eNotes: Workers’ Compensation – September 2024 – Pennsylvania

SIGNIFICANT CASE SUMMARIES

Pennsylvania Case Summaries

Federated Ins. Co. v. Summit Pharmacy (Bureau of Workers’ Comp. Fee Rev. Hrg. Office)
No. 61 MAL 2024
Supreme Court of Pennsylvania
Appeal Granted: August 27, 2024

The Supreme Court of Pennsylvania has granted an appeal in the case of Federated Insurance Company v. Summit Pharmacy, which challenges key aspects of the Commonwealth Court’s decision to limit the authority of the Bureau of Workers’ Compensation in determining the appropriate prescription drug fee schedule for resolving disputes. The Court will now address three critical legal questions which may have far-reaching implications for how pharmaceutical reimbursements are handled under the Pennsylvania Workers’ Compensation Act and beyond.

Background

This case originated from a dispute involving the reimbursement of prescription medication costs under the Pennsylvania Workers’ Compensation system. The Commonwealth Court had previously ruled against the use of the “Red Book,” a commonly referenced source for determining the “average wholesale price” (AWP) of pharmaceutical products, finding it inconsistent with the statutory language of the Workers’ Compensation Act. The court instead called for a pricing model based on actual average wholesale prices, such as those derived from the National Average Drug Acquisition Cost (NADAC).

The decision prompted an appeal by Summit Pharmacy, challenging the Commonwealth Court’s authority to impose such limitations on the Bureau of Workers’ Compensation and to determine the pricing methodology used for pharmaceutical products in fee review disputes.

Issues on Appeal

The Supreme Court has agreed to consider the following key questions raised by Summit Pharmacy:

1.  Authority Over Prescription Drug Fee Schedules: Did the Commonwealth Court exceed its authority by substituting its judgment for that of the General Assembly and limiting the Bureau of Workers’ Compensation’s discretion in selecting the appropriate prescription drug fee schedule, as specified under 34 Pa. Code § 127.131(b)?
2. Interpretation of “Average Wholesale Price”: Did the Commonwealth Court err in invalidating the Red Book as the standard for determining the “average wholesale price” by interpreting the term according to its common meaning, rather than its specialized meaning within the pharmaceutical industry?
3. Impact on Other Statutes and Programs: Did the Commonwealth Court err by implicitly invalidating other statutes and regulations in Pennsylvania that rely on Red Book values, including those governing childhood immunizations and the PACE Program?

Additionally, the parties have been directed to address the preliminary issue of whether the Commonwealth Court’s order is appealable.

Implications

The Supreme Court’s decision to grant the appeal marks an additional step in clarifying the regulatory framework governing pharmaceutical reimbursements under Pennsylvania law, which was all but eliminated by the Commonwealth Court. If the Court finds that the Commonwealth Court overstepped its authority or misinterpreted key statutory terms, it may reinstate the Red Book as the standard pricing reference, preserving the status quo for both insurers and pharmacies. Conversely, affirming the Commonwealth Court’s decision could solidify a shift away from the Red Book, potentially leading to reduced reimbursement rates and a new approach to managing pharmaceutical costs within the workers’ compensation system. Then, the Pennsylvania General Assembly would likely need to quickly enact new legislation to specify which pricing schedule, or methodology should be used for pharmaceutical reimbursements in workers’ compensation cases.

The outcome of this appeal will be closely watched, as it has the potential to reshape the financial and regulatory landscape of pharmaceutical reimbursements across multiple programs and industries in Pennsylvania.

Questions about this case can be directed to Christopher L. Scott at 717-237-7111 or cscott@tthlaw.com.

Martinez v. Lewis Tree Service (WCAB)
Supreme Court of Pennsylvania
No. 129 MAL 2024
Appeal granted: August 9, 2024

The PA Supreme Court granted allocatur on whether the “no fixed place of work” exception to the “going and coming rule” applied to a claimant who was involved in a motor vehicle accident while driving home from work.

Background

The Claimant worked as a tree trimmer. He was a crew leader, and his job duties included supervising workers, trimming trees and driving the trucks to job sites. While driving home in his personal vehicle at the end of the workday, the Claimant was involved in a motor vehicle accident.
The Claimant filed a Claim Petition alleging injuries because of the motor vehicle accident. The WCJ denied the petition, finding that the Claimant was not acting within the course and scope of his employment at the time of the accident. In making this finding, the WCJ found that the Claimant had completed his work duties on the date of the accident, returned the company truck to the yard, and was on his way home in his personal vehicle when the accident occurred. Based upon these facts, the WCJ found that the Claimant was outside the course and scope of employment because, generally, commuting to and from work does not constitute employment and the evidence did not establish any exception to this general rule. The Claimant appealed to the Board, which affirmed. The Claimant appealed to the Commonwealth Court, arguing that he was a traveling employee and, therefore, entitled to the presumption that he was in the course and scope of employment while driving home from work. The Court concluded that the Claimant was not a traveling employee because the Employer’s “yard” qualified as a fixed place of work. The Court further reasoned that travel was not “essential to serving the employer’s interest,” and a change of work location during the day or from day to day did not “make a claimant a traveling employee.”

Issue on Appeal

The PA Supreme Court has accepted allocatur in this case and will decide whether the “no fixed place of work” exception to the “going and coming rule” applied to the claimant at the time of the October 1, 2021, motor vehicle accident.

Takeaway

The outcome of this case will either strengthen or further erode the well-established “coming and going” rule for accidents which occur while commuting. The Claimant relied on prior decisions in which the courts had found claimants to be traveling employees in situations like the Claimant’s work as a tree trimmer. Specifically, in the Hohman case from 1946, the PA Supreme Court concluded that a foreman plumber, who worked assignments in and around the Pittsburgh area, was a travelling employee and had been in the course and scope of employment when injured in an accident while traveling from his home to a job site.

Questions about this case can be directed to Lee Ann Rhodes, at (412) 926-1453 or lrhodes@tthlaw.com.

Bradford County v. Pasko (WCAB)
No. 926 C.D. 2022
Commonwealth Court of Pennsylvania
Decided: August 14, 2024

Employers in Workers’ Compensation claims may not receive offset credit for pension benefits against a Claimant’s Workers’ Compensation Benefits post-retirement when a Claimant returns to the same Employer to work in a part-time position and is injured.

Background

The Claimant was employed by Bradford County and retired in 1993. Upon his retirement, the Claimant began to receive his employer-funded pension. After retirement, the Claimant decided to return to Bradford County to work in a part-time position to continue collecting his retirement pension benefits. While working part-time in June 2020, the Claimant hurt his back. As a result of the injury, the Claimant was disabled from employment for nearly a year. Following his period of disability, the Claimant returned to his part-time position with the county with no loss in earnings. While he was out of work due to the injury, the Claimant continued to regularly receive his pension benefits. The Claimant filed a Claim Petition seeking workers’ compensation benefits for the period of. The Employer alleged that whatever funds the Claimant received from his pension during that period must be credited to whatever wage loss benefits would be payable under the Workers’ Compensation Act. Because the pension benefits were over the amount which would be paid under the Act, it was the Employer’s position that any additional compensation would constitute a windfall. The WCJ granted the offset for the pension benefits, relying on the plain language of the Act. The Board reversed, and the Employer appealed to the Commonwealth Court.

Holding

The Commonwealth Court affirmed. The Court reviewed the structure and history of Section 204(a) and determined that the clear intent of the legislature was to make the injured worker whole, and nothing more. The Court held that although the pension employer and the post-pension employer are the same entity, there are two distinct employment relationships. The receipt of the pension had nothing to do with the work injury. By working after he began receiving his pension, and earning money on top of that pension, the Court felt that the Claimant showed a clear intent and expectation of earning money in addition to the pension. To allow credit here would not make the injured worker whole but would rather be a financial windfall for the Employer.

Takeaway

This case demonstrates a unique circumstance where a claimant can receive workers’ compensation benefits and a pension without an offset applying.

Questions about this case can be directed Taryn Vender at 570-825-4794 or tvender@tthlaw.com.

Berks Area Regional Transportation Authority v. Bennett (WCAB)
No. 942 CD 2023
Commonwealth Court of Pennsylvania
Decided: Aug. 21, 2024

A WCJ decision that describes a Claimant’s injuries with general language of body parts and symptoms without specific diagnoses is not well reasoned under the Act.

Background

The Claimant worked for the Employer as a bus driver and filed a Claim Petition seeking workers compensation benefits for a work injury. The WCJ granted the Claim Petition deeming the Claimant’s injury compensable and describing the work injury as a “left knee injury, a right hip injury, and a low back injury with associated radiculopathy”. The Employer appealed to the Board, which affirmed, and then to the Commonwealth Court. The Employer argued the WCJ’s decision was not adequately reasoned as it was too general and lacked sufficient particularity in the description of the injury.

Holding

The Commonwealth Court reversed in a published decision regarding the injury description and remanded for further findings of fact as to the extent and scope of the Claimant’s injury. The Court held that the WCJ’s decision was not sufficiently reasoned under 77 Pa. Stat. Ann. § 834 because by being so general it did not allow for effective review in future proceedings. Merely describing the work injury as a “left knee injury, a right hip injury, and a low back injury with associated radiculopathy” was too general and fell below the standard of the Act.

Takeaway

This case clarifies the standard of a well-reasoned decision regarding work injury description. Without sufficient particularity in an injury description, the parties are not properly equipped to know what issues will be present in future litigation. Merely describing a body part as injured or using symptom descriptions, like radiculopathy, is not enough. A finding of a specific diagnosis based on the medical testimony presented is required under the Act as it gives the parties a clear understanding of what issue will be the subject of future proceedings.

Questions about this case can be directed to Shelby A. Bennett at 412-926-1441 or sbennett@tthlaw.com.