Almaraz/Guzman II & Ogilvie II Decisions Issued
Wednesday, September 9, 2009 | 0
By Richard M. Jacobsmeyer
The Workers' Compensation Appeals Board has issued its anxiously awaited revised decisions in the Almaraz/Guzman and Ogilvie cases, upholding but significantly altering significant portions of Almaraz/Guzman and essentially upholding its prior decision in Ogilvie with some additional procedural clarifications:
Almaraz/Guzman
The Workers' Compensation Appeals Board (WCAB), in a 4-3 decision in this case significantly backs away from the very broad holding of its initial decision but still leaves a fair amount of room for medical and legal wrangling over permanent disability (PD). The WCAB held in substance:
- The language of Labor Code section 4660(c), which provides that "the schedule ... shall be prima facie evidence of the percentage of permanent disability to be attributed to each injury covered by the schedule," unambiguously means that a permanent disability rating established by the schedule is rebuttable;
- The burden of rebutting a scheduled permanent disability rating rests with the party disputing that rating;
- One method of rebutting a scheduled permanent disability rating is to successfully challenge one of the component elements of that rating, such as the injured employee's whole person impairment (WPI) under the AMA Guides; and
- When determining an injured employee's WPI, it is not permissible to go outside the four corners of the AMA Guides; however, a physician may utilize any chapter, table, or method in the AMA Guides that most accurately reflects the injured employee's impairment.
One key difference in this holding from the board's prior decision is the rejection of using materials outside of the AMA guides as a basis to rebut the PD rating. The WCAB has, correctly I believe, determined the AMA guides are mandated under Labor Code Section 4660 as the basic component of the PD rating. The WCAB, taking its cues from some of its prior panel decisions in a number of cases, has endorsed a more liberal approach to addressing PD within the AMA guides as the methodology for affecting PD ratings. In doing so the WCAB has also firmly rejected the initial standard that was set out as a basis for rebutting the AMA guides when it states:
"...In light of these holdings, we now specifically reject the "inequitable, disproportionate, and not a fair and accurate measure of the employee's permanent disability" standard set forth in our February 3, 2009 opinion."
The decision again discusses the concept of rebuttal of the PD rating system and reviews the legal basis for the ability to rebut the schedule. There is little new in that discussion and it is difficult to fault the WCAB's legal analysis on that issue. The board also has a section discussing the need for "consistency, uniformity and objectivity" in the PD system, it declares this does not mean the PD system is subject to a straightjacket in applying the AMA guides. In discussing rebuttal standards the Board looks only to the AMA guides for its description:
"...This may be done by establishing that another chapter, table, or method within the four corners of the Guides most accurately reflects the injured employee's impairment. This interpretation gives effect to the "prima facie evidence" language of section 4660(c) because it allows rebuttal evidence, but it also gives effect to the "shall promote consistency, uniformity, and objectivity" language of 4660(d) because it requires that the rebuttal evidence be rooted in the AMA Guides.
Nevertheless, although the WPI component of a scheduled rating must be founded on the AMA Guides (except in the case of psychiatric impairments), a physician is not inescapably locked into any specific paradigm for evaluating WPI under the Guides. Section 4660(b)(1) provides that the WPI component of a scheduled rating is to be rooted in "the descriptions and measurements of physical impairments and the corresponding percentages of impairments published in the [AMA Guides]." Therefore, section 4660(b)(1) does not mandate that the impairment for any particular condition must be assessed in any particular way under the Guides.
Moreover, while the AMA Guides often sets forth an analytical framework and methods for a physician in assessing WPI, the Guides does not relegate a physician to the role of taking a few objective measurements and then mechanically and uncritically assigning a WPI that is based on a rigid and standardized protocol and that is devoid of any clinical judgment. Instead, the AMA Guides expressly contemplates that a physician will use his or her judgment, experience, training, and skill in assessing WPI."
The WCAB makes various comments about arguments presented both in favor of and in rejection of its prior decisions. To the extent the prior decision allowed the parties to utilized information other than the AMA guides, this decision rejects that approach. Therefore use of FCE evaluations, Vocational evaluations, various checklists to assess "work impairments" etc, are all no longer considered as valid rebuttal to the PD descriptions from the Guides.
It also appears that the WCAB has determined that a PD rating that is in strict conformance with the AMA guides is entitled to a presumption of correctness and that a more expanded approach, in order to be followed requires the party seeking to rebut the rating to overcome that presumption. Overcoming the presumption is not accomplished by simply offering an alternative without any explanation as to why it would be a more accurate description of the injured worker's impairment. A rational must be presented to justify the application of such an expanded approach to the guides. The WCAB also makes it clear that a WCJ can adopt or reject the use of such an approach in individual cases depending on how well the opinion is supported.
The WCAB also discussed some of the procedural aspects of rebuttal to the PD rating, rejecting the idea that such rebuttal can only be presented after trial and after a PD rating has issued. In order to encourage a more efficient use of WCAB time, the board encourages these issues to be addressed before the mandatory settlement conference (MSC) principally through supplemental reports or cross-examination of physicians.
Commentary on Almaraz/Guzman:
This decision is certainly a significant pullback from the very expansive approach taken by the board in the initial opinion in these cases (and which would still be applied by the 3 dissenting commissioners). As a practical matter, this decision still leaves a fair amount of leeway in describing PD for evaluating physicians, but cuts down considerably on the scope of what can be considered (effectively no FCE, no VRC and no work impairment issues, etc.) to only what is in the 4 corners of the AMA guides.
As an example of what will not work, the rational used by the AME in the Guzman case, analogizing loss of use of an upper extremity as a basis for assigning a PD level, is likely inconsistent with the approach allowed as it utilizes a methodology that is not sanctioned by the Guides. However applying a different chart as a method for describing PD in WPI terms is acceptable as rebuttal to the straight AMA guideline rating. The WCAB may have provided a decision which is much easier to defend at the appellate levels and which will be more difficult to overturn on a legal basis.
What the WCAB has also done is set itself up as the gatekeeper to ultimately define how and when rebuttal to the guides can be accomplished and when it is not to be condoned. While we will clearly have more litigation over PD after Almaraz/Guzman than before, the scope and very likely the degree of litigation should be much more carefully controlled with this decision than the original one.
Ogilvie Decision:
The WCAB decision in this case is a resounding affirmance of the original decision that the future earnings capacity (FEC) factor can be rebutted and the methodology to be used. The board makes the point that the methodology must incorporate the same information used by the Rand study and the formula from their calculations. It is not permissible to "reinvent the wheel" by performing one's own studies to show the Rand data was flawed. Instead the decision uses the Rand information and methodology to individualize the FEC factor to an individual employee.
The decision repeats many of the same talking points in Almaraz/Guzman regarding the ability to rebut the schedule, the validity of the ability to challenge the schedule, consistency with the legislative purpose of the Labor Code sections etc. The WCAB also rejected applicant attorney arguments seeking to convince the board the FEC factor and the PD rating should be the same number. As before, only Commissioner Caplane was convinced by this argument.
For the most part, the kinds of adjustment that result from the application of Ogilvie are fairly modest. The smaller the standard WPI, the more like the recalculated FEC factor is likely to fall outside the 1.1 -1.4 range of the PD schedule and the more likely rebuttal can be accomplished. However, the WCAB continues to make it clear the simply because the result of the calculations is outside the current FEC ranges does not automatically entitle a party of a new FEC adjustment and the burden still rests with the party seeking to rebut the schedule that the presumptively correct PD rating has been rebutted.
As always, with evidence of this nature, care should be given to the underlying assumptions upon which loss of earnings capacity numbers are calculated. Many applicant attorneys will simply take an employee who has not worked and assert the total loss of earning capacity which results is a very significant alteration of the FEC factor. However the issue is "earnings capacity" and simply not having worked is not the same as having no earning capacity. This issue, and how to apply FEC factors to injuries with multiple body parts, will become the litigation issues assuming this decision survives further appeal.
The one given for both of these decisions is there will be further appeal, so stay tuned.
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Richard "Jake" Jacobsmeyer is a partner with the Oakland, Calif., firm of Shaw, Jacobsmeyer, Crain Claffey & Nix LLP
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