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What's Hot in Workers' Comp

TOP 10 DEVELOPMENTS IN PENNSYLVANIA WORKERS’ COMPENSATION IN 2022

What’s Hot in Workers’ Comp, Vol. 26, No. 12, December 2022

December 1, 2022

by Francis X. Wickersham

1.    House Bill 1837 Becomes Law 

On December 22, 2021, Governor Tom Wolf signed into law House Bill 1837, which moderately reformed Sections 413(c) and (d) and Section 449(c) of the Pennsylvania Workers’ Compensation Act. The law eliminated the requirement of two witness signatures or a notarized signature on the Compromise & Release Agreement, provided a claimant gives sworn testimony that the full legal significance of the agreement is understood. The law also eliminated the requirement of a notarized affidavit with the Notification of Suspension or Modification form, provided the insurer properly verifies that compensation is being suspended because the claimant has returned to work at prior or increased earnings. The law went into effect in February 2022. 

2.    Supreme Court holds that non-treating medical providers do not have a constitutional right to receive notice and to intervene in Utilization Review proceedings.
Keystone RX, LLC v. Bureau of Workers’ Compensation Fee Review Hearing Office (Compservices/AmeriHealth Casualty Services), 265 A.3d 322 (Pa. 2021)

In affirming the dismissal of a pharmacy’s Fee Review application, the Commonwealth Court prospectively held that non-treating health care providers, such as pharmacies, must be given notice and the opportunity to intervene in Utilization Review (UR) proceedings. The Pennsylvania Supreme Court reversed, holding that the Commonwealth Court was wrong to conclude that prohibiting providers from participating in the UR process, but treating UR Determinations as binding on subsequent Fee Review Determinations, would threaten providers' due process rights to payment. The court found that when an employer or insurer successfully challenges a treatment, non-treating providers do not have a constitutional entitlement to payment under the Act, simply an expectation of payment in the normal course and, thus, no viable due process claim. 

3.    Supreme Court holds that under Section 440(a) of the Act, a reasonable sum for attorney’s fees shall be awarded when a contested case is resolved in favor of the claimant.
Lorino v. WCAB (Commonwealth of Pennsylvania), 266 A.3d 487 (Pa. 2021)

This case involved litigation of a termination petition for a no-lost-time work injury that was acknowledged by a Medical Only Notice of Compensation Payable where the claimant requested payment of attorney’s fees under Section 440 of the Act. In dismissing the petition, the Workers’ Compensation Judge found there was a reasonable contest and denied an award of Section 440 counsel fees (while awarding fees under Section 442 for a lesser amount). Although the Appeal Board and the Commonwealth Court both affirmed, the Supreme Court reversed, holding that under Section 440(a), when a contested case is resolved in favor of the claimant, a reasonable sum for attorney’s fees shall be awarded but may be excluded where a reasonable basis for the contest has been established. 

4.    Supreme Court holds that claimant did not cease to be in the course and scope of employment once he drove past his home to attend a voluntary happy hour sponsored by the employer. 
Jonathan Peters v. WCAB (Cintas Corporation), 263 A.3d 375 (Pa. 2021)

The Pennsylvania Supreme Court held that the claimant, a traveling sales representative who sustained injuries in a motor vehicle accident on the way home from a non-mandatory but employer-sponsored work event, was in the course and scope of employment throughout the time of the event.

5.    Injury sustained by the claimant on his way to take a cigarette break and get a sandwich was compensable under the “personal comfort” doctrine.
Stanley Henderson v. WP Ventures, Inc. (WCAB), 269 A.3d 1272 (Pa. Cmwlth. 2022)

A claimant's head injury from falling in a park during a smoke break was compensable pursuant to the personal comfort doctrine. According to the court, the claimant’s time away from work was informal in nature, purely devoted to a personal comfort of a physical nature and brief enough that the course of employment was not broken. 

6.    Absent fraud, deception, duress, mutual mistake or unilateral mistake caused by the opposing party, a Compromise and Release Agreement cannot be set aside. 
James Hymms v. Commonwealth of Pennsylvania (WCAB), 281 A.3d 375 (Pa. Cmwlth. 2022)

The Commonwealth Court rejected the claimant’s argument that there was a mistake of fact relative to the settlement amount of his hearing loss claim since it was not based on the actual value of the percentage of his hearing loss, which was higher than the court-approved settlement the claimant agreed to accept. 

7.    Failure by a claimant to complete and return a required Wage and Benefit Reporting Form (LIBC-760) is not proper grounds for an employer to withhold payment of benefits ordered by a Workers’ Compensation Judge. 
Essix Holdings LLC v. Michael Dengel (WCAB), 276 A.3d 830 (Pa. Cmwlth. 2022) 

The employer’s refusal to pay benefits to the claimant following a Workers’ Compensation Judge’s decision approving a stipulation for a claim petition, on the basis that the claimant had not returned form LIBC-760, was a violation of the Act, and penalties were warranted. 

8.    A claimant cannot rely on prior Utilization Review Determinations, which established prescription medications were reasonable and necessary, in order to show in a later penalty petition that these medications were causally related to injury and payable. 
Theresa Skay v. Borjeson & Maizel, LLC (WCAB), 280 A3d. 19 (Pa. Cmwlth. 2022). 

Although the medications at issue were previously found to be reasonable and necessary via the Utilization Review process, the employer’s subsequent denial of payment for them on the basis they were unrelated to the work injury did not violate the Act, as the claimant had the burden of proving causal relationship. 

9.    Commonwealth Court holds that the Workers’ Compensation Appeal Board exceeded its statutory authority in ordering an employer to contribute to the cost of a new home purchased by the claimant. 
Ralph Martin Construction and Lackawanna American Insurance Company v. Castaneda-Escobar, 280 A.3d 1089 (Pa. Cmwlth. 2022)

The Commonwealth Court held that, although a one-time modification to a claimant’s home following a catastrophic injury was compensable under Section 306 of the Act, the purchase of a new home extends the phrase “orthopedic appliances” in Section 306 of the Act beyond a reasonable construction. 

10.    Where employer issues a Medical Only NCP after a Notice of Temporary Compensation Payable, the issuance of a Notice of Denial and Notice of Stopping Temporary Compensation is not required and employer is not prevented from seeking a termination of benefits as of a date that precedes the date the Medical Only NCP was issued. 
Wolfe v. Martellas Pharmacy (WCAB), 281 A.3d 1129, (Pa. Cmwlth. 2022) 

The Medical Only NCP issued by the employer to recognize that an injury occurred, described the injury and indicated that medical treatment for the injury would be paid. The Medical Only NCP did not admit that the Claimant remained disabled as of the date it was issued and thus the opinion of full recovery was not inconsistent with it. 
 

What’s Hot in Workers’ Comp, Vol. 26, No. 12, December 2022 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2022 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

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Commonwealth Court Reaffirms the Constitutionality of Act 111's IRE Provisions

In this case, the claimant sustained a work injury of January 6, 1994, which was acknowledged by Notice of Compensation Payable (NCP). After the claimant’s receipt of 104 weeks of temporary total disability benefits, the employer filed a Request for an Impairment Rating Examination (IRE). The IRE was performed in May 2023 and the IRE physician found that the claimant had a 5% whole person impairment, under the AMA Guides. The employer filed a Petition based on the IRE results, and the Petition was granted by the WCJ. During litigation, the claimant argued that the IRE provisions of Act 111 (Section 306(a.3) of the Act) were not applicable to her injury, since it predated June 24, 1996, the date Act 57 went into effect, and that the IRE provisions were unconstitutional. The Workers’ Compensation Judge (WCJ)) granted the Petition and the Board affirmed. On appeal to the Commonwealth Court, the claimant argued that Act 111 violated the nondelegation doctrine and that its retroactive application to the claimant’s injury was unconstitutional. The court rejected the arguments on the basis that they had already found the same arguments without merit in multiple, prior cases. The court also addressed an argument made by the claimant that Act 111 was procedurally defective under the Pennsylvania Constitution because it was only considered on two days in each House after having undergone amendments and reassignments. The court noted that the Pennsylvania Constitution requires every bill to be considered on three different days in each House. The claimant maintained that, according to the legislative history, the bill did not receive three separate days of consideration from each House when it was assigned a new bill number. The court pointed out, however, that the bill number, H.B. 1840 remained constant and was considered on three occasions by the House. Further, the court concluded that minor amendments to the bill were germane to its original subject, which was to modify the Act’s IRE process, in accordance with Protz II.

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Florida Supreme Court Rules Florida Statute §627.70152 Does not Apply Retroactively

In a decision that resolves years of appellate uncertainty and confirms that insurers and insureds alike can rely on the legal framework in place when a policy is issued, the Supreme Court of Florida last week found that Florida Statute §627.70152, which involves an insured’s requirement to provide an insurer with pre-suit notice before filing a suit, cannot be applied retroactively. In Universal Property & Casualty Insurance Company v. Hughes, the Court was presented with the issue of whether the statutory pre-suit notice requirement applied retroactively and whether it would apply to a breach of contract of an insurance policy that was issued before the statute went into effect. Before the Court was an appeal from a homeowner, Ms. Hughes, who sued her insurance carrier, Universal Property & Casualty Insurance Company (Universal) for breach of contract under an insurance policy that was in effect from April 24, 2019 through April 24, 2020. During the policy period, Ms. Hughes suffered a loss and, on May 29, 2019, made a claim for water damage. The carrier investigated the loss and issued payment; Ms. Hughes disputed the payment, finding the amount insufficient for repairs. On July 1, 2021, Florida Statute §627.70152 went into effect, which required insureds to provide notice of intent to initiate litigation against the carrier prior to filing a lawsuit; if an insured filed the lawsuit without complying with §627.70152, a court must dismiss the case without prejudice. On August 4, 2021, Ms. Hughes filed her lawsuit against Universal for breach of contract. Universal moved to dismiss based on her failure to comply with §627.70152. Ms. Hughes contended the notice requirement could not be applied retroactively. The trial court disagreed and dismissed the lawsuit without prejudice, and Ms. Hughes appealed. During the appeal, the Fourth District Court of Appeal, in Cole v. Universal Property & Casualty, 363 So. 3d 1089 (Fla. 4th DCA 2023), ruled that Florida Statute §627.70152 did apply retroactively to policies issued before the effective date of §627.70152. However, the Sixth District Court agreed with Ms. Hughes and overturned the trial court’s ruling, finding the statute could not retroactively apply to policies issued prior to the statute effective date. Thereafter, the other district courts weighed in, with the Third District Court agreeing with the Fourth District Court, and the First, Second and Fifth District Courts agreeing with the Sixth District Court. In resolving the conflict amongst the district courts, the Supreme Court advised “as a general rule, ‘the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.’ Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996). The Court applied the two-step test when deciding whether a statute has retroactive application: “First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.” Menendez v. Progressive Exp. Ins. Co., 35 So. 3d 873, 877 (Fla. 2010). In analyzing the Legislature’s intent, the Court must determine whether the Legislature has manifested a clear command for retroactivity in the statutory text.  In review of the statutory text, the Court found nothing in the language of the statute to indicate that the phrase “all suits” was serving another purpose of expanding its reach to suits based on policies that both predate and postdate the enactment of the statute. Buis v. Universal Prop. & Cas. Ins. Co., 394 So. 3d 738, 741 (Fla. 2d DCA 2024). Further, the Court noted the statute has an effective date, which has long been considered to be evidence against retroactive application of a statute. The Court concluded that, on its face, no provision of §627.70152 speaks to application of the statute to insurance policies issued before the statute’s effective date and therefore, the Legislature did not clearly command retroactivity of the statute to include insurance policies issued prior to the enactment of the statute. The Court briefly reviewed Universal’s argument that the presuit notice requirement was procedural, not substantive, and therefore should be applied retroactively; however, the Court agreed with the Sixth District Court’s finding that, in its entirety, §627.70152 transformed an insured’s ability to sue an insurance company under a property insurance policy and an insurer’s obligations to respond to and pay insurance claims, thus making the requirement a substantive change. The Court thereby upheld the decision of the Sixth District and disapproved the decision of the Fourth District in Cole.

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In this case, the claimant sustained injuries in the course and scope of her employment as a registered nurse. The employer acknowledged the injury by a Notice of Compensation Payable (NCP).  Subsequently, a Workers’ Compensation Judge (WCJ) expanded the description of injury. The employer then filed a Termination Petition, alleging the claimant was fully recovered from the injuries. Providers filed Utilization Review (UR) Petitions, challenging UR determinations finding their chiropractic treatment to be not reasonable and necessary. A settlement of the claim was eventually reached, and the employer filed a Petition to Seek Approval of a Compromise and Release (C&R) Agreement. The C&R outlined that the agreement fully resolved all future workers’ compensation claims except for the termination and UR Petitions. Briefs were filed and one day later, the WCJ issued an Interlocutory Order which stated if instructions were not followed regarding filing of a C&R, a settlement hearing date would not be given. The employer complied with the order, and filed the C&R. Subsequently, the WCJ notified the parties that the C&R must resolve all issues in the petitions, or would not be entertained. A settlement hearing was never held, and the WCJ then issued a decision, granting the Termination Petition and dismissing the UR Petitions. The WCJ also said that the Petition for Approval of a C&R was dismissed without prejudice, as the issues in the Termination and UR Petitions went to a decision. The claimant appealed to the Workers’ Compensation Appeal Board (Board). The Board granted the claimant’s appeal, finding that the WCJ violated the requirement of Section 449 that an expedited hearing be held when a Petition for Approval of a C&R is filed.  The Board further held that it was legally incorrect for the WCJ to insist that the C&R resolve all issues raised by the pending Petitions. The Board remanded the case to a new WCJ, and Employer appealed to the Commonwealth Court. The court affirmed the Board and held that the WCJ erred, as a matter of law, by refusing to hold an expedited hearing within 30 days, once the Petition for Approval of a C&R was filed.  The court noted that the language of Section 449(b) is mandatory, and a settlement hearing is not discretionary or dependent on a party’s separate request for a stay, or whether the record has been closed. The court further rejected Employer’s argument that the case should not be remanded to a new WCJ for a new decision on the termination and and UR Petitions, as the Board passed no judgment on whether the C&R Agreement resolved the termination and UR Petitions, and left it for the WCJ to decide in connection with the Petition for Approval of a C&R.

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