Articles Posted in Workers Compensation Settlements

In law, almost every cause of action has a “statute of limitations.”  This is simply a time within which a cause of action can be brought.  Typically, if a suit or action is not filed within the applicable statute of limitations, the suit or action will be dismissed.  Pennsylvania workers’ compensation cases are no different.  Basically, the statute of limitations for a PA workers’ compensation case is three years.  But that is only part of the story.

There are actually time constraints in PA workers’ comp other than the basic statute of limitations.  These can be longer or shorter than the general statute of limitations.  For example, notice of an injury must be provided within 120 days of the injury (though, in certain types of cases, that time can be extended under the “discovery rule”).  Unless the case is covered by the discovery rule, the failure of the injured worker to provide notice to the employer within 120 days of the injury will cause the workers’ compensation claim to be denied.

On the other hand, there are types of workers’ comp cases in PA that have a statute of limitations longer than three years.  When an injured worker dies subsequent to an injury, as a result of the work injury, we have what is known as a “fatal claim.”  Under the Pennsylvania Workers’ Compensation Act, as stated in Section 301(c)(1), ” . . . wherever death is mentioned as a cause for compensation under this act, it shall mean only death resulting from such injury and its resultant effects, and occurring within three hundred weeks after the injury.”  So, as long as the death takes place within 300 weeks of the work injury, fatal claim benefits may be obtained (these provide benefits to dependents, since general workers’ compensation benefits in PA end with the death of the injured worker).

When litigation begins in a workers’ compensation case in Pennsylvania, by law, a “Mandatory Mediation” must be conducted (unless such a mediation would be “futile.”).  The guidelines for these Mandatory Mediations can vary by the hearing office involved (generally, each county in Pennsylvania has a workers’ compensation hearing office).

Recently, the Philadelphia Workers’ Compensation Hearing Office issued a statement containing the policy of that office for Mandatory Mediations.  By the law, the mediations will be scheduled in each case, unless the Workers’ Compensation Judge (WCJ) assigned to the case deems it futile.  The date of the Mandatory Mediation will be determined with input from the attorneys on each case (as some cases require testimony or depositions to be completed before the parties are in a position to discuss settlement of a case).  The policy makes clear that no continuances will be granted for Mandatory Mediations.  If a Mandatory Mediation is cancelled, and the parties still wish to have a mediation done, the parties must approach another WCJ and schedule a Voluntary Mediation.

Mediation is a growing area in Pennsylvania workers’ comp. As we have previously discussed, a mediation is when an independent party, in this context usually a Workers’ Compensation Judge [WCJ] (other than the assigned WCJ), meets with the parties in an informal setting in an effort to resolve the differences between the parties. The ultimate goal is to achieve a settlement to the case (usually done by “Compromise & Release Agreement”).

Since we at Brilliant & Neiman LLC work with injured workers every day, having constant contact with the Pennsylvania workers’ compensation system, we are well-versed in most aspects of how the system functions from day to day. We are proud that our knowledge and experience will be used by the PA Bureau of Workers’ Compensation, as the Bureau adjusts the system to change with the times.

Since the start of “Mandatory Mediation,” added to the Pennsylvania Workers’ Compensation Act in the 1996 amendments to the Act, the system has been relatively stagnant. Recently, the Bureau has sought a small working group to evaluate the mediation system and see what, if any, changes could be beneficial to the mediation process.

Settling a workers’ compensation case in PA, generally referred to as a “Compromise & Release,” is a big decision. There are many factors which go into not only the value of the case, but whether settlement is even advisable. The advice of an attorney who is experienced with PA workers’ comp cases can be very valuable. This goes for the settlement itself, as well as the documents carrying out the settlement.

Recently, the Commonwealth Court of Pennsylvania decided the matter of Hoang v. Workers’ Compensation Appeal Board (Howmet Aluminum Casting, Inc.). In this case, the injured worker settled his case (by executing a Compromise & Release Agreement). Sometime after the settlement, the injured worker learned that his treating doctor had an outstanding bill for over $37,000.00.

An appeal of the Compromise & Release Agreement could not be filed (since one only has 20 days to file such an appeal), so the injured worker filed Review and Penalty Petitions, seeking payment of this medical bill. The Workers’ Compensation Judge (WCJ) noted that the Compromise & Release Agreement failed to state that the workers’ compensation insurance carrier would be responsible for any medical bills. Since this is a somewhat common statement in a PA workers’ comp settlement, the WCJ called this “telling.” The injured worker argued there was a “mutual mistake of fact,” so the settlement should be reopened. Ultimately, the WCJ denied the Petitions, finding that the workers’ compensation insurance carrier did not violate the Pennsylvania Workers’ Compensation Act because the Compromise & Release Agreement did not require payment of this bill. No mutual mistake of fact was seen by the WCJ. The decision was affirmed by the Workers’ Compensation Appeal Board (WCAB).

As attorneys who limit their practice to representing the injured worker in PA workers’ comp cases, we are thrilled by the recent announcement that the Supreme Court of Pennsylvania has approved the process of creating a “certified workers’ compensation attorney” in Pennsylvania (or, in other words, a workers’ compensation specialist).

We have seen the damage done to cases when an injured worker trusts a general practitioner to handle a Pennsylvania workers’ comp case. The Pennsylvania Workers’ Compensation Act is a complicated piece of legislation. As loyal readers of our blog know, this is a frequent topic of cases decided by the appellate courts in PA. Trusting a workers’ compensation case to an attorney not experienced in that area of law is akin to having an orthopedist handle your coronary artery bypass surgery. Just not a good idea.

A work-related injury can cause tremendous disruption, and loss, to both the injured worker and his and her family; we are thrilled that in the near future, that injured worker can have the confidence that he or she is selecting a “certified workers’ compensation attorney.” We, of course, look forward to becoming “certified workers’ compensation attorneys” as soon as the process for the testing and certification is completed.

When an injured worker in PA wants to settle his or her Pennsylvania workers’ compensation claim in exchange for a lump sum of money, the process generally used is the “Compromise & Release Agreement.” This type of workers’ comp settlement is voluntary between the parties. A Compromise & Release can only take place when agreed to by both the injured worker and the PA workers’ comp insurance carrier.

As we have noted in a previous blog entry, a Compromise & Release Agreement is not final until it is actually approved by a Workers’ Compensation Judge (WCJ). The law requires that a WCJ determine whether the injured worker understands and accepts the terms and conditions of the Compromise & Release Agreement. Until the approval of the WCJ is obtained, either party may back out of the Agreement.

The limits of this theory were recently tested before the Commonwealth Court of Pennsylvania in the case of McKenna v. Workers’ Compensation Appeal Board (SSM Industries, Inc. and Liberty Mutual Insurance Co.). In this case, the parties agreed to settlement terms at a mediation (a settlement conference with a WCJ, usually not the WCJ hearing the case). A Compromise & Release Agreement was signed by both parties.

From our blog, and our presence in the community, we receive many questions regarding workers’ compensation in Pennsylvania. Just recently, someone sent us an e-mail asking, “Is it a good idea to settle a case?”

Like many aspects of law, there is no easy answer to this question. Settling a workers’ compensation case in PA is a complicated issue. Frequently, there are good reasons to settle a case, and good reasons to wait. Only a discussion of the injured worker’s exact situation provides an answer in each person’s case. Facts in every case are different, as are the injured workers involved.

Even once an injured worker decides that settling the workers’ comp case is the way to go, questions remain. How much is the case worth? Will the medical treatment stay open, even for a short period of time? Will a resignation or release be necessary? Is a Workers’ Compensation Medicare Set-Aside (WCMSA) needed? These and other questions must be addressed as the parties negotiate a settlement.

While, in Pennsylvania, an injured worker generally cannot sue his or her employer for causing the injury, the injured worker is free to sue a third party. For example, the injured worker could file an action against a manufacturer of a product which caused the injury, or another driver who caused an accident. When an injured worker receives a settlement or a verdict leading to the recovery of money from a third party, Section 319 of the Pennsylvania Workers’ Compensation Act says the workers’ compensation insurance carrier is entitled to be repaid all or part of the benefits the carrier paid to the injured worker.

Though the goals of Section 319 are somewhat logical – to keep a party from receiving a double benefit, the result of this law is often troublesome. In effect, between the repayment made from the recovery, and the credit the workers’ compensation insurance carrier enjoys against future wage and medical benefits, the injured worker often winds up netting absolutely nothing from the third party case. Considering that the Pennsylvania Workers’ Compensation Act does not provide for any compensation for pain and suffering, it seems terribly unjust that the injured worker can recover money in a third party case, intended to compensate for pain and suffering, and yet end up netting nothing.

Recently, the Commonwealth Court of Pennsylvania decided the case of Gorman v. WCAB. Here, the claimant settled his workers’ comp case. At that time, he was not pursuing a third party suit. In the Compromise & Release Agreement (the document used when a workers’ compensation case is settled in PA), the parties stated that there was no lien for any third party case. After the workers’ compensation settlement was done, the claimant successfully pursued a third party case and recovered money.

There are many factors which have to be considered when an injured worker wants to settle his or her workers’ comp case in PA. Even aside from the primary things people think about, such as how much money will be involved, one has to determine if approval from the Centers for Medicare Services (CMS) will be required.

Under Federal Law, known as the Medicare Secondary Payer Act, all parties to workers’ compensation settlements in Pennsylvania must “consider the interests of Medicare” with regard to the settlement. This is regardless of whether the injured worker is entitled to Medicare or not. CMS does not want the burden of future medical treatment for the injured worker to simply be shifted from the workers’ compensation insurance carrier to Medicare.

CMS has certain guidelines for when their approval is needed. When a workers’ compensation settlement is more than $25,000.00 and the injured worker is entitled to Medicare, CMS must actually approve the terms of the settlement. Additionally, if the workers’ compensation settlement is over $250,000.00 (it is extremely rare for a workers’ comp settlement in PA to be more than $250,000.00) and the injured worker has a “reasonable expectation” that he or she will be entitled to Medicare within 30 months of the date of the workers’ compensation settlement, again, CMS must approve the settlement. In particular, CMS will want to approve the amount of the settlement which is allocated to future medical treatment.

On November 9, 2006, the most recent amendment to the Pennsylvania Workers’ Compensation Act, known as Act 147 of 2006, was signed into law. Several of the provisions of Act 147 were designed to quicken the litigation process in PA workers’ comp. One of those provisions created what is known as “Mandatory Mediation.”

Mediation, generally speaking, is a process where an independent person meets with the parties to a dispute and helps the parties reach a resolution to their quarrel. This is a process used in all types of litigation, and even in disputes outside of litigation. Usually, this is a very informal process. The mediator will meet with the parties separate and together, working to try and bring them together on common ground. There is no court reporter present, and things said in mediation are not admissible in the litigation (encouraging the parties to be honest about the strengths and weaknesses of their position).

Mediation has been used in Pennsylvania workers’ compensation matters as long as I can recall. In the past, mediation only happened in PA workers’ comp when the parties so requested. The process was entirely voluntary, and did not occur that often.

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