PROPOSED RULEMAKING
DEPARTMENT OF
LABOR AND INDUSTRY
[34 PA. CODE CH. 123]
Impairment Ratings
[53 Pa.B. 2165]
[Saturday, April 22, 2023]The Department of Labor and Industry (Department), Bureau of Workers' Compensation (BWC) proposes to amend Subchapter B (relating to Impairment Ratings) of Chapter 123 (relating to General Provisions—Part II) in conformance with the act of October 24, 2018 (P.L. 714, No. 111) (Act 111 of 2018) and recent case law.
Statutory Authority
The Department proposes these amendments under the authority contained in sections 401.l and 435(a) of the Workers' Compensation Act (act) (77 P.S. §§ 710 and 99l(a)) and section 2205 of The Administrative Code of 1929 (71 P.S. § 565).
Background
In 2016, the Pennsylvania Supreme Court determined that the then-existing provisions of the act governing Impairment Rating Evaluations (IREs) was an unconstitutional delegation of legislative authority. Protz v. Workers' Compensation Appeal Bd. (Derry Area School District), 161 A.3d 827 (Pa. 2016). In response, the General Assembly enacted Act 111 of 2018, which repealed section 306(a.2) of the act (77 P.S. § 511.2) and replaced it with section 306(a.3) (77 P.S. § 511.3), altering the statutory scheme governing the IRE process. Section 306(a.3) has been found constitutional. Pennsylvania AFL-CIO v. Commonwealth of Pennsylvania et al., 219 A.3d 306 (Pa. Cmwlth. 2019) aff'd per curiam (Aug. 18, 2020).
Act 111 of 2018 changed the IRE process in two ways; it required IRE determinations to be made under the American Medical Association (AMA) ''Guides to the Evaluation of Permanent Impairment,'' 6th edition (second printing April 2009) and it reduced the threshold impairment rating from 50% to 35%. See 77 P.S. § 511.3(1) and (2). The Department's existing regulations concerning impairment ratings are based on the now-repealed section 306(a.2) and are therefore inconsistent with the act.
The existing regulations do not specify the edition of the AMA Guides to the Evaluation of Permanent Impairment that must be used to conduct IREs. Additionally, the existing regulations provide that impairment rating of less than 50% is required to adjust the employee's benefit status from total to partial. See 34 Pa. Code § 123.105(d), (e) (relating to impairment rating determination). This is inconsistent with Act 111 of 2018, which provides that an employee is totally disabled if the impairment rating is equal to or greater than 35%.
In addition to the changes made in Act 111 of 2018, the IRE process has been the subject of a number of appellate court holdings. Cases decided since the regulations were enacted have addressed the timing of IREs and whether the relief, if appropriate, is automatic; whether an employer may designate the IRE physician for the second IRE; and the employee's basis for appeal of the adjustment of benefit status during employee's receipt of 500 weeks of partial disability benefits. Specifically, in Gardner v. WCAB (Genesis Health Ventures), 888 A.2d 758, 759 (Pa. 2005), the Pennsylvania Supreme Court clarified issues concerning the timing of IREs to obtain an automatic reduction in benefits. The Court held that ''once a claimant receives, that is, comes into possession, of 104 weeks of total disability benefits, the insurer has sixty days from that date during which it must request that the claimant submit to an IRE for the purposes of obtaining the automatic relief set forth in 77 P.S. § 511.2(2).'' Id. at 767-68. However, the failure to request submission to an IRE during this 60-day time limit does not preclude an insurer from requesting claimant submit to a later IRE, the results of which would not be self-executing, but rather subject to the ''traditional administrative process.'' Id. at 768. The Court refers to the traditional administrative process in reference to the former subsection 306(a.2)(5) which, per the Court, ''requires an adjudication or agreement under 77 P.S. § 512 before benefits may be modified. . .'' Id. at 766; see also Womack v. WCAB (School Dist. of Philadelphia), 83 A.3d 1139, 1146 (Pa. Cmwlth. 2014) (citing Id. at 768 (a utilization review matter which referenced the traditional administrative process as stated by Gardner as ''an adjudication or agreement between the parties.'')). In Lewis v. WCAB (Wal-Mart Stores, Inc.), 856 A.2d 313, 317-18 (Pa. Cmwlth. 2004), Commonwealth Court held that the insurer has ''the right to two IREs within a twelve-month period.'' Furthermore, the employer is not authorized to unilaterally designate an IRE physician; rather, ''agreement of the parties or Bureau designation are the sole and exclusive avenues for physician selection.'' Id. at 319. Finally, in Johnson v. WCAB (Sealy Components Group), 982 A.2d 1253, 1257, 1260 (Pa. Cmwlth. 2009), Commonwealth Court determined Claimant's appeal of the IRE determination (based on the lack of the doctor's qualifications) almost a year after she received a Notice of Change of Workers' Compensation Disability Status was prohibited because she ''did not produce the determination mandated by Section 306(a.2)(4) of the Act showing that she met the threshold impairment rating. . .''
The proposed amendments adjust remaining regulatory sections to conform with Act 111 of 2018. They also address the appellate court holdings outlined previously and create a regulatory scheme consistent with the direction of the courts.
Compliance with Executive Order 1996-1
The Department engaged in public and stakeholder outreach during the drafting process. The Department sought comment from all participants in the workers' compensation system through its Workers' Compensation Automation and Integration System (WCAIS). WCAIS is the enterprise tool used regularly by every workers' compensation employer, insurer (or self-insurer) and legal practitioner to file and manage workers' compensation claims.
Four comments were received, which the Department has carefully reviewed. At least one comment dealt with a statutory provision that the Department does not have authority to alter. There was also a request to extend the comment period and a request for a copy of the regulation. An additional public comment period will follow publication of this proposed rulemaking. The Department will review all comments submitted in response to this proposed rulemaking.
Purpose
These proposed amendments seek consistency with Act 111 of 2018 and recent case law, thereby preventing confusion between the regulations and corresponding statute or case law. These changes will avoid unnecessary litigation resulting from outdated regulations which will prevent clogging of the dockets and result in cost savings to the courts and parties.
Affected Persons
The persons affected by the proposed amendments include the physicians performing IREs, workers' compensation judges and staff, Workers' Compensation Appeal Board and staff, appellate courts and administrators, attorneys practicing workers' compensation, the Department's BWC Health Care Services division, and parties seeking and defending against IREs. The parties in workers' compensation cases include injured employees, self-insured employers, employers, insurance companies issuing workers' compensation policies, and the Department's BWC representing special funds created under the act.
Fiscal Impact
The amendments will not result in increased costs to the public or private sectors. The proposed amendments are designed to conform the regulations to the act, as amended, which would reduce confusion and unnecessary litigation caused by outdated regulations. Because the workers' compensation system is funded through assessments on workers' compensation insurance carriers and self-insured employers, any savings realized in the administration of the system may result in savings to the regulated community through lowered assessments. See section 446 of the act (77 P.S. § 1000.2), creating the Workers' Compensation Administration Fund and providing for maintenance of the fund through an annual assessment.
Summary of Proposed Rulemaking
§ 123.101. Purpose
This section is proposed to be amended to delete an obsolete reference to section 306(a.2) of the act. Section 306(a.2), regarding IREs, was repealed by Act 111 of 2018 and replaced by section 306(a.3), regarding IREs.
§ 123.102. IRE requests
Subsection (a) is proposed to be amended to require the adjustment of an employee's benefits status be automatic and relate back to the expiration of the employee's receipt of 104 weeks of total disability benefits, if the evaluation is scheduled to occur during the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits. This subsection is further amended to indicate that if the evaluation is requested and occurs beyond the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits, then the adjustment of disability status must be achieved through litigation and, if successful, shall be effective as of the date of the evaluation or as determined by the evaluating physician.
The proposed amendments to subsection (c) confirm the adjustment of disability status shall be automatic and relate back to the expiration of the employee's receipt of 104 weeks of total disability benefits if the insurer requests the IRE during the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits and the employee fails, for any reason, to attend the IRE, resulting in the performance of the IRE more than 60 days beyond the expiration of the 104 week period.
Lastly, subsection (f) is proposed to be amended to refer to the correct section of the act based on Act 111 of 2018 and to again clarify that where an IRE is performed outside the 60-day window after the receipt of 104 weeks of total disability benefits because of the insurer's failure to timely request it must be subject to a modification or other appropriate petition before benefits can be reduced.
§ 123.103. Physicians
The proposed amendments to subsection (d), paragraphs (1) and (2), require physicians designated by the Department to perform IREs to attend a Departmentally approved training course on the performance of evaluations under the AMA ''Guides to the Evaluation of Permanent Impairment,'' 6th edition (second printing April 2009) and provide certification upon passage of a Departmentally approved examination on the performance of evaluations under the AMA ''Guides to the Evaluation of Permanent Impairment,'' 6th edition (second printing April 2009), to be consistent with the requirements of Act 111 of 2018 that impairment rating be determined under the AMA Guides 6th edition (second printing, April 2009).
§ 123.104. Initial IRE; designation of physician by Department
The title of this section is proposed to be amended to correctly identify that it deals with the designation of physicians by the Department, not limited to the initial IRE.
This section is proposed to be amended to delete the first sentence of subsection (b), which incorrectly indicates the Department's duty to designate an IRE physician pertains only to the initial IRE request.
§ 123.105. Impairment rating determination
Subsection (a) is proposed to be amended to conform with Act 111 of 2018 and require that IREs be performed using the 6th edition (second printing April 2009) of the AMA ''Guides to the Evaluation of Permanent Impairment.''
Proposed subsection (c) requires that the Face Sheet be attached to a Report of Medical Evaluation as specified in the AMA ''Guides to the Evaluation of Permanent Impairment,'' 6th edition (second printing April 2009).
Subsection (d), including paragraph (1), is proposed to be amended to reflect the change in the threshold impairment rating required to adjust the employee's benefits status from total to partial from less than 50% to less than 35%. It also reflects the applicability of this section to those evaluations conducted during the 60-day period subsequent to the expiration of the 104-week period, to reflect the changes in case law described previously in the Background section. See also subsection (e) as follows.
Subsection (d.1) is proposed to be added to address the timing of IREs and, if appropriate, whether the results of the IRE are automatic thereby requiring use of Form LIBC-764, ''Notice of Change in Workers' Compensation Disability Status'' (Form LIBC-764) or can only be achieved through litigation. Specifically, this subsection is proposed to be amended to clarify that Form LIBC-764 shall be used when the IRE is requested and performed during the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits and results in an impairment rating of less than 35%. This subsection is also proposed to be amended to require the adjustment of the disability status be achieved through the traditional administrative process, not by completing Form LIBC-764, if the evaluation is requested and occurs beyond the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits and results in an impairment rating of less than 35%.
Subsection (e) is proposed to be amended to reflect the change the threshold impairment rating required to adjust the employee's benefits status from total to partial from less than 50% to less than 35%.
Lastly, subsection (f) is proposed to be amended to provide that the employee may appeal the adjustment of benefit status to a workers' compensation judge at any time during the employee's receipt of 500 weeks of partial benefits provided there is a determination that the employee meets the threshold rating that is equal to or greater than 35% impairment under the 6th edition (second printing April 2009) of the AMA ''Guides to the Evaluation of Permanent Impairment.''
Reporting, Record-Keeping and Paperwork Requirements
The existing forms used by the parties and the BWC have already been modified to be consistent with Act 111 of 2018. The proposed amendments do not require further modification to the existing forms, and thus do not impose any additional reporting, recording or paperwork requirements on either the Commonwealth or the regulated community.
Sunset Date
A sunset date is not appropriate for this proposed rulemaking. The BWC will periodically monitor this proposed rulemaking and submit amendments as needed.
Effective Date
This proposed rulemaking will be effective upon publication of the final-form rulemaking in the Pennsylvania Bulletin.
Contact Person
Interested persons are invited to submit written comments, suggestions or objections regarding this proposed rulemaking to Marianne H. Saylor, Esquire, Director, Bureau of Workers' Compensation, 651 Boas Street, 8th Floor, Harrisburg, PA 17121, masaylor@pa.gov within 30 days after publication in the Pennsylvania Bulletin.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P.S. § 745.5(a)), on April 12, 2023, the Department submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House and Senate Labor and Industry Committees. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria in section 5.2 of the Regulatory Review Act (71 P.S. § 745.5b) which have not been met. The Regulatory Review Act specifies detailed procedures for review prior to final publication of the rulemaking by the Department, the General Assembly and the Governor.
NANCY WALKER,
Acting SecretaryFiscal Note: 12-117. No fiscal impact; recommends adoption.
Annex A
TITLE 34. LABOR AND INDUSTRY
PART VIII. BUREAU OF WORKERS' COMPENSATION
CHAPTER 123. GENERAL PROVISIONS—PART II
Subchapter B. IMPAIRMENT RATINGS § 123.101. Purpose.
This subchapter interprets section [306(a.2)] 306(a.3) of the act [(77 P.S. § 511.2)] (77 P.S. § 511.3) which provides for a determination of whole body impairment due to the compensable injury after the receipt of 104 weeks of total disability compensation, unless otherwise agreed to by the parties.
§ 123.102. IRE requests.
(a) During the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits, the insurer may request the employee's attendance at an IRE. If the evaluation is scheduled to occur during this 60-day time period, the adjustment of the benefit status shall be automatic and relate back to the expiration of the employee's receipt of 104 weeks of total disability benefits. [In all other cases, the adjustment of the disability status shall be effective as of the date of the evaluation or as determined by the evaluating physician.] If the evaluation is requested and occurs beyond the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits, the adjustment of the disability status must be achieved through the traditional administrative process such as by filing a Petition for Modification and, if successful, the adjustment of the disability status shall be effective as of the date of the evaluation or as determined by the evaluating physician.
(b) Absent agreement between the insurer and the employee, an IRE may not be performed prior to the expiration of the employee's receipt of 104 weeks of total disability benefits.
(c) When an insurer requests the employee's attendance at an IRE during the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits and the employee fails, for any reason, to attend the IRE, when the failure results in the performance of the IRE more than 60 days beyond the expiration of the 104-week period, the adjustment of disability status shall be automatic and relate back to the expiration of the employee's receipt of 104 weeks of total disability benefits.
(d) The employee's receipt of 104 weeks of total disability benefits shall be calculated on a cumulative basis.
(e) The insurer shall request the employee's attendance at the IRE in writing on Form LIBC-765, ''Impairment Rating Evaluation Appointment,'' and specify therein the date, time and location of the evaluation and the name of the physician performing the evaluation, as agreed by the parties or designated by the Department. The request shall be made to the employee and employee's counsel, if known.
(f) Consistent with section [306(a.2)(6)] 306(a.3)(6) of the act [(77 P.S. § 511.2)] (77 P.S. § 511.3(6)), the insurer's failure to request the evaluation during the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits [may] does not result in a waiver of the insurer's right to compel the employee's attendance at an IRE, however the results of the evaluation may only be used to reduce benefits through the traditional administrative process such as by filing a Petition for Modification.
(g) The insurer maintains the right to request and receive an IRE twice in a 12-month period. The request and performance of IREs may not preclude the insurer from compelling the employee's attendance at independent medical examinations or other expert interviews under section 314 of the act (77 P.S. § 651).
(h) The employee's failure to attend the IRE under this section may result in a suspension of the employee's right to benefits consistent with section 314(a) of the act.
§ 123.103. Physicians.
* * * * * (d) In addition to the requirements of subsections (a) and (b), physicians designated by the Department to perform IREs shall meet training and certification requirements which may include, but are not limited to, one or more of the following:
(1) Required attendance at a Departmentally approved training course on the performance of evaluations under the American Medical Association ''Guides to the Evaluation of Permanent Impairment[.''],'' 6th edition (second printing April 2009).
(2) Certification upon passage of a Departmentally approved examination on the American Medical Association ''Guides to the Evaluation of Permanent Impairment[.''],'' 6th edition (second printing April 2009).
(3) Other requirements as approved by the Department.
§ 123.104. [Initial IRE; designation] Designation of physician by Department.
(a) The insurer is responsible for scheduling the initial IRE. Only the insurer may request that the Department designate an IRE physician.
(b) [The Department's duty to designate an IRE physician pertains only to the initial IRE.] A list of Departmentally approved IRE physicians will be available upon request.
(c) The request to designate a physician shall be made on Form LIBC-766, ''Request for Designation of a Physician to Perform an Impairment Rating Evaluation.''
(d) Within 20 days of receipt of the designation request, the Department will designate a physician to perform the IRE.
(e) The Department will provide the name and address of the physician designated to perform the IRE to the employee, the insurer and the attorneys for the parties, if known.
§ 123.105. Impairment rating determination.
(a) When properly requested under § 123.102 (relating to IRE requests), an IRE shall be conducted in all cases and an impairment rating determination must result under the [most recent edition of the American Medical Association] ''Guides to the Evaluation of Permanent Impairment[.''],'' 6th edition (second printing April 2009.
(b) To ascertain an accurate percentage of the employee's whole body impairment, when the evaluating physician determines that the compensable injury incorporates more than one pathology, the evaluating physician may refer the employee to one or more physicians specializing in the specific pathologies which constitute the compensable injury. Any physician chosen by the evaluating physician to assist in ascertaining the percentage of whole body impairment shall possess the qualifications as specified in § 123.103(a) and (b) (relating to physicians). The referring physician remains responsible for determining the whole body impairment rating of the employee.
(c) The physician performing the IRE shall complete Form LIBC-767, ''Impairment Rating Determination Face Sheet'' (Face Sheet), which sets forth the impairment rating of the compensable injury. The physician shall attach to the Face Sheet the ''Report of Medical Evaluation'' as specified in the American Medical Association ''Guides to the Evaluation of Permanent Impairment[.''],'' 6th edition (second printing April 2009). The Face Sheet and report shall be provided to the employee, employee's counsel, if known, insurer and the Department within 30 days from the date of the impairment evaluation.
(d) If the evaluation is requested and performed during the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits and results in an impairment rating of less than [50] 35%, the employee shall receive benefits partial in character. To adjust the status of the employee's benefits from total to partial, the insurer shall provide notice to the employee, the employee's counsel, if known, and the Department, on Form LIBC-764, ''Notice of Change in Workers' Compensation Disability Status,'' of the following:
(1) The evaluation has resulted in an impairment rating of less than [50] 35%.
(2) Sixty days from the date of the notice the employee's benefit status shall be adjusted from total to partial.
(3) The adjustment of benefit status does not change the amount of the weekly workers' compensation benefit.
(4) An employee may only receive partial disability benefits for a maximum of 500 weeks.
(5) The employee may appeal the adjustment of benefit status to a workers' compensation judge by filing a Petition for Review with the Department.
(d.1) If the evaluation is requested and occurs beyond the 60-day period subsequent to the expiration of the employee's receipt of 104 weeks of total disability benefits, and results in an impairment rating of less than 35%, the adjustment of the employee's disability status can only be achieved through the traditional administrative process such as by filing a petition for modification. This adjustment cannot be achieved by completing Form LIBC-764, ''Notice of Change in Workers' Compensation Disability Status.''
(e) If the evaluation results in an impairment rating that is equal to or greater than [50] 35%, the employee shall be presumed to be totally disabled and shall continue to receive total disability compensation. The presumption of total disability may be rebutted at any time by a demonstration of earning power in accordance with section 306(b)(2) of the act (77 P.S. § 512(b)(2)) or by a subsequent IRE which results in an impairment rating of less than [50] 35%.
(f) At any time during the receipt of 500 weeks of partial disability compensation, the employee may appeal the adjustment of benefit status to a workers' compensation judge by filing a Petition for Review, provided there is a determination that the employee meets the threshold impairment rating that is equal to or greater than 35% impairment under the American Medical Association ''Guides to the Evaluation of Permanent Impairment,'' 6th edition (second printing April 2009).
[Pa.B. Doc. No. 23-534. Filed for public inspection April 21, 2023, 9:00 a.m.]
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