Oct 15, 2019

PA Court Says “Protz-Fix” is Constitutionally OK

Section 306(a.3) Mandating Use of AMA Guides, 6th Ed., Stands

In enacting 77 Pa. Stat. § 511.3, which mandates a physician’s use of the American Medical Association “Guides to the Evaluation of Permanent Impairment,” 6th edition (second printing April 2009) for determining impairment in workers’ compensation cases, the state’s General Assembly did not delegate its legislative authority, but rather adopted existing standards as its own in the exercise of its power to legislate, held a state appellate court last Friday (Oct. 11, 2019) in Pennsylvania AFL-CIO v. Commonwealth, 2019 Pa. Commw. LEXIS 913 (Oct. 11, 2019). Accordingly, the court sustained the Commonwealth’s demurrer to a Petition for Review filed by the Pa. AFL-CIO that had challenged the constitutionality of the new section of law. (i.e., the “Protz fix”).

Background

Most readers will recall that in 1996, the General Assembly enacted Section 306(a.2) of the Act, which allowed employers to require workers’ compensation claimants to undergo an IRE, during which a physician would determine the claimant’s “degree of impairment” that was attributable to the claimant’s compensable injury. Under this section, the physician was to make this assessment by applying the methodology set forth in “the most recent edition” of AMA Guides. If the result of the IRE was a whole-body impairment rating of less than 50 percent, the claimant’s benefits would be modified from total disability to partial disability. While this change did not alter the amount of weekly benefits the claimant received, it did cap the receipt of those benefits to 500 weeks. At the time Section 306(a.2) was enacted, the “most recent edition” of the AMA Guides was the 4th Edition. As time passed, however, the AMA issued two new editions, the 5th Edition and 6th Edition. Each new edition meant that claimants who underwent IREs were subject to the newest edition’s methodology.

The Protz Challenge

In a highly debated and anticipated 2017 decision, a divided Supreme Court of Pennsylvania, in Protz v. Workers’ Compensation Appeal Board (Derry Area School District), 639 Pa. 645, 161 A.3d 827 (Pa. 2017), struck down Section 306(a.2) as unconstitutional, finding that it violated the state’s constitutional requirement that all legislative power “be vested in a General Assembly” [Pa. Const. art. II, § 1; for my discussion of Protz, click here and here]. While the Commonwealth Court tried to remedy the constitutional violation by holding that all IREs had to be performed using the 4th Edition of the Guides, the version that existed at the time Section 306(a.2) was enacted, the Supreme Court held that the section was unconstitutional in its entirety.

The “Protz Fix”

Subsequently, the Pennsylvania General Assembly passed, and the Governor signed, what many refer to as the Protz Fix. Enacted was a new provision, 77 Pa. Stat. § 511.3, which replaced the section struck down by the Court. The new provision made two changes: it substituted “the sixth edition” for the former “most recent edition”, and it reduced from 50 percent to 35 percent the threshold for evaluating whether an injured worker’s impairment should be changed from total disability to partial disability [for my discussion of the Protz Fix, click here].

The Pa. AFL-CIO Challenge

On February 5, 2019, PA AFL-CIO filed the a Petition for Review under the state’s Declaratory Judgments Act contending, in relevant part, that the Generally Assembly had, again, violated article II, section 1 of the Pennsylvania Constitution by delegating its legislative function to the AMA, a private entity. According to the AFL-CIO, the General Assembly had enacted the new law without making the necessary policy choices or establishing adequate standards that would guide and restrain the exercise of delegated administrative functions, as required by Protz. In response, the Commonwealth filed a demurrer.

No Delegation to AMA

The Court, quoting Protz, stressed that the non-delegation doctrine did not prohibit the General Assembly from “adopting as its own a particular set of standards which already are in existence at the time of adoption” (161 A.3d at 838). The Court noted that the AFL-CIO had admitted the 6th Edition of the Guides was in existence when Section 306(a.3) was enacted, “as its own.” When such an adoption occurred, Indicated the Court, the General Assembly was exercising its legislative and policy making authority by deciding that it was those particular standards that would become the law of the Commonwealth. It was not delegating its authority to legislate.

The Court added that the General Assembly made a policy decision regarding the standards that would apply to IREs in the Commonwealth going forward. PA AFL-CIO may disagree with that policy decision, said the Court, but that did not make that decision an improper delegation of the General Assembly’s legislative authority. It also stressed that Section 306(a.3) did not restrain or guide IRE physicians as to how to use the 6th Edition. Proper use of the Guides was a question answered during a challenge to the IRE’s results.

The Court concluded, therefore, that the AFL-CIO’s Petition for Review was legally insufficient and did not state a claim that the statute violated article II, section 1 of the Pennsylvania Constitution.