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March 27, 2008

Impairment Rating Evaluation Impact On Modification And Termination Petitions

In Sign Innovation v. WCAB (Ayers), the Pennsylvania Commonwealth Court addressed the impact of an Impairment Rating Evaluation (IRE) on the Employer’s attempt to modify a Claimant’s benefits based on earning power or to terminate a Claimant’s benefits. Under the Workers’ Compensation Act, once the Claimant receives total disability benefits for 104 weeks, the Insurer, within 60 days, may request that the Claimant submit to a medical examination to determine the degree of impairment due to the compensable injury. If the Claimant is found to be at least 50 percent impaired, the Claimant is presumed to be totally disabled. If the Claimant is found to be less than 50 percent impaired, the Claimant’s status is changed from total disability to partial disability.

The Claimant in Sign underwent an Independent Medical Examination (IME) in September 2004. Subsequently, the claimant underwent a vocational assessment and labor market survey based on the restrictions from the IME doctor. In the meantime, the Claimant reached 104 weeks of total disability benefits and the Employer was entitled to request an IRE. The Claimant underwent an IRE in October 2004. The IRE doctor determined that the Claimant had a whole person impairment of 50 percent. In September 2005, the Employer filed a modification petition seeking to modify the Claimant’s benefits based on the labor market survey, which revealed work was generally available to the Claimant. The Claimant moved to dismiss the Employer’s petition based on the IR rating of 50 percent. The Workers’ Compensation Judge (WCJ) and Appeal Board denied the Employer’s modification petition because the IRE determined that the Claimant was 50 percent impaired and, thus, he was presumed totally disabled. The Board further held that the Employer could rebut the Claimant’s presumption of total disability with evidence of earning power, but it only with evidence that pre-dated the IRE.

The Commonwealth Court found that the Employer was entitled to pursue its modification petition and simultaneously pursue an IRE remedy. The Court reasoned that if an Employer has evidence that a Claimant has earning power, the Employer is free to prove the Claimant’s earning power through a modification petition. If, in the meantime, the Claimant reaches 104 weeks of total disability, the Employer must request, within 60 days, that the Claimant attend an IRE for the purpose of assessing his degree of impairment. The Court stated that impairment is not the same as disability.

Prior to Sign, the Commonwealth Court in Weismantle v. WCAB (Lucent Technologies), 926 A.2d 1236 (Pa. Cmwlth. 2006) dealt with an IRE performed in the course of a pending termination petition. The Court held that the IRE did not moot the Employer’s pending termination petition. The Court found that the Act gives the Employer the right to pursue an IRE and termination without regard for the other because the IRE remedies are in addition to, not a replacement of, the remedies available to an Employer who believes an Employee’s loss of wages is not the result of a work-related injury. 

What It Means to You

An Employer may request an IRE without jeopardizing a pending modification or termination petition. In fact, once the 104 week period of disability expires, the Employer must request within 60 days that the Claimant attend an IRE. There is no exception to the 60 day requirement. As such, requesting the IRE within the 60 day period will preserve the Employer’s right to unilaterally change the Claimant’s status without jeopardizing a pending modification or termination petition. The Cipriani & Werner workers' compensation practice group can help answer your specific questions on IRE related issues.


Sign Innovation v. WCAB (Ayers), 937 A.2d 623 (Pa. Cmwlth. 2007)