Tuesday, June 20, 2017

PA Supreme Court rules Impairment Rating Evaluation remedy is Unconstitutional!

Pennsylvania Supreme Court rules Impairment Rating Evaluation remedy is Unconstitutional!

Mary Ann Protz v. WCAB (Derry Area School District) (Pa. June 20, 2017)

The Supreme Court of Pennsylvania has ruled that the PA Work Comp Impairment Rating Evaluation remedy is unconstitutional, in its entirety.

Previously, the Commonwealth Court Decision approved the continuing performance of impairment rating evaluations (IRE), albeit pursuant to the Fourth Edition of the AMA Guides to the Evaluation of Impairment. (AMA Guides). That portion of the Commonwealth Court Decision has been reversed. The Commonwealth Court ruling that Section 306(a.2) violates the non-delegation doctrine of the Pennsylvania Constitution was affirmed.

In effect, there is no longer an Impairment Rating Evaluation remedy for the Employer and Insurer.

Factual and Procedural Background

The underlying facts and procedural history in the Protz case are straightforward. Protz sustained a work related injury in 2007. The school district voluntarily began paying total disability benefits. In October of 2011 Protz underwent IRE at the school district’s request. The IRE physician evaluated Protz and assigned a 10% impairment rating based upon the Sixth Edition of the AMA Guides. As her impairment rating was less than 50%, the school district filed a Modification Petition seeking to convert her status from total to partial. This Petition would limit the duration of wage loss benefits to a period of 500 weeks.

The Workers’ Compensation Judge granted the school district Modification Petition, as the whole body impairment rating was less than 50%. Protz appealed the WCJ Decision to the Workers’ Compensation Appeal Board and argued that the general assembly unconstitutionally delegated to the AMA the authority to establish criteria for evaluated permanent impairment. The Appeal Board rejected this constitutional argument and affirmed the WCJ Decision.

In the Commonwealth Court appeal, Protz again argued that Section 306(a.2) of the Act violates Article II, Section I of the Pennsylvania Constitution. The Commonwealth Court agreed. The Court held that: the General Assembly has the power to make laws, but it cannot constitutionally delegate that power to any other branch of government or to any other body. The en banc panel agreed with Protz that Section 306(a.2) requirement that physicians use the “most recent edition” of the AMA Guides violates Article II Section I. The reasoning is that the assessment of impairment is placed in the hands of “another body”. The AMA could (and did) change the Guides without consulting the PA General Assembly. In effect, Pennsylvania law would change without legislative review or action.

The Commonwealth Court declared Section 306(a.2) unconstitutional, only in so far as it proactively approved versions of the AMA Guides beyond the Fourth Edition, without legislative review. The Court preserved a portion of the IRE remedy and remanded the Protz case to the WCJ with instructions to apply the Fourth Edition of the Guides, which was the version in existence when the General Assembly enacted Section 306(a.2) in 1996.

The Supreme Court Decision

Both Employee and Employer appealed the Commonwealth Court decision.
Justice Wecht authored this plurality opinion. First, he reviewed the non-delegation issue. The school district argued that the General Assembly is free to adopt current and future standards that are published by a well recognized independent authority. Protz argued that Section 306(a.2) violates the non-delegation doctrine as it gives the AMA unfettered discretion over Pennsylvania’s impairment rating methodology.

At the heart of the non-delegation doctrine is the principle that the General Assembly cannot delegate “to any other branch of government or to any other body or authority” the power to make law. However, the Constitution does permit the General Assembly, in some instances, to assign authority in its discretion, to execute or administer a law. The Constitution imposes two fundamental limitations when the General Assembly acts in this matter. First, the General Assembly must make “the basic policy choices”. Second, the General Assembly must include “adequate standards which will guide and restrain the exercise of the delegate administrative functions”.

The Supreme Court reviewed its prior decisions regarding the non-delegation issue. The Court concluded the authority delegated to the AMA in Section 306(a.2) is even more broad and unbridled than prior statutes which were reviewed and held to have violated the non-delegation doctrine (citing West Philadelphia Achievement Charter Elementary School (Pa. 2016)).

The Supreme Court found that the General Assembly did not favor any particular policies relative to the AMA Guides methodology for grading impairments nor did it prescribe any standards to guide and restrain the AMA’s discretion to create such a methodology. The Court speculated that the AMA could concoct a formula which would yield an impairment rating guide which could deem nearly every claimant to be at least 50% impaired or to the contrary to deem that almost no one exceeds a 50% threshold or the AMA could concoct anything in-between those two extremes.

The Supreme Court noted that the General Assembly did not include any procedural
mechanisms within the Section 306(a.2 )which the court has previously considered essential to protect against administrative arbitrariness and caprice. For example, the General Assembly did not require the AMA to hold hearings, accept public comments or explain the grounds for its methodology in a reasoned opinion, which then could be subject to judicial review.
It is noteworthy that The Supreme Court cited several medical literature articles regarding the flaws in the AMA Guides, including a group of physicians who authored a chapter in the 5th edition Guides!

Now that the Court concluded “most recent edition language” is unconstitutional could the IRE remedy be preserved, based upon utilization of the 4th edition, which was the Guide available at the time the 1996 amendment?

Unfortunately the answer was a resounding “NO”.

The Supreme Court determined that the Commonwealth Court erred in remanding the Protz case to the WCJ with instructions to apply the Fourth Edition of The Guides. 

The Court rejected the argument that the Fourth Edition of The Guides was in existence at the time the statute was enacted and it could have been incorporated by reference by the General Assembly.

The Supreme Court rejected this analysis as the statute did not specifically require use of the Fourth Edition of The Guides; rather the statute required the use of the “most recent edition” of the Guides.
The Supreme Court rejected the argument that striking the unconstitutional “most recent edition” language would allow the remainder of Section 306(a.2) to remain an effective remedy. 

The Court concluded that removal of the offending language renders the remainder of Section 306(a.2) incomprehensible. This Section was viewed as a paradigmatic example of a law containing valid provisions that are inseparable from void positions. The Court concluded – we must strike Section 306(a.2), in its entirety.

Recommendations for Cases with Past Impairment Rating Evaluation Determinations

1.       Situations where you must issue a supplemental agreement to recognize the modification of partial status to total disability status –

                                I.            “Open Cases- currently  pending before WCJ, WCAB, and Commonwealth Court”

                              II.            “Cases with Impairment Rating Determinations within 500 week  period”

a)      Ask claimant for a settlement demand.
b)      Make a settlement offer.
c)       Schedule an IME, to obtain a current physical capacity opinion.
d)      Retain a Vocational Expert to interview claimant, to perform a labor market survey and to prepare an Earning Power Assessment Report.
e)      Contact the Employer. Can they make a modified duty (even part-time) job offer to Employee, to commence (re-start) the 500 week clock.
f)      Determine if claimant has “retired” or withdrawn from the work force.
g)      Determine if claimant is working.

2.       In situations where you it is uncertain that benefit status must be voluntarily modified

                                I.            Claimant already paid 500 weeks of partial disability benefit status

a)      Ask claimant for a settlement demand
b)      Make a settlement offer
c)       Schedule an IME, obtain physical capacity opinion

3.       PENALTY assessment  for violation of the Act

a)      Will be available in “open” cases, if timely modification is refused.
b)      Reasonable time to modify benefit status – 21 days from request (?).
c)       “Closed” cases- possibility of penalty is less likely, as there is a legitimate argument as to entitlement of modification – at this point

4.       ATTORNEY FEE assessment for unreasonable contest

a.       Will be available in “open” cases, if timely modification is refused and litigation is required.
b.      “Closed” cases- possibility of attorney fee assessment is less likely, as there is a legitimate argument as to claimant entitlement of modification of benefit status – at this point.
This analysis may change, as appellate caselaw develops.


 Remember, these comments are not intended to be legal advice. Each case is unique and must be discussed at length, after you hire an attorney.

Tuesday, February 28, 2017

Commonwealth Court PROTZ decision impact upon prior Unappealed IRE Determinations

Past Unappealed IRE Determinations are not invalidated by the Commonwealth Court decision in Protz.

At this time, the issue of the constitutionality of the impairment rating evaluation (IRE) remedy of section 306(a.2) of the Workers’ Compensation Act remains pending before the Pennsylvania Supreme Court. 

Since the September 18, 2015 en banc decision of the Commonwealth Court in Protz v. WCAB (Derry Area School District), there have been several additional appellate case reports and several additional challenges to the impairment rating evaluation procedures.

                A number of questions remain unanswered at this point. However, the Commonwealth Court provided its analysis of the affect of the 2015 Protz decision in regards to prior unappealed impairment rating evaluations.

                 Riley v. WCAB (Commonwealth of PA) No. 238 CD 2016, a panel decision of the Commonwealth Court authored by Judge Hearthway on December 8, 2016 addressed this issue. The Court affirmed the decision of the Workers’ Compensation Judge and the Workers’ Compensation Appeal Board - that an injured worker could not successfully file a motion in October 2015 to vacate the prior 2003 impairment rating evaluation, after publication of the Protz decision.

Factual Background

                Employee sustained multiple work related injuries after an assault by a patient at the health care facility where she was employed. These August 2000 injuries were acknowledged via a Notice of Compensation Payable. Total disability benefits commenced. In April 2003, Employee underwent an impairment rating evaluation. Barry Schnall, M.D. He utilized the Fifth edition of the American Medical Association Guides and assigned Employee a 21% impairment rating for the work-related injuries to her nose, face, head and neck. An LIBC Notice of Change of Workers’ Compensation Disability Status dated May 5, 2003 was filed. Accordingly, Employee would receive indemnity wage loss benefits for partial disability status for a statutory duration of 500 weeks.

                In August of 2012 Employee filed a Petition for Review to seek to amend the Notice of Compensation Payable to include additional injuries to her shoulders. Employee also filed an additional petition alleging that Dr. Schnall failed to consider the full extent of her injuries.

                Before the WCJ, Employee presented medical expert testimony from her treating physician Dr. Menkowitz about her injury and treatment following the 2000 assault. Employer presented the medical expert testimony of Dr. Schmidt based upon his December 2012 IME of Employee. Dr. Schmidt concluded that the employee’s shoulder injuries were not work related.

WCJ decision 

                The WCJ decision in August 2014 found Employer’s medical expert testimony was more credible than Employee’s medical testimony. Employee failed to establish the NCP was incorrect, that she had sustained injuries other than those listed on the NCP.  Employee also failed to demonstrate that her work related impairment rating was equal to or greater than 50%. 
Employee appealed this decision to the Pennsylvania Workers’ Compensation Appeal Board.

                In May 2015, when the WCAB appeal was pending, Employee filed a motion to the Appeal Board to vacate the 2003 IRE determination in light of the Commonwealth Court decision in Protz v. WCAB (Derry Area School District). 

WCAB decision 

                The January 2016 WCAB decision affirmed the findings of fact and conclusions of law of the WCJ. The Appeal Board denied the Employee’s petition for review of the NCP. The Appeal Board denied the Employee’s motion to vacate the 2003 IRE determination. The Appeal Board found that the findings of fact of the WCJ were supported by substantial evidence and the WCJ credibility determination was reasoned.

                The Appeal Board found that Employee could no longer challenge the 2003 IRE determination as she failed to do so within the 60 day time period, as set forth in §306(a.2) (2) of the Act. 

Furthermore, she did not present any medical evidence of a new impairment rating, a rating of more than 50% as required by §306(a.2)(2). Citing: Johnson v. WCAB (Sealy Components Group) 982 A. 2d 1253 (Pa. Cmwlth. 2009).

                The Appeal Board found that Employee failed to challenge the constitutionality of the IRE until her October 2015 motion to vacate. On this basis the Appeal Board concluded Employee was precluded from raising that constitutionality issue before the Appeal Board. Employee petitioned for review of this Appeal Board decision to the Commonwealth Court.

Commonwealth Court Decision

                Commonwealth Court affirmed the decision of the Workers’ Compensation Judge and Workers’ Compensation Appeal Board. Employee argued that the WCJ decision to reject her medical expert testimony regarding her shoulder condition was not supported by accurate objective reasoning. Employee argued that the Appeal Board erred when it determined that the IRE properly evaluated her level of impairment utilizing the Fifth Edition of the AMA guidelines.

                The Commonwealth Court found that the WCJ determination regarding the lack of a relationship of the shoulder condition to the work injury was supported by substantial evidence. The WCJ decision pointed to the evidence of arthritis Employee’s shoulders, which predated the work injury. The WCJ found the Employer medical expert testimony to be more credible of the testimony of her medical witness. On this basis, the NCP did not incorrectly describe the work injury.

                The Commonwealth Court concluded that the September 2015 Protz decision does not invalidate the Employee’s 2003 impairment rating evaluation. This case is not controlled by the holding in Protz. In this case, Employee was evaluated by Dr. Schnall using the Fifth Edition of the AMA guides rather than the Fourth Edition as required under the ruling in Protz. However, the substantial distinction is that the claimant in Protz appealed the IRE determination within 60 days of the LIBC Notice of Change. In this case Employee waited nearly 10 years after the notice to challenge the use of the AMA guides in her 2003 IRE. The statutory language at §306(a.2)(2) is clear. Claimants have 60 days to appeal a reduction in the disability benefits status following a notice prior to the reduction becoming final. Here the Employee did not appeal within that time period, thereby waiving the right to challenge the 2003 IRE determination.

                The Commonwealth Court noted that a claimant may challenge an IRE during the 500 weeks period of partial disability benefit status by showing a revised impairment rating of equal or greater than 50% pursuant to §306(a.2)(4). In this case, employee failed to present such a challenge. She did not present any evidence of a new impairment rating of at least 50%.

                The Commonwealth Court noted that its prior decision at Johnson v. WCAB (Sealy Components Group)  addressed the waiver of an IRE challenge when the determination went uncontested past the initial 60 days. That claimant waived her argument that her constitutional due process rights were violated as she failed to timely file an appeal from the IRE determination.

                Similarly, in Wingrove v. WCAB (Allegheny Energy) 83 Atlantic 3rd 270 (Pa. Cmwlth. 2014) the court determined that the claimant was barred from challenging an IRE which used a subsequent edition of the AMA guides when he failed to challenge his IRE within the 60 days statutory time period nor did he present evidence that his impairment rating was equal or greater than 50%.

               Conversely, in Ruse v. WCAB (Valley Medical Facilities Sewickley) Pa. Cmwlth. January 13, 2016, the court remanded an IRE determination made utilizing the Fifth and Sixth Editions of the AMA guides where that claimant preserved the right to appeal the validity of the IRE by challenging the IRE determination within the 60 day time period.

                In the Riley decision, the Court noted that this Employee underwent an IRE in 2003 and that determination went unchallenged by employee until the 2015 decision in Protz. The Court emphasized that the decision in Protz does not give the employee a second chance to appeal her 2003 IRE, where she failed to raise her claim within the time period established at §306(a.2)(2).

                PRACTICE POINTERS:

1. Continue to file IRE Requests for designation of a medical expert to perform an impairment rating evaluation within 60 days of the 104th week of total disability status.

2. Request the IRE medical expert perform an IRE assessment of the total body impairment based upon the 4th Edition and 6th Edition of the AMA Guides.

3. Unappealed IRE determinations are final. An injured worker may request review of that determination, if there is medical expert evidence of an impairment rating of 50% or greater than 50%. This review may be filed during the 500 week period of partial disability benefit status. 

4. The Pennsylvania Supreme Court will rule on the constitutionality of the IRE remedy in the near future. One may only speculate as to the remedy available after that decision. 

Friday, January 13, 2017

2017 Pennsylvania Workers' Compensation Maximum Rate

2017 Pennsylvania  Workers' Compensation Maximum Rate Announced

The Department of Labor Industry announced, based upon the statewide average weekly wage, as determined by the Department of Labor & Industry, the maximum compensation rate payable under the Pennsylvania Workers' Compensation Act, Article 1, subsections 105.1 and 105.2 shall be $995.00 per week for injuries occurring on and after January 1, 2017.

For purposes of calculating the update to payments for medical treatment rendered on and after January 1, 2017, the percentage increase in the Statewide Average Weekly Wage was 1.7 percent.

The maximum weekly compensation is $995.00.

Employees earning $746.26 to $1,492.50 will be paid at a rate of 66 2/3% of their earnings.

Employees earning $552.78 to $746.25 will be paid at a rate of $497.50.

Employees earning less than $552.77 will be paid at a rate of 90% of their earnings.

The correct calculation of the injured employee's average weekly wage may become complicated for a number of reasons:

  • bonuses; 
  • vacation pay;
  • profit sharing;
  • commissions; 
  • concurrent employment;
  • self-employment;
  • periods of layoff; 
  • limited duration of employment;
  • seasonal employment;
  • etc ...
Do not hesitate to contact your workers' compensation attorney to review any Average Weekly Wage and Benefit Rate questions.