delvacca presents limiting exposure in workers’ compensation june 3, 2010 delvacca thanks bwh for...

DELVACCA presentsLIMITING EXPOSURE IN WORKERS’

COMPENSATION

June 3, 2010

DELVACCA thanks BWH for their sponsorship of this event

LIMITING EXPOSURE IN WORKERS’ COMPENSATION

Introduction:

Thomas C. Kelly, Esquire

Burns White & Hickton

At Burns, White & Hickton, we are committed to representing our clients with excellence. In fact, it was the pursuit of excellence that prompted us to establish our firm in 1987, focusing on transportation, litigation, and business law. Our ideal was and still is to abolish old-school thinking and to apply creative solutions to enhance their bottom-line results.


Not WC 101

Focus on what we as lawyers can do to avoid litigation and to limit exposure once a case is in litigation.


Issuance of initial bureau documents

Notice of Temporary Compensation Payable (NTCP)

Medical Only NTCP

Notice of Compensation Payable (NCP)

Notice of Workers’ Compensation Denial

Statement of Wages


Notice of Temporary Compensation Payable (NTCP) and Medical Only NTCP (LIBC 501)

Allows employer 90 days to conduct investigation

Automatically converts after 90 days

Usually used if possible factual issue or degree of medical issue is involved

Good tool if claim is likely compensable (but be careful)

LIMITING EXPOSURE IN WORKERS’ COMPENSATION Notice of Compensation Payable (NCP)(LIBC 495)

Claim is accepted as compensable

Once this is issued the employer/carrier cannot stop payment until either an agreement of the parties or judge’s order

One exception – Notice of Suspension or Modification (LIBC 751)

Description of injury and compensation rate generally dictate overall value of claim


NCP continued

Description of injury / Medical benefits

May also invite litigation

Indemnity benefits

Calculation of average weekly wage (AWW) and corresponding compensation rate.

Concurrent employment.


Notice of Workers’ Compensation Denial (Denial) (LIBC 496)

Usually invites litigation

If there is an injury, even if not severe, it must be recognized

Penalty Petition for failing to recognize injuries (LIBC 686)

Factual contests easier to defend than medical ones

Initial investigation crucial


Claim Petition (LIBC 362)

Claim now in litigation

Claimant’s burden

Remedial Act


“Yellow Freight” (Yellow Freight Sys., Inc. v. WCAB (Madara), 423 A.2d 1125 (Pa.Comwlth. 1981))

Untimely Answer to Claim Petition (more than 20 days)

Factual allegations deemed admitted

Claimant must still prove degree of disability

LIMITING EXPOSURE IN WORKERS’ COMPENSATION Limiting exposure

Termination Petition

Suspension Petition

Modification Petition

Notification of Suspension or Modification

Supplemental Agreement

LIMITING EXPOSURE IN WORKERS’ COMPENSATION Termination Petition (LIBC 398 (Multiple Use))

Legal standard (Employer’s burden)

Must prove that disability has ceased (change in medical condition) or that any present disability is not related to work injury (Daniels v. (WCAB Tristate Transport, (753 A.2d 293 (Pa.Cmwlth. 2000))

Purely medical issue

Judges are very claimant oriented (Remedial Act)

Medical questions almost always lose

Costs involved with Termination Petition must be considered

Litigations cost awarded if Employer looses

LIMITING EXPOSURE IN WORKERS’ COMPENSATION Suspension Petition (LIBC 398 (Multiple Use)


Return to work (RTW) at wages greater than or equal to pre-injury wage (Ede v. Ruhe Motor Corp., 136 A.2d 151 (Pa.Super. 1957))

Claimant needs to be released to RTW in Some capacity

Less difficult to obtain

Judges are more open to cutting off indemnity benefits if medical can remain open

Best if used in conjunction with termination petition

Judges more prone to grant lesser relief

LIMITING EXPOSURE IN WORKERS’ COMPENSATION Modification Petition (LIBC 398 (Multiple Use)


RTW with a wage loss

Employer responsible for 2/3 of difference (medical benefits remain open)

Least difficult to obtain (again, best if used with another petition - lesser relief)

Job offer with pre-injury employer (work availability)

Problem is that claimant may just show up.

Labor Market Survey (work generally available) (“Kachinski”)

Practically difficult

LIMITING EXPOSURE IN WORKERS’ COMPENSATION Modification Petition Continued

Labor Market Survey

Kachinski v. WCAB (Vepco Const. Co., 532 A.2d 374 (Pa. 1987)

Four prongs

Employer must produce medical evidence of change in condition (ability to work)

Employer must then produce referrals to then open jobs (within geographical areas, physical and educational limits)

Employee must prove good faith effort to apply for jobs If no job results benefits continue

LIMITING EXPOSURE IN WORKERS’ COMPENSATION Notification of Suspension or Modification (LIBC 751)

Unilateral tool

Good tool if claimant back to work, is a good employee, and is expected to remain

Claim is in suspended status (Medical still open)

Burden is on Claimant to come back and show wage loss

Reinstatement Petition

Employee Challenge

Special Supersedeas hearing


Supplemental Agreement (LIBC 337)

By agreement of parties

Can be difficult to administer if repeated agreement necessary

Can be helpful in determining value of a claim for settlement

Burden on Claimant to show a recurrent loss of wage

Reinstatement Petition


Supersedeas Fund

Termination / Suspension / Modification Petitions

Always request

Application for reimbursement (LIBC 662)

LIMITING EXPOSURE IN WORKERS’ COMPENSATION Settlement (Compromise and Release) (LIBC 755)

Typically between three and four years

Comp rate of $500 per week equals $26,000 annually

$78,000.00 – $104,000.00

Max Comp rate for 2010 is $845

Three years of benefits at the max comp rate in 2010 is $131,820


Impairment Rating Evaluation (IRE) Limits exposure to 500 weeks if less than 50%

impaired. Entitled to an IRE after 104 weeks (No burden of

proof needs to be met) Small window of opportunity (? Weeks) After that the case must be tried and Claimant

is given the opportunity to rebut findings. If impairment rating is over 50% Claimant is

entitled to ongoing benefits (unless you can reduce rate by way of another petition)


Rationale: Assuming an IRE comes back with a rating of less

than 50%, the employer is still on the hook for another 9.5 years worth of benefits, settlement at even four years of indemnity benefits greatly lowers that exposure

Settlement will usually absolve the employer from future medical treatment as well.

More than one way to skin a cat It is possible to leave medical benefits open

for a period of time arrived at during settlement negotiations.


Medicare considerations

Can be cost prohibitive (but we can help)

Open Medical benefits can circumvent this


Cost of a fully litigated claim

Typically about $5,000

Cost of an open claim

Can be into the hundreds of thousands


Unreasonable contest

Claimant’s counsel can seek “reasonable attorney’s fees if Employer prosecutes petition with insufficient evidence

Penalties

Claimant can seek up to 50% of back owed benefits or medical costs if penalty assessed


Mediations

Not really good for employers

Nature of the Act is remedial

Judges are mostly claimant oriented

Basically two against one

Once a judge puts a number on a case the Claimant will never come off of it


The bottom line is that once a claim is accepted as compensable we need to make every effort to obtain an opinion that the claimant can work in some capacity and offer them a position

Employers’ best chance of truly limiting exposure is to get the indemnity portion of the claim reduced by way of a job offer and subsequent suspension or modification petition

Once a favorable determination is obtained the value of the case is greatly diminished and claimants’ counsel will usually settle the case for a fraction of what it would be worth without a reduction

delvacca presents limiting exposure in workers’ compensation june 3, 2010 delvacca thanks bwh for...

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