April 2005..Happy Anniversary?

William Nathans
Editor

It has been one year since Arnie and the Legs reformed workers compensation. Has the mess gotten better or have we just created a new pile? Some things have gotten better (depending on which side of the fence you are on) some things have become worse and some we still have no clue about.

One thing that hasn’t changed is the whining. Fortunately for some, there are still things to whine about. Adjusters on the frontlines are still trying to figure out what the heck they are supposed to do. Applicant attorneys have spent so much time fighting the law that they haven’t had time to figure out the loopholes. Employer’s expected to receive a magic wand that would revert rates back before open rating went into effect. Medical providers haven’t spent the time to figure out ACOEM or how to write a ratable report under AMA guidelines (which will probably make them more money than before if they figure out how to bill). And now thanks to the Court of Appeals insurers are going to get hit for losses not contemplated, because unless the Supremes reverse their decisions, there can be no contribution from CIGA. Is everybody happy!

Suggestions can be sent to Bill@adjustingworld.com

Everything was fine before your small company landed the big new contract. Your overhead is high and you can't afford to hire any more employees, so everyone is working harder. Now your employees' tempers are flaring and fingers are pointing. People who once seemed to get along well are barely speaking to each other. In the last few weeks, your office has become a revolving door of complaints and conflicts... More >>

Apportionment: What does it Mean?

Stephen L. Kline, Esq.
ARMSTRONG LAW FIRM
stephenk@arm-law.com

On the First Anniversary of SB 899, April 19, 2005, the Workers Compensation Appeals Board, en banc, issued the Escobedo v Marshalls, et al. 70 Cal Comp Cases (2005) decision with instructions as to what apportionment means under Labor Code sections 4663 and 4664. They set out five specific holdings.

The first one … Causation of the injury is a different analysis than the causation of the permanent disability. “T he percentage to which an applicant’s injury is causally related to his or her employment is not necessarily the same as the percentage to which an applicant’s permanent disability is causally related to his or her injury.” With the exception of psychiatric injuries, the percentage of causation of an injury can be as low as 1%, if one can establish the principles of AOE/COE. The applicant obtains temporary disability, medical treatment and after 1/1/04, a supplemental job displacement voucher.

The second holding looked directly to the unambiguous words of the Labor Code section 4663(c):

“ In order for a physician’s report to be considered complete on the issue of permanent disability, it must include an apportionment determination. A physician shall make an apportionment determination by finding what approximate percentage of the permanent disability was caused by the direct result of injury arising out of and occurring in the course of employment and what approximate percentage of the permanent disability was caused by other factors both before and subsequent to the industrial injury, including prior industrial injuries.”

When a permanent disability amount is determined for an injured worker, then the analysis turns to what caused that disability. There are two percentages which equal 100%. There is the approximate percentage that is DIRECT RESULT of the injury that arose out of and occurred at the employment. The other percentage is “OTHER FACTORS”.

The simplicity of this section has befuddled Applicant’s attorneys for a year.

The third holding involves burdens of proof. “The applicant has the burden of establishing the percentage of permanent disability directly caused by the industrial injury.” “The defendant has the burden of establishing the percentage of disability caused by other factors.”

Burdens of proof are important because Labor Code section 3202.5 sets out that when it comes to burdens of proof; all parties are equal before the law. Thus if the Applicant fails to meet its burden to prove, with a preponderance of the evidence, the percentage of the permanent disability which occurs as a direct result of the injury AOE / COE, then he/she cannot get a boost from the Labor Code section 3202 that the workers compensation law should be interpreted so as to favor giving the injured worker the benefits.

The fourth holding is the most controversial and caused tremors throughout the applicant attorney world …. “Apportionment of permanent disability caused by ‘other factors both before and subsequent to the industrial injury, including prior industrial injuries,’ may include not only disability that could have been apportioned prior to SB 899, but it also may include disability that formerly could not have been apportioned (e.g., pathology, asymptomatic prior conditions, and retroactive prophylactic work preclusions), provided there is substantial medical evidence establishing that these other factors have caused permanent disability.”

This is HUGE! Diabetes, obesity, osteoarthritis, congenital defects, prior physical impairments and so many other factors that can & should be considered by the reporting physician to determine the causation of the injured worker’s disability.

The final holding recapitulates prior case law as to what constitutes “substantial evidence” and thus what reports are admissible before the Board.

Our job as defense attorneys and claims adjusters is to make sure that all medical reporters understand what apportionment means. The Legislature and now the WCAB have given us at least one tool to bring the workers compensation system under control.

The heart of the WCAB’s decision rests with the consistency between , “the statement in section 4663(a) that ‘[a]pportionment of permanent disability shall be based on causation’ and with the statement in section 4664(a) that ‘ [t]he employer shall only be liable for the percentage of permanent disability directly caused by the injury.’”

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