Last Friday, September 18, the Commonwealth Court issued an interesting decision invalidating Section 306 (a.2) of the PA Workers' Compensation Act dealing with Impairment Rating Evaluations (IREs), as an unconstitutional delegation of authority to a non-governmental entity (i.e. the American Medical Association), insofar as that Section measures an injured worker's impairment rating by utilizing the "most recent edition of the American Medical Association (AMA) guides."

By way of background, Act 57, which was passed in 1996, attempted to rein in the costs associated with workers' compensation by limiting the length of time an injured worker could remain on temporary total disability (TTD). Prior to 1996, there was no limitation on the amount of TTD benefits an injured worker could receive. Section 306 (a.2) introduced the concept of an "impairment rating evaluation," after payment of two (2) years of TTD benefits, to determine whether the injury produced an impairment rating of 50% or more under AMA guidelines. Unless the impairment rating is 50% or greater (a level of impairment rarely seen), an employer or insurer can file a Notice of Conversion from TTD to temporary partial disability (TPD) status, thereby capping its future wage loss exposure at 500 weeks. The guidelines had been revised to a fourth edition at the time the legislation passed.

Since 1996, the AMA guidelines have been revised to a fifth and later sixth edition. The Act 57 regulations provided for a grace period between revisions, during which the Workers Compensation Bureau (WC Bureau) would accept an IRE performed under either the existing or new AMA standards. However, the WC Bureau, according to the Court, exercised no guidance, restraint or governmental review on the use of the later edition guidelines and instead simply "rubber stamped" the new AMA guidelines, with each subsequent revision by the AMA, in violation of Pennsylvania State Constitutional principles.

With its September 18 decision, the Commonwealth Court remanded the case at issue back to the Workers' Compensation Appeal Board (WCAB), with instructions to remand it further to the WC Judge, who must now apply the original fourth edition AMA guidelines, rather than the sixth edition guidelines, under which the employee was found to have only a 10% impairment.

Although this case has created quite a buzz in the workers' compensation community, we suspect the long term impact will be somewhat muted. The AMA's own studies, for instance, show that there is only a minimal difference between impairment ratings calculated under the fourth, fifth and sixth guideline editions. Furthermore, we suspect that the WC Bureau is working on a regulatory response to address the constitutional shortcomings noted in the decision.

The important point for employers, insurers and third party administrators, is to make sure that any assigned IRE evaluations include an analysis under both the current AMA guidelines (i.e. sixth edition) and the original fourth edition guidelines. With this minor procedural adjustment, you will be in a position to support the results of your IRE before the WC Judge, WCAB and Commonwealth Court.