October 31, 2008 - Pennsylvania Workers' Compensation Update - 3rd Quarter '08
COMMONWEALTH COURT CASES
HCR ManorCare v. WCAB (Bollman), 2320 C.D. 2007 (Filed July 2, 2008).
Issue: Whether a WCJ has jurisdiction to determine if a URO complied with the requirements to obtain medical records?
Answer: Yes.
Analysis: The Employer filed a request for Utilization Review for the treatment rendered by Dr. LoDico. The request was assigned to a URO. Dr. LoDico submitted his records but did not return the verification form which he argued was not provided by the URO. Because the verification form was not returned, the URO did not provide the records to the reviewer but rather returned them to the provider. Therefore, the reviewer determined the treatment was not reasonable and necessary. Claimant filed a Petition to Review Utilization Review Determination.
The WCJ found that the records were supplied and ordered the request re-assigned to the URO for a complete review. Both parties appealed.
The WCAB affirmed.
The Commonwealth Court affirmed finding that although the WCJ does not have jurisdiction to review the merits of the Utilization Review Determination when the records have not been supplied, the WCJ does have jurisdiction to determine if the request for records and the verification form were properly undertaken by the URO.
Conclusion: A WCJ has jurisdiction to determine if the URO has properly perfected its request for records from the provider under review and, if the WCJ determines that there was a defect in the process, to re-assign the matter to the URO for further review.
William Gorman v. WCAB (Kirkwood Construction), 1926 C.D. 2007, (Filed July 9, 2008).
Issue: Does an employer who enters into a Compromise and Release Agreement, which indicates that there is no lien or potential lien for subrogation, waive its right to subrogate against a third party action that arose after the execution and approval of the Compromise and Release Agreement?
Answer: No.
Analysis: In 2000, Claimant sustained a work injury when a nail from a nail gun struck him in the eye. Employer issued an NCP and Claimant was paid benefits until his return to work. In 2001, Claimant filed a claim petition alleging loss of his eye and disfigurement benefits which was resolved via C&R.
In the C&R, the parties checked the box indicating that there was no lien or potential lien for subrogation rights under Section 319 of the Act. Several years later, Claimant recovered on a third party case filed after the C&R had been approved. Employer filed a Review Petition to subrogate against the third party recovery.
Both Claimant and Employer testified that no third party action was contemplated at the time of the C&R. The WCJ credited this testimony and found that when the parties indicated that there was no potential lien in the C&R, it constituted a mutual mistake. Therefore, the WCJ set aside the C&R.
Both parties appealed. The WCAB found that the C&R was not a mutual mistake as neither party contemplated a third party action at the time. The WCAB further found that the Employer had not waived its right to subrogation.
Claimant appealed. The Commonwealth Court found that although an employer can waive its right to subrogation, no waiver occurred in this matter. The Court reasoned that because neither party contemplated the third party action at the time of the C&R, the Employer could not have waived its right to subrogate.
Conclusion: The Court found that no waiver existed under these facts since neither party contemplated a third party action at the time of the C&R. The determination likely would have been different had the third party action been filed prior to the C&R. We always recommend that you assert a subrogation lien on the C&R Agreement as a precaution even if there is no known third party action.
Allegheny Power Services Corporation and Acordia Employer Services, Inc., v. WCAB (Cockroft), 242 C.D. 2007 (Filed July 22, 2008).
Issue: Whether a claimant who sustains a bilateral loss under Section 306(c)(23) of the Act (multiple amputations) is entitled to total disability benefits despite his return to work in a modified duty position?
Answer: Yes.
Analysis: In 1995, Claimant sustained severe electrical burns to both arms resulting in a below the elbow amputation of his right arm and multiple amputations of the fingers on the left. Pursuant to an NCP, Claimant received total disability benefits from January of 1995 through May of 1997. In May of 1997, Claimant returned to work in a modified duty position and Employer suspended benefits.
The WCJ found that the matter was governed by Section 306(c)(23), which creates a statutory presumption of total disability for individuals who sustain bilateral losses unless the Board shall otherwise determine. Therefore, the WCJ reinstated Claimant’s benefits.
The Employer then filed a Modification Petition. The WCJ rejected Employer’s evidence that Claimant could use his upper extremities to drive a car or use a telephone with modification and that the there was employment available to Claimant. Claimant had returned to work with the time of injury Employer in a created position; however, Claimant’s vocational expert testified that if Claimant were not employed in that position he would be unemployable. The WCJ found that Claimant remained totally disabled under Section 306(c)(23) of the Act and concluded that the Employer was not entitled to a credit for Claimant’s post-injury earnings.
Employer appealed and the WCAB affirmed. The WCAB concluded that a claimant’s earning power is not appropriately considered in awards rendered under section 306(c)(23) of the Act (bilateral loss).
On appeal to the Commonwealth Court, the Employer argued that the WCAB erred in interpreting Section 306(c)(23) of the Act to mandate the award of total disability benefits without regard to evidence of Claimant’s post-injury earning power. The Commonwealth Court disagreed, finding that while Section 306(c)(23) of the Act stated that awards “are to be compensated” according to section 306(a) of the Act (total disability section), the legislature did not intend to transform the award into something other than what is specified in section 306(c) (specific loss section). The Court further held that the right to compensation under Section 306(c) is measured by the extent of the injury regardless of the degree of disability. The Court found that the WCAB has discretionary authority under Section 306(c)(23) to determine that a claimant is totally disabled without regard to his earning capacity.
Judge Friedman, in an artfully worded dissent, disagreed and explained that it was inappropriate for someone who is working to receive total disability benefits even if that person sustained bilateral losses. Perhaps this issue will go to the Pennsylvania Supreme Court.
Conclusion: Fortunately, this situation does not occur often, but a claimant who sustains a bilateral loss under Section 306(c)(23) of the Act is entitled to a presumption that he is totally disabled, unless the WCAB finds that the claimant is not totally disabled. The WCAB need not consider the claimant’s earning capacity or even the claimant’s earnings. The WCAB and not the WCJ has the authority in this type of case.
Christopher Combine v. WCAB (National Fuel Gas Distribution Corporation), No. 539 C.D. 2008 (Filed August 14, 2008)
Issue: Does the Act require an IRE physician to determine that an injured worker is at maximum medical Improvement (MMI) as a prerequisite to calculating the worker’s impairment rating?
Answer: Yes.
Analysis: Employer filed a Modification Petition seeking to change Claimant’s disability status from total to partial disability based upon an IRE finding of twenty percent (20%) impairment. Claimant challenged the change in status on the basis that he had not reached maximum medical improvement (MMI).
The WCJ rejected Claimant’s argument and granted the petition. Claimant appealed. The WCAB Affirmed.
The Commonwealth Court reversed, holding that Section 306(a.2) of the Act requires that a claimant reach MMI before his impairment rating can be calculated. The Court noted that the IRE was not permitted prior to expiration of 104 weeks of benefits to allow for MMI and that only permanent impairment may be rated according to the American Medical Association “Guide to the Evaluation of Permanent Impairment.” Since the IRE physician in this case admitted that he would have conducted a different examination to determine MMI, the Court held that the finding of twenty percent impairment was invalid because there was no initial finding of MMI.
Conclusion: Although the IRE physician need not use magic language, “maximum medical improvement”, the opinion taken as a whole must establish that the claimant has reached maximum medical improvement in order for the impairment rating to be valid. The opinion of MMI is not required as a pre-requisite to obtaining the IRE; it is only a prerequisite to modifying claimant’s status from total to partial. Be careful of this distinction as claimants’ attorneys often try to block an IRE on the basis that there has not yet been a medical opinion of MMI. The question of MMI is for the IRE physician to determine. Your letter to the IRE physician should specifically request the physician to ascertain MMI.
Lori Jamison v. WCAB(Gallagher Home Health Services), 399 C.D. 2008 (Filed August 19, 2008)
Issue: Whether an employee who works for multiple employers and drives as part of her employment with each can be designated a “traveling employee” as to any employer?
Answer: Yes.
Analysis: Claimant was employed by Gallagher Home Health Services (GHHS) as a home health aide and traveled to between one and eight residences per day in that capacity. She was also employed by two other employers who also required driving. She could work and travel for all three employers in a single day. Claimant did not typically report to GHHS before going to her first client and typically prepared all paperwork from home. GHHS reimbursed claimant for mileage, but not the mileage from her home to the first GHHS client.
While traveling from her home to the first GHHS client, Claimant was involved in an auto accident and injured. She filed a Claim Petition alleging she was a traveling employee of GHHS. GHHS denied that Claimant was in the course and scope of her employment at the time of the injury.
The WCJ denied the Claim Petition reasoning that claimant was not a traveling employee because on any given day she could be working for any one of, or all three of, her employers. As a result, the WCJ found that Claimant’s injury occurred during her commute from home to the first GHHS client of that day. The WCAB affirmed.
The Commonwealth Court reversed. The Court stated that the inquiry must be whether the job in question required travel and whether the Claimant had a fixed place of work. Because the Court found that Claimant was a traveling employee for GHHS, Claimant’s injury was in the course and scope of her employment. The Court rejected the WCJ’s critical finding that Claimant could not be a traveling employee for GHHS when Claimant worked for three different employers and could be working for any one or all three on any given day.
Conclusion: An employee may be deemed a traveling employee of one employer even if employed by multiple employers who require travel for each job. If an employee is deemed a traveling employee, then the burden is on the employer to establish that the traveling employee has abandoned the business of the employer to take the case out of the course and scope of employment. This is a very difficult burden. This issue will surface more given that more employees are telecommuting.
Scott v. WCAB (Ames True Temper, Inc.), 647 C.D. 2008 (Filed September 29, 2008)
Issue: Whether violation of a safety rule can be used as a violation of positive work order defense?
Answer: Not in this case and not in any case unless claimant is involved in an activity that is disconnected with his job duties.
Analysis: Claimant, a machine operator, sought benefits for specific loss of his right index finger that he sustained while attempting to un-jam his machine. Employer did not deny that Claimant was permitted to un-jam his machine but rather alleged that his method of un-jamming the machine violated the established safety rules and therefore was in violation of a positive work order. The WCJ denied the claim petition on the grounds that Claimant violated a positive work order. The WCAB affirmed.
The Commonwealth Court reversed. The Court reasoned that in order for an employer to establish that claimant violated a positive work order, it must establish that (1) the employee violated a work rule and (2) that the rule implicated an activity not connected with the employee’s job duties. Because Claimant’s job duties involved the un-jamming of his machine in order to complete his work, the Court found that Employer could not meet the second prong of this two-pronged burden above.
Conclusion: Although the Commonwealth Court’s decision is frustrating, it nevertheless recites the current status of the positive work order law in Pennsylvania. A mere violation of a positive work order or safety rule, without more, will typically not preclude an award of benefits unless the employer can establish that the claimant’s actions were so disconnected with the employee’s work duties such that the employee is considered, at the time of injury, to be a mere trespasser. This is a very difficult burden on employers.
Editor
Co-Editor
Contributing Authors
Matthew Esslinger, Esq. | Frederick T. Lachat, III, Esq. | Lori A. DePolis, Esq.