Thursday, May 28, 2009

Supreme Court Grants Petition for Allowance of Appeal on "Footprint" Argument in Pension Benefit Offset

In Commonwealth of Pennsylvania DPW v. WCAB (Harvey) the Supreme Court granted allocatur to review the holding of the Commonwealth Court in Pennsylvania State University/PMA Insurance Group v. WCAB (Hensal), 911 A.2d 225 (Pa. Cmwlth. 2006) and Department of Public Welfare/Western Center v. WCAB (Cato), 911 A.2d 241 (Pa. Cmwlth. 2006) that an employer meets its burden of proof by only presenting evidence of an actuarially assumed rate of annual return on an employer’s contribution rather than evidence confirming the actual rate of return on the pension.

The second issue on which allocatur was granted is whether the Commonwealth Court's holdings disregard the plain language of Section 204(a) of the Workers’ Compensation Act, 77 P.S. § 71(a), which grants an employer a credit against an employee’s pension only“to the extent [the pension is] funded by the employer directly liable for the payment of workers’ compensation.

These issues arise in the "footprint" argument that posits a pension offset should be based on the actual contributions of the Employer while the Claimant worked there. This argument does not account for the contributions the Employer will make to keep the defined benefit plan solvent during the rest of the Claimant's "footprint" e.g. while the Claimant collects pension benefits.

Disposition of this appeal will be another interesting exercise in the sisyphean task of interpreting a statute that does not articulate a method for calculating defined benefit plan pension offsets.

Tuesday, May 26, 2009

Commonwealth Court Rules Claimant May Not Seek Review of the Determination of a URO That the Provider Did Not Properly Submit Records

In L. Sexton v. WCAB (Forest Park Health Center) the Employer filed a request for utilization review. The Provider forwarded treatment records in a timely manner, but did not complete a verification. The URO sent the records back to the Provider. They were not returned. The URO found the treatment unreasonable and unnecessary under 34 Pa. Code Section 127.464(a).

The Claimant was entitled to file a Petition to Review Utilization Review Determination to seek review of the URO's determination. Under HCR Manorcare v. Workers’ Comp. Appeal Bd. (Bollman), 951 A.2d 1242 (Pa. Cmwlth. 2008) and Gazzola v. Workers’ Comp. Appeal Bd. (Ikon Office Solutions), 911 A.2d 662 (Pa. Cmwlth. 2006) the WCJ can vacate the determination and order that the records be sent to a reviewer for a URO determination on the merits.

Although the WCJ did this after hearing evidence the provider did execute the authorization, the Board reversed the WCJ's determination and the Court affirmed. The Court held the URO complied with 34 Pa. Code section 127.464(b) which provides: Before rendering the determination against the provider, a URO shall do the following: (1) Determine whether the records were mailed in a timely manner. (2) Indicate on the determination that the records were requested but not provided. (3) Adequately document the attempt to obtain records from the provider under review, including a copy of the certified mail return receipt from the request for records.

The Court stated the URO had no choice but to deem the treatments unreasonable and unnecessary because the records were not properly submitted due to the lack of the required verification form. The Court also stated where no utilization report is issued, the reasonableness of the bills submitted are final and cannot be appealed to the WCJ, citing County of Allegheny v. Workers’ Compensation Appeal Board (Geisler), 875 A.2d 1222 (Pa. Cmwlth. 2005).

The majority's decision therefore extinguishes the right of the Claimant to seek review of a URO's
34 Pa. Code section 127.464(b) detemination by filing a Petition to Review Utilization Review Determination.

The majority did not discuss the more recent precedents of HCR Manorcare and Gazzola. Judge Butler authored a dissent stating these precedents were properly applied by the WCJ.

Sunday, May 24, 2009

City Can Subrogate Heart & Lung Act Claim Against Third Party Recovery

In City of Wilkes-Barre vs. Robert P. Sheils, Jr., Trustee in Bankrupcy, George W. Cole, Debtor the Third Circuit Court of Appeals held a municipality that pays Heart and Lung Act benefits has a subrogation interest against a third party recovery. The District Court held the subrogation claim was barred by Section 1720 of the Motor Vehicle Financial Responsibility Law.

The Third Circuit identified Brown v. Rosenberger and Coca-Cola Bottling Company as the controlling precedent of the Commonwealth Court and held the 1993 repeal of Section 1720 and 1722 as they relate to workers' compensation benefits also was a repeal as to Heart & Lung Act benefits. The Court looked at the identity of these payments and the inequity of not allowing recovery against a third-party tort-feasor for all losses sustained.