Today, the Supreme Court issued a much anticipated decision in the Protz case. The Court has invalidated the entire IRE provision of the Act, Section 306 (a.2), as unconstitutional. The Court determined that the IRE process, as drafted, constitutes a delegation of legislative authority to a private entity (the American Medical Association) without sufficient guidance or restraint on the authority delegated and therefore violated the Pennsylvania Constitution. Because the unconstitutional language concerning the "most recent edition" of the AMA Guides could not be severed without rendering the remainder of Section 306(a.2) incomprehensible, the Court ruled that the entire Section has to be stricken from the Act. This means that even IREs conducted using 4th Edition Guides will be invalid. Therefore the Court reversed the remand ordered by the Commonwealth Court in Protz to conduct an IRE using the 4th Edition Guides.
While the full implications of this decision are still being sorted out, in part, because the Supreme Court was silent on the retroactive application of this change in the law to previously decided matters, it is clear that the current IRE process is no longer available. Therefore the following actions should be considered:
There are many complicated issues yet to be resolved as a result of the Supreme Court's action and we are evaluating them. We will follow up with a more detailed alert as well as a webinar on this topic early next week.
Comment: The Protz ruling removes a very important tool to control indemnity exposure and position ongoing claims for settlement. Whether the legislature attempts to replace this with a new statutory provision remains to be seen but it will certainly not be any time soon. In the meantime, workers' compensation employers and insurers will need guidance to navigate this new legal environment.
For more information, please contact Peter J. Weber at firstname.lastname@example.org or 215.972.7901, or Stephen T. Potako at email@example.com or 267.765.4132.
Jennifer R. Williams