eNotes: Workers’ Compensation: September, 2019

TTH Speaking Engagements

On November 22, 2019, Ryan Blazure, an attorney in TTH’s Wilkes-Barre office, will be presenting in Scranton, PA on the negotiation and reduction of liens, as part of National Business Institute’s seminar entitled: Damages and Liens in Personal Injury.  The full-day course is accredited for Pennsylvania, New York and New Jersey Attorney, and Pennsylvania Insurance, continuing eduction credits.  Further details can be found at:
https://www.nbi-sems.com/ProductDetails/Damages-and-Liens-in-Personal-Injury/Seminar/83849ER_PACLEET2700000?crdt=OH%20CLE&pt=1.

Questions about this seminar can be directed to Ryan Blazure, at (570) 820-0240 ext. 8603 or rblazure@tthlaw.com.

Attorney Justin D. Beck out of TTH’s Pittsburgh office will serve as moderator of the upcoming panel, “Utilization Reviews,” at the Workers’ Compensation Fall Section Meeting in Hershey on September 27, 2019 at 10:15 a.m. The panel will explore critical legal developments in utilization review over the past decade, in addition to providing both claimant and defense perspectives on the leading issues faced by all interested stakeholders today.

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SIGNIFICANT PENNSYLVANIA CASE SUMMARIES

Kenney v. WCAB (Lower Pottsgrove Tp. and Delaware Valley Workers’ Compensation Trust), No. 845 C.D. 2018 (August 2, 2019)

By: Justin D. Beck, Esquire

In a reported opinion, the Commonwealth Court has held that a workers’ compensation insurance trust, which acted, for all intents and purposes, as a commercial carrier, was nevertheless not entitled to subrogation of a claimant’s third-party recovery where the claimant had received only Heart & Lung Act benefits.

Background: The police officer-Claimant sustained an injury in the course of his employment and received salary continuance under the Heart & Lung Act. At the same time, the municipality-employer’s insurer, the Delaware Valley Workers’ Compensation Trust, issued an NCP and paid indemnity benefits, which Claimant turned over to his employer.

Claimant subsequently filed a third-party action against the driver of the other vehicle involved in the accident, and the Trust asserted its lien of approximately $85,000. When Claimant posited that the Trust was not entitled to subrogation, it filed a petition to review before a WCJ, who denied same. The Board, however, reversed, holding that the Trust, acting as an insurance carrier, was entitled to subrogation of the workers’ compensation benefits paid separate from the Heart & Lung Act benefits.

Claimant appealed, and the Commonwealth Court has now reversed the Board.

Legal Analysis: Relying upon the controlling precedents of Stermel (Commonwealth Court) and Bushta (Supreme Court), the Court held that it was inconsequential whether the Trust had acted, for all intents and purposes, as a commercial insurance carrier. In this regard, the critical analysis was not the nature of the payor or the individual account from which benefits were paid, but instead, the nature of the benefits received by Claimant. Here, indeed, Claimant had received only Heart & Lung Act benefits – and could not board the same as damages in his third-party suit. The Court concluded, “there can be no subrogation out of an award that does not include these benefits as an item of damages.” For these reasons, the Trust was held not entitled to subrogation out of Claimant’s third-party recovery.

Takeaway: Over the course of the last five years, both self-insureds and commercial carriers alike have aggressively pursued reversal of or exceptions to the Commonwealth and Supreme Courts’ rigid rulings in the realm of Heart & Lung Act-related subrogation. Kenney represents the latest mile-marker in those efforts, and makes clear that the appellate courts are, at least for the time being, unreceptive to any such arguments advanced on behalf of employers. Accordingly, both the risk strategies and exposure analyses of municipal employers should consider the implications of the courts’ decisions, with full knowledge that no subrogation will be had from a third-party recovery where the claimant receives Heart & Lung Act benefits.

Any questions regarding this case can be directed to Justin D. Beck, Esquire at (412) 926-1441 or at JBeck@tthlaw.com.

 

Workers First Pharmacy Services, LLC v. Bureau of Workers’ Compensation (Cincinnati Ins. Co.), No. 1619 C.D. 2018 (August 7, 2019)

By: Justin D. Beck, Esquire

In a reported opinion, the Commonwealth Court has held that an employer, which denies the compensability of an injury pursuant the terms of a C&R, may nevertheless remain liable for medical bills that otherwise remain pending in fee review.

Background: There, the claimant and the employer entered into a C&R Agreement which expressly denied any liability for the alleged injury. The terms of the agreement also indicated that the claimant would remain responsible for all outstanding medical bills except topical pain creams dispensed by Workers First Pharmacy, which were the subject of a pending fee review that would not be disturbed by the C&R. The agreement provided that the claimant would not be responsible for such bills, regardless of the ultimate outcome of the fee review proceedings.

Once the C&R was approved, the employer argued in the fee review forum that, per its terms, no liability for the alleged injury existed, and thus, the Fee Review Hearing Office had no jurisdiction. The Hearing Office was so persuaded, and vacated the determinations of the Fee Review Hearing Section as premature.

The claimant appealed to the WCAB, which affirmed, and the Commonwealth Court reversed.

Legal Analysis: The court held that the employer, by the terms of the C&R, had in fact accepted liability for the Workers First Pharmacy debts, and could not subsequently divest the Hearing Office of jurisdiction by arguing that no liability for the injury, itself, existed. In so holding, the court relied, in critical aspect, upon Nickel v. WCAB (Agway Agronomy), 959 A.2d 498 (Pa. Cmwlth. 2008), which had held that an employer may simultaneously deny liability for a work injury in a C&R while agreeing to pay the claimant’s medical expenses. In such scenarios, however, the employer cannot thereafter contest a fee review based solely upon its denial of liability for the alleged injury.

Takeaway: Where entering into a C&R which denies liability for an alleged injury, it is critical to ascertain the liabilities which may remain outstanding for disputed medical bills in the fee review forum, and to tailor the language of the agreement accordingly. Notably, the parties may not use a C&R to divest the Hearing Office of jurisdiction over fee review proceedings.

Any questions regarding this case can be directed to Justin D. Beck, Esquire at (412) 926-1441 or at JBeck@tthlaw.com.

 

Mark Eckart v. Workers’ Compensation Appeal Board (Pete’s Carstar Collision), No 305 C.D. 2019 (August 23, 2019)

Pennsylvania Commonwealth Court, Unpublished

By: Andrew Kravitz, Esquire

An Employer is required to take affirmative action to investigate a claim. Issuing a Notice of Temporary Compensation Payable is not mandatory.

Background: Claimant alleged a violation of the Act when the insurer required medical records before accepting a claim and for issuing a Notice of Compensation Denial instead of a Notice of Temporary Compensation Payable. Claimant reported an injury to the employer on November 7, 2016. Claimant provided no medical documentation. The insurer spoke with Claimant and the employer and requested records Claimant’s doctor. The insurer testified that for questionable claims involving back injuries, actual medical documentation was required to accept a work injury. On November 26, 2016 an NCD was issued when no medical records were provided. The medical records were received on January 25, 2017, but contained records showing that Claimant had preexisting low back problems.

The WCJ denied the Penalty Petition. The WCJ found that the employer’s denial of the claim based on a lack of medical evidence to support the claim was proper under Section 406.1 of the Act. 77 P.S. §717.1. The Board affirmed the WCJ’s decision.

Claimant appealed alleging that the employer had to do more than simply wait for a claimant to submit medical documentation. In Geiger v. Workmen’s Compensation Appeal Board (Circle Fine Art Corporation), 654 A.2d 19 (Pa. Cmwlth. 1994), the Court held that fulfilling the mandate to perform a prompt investigation requires an employer to take some affirmative action to investigate a reported work-related injury within a reasonable time period. Claimant also asserted that the employer should have issued a NTCP instead of a NCD.

Legal Analysis: The Court found that the adjuster’s request for medical records before accepting the claim was not a violation of the Act. Also, insurer’s action of issuing an NCD within eight days of notice of the claim, while continuing its investigation, was consistent with the Court’s holding in Geiger. The Court held that the specific language of Section 406.1(d)(1) did not require the issuing of an NTCP in uncertain claims.

Take Away: When a claim is presented and there is any doubt as to the compensability of the claim, active investigation of the claim must be commenced to meet the employer’s obligations under the Act. Also, issuing a NTCP is not mandatory in cases where there is uncertainty as to compensability.

Any questions regarding this case can be directed to Andrew Kravitz, at (717) 237-7157 or AKravitz@tthlaw.com.

 

State Workers’ Ins. Fund v. Bureau of Workers’ Comp. Fee Review Hearing Office, No. 36 C.D. 2018 (August 19, 2019)

Pennsylvania Commonwealth Court, Unpublished

By: Stephanie A. Walczak, Esquire

The Commonwealth Court discussed the use of Utilization Review proceedings which concern the reasonableness and necessity of treatment versus the fee review process which concerns amount and timeliness of payment.

Background: Claimant was prescribed an electric scooter by Dr. Lam and Dr. Abdel. The scooter was provided by Harburg Medical Sales. The insurer filed a Utilization Review Request in relation to the treatment provided by Dr. Lam, only. A UR Determination was issued finding the prescription from Dr. Lam for the electric scooter to be unreasonable and unnecessary. Before receiving an official denial from the insurer, Harburg filed an application for fee review in relation to the bill for payment of the scooter. The Bureau’s Medical Fee Review Section circulated an administrative determination concluding that Harburg was not due payment for the electric scooter because the service had not been properly billed. Harburg filed a request for hearing with the Medical Fee Review Hearing Office. The insurer argued that the scooter was not properly billed because Harburg did not submit any medical records from Dr. Abdel along with the bill. The insurer also contested liability for the scooter based upon the UR Determination of Dr. Lam’s treatment. Although the insurer acknowledged that the UR Determination addressed the treatment of Dr. Lam and not Dr. Abdel, the insurer argued that the exact same treatment that was previously determined to be unreasonable and unnecessary was at issue in this proceeding. The Hearing Officer found that Harburg would not have had access to Dr. Abdel’s medical records and submitted all of the documentation required under the law. The Hearing Officer also noted that the UR Determination specifically addressed the treatment of Dr. Lam, not Dr. Abdel. The Hearing Officer ordered the insurer to pay Harburg for the scooter. The insurer appealed to the Commonwealth Court.

Legal Analysis: The Court held that Harburg provided proper documentation under the Act as it was not necessary for Harburg to submit Dr. Abdel’s medical records. The Court held that the insurer’s challenge to the reasonableness and necessity of Dr. Abdel’s treatment was not properly raised as a defense in the fee review process because the UR Determination was as to the treatment of Dr. Lam. The Court held it is well settled that a UR request is provider specific.

Takeaway: An insurer must use all available remedies when attempting to deny coverage for treatment. In this case the insurer had additional options available in the form of a UR Request for the remaining doctor and potentially, a petition to review medical treatment, if the insurer believed that that the treatment was not causally related to the work injury.

Any questions regarding this case can be directed to Stephanie A. Walczak, at (610) 332-7025 or SWalczak@tthlaw.com.

 

Zhang v. WCAB (Chopstix 4041, LLC), No. 1674 C.D. 2018 (August 2, 2019): A discussion of whether an employment relationship can be admitted by filing a late Answer.

By: Caroline E. Gentilcore

Background: At issue before the Commonwealth Court, was whether the denial of Claimant’s Claim Petition alleging a work-related injury on October 3, 2015 was properly denied by the Workers’ Compensation Judge as Claimant failed to establish an employment relationship. Claimant contended that he sustained a fractured right ankle when he fell off a ladder performing laborer work at a Chinese Food restaurant in Erie, Pennsylvania. Claimant originally identified an individual, Mr. Yong Zheng, as his employer. Claimant later filed a Claim Petition identifying a Chinese Food restaurant, Chopstix 4041, LLC, as his employer. Claim Petitions against the Uninsured Employers’ Guaranty Fund were also filed as neither alleged employer was insured. Mr. Zheng filed an Answer, but Chopstix failed to file an Answer. Claimant filed a Yellow Freight motion against Chopstix. Testimony was presented. Claimant testified that Mr. Zheng was present at the job site on October 3, 2015. He claimed that Mr. Zheng and another individual, Mr. Wei, directed his work at the Erie restaurant. Claimant did not testify to any connection between Mr. Zheng, Mr. Wei and Chopstix. Mr. Zheng testified that he was not Claimant’s employer. When Mr. Zheng was asked the name of the restaurant he and Claimant were laborers at, Mr. Zheng could not definitively identify the restaurant.

Holding: The underlying court held that Claimant failed to meet his burden of proof in support of his Claim Petition. Claimant’s testimony was deemed not credible, and Claimant did not present any evidence of a connection between the individuals he identified and Chopstix. The court noted that the work Claimant was performing was not within the regular course of business of Chopstix, and accordingly, Claimant would be considered a casual employee. Claimant appealed to the Workers’ Compensation Appeal Board, partially alleging that since Chopstix failed to file an Answer, an employer/employee relationship was admitted. The Board affirmed. Claimant again appealed to the Commonwealth Court. The Commonwealth Court uses strong language for Employer’s going forward in affirming the denial of the claim petition: “This Court has consistently held that conclusions of law, such as whether an employment relationship exists, cannot be deemed admitted by an untimely answer and must still be proven by the claimant.”

Take Away: The test surrounding the existence of an employment relationship is factually specific, and remains a question of law that Claimant bears the burden of proving even if a late Answer is filed.

If you have any questions, please do not hesitate to contact Caroline E. Gentilcore, Esquire, cgentilcore@tthlaw.com or (215) 564-2928 ext. 8518.