COMMONWEALTH COURT ISSUES ORDER VACATING ITS OPINION
DIEHL V. W.C.A.B (IA CONSTRUCTION AND LIBERTY MUTUAL)
No. 1507 C.D. 2007
On June 24, 2008 Commonwealth Court issued an Order Vacating its Opinion in the case of Diehl v. W.C.A.B. (IA Construction and Liberty Mutual Insurance), No. 1507 C.D. 2007.
Since the Order has been Vacated, this means the original Opinion in Diehl has no precedential value at this time and can not be relied upon. That the original Opinion can not be relied upon at this time, comes as a great relief to insurers.
The impact of the original Opinion in Diehl can be seen by reviewing the facts of the case and also by reviewing the Court’s original ruling.
In Diehl the insurer did not request that the claimant undergo an IRE within 60 days of the claimant’s receipt of 104 weeks of TTD. Instead, the insurer filed a Request for Designation of a Physician to Perform an IRE. The Bureau complied with this Request and designated a doctor to perform the IRE. The claimant attended the IRE and the doctor determined that the claimant had an impairment rating of 28%.
Because the IRE was not timely requested, the insurer could not automatically change the claimant’s benefits status from total to partial, so in accordance with the Pennsylvania Supreme Court’s opinion in Gardner v. W.C.A.B. (Genesis Health Ventures), 888 A.2d 758 (Pa. 2005), the insurer filed a Modification Petition seeking to modify the claimant’s benefit status from total to partial.
The WCJ concluded that the insurer proved that the claimant had a 28% impairment rating, but the WCJ concluded that under Gardner, the insurer could not change the claimant’s benefit status from total to partial by merely filing a Modification Petition and introducing an IRE report showing an impairment of 28%. Instead, the WCJ found that the only way for the insurer to attempt to modify the claimant’s benefit status when a IRE request was not timely, would be to perform a traditional job availability search or to perform a Labor Market Survey followed by a Modification Petition. Thus, the insurer’s Modification Petition was denied.
The Appeal Board reversed, holding that the filing of the Modification Petition, along with the proof of an impairment rating of 28%, was sufficient to change the claimant’s benefit status from total to partial. The claimant filed a Petition for Review to Commonwealth Court.
Commonwealth Court first made note of the Supreme Court’s holding in Gardner that if an IRE request is untimely, an insurer can only modify the claimant’s benefit status from total to partial, through the traditional administrative process. Commonwealth Court acknowledged that the Gardner Court gave no guidance as to what the traditional administrative process should be.
While agreeing that the Gardner Court provided no guidance, Commonwealth Court rejected the Appeal Board’s position that the traditional administrative process only required the filing of a Modification Petition supported by an impairment rating. The Court held that this was nothing more than a technical filing of paperwork and an appearance before a WCJ. The Court felt that this barely exceeded the self-executing requirements of a timely IRE request.
Ultimately, Commonwealth Court agreed with the WCJ that the traditional administrative process contemplated by the Court in Gardner, required the insurer to either prove that the claimant’s benefit status should be modified by the use of a traditional job availability search or by the use of a Labor Market Survey--even if there was an impairment rating of less that 50%.
It is clear that Commonwealth Court’s original Opinion in Diehl had a huge impact on an insurer’s ability to use the IRE process to modify a claimant’s benefit status from total to partial, if that insurer did not timely request the IRE. However, since the Opinion has been Vacated, IRE’s should still be requested, even if the request is not made within 60 days of the claimant’s receipt of 104 weeks of TTD. Also, if an untimely IRE was requested and the claimant attended the IRE and the impairment rating was less than 50%, a Modification Petition should be filed and the case litigated. This should be the approach until such time that there is a ruling to the contrary.
It should be noted that in its June 24, 2008 Order, Commonwealth Court scheduled the Diehl case for reargument. Thus, there is a good chance that at a later date there will be another Opinion from the Court addressing the exact issue raised in Diehl.
We will keep you updated as to the Court’s future rulings. In the meantime—feel free to contact us with any questions as to the Court’s original Opinion or as to the current status of the case.