Workers’ Compensation Rulings Affect IREs

Legislation regarding workers’ compensation claims sometimes ends up in the courts, and the results can have a profound impact on how insurers handle claims and workers’ entitlements. The decision regarding a 2015 appeal challenging the validity of an injured worker’s Impairment Rating Evaluation is a perfect example.

In 1996, Workers’ Compensation revisions included the addition of a section to require an Impairment Rating Evaluation (IRE) with a government appointed physician after the injured worker received 104 weeks of total disability benefits.

Before the recent case Protz v. Workers’ Compensation Appeal Board (Derry Area School District), physicians followed the guidelines established by the American Medical Association (AMA) to determine an injured worker’s level of impairment as set out in the Pennsylvania Workers’ Compensation Act (PA WC Act).

Since 1996, the AMA Guides underwent two revisions, but in this particular case the physician used the Fourth Edition, not the most recent Sixth Edition, to determine impairment. The plaintiff contended some claimants could be more than fifty percent impaired under the Fourth Edition and less than fifty percent impaired under the Sixth Edition.

Under the AMA model, a worker with less than a 50 percent rating was presumed to be partially disabled. This meant that insurers could adjust the worker’s disability status from total disability to partial disability with payments lasting no more than 500 weeks.

Not only did the Protz case challenge the use of a past AMA guide in the physician’s rating, it also challenged the validity of delegating legislative authority to the AMA and claimed it violated constitutional rights. The constitution states all legislative power “be vested in a General Assembly, and shall consist of a Senate and a House of Representatives” Article II, Section 1.

The Commonwealth Court reviewed the evidence and acknowledged that the General Assembly has the right to delegate responsibilities to a third-party, with limitations. They must establish primary standards and impose duties on others to carry out the duties.

Upon review the Court concluded “the Act is wholly devoid of any articulations of public policy governing the AMA.” Consequently, they found delegating legislative authority to the AMA unconstitutional and disallowed Section 306(a.2) of the Pennsylvania Workers’ Compensation Act.

This decision impacts new Workers’ Compensation benefits claims, although the court has not ruled whether it affects existing and/or prior cases. However, claimants with reduced benefits from total to partial disability could possibly file a Petition to Reinstate, a Petition to Review, or a Petition to Modify their compensation benefits to test the ruling.

In 2017, another case went to the Supreme Court regarding an Impairment Rating Evaluation performed by a physician. The lawsuit settled in favor of the plaintiff and found the physician must consider all conditions related to the injury, including psychological injuries not specifically mentioned in the Notice of Compensation Payable when assigning a rating. In this case, the Court invalidated the Impairment Rating Evaluation and cited the possibly inappropriate reliance on AMA Guides and the precedent set in the Protz case.

Clearly, changes in legislation affect workers and insurers and set the stage for further court cases. Gilbert’s Risk Solutions stays abreast of legislative changes and offers expert advice to help you measure risk and take appropriate measures. Contact us to discuss your insurance and risk management needs.

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