BADDA-BING: RE-BOOK YOUR IREs IN PENNSYLVANIA
By Kevin L. Connors, Esquire
Okay, the tag line is from Choice Hotels’ Badda-Bing television ad campaign.
A total distraction!
Check it out, Pennsylvania is in the process of reinstating Impairment Rating Evaluations, eviscerated in 2017 by the Pennsylvania Supreme Court’s landmark Decision in Protz v. WCAB (Derry Area School District), decided on June 20, 2017.
The evisceration of IREs under Act 57 by the Pennsylvania Supreme Court cast a dark shadow over Pennsylvania Workers’ Compensation claims, as IREs had been utilized by Employers, Insurers, and Third-Party Administrators, as a backstop against temporary total disability claims being “lifetime” claims in Pennsylvania, the paradigm being that once a workers’ compensation claim is accepted as compensable and work-related, and a Claimant begins receiving workers’ compensation benefits, whether through litigating a Petition for compensation benefits, and/or after the acceptance of a claim as compensable and work-related, resulting in claims conceptually being regarded as “lifetime” claims, absent one of the following occurring:
- The Claimant dies, and compensation benefits terminate by operation of both death and loss;
- The Claimant voluntarily returns to work in their pre-injury capacities, and there is no continuing wage loss post-return to work, such that the Claimant’s compensation benefits are suspended;
- The Claimant returns to work in a modified-duty capacity, with some reduction in return-to-work wages, such that the Claimant’s compensation benefits are modified, and temporary partial disability benefits are paid, subject to the 500 week limitation;
- The Claimant executes a Supplemental Agreement, perfecting either a termination, suspension, or modification of the Claimant’s workers’ compensation benefits;
- The Claimant signs a Final Receipt (almost never used), under which the Claimant agrees that all compensation benefits have been paid;
- The Claimant is deported by virtue of not being able to prove legal immigration status;
- The claim is settled under a Compromise and Release Agreement, perfecting some type of compromise of the indemnity and medical compensation benefits liability associated with the claim; and,
- The Claimant’s compensation benefits are terminated, modified, or suspended by order of a Workers’ Compensation Judge, with the Employer/Insurer carrying the burden of proving the entitlement to a change in the Claimant’s benefit entitlement status.
In 1996, the Pennsylvania General Assembly had enacted a landmark reform to the Pennsylvania Workers’ Compensation Act, incorporating a provision that would allow Employers, Insurers, Third-Party Administrators to utilize an Impairment Rating Evaluation as a means to determine if a Claimant receiving temporary total disability benefits, had an Impairment Rating of less than 50%, in which case the Claimant’s temporary total disability benefits, could be converted/modified to temporary partial disability benefits, which, by their very definition under Section 306(b) of the WCA, meant that the Claimant could only receive 500 weeks of the temporary partial disability benefits, as opposed to temporary total disability benefits never ending, absent death, full recovery, a return-to-work, a settlement of the workers’ compensation claim under a Compromise and Release Agreement, or a Claimant waiving the right to continue receiving “lifetime” benefits, the same having never occurred since 1996.
In 2017, the Pennsylvania Supreme Court ruled in Protz that the Act 57 provisions regarding Impairment Rating Evaluations was “unconstitutional,” as it transferred constitutional authority over Impairment Ratings from the legislature, to the AMA’s Guides for Evaluation of Impairment Ratings, with the Guides, of course, being revised, with Act 57 having used the 4th Edition, and the more recent Edition being the 6th Edition, with the Pennsylvania Supreme Court, in its infinite judicial wisdom, determining that that transference of jurisdictional authority was unconstitutional, resulting in IREs becoming unusable as a mechanism for managing the exposures created by workers’ compensation claims in Pennsylvania, with the pre-Act 57 models and mechanisms for managing exposures associated with workers’ compensation claims, reverting back to traditional practices, being Independent Medical Examinations establishing full recovery, often times given judicial indifference by Workers’ Compensation Judges deciding Employer-filed Termination Petitions in reliance upon Independent Medical Examinations with board-certified physicians testifying to full recovery opinions, against which Claimants will testify that they not only do not feel that they are fully recovered from their work injuries, but do not feel as though they can return to any level of work, and the other option being some type of alternative employment, either light-duty with the injury Employer, or alternative job availability, subject to a magical matrix of medical restrictions and pigeon-holed job descriptions, again being subject to microscopic inspection by Workers’ Compensation Judges, with the general consensus being that job availability was more useful for settlement valuations, than for actual return-to-works.
Post-Protz, confusion descended upon the workers’ compensation marketplace in Pennsylvania, with an IRE model that had been in place and working for 21 years being shredded by one Decision, with no alternative options being provided by the Supreme Court as to how Employers could manage open-ended liabilities under the Pennsylvania Workers’ Compensation Act, when Employees have either accepted injuries or judicially-approved injuries, although still seemingly having some capacity for working, but having no actual incentive for doing so, as our Act is not structured to facilitate and encourage return-to-work scenarios, instead being unintentionally structured to perpetuate the shelf life of workers’ compensation claims as opposed to actually being interested in rehabilitation, being it medical and/or vocational.
Several days ago, on October 24, 2018, Governor Wolf, seeking re-election on November 6, 2018, signed into law Act 111 of 2018, re-establishing the Impairment Rating Evaluation process in Pennsylvania, although this IRE process will be significantly different than the pre-Protz IRE provisions and procedures, as IREs will now need to be performed under the 6th Edition of the AMA’s Guides to Evaluation of Permanent Impairment, and the new IRE provisions under Act 111 will set a threshold for the presumption of total disability at 35%, as opposed to the pre-Protz presumption of total disability at or above 50%.
Since Act 111 is being immediately implemented into Pennsylvania’s Workers’ Compensation scheme, the Department of Labor and Industry, through the Bureau of Workers’ Compensation (Bureau) is re-activating the IRE functionality in its EDI platform, WCAIS, and it will resume authorization and designation of IRE physicians, to allow the performance of IREs pursuant to the regulations set forth in Act 111.
Seeking administrative consistency, it is anticipated that the process will track the pre-existing procedure on the regulatory framework in existence prior to Protz, to the extent and manner consistent with the newly-enacted provisions of Act 111.
Before exchanging high-fives, it should be noted that this functionality is still under review by the Bureau, as it updates its WCAIS screens and forms, with the Bureau ultimately needing to amend its regulations, to accurately reflect the new IRE provisions and requirements under Act 111.
Until those changes have been implemented, some screens and forms generated by the Bureau, regarding the IRE process, might still contain erroneous language, referencing the repealed language and requirements of the eviscerated Section 306(a.2), such as the reference in that statutory provision to “the most recent Edition” of the AMA Guides, and/or to any reference to a 50% threshold as being the controlling template for total disability consideration.
Notwithstanding any language to the contrary that might temporarily be found on either WCAIS screens, or Bureau forms, as well as any regulations previously utilized by the Bureau for IREs, it is anticipated that all IREs must be conducted and determined consistent with and pursuant to the new statutory requirements set forth in Act 111, during this transition, bridging the gap from Protz eviscerating IREs to IREs being resurrected by Governor Wolf in a modified paradigm.
Obviously, Act 111 is a compromise achieved by the diligence and energy of the insurance industry, to facilitate Employers having a mechanism for converting temporary total disability claims, not subject to any statutory cap, to temporary partial disability benefit claims, triggering the 500 week statutory gap under Section 306(b) of the Act.
It was a statutory framework resisted by the Claimant’s Bar, which relished the entombment of IREs under Protz, as the perception was that workers’ compensation claims had a greater value for settlement purposes, without IREs, as opposed to with IREs.
Yes, the vast majority of workers’ compensation claims will likely never involve IREs, as the injuries will not warrant that type of consideration, but for those claims that become more manageable with an IRE backstop, the IRE process has been, and will continue to be so, an invaluable instrument for Employers, Insurers and Third-Party Administrators seeking closure of open workers’ compensation claims in Pennsylvania.
While the total disability threshold has dropped from 50% to 35%, and only the 6th Edition of the AMA Guides are relevant for IRE purposes, let us not forget that the IRE is only accessible after a Claimant has received 104 weeks of temporary total disability benefits, and after the Claimant has reached maximum medical improvement, which still might require that an Independent Medical Examination be coordinated prior to an IRE, to secure a medical opinion of maximum medical improvement, prior to the IRE being implemented for conversion of total to partial disability.
Obviously, we encourage you to contact us with any questions you might have regarding the resurrection of IREs in Pennsylvania.
Trust us, we just get it! It is trust well spent!
We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout Pennsylvania. We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.
Every member of our Workers’ Compensation practice group is AV rated. Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.