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City of Philadelphia v. Workers' Compensation Appeal Board (Knudson)

Commonwealth Court of Pennsylvania

July 3, 2017

City of Philadelphia, Petitioner
Workers' Compensation Appeal Board (Knudson), Respondent

          Argued: May 3, 2017



          P. KEVIN BROBSON, Judge.

         In an Opinion and Order dated March 31, 2016, the Workers' Compensation Appeal Board (Board) affirmed, in large part, and reversed, in part, a decision by a Workers' Compensation Judge (WCJ), granting a claim petition filed by a cancer-stricken Philadelphia firefighter (Claimant) under Section 108(r) of the Workers' Compensation Act (Act), pertaining to the definitions of occupational diseases.[1] Relevant to this proceeding are two aspects of the Board's decision. First, the Board affirmed the WCJ's determination that Claimant's health insurer, Independence Blue Cross (IBC), submitted sufficient evidence to support the amount of its subrogation lien[2]-i.e., the amount IBC paid to cover Claimant's medical expenses prior to the WCJ's benefit determination- against Claimant's medical benefits under the Act. Second, the Board reversed the WCJ's determination that, as a matter of law, only medical expenses for services provided after the effective date of what is commonly known as Act 46[3](July 7, 2011), which designated cancer in firefighters as an occupational disease, were reimbursable. As a result, all of Claimant's medical expenses related to his illness became reimbursable under the Act. We affirm the Board.

         The matter came before the Board on an appeal filed by IBC and Claimant's employer, the City of Philadelphia (City). IBC challenged that portion of the WCJ's determination that limited reimbursement on its lien to services rendered to Claimant after July 7, 2011. The City cross-appealed, challenging IBC's right to a subrogation lien as well as the sufficiency of the proof offered in support of that lien before the WCJ. As noted above, the Board effectively granted IBC relief on its appeal and denied the City relief on its cross-appeal. The City then petitioned this Court for review.

         On appeal, [4] the City argues that, as a matter of law, IBC's lien can only attach to medical expenses incurred after the effective date of Act 46. Accordingly, IBC, as Claimant's health insurer, cannot claim a lien for medical expenses paid on account of services rendered prior to July 7, 2011, even though the services related to Claimant's work-related cancer. Alternatively, the City claims that the single document, a "Statement of Benefits, " that IBC submitted into evidence was insufficient to support the existence and amount of IBC's subrogation lien.[5] At the outset, it is important to note that Claimant's entitlement to benefits under the Act[6] is not at issue in this appeal. Moreover, no party to this appeal is contending that Claimant's medical expenses related to his illness have not been covered, either by IBC as Claimant's health insurer or pursuant to the Act. Instead, the entirety of the City's appeal is focused on limiting, if not eliminating, the amount that IBC, as Claimant's health insurer (or third-party administrator administering a self-insured healthcare plan), may recover on its subrogation lien.

         With respect to the City's first contention-i.e., that the Board erred by applying the Act 46 amendments "retroactively" when it recognized IBC's lien for medical expenses IBC paid on behalf of Claimant prior to the effective date of Act 46-we conclude that the Board appropriately applied the Act, as amended. It is undisputed that Claimant filed his claim petition on June 13, 2012, and that his petition was timely-filed under the Act.[7] Section 4 of Act 46 clearly and unambiguously provides: "The provisions of this act shall apply to claims filed on or after the effective date of this section." (Emphasis added.) As the Pennsylvania Supreme Court has recognized, "[t]he object of statutory construction is to ascertain and effectuate the General Assembly's intent. The plain language of a statute is, as a general rule, the best indicator of such legislative intent." Mercury Trucking, Inc. v. Pa. Pub. Util. Comm'n, 55 A.3d 1056, 1067-68 (Pa. 2012). Here, the General Assembly's intent is clear. Act 46 applies to all claims filed after July 7, 2011. In other words, any claimant who files a timely claim after July 7, 2011, is entitled to the benefits of Act 46. The Board did not, as the City contends, apply Act 46 "retroactively." Rather, the Board properly applied Act 46 prospectively to Claimant's claim, which Claimant timely filed after the effective date of Act 46. The Board, therefore, properly adjudicated the claim petition under the Act, as amended by Act 46.

         Turning to the City's second issue on appeal, the City challenges the sufficiency of IBC's evidence of its lien. During the August 5, 2013 hearing before the WCJ in this matter, counsel for IBC offered into evidence pre-marked Exhibit I-1. (Reproduced Record (R.R.) at 1a.) The document is titled "Consolidated Statement of Benefits." The "patient" is identified as Claimant. The "date of injury" is identified as October 18, 2009, which corresponds to the date of injury set forth in Claimant's claim petition and the date Claimant was diagnosed with renal cell cancer. In columnar format, the document sets forth dates of service, procedure codes, claim numbers, and "Provided Benefits, " which appears to be the cost paid to the provider for the service. On the record, the WCJ identified the document as "lien information" and asked all parties in attendance, including the City, whether there were any objections to admission of the exhibit into the record, leading to the following exchange:

MR. KACHLINE [CITY'S COUNSEL]: From the employer, the copy that you have in front of you, certain charges were stricken from that document as unrelated.
I believe counsel for IBC is here to agree that those ones can be marked off the list from there. Your Honor has already ruled on the retroactivity issues, so we don't need to go over that again. Based on the representation that those charges will be stricken from that document the [C]ity will waive its hearsay objection.
[WCJ]: Those charges are highlighted in yellow and total, probably around $100, right?
MR. MARTIN [COUNSEL FOR IBC]: That's why I took my ...

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