Court Opinion

ID: 4279173
Source: CourtListenerOpinion
Date Created: 2018-05-29 19:45:34.012327+00
Date Added: 2024-06-11T14:34:29.729694
License: Public Domain

[J-71-2017]
                    IN THE SUPREME COURT OF PENNSYLVANIA
                               WESTERN DISTRICT

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

PENNSYLVANIA STATE POLICE,                   :   No. 14 WAP 2017
                                             :
                     Appellant               :   Appeal from the Order of the
                                             :   Commonwealth Court entered October
                                             :   26, 2016 at No. 2426 CD 2015,
               v.                            :   affirming the Order of the Workers'
                                             :   Compensation Appeal Board entered
                                             :   November 3, 2015 at No. A14-1335
WORKERS' COMPENSATION APPEAL                 :
BOARD (BUSHTA),                              :   ARGUED: October 18, 2017
                                             :
                     Appellee                :

                                       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.
         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] - 2
              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] - 3
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 anti-

subrogation 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.

4Act 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] - 4
       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 self-

insured 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] - 5
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] - 6
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] - 7
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] - 8
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] - 9
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] - 10
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] - 11
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] - 12
      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] - 13
       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] - 14
             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] - 15
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] - 16
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.

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