Section V

The Commission's Joint Responsibilities with

the Division of Workers' Compensation


The workers' compensation reform legislation modified the California Labor Code to require that certain actions be taken both by the Commission on Health and Safety and Workers' Compensation and by the Division of Workers' Compensation (DWC).

Permanent Disability Rating Schedule Revision

California employs a permanent disability rating schedule (PDRS) which prescribes the monetary amount an injured worker is to be compensated for specified percentages of permanent impairment incurred due to industrial injury or occupational disease.

California Labor Code Section 4660(d) specifies: "On or before January 1, 1995, the administrative director shall review and revise the schedule for the determination of the percentage of permanent disabilities. The revision shall include, but not be limited to, an updating of the standard disability ratings and occupations to reflect the current labor market. However, no change in standard disability ratings shall be adopted without the approval of the Commission of Health and Safety and Workers' Compensation. A proposed revision shall be submitted to the commission on or before July 1, 1994."

At the first meeting of the Commission on July 28, 1994, the administrative director of DWC made a presentation regarding the permanent disability rating schedule and the responsibilities of the Commission and the DWC.

The administrative director stated that the permanent disability rating schedule was the most significant area where the responsibilities of the Commission and the Division cross. He explained that the PDRS determines the percentage of disability for a particular impairment, with adjustments for age and occupation. The PDRS was originally adopted in 1914, with a major revision in 1950 and a minor revision in the 1970's, but it has been basically the same for seventy years.

DWC has contracted with the California State University at San Diego to draft a revision of the PDRS. DWC has also established a committee composed of disability evaluators from the DWC Disability Evaluation Unit to focus on the revision of the schedule, with emphasis on upper extremities, lower extremities, visual impairment, and sensitivity restrictions (sunlight, for example). Sharon Collins, the head of that committee, reviewed sample ratings, showing how differences in ages and occupations will yield differing percentage disability ratings for the same impairment.

The administrative director stated that when DWC formulates the draft revision of the Permanent Disability Rating Schedule, it will be presented to the Commission for review and approval and then will go to public hearing.

During the October 14, 1994 Commission meeting, the administrative director reported on the status of the PDRS revision. He stated that the deadline of January 1, 1995 for completion of the revision would be missed, but that DWC staff have completed basic components of the revision.

Blair Megowan, manager of the Disability Evaluation Unit (DEU), discussed the four goals of the PDRS revision project:

* Update the occupational titles and the standards as required by the statute.

* Take advantage of this historical opportunity to improve the PDRS, which was last revised in the 1940's and 1950's. The project staff wanted to improve its predictability so that different people using the schedule would end up with the same answers for the same types of disability.

* Simplify the PDRS where possible and reduce unnecessary complexity.

* Keep changes cost neutral and benefit neutral.

The administrative director stated that the PDRS revision must be finalized and that a determination of the cost impact needs to be done before DWC is ready to present the new schedule to the Commission for approval. He informed the Commission that DWC will also conduct an evaluation of the effects of the schedule revision, which is anticipated to take anywhere from 2 to 4 months.

At the June 8, 1995 Commission meeting, the administrative director reported that there was a delay in the assessment of the impact of the proposed PDRS. This was due to problems in pulling a sample of cases to rate using both the current and proposed Permanent Disability Rating Schedules. The administrative director estimated that DWC would have the results of such comparative ratings by August 1995 and could complete the regulatory hearing process and finalize the proposed PDRS by the end of 1995. The Permanent Disability Rating Schedule must be approved by the Commission before it may be adopted.

Commission staff will continue to monitor the progress of the Division of Workers' Compensation's project to revise the Permanent Disability Rating Schedule.

Medical Evaluation Conflict of Interest Regulations

The Industrial Medical Council of the Department of Industrial Relations appoints physicians and certain other health care providers to serve as Qualified Medical Evaluators (QME). An injured worker has the right to request a formal medical evaluation from a QME if there is a dispute regarding the employer's determination of the extent of the injured worker's permanent impairment or other medical issues.

California Labor Code Section 139.2(o) specifies that a Qualified Medical Evaluator "may not request or accept any compensation or any other thing of value from any source that does or could create a conflict with his or her duties as an evaluator under this code." Section 139.2(o) further provides that the administrative director of the Division of Workers' Compensation shall adopt regulations to implement this subsection on or before July 1, 1994 after consultation with the Industrial Medical Council and the Commission on Health and Safety and Workers' Compensation.

The administrative director reported to the Commission that he was not entirely clear on the legislative intent of this requirement. He stated that he had attempted to place a proposal in the medical/legal fee schedule regulations to the effect that medical evaluators cannot have too much business with either side, applicant or defense. However, from the testimony at the hearing on those proposed regulations, the administrative director was convinced that such an approach was impractical.

The administrative director said he was able to implement Title 8, California Code of Regulations Section 9794(f) which provides that medical evaluators who violate the ban on self-referrals in the evaluation process cannot be paid.

The administrative director announced that he was not going to go forward with any other proposed regulations unless he received some guidance regarding what was required to fulfill the L.C. [[section]]139.2(o) mandate.

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