Pa. Supreme Court Rules on Workers’ Compensation Case Involving Impairment Rating Evaluations

Last Updated: Jul 13, 2017

A Pennsylvania Supreme Court decision issued on June 20, 2017, drastically changes how workers' compensation is handled in Pennsylvania. Physicians will no longer be able to use the American Medical Association Guides to the Evaluation of Recent Impairment (AMA Guides) as the standard for determining the claimant's degree of impairment.

In a 6-1 decision, the Pennsylvania Supreme Court ruled that Section 306(a.2) of the Pennsylvania Workers' Compensation Act (PWCA) unconstitutionally delegated to the American Medical Association the power to determine the criteria for evaluating permanent impairment. The Supreme Court has struck the entirety of Section 306(a.2) from the PWCA. Justice David Wecht authored the majority opinion, while Justice Max Baer dissented.

Under Section 306(a.2), an employer could demand that a claimant undergo an impairment rating evaluation (IRE) after 104 weeks of temporary total disability benefits. During the IRE, a qualified physician would determine the claimant's degree of impairment by applying the methodology set forth in the "most recent edition" of the AMA Guides. Using the AMA Guides, if a claimant's impairment rating was below 50 percent, the claimant's disability status could be modified from temporary total to permanent partial. This modification would limit the length of time that the claimant could receive workers' compensation benefits.

In Protz v. Workers' Compensation Appeals Boards, an injured worker, Protz, underwent an IRE at her employer's, Derry Area School District, request. The IRE physician evaluated Protz and assigned her to an impairment rating less than 50 percent based upon the Sixth Edition of the AMA Guides. Derry Area filed a modification petition seeking to convert Protz's disability status from total to partial. A Workers' Compensation Judge (WCJ) granted Derry Area's petition.

Protz subsequently appealed to the Workers' Compensation Appeal Board arguing the Pennsylvania General Assembly unconstitutionally delegated to the AMA the authority to establish criteria for modifying a claimant's disability from total temporary to permanent partial. The Appeal Board rejected Protz's constitutional argument and affirmed the WCJ's decision.

Protz then appealed to the Commonwealth Court. The Commonwealth Court reversed the Appeal Board's decision. The Commonwealth Court held that Section 306(a.2) was unconstitutional only insofar that it proactively approved versions of the AMA Guides beyond the Fourth Edition, which was the most recent AMA Guides when the legislation was enacted.

Both Protz and Derry Area appealed to the Pennsylvania Supreme Court. The Supreme Court held that Section 306(a.2) unconstitutionally delegated legislative power to the AMA. Additionally, the Court also held that the Commonwealth Court erred by remanding the case to the WCJ with instructions to apply the Fourth Edition AMA Guides. The entirety of Section 306(a.2) is unconstitutional, the Court ruled, and the section has been struck from the PWCA.

The General Assembly cannot delegate de facto control over policy, the Court held. Section 306(a.2) provided the AMA with an unrestrained authority to implement its own policies and standards as law without any legislative oversight.

Furthermore, although the General Assembly may delegate certain powers, the General Assembly must provide adequate standards to guide and restrain delegated administrative functions when doing so. The Court opined that Section 306(a.2) failed to provide any such guides or restraints. There were no procedural mechanisms such as the holding of hearings or acceptance of comments to protect against administrative arbitrariness and caprice. Not only did Section 306(a.2) give the AMA unfettered control over policy, the Court found nothing in Section 306(a.2) to prevent the AMA from acting arbitrarily.

The Protz decision effectually ended the use of IREs in Pennsylvania since there was no standard, without an edition of the AMA Guides to use, to measure an impairment rating.

However, on Oct. 17, 2018, the Pennsylvania legislature passed HB 1840. HB 1840 reinstates impairment ratings for injured workers in Pennsylvania by mandating that the AMA’s 6th edition guidelines are to be used for IREs. HB 1840 now awaits the governor’s signature to be signed into law.

The Pennsylvania Medical Society (PAMED) will continue to monitor developments and share any updates with members.

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