Pennsylvania – eNotes: Workers Compensation – March/April 2025

SIGNIFICANT CASE SUMMARIES

Pennsylvania Case Summaries

Borrelli v. Interstate Gas Supply, Inc. (Workers’ Comp. Appeal Bd.)
Commonwealth Court of Pennsylvania
No. 188 C.D. 2024

Decided February 24, 2025

The doctrines of res judicata and collateral estoppel prohibit a claimant from expanding the description of a work injury beyond the description of injury contained in a final and binding compromise and release (C&R) agreement.

Background

In a case handled by Thomas, Thomas & Hafer’s Marc Aoun and Joseph Shields, the WCJ approved a C&R Agreement wherein Attorney Aoun prudently limited the work injury to that of a soft tissue head injury. The C&R Agreement resolved Claimant’s Claim and Review Petitions but left Employer’s Termination Petition open for decision. After the approval of the C&R Agreement became binding, the parties litigated the Termination Petition. Upon cross-examination by Attorney Aoun, the Claimant admitted being fully recovered from the soft tissue head injury. The WCJ granted the Termination Petition, thereby finding Claimant fully recovered from the work injury. Claimant appealed, arguing that the WCJ erred in limiting the work injury to a soft tissue head injury. TT&H’s Attorneys Marc Aoun and Joseph Shields drafted the winning Commonwealth Court brief, establishing that Claimant was foreclosed from expanding the description of injury beyond the injury contained in the C&R Agreement based upon the doctrines of res judicata and collateral estoppel.

Holding

The Commonwealth Court agreed with TT&H’s position that the WCJ did not err in granting the Termination Petition, as the evidence of record, including Claimant’s own testimony, confirmed that Claimant was fully recovered from the injury described in the C&R Agreement. The doctrines of res judicata and collateral estoppel prohibited Claimant from expanding the description of injury after the approval of the C&R Agreement.

Takeaway

This Decision showcases the importance of being meticulous in drafting the description of injury in a C&R Agreement. Attorney Aoun’s careful wording in drafting the C&R Agreement coupled with the persuasive legal writing allowed the carrier here not only to close the claim rather than be susceptible to ongoing exposure but also allowed the carrier to recoup benefits paid out by way of reimbursement from the supersedeas fund.

Questions about this case can be directed to Cailey Farinaro at (610) 332-7008 or cfarinaro@tthlaw.com, Marc Aoun at (610) 332-7006 or maoun@tthlaw.com, or Joseph Shields at (570) 825-7227 or jshields@tthlaw.com.

Bolds v. City of Phila. (Workers’ Comp. Appeal Bd.)
Commonwealth Court of Pennsylvania
No. 488 CD 2024

Decided: February 25, 2025

When an employer denies that payments made to an employee were intended to function as payments in lieu of compensation, it is the claimant’s burden to prove the intent of the payments was to compensate for a work-related injury.

Background

The Claimant contracted COVID-19 and informed his Employer. The Employer paid the Claimant his full salary and designated the Claimant’s time off work as “E-Time,” not as sick or vacation time. Later, the Employer issued a notice denying the Claimant’s diagnosis was work-related. The Claimant filed petitions to reinstate benefits and to impose penalties, arguing that the “E-Time” payments amounted to an admission of liability for the COVID-19 diagnosis as being work-related. The WCJ and the Appeal Board denied the Claimant’s petitions. The Claimant then appealed to the Commonwealth Court.

Holding

The Commonwealth Court affirmed the Board, denying the Claimant’s petitions. As the Employer disputed the payments were payments in lieu of compensation, the burden then became the Claimant’s to prove the intent of the payments was to compensate for a work-related injury, which he was unable to meet. Testimony established the “E-Time” payments were intended to respond to the pandemic, regardless of whether the employee’s illness was work-related. Specifically, testimony was presented that showed the “E-Time” was for all employees who were out of work due to COVID-19, regardless of cause, as a measure to limit exposure for other employees. The Claimant was then unable to show the payments were intended to function as compensation for a work-related injury or illness.

Takeaway

This reported case is distinguished from prior decisions where employers had made payments explicitly intended as compensation for work-related injuries. Where the intent behind the payments is disputed by the employer, the burden shifts to the Claimant. Only when payments are intended by the employer to function as payments in lieu of compensation, do they amount to an admission of liability.

Questions about this case can be directed to Shelby Bennett at (412) 926-1441 or sbennett@tthlaw.com.

Schmidt v. Schmidt, Kirifides and Rassias, PC (WCAB)
No. 32 MAP 2024
Supreme Court of Pennsylvania

Decided: March 20, 2025

CBD oil may be compensable under the Act, and the carrier must reimburse a claimant for out-of-pocket expenses, provided they are reasonable, necessary, related, and part of a provider’s treatment plan.

Background

The Claimant sustained a work injury, and his physician prescribed him cannabinoid (CBD) oil to treat his pain. The Claimant purchased the CBD oil over the counter and used it as directed by his physician. The Employer refused to reimburse the Claimant for the CBD oil, arguing it was not a pharmaceutical drug. While the WCAB decided in favor of the Claimant, it did not reach a decision on whether CBD oil is a “supply” or a “medicine” within the meaning of Section 306(f.1) of the Act. The Commonwealth Court then found in favor of the Claimant and that any item that is a part of a health care provider’s treatment plan falls within “medicine and supplies” and that the cost containment provisions do not apply to non-providers, such as the Claimant.

Holding

In a unanimous decision, the Pennsylvania Supreme Court held that CBD oil is covered under the Act and that the cost containment provisions of the Act do not apply to a claimant who buys it over the counter. In affirming the Commonwealth Court, the Supreme Court found the plain language of Section 306(f.1) of the Act requiring employers to provide payment for “medicines and supplies” is a broad phrase that includes any items of a health care provider’s treatment plan. There is no need to separately classify medicines versus supplies. The Court further found the cost containment provisions only apply to health care providers, not claimants, based on the statutory definition of “provider” in the Act.

Takeaway

CBD oil which is part of a physician’s treatment plan is covered by the Act under the Supreme Court’s broad interpretation of “medicines and supplies,” and therefore an Employer must reimburse a claimant who buys CBD oil over the counter. Under these circumstances, the cost containment provisions do not apply, as the claimant is not a “provider.” Employers should challenge this type of medical treatment through the utilization review process.

Questions about this case can be directed to Shelby A. Bennett at sbennett@tthlaw.com.

Caldwell v. Towanda (WCAB)
No. 498 C.D. 2024
Commonwealth Court of Pennsylvania

Decided: March 26, 2025

A WCJ analyzing seasonal employment must consider the scope of the duties and the length of time to perform those duties. Furthermore, a WCJ can rely on personal knowledge when deciding if attorney’s fees are reasonable.

Background

The Claimant contracted with the Employer to be an excursion director at an overnight summer camp for 10 weeks. The Claimant’s contract did not specify any particular work duties outside of supervising a group of campers. Rather, the Claimant was obligated to perform any and all duties assigned. The Claimant argued that he was not a seasonal employee as he could perform his job year-round at a seasonal location, while the Employer argued the Claimant’s job duties were not incidental to the seasonal enterprise. The Claimant petitioned for benefits for a work injury. In addition, the Claimant’s counsel sought attorney’s fees at $395.00 per hour. The Workers’ Compensation Judge (WCJ) found that the Claimant was a seasonal employee and reduced counsel’s hourly rate to $200.00 based on the WCJ’s personal knowledge of prevailing hourly rates in the area. Both parties appealed.

Holding

The Court has defined “seasonal occupations” as being “vocations which, cannot from their very nature, be continuous or carried on throughout the year, but only during fixed portions of it.” The Court further stated that occupations possible of performance and being carried on at any time of the year, are not seasonal. To make this determination, courts have relied on: (1) the scope of duties; and (2) the span of time in which the Claimant had to perform those duties. A WCJ must award attorney’s fees to a claimant who is victorious over an employer who has presented unreasonable contest, despite if the claimant asked for such fees or not. A WCJ has discretion over what is a reasonable fee. In doing so, several factors can be taken into account, such as fee agreements, the legislative declaration of reasonableness, and personal knowledge of hourly counsel rates.

Takeaway

The determination of whether a claimant is a seasonal employee rests on: (1) the scope of duties; and (2) the span of time in which the claimant must perform those duties. Additionally, a WCJ’s personal knowledge of prevailing rates in the area can considered when deciding if an attorney’s fee is reasonable.

Questions about this case can be directed to Emily LaGreca at 610-312-1978 or elagreca@tthlaw.com.

Konzelman v. YHWH 3:5-6, LLC (WCAB)
No. 357 C.D. 2024
Commonwealth Court of Pennsylvania

Decided: March 17, 2025

Absent an abuse of discretion on the part of the WCJ, the credibility determination made by the WCJ regarding a claimant’s understanding of a 20% deduction on outstanding medical bills as well as future medical bills will not be reversed.

Background

The Claimant testified that he understood that his counsel would be entitled to 20% of the “outstanding medical bills” and that he understood the “recourse” for such deductions. Ultimately, the WCJ approved the fee agreement as it related to medical bills which were outstanding as of the date of the Decision, but not for future medical bills. The WCJ determined that although the Claimant testified that he “understands” there might be recourse, there was no testimony as to the Claimant’s understanding as to what it potentially meant legally and financially over the lifetime of his claim. Therefore, the WCJ found that counsel failed to show that the Claimant had this clear understanding and denied the proposed 20% attorney fee on future bills as not being fair or reasonable, consistent with Section 442 of the Act.

Holding

On appeal, the Commonwealth Court noted that regarding approval of fee agreements, it is incumbent upon the Claimant to establish that the parties intended that the counsel fee be applied to the entire award, including future medical bills. While Neves answered the question that a 20% fee on both indemnity and medical benefits is per se reasonable, the instant matter revolved around the Claimant’s personal understanding that his fee agreement in particular covered both types of benefits and encompassed deductions for medical benefits both outstanding and into the future. The WCJ determined that the Claimant did not establish his understanding beyond only the outstanding medical bills, and therefore, there was no error or abuse of discretion on appeal.

Takeaway

This case shows that WCJs have a fair degree of latitude to limit the scope of the fee agreement based on a claimant’s testimony regarding his or her understanding of the terms.

Questions about this case can be directed Taryn Vender at 570-825-4794 or tvender@tthlaw.com.

Zeller v. City of Philadelphia (WCAB)
Commonwealth Court of PA
No. 463 C.D. 2024Decided: March 11, 2025

Decided: March 11, 2025

Payments must be intended to compensate time missed specifically due to a work-related injury to constitute payments in lieu of compensation.

Background

The Claimant contracted COVID-19 in March 2021. He stopped working for 10 months and received his full pay. Beginning in March 2022, the Claimant began using his sick and vacation time. The employer issued a Notice of Denial, denying liability for the Claimant’s March 5, 2021, COVID-19 diagnosis on the basis that there was no medical evidence to support a work-related exposure. The Claimant filed Reinstatement and Penalty Petitions, alleging that the Employer had unilaterally terminated benefits in January 2022 after it had accepted the claim by paying him wages in lieu of benefits. The Employer presented testimony that it paid the Claimant under the “E-Time” designation until 2022, which was not intended to acknowledge that the officer had contracted COVID-19 at work. Rather, this designation had been used for all employees who were diagnosed with COVID, irrespective of whether the virus was contracted through work related exposure. The Judge denied the Claimant’s petitions, finding that he did not receive wages in lieu of compensation.

Holding

The Court rejected the Claimant’s argument that he received wages in lieu of compensation. The Court found no evidence to demonstrate that the Claimant received wages which were intended to compensate claimant for a work-related injury. The Court cited the credited testimony from the employer’s witnesses that the “E-Time” designation had been applicable to all employees who were diagnosed with COVID-19 and these payments were made to all officers to ensure that during the pandemic no officer was “financially penalized” by the condition.

Takeaway

This case turned on testimony and evidence presented by the Employer regarding its policies and practices regarding “E-Time” which were applicable to all employees who had contracted COVID-19 and was not intended to compensate a work-related injury.

Questions about this case can be directed to Lee Ann Rhodes at (412) 926-1453 or lrhodes@tthlaw.com.

Del Val Home Improvements v. Gaw (WCAB)
No. 1117 C.D. 2022
Commonwealth Court of Pennsylvania

Decided: March 19, 2025

The Commonwealth Court reaffirms the Pennsylvania Supreme Court’s holding in Duffey v. Workers’ Compensation Appeal Board (Trola-Dyne, Inc.), 152 A.3d 984 (Pa. 2017) (“Duffey II”), emphasizing that an Impairment Rating Evaluation (IRE) physician must exercise independent professional judgment to determine whether impairments are “causally related” to a work injury—even if those impairments are not specifically listed in the Notice of Compensation Payable (NCP). A Workers’ Compensation Judge (WCJ) may not discredit an IRE solely for including such conditions.

Background

The Claimant sustained serious injuries in a 2002 roofing fall. In 2021, his employer filed a Modification Petition based on a 30% whole-person impairment rating determined by the IRE physician. The IRE physician rated only some accepted injuries, excluded others he found healed, and included a hip replacement he believed was aggravated by the injury (despite it not being listed in the NCP). The Claimant’s rebuttal expert included additional impairments such as cervical strain and degenerative conditions, assigning a 41% impairment rating. He admitted that his rating would drop below 35% if limited to the NCP injuries. The WCJ credited the IRE physician’s evaluation and granted modification to partial disability. The Workers’ Compensation Appeal Board (Board) reversed, finding the WCJ erred by rejecting the Claimant’s rebuttal expert’s IRE for including conditions outside the NCP—a mistake under Duffey II.

History and Holding of Duffey II:

The Supreme Court’s decision in Duffey II addressed the proper scope of impairments considered in an IRE. The claimant in that case suffered electrical burns, which led to psychological conditions. However, those mental health conditions were not listed in the NCP, and the IRE physician excluded them from the impairment rating. The WCJ found the psychological conditions were causally related and rejected the IRE. The Board and Commonwealth Court reversed, holding that physicians must limit their evaluations to the NCP.

The Supreme Court disagreed, holding that the IRE process under the Workers’ Compensation Act requires evaluators to consider all impairments “caused by or fairly attributable to the compensable injury”, regardless of whether they appear in the NCP. Evaluators must use their clinical judgment in assessing causality and apportionment.

Holding

The Commonwealth Court found the WCJ improperly discredited Dr. Murphy’s IRE simply because it considered additional impairments, violating Duffey II. However, because Dr. Lerman’s IRE may still be legally valid—he included some impairments beyond the NCP, such as a hip replacement he attributed to aggravation from the injury—the case was remanded for the WCJ to conduct a proper credibility assessment between the two IREs, free from legal error.

Takeaway

IRE physicians are obligated to evaluate all impairments that are causally related to the accepted work injury, not just those in the NCP. WCJs may not reject an IRE for including such conditions, as doing so undermines the evaluator’s statutory discretion under the Workers’ Compensation Act.

Del Val leaves one important open question: Does an IRE physician’s inclusion of impairments that are not listed in the NCP—but deemed causally related—potentially open the door to future petitions to formally amend or expand the scope of accepted injuries? While Del Val does not resolve this issue, it raises important strategic considerations for both claimants and employers.

Questions about this case can be directed to Christopher Scott at 717-237-7111 or cscott@tthlaw.com.

Fort Washington Surgery Center v. PMA Management Corp. (Bureau of Workers’ Compensation Fee Review Hearing Office)
Nos. 1208 & 1282 C.D. 2023
Commonwealth Court of Pennsylvania

Decided: April 3, 2025

The Commonwealth Court reaffirmed that Pennsylvania’s Workers’ Compensation Act (WCA) ties medical reimbursement rates to a frozen 1994 Medicare fee schedule, adjusted annually only by the statewide average weekly wage (SAWW). While providers must adhere to Medicare’s coding and bundling rules, the Court made clear that Pennsylvania does not adopt Medicare’s updated payment levels. This decision, though frustrating to medical providers, provides employers and insurers with a stable legal framework for resisting inflated or separately billed charges for bundled services.

Background

In 2021, the Provider performed a spinal cord stimulator implantation on a City of Philadelphia employee and submitted two bills totaling over $120,000—one for the surgical procedure and another for the implantable devices. The Insurer reimbursed just $1,593.83. The Provider contested the payment through the fee review process, arguing that the procedure should be paid at 2021 Medicare rates and that the implantable device codes (L-codes) were separately reimbursable. The Medical Fee Review Hearing Officer partially agreed with the Provider, holding that the surgical procedure should be reimbursed at the 2021 Medicare rate, but that the device codes were bundled and thus not separately payable. Both parties appealed.

Holding

The Commonwealth Court, in an unpublished decision, reversed the hearing officer’s decision as to the surgical procedure, concluding that payment must follow the frozen WC Fee Schedule and not Medicare’s current-year rates. The Court emphasized that the WCA explicitly prohibits using post-1994 Medicare rate changes as a basis for calculating payment, regardless of any updates Medicare has made in response to changes in procedure classifications or bundling methodologies. The Court affirmed the denial of payment for the L-codes. Although the devices were expensive and integral to the procedure, Medicare classifies them as bundled into the surgical code. Because the WCA requires consistency with Medicare bundling rules, the provider cannot fragment or unbundle charges to receive separate reimbursement for the devices—even if Pennsylvania’s WC Fee Schedule does not reflect the increased procedural payments Medicare now provides. The decision leaves a substantial gap between provider costs and reimbursement, but the Court stated it is constrained by the statute. It also noted that although Medicare’s bundling rules evolved in 2008 to include implantable devices in the procedure code, the WCA did not adopt the corresponding increase in payment. As a result, providers may be left essentially uncompensated for high-cost procedures unless the legislature amends the law.

Takeaway

This decision reinforces two key principles: providers must bill in accordance with Medicare coding and bundling practices and reimbursement under the WCA is governed by a fee schedule frozen to 1994 Medicare rates (adjusted only by SAWW). This Decision is important because there has been a recent influx in various providers unbundling their billing to increase their costs.
While still unpublished, the ruling provides clear guidance. Denial of separately billed device codes is appropriate where Medicare bundling applies and attempts to bill under modern Medicare rates will be rejected unless a code is newly adopted and separately recognized by the Bureau.

Questions about this case may be directed to Christopher Scott at 717-237-7111 or cscott@tthlaw.com.