January 25, 2007
The WCAB has issued a series on en banc decisions addressing issues that are perceived by the WCAB to be of significant importance to the overall workers' compensation community.
Even though these cases are en banc decisions of the WCAB it is highly likely that these decisions are not final and in fact it is even possible that the Board may reverse itself on at least two of these cases as will be discussed below.
In this case the WCAB reviewed the question of whether the provisions authorizing insurance carriers and employers to contract with Medical Provider Networks to provide medical treatment to cure or relieve from the effects of an injury allow transfer of existing cases into the Medical Provider Networks. In a six to one decision the WCAB has determined that it is the intent of the Legislature that this particular statute be given prospective interpretation for all claims regardless of the date of injury. The Board reviewed the series of cases interpreting SB 899 as well as case law interpreting other statutory provisions and concluded that these provisions are to be given perspective effect for all claims regardless of the date of injury.
There is an interesting concurrent and dissenting opinion from Commissioner Brass who argues that while transfer of injured workers in a Medical Provider Network is contemplated by the statute, that in this case the existence of a satisfactory physician‑patient relationship should overshadow this statutory provision. Relying upon dicta from California Supreme Court decisions, Commissioner Brass would hold that because of the importance of the physician-patient relationship that the contractual provisions of the Medical Provider Network should not supersede the ability of the injured worker to retain that relationship.
In the majority decision the issue of whether it should be required that the employer/insurance carrier demonstrate a lack of satisfactory relationship was a necessary part of the MPN transfer process was considered and the panel concluded it was not. While Commissioner Brass does not suggest that in each and every case this be a requirement, he does place a great deal of consideration upon the existence of a physician-patient relationship. As this is a six to one decision the Board is certainly not likely to change its mind at a later date with a change in composition. While it is entirely possible that the applicant may appeal the determination of the Board the reality is that almost everyone within the system had already arrived at the conclusion that the transfer of care provisions authorized by statute effectively decided this issue already. The Appeals Board's decision simply ratifies the fairly widespread opinion on this issue.
This is a significantly more controversial decision coming as it is with a four to three majority and a very strong dissent by the chairman of the WCAB joined by James Cuneo and Frank Brass. In this case the WCAB considered the issue of whether the exception to use of the new permanent disability rating schedule for cases in existence prior to 1/1/05 was triggered with a comprehensive medical-legal report that did not comment on the existence of permanent disability. In arriving at the affirmative conclusion that it was not necessary for a comprehensive medical-legal report which issued prior to 1/1/05 actually comment on the existence of permanent disability the Board worked at a fairly careful reading of the statute to conclude that only the reports of the treating physician must comment on the existence of permanent disability in order to trigger use of the old rating schedule. Where there is a comprehensive medical-legal evaluation it is the report itself, not the content of the report which triggers the use of the old rating schedule as long as that report issued prior to 1/1/05 for a case that was in existence prior to that date.
The Board relied upon the so-called "last antecedent rule." This rule:
"Simply stated, the last antecedent rule means that ?qualifying words, phrases and causes are to be applied to the words of phrases immediately preceding and are not to be construed as extending to or including others more remote.'"
In applying this rule the Board concluded that the report of the treating physician is the immediately preceding antecedent to the qualifying phrase "indicating the existence of permanent disability."
The dissenting commissioners conclude that the majority is, in effect, splitting hairs by trying to separate the qualifying language regarding the reports describing existence of permanent disability between the treating physicians and comprehensive medical‑legal reports. In the majority's opinion the intent of the Legislature suggests that it was only reports addressing the issue of permanent disability which should trigger the use of the old schedule where those reports existed prior to 1/1/05. As pointed out by the dissenting panelists it is difficult to envision a public policy purpose to be achieved by using any medical-legal report which issued prior to 1/1/05 as triggering the use of the old schedule. The dissenting commissioners concluded that the intent of the Legislature was to select a group of cases where permanent disability was already at issue to apply the old schedule rather than creating artificial distinctions that had no basis in public policy.
In this case the WCAB has ruled on one of the ongoing controversial issues on when to apply the old versus new rating schedule. This case addresses the significance of the language which requires use of the old schedule where the obligation of the insurance carrier to issue notice pursuant to Labor Code § 4061 existed before 1/1/05.
The Appeals Board had previously issued panel decisions which had gone arrived and conflicting results on this issue. In this case the Board issues yet another four to three decision holding where temporary disability benefits commenced prior to 1/1/05 that the obligation to send notice pursuant to the termination of temporary disability as required in Labor Code § 4061 mandated the use of the old permanent disability rating schedule. The four‑member panel concludes:
"For purposes of Section 4660 that the employer's duty ?to provide the notice required by' Section 4061 arises with the first payment of temporary disability indemnity. There is no obligation to provide any Section 4061 notice unless temporary disability indemnity has been paid or should have been paid. Thus, as soon as the first date of compensable temporary disability occurs, the duty to give Section 4061 notice comes into existence. This is an absolute duty, and there is no circumstance under which the employer may avoid that duty.
We distinguish here between when the duty arises and when the duty is required to be executed. The duty arises when the first payment of temporary disability indemnity is made. The execution of that duty occurs when the last payment of temporary disability indemnity is made. If there is no temporary disability, no duty to give notice under Section 4061 arises."
Again, there is a strong dissent from Commissioners Miller, Cuneo and Brass. In their dissent they indicate:
".Section 4061 requires the employer to provide the injured worker with notice regarding permanent disability ?together with the last payment of temporary disability indemnity.'"
Therefore, we conclude that if the last payment of temporary disability indemnity was made on or after January 1, 2005, the 2005 schedule applies to determine the extent of permanent disability pursuant to Section 4660 (d). The dissenting panel also noted the public policy intent of the Legislature to give the earliest possible effective date to the changes generated by SB 899. If the exception described by the majority opinion were to be applied it would effectively eliminate virtually the entire exception to this particular provision.
There is very little that is controversial about the decision in Babbitt above. As indicated in my above commentary, this is essentially how the parties have been functioning throughout most of the time since Medical Provider Networks were in place. Even the W.C.A.B. pointed out that within the Medical Provider Networks, injured workers have extraordinary ability to move from physician to physician virtually at will. Their rights within the Medical Provider Network may actually exceed their rights outside those entities with the only limitation being the group of physicians that they have access to fir exercise those rights. Given the size of most Medical Provider Networks, there is little threat that injured workers will be unable to exercise sufficient choices in medical care to obtain treatment or to be satisfied with their treatment.
The two cases involving permanent disability and use of the old versus new rating schedule are much more controversial and are certain to be litigated further. There are already cases where petitions for hearing have been filed and granted before the Courts of Appeal addressing at least the issue in Pendergrass and very likely also in Baglione.
It is conceivable that these two decisions could actually end up being reversed by the W.C.A.B. at some point. Both of these decisions were concurred in by, now former, Commissioner Merle Rabine. Commissioner Rabine is no longer with the WCAB. Absent his vote these cases would have been three decisions and the Board would not have been able to issue an en banc opinion. Once the Governor appoints a new Commissioner to fill the open slot, it is possible that these cases could be reviewed again and a different result obtained. If I were the Defense attorney in the either Pendergrass or Baglione, I would probably recommend filing a new Petition for Reconsideration (since the W.C.A.B. rules allow filing a Petition for Recon on a decision that reverses a trial decision) and wait to see if the Governor fills the existing position fast enough to obtain a different result. This would still allow a Petition for Writ of Review to be filed at a later date but by then we may a new decision from the Court of Appeals the addresses the same issue. Given the razor thin margin of the majority, either of these cases could go the other way easily.
Because of the close nature of this decision it is likely that the Appellate Courts will not consider it to be one of the more persuasive authorities upon which to rely in their own review on these issues. There are currently pending at the Courts of Appeal several cases which are similar to, if not identical in terms of the legal issues presented. Therefore, it is quite likely that even though the Board has issued these en banc decisions that further clarifying authority from a higher level is in the process of being generated even as these cases are issued. In the Third Appellate District the Chang case will also decide whether the pre‑1/1/05 rating schedule applies in a similar situation to Pendergrass. There is also a case pending at the First Appellate District in Evets involving application of the permanent disability schedule and yesterday the California Supreme Court granted a writ in the Jackson case and transferred the matter back to the First Appellate District to consider the merits of application of the permanent disability rating schedule.
It seems, therefore, likely that while trial judges are bound by the existing case law issued by the Board in the en banc decision that further clarifying authority is likely to be received within the next four to six months and these cases may end up being reversed before they can be relied upon for very much longer.
It is the undersigned's belief that the holding by the Board in Baglione is supportable by the statutory language. The arguments presented by the dissenting commissioners are quite persuasive in terms of the purpose of the statutory scheme and the reason for requiring that a comprehensive medical-legal report actually comment on the existence of permanent disability, but from the standpoint of statutory construction the majority opinion is at least supportable.
The undersigned is of the belief that the majority's opinion in Pendergrass is not legally supportable. The language by the majority that the commencement of temporary disability carries with it the obligation to send notice under 4061 is a legal fiction. There is in fact no requirement to terminate temporary disability that exists by statute. Therefore, there is no legal obligation (we are talking legal obligation not practical result) to terminate temporary disability and the majority decision does not cite any authority for their assertion that the commencement of TTD carries with it the obligation to terminate TTD. The majority states that there is no circumstance under which notice under 4061 is not required. In fact, there is no circumstance at the time that temporary disability benefits commence that notice under 4061 is required. It is only with the termination of temporary disability that notice under 4061 arises. This opinion becomes one of the purest examples of a result driven decision rather than following the dictates of law.
The cases can all be located by clicking on the individual case names listed above.
Richard M. Jacobsmeyer
Certified Specialist, Workers' Compensation Law
The State Bar of California Board of Legal Specialization
SHAW, JACOBSMEYER, CRAIN & CLAFFEY
475 – 14th Street, Suite 850
Tel: (510) 645-7172
Fax: (866) 563-0092