Workers’ Compensation Affected by Recent Pennsylvania Supreme Court Decision

Jill RootBusiness Insurance, Insurance, Third Party Claim Administration

A recent Pennsylvania Supreme Court decision, Protz v. WCAB (Derry Area School District), stated the American Medical Association (AMA) guide for evaluating permanent impairment to an injured worker is unconstitutional.

Since 1996 Impairment Rating Evaluations (IREs) were used in the management of Workers’ Compensation claims to cap the indemnity exposure on certain claims in which an injured worker was paid Total Temporary Disability (TTD) Benefits for 104 weeks. An IRE could be performed, and if the results were below 50% whole person impairment per the most recent edition of the AMA Impairment Guidelines, then the Injured Worker’s disability status would change from total to partial and the Injured Worker, at most, would only be entitled to 500 remaining weeks of partial disability indemnity benefits.

Because workers’ compensation payments for partial disability are only required for 500 weeks but indefinitely for total disability, our claim handlers were able to use the disability status as leverage to settle claims.  It was a useful tool in controlling claim costs.  The Employers (Defendants) still have other legal vehicles to utilize and control workers’ compensation costs.

Recently, the Supreme Court ruled that the IRE provision within the Pennsylvania Workers’ Compensation Act is unconstitutional. In reaching its decision the Court ruled that this section of the law unconstitutionally delegated this rule making to the AMA absent  standards being designated by the Legislature.

At Murray, we work to resolve all workers’ compensation claims amicably so that the best outcome is reached, not only for our clients but also for their injured workers. Returning injured workers back to work as whole as they were prior to the work-related injury is always our priority.

We all know that some claims do not follow this track, and in those cases we work our hardest to resolve the claims as soon as possible.  What impact this ruling has on past IRE’s is an open question that will most likely not be resolved without case law, which should go through the courts over the upcoming years.  In light of the Court’s ruling, obviously IREs cannot now be obtained, and the Bureau of Workers’ Compensation predictably indicated that no IRE physicians will hereafter be designated by the Bureau.

We will continue to keep your team apprised of this and other case law impacting our claim management practices.

Should you have further questions, please do not hesitate to contact Jill Root, Workers’ Compensation Supervisor, Claims Solution, or your Workers’ Compensation defense counsel.


Updated July 24, 2017.

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