Assessing Liability for "Separate" Disability- beyond the "Loss of Use" Injury

Assessing Disability beyond the Loss of Use Injury.

A work injury which results in a permanent bodily loss of use for all practical intents and purposes is compensated pursuant to the schedule of benefit durations enumerated at Section 306(c).

If the work injury includes disability beyond the loss of use, the injured employee is entitled to total disability benefits of an indeterminate duration, pursuant to Section 306 (a) ... to be followed by the payment of specific loss benefits.

The interaction of section 306(a) benefits (for total or partial disability) and 306(c) benefits (loss of use) is sometimes referred to as a "shield versus sword" situation. In certain circumstances the Employer desires the limitation of benefits to a specific loss schedule, rather than liability for total disability of an indeterminate duration. Conversely, the Employee may seek specific loss benefits where they have returned to work.

A recent appellate case demonstrates a number of legal concepts may interact when the scope of the "injury" and the extent of "disability" are contested...

Lindemuth v. WCAB (Strishock Coal Co.) a published panel decision of the Commonwealth Court of Pennsylvania authored by Judge Cohn-Jubelirer on February 24, 2016, analyzed the interrelated legal issues of: (1) an employee's entitlement to review/modify specific loss benefits to total disability benefit status, and (2) the application of the legal doctrine of collateral estoppel - to preclude Employee/Employer arguments regarding the extent/description of the work injury.

The lengthy litigation was reviewed in a comprehensive 28 page decision.
For our discussion, we will focus upon:

•  the Employee arguments to expand the loss of use status to a total disability status;                  
•   the Employer arguments that Employee's remedies were limited by the prior litigation result.

Factual and Procedural Background

Employee was injured in a 2005 battery explosion. Chemicals, battery acid and shrapnel resulted in injuries to the right eye, left eye and face. Total disability benefits were voluntarily commenced via Notice of Compensation Payable. The accepted work injury was described as: "right and left eyes, face ... shrapnel and chemical injuries to eyes and face"

Employee filed a Claim petition in 2006 to assert his additional entitlement to loss of use benefits for the right eye, 80% loss of use of the left eye and facial scarring. (eligibility for facial scarring is also addressed in the Section 306(c) Loss of Use provisions).

Employer filed a Review petition of Employee total disability status, arguing that the work injury was limited to the loss of use of the right eye and that employee did not suffer any disability separate from the specific loss of the right eye, so as to be entitled to a total disability benefit status.

 2009 WCJ decision

Employee proved he sustained a loss of use of the right eye.
Employee failed to prove there was disability separate and apart from the disability associated with that loss of use of the right eye.
Employee failed to prove there was a loss of use of the left eye or any related residual injury or disability.

Employee successfully established that the work injury resulted in headaches, which required medical treatment, but these headaches did not result in any disability separate and apart from the right eye loss of use.

Employee successfully established the development of a post traumatic stress disorder and an adjustment disorder, but these additional injury descriptions did not result in any additional disability separate and apart from the right eye loss of use.

This 2009 WCJ decision was affirmed by the WCAB and Commonwealth Court.

Employee filed the instant petitions in April 2011.
(before the 2012 Commonwealth Court decision).
Claimant petitions were filed for: Review Medical Treatment; Modify Compensation; Review Compensation; Review Pension Benefit Offset; Reinstate Compensation.

Same WCJ presided.
What did employee want?
Reinstatement of Total Disability benefits (unlimited duration) due to increased frequency, duration and intensity of head pain caused by the work injury. ( in other words, headaches as an additional disability separate and apart from disability usually normally associated with the loss of use of the right eye.

2013 WCJ decision

The original October 2005 work injury did not worsen since the time of the 2009 WCJ decision.
There was no proof of a "disability separate and apart " from the 2009 injury description.
The injury was not amended to include a trigeminal nerve injury.

Employee subjective reports of increased frequency and intensity of headaches were not causally related to the work injury. (The prescribed narcotic medication was not related).
There was no worsening of condition so as to create a disability separate and apart, from the loss of use of the right eye.
[Employee evidence was credible only in regards to an unappealed UR petition issue].

WCJ found Employee and his medical expert, Dr. Kratz not credible regarding a worsening of his condition. WCJ noted, Employee treating physician Dr. Wirth was not aware of any worsening of headaches. Dr. Wirth believed there was just a continuation of symptoms.

Drs. Kratz and Wirth medical opinions were based solely on Employee's subjective reports, they never observed increasing, severe headaches. WCJ resolved conflicting medical evidence, as there was a documented difference regarding the dosage of medications [a point pertinent to a "worsening argument].
However, Kratz did not find any difference on physical examination despite assertions of increasing headaches and worsening of Employee condition. WCJ's observations of Employee, from time of prior litigation to present, were said to reflect no indication of any significant change, although Employee did appear subdued.

Employer medical witness Dr. Richard Kasden was found credible. Employee's complaints were not consistent with a trigeminal nerve condition. (Medications for that condition was said to be ineffective).  Neurological examination and MRI scan of the brain did not show any objective evidence to support Employee's headache complaints.

WCAB Appeal by Employee

1. WCJ ruling that he did not have a trigeminal nerve injury AND no longer required headache treatment- was barred by the doctrine of collateral estoppel
2. WCJ findings were not supported by substantial evidence; the credibility determinations were insufficient.

WCAB concluded Employee was barred by the legal doctrine of collateral estoppel from raising the issue in the April 2011 petitions that he sustained a trigeminal nerve injury. The description of injury issue was fully litigated in 2009.
WCJ was not bound by his prior findings in the 2009 decision to now find a trigeminal nerve injury.
WCJ decision was supported by evidence.

[side issues: Employee appeal included an argument that WCJ erred in not awarding attorney fees and all litigation costs. WCAB upheld pro rata costs award, only costs on UR petition. A reasonable contest existed, no attorney fees were due. ]

Commonwealth Court Decision

General rule # 1. Injuries, including those that result in a loss of earnings, that normally flow from the specific loss injuries are considered compensated by the specific loss benefits. Citing: Sharon Steel (Pa. Cmwlth. 2002).

General Rule #2. If the injury suffered is separate and apart from a specific loss that results in a loss of earnings, a claimant may receive Section 306(a) total disability benefits or Section 306(b) partial disability benefits, in addition to the Section 306(c) specific loss benefits. Citing: Faulkner Cadillac (Pa. Cmwlth. 2003).

General Rule #3. A claimant seeking concurrent specific loss and disability benefits must prove that he/she has a disability separate and apart from that which normally follows a specific loss injury. Citing: Richardson (Pa. Cmwlth. 1997).

General Rule #4. If a claimant fails to prove a disability separate and apart from the loss of use, the disability benefits are considered suspended. However, in subsequent litigation, the WCJ has the authority (section 413(a)) to reinstate or modify Employee's benefit status, IF claimant proves his injury has worsened and results in a total disability.

I. Collateral Estoppel argument
Employee argued the WCAB erred in applying the collateral estoppel doctrine to conclude he was barred from arguing that his work injury included a trigeminal nerve injury.

Employee argued the WCAB erred by failing to conclude the WCJ was barred from finding his headaches were not causally related to his work injury, asserting the WCJ made a contrary finding in the 2009 decision.

The Court agreed.
In 2009 the WCJ found the work injury resulted in a trigeminal nerve injury. The 2013 decision was contrary. The doctrine of collateral estoppel would bind the WCJ to the 2009 finding. The Court reviewed the collateral estoppel argument criteria: The legal issue was the same; This issue was actually litigated; This issue was essential and material to the adjudication; The parties had a full and fair opportunity to litigate the issue in question. Citing: Stiles (Pa. Cmwlth. 2004).

However, this error by the WCJ is not relevant to the instant matter.

In the 2009 decision the WCJ found Employee suffered a trigeminal nerve injury as a result of his work injury. Yet in the 2009 decision Employee failed to proof there was disability, separate and apart from the specific loss of the right eye. Injury and disability are not synonymous in this instance.

In 2009 the WCJ found headaches were caused by the work injury but they did not constitute a disability, separate and apart from the specific loss.

In 2013 the issue the WCJ had to decide was whether the claimant suffered from a worsening of headaches, such that this (worsened) condition would now constitute a disability separate and apart from the specific loss. In 2013 the WCJ concluded that claimant failed to prove a change or worsening of his condition since the 2009 decision.

The 2009 litigation addressed the Employee request to include headaches as part of the work-related condition. The headaches were alleged to be caused by the 2005 trigeminal nerve injury.
That 2009 issue did not bind the WCJ on the 2013 issues ... as the 2013 issue was a different!
 In 2013 the WCJ was asked to consider the worsening of Employee's headaches as a separate disability. As these two issues are different, the doctrine of collateral estoppel did not apply, so as to restrict the WCJ in his 2013 conclusions.

II. Substantial Evidence Argument
Employee argued that substantial competent medical evidence did not support the findings authored by the WCJ in the 2013 decision.
The Court disagreed. There was substantial competent medical evidence (Dr. Kasden) to support the 2013 finding that Employee's headaches did not worsen, nor were the headaches disabling in nature. Conflicting evidence was presented in Claimant testimony, his wife's testimony and testimony of Drs. Katz and Wirths. However, it is well-established that the WCJ is free to accept the testimony of any witness, in whole or in part. This resolution of conflicting evidence by the WCJ is not an error of law, where there is supporting substantial evidence.

III. Reasoned Decision Argument
The WCJ must issue a reasoned decision as per the section 422(a) requirement that the decision "allows for adequate appellate review". In a case with conflicting evidence, the WCJ must adequately explain the reasons for rejecting or accepting competent evidence. Here, in the 2013 decision the WCJ provided adequate  reasons for crediting Dr. Kasden and for rejecting Employee evidence.

IV. Attorney Fee Argument
Claimant argued the WCJ should have awarded attorney fees payable by Employer, or at least a portion of the requested attorney fees, as he prevailed in the UR Determination Review petition. The Court rejected this argument. Here was not an unreasonable contest of the UR issue as Employer did not contest the UR issues. All of the remaining contested issues were decided in Employers favor. On this basis, it is correct to deny the imposition of attorney fees payable by Employer.

PRACTICE POINTERS:

1. The compensation of a specific loss may be advantageous to the Employer, in the circumstances where the injuries are considered to normally flow from the specific loss. However, where there is disability, that is separate and apart from the specific loss, a claimant may receive indemnity wage loss benefits for total disability, in addition to the subsequent payment of specific loss benefits.

2. A competent credible medical opinion is required to address the "separate and apart" question. Further, an experienced medical examiner is necessary to address and explain the basis for a conclusion that the disability is limited to a specific loss. A credible explanation to the WCJ will support the necessary findings. Typically the parties can muster competent medical expert opinions, in support of their conflicting legal arguments. In my opinion, the logic and detail of the medical expert explanation may be a decisive factor in the WCJ assessment of credibility and the weight to be assigned to that medical evidence.

3. Application of the legal doctrine of collateral estoppel (and its first cousin, res judicata) may be confusing. In the long-standing workers compensation case, with multiple successive petitions, a careful analysis of the issues presented is required. Another related legal argument, which may arise, is the argument for a waiver of issues which were not preserved through out the litigation. When a workers compensation case presents with multiple petitions and a series of decisions,it is incumbent upon the Defense Counsel to identify the fully litigated issues and to identify the viable, undecided factual and legal issues.

A Best Practice would require the careful assessment of the factual and legal issues presented at the time the subsequent petitions are filed.  This legal assessment is not in the category of the quick "what do you think" telephone call. The above case demonstrates the importance of these legal arguments in obtaining a successful litigation and appellate result.

PA Supreme Court to review Constitutionality of IRE procedure

The Supreme Court of Pennsylvania has granted the Petition for Allowance of Appeal filed on behalf of Mary Ann  Protz AND the Petition for Allowance of Appeal filed on behalf Derry Area School District.

The two orders entered March 22, 2016 define the issues presented for review by the Court.


 "Whether the Commonwealth Court - after properly determining that Section 306(a.2) of the Workers' Compensation Act was unconstitutional - erred in remanding the case to the Workers' Compensation Judge with instructions to apply the Fourth Edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment when neither Section 306(a.2) nor any other section of the Act ever references the Fourth Edition and its usage was not sanctioned by the Pennsylvania Legislature.


  "Does Section 306(a.2) of the Workers' Compensation Act unconstitutionally delegate the State Legislature's lawmaking authority in violation of Article ll, Section 1 of the Pennsylvania Constitution by incorporating the most recent edition of the AMA Guides to the Evaluation of Permanent Impairment?

The Court will issue a schedule for the submission of Petitioner and Respondent Briefs. We anticipate oral argument will be scheduled thereafter. Based upon past experience, the time frame for publication of a final opinion and order may range from a few months, up to several months.

If there is an "even" number of Justices, equally splitting on resolution of these issues, the underlying decision of the Commonwealth Court will be the final opinion in this matter.

Challenges to IRE Determinations and the Waiver Argument

It seems that the year 2016 will be the year of the IRE - Impairment Rating Evaluation.
... and Challenges to the IRE!

Although this employer remedy first appeared in the Pennsylvania workers' compensation world in 1996 via the Act 57 amendments, the constitutionality of the IRE procedure was challenged in 2015, in the Commonwealth Court decision reported at: Protz v WCAB (Derry School District). (Pa. Cmwlth. 2015)

Protz declared that the portion of the IRE procedures which require the application of the "most recent version" of the AMA Guides to Evaluation of Permanent Impairment, was an unconstitutional delegation of legislative authority. 

Importantly, the Court did not throw out the entire remedy (as requested by claimant attorneys) rather the Court remanded the case for application of the 4th Edition of the AMA Guides. The 4th Edition was the AMA Guides edition that was in place when the statute was enacted  in 1996. 

***

Applications for Allowance of Appeal to the Supreme Court of Pennsylvania in Protz were filed in October 2015 and are presently pending before the Court. 

***

What to do in the interim???

In open cases, not yet decided by a WCJ decision,  Employer attorneys recommend the preparation of an addendum IRE report which utilizes the existing evidence, to perform a calculation of impairment in accord with the 4th Edition Guides. 

In some currently litigated cases, Claimant's continue to challenge the IRE results. The basis for these challenges are varied. Below we review a challenge based upon the sufficiency and propriety of the medical exam. Previous challenges to IRE determinations include: MMI status; injury description completeness; necessity of future surgery;  medical evidence competency; correct application of the Guides tables.

In cases already the subject of a final WCJ decision, which are currently pending on appeal
 ... there may be a WAIVER issue. The claimant attorney may have omitted a challenge to the constitutionality of the Guides.

If the Claimant has not raised and preserved the Protz constitutionality argument...
it may have been waived!

***

Attorney Stephen J. Fireoved, of the Chartwell Law Offices, Valley Forge office, recently obtained a successful result before the Commonwealth Court on this waiver issue. He serves as our guest contributor, to provide his "in the trenches" perspective:

In an unreported memorandum decision of a panel of the Commonwealth Court, authored by Judge Brobson, the Court affirmed the Workers' Compensation Appeal Board, which upheld the WCJ Decision and Order granting a modification of claimant status from total disability to partial disability based on an IRE determination. 
See: Timcho v. WCAB ( City of Philadelphia), No. 756 CD 2015, filed January 27, 2016.

Commonwealth Court Ruling 

The Commonwealth Court noted in a footnote that since claimant did not raise the constitutionality argument per Protz, "we need not consider the impact of our decision in Protz on this matter". 

We believe this is significant ruling , as claimant subsequently filed a Reinstatement petition seeking reinstatement from partial disability status to total disability status based on Protz argument .  (The IRE physician used the 6th Edition of the AMA Guides and not the 4th Edition). Employer's position was that the Reinstatement Petition should be dismissed as claimant was obligated to raise that constitutional argument in the underlying litigation, which was the subject of the ___-- Commonwealth Court decision. In failing to initially raise this issue in the litigation of the  underlying IRE determination , claimant waived his constitutional claim and cannot "get a second bite at the apple" by filing a new Petition before the WCJ. 

 Background and Procedural History 

The case involved a work injury of 5/20/08 in the nature of "myocardial infarction". The City filed a Modification Petition based on an IRE performed by Lance Yarus, D.O., an orthopedic surgeon, not a cardiologist. This examining expert found that Claimant had reached MMI and assigned a whole body impairment of 32% using the 6th Edition of the AMA Guides. 

Claimant challenged the IRE and argued that Dr. Yarus failed to order objective tests to support his IRE. The WCJ found that objective tests were performed in 2009 by Dr. DePace and that Dr. Yarus did in fact review and consider those tests in conjunction with his determination that claimant had reached MMI by the date of his IRE. As Dr. Yarus found claimant Impairment Rating to be below fifty (50) percent, the WCJ modified claimant's benefits from TTD to TPD. 

Claimant appealed and the Commissioners of the Workers' Compensation Appeal Board affirmed the WCJ decision, concluding that the AMA Guides do not specifically require testing as part of the IRE process. The requirements for physicians conducting IREs are that: he/she is a Commonwealth-licensed physician;  certified by an American Board of Specialties;  active in clinical practice for at least twenty hours per week. 

Claimant filed a petition for review with the Commonwealth Court raising the sole question of whether the Board erred in affirming the WCJ's decision, as they believed Dr. Yarus did not comply with the Guides. Claimant argued that Section 4.3a of the Guides requires IRE physicians to order tests as part of the IRE process and that such tests must be conducted contemporaneously with an IRE. He contended that Dr. Yarus failed to comply with this provision because (1) he did not order such tests as part of the IRE process; and (2) he admitted that he did not personally assess Claimant's left ventricular function but, rather, relied on the 2009 report. Those tests had been performed relative to Claimant's heart attack and the treatment for his coronary condition. Claimant contended that the opinion of Dr. Yarus was not competent to support his impairment rating and that the Board erred in concluding that Dr. Yarus's opinion was sufficient to support the WCJ's decision to grant the modification petition.

 Commonwealth Court Reasoning

The Commonwealth Court disagreed with Claimant's argument that the timing of the cardiac testing negated the reliability of such testing for the purpose of the IRE rating in this matter. The Court noted that the Guides state that physicians may render an impairment rating generally 3 to 6 months following treatment for a work related condition. The Act does not prohibit the use of tests that were taken within the first 104 weeks following a work injury. 

In this case, Claimant had a catheterization procedure and stents implanted in 2008. Dr. DePace determined in 2009 that claimant's left ventricular function was intact. The evaluation of Dr. DePace occurred more than 3 to 6 months after Claimant's 2008 injury and treatment for his myocardial infarction. This testing was appropriate 3 to 6 months after treatment occurred. The Guides place no other limitations on the performance of tests used to determine am impairment rating. Therefore Dr. Yarus's reliance upon the report of Dr. DePace and the testing performed in 2009 complied with Section 4.3a of the Guides. Finally, Dr. Yarus satisfied the statutory guides to be qualified as an IRE. As such, the Court affirmed the Board.

PRACTICE POINTERS:

1. Stephen Fireoved pursued an aggressive strategy. He responded to claimant arguments by reliance upon the statutory language. Although claimant may question the propriety of a non-cardiologist performing an IRE, the work comp statute requirements do not necessitate any particular specialty. We recommend requiring claimant attorney to identify and enumerate the specific challenges to the IRE by claimant at the time of the first hearing.
Know exactly what they are arguing!

2. For all cases pending before the WCAB, determine if the waiver argument applies to claimant
appeal. File a written motion to strike any argument which is not preserved and/or file an appellate brief documenting the waiver argument.

3. For petitions subsequent to an IRE determination,  note the limited circumstances under which one may "appeal" the IRE determination; the challenge must be based upon a determination that the claimant meets the threshold impairment rating of 50% of impairment. See: 306 (a.2) (4).

4. KEEP FILING IRE REQUESTS for Designation of a Physician to Perform an Impairment Rating Evaluation, LIBC-766. The IRE remedy is a significant method for Employers and Insurers to limit the duration of future indemnity wage loss benefit liability. The Commonwealth Court did not strike down the statute. The request for further appellate review by the Supreme Court of Pennsylvania remains pending.

Confirm that your IRE physician will utilize a 4th Edition and a 6th Edition calculation!

Employer Subrogation Recovery Available in Employee-Passenger Work-Related Accident

Employer Subrogation Remedy in Work-Related Motor Vehicle Accident

The Pennsylvania Workers Compensation Act allows an Employer and its Insurer to assert a right of subrogation against an Employee civil action recovery. The Employer has this right to recovery where it has paid workers' compensation benefits for an injury to its employee and that injury was caused by the acts (or omissions) of a third party. See: Section 319, 77 P.S. 671.

The phrase "the Employer subrogation right is absolute", is often repeated. Despite this absolute right, the Employer request for a subrogation payment is often met with challenge.

Limitations upon the rights of an Employer to assert a subrogation recovery do exist.
For example, a common limitation is that the Employer may not seek a subrogation recovery against any portion of the civil action recovery which is designated as a spousal claim arising from the work injury.

In the preceding blog post on January 11, 2016 we discussed the statutory limitation of the right of subrogation in a medical malpractice case. An Employer right of subrogation exists for any portion of the recovery designated for future wage loss or future medical expense reimbursements. The MCare statute specifically excludes Employer subrogation rights for any past payments of wage loss and medical benefits.

Originally, the Pennsylvania Motor Vehicle Financial Responsibility Act did not allow an Employer subrogation right against any employee Motor Vehicle Accident recovery. However, since 1993, The Workers' Compensation Act amendments changed this law, so that an Employer does have a right of subrogation where a third party causes the Employee to be injured in a work-related motor vehicle accident.

There are some limitations upon these Employer subrogation rights in Employee Motor Vehicle Accident case.

An Employer may not assert any subrogation lien against the employee's recovery from his/her personal insurance policy for uninsured or under-insured coverage. See: Standish v. American Manufacturers Insurance Co. (Pa. Super. 1997) and American Red Cross v. WCAB (Romano) (Pa. 2001).

Conversely, the Employer is entitled to subrogate against any Employee recovery from the Employer insurance policy for uninsured or under-insured coverage. See: City of Meadville v. WCAB (Kightlinger) (Pa. Cmwlth. 2002).

These appellate decisions provide guidance to handle subrogation issues in the instance of the Employee or the Employer insurance policy for uninsured or under-insured coverage.

QUERY: What about an uninsured or under-insured claim against the insurance policy purchased by a co-worker-driver, where the Employee is injured, in the scope of employment while riding as a passenger.

Karen Davis v. WCAB (PA Social Services Union) is a reported decision of a panel of the Commonwealth Court of Pennsylvania which directly addresses this issue.
No. 216 C.Cd. 2015, authored by Senior Judge Friedman on December 30, 2015.

Factual and Procedural Background

Employee was injured in a motor vehicle accident which occurred while she was in the course of her employment with PA Social Services Union. Employee was a passenger in a vehicle driven by a co-worker named Jarvie.The identity of the driver who hit Jarvie's vehicle is unknown.

Employer acknowledged this work injury and paid wage loss benefits with medical expenses to Employee in the total amount of $89,785.22.

Employee filed an uninsured claim with Allstate, the motor vehicle insurer of Jarvie, her co-worker.
Employer asserted its subrogation lien of $89,785.22.
Employee settled the Allstate uninsured motorist claim for $25,000.00.

Employer filed a Petition to assert its subrogation lien against the Employee settlement recovery in the Allstate uninsured motorist claim.

WCJ Decision

WCJ concluded that Employer was entitled to subrogate against Employee's uninsured motorist settlement with Allstate. WCJ reasoned the motor vehicle insurance policy that provided the uninsured motorist coverage was purchased by someone other than Employee. On this basis, a subrogation remedy was available to the Employer.
The WCAB affirmed this decision.

Employee Commonwealth Court Appeal

Employee argued that Employer is not entitled to a subrogation lien recovery where Employer did not pay for the uninsured motorist policy coverage.

The Commonwealth Court rejected Employee argument based upon its review of the Section 319 statutory language regarding subrogation rights.

Section 319 provides:

 " Where the compensable injury is caused in whole or in part by the act or omission of a third party, the employer shall be subrogated to the right of employe, ... against such third party to the extent of the compensation payable under this article by the employer ..."  . slip opinion page 3.

The Commonwealth Court reviewed the general parameters of subrogation rights, established in the prior appellate case decisions reported at Standish, American Red Cross and City of Meadville, mentioned above.

An additional decision was reviewed as support of the Employer right to subrogation in an uninsured motorist claim. In Hannigan v. WCAB (O'Brien Ultra Service Station) (Pa. Cmwlth. 2004), an employer was entitled to assert a subrogation lien against an employee recovery in an uninsured motorist claim from a customer's motor vehicle insurance policy. The employee was a mechanic and he was injured in an accident while driving a customer's vehicle. The negligent driver was uninsured.
The court reasoned that Employer was entitled to a subrogation recovery against the uninsured motorist benefit recovery, as those uninsured motorists benefits are paid in the place of adequate insurance of a negligent insured driver.

"Uninsured motorist benefits are intended to benefit, not only the insured, but also his relatives, passengers, lawful occupants and authorized drivers who are injured in the operation of the policy owner's vehicle. Thus, there is no difference between the policy holder and his beneficiaries".
Davis slip opinion page 6 citing Hannigan 860 A.2d at 640.

The Commonwealth Court has determined that an employer has a right to subrogation, not only where the employer has paid for the insurance policy, but also where a third party, such as a customer or co-worker has paid for the policy. Here, the Employee's co-worker paid for uninsured motorist coverage, therefore Employer was entitled to subrogate against the Employee's settlement.

Employee personally funded insurance policy benefits, continue to remain beyond the reach of the Employer subrogation lien recovery.

PRACTICE POINTERS;

1.   In your review of the work-related motor vehicle accident claim, investigate and identify each party and their respective insurers.

2.   Place each party on notice of the existence of the Employer statutory right to subrogation for any recovery arising from the work-related injury.

3.   Promise to provide any documentation necessary to establish the subrogation lien figures.

4.   Request a copy of the pleadings filed in the civil action

5.   Monitor the civil claim arising from the work-related injury.

6.  Look beyond the "policy limits" to determine if there is any additional coverage available.

7.   Do not allow the plaintiff attorney to "represent" your subrogation lien.
This is an inherent conflict of interest. When limited settlement funds are available, guess who will be asked to compromise their recovery? (hint: it is not plaintiff).

 8.   Dissatisfied with the representations that your subrogation lien will be recognized before any settlement proceeds are distributed?
Petition to Intervene as a Use-Plaintiff. As a party to the civil action you will participate in any settlement conference discussions.

Work Comp Subrogation available in Medical Malpractice Case

Employer Subrogation Rights against Employee civil action recovery.

Section 319 of the Pennsylvania Workers' Compensation Act provides a right of subrogation to the Employer against a third party recovery by the injured worker.  The Employer may recover compensation payable, reduced by its pro rata share of the attorney fees and litigation costs which created the civil action recovery. (Section 319; 77 P.S. 671).

The Supreme Court of Pennsylvania has stated that the Employer right of subrogation is "absolute" and not subject to equitable exceptions.
See: Thompson v WCAB (USF&G) (Pa. 2001) and Brubacher Excavating Inc. V. WCAB (Bridges) (Pa. 2003).

However, the Employer right of subrogation is not without limitation.
There are limitations upon subrogation rights in specific circumstances
(this blog post is not a discussion of all of the possible limitations).

The MCARE Act (Medicare Care Availability and Reduction of Error Act) of 2002 limits the Employer right of subrogation against medical malpractice recovery of past medical expenses and past wage loss, paid before the time of the trial, in which the injured worker seeks a malpractice recovery.

Worker's Compensation practitioners have noted the expressed limitation of the Employer subrogation rights in the Medical Malpractice case. However, since 2002, there are limited published legal precedents on the issue of Employer subrogation rights for future medical expense and future wage loss in the Medical Malpractice case

Protz v WCAB (Derry Area School District, No. 402 C.D. 2015,  is a published decision of a panel of the Commonwealth Court authored by President Judge Pelligrini on January 6, 2016. This decision addresses the Employer Subrogation rights in Medical Malpractice cases.

[NOTE: another Commonwealth Court decision entered September 18, 2015 addressed the issues of IRE application of the AMA Guides, in litigation involving the same parties.]

Factual and Procedural Background

Employee sustained a work-related knee injury in April 2007. This injury was accepted as work-related and Employee received partial disability benefits as of January 2012, pursuant to an Impairment Rating evaluation.

Employee's work injury resulted in a total knee replacement surgical procedure. Due to surgical complications, additional surgery was necessary, Employee filed medical malpractice civil action against the surgeon and hospital . Employee medical expert evidence related the initial surgery to the work injury and further related the subsequent medical conditions and surgical repair. These claims were settled.

Employer filed a Petition to Review Compensation Benefits, seeking to subrogate the civil action recovery pursuant to Section 319.

WCJ Litigation & Decision

Employer submitted the medical malpractice complaints, the settle and discontinue praecipe and the settlement distribution sheet prepared by Employee counsel.

Employer submitted the Employee medical expert report which related the surgery and subsequent complications to the work injury. She would not have experienced these complications, but for the alleged medical malpractice.

Significantly, these documents reflected that all of the monies awarded were in regard to future medical expenses and lost wages. None of these settlement funds were designated to be set aside a payment for past medical bills or past wage loss.

WCJ Decision awarded Employer subrogation from the time of the settlement forward. WCJ noted Section 508 of MCARE Act precluded Employer from obtaining subrogation for past medical expenses and past wage loss paid before the time of trial. Section 508 did not preclude Employer from seeking subrogation with respect to future payments.

WCAB affirmed WCJ determination of subrogation rights.
Employee appealed to the Commonwealth Court.

Commonwealth Court Appeal

Employee did not dispute that Section 508 of the MCARE Act is silent regarding subrogation rights for future medical and wage loss awards in medical malpractice cases; BUT Employee argues this silence must be construed as a prohibition of subrogation, in accord with the plain language of Section 508 (c).

Examination of the statutory  language reflects Section 508 (c) precludes subrogation of Employee medical malpractice proceeds to the extent that those proceeds are "covered in subsection (a)".

Subsection (a) bars recovery of "past medical expenses or past lost earnings incurred to the time of trial", including those paid by an employer or worker's compensation insurer.

Subsection (a) does not address future medical expenses and/or future wage loss.

Conclusion: as future medical expenses and future wage loss are not covered in subsection (a), the subsection (c) prohibition against subrogation does not apply.

The Commonwealth Court concluded, this plain-meaning statutory interpretation is consistent with the purpose of subrogation insofar as it prevents employee double recovery. Also, it furthers the goal of ensuring that employer is not compelled to compensate employee for injuries caused by the negligence of a third party. slip opinion page 11. 

This interpretation of Section 508 of the MCARE Act is consistent with the presumption that the legislature does not intend to change existing law by omission or implication but only by an express provision. See: Fletcher v. Pennsylvania Property and Casualty Insurance Guaranty Association, (Pa. 2009).

PRACTICE POINTERS:

1. Do not become complaisant in your review of your subrogation rights.
Do not accept the "general rule" that there is no right of subrogation in medical malpractice cases.

Examine the civil action documents. What were the subjects of the employee civil complaint? What were the damages plead? What were the damages proven by medical evidence? What are the terms reflected in the settlement documents?

Note, in this case, Employer prevailed before the WCJ, as the terms of the civil action settlement documents described compensation for future medical expense and future wage loss. These are two subjects which are not precluded from subrogation by the MCARE statute.

Query: do we have a different result if the civil action settlement documents described the award as payment for past medical expense and past wage loss?

Can the employer "go beyond the terms" of the settlement agreement to establish that the award "includes" compensation for amounts beyond those past losses?

Caselaw generally suggests that one may be limited to challenge any description (or apportionment) of the settlement proceeds in a workers compensation petition. Participation in the civil litigation may be required.

2. There may be an attempt to limit the Employer subrogation in non-medical malpractice civil  litigation. In the litigation of civil liability of a third party for medical expense and wage loss damages to the injured worker, there may be an attempt to limit the Employer subrogation rights via description the award or settlement.

Frequently the Employee will attempt to describe a portion of the settlement proceeds as settlement of any spousal claim for loss of consortium. This portion of the settlement is not subject to the Employer subrogation rights.

Ongoing Employee attempts to "apportion" an amount of a civil action settlement to damages beyond the scope of the Employer subrogation rights may describe a portion of the award as attributed to a "pain and suffering" recovery. Often this argument will fail, for lack of documentation of this alleged apportionment. However, this argument continues.

3. BEST PRACTICE: place the injured employee and his/her legal counsel on notice of any possible rights of subrogation. Monitor the civil action to determine if there are any apportionment (description of recovery) issues. If so, it may be necessary to intervene in the civil action litigation, in order to preserve the Employer subrogation recovery.

IMO, an employer/insurer should not allow the employee legal counsel to "represent" their subrogation rights. There is an inherent conflict of interest in proceeding in this fashion. This conflict typically arises when there is a limited recovery available and/or limited settlement proposal. When faced with the task of dividing the limited recovery between employee and employer, counsel may request a reduction of the subrogation lien, in order to preserve a recovery to employee. Avoid this unnecessary problem.

2016 New Maximum Workers' Compensation Rate

2016 Pennsylvania Maximum compensation rate

For injuries occurring on and after January 1, 2016, the Pennsylvania Department of Labor and Industry has determined that the maximum wage loss benefit payable shall be $978.00 per week.

For Medical Treatment rendered on or after January 1, 2016, for purposes of calculating payments, the percentage increase in the Statewide Average Weekly Wage is 2.9 percent.

Proper and Timely Notice of a Work-Related Injury in the "old" injury versus "new" injury claim

The Proper and Timely Notice of a Work-Related Injury, in the context of the "old" injury versus "new" injury analysis. 

The Pennsylvania Workers' Compensation Act requires an injured employee to provide notice of the work injury to the Employer.

This notice of injury must inform the employer that:
a certain employee,
received an injury,
described in ordinary language,
occurring in the course of his/her employment,
on or about a specific time,
at or near a place specified.
See: Section 312 language.

The notice of injury may be given to the immediate or other superior of the employee, to the employer or to any agent of the employer.

Actual knowledge of the occurrence of the injury by the employer (or its agents) is "notice" of injury imputed to the Employer. See: Section 313 language.

The time parameters for notice of injury are discussed at Section 311.
The employee must provide notice to the employer within 21 days after the injury.
No compensation shall be due until notice is given.
If notice is not given within 120 days after the occurrence of the injury, no compensation shall be allowed. This is a rather harsh rule, but its effect is somewhat mitigated by the following exception ...

... and in cases where the nature of the injury or its relationship to the employment is not known to the employee ...

in this circumstance, the time for notice does not begin to run until the employee knows of the existence of the injury and its possible relationship to his/her employment.

The employee must exercise reasonable diligence to learn of the existence of an injury and its possible relationship to his/her employment. What is reasonable?

This later category -  the situations where the occurrence of an injury or its possible relationship to one's employment is not known - may raise an interesting question of credibility  -
Exactly when did the employee learn these facts?
When did a physician tell Employee that he/she has a work-related injury?
How much later did the Employee inform the Employer?
(this is one of the most common factual scenarios).

NOTE: The question of the proper and timely notice of injury by the Employee to the Employee is a necessary finding of fact, to be made by the Worker's Compensation Judge, based upon legally competent and credible evidence. This issue is typically decided on a case-by-case basis. Specific facts are decisive in the finding of this necessary element of the proof for a compensable work injury.

The analysis of the presence/absence of proper and timely notice of injury is further complicated when two possible injuries or two possible causes are implicated. An appeal of a claim denial reviewed and addressed these notice issues at:
 Gahring v. WCAB (R and R Builders and Stoudt's Brewing Company), No. 534 C.D. 2015, a decision of a panel of the Commonwealth Court of Pennsylvania authored by Judge Leavitt on November 23, 2105.

Factual and Procedural Background

In this type of notice dispute, a careful review of the facts is necessary.

In 1997 Employee sustained a work-related lower back injury with R and R Builders (Employer #1).
The work injury was described as a disc herniation at L3-4 and L4-5 with chronic lower back pain. This condition required surgery.
In 2002 Employer #1 entered into a C&R lump sum settlement for future indemnity wage loss benefits. Employer #1 remained responsible for future reasonable and necessary work-related medical expenses.  

In 2010 Employee began to work with Stoudt's Brewing Company (Employer #2).
In 2011 he began to experience increased back pain.
On November 17, 2012 Employee underwent surgery.
On January 24, 2013 Employee was released to return to work with physical restrictions by his physician.  Employer #2 could not accommodate these physical restrictions. Employee was terminated by Employer #2. Employee received Unemployment Compensation benefits.

On February 6, 2013 Employee filed a Penalty petition against Employer #1 for non-payment of medical expenses alleged to be treatment of the 1997 work injury.

On March 11, 2013, at the first hearing, Employer #1 said it would file to join Employer #2 to the litigation of the responsibility for the medical expenses. The joinder petition alleged the medical expenses were solely related to the employment with Employer #2.

On March 19, 2013, Employee filed two Claim petitions:
1. against Employer #1 for payment of the 2012 surgical expenses.
2. against Employer #2 for a work injury suffered in April 2012, when he was burned on his left elbow. * (not a claim petition for the aggravation of a pre-existing low back condition?).

WCJ Decision

A. Left Elbow Injury Claim Petition against Employer #2 was granted. Employee supervisor witnessed this accident. This was notice to the employer.
A.1. Employee was released to return to work. He did return with another employer. His benefits were suspended.

B. Employer #1 Joinder Petition was considered a "claim petition" against Employer #2.
B.1.  Employee medical evidence was credible to establish a work-related aggravation of Employee's pre-existing low back condition while working with Employer #2.
B.2. BUT Employee failed to give Employer #2 notice of this aggravation injury withing 120 days from his last day of employment with Employer #2.
B.3. the Joinder/Claim petition against Employer #2 was denied as barred by the Section 311 notice provisions. 

Evidence regarding notice to Employer #2

Employee testified.
Employee physician testified regarding the date and cause of Employee's work injury.
Employer's supervisor testified.
Employer's office manager testified.

Employee testified he treated for ongoing back pain with his family doctor since 2002.
At a February 2012 office visit, Doctor Oliveri diagnosed Employee with sacroiliitis related to his 1997 work injury.

In October 2012 Employee's work hours increased at Employer #2 when another worker left.
Employee said "it (my back) started hurting mid-October through our busy season. (Carr, his supervisor) would keep asking me what was wrong with me and i just told him that my back was really bothering me". slip opinion page 5.

Employer #2 supervisor Carr testified Employee complained of back pain on a number of occasions. He confirmed Employee told him the additional work hours were making his back worse.

Carr made notes of the days when Employee's back pain caused him to miss time from work. He did not give these notes to the office manager, rather he told her that Employee's back pain was worsening and Employee needed surgery. A work comp injury report was not prepared.

Dr. Oliveri testified at his June 2013 deposition and opined that Employee's work at Employer #2 aggravated his post surgical condition and caused the sacroiliac condition which was addressed in the November 2012 surgery.

 He explained the bone for the 2002 spinal fusion procedure (to treat the 1997 work injury) was harvested from the iliac joint, but Employee did not experience symptoms in this area until the 2012 work duties. The Employer #2 work duties aggravated the sacroiliac condition, which had its origins in the 1997 work injury.

... from all of this testimony, the WCJ found the date of the work-related aggravation injury was the last day of work, November 10, 2012.

Employer #2 learned there may have been an aggravation injury as a result of its work duties at the April 2013 hearing, more that 120 days from the "date of injury". This was not timely notice to Employer #2.

WCAB Affirmed, The Employee's statements to Employer #2 supervisor were not sufficient to place them on notice that Employee may have a work-related injury.

Commonwealth Court reversed and remanded the Claim petition Denial.

The Commonwealth Court reviewed the general rules for proper and timely notice of injury to an employer, as per Section 311. Notice is required. Notice is a necessary element of the claimant burden of proof.

In an aggravation or cumulative trauma injury, " the last day of employment is the critical date of injury for purposes of determining timely notice". citing: City of Philadelphia v WCAB (Williams) (Pa. 2004).
However, the claimant must have knowledge that his injury is work-related. Section 311 states that the time for giving notice does not begin to run until the employee knows that his injury is work-related.

The Pennsylvania Supreme Court decision in Gentex Corporation v WCAB (Morack) (Pa. 2011) was reviewed for its precedential value. The worker experienced pain and swelling in her hands with increased work hours. She informed her supervisor she could no longer tolerate this pain and left work. She applied for sort-term disability benefits noting her swollen hands were due to her non-work high blood pressure and fibromyalgia.

About one month later, her physician diagnosed tendonitis and carpal tunnel syndrome as a result of her work duties.She then informed the employer of this work relationship. The Supreme Court concluded this worker satisfied the requirements for timely notice of injury to the employer.
Notice of injury may occur over collective communications - verbal statement, telephone calls, etc.

The worker does not need to state with certainty that the injury is work-related, as long as the employer is informed of the possibility it is work-related.  Gentex at page 536.

The worker statements on the STD documents was not fatal to her subsequent work comp claim.

A result similar to the Gentex decision was reported at Morris v. WCAB (Ball Corp.) (Pa. Cmwlth. 2015). Morris told his supervisor that he was beaten down and hurting. He had problems with his back, hands and legs, "because of all of the hours I'm working". This was sufficient notice.

HERE- the Employee statements to his supervisor Carr, that increased back symptoms followed his increased work hours, was sufficient to inform Employer #2 of the possibility that this 2012 back pain was work-related.

[QUERY: If the employee statements to his supervisor were not sufficient to put the employer on notice of the possibility of a work-relationship of his increased back symptoms, then the focus would be upon the date when claimant knew of a possible work-relationship.

Was there a time before the June 2013 deposition of Dr. Oliveri that claimant should have known through the exercise of reasonable diligence that his 2012 increased back symptoms were related, in some fashion, to his 2012 increased work hours??? This is another argument for another day. ]

Both Carr and Employee believed his back problems were related to the original 1997 work injury, UNTIL they learned otherwise from Dr. Oliveri's opinions regarding an aggravation-type of injury.

Similar to Gentex, this Employee's mistaken belief was not fatal to his work comp claim.
The case was remanded for a calculation of the benefits payable by Employer #2 for an aggravation-type injury.

PRACTICE POINTERS:

1.   Notice of the possibility of a work-relationship of a worker's complaints, is a minimal threshold.
In the training of supervisory personnel regarding the reporting of work injuries, Employer's should emphasize the necessity to record all information and make it available for further review by appropriate Insurer, HR or legal departments. Just as the courts do not require the worker to properly diagnose their complaints, we should not require supervisory personnel to make these judgments.

2.   NOTE the above-cited Section 312 requirements for proper notice are rather stringent. The "leniency" for notice requirements arises in the situation described in Section 311,  where "the nature of injury or its possible work relationship is not known by the employee".

Carefully review the medical records and worker statements to determine if there is any evidence that the employee knew or should have known of the existence of a work-relationship, through the exercise of reasonable diligence. 

This evidence may not result in a claim petition denial based upon an untimely notice argument, BUT it may raise a question as to the credibility of Claimant's version of events... and that question of credibility may arise in other areas of the claim, so as to impact the overall decision.

3.   The "OLD" injury versus "NEW" injury case assessment is impacted by the existence of a prior injury Compromise and Release settlement of indemnity wage loss benefits. A Claimant will have only one avenue for future indemnity benefits - that is, a claim for the NEW injury.

Consider the C&R where both indemnity and future medical expense liability are settled. In that context, the only available remedy for additional work comp benefits is the successful litigation of the NEW injury claim.

QUERY: where the claimant has "been through the system before", should we hold that claimant to be more familiar with the notice requirements?
In my opinion, this can be another element of the credibility assessment of claimant testimony.