New or Old PDRS?

Saturday, January 15, 2005 | 0

The question of when to use the Pre-1/1/05 Permanent Disability Rating Schedule (PDRS) and when to use the AMA Guidelines for Evaluation of Physical Impairment and Post 1/1/05 PDRM is coming rapidly into focus as an issue that requires our attention. It is one of the questions that has been posed to me more often over the past few weeks than any other issue currently pending on the WC horizon. Unfortunately this issue is going to prove to be somewhat complex because of the statutory language that we will be using to make such determinations.

Labor Code section 4660 provides:

"...The schedule and any amendment thereto or revision thereof shall apply prospectively and shall apply to and govern only those permanent disabilities that result from compensable injuries received or occurring on and after the effective date of the adoption of the schedule, amendment or revision, as the fact may be. For compensable claims arising before January 1, 2005, the schedule as revised pursuant to changes made in legislation enacted during the 2003-04 Regular and Extraordinary Sessions shall apply to the determination of permanent disabilities when there has been either no comprehensive medical-legal report or no report by a treating physician indicating the existence of permanent disability, or when the employer is not required to provide the notice required by Section 4061 to the injured worker."(Italics added)

The language may appear at first blush to be reasonably clear, but in the real world the application of these provisions is going to be the subject of a good deal of controversy.

There are three identified circumstances which dictate the application of the old schedule for injuries which occurred prior to 1/1/2005. These are as follows:

1. There has been a report from the treating physician indicating the existence of permanent disability;

2. There has been a comprehensive medical-legal report indicating the existence of permanent disability; and

3. The employee was entitled to notice under Labor Code section 4061.

While it is not stated in the statute, presumably each of these events is to be considered in light of the effective date of the new PDRS 1/1/2005. While each of these requirements appears to be relatively simple in fact the application of the principles is much more complex.

1. There Has Been a Report from the Treating Physician Indicating the Existence of Permanent Disability

The report of a treating physician indicating the existence of permanent disability is going to require significant judicial clarification in order to determine exactly what is meant by this language. This is in part because the applicants bar and many of the physicians who customarily do business with them have generated medical reports commenting on permanent disability in cases where the injured worker was not yet permanent and stationary prior to 1/1/2005. The intent of these reports is clear. It is to trigger the application of the pre-1/1/05 rating schedule rather than the AMA Guide and the 1/1/05 schedule.

These reports can fall into three separate categories.

A. "The injured worker is not yet permanent and stationary but "will have" permanent disability." This language indicates that while the injured worker's condition is not yet permanent and stationary the doctor is anticipating that there will be permanent disability. In my opinion this does nottrigger the application of the new schedule. The physician is not indicating that there is permanent disability or that permanent disability exists which is the statutory requirement. He is just commenting that there will be permanent disability in the future.

B. "The injured worker is not yet permanent and stationary but they have permanent disability as a result of their injury."

This language is somewhat more difficult to evaluate in terms of its impact on invoking the pre-1/1/05 rating schedule. Unlike the language above the doctor is indicating the existence of permanent disability and the anticipation of permanent disability. However permanent disability is disability which is "permanent." While the injured worker is still temporarily disabled it is a sophistry to identify the disability as permanent at the same time. While it is possible that the courts may interpret this language as being adequate to invoke the use of the pre-1/1/05 rating schedule it is my belief that this language is not sufficient to do so because of the inconsistency between a condition being temporarily disabling and the description that there is permanent disability. It can be argued that while this meets the strict language of the statute, it does so with use of a logically inconsistent statement.

It is my recommendation that carriers and third-party administrators treat these reports as not sufficient to invoke the use of the old schedule. However, we must recognize that it is possible the courts will disagree with this opinion and some consideration will have to be given to the possibility of the application of the old schedule on issues such cases where settlement is involved.

C. PD is described for one part of an injury but other parts of the claim are not yet P & S.

An injured worker may also be described by their treating physician as having disability in multiple parts of the body (such as a back and a knee) with part of the disability being permanent and stationary but other portions of the disability not yet be permanent and stationary (such as the injured worker has recently undergone surgery (i.e. to the knee but whose back injury is described as P & S).

This is a different situation from a physician indicating that there is permanent disability while the condition is still temporarily disabling. In this circumstance a physician has actually described current existing disability for a portion of the body but the entire injury is not yet permanent and stationary and therefore not ready to be rated. This circumstance in the undersigned's mind is one where the application of the old schedule is likely to be held to apply. There is existing disability that is permanent and stationary and can be identified while the remainder of the claim is not yet ready for complete evaluation.

It is my belief that injuries where a portion of the condition is permanent and stationary will qualify for use of the old schedule even though the entire injury is not yet ready to be evaluated for permanent disability.

Into this last category would also fall cases where the PTP may have reported that there is PERMANENT DISABILITY but not yet described it (such as on a PR-2). Such cases will qualify for the old PDRS should that opinion the report issue before 1/1/05. This situation also qualifies for application of the old PDRS based on #3 below as the employee is entitled to notice under LC 4061(1)(a).

2. There Has Been a Comprehensive Medical Legal Report Indicating the Existence of Permanent Disability

This provision is fairly easy to apply where there has been a permanent disability evaluation and the parties are discussing settlement on the case as the new year turns. Clearly such cases will be evaluated under the old PDRM.

The problem arises in cases where there have been prior reports indicating levels of PD but the parties did not rely on the reports or subsequent events have rendered the reports irrelevant. There are many cases where the IW has been declared P & S and PD described but in conditional terms. An example would be that the IW was considering a surgical procedure and the reporting physician indicated that the condition was P & S but only if surgery was declined. Sometimes there are AOE-COE evals which describe PD but the parties ignore the conclusions for various reasons.

Many of these situations will actually fall under #3 below. Once there is a report commenting on the existence of PD, the defendant is obligated to send notice of payment of PD and this triggers application of the old schedule. The vast majority of these cases will fall under the old schedule because of this requirement. Therefore it is not necessary to worry over whether a report is currently relevant in order to trigger the use of the old PDRS. The date or relevant of the medical-legal report does not control the appropriate rating methodology, the mandatory notices under LC 4601 will require use of the pre-1/1/2005 schedule.

3. The Employee Was Entitled to Notice of the Right to an Evaluation under Labor Code section 4061 Prior to 1/1/05

Labor Code section 4061 provides the circumstances under which an employee is entitled to notice of their right to a permanent disability evaluation. LC 4660 does not require that the actual notice be sent but merely that the employee was entitled to notice . Essentially any time temporary disability is terminated the right to notice in Labor Code 4061 is invoked. The notice is required to be sent out at the same time as the last payment of TTD is made regardless of whether the condition is permanent & stationary at that time. Additionally, under ADR 9812, if there is no payment of TTD but the employer receives notice of the existence of PD or if the employer determines that no PD is payable notice is to be sent within 14 days of that determination.(See 9812(g)(2) & (3))

As indicated above each of these specific circumstances has gray areas and language which is unclear in the application. Unfortunately it is going to take a significant amount of litigation and some decisions from the WCAB and courts beyond to address these issues and provide us with clarity. In the meantime it would seem prudent that in any case where an argument can be made for the application of either the new or old schedules, physicians should be asked to describe permanent disability both under the old rating schedule and under the new rating schedule. For settlement purposes the parties will have to weigh the probability of which schedule is going to be utilized in order to assess the risk/benefit of settlement on both sides.

By Jake Jacobsmeyer. Jake is the Managing Partner of theEast Bay Office (Concord, Ca.) of the law firm of Adelson, Testan, Brundo & Popalardo. He can be reached at 925 609-1990, or by e-mail at richardjacobsmeyer@atblaw.net.

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