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The California Supreme Court this week declined to review the 6th District Court of Appeal decision in the Milpitas USD v W.C.A.B. (Guzman) decision rendering that case now final on the issue of applying the a portion of the AMA guidelines in describing impairment. The Court’s action leaves standing the Appellate Decision issued in August as binding precedent.
According to workers' compensation law expert Jacob Jacobsmeyer, the second case in the appeal is still pending before the 5th appellate district court.
"It is unclear if the 5th district was waiting to see what the Supreme Court did with the appeal but briefing in that appeal ended in early June, 2010. That Court has yet to indicate if it will consider defendant’s request for hearing. In order for the issue not to be final with this decision, a contrary opinion will need to be issued from that district. In the event of a contrary decision, the Supreme Court would likely have to step in either by granting a request for review of decertifying the 5th district opinion in order to reconcile the conflict in case law," said Jacobsmeyer.
These precedent-setting decisions issued in 2009 (Ogilvie and Almaraz-Guzman) allow doctors and lawyers to challenge components of the post-reform formula for measuring impairment and setting Permanent Disability (PD) awards. In so doing, these decisions threaten the California Legislature's adoption of an objective measurement system based on guides published American Medical Association, reports Workers Compensation Action Network (WCAN), a coalition of business and insurance groups including IBA West.
This is not good news for containing workers' compensation costs. California's non-partisan Legislative Analyst's Office has concluded that these rulings could lead to "(1) changes in PD ratings, (2) increased incentive for litigation, and (3) decreased uniformity in determining PD. Ultimately, these effects would likely lead to increased benefits for workers and higher costs for businesses and governments." The WCIRB, meanwhile, has estimated that these cases will add $800 million in costs for employers.
"We are already seeing the effects of these decisions in the increasing costs of workers compensation," said Jerry Azevdo, WCAN spokesman.
This week the State Fund announced a 5.2 percent overall rate increase for 2011. The new rates apply to new and renewal workers’ compensation policies with an effective date on or after January 1, 2011.