Consequences of the Workers’ Compensation Appeals Board’s decisions in Almaraz v. Environmental Recovery Services (State Compensation Insurance Fund) and Guzman v. Milpitas Unified School District continue to reverberate through the workers’ comp community. They are horrific.
Over the past several years, California workers’ comp costs have dropped significantly, in part due to lower frequency of permanent disability claims. This was an intended consequence of the reforms, even though there is still a raging debate over whether those who have ratable impairments under the AMA Guides – and thus ratable permanent disability post-SB 899 – should be entitled to greater benefits than the law and schedule now provide. That latter debate, as should be the case with all debates over benefit adequacy, is best left to the folks in Sacramento.
Throw into the mix the following curious language from the board:
“It appears likely, for example, that an AMA Guides rating will be deemed to have been rebutted where the employee’s injury has no permanent effect on his or her ‘activities of daily living’ or it is simply not covered by the Guides – thereby resulting in no ratable AMA Guides impairment – but the injury seriously impacts the employee’s ability to perform his or her usual occupation and, therefore, significantly affects his or her future earning capacity.”
Well, that’s news to a lot of people, including the administrative director. But, as is the case with the rest of this magnum opus, we need to break this down into a little more detail to get to the heart of the matter. This language addresses two different situations – one where the AMA Guides do not consider the condition to result in impairment, and the other when the AMA Guides do not address the impairment at all. In the latter case, the Permanent Disability Rating Schedule (PDRS) says:
“If an impairment based on an objective medical condition is not addressed by the AMA Guides, physicians should use clinical judgment, comparing measurable impairment resulting from the unlisted objective medical condition to measurable impairment resulting from similar objective medical conditions with similar impairment of function in performing activities of daily living. (AMA Guides, p. 11)”
Well, that sure sounds as if the PDRS and Guides already address this issue and set forth an analytical framework for its resolution. Yet the board tosses this language, along with the entire PDRS.
Thus, it would seem that these issues should boil down to disputes over interpretation of the Guides rather than providing a road map to rebut the PDRS.
But that’s only one part of this analysis. Next we have cases in which there is no impairment under the AMA Guides but still a serious impact on the worker’s ability to perform his or her usual occupation. This is the oft-cited “zero” – a truly unfortunate characterization for anyone who has suffered an injury, but a term of use, nevertheless. Thus, it appears that the board says when there are work restrictions, someone must find a way to quantify impairment to make a disability award. The board conflates impairment and disability rating concepts in this decision, so it likely will be left up to future litigation to determine, once there is a new impairment rating, whether the rest of the schedule applies, or if we have gone totally outside the PDRS. Don’t have a clue, sorry.
Then there is the flip side. What happens when, parsing the board’s language, you have an impairment, but because of modified or alternative work – or even regular work – there is no “serious” impact on the employer’s ability to perform his or her job and thus no effect on his or her future earning capacity?
Well, the board hints at an issue here, too: “(b)ut, as indicated above, a defendant also can show that an AMA Guides rating should not be followed where it is inequitably high.” If indeed the California case law cited by the board is still relevant, then employers are given a new incentive to return injured workers to work – a laudable objective, to be sure – because they can reduce PD by showing no loss of earnings. Many think such a decision will be the inaugural flight of Porcine Air, but this too will have to be clarified by future litigation. Indeed, we may have created a situation where the injured worker can buy his or her job back with a lower PD award.
Talk about costing an arm and a leg.