Caroselli, Beachler & Coleman, L.L.C.

Pennsylvania Supreme Court rejects parts of workers’ comp laws

In a recent ruling this June by the Pennsylvania Supreme Court has ruled unconstitutional a section of the Worker's Compensation Act regarding how the impairment percentage is established to determine the workers' compensation and disability benefits a claimant can receive.

Pennsylvania Worker's Compensation Act Section 306(a.2)

Section 306(a.2) allowed employers of workers claiming disability to require claimants submit to an impairment-rating evaluation or IRE. During the assessment, a physician will examine the patient and give a determination of the claimant's degree of impairment. When making this decision, the doctor needs to follow the guidelines outlined in the most recent American Medical Associations (AMA) Guide to the Evaluation of Permanent Impairment.  

Protz vs. Derry Area School District

This section of the Pennsylvania Workers Compensation Act was challenged by an employee of the Derry Area School District who suffered a knee injury. After her 2007 injury, she began receiving temporary total disability payments. The Derry School District requested her to undergo an IRE to determine the level of her disability. Basing the diagnosis on the most recent AMA Guide for Evaluation of Permanent Impairment, the physician diagnosed her with 10% overall body disability which put her below the 50% requirement to collect total disability. This changed her to partial disability limiting her worker's compensation benefits.

Successful Appeal to the Pennsylvania Supreme Court

Protz appealed the decision claiming that Section 306(a.2) violates the Pennsylvania State Constitution which states that only the General Assembly can make laws and that they unconstitutionally delegated authority to the AMA to determine what constitutes impairment in regards to workers compensation claims.

The problem with impairment-rating evaluations

Among other considerations, two important legal points were brought up that the court was asked to consider:

  • The AMA, could poise itself to control workers compensation claims: With the American Medical Association setting the standards and criteria for these evaluations, they would essentially have control to push in the favor of claimants or businesses. The criteria could create a formula that would cause all claimants to fall in the range of 50% or above or they may even draft specific guidelines that make it so no claimant can ever achieve this 50% threshold. Therefore they could essentially control whether or not claims will be rejected or accepted just in the guidelines they set.
  • There is no set timeframe for the AMA to review their guidelines - The AMA makes the decision when to review and rewrite these guidelines and there is no set standard as to when this needs to occur.  These guidelines could be updated every year or could have as long as ten years between each update.  Each of these extremes can pose a problem for claimants or administrators dealing with worker's compensation claims.  If the guidelines are not updated for many years, advances in medical technology and other medical advances would not be accounted for in the guidelines.  

Pennsylvainia Supreme Court outcome

After a series of court cases, the Commonwealth Court sided with Protz declaring that the General Assembly alone can determine and set laws and that it is unconstitutional for them to delegate any of their power to any other body or branch of the government.  In effect they ruled that Section 306(a.2) of the Pennsylvania Worker's Compensation Law is unconstitutional.  Pennsylvania Supreme Court Justice David Wecht expressed the assenting opinion by stating, “As John Locke put it, legislative power consists of the power ‘to make laws, and not to make legislators."

So what does this mean for worker's compensation claims in the future?

With the Pennsylvania Supreme Court effectively removing the section of the Worker's Compensation Act that allows the AMA to set guidelines for impairment-ratings evaluation, a new set of guidelines or process to determine the percentage of disability caused by work-related injuries will need to be resolved.  

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