Pennsylvania Workers’ Compensation Lawyer Blog

In 2004, the Pennsylvania Bureau of Workers’ Compensation created the medical-only Notice of Compensation Payable (NCP).  This addressed a long-standing practice in the insurance industry of using a Notice of Denial (NCD) to accept a claim solely for medical benefits.  For years, we have questioned the procedure an injured worker would use to allege a wage loss after the issuance of a medical-only NCP.  To be safe, many of us filed both a Claim Petition and a Petition for Reinstatement in such a situation.  This issue has now been clarified by the Commonwealth Court of Pennsylvania.

In the case of Ingrassia v. Workers’ Compensation Appeal Board (Universal Health Services, Inc.), the injured worker was involved in a motor vehicle accident while performing his work duties.  A medical-only NCP was issued, accepting a neck and back strain.  The injured worker believed his injuries were more significant, and that the work injury caused him to be disabled from performing his job.  A Claim Petition was filed, then amended by the injured worker to operate as a Petition for Reinstatement (the burden of proof is much less for a Petition for Reinstatement, so that would be the desired petition for an injured worker to use in this situation).

After hearing the evidence, the Workers’ Compensation Judge (WCJ) concluded that the work injury was more extensive than already accepted (so the diagnosis of left ulnar neuropathy was added), but that the injured worker failed to prove that he was disabled by the injuries.  Upon appeal, the Workers’ Compensation Appeal Board (WCAB) affirmed.

From time to time in a Pennsylvania workers’ compensation case, the entity who is actually the “employer” for workers’ comp purposes is not clear. This is frequently due to the direct employer lacking PA workers’ compensation insurance coverage (which is against the law). When we face such a situation, often we are looking to see if there is a “statutory employer,” which is when a party other than the direct employer is responsible for the payment of workers’ comp benefits (this is most often seen in the construction arena, with subcontractor and general contractor). Almost always, the Uninsured Employers Guaranty Fund (UEGF) is involved in such a case (since the direct employer failed to carry workers’ comp insurance).

Recently, the Commonwealth Court of Pennsylvania was called upon to determine an interesting issue in this area – is a franchisor a “statutory employer” for an employee of a franchisee, if the franchisee fails to carry workers’ compensation insurance? In a word, the answer is no. The case is Saladworks, LLC and Wesco Ins. Co. v. WCAB (Gaudioso and UEGF).

This case revolves around an employee (“Claimant”) who worked at a Saladworks restaurant which was owned and operated by G21, LLC. Claimant twisted both knees when he slipped on water, and was rendered disabled by the incident. Seeking workers’ compensation benefits, Claimant filed Claim Petitions against both G21, LLC and the UEGF. In turn, UEGF filed a Joinder Petition against Saladworks, alleging that Saladworks (the franchisor) was the statutory employer in this case.

An injured worker in Pennsylvania generally has three years after the date of the injury to file a Claim Petition to seek workers’ compensation benefits for the injury. On the other hand, once an injury is accepted by the issuance of a Notice of Compensation Payable (NCP), and then wage loss benefits are suspended, the injured worker generally has 500 weeks, or three years from the date of last payment, whichever is later, to file for a reinstatement to such benefits. Where, then, does the issuance of a “medical-only” NCP leave an injured worker? This issue was recently addressed by the Commonwealth Court of Pennsylvania.

A “medical-only” NCP is a fairly recent document created under the PA Workers’ Compensation Act. This document allows the workers’ comp insurance carrier to accept responsibility for an injury, and to acknowledge the payment of medical treatment for such injury, but to deny any wage loss (“Disability”) has taken place. As discussed below, it is one of the most misused and abused documents in the entire Act.

The Commonwealth Court of Pennsylvania recently decided the case of Sloane v. Workers’ Compensation Appeal Board (Children’s Hospital of Philadelphia). Here, the injured worker was a nurse who suffered an injury to her right elbow, diagnosed as lateral epicondylitis, in 2004. This injury was accepted by NCP and wage loss benefits began. Eventually, she went back to work, on a light duty basis. In 2006, she suffered another work injury, this one to her right elbow and also to her right knee. This time a medical-only NCP was issued. She continued to work, still on light duty, until 2007, when she went out of work to have a total knee replacement performed on the right knee. She never was able to go back to work.

We have discussed Impairment Rating Evaluations (IRE) many times on this blog. Indeed, IREs are so prevalent in the Pennsylvania’s workers’ compensation system, we even have a page devoted to the IRE process on our website. However, a decision by the Commonwealth Court of Pennsylvania may change IREs in PA in a significant way.

Today, the case of M.A. Protz v. Workers’ Compensation Appeal Board (Derry Area SD) was decided by the Commonwealth Court of Pennsylvania. In this decision, the Court declared that Section 306(a.2), which states that IREs are to be performed “pursuant to the most recent edition of the American Medical Association (AMA) ‘Guides to the Evaluation of Permanent Impairment,'” is unconstitutional. Essentially, the Court found that the legislature cannot delegate legislative authority to the AMA (since the legislature would not be reviewing or approving each new edition of the AMA Guide). When the IRE process was instituted, as part of Act 57, the AMA Guide was in its Fourth Edition (it is currently in its Sixth Edition).

The Court remanded the case back to the Workers’ Compensation Judge (WCJ), for the WCJ to consider the IRE under the Fourth Edition (according to the Court, this would be the most recent edition actually reviewed by the legislature).

Injuries which occur within the State of Pennsylvania fall under the jurisdiction of the Pennsylvania Workers’ Compensation Act [Act] (unless the employee is excluded for another reason, such as being a Federal or Military employee). However, injuries which take place outside PA may still be covered under the Act if certain requirements are met.

Under Section 305.2(a), injuries taking place outside PA may still be covered by the Act if either, 1) the injured worker had employment “principally localized” in Pennsylvania; 2) the injured worker was hired in PA and his or her work was not “principally localized” in any State; 3) the injured worker was hired in PA for work “principally localized” in a State for which he or she cannot receive workers’ compensation benefits; or 4) the injured worker was hired in PA for employment outside the United States or Canada.

This issue was recently addressed by the Commonwealth Court of Pennsylvania in Watt v. Workers’ Compensation Appeal Board (Boyd Brothers Transportation). Here, Mr. Watt was a truck driver for a company based in AL. He was hired in OH, and an agreement was signed by Mr. Watt, acknowledging that any work injury he suffered would be “exclusively governed by the workers’ compensation laws of the State of Alabama. Further, [Claimant’s] agrees with [Employer] that, for purposes of worker’s compensation, [Claimant’s] employment is principally localized within the state of Alabama and that the company’s principle [sic] place of business is Clayton, Alabama.”

We have discussed the Uninsured Employers Guaranty Fund (UEGF) on this blog before. This is the Fund that was created in 2007 to provide benefits to injured workers when an employer fails to carry Pennsylvania workers’ compensation insurance (in direct violation of PA law). Though the UEGF has now been around for more than eight years, there have been some unanswered questions about actions against the UEGF; with a recent decision from the Commonwealth Court of Pennsylvania, however, two of these questions have now been answered.

In the matter of Jose Osorio Lozado v. Workers’ Compensation Appeal Board (Dependable Concrete Work and Uninsured Employers Guaranty Fund), the Commonwealth Court of PA had to address whether filing a civil action for damages, or providing late notice to the UEGF, constituted a complete bar to recovery against the UEGF. In a well-reasoned and logical decision, the Court held neither of these things would bar the injured worker from receiving the benefits he needed.

Once the injured worker in this matter determined that his employer failed to carry Pennsylvania workers’ compensation insurance, he (through his attorneys) knew that he had the choice of whether to proceed through the PA workers’ compensation system or sue his employer for negligence in the State Court System (this is not typically a choice for an injured worker – the protection employers ordinarily receive from civil liability is lost by the failure to carry insurance). Since the injured worker was unsure whether he would be able to receive benefits in the PA workers’ comp system (given that the UEGF contests every claim), civil suit was filed merely to protect the “statute of limitations.” The attorney for the injured worker specifically asked the civil court to hold the suit pending the outcome for the workers’ comp case.

One of the basic concepts of a workers’ compensation case in Pennsylvania, is that the injured worker actually be an employee. A person truly working as an “independent contractor” is not covered by the Pennsylvania Workers’ Compensation Act (Act). How someone becomes an “independent contractor,” at least for PA workers’ compensation purposes in the construction industry, was clarified a few years ago by the Pennsylvania Legislature.

As you may recall from our blog posting back in 2011, the Construction Workplace Misclassification Act (CWMA) sets requirements which must be met for an injured worker to be seen as an “independent contractor” and be excluded from coverage by the Act. These requirements are pretty strict, to make certain that only those individuals who should actually lose protection under the Act are those who should correctly do so.

Recently, the Commonwealth Court of PA addressed how strictly these requirements under the CWMA will be read. The answer? Pretty darn strict. The case at issue is Scott Lee Staron, d/b/a Lee’s Metal Roof Coatings & Painting v. Workers’ Compensation Appeal Board (Farrier).

Since coming into the Pennsylvania Workers’ Compensation Act (Act) in the 1996 amendments, the Impairment Rating Evaluation (IRE) is here to stay. This is an important tool available to the workers’ comp insurance carriers in PA, and can be used to contain exposure on a file. An entire page devoted just to the IRE process is on the website of Brilliant & Neiman LLC.

Recently, the Commonwealth Court of PA addressed the method to select a doctor to perform an IRE in Logue v. Workers’ Compensation Appeal Board (Commonwealth of Pennsylvania). The Act states, in relevant part of Section 306(a.2)(1), that the doctor to implement an IRE is to be ” . . . chosen by agreement of the parties, or as designated by the department . . . ” The Court was called upon to determine whether the workers’ compensation insurance carrier has the choice between those two options.

The injured worker sustained a strain of his wrist. After he had received workers’ compensation total disability benefits for more than 104 weeks, the workers’ comp insurance carrier filed a Request for Designation of IRE Physician with the Bureau of Workers’ Compensation. The injured worker refused to attend the IRE, believing that the statute cited above meant that the insurance carrier must first seek agreement from the injured worker on an IRE physician, before requesting that the Bureau designate the physician.