Case Summaries: January - February 2009
SUPERSEDEAS FUND REIMBURSEMENT PERMITTED FOR MEDICAL
TREATMENT RENDERED PRIOR TO THE DATE EMPLOYER FILED
TERMINATION PETITION AND REQUESTED SUPERSEDEAS
In Dept. of Labor & Industry Bureau of Workers’ Compensation v. W.C.A.B. (Crawford & Co.), No. 2211 C.D. 2007 (Pa. Cmwlth. February 2, 2009), the employer/insurer sought supersedeas fund reimbursement after succeeding on a petition to terminate benefits effective March 16, 2004. The claimant had received medical treatment for his accepted injury on June 1, 2004. Employer filed a termination petition on July 19, 2004 and requested supersedeas on the same date. The WCJ denied supersedeas on August 30, 2004. On October 11, 2004, the bill for the June 1, 2004 treatment in the amount of $34,405.45 was presented to the insurer. As supersedeas was denied, the insurer paid this bill. After the WCJ’s June, 2005, decision granting the termination petition became final, the insurer filed an Application for Supersedeas Fund Reimbursement. The Fund agreed to reimburse for everything except the medical bill for $34,405.45. The Fund argued that they were only to reimburse for services performed after supersedeas was requested; and because the claimant incurred the treatment prior to the date employer requested supersedeas, they refused to pay. This matter was appealed to Commonwealth Court.
Commonwealth Court held that “it does not matter that the date of service of the medical expenses in question preceded the request for supersedeas–what matters is that the treatment in question was later determined to be ineligible for payment, and the bill for that treatment was submitted to and paid for by Insurer after supersedeas was requested and denied.” The Court looked to the Act to determine what was meant by “payments of compensation that are made as a result of denial of the request for supersedeas”. The Bureau argued that supersedeas cannot be effective any earlier than the date on which the request for supersedeas is filed. The Court rejected this argument and determined that reimbursement may be had for all payments actually made after supersedeas denial including payment of benefits awarded retroactively for earlier periods of disability, provided that the bill and supporting documentation was received after supersedeas was requested. The Court was persuaded by the fact that there was no evidence that the employer/insurer unilaterally stopped paying benefits to the claimant when it held that the payment for the treatment in question was reimbursable. This case is useful for employers/insurers in terms of being able to obtain reimbursement for medical benefits paid prior to the petition for termination being filed if the petition is ultimately granted. The Court did place emphasize on the fact that the insurer continued to pay benefits during the pendency of the termination petition and did not unilaterally stop benefits before receiving a decision from the WCJ granting termination.
COURT RELIES ON REGULATIONS IN DETERMINING THAT OFFSETS FOR PENSION, SOCIAL SECURITY, UNEMPLOYMENT COMPENSATION AND SEVERANCE BENEFITS ARE TO BE CALCULATED ON NET AMOUNT OF BENEFITS RECEIVED BY THE CLAIMANT, NOT GROSS AMOUNT
In Philadelphia Gas Works v. W.C.A.B. (Amodei), No. 350 C.D. 2008 (Pa. Cmwlth. February 4, 2009), the claimant was receiving workers’ compensation benefits at $542.00 per week for a March 26, 1997 injury pursuant to an Agreement of Compensation. Claimant retired and began receiving pension benefits through a pension plan that was fully funded by the employer. The dispute between the parties was whether the employer was entitled to a credit in the “net” amount of pension benefits or the “gross” amount of pension benefits received by the claimant.
The Board and the Commonwealth Court both relied on the regulations which discussed enforcement of Section 204(a) of the Act. Section 204(a) addresses when insurers can apply credit or offset workers’ compensation benefits for other types of benefits received which include: pension benefits, unemployment compensation benefits, social security (old age) benefits and severance benefits. The Act does not specify whether the credits allowed are to be calculated by the gross or net amount received by the claimant.
The regulations at 34 Pa. Code §123.1 et. seq. direct that workers’ compensation benefits shall be offset by the net amount the claimant receives in unemployment compensation, pension benefits, social security benefits (old age) and severance benefits. While the instant matter dealt only with offset of pension benefits, the Court held that the Bureau’s regulations cannot be disregarded and their application is to all four types of benefits subject to offset.
The Court did discuss an alternative option to applying the offset to the net amount of benefits received, which can be applied to all four types of benefits. That option involves calculating the offset based on the gross amount of the other benefits received, subject to correction once the claimant notifies the insurer that he has paid the required tax. In order to request such repayment the claimant would need to notify the insurer in writing of the amounts paid in taxes previously included in the offset. If this is followed, the insurer shall repay the employee for amounts previously offset when that offset was calculated on the gross amount. 34 Pa. Code §123.4(f).
Any questions regarding this case can be directed to Carrie E. Smyth at (717) 441-7068 or csmyth@tthlaw.com.