 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
  2/25/2009 Ogilvie/Almaraz Analysis -- Part 1 What Do We Do Now That We Have the Ogilvie and Almaraz-Guzman Decisions? By Tracy Sturtevant, Gray & Prouty, San Bruno Office On Monday, February 4th, 2009, the WCAB issued two en banc decisions which exploded our thinking on how to use DFEC and AMA Guides to determine PD. What does this mean for those who are on the front lines of claims handling? How to determine Permanent Disability now? How to set reserves on cases that now have greater uncertainty on potential PD levels? We hope to assist in making sense of these two new blockbuster cases. While these cases are likely to go up on appeal, for now they are the law. Both deal with what is “rebuttable;” Ogilvie as to when DFEC evidence can be used to rebut the PD schedule and Almaraz-Guzman as to how medical evidence can be used to rebut the Guides. Both now give injured workers and their attorneys significant tools to increase PD levels on claims. This newsletter discusses rebuttal of the Rating Schedule as outlined in the Ogilvie decision. Our next newsletter will outline the findings of Almaraz-Guzman. In Ogilvie, the WCAB set out a “simple formula” to determine if DFEC evidence can be used to rebut the Rating Schedule. They outlined specific steps: 1. Determine the injured workers’ post-injury earnings. The Board suggests using a three-year period, but allows that other methods may produce a more fair assessment; 2. Determine the post-injury earnings of similarly-situated employees. The commissioners recommend using EDD data, however any substantial evidence which shows what employees in a work situation similar to the injured worker earn is acceptable; 3. Subtract the figure determined in step 1 (injured employee’s earnings) from the figure determined in step 2 (wages the injured worker most likely would have earned post-injury); 4. Divide the figure determined in step 3 (estimated earnings loss) by the average “control group” earnings (the figure determined in step 2). These four steps give the “Proportional Earnings Loss.” Once that is known, the WCAB decision mandates determination of the Injured Employee’s Individualized Ratio. Those steps are: 5. Determine the injured worker’s standard rating (before adjustment) under the WPI assessment by applying the schedule; 6. Divide the figure determined in step 5 (PD under the schedule) by that of step 4 (the injured worker’s proportional earning loss), which gives the Individualized Rating to Loss Ratio. 7. If this step-6 figure is within the range as per Table B for the particular part of body injured, the Rating Schedule has not been rebutted. 8. If the individualized rating to loss ratio falls within any of the range of ratios for the other seven FEC ranks, as per table A, the Schedule is not rebutted and the FEC Rank of Table A shall be used. 9. If the Individualized rating to loss ratio falls outside the schedule altogether, the following formula is used: 1.81/a x .1 + 1, with the figure in step 6 (individualized rating to loss ratio) substituted for the “a.” 10. This step-nine figure gives the “Individualized DFEC adjustment factor” to apply to the rating: multiply the standard WPI rating by this number for PD before adjusting for age, occupation and apportionment. Thereafter, rate out for adjustment. To illustrate with a case I currently have: The injured worker has not returned to work following injury. Her co-employees similarly situated are earning $20,000. She has PD per the schedule of 23%. Following the above formula, her PD could arguably be 41%. Or, if it can be shown that she has withdrawn from the labor market for reasons unrelated to her injury, it may be within the schedule. Or, if the scheduled rating is incorrect, and it is in fact lower, the PD standard would be 33%. In an effort to present a clear and concise method for using DFEC evidence, the commissioners may have increased litigation. Each step is fraught with disagreements: what time frame should be used to determine post-injury earnings?; what if the injured worker has retired for reasons unrelated to his/her injury?; who are the “similarly-situated employees” that should be used? Even before Ogilvie, determination of PD ratings used in step 5 were – and continue to be – hotly contested. And, how to determine whether or not to use this formula if loss of earning capacity is due to one body part which falls within Table B and/or one that is not? Where part of the rating is within the Schedule and where part is not? These are certainly issues which will arise as applicants’ lawyers attempt to maximum PD while defendants try to insure PD is not grossly overpaid. While the Board assures us that this determination can work both ways, I believe the majority of PD ratings will increase where this formula applies to rebut the Schedule; a belief shared by most applicant attorneys. Another perceived fallacy in the opinion is that it does away with DFEC experts. While it is likely to reduce that cost somewhat, there is still a need in many cases for this expert opinion—and the practical matter of how an already-busy claims handler can take the time to amass the needed information. In order to protect an employer’s interests, those steps must be taken to insure PD is fairly calculated. On first blush, the Ogilvie case appears very straightforward and simple: here’s the formula, follow it. However, as discussed above, it isn’t so simple. Yet, compared to the Almaraz-Guzman case, Ogilvie is a crystal-clear sunny afternoon of simplicity. Almaraz-Guzman and it’s challenges, will be the topic of our next e-mail newsletter. WCAB_ENBanc_OgilvieW.pdf | ||
|
||