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A Bold Strategy to Avoid Adding of Disabilities
The following are some of the key points upon which the Kite opinion may be attacked:
- Kite relied on a case whose application to post-SB 899 ratings was overturned by Fitzpatrick.
- Kite mistakenly analogized the Combined Values Chart to the MDT
- Kite inappropriately used the concept of adding impairments in the AMA Guides, which addresses impairment at the WPI level, to replace the Combined Values Chart and add post-adjustment disabilities instead.
Fitzpatrick Overturns a Key Case Upon Which Kite Relies
On January 2, 2019, the California Supreme Court denied review and denied the request for depublication of the Third District Court of Appeal decision in Department of Corrections and Rehabilitation v. W.C.A.B. (Fitzpatrick) (2018) 27 Cal. App. 5th 607, rendering the decision final and controlling authority on the determination of permanent disability.
The primary impact of Fitzpatrick is to remove Labor Code §4662(b) as a means to find permanent total disability “in accordance with the fact.” However, a secondary result might be to call into question the underpinning of the arguments in favor of adding disabilities instead of combining disabilities, which began with Athens Administrators v. W.C.A.B. (Kite) (2013) 78 Cal. Comp. Cases 213 (writ denied).
In Kite, the WCAB offered two cases in support of its opinion that the Labor Code and the 2005 Permanent Disability Rating Schedule (2005 Schedule) do not require the reduction method of combination. Those cases were Milpitas Unified School Dist. v. W.C.A.B. (Guzman) (2010) 187 Cal. App. 4th 808 and County of Los Angeles v. W.C.A.B. (LeCornu) (2009) 74 Cal. Comp. Cases 645 (writ denied). The former stands for the proposition that physicians may employ a different method of determining impairment as long as they remain within the four corners of the AMA Guides to the Evaluation of Permanent Impairment, 5th Edition, hence the WCJ’s reference to Section 1.4 of the AMA Guides. The latter was used to support the claim that “the Multiple Disabilities Table is a guide only.” It is this reference which is now called into question by Fitzpatrick.
LeCornu considered the 1997 Schedule and went on to find permanent total disability “in accordance with the fact” under Labor Code §4662. Although permissible under the 1997 Schedule, Fitzpatrick makes clear that SB 899 intentionally changed how permanent disability was to be determined and overturned the application of cases like LeCornu to cases rated under the 2005 Schedule. Due to its reliance on LeCornu, this makes Kite questionable authority at the very least.
The Court of Appeal in Fitzpatrick Questions the WCAB’s Arguments for Adding Disabilities
The Court of Appeal in Fitzpatrick went out of its way to criticize the WCAB’s attempt to insert the Kite arguments regarding adding disabilities versus combining disabilities. In Footnote 14, the Court of Appeal stated,
“Although we do not consider the Board’s new theory [adding disabilities versus combining disabilities], we would be remiss in failing to comment on the fact that the Board attempted to support its position by relying on the Schedule for Rating Permanent Disabilities dated April 1997 (1997 Schedule), relying on language not existent in the 2005 Schedule, and cases predating the 2004 legislative amendments and the 2005 Schedule for the proposition that “[j]udicial decisions agreed that combining factors of disability by addition was appropriate if it provided a more valid measure, and it was expected that the [Board] would take into account the conclusions of the examining physician and would exercise sound discretion in rating permanent disability.” The 2005 Schedule differs substantially from the 1997 Schedule, and appropriately so given the 2004 amendments and the Legislature’s directive.”
Department of Corrections and Rehabilitation v. W.C.A.B. (Fitzpatrick), supra, 27 Cal. App. 5th at p. 624, fn 14.
In the cases cited by the WCAB a common theme is the statement that the MDT is “a guide only”. The WCAB uses the MDT as an analog to the Combined Values Chart and attempts to apply the same reasoning. For instance, in Los Angeles County Metropolitan Transportation Authority v. W.C.A.B. (La Count) (2015) 80 Cal. Comp. Cases 470 (writ denied), the WCAB asserted the “Combined Values Chart and Multiple Disabilities Table have always been considered guides only.” The flaw in this reasoning is that the opinion that the MDT was a “guide only” was not a judicial interpretation, but rather was specifically included in the language of both the 1988 Schedule and the 1997 Schedule. As the Court of Appeal points out, this language does not exist in the 2005 Schedule.
Change in Language in the 2005 Rating Schedule
Under the title, “Combining Multiple Disabilities”, the 1988 Schedule uses the following language: “The result obtained by such calculation is not necessarily to be adopted as the final rating for combined disabilities but should serve as a guide only. The final rating will be the result of consideration of the entire picture of disability and possibility of employability.” (1988 Schedule, p. 81, emphasis added.)
Under the title, “Combining Multiple Disabilities,” the 1997 Schedule uses similar but different language: “The result obtained by the calculation is not necessarily to be adopted as the final rating for the combined disabilities but should serve as a guide only. The final rating will be the result of consideration of the entire picture of disability and diminished ability to compete in an open labor market.” (1997 Schedule, p. 7-12, emphasis added.)
In contrast, consistent with the substantial changes instituted pursuant to SB 899 in 2004, under the title “Section 8 – Combined Values Chart,” the 2005 Guides now states, “Use this chart to combine two or more impairments, or two or more disabilities.” There is no permissive language and no longer does the Schedule itself state that the method of combining disabilities is serve as a guide only.
Rating Disability Under the 2005 Schedule
Kite claimed, “[N]owhere in the Labor Code, the rating schedule or the AMA Guides is “combine” defined as entailing [the reduction method], or any particular method. The schedule provides that impairments are generally combined using the [reduction] formula.” Athens Administrators v. W.C.A.B. (Kite), supra, 78 Cal. Comp. Cases at p. 215. Based on the analysis below, I believe that statement is incorrect.
Following the 2004 amendments, permanent disability no longer considers an employee’s ability to compete in the open labor market. Permanent disability is now determined by Labor Code §4660 or Labor Code §4660.1 for injuries on or after January 1, 2013, with specific inclusion of “the descriptions and measurements of physical impairments and the corresponding percentages of impairments” published in the AMA Guides to the Evaluation of Permanent Impairment, 5th Edition. Labor Code §4660.1(b) further states that the whole person impairment, as provided in the AMA Guides, is then to be multiplied by an adjustment factor of 1.4. Further adjustment of this “standard” rating, is found in the permanent disability rating schedule adopted as of January 1, 2005, until the schedule is revised by the administrative director. L.C. §4660.1(d).
The 2005 Schedule states, “The calculation of a permanent disability rating is initially based on a evaluating physician’s impairment rating, in accordance with the medical evaluation protocols and rating procedures set forth in the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment, 5th Edition […], which is hereby incorporated by reference.” (2005 Schedule, p. 1-2.) The first step is to arrive at an “impairment standard” before then being adjusted to account for diminished future earning capacity, occupation and age at the time of injury to obtain a final permanent disability rating. (2005 Schedule, p. 1-2.)
“A final permanent disability rating is obtained only after the impairment rating obtained from an evaluating physician is adjusted for diminished future earning capacity, occupation and age at the time of injury.” (2005 Schedule, p. 1-3.)
If a single injury results in multiple impairments of several parts of the body, “Multiple impairments must be combined in a prescribed manner to produce a final overall rating. (See, Adjusting AMA Impairments and Combining Ratings on page 1-11.)” (2005 Schedule, p. 1-5, emphasis added.)
The next paragraph does state that it is “not always appropriate to combine all impairment standards resulting from a single injury, since two or more impairments may have a duplicative effect on the function of the injured body part. The AMA Guides provide some direction on what impairments can be used in combination. Lacking such guidance, it is necessary for the evaluating physician to exercise his or her judgment in avoiding duplication.” (2005 Schedule, p. 1-5, emphasis added.) As will be discussed later, this is prior to application of the adjustment factors. Note, however, that the statement allowing deviation from combining is concerned not with arriving at a higher “more accurate” rating, but rather is concerned with “avoiding duplication.”
Under “Final Permanent Disability Rating”, the 2005 Schedule states, “The number identified on the age adjustment table represents the final overall permanent disability rating percentage for a single impairment. (See Subdivisions C.1. and C.2. on pages 10 and 11 to combine multiple impairments and disabilities.)” (2005 Schedule, p. 1-9.)
Under subdivision C.1., impairments and disabilities are “generally combined” using the prescribed formula: a + b(1-a). (2005 Schedule, p. 1-10.) Combining and adjusting are two different actions. Per the 2005 Schedule, “adjusting” refers to “adjusting an AMA impairment rating for diminished future earning capacity, occupation and age.” (2005 PDRS, p. 1-11.) It goes on to state, “Except as specified below, all impairments are converted to the whole person scale, adjusted, and then combined to determine a final overall disability rating.” (2005 PDRS, p. 1-11, emphasis added.) Those exceptions do not relate to the formula, but rather the order of combination for multiple impairments of extremities. (2005 Schedule, p. 1-11.)
Although the 2005 Schedule makes a passing reference that impairments and disabilities are “generally combined”, there is no alternate method given. Rather than crafting a legal theory from a single word, the Court of Appeal in Fitzpatrick cautions, “The meaning of a statute may not be determined from a single word or sentence; the words must be construed in context and provisions relating to the same subject matter must be harmonized to the extent possible.” Department of Corrections and Rehabilitation v. W.C.A.B. (Fitzpatrick), supra, 27 Cal. App. 5th at p. 618, citing People v. Shabazz (2006) 38 Cal. 4th 55, 67.
Contrary to the statement in the Kite decision, the 2005 Schedule also states in a specific manner, “Multiple impairments must be combined in a prescribed manner to produce a final overall rating.” (2005 PDRS, p. 1-5.) What is the prescribed manner?
Section 8 of the 2005 Schedule is the Combined Values Chart. As is mentioned above, no longer does the Schedule state that the chart is to be considered a “guide only”. Instead, it states, “Use this chart to combine two or more impairments, or two or more disabilities.”
There is no indication in the 2005 Schedule that anything other than combining using the Combined Values Chart can be done after an impairment standard has been adjusted by 1.4 per LC §4660.1(b), age, and occupation.
AMA Guides on Adding Impairment
The proponents of the Kite reasoning use Milpitas Unified School Dist. v. W.C.A.B. (Guzman) (2010) 187 Cal. App. 4th 808, for the proposition that the rating should come from the “four corners” of the AMA Guides to the Evaluation of Permanent Impairment, 5th Edition. The AMA Guides does refer to alternative methods of combining impairments in section 1.4, entitled “Philosophy and Use of the Combined Values Chart.”
What seems to be lost in the Kite cases is that the alternate means of combining disabilities in the AMA Guides is only regarding the whole person impairment provided by the medical evaluator. As the WCAB has stated in an en banc decision, the AMA Guides simply produces the initial component of a permanent disability rating. Blackledge v. Bank of America (2010) 75 Cal. Comp. Cases 613, 619.
Instead, the WCAB has been applying the alternate method of combining after the whole person impairment has already been multiplied by 1.4 and then adjusted by age and occupation. There is absolutely no basis to take the theoretical statements from section 1.4 of the AMA Guides, which were clearly discussing pre-adjustment combining of impairment, and applying them to post-adjustment combining of disability.
If such an alternate method of combining were to be allowed, it should only be done at the WPI level. But this is rendered impractical in California because the rating schedule mandates that multiple disabilities be adjusted separately prior to being combined by the Combined Values Chart.
The Kite Interpretation Is Inconsistent with the Legislature’s Intent in Enacting the 2004 Amendments
Further, section 1.4 of the AMA Guides reference is made not only to adding, but also to subtracting and even multiplying. In theory, according to the Kite reasoning, doctors could also use this paragraph to subtract impairments or to multiply impairments. One does not have to think hard to envision the additional litigation which would be generated by such an interpretation.
The reasoning set forth in Kite and its progeny seems to run contrary to the intent of the California Legislature which was to “promote consistency, uniformity, and objectivity in the overall process of determining disability across individuals” and to “provide a system that is objective and uniform in application.” Department of Corrections and Rehabilitation v. W.C.A.B. (Fitzpatrick), supra, 67 Cal. App. 5th at p. 622, citing Milpitas Unified School Dist. v. W.C.A.B., supra, 187 Cal. Capp. 4th at p. 823, and Ogilvie v. W.C.A.B. (2011) 197 Cal. App. 4th 1262, 1273. Clearly, the intent was to simplify and standardize.
The California System Already Supplies a Method of Combining Which is Generally More than Additive
In language that is often left out of quotations from section 1.4, the AMA Guides states, “Many workers’ compensation statutes contain provisions that combine impairments to produce a summary rating that is more than additive.” (Section 1.4, p. 10, emphasis added.) With the mandated use of a 1.4 modifier, California is clearly one of those states.
For instance, if a 10% WPI were to be added to a 10% WPI, the result is 20% WPI. Yet under the 2005 PDRS, the same WPI modified by the 1.4 adjustment factor produces a 26% PD assuming a neutral age and occupation modifier. A 35% WPI added to another 35% WPI results in 70%, however, following application of the 1.4 multiplier and use of the CVC the result is 74%, again assuming a neutral age and occupation modifier. Similarly, taking a 50% WPI and adding a 25% WPI results in 75%, however, following the application of the 1.4 multiplier and use of the CVC the result is 81%.
Kite and La Count are the only decisions supporting the adding of disabilities which have reached a Court of Appeal and both were simply denied writs. La Count is overturned by the Fitzpatrick decision and Kite is called into question. Every other case is a board panel decision, which are not binding precedent. Although the statements made in the Fitzpatrick footnote are dicta, clearly the Third District Court of Appeal expressed significant concerns with the arguments made by the WCAB itself in favor of the theory by which it justifies adding disabilities instead of using the Combined Values Table. My recommendation is to argue that Kite is no longer valid law on which the WCAB may support a decision and neither is any case which cites Kite or its progeny for its basis.
Now that Fitzpatrick is a final decision, I recommend objecting to every paragraph in which an applicant’s attorney requests an AME or PQME to consider adding disabilities pursuant to Kite or any of its progeny. If necessary, in order to get to the PQME evaluation without going to trial, I would concede to include language addressing the paragraph in the AMA Guides discussing adding, but also informing the doctor about the 1.4 modifier and the adjustments for age and occupation which are subsequently applied to their impairment rating. (I have found that many doctors do not understand that their rating does not equate with the final disability.) Finally, if a case were to go to trial over the issue of adding versus combining, I would make sure that the WCJ received a complete brief on the history of Kite and the flaws in its reasoning which have been passed down as well as how the Court of Appeal decision in Fitzpatrick requires the issue to be reassessed.
By Peter M. Golden San Diego Office March 2019