BILL ANALYSIS Senate Committee on Labor and Industrial Relations Carole Migden, Chair Date of Hearing: February 27, 2008 2007-2008 Regular Session Consultant: Rodger Dillon Fiscal:No Urgency: No Bill No: SB 1115 Author: Migden Version: As Introduced January 22, 2008 SUBJECT Workers' compensation: permanent disability reports: apportionment. KEY ISSUE Should language prohibiting various forms of discrimination in the apportionment of industrial disabilities be added to the Labor Code? PURPOSE To bar the consideration of race, national origin, gender, sex, genetic predisposition, and certain other factors in the determination of an apportionment of the causes of an industrial disability. ANALYSIS Existing law : Generally requires employers to secure the payment of workers' compensation for injuries incurred by their employees that arise out of, and in the course of, employment. Benefits to which an injured worker may be entitled include permanent disability indemnity (payment for loss) benefit payments for long-term permanent injuries. The amount and duration of such payments are determined by a schedule in law that is in turn dependent upon a permanent disability rating reached through an evaluation by a physician of the injured worker's bodily impairment. (The impairment rating is converted into a disability rating through a formula devised by regulation.) Requires that a physician make an "apportionment determination" with respect to the permanent disability. That is, the physician must find (a) what approximate percentage of the permanent disability is caused by the direct result of the injury arising out of and in the course of employment, and (b) what approximate percentage of the permanent disability is caused by other factors both before and subsequent to the industrial injury. If the physician determines that the disability is partially the result of these "other factors" the (degree of) impairment rating must be reduced by the relevant percentage, ultimately resulting in a lower permanent disability rating and reduced permanent disability indemnity payments. Provides that no person in the State of California shall, on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, or disability, be unlawfully denied full and equal access to the benefits of, or be unlawfully subjected to discrimination under, any program or activity that is conducted, operated, or administered by the state or by any state agency, is funded directly by the state, or receives any financial assistance from the state. [Government Code 11135] This Bill provides that race, religious creed, color, national origin, age, gender, marital status, sex, or genetic predisposition shall not be considered a cause or other factor of disability with regard to any workers' compensation apportionment determination. This language would, if the bill is approved, be placed in the Labor Code. COMMENTS Hearing Date: February 27, 2008 SB 1115 Consultant: Rodger Dillon Page 2 Senate Committee on Labor and Industrial Relations 1. Need for this bill? A. What is going wrong with apportionments? Since the passage of SB899 in 2004, there have been increasing reports that physicians, reading the law as requiring apportionment in all workers' compensation cases, have been apportioning disabilities on the basis of "risk factors" such as age, race, sex, and genetic predisposition - rather than basing the apportionment on actual documented and evaluated evidence of pre-existing medical condition. In a recent State Court of Appeals case (Vaira v Workers Comp. Appeals Board), for example, which was widely reported in the public media, the court sent the case back to the Workers' Compensation Appeals Board, stating that the physician who had done the apportionment failed to base the apportionment on actual medical evidence. The physician based the apportionment to the "other factors" on the grounds that the individual in the case was an elderly woman at high risk of osteoporosis and showing some evidence of the condition. However, the physician did not demonstrate, with substantial medical evidence, the link between any actual condition and the disability. Dean Calbreath, in a February 17th article in the San Diego Union Tribune, cited a number of similar instances of improper apportionment procedures. He highlight one case where a medical examiner cut a man's workers' comp payments in half because, as an African-American, he had a "genetic" predisposition to high blood pressure or hypertension. Other examples Calbreath noted: ? Last month, medical examiners at Kaiser Permanente in San Diego cut down a food service worker's claims for carpal tunnel syndrome because she had several pre-existing conditions, including "being female." In the past several years, medical examiners in other locales have cited "female gender" as a reason for cutting carpal tunnel claims, since women statistically report more problems than men. ? Last September, a medical examiner in Los Angeles Hearing Date: February 27, 2008 SB 1115 Consultant: Rodger Dillon Page 3 Senate Committee on Labor and Industrial Relations disallowed a third of a 52-year-old clerk's claims of work-related stress on the grounds that her advanced age made her susceptible to hypertension. ? Last March, a medical examiner in Torrance disallowed a portion of a cleaning woman's claims that her work-related back injury had resulted in depression. The examiner's reasons for slimming down the claim included that she was a woman from Central America. "She's from El Salvador and she is, as the pronoun indicates, a woman," the examiner said in a deposition. "She has a personality disorder, which sadly might apply to all too many women. And I must say, when it comes to Central America, it might apply to more men than I would care to mention." ? A middle-aged Hispanic man who spent decades working for a utility company injured his left shoulder and left leg on the job. By the medical examiner's account, the worker was involved in intense physical activity: "putting up (power) lines, working underground, climbing up poles, construction, maintenance of lines, kneeling, squatting." But the examiner trimmed his claim, saying that his injuries were also caused by his race, age and gender. "Age plays a big role in what you determine the nonwork-related factors are, even though he did work half of his life there," the examiner said. "Some of these (factors) are racially connected and some are gender connected." "Is part of his disability due to the fact that he's a man versus a woman?" the worker's attorney asked. "Very likely, yes." B. Why does the language in this bill need to be placed in the Labor Code, given that very similar language is currently in Government Code 11135? In the workers' compensation arena, which involves thousands of persons and which is governed primarily by the Labor Code, there seems to be substantial misunderstanding of the proper, legal procedures for apportionment. Placing this language in the Labor Code will help to clarify the law prohibiting discrimination and make the specified language more evident to those who look to the Labor Code Hearing Date: February 27, 2008 SB 1115 Consultant: Rodger Dillon Page 4 Senate Committee on Labor and Industrial Relations for guidance in making decisions relating to workers' compensation. In addition, this bill adds the term "genetic predisposition" to the protected classes, a term that is not in existing code. C. Does this bill place new responsibilities on employers, making them responsible for medical conditions (with associated costs) for which they are not currently responsible? No. This bill prohibits discrimination on the basis of generalized "risk factors," which is almost certainly currently illegal under G.C. 11135. Apportionments determined through an evaluation of the actual medical evidence, establishing a clear, causal link between the condition and the disability are, and will continue to be appropriate and lawful. 2. Proponent Arguments : Supporters of this bill believe that since the apportionment provisions were rewritten in 2004 (SB899) employers, carriers, and physicians have been misinterpreting and misapplying the new language to deny injured workers the civil rights protections that all other persons enjoy. Supporters argue that an apportionment determination that is based on supposed "risk factors" such as age, gender, or genetic predisposition, rather than an evaluation of the medical evidence linking actual medical conditions to a disability, is patently inappropriate and unfair. Such a formula results in discriminatory practices, lowering disability ratings and reducing benefits for particular individuals. The proponents state further that SB1115 would not increase employers' liability but would instead simply clarify and conform the Labor Code to Government Code sections that bar unfair discrimination. 3. Opponent Arguments : None received to date. Hearing Date: February 27, 2008 SB 1115 Consultant: Rodger Dillon Page 5 Senate Committee on Labor and Industrial Relations SUPPORT California Applicant Attorneys Association (CAAA) - sponsor American Federation of State, County, and Municipal Employees (AFSCME) California Labor Federation, AFL-CIO California Society of Industrial Medicine and Surgery California Society of Physical Medicine and Rehabilitation California State Conference of the National Association for the Advancement of Colored People (CSC-NAACP) Gray Panthers, California OPPOSITION None received * * * Hearing Date: February 27, 2008 SB 1115 Consultant: Rodger Dillon Page 6 Senate Committee on Labor and Industrial Relations