Saturday, December 31, 2005

Supreme Court Affirms Gardner, But Holds Employer Can File a Petition to Modify Based On Later IRE

In Gardner v. WCAB (Genesis Health Ventures) and Wal-Mart Stores, Inc. v. WCAB (Rider) the Supreme Court addressed the mandatory language of Section 306(a.2)(1) of the Act which requires that an employer have an IRE within sixty (60) days of the Claimant's receipt of 104 weeks of temporary total disability benefits.

The Court easily disposed of Rider. In that case, the 104 weeks passed while the case was still in litigation. The Commonwealth Court then allowed the employer to request the IRE within 60 days of the final order. As I recall, the Commonwealth Court opinion allowed the reader to assume supersedeas had been granted in the case, and the claimant did not receive the benefits until after the final order.

Actually, supersedeas as to indemnity benefits had not been granted. The claimant did receive the 104 weeks of benefits prior to the final order. Consistent with Gardner, the IRE request was untimely and the Supreme Court so held, reversing the Commonwealth Court.

The Supreme Court affirmed Gardner, holding the statutory language is clearly mandatory.

The Supreme Court then turned to Section 306(a.2)(6). This section provides an Employer may have only two independent medical evaluations in a twelve (12) month period, codifying the rule of thumb among WCJs for many years. However, in this section an independent medical evaluation is also referred to as an appropriate vehicle for determining the status of impairment.

A theory about the application of Section 306(a.2)(6) held that if there was no IRE within the 60 day window, there was nothing to review in a later IRE. The Supreme Court held that even if the Employer misses the sixty (60) day window in Section 306(a.2)(1), the Employer can request a later IRE. The Supreme Court did this by creating a presumption that the Claimant's impairment is greater than 50% if the Employer does not request the IRE in the first 60 days following the receipt of 104 weeks of benefits.

Furthermore, the Supreme Court held that when the employer requests the IRE after the 60 day window expires, the employer is not entitled to file a self-executing LIBC-764 Notice of Change of Workers' Compensation Disability Status. Section 306(a.2)(5) of the Act provides it must be adjudicated or agreed that the claimant's condition has improved to an impairment rating that is less than fifty per centum (50%).

Accordingly, the employer must ask the claimant to sign a supplemental agreement endorsing the IRE findings. Many will sign, since the claims representative will explain their benefits will not stop for 500 weeks.

For claimants who follow others' advice to "sign nothing", the employer will have to file a modification petition. Claimants will have no practical defense to this petition. Claimants will seek counsel, who will advise only the few whose impairment may exceed 50% should incur the cost of a claimant's IRE. The supplemental agreement will be signed. The claims representative will get claimant's counsel's phone number for the claims representative's file.

The final group of claimants will not sign and will not seek counsel, but will verify that the relief the employer is seeking will not stop their benefits, at least for 500 weeks. They will then be no-shows at the hearing like claimants who return to work and do not sign supplemental agreements. The WCJ will accept the IRE in evidence and issue a decision endorsing its findings.