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                                                                                                                                    October 31, 2018

CLIENT UPDATE

RECENT DEVELOPMENT: GOVERNOR WOLF SIGNS HB 1840, RESTORING IMPAIRMENT RATING EVALUATIONS UNDER THE SIXTH EDITION OF THE AMA GUIDES


On October 24, 2018, Pennsylvania Governor Tom Wolf signed HB 1840, which restores Pennsylvania employers' and insurers' right to use Impairment Rating Evaluations (IREs) to modify a claimant's workers compensation benefits. Prior to last year's Pennsylvania Supreme Court's Decision in Protz v. W.C.A.B. (Derry Area School District), 161 A.3d 827 (Pa. 2017), employers and insurers could direct a workers' compensation claimant who had received at least 104 weeks of temporary total disability (TTD) benefits to an IRE to determine the extent of the employee's impairment. If a Bureau-assigned physician found that the employee's whole-person physical impairment rating was less than 50% under the AMA Guides to the Evaluation of Permanent Impairment, the employer or insurer could seek to modify the claimant's wage loss benefit status from TTD to temporary partial disability (TPD) and limit ongoing wage loss benefit entitlement to an additional 500 weeks.

HB 1840, which is effective immediately, modifies the prior IRE framework in two important ways. First, instead of using the "most recent version" of the AMA Guides, HB 1840 directs that future IREs be performed pursuant to the 6th Edition of the AMA Guides. This provision is clearly intended to insulate the new statute from the challenge raised in Protz. In Protz, the Supreme Court concluded that directing the IRE physician to use the "most recent" AMA Guides was an unconstitutional delegation of legislative authority, as the AMA Guides could be updated without Pennsylvania legislative or regulatory oversight. While we anticipate that the claimant's bar will seek to challenge the constitutionality of HB 1840 as well, we are confident that the statute's new language will satisfy the Supreme Court, as numerous other Pennsylvania statutes incorporate documents and guides created by non-legislative, non-governmental bodies.

The second substantial change affects the maximum rating percentage under which an employer or insurer can seek a modification to TPD status. Under the prior IRE section, an employer or insurer could seek modification as long as the whole-person impairment rating fell below 50%. HB 1840 provides that the employee's whole person impairment must be under 35% to permit an employer or insurer to seek a modification of benefits. While this represents a substantial reduction in the maximum impairment rating, many physicians and attorneys believe that the Sixth Edition provided for lower impairment ratings than prior editions. Some commentators have opined that 35% impairment under the Sixth Edition is almost equivalent to 50% impairment under the Fourth Edition.

The remaining text and legal framework remains essentially identical to the IRE provisions in place before Protz. A new IRE cannot be requested before 104 weeks of TTD benefits have been received. Employers and insurers are directed to request the IRE within 60 days of the claimant's receipt of their 104th week of TTD benefits. In addition to the IRE provisions, HB 1840 provides for an increase in the amount of burial expenses payable on fatal claims from $3,000.00 to $7,000.00.

We anticipate that prior case law interpreting the revived portions of the IRE section of the Act will continue to apply, meaning that obtaining and enforcing an IRE in the future will likely look similar to the procedures in place before Protz. Specifically, we anticipate that prior case law permitting an IRE to be requested beyond the 60-day period will be considered valid, given that the reenacted statute is largely identical, and the legislature clearly intended to revive the prior system with only some minor changes.

However, it is less clear how HB 1840 will affect claims where an IRE was performed prior to Protz. HB 1840 specifically provides employers and insurers with a credit for any TPD benefits paid prior to enactment of the new law. The recent Commonwealth Court decision in Whitfield v. WCAB (Tenet Health Sys. Hahnemann LLC), 188 A.3d 599 (Pa. Commw. 2018) provides that a reinstatement under a pre-Protz IRE is only effective back to the date the Reinstatement Petition was filed. As a result, HB 1840 should provide a credit for any periods of TPD paid under a prior IRE that occurred prior to a Reinstatement Petition under Protz. However, two cases pending before the Pennsylvania Supreme Court - Moore v. WCAB (Sunoco, Inc. R&M), 422 MAL 2018 and 444 MAL 2018 and Pavlack v. WCAB (UPMC Southside), 263 WAL 2018 - are seeking to eliminate all awarded periods of TPD for prior IREs challenged under Protz. If these challenges are successful, they would overrule Whitfield and substantially limit the value of the credit provisions in HB 1840.

Although HB 1840 will be a great tool for managing workers' compensation claims in the future, its effect on individual cases is likely to be very fact-specific. Nevertheless, prompt action will be beneficial in all cases where a Claimant has received 104 weeks of TTD benefits. As such, we recommend that you contact your defense counsel immediately to discuss the potential effects of HB 1840 on all long-standing open claims. The workers' compensation attorneys at Dell, Moser, Lane & Loughney are available to answer any questions you may have regarding these new statutory enactments, as well as offer guidance with respect to requesting and enforcing IREs.