The opinion of the court was delivered by: Judge Leavitt
Argued: November 12, 2008
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge, HONORABLE DORIS A. SMITH-RIBNER, Judge, HONORABLE DAN PELLEGRINI, Judge, HONORABLE ROCHELLE S. FRIEDMAN, Judge*fn1 HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE MARY HANNAH LEAVITT, Judge.
Timothy Diehl (Claimant) petitions for review of an adjudication of the Workers' Compensation Appeal Board (Board) ordering a change in Claimant's disability status from total to partial disability based on the results of Claimant's impairment rating evaluation (IRE). The Board held that this change in Claimant's disability status, which had no impact on the amount of Claimant's weekly disability benefits, did not require IA Construction (Employer) to prove job availability. In this appeal, we consider what proof is required where an employer seeks to modify a claimant's disability status on the basis of an IRE requested more than 60 days after the claimant has collected 104 weeks of total disability.
The facts of this case are not in dispute. Claimant sustained a work-related injury to his right foot on May 24, 1999, and Employer began paying Claimant total disability benefits. By May 24, 2001, Claimant had collected total disability for 104 weeks. To effect a unilateral change in Claimant's disability status, Employer had to request an IRE within a 60-day period following Claimant's receipt of total disability for 104 weeks, i.e., between May 24, 2001, and July 24, 2001. Gardner v. Workers' Compensation Appeal Board (Genesis Health Ventures), 585 Pa. 366, 888 A.2d 758 (2005). Employer requested the Bureau of Workers' Compensation to designate a physician to perform an IRE on April 4, 2002, long after the 60-day window had passed.
The first physician assigned by the Bureau to do the IRE refused the appointment. The second physician assigned, Michael Wolk, M.D., did the IRE on November 8, 2002. Dr. Wolk concluded that Claimant had an impairment of 28 percent. In January 2003, while this area of the law was still uncertain, Employer attempted to effect a unilateral change in Claimant's benefit status from total to partial on the basis of Dr. Wolk's IRE report. After Claimant challenged Employer's action, however, Employer abandoned this effort. In 2005, the Supreme Court issued its decision in Gardner, 585 Pa. 366, 888 A.2d 758, clarifying that an employer cannot effect a unilateral change in a claimant's disability status if it requests an IRE outside the 60-day window. Employer then filed a modification petition for the purpose of effecting a change in Claimant's benefit status from total to partial disability, but not for effecting a reduction in Claimant's disability compensation. The parties made the record on the modification petition by stipulation.
After reviewing the evidence, the WCJ concluded that Employer proved that Claimant was impaired to the level of 28 percent in accordance with Dr. Wolk's November 8, 2002, IRE findings. However, the WCJ believed that before Claimant's disability status could be changed from total to partial, Employer was also required to prove the availability of employment suitable for Claimant, either by a labor market survey or by a referral to actual jobs Claimant was capable of performing. Because Employer did not present this employment evidence, the WCJ denied Employer's request for modification.
Employer appealed, and the Board reversed. The Board held that because Employer sought a change in disability status, not a change in compensation amount, Employer did not have to present evidence of job availability. The Board affirmed the WCJ's conclusion that Employer proved that Claimant had a 28 percent impairment rating. In accordance with that finding, the Board ordered Claimant's disability benefit status changed from total to partial as of November 8, 2002. Claimant then petitioned for this Court's review.*fn2
On appeal,*fn3 Claimant presents one issue for our consideration. Claimant contends that the Board erred. Claimant asserts that where the employer makes the IRE request more than 60 days after the claimant's collection of 104 weeks of total disability, the employer must present evidence of job availability. If not, the 60-day deadline in the Workers' Compensation Act (Act)*fn4 is rendered meaningless.
Employer counters that where the modification petition seeks a change in benefit status, and not a reduction in compensation amount, the Act does not require evidence of job availability. Where the employer requests the IRE outside the statutory 60-day window the change in benefit status is not automatic, as it is for requests made during the 60-day window. Rather, the employer must present evidence to prove that the claimant has an impairment of less than 50 percent. Further, the claimant may present evidence to rebut the findings in the IRE report, which cannot be done where the change is effected unilaterally by the employer.*fn5
We begin with a review of the Act's requirements relevant to modification petitions. Such petitions are filed in the circumstance where an employer seeks to change a claimant's benefit status or, alternatively, where an employer seeks to reduce a claimant's compensation amount.
A claimant who is injured and not capable of working is initially entitled to total disability benefits, because disability under the Act is synonymous with a loss of earning power. Landmark Constructors, Inc. v. Workers' Compensation Appeal Board (Costello), 560 Pa. 618, 625, 747 A.2d 850, 854 (2000). An employer wishing to modify the claimant's total disability benefits to partial disability may do so, inter alia, by establishing that the claimant has "earning power." Such a proceeding is governed by Section 306(b)(2) of the Act, which explains that earning power shall be determined by the work the employe is capable of performing and shall be based upon expert opinion evidence which includes job listings with agencies of the department, private job placement agencies and advertisements in the usual employment area. Disability partial in character shall apply if the employe is able to perform his previous work or can, considering the employe's residual productive skill, education, age and work experience, engage in any other kind of substantial gainful employment which exists in the usual employment area in which the employe lives within this Commonwealth.
77 P.S. §512(2) (emphasis added). By showing the availability of suitable employment that the claimant is capable of performing, located through a labor market survey, an employer may reduce the amount of a claimant's benefits from total to partial disability. Alternatively, the employer may show that the claimant can work by referring the claimant to specific job openings. Kachinski v. Workmen's Compensation Appeal Board (Vepco Construction Co.), 516 Pa. 240, 532 A.2d 374 (1987).*fn6 Once the claimant's earning power is established under either method, the claimant's total disability benefit amount will be reduced to a partial disability benefit. Partial disability benefits are defined as sixty-six and two-thirds per centum of the difference between the [pre-injury] wages of the injured employe . and the earning power of the employe thereafter..
Section 306(b)(1) of the Act, 77 P.S. §512(1).
In 1996, the General Assembly amended the Act to add Section 306(a.2).*fn7 This amendment established another approach to moving a claimant from total disability by examining the degree to which a claimant has been impaired by his work injury. This approach changes the claimant's disability status but does not change the claimant's compensation amount. See Section 306(a.2)(3) of the Act, 77 P.S. §511.2(3).*fn8
The impairment evaluation cannot be undertaken until a claimant has been on total disability for 104 weeks. Section 306(a.2)(1) of the Act provides:
When an employe has received total disability compensation pursuant to clause (a) for a period of one hundred four weeks, unless otherwise agreed to, the employe shall be required to submit to a medical examination which shall be requested by the insurer within sixty days upon the expiration of the one hundred four weeks to determine the degree of impairment due to the compensable injury, if any. The degree of impairment shall be determined based upon an evaluation by a physician who is licensed in this Commonwealth, who is certified by an American Board of Medical Specialties approved board or its osteopathic equivalent and who is active in clinical practice for at least twenty hours per week, chosen by agreement of the parties, or as designated by the department, pursuant to the most recent edition of the American Medical Association "Guides to the Evaluation of Permanent Impairment."
77 P.S. §511.2(1) (emphasis added). "Impairment" is defined in Section 306(a.2)(8)(i) as "an anatomic or functional abnormality or loss that results from the compensable injury and is reasonably presumed to be permanent." 77 P.S. §511.2(8)(i). Section 306(a.2)(2) then instructs that if the claimant is found to have an impairment equal to or greater than 50 percent, then he is presumed to be totally disabled.*fn9 If the impairment rating is less than 50 percent, then the claimant's status changes to one of partial disability.
As noted, changing a claimant's "disability status" from total to partial does not affect the amount, or rate, of compensation. The claimant continues to be paid at the total disability rate. Changing the claimant's benefit status to partial disability, however, limits the claimant to 500 weeks of compensation, as is the case for ...