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Important Case Law Update in Pennsylvania - Workers' Compensation
Written on Thursday, June 22, 2017
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On June 20, 2017 the Pennsylvania Supreme Court issued its long awaited Decision in the case of Protz v. WCAB (Derry Area School District). Unfortunately, the Pennsylvania Supreme Court held that Section 306 (a.2), which gave Employers and Carriers the right to request an Impairment Rating Evaluation, was unconstitutional, and struck this provision from the Pennsylvania Workers' Compensation Act. The Court’s ruling in this case will have a detrimental effect on any cases in Pennsylvania which utilized the Impairment Rating Evaluation (IRE).

By way of background, in 1996, the State Legislature enacted Section 306 (a.2), which permitted Employers to schedule an IRE. If the IRE yielded an impairment rating of less than 50 percent, the Claimant's disability status could be modified from total to partial disability without having to litigate any type of petition. When the law was enacted, the Fourth Edition of the American Medical Association (AMA) Guidelines was the most recent edition. The AMA was revised in 2001 and again in 2008.

In Protz, the Claimant injured her knee in 2007. In 2011, the Employer requested an IRE. The IRE physician assigned her a 10 percent impairment rating based upon the Sixth Edition of the AMA. The Employer filed a Modification Petition seeking to convert the Claimant's disability status from total to partial disability. The Workers' Compensation Judge (WCJ) ruled that the impairment was less than 50 percent and granted the Modification Petition. The Claimant appealed to the Workers' Compensation Appeal Board (WCAB) challenging whether the legislature "unconstitutionally delegated to the AMA the authority to establish criteria for evaluating permanent impairment." The WCAB affirmed the Judge, and the Claimant appealed to the Commonwealth Court. The Commonwealth Court reversed the WCAB and declared the law unconstitutional only "insofar as it proactively approved versions of the AMA Guides beyond the Fourth Edition without review." The Court remanded the case back to the WCJ with specific instructions to apply the Fourth Edition of the Guidelines, the version that was in existence when the law was enacted in 1996.

When this Decision was issued by the Commonwealth Court, we instructed our clients to make certain that any IREs that were being utilized were following the Fourth Edition of the Guidelines. In many circumstances, the Employers had to schedule updated evaluations to make sure the ratings were done in accordance with the AMA's Fourth Edition. Although it seemed like an inconvenience, the Commonwealth Court still permitted the Employers to have an IRE performed and potentially limit the number of weeks of total disability.

The Pennsylvania Supreme Court went a step further and declared Section 306 (a.2) unconstitutional. In reaching its Decision, the Court held that the General Assembly improperly delegated authority to the AMA to assess permanent disability. Accordingly, the Court completely struck Section 306 (a.2) from the Act.

What does this mean for Employers in Pennsylvania? As of June 20, 2017, the Employer has no right to request an IRE. It could also mean that the Claimant now has the right to challenge any claim where his or her rights were modified based upon an IRE. We can only hope at this time that the Employer will file an appeal, and that a stay will be granted until this matter is heard. For now, we recommend that you cancel all IRE's which you currently have scheduled. Should you begin receiving Reinstatement, Review or Modification Petitions filed by Claimants or their attorneys, please refer those Petitions out to counsel for answer and defense. Our department will stay on top of this issue and make sure that the voice of Employers is heard.

Please do not hesitate to contact our department if you have any questions regarding this Decision. We hope you have a great summer!

Update: On June 21, 2017 the Pennsylvania Department of Labor & Industry, Bureau of Workers' Compensation, posted a notice on WCAIS that it will no longer designate physicians to perform IRE's, in light of the Supreme Court decision.