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by Steve Kline, Esq.

EK Health Services' Legal Counsel

For several years, these three cases have dominated the workers' compensation water cooler talk about the 2005 permanent disability schedule.  They may even have a Facebook page. (If you’re still at work, wait till you get home to friend it.)

These three cases have centered on the statutory language of Labor Code §4660 that the “schedule … shall be prima facie evidence of the percentage of permanent disability to be attributed to each injury covered by the schedule.”  It has been a long-standing principle that when a statute provides a certain fact, group or document is “prima facie evidence”, then it is rebuttable and can be overcome by some other evidence.

The inquiry then shifts to the nature and weight of the evidence that is being used to rebut the statutory fact, etc.

The Permanent Disability Rating Schedule (PDRS) is composed of several elements. They are the injured worker’s whole person impairment (WPI), age, occupation, and diminished future earning capacity.  The calculation of these elements through the use of the schedule’s formula produces a permanent disability rating which then is converted into a monetary award.

Last year, the Sixth District Court of Appeal issued its opinion in the Guzman case.  The Court affirmed the WCAB’s opinion that any of the elements that are part of the formula could be rebutted.  Their focus was on the ‘whole person impairment” element. The Court indicated that in challenging the doctor’s determination of WPI from the AMA Guides, one could look throughout the book, to all “four corners”, to challenge the doctor’s WPI assessment.

Thus, if a doctor used a certain section in the AMA Guides for an injured worker’s WPI, evidence could be presented to the trial judge that another section in the AMA Guides more accurately reflects the injured worker’s impairment level.  

The Supreme Court denied a writ of review to overturn the Sixth District’s decision.

Next up, was the Almarez case which was very similar to Guzman, but in the First District.  That Court of Appeal issued its opinion in the same tone as the Sixth District.  Within the last thirty days, the Supreme Court denied a writ of review in that matter.  Thus, the law is settled that every part of the AMA Guides can be used to determine an injured worker’s WPI.

Since my last article, the Olgilve case was decided by the First District Court of Appeal.  This case challenged the “diminished future earning capacity” element.  This new 2004 SB 899 element was “premised on a numerical formula based on empirical data and findings that aggregate the average percentage of long-term loss of income resulting from each type of injury for similarly situated employees.”

Rebutting the PDRS’ statutory standing as prima facie evidence for this element caused many problems.  The Court posed the question: “What showing is required by an employee who contests a scheduled rating on the basis that the employee’s diminished future earning capacity is different than the earning capacity used to arrive at the scheduled rating?”

First, the Court threw out the WCAB’s attempt to create a new formula. They continued by indicating that the statutory change in language was not really any substantive change. “Indeed, the terms “diminished future earning capacity” and “ability to compete in an open labor market” suggest to us no meaningful difference, and nothing in Senate Bill No. 899 suggests that the Legislature intended to alter the purpose of an award of permanent disability through this change of phrase.”

“Employers must compensate injured workers only for that portion of their permanent disability attributable to a current industrial injury, not for that portion attributable to previous injuries or to nonindustrial factors.”  This is an important rebuttal to the argument that you take the worker “as is”.  The Court noted that if this argument was given weight, then employers maybe disinclined to employ some potentially more vulnerable people.

In conclusion, the Court set out three ways to challenge the Rand Study. “An employee may challenge the presumptive scheduled percentage of permanent disability prescribed to an injury (1) by showing a factual error in the calculation of a factor in the rating formula or application of the formula, (2) the omission of medical complications aggravating the employee’s disability in preparation of the rating schedule, or (3) by demonstrating that due to industrial injury the employee is not amenable to rehabilitation and therefore has suffered a greater loss of future earning capacity than reflected in the scheduled rating.”

The vocational rehabilitation expert industry has been given new life.  Their analysis and testimony, limited to industrial factors, present the new challenge to rebut the PDRS.  

Most commentators and stakeholders agree that the 2005 PDRS is currently not adequate.  The challenge for the Department of Workers' Compensation and maybe the Legislature is how to make the necessary changes.  Until those changes are made, the Almarez-Guzman-Olgilve rebuttals will continue, resulting in increased litigation expenses.

Thanks for listening.