Insurer must show change in condition since prior disability adjudication before filing a subsequent petition seeking a reduction in disability status

The Supreme Court issued a decision in Lewis v. W.C.A.B. (Giles & Ransome, Inc), No. 6 EAP 2006, which has an impact on an insurer’s ability to file Termination or Modifications Petitions once a disability determination has been issued on a prior petition.

In Lewis, insurer had filed three Termination Petitions, all of which had been denied. Insurer filed its fourth Termination Petition three days after the Appeal Board had affirmed the dismissal of its third termination petition. The WCJ granted the fourth Termination Petition and the Appeal Board affirmed as did Commonwealth Court.

Meanwhile, the Supreme Court decided to review the matter to determine if an insurer must demonstrate a change in a claimant’s physical condition since the prior disability adjudication in order to bring a later Termination or Modification petition alleging a decrease in physical disability.

In addressing the issue, the Court noted that according to Section 413(a) of the Act, 77 P.S. §772 a WCJ may modify or terminate benefits when it has been demonstrated that the claimant’s disability has changed, i.e. increased, decreased, recurred or has temporarily or finally ceased. The Court went on to hold that when there have been prior petitions to modify or terminate that were fully litigated, the insurer must demonstrate a change in the claimant’s physical condition since the last disability adjudication before filing additional petitions to modify or terminate.

In Lewis, the Supreme Court determined that insurer’s medical expert agreed that claimant was in the same condition and suffering from the same disorders that the same doctor had diagnosed during a previous exam. The Court concluded that because insurer’s medical expert merely tried to re-characterize the cause of the conditions, the insurer failed to demonstrate a change in the claimant’s physical condition since the last disability determination. Therefore, the Termination Petition was dismissed.

The Court’s ruling in Lewis makes it clear that serial Termination or Modification Petitions can not be filed unless there is proof of a change in a claimant’s physical condition. What that change in physical condition is, will depend upon the circumstances of each claim.

Insurer’s issuance of a Notice of Denial and Notice Stopping of Temporary Compensation when aware that claimant had compensable injury, justification for 50% penalty

Claimant in Jordan v. W.C.A.B. (Philadelphia Newspapers), No. 340 C.D. 2006 and No. 420 C.D. 2006, suffered an injury on May 14, 2003. On June 13, 2003 insurer issued a Notice of Temporary Compensation Payable. On July 17, 2003 employer issued a Notice Stopping and a Notice of Denial with Denial #6 being checked, with language added to the effect that there was compensable lost time from 05/22/03 until return to work on 07/11/03.

Claimant then filed a Claim Petition which was granted by the WCJ with benefits being awarded for two closed periods followed by a suspension. The WCJ also found that insurer violated the Act by not acknowledging the injury so penalties of 50% were awarded as were attorney’s fees for an unreasonable contest.

Claimant appealed from the suspension of benefits and insurer appealed from the granting of the penalties and attorney’s fees. Insurer suggested that the penalty was excessive because claimant continued to receive his salary for a period of time after the injury so he did not suffer economic harm. Insurer also contended that its contest was reasonable. The Appeal Board granted insurer’s appeal only to the extent that the penalty was reduced from 50% to 20% and the Board denied claimant’s appeal

Before Commonwealth Court, insurer argued that no penalties were warranted because claimant did not experience a wage loss until July 4, 2004 due to salary continuation. Meanwhile, claimant argued that insurer violated the Act by issuing a Notice of Denial when it knew that it was liable for a work-related injury.

The Court held that insurer violated the Act by forcing claimant to file a Claim Petition due to the issuance of the Denial. According to the Court, even though claimant did not have a wage loss due to the salary continuation that did not obviate insurer’s obligation to acknowledge the injury. According to the Court, Section 406.1 of the Act, 77 P.S. §717.1, providing for the acceptance or denial of injuries, applied to injuries that resulted in a disability and also to work injuries that did not cause any disability. The Court concluded that insurer’s failure to issue a Notice of Compensation Payable, instead of Notice of Denial, resulted in a significant delay before the injury was acknowledged and also forced claimant to file a claim petition. In light of this, the Court reinstated the award of 50% penalties. (The Court upheld the WCJ‘s suspension of benefits).

Commonwealth Court approves use of Notice of Denial with Denial #4 checked for non-disabling work injury when preceded by Notice of Temporary Compensation Payable describing injury

Insurer in Armstrong v. W.C.A.B. (Haines & Kibblehouse, Inc.), No. 680 2007, issued a Notice of Temporary Compensation Payable on February 7, 2005 and then issued a Notice Stopping on March 31, 2005. Insurer also issued a Notice of Denial with Denial #4 checked, indicating that while an injury took place, claimant was not disabled from the injury. Insurer then filed a UR request as to treatments provided to claimant by Dr. Wisdo.

Claimant filed a Claim Petition and because the treatments were found unreasonable and unnecessary, Dr. Wisdo filed a Petition for Review of the UR Determination. The WCJ granted the Claim Petition but denied Dr. Wisdo’s Petition for Review of the UR Determination. Claimant appealed from the denial of the Petition for Review of the UR Determination. The Appeal Board affirmed the WCJ’s decision.

Claimant argued to Commonwealth Court that insurer should not have been allowed to file a UR request as to Dr. Wisdo’s treatments since insurer never acknowledged the injury by way of a Medical-Only NCP.

Commonwealth Court held that because the Notice of Denial had Denial #4 checked, the injury was clearly and legally acknowledged and accepted by insurer. The Court then went on to hold that insurer was not required to issue a Medical-Only NCP in order to file a UR request as to Dr. Wisdo’s treatments. The Court once again indicated that the issuance of a Notice of Denial with Denial #4 checked meant that the insurer legally acknowledged a non-disabling work injury and the fact that a Notice of Temporary Compensation Payable was issued meant that there was a clear record and full description of the injury. The Court concluded that the procedures followed by insurer were in accord with the Act and claimant was put on notice as to the extent of insurer’s acceptance of the injury.

The Court clearly found it important that the Notice of Denial with Denial #4 checked was only issued after a Notice of Temporary Compensation Payable was issued describing the injury. In fact, in footnote #7 of the Opinion, the Court indicates that if a Notice of Temporary Compensation Payable had not been issued, then the Court would have agreed that the Notice of Denial, with Denial #4 checked, would not have established the nature of the injury and therefore insurer would not have been able to request a UR.

Commonwealth Court rules that UR must be filed against each provider in a medical practice

In Bucks County Community College v. W.C.A.B. (Nemes, Jr.), No. 950 C.D. 2006, insurer filed a UR request against, “Dr. Daniel Files and all other providers under the same license and specialty.”

Commonwealth Court determined that only the treatments of Dr. Files could be reviewed by the URO, and it would have been inappropriate for the URO to address treatments rendered by other doctors who were in the same medical group as Dr. Files. This was the Court’s holding because it determined that the language of Section 306(f.1)(6)(i) of the Act, 77 P.S. §531(6)(i) and 34 Pa. Code §127.407(a), is unambiguous and only allows for a review of the treatment given by a single provider.

WCJ permitted to take evidence that records were mailed to URO if UR Determination finds treatments unreasonable and necessary because no records provided

In Gazzola v. W.C.A.B. (Ikon Office Solutions), No. 1138 C.D. 2006, the employer filed a UR request as to treatments provided by Dr. Marvin Weinar. The URO issued a Determination finding Dr. Weinar’s treatments unreasonable and unnecessary due to Dr. Weinar’s failure to supply records.

Claimant filed a Petition for Review of the UR Determination and the WCJ dismissed the Petition on the basis of Commonwealth Court’s holding in County of Allegheny v. W.C.A.B. (Geisler), 875 A.2d 1222 (Pa. Cmwlth. 2005), which held that a WCJ does not have jurisdiction over a Petition for Review of a UR Determination if a UR could not be performed because the provider under review did not provide records to the URO. The Appeal Board affirmed the WCJ’s application of Geisler.

Before Commonwealth Court, claimant argued that the WCJ erred in dismissing his Petition for Review without holding a hearing to determine if the records actually were supplied to the URO or to allow Dr. Weinar to introduce evidence that he had an adequate excuse for not supplying the records within the 30-day time that providers have to respond to the URO’s records request.

Commonwealth Court agreed with claimant and remanded the matter back to the WCJ to permit the WCJ to hear evidence as to whether or not the URO properly requested the records from the provider and whether the provider under review supplied the records in a timely fashion. The Court went on to state that after this evidence is provided, the WCJ then had the jurisdiction to decide if the UR Determination should be upheld on the basis that the records were not provided or the WCJ could vacate the Determination and order that the records be sent to a reviewer for a UR Determination on the merits.

Claimant’s Petition for Review of a UR Determination granted to the extent that UR doctor did not adequately explain why procedures not reasonable or necessary

The UR reviewer in Sweigart v. W.C.A.B. (Burnham Corporation), No. 1714 C.D. 2006, issued a UR Determination finding that none of the medical care under review was reasonable or necessary.

Claimant filed a Petition for Review of the UR Determination and insurer offered into the evidence the UR Determination. Meanwhile, claimant testified on her own behalf and also offered the records from her treating doctor. The WCJ denied the Petition for Review and in so doing, accepted the opinions of the UR Reviewer. Claimant appealed to the Appeal Board which affirmed.

Before Commonwealth Court claimant offered a number of arguments as to the inadequacy of the UR Reviewer’s Determination. All of the arguments were rejected, except for claimant’s averment that the UR Reviewer’s Determination did not comply with 34 Pa. Code §127.472 which suggests that UR Determinations are to contain a detailed explanation of the reasons for the reviewer’s conclusions. The Court reviewed the Determination offered into evidence by insurer and determined that the UR Determination did not contain a detailed explanation for the Reviewer’s conclusion that blood patches prescribed for claimant were not reasonable or necessary to treat work-related headaches. In concluding that the UR Determination was not adequate, the Court noted that the Reviewer opined that the treating doctor failed to convince the Reviewer that the blood patches were reasonable and necessary. The Court suggested that it was not claimant’s burden to prove that the blood patches were reasonable and necessary; instead it was employer’s burden to prove otherwise. The Court felt that the UR Reviewer did not adequately explain his opinions so claimant’s Petition for Review was granted as to the blood patches and related office visits.

Employer not entitled to reimbursement from the Supersedeas Fund because language of Compromise and Release rendered Termination Petition moot

Claimant and insurer in the case of Commonwealth of Pennsylvania, Department of Labor & Industry, Bureau of Workers’ Compensation v. W.C.A.B. (US Food Service), No. 2011 C.D. 2006, entered into a Compromise and Release Agreement fully resolving all “past, present and future liability” resulting from claimant’s injury. The Compromise and Release Agreement was approved by a WCJ and two weeks later, the same WCJ granted a Termination Petition that had been filed by insurer.

After the granting of the Termination Petition, insurer sought reimbursement from the Supersedeas Fund for money paid to claimant after the filing of the petition until its Termination Petition was granted. The Fund rejected the Application for Reimbursement, but a WCJ Ordered the Fund to reimburse insurer. The Fund appealed and the Appeal Board affirmed.

Before Commonwealth Court, the Fund averred that insurer was not entitled to reimbursement from the Fund for money paid to claimant after the filing of the Termination Petition until the termination was granted because all issues with respect to past, present and future compensation were addressed in the Compromise and Release Agreement thereby rendering the Termination Petition moot.

The Court agreed with the Fund that by entering into the Compromise and Release Agreement insurer intended to resolve all outstanding issues, including claimant’s right to past due benefits. This meant that the issue of whether or not claimant had completely recovered from the work injury had been resolved via the Compromise and Release so the Court held that it was erroneous for the WCJ to even consider the Termination Petition.

The lesson from this case is that if reimbursement from the Supersedeas Fund is contemplated at the same time that a settlement is considered, the Compromise and Release Agreement must contain language that not all liability is being released or the Agreement must contain specific language that employer’s petitions remain open and would be adjudicated.

Supreme Court rules that premature request for IRE renders the IRE determination itself invalid.

Claimant in Dowhower v. W.C.A.B. (Capco Contracting), No. 94 MAP 2006, became entitled to 104 weeks of temporary total disability benefits as of July 23, 1999. Meanwhile, on May 20, 1999, before claimant’s receipt of the 104 weeks of temporary total disability benefits, insurer requested that claimant undergo an IRE. The IRE took place on September 1, 1999 and determined that claimant had a 10% whole body impairment. The insurer then issued a Notice of Change of Workers’ Compensation Disability Status and claimant in turn filed a Review Petition changeling the change in disability status.

The WCJ granted the Review Petition on the basis that the IRE was premature because it was not requested within 60 days after claimant’s receipt of 104 weeks of temporary total disability benefits as required by the Act. The Appeal Board reversed the WCJ, holding that because claimant actually attended the IRE, his argument that it was premature was rendered moot.

Commonwealth Court affirmed the Appeal Board but in so doing, rejected the Appeal Board’s argument that claimant waived this right to challenge the IRE by actually attending the exam. Instead, Commonwealth Court concluded that the Act did not preclude an insurer from requesting an IRE prior to the expiration of the 104 week period. The Court held that claimant was not prejudiced by the premature request because the IRE itself took place after he had received 104 weeks of benefits.

The Pennsylvania Supreme Court reversed Commonwealth Court holding that the Act contains unambiguous language that the insurer, must request an IRE, during the 60-day period after the expiration of a claimant’s receipt of 104 weeks. The Court concluded that because the language was mandatory, the request for an IRE prior to Mr. Dowhower’s receipt of 104 weeks of benefits was premature and the Court held that the IRE finding that Mr. Dowhower had a 10% disability was void.

Of course, the significance of requesting an IRE within 60 days of a claimant’s receipt of 104 weeks of temporary total disability benefits is that if the impairment rating is 49% or less, then insurer can take an automatic reduction of benefits from total to partial.

However, if the IRE is not requested within 60 days of a claimant’s receipt of 104 weeks of temporary total disability benefits, an IRE is still permitted but the insurer will have to go before a WCJ to prove that there should be a reduction in benefits if the IRE results in an impairment rating of 49% or less. In Dowhower, insurer had asked for a second IRE while the litigation was proceeding with respect to the initial IRE and the Supreme Court in Dowhower sent the matter back to Commonwealth Court to address the issues surrounding insurer’s request for a second IRE.

IRE finding a permanent impairment does not preclude WCJ from granting a Termination Petition

Insurer in Weismantle v. W.C.A.B. (Lucent Technologies), No. 1393 C.D. 2006, filed a Termination Petition in January of 2003 averring that claimant had fully recovered from his work injury as of August 23, 2002. While the Petition was pending, claimant underwent an IRE which resulted in a determination that claimant had a 10% impairment rating. Insurer issued a Notice of Change of Workers’ Compensation Disability Status advising claimant that his disability status was being changed from total to partial.

The WCJ denied insurer’s Termination Petition on the basis that the insurer had acknowledged claimant was impaired by placing him on partial disability as of November 11, 2003 because of the IRE determination.

The Appeal Board reversed the WCJ, concluding that nothing in the Act prohibited an insurer from pursuing an IRE and a termination at the same time. The matter was remanded and the WCJ issued a second decision granting the termination. Claimant appealed and the Appeal Board affirmed.

Before Commonwealth Court, claimant argued that once there was an IRE finding of a 10% impairment, insurer was foreclosed from seeking a termination of benefits. Commonwealth Court rejected claimant’s argument by concluding that the inquiry in an IRE is not the same as the inquiry in a termination petition. The Court indicated that IRE’s are governed by the AMA Guidelines to Evaluation of Permanent Impairment, which look to determine impairment, and the Guidelines do not look to determine whether a person could perform his/her pre-injury position—which is the issue with a termination or modification petition. Ultimately, the Court affirmed the granting of the Termination Petition.

Not unreasonable for insurer to pursue termination after an IRE suggests claimant had 6% whole body impairment

In Schachter v. W.C.A.B. (SPS Technologies), No. 320 C.D. 2006, claimant was injured in December, 2000. In November, 2003, an IRE was conducted and it was determined that claimant had a 6% impairment. Insurer filed a Notice of Change of Workers’ Compensations Disability Status. In February, 2004, insurer filed a Termination Petition averring that claimant had fully recovered from his work injury as of January 5, 2004.

The WCJ denied the Termination Petition and also awarded attorney’s fees for an unreasonable contest and insurer appealed.

The Appeal Board affirmed the WCJ’s denial of insurer’s Termination Petition, however the Appeal Board reversed the award of attorney’s fees. According to the Appeal Board, the WCJ could have credited the testimony of insurer’s witness, in which case insurer would have prevailed on the Termination Petition.

Claimant argued to Commonwealth Court that the Appeal Board erred in reversing the award of attorney’s fees. Claimant contended that because the IRE established that he had a 6% impairment, insurer was precluded from seeking a termination of benefits. Claimant also argued that insurer’s issuance of a Notice of Change of Workers’ Compensation Disability Status constituted a judicial admission that claimant’s disability was irreversible.

In holding that insurer was permitted to file a Termination Petition after an IRE had been performed, the Court noted that there was no evidence that claimant’s right knee injury was irreversible. The Court held that to adopt claimant’s position, would mean that an impairment rating of even 0% would forever preclude an insurer from terminating or modifying benefits.

The Court also affirmed the Appeal Board’s reversal of the WCJ’s award of attorney’s fees. The Court noted that insurer presented medical evidence, which if believed, would be sufficient to supports its Termination Petition. Therefore, the Court held insurer’s contest was reasonable as a matter of law.