The defense, led by Bradford & Barthel’s own Louis Larres, scored a number of “wins” in Round Two of Almaraz/Guzman:
“Not Fair” is “No Standard”
The WCAB has now jettisoned its original standard for determining whether an AMA Guides-based PD rating is rebutted. In AG I, the WCAB claimed an injured worker need only demonstrate the Guides-based rating is “inequitable, disproportionate, and not a fair and accurate measure of the employee’s [PD].” The AG II majority acknowledged Mr. Larres’ arguments that this standard “is subjective and may lead to inconsistent and non-uniform permanent disability ratings, i.e., what is inequitable, disproportionate, and not fair and accurate to one trier-of-fact may be equitable, proportionate, and fair and accurate to another.” (AG II, p. 28) Indeed, “a ‘fairness’ standard is not a true standard at all.” (AG II, p. 29, footnote 38)
What Can CAAA Use to Inflate Permanent Disability Awards?
“[I]f a party seeks to rebut the WPI element of a scheduled rating, it must stay within the four corners of the AMA Guides.” (AG II, p. 30) This represents a dramatic pull back from AG I, which would have permitted physicians to provide impairment determinations “partially based on the AMA Guides” or even “not based on the AMA Guides” at all. AG I envisioned that, once the AMA Guides was rebutted, impairment would “[o]rdinarily” be measured “through the opinions of treating or evaluating physicians who, using a methodology in addition to and/or independent of the AMA Guides, conclude that the injured employee’s impairment is greater than—or lesser than—the impairment rating called for by the Guides.” (AG I, p. 44) AG I also invited doctors to consider other generally accepted medical literature, such as other AMA publications, as well as publications of other established medical organizations. Even worse, AG I invited physicians to review and consider the vocational specialist’s opinions regarding employability to ascertain impairment. Given AG II‘s rejection of these options, the defense can save a bundle in litigation costs in this area alone!
The majority has begun to acknowledging the importance of Labor Code 4660(d)’s requirement (brought to us by SB 899) that “[t]he schedule shall promote consistency, uniformity, and objectivity.” It is 4660(d)’s mandate that leads the majority to conclude doctors must “stay within the four corners of the AMA Guides.”
The Fight Must Continue:
While recognizing the central role the AMA Guides plays in promoting consistency, uniformity, and objectivity, the WCAB now nevertheless permits the misapplication of the Guides:
“[A] physician is not inescapably locked into any specific paradigm for evaluating WPI under the Guides… [E]ach reporting physician…should give an expert opinion on the injured employee’s WPI using the chapter, table, or method of assessing impairment of the… Guides that most accurately reflects the injured employee’s impairment.” (AG II, p. 22-23)
Thus, the majority suggests that we can no longer expect and demand that a physician use the AMA Guides Chapter 15 (“The Spine Chapter”) just because there is a spine injury! As long as the doctor doesn’t “arbitrarily assess [the]… impairment” (p. AG II, p. 23) and does “explain” his/her “impairment conclusions,” the doctor may mix and match the “most accurate” chapters, tables, and methods. (AG II, p. 23). This is exactly what the B&B Rating Service sees in 81 percent of the MMI reports we evaluate; the physicians misapply the Guides and, thus, overstate the impairment/PD… often by tens of thousands and even hundreds of thousands of dollars.
WCAB’s Achilles’ Heel
While the WCAB has stepped back from AG I and, thus, improved the overall strength of its arguments, AG II carries plenty to both hate and use against it to achieve its inevitable downfall.
The Guzman portion of the opinion will be the subject of a writ to the Sixth District Court of Appeal. Expect the 6th DCA to be won over by some of the following considerations:
- While the WCAB now believes (or at least claims) they have achieved consistency, uniformity, and objectivity by limiting impairment assessments to the “four corners of the AMA Guides,” said consistency/uniformity is pretty much limited to the fact that impairment assessments require that we use a big green book. 1 After referencing the Guides, consistency/uniformity are maintained only so long as it takes physicians to discover “creative” ways of misapplying the Guides, and claiming such creative (and more expensive) WPI determinations more “accurately reflect the injured employee’s impairment.”
- Labor Code 4660(b)(1) requires that, in assessing PD, the “nature of the physical injury or disfigurement” component of disability “shall incorporate the descriptions and measurements of physical impairments and the corresponding percentages of impairments published in the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition).”
Is it unreasonable to believe that the California Legislature, in mandating the use of the AMA Guides, wanted us to apply the Guides as written? While such a statutory interpretation seems only reasonable and logical, the WCAB chooses a different path, inviting doctors to apply any “chapter, table, or method of assessing impairment of the AMA Guides” that the physician can “explain”!
- While the majority “agree[s] that one of the ways the Legislature helped to reduce [PD] costs [via SB 899] was by requiring that WPI be based on the AMA Guides,” AG II ignores that its new program for assessing WPI/PD will dramatically increase costs by invariably resulting in at least two different WPI analyses in every case: (1) an analysis based on the AMA Guides as written, and (2) a secondary—inflationary—calculation that mixes and matches the doctor’s various favorite (read: more expensive) “chapters, tables and methods.”
In short, AG II (a) gives mere lip service to the requisite consistency, uniformity, and objectivity, (b) invites “creative writing” in disability reports by permitting the misapplication of the Guides as written, and (c) stymies the legislative intent of SB 899 by increasing, rather than decreasing, the costs associated with PD and litigation!
While CAAA may be impressed, I doubt the 6th District Court of Appeal will concur!
But How Do I Set Reserves?
Setting reserves has always been part science, part art and lots of guesswork. Things had gotten much better with SB 899, at least in terms of PD. Until AG I, the adjuster simply estimated the impairment—based on the Guides as written—and applied the 2005 PDRS to adjust for DFEC, occupation. and age. PD reserve accuracy dramatically increased statewide!
What else can/should an adjuster do in the world of Almaraz/Guzman I and II?
Nothing! WPI assessments based on the Guides as written, and properly adjusted to PD using the 2005 PDRS, remain “prima facie evidence of the percentage of permanent disability.” Who says? Labor Code 4660(c)!
Any attempt to set reserves by predicting exactly how an evaluating physician might successfully misapply the Guides would represent nothing but guesswork virtually destined to fail!
Good luck! And keep up the good fight!
Donald R. Barthel is a founding partner of Bradford & Barthel, LLP as well as B&B’s Rating & File Consultation Services. Mr. Barthel is an acknowledged expert regarding the AMA Guides to the Evaluation of Permanent Impairment and the 2005 PDRS. Much of his time is dedicated to teaching these topics to adjusters, human resource directors, employer representatives, attorneys, and physicians throughout California and the United States. Have a PDRS or AMA Guides question? Call Don Barthel at (916) 996-1263 or email him at firstname.lastname@example.org.
1 Kudos to Illinois Midwest Insurance Agency’s own John Hanlon for this brilliant insight!
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