September 2021 Case of the Month - Pennsylvania: Omission of Medical Marijuana from MSA is No Reason to Set-Aside Settlement
Lehigh Specialty Melting, Inc. v. WCAB (Bosco), 569 C.D. 2020, filed July 3, 2021, 2021 WL 2934769 (en banc, unreported, Pa. Commw. 2021).
On April 27, 2011, Joseph Bosco, the claimant, sustained a work injury in the nature of a low back sprain/strain and a disc herniation. The injury was accepted by the employer by way of Notice of Compensation Payable and the Claimant commenced the receipt of wage loss and medical benefits under the Workers’ Compensation Act. The parties subsequently entered into a Compromise and Release Agreement (C&R), which was approved in a decision and order of a WCJ on May 19, 2014. The same WCJ who approved the C&R issued an amended order on June 10, 2014, specifying that the employer was to continue to pay the medical expenses associated with the claimant’s work injury until it funded a Workers’ Compensation Medicare Set Aside Arrangement (MSA) approved by the Center for Medicare & Medicaid Services (CMS).
Two years after the C&R, medical marijuana was legalized, and the worker began using medical marijuana as a form of treatment for his injury. In 2018, the employer secured CMS approval of an MSA. The claimant advised the employer of his medical marijuana use, and the employer contacted CMS to determine if the claimant’s use of the same would alter the MSA amount. CMS advised the employer that the claimant’s use of medical marijuana would not alter the MSA amount. The employer’s counsel also informed the claimant’s counsel that medical marijuana cannot be considered for an MSA because marijuana is illegal under Federal law.
Thereafter, the claimant refused to cooperate in executing documents to finalize the MSA. The employer filed a Petition to Seek Approval of a C&R Agreement and requested that the WCJ find that Claimant was bound by the original C&R Agreement. At hearings, the claimant acknowledged that he knew a delay would occur between the original C&R and the funding of an MSA. The WCJ ultimately granted the C&R, finding that Claimant fully understood the first C&R Agreement and the decision to fund an MSA lay entirely with the Defendant/Employer.
Claimant appealed to the WCAB, arguing that there had been no resolution of the medical portion of the Claim as there had been no “meeting of the minds” as to this portion of the resolution. The WCAB reversed the WCJ finding that the WCJ had no authority to order the Claimant to execute the documents needed to finalize funding the MSA. The Board further held that there could be no meeting of the minds as medical marijuana was not legal at the time of the original C&R approval, relying on the Commonwealth Court’s holding in Stroehmann Bakeries v. WCAB (Plouse), 768 A.2d 1193 (Pa.Cmwlth. 2001).
Defendant appealed to the Commonwealth Court, arguing that the WCAB misapplied the “meeting of the minds” standard. Ultimately, the Commonwealth Court reversed the WCAB, reinstating the Order of the WCJ. The Court held that the only bases for setting aside a C&R Agreement are fraud, coercion, or mistake. The Court held further the intervening legalization of medical marijuana did not reflect a “mistake” sufficient to change the terms of the already approved C&R.
When entering into a Compromise and Release Agreement, it is crucial to clearly spell out the terms of the Agreement both in the document and during the hearing before the WCJ. In cases where medical benefits will continue to be paid pending submission of a Medicare Set-Aside Trust for approval and later funding, testimony must be elicited at the time of the hearing from the injured worker which establishes that they understand they must cooperate with the carrier in obtaining and funding the MSA and, further, this includes signing any paperwork associated with obtaining approval of the MSA from the Centers for Medicare and Medicaid Services.
New proposed legislation was introduced on September 2, 2021 regarding the requirement for witness signatures or signature before a notary on a Compromise and Release Agreement. With the pandemic emergency orders which waived the requirement for witness and/or notary signatures set to expire on September 30, 2021, the new legislation would codify the pandemic emergency order. House Bill 1837 of 2021 would waive the requirement for witness signatures or signature of a Compromise and Release Agreement before a Notary if the injured worker or widow/widower would appear “personally” before a Workers’ Compensation Judge and attest that they fully understood the legal significance of the Compromise and Release Agreement. The proposed legislation would otherwise not modify the Compromise and Release Agreement or process by which claims are resolved under the Workers’ Compensation Act.