in having his costs reimbursed.
Paul v. WCAB (Integrated health Services), No. 16 C.D. 2008 (Filed June 11, 2008)
Issue: Whether an employer must show a "change in condition" to succeed on an initial termination petition?
Answer: No.
Analysis: In the case of Lewis v WCAB (Giles & Ransome, Inc.), 919 A.2d (Pa 2007), and as reported in our 2nd Q 2007 update, the PA Supreme Court concluded that an employer must establish a change in condition in order to be successful in a petition following a Judge's Decision. In this case, the Claimant tried to expand the Lewis holding to include standard first level petitions.
In Paul, Employer accepted claimant's work injuries via Notice of Compensation Payable which identified the injuries as left ankle, left wrist, left thigh and right knee contusion. Employer subsequently filed a Termination Petition alleging full recovery based upon the IME of Dr. Agnew. Claimant testified that she continued to have problems with her left wrist and right knee.
The WCJ granted the Termination Petition, finding the testimony of Dr. Agnew credible that claimant had fully recovered. Claimant appealed, arguing that Lewis required that the Employer establish a change in condition and asserting that Employer did not do so in this case.
The Board affirmed.
The Commonwealth Court also affirmed. In so doing the Court held that Lewis did not apply to an initial termination petition but rather was limited to situations where the nature of the injuries and disability had been the subject of prior litigation. The Court noted that because there had been no prior adjudication regarding the nature of the injury or the disability status of Claimant, there was no baseline for the employer to establish a change in condition but rather the issue was whether the disability had ceased or was now related to a condition separate and apart from the work injury.
Conclusion: Lewis does not apply to initial proceedings. However, if prior litigation has occurred, it is essential that the medical expert testify to a change in condition from the prior decision, and it is crucial that the IME letter be properly worded so that the IME physician takes into consideration the prior litigation findings.