AMA Guides Are for Determining Whole Person Impairment, Not Apportionment

The AMA Guides under the California’s workers’ compensation system are for determining whole person impairment (WPI) and not apportionment under Labor Code §§ 4663 and 4664

In two separate cases, Caires v. Sharp Healthcare, 2014 Cal. Wrk. Comp. P.D. LEXIS 145 (WCAB panel decision) and Hosino v. Xanterra Parks & Resorts, 2016 Cal. Wrk. Comp. P.D. LEXIS 351 (WCAB panel decision), the WCAB held that while whole person impairment and permanent disability are closely related, they should not be equated nor are they synonymous when used by evaluating physicians to determine whether or not there is valid nonindustrial apportionment under the AMA Guides to the Evaluation of Permanent Impairment, Fifth Edition (AMA Guides).

(Note: Citations link to Lexis Advance.)

In Caires, the WCJ awarded 9% permanent disability relying on WPI and apportionment opinions and determinations by a PQME in orthopedics, a primary treating physician in orthopedics, and an AME in psychiatry.  Applicant filed a Petition for Reconsideration contending the opinions of all three evaluating physicians on apportionment did not constitute substantial medical evidence.  The WCAB granted applicant’s Petition for Reconsideration, rescinded the award, and remanded the case back to the trial level for further development of the record.  The WCAB found that all three reporting physicians’ opinions on apportionment were fundamentally flawed for different reasons.  Moreover, in light of what appeared to be a clear lack of familiarity with the basic concepts and principles of valid legal apportionment under Labor Code §4663, the parties should consider the use of an AME, or if they were unable to do so, the WCJ may consider appointing a “regular physician” under Labor Code §5701.

A large part of the WCAB’s decision focused on the opinion of the SPQME in orthopedics who found that 87.5% of applicant’s 24% whole person impairment was related to nonindustrial degenerative conditions, leaving only 3% permanent disability as industrial. 

In assessing and determining WPI, the SPQME in orthopedics utilized the range of motion method (ROM).  However, with respect to apportionment and causation of orthopedic permanent disability, the SPQME used DRE lumbar Category IV.  The SPQME was deposed by applicant’s counsel.  He was specifically questioned as to why he determined impairment using ROM and then used DRE Category IV in determining apportionment.  In trying to explain the methodology he used, the SPQME specifically referenced an example in the AMA Guides as follows:

A. Well, to answer your question about using rating—using impairment—rating impairment using range of motion and then apportionment using the DRE category four, actually, there’s a classic example in the AMA guides using the same method of analysis.  It’s actually the book.  It’s one of the examples in the book.  They rate a condition by range of motion, and then at the very end they say because there is a degenerative condition, one might use the DRE method to apportion out the preexisting condition.  So it is within the AMA guides cited as one of the example cases.  So that’s how I followed this rule.  (Exh. E, September 9, 2009 deposition transcript, pp. 20:3-14.)

The WCAB found the SPQME’s opinion on apportionment did not constitute substantial medical evidence since he relied exclusively on an apportionment example in the AMA Guides as opposed to rendering an opinion on apportionment in accordance with Labor Code §§4663 and 4664, which the Board emphatically stated, “…defines apportionment without reference to the AMA Guides.”  In footnote 3, in Caires, the WCAB stressed, that the Guides acknowledge that “[m]ost states have their own customized methods for calculating apportionment.” (Guides §1.6b, p.12). In a lengthy two and a half page analysis and discussion, the WCAB made a careful distinction between a determination of whole person impairment under the AMA Guides as opposed to a separate and distinct determination of disability and apportionment.

Initially, the WCAB indicated that under the Labor Code whole person impairment is merely a component of permanent disability.  In that regard the Board stated:

Labor Code section 4660(b)(1) requires an evaluating physician to use the descriptions, measurements, and percentages in the American Medical Association Guides to the Evaluation of Permanent Impairment 5th Edition (AMA Guides) as part of the basis for determining whole person impairment.  (City of Sacramento v. Workers’ Comp. Appeals Bd. (Cannon) 222 Cal.App.4th 1360 [79 Cal.Comp.Cases 1]; Blackledge v. Bank of America (2010) 75 Cal.Comp.Cases 613, 619-620 (Appeals Board en banc).)  Whole person impairment is a component of permanent disability.  (Lab.Code § 4660; Schedule for Rating Permanent Disabilities (Dept. of Industrial Relations, Div. of Workers’ Comp.’ January 2005), p.1-5; AMA Guides, § 1.8, p. 13.)

In Caires, the WCAB also indicated that if an evaluating physician uses an example from the AMA Guides to make an apportionment determination, that example must be consistent with Labor Code §4663 and requires a detailed explanation by the evaluating physician.      

“…[W]hen evaluating apportionment of permanent disability, a physician must offer an opinion in accordance with Labor Code sections 4663 and 4664, which define apportionment without reference to the AMA Guides.  An example from the AMA Guides may be utilized by a physician if he or she explains how the example addresses the current cause of permanent disability under Labor Code section 4663 and Escobedo. (emphasis added).

In Caires, the SPQME in orthopedics failed to provide any explanation as to why the apportionment example he used from the AMA Guides was consistent with §4663 and applicable case law.

In Hosino v. Xanterra Parks & Resorts, 2016 Cal. Wrk. Comp. P.D. LEXIS 351 (WCAB panel decision), the second and most recent case, the WCJ relying on the opinion of an AME in orthopedics related to an October 26, 2011, specific injury, awarded applicant 34% permanent disability after nonindustrial apportionment of 35%.  Applicant filed for Reconsideration, which was granted by the WCAB.  The case was returned to the trial level for further proceedings related to permanent disability and apportionment. The AME was deposed by applicant’s counsel and the WCAB included in its lengthy Opinion seven full pages from the AME’s deposition transcript. 

The WCAB indicated there were numerous ambiguities and conflicts in the AME’s deposition testimony.  The most significant flaw in the AME’s opinion and analysis was that the AME equated apportionment of impairment with apportionment of disability which the WCJ also erroneously adopted.  The WCAB stated:

We disagree with the WCJ’s statement that “the proper method of determining apportionment was utilized,” because Dr. Wood and the WCJ apportioned impairment not permanent disability.  Of course impairment and permanent disability are closely related, but they should not be equated to determine apportionment.

The WCAB then cited Caires to remind the WCJ on remand that the AMA Guides can be used to evaluate whole person impairment but that with respect to determining apportionment, Labor Code §4663 is “controlling.”  As it did in Caires, the WCAB in Hosino stated:

In contrast, when evaluating apportionment of permanent disability, a physician must offer an opinion in accordance with Labor Code sections 4663 and 4664, which define apportionment without reference to the AMA Guides.”  In Caires, the Board panel also noted in footnote 3 that “[t]he Guides acknowledge that [m]ost states have their own customized methods for calculating apportionment.” (Guides § 1.6b, p. 12).”

As a consequence the Board found that the AME’s opinion on apportionment did not constitute substantial medical evidence.  While affirming parts of the WCJ’s Findings and Award the WCAB amended the Findings of Fact, indicating that the issues of permanent disability and apportionment should be deferred pending further proceedings and a new decision by the WCJ on remand with jurisdiction reserved.

The critical lessons and practice pointers from both Caires and Hosino are:

1. That while WPI and permanent disability are closely related, they are not synonymous nor can they be used by evaluating physicians or the parties to determine valid legal apportionment under Labor Code §§4663 & 4664.

2. Labor Code §4663 and related case law construing and applying §§4663 & 4664 define apportionment without reference to the AMA Guides, including any references or examples of apportionment in the Guides.

3. If an evaluating physician attempts to utilize an example in the AMA Guides to determine apportionment, he or she must explain in detail how the apportionment example in the AMA Guides addresses the current causes of the applicants permanent disability under Labor Code §4663, Escobedo and other cases construing and applying §4663.  The author believes very few, if any, evaluating physicians will be able to provide such an explanation that will constitute substantial medical evidence.

© Copyright 2017 by Raymond F. Correio. All rights reserved. Reprinted with permission.