Pennsylvania Workers’ Comp Case Update

Several recent court case decisions in Pennsylvania could impact the way workers’ compensation adjusters handle claims.

According to Tony Salvino, chair of the Workers’ Compensation Group at White and Williams’ Philadelphia law office, in an interview with Claims Journal, the first half of 2012 was a busy period for workers’ compensation with at least six cases.

Workers’ compensation adjusters often have to calculate a worker’s average weekly wage.

“In Pennsylvania, you look one year back from the date of injury, divide it into four 13 week quarters, then take the highest three quarters, and average it out. This is the average weekly wage,” Salvino said.

In the Lancaster case, the claimant was working at Lancaster General Hospital in 1980, cleaning a patient’s tracheostomy. The patient was infected with the Herpes Simplex virus. The patient sneezed, spraying the plaintiff’s left eye. The claimant received medical treatment at the time, but every couple of years she would get recurrent eye infections, Salvino said.

In May 2007, the claimant lost vision in the left eye and though it related back to the 1980 incident, it was treated as a new injury. By then, the claimant no longer worked for the hospital, said Salvino. She was still in the healthcare industry, but she worked for a group of cardiologists.

“Everyone agrees the claimant was entitled to 275 weeks of indemnity benefits for loss of the eye. But her attorney said the average weekly wage does not go back to 1980, when she only made eight dollars an hour, it went back to the 2007 injury because the injury showed itself in 2007 and that should be the date of the injury,” said Salvino.

The hospital disagreed, indicating it shouldn’t have to pay for 2007 wages since they did not employ the plaintiff at that time.

According to Salvino, the Supreme Court ruled that it was a 2007 injury because it flowed from the original one but was considered a new injury.

“So the Court used it at that rate that she was making in 2007,” Salvino said. “She ended up getting significantly more money because 20 years had gone by, she had gotten raises, and she had just started.”

Salvino said the odds of this happening are not great, but there is always a chance.

“A person can have a knee injury, then five years or 10 years down the road the person needs a knee replacement. That person can relate it back to that incident and that person might be able to get the average weekly wage bumped up to what he was working at when he required the knee replacement,” said Salvino, providing an example.

This case could have far reaching ramifications, the workers’ compensation attorney said.

“It creates dangerous precedent that even though somebody had an injury 20 years ago, the average weekly wage for that person when the injury evidenced itself could be applicable,” he said.

The Rhonda Walker case is important because adjusters are often faced with the question of specific loss in Pennsylvania, Salvino said.

“For example, when someone has a neck injury, that person may have to get a cervical fusion or surgery, a discectomy in their neck. Under Pennsylvania law that person would be entitled to disfigurement if there was any unsightly, permanent scar above the clavicle. That is how a disfigurement claim is described. If a person worked in the area that dealt with fire and he had a scar on his face because of that, he would be entitled to compensation for that,” the attorney explained.

According to Salvino, because disfigurement is subjective, if you lose a thumb in Pennsylvania it is 100 weeks, but the scar value is at the discretion of the judge, ranging anywhere from zero to 275 weeks.

Walker was injured on August 10th, 2007, when she fell down at work. She had bruises on various parts of her body, but the major injury was to her nose.

“As a result of the injury she had a crooked nose. So she believed that she had a specific loss because she had disfigurement above her clavicle, in her face,” Salvino said.

She filed a workers’ compensation disfigurement claim and was awarded 45 weeks, almost a year of benefits by the judge, he said.

The case was taken to appeal by both the claimant and the employer because the claimant wanted more than 45 weeks, the employer less.

“The board reversed it and said that she did have a slight crookedness to the left side, but the board held the crookedness is not noticeably disfiguring and therefore not compensable,” Salvino said.

The claimant appealed the board’s decision and the Commonwealth Court said that not every single scar or disfigurement to the face is compensable.

“The Court stated that it also has to be unsightly and if it is not unsightly, and the Court stated a little bit of a crooked nose is not unsightly, the claimant will receive zero and they actually affirmed the board and said no,” said Salvino. “I would tell you before this case, I would think that most adjusters on the slight disfigurement claims would probably give them 25 weeks on these cases because the adjusters would want to take it out of the hands of the judge…Now, if the scar or disfigurement is not very really not noticeable, these adjusters could take the position that ‘Hey, it is not unsightly and we are not going to give you anything.’”

According to Salvino, the still pending Phoenixville case deals with vocational labor market surveys.

“In Pennsylvania, if the employer has no job to offer the claimant, the employer can go out and do a vocational assessment or an earning power assessment. Under the current state of the law, the employer just has to get an evaluation and then hire a vocational expert to go and perform an assessment of these local geographical areas. Then, a petition is filed,” Salvino said.

The Phoenixville case may harken back to the days when the Kachinski standard applied, when jobs actually had to be available to claimant.

“If they are…going back to the Kachinski standard, where the employer actually had to offer the job to the claimant and the claimant would have to apply. Something like that will impact how the adjuster handles the case,” Salvino said, indicating the adjuster will be involved in making referrals and dealing with the vocational consultant.

According to Salvino, under Pennsylvania law, if a particular contractor doesn’t have workers’ compensation insurance for its employees, then responsibility climbs up the ladder to the general contractor, also known as the statutory employer.

“In a construction case, it makes sense because the idea is the general contractor should ask for a certificate of insurance. Business should only be conducted with reputable contractors. If not, there is a risk of having to pay workers’ compensation insurance and that’s in the statute,” Salvino said.

The attorney described a case involving a farm conglomerate, a company that has farms across the country that hired trucking companies to distribute its produce.

According to Salvino, one of the trucking companies had an injured truck driver who filed a lawsuit against his employer, a truck owner and an independent contractor of the farm conglomerate. The truck owner didn’t have workers’ compensation coverage. The truck driver tried to go up the chain to the farm, under the statutory employer theory, and the Supreme Court ruled in his favor.

“There are some adjusters who believed, before this case, that it only applied to the construction business where the general contractor hires the subcontractor,” the workers’ comp attorney said.

The high court ruled that the legislature meant to require persons or entities contracting with others to perform work, and it has to be a regular or recurrent part of their businesses, to ensure that the employees of those subcontractors are covered by workers’ compensation insurance.

“In other words, if you’re a business and you regularly contract with another entity to provide services…for example, the trucking company, and you do not make sure that they have a certificate of insurance, you are on the hook for those employees if that company does not have insurance,” Salvino said.

There are instances where the wage portion of the claim is resolved and the insurer is still responsible for the medical benefits, Salvino said.

In the Giant Eagle, the Supreme Court found that a judge has in his discretion the ability to award a discontinuance of medical benefits.

“Under Pennsylvania law, you can send workers to an Independent Medical Examination every six months and if the worker refuses to attend, you can file what’s called a Section 314 petition and get a court order. The court will order it 99.9 percent of the time. The Court will order it because they are saying, ‘Well, you are getting compensation. The insurance carrier and the employer are entitled to six month intervals of getting updated medicals,’” Salvino said.

If the court orders it and the claimant refuses to attend, the adjuster can then file for suspension of the weekly or biweekly checks, he said.

With the decision in Giant Eagle, adjusters can now seek a hearing before a judge in order to cut off medical benefits.

“Medical benefits can be suspended but it is at the discretion of the judge and based on the facts of the case,” Salvino said.

In the Cozzone case, the Commonwealth Court held that a three year extension for filing a modification and/or reinstatement petition under Section 413(a) of the Workers’ Compensation Act is inapplicable to reinstatements following suspensions. The three year extension is applicable only to reinstatements following a termination of benefits. Section 413(a) of the Act imposes a statute of repose whereby a reinstatement petition must be filed within 500 weeks from a suspension of a claimant’s benefits in order to be considered timely filed, Salvino explained.

In the Palaschak case, the Worker’s Compensation Appeal Board affirmed the judge’s decision to deny the claimant’s request for reinstatement because it was filed more than 500 weeks after his disability benefits were suspended on February, 5, 1996.

According to Salvino, the claimant argued that he became totally disabled in March of 2006 and that there is no time bar on the right to seek total disability benefits. The claimant argued that because his employer provided a modified-duty job, he should be given three years from the date that benefit terminated to seek a reinstatement of total disability benefits.

The employer argued that the state law is clear in that a claimant whose benefits have been suspended may seek reinstatement so long as the reinstatement is filed within 500 weeks of the last payment of disability. In the alternative, the employer asserted that even if the claimant’s petition was not time-barred, he failed to meet his burden of proof for a reinstatement of benefits, according to Salvino.

The court held that the case is governed by the last sentence of the second paragraph of Section 413(a), which gave the claimant, whose benefits were in suspension status, the right to seek reinstatement, so long as he did so within 500 weeks of the suspension date, Salvino explained.

According to the workers’ comp attorney, the court unambiguously held that Section 413’s three year limitation is totally inapplicable where there has been a suspension. In addition, the court held that there is no language in the act to support the claimant’s theory that payment of real wages for doing a light-duty job is a type of “compensation.” To allow this, the statute of limitations would never expire as long as there was a light-duty job available to a claimant, Salvino said.

The claimant’s alternative argument was rejected since the Supreme Court held that if a claimant is working after 500 weeks and up to the time he seeks reinstatement, he must prove that he has an increased, work-related impairment that precludes the continuation of the light-duty employment.