Appellate Decision Limits Hikida; Allows Apportionment for Impairment Caused by Medical Treatment
July 21, 2020
In a recent case which is helpful to the defense bar, County of Santa Clara v. WCAB (Justice), the 6th District Court of Appeal limited the scope of the findings in the 2nd District Court’s previous holding in Hikida v. WCAB (2017) 12 Cal. App. 5th 1249. Justice clarified that apportionment to preexisting or non-industrial conditions can still apply to industrial disability where the treatment itself is the source of the disability.
To review, Hikida created shockwaves in the workers’ compensation world when it held that if industrial medical treatment caused a worsening of an industrial condition—which in the applicant’s case was the development of Complex Regional Pain Syndrome after an industrial surgery— apportionment to preexisting conditions does not apply. After Hikida, injured workers applied this holding broadly, arguing that if they had surgery—a total knee replacement for example—then apportionment to preexisting or non-industrial pathology like osteoarthritis would not apply. This argument was buoyed by several mandatory provisions of the Permanent Disability Rating Schedule (PDRS) which require a finding of permanent impairment following certain types of surgery.
Justice narrows the scope of Hikida, holding that it applies only to a new, unexpected condition that was solely caused by the medical treatment for an industrial injury. Justice found that a knee replacement surgery, the need for which partially arose from non-industrial factors, and which improved applicant’s functionality after surgery, still allowed apportionment to non-industrial causes of the resulting mandatory impairment for a knee replacement per the AMA Guides.
The applicant in Justice was a workers’ compensation claims adjuster for Santa Clara County from 1991 until 2016. She had a specific injury in 2011 to her left knee when she fell at work, causing a meniscal tear, and later claimed her right knee as a compensable consequence. Applicant had bilateral knee replacements. The AME Dr. Anderson found that there was significant pre-existing degeneration, all of which predated the fall at work, and apportioned 50% of the bilateral knee disability to the non-industrial, pre-existing degeneration in the knees.
At his deposition, when asked about what caused the need for a knee replacement, Dr. Anderson testified that “total knee replacement was not required because of the meniscus tear… but rather as a result of the underlying arthritis,” because “a meniscal tear does not require a knee replacement.” In other words, absent the pre-existing arthritis, a knee replacement would not have been needed.
The trial court found that although applicant’s functionality increased after obtaining knee surgery, the AMA Guides dictated a higher rate of permanent impairment as a result of having surgery, since the current PDRS is often diagnosis-based, not based upon functional capacity as it was pre-2005. The trial court awarded 48% permanent disability without apportionment, based upon the Hikida decision. The trial court specifically indicated that the 50% apportionment analysis by the AME was sound, but the trial court felt compelled by Hikida to not allow apportionment since the medical treatment caused the permanent disability.
The Workers’ Compensation Appeals Board granted reconsideration, but only to amend the Award due to a clerical error. The merits of the argument regarding whether apportionment should apply were rejected.
On Petition for Writ of Review, the 6th District Court of Appeals took the case, and reviewed the apportionment issue de novo. The Appellate court stated that Labor Code section 4663 provided for apportionment of permanent disability based upon causation from three sources: non-industrial, prior industrial and current industrial.
The Hikida decision, the court reasoned, changed the apportionment analysis. In Hikida, the injured worker was diagnosed with carpal tunnel syndrome, and underwent surgery to treat the condition. After surgery, the injured worker developed Complex Regional Pain Syndrome (CRPS). The medical-legal evaluator found that applicant was permanently and totally disabled due to the CRPS developed as a result of the failed carpal tunnel surgery, which had been provided by the employer. The Court noted the well-established principles that the provision of medical treatment was not apportionable, and that an aggravation of an industrial injury or infliction of a new industrial injury resulting from its treatment or examination are compensable. From these two principles, the Court determined that the fact that applicant suffered a far more disabling condition, CRPS as opposed to carpal tunnel, as a result of treatment gone poorly, meant that the disability arising from the new disabling condition was not apportionable.
The Court noted that the applicant in Justice had documented prior arthritis in the knees. The Court also distinguished the Hikida facts, noting that in Hikida there was “a new unexpected consequential injury” (CRPS) entirely caused by medical treatment for a different industrial condition (carpal tunnel). In contrast, the applicant’s surgery in Justice actually improved her condition, and there was unrebutted evidence that applicant’s condition was half caused by industrial factors and half caused by non-industrial factors. Therefore, the Hikida limitation on apportionment only applies when there is a new condition entirely caused by medical treatment for an industrial injury.
Impact on Litigation
What does Justice mean for defendants? The facts of the case matter. Showing that medical treatment was beneficial to the applicant may have helped the outcome, but it is not the only relevant factor. The fact that there was no new, debilitating condition, as there had been in Hikida, seems to be the deciding factor for the Court of Appeal. It should be noted that the principles which formed the basis of Hikida are still intact after the Justice decision, including that medical treatment cannot be apportioned, and that the defendant is responsible for the outcome of industrial medical treatment. However, Justice significantly limits the breadth of application of Hikida, which should pay immediate dividends for defendants.
Another important detail to note is that the court in Justice emphasized that the new medical condition in Hikida, CRPS, was “solely” caused by the industrial medical treatment. Since the defense has the burden of proving apportionment, the defense practitioner should solicit a medical-legal opinion regarding whether the need for surgery was “solely” caused by the industrial injury. An opinion that reflects other causes besides the industrial injury may be helpful to show that apportionment can still apply, even where the employer provides surgery for an industrial condition. Also, if possible, the practitioner should elicit an opinion from the medical-legal evaluator that the industrial treatment did not cause a “new” injury. In the absence of a “new” injury, the ultimate award should take into account preexisting conditions as partially causative of the disability, if the evaluator’s opinion is substantial on the issue of apportionment.
The analysis used in Justice may also be applied in COVID-19 cases, where the injured worker has preexisting diabetes, cardiac, renal, or pulmonary issues. Query whether the industrial treatment solely caused a new condition, or if a pre-existing condition contributed to the need for treatment. Overall, many of the defense community’s fears about Hikida and subsequent cases have been put to rest by the aptly named Justice case. While Hikida will still apply in cases where the applicant’s impairment is derived from a new condition caused “solely” by medical treatment, the broader application to treatment such as joint replacements or other diagnosis based impairments in the PDRS may appropriately be apportioned to preexisting or non-industrial conditions. Justice marks a welcome return to common sense in apportionment, and reinvigorates Labor Code Section 4663 for the foreseeable future.