         IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Roxanna Nelson,                              :
                                             :
                     Petitioner              :
                                             :
              v.                             :   No. 692 C.D. 2015
                                             :   Submitted: November 17, 2015
Workers’ Compensation Appeal                 :
Board (Commonwealth of                       :
Pennsylvania),                               :
                                             :
                     Respondent              :


BEFORE:       HONORABLE BONNIE BRIGANCE LEADBETTER, Judge
              HONORABLE ROBERT SIMPSON, Judge
              HONORABLE JAMES GARDNER COLINS, Senior Judge


OPINION NOT REPORTED

MEMORANDUM OPINION BY
SENIOR JUDGE COLINS                                       FILED: December 10, 2015

              This case is a petition for review filed by Roxanna Nelson (Claimant)
appealing an order of the Workers’ Compensation Appeal Board (Board) that held
that her employer, the Department of Public Welfare (Employer), was entitled to
modification of total temporary disability benefits to partial disability based on an
impairment rating evaluation (IRE) pursuant to Section 306(a.2) of the Workers’
Compensation Act.1 For the reasons set forth below, we affirm.




1
 Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2501-2708. Section 306(a.2)
was added by the Act of June 24, 1996, P.L. 350, No. 57, § 4, as amended, 77 P.S. § 511.2.
            Claimant, a psychiatric aide at Employer’s Torrance State Hospital,
suffered right thumb and left ankle sprains and strains while assisting a patient on
October 4, 2008. (Workers’ Compensation Judge (WCJ) Decision Finding of Fact
(F.F.) ¶1; Employer Ex. 1, Notice of Compensation Payable (NCP), Ex. A to
Respondent’s Brief (Supp. R.R.) at 1; Employer Ex. 4, IRE Determination,
Reproduced Record (R.R.) at 21a.) Employer has paid Claimant her full salary
since 2008, while she has been disabled by these injuries, pursuant to the Act of
December 8, 1959, P.L. 1718, as amended, 61 P.S. §§ 951–952 (Act 534). (WCJ
Decision F.F. ¶7; 9/6/13 Hearing Transcript (H.T.) at 5, 7-8, R.R. at 35a, 37a-38a;
11/1/13 H.T. at 7, R.R. at 55a.) On February 9, 2009, Employer issued an NCP
accepting total disability liability for Claimant’s October 4, 2008 injuries, and
stating that Claimant “RECEIVES ACT 534 BENEFITS IN LIEU OF
WORKERS[’] COMPENSATION BENEFITS.”                      (WCJ Decision F.F. ¶2;
Employer Ex. 1, NCP, Supp. R.R. at 1-2.) Employer is self-insured for workers’
compensation and has made internal workers’ compensation payments to itself at
the total disability rate for over 200 weeks, reimbursing itself for the Act 534
payments it made to Claimant. (WCJ Decision F.F. ¶9; Employer Ex. 2, R.R. at
2a-7a.)
            In 2013, Employer filed a request with the Bureau of Workers’
Compensation (Bureau) for designation of a physician to perform an IRE. (WCJ
Decision F.F. ¶10.) The physician designated by the Bureau conducted an IRE
examination of Claimant on June 28, 2013, and found that Claimant had a 15%
impairment from her October 4, 2008 injuries. (Id. ¶¶10-11; Employer Ex. 4, IRE
Determination, R.R. at 18a-26a.)       On August 6, 2013, Employer filed a
Modification Petition seeking to change Claimant’s workers’ compensation status


                                         2
from total disability to partial disability effective June 28, 2013 based on the IRE
finding of 15% impairment. (WCJ Decision F.F. ¶3; Board Op. at 1.) In the
hearings on this petition, the parties stipulated that Claimant had reached
maximum medical improvement as of the IRE examination and that Claimant had
received over 104 weeks of benefits under Act 534 for her October 4, 2008 injury.
(9/6/13 H.T. at 6, R.R. at 36a; 11/1/13 H.T. at 7, R.R. at 55a.)                    Employer
introduced its NCP and documents concerning its internal workers’ compensation
payments in evidence, but neither party submitted testimony of any witness.
Claimant did not contest the validity of the IRE, and the sole issue disputed by the
parties was whether Claimant was subject to modification of her workers’
compensation benefits by an IRE under Section 306(a.2) of the Workers’
Compensation Act.
              On January 12, 2014, the WCJ denied Employer’s Modification
Petition on the ground that Employer had not satisfied the requirement of Section
306(a.2) that the Claimant received workers’ compensation benefits for 104 or
more weeks. (WCJ Decision Conclusion of Law ¶3.) Employer timely appealed
and the Board reversed on March 31, 2015, holding that Claimant’s receipt of Act
534 benefits from Employer for an injury for which Employer issued an NCP
constituted receipt of workers’ compensation benefits. (Board Op. at 1-2, 4-5.)
This appeal followed.2

2
  Our review is limited to determining whether an error of law was committed, whether the
WCJ’s necessary findings of fact are supported by substantial evidence and whether
constitutional rights were violated. Verizon Pennsylvania Inc. v. Workers’ Compensation Appeal
Board (Ketterer), 87 A.3d 942, 945 n.2 (Pa. Cmwlth. 2014). The issue here, the interpretation of
Section 306(a.2) of the Workers’ Compensation Act, is a question of law subject to this Court’s
plenary, de novo review. Gardner v. Workers’ Compensation Appeal Board (Genesis Health
Ventures), 888 A.2d 758, 761 n.4 (Pa. 2005); Verizon Pennsylvania Inc., 87 A.3d at 945 n.2.
(Footnote continued on next page…)
                                               3
              Section 306(a.2) of the Workers’ Compensation Act provides for IREs
to evaluate the degree of permanent impairment caused by a work injury and for
change of a claimant’s disability status from total disability to partial disability
based on the degree of impairment determined by the IRE. Section 306(a.2)(1)
states:

              When an employe has received total disability compensation
              pursuant to [the Workers’ Compensation Act] 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). If a valid IRE results in an impairment rating
of less than 50%, the claimant is entitled only to partial workers’ compensation
disability benefits. 77 P.S. § 511.2(2).3 The requirements set forth in Section


(continued…)
3
  An IRE requested within 60 days after the claimant has received 104 weeks of total disability
that results in an impairment rating of less than 50% operates to automatically reduce the
claimant’s status to partial disability. Gardner, 888 A.2d at 765-68; Verizon Pennsylvania Inc.,
87 A.3d at 946. If an IRE is not requested within that 60-day period, an IRE may be requested
under Section 306(a.2)(6), but reduction of claimant’s status to partial disability based on the
results of such an IRE is not automatic and must be sought through a modification petition. 77
P.S. § 511.2(6); Diehl v. Workers’ Compensation Appeal Board (I.A. Construction), 5 A.3d 230,
(Footnote continued on next page…)
                                               4
306(a.2)(1) are mandatory. Gardner v. Workers’ Compensation Appeal Board
(Genesis Health Ventures), 888 A.2d 758, 765-66 (Pa. 2005); Verizon
Pennsylvania Inc. v. Workers’ Compensation Appeal Board (Ketterer), 87 A.3d
942, 946 (Pa. Cmwlth. 2014).
             Claimant argues that the Act 534 benefits that she received from
Employer are not workers’ compensation benefits, and that Section 306(a.2)
therefore cannot apply because she has not received workers’ compensation
benefits for 104 or more weeks. We do not agree.
             Act 534 provides:

             Any employe of … a State mental hospital … who is injured
             during the course of his employment by an act of any inmate
             or any person confined in such institution … shall be paid, by
             the Commonwealth of Pennsylvania, his full salary, until the
             disability arising therefrom no longer prevents his return as an
             employe of such department, board or institution at a salary
             equal to that earned by him at the time of his injury.
Section 1 of Act 534, 61 P.S. § 951. Act 534 further provides that when a disabled
employee is paid her salary under its provisions, “any workmen’s compensation
received or collected for such period shall be turned over to the Commonwealth
and paid into the General Fund, and if such payment shall not be so made, the
amount so due the Commonwealth shall be deducted from any salary then or
thereafter becoming due and owing.” Id.


(continued…)
245-46 (Pa. 2010); Gardner, 888 A.2d at 766-68; Verizon Pennsylvania Inc., 87 A.3d at 946.
Section 306(a.2)(1)’s requirements for IREs apply to IREs requested and performed under
Section 306(a.2)(6). Diehl, 5 A.3d at 245-46; Logue v. Workers’ Compensation Appeal Board
(Commonwealth of Pennsylvania), 119 A.3d 1116, 1119 (Pa. Cmwlth. 2015); Verizon
Pennsylvania Inc., 87 A.3d at 946.


                                            5
                 Act 534 is similar in purpose and construction to the Heart and Lung
Act,4 which provides full salary benefits to police, firefighters and other public
safety employees injured on the job and, like Act 534, requires them to turn over to
the employer any workers’ compensation benefits received. Section 1(a) of the
Heart and Lung Act, 53 P.S. § 637(a); Polk Center/Department of Public Welfare
v. Workmen’s Compensation Appeal Board (Pochran), 682 A.2d 889, 894 (Pa.
Cmwlth. 1996). Case law concerning Heart and Lung Act benefits is therefore
applicable to the interpretation of Act 534. Polk Center/Department of Public
Welfare, 682 A.2d at 894.
                 Because an employee receiving Heart and Lung Act benefits is
required to turn over workers’ compensation that she receives to the employer, an
employer paying Heart and Lung Act benefits for a work injury who is self-insured
for workers’ compensation may fulfill its obligation to pay workers’ compensation
benefits by issuing an NCP for the injury without making additional benefit
payments to the employee. City of Erie v. Workers’ Compensation Appeal Board
(Annunziata), 838 A.2d 598, 604-06 & n.7 (Pa. 2003); City of Philadelphia v.
Workers’ Compensation Appeal Board (Ford-Tilghman), 996 A.2d 569, 574 (Pa.
Cmwlth. 2010). Where a self-insured employer is paying Heart and Lung Act
benefits and has issued an NCP for the same injury, two-thirds of the Heart and
Lung Act payments received by the employee constitute workers’ compensation as
a matter of law and the employer may assert rights under the Workers’
Compensation Act on the ground that the Heart and Lung Act payments are
payments of workers’ compensation disability benefits.                Bureau of Workers’
Compensation v. Workers’ Compensation Appeal Board (Excalibur Insurance

4
    Act of June 28, 1935, P.L. 477, as amended, 53 P.S. §§ 637–638.


                                                6
Management Service), 32 A.3d 291, 294-95 (Pa. Cmwlth. 2011) (self-insured
employer was entitled to supersedeas fund reimbursement despite fact that its
payments were Heart and Lung Act benefits because “unless there is evidence to
the contrary, as a matter of law, when an employer is self-insured for worker[s’]
compensation purposes, and it is required to pay Heart and Lung payments in
addition to workers’ compensation benefits, two-thirds of the amount paid
automatically represents workers’ compensation benefits”); Wisniewski v.
Workmen’s Compensation Appeal Board (City of Pittsburgh), 621 A.2d 1111,
1113 (Pa. Cmwlth. 1993) (employer that issued NCP for injury for which it paid
only Heart and Lung Act full-salary benefits may seek to terminate workers’
compensation benefits because “when it began making payments pursuant to the
notice of compensation payable two-thirds of the monies Claimant received
represented workmen’s compensation benefits”).
             This case is indistinguishable from Excalibur Insurance Management
Service and Wisniewski. As in those cases, Employer is self-insured and issued an
NCP accepting total disability liability for the injury for which it paid Claimant Act
534 benefits. Two-thirds of the Act 534 payments that Claimant received therefore
constitute total disability benefits under the Workers’ Compensation Act as a
matter of law.     Excalibur Insurance Management Service, 32 A.3d at 295;
Wisniewski, 621 A.2d at 1113. Because it was stipulated that Claimant received
Act 534 benefits for more than 104 weeks, Claimant “received total disability
compensation pursuant to [the Workers’ Compensation Act] for a period of one
hundred four weeks,” 77 P.S. § 511.2(1), and Employer was entitled to seek
modification of Claimant’s workers’ compensation benefits under Section
306(a.2).


                                          7
              Ford-Tilghman and Brown v. Unemployment Compensation Board of
Review, 87 A.3d 1002 (Pa. Cmwlth. 2014), relied on by Claimant, are not to the
contrary. In Ford-Tilghman, the issue was whether the portion of the claimant’s
workers’ compensation paid to the claimant’s attorney and not to the claimant was
received by the claimant and subject to recovery by the employer, not whether
Heart and Lung Act or Act 534 payments received by a claimant include workers’
compensation benefits. 996 A.2d at 574. Here, in contrast the payments were
made to Claimant, not to a third party, and the only issue is whether those
payments received by her include workers’ compensation. Brown held only that
evidence that an unemployment compensation claimant received Act 534 payments
during his base year was not sufficient by itself to show that he was receiving and
eligible for workers’ compensation benefits during his base year. 87 A.3d at 1005-
06. No showing was made in Brown that an NCP was in effect for the claimant’s
injury during that base year.
              Claimant is correct that Employer’s Modification Petition cannot
terminate or reduce her Act 534 benefits. The WCJ and Board do not have
jurisdiction over Heart and Lung Act benefits or Act 534 benefits, and a
modification or termination of benefits granted by a WCJ or the Board therefore
alters only the employee’s rights to workers’ compensation, not the employee’s
rights to Heart and Lung Act benefits or Act 534 benefits. Ford-Tilghman, 996
A.2d at 574-75; Polk Center/Department of Public Welfare, 682 A.2d at 894-95;
Wisniewski, 621 A.2d at 1113-15.       The Board, however, did not order any
modification of Claimant’s Act 534 benefits. Rather it ordered only a modification
of Claimant’s workers’ compensation benefits from total disability to partial
disability.


                                        8
            Because the Board correctly held that Claimant’s Act 534 benefits
constituted receipt of workers’ compensation and that her workers’ compensation
benefits were therefore subject to modification by an IRE under Section 306(a.2)
of the Workers’ Compensation Act, we affirm the Board’s order.




                                    ____________________________________
                                    JAMES GARDNER COLINS, Senior Judge




                                       9
       IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Roxanna Nelson,                     :
                                    :
                  Petitioner        :
                                    :
           v.                       :   No. 692 C.D. 2015
                                    :
Workers’ Compensation Appeal        :
Board (Commonwealth of              :
Pennsylvania),                      :
                                    :
                  Respondent        :


                                ORDER


           AND NOW, this 10th day of December, 2015, the order of the
Workers’ Compensation Appeal Board in the above matter is AFFIRMED.




                                  ____________________________________
                                  JAMES GARDNER COLINS, Senior Judge
