BILL ANALYSIS Ó
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ASSEMBLY THIRD READING
AB
1643 (Gonzalez)
As Amended March 16, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Insurance |9-3 |Daly, Calderon, Chu, |Travis Allen, |
| | |Cooley, Cooper, |Bigelow, Dahle |
| | |Dababneh, Frazier, | |
| | |Gatto, Rodriguez | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |15-5 |Gonzalez, Bloom, |Bigelow, Gallagher, |
| | |Bonilla, Bonta, |Jones, Obernolte, |
| | |Calderon, Chang, |Wagner |
| | |Daly, Eggman, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Prohibits the use of certain gender-related
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characteristics in the calculation of permanent disability
benefits for injuries occurring on or after January 1, 2017.
Specifically, this bill:
1)Prohibits granting the disabling effects of breast cancer a
lower disability rating than granted to the disabling effects
of prostate cancer.
2)Prohibits the use of pregnancy, osteoporosis, menopause, or
carpal tunnel syndrome to apportion permanent disability with
respect to a physical injury.
3)Prohibits the use of a prior psychiatric injury, if that prior
injury was caused by pregnancy, osteoporosis, menopause, or
carpal tunnel syndrome, to apportion permanent disability with
respect to a psychiatric injury.
EXISTING LAW:
1)Provides for a comprehensive system to provide workers'
compensation benefits to workers whose injuries or conditions
arise out of or in the course of employment, including medical
treatment and financial compensation if the injury or
condition has a permanently disabling effect.
2)Establishes a Permanent Disability Rating Schedule (PDRS), a
methodology for calculating impairment through the use of the
American Medical Association Guides to the Evaluation of
Permanent Impairment (AMA Guides), and other tools that are
used to determine the extent of an injured worker's permanent
disability (PD).
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3)Allows for the "apportionment" of PD determinations to prior
industrial causes, or to prior non-industrial causes, and
reduces the amount of the injured worker's PD award to the
extent these prior causes have contributed to the extent of
the disability.
4)Requires the physician who is making a recommendation on the
extent of disability that has followed from an industrial
injury to identify, and quantify, causation of the disability
that is either prior to or subsequent to the industrial
injury.
FISCAL EFFECT: According to Assembly Appropriations Committee,
approximately $6 million in new administrative costs associated
with litigation over the bill's new rules; however, it is
difficult to accurately quantify the scope of this issue.
Unknown, but potentially significant costs to the state based on
increased payouts to injured state employees.
COMMENTS:
1)Purpose. The purpose of the bill is to eliminate gender bias
in the workers' compensation system. According to the author,
California must eliminate the remnants of gender bias in the
workplace, no matter how widespread, including within workers'
compensation. The author maintains that the AMA Guides
inappropriately assign little to no value to the loss of a
woman's breasts, and that it is also inappropriate to
apportion disability to non-industrial causation if that
causation is a factor or condition that is uniquely or
predominantly based on gender.
2)Case Law. In an unpublished appellate decision, Vaira v.
WCAB, the Court of Appeal returned a case to the Workers'
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Compensation Appeals Board (WCAB) because the record was
insufficient to determine whether the physician had based his
apportionment decision on medical facts that showed the older
female claimant suffered from osteoporosis, or on the basis
that the risk factor (older women face a high risk of
suffering from osteoporosis) alone was sufficient to assign a
percentage of the causation to osteoporosis. This decision
has been broadly applied in the workers' compensation courts
as establishing the following rule: a risk characteristic
such as older women having a high incidence of osteoporosis,
or older African American men having a high incidence of
hypertension, cannot be used as a basis to apportion a
permanent disability award. However, a woman diagnosed with
osteoporosis that contributes to her disability resulting from
the subsequent industrial injury, or an African American man
diagnosed with hypertension that contributes to his disability
resulting from the subsequent industrial injury, can have the
disability award apportioned based on the prior nonindustrial
causation. This is the rule Governor Brown alluded to in his
Veto Message on AB 1155 (Alejo) of 2011 (see below).
3)Scope of problem. There is substantial disagreement as
between supporters of this bill and opponents of this bill on
whether or not there is a serious problem of gender-based
unfairness in the workers' compensation system. Some
supporters have asserted that "we see it every day" while some
opponents assert that the wrongs complained of simply do not
occur in the workers' compensation courts.
This issue has been presented to, and debated in, the
Legislature in one form or another for at least eight years,
and there is a paucity of concrete evidence, either academic
or anecdotal, to show that there is pervasive discrimination
based on gender, or other protected classes. The California
Applicants' Attorneys Association (CAAA), in its letter in
support of this bill, and the author in the Background
materials provided to the Committee, cite several examples of
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cases where women are alleged to have suffered unfair
treatment by the system. Without getting into too much
case-specific detail, two things appear from the cited
examples: first, the characteristics used to reduce permanent
disability awards appear to be risk factors or broad
characteristics like those the Vaira case prohibits; second,
in most examples, it is claimed that "the doctor" has pointed
to the offending apportionment factor. Despite requests for
any information indicating that workers' compensation judges
have accepted these inappropriate apportionment factors,
proponents have been unable to do so. Opponents, on the other
hand, have argued that "dumb doctors" making ill-advised,
discriminatory apportionment statements are not a basis to
change the law - they are a basis for the attorney
representing the injured worker to argue to a workers
compensation judge that the doctor recommended an illegal or
inappropriate factor that does not support apportionment.
4)Apportionment. Apportionment applies to PD determinations
when the disabling effect of an industrial injury has some
percentage of causation that either predates or occurs
subsequent to the industrial injury. Apportionment does not
apply to medical treatment. For example, no matter how much
the old football injury is making an industrial knee injury
more complicated or extensive, the workers' compensation
system provides medical treatment for the industrial knee
injury fully and comprehensively. The fact that there is
pre-industrial injury causation that affects the seriousness
of the injury does not limit the extent of medical treatment.
But causation of the disability is treated differently from
causation of the injury. There are at least three policy
rationales underpinning the apportionment rule. First, it has
been deemed unfair to require an employer to pay for
disability that was not caused by the employment. Second, if
the prior causation was a previous industrial injury that
resulted in a PD award, the injured worker would have already
been compensated for that portion of the disabling condition.
Third, if an employer knew that a job candidate suffered a
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previous injury that might lead to more expense if he should
re-injure himself, the employer might opt to hire someone else
who does not pose that financial risk.
Apportionment as a policy is not without its critics. On a
"but for" causation rationale, the injured worker would not be
suffering the current disability to any extent but for the
current industrial injury. And if the injury were being
compensated in the tort system, the person who acted
negligently to cause an injury would be responsible for the
full extent of the disability, because in tort the "victim's"
preconditions do not operate to diminish the consequences of
the acts that cause injury. However, apportionment is the
rule in workers' compensation, and this bill proposes
exceptions to the normal rules of apportionment.
5)Does case law result in gender discrimination? Proponents
strongly argue that it is inappropriate gender discrimination
to use even factual conditions that contribute to disability
causation if those factors are uniquely attributable to being
a woman. In the proponents view, even the Vaira decision
endorses gender discrimination, because Vaira merely rejected
use of risk factors, but allowed use of factual pre-existing
conditions, including some of the factors that the bill would
prohibit. Thus, the policy argument is that the uniquely
female gender factors addressed by the bill should simply not
be used to reduce permanent disability awards. Opponents
counter that the workers' compensation system is designed to
require employers to pay to injured workers what the job
itself caused, not what non-job factors caused.
6)Breast cancer vs prostate cancer. A key provision in this
bill that proponents argue cures gender discrimination is the
mandate that breast cancer and prostate cancer be treated the
same in terms of disability ratings. Since 2004, the AMA
Guides has been the basis in California law for making PD
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determinations.
The AMA Guides were first published in 1971 to provide "a
standardized, objective approach to evaluating medical
impairments". The Guides define "impairment" as a loss, loss
of use, or derangement of any body part, organ system, or
organ function. The AMA Guides deal chapter by chapter with
specific areas of the body or a specific type of permanent
impairment and discuss how to measure impairment in a specific
individual. This impairment measurement is a percentage known
as the whole person impairment (WPI), with a higher WPI
percentage signifying a higher level of impairment.
WPI serves as the foundational calculation for the purposes of
calculating a PD rating. In bringing the AMA Guides into the
workers' compensation system in 2004, the goal was to make the
measurement of impairment, and by extension PD ratings, more
objective and uniform throughout the state and based on the
best available medical evidence. Further, as a part of the
2012 reform, the Legislature codified case law that allows
doctors to "rate by analogy" or to use other chapters of the
AMA Guides if those chapters better explain the nature of the
impairment.
Proponents of this bill have argued that the AMA Guides are
not objective in this context. Proponents have both specific
and broad criticisms of the AMA Guides. Specifically, they
point to the fact that the AMA Guides rate the removal of
female breasts at a WPI of 0%, while the removal of a prostate
would rate a 16% to 20% WPI, arguing that such a rating shows
bias against women. More generally, they argue that there has
long been an outdated cultural gender bias that remains to
this day, with an underappreciation of the psychological and
physiological consequences to a woman of the loss of her
breasts.
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However, the male prostate may not be a strong equivalent to
female breasts. The closest female equivalent, or homologue,
to the prostate is the skene's gland, which is located on the
surface of the vulva. Alternatively, one could also look at
urthereal disease, which would lead to incontinence in women.
A review of how the AMA Guides rate these female conditions
shows that there is a comparable WPI rating to male prostate
ratings. Opponents have argued that comparing ratings for
breast and prostate cancer is simply the wrong comparison, and
does not establish gender discrimination.
7)Menopause. Without question, menopause is a gender-based
characteristic that ought not be used as a basis to apportion
permanent disability. Opponents even state that "we don't do
that." However, the effect of adding menopause to the
apportionment statute causes great concern. They point out
that courts have held that menopause is not a disability.
They also point out that there are any number of symptoms that
may be associated with menopause, and if any of those symptoms
is associated with a factual pre-existing condition that
contributes to permanent disability, there will be
substantial, costly litigation because attorneys would be
duty-bound to pursue the argument that menopause, and not the
symptom, is the actual basis for the proposed apportionment.
8)Pregnancy. As with menopause, it is difficult to argue that
permanent disabilities ought to be apportioned due to
pregnancy. Indeed, many employers and insurers argue that
this is not done, nor is it allowed in the workers'
compensation system. However, they point out that adding this
characteristic to the statute poses problems. First, they
argue that it confuses the idea of causation to injury with
causation to disability. They suggest that pregnancy can
contribute to injury, but it is hard to understand how it is a
condition that causes permanent disability. However, by
adding pregnancy to the apportionment statue, uncertainties
are created that will cause extended litigation to determine
the precise meaning of the statutory change.
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9)Osteoporosis. Osteoporosis presents a fundamental difference
of perspective as between proponents and opponents. This is a
predominantly (although not exclusively) female medical
condition involving loss of bone mass, and the resulting risk
of broken bones and other complications. Proponents argue
that it is fundamentally wrong to reduce a woman's permanent
disability award for a physical injury that occurs on the job
due to this inherently gender-specific causation factor.
Opponents, on the other hand, argue that it is fundamentally
wrong to require employers to pay for disability that is
factually unrelated to employment.
10)Carpal tunnel syndrome. The primary difference between this
bill and last year's AB 305 (Gonzalez) of 2015 is the addition
of carpal tunnel syndrome as one of the gender-based
conditions for which apportionment would be prohibited.
Proponents have suggested that this syndrome afflicts women
more than men, citing a National Institutes of Health (NIH)
report. California workers' compensation data is consistent
with the NIH report. According to proponents, the study found
the syndrome three times more likely to afflict women. The
study suggested, but did not conclude, that the frequency in
women might be due to a smaller carpal tunnel in women's
hands. Opponents have cited a University of California,
Berkeley study that found some occupation based differences
that result in some conditions being more likely causing men
to have higher injury rates, and others more likely affecting
women. However, that study found no across-the-board
discrimination against either gender.
11)Psychiatric injuries. The approach to psychiatric injuries
in the bill is narrower than AB 305. AB 305 used sexual
harassment as a trigger for when apportionment would be
prohibited with respect to a new psychiatric injury, but that
provision is not included in this bill. Instead, this bill
more clearly prohibits using a prior psychiatric injury to
apportion permanent disability with respect to a new
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psychiatric injury if the prior psychiatric injury was caused
by menopause, pregnancy, osteoporosis or carpal tunnel
syndrome.
12)Prior legislation. In 2008, SB 1115 (Migden) of 2008, and in
2011, AB 1155 (Alejo) of 2011, addressed the apportionment
discrimination issue in virtually the same language. Unlike
this bill, those bills would have broadly prohibited the use
of the protected classes defined in the Unruh Civil Rights Act
as a basis to apportion permanent disability awards. Each was
vetoed by the Governor. The Veto Message to AB 1155 provided:
"This bill would state that workers' compensation
injury determinations shall not include consideration
of race, religious creed, color, national origin,
age, gender, marital status, sex, sexual orientation,
or genetic characteristics.
The courts already recognize that apportioning a
disability award to any of these classifications is
antithetical to our states' non-discrimination
policies. The courts also recognize that
apportioning to an actual non-industrial condition
that contributes to causing a disability is
permissible and required by the principle that
apportionment is based on causation.
This bill would not change existing law as
interpreted by the courts to date. This bill would,
however, generate new litigation over questions of
whether it is intended to change existing
interpretations. At best, that additional litigation
would add to employers' costs for workers'
compensation. At worst, this bill could disturb the
appropriate interpretation of existing law that is
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already taking shape in the courts."
This bill, and AB 305 (Gonzalez) of 2015, take a different
approach to the issue. Rather than addressing the use of
protected characteristics, the bill proposes to prohibit
precisely what the AB 1155 Veto Message notes that courts
currently recognize: that apportionment to actual, factual
prior industrial or non-industrial causation is acceptable.
This bill identifies specific factors that proponents argue are
inappropriate apportionment factors, and prohibits their use
regardless of whether there is factual causation. AB 305 was
substantially similar to this bill. The Governor vetoed AB 305.
The Veto Message provided:
"This bill prohibits the use of certain gender-related
characteristics in the calculation of permanent disability
benefits for injuries occurring on or after January 1,
2016.
The workers compensation system must be free of
gender-bias. No group should receive less in benefits
because of an immutable characteristic. However, this bill
is based on a misunderstanding of the American Medical
Association's evidence-based standard, which is the
foundation of the permanent disability ratings, and
replaces it with an ill-defined and unscientific standard."
Analysis Prepared by:
Mark Rakich / INS. / (916) 319-2086 FN: 0003205
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