Significant Case Summaries - November 2010
SUSPENSION OF BENEFITS: RETIREMENT
City of Pittsburgh v. WCAB (Robinson) – Commonwealth Court
Commonwealth Court addressed the issue of when a Claimant is deemed to be “retired” in order for the employer to suspend benefits. Claimant suffered a work-related injury 1997 while working as a police officer. After the injury, she returned in a light-duty capacity. While traveling to an appointment for treatment for her work injury, Claimant was in a motor vehicle accident which caused injuries to her neck, the right side of her lower back and right shoulder. These injuries were accepted and Claimant did not return to work. Ultimately, her modified duty position was eliminated when the transitional duty program was eliminated entirely in 2004. Later that year, Claimant applied for and received a disability pension.
Employer Petitioned to Suspend alleging that Claimant was capable of light duty work but had failed to look for any within her restrictions. After the suspension petition was filed, which was only two weeks after a light duty Notice of Ability to Return to Work had been issued, Claimant began searching for work but was unable to obtain any. Ultimately, the WCJ found that the Claimant was not “retired” under the definition of the workers’ compensation act and was entitled to continue to receive benefits.
The WCAB affirmed and the employer appealed to the Commonwealth Court. Ultimately, the Commonwealth Court held that the Claimant had not retired and the WCJ and WCAB were affirmed. They found that circumstances which supported a holding that the Claimant had retired included (1) where there was no factual dispute that the Claimant retired; (2) where the claimant accepted a retirement pension; or (3) the claimant accepted a pension and refused suitable employment within their restrictions.
Practical effect: When a Claimant has applied for and been approved for a disability pension, to show that they have retired, you need to show that they have withdrawn from the workforce entirely or that they have refused a job within restrictions. There was no job offered in this case and had there been one, the decision may have ultimately been different.
UTILIZATION REVIEW: “PROVIDER UNDER REVIEW”
MV Transportation v. WCAB (Harrington), Commonwealth Court
This case points up the importance of properly describing “whose” review is being sought. The facts are as follows: The injured worker was receiving physical therapy prescribed by a Dr. Ficci. She saw a physical therapist named Mr. Shenko, but also saw others within the same practice. The Employer filed for a UR of the therapy and listed only “Frank Shenko, LPT” as the provider under review. Under the “treatment to be reviewed,” the employer requested review of all “physical therapy – passive and active treatment by any and all providers at this location or other locations of this provider from 10/3/2006 through the present and into the future.” The reviewing physician found that Mr. Shenko’s care under review was not reasonable or necessary. The Reviewer did not comment on the care of the other physical therapists, noting that the treatment under review was limited to that of Mr. Shenko.
On appeal, employer argued that it should not have to file for a UR naming each physical therapist as a provider when seeking utilization review of the physical therapy, generally. The Court agreed, but denied the employer’s request for relief since the employer failed to identify the “provider under review” as the doctor who prescribed the therapy, Dr. Ficci. The Court indicated that when making a UR request for physical therapy prescribed by a doctor and administered in a doctor’s facility under his or her supervision, the employer must name the doctor prescribing the physical therapy and the facility where the Claimant receives that therapy.”
Practical effect: This case once again points out the limitations of the UR process in that it is set up to review the provider, not the type of treatment. When making a request for UR, make sure that you are careful to note who the provider is that you wish to have reviewed.
UTILIZATION REVIEW: EVIDENCE USED TO SUPPORT DETERMINATION
The Toad Road v. WCAB (McLean), Commonwealth Court
In this case, the Court was asked to consider what evidence a WCJ could rely upon in a Utilization Review proceeding.
Here, Claimant suffered a head injury which caused her to lose use of her right arm, leg and eye as well as suffer significant disfigurement on her face and neck. After the injury, employer began providing unskilled home care to her five days per week, eight hours per day. In 2002, Claimant filed a request for utilization review seeking to increase her home care to twelve hours per day, seven days per week. Shortly thereafter, the employer approved home care 7 days per week, eight hours per day. The reviewer found the increase in assistance and referrals to occupational, speech and physical therapy were appropriate. Employer filed a Petition to Review the Utilization Review Determination and a Petition to Review Medical Treatment and/or Billing. In litigating the petitions, Employer presented testimony of a physician who had performed an IME following the Utilization Review who testified that Claimant’s condition had not changed in a way which necessitated the increased care. Employer also presented testimony of several of Claimant’s home care aides who testified that a portion of their days had been spent doing the Claimant’s housework. Claimant presented the testimony of her treating physician who testified that the increased homecare was necessary.
The WCJ granted Employer’s Petitions, finding that the increased referrals were not necessary and assistance eight hours per day, seven days per week was all that was required. Further, the WCJ found that the Employer had been billed for non health-care related services. Claimant appealed, arguing that as the IME had not taken place until after the Petition for Review of the UR Determination was filed, the WCJ had erred in relying on the doctor’s testimony. The WCAB agreed and reversed the WCJ. Employer appealed to the Commonwealth Court.
Commonwealth Court reinstated the holding of the WCJ and reversed the WCAB. They specifically noted that because the proceeding on a Review of a Utilization Review Determination is a de novo proceeding that the parties are free to offer evidence beyond that which is considered in the UR proceeding to meet their burden of proof.
Practical effect: In order to challenge a Utilization Review Determination, it is not necessary to have the evidence to do so at the time of the determination by a reviewing physician but it can be developed afterwards if necessary. Moreover, evidence garnered in an IME can be used to bolster arguments made in the URO context.
MODIFICATION: LABOR MARKET SURVEY
Phoenixville Hospital v. WCAB (Shoap) – Commonwealth Court
Claimant suffered a work injury and later declared capable of performing sedentary work as per IME. Labor Market Survey performed and 5 jobs were identified as being available and within Claimant’s physical restrictions.
Claimant applied for 3 positions by written application. Claimant was never contacted by the prospective employers and was never offered a position by any of the employers identified by the LMS.
The WCJ determined that Claimant was capable of performing the jobs identified but would not modify her benefits because he found that she had applied for the jobs in good faith and this did not result in an offer of employment. Commonwealth Court, however, reversed, holding that good faith application is not the test in the setting of labor market surveys.
Under Act 57, there is no requirement that a Claimant be offered a job for an employer to obtain modification/suspension of benefits relying upon evidence of earning power. The positions identified must merely be open and available at the time the Labor Market Survey is conducted. The Employer is not precluded from obtaining a modification or suspension of benefits if the Claimant subsequently applies for the positions and is not offered a job.
Practical Effect: WCJ’s are still leery of modification petitions based on labor market surveys. Therefore, while this case reaffirms that benefits can be suspended and/or modified based on a LMS even where a Claimant has applied for the work, it is not a guarantee of the same.
AMENDING DESCRIPTION OF INJURY: TIME LIMITS
Fitzgibbons v. WCAB (City of Philadelphia) – Commonwealth Court
Claimant suffered an injury which was recognized by NCP as “epicondylitis of the left elbow.” Claimant received benefits for a period and they were thereafter suspended from for a period of four (4) years. Claimant then filed review and reinstatement petitions, seeking to have benefits reinstated and the description of injury expanded to include injuries to the “neck, low back, left hip, leg and knee.” The WCJ denied both petitions because the Claimant’s petition had not been filed within three (3) years of the original injury, and was thus untimely.
On appeal to the WCAB, Claimant argued that the NCP was “materially incorrect” since she had sustained those injuries at the time of the original injury but the NCP failed to reflect them. Without addressing the ultimate legal issue of whether the statute of limitations applied to a review petition to correct an NCP, the WCAB vacated the WCJ’s decision and remanded the matter to make findings regarding whether the injuries existed at the time of the NCP or had arisen later. On remand, the WCJ accepted additional evidence on the issue of the NCP and ultimately held that even if Claimant’s injuries had been present at the time of the NCP, the statute had run as the review petition acted as an original claim petition and thus was untimely. Claimant again appealed to the WCAB, arguing that the WCJ erred in failing to address the reinstatement petition and in applying the Jeanne’s Hospital holding to the case in chief – that is treating the review petition as an original claim petition. The Board this time affirmed the WCJ, holding that where the Claimant suffered “additional” injuries that result from the original harm, the review petition must be filed within 3 years of the date of the most recent payment of compensation and was therefore untimely as the Claimant had last received workers compensation 4 years prior to the commencement of the litigation.
Claimant appealed to the Commonwealth Court, arguing that the 3 year statute did not apply if the Claimant sought correction of the NCP due to material mistake. The Court held that whether the Claimant is seeking to correct the NCP due to material mistake or seeking to add additional consequential injuries to the Claimant’s compensable work-related injuries, the Claimant must file the petition within 3 years of the most recent payment of compensation.
Practical effect: When benefits have been suspended for a period of three years or more, claimants may not seek to “add” additional injuries. This can have important implications for settlement and reinstatement.
“STATUTORY EMPLOYER”: CONTROL OF PREMISES ISSUE
Six L’s Packing Company v. WCAB (Williamson) – Commonwealth Court
Defendant Six L’s Packing Company (Six L) owned fields on which tomatoes were grown, a warehouse where they were packed and processing centers to which tomatoes were delivered. Six L contracted with Garcia & Sons to harvest and haul tomatoes. Claimant worked for Garcia & Sons as a truck driver and was severely injured in a motor vehicle accident while transporting tomatoes.
Garcia & Sons did not purchase workers’ compensation coverage for its employees. Claimant sought to obtain coverage from Defendant Six L as the “statutory employer.” The WCJ found that Defendant Six L was the statutory employer under the traditional tests set forth in McDonald v. Levinson Steel Co., 153 A. 424 (Pa. 1930): i.e., that (1) the employer must be working under a contract with the premises owner; (2) the premises must be occupied or under the control of the employer; (3) the employer has contracted with a subcontractor to do work; (4) part of the employer’s regular work is entrusted to the subcontractor; and (5) the injured person is the subcontractor’s employee.
The WCAB affirmed the finding of statutory employment but on a different basis. The WCAB stated that the McDonald test is only applicable to fixed work site injuries noting that the second prong of the McDonald test requires the contractor to occupy or control the premises where the injury occurred which was not the case with a driver out on the highway hauling tomatoes. (It is also not clear that the first prong was met from the facts in the Opinion). The WCAB found that the Legislature intended a contractor under the second paragraph of Section 302(a) of the Act to be excluded from the requirement that it occupy or control the premises where the injury occurred. It found Six L qualified as a statutory employer under subsection (a) of Section 302 of the Act.
Commonwealth Court affirmed the WCAB. Defendant Six L was considered to be a “person who contracts with another” (Garcia & Sons) to have work performed of a kind which is a regular or recurrent part of its business (transporting tomatoes) and Defendant Six L was therefore deemed to be a contractor and Garcia & Sons was deemed to be a subcontractor. The “subcontractor” was uninsured for workers compensation and therefore liability was found with the “statutory employer” Defendant Six L.
Practical effect: This holding represents an expansive view of statutory employer liability. To avoid this liability it is necessary to have a good system in place to obtain proof of workers compensation insurance coverage from all subcontractors. An interesting issue is whether the recent creation of the Pennsylvania Uninsured Employers Guaranty Fund changes the result since employees now have recourse to the UEGF if their employer fails to purchase workers compensation insurance. That issue is being litigated since the Fund does not extend coverage when an alleged statutory employer is identified.
IMPAIRMENT RATING EVALUATION: OUTSIDE THE “60 DAY WINDOW”
Deihl v. WCAB (I.A. Construction and Liberty Mutual Insurance) – PA Supreme Court
This is the appeal of the 2009 Commonwealth Court decision. This case originally involved an out of time Impairment Rating Evaluation. Claimant suffered an injury on May 24, 1999 consisting of a right mid-foot and calcaneus fracture. The injury was accepted. On April 4, 2002, the Employer/Carrier filed a request for designation of a physician to perform an impairment rating evaluation. The IRE was performed on November 8, 2002 and a report was issued on December 3, 2002. Based on the IRE, the Employer/Carrier filed a Notice of Change of Workers’ Compensation Status on January 9, 2003. Claimant filed a Petition to Review Medical Treatment, Modify Compensation and Reinstate Compensation Benefits. When Employer/Carrier withdrew the Notice of Status Change and the Claimant withdrew their petitions. Three years later, on February 1, 2006, Employer/Carrier filed a Petition to Modify Benefits seeking to modify benefits from total to partial disability based on that 2002 IRE. The WCJ ultimately dismissed the Petition, finding that even though the Employer/Carrier had met their burden in proving the impairment rating of twenty-eight percent, the Employer failed to show an availability of suitable employment within the physical limitations Claimant suffered as a result of the work injury. Employer/Carrier appealed to the WCAB who reversed the WCJ and granted the Modification Petition, modifying benefits back to the November, 2002 IRE. The WCAB held that the Employer need not show an availability of suitable employment as detailed by the Court in Kachinski v. WCAB (Vacco Constr. Co.), 532 A.2d 374 (Pa.1987).
Claimant then appealed to the Commonwealth Court. The Court, sitting as a three judge panel, held that where an out of time IRE is performed, benefits cannot be modified to partial disability without going through a “traditional administrative process” as stated by 77 P.S. §511.2. They described this “traditional administrative process” as proving job availability and earning capacity as required by Kachinski. The WCJ’s Decision and Order was reinstated. The Employer/Carrier filed for re-argument before the Court en banc. After re-argument, the Court reversed itself, reinstating the holding of the WCAB. The majority stated that there is no requirement for the Employer/Carrier to prove job availability or earning capacity before modifying benefits based on an IRE. Claimant then appealed to the Supreme Court.
The Pennsylvania Supreme Court upheld the Commonwealth Court’s en banc opinion. Unlike the original Commonwealth Court decision, the Supreme Court focused on the “or” in Section 306(b). This section states that to modify benefits to partial disability, an employer must establish either that the Claimant’s condition has improved to less than 50% impairment rating or that Claimant has an earning capacity.
Practical effect: Where an IRE is requested outside the sixty day window after 104 weeks, a Petition to Modify Benefits will be required. The Supreme Court restored the state of the law as it existed prior to the Commonwealth Court’s original decision in this case.
REINSTATEMENT: EMPLOYEE LEAVES TIME OF INJURY EMPLOYER AND FACES LAYOFF
Bufford v. WCAB (North American Telecom), Pennsylvania Supreme Court
The Supreme Court of Pennsylvania granted allocator to decide the issue of the burden of proof for reinstatement on a claimant who leaves a modified duty position to accept other employment which thereafter ends due to no fault of the Claimant.
The facts of this case are as follows: Claimant injured his back in 1998. The claim was accepted and Claimant began receiving TTD benefits. One month later, Claimant returned to a modified light duty position and his benefits were reduced to a partial disability rate. In March 1999, Claimant left the light duty position with the time of injury employer to accept a job elsewhere with higher pay and less rigorous physical demands. Employer filed a Notification of Suspension of the TPD benefits. After four and one half years in the new position, Claimant was laid off for economic reasons and filed a reinstatement petition alleging that he was again disabled as a result of the work injury. The WCJ decided that Claimant had left the modified duty position for higher wages and denied the petition. Claimant appealed to the WCAB who affirmed as did Commonwealth Court.
On appeal to the Supreme Court, the Court reversed the Commonwealth Court. They found that the reinstatement should have been granted. The Court held that a Claimant seeking reinstatement of suspended benefits must prove that his or her earning power is once again adversely affected by his or her disability and that such disability is a continuation of that which arose from his or her original claim. Once the Claimant has proved this, the burden then shifts to the employer to prove that a Claimant’s loss in earnings is not caused by the disability stemming from the injury. One way the Court mentioned that an employer may meet this shifting burden is by proving that loss of earnings was now caused by Claimant’s bad faith rejection of available work within the relevant required medical restrictions.
Practical effect: This case is going to make it more difficult to defend reinstatement petitions where the claimant has returned to modified duty work with a new employer after leaving modified duty employment with the time of injury employer. This represents a reversal of the previous state of the law on the subject.