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Act 111 Reinstates the IRE Process in Pennsylvania

November 1, 2018
By: Karyn Dobroskey Rienzi

Last year, the Pennsylvania Supreme Court declared that Section 306(a.2) of the Workers’ Compensation Act constituted an unconstitutional delegation of legislative power to the American Medical Association (“AMA”) and struck the 21-year-old provision from the Act, thereby eliminating the Impairment Rating Evaluation (“IRE”) process from Pennsylvania workers’ compensation law.

On October 24, 2018, Pennsylvania Governor Tom Wolf signed into law Act 111 (formerly known as House Bill 1840), which restores the IRE process so that Pennsylvania workers’ compensation insurers and employers may once again cap benefits for certain injured workers at 500 weeks of partial disability benefits. Act 111 became immediately effective on October 24, 2018.  

Previously, an injured workers’ status could be changed from total to partial disability if an IRE physician assessed his or her disability at less than 50 percent of total body impairment in accordance with the Edition of the AMA Guides to the Evaluation of Permanent Impairment in effect at the applicable time. Under Act 111, the IRE physician is required to utilize the Sixth Edition of the AMA Guides (second printing April 2009) when assessing an injured workers’ impairment. Furthermore, the injured worker’s status will be changed from total to partial disability only where the IRE physician assesses the injured worker’s disability at less than 35 percent of total body impairment.

Similar to the prior IRE statute, Act 111 provides that a workers’ compensation insurer or an employer, after paying 104 weeks of total disability benefits, may request that the injured worker submit to an evaluation by an IRE physician for the purposes of determining the degree of his or her impairment.  Importantly, Act 111 provides for a credit to the insurer or employer for the payment of total disability benefits prior to the effective date of the Act in order to calculate when the employee has received 104 weeks of temporary total disability benefits.

The Act also provides a credit for partial disability benefits paid prior to the effective date of the Act in order for the insurer or employer to calculate the maximum 500 week period of an injured worker’s entitlement to partial disability benefits. The Act is silent as to whether prior periods of partial disability benefits, resulting from IRE determinations made prior to the Supreme Court’s decision in Protz v. WCAB (Derry Area School District), will be included within the calculation of the maximum 500-week period. It is likely that this issue will be the subject of litigation and ultimately will be decided by the appellate courts.

The Act includes a new provision that permits an injured worker to have a health care provider of his or her own selection, to be paid by the injured worker, to participate in an IRE examination requested by an employer or ordered by a workers’ compensation judge. It is anticipated that the “participation” of the injured worker’s own health care provider will be utilized by injured workers and their counsel to contest any IRE determination that results in an impairment rating less than 35 percent, as the Act permits injured workers to contest the change in their disability status in the same manner as provided in the prior IRE statute.

As of October 30, 2018, the Department of Labor and Industry, Bureau of Workers’ Compensation has reactivated the IRE functionality in WCAIS and has resumed the authorization and designation of IRE physicians, to allow for the performance of IREs pursuant to Act 111. At this time, the process will track the preexisting procedural and regulatory framework. The Bureau has noted that some of its screens and forms have not yet been updated to accurately reflect the new IRE provisions; however, notwithstanding any outdated or improper language, the Bureau expects that all IREs will be conducted in accordance with the requirements set forth in Act 111. The Bureau has not yet commented on which physicians are on the panels for the new IRE examinations.

Act 111 further provides cost-savings to Pennsylvania workers’ compensation insurance carriers and employers. Specifically, the Act provides that within 90 days of October 24, 2018, the Pennsylvania Compensation Rating Bureau is required to calculate the savings achieved via the passage of Act 111 and to provide an immediate reduction in rates, equal to those savings, applicable to employers’ workers’ compensation policies.

Finally, in sections unrelated to the IRE process, Act 111 also increased the burial expenses to be paid by a workers’ compensation insurer or employer where a worker is fatally injured from $3,000.00 to $7,000.00. In addition, Act 111 also increased the fatal claim benefits for dependents of workers who suffer fatal claims; in this regard, when calculating the dependent benefit rate, in no case shall be wages of the deceased worker be taken to be less than fifty percent of the Statewide Average Weekly Wage of the year in which the death occurs.

Post & Schell’s Workers’ Compensation and Appellate Departments will continue to provide updates concerning this new IRE statute and any case law discussing the statute.

We recommend reassessing all existing claims in order to determine whether an injured worker has received 104 weeks of total disability benefits, thereby triggering the IRE process, or whether an injured worker is approaching or has received the maximum 500 weeks of partial disability benefits. If you have questions about a specific claim, please contact any of the following of Post & Schell’s Workers’ Compensation Attorneys:

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About the Author

Karyn Dobroskey Rienzi focuses her practice on post-trial and appellate matters, predominantly in the areas of workers’ compensation and casualty. She regularly appears before the Pennsylvania Workers’ Compensation Appeal Board and has argued before the Pennsylvania Commonwealth Court and the Pennsylvania Superior Court.

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