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Supreme Court holds that the employer does not need to present evidence of earning power to change a claimant's status from total to partial disability under section 306(a.2) of the Act based on an impairment rating evaluation.

January 1, 2011
Diehl v. WCAB (I.A. Construction); No. 26 WAP 2009, filed September 29, 2010; by Chief Justice Castille

Section 306 (a.2) of the Act authorizes an automatic change of disability status from total to partial when an employer obtains an Impairment Rating Evaluation ("IRE") within 60 days after a claimant has received 104 weeks of total disability benefits and the IRE reveals that the claimant has an impairment of less than 50 percent. However, where the IRE is not requested within 60 days of the expiration of the 104 weeks of temporary total disability, the employer has to invoke the administrative process by filing a modification petition. The issue in Diehl was what the "administrative process" involves in seeking to change a claimant's status under section 306(a.2) where the IRE is requested beyond the 60-day period. In Diehl, the employer obtained an IRE rating of 28% outside of the 60-day time period for an automatic change of status, so it filed a modification petition. The workers' compensation judge denied the petition, finding that since the employer missed the time limit for an automatic change in status, it could not obtain a modification without showing the availability of suitable employment within the claimant's physical limitations. On appeal, the Appeal Board found that the workers' compensation judge erred in denying the modification petition since the amount of compensation is not affected by a change of disability status based on an IRE and, thus, an employer does not have to demonstrate job availability or earning capacity. A majority panel of the Commonwealth Court reversed the Appeal Board's decision and reinstated the workers' compensation judge's finding, holding that Gardner v. WCAB (Genesis Health Ventures), 888 A.2d 758 (Pa. 2005), required an employer to follow the "traditional administrative process" under the standard set forth in Kachinski v. WCAB (Vacco Constr. Co.), 532 A.2d 374 (Pa. 1987) (referral to open position within the claimant's physical and vocational capabilities). On reargument to an en banc panel, the Commonwealth Court vacated the panel decision and affirmed the Appeal Board's decision that the employer did not have to establish job availability or earning power to change the disability status, as opposed to reducing the amount of a the claimant's compensation. The court determined that the administrative process for a change in disability status based on an IRE under section 306(a.2) does not require proof of earning power. To do so would be contrary to the express language and the intent of the statute to make the workers' compensation system more efficient. The Supreme Court agreed with the Commonwealth Court, focusing on the distinction between "impairment," which deals with the physical aspects of the claimant's injury, and "disability," which is synonymous with loss of earning power. Thus, an IRE focuses solely on impairment and not earning powers, therefore, proof of earning power is unnecessary.

Case Law Alert - 1st Qtr 2011

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