Monday, April 29, 2013

Pa. Employer Job Offer Requirement

An Employer may Petition to Modify total disability benefits to a partial disability benefit, based upon work available to the injured worker, within their vocational and physical capabilities.

A Modification may be based upon an actual job offer.
The Pennsylvania Supreme Court decision in Kachinski v. WCAB (Vepco Construction Co.)
(Pa. 1987) sets forth that criteria.

A Modification may be based upon Vocational Expert witness testimony and evidence of the post-injury earning capacity of the injured worker, without an actual job referral.
This remedy is authorized by the 1996 amendment to Section 306(b)(2).

However, before the Employer may pursue a modification based upon a Vocational Expert Labor Market Survey and Earning Power Assessment evidence, the Employer must make a job offer to the employee, where there is a job available that the employee could perform.

The Employer "Job Offer Obligation" is spelled out in Regulation 123.301:

b. The time frame for the Employer obligation commences with the filing of the LIBC 757 Notice of Ability to Return to Work form and ends after 30 days or with the filing of the Modification petition, whichever is longer.

c. The Employer meets its obligation if they show:

i.  the employee was notified of a job vacancy and failed to respond.
ii. a specific vacancy was offered to employee and employee refused.
iii. the employer offered a modified job to employee and employee refused.
iv. No job vacancy exists with Employer within the Employee usual employment area.

d. When the Employer has more than one position available the Employer has the right to select the job to be offered.

e. job offers are made consistent with the Employer's usual business practice or collective bargaining agreement.

f. If the Employer presents evidence that they have no job vacancy, the Employee may present
rebuttal evidence by demonstrating, [during the job offer obligation time period]:

1. the Employer was actively recruiting for a specific job the employee could perform.

2. the Employer posted or announced the existence of a specific job which the employer intends to fill.

g. A job may not be considered vacant if the employee's ability to fill the position was precluded by any applicable collective bargaining agreement.

This last provision was recently addressed by the Commonwealth Court in an unreported panel decision at: Seador v. WCAB (United Parcel Service) authored by Judge Cohn-Jubelirer at No. 1704 C.D. 2012, on April 25, 2013.

Factual Background

The Employer in Seador filed a Modification petition based upon a Vocational Expert Labor Market Survey and Earning Power Assessment Report.
The Workers Compensation Judge granted the modification.
The WCAB affirmed.

On Appeal, Employee argued, he was capable of full duty and employer did not demonstrate that he could not perform job available at their facility. This argument was rejected, as the WCJ finding of a work limitation of 50 lbs was supported by substantial medical evidence.

Employee argued there was work available at the employer's facility, which he could perform.

This argument was rejected.
Employer's witness testified that the union contract requires that all employees are capable of a 70 lbs lifting requirement. This is an essential function of all positions, as the employer may "pull" employees from one position to another, in order to keep operations moving and on schedule.
The WCJ found this testimony was credible.

The Modification based upon Vocational Expert evidence was appropriate and affirmed.

Practice Pointers:

1. Designate the vocational expert as the party responsible for monitoring the employer job availability during the appropriate time frame.

2. If a position is available within the claimant's physical and vocational capabilities, there must be a job offer. If you do not make a job offer, the employee may defeat your Earning Power Modification petition.

3. Where there are multiple jobs available, consider making alternative job offers.

4. If no jobs are available, document that fact by an affidavit of the employer representative.

Thursday, April 25, 2013

Credit for Short Term Disability Benefit must be established before WCJ

An employee may receive Short Term Disability (STD) benefits from an Employer-funded program when the "compensibility" of a medical condition is disputed. If that medical condition is determined to be a compensible work-related injury under the Pa. Workers' Compensation Act, the STD payments may be the subject of a subrogation lien of the STD insurer or a credit against the Employer/Insurer work comp benefit liability.

Regardless of whether there is a subrogation right or a credit offset, one thing is certain, the Employer/Insurer must timely assert it's right before the Workers' Compensation Judge to successfully recover these payments or to avoid a "double" payment.

Sheetz, Inc. v. WCAB (Brown), No. 1547 C.D. 2011 is an unreported memorandum opinion of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Brobson on April 18, 2013, which addressed this problem.

Procedural History

October 8, 2007 Employee injured her neck.
Employee received STD benefits of $944.00 per month from Hartford.
November 3, 2008, Employee files a claim petition for total disability.
May 24, 2010, WCJ decision granted claim petition.
WCJ did not grant a credit or subrogation lien for the STD Hartford payments.
Employer appeal.

Commonwealth Court Reasoning:

The denial of a credit or subrogation lien recovery for the STD benefit payments of Hartford to Employee was affirmed.

Although the topic of a credit or subrogation lien was raised by the WCJ and asserted by Employer counsel, the Employer/Insurer did not produce any evidence that:
1. the nature of the benefits met the criteria for a credit,
2. there was no evidence of the duration of the benefits.

To assert a claim for a credit for STD benefits against a work comp award, the Employer must prove that the payments were:
(1) made by the employer or its insurer,
(2) for an injury and/or subsequent disability arising in the course of employment, and
(3) that the payments are not wages for employment.
citing Humphery v. WCAB (Supermarket Service) 514 A.2d 246, 249 (Pa. Cmwlth. 1986).

Payments that Claimants receive "in relief of their incapacity to labor" may be subject to credit so long as the claim to credit is timely raised. The employer is required to raise the credit at the earliest possible stage , so that the claimant has the opportunity to contest the amount of credit claimed and to have a hearing where there is a disagreement on the amount.

Practice Pointers:

A. Credit or Subrogation lien must be documented by a printout of the benefits paid to claimant.
Make these payment documents an exhibit.

B. Present testimony if the nature of the benefits is contested. Make the benefit plan documents and exhibit, as the plan will often reflect a coordination with work comp benefits.

C. Seek a stipulation from claimant regarding the availability of a credit/subrogation lien (nature of the benefit) and the amount of the credit/lien.

Tuesday, April 23, 2013

Medical Fee Review - Another lesson of "Strict Compliance"

Medical Fee Review Petitions are the subject of another reported opinion of the Commonwealth Court of Pennsylvania. On April 18, 2013 we reviewed the decision in Witkin regarding Insurer "downcoding" of TMR (therapeutic magnetic resonance) treatments.

Petolillo v. Bureau of Workers' Compensation Fee Review Hearing Office (Traveler's Ins. Co.)
_A.3d _ (Pa. Cmwlth. April 22, 2013) reports eleven (11) consolidated Medical Fee Review petitions filed by nine (9) different medical providers, all involving insurer downcoding of TMR "treatments".

The Commonwealth Court remanded all of these petitions for a hearing to consider the insurers' compliance with the downcoding procedures at Regulation 127.207.

Apparently, in the recent past, the Fee Review Hearing Officers (HO) have decided on several occasions (with the same providers) that the correct CPT code for reimbursement of TMR treatments would be 97032 with a reimbursement rate of $26.24 not the requested $3,298.00.

In subsequent petitions, the HO applied their prior decisions to the current petitions and ...
reached the same result!!!

These TMR providers continue to appeal these determinations.
The subject of their appeal is the application of these prior determinations, without a full hearing on the merits of the "new" petitions..

Well, the Commonwealth Court has reluctantly agreed and the providers are allowed another hearing, on the same issue, with the same arguments.  Why?

The Judges believe that the statute and regulation, as written, compel the right to a hearing.
The HO must first determine that the insurer complied with the downcoding procedures before applying the existing caselaw, as the providers would be entitled to full payment if the insurer failed to follow the procedures.

Procedures for Downcoding

As the insurer compliance with the downcoding procedure may be the difference between reimbursement to a provider of $26.24 per treatment versus  $3,298.00 per treatment, we should familiarize ourselves with these procedures.

Regulation 127.207 "Downcoding by Insurers"

(a) changes to a provider's codes by an insurer may be made if the following conditions are met:

(1) the provider has been notified in writing of the proposed changes and the reasons in support of the changes.

(2) the provider has been given an opportunity to discuss the proposed changes and support the original coding decisions.

(3) the insurer has sufficient information to make the changes.

(4) the changes are consistent with Medicare guidelines, the Act and this subchapter.

(b) for purposes of subsection (a)(1) the provider shall be given 10 days to respond to the notice of the proposed changes and the insurer must have written evidence of the date notice was sent to the provider.

(c) whenever the changes to a provider's billing codes are made, the insurer shall state the reasons why the provider's original codes were changed in the explanation of benefits (letter) required by section 127.209 (relating to explanation of benefits paid).

(d) if an insurer changes a provider's codes without strict compliance with subsections (a)-(c), the Bureau will resolve an Application for Fee Review filed under section 127.252 (relating to application for fee review - filing and service) in favor of the provider under section 127.254
(relating to downcoding disputes).

Practice Pointers:

1. As Medical Providers of TMR are litigating these petitions, prepare your correspondence and documents, in anticipation of litigation. This is true of review of the TMR treatments and other alternative care, such as "Vax D" and "H Wave" therapies.

2. Document your correpondence! Note the Regulations requires the Insurer to have evidence of the date notice was given to the provider.

3. Also you must document your position with reasons. Where there is no Medicare CPT code, provide your explanation and the selection of an alternative code.

When in doubt ... ask for help from your Legal Counsel and/or you Medical Bill Review vendor.

Thursday, April 18, 2013

Strict Compliance Required in Medical Fee Review Procedures

Medical Fee Review is the procedure in Pennsylvania Workers' Compensation to review the amount and/or timeliness of the payment of a work-related medical expense.

Utilization Review is the procedure to challenge the reasonableness and necessity of a work-related medical expense.

Denial of a Medical Bill is the proper method to challenge the "work-relation" or causal relationship of the medical expense to the accepted work injury.

Downcoding occurs when an insurer changes a CPT code (Current Procedural Terminology) submitted by the healthcare provider. The procedure is set out at Regulation 127.207.

Medical Fee Review Procedure
Medical Fee Review is initiated by the filing of a form, LIBC-507, Application for Fee Review Pursuant to Section 306 (f.1) with the Bureau of Workers' Compensation. This Application must be filed within 30 days of notification of a dispute regarding the bill OR within 90 days of the following the original billing date, whichever is later. [ See: Regulation 127.252].

The Bureau of Workers' Compensation performs an initial Administrative review, within 30 days of receipt of all necessary documents
If a party is unsatisfied with the result, an "appeal" may be filed within 30 days of the administrative determination.
The Bureau will assign the request for hearing to a Hearing Officer (HO) to conduct a de novo hearing.
The HO will issue a decision within 90 days of the close of the record.
Any further appeal may be filed with the Commonwealth Court.

Strict compliance with the Medical Fee review procedures has been required.

Witkin v. Bureau of Workers' Compensation Fee Review Hearing Office (SWIF),
a reported decision of a panel of the Commonwealth Court of Pennsylvania authored by Judge McCullough on April 17, 2013 reviewed this procedural issue.

The treatment under review was the "notorious" TMR Therapeutic Magnetic Resonance treatment.
TMR is said to use magnets to reorganize scattered molecules in a painful region and ostensibly reduce pain.

Factual and Procedural Background

In the past, the Fee Review office has addressed the issue of correct code and reimbursement rate for TMR treatments.

In the instant case, Provider Witkin submitted invoices for TMR treatment billed at $3,298.00 per treatment under CPT code 76498 (generally used to identify magnetic resonance procedures).

SWIF downcoded the procedure to CPT code 97032  and paid $26.24 per treatment.

Witkin filed two Fee Review Applications.
After Administrative Review, the Fee Review office concluded that SWIF properly reimbursed the provider.
Witkin appealed this administrative determination.
A Hearing Officer (HO) was assigned to the appeal.

Without conducting a hearing the HO conducted a de novo review (sic) and issued a decision stating that the issue of coding for TMR has been "fully litigated" in the past and the proper CPT code for TMR treatment is 97032. The HO found no basis for the Provider to have a "second chance" to litigate the correct code.

Commonwealth Court Decision

The Provider Fee Review Applications were remanded for a hearing.
[SWIF did not oppose the Provider's request to reverse the HO decision and remand this matter for a full hearing on the merits].

The HO must first determine that SWIF strictly adhered to the downcoding procedures mandated by Section 127.207 of the Regulations and the prior decision at Liberty Mutual v. Bureau of Workers' Compensation (Kepko) 37 A.3d 1264 (Pa. Cmwlth 2012, appeal denied 53 A.3d 51 (Pa. 2012).

If the Insurer does not strictly comply with the procedure, the provider is entitled to reimbursement for the actual charges. Liberty Mutual, 37 A.3d at 1270.

In Witkin, the HO concluded the provider was barred from "relitigating" the proper CPT code, without conducting a hearing to determine if insurer SWIF complied with the downcoding regulations.

"A prior determination of the proper CPT code for TMR treatment is immaterial until the issue of whether SWIF strictly complied with the Regulations is decided."  slip opinion at page 5.

Practice Pointers:

1. The Fee amounts involved in this dispute demonstrate the importance of employing a knowledgeable and experienced medical bill re-pricing employee or vendor. The difference in reimbursement for two treatments was $52.48 versus $6,596.00, a significant difference!

 2. Proactively review medical expense billing statements. In many work comp cases the payments for medical expenses may exceed the payment of wage loss benefits.  The Pennsylvania Workers' Compensation Act was amended in 1993 and 1996 to provide Employers and Insurers with remedies to review and maintain some degree of control over medical expenses.

Be proactive, use these procedures and remedies!!!

Monday, April 15, 2013

Pa Court - Failed Drug Test = Suspension of Benefits

A Failed Drug Test may result in the discharge of an Employee.
An  Employee alleging a work injury, may also suffer an employment discharge , as the Employer is relieved of any duty to establish available employment.

In Brewer v. WCAB (E2Payroll & Staffing Solutions) (Pa. Cmwlth. February 13, 2013),
the Commonwealth Court affirmed the WCJ decision that granted the claim petition, in part, as employee demonstrated a work injury, but failed to qualify for wage loss benefits, as he was discharged for cause, based upon the positive drug test result.

His loss of earning was due to the discharge, not due to his injury.

On April 12, 2013, the Commonwealth Court of Pennsylvania issued an order amending the language in its memorandum opinion issued February 13, 2013 and designated the unpublished memorandum opinion as a published opinion, which can be cited in future appellate arguments in similar cases.

See my February 19, 2013 blog post for a more detailed discussion of this decision.

Friday, April 12, 2013

Retirement= Suspension ... an emerging theme

Retirement of Employees receiving workers compensation benefits has been a recurring theme.
An Employer may pursue a suspension of indemnity wage loss benefits, where an Employee has retired and withdrawn from the workforce.
The Employer does not need to establish the availability of suitable work, where the Employee has retire from the workforce. The Employee may continue to receive work comp indemnity wage loss benefits, where he/she has demonstrated a continuing effort to seek employment OR the work-related injury forced the Employee to retire.

The Commonwealth Court employed a "totality of circumstances" analysis of the evidence of "retirement" or "withdraw" from the workforce in its decision at:
City of Pittsburgh v. WCAB (Robinson) 4 A.3d 1130 (Pa. Cmwlth. 2010).
This decision was affirmed by the Supreme Court of Pennsylvania on March 25, 2013.

On April 3, 2013, the Supreme Court of Pennsylvania declined the Petition for Allowance of Appeal, filed on behalf of Employee, Thomas Krushauskas v. WCAB (General Motors), No. 877 MAL 2012.

In Krushauskas the Commonwealth Court determined there was substantial credible evidence in support of a finding of fact that Employee had voluntarily retired from the workforce and was not entitled to indemnity wage loss benefits.

An second significant issue on appeal was whether the Employer was required to file a separate suspension petition raising the retirement issue.

[Employee also argued Employer took what amounted to an illegal pension offset against his work comp benefits without filing the appropriate LIBC forms. This argument was rejected.]

In Krushauskas, the evidence of retirement included Employer testimony and documents signed by Employee, accepting an "Special Attrition Plan" offer of Employer.
The documents provided employee "retire effective the first of the month...". 

Employee testified that: he was not seeking employment; he did not decide to retire; that he does not feel sufficiently recovered to return to work.
This testimony was deemed "not credible" by the Workers' Compensation Judge.

The Krushauskas Commonwealth Court opinion cites its decision at City of Pittsburgh v. WCAB (Robinson).

The Argument that the Employer must file a separate Suspension Petition to raise the "retirement" legal argument, was rejected by the court in Krushauskas.

The recent Commonwealth Court opinion at Fitchett v. WCAB (School District of Philadelphia) (Pa. Cmwlth. April 8, 2013) cited as authority its decisions at Krushauskas and Robinson, for the propositions that:

(1) an Employer need not prove the availability of suitable work when the employer establishes, under the totality of the circumstances, that the claimant has voluntarily retired from the workforce,

(2) where a claimant accepts a retirement pension, she(he) is presumed to have voluntarily retired from the workforce,

(3) in such case, the employer is entitled to a suspension unless the claimant can show she(he) is seeking employment OR that the work injury forced her(him) to retire.

The "Separate Suspension Petition" argument was rejected In Krushauskas and again in Fitchett.

An emerging consensus appears to allow a Suspension remedy to the Employer, in the absence of a discrete "retirement" averment in a petition [or amendment to an existing petition] where:

(1) the claimant has clear notice that a suspension was possible,

(2) the claimant was given an opportunity to defend against it,

(3) the Workers' Compensation Judge is empowered to take appropriate action based upon the
      evidence presented.

Practice Pointers:

A. IMO the best practice is to file a separate petition or amend an existing petition.

B. REVIEW existing open Work Comp files to determine IF an employee has accepted a pension benefit. If so, continue the analysis and determine if a Suspension remedy is available.

Tuesday, April 9, 2013

Voluntary Retirement = Suspension (is a Petition Required?)

An injured worker, who has retired from the workforce, may not be entitled to indemnity wage loss benefits.

On March 25, 2013 the Supreme Court of Pennsylvania affirmed the decision of the Commonwealth Court at Robinson v. WCAB (City of Pittsburgh) (Pa. 2013) to utilize a "totality of the circumstances" standard when reviewing the Employer entitlement to a Suspension of indemnity wage loss benefits, where the allegation is that the employee has "retired" and voluntarily withdrawn from the (entire) workforce.

Typically the Employer will file a Petition for Suspension and/or Modification, where the employee receives a pension benefit and has not demonstrated any connect to the workforce, via job application.

At times, this "retirement" issue arises in the context of litigation of another petition or another issue.
Is the filing of a separate Petition or Amendment to a pending Petition required? ... Maybe not...

Fitchett v. WCAB School District of Philadelphia), No. 1713 C.D. 2011, a reported decision of a panel of the Commonwealth Court of Pennsylvania was authored by Judge Simpson on April 8, 2013.

Factual & Procedural Background

Employee filed a Penalty Petition in October 2003, alleging Employer unilaterally suspended work comp benefits. Employer sent Employee an LIBC 760 form, requesting information regarding her employment, self-employment and physical condition. By statute, If this form is not returned within 30 days, the employer/insurer may suspend benefit payments until the form is returned. Section 311.1
She alleged she never received the form. The Employer filed a Notice of Suspension LIBC-762.

The Employer filed a Petition for Termination alleging a full medical recovery as of September 2003.
Employee later filed a second penalty petition.

At an initial hearing, the WCJ interlocutory order directed Employer to reinstate benefits after employee produced the LIBC-760 form. A credit was granted for pension and Social Security benefits, against the reinstated work comp benefits.
The Termination Petition supersedeas request was denied.

Employee testified that she filed and received pension benefits beginning April 2002 and social security retirement benefits beginning October 2004. She testified she filed for these benefits for financial reasons. She did not look for work since the February 2001 work injury.

First IME opined Employee was fully recovered and was physically capable of returning to work without restriction in September 2003.
Second IME opined reached  a similar conclusion in April 2007.
Employee medical expert opined she could not return to work due to unresolved nerve, shoulder, neck and headache conditions.

Testimony regarding Work Intentions
Employee testified she planned to find work as a babysitter but did not do so because she feared her work injuries would limit her capabilities.

When asked: "Are you retired at this point?" She replied "YES". [ slip opinion page 7].

On redirect she clarified that by "retired" she meant she had to leave work due to her injuries and she would be working if not for her injury.

WCJ Decision
Employee Penalty petitions granted, in part.

Employer Termination Petition, not granted as left shoulder injury has not fully resolved...
BUT WCJ found:

d) that as of June 4, 2005 [Claimant] was essentially retired and had voluntarily withdrawn from the workforce.
The WCJ suspended benefits as of that date.

Commonwealth Court Decision
Employee arguments:

 1. the WCJ erred in Suspending benefits as the Employer never requested a suspension due to "retirement" via amendment to the Termination petition or issuing a suspension notice.
(LIBC form?)

Employee was not placed on notice of the suspension issue, she could not answer that averrment and was deprived of her due process rights.

2. WCJ did not issue a "reasoned decision". [ addressed and rejected in footnote #6].

Commonwealth Court Reasoning
A. The WCJ has the authority to suspend benefits in the absence of a formal petition...
where doing so would not prejudice the claimant.
citing Krushaukas v. WCAB (General Motors) (Pa. Cmwlth. 2012)
[Claimant Petition for Allowance of appeal, just denied by Pa. Supreme Court on April 3, 2013!]

A claimant is not prejudiced, when placed on notice that a termination or suspension is possible and is given the opportunity to defend against it.

HERE, Employee was on notice of the Employer's termination request.

ALSO, Employee was placed on notice of suspension request, by the Employer filing of the LIBC 762, the Notice of Suspension for Failure to Return Form LIBC-760.
This remained an issue as Employee filed a Penalty petition for employer failure to timely reinstate benefits. The WCJ interlocutory order only partially resolved these issues pending further evidence and final decision.

"Significantly for current purposes, the WCJ's interlocutory order also granted Employer a credit for pension and Social Security benefits against the reinstated benefits".

So Employee had notice Employer was seeking:
     i. a termination based upon medical exam,
     ii. a suspension based upon failure to timely return the LIBC form,
     iii. a credit for pension and Social Security benefits ...
          [ I don't see any mention of the retirement issue?]

"More importantly, as in Krushauskas, the parties fully litigated the issue of whether Claimant voluntarily retired from the workforce". slip opinion page 11.

In his dissenting opinion, President Judge Pellegrini states the claimant retirement was incidentally raised on cross exam and was never the focus of this litigation. Based on scant testimony the WCJ suspended benefits finding claimant had voluntarily retired from the work force.
The issue of retirement was never raised by petition or motion.
President Judge Pellegrini believed the "totality of the circumstances" issue was not sufficiently raised for the WCJ to be able to consider it. [ dissent page 2].

The Majority reviewed the evidence in support of a suspension based upon "retirement":

i. Claimant applied and receives a retirement pension from Employer,
ii. Employee receive Social Security "old-age" retirement benefits,
iii. she completed the IME intake form noting "retired",
iv. she told her M.D. she had retired,
v. she has not applied for or looked for any work.

WCJ found Employee had essentially retired from the entire labor force, as of June 4, 2005, the date corresponding to the day after, her benefits were reinstated.

Commonwealth Court Majority believed the findings of fact reflect the WCJ provided claimant an adequate opportunity to defend against a suspension. [does anyone else see a big leap of logic here?]
[I'm still not sure how the Employee was placed on notice of suspension?]

BUT, I think there was ample evidence to support a finding of fact that based upon the totality of the circumstances that it appears Employee has withdrawn from the work force and considers herself retired.

Commonwealth Majority cites the recent Pa. Supreme court decision in Robinson for the standard that, where a claimant accepts a retirement pension, she is presumed to have voluntarily retired from the workforce. In such a case, the employer is entitled to a suspension unless the claimant can show she is seeking employment or that her work injury forced her to retire. slip opinion page 14, citing Robinson.

Here the WCJ did not believe Employee intended to return to the workforce.
This credibility determination is within the WCJ province as fact-finder.

The Commonwealth opinion addresses several other issues regarding:
credits and offsets;
right shoulder injury relationship;
LIBC-760 form suspension;
litigation cost reduction;
unreasonable contest attorney fees.
For the purposes of this blog post, I wanted to focus upon the retirement and suspension issues.

Practice Pointers:

1. File Petition , Amend Petition, or file a motion, to clearly place the "retirement" issue and suspension request before the WCJ.

2. Marshall the type of evidence this Employer demonstrated.
Review medical records for "retirement" language or comments regarding return to work intentions.

3. Review benefit plan applications to establish a chronology.

4. Review financial documents, tax documents, loan applications, etc
   ... how does claimant describe their work status?

Rarely will a claimant state on cross-exam that they are "retired".
If they do, you will see the response on re-direct exam, as noted above, that they really did not mean retirement. For this reason I believe you need to review other sources, where claimant may have responded to a question regarding their work status.

This evidence will build your totality of circumstances argument for Suspension.

Friday, April 5, 2013

Fatal Claim and Claimant Burden of Proof

Fatal Claim Benefits are payable to specific class of beneficiaries upon proof of a work-related death. The Claimant Burden of Proof includes establishing the decedent was an employee and was acting in the furtherance of the business of the purported Employer. The Decedent must have been acting within the course and scope of employment at the time of the fatal injury.

Cohen v. WCAB (Getty Petroleum Marketing Co. Inc.), No. 982 C.D. 2012, an unreported memorandum opinion of a panel of the Commonwealth Court authored by Judge Leavitt on March 28, 2013 discussed these issues.

Factual & Procedural Background

Claimant widow filed a Fatal Claim petition alleging that her husband was acting within the course and scope of his employment with Getty Petroleum at the time of his fatal motorcycle accident.
Purported Employer Getty, denied an employment relationship.

Decedent operated a Getty gas station under a lease agreement. Getty owned the real property where Decedent conducted his business. Decedent paid monthly rent to Getty. He was responsible for utilities. Getty paid him a commission on the amount of gas sold.

Decedent also conducted an auto repair business on the property. The lease allowed this repair business, but Getty did not share in the revenue or profits of the auto repairs.  "Lessee understands that Lessee is an independent business person and is to conduct Lessee's business in Lessee's own name and at Lessee's own cost and expense".

A Getty witness testified that Getty required proof of work comp insurance upon persons working at the lessee's gas station. If not secured, Getty required a monthly penalty of $98.00 . Decedent paid this amount until he presented documentation that he was a sole proprietor, he had no employees and he was eligible to waive coverage as a sole proprietor.
[documents included Decedent's Subchapter S incorporation documents and Decedent waiver of work comp coverage based upon his ownership interest].

After the record was closed, Claimant alleged the $98.00 payment was in the nature of a workers compensation premium.   The case was re-opened and assigned to another WCJ. Additional evidence was allowed.

Getty presented additional testimony that work comp insurance was not provided to Decedent. The lease authorized Getty to charge an additional amount to procure wc insurance coverage, but Getty did not exercise this provision. It was the practice of Getty to terminate the lease if the lessee did not secure work comp insurance.

Claimant testified she did not discuss her husband's planned route on the morning of the accident.
Decedents cousin testified he worked in the auto repair business.
He understood decedent was going to purchase parts at Pep Boys for a customer vehicle tune-up on his way to work on the day of the accident.

Getty argued that Decedent cousin stated on the morning of the accident, Decedent was on his way to Pep Boys to purchase parts for a customer vehicle repair. If decedent was on a "work related errand", it was for his auto repair business, not the Getty business. Getty provided the gas station and gas. Decedent sold the gas. Getty set the price. Decedent earned a commission. Getty was not involved in any aspect of the auto repair business.

The WCJ found Claimant witnesses credible, in part, but found Decedent was not acting in the course or scope of employment with Getty. He was not an employee of Getty.  Rather, he was commuting to work. He was not on a "special mission" for Getty.

Commonwealth Court
A.   Employment Status of Decedent
Claimant argued that Getty retained the power to direct and control Decedent's business, and this made him an employee of Getty.

The Claimant bears the burden of establishing an employer-employee relationship existed.
Factors to be considered include:

(1) control of the manner the work is done, (2) responsibility for result only, (3) terms of agreement between parties, (4) nature of the work/occupation, (5) skill requires for performance, (6) whether one is engaged in a distinct occupation or business, (7) which party supplies the tools/equipment, (8) whether payment is by time or by the job, (9) whether work is part of the regular business of employer and (10) the right to terminate employment.
Citing American Road Lines v. WCAB (Royal) (Pa. Cmwlth. 2012).

Based upon the testimony and documents, the Court concluded the Decedent worked as a sole proprietor, not as an employee of Getty. The lease terms, Decedents corporate and tax records together with the work comp waivers support this legal conclusion.

B.   WCJ failed to provide a "Reasoned Decision"
Claimant argued that the decision in Daniels v. WCAB (Tristate Transport) limits the WCJ from making credibility determinations of a witness who did not appear before them.
No, the Daniels decision requires the WCJ to author findings as to the actual objective basis for the credibility determination of a witness who does not appear live.
Here the WCJ explained her credibility determinations, as required.

Practice Pointers:
1. The Employer presented witnesses and documents to rebut the Claimant arguments that Decedent was an employee. The evidentary record reflects an investigation of that events and preparation of rebuttal evidence on the critical issue of the employment relationship.

2. The Claimant evidence that Decedent was an "employee" was premised upon the existence of a relationship of Getty to the auto repair business. This relationship was "spelled out" in the documents and testimony of the Employer witnesses. The claimant witnesses did not directly rebut any of these critical factors, in assessment of the existence of an employment relationship.

3. Another hurdle to the employment relationship argument, is that Claimant must prove the Decedent trip from the residence was going to Pep Boys, as a work related task. This could change the nature of the morning commute into a business purpose. Claimant failed to prove this crucial element, via credible testimony.

Wednesday, April 3, 2013

Pa WCJ Decision and the "Reasoned Decision" Requirement

The Pennsylvania Workers' Compensation Act was amended in 1993 to require that the Workers' Compensation Judge file "... a reasoned decision, containing findings of fact and conclusions of law based upon the evidence as a whole which clearly and concisely explains the rationale for the decisions so that all can determine why and how a particular result was reached. The workers' compensation judge shall specify the evidence upon which the workers' compensation judge relies and state the reasons for accepting it in conformity with this section". 
Section 422(a) 77 P.S. 834.

Section 422(a) continues: " when faced with conflicting evidence, the workers' compensation judge must adequately explain the reasons for rejecting or discrediting competent evidence. Uncontroverted evidence may not be rejected for no reason or for an irrational reason; the workers' compensation judge must identify that evidence and explain adequately the reasons for its rejection.
The adjudication shall provide the basis for meaningful appellate review".

Often unsuccessful litigants will allege on appeal that the WCJ failed to author a "reasoned decision".

A recent unreported memorandum opinion of a panel of the Commonwealth Court of Pennsylvania,  No. 1533 C.D. 2012, authored by Judge Brobson on March 27, 2013 discussed this issue at:
Cardone Industries v. WCAB (Varghese) (Pa. Cmwlth. 2013).

Factual & Procedural Background

Employee fell after being struck by a forklift at the workplace.
His claim petition alleged injuries to the left shoulder, wrist and hand.
Employee, Employee Medical witness and Employer Medical Witness, all testified via deposition.
WCJ granted the claim for ongoing total disability as a result of a left wrist injury.
Employer appealed and argued the WCJ failed to issue a reasoned decision.

Employer Legal Arguments
The WCJ summarized the deposition testimony of each witness.
The WCJ "announced" her credibility determinations.
She failed to provide reasons for finding Employee credible.
She failed to provide reasons for finding Employee Medical witness more credible than Employer's medical witness.

Commonwealth Court Decision
VACATED the WCAB decision which affirmed the WCJ award.
The case was REMANDED to the WCJ for a new decision and order,
"Which shall include actual objective bases for her credibility determinations pursuant to Section
422(a) of the Act".   [slip opinion page 11]

The WCJ summarized the testimony of each witness. The Court decision "reprinted" these summaries in full. The instant WCJ decision was said to be similar to prior WCJ decisions reviewed by the Pa Supreme Court in Daniels v. WCAB (Tristate Transport) and the Commonwealth Court in Lewis v. WCAB (Disposable Products).

As stated by the Supreme Court in Daniels: ... although the WCJ's summarization of the witnesses' testimony demonstrates her grasp of the whole evidentary record, the WCJ articulated no objective basis for deeming the deposition opinions of the [employer's medical witness] to be more credible and persuasive than those of the [claimant's medical witness].

"... absent some articulation of the basis for her conclusion on credibility ... the credibility decision does not meet the standard found at Section 422(a)".
828 A.2d at 1054.

Here, in Cardone Industries, the WCJ simply states that she had "reviewed and considered all of the evidence" and found Employee to be credible.
She credited Employee's medical witness over Employer's medical witness, based upon "a review of the evidentary record as a whole".

Most WC practitioners will recognize these statements are somewhat "standard" phrases in WCJ decisions.
However, these statements are insufficient to constitute actual objective bases for crediting one witness over another.

Practice Pointers:

1. IMO it is difficult to reverse a WCJ decision solely based upon the "reasoned decision" argument.
    But consider the instant case. What were the reasons for the award? In future review of this award,
    what do you need to prove to prevail in a future Modification/Suspension/Termination request?
    Cudos, to Employer for challenging this decision.

2. What are sufficient reasons from the WCJ?  We have discussed and debated this topic since the
     1993 amendments.

Do we want the WCJ to find employee or employer witness less credible because:
    they are argumentative in their answers,
    they do not answer questions directly,
    they do not make eye contact?

Do we want to compel the WCJ to "explain" that one medical witness is more persuasive than another because:
              they have the opportunity to examine employee more than once,
              they had the opportunity to review all medical records,
              the medical witness listed more "reasons" for his opinion?

3. These are evidentary issues that we must consider at the outset of litigation, before any testimony. We should ask:

How does each piece of evidence, how does each witness build the case?

What fact or factors can we develop as legal counsel to promote the "worthiness" of one witness over another?

Does this medical witness "specialize" in this type of injury?
Did this witness work with the employee... and was unaware of any injury?
The questions are endless...

As advocates for our clients positions, we must insist that the WCJ explain the reasons for their decision, so that the parties can understand why they "won or lost". We may not agree with the decision, but we are entitled to know "why" the case was decided.