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August 8, 2017

The Paul Revere of Apportionment

by Jessie Zaylia, Partner

On June 22, 2017, the Second District Court of Appeal held that it is inappropriate to apportion an employee’s medical treatment expenses or “any disability arising directly from unsuccessful medical intervention [. . .].”  In so ruling, the court noted that nothing in the “new regime of apportionment based on causation” changed these decades-old rules.

In Hikida v. WCAB, the applicant suffered from, among other medical conditions, carpal tunnel syndrome.  The applicant underwent carpal tunnel surgery; but, as the court observed, “[t]he surgery went badly,” leaving the applicant with chronic regional pain syndrome (“CRPS”) that rendered her permanently disabled.  The agreed medical examiner (“AME”) examined the applicant and found that her permanent disability was caused entirely by CRPS.  The AME went on and found that the applicant’s carpal tunnel was 90% caused by industrial factors and 10% caused by nonindustrial factors.  Accordingly, the workers’ compensation judge (“WCJ”) apportioned the applicant’s award to reflect that her permanent disability was 90% caused by industrial factors.

On reconsideration, a divided WCAB affirmed the judge’s award.  The Board’s majority found that the WCJ had appropriately apportioned the applicant’s award, even though the AME had determined that the applicant’s “CRPS caused her to be totally permanently disabled.”  The majority determined that the WCJ had correctly focused on the causes of the applicant’s carpal tunnel rather than her CRPS to apportion the award.

The lone dissenter, however, concluded that the WCJ erred by apportioning the applicant’s permanent disability when basing the apportionment on the “underlying carpal tunnel injury and not upon the cause of her permanent disability.”  The dissenter cited case law supporting the proposition that an employer is responsible for an injury that resulted from treatment of an industrial injury.  Accordingly, the dissenter opined that the applicant’s award was inappropriately apportioned because her CRPS “resulted entirely from the surgery [. . .].”

On appeal, the court proceeded to resolve the main issue presented before it: “whether an employer is responsible for both the medical treatment and any disability arising directly from unsuccessful medical intervention, without apportionment.” (Emphasis added.)

Cognizant of the Legislature’s 2004 Amendments to the Labor Code and the new regime that it created, the court nevertheless relied on pre-2004 case law.  It found that employers are required to pay for an employee’s medical treatment expenses “once [an employer] has established that an industrial injury contributed to an employee’s need for it.”  It noted that previous courts had found the rule necessary to ensure that employees did not forego treatment due to an inability to pay or because of a delay in treatment. (See Granado v. WCAB (1968) 69 Cal.2d 399, 405–06.)  Further, the court concluded that employers are responsible for “the aggravation of an industrial injury or the infliction of a new injury resulting from its treatment or examination [. . .].”  It noted that previous courts had found the rule necessary to avoid a “breakdown” of the workers’ compensation system and to avoid unnecessary “independent suits.”

Conscious of the tension between the new regime and the pre-2004 rules, the court determined that the Legislature had not intended to deviate from the requirement that employers “pay for all medical treatment caused by an industrial injury, including the foreseeable consequences of such medical treatment.” Accordingly, it found that the applicant’s award had been wrongly apportioned, and it annulled the Board’s decision.

The Second District is the first court to clarify whether apportionment is appropriate when an employee’s permanent disability is caused by an unsuccessful attempt to treat an industrial injury. Perhaps this case demonstrates how critical it is to ensure that inappropriate treatment is not rendered, which further underscores the importance of timely UR determinations as well as the selectivity of physicians within MPNs.

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