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It is well settled that when an individual seeks compensation benefits under the Workers’ Compensation Act, he or she exposes himself or herself to an exception to the physician-patient privilege. When a party places his or her physical or mental condition at issue under the act, the privacy right against disclosing private medical information is waived. Much to the detriment of injured workers, this exception has been used by employers to treat company “panel” physicians essentially as they would “independent” medical examiners. They often use the doctors as experts and engage in multiple written and verbal communications, as well as hold lengthy pre-deposition meetings. In theory, the benefit of using a panel doctor as a defense expert is that a treating physician’s opinion is often more valuable than that of a doctor who evaluates an individual on one occasion, and is paid by the employer to do so. That makes the level of control a defendant has over a treating doctor crucial.

At the end of last year, in the matter of Pennsylvania State University v. Workers’ Compensation Appeal Board (Sox), Nos. 454 C.D.2013, 455 C.D.2013, the Commonwealth Court was faced with determining whether this exception to the physician-patient privilege created a carte blanche for insurers and their counsel to manipulate physicians with impunity. Fortunately, the court affirmed that the waiver “does not permit unfettered disclosure, and it does not permit an employer’s counsel to obtain information in any way he sees fit.”

While most of the Sox case dealt with whether the employer presented a reasonable basis for the underlying contest, and the extent to which attorney fees should be imposed against the employer, the more significant issue was that pertaining to the physician-patient privilege. The facts of the case concern an individual who sustained three distinct traumas to his right arm and shoulder. The first was 2006 with his then-employer, Keystone Central School District. The last two were three months apart in 2009 while working for Penn State University, the opinion said.

In the course of litigating multiple petitions with both Keystone and Penn State, Keystone obtained an independent medical exam. Penn State chose to rely on the opinions of two treating panel physicians. Perhaps in keeping with the adage “bad facts make bad law,” (or good law, as it were), the panel doctors also happened to be employees of Penn State. It would seem this fact made it easier for the court to come to its ultimate conclusion on the issue.

When Penn State scheduled the trial depositions of the panel doctors, the claimant, Thomas Sox, objected, or alternatively requested an order prohibiting ex parte communications between the employer’s attorney and the treating physicians. Via interlocutory order, the workers’ compensation judge overruled the objection in part, indicating that the employer could schedule the deposition of the treating doctors, but could not have any ex parte contact with the physicians to be deposed, the opinion said. The order also permitted Sox’s counsel to cross-examine the doctors as to any ex parte communications during the deposition. While the employer immediately appealed this interim order, the Workers’ Compensation Appeal Board quashed the appeal as interlocutory and not subject to appeal.

Following the board’s action, the employer decided not to take the depositions of the panel physicians in question, but rather chose to submit medical reports from the doctors in lieu of their deposition testimony, the opinion said. This was only permissible due to the fact that the claim was for less than 52 weeks of benefits and as such, reports are admissible under Section 422(c) of the act.

On June 29, 2011, the WCJ issued a final decision, disposing of multiple petitions, releasing Keystone from further liability and suspending Sox’s benefits from Penn State as of his Aug. 15, 2010, return to work date. As it pertains to the physician-patient privilege issue, the decision held that ex parte communications between the employer’s attorney and the treating panel physicians were not supported under Pennsylvania law, generally. The WCJ found that since the doctors were treating physicians for Sox, he therefore enjoyed a physician-patient privilege with them, the opinion said. As a result, the employer’s attorney was precluded from engaging in ex parte, nondisclosed communications with the panel doctors, absent consent from Sox.

As a side note, during the litigation, the employer had made the novel argument that pursuant to Pennsylvania Rule of Civil Procedure 4003.6, there was actually an attorney-client relationship that existed between the panel physicians and the employer’s attorney, since as alluded to above, the doctors were employees of defendant Penn State. The WCJ rejected this argument, suggesting that the General Assembly did not intend to create a privilege for ex parte communications between attorneys for employers and their panel physicians.

The employer appealed the WCJ’s final decision. While the board primarily addressed the various petitions that had been decided by the WCJ and the unreasonable-contest issue, it also concluded that the issue of the WCJ’s interim order and whether there was an attorney-client privilege was moot, the opinion said. Specifically, the board relied on the employer’s decision to submit medical evidence by report under the 52-week rule, and the WCJ’s consideration of those reports.

On appeal to the Commonwealth Court, the employer argued, inter alia, that the board erred in concluding that the employer’s challenge to the WCJ’s interim order was moot and that the WCJ erred in issuing the interim order, because it improperly limited employer’s counsel’s contacts with Sox’s treating physicians. Theoretically, the WCJ may have decided the credibility issues differently had there been depositions instead of reports. Consequently, the court framed the issue as whether the board erred in granting the claim petitions for the two 2009 injuries in light of the alleged prejudice to the employer stemming from the limitations the WCJ’s interim order imposed on the employer’s attorney. The employer also raised the aforementioned attorney-client privilege issue, contending that as a result of the panel doctors’ employment with Penn State, the ex parte communications between the employer’s attorney and the treating physicians were subject to the attorney-client privilege.

While the Commonwealth Court agreed with the defendants that the board erred in finding that the WCJ’s interim order was moot, it found that it was a harmless error since the order itself was proper. In addressing the employer’s contention that the employment relationship between the panel physicians and Penn State enables employer’s counsel to engage in ex parte contacts with those physicians without being subject to cross-examination by Sox’s counsel about those contacts, the court appealed to Section 5928 of the Judicial Code, 42 Pa. C.S. § 5928, dealing with attorney-client privilege, which is generally applicable in workers’ compensation cases. The court found that it was clear that despite the employment relationship that “happens to exist” between the treating physicians and Penn State, the treating physicians were acting in their capacity as treating doctors of Sox, and not as employees of Penn State. Thus, they were not authorized to act on behalf of Penn State and could not be considered clients of the employer’s counsel, the opinion said.

The employer also relied on Rule of Civil Procedure 4003.6, relating to discovery of a treating physician, in support of its position that its attorney may engage in ex parte communications with the treating doctors without condition. Rule 4003.6 provides in pertinent part: “Information may be obtained from the treating physician of a party only upon written consent of that party or through a method of discovery authorized by this chapter. This rule shall not prevent an attorney from obtaining information from

(1) the attorney’s client,

(2) an employee of the attorney’s client, or

(3) an ostensible employee of the attorney’s client.”

In finding the Rules of Civil Procedure to be instructive, while not strictly controlling in a workers’ compensation matter, the court rejected the employer’s argument, appealing to the Superior Court’s analysis of Rule 4003.6 in Marek v. Ketyer, 733 A.2d 1268 (1999). In the case, the state Superior Court held that similar ex parte communications did violate Rule 4003.6.

The Commonwealth Court quoted Marek as follows: “Although the statutory physician-patient privilege was waived by the filing of the lawsuit, this waiver does not permit unfettered disclosure. Rule 4003.6 regulates the manner in which defense counsel obtains information from the plaintiff’s treating physician. Regulating the contacts between a treating physician and defense counsel ‘affects defense counsel’s methods, not the substance of what is discoverable.’

“Rule 4003.6 is clear in its directive. Only upon consent or through a method of authorized discovery may information be obtained from a party’s treating physician. These procedures protect both the patient and the physician by ensuring that adverse counsel will not abuse the opportunity to contact or interrogate the physician privately. When formal discovery is undertaken in the presence of a patient’s counsel it can be assured that irrelevant medical testimony will not be elicited and confidences will not be breached, preserving the trust that exists between doctor and patient.”

The Commonwealth Court held that the Superior Court’s analysis also applies “with equal force” in the workers’ compensation context. Essentially, the waiver of the physician-patient privilege inherent in filing a workers’ compensation claim does not permit “unfettered disclosure” and further precludes an employer’s counsel to obtain information in “any way he sees fit.”

Just for good measure, the court quotes the physician-patient privilege, which is codified in Section 5929 of the Judicial Code, 42 Pa. C.S. § 5929. It states: “No physician shall be allowed, in any civil matter, to disclose any information which he acquired in attending the patient in a professional capacity, and which was necessary to enable him to act in that capacity, which shall tend to blacken the character of the patient, without consent of said patient, except in civil matters brought by such patient, for damages on account of personal injuries.”

In its final analysis, the court was particularly troubled by “the potential that defense counsel may seek to improperly influence the physician or to dissuade the doctor from testifying.” This was particularly true where the employer sought to present the employer’s own employees, as expert witnesses. Bad facts do sometimes make good law. After years of struggling with this issue and implementing novel ways to neutralize panel physicians who are often no more than hired guns, the claimants bar now has Commonwealth Court authority, as well as the direct applicability of the Rules of Civil Procedure and the Judicial Code to rely on.

Christian Petrucci is a solo practitioner and past co-chairman of the Philadelphia Bar Association’s workers’ compensation section. He concentrates his practice in workers’ compensation litigation and Social Security disability.