PENALTIES FOR INSURER CAUSED DELAYS -REDUCTION IN PENALTIES Before
the 2004 reform, penalties could be assessed against an insurer for
unreasonable delay of medical treatment and unreasonable delay of
temporary disability. The penalty for delay was 10% of the entire
amount of the type of benefit payable, not just 10% of the particular
benefit that was delayed. This was an effective incentive to get
insurers to authorize medical treatment promptly and to pay indemnity
benefits properly where the carrier had no basis for genuine doubt as
to whether the benefit should be provided.
Now a penalty can be
assessed only of 15% on the particular benefit that is delayed.
Although the percentage has been raised from 10% to 15%, the financial
risk to the insurer who delays benefits is significantly lessened. For
example, an insurer who unreasonably fails to authorize a $1500 MRI
scan (thus prolonging the workers' time off and his wage loss) might be
assessed with a 10% of $1500 penalty, i.e. $150. Unfortunately it is no
longer economically feasible for lawyers to pursue penalties for many
delays in workers' compensation unless the treatment is a very
expensive type of treatment.
RATING SYSTEM CHANGED -AMA SYSTEM ADOPTED California
will be using the American Medical Association Guides to the Evaluation
of Permanent Impairment, 5th Edition to rate impairments. The AMA
system is big on range of motion measurement and neurological test
results and other so-called "objective" impairments of impairment. The
AMA system produces an impairment of the whole person percentage based
on an assessment of how an impairment impacts activities of daily
living. The AMA rating is not designed to assess work impairment or
disability and for that reason does a very poor job of assessing
impairment of workers who have limitations and preclusions from
physical activities required in the workplace.
QME PROCEDURES CHANGED -CHANGES FOR REPRESENTED WORKERS What
happens when there are disputes about medical treatment, temporary
disability or permanent disability that need to be resolved? The big
procedural change for workers who have a lawyer is that the lawyer and
the insurer are to either agree on a neutral agreed medical examiner
(AME) or to each disqualify one of 3 QMEs from a state list, thereby
arriving at a QME who will do the evaluation.
APPORTIONMENT -PRIOR AWARDS DEDUCTIBLE 2004
reforms state that if the worker has received a prior award of
permanent disability, it shall be conclusively presumed that the prior
permanent disability exists at the time of any subsequent industrial
injury.
Labor Code 4663 enacted in 2004 requires apportionment
based on causation. Until now under California case law apportionment
to preexisting non-disabling pathology has not been permitted. Now 4663
requires the examining physician to make an apportionment determination
by finding that approximate percentage of the permanent disability was
caused by the direct result of the work injury and what percentage
caused by other factors before and after the work injury. The appellate
courts will be issuing ruling clarifying whether apportionment to
non-disabling pathology is legal. If apportionment to non-disabling
"pathology" is legal, then it may be necessary to file a claim for
cumulative trauma in many cases. Each case will need to be carefully
analyzed by an attorney.
SUMMARY These are a few of the most
significant changes. Where can you get more information? Other sites of
interest are the site of the California Applicants' Attorneys
Association www.caaa.org and the California Department of Industrial
Relations www.dir.ca.gov/, where the text of new regulations can be
downloaded.
