IR #2004-14
Monday, November 17, 2004

Dean Fryer
Susan Gard

Division of Workers' Compensation posts proposed permanent disability rating schedule on line for public comment

SAN FRANCISCO - The California Department of Industrial Relations, Division of Workers' Compensation (DWC) today posted the first draft of its permanent disability rating schedule (PDRS) emergency regulations on the Internet. The rating schedule is posted at, click on Division of Workers' Compensation forum. Comments will be accepted on the forum through Monday, Nov. 29, 2004.

"The Legislature earlier this year overwhelmingly passed workers' compensation reforms to fix a system in which costs were out of control," said DWC Administrative Director Andrea Hoch. "For the first time, California's disability rating system will be based on objective medical conditions instead of subjective factors and work restrictions, which will result in cost savings. This new schedule represents a fundamental shift in the way disabilities are rated and promotes consistency, uniformity and objectivity."

Permanent disability benefits are paid to injured workers who will never recover completely from their injury and will always be somewhat limited in their ability to work. Before those benefits can be paid, a worker's level of disability must be rated.

Once a worker's injury is well stabilized and unlikely to change substantially, the worker's level of disability can be assessed. Under the proposed regulations, a medical evaluator first rates the worker's impairment based on American Medical Association (AMA) guides. Then the impairment ratings are consolidated by body part and converted to a whole person impairment rating referred to as impairment standard. The impairment standard is then adjusted to account for the worker's diminished future earning capacity - a completely new factor - occupation, and age at the time of injury to obtain a final permanent disability rating.

A disability rating can range from zero to 100 percent. Ratings of 100 percent are very rare. A rating of between one and 99 percent means a worker has a permanent partial disability. Each rating corresponds to a fixed number of weeks of compensation, and compensation rates are set by law.

"Comparing what an injured worker might have received under California's current disability rating system to what they will receive under the new schedule is difficult because of the difference in factors that could be considered under the two schedules," said Hoch. "The current system bases ratings on subjective factors and work restrictions, therefore ratings can vary dramatically for the same injury. The new schedule rates injuries based on objective medical standards."

The proposed schedule is consistent with the language of SB 899: It is based on AMA impairment ratings and a diminished future earning capacity adjustment taken from empirical wage loss data provided by the RAND Institute for Civil Justice, December 2003 interim report.

"The proposed schedule provides increased permanent disability ratings for more serious work-related injuries, which will be measured by a higher AMA impairment rating, and lower ratings for the least serious work-related injuries," said Hoch. "Once this system is in place, the division is committed to gathering data on actual wage losses suffered by injured workers and making appropriate adjustments to the schedule when necessary."

The proposed PDRS regulations have been provided to a diverse advisory group that includes employer, labor and insurer representatives for comment - the same process used to develop the medical provider network (MPN) regulations.

The DWC will review forum comments on the PDRS and plans to post an updated version of the schedule. The PDRS emergency regulations will be sent to the Office of Administrative Law for approval in December in anticipation of the effective date of Jan. 1, 2005.

For more information on SB 899, workers' compensation reforms passed in April, visit the DWC Web site at