FOR IMMEDIATE RELEASE
IR #2009-07
March 26, 2009

CONTACT:
Dean Fryer
415-703-5050

Internet: www.dir.ca.gov


Fund Administrator calls for reversal of WCAB En Banc Decisions

San Francisco—March 26—In a letter sent today to the Workers’ Compensation Appeals Board, John C. Duncan, Administrator of the Uninsured Employers Benefits Trust Fund and the Subsequent Injuries Benefits Trust Fund requested Chairman Miller and the Commissioners to vacate their decisions in recent en banc decisions.

Duncan requested the commissioners to vacate their two en banc decisions because these cases unduly expand the extent by which the 2005 Permanent Disability Rating Schedule can be rebutted given the express language of legislation that mandates the use of the American Medical Association’s (AMA) Guides and the RAND formula regarding the loss of future earnings capacity

The Board’s two en banc decisions include 1) the combined decision in Almaraz v. Environmental Recovery Services aka Enviroserve and State Compensation Insurance Fund; Guzman v. Milpitas Unified School District, Permissibly Self-Insured; Keenan & Associates and 2) Ogilvie v. City and County of San Francisco, Permissibly Self-Insured.

In his letter Duncan stated “I hereby request that you vacate the decisions on your own motion because, among other reasons, the announced rebuttal criteria discussed in Almaraz and Guzman are unclear and the lack of clarity is having far-reaching, system-wide effects.” 

While Duncan indicated that neither of the funds of which he is the Administrator are party in the cases, he believes that both funds are greatly affected by the recent decisions. He pointed out that the Board should consider soliciting argument from a broader range of stakeholders in the workers’ compensation system as was done in the past when the board invited amicus briefing in matters of potentially far-reaching effect.

 “These decisions already are having substantial impact both on the administration of the workers’ compensation adjudication system and on the level of workers’ compensation benefits due injured workers,” added Duncan.  “Recently, for example, the Workers’ Compensation Insurance Rating Bureau announced a large mid-term proposed premium rate increase, of which 5.8% was directly attributed to the Board decisions.”

In the Almaraz and Guzman cases, the Board held that the AMA guides portion of the 2005 Schedule is rebuttable by showing that the permanent disability (PD) rating would be inequitable, even though the legislation expressly requires that the AMA Guides are to be used by physicians.  The Board’s decision will allow physicians to use alternative methodologies for describing an injured worker’s impairment. 

In the Ogilvie case, the Board ruled that an injured worker can rebut the Diminished Future Earnings Capacity (FEC) adjustment factor of the 2005 Schedule by applying facts about their own specific wage loss to the existing range of FEC adjustment factors set forth in the Schedule.

As administrator of the Uninsured Employers Benefits Trust Fund and the Subsequent Injuries Benefits Trust Fund as well as the Workers’ Compensation Administration Revolving Fund and Ex Officio Member of the State Compensation Insurance Fund, Duncan has a duty to express his concern regarding possible adverse affects on the funds and programs that he administers. 

For a copy of the letter and the decisions visit the Dept. of Industrial Relations web site at www.dir.ca.gov.

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