For injuries on and after Jan. 1, 2013, there shall be no increase in impairment ratings for the compensable consequence of a physical injury resulting in psyche, sleep, or sexual dysfunction or any combination thereof, an exception thereto being catastrophic injury which includes but is not limited to loss of a limb, paralysis, severe burn, or severe head injury.
Clearly the legislature, in enacting Senate Bill 863, continues the march to restrict psychiatric claims. This should reduce what now appears to be a routine of some physicians who report compensable consequence psychiatric injury, but the Labor Code and regulations are silent as to what constitutes catastrophic injury and, as we all know, this breeds mischief.
What is the reach of restricting indemnity for psychological injuries flowing from physical injuries under SB 863?
Newly enacted Labor Code §4660 1 C (1) states in pertinent part that except as provided in paragraph (2), there shall be no increases in impairment ratings for sleep dysfunction, sexual dysfunction, or psychiatric disorder, or any combination thereof, arising out of a compensable consequence injury. Nothing in this section shall limit the ability of an injured employee to obtain treatment for sleep dysfunction, sexual dysfunction or psychiatric disorder, if any, that are a consequence of an industrial injury.
A stated exception to the new rule barring increase permanent impairment in compensable psyche injuries flowing from physical injuries is spelled out in Labor Code §4660 1 C (2) which states that an increased impairment rating for psychiatric disorder shall not be subject to paragraph (1) if the compensable psychiatric injuries resulted from either applicant being a victim of violent act or direct exposure to a significant act within the meaning of Labor Code §3208.3 (b) or a catastrophic injury including but not limited to loss of a limb, paralysis, severe burn, or severe head injury.
This newly enacted provision specifically uses the term "catastrophic injury" as opposed to "catastrophic event."
This suggests the focus to be on the injury or the outcome of a work-related injury and not necessarily on the mechanism of the injury.
The outcome or the effects of an injury would be one of the criteria used to define a "catastrophic injury." But, case authority has yet to make this determination as to how to properly define "catastrophic injury."
Consider the following claim:
A 23-year-old food-service worker sustains an accepted compensable injury to her non-dominant hand; that is, loss of a portion of her ring finger by amputation. Applicant receives medical care and temporary disability and, per her treating physician, is released to return to her usual and customary duties without restriction.
Does this loss of a portion of one finger translate into a “catastrophic injury” allowing increased impairment on the basis of psychiatric injury?
Applicant could be heard to contend several bases to argue that such an injury should be defined as catastrophic.
For dates of injury on and after Jan. 1, 2008, aggregate temporary disability payments for a single injury shall not extend for more than 104 compensable weeks within a period of five years. This rule and limitation as to the entitlement of temporary total disability is subject to an exception under Labor Code §4656(c)(3) subpart C, allowing an employee who suffers an amputation, increased entitlement, up to 240 compensable weeks within a period of five years.
Applicant would therefore contend this is evidence that the injury, of even a modest amputation, should be considered "catastrophic."
Applicant could also contend there are potential sources for a definition of “catastrophic injury” under other California statutes and regulations. For example, California Education Code §44043.5(a)(1) and §87045(a)(1) each provide that “catastrophic injury” means an injury expected to incapacitate the employee for an extended period of time which incapacity requires the employee to take time off from work for an extended period of time and taking extended time off work creates a financial hardship for the employee because he or she has exhausted all sick leave and other paid time off.
Likewise, California Labor Code §19991.13(b)(1) provides that “catastrophic injury” means an injury expected to incapacitate the employee and create a financial hardship because the employee has exhausted all sick leave and other paid time off.
But, recall the general rule in the workers’ compensation realm: financial difficulties, for example from the litigation process alone, do not rise to the level of AOE/COE injury.
There is a better analytic approach to our hypothetical scenario of the 23-year-old service worker.
Consider the nature of her loss under the American Medical Association Guides to Permanent Impairment, Fifth Edition. After all adjustments, she would have a whole-person impairment of 5%.
If a workers' compensation judge finds this to be catastrophic, would it not follow that any low back injury falling in a diagnostic-related estimate (DRE) Category II would be “catastrophic” because it would, likewise, have a base value of 5% whole person impairment?
A better approach is to consider whether our applicant could return to her usual and customary duties after her temporary disability period. Consider also the nature, extent and probability of future medical care entitlement.
Is Labor Code §4660 1 C (1) a pyrrhic victory against the shoddy, incomplete, misleading, and otherwise faulty psychiatric or psychological reporting too often seen in workers’ compensation claims?
There is no indication that SB 863 specifically bars temporary disability benefits in cases in which an injured worker has sustained industrial injury to the psyche as a function of a compensable consequence of physical injury.
Labor Code §4660 1 C, while stating there shall be no increase in impairment ratings, does not restrict provisions for temporary psychological disability benefits.
The counter to this position is that SB 863 §1(b) did reference disability in its legislative intent, which should extend to include temporary disability benefits. SB 863 §1(b) states: The legislature intends to eliminate questionable claims of disability when alleged to be caused by a disabling physical injury arising out of and in the course of employment while guaranteeing medical treatment as required by division (commencing with §3200) of the Labor Code.
The focus of the legislative intent of Labor Code §4660 1 C (1) is not limited to permanent psychological impairment but should be cast also as including limitation on entitlement to temporary disability benefits.
Temporary disability entitlement is an open question yet to be judicially resolved.
Psychiatric and psychological treatment are not limited by SB 863 and Labor Code §4660 1 C (1). Rather the code states nothing in this section shall limit the ability of an injured employee to obtain treatment for psychiatric disorder if any is a consequence of an industrial physical injury.
The well-read treater will assert that Medical Treatment Utilization Schedule (MTUS) (American College of Occupational and Environmental Medicine Practical Guidelines, Second Edition (2004) Chapter 15) would apply.
A judge could rule that the current and future psychiatric and psychological treatment remains a benefit for an industrially related mental disorder that emerged as a compensable consequence of a physical injury with the ACOEM Practical Guidelines serving as the utilization review standard for treatment of mental disorders.
Likewise, the chronic pain medical treatment guidelines (8 CCR §9792.20 – §9792.26) recommend psychological evaluations and cognitive-based treatment (presuming there exists chronic pain).
The history and legislative intent of SB 863 is to place increased scrutiny on and to eliminate questionable claims of disability alleged to be caused by a disabling physical injury arising out of the course and scope of employment. A careful and close analysis must be undertaken to obtain a balanced reasoned outcome as to what may, or may not be, considered "catastrophic" within the meaning of the new legislation. Stay tuned.
Matthew G. Markham is a partner with Bradford & Barthel in Ontario, California. This column was reprinted with the firm's permission from Bradford & Barthel's Blog.
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