APPORTIONMENT AND SIBTF (formerly SIF): Acme Steel v. WCAB & Borman

When Labor Codes 4663 and 4664 were changed pursuant to SB 899 it was understood by the legal and medical stakeholders that major changes in applicable case law were in the making and that the issue of apportionment was about to become even more difficult than it already was. The upshot is that medical evidence that may be considered substantial and that was not rebutted may still be considered even in cases where Permanent Disability has been awarded at the 100% level. 

In Acme Steel v. WCAB & Borman, Acme Steel appealed the verdict in favor of Borman wherein Borman was awarded 100 percent permanent disability without apportionment for hearing loss. It was Borman's contention that his hearing loss, associated with injury  to other body parts, was attributable to his job with Acme (DOI 10/16/03). Three different AMEs worked the case, orthopedics, neurology, and otolaryngology for hearing loss. 

The hearing loss was reported as apportioned to both industrial and non-industrial factors, 40% to cochlear degeneration on a non-industrial basis, 60% to "occupational factors," e,g., hearing loss caused by on-the-job noise. The applicant's hearing loss was diagnosed as secondary to cochlea degeneration in turn secondary  to congenital disease of the Organ of Corti.  However, it was also understood that in 1994 the applicant sustained loss of consciousness secondary to an explosion that occurred on-the-job and that catapulted the applicant across the room. A workers comp claim was filed at the time. Applicant Borman was awarded 22% disability; however, his hearing continued to deteriorate.

Applicant Borman's hearing loss was bilateral from the beginning. Hearing aids were advised. Ten years later the AME found that there was "further hearing loss" and that this "further hearing loss ... was the result of both cochlear degeneration ... and persistent noise exposure." 

In 2012 the Workers Comp Admintrative Law Judge (ACALJ) found that Applicant Borman's injury was ratable under the post-2004 Permanent Disability Rating Schedule (PDRS) and that Borman showed 100% loss of earning capacity so that he was entitled to Permanent Total Disability (PTD). The WCALJ also said that LC Sec. 4664 was not pertinent because there was no earning loss before the prior award. In other words, Borman had continued to work while his hearing loss got worse. That's about when ACME appealed by stating that the WCALJ failed to apportion injury pursuant to LC 4663. In other words, there was prior evidence showing 40% hearing loss on a non-industrial basis. 

The WCALJ replied that she was not bound by the findings of the AME because there was "convincing vocational testimony regarding loss of earning capacity." In 2013 WCAB denied ACME's petition for reconsideration. It was at about this time that matters got hot. The case came before the First Appellate District Court. Division One, "Not to be published,"  7/16/13.

The discussion led off with this remark: "When a workers' compensation decision rests on the Board's erroneous interpretation of the law, the reviewing court will annul the decision." The Appellate Court then indicated that the WCALJ's decision asserting that Borman could rebut the rating schedule's DFEC by offering vocational expert testimony showing evidence of 100% loss of earning capacity was proper; however, it then also said that the WCALJ erred "by failing to address the issue of apportionment." 

This assertion was based on changes in LC Sections 4663 and 4664 which were enacted in 2004 as part of SB 899. These changes reflected changing concepts re the issues of apportionment and causation in favor of employer and insurance interests for any portion of a disability that would not have occurred but for the current industrial cause and where injured workers had "wide latitude to disprove apportionment based on prior permanent disability awards by demonstrating that they had substantially rehabilitated the injury." 

The Supreme Court was quoted as saying that "the plain language of new sections 4663 and 4664 demonstrates they were intended to reverse these features." Apportionment was now to be based on causation such that "the new approach to apportionment is to look at the current disability and parcel out its causative sources -- industrial, prior industrial, current industrial -- and decide the amount directly caused by the current industrial source. This approach requires thorough consideration of past injuries, not disregard of them (italics added)." 

The court ruled that it was the "clear intent" of the legislature in enacting SB 899 "to charge employers only with that percentage of permanent disability directly caused by the current industrial injury." It was then asserted that the WCAB had ignored substantial medical evidence from the otolaryngology AME that 100% of Borman's hearing loss could not be attributed to the current cumulative trauma. 

The court said that the WCAB's failure to apportion the hearing loss portion of the cumulative trauma was contrary to law such that the award to Borman was annulled. ACME's petition for review was granted. The order denying consideration was annulled. 

My Comment

It can now be expected that this determination on Apportionment will have an effect on SIBTF (SIF) cases. The crucial happenstance in the ACME v. Borman case is that the applicant's total disability award was actually vacated by being annulled and that apportionment was then determined to be applicable. The meaning of this determination is that what is lost in terms of apportionment may now be applicable and applied to  SIBTF situations where prior injury resulted in work disability or "labor disablement."  Labor disablement is currently a crucial concept in SIBTF cases which requires its own level of documentation and proof. 

References

ACME Steel v WCAB and Michael Borman, A137915, filed 7/16/13

Opinion on Decision, WCALJ Deborah Lieberman, 10/25/12

California: A Radical/Diametrical Change in the Law of Apportionment, 09/13/13, Raymond F. Correio

SB 863: A Political Tsunami in California

When Governor Brown declined to accept legislation that would have been a partial fix for workers' compensation at the end of 2011, he said he wanted an overall solution, not a piecemeal adjustment.

Among the politically savvy persons who heeded this admonition was Angie Wei, indefatigable chief lobbyist and legislative director for the California Labor Federation. Wei deftly developed her version of a comprehensive fix. What labor wanted most was an increase in permanent disability. Wei got that, or so it seemed, in the form of $740 million added to permanent disability. Speaking early on about SB 863, Wei said "there is no other path to getting $740 million back in benefits to injured workers. The legislature must pass SB 863." Wei, not exactly a friend of specialty medical  doctors, also protested against them when she complained that previous legislation caused medical treatment to be delayed because of "opposition from vendors who profit from the status quo."

SB 863 doesn't appear so far to be as good as its promise. Wei quickly understood that Governor Brown wanted a bipartisan bill, not one crafted only by the labor federation, and not one crafted entirely by insurance companies. Score one for Brown: he forced the two extremes to work together.

Grimmway Farms, Sean McNally, Vice President for corporate and Government Affairs,  soon became the chief player for business. No way Big Biz was going to let $740 million slip into Permanent Disability (PD) funding without getting something in return. Pouncing on some of the more abused parts of PD funding, Grimmway et al focussed on out-patient surgery centers, sleep impairments (dyssomnia), and sexual dysfunction (impaired sexual ability even when secondary to spinal injury). The open sesame to the assault on sex-and-sleep was the frequent inclusion of these complaints by applicants' attorneys into their legal pleadings. Deductions emerged:

*  Sleep impairment remains open for treatment but not for inclusion in permanent disability claims: this exclusion alone takes $40 million away from the PD pot.

*  Sexual impairment remains open for treatment but not for inclusion in permanent disability claims: this exclusion takes $10 million from the PD pot.

*  The big slam is the removal of $110 million for out-patient surgery centers.

*  All in all, current estimates are that of the $740 million Wei originally sought, about $200 million has already been lost thanks to the maneuvering of Grimmway which in this matter out-maneuvered Wei and Cal Fed.

* Two pro-injured workers bills bit the dust as SB 863 paddled furiously to victory: AB 369 (Huffman) and AB 1867 (Fong).  The fun-filled irony in the case of these two bills was that their authors voted in favor of SB 863 the passage of which was then used to tell authors Huffman and Fong that their bills were no longer needed.  Huffman's bill was designed to put a stop to step-therapy and was supported by Big Pharmacy, Pfizer, among others. Fong's bill would have required 12-point bold type on the first page of treatment authorization denial letters "so as to be prominently visible to the employee."
So step-therapy which prevents doctors from prescribing medications of choice is still the rule and so is keeping injured workers in the dark. The insurance companies wanted both bills defeated: they got their wish because Brown obliged and used SB 863 as the cudgel to do it. Score another for Brown, in fact, a double-score since he nailed both bills. The workers, ostensibly the constituents that Wei and Cal Fed wanted to serve, lost.

A big time score goes to Governor Brown because one day before passage of SB 863 when it looked as though the bill was going down to defeat Brown went to work in high gear and took up his own lobbying cudgel.  Effective lobbying from the California Society of Industrial Medicine and Surgery (CSIMS), directed by Carl Brakensiek and Steve Cattolica of AdvoCal, assisted by the California Society of Physical Medicine and Rehabilitation (CSPMR), the California Neurology Society (CNS), The California Chapter of the International Association of Rehabilitation Professionals, VQ OrthoCare, and the Californa Workers Compensation Services Association, almost defeated the bill despite abandonment of the California Medical Association (CMA) and the American Federation of State, County and Municipal Employees (AFSCME) both of whom voted for passage of SB 863. CMA and AFSCME knuckled under to Brown.

The CMA is credited with getting the Medicare RBRVS modified and once that was done agreed to support the bill.  Consultations in workers' comp will be allowed although they're no longer allowed in standard Medicare. AFSCME which represents a few thousand doctors in California wanted to befriend Brown more than it wanted to support its dues-paying doctors and assumed that its doctor members wouldn't  protest with too much vigor.   AFSCME's political judgment so far has turned out to be correct.

When Brown saw that SB 863 was in trouble, he went to work. He lobbied and asserted the bill would "reduce litigation, claims administration costs, and other frictional costs." He personally lobbied for the bill,  actually, furiously in the last two days. His hard work paid off. Score a personal hard-earned political triumph for Governor Brown and chalk up a loss for a medical community that knows how to provide services but not how to persuade anybody that what we do is as worthwhile as we say.

Our opposing position was, and still is, that the bill strips injured workers of their ability to appeal wrongful decisions while also cutting the $740 million for PD by at least $200 million. What Brown calls "frictional costs" are actually the lifeblood costs that injured workers incur in appeals. Appeals for wrongful decisions to the WCAB are eliminated by SB 863 which creates an Independent Medical Review (IMR) process that'll rely on anonymous doctors whose decisions are nearly appeal-proof.

In fact, what Brown was really after all along was Proposition 30 to allow increased taxes. To get it he needed to take down the heat from Big Business. Brown  worked to get SB 863 passed to reduce the level of interest against Proposition 30. The strategy worked. The trouble now is the fiscal cliff which, if the country falls off it, will result in widespread financial hardship and will nullify much of what Proposition 30 just won.

Our focus now is on the Independent Medical Review system that has been designed to replace the current Utilization Review system. The IMR system retains the worst aspects of UR, i.e., no need to be licensed to practice medicine in California and no need to interview or examine the patients from  whom treatment opportunities may be withdrawn. The IMR method gets an additional advantage, namely, the promise of anonymity so that appeals against even the stupidest of judgments resulting in harmful denial of care will be turned away and will not be eligible for appeal to the WCAB.

Statewide implications

The move is on to  restrict access to medical care and shift the blame to doctors, particularly the conveniently convened IMR doctors. The name of the game is cost-reduction while touting improved quality of care. In California, access to the WCAB is being restricted; however, similar wrongful uses of denial-of-care are used by HMOs and in Knox-Keene plans. This accelerating trend deserves to be derailed.

Federal implications

The current IPAB derived from the ACA (Obamacare) also promotes cost conservation at the risk of harming patients. These techniques are being adopted by the ACOs even faster than they were by the HMOs. This trend also begs to be derailed.

OPPOSE PROPOSED WORKERS COMP REFORM MEASURE, BRIEFLY KNOWN AS SB 863, A GUT AND AMEND VEHICLE

WHY THE PROPOSED WORKERS' COMP REFORM MEASURE WITH A SHORT HALF-LIFE AS SB 863 SHOULD  BE DEFEATED  

SB 863 was originally chosen to be the gut-and-amend vehicle for this proposed workers' comp travesty.  We have revised our own original text. Where it previously said SB 863 for a few hours, it now only says "the proposed workers' comp reform measure" albeit with a hiss and a spit every now and then.

We previously opposed SB 923 because it would shove the Medicare RBRVS down the throats of injured workers and their treating doctors. The idea of this bill was to replace the low pay Official Medical Fee Schedule (OMFS) with the still lower paying Medicare RBRVS.  The upshot would be loss of access to specialty care.  It would foist on Primary Treating Physicians (PTPs) a level of care requirement beyond their training. 

We now find that the provisions of SB 923 are hidden within 279 pages of proposed legislative language. When 279 pages of a legislative proposal are sprung at the end of session we suspect that somebody is getting ambushed. In this case it's the injured workers and their access to specialty care.

We have supported AB 1687 which would open up the Utilization Review (UR)  process a little and give injured workers a chance. The proposed workers' comp reform measure wipes that opportunity out because it proposes an Independent Medical Review (IMR) process that will protect the worst aspects of the current UR process, namely, the allowed process of letting doctors who don't interview or examine specific injured workers to overrule the decisions of the doctors who have interviewed and examined them.

The 279 pages referenced above arrogantly protect this unfair system by establishing an IMR process that will be even harder to appeal against than the current already obtuse UR system. 

One is obliged to ask how a system that alleges it'll put an additional $700 million into Permanent Disability (PD) could be bad for injured workers. The answer lies in the claim that it'll also reduce costs by $1.4 billion. We are not told who will get the left over $700 million.  We are not told that management groups of non-physicians who charge groups of treating doctors for administrative services will be allowed to raise their management fees. While they may pay the PTPs a little more, they're not obliged to do so.

Here's what else the 279 pages tell us, well, some of it, anyway:

The proposed workers' comp reform measure currently plans to impose $150 mandatory filing fees for liens. Once the doctors are then short-changed and obliged to file fees for liens anyway, they'll reconsider if they should stay in the system.

The proposed workers' comp reform language  currently plans to impose a copy service fee that will further slow down injured workers' ability to prove their workers' comp cases.

The proposed workers' comp reform measure will curtail some of the features currently allowed by the otherwise already restrictive AMA Guides to Impairment currently used to establish reimbursable impairments re Activities of Daily Living (ADLs).

Sadly, the newly proposed workers' comp reform measure  has earned the right to be disgraced before it is defeated. It also exposes how the gut-and-amend process may be abused and misused.