BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1643|
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THIRD READING
Bill No: AB 1643
Author: Gonzalez (D), et al.
Amended: 3/16/16 in Assembly
Vote: 21
SENATE LABOR & IND. REL. COMMITTEE: 4-1, 6/29/16
AYES: Mendoza, Jackson, Leno, Mitchell
NOES: Stone
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 60-20, 6/1/16 - See last page for vote
SUBJECT: Workers compensation: permanent disability
apportionment
SOURCE: California Applicants Attorneys Association
DIGEST: This bill prohibits apportionment in cases of physical
injury based on pregnancy, menopause, osteoporosis, and carpal
tunnel syndrome and requires that breast cancer not be less than
the comparable impairment rating for prostate cancer.
ANALYSIS:
Existing law:
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1)Establishes a workers' compensation system that provides
benefits to an employee who suffers from an injury or illness
that arises out of and in the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either securing the consent of
the Department of Industrial Relations to self-insure or by
securing insurance against liability from an insurance company
duly authorized by the state.
2)Requires that, if an occupational injury results in a
permanent disability, the percentage of disability to total
disability shall be determined, and the disability payment
computed on the basis of the percentage of disability to total
disability. (Labor Code §4658)
3)Requires that, when doctors are determining the nature and
severity of an occupational injury, the American Medical
Association (AMA) Guides to the Evaluation of Permanent
Impairment (5th Edition) must be used to measure physical
impairment and determine an injured worker's whole person
impairment (WPI). (Labor Code §4660.1)
4)Creates the Permanent Disability Ratings Schedule (PDRS),
which increases the WPI by 40% and adjusts for occupation and
age to calculate a percentage of permanent disability (PD),
also known as a PD rating. (Labor Code §4660.1)
5)Requires that any physician who prepares a report addressing
the issue of permanent disability include an apportionment
determination, where the physician determines what approximate
percentage of the permanent disability was caused by other
factors, including prior industrial injuries. (Labor Code
§4663)
This bill:
1)Require that WPI ratings for breast cancer and its sequelae
shall in no event be less than comparable WPI ratings for
prostate cancer and its sequelae.
2)Prohibit apportionment in cases of physical injury occurring
on or after January 1, 2017 based on the following conditions:
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a) Pregnancy;
b) Menopause;
c) Osteoporosis; and
d) Carpal Tunnel Syndrome.
1)Prohibit apportionment in cases of psychiatric injury caused
by any of the conditions listed above.
Comments
1)A Brief Word on the AMA Guides: 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. Excluding the
introductory chapters, each chapter of the AMA Guides deals
with a specific area of the body or a specific type of
permanent impairment and discusses 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 Permanent Disability (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 (see Milpitas
Unified School District v. Workers' Comp. Appeals Bd. (Guzman)
(2010) 187 Cal.App.4th 808).
However, some proponents of the bill have argued that the AMA
Guides are not objective, specifically in the area of
gender-specific injuries. Specifically, proponents 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%-20% WPI, arguing that such a rating shows bias
against women. This line of argument, however, has some
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difficulties.
First, a permanent disability rating must take into account
all the complete nature of the injury. In the case of breast
cancer, while the removal of the breast may be rated 0%, the
sequelae of the surgery would be ratable. For example, if the
injured worker suffered neuropathic pain, skin issues, spine
issues or general pain, each one of those factors would
ratable. Additionally, this would include consequences from
the chemotherapy drugs used to treat the breast cancer would
also be ratable. These ratable impairments are combined to
create a single permanent disability rating. According to case
law, statute, and the AMA Guides, a woman who suffers a
comparable level of impairment due to breast cancer when
compared to a man suffering from prostate cancer must be rated
comparably.
Second, the evidence that the AMA Guides are not objective is
fundamentally limited. Some proponents point to a 1990 Harvard
Law Review article which argued that the 3rd Edition of the
AMA Guides showed consistent gender bias. The California
workers' compensation system uses the 5th Edition of the AMA
Guides, which does not suffer from the gender bias issues
raised in that article. Moreover, since the 1990 gender bias
Harvard Law Review article, no similar articles have been
published arguing that the AMA Guides show gender bias.
2)A Brief Word on Apportionment: Under existing law, every time
a doctor prepares a report on if a claimed workplace injury is
permanently disabling, the physician must determine causation
AND what percentage of the injury is due to non-occupational
issues, including prior workplace injuries. An injured
worker's PD award is then adjusted down by this percentage.
Only a physician can determine if apportionment is appropriate
and to what degree.
This makes apportionment a uniquely provocative policy. On one
hand, it would be difficult to defend requiring an employer to
provide PD awards for an injury that is unrelated to work or
occurred at another place of employment. This is why language
limiting PD awards to only cover the consequences of a
workplace injury has been in law since 1917. While the current
apportionment statute dates back to 2004, the idea behind it
is nearly a century old.
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On the other hand, determining what percentage of an injury is
or is not occupational is highly dependent on the judgment of
the physician. Workers Compensation Appeals Board (WCAB) case
law provides that an apportionment finding is only valid if
the physician's medical opinion:
a) Framed in terms of reasonable medical probability;
b) Not speculative;
c) Based on pertinent facts and on an adequate examination;
d) Sets forth the reasoning in support of its conclusion;
and
e) Explains how and why the apportionable factor is
responsible for the disability. (See Escobedo v. Marshalls,
(2005) 70 Cal. Comp. Cases 604)
Despite this case law, sometimes physicians fail to meet these
requirements when making an apportionment determination.
For example, in Rice v. City of Jackson, ADJ8701916 (2015), an
injured worker's PD award was apportioned by 49% due to
"family history", or the injured worker's father's history of
hip and back issues. The physician cited several journal
articles, but did not evaluate the injured worker's family or
connect the "how and why" such family history led to the
injured worker's level of permanent disability. The WCAB ruled
that apportioning on the basis of genetic predisposition was
inappropriate, noted that apportioning on the basis of
immutable factors is impermissible, and returned the case to
the local board for a new unapportioned award of permanent
disability.
One final note on apportionment: the apportioning of a PD
award has no impact on the ability of an injured worker to
receive medical care. Even in the event that a PD award is
apportioned to 0%, the worker has a right to medical care if
the injury arises or occurs in the course of employment (See
Employers Mutual Liability Ins. Co. of Wisconsin v. Industrial
Acc. Com. (Gideon) (1953) 41 Cal.2d 676 and Reyes v. Hart
Plastering (2005) 70 Cal.Comp.Cases 223).
Prior Legislation
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AB 305 (Gonzalez) of 2015 was very similar to this bill. It was
vetoed by Governor Brown. In his veto message, the Governor
stated:
"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."
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
According to the Senate Appropriations Committee analysis, the
Department of Industrial Relations (DIR) indicates that it would
incur costs (special funds) of $6.4 million in the first year,
and $6 million annually thereafter to implement the provisions
of the bill. The analysis also reports that DIR believes that
the bill would also result in increased litigation costs to the
State as a direct employer. The magnitude is unknown, but
potentially significant.
SUPPORT: (Verified 8/12/16)
California Applicants' Attorneys Association (source)
Alliance of Californians for Community Empowerment
American Association of University Women
California Asset Building Coalition
California Child Care Resource and Referral Network
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Domestic Workers Coalition
California Employment Lawyers Association
California Latinas for Reproductive Justice
California Partnership
California Teamsters Public Affairs Council
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California Women's Law Center
California Work and Family Coalition
Child Care Law Center
Courage Campaign
Engineers & Scientists of California
Equal Rights Advocates
International Longshore & Warehouse Union
Legal Aid Society Employment Law Center
Los Angeles County Professional Peace Officers Association
Mujeres Unidas y Activas
National Council of Jewish Women
Organization of SMUD Employees
Parent Voices
Professional & Technical Engineers
Raising California Together
San Diego County Court Employees Association
San Luis Obispo County Employees Association
The Center for Popular Democracy
The Opportunity Institute
The Organization of SMUD Employees
The Women's Foundation of California
Tradeswomen, Inc.
UNITE-HERE, AFL-CIO
Utility Workers Union of America, AFL-CIO
Voices for Progress
Western Center on Law and Poverty
9 to 5 California
OPPOSITION: (Verified8/12/16)
Acclamation Insurance Management Services
Allied Managed Care
ALPHA Fund
American Insurance Association
Associated General Contractors
Association of California Healthcare Districts
Association of California Insurance Companies
California Association for Health Services at Home
California Association of Joint Powers Authorities
California Chamber of Commerce
California Coalition on Workers' Compensation
California Delivery System
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California Grocers Association
California Joint Powers Authority
California League of Food Processors
California Manufacturers and Technology Association
California Retailers Association
California School Boards Association
California Special Districts Association
California State Association of Counties
CAWA - Representing the Automotive Parts Industry
CSAC Excess Insurance Authority
Culver City Chamber of Commerce
League of California Cities
Los Angeles County Board of Supervisors
National Association of Mutual Insurance Companies
National Federation of Independent Business
Property Casualty Insurers Association of America
Rural County Representatives of California
Southwest California Legislative Council
ARGUMENTS IN SUPPORT: The sponsor of this bill, the
California Applicants' Attorneys Association (CAAA), argues that
AB 1643 will eliminate gender bias from apportionment when
determining permanent disability ratings. CAAA argues that
factors such as pregnancy and menopause are used as factors to
lower permanent disability. CAAA also cites several cases where
apportionment is purported to have occurred due to risk factors
and immutable characteristics, rather than proven conditions.
CAAA also notes that AB 1643 will make breast cancer eligible
for the same disability rating as prostate cancer. Finally, CAAA
argues that the workers' compensation system treats being a
woman as a pre-existing condition, and that AB 1643 will ensure
that women receive the level of permanent disability they
deserve.
ARGUMENTS IN OPPOSITION: Opponents argue that AB 1643 is an
attempt to undermine an employer's use of apportionment when
determining liability for permanent disability awards.
Specifically, opponents note that apportionment is more than a
decade old and ensures that employers do not need to pay for
non-industrial injuries. Further, opponents point to case law
and statute which protects injured workers from abusive
apportionment, including apportionment on the basis of gender.
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Opponents further argue that AB 1643 will increase litigation,
raise indemnity costs on employers, and increase systemic
instability and subjectivity.
ASSEMBLY FLOOR: 60-20, 6/1/16
AYES: Achadjian, Alejo, Arambula, Atkins, Baker, Bloom,
Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau,
Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman,
Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hernández,
Holden, Irwin, Jones-Sawyer, Levine, Linder, Lopez, Low,
Maienschein, McCarty, Medina, Melendez, Mullin, Nazarian,
O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Weber, Williams, Wood,
Rendon
NOES: Travis Allen, Bigelow, Brough, Chávez, Dahle, Beth
Gaines, Gallagher, Grove, Harper, Jones, Kim, Lackey, Mathis,
Mayes, Obernolte, Olsen, Patterson, Wagner, Waldron, Wilk
Prepared by:Gideon L. Baum / L. & I.R. / (916) 651-1556
8/16/16 9:01:02
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