July 8, 2008

The
IRE
Matrix

Whether intended as an impolite upright extension of the Commonwealth Court’s collective middle finger at the Gardner Supreme Court decision in 2005, or simply a complete deconstruct of statutory interpretation, it is nevertheless a ruling that most practitioners, on whatever level, be it claims handlers, counsel, or thoughtful compensation judges, consider to have eroded confidence in the efficacy of the system, and to undercut the public policy that originally permitted a pure anomaly, in the context of a disability-based statute, to have been inbred into the statute, in the form of never-fully-understood Impairment Rating Examination.

No one actively engaged in PA Workers’ Compensation law has ever possessed a really firm grasp of what impairment ratings were intended to stand for.

To be fair to all parties involved in the underlying judge’s decision, to include counsel, the parties, and the deciding workers’ compensation judge, no one actively engaged in the practice and procedure of Pennsylvania Workers’ Compensation claims and law has ever possessed a really firm grasp of what impairment ratings were intended to stand for in the procedural minefield of compensation claims.

This broadbrush stroke referenced above applies across the board to the Bureau, and the claims, legal, and medical communities that continue to face the intellectual challenge of understanding the legislative and statutory rationale behind the patchwork legislation that the IRE quilt covers.

Entering our compensation time machine, we are flashing back to the legal and claims chaos of the early 1990s when the exorbitant costs that employers and insurers faced for workers’ compensation claims and premiums routinely was headline news. Empowered by the necessity of reforming a then dysfunctional law, the Pennsylvania legislature set out with a single-minded purpose to reduce all costs associated with workers’ compensation, to include costs associated with indemnity and medical compensation benefits, as well as the costs associated with premiums for purchasing workers’ compensation insurance.

From the safety of our claim-encased compensation time machine, we can easily look back with awe and wonderment at the 1993 (Act 44) and 1996 (Act 57) reforms, that germinated from the necessity of implementing financial control and balance over a compensation scheme that was inflexible, outdated, and under attack from all stakeholders.

Two key paradigms went online.  One was “earning power,” a compensation mutation of social security disability law.  The other paradigm was the impairment rating♦.

In the legislative rush for reform, two key paradigms never before used in Pennsylvania Workers’ Compensation practice went online. One, not the subject of this epistle, was “earning power,” a compensation mutation of social security disability law. The other paradigm, to this day not clearly understood by anyone, was the concept of an impairment rating, and how that rating would impact on an injured worker’s entitlement to temporary total disability benefits.

Those two paradigms continue to frustrate practitioners, no less so than Pennsylvania’s 1972 adoption of the “injury” paradigm, for proving a work-related injury, with the consequent explosion of compensation litigation, as the burden of proof related to the inception of wage-loss producing disability converted from having to prove a work-related accident, to merely needing to prove a work-related injury resulting in the incapacity to earn pre-injury wages.

So what, if anything, does the Diehl ruling teach us? As practitioners of the compensation arts, one all too easily arrives at the simplistic conclusion that English remains a second language to more advocates than we would dare admit, although, in their defense, we again must be reminded that the number of people in Pennsylvania who actually understand the paradigm of impairment can probably be counted on one hand. We have, and likely always will, a compensation community that has a limited intellectual comfort level beyond the blinders focusing our finishing line on disability issues, with the consequent inability to understand the paradigm of impairment, beyond that it has some administrative play in the reduction of potential exposure for lifetime disability compensation claims.

This decision makes all too evident that there exists an almost universal and pandemic sense of confusion about impairment law

In defense of the workers’ compensation judge initially deciding Diehl, this decision makes all too evident that there exists an almost universal and pandemic sense of confusion, and ubiquitous misunderstanding, associated with impairment law, as the principles attendant with impairment are contrasted against principles attendant with disability law.

With the Diehl judge ruling that the employer had failed to present “earning power” evidence in support of the employer’s Petition for Modification, under which the employer merely sought to seek a “conversion” of the Claimant’s temporary total disability benefits to temporary partial disability benefits, as clearly permitted by operation of Section 306(a.2)(1) and (2), in reliance upon an impairment rating that had evidenced an impairment rating of less than 50% of a whole person impairment, the statutory threshold for the employer-sought “conversion,” the judge found, as well as the Commonwealth Court, “earning power” evidence, implicating a different section of the Act, and having no prior integration under either the Act, or any compensation decisional authorities, had to, by necessity, be married with the impairment rating, thereby thoroughly confusing “impairment” with “disability” in order to convert the Claimant’s compensation from total to partial disabiilty.

It is now absolutely evident that there is a generic and almost communal statutory disconnect, evidencing an almost generic sense of confusion and misunderstanding associated with impairment law, as contrasted against disability law.

Clearly, the Diehl workers’ compensation judge, and the Commonwealth Court, have confused the lines of demarcation between the two paradigms, impairment and disability, with the Commonwealth Court further expressing some procedural confusion in terms of the meaning of a “traditional administrative process,” being a petition with evidence in support and opposition thereto, resulting in an adjudication, we hope “well-reasoned,” by a workers’ compensation judge, with the end result being, at this moment in compensation time, that no one associated with the practice has any confidence in either impairment ratings, or in the ability of compensation judges or courts to apply the law in a reasoned decision, free from intellectual confusion over issues, in defense of both judges and courts, that the legislature has never been pressed to clearly define.

The Diehl ruling leads to some measure of administrative and legal chaos, until such time as it is stricken or overturned.

 If asked pointedly what does the Diehl ruling mean, either literally, or in terms of its scud-like impact on our compensation practices, the most immediate visceral response is, and would be that it means some measure of administrative and legal chaos, until such time as it is stricken or overturned, an eventuality that is as foreseeable as the next sunrise; thankfully, Judge Leadbetter’s June 24, 2008 gives us a temporary reprise from the Diehl rulings abyss. 

Beyond the current chaos associated with Diehl’s deconstruction of the validity of impairment ratings, whether timely-requested or not, however marginal their value is in our compensation practice, Diehl is more illustrative of how little we, meaning everyone of us, know about a statute that consumes our every waking thought.

A few closing thoughts:

• Untimely IRE requests, outside the 104 weeks, plus 60 days, before or after the expiration of 104 weeks of TTD, will remain problematic, until Diehl is finally and forever overturned and reversed.

• The Diehl appeal should be carefully tracked before the Commonwealth and Supreme Courts.

• Anticipate routine counsel objections to untimely IRE requests.

• Anticipate routine counsel objections and Dismissal Motions to Modification Petitions based on untimely IRE requests.

• Recommend careful consideration as to the risk/reward, associated with pursuing an untimely IRE request.

• Recommend deferment or suspending litigation involving untimely IRE requests, where the litigation seeks to enforce a non-automatic “conversion” of disability from total to partial, in reliance upon Gardner and the Act, neither of which seem to have concerned the Commonwealth Court in Diehl.

• Recommend firm stand that timely IRE’s are not affected or controlled by Diehl’s bizarre holding.

• Recommend keeping a close watch on the Commonwealth Court’s website for further developments regarding its final resolution of the issues raised in Diehl.

Dedicated to defending parties and insurers subjected to personal injury litigation, we encourage you to contact us with questions regarding casualty claims, and casualty litigation.

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