Impairment Rating Evaluation Update: Clarifying the Intent and Effect of Act 111
In 2017, the Pennsylvania Supreme Court, in Protz v. WCAB (Derry Area School District), 161 A.3d 827 (Pa. 2017) (Protz II), found the provisions of Section 306 (a.2) of the Workers’ Compensation Act, relating to Impairment Rating Evaluations (IRE’s) to be unconstitutional in their entirety. In Protz II, the Court ruled that that the legislature improperly delegated to a third party (the American Medical Association) the authority to promulgate the standards used to perform impairment ratings as permitted under the Workers’ Compensation Act. The Court did not, however, provide specific guidance as to how its ruling affected the entitlement to benefits in workers’ compensation claims where a claimant had previously undergone an IRE under Section 306(a.2), which it determined did not pass constitutional muster. In response to the ruling in Protz II, the Pennsylvania Legislature enacted Act 111 in 2018, which cured the improper delegation issue, and allowed an employer to obtain a new IRE for any claim in which 104 weeks of temporary total disability (TTD) benefits had been paid, even if they had been paid before Act 111 was signed into law. Act 111 also permitted an employer to obtain a credit for any temporary partial disability (TPD) paid based upon IRE’s that were performed under the provisions found to be unconstitutional in Protz II. An associate with Dethlefs-Pykosh Law Group, Steven Spahr, has litigated a number of reported cases that have helped answer some of the open questions regarding the effect of Protz II, and interpretation of the subsequently enacted, Act 111.
In Cantanese v. WCAB (RTA Services Company Inc.), 1739 C.D. 2019 (June 12, 2020), (Reported per Order, No. 1739 C.D. 2019), the Claimant failed to attend an IRE which was scheduled pursuant to the provisions of Act 111. The Employer thereafter filed a Petition to Compel the Claimant to attend an IRE. Claimant argued that since his work injury occurred prior to the legislature’s passage of Act 111, the provisions of Act 111 requiring Claimant to attend an IRE, were unconstitutional. This was an argument that was being made by numerous Claimants’ Attorneys in an attempt to prevent a future modification to TPD benefits under Act 111. The Workers’ Compensation Judge in Cantanese granted the Employers Petition to Compel an IRE and the Claimant appealed. The Workers’ Compensation Appeal Board affirmed the Judge’s Decision, finding that the Order directing Claimant to attend the IRE, was not a final order, and therefore, it not subject to appeal. Claimant again appealed, and the Commonwealth Court accepted the Employer’s argument that the Order of the Judge that required a Claimant to attend an IRE did not, in itself, affect Claimant’s right to receive benefits, and therefore it was interlocutory, and not appealable. Accordingly, the Court affirmed the Decision of the Judge and dismissed the Claimant’s Appeal.
In a subsequent Decision, Rose Corporation v. WCAB (Espada) No. 661 C.D. 2019 (August 17, 2020), the Commonwealth Court, addressed Employer’s request for clarification of the effect of Act 111 on claims where an IRE was performed under the prior IRE provisions. In Rose Corporation , the Court, for the first time confirmed the constitutionality of the provisions of Act 111, which permit an employer to request a new IRE, even if an injury occurred before Act 111 was enacted. The Court also confirmed that Act 111 allows the employer to take a credit against the 500 week maximum period for entitlement to partial benefits, for all TPD benefits paid, even if the benefits were paid under an IRE found to be unconstitutional under the holding in Protz II. Following the passage of Act 111, Claimants had often argued that Act 111 should not apply to claims occurring before Act 111 became effective, or alternatively, that no Act 111 IRE was permitted until the Claimant had received a 104 weeks of TTD benefits after October 24, 2018, the date Act 111 became effective. Claimants also regularly argued that any credit afforded an employer under Act 111 for TPD benefits paid under a pre-Act 111 IRE, was unconstitutional, as the pre-Act 111 IRE should be void and have no effect on a Claimant’s receipt of future benefits. The holding in Rose Corporation implicitly rejected the various arguments being made by Claimant’s regarding the constitutionality of Act 111’s provisions, and clarified the procedure needed to obtain the credit for benefits previously paid under a pre-Act 111 IRE.
As a side note, the Commonwealth Court, in an unreported decision on another case handled by Mr. Spahr, Perillo v. WCAB (Extended Healthcare Services, Inc./SWIF, No. 649 C.D. 2020, filed March 3, 2021 (unreported, Pa. Commw. Ct. 2021), which was cited in the Bureau of Workers Compensation’s newsletter, explicitly rejected the Claimant’s argument that Claimant’s constitutional rights were in any manner impaired by the credit granted by Act 111 for TPD benefits paid pursuant to a pre-Act 111 IRE. Claimant had argued (like the Claimant in Cantanese) that if a credit was granted for TPD benefits paid under a pre-Act 111 IRE, the Claimant’s period of entitlement to benefits in the future would be affected and would deprive Claimant of vested rights in violation of the “Remedies Clause” found in the Pennsylvania State Constitution. The Court concurred with his argument, that because Section 413(a) of the Workers’ Compensation Act permitted a change in entitlement to workers’ compensation benefits at any time in which Claimant was receiving benefits, Claimant had no vested right in any specific type of benefits, or in fact, to the continuation of benefits. The Court held that its determination that a pre-Act 111 IRE was not rendered void from the outset, and allowing a credit for previously paid TPD benefits where the claimant did not challenge the IRE previously, did not violate the Remedies Clause. The Claimant in Perillo did file a Petition for Allowance of Appeal from the Commonwealth Court Decision, however, the Pennsylvania Supreme Court denied the Claimant’s Petition.
In another reported case, Riley v. WCAB (Commonwealth of Pennsylvania), 675 C.D. 2019, (Pa. Cmwlth. Ct. Aug. 5, 2021), litigated by Mr. Spahr, the Claimant appealed a determination by the Workers’ Compensation Appeal Board which held that, because the Claimant’s Petition challenging the constitutional validity of a pre-Act 111 IRE was filed more than three years after the last benefits were paid to Claimant, the Claimant’s request for reinstatement to TTD status, was barred by Section 413(a) of the Act, which only allows 3 years after the date of last payment to seek a reinstatement of benefits.
By way of history, Claimant had previously filed a petition in 2012 arguing that the 2003 IRE was invalid because the physician who performed the IRE did not consider all of Claimant’s work related injuries when determining the Claimant’s percentage of whole body impairment. Claimant’s Petitions were dismissed by the Workers’ Compensation Judge. Claimant appealed and while Claimant’s appeal was pending before the Workers’ Compensation Appeal Board, the Commonwealth Court issued a decision in Protz (Protz I) finding that the IRE provisions were, in part, unconstitutional. Claimant then filed a motion with the Appeal Board for the first time raising a constitutional challenge to the 2003 IRE. The Appeal Board denied Claimant’s Appeal and dismissed Claimant’s constitutional challenge. The Appeal Board’s Decision was affirmed by the Commonwealth Court in Riley v. WCAB (Commonwealth of PA), 154 A. 3d 396 (Pa: Cmwlth. Ct. 2016). Claimant did not seek an appeal with the Pennsylvania Supreme Court, and the 2016 Decision became final.
Claimant, as indicated above, following the decision in Protz II, then filed a Petition in 2017 seeking reinstatement of TTD benefits as of the date of the 2003 IRE. The Judge found that the 2015 Motion before the Appeal Board, challenging the constitutionality of the 2003 IRE, having been filed within 3 years of the last payment of benefits (which occurred in 2012), permitted the Claimant to obtain a reinstatement to TTD benefits, despite the unchallenged 2016 Decision, which found that Claimant was not entitled to any additional benefits. Employer appealed and the Workers’ Compensation Appeal Board reversed the Decision of the Judge. Claimant appealed the Appeal Board’s Decision to the Commonwealth Court. While the appeal was pending, the Pennsylvania Supreme Court issued a Decision in Dana Holding Corp. v. WCAB (Smuck), 232 A.3d 629 (2020), which addressed the issue of in what situation should a Claimant’s benefits be reinstated to TTD on a challenge to a pre-Act 111 IRE. (the Dana Court held that since the Claimant in that case had asserted a challenge to the pre-Act 111 IRE which was pending at the time that the Decision in Protz I was issued, the claimant in that case was entitled to a reinstatement to TTD as of the date of the Pre-Act 111 IRE. In the Dana Decision, the Court indicated that there may be other instances where a reinstatement to TTD status might be warranted under “equitable balancing” principles where benefits were modified under a pre-Act 111 IRE. Claimant, relying on Dana Holding, argued that her benefits should be reinstated to TTD under these “equitable balancing” principles. In its Decision, the Commonwealth Court in this iteration of Riley, declined to apply equitable balancing, finding that the Claimant’s 2017 Petition, filed nearly 5 years after Claimant last received compensation benefits, was barred by Section 413(a) of the Act, and an entitlement to benefits could not be revived since the 3 year deadline to seek reinstatement is absolute. As in Perillo, the Claimant in Riley has filed a Petition for Allowance of Appeal which has not yet been ruled upon by the Supreme Court.
The case law related to IRE’s in the aftermath of Protz II and in light of Act 111 still continues to evolve. In the meantime, there has been some clarification as to the law in regard to at least some the questions raised since Protz II. At this point, it will be informative to see what, if any, IRE cases the Supreme Court decides to hear in the future since it will likely provide some clue as to what issues it believes are still unresolved in this area of Workers’ Compensation law.