Permanent Disability Strategies Take Center Stage at 2020 Palm Springs CAAA Convention

April 21, 2020

The 2020 CAAA Convention took place in Palm Springs, and while we are used to seeing the applicants’ bar come up with creative approaches to increase permanent disability, given that permanent disability can be a primary cost-driver for a claim’s value, it is not surprising that strategies focused on increasing PD were once again a hot topic.

One novel idea was focused on a broad reading from the AMA Guides 5th Edition. In giving general examples of various rating percentages, Page 5 of the AMA Guides states that 0% WPI occurs when there are 1) no significant organ or body system functional consequences, and 2) no limitation of common activities of daily life (ADLs). The suggestion at CAAA, however, was that where there are impacts to ADLs, a medical expert is prohibited from finding 0% whole person impairment.

For example, an applicant could have suffered a thoracic spine injury, and though the symptoms do not result in WPI under range of motion or Diagnosis Related Estimate (“DRE”), the applicant nevertheless has self-reported limitations in ADLs and functional capacity as a result of the injury. The argument put forth at CAAA, was that per the AMA Guides, the expert must give an impairment rating based on this functional limitation, and that findings of 0% WPI are limited to only those applicants who have no functional limitations or impacts to ADLs. This methodology is tiptoeing into the purely subjective, and while we are used to dealing with subjective complaints forming a part of the impairment rating through Almaraz-Guzman or pain add-ons, this method would mandate a finding of impairment even where there are only subjective complaints.

The Guides allow for WPI based on ADLs, but what measurements of ADLs should determine WPI? Surely there must be some accredited, peer studied, or otherwise approved ADL scale. As you might have guessed, not exactly. The Guides recommends “validated” scales, but admits shortcomings:

Since there is no agreed-upon scale…a physician may choose the most appropriate…validated scales for…assessment of ADL…to supplement clinical judgment, or…in determining where an individual stands within an impairment range.

In a system where the injured worker receives the benefit of the doubt, these grey areas (see also: gaping black holes) in the law are resolved in favor of the injured worker. It is therefore unsurprising that basing WPI on subjective complaints is coming into vogue in the applicants’ bar.

Outside of the Guides’ murky instruction, applicants’ attorneys continue to find safe harbor in the ever-expanding waters of Kite and its offspring. Adding WPI instead of combining using the Combined Values Chart is possibly the most favored strategy to increase PD when multiple body parts are involved, and is finding increasing support in subsequent case law.

In De La Cerda (83 CCC 567), the WCAB reversed the WCJ, finding the AME’s failure to use the synergistic language when recommending adding WPI is not determinative of the validity of that method. The requirement is merely that substantial medical evidence supports the doctor’s opinion that addition results in a more accurate rating of the disability level. This method sounds suspiciously like the language used in the Almaraz-Guzman case. But without a “four corners” limitation, does this mean that a QME need only make the conclusory statement that a “rating” is more accurate if added rather than combined?

Another shiny new tool for applicants’ attorneys discussed at the CAAA Convention was the consultative report. In the case of Ponce DeLeon v. So. Cal. Edison (2019) 47 CWCR 194, decision after reconsideration, the court found that Labor Code §4060 et seq. does not limit the admissibility of medical reports, and a consultative report obtained at the party’s own expense is admissible. This position was somewhat tempered by the WCAB still recognizing that a consulting report cannot be obtained “for the sole purpose” of rebutting the QME report and cannot be the sole basis for award. It seems like applicants’ attorneys pine for the days of dueling QME reports.

Communicating (see also: schmoozing) with doctors was another method discussed to increase WPI. A sample letter was presented for ways to invite a treating doctor to meet, even over coffee or dinner. Another example given was putting all treating doctors on a case law update mailing list. As treating physicians are also sometimes QMEs, one could imagine the potential ex parte issues with both approaches. If an attorney sends a case law update to all of her clients’ treating doctors, and one of those doctors is also a QME on a different client’s case, would the “case law updates” not be ex parte communications? There could be a reason we are seeing PTP depositions and rebuttal reports where the QME does not go applicant’s way. Could this also be a double-edged sword?

Applicants’ attorneys are also reminding treating doctors that they can escape the fee schedule by billing under the billing guidelines of Labor Code Section 4620 as a medical legal report. CCR 9793 allows treating doctors to bill for comprehensive medical-legal evaluations, if limited to medical-legal expenses, or expenses incurred in order to determine a contested issue.

Of course, defendants can do the same. Medical legal billing can incentivize a treating doctor to issue reports needed to settle cases, such as PR-4s or deciding contested issues.

When attempting to increase impairment, it helps to divert attention from case law precedent that hinders that goal. While potentially short sighted, there was a concerted effort to avoid discussing or otherwise minimize and distinguish the Court of Appeals 5th District holding in City of Petaluma v. WCAB (Lindh) (2018) 83 Cal. Comp. Cases 1869.

In Lindh, the medical-legal evaluator found non-industrial apportionment to an underlying condition that put the injured worker at higher risk to sustain injury, such as losing vision in his left eye one month after experiencing blows to the head. Affirming the WCJ’s unapportioned award, the WCAB rejected the non-industrial apportionment to the “risk factors” of an underlying condition. Following Escobedo, the Court of Appeal reversed, allowing apportionment to be based upon pathology, or asymptomatic prior conditions.

The applicants’ attorneys shed some light on their plan to distinguish Lindh. The argument is that Lindh involved unusual facts, namely an extremely rare disorder combined with vision loss one month after the incident. The Court of Appeals decision did not define “direct cause” in terms of apportionment and whether something other than the work injury caused the PD (as opposed to causing the injury itself).

The arguments to distinguish Lindh approached the absurd, as the presenters argued that any part of the anatomy is a pre-existing condition. If followed to its end, an industrial meniscus tear should be apportioned to the pre-existing condition of having a meniscus. If no meniscus there would be no tear, right? Or, if an NBA player bangs his head on a doorway, do we apportion to his height? Yes, both of these were actual examples presented at CAAA as being counter-arguments to make the holding of Lindh appear ridiculous. We find it unlikely the Lindh case presents the slippery slope applicants’ attorneys have made it out to be, but it is worth keeping any eye on.

While delving into the absurd, the applicants’ bar had its seafood buffet and ate it too. They proposed using Hikida v WCAB (2017) 12 Cal.App.5th 1249 to, in some cases, eliminate apportionment altogether. Their argument was that Hikida’s holding supports an argument that any medical treatment which results in WPI under the Guides is not apportionable. For example, the WPI automatically awarded for knee surgery or hip replacement regardless of surgical outcome per the AMA Guides, would not be subject to apportionment to the preexisting arthritis that caused the need for the surgery in the first place. How can one apportion to arthritis that is no longer present in the affected joint?

One potential defense rebuttal, is that Hikida did not address whether the applicant’s underlying carpal tunnel in that case (found to be 10% nonindustrial) was still subject to apportionment, leaving that question unanswered. In direct response to the arguments presented at CAAA, one could argue that Hikida only applies to distinct and unintended medical consequences. In Hikida the surgery resulted in a completely new and distinct medical condition of CRPS. This seems distinguishable from a successful knee replacement, which results in the expected correction. It would seem that medical treatment resulting in the expected/intended correction should not be treated the same as medical treatment resulting in unintended medical consequences or a new and worse medical condition.

One example of the WCAB’s expansion of Hikida, is Hector Gonzalez v. Recology Golden Gate PSI (2019) ADJ10473323 ADJ9241894) (San Francisco Board). In this case, a trash collector reported a specific injury and cumulative trauma to the right knee, underwent three knee surgeries with no improvement and developed “flexion contracture.” The WCJ rejected the AME’s failure to apportion between the two industrial injuries, finding that Hikida did not apply because there was only industrial apportionment between dates of injury. The WCAB reversed on appeal, finding that under Hikida, where PD arises from effects of medical treatment for two industrial injuries, the applicant is entitled to a single, unapportioned award. The dissent argues that Hikida only applies when there is nonindustrial apportionment. Hikida, it seems, could be applied to all cases in which impairment is based on particular treatment, even where the applicant has multiple injuries to the same body part.

As the applicants’ bar continues to find ways around the SB 899 reforms, it is hard to picture that shiny April in 2004 when the state of California was trying to decrease the cost of workers compensation, not increase it.

It’s a brave new world for the defense bar. The landscape is rapidly changing both through case law and statutes, systematically undoing the cost-saving measures of SB 899. One wonders how long it will take for the next reform to reign in the claims costs that continue to grow.