Pennsylvania Commonwealth Court orders Work Comp insurer to reimburse an injured worker for out-of-pocket expense for medical marijuana

In two recent decisions, the Pennsylvania Commonwealth Court reversed the Workers Compensation Judge decision and ordered the workers compensation insurer to reimburse out-of-pocket expenses, incurred by an injured worker, as reasonable and necessary medical expenses. See:

Teresa L. Fegley, as Executrix : of the Estate of Paul Sheetz v. Firestone Tire & Rubber (WCAB), No. 680 C.D. 2021 opinion filed March 17, 2023

And

Edward Appel v. GWC Warranty Corporation (WCAB), No. 824 C.D. 2021 opinion filed March 17, 2023

Issues Presented in Appeal to the Commonwealth Court

The Appel appeal argued one issue, that the WCAB erred:

1. by concluding that a workers compensation insurer or employer cannot be required to pay for the lawful use of medical marijuana based on the plain language of the Medical Marijuana Act (MMA) section 2102.

The Fegley appeal argued several issues, that the WCAB erred:

1. as Employer did not raise and therefore waived, Section 2102 of the Medical Marijuana Act as a defense;

2. by concluding Section 2102 of the MMA applies to WC carriers and overrides the WC Act requirements that insurers pay for reasonable, necessary medical treatment that is related to an accepted work injury;

3.by concluding that Section 2102 of the MMA precludes reimbursement for medical marijuana to a claimant such treatment was determined to be reasonable, necessary and related to an accepted work injury;

4. by failing to address and reverse the WCJ’s sole basis for denying the Penalty Petition – that reimbursement of Claimant’s medical marijuana treatment would cause the WC carrier to violate federal law.

NOTE: As the Fegley opinion and reasoning is cited and relied upon in the Appel decision, we will utilize the Fegley opinion as the starting point for analysis of these Medical Marijuana issues.

Fegley Opinion  - Commonwealth Court Conclusions 

Employer did preserve the defense that Section 2102 of the MMA prevented the WCAB from compelling Employer to reimburse Claimant for his lawful use of medical marijuana.

Section 2102 of the MMA applies to WC carriers. The plain language of Section 2102 is limited to not requiring insurers to provide coverage for medical marijuana. The Court resolved that the term “coverage” is different and distinct from the term “reimbursement” …

Such that … there is no statutory language which prohibits insurers from reimbursing claimants who lawfully use medical marijuana to treat a work injury when such treatment is medically reasonable and necessary.

***

The Commonwealth Court reasoning and resolution is based upon several factors.  Given:

-        the WC Act’s “humanitarian objectives” ;

-        reimbursing Claimant for his out-of-pocket expenses for his lawful use of medical marijuana as a reasonable and necessary treatment for his work injury would not require Employer’s WC carrier to violate the Federal Drug Act, or be at risk of facing federal prosecution by doing so;

-        the General Assembly’s express intent to provide Commonwealth citizens who are patients “access to medical marijuana,” 35 P.S. §10231.102(3)(i) (emphasis added);

-        the MMA’s containment of an immunity provision protecting patients from government sanctions;

-         and the MMA statement that “no individual ‘shall be . . . denied any right or privilege, . . . for lawful use of medical marijuana . . .”.

…  the Commonwealth Court concluded that the Board erred, and the Court ruled that Employer’s failure to reimburse Claimant’s out-of-pocket costs for medical marijuana to treat his work-related injury is a violation of the WC Act.

The Fegley WCAB Order denying Claimant’s Penalty Petition is reversed and the matter is remanded to the WCAB to remand to the WCJ to determine whether a penalty should be imposed.

The Appel WCAB Order partially denying Claimant's Review Medical Petition was reversed. 

*** 

For a more detailed review of the analysis of the Commonwealth Court Opinions, we will review the background facts, procedural status and the reasoning provided:

Fegley Background and Procedural History 

Claimant sustained a 1977 work-related injury. Medical treatment included back surgeries, opiates and narcotics prescribed for severe back and leg pain. Claimant began using medical marijuana in 2019 at his doctor’s recommendation. Medical marijuana afforded Claimant pain relief and reduced his need for opiates and narcotics. A 2019 UR determination determined Claimant’s medical marijuana use was reasonable and necessary.

Claimant filed a Penalty Petition that Employer’s failure to pay for his medical marijuana, despite the UR Determination, was a violation the WC Act. The WCJ 2020 Decision denied the Penalty Petition, concluding that Claimant failed to prove that Employer’s refusal to pay for medical marijuana treatment violated the WC Act. The WCJ decision granted Employer’s Petition for Review of Utilization Review Determination. The WCAB Affirmed.

Appel Background and Procedural History 

Appel sustained cervical and lumber injuries in 2006, which were accepted as compensable via a Stipulation approved in a 2015 WCJ Decision.

Appel received extensive medical treatment, including surgeries. His physician prescribed opioids for chronic low back pain and leg symptoms. In April 2018, he received a medical marijuana card and used medical marijuana for withdrawal symptoms while weaning off of opioids. He testified medical marijuana was more effective than any other medication, as opioids became less effective over time.

A Review Medical Petition sought a determination that his medical marijuana was causally related to his work injury and an order directing Employer to reimburse him for the cost. A 2020 WCJ decision concluded claimant proved his medical marijuana use was related to the accepted work injury, however claimant failed to prove that Employer must reimburse him for his out-of-pocket medical marijuana expenses pursuant to Section 2102 of the MMA, which does not require an insurer or health plan to provide “coverage” for medical marijuana. WCAB affirmed.

 ***

Commonwealth Court Analysis

The Fegley and Appel decisions utilized the same analysis and reasoning to address and resolve the Medical Marijuana issues.

The analysis of the majority opinion began with the ubiquitous statement that the Pennsylvania Workers Compensation Act (WCA) is remedial in nature and intended to benefit the worker, and, therefore, the Act must be liberally construed to effectuate its humanitarian objectives.

Responsibility for work-related medical expenses

Pursuant to Section 301(c) of the WCA, an employer is only liable to pay for a claimant’s medical expenses that arise from and are caused by a work-related injury.

A claimant has the initial burden to establish an injury is work-related Once employer is established, the claimant is not required to continually establish that medical treatment is causally related.  Thereafter the employer has the burden to prove that a medical expense is unreasonable, unnecessary, or is not related to the accepted work injury.

Review of the Pertinent Medical Marijuana Act Provisions

 The Commonwealth Court reviewed Section 102 of the MMA, which provides, in part: 1) Scientific evidence suggests that medical marijuana is one potential therapy that may mitigate suffering in some patients and also enhance quality of life… (3) It is the intent of the General Assembly to: (i) Provide a program of access to medical marijuana which balances the need of patients to have access to the latest treatments with the need to promote patient safety. (ii) Provide a safe and effective method of delivery of medical marijuana to patients… 35 P.S. § 10231.102).

Under the MMA, use or possession of medical marijuana as set forth in the MMA is lawful within this Commonwealth.” Section 303(a) of the MMA, 35 P.S. § 10231.303(a).

The Court assigned relevance to the MMA immunity provision protecting patients from government sanctions. Per the statute, no such individual “shall be subject to arrest, prosecution or penalty in any manner, or denied any right or privilege, . . . solely for lawful use of medical marijuana . . .”. See Section 2103(a) of the MMA.

Arguments – Application of MMA to WC Insurers

Claimant argued the MMA did not apply to work comp insurers.

Employer argues a WC carrier is an insurer, as defined by the WCA and Insurance law. As WC carriers are insurers under the law, the Court held that they are “insurers” for purposes of the MMA.

Section 2102 of the MMA – “Coverage” Arguments

Claimant argued that Section 2102 of the MMA only prohibits an insurer or health plan from being compelled “to provide coverage for medical marijuana.” 35 P.S. § 10231.2102. Claimant maintains that coverage refers to the insurer paying the provider directly for a medical service, while reimbursement signifies the insurer paying the patient for the costs of medical treatment already incurred and paid.

Employer asserts that the MMA’s plain language exempts employers/insurers from being required to cover medical marijuana.

The Court resolved this issue by reviewing the statutory language. While the MMA provides that an insurer is not required to include medical marijuana as a risk under its insurance policy, there is no language in the MMA precluding a WC carrier from repaying a claimant for his out-of-pocket medical treatment cost which has been found to be reasonable and necessary for his work-related injury.

Because the plain language of Section 2102 of the MMA is limited to not requiring insurers to provide coverage for medical marijuana, and the WC Act mandates WC carriers to reimburse claimants for out-of-pocket costs of medical treatment, which has been found to be reasonable and necessary for their work-related injury, the MMA does not command otherwise.

If the PA General Assembly intended for medical marijuana expenses not to be reimbursable, it would have expressly included the word reimbursement, as other states have explicitly done, but it did not. 

Section 301 Section 306(f.1)(1)(i) of the WC Act requires: “The employer shall provide payment in accordance with this section for reasonable surgical and medical services, . . . medicines and supplies, as and when needed.” 77 P.S. § 531(1)(i).

The Court rejected the Employer’s arguments. The MMA specifically mandates that no medical marijuana patients be denied any rights for lawful use of medical marijuana and the WC Act provides employees a statutory right to WC medical expenses that are reasonable and necessary to treat a work injury; therefore, if this Court was to agree with Employer, it would be removing those express protections from the MMA and the WC Act.

The Commonwealth court rejected Employer’s argument that the MMA to prohibits WC carriers from reimbursing claimants who lawfully use medical marijuana to treat their work-related injuries – noting this interpretation  would undermine the General Assembly’s express intent to provide patients “access to medical marijuana…”.

In summary the Court ruled that “coverage” is different and distinct from “reimbursement” and while the plain language of Section 2102 of the MMA states that insurers cannot be required to provide coverage for medical marijuana, there is no statutory language which prohibits insurers from reimbursing claimants who lawfully use medical marijuana to treat an accepted work injury when such treatment is medically reasonable and necessary.

Claimant Federal Law Argument

Claimant argued the Board erred by failing to address, and reverse, the WCJ’s sole basis for denying the Penalty Petition - that reimbursement would cause the WC carrier to violate federal law. As the Board was able to resolve the issue based on Pennsylvania law, albeit erroneously, it is of no moment that the Board did not decide the federal law issue.

Note Section 2103 of the MMA mandates: “Nothing in the MMA shall require an employer to commit any act that would put the employer or any person acting on its behalf, i.e., WC carriers, in violation of federal law.” 35 P.S. §10231.2103.

Because reimbursing Claimant for his out-of-pocket expenses for his lawful use of medical marijuana as a reasonable and necessary treatment for his work injury would not require Employer’s WC carrier “to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance,” 21 U.S.C. § 841(a), Employer’s WC carrier would not violate the Federal Drug Act, or be at risk of facing federal prosecution by doing so.

 As the employer is not prescribing marijuana, but rather reimbursing the claimant for his lawful use, the employer is not in violation of the Federal Drug Act. The fact that dispensing marijuana is illegal under federal law does not transform a medically reasonable and necessary treatment under the WC Act for a work injury to a medically unreasonable and unnecessary treatment. Such a determination would eviscerate the entire MMA. 

***

CONCURRING AND DISSENTING OPINION

In the workers’ compensation context, and under the current state and federal laws, I cannot conclude that the MMA requires a WC insurance carrier to pay a claimant’s costs incurred in purchasing medical marijuana. Therefore, for the following reasons, I respectfully disagree with the majority’s conclusion -

I.               The MMA Does Not Require an Insurer to Pay for Medical Marijuana

Section 102 of the MMA, 35 P.S. § 10231.102 seeks to advance medical research and enhance quality of life, but it also reflects caution in enacting “a temporary measure” regarding access to medical marijuana, as well as “balancing the need of patients to have access to the latest treatments with the need to promote patient safety” .

Section 2102 of the MMA, relating to insurers, provides: “Nothing in this act shall be construed to require an insurer or a health plan … to provide coverage for medical marijuana.” 35 P.S. § 10231.2102. The WCAB correctly concluded that the plain language of Section 2102 does not require reimbursement for medical marijuana prescribed to a claimant to treat a work injury.

Section 2102 does not expressly address “reimbursement” of medical marijuana costs, but rather provides that the MMA cannot be construed to require an insurer to provide “coverage” of such costs. 35 P.S. § 10231.2102. However, “coverage” is not defined in the MMA. Further, the Board did not address whether “coverage” and “reimbursement” are synonymous under the MMA.

The majority echoes Claimant’s argument that “coverage” is not the same as “reimbursement,” The MMA does not require “coverage” for medical marijuana expenses but it requires Employer to reimburse Claimant for those expenses. I respectfully disagree.

Insurance reimbursement is when one is reimbursed in accord with an insurance policy, for expenses that have been incurred and are covered under the policy . . . . Some types of insurance reimbursement are paid to the insured person. Other types of reimbursements are paid directly to the provider after the provider has submitted an assignment of benefits document to the insurance company. Each insurance policy has specific items for which expenses are covered, not covered or covered in part. In other words, “coverage” is the extent of the insurer’s potential liability under an insurance policy; “reimbursement” is repayment of claims for which there is “coverage” under the policy. “Coverage” and “reimbursement” are two sides of the same coin: if there is coverage for a claim, the insurer must provide reimbursement.

Thus, it makes no sense for Claimant to argue that reimbursement may be required where coverage may not. Nonetheless, Claimant argues that because the WC Act is to be liberally construed, the MMA should not be interpreted to preclude reimbursement that is otherwise required by the WC Act. The most obvious flaw in this argument is that prior to the enactment of the MMA, there was no legal medical marijuana in Pennsylvania, and therefore, no reimbursement was required for it under the WC Act.

The MMA legalized medical marijuana for the first time and in a limited manner; in doing so, it made clear that it was not to be construed to require insurance coverage of medical marijuana. This makes sense, inasmuch as medical marijuana has not yet been approved by the FDA as safe and effective for use in medical treatment, and its use is not legal under federal law. In any event, the legislature, not the courts, must effect any change in the MMA’s stated policy and the balance struck regarding insurance coverage. Therefore, I believe this Court is constrained to agree with the Board that the MMA cannot be read to mandate reimbursement for prescribed medical marijuana provided to WC claimants.

II. Alleged Waiver of Employer’s MMA Defense

I concur in the majority’s conclusion that Employer did not waive its ability to assert a defense of illegality. In addition, I believe the defense is not subject to waiver as a matter of law.

An employer that unilaterally stops paying a claimant’s medical bills is subject to penalties under the WC Act, at the discretion of a WCJ, if the WCJ finds that the medical bills are causally related to the employee’s work injury.A claimant who files a penalty petition must first meet his initial burden of proving a violation of the WC Act occurred. The burden then shifts to the employer to prove the violation did not occur.

Here, the Utilization Review (UR) Determination found that medical marijuana was reasonable and necessary to treat Claimant’s pain and Employer did not appeal that determination. Thus, without more, it might be argued that Claimant met his burden of showing a violation of the WC Act in Employer’s refusal to pay for Claimant’s medical marijuana.

However, the WCJ found that requiring Employer to pay for Claimant’s medical marijuana would improperly force Employer to commit a crime under federal law. The issue is whether Employer could waive its illegality defense, as it failed to appeal the UR Determination. Both this Court and our Supreme Court have found the defense of illegality cannot be deemed waived in other contexts, such as employment and contract actions.

III. Current State of Federal Law on Marijuana

As the majority correctly observes, Section 2103 of the MMA specifies that nothing in the MMA requires an employer to commit any act that would violate federal law. Claimant argues that the Board erred in not addressing and reversing the WCJ’s sole basis for denying the Penalty Petition, that reimbursement would cause the WC carrier to violate federal law. This Court need not reach this issue because, as discussed above, the MMA expressly does not require insurance reimbursement of medical marijuana costs. In any event, however, Claimant’s argument lacks merit.

At first blush, Claimant’s argument appears somewhat persuasive. The federal Controlled Substances Act does not expressly forbid reimbursement for prescribed medical marijuana. Therefore, it appears an insurer reimbursing for medical marijuana costs under state law could be subject to federal prosecution only on a secondary basis as either an aider/abettor or an accessory after the fact.

However, both parties’ arguments relate solely to the legality of a WC insurer’s conduct in reimbursing costs of medical marijuana. Both parties, as well as the Board, ignore the fact that, unlike the insurer, the provider necessarily distributes or dispenses medical marijuana. Thus, the provider necessarily violates federal criminal law by doing so. Case law is sparse on this issue, but in other contexts, this Court has held that where a provider cannot provide treatment legally, that treatment cannot be deemed reasonable and necessary, and the provider cannot obtain reimbursement.

As discussed above, although the MMA legalizes the use of medical marijuana in Pennsylvania, a provider still cannot legally dispense medical marijuana under federal law. Therefore, because it is illegal, such treatment cannot be reasonable and necessary under the WC Act; accordingly, the dispenser cannot obtain reimbursement from a WC insurer.

IV. Dissenting Opinion Conclusion

Based on the foregoing discussion, I do not believe the MMA can be read as requiring a WC insurer to pay the costs of medical marijuana. Although it does not expressly forbid requiring such reimbursement under a separate statute such as the WC Act, the MMA effects no change in the preexisting reimbursement requirements, because it expressly cannot be read to create a reimbursement requirement where, as here, one did not exist before.

 ***

RECOMMENDATIONS

1. When assessing liability for medical marijuana reimbursement expenses -                 is the medical marijuana expense in addition to ongoing medications or is it a   replacement for more expensive treatment options?

2. Is an Independent Medical Expert Evaluation necessary to address questions of the causal relationship and/or the reasonableness and necessity of the medical marijuana expense to the accepted work injury?

3. Is a Utilization Review necessary to address questions of the reasonableness and necessity of the medical marijuana expense to the accepted work injury?

4. A this time, this intermediate appellate court decision approves the reimbursement of out-of-pocket expenses to an injured worker for medical marijuana expense that has been determined to be reasonableness and necessity treatment of an the accepted work injury. These are specific requirements for reimbursement.

... This intermediate appellate court decision did not approve the reimbursement of medical marijuana expense to a provider.

 

 

Recent PENNSYLVANIA SUPREME COURT Petition for Allowance of Appeals

WORKERS' COMPENSATION CASES - DENIED; listed by date of Order

July 12 2022    

Kamp v. WCAB (Green Acres Contracting Co.) No. 1275 C.D. 2020

Published Opinion filed : January 21, 2022

WCJ denied Claimant’s Review petition seeking to limit the subrogation interest of Employer. Claimant argued Section 319 violates PA Constitution.

WCAB and Commonwealth Court affirmed.

July 12 2022      

Blythe v. WCAB (City of Chester) No.  437 C.D. 2021

Memorandum opinion filed: December 29, 2021

Employer was entitled to pension credit offset.

 

July 6 2022

Adams v. WCAB (School District of Philadelphia) No. 1060 C.D. 2020

Memorandum opinion filed: March 30,  2022.

IRE - Reinstatement date is as of filing date of Claimant petition to Reinstate

 

July 6 2022

Eastman Kodak v. WCAB ( Smith)

Memorandum opinion filed: December 23, 2021

IRE - Reinstatement date is as of filing date of Claimant petition to Reinstate

 

July 7 2022

Raymour & Flanigan v. WCAB (Obeid)

Published Opinion filed : August 16, 2021

An Employer may file a “Medical Only” NCP to change the benefit status of the injured worker.

Changing the benefit status after NTCP does not require “Notice Stopping” and “Notice of Denial”.

 

June 22 2022

Pullin v. WCAB (S.D. of Philadelphia) 727 C.D. 2021

Memorandum opinion filed: December 22, 2021

IRE – reinstatement date is as of filing date of Claimant petition to Reinstate.

 

June 22 2022

Regan v. WCAB (City of Philadelphia) : No. 1277 C.D. 2020

Memorandum opinion filed: December 13, 2021

Firefighter cancer claim; Claimant not meet burden to establish general causation, the burden of proof did not shift to Employer.

   

June 15 2021     

Hughes v. WCAB (Wawa Inc.) No. 333 C.D. 2021

Order to Publish filed February 28, 2022:

Memorandum opinion filed: December 13, 2021

Post C&R Utilization Review of excessive Oxycontin prescriptions concluded ongoing use was not Reasonable or Necessary.

 

June 7 2022

Haplin v. WCAB (City of Philadelphia) 647 C.D. 20221

Memorandum opinion filed: December 13, 2021

WCJ Reinstatement of benefits was reversed on appeal as Claimant made a unilateral mistake in interpretation of the stipulation

he entered into to suspend his benefits and relinquish future rights of reinstatement.

 

June 7 2022

Hutchinson v. WCAB (Annville Township) Nos. 16 & 17 C.D. 2021

Published Opinion filed August 9, 2021

IRE - Reinstatement date is as of filing date of Claimant petition to Reinstate

 

The Scope of injury description under review can be altered by an Impairment Rating Evaluator - so says a Recent PA Commonwealth Court decision

A recent Pennsylvania Commonwealth Court decision would allow the Impairment Rating Evaluator to alter/revise/expand the scope of the work-related injury 

The Impairment Rating procedure remains a powerful remedy for the Employer and Insurer to attempt to limit future indemnity wage loss benefit exposure. On October 24, 2018, Act 111 replaced the constitutionally infirm Section 306(a.2) with revised language. One requirement of  Section 306(a.3) is that an injured worker receive 104 weeks of total disability benefits before an employer may require one’s submission to an Impairment Rating Evaluation (IRE).

At this time - legal challenges to the constitutionality of Section 306(a.3) continue to course their way through the appellate courts.

Recently a Commonwealth Court panel decision impacts an important factor in an Impairment Rating Evaluation - the description of work-related injury under review. 

In Sicilia v. WCAB (API Roofers Advantage Program) No. 747 C.D. 2021, filed: June 7, 2022, a WCJ decision granting an Employer petition to modify a Claimant’s benefit status from total to partial disability pursuant to a Section 306(a.3) Impairment Rating Evaluation (IRE) was reversed by a three Judge Panel of the Commonwealth Court. The case was remanded for reinstatement of ongoing total disability benefits.

The Commonwealth Court determined that a limitation of the scope of the IRE to the accepted/recognized work-related diagnoses was an error of law, based upon their interpretation of the prior Pennsylvania Supreme Court decision in Duffey v. WCAB (Trola-Dyne,Inc.), 152 A.3d 984 (Pa. 2017) (cited as Duffey II).

The Sicilia opinion reviewed the factual background reflecting the “rounds of litigation” involving a 1999 work injury which the Notice of Temporary Compensation Payable initially described as a “lumbar strain and left knee contusion”.

A 2003 WCJ decision expanded the work injury description, approving a stipulation which
added: chronic pain syndrome; chronic adjustment disorder; anxiety; depression.

A 2011 WCJ decision found that 2007 back surgery was related to the work injury. The injury description remained unchanged.
A 2014 WCJ decision approved a stipulation, resolving a Penalty petition for unpaid medical
bills. The injury description remained unchanged.

In 2019 Employer secured an IRE, in accord with the “new” IRE procedures at Section 306a(3). Based upon the accepted work injury descriptions, the IRE whole person impairment was 23% which would  support a modification of claimant’s benefits to a partial disability status. A separate score for the  chronic pain syndrome diagnosis was not added as there was a diagnosis that covered the pain generator. The addition of a separate pain score would increase the Impairment percentage to 25%.

Significantly - the IRE physician report, clinical summary section included diagnoses secondary to the 1999 work accident, which were beyond the diagnoses described in the prior WCJ decisions: “lumbar protrusion or spondylolisthesis with lumbar radiculopathy”. The IRE physician qualified her rating,  stating that her rating was constrained to address only to the diagnoses accepted by the NTCP, NCP, Stipulations or WCJ decisions.

Importantly - to better understand the appellate court decision – the IRE evaluator stated that she was convinced that the additional diagnoses were in fact attributable to the work injury.

Employer requested an addendum IRE report to separately address the inclusion of Impairment scores for diagnoses beyond the accepted injury description - “lumbar protrusion or spondylolisthesis with lumbar radiculopathy”. With that inclusion, the whole person Impairment score was 43%. If one added a separate chronic pain score, the rate was 45%.  As this addendum report Impairment rating score exceeded the 35% threshold, there would be a presumption of continuing total disability. Section   306(a.3) (2), (4), (5), (7)).

The WCJ decision found the IRE initial report of 25% impairment was credible. The WCJ found the portion of the IRE physician-evaluator  testimony (and addendum report) that the 1999 work-related injury included the additional lumbar diagnoses, was not credible medical evidence.

The Court's opinion in Sicilia reversed the modification of claimant’s benefit status, commenting that the IRE physician-evaluator “misapprehended her responsibility as a physician-evaluator in her initial calculation of Claimant’s whole person impairment rating”, as she felt her initial rating was constrained to the accepted injury diagnoses.

The Sicilia Court exclusively relied upon the Supreme Court Duffy opinion in reciting:

- The IRE physician-evaluator is explicitly invested with the obligation to determine “the
degree of impairment due to the compensable injury,” (emphasis in original)
- “a physician-evaluator must consider and determine causality in terms of whether any
particular impairment is ‘due to’ the compensable injury”.
- Moreover, the required evaluation is of “the percentage of permanent impairment of the
whole body resulting from the compensable injury.”

The Sicilia Court acknowledged that the NCP (NTCP) should define “compensable injury” for purposes of this inquiry but the Court further stated that even under former Section 306(a.2) and the AMA Guides, “the physician-evaluator must exercise professional judgment to render appropriate decisions concerning both causality and apportionment.”

The Sicilia Court stated - the AMA Guides refer to an “event” rather than an “injury,” permitting the physician-evaluator to attribute a particular condition to the event in which the claimant was injured rather than the injury itself – “a physician-evaluator simply may not entirely disavow any and all responsibility to consider causality relative to a given condition.”

The Commonwealth Court reasoning rejected the Employer arguments that:
1. res judicata controls and Claimant is bound by the stipulated injuries incorporated in the
    2003, 2011 and 2014 WCJ decisions;
2. Claimant succeeded in obtaining payment of medical bills for lower back surgeries in the
    2011 decision but did not amend or expand the injury description;
3. the WCJ was within her discretion to reject the expanded scope of the lumbar injuries
    given the extensive case background. The WCJ is charged with assessing the credibility
    of medical evidence. The WCJ rejected the credibility of the IRE addendum report.
4. Duffey ll is distinguishable as the procedural posture differs. There was
    extensive litigation in this matter that addressed the compensable injuries, whereas in
   Duffey II a review petition seeking to modify the injury description was not filed until
   after the IRE.

The Commonwealth Court reasoned –
a. Employer’s arguments boil down to an assertion that the WCJ decision(s) description of
    the work injury controls the IRE process.
b. “While no petition or other request for such change was made in this case, it is
    disingenuous to assert that an injury description in one WCJ’s decision, or a string of
    such decisions, binds subsequent WCJs later in the history of a claim. Even when an
    injury description is not formally amended, a diagnosis may become an accepted injury
    if a WCJ finds it was caused or aggravated by the work injury. 
c. The WCJ’s reasoning for rejecting the IRE testimony concerning the additional
    diagnoses, and the higher rating resulting from such inclusion, was not, in fact, a
    credibility determination based on evaluation of the evidence, but rather a
    misapprehension of the discretion accorded an IRE physician-evaluator. The only
    reason proffered for discrediting the additional diagnoses was that they had not been
    previously found by other WCJs. Simply put, the WCJ erred as a matter of law in
    constraining the IRE review solely to the earlier accepted descriptions of Claimant’s
    work injuries.

The Dissent opinion stated - Duffey II has muddled the law in this area. It takes the IRE into issues of liability and causation for a work injury when the sole purpose of an IRE is to determine the claimant’s disability status after maximum medical improvement from the adjudicated work-related injury.      

See: Section 306(a.3)(8)(i) which defines “impairment” as “anatomic or functional abnormality or loss that results from the compensable injury and is reasonably presumed to be permanent.”

Dissent would affirm the WCAB and WCJ, as the WCJ simply rejected the credibility of the IRE evaluator’s addendum opinion that Claimant’s other symptoms were attributable to his work injury. Therefore, there was no credible evidence to support a finding that Claimant has a whole-body impairment greater than 35%.

PRACTICE RECOMMENDATIONS:

1. Continue to utilize the IRE remedy as a means of limiting the duration of work-related total disability status and the overall duration of future indemnity benefit liability.

2. Before filing the IRE physician designation request - Review the pre-IRE appointment records of medical treatment. Has there been a change or additional description of the diagnoses treated, when compared to the accepted injury description in the NTCP, NCP or prior WCJ decision?

If so, consider a pre-IRE medical document review to preliminarily assess the existence of additional    diagnoses that would exceed the 35% threshold. Is there a diagnosed condition that is improving … or declining?

3. If there are additional diagnoses, beyond the accepted work-related injury, then consider an IME to attempt to secure a medical expert opinion that the additional diagnosis IS NOT work-related.

In recent discussions, at least one Impairment Rating physician evaluator welcomes additional pre-exam information when there are issues regarding the description or scope of the work-related injury. An example is the case where a WCJ has defined the work-related injury in a manner that may include a medical condition that clinically is not typically attributed to the accepted type of injury.

4.  Also, one must consider the impact of a separate "chronic pain" diagnosis  score - where the medical condition, that is the pain generator, is not considered in the IRE score.

Once again, the best practice in handling this workers compensation issues depends upon the specific facts presented. One must take the time to review the medical records of treatment in your case – before

you select an appropriate worker's compensation remedy. 

As we always recommend, please discuss your case handling options with your workers compensation professionals.

The Pennsylvania Bureau of Workers’ Compensation has revised the Notification of Suspension or Modification Pursuant to 413 (c) & (d); form LIBC-751

This change is effective February 20, 2022.

What does this mean?  The form is simpler to use!

Here is a copy of the Bureau announcement -

On Dec. 22, 2021, Governor Tom Wolf signed Act 95 (House Bill 1837) into law. This act amended Section 413(c) & (d) of the PA Workers Compensation Act such that an affidavit is no longer required on the Notification of Suspension or Modification Pursuant to 413(c) & (d) - LIBC 751, effective February 20, 2022.

The Bureau of Workers Compensation has revised the Notification of Suspension or Modification, LIBC-751, to comply with Act 95. 

 

The notification now includes two verification boxes which must be checked before the document is signed. 

 

The notification must still be sent to the claimant and the bureau within seven days of the modification or suspension of benefits. 

 

Due to the substantive change to the form, the revised form must be used beginning February 20, 2022.

 After March 2, 2022, prior versions of the form will be marked incomplete.

Please upload completed forms into WCAIS. Filing in WCAIS is available 24/7 and reflects a "filed date" when uploaded. This practice offers cost savings,

timely filing to the bureau without the need for a valid US Post Mark and makes the document available for instant viewing by all parties to the claim. Uploading can be done within the Action Tab of a claim, using the "Document Type" Notification of Suspension or Modification (LIBC-751) in the tab's drop-down list. The form may also be mailed to the bureau for filing.

Here is a reproduction of the “new” sections – 

NOTIFICATION OF SUSPENSION OR MODIFICATION PURSUANT              TO §§ 413 (c) & (d)  LIBC-751 REV 12-21

INSTRUCTIONS

This form must be completed, mailed to the employee, and uploaded to WCAIS or mailed to the Bureau of Workers’ Compensation within seven days of the suspension or modification of benefits under the provisions of the Workers’ Compensation Act. You must submit an EDI transaction to match the LIBC-751 to update the status of the claim in WCAIS.

*** 

You are notified that because you returned to work on  month day year  your weekly disability benefits for this injury have been:

 __  Suspended effective month day year  because you have returned to work at earnings equal to or greater       

        than your time- of-injury earnings of $._____.

 OR

__  Modified to the rate of $ ____ per week, effective month day year  because you returned to work at earnings

       less than your time-of-injury earnings.

 *** 

 ___   I confirm I have served a copy of this form to the Bureau of Workers’ Compensation.

___    I confirm I have served a copy of this form to the employee.

***                                             

Claims representative’s signature                                                   

Claims representative’s name (typed/printed) 

phone number

This Insurer’s Verification language appears to the right of the Claim rep signature lines -

 INSURER’S VERIFICATION

I verify that this information is true and correct based upon my knowledge, information and belief. I understand false statements are subject to the penalties of 18 Pa. C.S. Section 4904 relating to unsworn falsifications to authorities. Any individual filing misleading or incomplete information knowingly and with intent to defraud is in violation of Section 1102 of the Pennsylvania Workers’ Act and may also be subject to criminal and civil penalties through Pennsylvania Act 165 of 1994.

If you have any questions regarding the proper usage, preparation or filing of this revised form – please feel free to ask your workers compensation attorney at www.ChartwellLaw.com 

2022 Pennsylvania Workers' Compensation - State Wide Average Weekly Wage and Total Disability Benefit Rates

 
Pursuant to the Workers’ Compensation Act, Section 105.1, the Department of Labor & Industry has determined the statewide average weekly wage for injuries occurring on and after January 1, 2022, shall be $1,205.00 per week.  

The maximum weekly compensation rate for calendar year 2022 is $1,205.00. 

The weekly compensation rate is 66 2/3 percent of the employee's average weekly wage if the average weekly wage falls between $1,807.50 and $903.76.

The weekly compensation rate is $602.50 if the employee's average weekly wage is between $903.75 and $669.44.

If the employee's average weekly wage is $669.43 or less; the weekly compensation rate is 90 percent of the employee's average weekly wage.

 NOTE: For purposes of calculating the update to payments for medical treatment rendered on and after January 1, 2022, the percentage increase in the Statewide Average Weekly Wage is 6.6 percent.

PA Employers are not entitled to workers' comp benefit credit for Federal Pandemic Unemployment Compensation paid under the CARES Act

Federal Pandemic Unemployment Compensation paid to an Employee under the CARES Act is not equivalent to "Unemployment Compensation Benefits" for which an Employer is entitled to a credit under Section 204(a) of the PA Act.

See: Carbon Lehigh Intermediate Unit #21 v. WCAB (Waardal), a Pennsylvania Commonwealth Court decision published at No. 750 C.D. 2021; filed on January 3, 2022.

HOLDING: The sole issue before the Court was whether Federal Pandemic Unemployment Compensation under the CARES Act is the equivalent to UC benefits for which a PA Employer is entitled to a credit under Section 204(a) of the Workers Compensation Act.

The Carbon Lehigh decision relied upon its prior analysis in Dietrich Industries, Inc. v. WCAB (Shank) (Pa. Cmwlth. 1999) to conclude that no credit is available to the Employer for the CARES benefits paid. In Shank the Court disallowed a credit under Section 204(a) for federally funded trade readjustment allowance (TRA) benefits a claimant received.

The Carbon Lehigh decision arose from Employer's  appeal of the WCAB order affirming the WCJ decision to deny the Employer a credit against its payment of workers’ compensation benefits for the Federal Pandemic Unemployment Compensation that Claimant received pursuant to Section 2104(b)(1) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, 15 U.S.C. § 9023(b)(1).

REASONING of the COURT

As one may have anticipated, the Commonwealth Court relied upon its decision at Shank to deny the Employer a credit in the instant matter.

In Shank the claimant received sickness and accident benefits following a work-related lower back injury along with UC benefits and TRA benefits, which “were intended to supplement state unemployment insurance benefits.” Shank’s receipt of TRA benefits was subject to various statutory requirements, including exhaustion of his entitlement to “unemployment insurance benefits.”

Shank’s employer sought a credit against workers’ compensation in the amount of Shank’s UC and TRA benefits. A WCJ granted the credit for Shank’s sickness and accident and UC benefits but disallowed a credit for his TRA benefits.

The Commonwealth Court analyzed the employer’s right to a credit under Section 204(a). The Court noted that TRA benefits, which were intended to supplement UC benefits, were funded entirely by the federal government, as was the cost of administering the TRA program. 

Shank’s Employer argued that the funding source for Shank’s TRA benefits was irrelevant, as Section 204(a) made no such distinction when mandating a credit for a claimant’s receipt of UC benefits. The Court disagreed, stating that an Employer’s credit against its obligation to pay workers’ compensation stems from its payment of “regular stated amounts, out of its own general funds or from sick or accident benefits,” which do not constitute “wages or salary for work performed, but which are paid in relief of the employee’s incapacity to work.”

The Court further reasoned that TRA benefits were not among the types of payments delineated in Section 204(a) from which an employer could seek a credit towards its workers’ compensation obligation. They recognized that, where certain items are specifically designated in a statute, omissions are understood to be excluded. Having concluded that TRA benefits were “distinct from the type of benefits contemplated” under Section 204(a), the Court affirmed the denial of a credit to the Employer.

In support of its right to a credit for Claimant’s receipt of Federal Pandemic Unemployment Compensation, this Employer essentially resurrects the argument the Court rejected in Shank – that Section 204(a) makes no distinction as to the funding source of a claimant’s UC benefits.

The Court stated – “We are similarly unpersuaded by Employer’s attempts to distinguish this matter from our holding in Shank”. They found it was noteworthy that Pandemic Compensation is available to individuals who are not otherwise eligible to receive “regular” UC benefits, and the CARES Act provides for federal reimbursement of the amounts paid by a state for Pandemic Compensation. Furthermore, Pandemic Compensation is referenced separately from “regular compensation” throughout the relevant provisions of the CARES Act.

The Court concluded that these distinctions render Pandemic Compensation sufficiently “distinct from the type of benefits contemplated” under Section 204(a) of the Act.

It was acknowledged that Section 204(a), which was last amended in 1996, did not contemplate the benefits at issue here. However, it is clear that the General Assembly has not seen fit to amend Section 204(a) in the two decades following the decision in Shank, so as to specify that the credit provisions of Section 204(a) encompass the types of federally funded benefits at issue in Shank and the instant matter.

Ultimately, the legislative intent behind Section 204(a) is to prevent an employer from having to pay “duplicate benefits for the same loss of earnings.” (emphasis added). Allegheny Ludlum Corp. v. Workers’ Comp. Appeal Bd. (Bascovsky), (Pa. Cmwlth. 2009). Disallowing a credit for Pandemic Compensation that is wholly paid for by another entity does no disservice to the overall purpose of Section 204(a), nor does it place Employer in the position of “paying duplicate benefits for the same loss of earnings.”

Supreme Court of PA reviewed the scope of Employer liability for a traveling employee injury after attendance at an Employer-sponsored social event.

The Supreme Court of Pennsylvania recently reviewed the scope of an Employer’s liability for an injury sustained after a traveling employee attended an Employer-sponsored social event.

As we approach the time of the year for Employer-sponsored Holiday and End-of -the- Year social gatherings, the analysis of the traveling employee doctrine by the Pennsylvania Supreme Court is both informative and instructive for employers, insurers and workers’ compensation practitioners.

See: PETERS v. WCAB (CINTAS CORPORATION), No. 1 MAP 2020; 

DECIDED: November 17, 2021, authored by JUSTICE MUNDY 

(Appeal from the Commonwealth Court at No. 1835 CD 2017 dated July 18, 2019 Affirming the decision of the WCAB at No.A16-1263 dated November 16, 2017.)

HOLDING:

An Employee who travels in the course of their work-related duties is presumed to remain within the scope of employment when attending an Employer-sponsored social event. An Employer is responsible for injury sustained by the Employee, after his departure from that work-related event - if he did not abandon his employment prior to the accident, via actions which “were so foreign to and removed from his usual employment that they constitute an abandonment of that employment.”

This case was remanded to the WCJ for additional fact-finding to resolve the conflicting testimony of the Employee and his sales manager, as to whether the Employee was traveling back to his home or traveling to/from another non-work event, at the time of his accident.

Although there was no announcement of a new rule of law, or even a final determination in this specific case, the analysis employed by the Pennsylvania Supreme Court is instructive for Employers and their Workers’ Compensation insurers, when assessing issues of responsibility for injury occurring in work-related travel and social function attendance.

Factual Background

Factual distinctions may determine the compensability of an injury. In the instant case, the facts reflect that this Employee was engaged in work-related travel as a regular part of his work duties. He was employed as a uniform sales representative, which included three half-days in the Employer’s office and travel for the remainder of the work week, to meet with potential customers and present products in his sales region.

Following his last sales appointment, Employee drove pass the highway exit to his home, on his way to an Employer-sponsored event at a local pub. After leaving that event, the Employee was injured in a motor vehicle accident. A claim petition was filed to seek benefits, as Employee alleged the motor vehicle accident occurred during the course of his employment.

Employee testified that his sales manager invited the sales representatives to this pub event. Employee described this event as a celebration to mark the end of a “sales blitz”. These types of events were held on prior occasions during sales blitzes.  He believed these events to be “sort of” mandatory. At the event, he said there was a recap of the work performed during the sales blitz. Food and drinks were paid by the Employer. Employee testified that after he left the event he was involved in a motor vehicle accident, which occurred on his way home.

Conflicting testimony was presented regarding the description and nature of the pub event. Employer testimony from a sales representative and a Sales Manager confirmed this type of event was routinely held during sales blitzes, as a “voluntary perk”. Contrary to the Employee’s testimony, they both emphasized the voluntariness and social nature of the event. They described this as a chance for the sales representatives to relax after the sales blitz. They disputed the Employee’s representation that the sales blitz work was recapped at the event.  The sales representative specifically testified that work was not discussed during the event, rather the conversations were general “chit chat.” 

The Sales Manager testified that he received a call from the Employee later that evening, reporting that he had been in a motor vehicle accident. Significantly, He further testified that during this phone conversation that Employee stated that he was not on his way home from the pub event at the time of the motor vehicle accident, but rather he was on his way from some other event. However, the Sales Manager testified that he could not recall specifically where the Employee said he was coming from. (this becomes relevant in the final analysis of this claim).

Supreme Court Analysis

As noted above, the Supreme Court did not announce a new rule of law regarding the scope of compensability of injury sustained by a traveling employee. As a starting point in its analysis, the Supreme Court cited Section 301(a) of the Act, for the proposition that an employer is liable for compensation for injury or death sustained in the course of one’s employment. An employee’s injury is considered to have arisen in the course of employment in the following two circumstances: 

When an employee is injured on or off the employer’s premises while engaged in furtherance of the employer’s business or affairs; 

When an employee is not furthering the employer’s business or affairs but nonetheless  is on the premises occupied or under the control of the employer; upon which the employer’s business or affairs are being carried on; 

When required by the nature of his employment to be present on his employer’s premises; and sustained injuries caused by the condition of the premises or by operation of the employer’s business or affairs thereon. (301(a). 

In the litigation of a claim petition, the injured worker has the burden of proof to demonstrate that his/her injury was sustained in the course of employment.

In the instant case this Employee was injured off Employer’s premises. Therefore, for this accident to be considered to have “arisen in the course of his employment”, the Employee must have been furthering the business and affairs of the Employer at the time of his motor vehicle accident.

The Traveling Employee Presumption

The Supreme Court reviewed the historical development of the traveling employee doctrine. Employee argued that he was in the course of his employment at the time of his motor vehicle accident, pursuant to this doctrine.

The traveling employee doctrine provides:

When a traveling employee is injured after setting out on the business of his employer,  it is presumed that he was furthering the employer’s business at the time of the injury. The employer bears the burden of rebutting the presumption. To meet its burden, the employer must prove that the employee’s actions were so foreign to and removed from his usual employment that they constitute an abandonment of that employment.

Temporary departures from the work route for the purpose of administering to the comforts of an off-the-premises employee, including authorized breaks for lunch, will not interrupt the continuity of the one’s course of employment.

For example, a traveling salesperson cannot carry out the business of the employer without traveling to present products and solicit business. As such, the act of traveling, in and of itself, furthers the business and affairs of a traveling employee’s employer. So too do the activities incidental to travel such as lodging, refueling, and stopping for food and drink. During their travels, traveling employees are subject to the risks associated with travel that stationary employees are not. Therefore, the “hazards of travel become the hazards of employment”. See:  Ball-Foster Glass Container Co.

Application of the Traveling Employee Doctrine

The Supreme Court rejected the Employer’s argument (and the WCJ, WCAB and Commonwealth Court conclusion) that this Employee abandoned his employment when he passed the highway exit to his home and proceeded to the pub event, as his attendance was not mandatory for his employment nor was the event “work-related.”

It was not disputed that this individual was a traveling employee. As such, he is presumed to remain in the course of his employment, unless the employer rebuts the presumption by showing that his actions, at some point prior to the injury, constituted abandonment of his employment.

The Supreme Court concluded that this Employee did not abandon his employment by attending the pub event. The WCJ found testimony was credible that these types of events were regularly held during sales blitzes. The Court reasoned that it would be difficult to conclude that attending a regularly held type of event constituted an act so foreign to and removed from his regular employment to be considered abandonment of employment.

Also, the WCJ found the event to be voluntary and social in nature. However, those facts, do not mean the event was not work related! The Employer hosted and sponsored the event. While work may not have been discussed at the event, the event still benefited Employer by fostering relationships and improving morale. See: Investors Diversified Services.

The Supreme Court could not conclude that this Employee abandoned his employment by attending the pub event. But their analysis did not end there, as there remains a question as to whether the Employee abandoned his employment sometime between leaving the pub event and the occurrence of the motor vehicle accident.

The record reflects conflicting testimony as to where this Employee was coming from at

the time of the motor vehicle accident. The WCJ did not explicitly resolve this conflicting testimony. As the conflicting witness testimony was unresolved, this leaves open the question of whether the Employee took some action after leaving the pub event that could constitute abandonment of his employment.

As often stated, “the WCJ is the ultimate finder of fact and the exclusive arbiter of credibility and evidentiary weight". The Supreme Court remanded this case to the WCJ to resolve the conflicting testimony with respect to whether the Employee was coming from the pub event at the time of his accident or coming from some other unknown non-work event.

Recommendations:

1.    This decision was not an announcement of a new rule of law regarding the extent of compensability for injury to a traveling employee. Rather, this decision reflects an analysis of the existing law with application to the specific facts presented, to reach a different conclusion regarding the compensability of an injury sustained after attendance at a work event.

To properly assess the compensability of an injury to a traveling employee, the Work Comp professional must engage in a thorough investigation of the facts, including the past practices of the Employer.

2.    The assessment of responsibility for injury to a non-traveling employee, sustained after attendance at a work-related event is different.

As cited by the Supreme Court, in the past, a non-traveling employee, injured after attendance at a work related event, may not be in the course of employment after the event has ended and the employee is traveling home. 

Citing: Brown v. WCAB (Liken Employment Nursing Services) (Pa.Cmwlth. 1991), and Canning v. WCAB (Pa. Senate) (Pa. Cmwlth. 2015) The claimant in Brown, who was not a traveling employee, was struck by a motor vehicle while crossing a public roadway after leaving her employer’s annual Christmas party held at the employer’s office. The Commonwealth Court concluded that even if the party benefited the employer by cultivating interpersonal relationships, the claimant was not furthering her employer’s business at the time of her accident because she was injured while returning from the employer’s party and not while attending the social event.

Query: would the result in Brown be different after the Peters decision ?

What about the “special mission” line of cases, which can expand the Employer’s liability to a non-traveling employee?

In preparation of one's defense to a claim, one must carefully investigate the facts presented regarding: (i) the details of the employment; (ii) the details of the event; (iii) the past practices of the Employer regarding events.