M.W. Sheaffer v. WCAB (Standard Steel, LLC) ( 2017 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Mark W. Sheaffer, :
: No. 783 C.D. 2016
Petitioner : Submitted: September 23, 2016
:
v. :
:
Workers' Compensation Appeal :
Board (Standard Steel, LLC), :
:
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE WOJCIK FILED: February 14, 2017
Mark W. Sheaffer (Claimant) petitions for review of the April 15,
2016 order of the Workers’ Compensation Appeal Board (Board), which affirmed
the July 1, 2015 decision and order of Workers’ Compensation Judge Michael
Kroll (the WCJ), confirming and documenting that Standard Steel, LLC and its
insurer (together, Employer) obtained approval of a Workers’ Compensation
Medicare Set-Aside account from the Centers for Medicare and Medicaid Services
(CMS); incorporating an Addendum to the parties’ Compromise and Release
Agreement (C&R) submitted by Employer; and confirming the conclusion of
Employer’s responsibility for any future workers’ compensation payments related
to Claimant’s May 19, 2009 work injury. We affirm.
On May 19, 2009, Claimant sustained a work-related injury in the
nature of a herniated disc at L2-3. Reproduced Record (R.R.) at 16a. The parties
entered into a C&R on December 16, 2014,1 agreeing that payment of $190,000
represented payment of all past, present, or future wage loss benefits. R.R. at 17a-
18a. With respect to medical benefits,2 the parties agreed as follows:
Claimant is receiving Social Security and Medicare. As
for medical benefits, the Claimant retains his rights to
medical benefits, as such, [Employer] retain[s] all rights
concerning medical benefits also, including but not
limited to, the right to file a UR, Challenge medical bills,
defend against Fee Review Applications, obtain IMEs,
etc. The parties are seeking a Workers’ Compensation
Medicare Set Aside Account [WCMSA] approval from
[CMS]. As an express term of this agreement, Claimant
agrees to [cooperate] with [Employer] in [its] efforts [to]
obtain CMS approval of a WCMSA; once CMS approves
a WCMSA, [Employer] will have at [its] sole discretion
the option to either fully fund the WCMSA via an
annuity or by other means or to keep the Claimant’s WC
medical benefits open.
1
The C&R was approved by decision and order of WCJ Geoffrey Russell dated
December 22, 2014.
2
When a claimant is entitled to Medicare payments or may be entitled to Medicare
payments in the future, workers’ compensation agreements settling future medical benefits must
adequately consider Medicare’s interests. 42 U.S.C. §1395y(b)(2); 42 CFR §§411.46, 411.47,
and 411.21. The recommended method to protect Medicare’s interests is a Workers’
Compensation Medicare Set Aside Account, a financial agreement that allocates a portion of a
workers’ compensation settlement to pay for future medical services related to the work injury,
illness, or disease. Department of Health & Human Services, Centers for Medicare & Medicaid
Services, Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference
Guide, Version 2.5, Rev. April 4, 2016. https://www.cms.gov/Medicare/Coordination-of-
Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/WCMSA-
Overview.html (last visited January 27, 2017).
2
C&R, par. 13, R.R. at 17a. In his decision approving the C&R, WCJ Russell found
and concluded that Claimant understood the full legal significance of the C&R and
entered into it knowingly and voluntarily. R.R. at 12a-15a.
On April 16, 2015, Employer filed a petition to “Seek Approval of a
Compromise and Release Agreement (ask Judge to approve settlement),”
indicating that the parties had agreed to resolve Claimant’s medical benefits,
pursuant to Section 449 of the Workers’ Compensation Act (Act).3 Claimant’s
counsel advised the WCJ that there was no such agreement, and the WCJ held a
telephone hearing on June 9, 2015.
During the hearing, the parties agreed that in lieu of a second C&R,
Employer would submit documentation and the WCJ would issue an order
confirming that Employer exercised its option pursuant to the original C&R and
fully funded the set aside account.
[WCJ]: [I]s there actually a need based upon the prior
[C&R] to have a separate C&R . . . ? I know there [are] a
lot of occasions where I will see the parties simply enter
into the first agreement and then fund the Medicare Set
Aside, stop payment of their medical benefits consistent
with the initial agreement, and then go from there.
[Employer’s counsel]: Yes, I mean it’s my customary
practice to do, at least it’s customary to my practice to do
a second C&R, but you’re right. . . . I don’t know, I mean
if [Claimant’s counsel]’s not objecting to it, if you want
to just issue an order, I can submit the CMS letter and we
can submit everything and you can issue [an] order and
say, hey, they exercised their option, they fully funded it
as per the other C&R . . . .
3
Act of June 2, 1915, P.L. 736, as amended, added by the Act of June 24, 1996, P.L. 350,
77 P.S. §1000.5, which provides in part that a C&R “must be explicit with regard to the payment,
if any, of reasonable, necessary and related medical expenses.”
3
* * *
[WCJ] If you want to go ahead and confirm the
submission in payment of the amounts in question and
then submit that document, to upload that documentation,
I would have no issue in essentially entering an order that
can be basically very short that the parties entered into an
agreement approved by [WCJ Russell] December 22nd
and that’s Judge’s Exhibit One. The parties filed a C&R
but rather than proceed with an additional hearing,
[Employer has] submitted documentation confirming that
they have fully obtained Medical Set Aside approval,
fully funded the amount with proof of payment and that
the medical portion of this case is now resolved by way of
the initial C&R and subsequent funding of a Medicare
Set Aside amount. That simple.
R.R. at 59a-60a (emphasis added)
Claimant’s counsel expressly consented:
[Employer’s counsel]: Jack, do you have an objection to
that?
[Claimant’s counsel]: No, it’s almost an administerial
(sic) function, I suppose.
Id.
The WCJ continued the matter for thirty days. Id. Thereafter,
Employer submitted a copy of the WCMSA, documentation of CMS approval and
an addendum to Paragraph 13 of the C&R. R.R. at 34a-35a. By decision and
order dated June 30, 2015, the WCJ adopted and approved the Addendum as fair
and equitable and as confirmation of the conclusion of Employer’s responsibility
related to Claimant’s May 19, 2009 work injury.
Claimant then appealed to the Board, asserting that: Employer wrote
to the WCJ on June 27, 2015, requesting an order adopting an addendum to
paragraph 13 of the previously approved C&R; the WCJ received that
4
correspondence of June 29, 2015; on June 29, 2015, Employer faxed additional
documentation to the WCJ and mailed a copy of his June 27 th correspondence to
Claimant’s counsel, who received it on July 1, 2015; and, without providing
Claimant an opportunity to object or offer evidence, the WCJ admitted the
documents and issued an order on July 1, 2015, declaring that Employer’s
resolution of all workers’ compensation responsibility was concluded as of June
30, 2015. Claimant argued that the WCJ’s decision is a product of an ex parte
communication with Employer and acceptance of documents that were provided ex
parte, that the WCJ should have dismissed Employer’s petition because there was
no agreement, and that Claimant did not have an opportunity to object or provide
testimony.
The Board rejected these arguments, stating that there was no
evidence of an improper ex parte communication, the documents submitted by
Employer were the documents agreed upon at the June 9, 2015 hearing, and
Claimant’s attorney specifically declined an opportunity for a further hearing on
the matter. Accordingly, the Board affirmed the WCJ’s decision, and Claimant
continues these arguments on appeal to this Court.4
Claimant contends that the Board erred in concluding that the original
C&R contemplated a modification of its terms without providing him notice and an
opportunity to object or provide testimony concerning his understanding of the
agreement. Claimant also argues that the Board erred in determining that the
documents submitted to the WCJ were not ex parte communications and in
4
Our scope of review is limited to determining whether constitutional rights were
violated, whether the adjudication is in accordance with the law, or whether the necessary
findings of fact are supported by substantial evidence. Milner v. Workers’ Compensation Appeal
Board (Main Line Endoscopy Ctr.), 995 A.2d 492, 495 n.2 (Pa. Cmwlth. 2010).
5
concluding that he waived any due process rights to object to a decision based on
those documents. Each of these arguments rests on Claimant’s assertion that the
WCJ’s July 1, 2015 order changed the terms of the previously approved C&R.
Employer responds that, rather than reflecting a modification of the
original C&R or a new agreement between the parties, the order adopting and
approving the Addendum to Paragraph 13 simply recognized that the condition
contemplated in the original C&R, CMS approval of the WCMSA and Employer’s
decision to fund the WCMSA, had occurred. Additionally, Employer notes that
Claimant voiced no objection to the WCJ’s proposal during the June 9, 2015
hearing. We agree with Employer.
The record is clear that, as an express term of the original C&R,
Claimant agreed to cooperate with Employer in its efforts to obtain CMS approval
of a WCMSA, and Claimant further agreed that once CMS approved the set-aside
account, Employer would have, at its sole discretion, the option to either fully fund
the WCMSA via an annuity or other means or keep Claimant’s entitlement to
medical benefits open. R.R. at 17a. Claimant’s arguments concerting ex parte
communications and due process also are belied by the record, which reflects that
Claimant’s counsel specifically and unequivocally agreed to the ensuing
procedure.
Accordingly, we affirm.
MICHAEL H. WOJCIK, Judge
6
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Mark W. Sheaffer, :
: No. 783 C.D. 2016
Petitioner :
:
v. :
:
Workers' Compensation Appeal :
Board (Standard Steel, LLC), :
:
Respondent :
ORDER
AND NOW, this 14th day of February, 2017, the order of the
Workers’ Compensation Appeal Board, dated April 15, 2016, is AFFIRMED.
__________________________________
MICHAEL H. WOJCIK, Judge