Thursday, September 24, 2015

IRE process is Unconstitutional - as per Commonwealth Court

Pennsylvania Workers' Compensation Impairment Rating Evaluations based upon the AMA Guides to the Evaluation of Permanent Impairment.

In 1996 the Pennsylvania Workers' Compensation Act was amended to provide a "new" remedy to the Employer and Insurer, the Impairment Rating Evaluation (IRE) for modification of the injured Employee status from total disability (unlimited duration) to a partial disability status (500 week duration). Section 306(a.2).

As expressed in prior posts, we believe the IRE remedy is the most important remedy available to the Employer and Insurer to limit future indemnity wage loss exposure. In a relatively straight-forward process, after the Employee receives 104 weeks of total disability benefits, the Employer may request the designation by the Bureau of a physician to conduct an impairment rating evaluation, in accord with the AMA Guides to the Evaluation of Permanent Impairment. [LIBC-766 Request for Designation].

Where the degree of impairment is determined to be less than 50% (according to the Guides formula) the Employee status is converted from total disability to partial disability.[LIBC-764 Notice of Change of WC Disability Status].

 The IRE converts the duration of Employee disability status from total disability to a partial disability status of a duration of 500 weeks. The rate of indemnity wage loss benefits is not altered by this process. 

Protz v. WCAB (Derry Area School District, No. 1024 C.D. 2014, an en banc decision of the Commonwealth Court of Pennsylvania authored by President Judge Pellegrini on September 18, 2015, determined that a provision of the IRE process is an UNCONSTITUTIONAL delegation of state legislative authority.

The Commonwealth Court concluded that when the Pennsylvania State Legislature drafted the Section 306(a.2) language to allow use of the most recent edition of the AMA Guides to assess the level of impairment, that was wrong. That was a delegation of its legislative power to a private body.

Why? Because any future change in the AMA Guides would be an "automatic" change in the Work Comp law, thus it is a change made by a private body, the AMA, not a change made by the state legislature.

What does this mean for pending IRE determinations?

The Protz case was remanded to the WCJ with instruction to apply the Fourth Edition of the AMA Guides and to adjudicate the Employer petition for modification. 

... So, to recap, the entire IRE process was not tossed out.
The Court wants all IRE determinations to be made based upon the Fourth Edition Guides, not the subsequent 5th of current 6th Editions.


1.   Where the IRE physician has conducted a physical examination and documented his/her findings, they must now use the Fourth edition formulas and tables to convert those physical exam findings into a Fourth Edition Impairment rating.

2.   This may be accomplished by making a request to the IR Physician to author a supplemental report, based upon the prior documented physical examination.

3.   Look at your files. If there is a pending IR exam, write to the IR physician and request that they calculate impairment in accord with the Fourth Edition, in addition to a Sixth Edition assessment. We anticipate this Protz decision will be reviewed by the Supreme Court and they may direct the use of the Sixth Edition, at some future point. So you will want to have evidence of both Editions of the Impairment Rating.

4.   We anticipate that Employee counsel will make a request to the WCJ to re-open any pending IRE petition. We anticipate that some Employee counsel will file an appeal to the WCAB within 20 days of any past IRE determination, to have this new ruling applied to that case.

5.   HOWEVER... cooler heads may prevail ... as a practical matter ... if the Employee has a "low"  impairment rating, let's say in the range of 5% according to the 6th Edition... as a practical matter, application of the 4th edition of the AMA guides will not result in an IRE determination in excess of 50%.

6.   ... BUT for a more detailed review of the differences between the 5th and 6th editions of the AMA guides, SEE: the NCCI Workers Compensation Legislative Research article,
" Impact on Impairment Ratings from Switching to the AMA's  6th Edition of the Guides to the Evaluation of Permanent Impairment",  by Robert Moss, David McFarland, CJ Mohin and Den Haynes, July 2012.

One of the conclusions of this article is that the application of the 6th Edition would result in a LOWER impairment figure than by application of the 5th Edition !

In the several states studied in this article the DECREASE in the impairment rating when the 6th edition was used rather than the 5th Edition was in a range of 25% to 32% for a whole body impairment rating!
PENNSYLVANIA was not part of this study. 

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