A WCJ approved Compromise and Release Settlement cannot be negated by a subsequent allegation there was no "meeting of the minds" regarding MSA medical expenses.

Lehigh Specialty Melting, Inc. v. WCAB (Bosco): No. 569 C.D. 2020

Employer’s Petition to Review requested relief and enforcement of the terms of an approved Compromise and Release settlement. Consistent with the terms of a C&R settlement, Employer obtained a Medical Set-Aside (MSA) approved by CMS. Claimant refused to execute the paperwork necessary to secure the MSA (as agreed upon in the C&R) as the MSA did not include expenses for medical marijuana. Lehigh Specialty Melting, Inc. 

WCJ Decision granted Employer's Petition. WCAB Order reversed.    Commonwealth Court reinstated WCJ decision.

September 21, 2021 ordered that the Memorandum Opinion filed on July 13, 2021 shall be designated OPINION and it shall be reported.

The Commonwealth Court ruled that once a C&R has been approved, a claimant cannot ask a workers’ compensation judge to negate it based on the contention that there was no meeting of the minds. After WCJ approval, the only means for a party to negate the C&R is to convince a WCJ that the agreement was entered into as a result of fraud, deception, duress, mutual mistake, or unilateral mistake caused by an opposing party’s fault. As none of these conditions exist in the case sub judice, the WCJ decision was reinstated.

Factual Background 

The parties entered into a Compromise and Release Agreement (C&R), which was approved in a 2014 WCJ decision. An amended 2014 WCJ order specified that Employer was to continue to pay medical expenses associated with Claimant’s work injury until it funded a Workers’ Compensation Medicare Set Aside Arrangement (MSA) approved by the Center for Medicare & Medicaid Services (CMS).

In 2018, Employer filed a Petition to Seek Approval of a C&R, a Petition to Review Medical Treatment and/or Billing and a Petition to Review Compensation Benefits.

The gist the three petitions was that Claimant entered into a C&R wherein he agreed not only to a lump sum settlement but also to the potential establishment and funding of an MSA.  Claimant agreed to timely complete all paperwork necessary for Employer to apply for and secure an MSA or Allocation. Thereafter, when Employer obtained a set-aside approved by CMS, Claimant refused to follow through with executing the paperwork necessary to secure the MSA.

WCJ Decision

The WCJ found Claimant testimony was credible that he knowingly and voluntarily agreed that if Employer obtained approval of an MSA and properly funded it, Claimant’s medical benefits would end.

Summary of the WCJ findings of fact reflect -

Claimant agreed to cooperate with Employer’s efforts to obtain an MSA. Under the C&R, Employer’s only obligation [if it chose to exercise it], was to obtain approval of an MSA and fund the same. There was no provision that Employer needed to pay for anything other than the MSA. Employer’s evidence demonstrated that it submitted an MSA to CMS, the MSA was approved, the paperwork was forwarded to Claimant and Claimant’s refused to sign the paperwork because the MSA did not include all of Claimant’s ongoing work-related medical treatment - including medical marijuana.

Employer resubmitted the MSA proposal to CMS, which again approved it with a “notation that medical marijuana is not covered by Medicare and is thus not considered part of an MSA". WCJ found the Employer’s obligation was solely to obtain an MSA and fund it, “not to obtain an MSA and cover other services not covered by Medicare.”  The evidence clearly shows that Claimant failed to cooperate by signing the documents needed to finalize the MSA. Employer could not obtain final approval of the MSA.

The WCJ noted Claimant’s position -  he wants to be reimbursed for his past usage of medical marijuana and he does not want to agree to the MSA unless there is some provision for the funding of his future use of medical marijuana.

The WCJ concluded that Claimant was attempting to re-write the C&R to include payment for non-Medicare covered services as part of Employer’s obligation. However, Claimant has shown no basis for a re-writing of a contract. The WCJ concluded as a matter of law that (claimant's request) is not part of the legal obligation that the parties contractually agreed to in the C&R.

The WCJ decision stated that, if Employer wished to end its obligation for Claimant’s medical benefit payments, it was to obtain a new MSA structured settlement quote and forward the paperwork to Claimant for signing. 

If Claimant signs the MSA paperwork, Employer and its Insurer are relieved of all future liability of medical expenses related to the work injury.  If Claimant does not sign the MSA paperwork, then Employer may send Claimant a check for the value of the MSA and its obligation to pay for work-related medical expenses shall end.

Claimant Appeal to WCAB

The WCAB agreed with Claimant that the WCJ has no authority to require Claimant to execute the MSA documents. Citing Stroehmann Bakeries v. Workers’ Compensation Appeal Board (Plouse), 768 A.2d 1193 (Pa. Cmwlth. 2001). The Board determined that a C&R is enforceable only where there has been a “meeting of the minds” on all of its terms.

WCAB reasoned - circumstances have changed and medical use of marijuana is now approved in Pennsylvania. Claimant contends that medical marijuana is a reasonable treatment for his work injury. Employer disagrees. Accordingly, there is no meeting of the minds. The C&R provision requiring Claimant execute documents for the approval of the MSA and final settlement of his claim for medical benefits - is not enforceable.

Commonwealth Court Appeal of Employer

The Commonwealth Court analysis began with a review of section 449 regarding approval of a C&R agreement -

The workers’ compensation judge shall not approve any C&R unless he first determines that the claimant understands the full legal significance of the agreement. The agreement must be explicit with regard to the payment, if any, of reasonable, necessary and related medical expenses.

The Court reviewed the C&R terms - Claimant’s wage loss benefits were settled for a lump sum payment;  the C&R did not resolve Claimant’s medical benefits but, instead, provided Employer with the option of funding an MSA or continuing to pay the medical bills related to Claimant’s work injury.

The C&R specifically stated Employer shall continue to remain liable for payment of all reasonable and necessary medical expenses related to Claimant’s work injury through CMS approval of an MSA and Employer’s funding of the same. Claimant agrees to timely complete all paperwork necessary for Employer and its Insurer/Third-Party Administrator to apply for and secure an MSA or Allocation. (emphasis in original).

The Court emphasizeded the C&R was approved by a WCJ, who confirmed via Claimant’s testimony that Claimant understood its terms. Although the medical aspect of Claimant’s workers’ compensation claim was left open at the time, the language clearly demonstrated that the parties agreed that Employer could submit an MSA for CMS approval at a later date. If the MSA was approved by CMS, and Employer chose to fund it, Employer would be absolved of further responsibility for Claimant’s medical bills. As part of this agreement, Claimant agreed to cooperate by preparing all necessary paperwork for Employer to submit the MSA proposal.

Now, Claimant refuses to cooperate as he had promised in the C&R because the MSA and/or Employer will not pay for his use of medical marijuana, which became legal in Pennsylvania approximately two years after the C&R became effective. Claimant relied upon Stroehmann to suggest there is no meeting of the minds and a new C&R was required to relieve Employer of its responsibility for Claimant’s medical expenses.

The Court rejected Claimant’s assertion that Stroehmann requires the C&R to reflect a “meeting of the minds”, noting - nowhere in Stroehmann is the expression “meeting of the minds” used. The focus of Stroehmann was on bringing final resolution to workers’ compensation claims in a way that had not been available to parties in workers’ compensation litigation prior to 1996.

The Court explained that a WCJ’s evaluation of a C&R is primarily focused upon the claimant’s understanding of the terms of the agreement. The fact that the parties have agreed upon a resolution of the claim seems indicative of a meeting of the minds.

Once a C&R has been approved, a claimant cannot ask a workers’ compensation judge to negate it, based on the contention that there was no such meeting of the minds. After approval, the only means for a party to negate the C&R is to convince the workers’ compensation judge that the agreement was entered into as a result of fraud, deception, duress, mutual mistake, or unilateral mistake caused by an opposing party’s fault.     None of these conditions exist in the matter sub judice.

To the extent any of these reasons could even remotely apply to the present case, only mistake might come at all close. Having said as much, we stress that we do not equate a change in law, after the C&R’s approval, with a "mistake" at the time the C&R was negotiated and approved by the WCJ.

At the time the parties entered into their C&R, and it was approved, there was apparent agreement on its terms. The only notable change is that medical marijuana became available in Pennsylvania.

However, given that (1) medical marijuana was neither contemplated nor legal in Pennsylvania when the C&R was approved, (2) Claimant never appealed approval of the C&R, (3) Claimant accepted $155,000 to resolve the indemnity portion of his claim, (4) Claimant agreed to cooperate in Employer’s efforts to secure an MSA, (5) it was up to Employer’s sole discretion whether to fund the MSA, and (6) CMS will not fund medical marijuana, despite changes in State law -  The Court cannot agree with Claimant that a new C&R is required for Employer to exercise its option to resolve the medical portion of Claimant’s workers’ compensation claim.

The Court referenced the Pennsylvania Superior Court’s opinion in Felix v. Giuseppe Kitchens & Baths, Inc., 848 A.2d 943 (Pa. Super. 2004). regarding a trial court’s enforcement of a settlement agreement. The Felix Court stated that “settlement agreements are enforced according to principles of contract law. Courts will enforce a settlement agreement if all its material terms are agreed upon [sic]. A settlement agreement will not be set aside absent a clear showing of fraud, duress or mutual mistake.” Felix, 848 A.2d at 947 The Superior Court added that “it is well settled that a party assumes the risk of his or her own inability to perform contractual duties.” 

The Commonwealth Court reasoned – that in the instant matter - we are not faced with a party’s inability to perform contractually agreed upon duties. We are presented with something more substantial - an unwillingness to perform.

Thus, as per the Superior Court in Felix and in light of the inability of the WCJ to require Claimant to sign the MSA paperwork, we see no error in the WCJ’s decision to enforce the settlement agreement rather than set it aside. The remedy imposed by the WCJ, i.e., requiring Employer to obtain a new quote for the MSA from CMS and giving Claimant two weeks to review and sign the paperwork, followed by the opportunity for Employer to send Claimant a check for the value of the MSA should Claimant choose not to cooperate, is reasonable.

The Court noted - Employer is correct that the Board’s standard would open a Pandora’s box that could potentially unravel countless C&Rs - based on the contention that there was no “meeting of the minds” at the time the agreements were approved. This, in turn, would defeat the true meaning of Stroehmann - which was to underscore the value of bringing permanent resolution to workers’ compensation claims by encouraging settlements and stressing finality.

PRACTICE POINTERS

1. Negotiate and itemize specific settlement terms regarding wage loss medical expense and all other type of payment due at the time of settlement and at any future point. 
2. Draft specific settlement terms regarding the obligations of each party, particularly regarding future medical expense liability. Consider options and alternatives that are available to each party.
3. Present testimony before the WCJ of the claimant's understanding of: specific settlement terms; payments due; future benefit rights; future obligations. 

PA Work Comp total disability benefit status reinstatement, after unconstitutional IRE, is the date of filing of the Petition to Reinstate

In a series of Memorandum Opinions issued throughout 2021, the Pennsylvania Commonwealth Court has consistently held that a Claimant is entitled to reinstatement of  total disability benefit status, as of the filing date of the Claimant Petition to Reinstate, where the change in benefit status was based upon an unconstitutional IRE.

Marcellini v. WCAB (Brighthouse Life Insurance Company and Travelers Indemnity Company) No. 1014 C.D. 2020; Memorandum Opinion filed September 13, 2021

In Marcellini the Commonwealth Court dismissed Claimant arguments that (1) the White decision and its progeny are erroneous regarding the correct date for reinstatement and (2) the claimant has a “vested right” to workers’ compensation benefits.

Procedural Background

Claimant appealed the WCAB decision that reinstated her total disability benefits as of July 18, 2017, the date she filed her petition for reinstatement. (After the 1^st WCJ decision there was a remand to WCJ, to consider the effects of the Whitfield decision and Act 111 enactment. The WCJ decision was unchanged.) The WCAB affirmed the WCJ decision. On appeal, Claimant argued the WCAB erred, as properly she was entitled to reinstatement as of March 19, 2009 - the date her status was modified from total to partial on the basis of an unconstitutional impairment rating evaluation (IRE).

In affirming the WCAB decision, The Commonwealth Court relied upon a recent decision in Whitfield. That opinion held a claimant, who showed that her work-related disability continued, was entitled to reinstatement of her total disability status, as of the date she filed her reinstatement petition.

The Whitfield Court reasoned - Simply because Protz is being applied to a case that arose from a work injury and a change in disability status that predates it does not mean it operates retroactively…. This (Protz) decision does not alter the claimant’s past status. Rather, it gives effect to the claimant’s status as it existed at the time she filed her reinstatement petition. Citing: Whitfield, 188 A.3d at 617.

The Commonwealth Court compared the date of reinstatement ordered in Dana Holding Corporation v. Workers’ Compensation Appeal Board (Smuck) (Pa. Cmwlth. 2018), aff’d, 232 A.3d 629 (Pa. 2020), to that ordered in Whitfield. In Dana Holding, claimant had appealed the modification of compensation based upon an IRE, and that appeal was pending when Protz was decided.

In the Dana Holding situation, the Court held that the claimant was entitled to reinstatement as of the date of the IRE. By contrast, in Whitfield, claimant did not appeal the modification but, rather, filed a reinstatement petition following the Protz decision. Because the claimant in White had not appealed the initial modification, this Court held that she was entitled to reinstatement as of the date of her petition, not the date of the change in her disability status from total to partial. See White, 237 A.3d at 1231 (explaining the different paradigms of Dana Holding and Whitfield).

In the instant case,  Claimant did not challenge the validity of her 2009 IRE until after Protz was decided in 2017. On this basis, the Board properly reinstated her total disability status as of the date she filed her petitions. Citing: White, supra.

Claimant argued she has a vested right in workers’ compensation benefits. She argued she was deprived of a vested right to total disability compensation by an unconstitutional procedure. This requires the 2009 modification of her disability status to be set aside. However, as noted by the Court in Perillo v. Workers’ Compensation Appeal Board (Extended Healthcare Services, Inc.) (Pa. Cmwlth., a claimant does not have a vested right in workers’ compensation benefits and, thus, there is no entitlement to reinstatement of total disability benefits effective as of the date of the prior invalid IRE.

The Court explained that the Pennsylvania Supreme Court has limited the scope of the protection to vested rights: “It must be something more than a mere expectation, based on an anticipated continuance of existing law. It must have become a title, legal or equitable, to the present or future enforcement of a demand, or a legal exemption from a demand made by another.” Perillo, slip op. at 5, n.10.

Because workers’ compensation benefits can be changed at any time, “there are no vested rights in workers’ compensation benefits.” Perillo, slip op. at 4. In the instant case, the Court reject Claimant’s premise that she had a vested right to total disability compensation.

PRACTICE POINTERS

1. Continue to pursue the Impairment Rating Evaluation (IRE) as a remedy to limit the duration of total disability benefit payment. After the injured worker receives 104 weeks of total disability benefits, file an IRE request for designation of an expert to conduct an evaluation.

2. As the IRE physician is limited to address only issues of MMI status and the degree of impairment – if you wish to contest the extent or duration of work-related disability – an Independent Medical Examination (IME) is the remedy to pursue.

 

PA Bureau of Work Comp Fee Review Hearing Office may determine – who is a “medical provider” with standing to pursue a fee review remedy.

Fee Review provides a forum to medical providers to contest the amount or timeliness of the payments received from an employer or insurer. In 2019, The Commonwealth Court issued a decision, allowing jurisdiction to the Hearing Office to address the issue of whether an entity was a provider. The definition of “who is a provider” continues to be disputed.

See: Harburg Medical Sales Co. v. PMA Management Corp. (Bureau of Workers’ Compensation, Fee Review Hearing Office), No. 635 C.D. 2020; August 30, 2021

Harburg Medical Sales Co., appealed two adjudications of the Bureau of Workers’ Compensation, Fee Review Hearing Office, that denied Harburg’s requests for de novo hearings to contest the Bureau’s administrative denial of fee review applications on the ground that Harburg was not a provider within the meaning of Section 109 of the Workers’ Compensation Act and, therefore, lacked standing to invoke the fee review process.

Factual Background

A worker sustained an injury in the course of his employment . After he developed chronic pain, his doctor sent orders for certain pain treatment modalities to Harburg. Upon receiving the orders, Harburg communicated with various distributors (never identified, except—at one point—as Amazon, in these proceedings), advanced payment for the items, and directed them to be delivered to Maximo’s residence via UPS or FedEx. Thereafter, Harburg billed PMA Management Corporation.

Following a dispute between Harburg and PMA as to the amount properly payable for the items, Harburg filed fee review applications with the Bureau.

Upon the Bureau’s denial of the applications, Harburg sought further review by requesting de novo hearings.  PMA moved to dismiss the applications on the grounds that Harburg was not a provider and that the Hearing Office lacked jurisdiction to address the issue of whether an entity was a provider. The Hearing Office denied the motion to dismiss based on the then-controlling case law. The Hearing Office relied on Selective Insurance Co. of America v. Bureau of Workers’ Compensation Fee Review Hearing Office (The Physical Therapy Institute), 86 A.3d 300 (Pa. Cmwlth. 2014), which the Commonwealth Court subsequently overruled.

Subsequently, the Commonwealth Court issued two decisions impacting the instant case. In Armour Pharmacy v. Bureau of Workers’ Compensation Fee Review Hearing Office (Wegman’s Food Markets, Inc.), 206 A.3d 660, 671 (Pa. Cmwlth. 2019) (en banc) (Armour I),  the Court held that the Hearing Office had jurisdiction to determine whether a supplier was a provider.

Thereafter,  the Commonwealth Court directed the Hearing Office in a related series of cases to adjudicate the threshold issue of whether Harburg was a provider. See: PMA Mgmt. Corp. v. Bureau of Workers’ Comp. Fee Rev. Hearing Off. (Harburg Med. Sales, Co., Inc.) (Pa. Cmwlth., No. 1757 C.D. 2017, filed Apr. 12, 2019).  Pursuant to that directive, Hearing Officer David Torrey conducted a hearing and concluded that Harburg was not a provider. Harburg filed this appeal.

Decision and Reasoning of the Court

In determining that Harburg does not meet the definition of provider, the Commonwealth Court noted that Harburg is neither licensed nor authorized by the Commonwealth to provide health care services.

Additionally, there are no government agencies specifically authorizing Harburg to distribute medical supplies, no state or federal quality standards for suppliers of such items, and no continuing education requirements for operating a medical supply company. Review of the facts do not warrant a legal determination that Harburg is an agent of a licensed health care provider.

The Court rejected Harburg’s argument that the Hearing Officer’s decision violated Harburg’s due process rights by depriving it of a forum to contest the amount or timeliness of the payments received from the employer or the insurer.

Even though Harburg may have rendered convenient services or assisted injured workers to obtain equipment or supplies that were part of his or her treatment plan, the pertinent legislation does not dictate that any person or entity which does so be afforded an opportunity to invoke the fee review process.

Pursuant to the clear language of Section 306(f.1)(5) of the Act, only providers have standing to do so. If the General Assembly wishes to expand the definition of provider in legislation pertaining to medical cost containment and the fee review process, then it needs to enact appropriate laws.

The Court concluded that Harburg was not deprived of its due process rights. In Armour I, the Commonwealth Court held that “it offended due process . . . as well as the Act’s careful scheme for resolving fee disputes to place the question of whether a putative provider is actually a ‘provider’ beyond the reach of judicial review.” Armour I, 206 A.3d 670. The Court determined that the Hearing Office has jurisdiction to determine whether a supplier is a provider.

In the instant case, Harburg was given a full hearing on this issue and afforded due process; it simply did not agree with either the result or the consequences necessarily following therefrom—its inability to invoke the fee review process. Determining the legal status of Harburg ends our inquiry. As Hearing Officer Torrey concluded: “It may well be that some medical supply houses are, somehow, providers under the Act, and have standing to file Requests in this forum. However, on the evidence presented in this case, Harburg is not one of them.”

PRACTICE POINTERS:

Carefully review medical billing statements. Is the statement from the medical provider or from another entity? If not a provider, the employer/insurer may seek dismissal of the review request.

2.      Fee Review provides a forum to medical providers to contest the amount or timeliness of the payments received from an employer or insurer.

3.      Utilization Review provides a forum to employers, insurers and claimants to request prospective, concurrent or retrospective review of the reasonableness or necessity of medical treatment expense.

4.      The Employer and Insurer have additional remedies to contest medical expenses. A Petition to Review may challenge the causal relationship of a medical expense and the work injury. A medical expense may be denied outright – but a WCJ may ultimately determine the denial was unreasonable and assess counsel fees.

5.      When reviewing medical expenses, consider your options. What is the focus of your dispute ? Is it the expense amount, the frequency of care or type of care? Discuss your remedies with your work comp counsel.

 

 

 

Post-Protz Commonwealth Court decision reinstates total disability status as of the Petition filing date, not as of the unconstitutional IRE date, rejecting the "void ab initio" argument.

Commonwealth Court Reinstates Worker's Total Disability benefit status as of the Petition filing date, not as of the date of the prior unconstitutional IRE, thus rejecting the "void ab initio" argument. 

Ellison v. WCAB (SEPTA), No. 1080 C.D. 2020 MEMORANDUM OPINION;   August 20, 2021

Another appellate decision addresses the date of reinstatement of total disability status following the PA Supreme Court decision in Protz. The Commonwealth Court has consistently held that the date of reinstatement is the date of the filing of the Worker's Petition to Reinstate. Arguments for Reinstatement as of the date of the unconstitutional IRE have been rejected. In Ellison, the Court rejects an argument based upon the "void ab initio" doctrine.

Factual & Procedural Background 

Claimant appealed a WCAB order which affirmed a WCJ decision to grant Claimant’s petition to reinstate disability benefits, in part, and reinstated benefits as of July 18, 2017, which is the filing date of Claimant's petition. 

Claimant sustained a work related injury on February 11, 1998. Employer issued a NTCP which accepted a work-related injury of a “lumbar strain/sprain.” A 2007 WCJ decision granted Claimant’s Petition to Review the injury description to include two lumbar surgeries.

A 2009 IRE resulted in a whole person impairment of 29%.  Employer issued a Notice of Change of Workers’ Compensation Disability Status and Claimant benefits status was changed effective September 24, 2009,  Claimant did not appeal the change of his disability status.

In 2017 Claimant filed a Petition to Reinstate Compensation Benefits. The 500-week period of partial disability benefits had expired on July 11, 2015, before Claimant filed the Reinstatement Petition.

Following an initial WCJ decision denying the Reinstatement Petition, and a remand by the Board, following further hearings, the WCJ issued a new decision granting the Reinstatement Petition in part, and directing Employer “to reinstate Claimant’s workers’ compensation benefits to total disability status as of July 18, 2017.

Claimant appealed the WCJ’s decision to the Board, arguing that under Protz II, the IRE provisions of former Section 306 (a.2) of the Act were determined to be void ab initio, so his disability benefits should have been reinstated as of September 24, 2009, the date of his unconstitutional IRE and not as of July 18, 2017, the date that he filed his Reinstatement Petition. The Board rejected this claim citing Whitfield.

In his Commonwealth Court appeal, Claimant argued the Board erred in affirming the WCJ’s decision as the Board erroneously applied the Whitfield decision - which Claimant argued was effectively overruled by Commonwealth v. McIntyre (Pa. 2020)

In McIntyre, the PA Supreme Court, applied the void ab initio doctrine in a criminal proceeding, which challenged a purportedly invalid judgment of sentence. Claimant argued, his disability benefits should have been reinstated as of the date of the unconstitutional IRE, i.e., September 24, 2009, and not the date of his filing of the Reinstatement Petition, July 18, 2017.

The Commonwealth Court rejected this argument, noting that in Weidenhammer, they considered the application of the void ab initio doctrine in Glen-Gery (a Pa. 2006 case), and applied it to the reinstatement of disability benefits under Protz II, explaining, in relevant part:

The right to disability benefits for a work injury was created by the Act. The Act has imposed limits and conditions on an injured workers right to benefits. A WCJ may reinstate, suspend or terminate compensation "at any time".

Section 413 (a) acts as a statute of repose. A claimant whose benefits were suspended may seek reinstatement within three (3) years of the last benefit payment or the 500 weeks allowed for partial disability, which ever is later. 

In Weidenhammer the claimant’s statutory right to total disability compensation had been extinguished at the point in time that she filed her reinstatement petition. To allow claimant to resuscitate her right to disability compensation would violate Section 413(a) of the Act, 77 P.S. §772. Claimant may be correct that Protz II rendered former Section 306(a.2) of the Act, formerly 77 P.S. §511.2(1), void ab initio, but it does not follow that the Pennsylvania Supreme Court intended its ruling in Protz II to be given a fully retroactive effect or to nullify the statute of repose in Section 413(a) of the Act.

Importantly, this Court also noted the distinction between applying the void ab initio doctrine in a criminal matter, as in McIntyre, and applying it in proceedings under the Act, observing - "full retroactive effect is generally reserved for criminal cases where life or liberty is at stake. Citing: Weidenhammer, 232 A.3d at 995 n.12.

Based upon it's analysis, the Commonwealth Court stated -  it is clear that Claimant’s assertion that the Supreme Court’s opinion in McIntyre effectively overruled this Court’s holding in Whitfield is patently without merit. 

To the contrary, like the claimant in Weidenhammer, Claimant’s statutory right to total disability compensation had been extinguished at the point in time that he filed his reinstatement petition. To allow Claimant to resuscitate his right to disability compensation would violate Section 413(a) of the Act.

Recommendations:

We anticipate continued appeals of IRE reinstatement petition decisions, until the PA Supreme Court rules on these issues and arguments.

IMO, it is noteworthy that the PA Supreme Court denied a claimant's application for allowance of appeal in the Pierson v. WCAB (Consol Coal Co.) 59 WAL 2021 (08/17/2021). (04/26/2021 order for publication of CW CT decision).

In Pierson, Claimant raised several constitutional issues for review: 

- Act 111 should not apply to injury dates before its enactment; 

- credit should not be given for pre-Act 111 TTD weeks for the 104 week threshold; 

- Act 111 language does not have clear language to have a retroactive effect; 

- as prior IRE procedures were unconstitutional, they should not be applied to calculation of compensation; 

- Act 111 interferes with vested benefit rights.

***

We recommend continued use of the IRE remedy as an effective means to limit the duration of future wage loss benefit liability.

PA Work Comp benefits paid pursuant to A Notice of Temporary Compensation Payable may be changed via a timely Medical Only NCP document

 

Changing the benefit status of a PA Work Comp injured worker, who is compensated via a Notice of Temporary Compensation Payable (NTCP) LIBC-501 document is now less cumbersome.

An Employer may file a “Medical Only” Notice of Compensation Payable (MO-NCP) to change the benefit status of the injured worker, when the MO- NCP  is filed within the ninety-day temporary compensation payable period. In this circumstance, the Employer is not required to also file a Notice Stopping Temporary Compensation Payable (NSTCP) and a Notice of Compensation Denial (NOCP). This case was successfully argued by Chartwell Law founding partner Andrew Greenberg.

See: Raymour & Flanigan v. WCAB (Obeid);  No. 371 C.D. 2020 Filed: August 16, 2021.

The Commonwealth Court reversed a decision of the PA Workers’ Compensation Appeal Board, noting this was an issue of first impression. The Board decision reinstated ongoing indemnity wage loss benefits payable to Claimant, back to the date the Employer stopped those indemnity payments  pursuant to the filing of the MO-NCP. The Board concluded the Employer violated the Act as the NTCP “converted” to a NCP after 90 days - by operation of law – in the absence of the filing of the Notice Stopping Benefits and Notice of Compensation Denial.

Factual & Procedural Background

This litigation commenced when the injured worked file a Petition for Penalties and requested reinstatement of indemnity wage loss benefits. Initially, after the report of a work-related injury,  the Employer commenced work comp benefits to the injured worker via NTCP an injury described as inflammation of her coccyx/sacrum . Sixteen days later the Employer issued a MO-NCP.

The WCJ found that under Section 121.17(d) of the workers’ compensation regulations, 34 Pa. Code § 121.17(d), there was no requirement to file a Notice Stopping Temporary Compensation Payable if, during the 90 day temporary compensation payable period, the employer decided to issue a notice of compensation payable The WCJ  concluded that Claimant failed to prove that Employer violated the Act and dismissed the penalty petition.

The Appeal Board concluded that under its interpretation of Section 406.1(d)(5)-(6) of the Act and Section 121.17(d) of the regulations, that the Employer had violated the Act and the Board ordered reinstatement of indemnity benefits as of the date as indemnity payments were stopped and further ordered continuing benefits.  Employer appealed this ruling.

The Commonwealth Court reviewed the statutory language at Section 406.1, which addresses the requirements for commencement of work comp benefits via NCP or NTCP. The Court noted that an employer may initiate compensation payments without prejudice and without admitting liability pursuant to a notice of temporary compensation payable.

If an employer decides to stop making payments pursuant to a NTCP the employer must provide notice to the injured worker via, a form prescribed by the Bureau.

If the employer does not file a notice within the ninety-day period during which temporary compensation is paid, then the employer is deemed to have admitted liability and the notice of temporary compensation payable is converted to a notice of compensation payable.

Reasoning & Holding

The Commonwealth Court reviewed Section 121.17(d) of the Bureau’s regulations. This regulation states that if temporary payments are stopped, an employer must do one of the following:

-          file both a notice stopping temporary compensation, Form LIBC-502, and a notice of compensation denial, Form LIBC-496;

or

-          file a notice of compensation payable, Form LIBC-495;

or

-           file an agreement for compensation for disability or permanent injury, Form LIBC-336

In the instant case – the Employer filed a version of the NCP the “Medical Only” version. The NCP form LIBC-495 included a check box – which was checked by the Employer – stating “Check only if compensation for medical treatment (medical only, no loss of wages) will be paid subject to the Act.” The Court concluded -  by filing a NCP, albeit a “Medical Only” the Employer clearly complied with the regulation. The NCP was sufficient notice to the injured worker that their work comp benefit status had changed.

Employer arguments relied upon the prior decisions at City of Philadelphia v. WCAB (Brown) and Waldameer Park v. WCAB (Morrison) for the proposition that the acknowledgement of compensability, accomplished by filing a Medical Only NCP, is sufficient to meet the Employer’s obligations under Section 406.1. The Court agreed.

Practice Pointers & Recommendations

1.      A work-related injury may be recognized via: a Notice of Compensation Payable LIBC-495; A Notice of Temporary Compensation Payable LIBC-501; an Agreement for Compensation for Disability of Permanent Injury LIBC- 336.

The NTCP provides the Employer and Insurer with a period of 90 days for review and possible revocation.

2.      A NTCP may be revised and/or corrected via an Amended NTCP during the 90 day temporary compensation benefit period.

3.      A NCP may be “amended” to expand the description of injury and/or to increase the benefit rate.

4.      Consistent with this Commonwealth Court decision – a NTCP may be followed by a Medical Only NCP, to change the benefit status of an injured worker from indemnity/medical liability to medical only liability.

5.      A NTCP may be followed by a Notice Stopping Temporary Compensation Payable LIBC-502 and a Notice of Compensation Denial LIBC-496 – IF the Employer and Insurer wish to totally deny liability for the alleged work-related injury.

6.      As the Workers’ Compensation Judge may assess attorney fees for an unreasonable contest of the claim – one must be judicious when making the claim acceptance/denial decision.

As always … when you have questions regarding the proper LIBC document to be issued in a specific factual situation … contact your workers compensation attorney to discuss your options. As a matter of strategy, one form may provide more appropriate handling options that you wish to pursue.

 

 

 

 

Examining the PA Work Comp Criteria to Establish the Existence of an Employer - Employee Relationship

Examining  the Pennsylvania Workers Compensation Criteria to Establish the Existence of an Employer - Employee Relationship 

One of the early published decisions of the newly constituted Commonwealth Court was the J. Miller Co. v. Mixter decision in 1971. That decision determined the existence of an employer-employee relationship via application of the "control test".  This analysis remains the standard, to this day.

The existence of an Employer-Employee relationship is an essential element of a compensable workers compensation disability claim. New positions in developing service industry areas (rideshare drivers) give rise to new questions of the existence of an employment relationship.

We will assess the existence of an employment relationship in these new economy endeavors ... by application of existing caselaw and past precedents. . Past caselaw decisions have reviewed many relationships in the trucking industry. A recent case examines the employment relationship.

Berkebile Towing & Recovery v. WCAB (Harr, SWIF & UEGF) No. 220 C.D. 2020 Memorandum Opinion by Judge Fizzano Cannon filed May 10, 2021.

 QUESTION PRESENTED:

Was the worker performing tow truck operator duties functioning as an “Employee” or as an “Independent Contractor” at the time of injury?

 BACKGROUND FACTS:

The Commonwealth Court provided a rather detailed analysis of the evidence presented to determine if an individual functioned as an “Employee” within the intent and meaning of section 104 of the  Pennsylvania Workers Compensation Act. Worker’s when he sustained a fatal injury in the performance of his duties as a tow truck operator

As Appellate decisions assessing the existence of an employment relationship delve into the details of the relationship of the parties, to determine the degree of “control” maintained and exercised by the purported Employer, we recite the detailed facts found in the WCJ decision to award fatal claim benefits.

The WCJ reviewed the facts presented in the context of the Universal Am-Can case and expressly considered the extent of Berkebile’s right of control over the work to be completed by Decedent Harr and other drivers.  The WCJ reviewed the factors concerning: the nature of work; the skills required to do the work; the centrality of the work to Berkebile’s business; Berkebile’s supply of the tools and equipment; their right to terminate the relationship. 

Berkebile owned the tow trucks, set the rates, and collected payment for the jobs.  Berkebile prohibited drivers from using Berkebile trucks to take tow calls from other companies.  The WCJ found these facts were analogous to those that established an employment relationship in Sarver Towing v. WCAB (Bowser), 736 A.2d 61 (Pa. Cmwlth. 1999)

The WCJ concluded that although Berkebile did not “micromanage” any individual tow job, Berkebile did maintain extensive domain over Harr’s work day.  Trucks had very large placards with the Berkebile name and very small signage that the trucks were driver leased.  Berkebile maintained a significant degree of control over how the drivers could and could not use the trucks – they could take them home but they could not use them to perform jobs for other towing companies.  Drivers did not set the prices. If customers paid directly, the payment was turned over to Berkebile.  If a driver declined too many calls, then Berkebile could stop assigning calls and reclaim its truck.  The WCJ found these facts overrode the existence of other facts in favor of contractorship - such as the IC Agreement, the driver ability to decline jobs, payment by the job rather than time, and the driver’s responsibility for taxes.

Appellate Court HOLDING

The Commonwealth Court denied the Employer appeal from the award of fatal claim benefits and challenge to the conclusion that Decedent Harr was an employee of Berkebile Towing rather than an independent contractor.  The Commonwealth Court performed a detailed analysis of the factual evidence presented, in accord with the “control” standard.

“While no hard and fast rule exists to determine whether a particular relationship is that of employer-employee or owner-independent contractor, certain guidelines have been established and certain factors are required to be taken into consideration.”  Universal Am-Can Ltd. WCAB (Minteer), 762 A.2d 328 (Pa. 2000). 

“The following indicia and principles are part of the inquiry: control of manner (in which) work is to be done; responsibility for result only; terms of agreement between the parties; the nature of the work or occupation; skill required for performance; whether once is engaged in a distinct occupation or business; which party supplied the tools; whether payment is by the time or by the job; whether work is part of the regular business of the employer and also the right to terminate the employment at any time.”

“Whether some or all of these factors exist in any given situation is not controlling.  Further, while each factor is relevant, there are certain guidelines that have been elevated to be dominant considerations … [C]ontrol over the work to be completed and the manner in which it is to be performed are the primary factors in determining employee status.  Moreover, it is the existence of the right to control that is significant irrespective of whether the control is actually exercised.”  

The Commonwealth Court reviewed the instant case in the context of prior similar decisions regarding the employment status of the tow truck drivers such as Sarver Towing v. WCAB (Bowser), 736 A.2d 61 (Pa. Cmwlth. 1999) (where the right to control the manner of the claimant’s work was critical even if that right is not exercised) and Baykhanov v. WCAB (Onixe Express), (Pa. Cmwlth. 245 C.D. 2018 filed October 12, 2018) (where a car carrier driver was found to not be an employee). 

In the Baum case, a truck driver was found to be an employee even though he had some degree of ability to decline work which was found to be evidence of flexibility in work scheduling rather than a negation of an employment relationship.  The instant Court noted the facts found by the WCJ in the Berkebile case - Berkebile ownership control over the availability and use of trucks - favored a finding an employer-employee relationship, but contrasted the Baykhanov case, where similar facts led to a finding of an independent contractor relationship. 

This Court assessed these two case law precedents and distinguished weight afforded a published decision in Sarver from the unreported divided opinion in Baykhanov.  Additionally, in the instant case, the WCJ found Harr’s witnesses to be credible regarding the employment relationship, which was not true in Baykhanov.

In support of its conclusion that an Employee-Employer relationship existed, the Court reviewed the detailed evidence and testimony that was available to the WCJ –

Harr drove a tow truck with a permanent Berkebile placard.  Harr did not own the truck. He did not pay any formal lease or rental payments.  Harr did not pay for the truck’s registration, inspections, or insurance.  Berkebile provided a fuel card. Berkebile testified he had verbal agreements with the drivers to lease the truck for a 10% fee. Berkebile did not maintain workers’ compensation insurance. 

Berkebile’s tow trucks were fully equipped so drivers did not bring their own tools or equipment.  Harr wore clothing with Berkebile’s name.  Harr had no employers and did not do any (similar) side work.  Harr did not have a set schedule, he received calls from Berkebile’s dispatcher on a 24/7 basis.  He did not get paid if he did not go out on calls. Berkebile had drivers perform odd jobs at the shop when they were not dispatched.  Berkebile provided little training and did not supervise Harr when he performed tow jobs or service calls. Berkebile negotiated mandatory corporate clients rates.  If customers paid Harr, he would turn over the payment to Berkebile.

RECOMMENDATIONS:

This appellate case law review provides a lengthier and more detailed factual review, when compared to the typical workers’ comp case review.

This is intentional – as a means to demonstrate the amount of detail the WCJ, WCAB and Commonwealth Court will analyze in the weighing of evidence of the presence or absence of an Employee – Employer relationship.

Consequently – this level of detail in the evidence presented - reflects the detail the workers’ comp defense attorney must strive to present – to allow a full assessment of the evidence and testimony in support of the existence of an employment or independent contractor relationship.

Discovery of Employer documents and witness interviews are essential components of the initial case review and litigation preparation process. One must emphasize to the Employer/Insurer client that our early involvement and client cooperation with evidence production are essential to an attempt to achieve a successful litigation result or a favorable negotiated resolution.

 

 

Best Practices – WCAB Appeals and Medical Expense Denials

 

Best Practices – WCAB Appeals and Medical Expense Denials

A recent Memorandum Opinion of the Commonwealth Court highlighted the necessity for the Workers’ Compensation practitioner to carefully draft the averments in the Appeal Documents filed with the Pennsylvania Workers’ Compensation Appeal Board.

The Court also reviewed the appropriateness of an assessment of penalties where there is a unilateral cessation of medical expense reimbursement where the employer liability for medical expenses has been established.  The “risk” involved in the denial of medical expenses based upon a causal relation argument was reviewed.

In W&W Contractors v. WCAB (Holmes); 836 C.D. 2020; Commonwealth Court Memorandum Opinion filed June 28, 2021 An Employer appealed the decision of the Workers’ Compensation Judge and WCAB to grant in part and deny in part, the Employer’s termination petition and to grant claimant’s unreasonable contest attorney’s fee request and penalty petition. (the termination issue was not appealed).

The Commonwealth Court affirmed the underlying decision that found the Employer contest of certain medical expenses was unreasonable and further, that unilateral cessation of medical expense payments was a violation of the Act, particularly where the employer liability for medical expenses has been established. 

As noted above, the Commonwealth Court found the Employer did not preserve their argument on appeal regarding the assessment of attorney fees for an unreasonable contest.  Although the Employer prepared the proper appeal document and listed the contested findings of fact and conclusions of law “by number” that were the subject of appellate review, the Employer did not make a statement of the particular grounds upon which the appeal is based.  The citation of the finding of fact by number alone, is insufficient and the appealing party must provide a description of the grounds on which the appeal is filed.

The Claimant penalty petition was filed based upon the Employer unilaterally ceasing payment of certain medical supplies such as heating pads, electrical stimulation supplies, etc.  When the medical supply company attempted to file a fee review, that request was denied because the Employer contested the causal relationship of the expenses.  The Employer presented a medical opinion of an IME physician approximately one year after the medical expense denials.  That IME opinion found that the claimant had fully recovered and the medical supplies were not necessary or related to the accepted injury.  Claimant presented the testimony of his treating physician to relate the expenses to the work injury.  The Judge found the Claimant’s physician to be more credible and found that the Employer violated the Act by the unilateral cessation of medical expense payments. 

The Commonwealth Court rejected the Employer’s argument that the Termination petition was filed to address a genuinely-disputed issue.  Employer argued the issue of – What is the “scope” of medical supplies where the supplies were not “medical” in nature, such as alcohol patches, lotion and the batteries for the electrical stim unit. 

The Court explained that if the Employer unilaterally ceases the payment of medical expenses, it takes the risk that the WCJ will hold that those bills are related.  In this circumstance, there is a violation of the Act.  Employer cited the prior cases where there was no penalty assessed -  where the Workers’ Compensation Judge did not find a causal relationship of the denied medical expenses.  The Commonwealth Court cited Section 306(f.1) for the proposition that an employer has a responsibility to pay for reasonable and necessary medical expenses that are causally related.  Once liability is established, the employer may not unilaterally cease payment.

 The Court noted there is a clear line between the argument of “reasonableness” or argument of “causation” when addressing liability for medical expense reimbursements.  If the employer questions the causal relationship of the medical expense, there is no penalty if the WCJ ultimately decides the expense was not related.  Claimant argued on appeal that the employer changed its argument as they originally alleged that the medical supplies were not causally related to the accepted work injuries.  It was said that they later raised the issues of the “scope” of what is a “medical” supply and the alleged inflation of medical costs.  These arguments were unpersuasive to the Court. The assessment of a Penalty was affirmed.

Practice Pointers:

1. Regarding WCAB Appeals – carefully draft the appeal document to identify each finding of fact and each conclusion of law that should be the subject of review on appeal. Then add the particular legal argument to identify the alleged error of law. One may broadly draft or specifically state their reasons for assertion of an error.

2. Regarding Medical Expense Denials - The Employer and Insurer may contest the causal relationship of any medical expense. But as noted above – this position comes with the risk - that the WCJ may disagree and may further assess a penalty. One may increase their chance for success by having medical evidence to support their assessment that an expense is not related to the work injury. If the WCJ does not rule in favor of the Employer position, the existence of medical evidence may result in the avoidance of a penalty.

3. Regarding Challenge to the Reasonableness of a Medical Expense – the Employer remedy is to file an application for Utilization Review.