September 6, 2007

Digest of
Appellate Decisions
August 2007

Gadonas v. WCAB
(Boeing Defense & Space Group),
1943 C.D. 2006 (Pa. Cmwlth. 2007)

Sixty-day time limit on contribution to IRA in order to avoid petition for offset due to disability pension payments did not apply, when Claimant reasonably relied on benefit administrator’s assurance that there would be no attempt to offset benefits due to receipt of disability pension.

Commonwealth Court reversed the decision of the Board and reinstated the WCJ’s decision that granted Claimant’s petition to review benefit offset. Claimant had begun receiving benefits retroactive to 1998. Claimant decided to apply for disability retirement in 2003. Employer’s benefits administrator advised him that his disability pension would not be offset by his workers’ compensation benefits. Claimant began receiving his pension in May 2003 and five months later, Employer filed its notice of offset. Claimant filed the instant petition, and also took out a loan for $500.00, representing the amount of pension benefits he had received and deposited it in an IRA. Claimant testified it was his intention to “roll over” these funds into an IRA. The WCJ found this testimony to be credible and held that these funds could not offset benefits as long as Claimant did not withdraw the IRA funds while receiving benefits. The WCJ granted Claimant’s petition and ordered ongoing benefits. Employer appealed and the Board agreed that Claimant did not establish that he rolled over his pension benefits into an IRA, since the pension fund was not established within 60 days after the funds were received.

On appeal, Claimant argued that the Board erred in determining the date when he began receiving funds. Claimant stated that he was not notified until after the 60-day date that Employer was seeking to offset the benefits already received. Further, Claimant argued that he was misled by Employer’s benefits administrator. Employer countered that Claimant had waived this argument at hearing. The Court concluded that the circumstances of the case estopped Employer from disputing the pension payments Claimant received initially. Through his testimony, Claimant clearly showed that one of the chief concerns he had regarding applying for the disability pension was the effect the pension would have on his workers’ compensation benefits. Reasonably relying on the assertions of Employer’s administrator, Claimant took no steps to shelter the benefits until he was advised that Employer was seeking offset. Once he learned of the offset attempt, Claimant acted immediately. The credibility determination of the WCJ in this matter was binding on both the Board and the Court. Accordingly, the WCJ’s order was reinstated.

Vaneman v. WCAB
(Apollo Moving and Vanliner Insurance Company),
1711 C.D. 2006 (Pa. Cmwlth. 2007)

Employer had authority to compel vocational interview of Claimant, even though Claimant had returned to work at a reduced wage and concurrently received partial benefits.

Commonwealth Court affirmed the decisions of the Board and WCJ, which granted Employer’s petition for an expert interview of Claimant. Claimant had begun to receive benefits in March 2003. One year later, Employer filed this petition. The WCJ ordered Claimant to attend the interview. Five days after the order, Claimant returned to work with Employer at a reduced wage and concurrently received partial benefits. Claimant then filed to dismiss the petition. The WCJ denied Claimant’s petition, reasoning that section 314(a) allowed an employer to request an expert interview at any time after an injury, regardless of whether a claimant had returned to work. The Board agreed with this decision.

On appeal, Claimant argued that section 314(a) should have been read in conjunction with code sections 123.301 and 123.302, which related to employer job offer obligation and evidence of Claimant’s earning power. In reading all three together, Claimant urged that it was not reasonable to use a vocational interview as a means to determine earning power where a claimant had returned to work at a reduced rate while receiving partial benefits.

The Court disagreed with this rationale and noted that section 314(a) allowed an employer to request an expert interview “at any time after injury.” Beyond requiring that the request be reasonable, there was no modifying language in the section that limited when the request could be made. Particularly when reading section 314(a) with section 306(b)(2) of the Act, it was clear that a vocational interview could be used to assess a claimant’s earning power on a periodic basis. Such an interview was an assessment tool, and Employer need not file a petition first in order to access it. In fact, the interview could be used by Employer in order to determine whether filing a petition to modify was a reasonable step. The WCJ properly concluded that Employer had the authority to have Claimant submit to the interview, and the decision was affirmed.

Dollar Tree Stores, Inc. v. WCAB
(Reichert),
797 C.D. 2007 (Pa. Cmwlth. 2007)

Employer was unable to recoup overpayment resulting from error in calculation of Claimant’s average weekly wage.

Commonwealth Court affirmed the decision of the Board, which reversed the WCJ’s decision finding that employer was entitled to recoup an overpayment of benefits to Claimant. Claimant was injured in 2001 and began receiving benefits. Employer filed a review petition in 2005, alleging that it was paying benefits on an incorrect average weekly wage. Prior to hearing, the parties executed a stipulation of facts that included the fact that the AWW had been improperly calculated and that Claimant had been overpaid $27,000.00 through no fault of his own. The WCJ accept the stipulation as her findings of fact and granted Employer’s petition allowing Employer a $112.00 per week credit against future benefits until the overpayment was paid off. Claimant appealed, noting that recoupment for overpayment was allowed by only one provision of the Act, to correct an agreement filed with the Board. Claimant contended that repayment should not have been ordered, since there was no agreement to modify as Employer failed to issue an NCP, a supplemental agreement or an agreement for compensation regarding his injury. The Board agreed with this argument and reversed the WCJ’s decision.

Employer appealed, arguing that recoupment was allowed under the doctrine of unjust enrichment. The Court discounted this argument and pointed to case law that held that the Board did not have roots in equity and its powers must be restricted in light of its statutory constraints. The Board could only act to correct the errors in an agreement. The Court disagreed that the stipulation the parties entered into prior to the WCJ hearing was an agreement that allowed for an order of recoupment because it was not entered into for the purpose of paying compensation, only to expedite litigaion. Accordingly, the Board’s order was affirmed.

Maxim Crane Works v. WCAB
(Solano),
2224 C.D. 2006 (Pa. Cmwlth. 2007)

Failure to send Claimant benefit offset reporting in a timely manner precluded Employer from two years’ worth of offset for Claimant’s Social Security benefits.

Commonwealth Court affirmed the decision of the Board, which modified and affirmed the WCJ’s decision granting Claimant’s petition to review benefit offset. Claimant suffered a work-related injury in 2000, but continued to work until his termination two months later. In 2003, Claimant applied for his Social Security retirement benefits. A few months thereafter, Claimant and Employer entered into an agreement for compensation benefits, an agreement that was later modified. In 2005, Claimant received a request from Employer to report benefits for offset; Claimant confirmed his receipt of Social Security and Employer responded with an offset notice that would set Claimant’s benefits at zero for a six-month period. Claimant filed this petition, alleging that the offset was calculated in error.

At hearing, Claimant testified that he had not received any request regarding his Social Security until 2005. The WCJ ruled that Employer was only entitled to offset from the period of time that the first request to report other benefits was made in 2005, not back to the date that Claimant actually began receiving Social Security. The WCJ recalculated the offset amount and modified Claimant’s benefits. The Board affirmed, but recalculated the amount of benefits, citing clerical error. The Court reviewed the relevant portions of the Act that required the reporting of receipt of such Social Security benefits and noted that, while Claimant had an affirmative duty to report the receipt, Employer was required to notify employees of their reporting requirements. Further, the language of the Code section stated that an insurer may be able to offset benefits after receipt of the completed form reporting the benefits. The Court held that this language did not provide Employer with an entitlement to offset benefits, only the possibility. The WCJ also properly applied the doctrine of laches in the administrative proceeding, since Employer had failed to act in a timely manner, and the resulting action prejudiced Claimant. Accordingly, the decision was affirmed.

Pa. Department of Labor & Industry, Bureau of Workers’ Compensation,
2001 C.D. 2006 (Pa. Cmwlth. 2007)

Employer was not entitled to reimbursement from Supersedeas Fund where it had reached earlier C&R with Claimant that settled all claims and purported to end litigation.

Commonwealth Court reversed the decisions of the Board and WCJ, which granted Employer’s application for supersedeas reimbursement. Claimant had been injured and began receiving benefits in 2001. Employer filed a termination petition and request for supersedeas two years later, alleging that Claimant had recovered from his injuries. Employer’s request for supersedeas was denied and Claimant was allowed attorneys’ fees. While the underlying termination petition was pending, the parties entered into a C&R in which Employer paid Claimant a lump sum of $65,000.00 to fully satisfy its liability. The agreement was approved by the WCJ, who two weeks later circulated an opinion granting the petition for termination, ruling that Employer had met its burden by showing that Claimant was fully recovered from his injuries. Pursuant to the granting of the petition, Employer filed the instant application for reimbursement from the supersedeas fund from the date it had filed the termination petition until the date the petition had been granted. A second WCJ granted the application for reimbursement and ruled that Employer met the requirements of section 443(a) of the Act that governed reimbursement. The Board affirmed, and while noting the agreement’s existence, held that the fact that the termination petition remained outstanding and was ruled in favor of Employer allowed for reimbursement.

On review, the Court outlined the five requirements for the successful pursuit of a request for reimbursement. Among them was that the final outcome of the proceedings determined that the compensation was not payable. Unlike the lower bodies, the Court held that the outcome of the case was finalized when the WCJ approved the C&R entered into by the parties, not when the termination petition was granted. The agreement purported to satisfy all past, present and future liability for the injury, and provided for the termination of all litigation. There was no express language that called for leaving the pending termination petition open. Absent such specific language, the Court held that the C&R resolved all outstanding litigation, including the termination petition. The WCJ erred in ruling on the termination petition once the C&R had been approved, since the agreement was clearly the final outcome of the parties’ proceedings. Accordingly, the decisions of the Board and the WCJ were reversed and the reimbursement was denied.

Hospital of the University of Pennsylvania v. Bureau of Workers’ Compensation
(Tyson Shared Services, Inc.),
508 C.D. 2007 (Pa. Cmwlth. 2007)

Once Insurer had rejected part of medical bill due to a liability determination, Provider had 30 days to file a fee dispute application with the Bureau.

Commonwealth Court affirmed the order of the Bureau, which determined that Provider failed to timely file its fee dispute application. Provider had sought payment for a motor vehicle accident involving Claimant, who was injured during the course of his employment. Claimant was taken to Provider’s hospital for treatment and Provider submitted bills for the treatment to Insurer in an amount over $250,000.00. Provider later submitted medical records and Insurer made payments of nearly $118,000.00. Provider countered that the medical guidelines dictated that Claimant be treated at a Level I trauma center; as such Provider was entitled to receive 100% reimbursement according to the Act’s reimbursement guidelines. When Insurer still did not pay, Provider submitted a medical insurance claim appeal to Insurer. Insurer responded stating that Provider had not properly billed Insurer for Claimant’s care. Provider then included medical records, reports and a LIBC-9 form. When no payment was received after three months, Provider filed an application for fee review with the Bureau. An administrative decision denying the application was issued, ruling that the application had not been timely filed under section 306(f.1)(5) of the Act.

At a de novo hearing requested by Provider, it was argued that the statute of limitations did not run until Provider submitted the LIBC-9 form, thus the application was timely. The Bureau rejected this argument, and found that Provider’s application for fee review was filed twenty months after the original billing date for treatment. The Court distinguished the case from others where an insurer was not required to pay the bill until a provider submitted it with the appropriate documentation. However, Insurer in this case did not reject the bill based on an incomplete record, it paid the bill to the extent it determined itself liable. Once the payment was made, Provider could not sleep on its rights, but was required to file its application within 30 days after notification of a disputed treatment. The fact that Provider delayed in sending in all the proper paperwork did not extend the deadline, since nothing prevented Provider from sending the paperwork within the required period. Accordingly, the order of the Bureau was affirmed.

Boleratz v. WCAB
(Airgas, Inc.),
147 C.D. 207 (Pa. Cmwlth. 2007)

Services of a massage therapist, who is not licensed or otherwise authorized by the Commonwealth to provide health care services, are not reimbursable under the Act, even if the services are prescribed by a health care provider.

Commonwealth Court affirmed the decision of the Board, which reversed the WCJ decision that held that Employer was responsible for paying bills from Claimant’s massage therapist. Claimant sustained a low back strain on the job in 2000. Five years later, Claimant filed the instant petition alleging that Employer refused to pay for treatment ordered by his treating physician. When Claimant had not had relief from his back pain through chiropractic medicine, he asked his treating physician to prescribe massage therapy from a massage therapist Claimant was acquainted with. Claimant’s doctor wrote the prescription and Claimant testified to a reduction of pain after the massage therapy. At hearing, Claimant presented the prescription for therapy and proof that the therapy was provided on numerous dates. Employer stipulated that the treatment was causally related to the work injury, but claimed that it was not responsible for payment because the therapist was not a health care provider as defined by the Act.

The WCJ held that Employer was responsible because a doctor had prescribed the therapy and the fact that the therapist was not licensed was not the fault of the therapist, but was the fault of the Commonwealth in failing to establish a program for licensing massage therapists. On appeal, the Board reversed, ruling that reimbursable medical services must be rendered by a duly licensed medical practitioner. The Board agreed with this determination and further held that the doctor’s prescription for the therapy did not convert the services into reimbursable ones absent his supervision. Accordingly, the Board’s order was affirmed. Judge Smith-Ribner dissented, arguing instead that reimbursement of the physician-prescribed services was consistent with the humanitarian purposes of the Act.

Armstrong v. WCAB
(Haines & Kibblehouse, Inc.),
680 C.D. 2007 (Pa. Cmwlth. 2007)

Where Employer had filed a temporary NCP, then a later NCD acknowledging the injury, but denying the disability, employer had standing to seek utilization review of Claimant’s treatment.

Commonwealth Court affirmed the decisions of the Board and the WCJ, which denied Provider’s petition to review a utilization determination. Claimant began receiving benefits pursuant to a temporary notice of compensation payable in January 2005. Two months later, Employer issued a denial, stating that, while the injury took place, Claimant was not disabled as a result. Claimant then filed a claim petition. While this petition was pending, Employer sought utilization review of Claimant’s chiropractic treatment with Provider. Treatment was not approved after August 2005, because the submitted documentation did not show that Claimant had continued improvement with treatment.

Provider filed the instant petition and it was considered with Claimant’s petition, but not consolidated. The WCJ granted the claim petition, but denied Provider’s petition, finding that the opinions of the reviewing physician were more credible.

On review, Claimant argued that Employer was not legally permitted to seek utilization review at the same time it denied compensation to Claimant. The Board held that Employer acted correctly because it agreed that Claimant had been injured on the job. The Court carefully reviewed the procedures undertaken by Employer and found them to be fully consistent with the requirements of the Act. Employer was not required to issue a “medical only” NCP in this case, since it was at first uncertain whether Claimant’s injury would result in disability. Employer’s course of action ultimately served the same objective as filing a medical only NCP. Once having legally recognized the existence of an injury, Employer was entitled to seek utilization review of the treatment provided. Accordingly, the decision was affirmed.

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