(Transcript)

Cindy Speaker:  Good afternoon and welcome to our broadcast on Facebook Live. My name is Cindy Speaker, and I have with me as my guest today Attorney Bill Kovalcik of Michael J. O’Connor and Associates. Bill is a workers’ compensation attorney, and he’s gonna talk with us about some recent legislation through the Pennsylvania Supreme Court that is changing how the courts are dealing with workers’ compensation. So it’s gonna affect not only people that are injured recently, but it will affect people that have been injured in the past, may affect their future benefits. So this is one you want to listen to. So Bill, thanks for being with us today.

Bill Kovalcik:  Hi Cindy, thanks for having me, happy to be here.

Cindy Speaker: Excellent. Well, Bill, let’s talk about this decision. It’s the PA Supreme Court, is it Mary Ann Protz versus … Help us out.

Bill Kovalcik: It is. Right. Protz versus WCAB. A holding that the entire workers’ compensation bar has been waiting for quite some time. And on June 20 of this year, it came down from the Supreme Court. Now, before I talk to you about what the holding is, I think it would be important for me to tell everybody, just give them a thumbnail sketch about what an impairment rating evaluation is, because that’s what this court case took up.

Now, 20 years ago, the workers’ comp act was amended to allow for impairment rating evaluations, also known as IRE. Now this is a real common thing and it’s done in most states, but every state handles it a little differently. The point of it is, there are medical books called the American Medical Association Guidelines to Permanent Impairment, and these books tell doctors how to classify people’s impairments and give them a percentage. So they’re used nationwide, and we weren’t using it in Pennsylvania for years until ’96, when Act 57 allowed insurance companies to use it.

So the process is, you’re asking actually the Bureau of Workers’ Comp to designate a doctor who is certified to do this kind of thing. That individual does it, and a percentage of whole body impairment is assigned. Should that be below 50 percent, benefits are modified immediately to 500 weeks. In other words, capped. So that was the procedure in question.

Now, initially, our Commonwealth Court determined that it was unconstitutional as well, and here’s the basis for it, basically.

In 1996, when they decided to amend the workers’ compact, these American Medical Association guidelines were in their fourth edition. So those had been revised four times. Based upon … You know, there’s a committee of the AMA, and these doctors as research progresses, they find new things and they change the guidelines based on advances in modern medicine.

Cindy Speaker:  Right.

Bill Kovalcik:  That was in fourth edition when they enacted it. By the time Protz had her IRE, it was in the sixth edition. So normally, the doctors would just apply the guidelines that were currently in effect. And for years it was fifth and the sixth, whatever. The court found, and the Supreme Court agreed … The lower court found, and the Supreme Court agreed that this was unconstitutional, because it delegated legislative authority. In other words, creating rules that affect injured workers, it delegated it to the American Medical Association. Because they get to decide, every time there’s a new edition, how literally the law changes in terms of impairment. So that’s unconstitutional. Now-

Cindy Speaker:  Can I just clarify, I want to understand that.

Bill Kovalcik: Sure.

Cindy Speaker:  Okay. So you’re saying that the law stipulates that it’s regulated by the fourth edition.

Bill Kovalcik:  No. That’s not true. Here’s what happened.

Cindy Speaker:  Okay, yeah.

Bill Kovalcik:   In 1996, they just amended it to say, “We’re now gonna use the American Medical Association guidelines for permanent impairment.” However, at that time, the fourth edition just happened to be the current edition.

Cindy Speaker:   Okay.

Bill Kovalcik:  The legislature didn’t comment on how we could change that. Now, they might have to, and I’ll get to that later. They just said, use those guidelines. So over the years, the guidelines change, they’re delegating rule-making authority to a non-legislative body. That’s what’s unconstitutional.

Cindy Speaker:  Okay.

Bill Kovalcik:   So, what we really wanted to find out was what the Supreme Court was gonna do. Most of us in the business, we’re pretty clear on that we thought they would find it unconstitutional in some fashion, but then again, what? What would they do? The Commonwealth Court said that it would be okay to do these impairment rating evaluations under both the fourth and the sixth edition to cover both bases.

Cindy Speaker:  Okay.

Bill Kovalcik:  So we found during the pendency of this litigation on appeal, defense firms were doing just that. They were having doctors review it again and apply the fourth edition, which was what was in effect at the time the law was enacted. Hoping that would cure the problem. It did not, because ultimately the Supreme Court has decided that whole section of the workers’ comp act is unconstitutional ab initio, which means from the beginning, which means every case that was decided under that is now presumptively invalid.

Cindy Speaker: Wow.

Bill Kovalcik:  Right. It’s a big deal, and it really has changed a lot of things in our practice. So now, the Pennsylvania law has no IRE component, it has nothing. So the Bureau put out a notice, they’re not even going to designate any more doctors, and all the attorneys who represent insurance companies who were involved in current cases have written letters to judges withdrawing their case because of this Supreme Court decision. So it has far-ranging implications, and I’m gonna talk a little bit about that.

Cindy Speaker:  Good.

Bill Kovalcik:  Now, when we as a group here heard about this decision then decided, “Well, what are we gonna do about it?” There were a number of different scenarios that we had to go through. So if we had a case, which we did, several, that were on appeal or before a judge, we presumed that those would just be resolved in our favor. And in fact, that has happened. So what that means is that if you as a person are facing a cap on your benefits due to this IRE, that’s now gone away. That threat has gone away. They can’t do it, they can do other things but they can’t do that.

Cindy Speaker:  Okay.

Bill Kovalcik:  So we thought, what about people on appeal? So certainly again, and we had been regularly appealing these IREs to the next highest court, which is the Workers’ Comp Appeal Board, to preserve our right to argue it’s unconstitutional when Protz came down. And again those appeals are being resolved in our favor, and again that person is back to zero. In other words, it’s like it never happened.

Cindy Speaker:    Okay.

Bill Kovalcik:    Now, there are other people too that we thought about. And those are the people, say, that several years ago they had this IRE procedure and their claim was capped. Cause back then, we used to advise people, there’s very little we can do. Because it we don’t have a legal defense, the medical, it’s almost impossible to show someone is over 50 percent under these guidelines, unless they have a devastating injury that keeps them in bed or in a wheelchair or otherwise. Everybody’s under 50 percent.

Now all of a sudden, we had reason to object, we had this legal defense. So back several years ago, there might have been these impairment rating evaluation procedures that the claim the injured worker lost. And benefits were capped at 500. Presumably, we can file petitions in all those cases to reverse it. Get that person back to what’s called temporary total disability, which is an indefinite period.

Cindy Speaker:   Okay, so it’s not capped at the 500 weeks.

Bill Kovalcik:   Correct.

Cindy Speaker:  Okay.

Bill Kovalcik:   So if you have the IRE and you’re capped at the 500 weeks, and say you’ve used 300 weeks up. Protz is decided. It’s our position that Protz is retroactive. Now, it’s one of the things about constitutional law, is this. This is a constitutional case. So is it going to be applied retroactively or not? And there a lot of rules to that, but one of the rules is, if the court doesn’t say it’s prospective only, then it should be retroactive. There are cases on that. The Protz court didn’t say, they didn’t say, oh, this is gonna apply to everybody or just going forward. So we’re taking the position that it applies to everybody. So if people have already been capped at 500 weeks and they’ve been using that … Or people, even people, and we’re searching our files now … Even people who have run out of 500 weeks, perhaps we can file something to get them back on comp. Now, I don’t know how that’s …

We’re willing to file it. But this an emerging thing for people in our business, and now it’s gonna turn out. But we’re going to cause a stir and file everything we get.

Cindy Speaker:  So one more time. The Protz case is a positive case for injured workers, is that what you’re saying? It’s a positive …

Bill Kovalcik:   Protz case is a very positive case for injured workers.

Cindy Speaker:   Okay. Okay.

Bill Kovalcik:  And it has a wide ranging effect, because there’s a lot of people in the commonwealth who it affects. Because these IREs are very common. Now you can’t do them.

Cindy Speaker:  So then … Yeah, and let me just ask. So you’re saying it being retroactive, then really anybody that is even listening today that has an active workers’ compensation claim, it would really behoove them to check in with you and see if it’s going to possibly apply to them and remove that 500 week cap?

Bill Kovalcik:   Absolutely. The only exception to that is this. A lot of the cases settle, so if you went through an impairment rating evaluation years ago, but during the pendency of that you settled your case, you’re waiving everything. So for those people who have settled, been through what is called a compromise and release, they’ve waived their right to go back on total disability. But those people who haven’t … And for instance, I had a case pending on appeal for a number of years during this cross-litigation. And the guy’s 500 weeks were about to run out. Next year, they were gonna run out. And I had already told him that. So Protz comes down, I call him and tell him he goes back to zero. So you know, he had been on … 500 weeks is nine and a half years. He’d already used up eight years. Now he goes back to zero and starts all over.

Cindy Speaker:   It’s a reset. Okay, fantastic.

Bill Kovalcik:   So, it was a huge …

Cindy Speaker:   Yeah.

Bill Kovalcik:    Benefit to him. But since a lot of these cases settle, then you’re just waiving your right to argue anything in the future. But we’re still-

Cindy Speaker:   Can you kind of explain?

Bill Kovalcik:  We’re encouraging people to call us.

Cindy Speaker:  I’m sorry.

Bill Kovalcik:   We’re encouraging people to call us. If there’s any question, if they have been through an impairment rating evaluation, they don’t know their rights now, call us.

Cindy Speaker:   Okay, so it’s only relevant if they’ve been through the impairment rating evaluation.

Bill Kovalcik:   Right. See, even if they had an exam … Just because you’ve had the exam doesn’t mean the 500 weeks automatically attaches. There are rules. Sometimes it automatically attaches, but sometimes there has to be litigation. And sometimes we file the litigation to challenge it, sometimes the insurance company files the litigation to establish the 500 weeks. It’s complicated, but if anything regarding IRE has touched your life as an injured worker, you should immediately call an attorney. We can tell you what your rights are.

Cindy Speaker:   Excellent, excellent. Now what about this Act 57 law? Is that relative to this conversation?

Bill Kovalcik:   Act 57 is what we refer to as the 1996 amendments to the Pennsylvania Workers’ Compact. So prior to 1996, when Act 57 came into effect, there were a number of things that didn’t exist in workers’ compensation. One of which was impairment rating evaluations, they did not exist. That was established by that amendment. There were other things, like they lengthened the period that you have to treat with the company doctor. They established forms where they could automatically stop your comp by issuing a form. And things like that. These were all things that were put into place to help insurance companies, but that’s Act 57. Back then, they didn’t have the benefit of capping a claim at 500 weeks. Now, once they did, that changed how we evaluated resolving cases, and it still does to this day.

But with the Protz decision, it’s a whole new day and everything needs to be re-evaluated.

Cindy Speaker:   Okay. Interesting. You know what, can you … We didn’t talk about the specifics of that case. Can you kind of explain what happened in that Protz case?

Bill Kovalcik:  Right. So Protz was just like any other impairment rating case, except Mary Ann Protz’s attorney is a brilliant guy from Pittsburgh named Tom Baumann and from the start, he raised the issue of unconstitutionality. He was able to develop this argument that just the existence of this act, this part of the workers’ compact, violated the Pennsylvania constitution in that it unconstitutionally delegated law-making authority. And this issue had never been raised before.

So she of course, like most people, the impairment rating evaluation went against her, and they continued to appeal based on this unconstitutionality argument. And ultimately the Commonwealth Court bought it, and the Supreme Court affirmed.

Cindy Speaker:  That’s great.

Bill Kovalcik:    It was quite an achievement for Tom Baumann, and he is getting national recognition right now.

Cindy Speaker:  Oh, that’s excellent.

Bill Kovalcik:   It is. Yeah.

Cindy Speaker:   Now, Bill, what about in … How does this affect settlements, because it sounds like it would make the potential lifelong value of the case better? Does it affect the settlements?

Bill Kovalcik:   Absolutely. Now, we’ve given thought about this too. For instance, my guy, whose 500 weeks was about to end in a year …

Cindy Speaker:   Right, right.

Bill Kovalcik:   How could his case be valuable at all when the commonwealth knows in a year they’re done paying it? Now we’re back to zero. So the value of his case is whatever I can convince them it is at this point. He just made himself a bunch of money because of this Supreme Court. And a lot of people could be in that position.

Cindy Speaker:   Yeah.

Bill Kovalcik:   Especially people, say for instance we file litigation for somebody who had an IRE years ago. And the company, they might want to fight it, they might want to make legal arguments, but they might just want to settle it. So here’s a person, maybe he wasn’t getting any money. They thought their injury was over, and all of a sudden the insurance company’s up there offering money. That could happen, and we’re looking for those instances where we think people can be helped by this.

Cindy Speaker:  Excellent.

Bill Kovalcik:  Yeah. And you know, there will be people I’ve never met who should call and talk about it. It’s worth talking about it. I don’t know how many are out there, but you know …

Cindy Speaker:   Well, like you said, it really makes sense for anybody that has gone through … As you said, if IRE has touched their lives, they really need to check with someone like you to find out if it’s changed their case.

Bill Kovalcik:    Surely. Absolutely.

Cindy Speaker:     So that makes sense.

Bill Kovalcik:   Right.

Cindy Speaker:  Well, finish up on that, and then I have another question about another bill, but what else do you want to add for us to understand this whole Protz case?

Bill Kovalcik:   Okay, so. This is not gonna be permanent.

Cindy Speaker:  Okay.

Bill Kovalcik:   Here’s the deal.

Cindy Speaker:  Oh.

Bill Kovalcik:  Because right now it’s unconstitutional, that section of the law doesn’t exist, et cetera, et cetera. But what that is, it’s a call for the Pennsylvania General Assembly to take action. Because now they have to amend the workers’ compact in a way that will survive a constitutional attack.

Cindy Speaker:  Wow.

Bill Kovalcik:   So that amendment, specifically, will only be prospective. They will not be able to make that retroactive. So at some point in time, the General Assembly will act, there’ll be a bill, it’ll be debated, it’ll be passed presumably to replace what we had, and probably to put some kind of IRE provision that allows the legislature to approve every change in the AMA guidelines. Therefore, it would be an act of the legislature, not merely a board of doctors.

Cindy Speaker:   Yeah.

Bill Kovalcik:    You follow me, so that’s probably what they’re gonna do. Now, in anticipation of today, I talked to some representatives at the General Assembly to see if there was anything going on. And unfortunately, what I’m getting is this. Pennsylvania right now is in a budget crisis. They haven’t passed one yet, and the time has come and gone. In any event, they are working hard to do that, and they are not really doing anything on this front. But we anticipate that they will in the near future do something. Of course, that doesn’t change the fact that all these people in the past who have been subject to IREs are now gonna be in court. I just filed one a week ago, so we’re gonna be there.

Cindy Speaker:   So good news for injured workers, and they deserve it. I mean, when you’re horrifically injured … You had mentioned earlier, nobody gets more than a 50 percent … I believe you called it a disability rating. But it just doesn’t seem fair, so many people are so horrifically injured. So this is pro injured worker. My concern, as an objective person, is if they’re going to change the workers’ compensation act going forward, isn’t that something we should be a little fearful of because I’m just concerned what they’re gonna do to change it.

Bill Kovalcik:    Certainly. And Act 57, when it was signed into law, was a pro insurance company bill and everybody knows it. And there hasn’t been anything since then, really, that’s been pro worker.

Cindy Speaker:   Yeah.

Bill Kovalcik:  Now, the unions lobby hard for this and there are other organizations. The Bar Association, the elements that represent injured workers certainly lobby for pro worker amendments to the workers’ compact. But so far, we don’t know what this is going to look like. We really don’t. It’ll be interesting to see.

Cindy Speaker:   Yeah, yeah. Well, we’ll have to talk with you again as things get updated, just stay on top of this. And again, just to reiterate, anybody that’s out there that has a workers’ compensation case where IRE was a factor, you need to call an attorney and you need to find out if it’s affecting your case or could potentially affect your case, because this is a positive thing.

Bill Kovalcik:   It is. It could be helpful to injured workers all over the commonwealth.

Cindy Speaker:   Yeah, absolutely. Can we switch gears and go to House Bill 998? Talk about that.

Bill Kovalcik:   So, this came to my attention recently through the AFSCME, the American Federation of State, County, Municipal Employees. They are lobbying against House Bill 998. And I’ll tell you why. First of all, House Bill 998 is attempting to amend what had previously been referred to as Act 632, which then was amended by what was called Act 534. So these acts are similar to what we call heart and lung benefits, but they’re not exactly the same. In Pennsylvania, we have not only workers’ comp, but we have special benefits for special workers. So policemen, firemen, corrections officers who are injured, sheriffs’ deputies in the line of duty, if they are injured they can get full salary. That’s the difference. Because workers’ compensation is not full salary. It’s a percentage of that. So those individuals get the protection of the heart and lung act.

Cindy Speaker:   Okay.

Bill Kovalcik:   Years ago, I don’t know if it was 30 years ago or whenever, there was a similar act that was put into effect, it was called Act 632, then it was amended by Act 534. And what it did was it provided similar full salary benefits to individuals who are assaulted by inmates at state mental institutions, state detention centers for juveniles, things like that. Because they weren’t … Technically they weren’t covered by the heart and lung act, and the legislature decided they wanted to provide them with similar benefits. Because these jobs, and I represent a lot of these people, these are dangerous jobs and thankless jobs and a lot of the people they’re subject to take care of are violent. And these people, I’ve had a guy who was assaulted four times and now he’s on comp. So they have these benefits.

So, the difference between heart and lung and these 534 benefits, though, is that you can collect the 534 benefits indefinitely. In other words, full salary for as long as you’re disabled. Heart and lung is a little different, because once … Say for instance a fireman or a police officer is getting heart and lung benefits and his condition becomes permanent rather than temporary, he loses his heart and lung benefits and it goes back to just workers’ comp. So he actually loses money.

Cindy Speaker: Wow.

Bill Kovalcik:   That’s the law. It’s kind of the opposite of what workers’ comp law is.

Cindy Speaker:  Right.

Bill Kovalcik:   Right, when you get permanency in workers’ comp you usually get more. But it’s the opposite in heart and lung. But these 534 benefits never had that provision. So somebody in the legislature, I forget which … I won’t name him, but regardless it’s a Republican, of course. But the point is this. They looked at these 534 benefits and said, “There’s no cap on it.” So now this bill seeks to put a three year cap on how long you can collect that. If you’re still on benefits at that time, then you would go on workers’ comp and no more full salary for you.

Cindy Speaker:  Oh, okay. Okay.

Bill Kovalcik:  AFSCME against this, of course, and other pro worker organizations are against it. Because, you know, the legislators knew what they were doing back when they enacted this. They wanted to provide benefits indefinitely. Now they’re trying to take that away and limit it to three years. So we’re against it as well, and I spoke to a representative’s office who said that no amendments have been offered to this, it’s still in committee, they don’t know if it’s gonna come up for a vote, right now the status is it’s just a bill. But we’d really like to see this not get enacted, I think it would affect a lot of our clients negatively who are receiving these benefits.

Cindy Speaker:  Let me just clarify. So I’m getting the 534 and the heart and lung mixed up. Which group is it that it’s going to affect?

Bill Kovalcik:   It’s only gonna affect 534 people.

Cindy Speaker:  Which is …

Bill Kovalcik:  And those are the people who worked in mental institutions. These are non uniformed … You know, the heart and lung was meant to be cops and firefighters and correctional officers.

Cindy Speaker:  So it won’t affect them.

Bill Kovalcik:   It won’t affect them. They’re subject to different law. But those people, not only do you have to work in a mental institution or detention center or something, but you have to be assaulted. So it’s only for people who were injured in an assault that this act covers. So if you’re one of those people … And a lot of them develop head injuries, frankly. They’re disabled indefinitely, and I have a number like that. So to cap them at three years I think would be unfair.

Cindy Speaker:  Well, the other thing I’m thinking, Bill, I would imagine that in some cases PTSD could even be a concern. If you’re assaulted in a place like that, you could have long ranging effects.

Bill Kovalcik:   It’s a big concern. I have a number of clients who have both closed head injuries and PTSD from being in a fight, an attack. And part of the problem is it’s awful for them because going back in there, it’s a horrific thought and they really are sometimes the commonwealth, they enact policies about restraint. So unfortunately, these people who have to take care of violent people are very circumscribed in what they can do the defend themselves. And often that results in them getting hurt.

Cindy Speaker:  Right. Right.

Bill Kovalcik:   Not the inmate. Not the patient. Anyway, it’s a tough job.

Cindy Speaker:    Yeah. Well, you know, and I think it’s great that there’s attorneys like you out there that it’s somebody to be on the injured workers’ side. Because as we know, the insurance company is not on your side and is not gonna really help you.

Bill Kovalcik:   That’s right.

Cindy Speaker:   So anything you want to add before we close this out, Bill?

Bill Kovalcik:   Nope, not at all. Just give us a call at any time about any of these issues or any workers’ comp matter. Of course, we offer free consultations. I’m not saying that we’ll take every case or that you have a case under this IRE change in the law, but it’s certainly worth pursuing in every instance. So call us.

Cindy Speaker:   And how can they reach you, Bill?

Bill Kovalcik:  We have an 800 number. 1-800-518-4LAW. Or you can call us locally at 570-874-3300.

Cindy Speaker:   Very good. Well, Bill, thanks so much for your time today.

Bill Kovalcik:  Mm-hmm (affirmative). It was good to see you, Cindy, and we’ll talk again soon, I hope.

Cindy Speaker:   You too! We’ll talk again soon. Okay. Bye bye.

Bill Kovalcik:  Bye.