Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, to compensate an employee for injuries sustained in the course of his or her employment.

Existing law makes an employer liable only for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. Existing law also requires that apportionment of permanent disability be based on causation, and requires the physician to determine the approximate percentage of the permanent disability that was caused by the direct result of injury arising out of and occurring in the course of employment and the approximate percentage of the permanent disability that was caused by other factors both before and subsequent to the industrial injury, including prior industrial injuries. Existing law requires a physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury to address in that report the issue of causation of the permanent disability.

This bill would prohibit a physician from using race, gender, or national origin in determining the percentage of permanent disability that was caused by other factors before and subsequent to the industrial injury.

Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, to compensate an employee for injuries sustained in the course of his or her employment.

Existing law makes an employer liable only for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. Existing law also requires that apportionment of permanent disability be based on causation, and requires the physician to determine the approximate percentage of the permanent disability that was caused by the direct result of injury arising out of and occurring in the course of employment and the approximate percentage of the permanent disability that was caused by other factors both before and subsequent to the industrial injury, including prior industrial injuries. Existing law requires a physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury to address in that report the issue of causation of the permanent disability.

This bill would prohibit a physician from using race, gender, or national origin in determining the percentage of permanent disability that was caused by other factors before and subsequent to the industrial injury.

Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, to compensate an employee for injuries sustained in the course of his or her employment.

Existing law makes an employer liable only for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. Existing law also requires that apportionment of permanent disability be based on causation and causation, and requires the physician to determine the approximate percentage of the permanent disability that was caused by the direct result of injury arising out of and occurring in the course of employment and the approximate percentage of the permanent disability that was caused by other factors both before and subsequent to the industrial injury, including prior industrial injuries. Existing law requires a physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury to address in that report the issue of causation of the permanent disability.

Existing law establishes a workers compensation system, administered by the Administrative Director of the Division of Workers Compensation, to compensate an employee for injuries sustained in the course of his or her employment.

Existing law makes an employer liable only for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. Existing law also requires that apportionment of permanent disability be based on causation and requires a physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury to address in that report the issue of causation of the permanent disability.

In City of Jackson v. Workers Compensation Appeals Board (2017) 11 Cal.App.5th 109, the court of appeal found that the law governing apportionment of disability permits the determination of causation to include heritability and genetics, which may result in the reduction of an individual workers benefits due to his or her heredity or genetic makeup.

This bill would set forth a statement of legislative findings and declarations stating, among other things, that the City of Jackson decision is an abhorrent decision that violates legal norms, undermines legislative intent, and abuses the dignity of injured workers. The bill would express the intent of the Legislature to abrogate the decision and affirm prior decisions prohibiting apportionment of disability to immutable factors. The bill would also express the intent of the Legislature that these provisions do not prohibit apportionment of disability to specific identifiable factors.

Existing law establishes a workers compensation system to compensate an employee for injuries sustained in the course of his or her employment. Under this system, the Workers Compensation Appeals Board has jurisdiction to determine these claims. Existing law provides that actions of the board are taken by a decision of a majority of the board, except as provided.

This bill would make technical, nonsubstantive changes to that provision.

 VETO  

Bill No: SB 899

Author: Pan

:

Vote:

SENATE LABOR & IND. REL. COMMITTEE: 4-0, 4/25/18

AYES: Pan, Jackson, Mitchell, Wieckowski

NO VOTE RECORDED: Stone

SENATE APPROPRIATIONS COMMITTEE: 5-0, 5/25/18

AYES: Lara, Beall, Bradford, Hill, Wiener

NO VOTE RECORDED: Bates, Nielsen

SENATE FLOOR: 32-3, 5/29/18

AYES: Allen, Anderson, Atkins, Bates, Beall, Bradford, Cannella, De León, Dodd, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mitchell, Monning, Newman, Nguyen, Pan, Portantino, Roth, Skinner, Stern, Vidak, Wieckowski, Wiener, Wilk

NOES: Morrell, Nielsen, Stone

NO VOTE RECORDED: Berryhill, Fuller, Gaines, Moorlach

SENATE FLOOR: 37-0, 8/21/18

AYES: Allen, Anderson, Atkins, Bates, Bradford, Cannella, Chang, Delgado, Dodd, Fuller, Gaines, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pan, Portantino, Roth, Skinner, Stern, Stone, Vidak, Wieckowski, Wiener, Wilk

NO VOTE RECORDED: Beall, Berryhill, De León

ASSEMBLY FLOOR: 80-0, 8/20/18 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill explicitly excludes race, gender, and national origin as apportionable factors.

ANALYSIS:

Existing law:

1. Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
2. Requires that, if an occupational injury results in a permanent disability, the percentage of disability to total disability shall be determined, and the disability payment computed on the basis of the percentage of disability to total disability. (Labor Code §4658)
3. Requires that, when doctors are determining the nature and severity of an occupational injury, the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition) must be used to measure physical impairment and determine an injured worker’s whole person impairment (WPI). (Labor Code §4660.1)
4. Creates the Permanent Disability Ratings Schedule (PDRS), which increases the WPI by 40% and adjusts for occupation and age to calculate a percentage of permanent disability (PD), also known as a PD rating. (Labor Code §4660.1)
5. Requires that any physician who prepares a report addressing the issue of permanent disability include an apportionment determination, where the physician determines what approximate percentage of the permanent disability was caused by other factors, including prior industrial injuries. (Labor Code §4663)
6. Requires workers’ compensation law to be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment. (Labor Code §3202)

This bill excludes race, gender, and national origin as factors that can be used in an apportionment determination.

Comments

1. What is Apportionment? Under existing law, every time a doctor prepares a report on if a claimed workplace injury is permanently disabling, the physician must determine causation AND what percentage of the injury is due to non-occupational issues, including prior workplace injuries. An injured worker’s PD award is then adjusted down by this percentage. Only a physician can determine if apportionment is appropriate and to what degree.

This makes apportionment a uniquely provocative policy. On one hand, it would be difficult to defend requiring an employer to provide PD awards for an injury that is unrelated to work or occurred at another place of employment. This is why language limiting PD awards to only cover the consequences of a workplace injury has been in law since 1917. While the current apportionment statute dates back to 2004, the idea behind it is nearly a century old.

On the other hand, determining what percentage of an injury is or is not occupational is highly dependent on the judgment of the physician. Workers’ Compensation Appeals Board (WCAB) case law provides that an apportionment finding is only valid if the physician’s medical opinion:

• 1. Framed in terms of reasonable medical probability;
  2. Not speculative;
  3. Based on pertinent facts and on an adequate examination;
  4. Sets forth the reasoning in support of its conclusion; and
  5. Explains how and why the apportionable factor is responsible for the disability.

(See Escobedo v. Marshalls, (2005) 70 Cal. Comp. Cases 604)

Despite this case law, sometimes physicians fail to meet these requirements when making an apportionment determination. Apportionment determinations by QMEs (Qualified Medical Evaluator) have been and remain a cause and source of litigation in workers’ compensation system.

One final note on apportionment: the apportioning of a PD award has no impact on the ability of an injured worker to receive medical care. Even in the event that a PD award is apportioned to 0%, the worker has a right to medical care if the injury arises or occurs in the course of employment (See Employers Mutual Liability Ins. Co. of Wisconsin v. Industrial Acc. Com. (Gideon) (1953) 41 Cal.2d 676 and Reyes v. Hart Plastering (2005) 70 Cal.Comp.Cases 223).

1. SB 899 and Apportionment Case Law The prior version of SB 899, which was passed by the Senate Labor Committee and voted off the Senate Floor earlier this year, dealt explicitly with City of Jackson v. WCAB (Rice) (2017) 11 Cal.App.5th 109, which touched upon genetics as a basis for reducing permanent disability benefits. City of Jackson raised concerns that correlation and risk factors could be used as a basis for reducing workers’ compensation benefits, rather than a diagnosable pathology or factor. Such an outcome would have introduced a new basis for apportionment into California’s workers’ compensation system.

Unfortunately, in abrogating City of Jackson, the prior version of SB 899 potentially raised its own challenges. This is because, by abrogating Rice, it was unclear what impact SB 899 may have on prior precedents that cited by the Court in Rice. Specifically, City of Jackson cited three past precedents (Escobedo, Kos, and Acme Steel) which are some of the core precedents since 2004 that guide the practice of apportionment. Many stakeholders were concerned that, by abrogating City of Jackson, it may be inadvertently be abrogating long-standing apportionment case law and eliminating apportionment of lawful factors that may have some genetic components.

The current version of SB 899 addresses this by no longer referencing City of Jackson. Rather, SB 899 explicitly rejects apportionment on the basis of race, gender, or national origin. For example, Acme Steel permits apportionment on the basis of inheritable condition if expert testimony and diagnostic tests are conclusive. This would still be lawful apportionment under SB 899. If, however, someone apportioned to hearing loss based on the probability or risk factor of an injured worker’s race or gender or national origin, this would be unlawful under SB 899. This important change in the law voids the fears raised by stakeholders with City of Jackson, while still permitting existing precedential case law to stand.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

The Assembly Appropriations Committee states the following: “According to the Senate Appropriations Committee, the prior version of the bill would have resulted in an undeterminable increase in PD payments to state workers as a result of the bill eliminating one aspect of apportionment. The current version of the bill, while narrower in scope, could lead to similar results.”

SUPPORT: (Verified 8/21/18)

California Applicants’ Attorneys Association

California Association of Joint Powers Authorities

California Special Districts Association

California State Association of Counties

California Coalition on Workers’ Compensation

League of California Cities

OPPOSITION: (Verified 8/21/18)

None received

ARGUMENTS IN SUPPORT: A coalition of employers, including the California Association of Joint Powers Authorities (CAJPA) and California Coalition on Workers’ Compensation (CCWC), writes in support of SB 899, arguing the following:

“SB 899 would amend California Labor Code Section 4663(a) and specifically state consideration of consideration of race, gender, and national origin are excluded from determination of apportionment regarding causation of Permanent Disability.

We support SB 899 as it provides further clarity for the determination of Permanent Disability relating to industrial injury or illness. This measure assures employers pay only for Permanent Disability relating to the work environment, while providing injured workers with appropriate benefits requiring reduced litigation.

For these reasons and more, our organizations look forward to working with you and your staff in SUPPORT of SB 899.”

GOVERNOR'S VETO MESSAGE:

I am returning Senate Bill 899 without my signature.

Consistent with current law, this measure seeks to preclude a physician from using race, gender, or national origin as a basis for apportionment. I am vetoing this bill for many of the same reasons that I returned a similar measure in 2011 - Assembly Bill 1155.

This bill is unnecessary as it would not change existing law and may disturb settled court decisions, which already provide protection from the inappropriate application of the apportionment statutes. Additionally, the proposed wording of the amended statute may create ambiguities in the law, resulting in increased litigation, costs for employers and confusion for injured workers and their representatives.

ASSEMBLY FLOOR: 80-0, 8/20/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rivas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

Prepared by:

10/9/18 10:57:28

**** END ****

 UNFINISHED BUSINESS  

Bill No: SB 899

Author: Pan

:

Vote:

SENATE LABOR & IND. REL. COMMITTEE: 4-0, 4/25/18

AYES: Pan, Jackson, Mitchell, Wieckowski

NO VOTE RECORDED: Stone

SENATE APPROPRIATIONS COMMITTEE: 5-0, 5/25/18

AYES: Lara, Beall, Bradford, Hill, Wiener

NO VOTE RECORDED: Bates, Nielsen

SENATE FLOOR: 32-3, 5/29/18

AYES: Allen, Anderson, Atkins, Bates, Beall, Bradford, Cannella, De León, Dodd, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mitchell, Monning, Newman, Nguyen, Pan, Portantino, Roth, Skinner, Stern, Vidak, Wieckowski, Wiener, Wilk

NOES: Morrell, Nielsen, Stone

NO VOTE RECORDED: Berryhill, Fuller, Gaines, Moorlach

ASSEMBLY FLOOR: 80-0, 8/20/18 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill explicitly excludes race, gender, and national origin as apportionable factors.

Assembly Amendments

remove references to the recent City of Jackson court decision and explicitly prohibit the use of race, gender, and national original as a basis of apportionment.

ANALYSIS:

Existing law:

1. Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
2. Requires that, if an occupational injury results in a permanent disability, the percentage of disability to total disability shall be determined, and the disability payment computed on the basis of the percentage of disability to total disability. (Labor Code §4658)
3. Requires that, when doctors are determining the nature and severity of an occupational injury, the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition) must be used to measure physical impairment and determine an injured worker’s whole person impairment (WPI). (Labor Code §4660.1)
4. Creates the Permanent Disability Ratings Schedule (PDRS), which increases the WPI by 40% and adjusts for occupation and age to calculate a percentage of permanent disability (PD), also known as a PD rating. (Labor Code §4660.1)
5. Requires that any physician who prepares a report addressing the issue of permanent disability include an apportionment determination, where the physician determines what approximate percentage of the permanent disability was caused by other factors, including prior industrial injuries. (Labor Code §4663)
6. Requires workers’ compensation law to be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment. (Labor Code §3202)

This bill excludes race, gender, and national origin as factors that can be used in an apportionment determination.

Comments

1. What is Apportionment? Under existing law, every time a doctor prepares a report on if a claimed workplace injury is permanently disabling, the physician must determine causation AND what percentage of the injury is due to non-occupational issues, including prior workplace injuries. An injured worker’s PD award is then adjusted down by this percentage. Only a physician can determine if apportionment is appropriate and to what degree.

This makes apportionment a uniquely provocative policy. On one hand, it would be difficult to defend requiring an employer to provide PD awards for an injury that is unrelated to work or occurred at another place of employment. This is why language limiting PD awards to only cover the consequences of a workplace injury has been in law since 1917. While the current apportionment statute dates back to 2004, the idea behind it is nearly a century old.

On the other hand, determining what percentage of an injury is or is not occupational is highly dependent on the judgment of the physician. Workers’ Compensation Appeals Board (WCAB) case law provides that an apportionment finding is only valid if the physician’s medical opinion:

• 1. Framed in terms of reasonable medical probability;
  2. Not speculative;
  3. Based on pertinent facts and on an adequate examination;
  4. Sets forth the reasoning in support of its conclusion; and
  5. Explains how and why the apportionable factor is responsible for the disability.

(See Escobedo v. Marshalls, (2005) 70 Cal. Comp. Cases 604)

Despite this case law, sometimes physicians fail to meet these requirements when making an apportionment determination. Apportionment determinations by QMEs (Qualified Medical Evaluator) have been and remain a cause and source of litigation in workers’ compensation system.

One final note on apportionment: the apportioning of a PD award has no impact on the ability of an injured worker to receive medical care. Even in the event that a PD award is apportioned to 0%, the worker has a right to medical care if the injury arises or occurs in the course of employment (See Employers Mutual Liability Ins. Co. of Wisconsin v. Industrial Acc. Com. (Gideon) (1953) 41 Cal.2d 676 and Reyes v. Hart Plastering (2005) 70 Cal.Comp.Cases 223).

1. SB 899 and Apportionment Case Law The prior version of SB 899, which was passed by the Senate Labor Committee and voted off the Senate Floor earlier this year, dealt explicitly with City of Jackson v. WCAB (Rice) (2017) 11 Cal.App.5th 109, which touched upon genetics as a basis for reducing permanent disability benefits. City of Jackson raised concerns that correlation and risk factors could be used as a basis for reducing workers’ compensation benefits, rather than a diagnosable pathology or factor. Such an outcome would have introduced a new basis for apportionment into California’s workers’ compensation system.

Unfortunately, in abrogating City of Jackson, the prior version of SB 899 potentially raised its own challenges. This is because, by abrogating Rice, it was unclear what impact SB 899 may have on prior precedents that cited by the Court in Rice. Specifically, City of Jackson cited three past precedents (Escobedo, Kos, and Acme Steel) which are some of the core precedents since 2004 that guide the practice of apportionment. Many stakeholders were concerned that, by abrogating City of Jackson, it may be inadvertently be abrogating long-standing apportionment case law and eliminating apportionment of lawful factors that may have some genetic components.

The current version of SB 899 addresses this by no longer referencing City of Jackson. Rather, SB 899 explicitly rejects apportionment on the basis of race, gender, or national origin. For example, Acme Steel permits apportionment on the basis of inheritable condition if expert testimony and diagnostic tests are conclusive. This would still be lawful apportionment under SB 899. If, however, someone apportioned to hearing loss based on the probability or risk factor of an injured worker’s race or gender or national origin, this would be unlawful under SB 899. This important change in the law voids the fears raised by stakeholders with City of Jackson, while still permitting existing precedential case law to stand.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

The Assembly Appropriations Committee states the following, “According to the Senate Appropriations Committee, the prior version of the bill would have resulted in an undeterminable increase in PD payments to state workers as a result of the bill eliminating one aspect of apportionment. The current version of the bill, while narrower in scope, could lead to similar results.”

SUPPORT: (Verified 8/21/18)

California Applicants’ Attorneys Association

California Association of Joint Powers Authorities

California Coalition on Workers’ Compensation

California Special Districts Association

California State Association of Counties

League of California Cities

OPPOSITION: (Verified 8/21/18)

None received

ARGUMENTS IN SUPPORT: A coalition of employers, including the California Association of Joint Powers Authorities and California Coalition on Workers’ Compensation, writes in support of SB 899, arguing the following:

SB 899 would amend California Labor Code Section 4663(a) and specifically state consideration of consideration of race, gender, and national origin are excluded from determination of apportionment regarding causation of Permanent Disability.

We support SB 899 as it provides further clarity for the determination of Permanent Disability relating to industrial injury or illness. This measure assures employers pay only for Permanent Disability relating to the work environment, while providing injured workers with appropriate benefits requiring reduced litigation.

For these reasons and more, our organizations look forward to working with you and your staff in SUPPORT of SB 899.

ASSEMBLY FLOOR: 80-0, 8/20/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rivas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

Prepared by:

8/21/18 13:33:03

**** END ****

SENATE THIRD READING

STR Bill Id:SB 899

Author:(Pan)

As Amended Ver:July 2, 2018

Majority vote

SENATE VOTE: 32-3

SUMMARY: Specifies that apportionment of permanent disability in the workers' compensation system cannot be based on race, gender, or national origin.

EXISTING LAW:

1. Establishes a workers' compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either obtaining a certificate of self-insurance from the Department of Industrial Relations or by purchasing an insurance policy from an insurance company duly authorized by the state.
2. Requires that, if an occupational injury results in a permanent disability, the percentage of disability shall be determined, from 0% up to total disability, and the disability payment computed on the basis of a statutory formula.
3. Requires that, when doctors are determining the nature and severity of an occupational injury, the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition) must be used to measure physical impairment and determine an injured worker's whole person impairment (WPI).
4. Creates the Permanent Disability Ratings Schedule (PDRS), which increases the WPI by 40% and adjusts for occupation and age to calculate a percentage of permanent disability (PD), also known as a PD rating.
5. Requires that any physician who prepares a report addressing the issue of permanent disability include an apportionment determination, where the physician determines what approximate percentage of the permanent disability was caused by other factors, including prior industrial injuries.
6. Requires workers' compensation law to be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment.

FISCAL EFFECT: Unknown. According to the Senate Appropriations Committee, the prior version of the bill would have resulted in an undeterminable increase in PD payments to state workers as a result of the bill eliminating one aspect of apportionment. The current version of the bill, while narrower in scope, could lead to similar results.

COMMENTS:

1. Purpose. In its current form, this bill is intended to guard against the most troublesome implications from a recent Court of Appeal decision. In City of Jackson v. WCAB (Rice), (2017) 11 Cal.App.5th 109, discussed in more detail below, the Court ruled that it is appropriate to apportion (reduce) PD benefits on the basis genetics. Earlier versions of the bill sought to overrule that decision for a number of reasons, including the implications the case had related to racial, ethnic, and gender discrimination. There are a number of conditions that may be genetically correlated to these classes – osteoporosis for women, hypertension for African American males – and automatically apportioning (reducing) PD awards for workers who suffer industrial illnesses and injuries without evidence that the particular injured worker's disability was in fact caused by the genetic risk factor is simply wrong. The current version of the bill more narrowly focusses on these most troubling implications of the case.

Apportionment. Under existing law, every time a physician prepares a report evaluating whether a claimed workplace injury is permanently disabling, the physician must determine causation AND what percentage of the injury is due to non-occupational issues, including prior workplace injuries. An injured worker's PD award is then adjusted down by this percentage. Only a physician can determine if apportionment is appropriate and to what degree.

1. This makes apportionment a uniquely provocative policy. On one hand, it would be difficult to defend requiring an employer to provide PD awards for an injury that is unrelated to work or occurred at another place of employment. This is why language limiting PD awards to only cover the consequences of a workplace injury has been in law since 1917. While the current apportionment statute dates back to 2004, the idea behind it is nearly a century old.

On the other hand, determining what percentage of an injury is or is not occupational is highly dependent on the judgment of the physician. Workers' Compensation Appeals Board (WCAB) case law provides that an apportionment finding is only valid if the physician's medical opinion is:

• 1. Framed in terms of reasonable medical probability;
  2. Not speculative;
  3. Based on pertinent facts and on an adequate examination;
  4. Sets forth the reasoning in support of its conclusion; and
  5. Explains how and why the apportionable factor is responsible for the disability.

(See Escobedo v. Marshalls, (2005) 70 Cal. Comp. Cases 604)

Despite this case law, sometimes physicians fail to meet these requirements when making an apportionment determination. Apportionment determinations by Qualified Medical Evaluators (QMEs) have been and remain a cause and source of litigation in workers' compensation system.

As a final note on apportionment, the apportioning of a PD award has no impact on the ability of an injured worker to receive medical care. Even in the event that a PD award is apportioned to 0%, the worker has a right to medical care if the injury arises or occurs in the course of employment.

1. City of Jackson v WCAB (Rice). The issue of genetics, speculation, and causation crossed paths in a series of recent cases. The WCAB considered these issues in Rice v. City of Jackson, ADJ8701916 (2015). A QME evaluated an injured worker with cervical radiculopathy and cervical degenerative disc disease and apportioned the PD award by 49% due to "family history", or the injured worker's father's history of hip and back issues. To support this claim, the QME cited several journal articles that suggested a correlation between spinal disc degeneration and genetics. However, none of the studies suggested 'how' or 'why' the genetic correlation could lead to causation.

Noting this, the WCAB ruled that apportioning on the basis of genetic predisposition was inappropriate, and that apportioning on the basis of immutable factors is impermissible. However, the WCAB also found that apportionment on the basis of specific, identifiable factors was still permitted. It remanded the case to the original ALJ to reconsider the apportionment issue based on this ruling. The City appealed.

On appeal, the WCAB ruling was reversed. The Court found that, not only was apportionment on the basis of genetics permitted, it had been appropriately done by the QME. Specifically, City of Jackson cited three past precedents (Escobedo, Kos, and Acme Steel) to support the notion that apportionment on the basis of genetics has been present in the workers' compensation system since 2004. After the CA Supreme Court declined to hear City of Jackson in August of last year, it became settled law. The concern with the City of Jackson decision, as compared to earlier case law, is the implication that mere risk factors, as opposed to specific, individualized conditions attributable to the particular injured worker, can be used to reduce that injured worker's PD award.

1. Prior Legislation. Legislation similar to the current version of this bill has been considered and passed by the Legislature. SB 1115 (Migden) of 2008 and AB 1155 (Alejo) of 2011 both sought to prohibit discrimination in the workers' compensation system based on the protected classes specified in the Unruh Civil Rights Act. Both bills were vetoed. In his veto message to AB 1155, Governor Brown stated: "The courts already recognize that apportioning a disability award to any of these classifications is antithetical to our states' non-discrimination policies. The courts also recognize that apportioning to an actual non-industrial condition that contributes to causing a disability is permissible and required by the principle that apportionment is based on causation. This bill would not change existing law as interpreted by the courts to date." (Emphasis added.) There is legitimate concern that the sentiments expressed by the Governor have been challenged by the City of Jackson decision.
2. Effect of Current Bill. It seems obvious that a QME, even under current law, could not apportion a particular injured worker's PD award "because he is an African American male." However, the QME, pursuant to the City of Jackson case, apparently can apportion that same injured worker's PD award "because his condition has a correlation to the genetics of African American males." The purpose of this bill is to ensure that any apportionment that involves race, ethnicity, or gender is done not on those bases, but rather on specific conditions that the particular injured worker actually has, as opposed to what she might, as a member of a class with certain genetic risk factors, have.

Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0003709

Date of Hearing: June 27, 2018

ASSEMBLY COMMITTEE ON INSURANCE

Tom Daly, Chair

SBPCA Bill Id:SB 899

Author:(Pan) – As Amended Ver:June 19, 2018

SENATE VOTE: 32-3

SUBJECT: Workers’ compensation

SUMMARY: Specifies that apportionment of permanent disability in the workers’ compensation system cannot be based on race, gender, or national origin.

EXISTING LAW:

1. Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either obtaining a certificate of self-insurance from the Department of Industrial Relations or by purchasing an insurance policy from an insurance company duly authorized by the state.
   
2. Requires that, if an occupational injury results in a permanent disability, the percentage of disability shall be determined, from 0% up to total disability, and the disability payment computed on the basis of a statutory formula.
   
3. Requires that, when doctors are determining the nature and severity of an occupational injury, the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition) must be used to measure physical impairment and determine an injured worker’s whole person impairment (WPI).
   
4. Creates the Permanent Disability Ratings Schedule (PDRS), which increases the WPI by 40% and adjusts for occupation and age to calculate a percentage of permanent disability (PD), also known as a PD rating.
   
5. Requires that any physician who prepares a report addressing the issue of permanent disability include an apportionment determination, where the physician determines what approximate percentage of the permanent disability was caused by other factors, including prior industrial injuries.
6. Requires workers’ compensation law to be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment.

FISCAL EFFECT: Undetermined. According to the Senate Appropriations Committee, the prior version of the bill would have resulted in an undeterminable increase in PD payments to state workers as a result of the bill eliminating one aspect of apportionment. The current version of the bill, while narrower in scope, could lead to similar results.

COMMENTS:

1. Purpose. In its current form, the bill is intended to guard against the most troublesome implications from a recent Court of Appeal decision. In City of Jackson v. WCAB (Rice), (2017) 11 Cal.App.5th 109, discussed in more detail below, the Court ruled that it is appropriate to apportion (reduce) PD benefits on the basis genetics. Earlier versions of the bill sought to overrule that decision for a number of reasons, including the implications the case had related to racial, ethnic, and gender discrimination. There are a number of conditions that may be genetically correlated to these classes – osteoporosis for women, hypertension for African American males – and automatically apportioning (reducing) PD awards for workers who suffer industrial illnesses and injuries without evidence that the particular injured worker’s disability was in fact caused by the genetic risk factor is simply wrong. The current version of the bill more narrowly focusses on these most troubling implications of the case.
2. Apportionment. Under existing law, every time a physician prepares a report evaluating whether a claimed workplace injury is permanently disabling, the physician must determine causation AND what percentage of the injury is due to non-occupational issues, including prior workplace injuries. An injured worker’s PD award is then adjusted down by this percentage. Only a physician can determine if apportionment is appropriate and to what degree.

This makes apportionment a uniquely provocative policy. On one hand, it would be difficult to defend requiring an employer to provide PD awards for an injury that is unrelated to work or occurred at another place of employment. This is why language limiting PD awards to only cover the consequences of a workplace injury has been in law since 1917. While the current apportionment statute dates back to 2004, the idea behind it is nearly a century old.

On the other hand, determining what percentage of an injury is or is not occupational is highly dependent on the judgment of the physician. Workers’ Compensation Appeals Board (WCAB) case law provides that an apportionment finding is only valid if the physician’s medical opinion is:

1) Framed in terms of reasonable medical probability;

2) Not speculative;

3) Based on pertinent facts and on an adequate examination;

4) Sets forth the reasoning in support of its conclusion; and

5) Explains how and why the apportionable factor is responsible for the disability.

(See Escobedo v. Marshalls, (2005) 70 Cal. Comp. Cases 604)

Despite this case law, sometimes physicians fail to meet these requirements when making an apportionment determination. Apportionment determinations by Qualified Medical Evaluators (QMEs) have been and remain a cause and source of litigation in workers’ compensation system.

As a final note on apportionment, the apportioning of a PD award has no impact on the ability of an injured worker to receive medical care. Even in the event that a PD award is apportioned to 0%, the worker has a right to medical care if the injury arises or occurs in the course of employment.

1. City of Jackson v WCAB (Rice). The issue of genetics, speculation, and causation crossed paths in a series of recent cases. The WCAB considered these issues in Rice v. City of Jackson, ADJ8701916 (2015). A QME evaluated an injured worker with cervical radiculopathy and cervical degenerative disc disease and apportioned the PD award by 49% due to “family history”, or the injured worker’s father’s history of hip and back issues. To support this claim, the QME cited several journal articles that suggested a correlation between spinal disc degeneration and genetics. However, none of the studies suggested ‘how’ or ‘why’ the genetic correlation could lead to causation.
   

Noting this, the WCAB ruled that apportioning on the basis of genetic predisposition was inappropriate, and that apportioning on the basis of immutable factors is impermissible. However, the WCAB also found that apportionment on the basis of specific, identifiable factors was still permitted. It remanded the case to the original ALJ to reconsider the apportionment issue based on this ruling. The City appealed.

On appeal, the WCAB ruling was reversed. The Court found that, not only was apportionment on the basis of genetics permitted, it had been appropriately done by the QME. Specifically, City of Jackson cited three past precedents (Escobedo, Kos, and Acme Steel) to support the notion that apportionment on the basis of genetics has been present in the workers’ compensation system since 2004. After the CA Supreme Court declined to hear City of Jackson in August of last year, it became settled law. The concern with the City of Jackson decision, as compared to earlier case law, is the implication that mere risk factors, as opposed to specific, individualized conditions attributable to the particular injured worker, can be used to reduce that injured worker’s PD award.

1. Prior Legislation. Legislation similar to the current version of this bill has been considered and passed by the Legislature. SB 1115 (Migden) in 2008 and AB 1155 (Alejo) in 2011 both sought to prohibit discrimination in the workers’ compensation system based on the protected classes specified in the Unruh Civil Rights Act. Both bills were vetoed. In his veto message to AB 1155, Governor Brown stated: “The courts already recognize that apportioning a disability award to any of these classifications is antithetical to our states' non-discrimination policies. The courts also recognize that apportioning to an actual non-industrial condition that contributes to causing a disability is permissible and required by the principle that apportionment is based on causation. This bill would not change existing law as interpreted by the courts to date.” (Emphasis added.) There is legitimate concern that the sentiments expressed by the Governor have been challenged by the City of Jackson decision.
2. Effect of Current Bill. It seems obvious that a QME, even under current law, could not apportion a particular injured worker’s PD award “because he is an African American male.” However, the QME, pursuant to the City of Jackson case, apparently can apportion that same injured worker’s PD award “because his condition has a correlation to the genetics of African American males.” The purpose of the bill is to ensure that any apportionment that involves race, ethnicity, or gender is done not on those bases, but rather on specific conditions that the particular injured worker actually has, as opposed to what she might, as a member of a class with certain genetic risk factors, have.
3. Technical Amendment. As noted above, SB 899 was recently amended to clarify the process of apportionment. Unfortunately, due to a drafting error, the amendments create some confusion on apportionment disagreements between physicians. To address this technical issue, the Author may wish to consider the following amendment, which would return the language to its current form in existing law:
   
   On page 3, line 6, between the words “shall” and “consult”, insert the word then.

REGISTERED SUPPORT / OPPOSITION:

Support

None received.

Opposition

None received.

Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086

Date of Hearing: June 27, 2018

ASSEMBLY COMMITTEE ON INSURANCE

Tom Daly, Chair

SBPCA Bill Id:SB 899

Author:(Pan) – As Amended Ver:June 19, 2018

SENATE VOTE: 32-3

SUBJECT: Workers’ compensation

SUMMARY: Specifies that apportionment of permanent disability in the workers’ compensation system cannot be based on race, gender, or national origin.

EXISTING LAW:

1. Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either obtaining a certificate of self-insurance from the Department of Industrial Relations or by purchasing an insurance policy from an insurance company duly authorized by the state.
   
2. Requires that, if an occupational injury results in a permanent disability, the percentage of disability shall be determined, from 0% up to total disability, and the disability payment computed on the basis of a statutory formula.
   
3. Requires that, when doctors are determining the nature and severity of an occupational injury, the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition) must be used to measure physical impairment and determine an injured worker’s whole person impairment (WPI).
   
4. Creates the Permanent Disability Ratings Schedule (PDRS), which increases the WPI by 40% and adjusts for occupation and age to calculate a percentage of permanent disability (PD), also known as a PD rating.
   
5. Requires that any physician who prepares a report addressing the issue of permanent disability include an apportionment determination, where the physician determines what approximate percentage of the permanent disability was caused by other factors, including prior industrial injuries.
6. Requires workers’ compensation law to be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment.

FISCAL EFFECT: Undetermined. According to the Senate Appropriations Committee, the prior version of the bill would have resulted in an undeterminable increase in PD payments to state workers as a result of the bill eliminating one aspect of apportionment. The current version of the bill, while narrower in scope, could lead to similar results.

COMMENTS:

1. Purpose. In its current form, the bill is intended to guard against the most troublesome implications from a recent Court of Appeal decision. In City of Jackson v. WCAB (Rice), (2017) 11 Cal.App.5th 109, discussed in more detail below, the Court ruled that it is appropriate to apportion (reduce) PD benefits on the basis genetics. Earlier versions of the bill sought to overrule that decision for a number of reasons, including the implications the case had related to racial, ethnic, and gender discrimination. There are a number of conditions that may be genetically correlated to these classes – osteoporosis for women, hypertension for African American males – and automatically apportioning (reducing) PD awards for workers who suffer industrial illnesses and injuries without evidence that the particular injured worker’s disability was in fact caused by the genetic risk factor is simply wrong. The current version of the bill more narrowly focusses on these most troubling implications of the case.
2. Apportionment. Under existing law, every time a physician prepares a report evaluating whether a claimed workplace injury is permanently disabling, the physician must determine causation AND what percentage of the injury is due to non-occupational issues, including prior workplace injuries. An injured worker’s PD award is then adjusted down by this percentage. Only a physician can determine if apportionment is appropriate and to what degree.

This makes apportionment a uniquely provocative policy. On one hand, it would be difficult to defend requiring an employer to provide PD awards for an injury that is unrelated to work or occurred at another place of employment. This is why language limiting PD awards to only cover the consequences of a workplace injury has been in law since 1917. While the current apportionment statute dates back to 2004, the idea behind it is nearly a century old.

On the other hand, determining what percentage of an injury is or is not occupational is highly dependent on the judgment of the physician. Workers’ Compensation Appeals Board (WCAB) case law provides that an apportionment finding is only valid if the physician’s medical opinion is:

1) Framed in terms of reasonable medical probability;

2) Not speculative;

3) Based on pertinent facts and on an adequate examination;

4) Sets forth the reasoning in support of its conclusion; and

5) Explains how and why the apportionable factor is responsible for the disability.

(See Escobedo v. Marshalls, (2005) 70 Cal. Comp. Cases 604)

Despite this case law, sometimes physicians fail to meet these requirements when making an apportionment determination. Apportionment determinations by Qualified Medical Evaluators (QMEs) have been and remain a cause and source of litigation in workers’ compensation system.

As a final note on apportionment, the apportioning of a PD award has no impact on the ability of an injured worker to receive medical care. Even in the event that a PD award is apportioned to 0%, the worker has a right to medical care if the injury arises or occurs in the course of employment.

1. City of Jackson v WCAB (Rice). The issue of genetics, speculation, and causation crossed paths in a series of recent cases. The WCAB considered these issues in Rice v. City of Jackson, ADJ8701916 (2015). A QME evaluated an injured worker with cervical radiculopathy and cervical degenerative disc disease and apportioned the PD award by 49% due to “family history”, or the injured worker’s father’s history of hip and back issues. To support this claim, the QME cited several journal articles that suggested a correlation between spinal disc degeneration and genetics. However, none of the studies suggested ‘how’ or ‘why’ the genetic correlation could lead to causation.
   

Noting this, the WCAB ruled that apportioning on the basis of genetic predisposition was inappropriate, and that apportioning on the basis of immutable factors is impermissible. However, the WCAB also found that apportionment on the basis of specific, identifiable factors was still permitted. It remanded the case to the original ALJ to reconsider the apportionment issue based on this ruling. The City appealed.

On appeal, the WCAB ruling was reversed. The Court found that, not only was apportionment on the basis of genetics permitted, it had been appropriately done by the QME. Specifically, City of Jackson cited three past precedents (Escobedo, Kos, and Acme Steel) to support the notion that apportionment on the basis of genetics has been present in the workers’ compensation system since 2004. After the CA Supreme Court declined to hear City of Jackson in August of last year, it became settled law. The concern with the City of Jackson decision, as compared to earlier case law, is the implication that mere risk factors, as opposed to specific, individualized conditions attributable to the particular injured worker, can be used to reduce that injured worker’s PD award.

1. Prior Legislation. Legislation similar to the current version of this bill has been considered and passed by the Legislature. SB 1115 (Migden) in 2008 and AB 1155 (Alejo) in 2011 both sought to prohibit discrimination in the workers’ compensation system based on the protected classes specified in the Unruh Civil Rights Act. Both bills were vetoed. In his veto message to AB 1155, Governor Brown stated: “The courts already recognize that apportioning a disability award to any of these classifications is antithetical to our states' non-discrimination policies. The courts also recognize that apportioning to an actual non-industrial condition that contributes to causing a disability is permissible and required by the principle that apportionment is based on causation. This bill would not change existing law as interpreted by the courts to date.” (Emphasis added.) There is legitimate concern that the sentiments expressed by the Governor have been challenged by the City of Jackson decision.
2. Effect of Current Bill. It seems obvious that a QME, even under current law, could not apportion a particular injured worker’s PD award “because he is an African American male.” However, the QME, pursuant to the City of Jackson case, apparently can apportion that same injured worker’s PD award “because his condition has a correlation to the genetics of African American males.” The purpose of the bill is to ensure that any apportionment that involves race, ethnicity, or gender is done not on those bases, but rather on specific conditions that the particular injured worker actually has, as opposed to what she might, as a member of a class with certain genetic risk factors, have.
3. Technical Amendment. As noted above, SB 899 was recently amended to clarify the process of apportionment. Unfortunately, due to a drafting error, the amendments create some confusion on apportionment disagreements between physicians. To address this technical issue, the Author may wish to consider the following amendment, which would return the language to its current form in existing law:
   
   On page 3, line 6, between the words “shall” and “consult”, insert the word then.

REGISTERED SUPPORT / OPPOSITION:

Support

None received.

Opposition

None received.

Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086

 THIRD READING  

Bill No: SB 899

Author: Pan

:

Vote:

SENATE LABOR & IND. REL. COMMITTEE: 4-0, 4/25/18

AYES: Pan, Jackson, Mitchell, Wieckowski

NO VOTE RECORDED: Stone

SENATE APPROPRIATIONS COMMITTEE: 5-0, 5/25/18

AYES: Lara, Beall, Bradford, Hill, Wiener

NO VOTE RECORDED: Bates, Nielsen

SUBJECT:

SOURCE: Author

DIGEST:

This bill abrogates the City Of Jackson decision, returning to prior law on the impermissibility of reducing workers’ compensation permanent disability benefits on the basis of immutable genetic and inheritable characteristics, which include race, gender, and religion.

ANALYSIS:

Existing law:

1. Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
2. Requires that, if an occupational injury results in a permanent disability, the percentage of disability to total disability shall be determined, and the disability payment computed on the basis of the percentage of disability to total disability. (Labor Code §4658)
3. Requires that, when doctors are determining the nature and severity of an occupational injury, the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition) must be used to measure physical impairment and determine an injured worker’s whole person impairment (WPI). (Labor Code §4660.1)
4. Creates the Permanent Disability Ratings Schedule (PDRS), which increases the WPI by 40% and adjusts for occupation and age to calculate a percentage of permanent disability (PD), also known as a PD rating. (Labor Code §4660.1)
5. Requires that any physician who prepares a report addressing the issue of permanent disability include an apportionment determination, where the physician determines what approximate percentage of the permanent disability was caused by other factors, including prior industrial injuries. (Labor Code §4663)
6. Requires workers’ compensation law to be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment. (Labor Code §3202)

This bill finds and declares the following:

1. In the City of Jackson decision, the court of appeal found that the law governing apportionment of disability permits the determination of causation to include “heritability and genetics,” which may result in the reduction of an individual worker’s benefits due to his or her heredity or genetic makeup.
2. In contrast, a prior decision in Rice v. City of Jackson, prohibited apportionment of disability to immutable factors while also referring to “proper apportionment” of disability to “specific identifiable factors.”
3. The City of Jackson decision effectively legalizes discrimination on the basis of genetics and heritability, including race, gender, and religion, creating disparate impacts in the form of reduced permanent disability benefits to injured workers.
4. The Legislature has consistently prohibited discrimination on the basis of race, gender, religion, and genetics in employment and governmental benefits.
5. The City of Jackson decision is an abhorrent decision that violates legal norms, undermines legislative intent, and abuses the dignity of injured workers.
6. It is the intent of the Legislature in enacting this subdivision to abrogate the decision in City of Jackson and to affirm prior administrative and judicial decisions, including Rice, prohibiting apportionment of disability to immutable factors.
7. It is also the intent of the Legislature that this subdivision does not prohibit apportionment of disability to specific identifiable factors.

Comments

1. What is Apportionment? Under existing law, every time a doctor prepares a report on if a claimed workplace injury is permanently disabling, the physician must determine causation AND what percentage of the injury is due to non-occupational issues, including prior workplace injuries. An injured worker’s PD award is then adjusted down by this percentage. Only a physician can determine if apportionment is appropriate and to what degree.

This makes apportionment a uniquely provocative policy. On one hand, it would be difficult to defend requiring an employer to provide PD awards for an injury that is unrelated to work or occurred at another place of employment. This is why language limiting PD awards to only cover the consequences of a workplace injury has been in law since 1917. While the current apportionment statute dates back to 2004, the idea behind it is nearly a century old.

On the other hand, determining what percentage of an injury is or is not occupational is highly dependent on the judgment of the physician. Workers’ Compensation Appeals Board (WCAB) case law provides that an apportionment finding is only valid if the physician’s medical opinion:

• 1. Framed in terms of reasonable medical probability;
  2. Not speculative;
  3. Based on pertinent facts and on an adequate examination;
  4. Sets forth the reasoning in support of its conclusion; and
  5. Explains how and why the apportionable factor is responsible for the disability.

(See Escobedo v. Marshalls, (2005) 70 Cal. Comp. Cases 604)

Despite this case law, sometimes physicians fail to meet these requirements when making an apportionment determination. Apportionment determinations by QMEs (Qualified Medical Evaluator) have been and remain a cause and source of litigation in workers’ compensation system.

One final note on apportionment: the apportioning of a PD award has no impact on the ability of an injured worker to receive medical care. Even in the event that a PD award is apportioned to 0%, the worker has a right to medical care if the injury arises or occurs in the course of employment (See Employers Mutual Liability Ins. Co. of Wisconsin v. Industrial Acc. Com. (Gideon) (1953) 41 Cal.2d 676 and Reyes v. Hart Plastering (2005) 70 Cal.Comp.Cases 223).

1. Rice v. City of Jackson and City of Jackson v. WCAB: The issue of genetics, speculation, and causation crossed paths in a series of recent cases. In Rice v. City of Jackson, ADJ8701916 (2015), a Qualified Medical Evaluator (QME) evaluated an injured worker with cervical radiculopathy and cervical degenerative disc disease and apportioned a workers’ PD award by 49% due to “family history”, or the injured worker’s father’s history of hip and back issues. To support this claim, the QME cited several journal articles that suggested a correlation between spinal disc degeneration and genetics. However, none of the studies suggested ‘how’ or ‘why’ the genetic correlation could lead to causation.

Noting this, the WCAB found that ruled that apportioning on the basis of genetic predisposition was inappropriate, noted that apportioning on the basis of immutable factors is impermissible, and returned the case to the local board for a new unapportioned award of permanent disability. However, the WCAB also found that apportionment on the basis of specific, identifiable factors was still permitted.

On appeal, however, this decision was reversed. In City of Jackson v. WCAB (Rice), (2017) 11 Cal.App.5th 109, the Court found that, not only was apportionment on the basis of genetics permitted, it has been appropriately done by the QME. Specifically, City of Jackson cited three past precedents (Escobedo, Kos, and Acme Steel) to support the notion that apportionment on the basis of genetics has been present in the workers’ compensation system since 2004. After the CA Supreme Court declined to hear City of Jackson in August of last year, it became settled law.

1. How Does the City of Jackson Decision Impact Apportionment? As noted above, if the Court of Appeals is correct, the potential impact of City of Jackson is largely minimal, as other precedential decisions have found that apportionment on the basis of genetics is appropriate. However, there are some significant issues raised by such a line of argument. These are discussed below.

Escobedo, Kos, Acme Steel and the Role of Genetics: In City of Jackson, the Court cited 3 prior precedential decisions where apportionment had at least some genetic component: Escobedo, Kos, and Acme Steel. However, as has at least one legal scholar has pointed out, all three cases have one significant factor in common: diagnostic tests that ruled out every other factor except non-occupational (and likely genetic) factors.

For example, in Acme Steel v. WCAB (2013) 218 Cal.App.4th 1137, the Court for apportionment of a worker’s PD award for hearing loss due to genetic deterioration of the cochlea, but was able to establish the non-industrial portion of the hearing loss through diagnostic tests which showed low frequency hearing loss that is not associated with hearing loss due to repetitive noise. Similarly, in Kos v. Workers’ Comp.Appeals Bd (2008) 73 Cal.Comp.Cases 529 and Escobedo v Marshalls (2005) 70 Cal.Comp.Cases 604, an MRI and an MRI with X-Rays, respectively, were able to establish grounds for specific, individualized apportionment to genetic factors.

It is also illustrative to compare City of Jackson to a similar ruling made by the same Court: United Airlines v. WCAB (Milivojevich) (2007) 72 Cal.Comp Cases 1415. In Milivojevich, a QME apportioned 40% of the injured worker’s PD from an industrially-caused stroke to high blood pressure. The Court, however, ruled that this was apportioning to a risk factor for injury, rather than the actual disability, and was not permitted. Like high cholesterol, disc degeneration may or may not lead to disability. Like disc degeneration, high cholesterol has a genetic component. Additionally, like high cholesterol and strokes, there appears to be a correlation between disc degeneration and genetics. These are similar cases, and external observers would be forgiven for expecting similar rulings.

Yet, in City of Jackson, the Court sanctioned apportionment on the basis of correlation and risk factors. While the QME cited several studies which suggested a high correlation between genetics and spinal disc degeneration, none of these studies showed causation, as required by the statute (and Milivojevich), in showing how genetics caused disability in the case of this specific injured worker. The statute calls for causation; correlation is not causation. And yet City of Jackson treats them as if they are one and the same.

City of Jackson and the Special Role of Genetics in Disability Causation: More troublingly, the findings in City of Jackson on disability due to disc degeneration are not limited to the facts in this specific case. Rather, the Court found that they apply to all workers’ compensation cases that involve disc degeneration:

“Rice argues Dr. Blair cannot have known his degenerative disc disease was caused by genetics because she never researched his familial medical history. It was unnecessary for Dr. Blair to conduct such an analysis because her research indicated that genetics or heredity was a majority factor in all cases of degenerative disc disease. This explains Dr. Blair’s response to Rice’s attorney’s request that Dr. Blair consider a hypothetical in which one patient has cervical degenerative disease caused by genetics and the other one has the disease caused by environmental factors. She responded that such a hypothetical situation would never be seen in practice and that the assumption was not reasonable.”

This conclusion, however, goes far beyond what has been established by the research. For example, QME cites a study by Stitzlein, et al. in “The Role of Genetics in Degenerative Disc Disease” (Spineline, July/August 2012, 20-25), but study explicitly states that:

“While much progress has been made in understanding the process of disc degeneration, the etiology remains elusive. A complex set of factors, including environmental and genetic, appear to cause degenerative disc disease. While one’s genetic makeup may not lead directly to degenerative disc disease, it certainly may facilitate disc degeneration by weakening the disc or impairing its ability to heal.”

If the role of genetics in disc degeneration is in weakening the disc or impairing its ability to heal, then non-genetics sudden loom large: even with individuals with the same genetic makeup, workplace variability could have a significant impact on the ability of an injured worker’s discs to heal or even to be injured in the first place. These are factors that may determine the ‘how’ and ‘why’ of an injury is disabling: in short, apportionment causation. This ambiguity in the medical literature is not reflected in the City of Jackson, opening the door to automatic apportionment decisions that impact an entire group of injured workers that cannot be supported by the cited medical literature.

City of Jackson, Hidden Bias, and Apportionment by Genotype. In short, City of Jackson opens up apportionment of all injured workers’ PD benefits to correlation, vague conceptual arguments surrounding genetics, and imprecise appeals to the authority of medical journals. City of Jackson opens the door to apportionment not on the basis on individual circumstances, but rather to membership of an ill-defined genotype. It asks California to set aside its statute calling for apportionment on the basis of causation and instead trust in the impartial knowledge of a QME as he or she weighs in on genetics and the individual, as well as genetics of the entire spectrum of workers who suffer from the same or similar disability.

Yet, this places an extraordinary burden on QMEs and the entire workers’ compensation system. Is it the role of QMEs to ensure that medical studies are free from implicit bias and appropriately control for all of the various factors that go into genetics and inheritability, including race, gender, religion, and class? If a QME is later found to have had animus towards a specific religion or race, can we trust his or her research reviews on genetics, etiology, and disability? Or would we need to review open claims to ensure that the injured worker had not been a victim of a hidden bias?

Are we comfortable with apportionment by broad cross-section, rather than individual characteristics? If City of Jackson holds that all injured workers with disc degeneration should have their PD benefits reduced through apportionment, are we comfortable apportioning all African Americans with hypertension? What about diabetes in Latinos? And how should the workers’ compensation address epigenetics, or changes in our genetics due to environment? Would it be appropriate to apportion the PD benefits of children or grandchildren of Holocaust survivors due to the possibility of epigenetic impacts?

These are questions that we did not need to ask prior to the City of Jackson decision, but now loom large.

1. SB 899 and City of Jackson: SB 899 would strike the Court’s decision in City of Jackson and return the law to its original path. Specifically, SB 899 would make findings and declarations on the impact of City of Jackson on permanently injured workers. Finally, SB 899 would prohibit apportionment of disability on the basis of immutable characteristics, but it would allow for apportionment on the basis of individual, identifiable characteristics, as permitted in Rice.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, by abrogating the relevant court decision related to workers’ compensation, this bill would likely lead to state disability payments in excess of what they would be absent the bill. The magnitude of the difference in a given year is unknown and would depend on future events; however, the impact is potentially significant (General Fund and special funds).

Additionally, the Senate Appropriations Analysis states that Department of Industrial Relations (DIR) indicates that the bill would likely generate additional litigation; however, resulting costs to its Division of Workers Compensation to accommodate the additional workload, and the resulting costs, are unknown (Workers Compensation Administration Revolving Fund).

SUPPORT: (Verified 5/25/18)

Los Angeles County Professional Peace Officers Association

OPPOSITION: (Verified 5/25/18)

None received

ARGUMENTS IN SUPPORT: The Los Angeles County Professional Peace Officers Association writes in support of SB 899, arguing:

“The Los Angeles County Professional Peace Officers Association is in strong support of SB 899… to abrogate the Appellate Court decision in City of Jackson v. Workers’ Compensation Appeals Board, which found that the law governing apportionment of disability permits the determination of causation to include “heritability and genetics”.

The recent decision from the Court of Appeals in City of Jackson v. Workers’ Compensation Appeals Board… has justifiably engendered a wide spread controversy in the workers; compensation community… The City of Jackson decision is an abhorrent decision that violates legal norms, undermines legislative intent, and abuses the dignity of injured workers. We strongly support SB 899 to abrogate the decision in City of Jackson.”

Prepared by:

5/26/18 14:24:12

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

SB 899 (Pan) - Workers’ compensation

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

This bill would indicate the Legislature’s intent to abrogate the “City Of Jackson” workers’ compensation decision, returning to prior law regarding the impermissibility of reducing workers’ compensation permanent disability benefits on the basis of immutable genetic and inheritable characteristics, which include race, gender, and religion.

Fiscal Impact:

By abrogating the relevant court decision related to workers’ compensation, this bill would likely lead to state disability payments in excess of what they would be absent the bill. The magnitude of the difference in a given year is unknown and would depend on future events; however, the impact is potentially significant (General Fund and special funds). Additionally, the Department of Industrial Relations (DIR) indicates that the bill would likely generate additional litigation; however, resulting costs to its Division of Workers Compensation to accommodate the additional workload, and the resulting costs, are unknown (Workers Compensation Administration Revolving Fund).

Background:

Current law establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that occurs during the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either (1) securing the consent of DIR to self-insure, or (2) securing insurance against liability from an insurance company authorized by the State. Also, under current law, when doctors are determining the nature and severity of an occupational injury, the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition) must be used (1) to measure physical impairment, and (2) to determine an injured worker’s whole person impairment (WPI). Additionally, current law creates the Permanent Disability Ratings Schedule (PDRS), which increases the WPI by 40 percent and adjusts for occupation and age to calculate a percentage of permanent disability, also known as a PD rating.

When physicians prepare a report regarding whether a claimed workplace injury is permanently disabling, they must determine both (1) causation, and (2) what percentage of the injury is due to non-occupational issues, including prior workplace injuries. An injured worker’s PD award is then adjusted down by this percentage. Only a physician can make the determination whether and to what extent such apportionment is appropriate. Thus, the judgement of the doctor comes into play during the apportionment process. Workers’ Compensation Appeals Board (WCAB) case law provides that an apportionment finding is only valid if the physician’s medical opinion is: (1) framed in terms of reasonable medical probability, (2) not speculative, (3) based on pertinent facts and on an adequate examination, (4) sets forth the reasoning in support of its conclusion, and (5) explains how and why the apportionable factor is responsible for the disability. Despite this case law, however, physicians can fail to meet these requirements when making an apportionment determination; in particular, apportionment determinations by QMEs (Qualified Medical Evaluators) have been consistent sources of litigation in workers’ compensation system.

The issue of genetics, speculation, and causation have been at the center of key decision in recent workers compensation cases. In Rice v. City of Jackson, ADJ8701916 (2015), a QME evaluated an injured worker with cervical radiculopathy and cervical degenerative disc disease, and apportioned (adjusted downward) the workers’ PD award by 49 percent due to “family history”, or the injured worker’s father’s history of hip and back issues. To support this claim, the QME cited several journal articles that suggested a correlation between spinal disc degeneration and genetics. However, none of the studies suggested causation between the two.

Noting this, the Workers Compensation Appeals Board (WCAB) ruled that apportioning on the basis of genetic predisposition was inappropriate, noted that apportioning on the basis of immutable factors is impermissible, and returned the case to the local board for a new unapportioned award of PD. WCAB also found that apportionment on the basis of specific, identifiable factors was still permitted.

On appeal, however, the WCAB ruling was reversed. In City of Jackson v. WCAB (Rice), (2017) 11 Cal.App.5th 109, the Court found that, not only was apportionment on the basis of genetics permitted, it has been appropriately done by the QME. The California Supreme Court declined to hear City of Jackson in August, 2017. Thus, it became settled law.

Proposed Law:

This bill would codify in the Labor Code language finding and declaring the intent of the Legislature to abrogate the decision in City of Jackson v. WCAB. The Legislature would also find and declare that subdivision does not prohibit apportionment of disability to specific, identifiable factors.

Related Legislation:

SB 899 (Poochigian, Chapter 34, Statutes of 2004) created, among other things, the current process of apportionment.

Staff Comments:

The Office of the Legislative Counsel has keyed this bill “non-fiscal.” However, the purview of this Committee, pursuant to Joint Rule 10.5, is to review and analyze bills that would, among other things, result in a substantial expenditure of state money. Thus, even though the bill was keyed “non-fiscal,” the Committee requested the bill to examine the extent to which it might potentially increase both workload and state costs. The bill has the potential to create significant fiscal pressure on the State in the following ways: (1) increased litigation, leading to higher costs to DIR, and (2) increased PD costs for the State of California as a direct employer.

Under the Constitution, the Legislature’s grant of power of California’s workers’ compensation system is essentially absolute; this has been recognized by several decades of court decisions, and was specifically discussed in City and County of San Francisco v. WCAB (1978), which noted that while the State Constitution was passed to place a limit on the Legislature’s power, the workers compensation provisions place no provision on the Legislature’s powers and the Legislature has police power to protect workers and their dependents. Specifically, Article XVI, Section 4 of the Constitution states the following:

“The Legislature is hereby expressly vested with plenary power, unlimited by any provision of this Constitution, to create, and enforce a complete system of workers’ compensation, by appropriate legislation, and in that behalf to create and enforce a liability on the part of any or all persons to compensate any or all of their workers for injury or disability, and their dependents for death incurred or sustained by the said workers in the course of their employment, irrespective of the fault of any party. A complete system of workers’ compensation includes adequate provisions for the comfort, health and safety and general welfare of any and all workers and those dependent upon them for support to the extent of relieving from the consequences of any injury or death incurred or sustained by workers in the course of their employment, irrespective of the fault of any party; also full provision for securing safety in places of employment; full provision for such medical, surgical, hospital and other remedial treatment as is requisite to cure and relieve from the effects of such injury; full provision for adequate insurance coverage against liability to pay or furnish compensation; full provision for regulating such insurance coverage in all its aspects, including the establishment and management of a state compensation insurance fund; full provision for otherwise securing the payment of compensation; and full provision for vesting power, authority and jurisdiction in an administrative body with all the requisite governmental functions to determine any dispute or matter arising under such legislation, to the end that the administration of such legislation shall accomplish substantial justice in all cases expeditiously, inexpensively, and without incumbrance of any character; all of which matters are expressly declared to be the social public policy of this State, binding upon all departments of the state government.

The Legislature is vested with plenary powers, to provide for the settlement of any disputes arising under such legislation by arbitration, or by an industrial accident commission, by the courts, or by either, any, or all of these agencies, either separately or in combination, and may fix and control the method and manner of trial of any such dispute, the rules of evidence and the manner of review of decisions rendered by the tribunal or tribunals designated by it; provided, that all decisions of any such tribunal shall be subject to review by the appellate courts of this State. The Legislature may combine in one statute all the provisions for a complete system of workers’ compensation, as herein defined.

The Legislature shall have power to provide for the payment of an award to the State in the case of the death, arising out of and in the course of the employment, of an employee without dependents, and such awards may be used for the payment of extra compensation for subsequent injuries beyond the liability of a single employer for awards to employees of the employer.

Nothing contained herein shall be taken or construed to impair or render ineffectual in any measure the creation and existence of the industrial accident commission of this State or the state compensation insurance fund, the creation and existence of which, with all the functions vested in them, are hereby ratified and confirmed.”

As noted above, this bill would strike the Court of Appeals’ decision in City of Jackson and return the law to its previous interpretation. In other words, it would prohibit apportionment of disability on the basis of immutable characteristics, but it would allow for apportionment on the basis of individual, identifiable characteristics, as permitted in Rice. In terms of fiscal impact, PD awards will likely be higher under this bill that would be the case in its absence (in other words, if the Court of Appeals ruling were still in effect). The magnitude would depend on future disability claims and their specific characteristics, but on balance, because this bill would reduce the likelihood of apportionment in certain instances, PD payments would likely be higher than they would be absent the bill.

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SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS

Senator Richard Pan, Chair

2017 - 2018 Regular

Bill No: SB 899 Hearing Date: April 25, 2018

Subject: Workers’ compensation

KEY ISSUE

Should the Legislature abrogate the City Of Jackson decision, returning to prior law on the impermissibility of reducing workers’ compensation permanent disability benefits on the basis of immutable genetic and inheritable characteristics, which include race, gender, and religion?

ANALYSIS

Existing law:

1. Establishes a workers’ compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. This system requires all employers to secure payment of benefits by either securing the consent of the Department of Industrial Relations to self-insure or by securing insurance against liability from an insurance company duly authorized by the state.
2. Requires that, if an occupational injury results in a permanent disability, the percentage of disability to total disability shall be determined, and the disability payment computed on the basis of the percentage of disability to total disability. (Labor Code §4658)
3. Requires that, when doctors are determining the nature and severity of an occupational injury, the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment (5th Edition) must be used to measure physical impairment and determine an injured worker’s whole person impairment (WPI). (Labor Code §4660.1)
4. Creates the Permanent Disability Ratings Schedule (PDRS), which increases the WPI by 40% and adjusts for occupation and age to calculate a percentage of permanent disability (PD), also known as a PD rating. (Labor Code §4660.1)
5. Requires that any physician who prepares a report addressing the issue of permanent disability include an apportionment determination, where the physician determines what approximate percentage of the permanent disability was caused by other factors, including prior industrial injuries. (Labor Code §4663)
6. Requires workers’ compensation law to be liberally construed by the courts with the purpose of extending their benefits for the protection of persons injured in the course of their employment. (Labor Code §3202)

This bill finds and declares the following:

1. In the City of Jackson decision, the court of appeal found that the law governing apportionment of disability permits the determination of causation to include “heritability and genetics,” which may result in the reduction of an individual worker’s benefits due to his or her heredity or genetic makeup.
2. In contrast, a prior decision in Rice v. City of Jackson, prohibited apportionment of disability to immutable factors while also referring to “proper apportionment” of disability to “specific identifiable factors.”
3. The City of Jackson decision effectively legalizes discrimination on the basis of genetics and heritability, including race, gender, and religion, creating disparate impacts in the form of reduced permanent disability benefits to injured workers.
4. The Legislature has consistently prohibited discrimination on the basis of race, gender, religion, and genetics in employment and governmental benefits.
5. The City of Jackson decision is an abhorrent decision that violates legal norms, undermines legislative intent, and abuses the dignity of injured workers.
6. It is the intent of the Legislature in enacting this subdivision to abrogate the decision in City of Jackson and to affirm prior administrative and judicial decisions, including Rice, prohibiting apportionment of disability to immutable factors.
7. It is also the intent of the Legislature that this subdivision does not prohibit apportionment of disability to specific identifiable factors.

COMMENTS

1. What is Apportionment?

Under existing law, every time a doctor prepares a report on if a claimed workplace injury is permanently disabling, the physician must determine causation AND what percentage of the injury is due to non-occupational issues, including prior workplace injuries. An injured worker’s PD award is then adjusted down by this percentage. Only a physician can determine if apportionment is appropriate and to what degree.

This makes apportionment a uniquely provocative policy. On one hand, it would be difficult to defend requiring an employer to provide PD awards for an injury that is unrelated to work or occurred at another place of employment. This is why language limiting PD awards to only cover the consequences of a workplace injury has been in law since 1917. While the current apportionment statute dates back to 2004, the idea behind it is nearly a century old.

On the other hand, determining what percentage of an injury is or is not occupational is highly dependent on the judgment of the physician. Workers’ Compensation Appeals Board (WCAB) case law provides that an apportionment finding is only valid if the physician’s medical opinion:

1) Framed in terms of reasonable medical probability;

2) Not speculative;

3) Based on pertinent facts and on an adequate examination;

4) Sets forth the reasoning in support of its conclusion; and

5) Explains how and why the apportionable factor is responsible for the disability.

(See Escobedo v. Marshalls, (2005) 70 Cal. Comp. Cases 604)

Despite this case law, sometimes physicians fail to meet these requirements when making an apportionment determination. Apportionment determinations by QMEs (Qualified Medical Evaluator) have been and remain a cause and source of litigation in workers’ compensation system.

One final note on apportionment: the apportioning of a PD award has no impact on the ability of an injured worker to receive medical care. Even in the event that a PD award is apportioned to 0%, the worker has a right to medical care if the injury arises or occurs in the course of employment (See Employers Mutual Liability Ins. Co. of Wisconsin v. Industrial Acc. Com. (Gideon) (1953) 41 Cal.2d 676 and Reyes v. Hart Plastering (2005) 70 Cal.Comp.Cases 223).

2. Rice v. City of Jackson and City of Jackson v. WCAB:

The issue of genetics, speculation, and causation crossed paths in a series of recent cases. In Rice v. City of Jackson, ADJ8701916 (2015), a Qualified Medical Evaluator (QME) evaluated an injured worker with cervical radiculopathy and cervical degenerative disc disease and apportioned a workers’ PD award by 49% due to “family history”, or the injured worker’s father’s history of hip and back issues. To support this claim, the QME cited several journal articles that suggested a correlation between spinal disc degeneration and genetics. However, none of the studies suggested ‘how’ or ‘why’ the genetic correlation could lead to causation.

Noting this, the WCAB found that ruled that apportioning on the basis of genetic predisposition was inappropriate, noted that apportioning on the basis of immutable factors is impermissible, and returned the case to the local board for a new unapportioned award of permanent disability. However, the WCAB also found that apportionment on the basis of specific, identifiable factors was still permitted.

On appeal, however, this decision was reversed. In City of Jackson v. WCAB (Rice), (2017) 11 Cal.App.5th 109, the Court found that, not only was apportionment on the basis of genetics permitted, it has been appropriately done by the QME. Specifically, City of Jackson cited three past precedents (Escobedo, Kos, and Acme Steel) to support the notion that apportionment on the basis of genetics has been present in the workers’ compensation system since 2004. After the CA Supreme Court declined to hear City of Jackson in August of last year, it became settled law.

3. How Does the City of Jackson Decision Impact Apportionment?

As noted above, if the Court of Appeals is correct, the potential impact of City of Jackson is largely minimal, as other precedential decisions have found that apportionment on the basis of genetics is appropriate. However, there are some significant issues raised by such a line of argument. These are discussed below.

Escobedo, Kos, Acme Steel and the Role of Genetics:

In City of Jackson, the Court cited 3 prior precedential decisions where apportionment had at least some genetic component: Escobedo, Kos, and Acme Steel. However, as has at least one legal scholar has pointed out, all three cases have one significant factor in common: diagnostic tests that ruled out every other factor except non-occupational (and likely genetic) factors.

For example, in Acme Steel v. WCAB (2013) 218 Cal.App.4th 1137, the Court for apportionment of a worker’s PD award for hearing loss due to genetic deterioration of the cochlea, but was able to establish the non-industrial portion of the hearing loss through diagnostic tests which showed low frequency hearing loss that is not associated with hearing loss due to repetitive noise. Similarly, in Kos v. Workers’ Comp.Appeals Bd (2008) 73 Cal.Comp.Cases 529 and Escobedo v Marshalls (2005) 70 Cal.Comp.Cases 604, an MRI and an MRI with X-Rays, respectively, were able to establish grounds for specific, individualized apportionment to genetic factors.

It is also illustrative to compare City of Jackson to a similar ruling made by the same Court: United Airlines v. WCAB (Milivojevich) (2007) 72 Cal.Comp Cases 1415. In Milivojevich, a QME apportioned 40% of the injured worker’s PD from an industrially-caused stroke to high blood pressure. The Court, however, ruled that this was apportioning to a risk factor for injury, rather than the actual disability, and was not permitted. Like high cholesterol, disc degeneration may or may not lead to disability. Like disc degeneration, high cholesterol has a genetic component. Additionally, like high cholesterol and strokes, there appears to be a correlation between disc degeneration and genetics. These are similar cases, and external observers would be forgiven for expecting similar rulings.

Yet, in City of Jackson, the Court sanctioned apportionment on the basis of correlation and risk factors. While the QME cited several studies which suggested a high correlation between genetics and spinal disc degeneration, none of these studies showed causation, as required by the statute (and Milivojevich), in showing how genetics caused disability in the case of this specific injured worker. The statute calls for causation; correlation is not causation. And yet City of Jackson treats them as if they are one and the same.

City of Jackson and the Special Role of Genetics in Disability Causation:

More troublingly, the findings in City of Jackson on disability due to disc degeneration are not limited to the facts in this specific case. Rather, the Court found that they apply to all workers’ compensation cases that involve disc degeneration:

“Rice argues Dr. Blair cannot have known his degenerative disc disease was caused by genetics because she never researched his familial medical history. It was unnecessary for Dr. Blair to conduct such an analysis because her research indicated that genetics or heredity was a majority factor in all cases of degenerative disc disease. This explains Dr. Blair’s response to Rice’s attorney’s request that Dr. Blair consider a hypothetical in which one patient has cervical degenerative disease caused by genetics and the other one has the disease caused by environmental factors. She responded that such a hypothetical situation would never be seen in practice and that the assumption was not reasonable.”

(Emphasis added)

This conclusion, however, goes far beyond what has been established by the research. For example, QME cites a study by Stitzlein, et al. in “The Role of Genetics in Degenerative Disc Disease” (Spineline, July/August 2012, 20-25), but study explicitly states that:

“While much progress has been made in understanding the process of disc degeneration, the etiology remains elusive. A complex set of factors, including environmental and genetic, appear to cause degenerative disc disease. While one’s genetic makeup may not lead directly to degenerative disc disease, it certainly may facilitate disc degeneration by weakening the disc or impairing its ability to heal.” (Emphasis added)

If the role of genetics in disc degeneration is in weakening the disc or impairing its ability to heal, then non-genetics sudden loom large: even with individuals with the same genetic makeup, workplace variability could have a significant impact on the ability of an injured worker’s discs to heal or even to be injured in the first place. These are factors that may determine the ‘how’ and ‘why’ of an injury is disabling: in short, apportionment causation. This ambiguity in the medical literature is not reflected in the City of Jackson, opening the door to automatic apportionment decisions that impact an entire group of injured workers that cannot be supported by the cited medical literature.

City of Jackson, Hidden Bias, and Apportionment by Genotype

In short, City of Jackson opens up apportionment of all injured workers’ PD benefits to correlation, vague conceptual arguments surrounding genetics, and imprecise appeals to the authority of medical journals. City of Jackson opens the door to apportionment not on the basis on individual circumstances, but rather to membership of an ill-defined genotype. It asks California to set aside its statute calling for apportionment on the basis of causation and instead trust in the impartial knowledge of a QME as he or she weighs in on genetics and the individual, as well as genetics of the entire spectrum of workers who suffer from the same or similar disability.

Yet, this places an extraordinary burden on QMEs and the entire workers’ compensation system. Is it the role of QMEs to ensure that medical studies are free from implicit bias and appropriately control for all of the various factors that go into genetics and inheritability, including race, gender, religion, and class? If a QME is later found to have had animus towards a specific religion or race, can we trust his or her research reviews on genetics, etiology, and disability? Or would we need to review open claims to ensure that the injured worker had not been a victim of a hidden bias?

Are we comfortable with apportionment by broad cross-section, rather than individual characteristics? If City of Jackson holds that all injured workers with disc degeneration should have their PD benefits reduced through apportionment, are we comfortable apportioning all African Americans with hypertension? What about diabetes in Latinos? And how should the workers’ compensation address epigenetics, or changes in our genetics due to environment? Would it be appropriate to apportion the PD benefits of children or grandchildren of Holocaust survivors due to the possibility of epigenetic impacts?

These are questions that we did not need to ask prior to the City of Jackson decision, but now loom large.

4. SB 899 and City of Jackson:

SB 899 would strike the Court’s decision in City of Jackson and return the law to its original path. Specifically, SB 899 would make findings and declarations on the impact of City of Jackson on permanently injured workers. Finally, SB 899 would prohibit apportionment of disability on the basis of immutable characteristics, but it would allow for apportionment on the basis of individual, identifiable characteristics, as permitted in Rice.

5. Technical Amendments:

At the request of the current author, authorship will be transferred to the new chair of the Labor Committee, Senator Pan.

6. Double Referral:

This bill has been double referred and, if approved by this committee, it will be sent to the Senate Appropriations Committee for hearing.

7. Proponent Arguments:

The Los Angeles County Professional Peace Officers Association writes in support of SB 899, arguing:

“The Los Angeles County Professional Peace Officers Association is in strong support of SB 899… to abrogate the Appellate Court decision in City of Jackson v. Workers’ Compensation Appeals Board, which found that the law governing apportionment of disability permits the determination of causation to include “ heritability and genetics”.

The recent decision from the Court of Appeals in City of Jackson v. Workers’ Compensation Appeals Board… has justifiably engendered a wide spread controversy in the workers; compensation community… The City of Jackson decision is an abhorrent decision that violates legal norms, undermines legislative intent, and abuses the dignity of injured workers. We strongly support SB 899 to abrogate the decision in City of Jackson.”

8. Opponent Arguments:

None on file.

9. Prior Legislation:

SB 899 (Poochigian), Chapter 34, Statutes of 2004, created, among other things, the current process of apportionment.

SUPPORT

Los Angeles County Professional Peace Officers Association

OPPOSITION

None on file.

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