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2025 Forecast in California Workers’ Compensation

January 31, 2025

In 2024, Californian workers faced a tempered legislative and judicial climate following an exciting election cycle from 2024. The California State Legislature and Governor Newsom have adjourned a legislative session that conflicted in a post-Covid landscape with ongoing attempts by the California Legislature to enact laws regarding utilization review and workplace safety, which failed as a result of vetoes by Governor Newsom. In addition, the WCAB issued several key decisions affecting combination of permanent impairments, and defense to claims. This year, we expect to see further legislative conflict regarding rebuttal presumptions for industrial injuries and medical treatment.

Governor Newsom Vetoed Two Key Bills passed by the Legislature During the 2024 Session

Senate Bill 1299 was ultimately vetoed by Governor Newsom to reject a bid to extend workplace safety enforcement in workers’ compensation. Senate Bill 1299, would have provided for a rebuttable industrial presumption for agricultural workers who developed a heat illness injury working outdoors where the agricultural employer failed to comply with existing heat standards.  For agricultural industry employers, the Governor’s veto acknowledged that workplace safety standards linked to heat illness injury is a matter for Cal/OSHA and not the Department of Industrial Relations.

Senate Bill 636 regarding medical treatment authorizations was also vetoed by Governor Newson. The bill would have required private employers to utilize a physician licensed by California state law in their utilization review process. Under existing law, employers are required to have a utilization review process in place that utilizes a licensed physician who is competent to evaluate the specific clinical issues involved in the requested medical treatment services. This bill would have limited private employer’s utilization review to only California physicians. In his veto message, Governor Newsom cited concerns of enacting a different standard in utilization review for private employers.

Notable Case Decisions at the Workers Compensation Appeals Board
Regarding Workplace Safety and Utilization Review

The WCAB continues to support liberal application of case and statutory law to injured workers statewide. The most notable case this year was Vigil v. County of Kern, (2024) 89 Cal. Comp. Cases 686 (appeals board en banc), however, there have been several other key cases.

In Vigil v. County of Kern, (2024) 89 Cal. Comp. Cases 686 (appeals board en banc), the Appeals Board held that the Combined Values Chart in the PDRS can be rebutted and the impairments may be added, as the Panel previously held in Kite. However, contrary to the guidance in Kite seemingly requiring a “synergistic effect” between the impairments, the WCAB indicated the use of that term is not a “magic word” invoking addition of impairments, and instead laid out a new test for rebutting the CVC. Going forward, in order to rebut the CVC the injured worker must satisfy either element of a two part test:

  • 1. If the injured worker proves the effects on ADLs caused by each body part rated do not overlap, they have successfully rebutted the use of the CVC and it need not be followed;
  • 2. Where the impairments do overlap, the injured worker must prove that the overlap “increases or amplifies” the impact on the overlapping ADLs.

Furthermore, the WCAB emphasized that the physician “must set forth a reasoned analysis explaining how and why synergistic ADL overlap exists.”  Where there is no overlap in the effects on ADLs, the PDRS may be rebutted and the impairment may be added versus combined on the CVC.  Conversely, when the effect on ADLs do overlap, there must be substantial medical evidence of the “synergistic effect” of the multiple impairments on the applicant, meaning the physician must do more than simply state that there is synergy, and must provide an explanation focusing on the effects of the impairment on ADLs.

In, Kyorkian v. Gustafson, 2024 Cal. Wrk. Comp. P.D. LEXIS 276, the WCAB clarified the initial physical aggressor defense.  The Court determined the initial physical aggressor defense under LC §3600(a)(7) did not bar the applicant’s claim because the defendant failed to provide testimony from a co-worker who had argued with the applicant. The applicant stated that he might have touched the co-worker while walking past, and another worker testified to hearing the argument but provided limited observations. The WCAB concluded that the employer did not present sufficient evidence to prove the initial physical aggressor defense, as the record did not demonstrate that the applicant’s contact with the co-worker constituted a genuine, immediate, and obvious threat of bodily harm.

Kyorkian v. Gustafson shows that employers must thoroughly document workplace investigations when using an initial physical aggressor defense. An employer needs enough supporting evidence to show a genuine, immediate, and obvious threat of bodily harm.

In Gutierrez v. Mission Pools, 2024 Cal. Wrk. Comp. P.D. LEXIS 246, the court clarified that a doctor merely commenting on unrelated body parts is not enough for a formal request for treatment. A formal request for authorization for treatment is still required.

The Court held that the applicant could not seek treatment outside the defendant’s Medical Provider Network (MPN) because there was insufficient evidence in the record to establish that the defendant neglected or denied a reasonable and necessary medical treatment request. While the defendant accepted liability for the applicant’s right elbow injury, the trial judge found that the defendant had neglected or refused treatment for the applicant’s neck based on the treating physician’s report, which indicated he was only authorized to treat the elbow. The physician noted he would treat the neck if it was an accepted body part. Was this enough to constitute a request for authorization?  Fortunately, no. The WCAB determined it was unclear whether the physician had formally requested authorization to treat the neck or simply assumed it would not be approved. The WCAB found no direct evidence that the defendant denied a treatment request and remanded the matter to the trial level for further proceedings.

The WCAB clarified, though, that if the judge finds the defendant neglected or refused medical treatment, the applicant would be entitled to continue treating outside the defendant’s MPN at its expense until the defendant complies with the transfer of care protocols under 8 CCR §9767.9.

As medical providers frequently provide commentary on unrelated body parts, this case is helpful guidance when reviewing medical reporting that references disputed body parts.

In Correa v. Display Products Inc., 2024 Cal. Wrk. Comp. P.D. LEXIS 198, the WCAB ruled that the defendant’s utilization review (UR) determination was untimely because (a) there was no evidence that a medical professional evaluated the expedited review request and (b) the review was longer than 72 hours.

The WCAB clarified that under 8 CCR §9792.9.1(c)(4), an RFA marked for “expedited review” requires that the medical reviewer must assess (1) if there is an imminent and serious health threat to applicant or (2) that a delay in treatment would harm their condition. Then, (3) the reviewer must decide whether the requested medical treatment is necessary, based on treatment guidelines and evidence-based medicine. The WCAB emphasized that these determinations must be made by a medical professional, not a claims professional.

Looking Forward to 2025

Governor Newsom’s vetoes suggest he is trending toward more moderate policies involving workplace safety and medical treatment, which seems to differ from the Legislature’s actions in 2024. At this time, there does not appear to be an appetite for any kind of major reform in the California’s workers’ compensation system.   We have been dealing with the “new” system now for more than 20 years.  SB 899 went into effect in 2004, with additional changes resulting from SB 863 in 2012.  Stay tuned.

Written By:

Briana Jane Del Bono, Esq. of our LFLM – San Francisco Office

Laughlin, Falbo, Levy & Moresi, LLP.

www.lflm.com