[J-71-2017]

IN THE SUPREME COURT OF PENNSYLVANIA

WESTERN DISTRICT

SAYLOR, C.J., BAER, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

PENNSYLVANIA STATE POLICE,

Appellant

v.

WORKERS' COMPENSATION APPEAL 

BOARD (BUSHTA),

Appellee

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No. 14 WAP 2017

Appeal from the Order of the 

Commonwealth Court entered October 

26, 2016 at No. 2426 CD 2015, 

affirming the Order of the Workers' 

Compensation Appeal Board entered 

November 3, 2015 at No. A14-1335

ARGUED: October 18, 2017

OPINION

JUSTICE TODD DECIDED: MAY 29, 2018

In this discretionary appeal, we consider whether Appellant, the Pennsylvania 

State Police (“PSP”), is entitled to subrogation of benefits that a trooper – who was 

injured in a motor vehicle accident – was eligible to receive under the Workers’ 

Compensation Act (“WCA”)1 against the trooper’s recovery from a third-party tortfeasor

pursuant to the Motor Vehicle Financial Responsibility Law (“MVFRL”).2 For the 

reasons that follow, we conclude that PSP does not have a right of subrogation. 

Accordingly, we affirm the order of the Commonwealth Court.

 

1 77 P.S. §§ 1-1041.4, 2501-2708.

2 75 Pa.C.S. §§ 1701-1799.7.
[J-71-2017] - 2

As the instant appeal involves the interplay between three Pennsylvania statutes 

− the WCA, the Heart and Lung Act,3 and the MVFRL, we first review the applicable 

language and background of these statutes. The WCA, which applies to both public 

and private employees, provides compensation to employees who suffer work-related 

injuries. Under the WCA, an employee who is totally disabled and experiences a 

complete loss of earning power is entitled to receive benefits in the amount of 66-2/3% 

of his or her average weekly wages. 77 P.S. § 511.

Under Section 319 of the WCA, benefits paid to an employee are subject to 

subrogation by his or her employer:

Where the compensable injury is caused in whole or in part 

by the act or omission of a third party, the employer shall be 

subrogated to the right of the employe, his personal 

representative, his estate or his dependents, against such 

third party to the extent of the compensation payable under 

[the WCA] by the employer.

77 P.S. § 671.

In contrast to the WCA’s provision of partial wages to employees who are injured 

on the job, the Heart and Lung Act provides certain designated public employees, 

primarily police and fire personnel, who are injured in the course of their duties, with 

their full salary until their return to duty. Specifically, the Heart and Lung Act provides:

any member of the State Police Force[:]

* * *

who is injured in the performance of his duties including, in 

the case of firemen, duty as special fire police, and by 

reason thereof is temporarily incapacitated from performing 

his duties, shall be paid by the Commonwealth of 

Pennsylvania if an employe identified under paragraph (1), 

(2), (3), (4), (5), (6), (7), (8) or (12) . . . his full rate of salary, 

as fixed by ordinance or resolution, until the disability arising 

therefrom has ceased. All medical and hospital bills, 

 

3 53 P.S. § 637.
[J-71-2017] - 3

incurred in connection with any such injury, shall be paid by 

the Commonwealth of Pennsylvania . . . . During the time 

salary for temporary incapacity shall be paid by the 

Commonwealth of Pennsylvania . . ., any workmen's 

compensation, received or collected by any such employe 

for such period, shall be turned over to the Commonwealth 

of Pennsylvania . . . and paid into the treasury thereof, and if 

such payment shall not be so made by the employe the 

amount so due the Commonwealth of Pennsylvania . . . shall 

be deducted from any salary then or thereafter becoming

due and owing.

53 P.S. § 637(a)(1), (12).

As we explained in City of Erie v. W.C.A.B. (Annunziata), 838 A.3d 598, 603 (Pa. 

2003), the primary consideration in enacting the Heart and Lung Act was not the best 

interest of the disabled officer, but, rather, the interest of the municipality in attracting 

qualified individuals to hazardous occupations. While the Heart and Lung Act is thus 

often viewed as more generous than the WCA, the wages paid to an injured employee 

pursuant to the WCA may also include vacation and overtime pay. Id. Further, unlike 

the WCA, the Heart and Lung Act does not apply to work-related injuries which are 

permanent, and, while the WCA is to be liberally construed in favor of the injured 

employee, the Heart and Lung Act must be strictly construed. Id. at 604.

Finally, given that the Claimant’s injury in this case was caused by a motor 

vehicle accident, the subrogation and recovery provisions of the MVFRL are implicated. 

Section 1720 provides:

§ 1720. Subrogation

In actions arising out of the maintenance or use of a motor 

vehicle, there shall be no right of subrogation or 

reimbursement from a claimant's tort recovery with respect 

to workers' compensation benefits, benefits available under 

section 1711 (relating to required benefits), 1712 (relating to 

availability of benefits) or 1715 (relating to availability of 

adequate limits) or benefits paid or payable by a program, 

group contract or other arrangement whether primary or 

excess under section 1719 (relating to coordination of 

benefits).
[J-71-2017] - 4

75 Pa.C.S. § 1720. Relatedly, Section 1722 provides:

§ 1722. Preclusion of recovering required benefits

In any action for damages against a tortfeasor, or in any 

uninsured or underinsured motorist proceeding, arising out 

of the maintenance or use of a motor vehicle, a person who 

is eligible to receive benefits under the coverages set forth in 

this subchapter, or workers' compensation, or any program, 

group contract or other arrangement for payment of benefits 

as defined in section 1719 (relating to coordination of 

benefits) shall be precluded from recovering the amount of 

benefits paid or payable under this subchapter, or workers' 

compensation, or any program, group contract or other 

arrangement for payment of benefits as defined in section 

1719.

75 Pa.C.S. § 1722.

Critically, in 1993, the legislature repealed both Sections 1720 and 1722 insofar 

as they pertained to WCA benefits, thus allowing for subrogation and recovery of such 

benefits. See Act of July 2, 1993, P.L. 190, No. 44, § 25(b) (“Act 44”).

4

 By the express 

language of Act 44, however, the legislature did not eliminate the prohibition on 

subrogation and recovery of Heart and Lung benefits. See Oliver v. City of Pittsburgh, 

11 A.3d 960, 966 (Pa. 2011) (“By its plain terms, [Act 44] does not impact any antisubrogation mandates pertaining to [Heart and Lung] benefits.”). Indeed, in Heller v. 

Pennsylvania League of Cities and Municipalities, this Court recognized that the 

purpose of Act 44 was to transfer costs associated with work-related automobile 

accidents from the workers’ compensation system back to the automobile insurance 

market. 32 A.3d 1213, 1127 (Pa. 2011). With this background in mind, we now turn to 

a discussion of the facts of the instant case.

 

4 Act 44 provides: “The provisions of 75 Pa.C.S. §§ 1720 and 1722 are repealed insofar 

as they relate to workers' compensation payments or other benefits under the Workers' 

Compensation Act.” Act of July 2, 1993, P.L. 190, No. 44, § 25(b).
[J-71-2017] - 5

On February 25, 2011, Pennsylvania State Trooper Joseph Bushta (“Claimant”) 

was on duty when his police vehicle was hit by a tractor-trailer. As a result of the 

collision, Claimant suffered various cervical, thoracic, and lumbar injuries which required 

medical treatment and physical therapy, and which resulted in Claimant’s inability to 

perform his job duties for approximately 16 months. On March 18, 2011, PSP, a selfinsured public employer, issued a notice of compensation payable (“NCP”) indicating a 

weekly compensation rate of $858.08 under the WCA. The NCP contained the 

following notation under the heading “Remarks”: “Paid Salary continuation. Heart & 

Lung Benefits by the employer.” Notice of Compensation Payable, 3/18/11, at 2.

On January 21, 2014, Claimant and his spouse entered into a Settlement and 

Indemnity Agreement and Release of all Claims (“Settlement Agreement”) with the 

tractor-trailer driver, the driver’s employer, and the other responsible parties 

(collectively, “third-party tortfeasors”) for $1,070.000.

5

 The Settlement Agreement 

provided, inter alia, that Claimant would “reimburse any lien holder, known or unknown, 

for any liens as a result of the . . . incident.” Settlement Agreement, 1/21/14, at 1 ¶ 3 

(Reproduced Record (“R.R.”) at 43a). Claimant further acknowledged that he was 

“solely responsible for the payment of any medical bills, hospital liens, MedPay liens, 

worker[s’] compensation liens, attorney’s fees, taxes, withholding and all other fees, 

costs and expenses they have incurred as a result of the Accident.” Id. at 1 ¶ 6.

On February 4, 2014, PSP filed a petition to review compensation benefits 

pursuant to Section 771 of the WCA, asserting a right of subrogation against the 

 

5 Of this amount, $200,000 was apportioned to the Claimant’s spouse’s loss of 

consortium claim. Further, the contingent fee agreement between Claimant, his 

spouse, and their personal injury attorneys, Powell Law, provided that the firm would 

receive 33 1/3 % of the recovery, and that Claimant would be responsible for the costs 

incurred in connection with the prosecution of the third-party claim, which totaled 

$18,723.68.
[J-71-2017] - 6

proceeds of Claimant’s settlement with the third-party tortfeasors under Section 319 of 

the WCA. On November 19, 2014, Claimant entered into a signed stipulation 

(“Stipulation”) with PSP and PSP’s third-party administrator, Inservco Insurance 

Services, Inc. (“Inservco”). The Stipulation indicated, in pertinent part, that, between the 

date of Claimant’s injury on February 26, 2011 and the date he returned to work on

June 3, 2012, Claimant had been paid $56,873.13 under the WCA. Stipulation, 

11/19/14, at 2-3 ¶ 6 (R.R. at 110-11a). Notably, PSP concedes that Claimant never 

received any direct payment of benefits under the WCA, and that, instead, Inservco paid 

Claimant’s wage loss benefits directly to PSP, thereby avoiding the need for Claimant to 

remit these benefits back to the Commonwealth, as would have been required under 

Section 637(a)(12) of the Heart and Lung Act. The Stipulation further indicated that 

Claimant had been paid $94,166.64 under the Heart and Lung Act, and medical benefits 

in the amount of $110,869.53. Id. Finally, the Stipulation contained an 

acknowledgement that the parties had executed a “Third Party Settlement Agreement 

calculation sheet,” reflecting that PSP was entitled to reimbursement of a net lien in the 

amount of $109,021.32 based on the amount of WCA benefits and medical benefits

paid by PSP; the lien asserted did not include $37,293.51 in wage loss benefits payable 

solely pursuant to the Heart and Lung Act. Id. at 3 ¶ 7. According to the Stipulation, 

after the deduction of litigation expenses and attorneys’ fees, the total amount of PSP’s 

lien against Claimant’s recovery from the tortfeasors was $108,895.18. Id. However, 

as an alternative to litigation, PSP agreed to accept $98,895.18 as full payment of its 

lien. Id. at 3-4 ¶ 8. Nevertheless, the Stipulation specifically stated: “Claimant denies 

the existence of a lien given it is his contention that all benefits were paid pursuant to 

the terms of the Heart and Lung Act.” Id. This stipulation was signed by PSP on 
[J-71-2017] - 7

November 20, 2014, and, on December 2, 2014, it was approved by the Workers’ 

Compensation Judge (“WCJ”), Howard Spitzer, and adopted as an order.

Significantly, approximately one week prior to the execution of the Stipulation, the 

Commonwealth Court, on November 13, 2014, issued its decision in Stermel v. WCAB 

(City of Philadelphia), 103 A.3d 876 (Pa. Cmwlth. 2014). In Stermel, the claimant, a

Philadelphia police officer, suffered a back injury that rendered him unable to work for 

21 weeks when his police cruiser was rear-ended by a drunk driver. The employer, the 

City of Philadelphia, issued an NCP acknowledging that the claimant was entitled to 

workers’ compensation payments, but indicating that “Claimant received salary 

continuation in lieu of PA Workers’ compensation for period of lost time under the City of 

Philadelphia’s Heart and Lung Act.” Id. at 881. Subsequently, the claimant recovered 

$100,000 via a third-party tort claim against the drunk driver and the tavern that served 

the driver while he was visibly intoxicated. The employer sought subrogation of its 

payment of the claimant’s medical bills and wage loss. In holding that the employer was 

entitled to subrogation, the Workers’ Compensation Appeal Board (“Board”), relying on

Bureau of Workers’ Compensation v. Workers’ Compensation Appeal Board (Excalibur 

Insurance Management Service), 32 A.3d 291 (Pa. Cmwlth. 2011), and Wisniewski v. 

Workmen’s Compensation Appeal Board (City of Pittsburgh), 621 A.2d 1111 (Pa. 

Cmwlth. 1993), determined that “two-thirds of the Heart and Lung disability benefits paid 

[to the claimant] represented workers’ compensation benefits.” Stermel, 103 A.3d at 

881.

On appeal, the Commonwealth Court reversed and held that the employer was 

not entitled to subrogation of its payment of the claimant’s medical bills and wage loss 

against the claimant’s third-party tort recovery. In particular, the Commonwealth Court 

rejected the Board’s reliance on Excalibur Insurance and Wisniewski, noting that neither 
[J-71-2017] - 8

was a subrogation case involving the MVFRL. The Commonwealth Court observed that 

the anti-subrogation provision in Section 1720 of the MVFRL has been construed to 

include benefits paid under the Heart and Lung Act. Stermel, 103 A.3d at 885. The 

court further acknowledged that, while the legislature, through Act 44, expressly 

repealed both Sections 1720 and 1722 insofar as they pertained to subrogation of 

benefits under the WCA, the legislature did not eliminate the prohibition against 

subrogation of Heart and Lung benefits. Thus, the Commonwealth Court reasoned that 

the claimant “continued to be ‘precluded’ from recovering the amount of benefits paid 

under the Heart and Lung Act from the responsible tortfeasors,” and that there can be 

no subrogation out of an award that does not include WCA benefits. Id.

In the instant case, on December 22, 2014, conceding that he was unaware of 

the Stermel decision at the time the Stipulation was signed, counsel for Claimant filed 

an appeal with the Board, asserting that all the benefits Claimant had received had 

been paid pursuant to the Heart and Lung Act, and, thus, under Stermel, were not 

subrogable. On November 3, 2015, the Board determined that, because Stermel was 

decided on November 13, 2014 − prior to the date PSP and Claimant signed the 

Stipulation − Stermel was controlling and Claimant was not bound by his lien-related 

concessions in the Stipulation, as they were based on an erroneous reading of the law 

by his counsel. Accordingly, the Board held the Stipulation was void as contrary to law, 

and reversed the WCJ’s order adopting the Stipulation as an order.

PSP petitioned the Commonwealth Court for review of the Board’s decision. In a 

unanimous published opinion authored by Judge Ann Covey, a three-judge panel of the 

court affirmed the Board’s decision. Pennsylvania State Police v. Workers’ 

Compensation Appeal Board (Bushta), 149 A.3d 118 (Pa. Cmwlth. 2016). The court 

first agreed that, because Stermel was decided prior to the issuance of the WCJ’s order 
[J-71-2017] - 9

approving and adopting the Stipulation, and prior to Claimant’s appeal to the Board, 

Stermel was controlling law at the time the Board decided Claimant’s appeal, and, 

therefore, the Board did not err in applying Stermel to the instant case. Id. at 121.6

The Commonwealth Court further determined that, pursuant to Stermel, PSP was 

not entitled to subrogation of the lost wages paid to Claimant under the Heart and Lung 

Act from the proceeds of Claimant’s settlement with the third-party tortfeasors. 

Additionally, the Commonwealth Court recognized that, while the court in Stermel

appeared to limit its holding to lost wages, because the Heart and Lung Act requires 

payment of all medical expenses in addition to full salary, PSP could not recover from 

the proceeds of Claimant’s settlement with the third-party tortfeasors any portion of the 

medical benefits paid to Claimant under the Heart and Lung Act.

PSP filed a petition for allowance of appeal, and this Court granted review to 

consider the following issues:

(1) Is compensation payable pursuant to Article III of the 

[WCA], when the Claimant suffers a work related injury and 

is concurrently entitled to benefits under the [WCA] and the 

Heart and Lung Act?

(2) Did the Commonwealth Court err in its determination that 

a self-insured municipality . . . is not entitled to subrogation, 

to the extent of the compensation payable pursuant to Article 

III of the [WCA], when it has concurrent obligations to an 

injured State Trooper under the [WCA] and the Heart and 

Lung Act?

Pennsylvania State Police v. Workers’ Compensation Appeal Board (Bushta), 168 A.3d 

1260 (Pa. 2017) (order).

In its brief to this Court, PSP insists that it is not challenging this Court’s 

determination in Oliver that, pursuant to the MVFRL, employers are precluded from 

 

6 This aspect of the Commonwealth Court’s decision is not before us.
[J-71-2017] - 10

obtaining subrogation of payments made to a claimant under to the Heart and Lung Act. 

Rather, PSP maintains that, where an injured employee is entitled to concurrent

benefits under the WCA and the Heart and Lung Act, the benefits to which the 

employee is entitled to under the WCA constitute “compensation payable” to which an 

employer has a right of subrogation. Moreover, PSP contends that an employer has a 

right of subrogation to “compensation payable” under the WCA regardless of whether 

the employer actually pays workers’ compensation benefits to the claimant. Appellant’s 

Brief at 18; 29 (“The issue is not the extent that the Claimant has received 

compensation under the [WCA], but rather the extent to which compensation is actually 

payable under the WCA on account of a work injury.”).7 Claimant responds that PSP’s 

argument not only ignores the plain language of the Heart and Lung Act, the WCA, and 

the MVFRL, but also this Court’s decision in Oliver, and the Commonwealth Court’s 

decision in Stermel.

8

As support for its position, PSP cites, inter alia, this Court’s decision in 

Annunziata, wherein we held that “there is ‘compensation payable’ for wage loss 

benefits payable under the [WCA] even while the Claimant is receiving benefits under 

the Heart and Lung Act.” Appellant’s Brief at 22. According to PSP, the language of 

Section 637(a) of the Heart and Lung Act, which requires that any workers’ 

compensation benefits received or collected by an employee who is receiving Heart and 

Lung benefits shall be turned over to the Commonwealth, further supports the

proposition that compensation is payable under the WCA and the Heart and Lung Act 

concurrently. Id. at 17. In PSP’s view, the legislature would not require employers to 

 

7 The Delaware Valley Workers’ Compensation Trust has submitted an amicus brief in 

support of PSP.

8 The Pennsylvania Association for Justice and Patricia Hodge, a named plaintiff in a 

class action suit involving individuals subjected to subrogation liens for Heart and Lung 

benefits, have filed amicus briefs in support of Claimant.
[J-71-2017] - 11

provide concurrent workers’ compensation benefits to an employee who is receiving 

Heart and Lung benefits without affording the employer corresponding rights under the 

WCA − namely, the employer’s right to subrogation of the “compensation payable” 

under the WCA. Id. at 19.

Moreover, in arguing that an employer has a right of subrogation to

“compensation payable” under the WCA − regardless of whether the employer actually 

paid benefits to the claimant − PSP suggests that, if there is no “compensation payable” 

under such circumstances, there would be no basis for an award of counsel fees to an 

attorney for a claimant who is also receiving Heart and Lung benefits. See Organ v. 

Pennsylvania State Police, 535 A.2d 713 (Pa. Cmwlth. 1988). PSP also posits that an 

employer must be afforded a right to subrogation of compensation payable under the 

WCA, whether or not benefits are actually paid by the employer, in order for the WCJ to 

have jurisdiction to rule on petitions involving a claimant who is receiving benefits under 

the Heart and Lung Act. Appellant’s Brief at 21.

PSP is correct in its observation that this Court has held that a claimant may be 

entitled to concurrent benefits under the WCA and the Heart and Lung Act. In 

Annunziata, the claimant, a police officer for the City of Erie, was injured while on duty

and received his full salary pursuant to the Heart and Lung Act. The claimant also 

sought workers’ compensation benefits for his loss of earning power with respect to his 

concurrent, supplemental employment as a part-time security guard and a part-time 

maintenance worker. In denying an obligation to pay workers’ compensation benefits, 

the city argued that the clear language of the Heart and Lung Act precluded the 

claimant from recovering from a collateral source benefits for the same work injury, 

even if the benefits relate to concurrent employment. This Court rejected that 
[J-71-2017] - 12

argument, and determined that the claimant was entitled to seek workers’ compensation 

for his concurrent employment, reasoning:

[t]he unambiguous language of Section 1(a) of the Heart and 

Lung Act . . . clearly contemplates the ability of an injured 

employee to seek workers’ compensation. That section 

provides that any workmen’s compensation received or 

collected by [the employee for the period of injury] shall be 

turned over. . . . 53 P.S. 637(a) (emphasis added). . . . This 

language does not estop an injured employee from seeking

workers’ compensation, only from retaining monies collected 

pursuant to a workers’ compensation Claim Petition. While 

the effect of this dichotomy may ultimately be rendered 

hollow by the set-off, . . . nonetheless the Heart and Lung 

Act does not relieve the employer from its ‘continuing 

obligations to pay workers’ compensation benefits for the 

work injury.’ Likewise, nothing in the [WCA] eliminates the 

responsibility of an employer to pay workers’ compensation 

to an injured employee who is receiving Heart and Lung 

Benefits. . . . [The employer’s] obligation to pay Heart and 

Lung benefits “is concurrent with, not in lieu of its obligation” 

pursuant to the workers’ compensation scheme.

Annunziata, 838 A.2d at 604-05 (emphasis and some citations omitted).

However, although we recognized in Annunziata that an injured employee who is 

receiving benefits under the Heart and Lung Act may seek benefits under the WCA for 

concurrent employment, we stressed that our decision “should not be read to imply that 

an injured employee can, in good faith, seek workers’ compensation benefits for the 

same job that gives rise to Heart and Lung benefits.” Id. at 606 n.8. Moreover, we 

cautioned that, while a claimant who is receiving Heart and Lung benefits may “seek 

and receive worker’s compensation benefits for concurrent employment,” the Heart and 

Lung Act requires the employee to turn over to the employer all workers’ compensation 

benefits “received or collected.” Id. at 605-06 (emphasis original). It follows that, in 

cases where the employee does not actually receive or collect workers’ compensation 

benefits, such as in the instant case, there is no basis for subrogation.
[J-71-2017] - 13

Similarly, in Organ, the claimant, who was the recipient of benefits under both the 

Heart and Lung Act and the WCA, challenged a salary deduction of 20% of his WCA 

benefits that were paid directly to his attorney. The remaining 80% of the WCA benefits 

was paid to the employer, as required under the Heart and Lung Act. Noting that the 

claimant “never actually received the portion of the workmen’s compensation benefits 

paid directly to his attorney,” the Commonwealth Court held that portion was not subject 

to recovery by the Commonwealth. 535 A.2d at 714. Thus, neither this Court’s decision 

in Annunziata, nor the Commonwealth Court’s decision in Organ, supports PSP’s 

argument that an employer is entitled to subrogation of workers’ compensation benefits 

which are “payable,” but not actually paid, to an employee.

Notwithstanding the above, PSP argues that, pursuant to Wisniewski and 

Excalibur Insurance, a portion of the benefits actually paid to Claimant pursuant to the 

Heart and Lung Act in the instant case do, in fact, constitute workers’ compensation 

benefits to which PSP has a right of subrogation. In Wisniewski, the claimant was a 

police officer who was injured on the job, and her self-insured employer issued an NCP 

indicating the claimant’s weekly disability rate, and further noting that she was receiving 

her full salary under the Heart and Lung Act. Thereafter, the employer filed a 

termination petition based on the claimant's full recovery, and the petition was granted. 

The claimant appealed, arguing that there could be no termination of workers' 

compensation benefits because she had never actually received them; rather, she had 

received her full salary under the Heart and Lung Act. The Commonwealth Court held 

that, where a self-insured employer pays Heart and Lung benefits, two-thirds of those 

payments represent workers' compensation benefits, and, therefore, the employer could

seek termination of workers' compensation benefits even while Heart and Lung benefits 

continued.
[J-71-2017] - 14

Excalibur Insurance also involved a police officer who was injured on the job. His 

self-insured employer acknowledged liability under the WCA, but paid the claimant his 

full salary under the Heart and Lung Act. Subsequently, the employer filed a 

termination petition and requested supersedeas, which was denied. Ultimately, the 

termination was granted and the employer sought reimbursement from the supersedeas

fund. The Bureau of Workers' Compensation opposed the request, arguing that only 

Heart and Lung benefits were paid. Relying on Wisniewski for the proposition that 2/3 

of the benefits received by an employee from a self-insured employer who is obliged to

pay benefits under both the Heart and Lung Act and the WCA represent workers’ 

compensation benefits, and reasoning that it would be inequitable to treat a self-insured 

employer differently than a third-party insurer, the Commonwealth Court held that the 

employer was entitled to reimbursement from the supersedeas fund for the portion of 

the Heart and Lung benefits paid in lieu of workers' compensation benefits. 32 A.3d at 

295.

PSP argues that the Commonwealth’s Court’s decision below effectively 

extinguishes an employer’s subrogation rights to workers’ compensation benefits by 

classifying all benefits received by an injured public employee as Heart and Lung 

benefits, in contravention of Wisniewski and Excalibur Insurance. However, we note 

that PSP’s argument is the same argument made by the Board in Stermel, which was 

rejected by the Commonwealth Court:

Wisniewski and Excalibur Insurance are not subrogation 

cases. Wisniewski terminated the employer's liability for 

workers' compensation, but it also held that the employer 

had to pay the claimant full Heart and Lung benefits unless 

and until those benefits were terminated in another 

proceeding. Stated otherwise, Wisniewski expressly 

acknowledged that Heart and Lung benefits and workers' 

compensation benefits are subject to different statutory 

regimes. Excalibur Insurance dealt with the employer's right 
[J-71-2017] - 15

to recoup from the supersedeas fund. In both cases, the 

Court decided the issues solely under the [WCA]. In neither 

case was the [MVFRL] implicated.

By contrast, this case does involve the [MVFRL], and 

it prohibits a plaintiff from including as an element of 

damages payments received in the form of workers' 

compensation or other “benefits paid or payable by a 

program . . . or other arrangement.” 75 Pa.C.S. § 1720.

This language “benefits paid or payable by a program” has 

been construed to include the program by which Heart and 

Lung benefits are paid. Fulmer [v. Pennsylvania State 

Police, 647 A.2d 616, 618-19 Pa. Cmwlth. 1994)]. Section 

25(b) of Act 44 changed the Section 1720 paradigm only for 

workers' compensation benefits, not Heart and Lung 

benefits. This means Claimant continued to be “precluded” 

from recovering the amount of benefits paid under the Heart 

and Lung Act from the responsible tortfeasors. 75 Pa.C.S. § 

1722. There can be no subrogation out of an award that 

does not include [workers’ compensation benefits].

Likewise, because the tort recovery cannot, as a matter of 

law, include a loss of wages covered by Heart and Lung 

benefits, Claimant did not receive a double recovery of lost 

wages or medical bills.

103 A.3d at 884-85.

PSP ignores the fact that, like Stermel, the instant case is distinguishable from 

Wisniewski and Excalibur Insurance because it involves the MVFRL. Indeed, here, as 

in Stermel, Claimant was precluded from recovering his lost wages and medical benefits 

from the tortfeasors under the MVFRL because Claimant’s wages and medical benefits 

were fully covered by the Heart and Lung Act. We agree with the Stermel court that, for 

purposes of the MVFRL, Heart and Lung benefits subsume WCA benefits, and thus 

subrogation of such benefits is barred.

Nevertheless, PSP argues that Stermel should be “limited solely to those 

instances where there was no actual evidence offered showing what amount of 

‘compensation payable’ the employer actually remitted based upon the obligations 

imposed under the [WCA].” Appellant’s Brief at 27. Specifically, PSP highlights that the 
[J-71-2017] - 16

NCP in Stermel indicated that the claimant’s Heart and Lung benefits were being paid 

“in lieu of workers’ compensation,” whereas the NCP in the instant case contained no 

such provision. Id. at 33. PSP further contends that the evidence it submitted 

demonstrating that all medical bills were paid after “re-pricing” “means that all medical 

bills were paid pursuant to the [WCA] and comprised the compensation payable for 

medical benefits . . . under the WCA.” Id. at 34.9

PSP offers no support for its suggestion that, because the NCP issued to 

Claimant identified a weekly compensation rate of $858.08 under the WCA, and did not 

specifically provide that the Heart and Lung benefits provided to Claimant were in lieu of 

workers’ compensation benefits, the benefits provided to Claimant must be considered, 

at least in part, WCA benefits for the purposes of the MVFRL anti-subrogation provision. 

As recognized in Stermel, self-insured public employers, such as PSP, that pay Heart 

and Lung benefits

do not also make workers’ compensation payments because 

they would simply be returned. Wisniewski, [621 A.3d at 

113]. Nevertheless, self-insured employers paying Heart 

and Lung benefits issue a notice of compensation payable to 

acknowledge the work injury. See City of Philadelphia v. 

Workers’ Compensation Appeal Board (Ford-Tilghman), 996 

A.2d 569, 573 (Pa. Cmwlth. 2010).

Stermel, 103 A.3d at 877-78. We find no basis upon which to conclude that a mere 

acknowledgement in an NCP of a work injury, and the specification of the amount of 

 

9 Consistent with Act 44’s goal of cost containment, the legislature enacted Section 

306(f.1)(3) of the WCA, which limits the amount a health care provider may charge or 

accept as payment for health services to 113% of the prevailing charge payable by 

Medicare. See 77 P.S. § 531(3)(i); Jaquay v. Workers’ Compensation Appeal Board 

(Central Property Services), 717 A. 1075, 1077 (Pa. Cmwlth. 1998) (noting that the 

General Assembly enacted 306(f.1)(3) of the WCA in an attempt to contain “the 

escalating medical costs to employers in workers’ compensation cases”).
[J-71-2017] - 17

benefits to which an injured employee would be entitled under the WCA, transforms an 

injured employee’s Heart and Lung benefits into WCA benefits under the MVFRL.

Finally, we reject PSP’s suggestion that, because Claimant’s medical bills were 

paid using the “re-pricing” formula set forth in the WCA, such medical payments 

constitute compensation payable under the WCA. As the Commonwealth Court

recognized below, the Heart and Lung Act provides for the payment of “[a]ll medical and 

hospital bills, incurred in connection with any such injury.” 53 P.S. § 637(a)(12). 

Further, in Oliver, this Court explained that the Heart and Lung Act:

applies to protect employees serving the public in essential, 

high-risk professions. The design is to insure that, if they are 

temporarily disabled in the performance of their duties, these 

critical-services personnel do not suffer salary losses or 

incur the expense of medical care and treatment. 53 P.S. § 

637(a); see, e.g., [Annunziata, 838 A.2d 603-04 & n.6]. 

Although the WCA also embodies a similar remedial 

scheme, the [Heart and Lung Act’s] more favorable 

treatment of public-safety employees who are temporarily 

disabled suggests against treating an overlap as an 

equivalency.

Oliver, 11 A.3d at 966 (emphasis added). Payment of a claimant’s medical care and 

treatment is required under the Heart and Lung Act, and, regardless of the pricing 

schedule utilized, such payment constitutes a Heart and Lung benefit.

For all of the foregoing reasons, we conclude that all of the benefits Claimant 

received were Heart and Lung benefits, not WCA benefits. Thus, pursuant to the 

MVFRL, PSP does not have a right of subrogation against Claimant’s settlement with 

the third-party tortfeasors. Accordingly, we affirm the order of the Commonwealth 

Court.

Order affirmed.

Chief Justice Saylor and Justices Baer, Donohue, Dougherty, Wecht and Mundy 

join the opinion.