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Pennsylvania State Senate
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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: September 11, 2017 09:23 AM
From: Senator Kim L. Ward
To: All Senate members
Subject: Re-enacting the IRE Process in Workers' Compensation
 
I plan to introduce legislation in the near future to address a recent Pennsylvania Supreme Court decision related to workers’ compensation. This decision, known as the Protz case, prompted the Pennsylvania Compensation Rating Bureau to file for a mid-year loss cost increase of 6.06%: an unprecedented action that could lead to significant workers compensation premium increases for Pennsylvania employers.

The Court’s decision in Protz v. Workers’ Compensation Appeals Board eliminated Impairment Rating Evaluations (IREs), a feature of Pennsylvania’s workers’ compensation system since 1996. Under the system, if an injured worker received total disability compensation for a period of two years an insurer could request an IRE to be conducted by a physician. The physician evaluated the patient using guidelines from the American Medical Association (AMA) to determine the level of impairment. If impairment was determined to be less than 50 percent based on the guidelines, the patient was moved to partial disability status and wage-loss benefits were limited to 500 weeks (just under 10 years).

The IRE is a nationally accepted means of adjusting to changes that inevitably occur during the course of an employee’s recovery from workplace injury. IREs are used across the country in workers compensation, as are AMA guidelines. IREs have generally served their purpose of bringing structure and fairness to the process of determining circumstances in which claimants can reasonably be expected to transition off wage-loss benefits and when benefits should be paid for the rest of an individual’s life. IREs helped stabilize the overall workers’ compensation system in Pennsylvania, which had experienced massive cost increases in the late 1980s and early 1990s.

In the Protz decision, the Supreme Court did not object to the IRE process but disagreed with the method used to update the version of the AMA guidelines used to determine the level of impairment, finding it an unconstitutional delegation of legislative authority. My legislation will simply re-enact the IRE process with specific reference to the 6th edition of the AMA Guides to the Evaluation of Permanent Impairment.

If you have any questions, please feel free to contact me or Eric Kratz at (717) 787-6063.



Introduced as SB963