Court Opinion

ID: 4548321
Source: CourtListenerOpinion
Date Created: 2020-07-15 13:10:16.387414+00
Date Added: 2024-06-11T12:56:26.819006
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Anna Griffis,                               :
                           Petitioner       :
                                            :
                    v.                      :   No. 273 C.D. 2019
                                            :
Workers’ Compensation Appeal                :
Board (Albert Einstein Healthcare           :
Network),                                   :
                        Respondent          :

Albert Einstein Medical Center,             :
                         Petitioner         :
                                            :
                    v.                      :   No. 280 C.D. 2019
                                            :   Argued: June 9, 2020
Workers’ Compensation Appeal                :
Board (Griffis),                            :
                      Respondent            :

BEFORE:      HONORABLE RENÉE COHN JUBELIRER, Judge
             HONORABLE ELLEN CEISLER, Judge (P.)
             HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY
JUDGE COHN JUBELIRER                            FILED: July 15, 2020

      Before this Court are the cross-petitions for review filed by Anna Griffis
(Claimant) and Albert Einstein Medical Center (Employer),1 which have been
consolidated, challenging the Workers’ Compensation Appeal Board’s (Board)
February 13, 2019 Order.         In that Order, the Board affirmed a Workers’

      1
         Claimant’s Petition for Review identifies as her employer Albert Einstein Health
Network, of which Employer is a subsidiary corporation.
Compensation Judge’s (WCJ) May 10, 2018 Decision (2018 WCJ Decision)
granting Claimant’s Penalty Petition based on Employer’s violation of the Workers’
Compensation (WC) Act2 (WC Act), but imposing no penalty. The Board also
affirmed, as modified, the 2018 WCJ Decision granting Employer’s Modification
and Suspension Petition, directing Claimant to pay a lump sum from her third-party
recovery in a medical malpractice action to Employer and suspending Claimant’s
benefits until she reimbursed Employer.3 The WCJ ordered the lump sum payment
to reimburse Employer for the indemnity and medical benefits Employer had paid
between the date of her third-party recovery in 2013, and the 2017 WCJ decision
approving subrogation, which Employer characterizes as an “accrued lien.” The
Board modified the 2018 WCJ Decision by reducing the amount of Claimant’s lump
sum payment to Employer to exclude the medical benefits it had paid since the
settlement of the third-party action pursuant to Whitmoyer v. Workers’
Compensation Appeal Board (Mountain Country Meats), 186 A.3d 947 (Pa. 2018).
       On appeal, Claimant argues the Board erred in affirming the 2018 WCJ
Decision, which did not impose a penalty for Employer’s violation of the WC Act,
by unilaterally suspending its payment of benefits. Claimant also asserts that the
Board erred in affirming, even as modified, the suspension of her benefits based on
her non-payment of any accrued lien because no such lien exists under Whitmoyer
and/or Protz v. Workers’ Compensation Appeal Board (Derry Area School District),
131 A.3d 572 (Pa. Cmwlth. 2016).                 Employer argues there was no error in
suspending Claimant’s benefits or in not awarding a penalty, but asserts the Board

       2
          Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4; 2501-2710.
       3
          In a case argued on the same day as this matter, Griffis v. Workers’ Compensation Appeal
Board (Albert Einstein Health Network) (Pa. Cmwlth., No. 272 C.D. 2019, filed July 15, 2020)
(Griffis I), the Court addresses Claimant’s arguments that her third-party recovery is not subject to
subrogation under Section 319 of the WC Act, 77 P.S. § 671.

                                                 2
erred in recalculating Employer’s accrued lien to exclude the medical benefits it has
paid since the date of her third-party recovery and from its future recovery from
Claimant’s medical benefits based on Whitmoyer. Employer asserts that Whitmoyer
does not apply to a situation where, as here, the third-party action was a medical
malpractice action subject to Section 508 of the Medical Care Availability and
Reduction of Error (MCARE) Act,4 40 P.S. § 1303.508, and Protz.                   The
Pennsylvania Association For Justice, as amicus curiae, argues that the MCARE Act
prohibits Employer from asserting a subrogation claim under Section 319 of the WC
Act against any of Claimant’s past or future WC benefits. Accordingly, the issues
before the Court primarily involve the interplay of Section 319 of the WC Act and
Section 508 of the MCARE Act, as well as the recent decisions in Whitmoyer and
Protz, and the impact these statutory provisions and this precedent have on an
employer’s right to subrogate a third-party award from a medical malpractice action
arising from the treatment of a work-related injury.

      I.       Background
      A. Factual Background
      The full factual background of Claimant’s work-related injury, her third-party
medical malpractice action, and the 2017 proceedings before a WCJ that resulted in
the grant of Employer’s prior modification petition and recognition of its
subrogation rights under Section 319 of the WC Act is set forth in Griffis v. Workers’
Compensation Appeal Board (Albert Einstein Health Network) (Pa. Cmwlth., No.
272 C.D. 2019, argued June 9, 2020) (Griffis I). We briefly recount the facts
pertinent to this matter.

      4
          Act of March 20, 2002, P.L. 154, as amended, 40 P.S. § 1303.508.

                                               3
       On April 28, 2009, Claimant sustained a work-related injury to her neck, and,
during her initial treatment, Claimant’s spinal cord injury was not properly
diagnosed and treated. Ultimately, Claimant had to undergo emergency surgery,
which left her with ongoing neurological dysfunctions. Claimant filed a medical
malpractice action against the doctors who initially treated her, contending they did
not properly diagnose her injuries and that, as a result, she incurred additional
medical expenses, future disability, and pain and suffering. In April 2013, an
arbitrator found those doctors negligent and awarded Claimant $2.5 million and
$375,000 to her husband. This award was capped, pursuant to a high-low agreement,
at $2.4 million. Claimant’s share of the award is $2.088 million.
       Prior to the third-party action, Employer accepted an injury described as a
cervical sprain pursuant to a Notice of Temporary Compensation Payable, which
converted by operation of law into a Notice of Compensation Payable. This injury
was expanded in June 2013 by a stipulation of the parties. Thereafter, Employer
filed modification petitions seeking to subrogate Claimant’s third-party recovery
under Section 319. Claimant denied the allegations.5 On August 1, 2017, a different
WCJ issued a decision finding that Employer had met its burden of establishing its
entitlement to subrogation and granting Employer’s modification petition (2017
WCJ Decision). Upon Claimant’s appeal, the Board affirmed.

       5
         Claimant also filed a review petition seeking to expand the description of her work injury
to include a psychological component, which Employer acknowledged existed, and additional
cervical injuries, which Employer denied as being not work related. The WCJ added the
psychological component, but rejected Claimant’s attempt to add additional cervical injuries. The
Board affirmed. Claimant’s challenge to this determination is at issue in Griffis I.

                                                4
       B. The Petitions
       Following the 2017 WCJ Decision, Employer stopped making payments to
Claimant and her counsel beginning on or around October 3, 2017. Claimant filed
the Penalty Petition on November 3, 2017, alleging that Employer unilaterally
stopped payment of Claimant’s pro rata share of fees and expenses related to the
third-party recovery. (2018 WCJ Decision, Finding of Fact (FOF) ¶ 1.) She sought
the imposition of a 50% penalty and unreasonable contest attorney’s fees.
(Supplemental Reproduced Record (S.R.R.) at 153b-54b.) In its answer, Employer
denied the allegations and asserted it was exercising its right to subrogation pursuant
to the 2017 WCJ Decision. (FOF ¶ 1.) Employer filed its Modification and
Suspension Petition on December 22, 2017, for the purpose of protecting its
subrogation interests, restating its position that it could stop paying Claimant’s pro
rata benefits pursuant to the 2017 WCJ Decision. (Id. ¶ 2.) Claimant filed an answer
denying the allegations and seeking unreasonable contest attorney’s fees. The
Petitions were consolidated and assigned to the WCJ.

       C. Proceedings Before the WCJ and the 2018 WCJ Decision
       The parties presented documentary evidence and argument. Claimant offered
WCJ decisions from 2013, 2014, and 2017.6 She also presented her own statement
that she had not received any payments from Employer since October 3, 2017, and
a statement from her counsel’s office reflecting that counsel had not received any
payment of attorney’s fees since that date. Claimant also submitted her litigation
costs and a quantum meruit statement for her counsel. Employer submitted the 2017

       6
           Respectively, the WCJ’s decisions in 2013 and 2014 expanded the definition of
Claimant’s work-related injury and dismissed, without prejudice, a prior modification petition filed
by Employer seeking to assert its subrogation interest. The 2017 WCJ Decision is at issue in
Griffis I.

                                                 5
WCJ Decision and a listing of the payments it had made since April 2013. Both
parties presented correspondence between counsel after the 2017 WCJ Decision. By
letter dated September 27, 2017, Employer advised Claimant that it sought
$265,507.01 as reimbursement for the medical and indemnity benefits it had paid
since the date of third-party recovery, which it characterized as its accrued lien, and
that it was asserting its right to a future credit against Claimant’s future benefits. (Id.
¶ 3(e).)   Employer attached to that letter a Third-Party Settlement Agreement
(TPSA) setting forth the calculations supporting its claims. (Id.) Claimant’s counsel
responded in an October 4, 2017 letter, agreeing to Employer’s future credit and pro
rata share of cost calculations, but asserting that Claimant had no legal obligation to
reimburse Employer for its “accrued lien.” (Id. ¶ 3(f).) Therein, Claimant asserted
that the 2017 WCJ Decision “did not specifically state that [Employer] was entitled
to reimbursement of the accrued lien.” (Id.) Per advice of its counsel, Employer
stopped paying Claimant’s pro rata share of her compensation payments as of
October 3, 2017. (Id. ¶ 3(g).)
       Reviewing the evidence, the WCJ found that Employer had violated the WC
Act when, on or about October 3, 2017, it unilaterally stopped making the pro rata
share payments to Claimant. (2018 WCJ Decision, Conclusion of Law (COL) ¶ 2.)
However, the WCJ did not award a monetary penalty for this technical violation of
the WC Act, finding that “Claimant ha[d] retained a substantial windfall in failing
to reimburse the accrued lien payable from the third-party settlement.” (Id. ¶ 6.)
The WCJ held that Claimant was “obligated to immediately reimburse [Employer]
for the accrued lien” and that Employer had proven its “entitlement to a full
suspension of Claimant’s benefits until such time as the accrued lien [was]
reimbursed.” (Id. ¶¶ 3-4.) Further, the WCJ concluded, Employer was “entitled to

                                            6
a future credit for the balance of recovery,” “over the grace period pursuant to the
[TPSA] to which the parties ha[d] agreed” subject to its payment to Claimant of its
pro rata share of the costs. (Id. ¶ 3.) Upon Claimant’s payment to Employer of the
full accrued lien, the WCJ held that Claimant’s “benefits will be modified to the
agreed pro rata share as calculated in the [TPSA].” (Id. ¶ 5.) The amount of the
accrued lien for which immediate payment was due, as set forth in the TPSA, was
$265,507.01.7 The amount of Claimant’s pro rata share of the third-party litigation
expenses was 39.7366% of the balance of recovery, or $322.20 per week.

       D. The Board’s Opinion
       Claimant and Employer appealed to the Board. Claimant argued the WCJ
erred in directing that she immediately reimburse Employer the accrued lien and
approving the full suspension of her benefits until the accrued lien was reimbursed.8
Claimant further asserted the WCJ abused his discretion in not awarding a penalty
despite finding a violation of the WC Act.               Employer challenged the WCJ’s
conclusion that it had violated the WC Act, asserting it had not unilaterally
suspended its payments but had done so in accordance with the 2017 WCJ Decision.
       The Board disagreed with Claimant that the WCJ erred in ordering immediate
reimbursement of Employer’s accrued lien. The Board held that the award of an
immediate lump sum repayment for the benefits Employer had paid is within a

       7
          This calculation was based on the payment of $196,439.20 in indemnity benefits and
$244,138.78 in medical benefits, for a total accrued lien of $440,577.98, which was reduced by
$175,070.97, the amount of litigation expenses attributed to the accrued lien. (Board Opinion
(Op.) at 6-7 & n.5.)
        8
          Claimant further argued that the WCJ erred in granting the Modification and Suspension
Petition for the reasons she asserted in her appeal from the 2017 WCJ Decision, which the Board
rejected in its opinion denying Claimant’s appeal in Griffis I. The Board in this matter observed
that, having already rejected those arguments, it would not discuss them again.

                                               7
WCJ’s authority. (Board Opinion (Op.) at 5 (citing Ward v. Workmen’s Comp.
Appeal Bd. (Sun Ref. & Mktg. Co.), 599 A.2d 1013, 1015 (Pa. Cmwlth. 1991)).)
Further, the Board explained that under Section 508 of the MCARE Act and Protz,
an employer was limited to the “subrogation of indemnity and medical benefits paid
after the medical malpractice third-party adjudication.” (Id. at 4.) The Board held
that, pursuant to Protz, an employer is entitled to subrogate “all benefits paid after
the claimant’s medical malpractice claim settled, not as of the date the [employer]
sought reimbursement,” and this entitlement begins upon the recovery of the third-
party award, here April 2, 2013. (Id. at 4, 8-9.) Upon the issuance of the 2017 WCJ
Decision, the Board concluded, Claimant had an obligation to immediately
reimburse Employer, and, given Claimant’s refusal to do so, the WCJ did not err in
suspending Claimant’s indemnity benefits until such time as the accrued lien was
repaid. It was only after that reimbursement, the Board held, could the balance of
recovery be used to provide Employer a “grace period” during which the indemnity
benefits due to Claimant are deemed to have been prepaid save for the payment of
Claimant’s pro rata share of litigation costs. (Id. at 5-6, 9.)
      As for the amount to be reimbursed, the Board agreed with Claimant in part.
The Board observed that, after Protz, the Supreme Court issued Whitmoyer in which,
according to the Board, the Supreme Court concluded, based on the plain language
of Section 319 of the WC Act, that an employer’s “entitlement to subrogation of
benefits paid after the third-party recovery is limited to future indemnity benefits,
specifically excluding reimbursement of future medical benefits.” (Id. at 4-5, 9
(citing Whitmoyer, 186 A.3d at 957-58).) Pursuant to Whitmoyer, the Board held
that Employer was precluded “from recovering medical expenses paid after
Claimant’s third-party recovery” and that the repayment amount authorized by the

                                           8
WCJ, $265,507.01, included medical benefits Employer paid after the date of
Claimant’s third-party recovery. (Board Op. at 9-10.) Therefore, the Board reduced
the amount from $265,507.01 to $118,380.97,9 but held that this did not alter the pro
rata reimbursement compensation rate. (Id. at 10 & n.9.)
       The Board then addressed the WCJ’s grant of the Penalty Petition without
awarding Claimant penalties. Initially, the Board rejected Employer’s arguments
that it did not violate the WC Act when it suspended Claimant’s payments, reasoning
that the 2017 WCJ Decision had not authorized the suspension of Claimant’s
benefits. (Id. at 11.) The Board also rejected Claimant’s contention that penalties
should have been awarded based on that violation, concluding no penalty was
appropriate or necessary under these circumstances. The Board held that this
situation was very similar to that in DeVore v. Workmen’s Compensation Appeal
Board (Sun Oil Company), 645 A.2d 917, 920 (Pa. Cmwlth. 1994), wherein this
Court held that it was not an abuse of discretion not to award penalties if, ultimately,
the WCJ orders the same relief as that taken by the employer. Because the WCJ
ultimately ordered the suspension of Claimant’s benefits until she reimbursed
Employer its accrued lien, the Board held there was no error in the 2018 WCJ
Decision.

       9
         The Board arrived at this amount by subtracting the $196,439.20 in indemnity benefits
paid from Claimant’s $2.088 million third-party recovery, resulting in $1,891,560.80. (Board Op.
at 10.) The Board used that amount to calculate the reimbursement rate by dividing the accrued
lien by the third-party recovery and multiplying the result by 100 for a reimbursement rate of
9.4080%, ($196,439.20/$2,088,000 x 100 = 9.4080%). (Id.) Then, it multiplied the expenses of
recovery, $829,700.59, by 9.4080% to ascertain the amount of those expenses attributable to the
accrued lien, which is $78,058.23. (Id.) Subtracting $78,058.23 from the accrued lien of
$196,439.20 results in the net accrued lien of $118,380.97. (Id.)

                                               9
       Claimant and Employer now petition this Court for review.10,11

       II.     Appeal to this Court
       A. Modification and Suspension Petition
       The arguments presented involve the interplay between Section 319 of the
WC Act, Section 508 of the MCARE Act, Whitmoyer, and Protz, and their impact
on an employer’s right to subrogate a third-party award issued in a medical
malpractice action arising from the treatment of a work-related injury. We first set
forth these statutory provisions and precedent to aid our review.

               1. Relevant Legal Principles
       Initially, we note the questions before the Court require the interpretation of
statutory provisions and, therefore, are questions of law over which this Court’s
review is de novo. Whitmoyer, 186 A.3d at 954. It is well settled that, in interpreting
statutory language, the object is to “ascertain and effectuate the intention of the
General Assembly.” Section 1921(a) of the Statutory Construction Act of 1972, 1
Pa.C.S. § 1921(a). In doing so, we must give meaning to each word and provision
of the statute. Id. “[T]he statute’s plain language generally offers the best indication
of legislative intent, and we are instructed to give the statute its obvious meaning
whenever the language is clear and unambiguous.” Whitmoyer, 186 A.3d at 954
(citing 1 Pa.C.S. § 1921(b)). Only if the statutory language is ambiguous should a

       10
          Our review in WC matters “is limited to a determination of whether constitutional rights
were violated, errors of law were committed, or the necessary findings were supported by
substantial, competent evidence.” Griffin v. Workers’ Comp. Appeal Bd. (Thomas Jefferson Univ.
Hosp.), 745 A.2d 61, 63 n.3 (Pa. Cmwlth. 1999).
       11
          By Memorandum Opinion and Order dated July 9, 2019, a single judge of this Court
denied Claimant’s Petition for Supersedeas following telephone argument during which the parties
agreed to maintain the status quo. Griffis v. Workers’ Comp. Appeal Bd. (Albert Einstein
Healthcare Network) (Pa. Cmwlth., No. 273 C.D. 2019, filed July 9, 2019).

                                               10
court examine factors beyond the text. Id. With these principles in mind, we turn
to the statutory provisions at issue and the recent judicial interpretations thereof.

                 a. Section 508 of the MCARE Act and Protz
      Section 508 of the MCARE Act addresses the effect a medical malpractice
plaintiff’s receipt of payments from a collateral source has on the plaintiff’s recovery
in that action and the ability of the provider of those collateral benefits to subrogate
any medical malpractice award obtained. Section 508 provides:

      (a) General rule.--Except as set forth in subsection (d), a claimant in a
      medical professional liability action is precluded from recovering
      damages for past medical expenses or past lost earnings incurred
      to the time of trial to the extent that the loss is covered by a private or
      public benefit or gratuity that the claimant has received prior to trial.

      (b) Option.--The claimant has the option to introduce into evidence at
      trial the amount of medical expenses actually incurred, but the claimant
      shall not be permitted to recover for such expenses as part of any verdict
      except to the extent that the claimant remains legally responsible for
      such payment.

      (c) No subrogation.--Except as set forth in subsection (d), there shall
      be no right of subrogation or reimbursement from a claimant’s tort
      recovery with respect to a public or private benefit covered in
      subsection (a).

      (d) Exceptions.--The collateral source provisions set forth in subsection
      (a) shall not apply to the following:

          (1) Life insurance, pension or profit-sharing plans or other deferred
          compensation plans, including agreements pertaining to the
          purchase or sale of a business.

          (2) Social Security benefits.

          (3) Cash or medical assistance benefits which are subject to
          repayment to the Department of Public Welfare.

                                          11
         (4) Public benefits paid or payable under a program which under
         Federal statute provides for right of reimbursement which
         supersedes State law for the amount of benefits paid from a verdict
         or settlement.

40 P.S. § 1303.508 (emphasis added). In Protz, this Court reviewed Section 508 in
relation to a claimant’s challenge to a WCJ decision granting her employer
subrogation related to her third-party medical malpractice award. Therein, the
employer filed a modification petition under Section 319 of the WC Act in December
2012 seeking to subrogate the third-party award entered into as of November 2012.
The claimant responded that the employer was not entitled to any subrogation of her
third-party recovery under the MCARE Act. Protz, 131 A.3d at 574-75. Concluding
the language in Section 508(a) and (c) imposed a bar to an employer’s subrogation
only of “past medical expenses and past lost earnings” incurred to the time of trial,
the WCJ in Protz held that the employer could seek subrogation with respect to its
future payments to the claimant. 131 A.3d at 575-76. The Board affirmed.
      The claimant appealed to this Court, asserting that the silence in Section 508
regarding the subrogation of future benefits should be construed as prohibiting that
subrogation. Recounting the absolute right to and purpose of subrogation under the
WC Act and the language of Section 508, we disagreed that the silence should be
construed in that manner. Applying a plain meaning interpretation of that section,
we affirmed the allowance of future subrogation of the third-party award in a medical
malpractice action and noted that doing so was consistent with the purposes of
subrogation to prevent double recovery by claimants and to prevent employers from
having to compensate claimants for the negligence of third parties. Protz, 131 A.3d
at 577-78. Further, we held, the General Assembly’s enactment of the MCARE Act
changed the prior state of the law, which had allowed employers to subrogate both

                                         12
past and future benefits. Id. at 578. Accordingly, we affirmed the “order awarding
[the e]mployer and [i]nsurer subrogation of [the c]laimant’s third[-]party medical
malpractice recovery with respect to the award for her future medical expenses and
wage loss.” Id.

                  b. Section 319 of the WC Act and Whitmoyer
      Section 319 of the WC Act sets forth the right of employers to subrogate third-
party awards obtained by claimants and provides, in relevant part:

      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 . . . to the extent of the compensation
      payable under this article by the employer; reasonable attorney’s fees
      and other proper disbursements incurred in obtaining a recovery or in
      effecting a compromise settlement shall be prorated between the
      employer and employe . . . . The employer shall pay that proportion of
      the attorney’s fees and other proper disbursements that the amount of
      compensation paid or payable at the time of recovery or settlement
      bears to the total recovery or settlement. Any recovery against such
      third person in excess of the compensation theretofore paid by the
      employer shall be paid forthwith to the employe, . . . and shall be
      treated as an advance payment by the employer on account of any
      future instalments of compensation.

77 P.S. § 671 (emphasis added). Our Supreme Court has described subrogation
under Section 319 as follows:

      Subrogation in our workers’ compensation system is a significant and
      firmly established right. Specifically, while subrogation is an important
      equitable concept that applies whenever a debt or obligation is paid by
      one party though another is primarily liable, . . . , in the realm of
      workers’ compensation, it has assumed even greater stature. Our Court
      has stated that the statutory right to subrogation is “absolute and can be
      abrogated only by choice.” . . . . This is so because the statute granting
      subrogation “clearly and unambiguously” provides that the employer
      “shall be subrogated” to the employee’s right of recovery. . . . Thus,

                                         13
      the importance and strength of subrogation in our system of workers’
      compensation cannot be understated.

Brubacher Excavating, Inc. v. Workers’ Comp. Appeal Bd. (Bridges), 835 A.2d
1273, 1275-76 (Pa. 2003) (quotations and citations omitted). The policy behind
subrogation under the WC Act is to prevent double recovery for the same injury, to
prevent an employer from having to pay compensation due to the wrongful acts of a
third party, and to prevent a third party from escaping liability for its wrongful
conduct. Poole v. Workers’ Comp. Appeal Bd. (Warehouse Club, Inc.), 810 A.2d
1182, 1184 (Pa. 2002).
      Prior to 2018 and the Supreme Court’s decision in Whitmoyer, an employer
could recover its subrogation interest by obtaining repayment of its accrued
subrogation lien and by taking a credit against not only a claimant’s future indemnity
payments, minus the pro rata share, but also the claimant’s future medical benefits
until the balance of recovery was exhausted. At that point, the employer again
became responsible for paying claimants the full amount of indemnity and medical
benefits due. However, our Supreme Court changed the interpretation of the type of
compensation an employer could recover through its subrogation interest in
Whitmoyer. In that case, the claimant challenged his employer’s attempt to recover
its subrogation interest entirely from his future medical benefits because he was no
longer receiving indemnity benefits based on a prior commutation of those benefits.
Whitmoyer, 186 A.3d at 950. After paying the claimant full medical benefits for 13
years after the claimant’s third-party settlement, the employer filed a modification
petition asserting its right to a credit that would reduce its obligation to pay only
26.09% of the claimant’s medical benefits until the balance of recovery was
exhausted.     The claimant argued that the phrase “future instalments of
compensation,” 77 P.S. § 671, used in Section 319 of the WC Act did not apply to

                                         14
the payment of medical benefits, which are not paid in instalments. The WCJ
granted the modification petition, and the Board affirmed. This Court affirmed as
well, concluding that the term “compensation” referred to both indemnity and
medical benefits.
      On appeal to the Supreme Court, the claimant argued that this Court’s
interpretation read the word “instalments” out of Section 319. Examining the plain
language of Section 319, the Supreme Court agreed, reasoning that the term
“compensation” and the phrase “instalments of compensation” do not carry the same
meaning and that only indemnity benefits are paid in “instalments” per Section 308
of the WC Act, 77 P.S. § 601 (providing that “compensation payable under [the WC
Act] in periodic instalments, as the wages of the employe were payable before the
injury”). Whitmoyer, 186 A.3d at 955. The Supreme Court further reasoned that,
under Section 319’s plain language, the General Assembly intended the balance of
recovery to “be treated as an advance payment by the employer on account of any
future instalments of compensation,” and applying this provision only to indemnity
benefits, “which are known amounts paid at established intervals,” reflects that the
claimant is “simply be[ing] paid in advance[, via the retention of the excess award,]
for outstanding instalments owed to” the claimant. Id. at 955-56. Future medical
expenses, the Supreme Court held, are not known at the time of settlement and are
required by the WC Act to be paid upfront by employers and to require claimants to
relinquish some of their “advance payment” in order for the employer to recoup its
costs was “in derogation of the plain meaning of that term.” Id. at 957 (internal
quotations omitted).
      Finally, concluding its analysis was supported by the unambiguous statutory
language, the Supreme Court stated that “discussion of the purpose or rationale

                                         15
behind [S]ection 319 . . . is unnecessary.” Id. at 958. Nonetheless, it found that,
even if it engaged in “an ambiguity analysis,” its conclusion would not change and
that “reading ‘instalments of compensation’ to exclude medical expenses does not
undermine the rationale behind [S]ection 319.” Id.   It explained, first, that
“[r]egarding the potential ill of an employee making a ‘double recovery,’ . . . this
would be impossible to know in the context of a settlement, where the amount of
recovery is a lump sum that does not neatly or necessarily break down by category
of damages.” Id. Second, protecting an employer from having to pay for injuries
resulting from the negligence of a third party “has its limits” and the WC Act’s
“default is to hold an employer liable for a[ claimant’s] work-related injury,” a
liability that is temporarily circumscribed only to the extent of the third-party
recovery. Id. In Whitmoyer, the employer conceded that, even if the Court found in
its favor, “its liability would be circumscribed ‘only to the extent of [claimant’s]
third party recovery,’” and once that amount is exceeded, employer/insurer would
again be responsible. Id. For these reasons, the Supreme Court held that “an
employer is not permitted to seek reimbursement for future medical expenses
from the [claimant’s] balance of recovery.” Id. (emphasis added).

             2. Parties’ Arguments
                a. Claimant’s Arguments
      Claimant argues as follows. Applying the principles set forth in Section 508
of the MCARE Act, Section 319 of the WC Act, Whitmoyer, and Protz, Employer
is only authorized to subrogate Claimant’s future indemnity benefits and this
entitlement, at least in a medical malpractice action, did not arise until the 2017 WCJ
Decision that officially recognized the subrogation interest. At the time of the third-
party settlement in April 2013, no lien had accrued because the payments made prior

                                          16
to that date were past payments for medical and wage loss benefits that are not
recoverable under Section 508 of the MCARE Act and Protz. There was no accrued
lien that Claimant had to pay Employer because its entitlement to recover did not
begin until Employer proved its case on its modification petition, here, on August 1,
2017, the date of the 2017 WCJ Decision. Absent that determination, there was no
“overpayment” for which she had to immediately repay Employer in a lump sum.
Even if Claimant did have to pay a lump sum to reimburse a lien, the amount ordered
by the WCJ and set forth in the TPSA was erroneous under Whitmoyer because it
included medical benefits that were paid after the date of her third-party recovery,
an error recognized by the Board. Under Claimant’s interpretation, even though
Employer would not receive a lump sum payment, it is still recovering its monies by
taking a credit against her future indemnity benefits, subject to the payment of
Claimant’s pro rata share of the litigation expenses related to the third-party award.
Finally, per CNA Insurance, Co. v. Workmen’s Compensation Appeal Board
(Romeo), 578 A.2d 1375 (Pa. Cmwlth. 1990), the grace period did not begin until
the WCJ awarded relief, not as of the date of her third-party recovery, and, therefore,
no payment to Employer was immediately due at the time of the settlement.

                b. Employer’s Arguments
      In opposition to Claimant’s appeal, Employer argues as follows. Claimant’s
challenge to Employer’s subrogation rights based on the MCARE Act and Protz
were not raised before the WCJ or the Board in the 2017 WCJ Decision and,
therefore, are not preserved for appellate review. These arguments are a collateral
attack on the 2017 WCJ Decision that should not be permitted in the appellate review
of the 2018 WCJ Decision. Even if the arguments are preserved, Claimant misreads
Protz to support her claims that no accrued lien exists that she must immediately

                                          17
repay and that Employer’s rights are limited to a credit against her future indemnity
benefits less the pro rata share. Protz contains no language supporting Claimant’s
assertions and reflects a balance between Section 319 of the WC Act and Section
508 of the MCARE Act. The rationale for the limitation on the subrogation of past
medical and indemnity benefits paid is the fact that such amounts could not be
claimed as damages in a third-party medical malpractice action pursuant to Section
508(a) of the MCARE Act. As Claimant could not recover the amount Employer
paid prior to the third-party action’s settlement, Employer could not assert a
subrogation claim for those benefits because Claimant was not being paid twice for
those benefits. However, Claimant was not precluded from pleading and proving
future wage loss and medical costs during that trial and, therefore, Employer is not
precluded from asserting a subrogation lien calculated on the basis of its payment of
those benefits after the date of the third-party medical malpractice settlement.
Neither Protz nor the MCARE Act rescinded Employer’s subrogation right to
recover anything paid after the third-party settlement. Claimant’s reliance on the
word “future” used in Protz to argue that subrogation does not arise until a WCJ
decision is issued misreads the holding. The terms “past” and “future” as used in
Protz mean, respectively, payments made before the date of the civil trial or
settlement and payments made after the civil trial or settlement. Employer sought
immediate reimbursement only for those “future” payments made after the date
Claimant settled her third-party action, as supported by its record of payments, in
the form an accrued lien and then a credit against Claimant’s benefits until any
balance of recovery is exhausted. The 2018 WCJ Decision properly recognized
Employer’s right, after the 2017 WCJ Decision, to be immediately reimbursed for
the amounts it had paid Claimant and on Claimant’s behalf since the settling of the

                                         18
third-party action and directed Claimant to make such payment.           While it is
presumed that claimants will cooperate and tender the accrued lien, WCJs are
empowered to order the payment of a lump sum if a claimant fails to do so, Ward,
599 A.2d at 1015, and to suspend the claimant’s benefits until the accrued lien is
reimbursed, Wheeling-Pittsburgh Steel Corporation v. Workmen’s Compensation
Appeal Board (McFadden), 587 A.2d 852, 854-55 (Pa. Cmwlth. 1991).
      In support of its own appeal, Employer argues as follows. The Board erred
when it applied Whitmoyer to reduce the amount of Claimant’s reimbursement from
$265,607.01 to $118,380.97. The Board based this reduction on its conclusion that
“[w]here a defendant is entitled to subrogation for the claimant’s future benefits,
such subrogation is limited to indemnity benefits only; and the defendant is barred
from subrogating any future medical expenses. Whitmoyer.” (Board Op. at 9.)
Whitmoyer does not apply to MCARE subrogation because that case did not involve
a medical malpractice action arising out of the treatment of a claimant’s work injury.
Therefore, the Supreme “Court did not contemplate or address an MCARE
subrogation claim.” (Employer’s Brief (Br.) at 65.) It notes that, because Whitmoyer
was not an MCARE case, the employer was able to recover all of the payments it
made prior to the date of the third-party recovery. While Section 319 authorizes
only a “credit against ‘any future instalments of compensation,’” the MCARE Act
does not include any such limiting language or use the word “compensation.” (Id.
at 66 (quoting 77 P.S. § 671).) Rather, it limited the collateral source rule for
medical malpractice actions by disallowing plaintiffs to seek damages for past lost
earnings and medical expenses and precluding subrogation for those amounts. No
similar limitations are found in Section 508 of the MCARE Act for future medical
expenses and lost earnings. Allowing employers in medical malpractice actions to

                                         19
take a credit against both future indemnity and medical benefits, therefore, is
consistent with the purposes of subrogation – to prevent double recovery and place
the liability for the damages on the responsible third party. Therefore, Whitmoyer
should not be applied under these circumstances. However, if Whitmoyer did apply,
the Board erred in using it to reduce Employer’s accrued lien, which is subject to
immediate reimbursement (the first component of Section 319 subrogation), rather
than to calculate the grace period during which time Employer recovers the balance
of recovery by taking a credit against future payments of benefits (the second
component of Section 319 subrogation).        Whitmoyer does not affect the first
component of subrogation, the calculation of the accrued lien; it only altered how
the second component, the balance of recovery, is administered, as that is where the
phrase “instalments of compensation” is found. 77 P.S. § 671. Whitmoyer should
not be read to limit the recovery of medical costs already paid as of the date of the
subrogation calculation.

                c. Claimant’s Reply
      In her reply brief, Claimant responds to Employer’s contentions that she
waived her arguments regarding the recalculation of Employer’s subrogation
reimbursement. She argues that the Supreme Court did not issue its decision in
Whitmoyer until 2018, which was after both the 2017 WCJ Decision and 2018 WCJ
Decision. She therefore could not rely on Whitmoyer at the time of the WCJ
proceedings, and she raised Whitmoyer at the first opportunity to do so and,
therefore, it is not waived per Thompson v. Workers’ Compensation Appeal Board
(Exelon Corporation), 168 A.3d 408 (Pa. Cmwlth. 2017). Further, Employer did
not challenge Claimant’s assertion of arguments based on Protz before the WCJ in
the current proceedings, and, therefore, its own waiver arguments are waived.

                                         20
             d. The Pennsylvania Association For Justice’s Arguments
      The Pennsylvania Association For Justice, as amicus curiae, argues that
Section 508(c) of the MCARE Act precludes Employer from asserting any
subrogation claim or credit against Claimant’s future benefits based on the payment
of past benefits and, therefore, Whitmoyer does not apply. It maintains that Section
508 of the MCARE Act prohibits the recovery of past lost wages and past medical
benefits covered by public or private benefit as damages in medical malpractice
claims and states that there is no right to subrogation or reimbursement from a tort
recovery with respect to such public or private benefit, which is what Employer is
attempting to do in this matter. Under the plain language of the MCARE Act, the
Pennsylvania Association For Justice contends that Employer’s arguments that it is
entitled to repayment of its lien and to a credit against Claimant’s future indemnity
benefits must be rejected.

             3. Discussion
                a. Whether Claimant waived her arguments based on Protz and
                   Whitmoyer.
      It is well settled that the Court may not address issues that were not raised
before an administrative agency.      Pennsylvania Rule of Appellate Procedure
1551(a), Pa.R.A.P. 1551(a). However, in Thompson, we held that a claimant was
not barred from challenging the validity of her impairment rating evaluation (IRE)
by failing to timely raise that issue where, during the course of the ongoing workers’
compensation proceedings, the statutory provision authorizing the IRE was declared
unconstitutional. 168 A.3d at 412 n.4. Because the claimant’s appeal implicated the
validity of the IRE and that statutory provision and she had raised that issue at the
first opportunity, we concluded she was not precluded from relying on the change in
the law to challenge her IRE. Id.

                                         21
      Claimant raised Protz in her Penalty Petition. (S.R.R. at 153b.) Claimant’s
Penalty Petition was premised on Employer not paying the pro rata share of the
litigation expenses. (Id.) Claimant also raised Protz in a letter to Employer early on
in this litigation, which was submitted as evidence in this matter. (Id. at 152b.) The
parties discussed Claimant’s reasons for filing the Penalty Petition and why she
asserted no lump sum reimbursement was due during the December 19, 2017
hearing. (Id. at 163b-69b.) During that hearing, Employer’s counsel noted that it
waited until after Claimant filed her appeal from the 2017 WCJ Decision to send
Claimant’s counsel “the [TPSA,] which include[d] a requirement that the
[E]mployer be provided immediate reimbursement of $265,000 and some change.”
(Id. at 166b.) This statement is supported by the record, which reflects this letter
was sent on September 27, 2017, and the TPSA was dated September 26, 2017. (Id.
at 147b-51b.) Further, Employer’s counsel acknowledged that the WCJ in the 2017
proceedings “doesn’t even discuss” the lump sum being asserted. (Id. at 168b.)
While Claimant’s counsel appears to have agreed, after the fact, that the figures were
correct, the Penalty Petition appears to challenge the import of those figures.
Further, Claimant’s appeal to the Board asserted that Claimant was not obligated to
immediately reimburse Employer and that it was error to award a full suspension of
her benefits until the lien was reimbursed. (Id. at 191b-94b.) In support of that
appeal, Claimant argued that Protz limited Employer’s recovery only to the payment
of future benefits and, therefore, Employer violated the WC Act by unilaterally
suspending benefits, including the payment of her pro rata share of litigation
payments, based on her non-payment of a lien that she did not owe. (Id. at 367b,
371b-73b.)    Claimant later filed another brief with the Board, asserting that
Whitmoyer precluded the inclusion of medical benefits in the accrued lien approved

                                         22
by the WCJ and Employer being able to take a credit for those benefits into the
future. (Id. at 386b, 403b-04b.)
      Claimant’s Penalty Petition and current arguments involve issues that are
separate from whether the 2017 WCJ Decision properly granted subrogation. Given
that Employer did not advise Claimant of the amounts at issue or that it would be
seeking automatic reimbursement of more than $265,000 until after Claimant
appealed the 2017 WCJ Decision, Claimant could not have raised these arguments
during those proceedings. She most certainly could not have challenged Employer’s
subsequent suspension of her benefits based on the 2017 WCJ Decision or requested
the imposition of a penalty based on that action. What is apparent from the record
is that Claimant has raised Protz from the beginning of this litigation in support of
her Penalty Petition and in opposition to Employer’s Modification and Suspension
Petition. Because this matter began before the Supreme Court issued its decision in
Whitmoyer and Claimant’s arguments implicated the scope of Employer’s
subrogation rights, we agree with Claimant that she raised Whitmoyer at the first
opportunity to do so. Under Thompson, she is not precluded from relying on
Whitmoyer to argue Employer’s claimed subrogation amounts include benefits that
are not subject to subrogation. For these reasons, Claimant did not waive her current
arguments due to her failure to preserve them below.

                b. Whether Employer has the right to recover any medical benefits
                   it has paid or will pay on Claimant’s behalf through subrogation,
                   and whether Claimant has an obligation to make any lump sum
                   payment to reimburse Employer.
      We have two main questions before us. First, whether Employer may recover
the payments Employer made for Claimant’s medical expenses prior to the 2017
WCJ Decision, and/or will make after that decision. Second, whether Claimant has

                                         23
an immediate obligation to reimburse Employer for any of the payments Employer
made prior to the 2017 WCJ Decision. We begin with Employer’s contention that
it can recover from Claimant the medical benefits it paid both after the date of
Claimant’s third-party recovery and that it will make after the 2017 WCJ Decision.
      The parties do not dispute, nor could they reasonably do so following Protz,
that Section 508(c) of the MCARE Act precludes an employer from recovering,
pursuant to Section 319 of the WC Act, the indemnity and medical “benefits paid up
until the time of trial.” Protz, 131 A.3d at 578. Protz stands for the proposition that
an employer’s right to subrogation begins immediately after the date of third-party
recovery. While the Pennsylvania Association For Justice argues that Section 508
of the MCARE Act precludes an employer from asserting any subrogation claim,
this argument is contrary to our holding in Protz. There is no indication that Protz
involved, as here, an employer seeking a lump sum repayment of the benefits it had
paid between the time of the settlement of the third-party action and the resolution
of the modification petition, perhaps because there the employer filed its review
petition one month after the settlement. The WCJ in Protz ordered the recovery of
the employer’s subrogation interest only through the use of the grace period
entitling the employer to reduce the claimant’s “medical bills and disability benefits
at the rate of 47% of the repriced amount for future medical bills and 47% of her
weekly disability rate,” id. at 576, and did not order, as Employer seeks here, the
claimant to pay a lump sum followed by the use of a grace period. As such, Protz
does not directly resolve the question of how to treat payments made where there
has been a lengthy delay between the resolution of the third-party action and the
grant of a modification petition.

                                          24
      Whitmoyer addressed the treatment of “future benefits” for subrogation
purposes under Section 319 of the WC Act, but it did not involve a third-party
settlement under the MCARE Act. Therefore, in Whitmoyer, the employer was not
precluded from recovering all of the benefits it had paid prior to the date of the third-
party recovery, both wage loss and medical, as an accrued subrogation lien, and the
focus was on how the balance of recovery would be credited against the payment of
the claimant’s future benefits. Accordingly, Whitmoyer, too, does not exactly
answer, at least completely, the questions presently before the Court.
      Claimant appears to view the payments of indemnity and medical benefits
made on her behalf between April 2013, the date of her third-party recovery, and the
2017 WCJ Decision as past, not future, payments of medical expenses and lost
earnings that are not subrogable under Section 508 of the MCARE Act and Protz.
She contends that Employer is entitled to recover its subrogation interest through a
grace period beginning as of the 2017 WCJ Decision, during which time Employer
can take a credit against her balance of recovery, as limited by Whitmoyer, but is
obligated to continue to pay Claimant its pro rata share of the third-party litigation
costs. In contrast, Employer appears to view, for the purposes of Claimant’s appeal,
the payments between April 2013 and the 2017 WCJ Decision as “future” payments
that can be subrogated under Section 508 of the MCARE Act and Protz, thereby
allowing it to obtain immediate reimbursement of those amounts which include both
medical and indemnity benefits. Conversely, Employer appears to view these
payments, for the purposes of its own appeal, as not being “future” payments subject
to Whitmoyer’s limitation on an employer’s ability to subrogate future medical
benefits.

                                           25
      The Board concluded neither parties’ approach was consistent with the
relevant legal principles, and, therefore, issued an order that recognized the benefits
paid by Employer after the date of Claimant’s third-party recovery in April 2013 as
“future” benefits which Employer was entitled to recover under Protz, but that, as
such benefits qualified as “future” benefits, the recovery of those benefits was
limited by Whitmoyer and did not include medical benefits. Upon review, the
Board’s approach is consistent with, and gives effect to, the relevant statutory
provisions, Whitmoyer, and Protz.
      Employer argues Whitmoyer is inapplicable for several reasons. It maintains
Whitmoyer did not involve the first sentence of Section 319, which Employer asserts
is the basis of its right to reimbursement of the medical benefits, and, therefore,
Whitmoyer’s limitation on an employer’s ability to recover its subrogation against
medical benefits is inapplicable.       Employer also asserts that Whitmoyer is
distinguishable because it did not involve a third-party settlement under the MCARE
Act, and, under the MCARE Act, Claimant could seek damages related to her future
wage loss and medical expenses, which Employer should be permitted to subrogate.
Limiting its subrogation rights to Claimant’s indemnity benefits based on
Whitmoyer, Employer contends, is not consistent with the purposes of subrogation,
which are, among others, to prevent claimants from receiving a double recovery and
to prevent employers from having to pay for the negligent actions of others.
      Employer’s first argument is premised on its contention that its
reimbursement is governed by the first sentence of Section 319, but that argument is
not consistent with the Supreme Court’s interpretation. Section 319 provides, in
pertinent part:

      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

                                          26
      right of the employe, his personal representative, his estate or his
      dependents, against such third party to the extent of the compensation
      payable under this article by the employer; reasonable attorney’s fees
      and other proper disbursements incurred in obtaining a recovery or in
      effecting a compromise settlement shall be prorated between the
      employer and employe, his personal representative, his estate or his
      dependents. The employer shall pay that proportion of the attorney’s
      fees and other proper disbursements that the amount of compensation
      paid or payable at the time of recovery or settlement bears to the total
      recovery or settlement. Any recovery against such third person in
      excess of the compensation theretofore paid by the employer shall be
      paid forthwith to the employe, his personal representative, his estate or
      his dependents, and shall be treated as an advance payment by the
      employer on account of any future instalments of compensation.

77 P.S. § 671. The Supreme Court, in Whitmoyer, explained that Section 319

      addresses two distinct scenarios. See Rollins Outdoor Advert[.] v.
      W[orkers] C[omp.] A[ppeal] B[d.], . . . 487 A.2d 794, 796 ([Pa.] 1985).
      First, “the compensation paid by the employer to the date of the third-
      party recovery constitutes a claim against the recovery, payable
      immediately upon recovery to the employer.” Id. As to this scenario,
      the General Assembly chose to use the word “compensation” without
      modification by the term “instalments of.” That is, an employer’s
      subrogation right “at the time of recovery or settlement” encompasses
      all “compensation” “theretofore paid” or “payable” to date. 77 P.S. §
      671. This is the amount understood to be the employer’s accrued
      subrogation lien or “total lien.” . . . .

      The second scenario relates to the distribution of the net settlement
      proceeds, namely what is left of the recovery after the employer has
      been reimbursed for “compensation theretofore paid.” See id.; see also
      Rollins Outdoor Advert[.], 487 A.2d at 796. Regarding this “excess”
      amount, section 319 provides that it shall be “paid forthwith” to the
      employee to be treated as an “advance payment by the employer”
      – not as to “compensation” but rather “on account of future
      instalments of compensation.” 77 P.S. § 671.

Whitmoyer, 186 A.3d at 954-55 (emphasis added).
      The first scenario, under which Employer argues it may recover the medical
benefits it paid between the date of Claimant’s third-party recovery in 2013 and the

                                         27
2017 WCJ decision, applies to compensation payments that were made up “to the
date of the third-party recovery.” Id. at 954 (emphasis added). Here, however,
the first scenario is inapplicable because Employer was precluded from seeking
reimbursement for the “compensation theretofore paid,” up “to the date of the third-
party recovery,” id. (emphasis added), by Section 508(a) of the MCARE Act as that
“compensation” constituted “past medical expenses or past lost earnings” that were
“covered by a private . . . benefit or gratuity that the claimant ha[d] received prior to
trial,” 40 P.S. § 1303.508(a). Because under the MCARE Act, Claimant could not
recover those amounts, there was no recovery Employer could subrogate. Instead,
the entirety of Claimant’s third-party recovery became, in essence, the “net
settlement proceeds” that have to be treated as “an ‘advance payment by . . .
[E]mployer’ – not as to ‘compensation’” but rather “on account of future instalments
of compensation.” Whitmoyer, 186 A.3d at 955. As the phrase “future instalments
of compensation” excludes medical benefits per Whitmoyer, the “advance
payments” against which Employer can recover its subrogation rights are limited to
Claimant’s indemnity benefits, and “[E]mployer is not permitted to seek
reimbursement for future medical expenses from . . . [Claimant’s] . . . recovery.” Id.
at 958.   Employer cannot change the nature of those payments as statutorily
delineated by merely delaying the filing of its petition and thus delaying the decision
awarding subrogation, which could incentivize delaying the assertion of subrogation
rights in order to recover medical benefits and avoid Whitmoyer’s limitation.
      Employer’s second and third arguments are premised on its belief that the
main purpose of subrogation, to prevent double recovery, is not being fulfilled if
Whitmoyer is applied to prevent it from recouping the medical benefits it paid
following the date of Claimant’s third-party recovery and will pay into the future

                                           28
through the lump sum payment and a credit against Claimant’s future medical
benefits. These arguments are well-taken. However, the Supreme Court specifically
stated it would not be appropriate for the Court to consider the “purposes” of
subrogation given its finding that the statutory language in Section 319 was plain
and unambiguous.       Because the Supreme Court has already rejected these
arguments, we are bound by that interpretation. We recognize that, although the
settlement here was a lump sum, as it was in Whitmoyer, “that does not neatly or
necessarily breakdown by category of damages,” 186 A.3d at 958, it is possible that
the category of future medical expenses may have been included, in which case,
Claimant would receive damages for future medical expenses and not have to pay
those expenses. However, the claimant in Whitmoyer, although the settlement
amount was significantly less than here, did not have to pay his ongoing medical
expenses and employer there received only its accrued subrogation lien.
      To summarize, Protz expressly allows, through Section 319 of the WC Act,
for the recovery of payments that an employer makes on a claimant’s behalf
following the resolution of the claimant’s third-party action. Benefits paid prior to
the date of the third-party recovery are not subject to subrogation per Section 508(a)
and (c) of the MCARE Act as they are not to be included in calculating the claimant’s
damages. Protz. Here, because more than four years elapsed between the date of
Claimant’s third-party recovery and approval of Employer’s request for subrogation,
Employer paid four years’ worth of benefits that are considered “future” benefits
(occurring after the third-party settlement). Because they were paid after the third-
party settlement, they are “future” benefits subject to subrogation.        The date
subrogation is approved is not the relevant date in this inquiry; it is the date of a
claimant’s third-party recovery that is determinative. 77 P.S. § 671; Whitmoyer, 186
29
A.3d at 955; Protz, 131 A.3d at 578. Both Protz and Whitmoyer involved an
employer’s recovery of “future” payments of compensation from a claimant’s
settlement of a third-party action. Accordingly, Protz and Whitmoyer relate to the
same topic and should be considered together, as the Board did here. While Protz
did not preclude recovery against both medical and indemnity benefits paid after the
third-party settlement, Protz was effectively modified by the Supreme Court’s
subsequent decision in Whitmoyer.
      Under Whitmoyer, an employer’s subrogation rights to a credit against a
claimant’s “future instalments of compensation” are limited to recouping indemnity
benefits and precludes the employer from recouping the medical benefits it pays on
the claimant’s behalf because “an employer is not permitted to seek reimbursement
for future medical expenses from the [claimant’s] balance of recovery.” Whitmoyer,
186 A.3d at 958. This is what the Board concluded and so modified the WCJ’s
award to preclude Employer’s recovery of any of the medical benefits it had paid
since the third-party settlement or will pay into the future.
      We now turn to Claimant’s challenge to the directive that she make a lump
sum payment to Employer to reimburse it for the amounts it paid in indemnity
benefits between the date of her third-party recovery in 2013 and the 2017 WCJ
Decision. We find no error or abuse of discretion in the Board’s Order requiring
Claimant to reimburse Employer for those amounts. Employer was entitled under
Protz and Whitmoyer to assert its subrogation rights against the indemnity benefits
it paid after the date of her third-party recovery because, at that point, Section 508’s
prohibition was no longer in effect. Under these circumstances, the entirety of
Claimant’s third-party recovery, per Whitmoyer, constituted an “advance payment”
of her “future instalments of compensation,” 77 P.S. § 671, which commenced as of

                                          30
the date of the third-party settlement per Protz. In addition to this advance payment,
Employer directly paid Claimant her normal indemnity benefits during that period.
Thus, Claimant received a double payment of indemnity benefits during that time
period. Recoupment of an overpayment of benefits directly from a claimant is
available to prevent unjust enrichment or a double recovery. Commonwealth v.
Workers’ Comp. Appeal Bd. (Noll), 80 A.3d 525, 530 (Pa. Cmwlth. 2013). This is
what the $118,380.97 lump sum the Board directed to be paid represents. As for the
suspension of the payment of Claimant’s benefits and pro rata share, “[w]here the
claimant cannot or will not reimburse the employer for compensation previously
paid, the court has utilized a[] . . . formula, under which the entire net recovery (total
recovery less costs) is applied to future credit weeks.” Emanuel v. Workmen’s
Comp. Appeal Bd. (Coco Bros., Inc.), 692 A.2d 1182, 1186 (Pa. Cmwlth. 1997); see
also Monessen, Inc. v. Workers’ Comp. Appeal Bd. (Fleming), 875 A.2d 415, 419
(Pa. Cmwlth. 2005) (holding “where there is no cash from the third[-]party
settlement to [make] a lump sum payment, a WCJ may grant a grace period at the
full compensation rate”); Wheeling-Pittsburgh Steel Co., 587 A.2d at 854-55
(authorizing suspension of a claimant’s benefits where the claimant will not
reimburse the employer). Thus, the WCJ was authorized to suspend Claimant’s
benefits in their entirety under Monessen and Emanuel until the full reimbursement
has been made.
      The Board’s resolution, which allows Employer to recover from Claimant’s
third-party award of $2.088 million, which is deemed an advance payment of her
indemnity benefits, a lump sum calculated using only the indemnity benefits it
directly paid to Claimant from April 2013, the point when Employer’s entitlement
to subrogation began, until the 2017 WCJ Decision, gives effect to Section 508 of

                                           31
the MCARE Act and Protz, while also giving effect to Section 319 of the WC Act
and Whitmoyer.       Employer obtains reimbursement for the “future” indemnity
benefits it directly paid Claimant following the 2013 third-party settlement, either
through Claimant making a lump sum payment or, should she refuse to pay that lump
sum, through the suspension of all of Claimant’s benefits including her pro rata
share, the amount of which the parties do not challenge, until that amount is
reimbursed in full.12 Once there is full reimbursement, Employer is able to take a
credit against Claimant’s ongoing indemnity benefits, minus the pro rata share, until
Claimant’s third-party recovery is exhausted.

       B. Penalty Petition
       Claimant argues that Employer’s unilateral suspension of her benefits was “a
gross violation” of the WC Act and the fact that it may have been entitled to a lump
sum payment of its accrued subrogation lien did not authorize the suspension of her
benefits.    (Claimant’s Br. at 11, 23.)           Employer’s actions are particularly
“disingenuous,” Claimant asserts, because Employer was only entitled to subrogate
future benefits under the MCARE Act and the grace period does not begin to run
until the date Employer’s relief was granted. (Id. at 24.) Claimant further asserts
that Employer agreed, in a June 1, 2015 letter, that it was not entitled to
reimbursement of its net lien and now claims that it is entitled to that reimbursement.
(Id. at 25.) Therefore, according to Claimant, the WCJ properly granted the Penalty
Petition but erred in failing to award a penalty.

       12
          We note that, due to the suspension of Employer’s obligation to pay Claimant the pro
rata share and the ongoing credit Employer is taking against what it would have had to pay
Claimant in indemnity benefits, the amount outstanding has reduced and will continue to reduce
with each week of Employer’s non-payment.

                                             32
         Employer responds that the Board incorrectly concluded that it unilaterally
suspended Claimant’s benefits in violation of the WC Act because it was acting
pursuant to the 2017 WCJ Decision. However, even if that conclusion was correct,
Employer argues the decision not to impose penalties is supported by precedent and
should be affirmed. Employer disagrees that its June 1, 2015 letter reflected that it
was not entitled to reimbursement of its net lien. (Employer’s Br. at 45.) Rather,
that letter reflects that it was not entitled to reimbursement of $194,965.78, which
was based on Claimant’s receipt of past collateral benefits (paid until trial), but
would be seeking to assert a subrogation lien against the post-adjudication benefits
it had paid to Claimant after April 8, 2013. (Id. at 45-46 (quoting S.R.R. at 440b-
41b).)
         Section 435(d) of the WC Act, 77 P.S. § 991(d),13 authorizes the imposition
of penalties for violations of the WC Act, the rules, or regulations, and such penalties
may range from 10% to 50% for unreasonable or excessive delays. Claimants bear
the burden of proving a violation of the WC Act. “[E]ven where a violation . . . is
apparent on the record,” penalties “are not automatic, but are left to the discretion of
the WCJ.”          P & R Welding & Fabrication v. Workmen’s Comp. Appeal Bd.
(Pergola), 664 A.2d 657, 663 (Pa. Cmwlth. 1995). “The assessment of penalties as
well as the amount of the penalties imposed is discretionary,” and “[a]bsent an abuse
of discretion by the WCJ, this Court will not overturn a WCJ’s assessment of
penalties.” Jordan v. Workers’ Comp. Appeal Bd. (Phila. Newspapers, Inc.), 921
A.2d 27, 41 (Pa. Cmwlth. 2007). “An abuse of discretion is not merely an error of
judgment but occurs, . . . , when the law is misapplied in reaching a conclusion.”

         13
              Added by Section 3 of the Act of February 8, 1972, P.L. 25.

                                                  33
Westinghouse Elec. Corp. v. Workers’ Comp. Appeal Bd. (Weaver), 823 A.2d 209,
213-14 (Pa. Cmwlth. 2003).
      Because there was no error in suspending Claimant’s benefits until she repays
Employer as set forth above, the WCJ did not abuse his discretion in declining to
impose penalties despite finding a violation of the WC Act. A unilateral change by
an employer does not always warrant the imposition of a penalty. In DeVore, this
Court affirmed the decision not to award a penalty despite the employer unilaterally
reducing its payments to the claimant based on its belief that it was statutorily
entitled to subrogate the claimant’s third-party recovery. 645 A.2d at 918, 920.
Upon consideration of the claimant’s penalty petition and the employer’s
modification petition, the referee, as WCJs were then called, granted the
modification of the claimant’s benefits to reflect the employer’s subrogation rights
and denied the claimant’s request for penalties. Id. at 918. Although we recognized
that the unilateral action was a violation of the WC Act, we found “no legal reason
to reverse” the referee’s decision not to impose penalties because the WCJ ultimately
ordered the reduction of the claimant’s benefits. Id. at 920.
      Here, even assuming that Employer unilaterally suspended Claimant’s
benefits as of October 3, 2017, to recover its accrued lien in violation of the WC Act,
the WCJ ultimately suspended Claimant’s benefits for that reason in the 2018 WCJ
Decision. The WCJ recognized the violation of the WC Act, but, acting within his
discretion, decided that this was a technical violation that did not warrant the
imposition of a penalty particularly where “Claimant ha[d] retained a substantial
windfall in failing to reimburse the accrued lien payable from the third-party
settlement.” (2018 WCJ Decision, COL ¶ 6.) Substantial discretion is afforded to
WCJs in making these determinations, and, as in DeVore, we find “no legal reason

                                          34
to reverse” the WCJ’s decision not to award penalties under these circumstances.
645 A.2d at 920.

      III.   Conclusion
      For the foregoing reasons, the Board did not err in affirming the WCJ’s grant
of the Penalty Petition without awarding penalties or in affirming, as modified, the
grant of the Modification and Suspension Petition. Accordingly, we affirm.

                                      _____________________________________
                                      RENÉE COHN JUBELIRER, Judge

                                        35
        IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Anna Griffis,                            :
                         Petitioner      :
                                         :
                   v.                    :   No. 273 C.D. 2019
                                         :
Workers’ Compensation Appeal             :
Board (Albert Einstein Healthcare        :
Network),                                :
                        Respondent       :

Albert Einstein Medical Center,          :
                         Petitioner      :
                                         :
                   v.                    :   No. 280 C.D. 2019
                                         :
Workers’ Compensation Appeal             :
Board (Griffis),                         :
                      Respondent         :

                                      ORDER

      NOW, July 15, 2020, the Order of the Workers’ Compensation Appeal Board,
entered in the above-captioned matters, is AFFIRMED.

                                       _____________________________________
                                       RENÉE COHN JUBELIRER, Judge