California: Labor Code Section 4663(c) Revisited: When Is a Physician’s Apportionment Determination Substantial Evidence?

By Hon. Susan V. Hamilton, Former Assistant Secretary and Deputy Commissioner, California Workers’ Compensation Appeals Board

Nearly two decades ago Senate Bill 899 was enacted and ushered in a new apportionment scheme making the employer liable only for the percentage of permanent disability directly caused by the industrial injury (Lab. Code § 4664(a)). To effectuate that statutory mandate, the physician who prepares a report that addresses permanent disability is required to address the cause(s) of the permanent disability by making an apportionment determination. The contours of an apportionment determination are spelled out in Lab. Code § 4663(c) as follows:

In order for a physician’s report to be considered complete on the issue of permanent disability, the report must include an apportionment determination.  A physician shall make an apportionment determination by finding what approximate percentage of the permanent disability was caused by the direct result of an injury arising out and occurring in the course of employment and what approximate percentage of the permanent disability was caused by other factors both before and subsequent to the industrial injury, including prior industrial injuries.  If the physician is unable to include an apportionment determination in his or her report, the physician shall state the specific reasons why the physician could not make a determination of the effect of that prior condition on the permanent disability arising from the injury.  The physician shall then consult with other physicians or refer the employee to another physician from whom the employee is authorized to seek treatment or evaluation in accordance with this division in order to make the final determination.

While the language of Lab. Code § 4663(c) is unambiguous, whether a physician’s report constitutes substantial evidence on the issue of apportionment continues to flummox practitioners and judges. A recent Appeals Board panel decision is instructive on the precise requirements of that subsection. The case is Vizcarra v. Master Toys and Novelties (ADJ 7810002, ADJ7982917, November 21, 2023).

The Facts

Applicant, a warehouse manager, sustained a specific industrial injury to his lumbar spine as well as a cumulative industrial injury to his cervical spine, lumbar spine, right shoulder, left shoulder, bilateral wrists, left knee, psyche, and internal system. The parties selected Dr. Thomas Fell, M.D. as the agreed medical evaluator (AME) in orthopedics. Dr. Gregory Cohen, M.D. was the psychiatric qualified medical evaluator (QME), and Dr. Stanley Majcher, M.D. was the internal medicine QME. The physicians each evaluated applicant, reviewed medical records, and authored medical-legal reports addressing applicant’s level of permanent impairment resulting from the two injuries.

A trial was first held on April 20, 2022. The parties submitted evidence in the form of reports from applicant’s treating physician and medical-legal reporting from the AME and QMEs. Vocational evidence was also submitted. The disputed issues included permanent disability, apportionment, and attorney fees. The case was submitted for decision at the conclusion of the trial.

On June 9, 2022, the WCJ issued two separate findings and awards for each date of injury. Applicant timely petitioned for reconsideration, arguing in the alternative that applicant was either entitled to an un-apportioned award of 100% permanent disability based on Ogilvie v. Workers’ Comp. Appeals Bd. (2011) 197 Cal. App. 4th 1262, 76 Cal. Comp. Cases 624 (due to industrial injury employee not amenable to vocational rehabilitation) or a combined award of 76% permanent disability. Defendant’s answer to the petition for reconsideration asserted that applicant failed to rebut the permanent disability rating schedule because the opinions of Dr. Cohen and Dr. Majcher were not substantial evidence.

The WCJ then issued an order and opinion vacating the Findings and Awards and ordered further development of the record. The WCJ authored letters to Dr. Cohen and Dr. Majcher requesting that each provide further explanation as to why permanent disability could not be apportioned between applicant’s specific injury and his cumulative injury.

Both Dr. Cohen and Dr. Majcher issued supplemental reports in response to the WCJ’s request. Further proceedings were held, at which time the supplemental reports from both physicians were admitted into evidence. Dr. Cohen explained that his review of applicant’s medical records did not identify any differences in psychiatric symptoms and dysfunction that could be attributed solely to the cumulative injury or solely to the specific injury. Then, after further review of the entire medical record, Dr. Cohen stated that there was insufficient evidence to enable him with any degree of reasonable medical probability to apportion permanent psychiatric impairment between applicant’s specific and cumulative injuries.

Similarly, in his supplemental report Dr. Majcher advised the WCJ that his review of the entire medical record did include numerous references from orthopedists regarding symptoms of pain and stress and the use of non-steroidal anti-inflammatory medications, but there was no specificity as to which injury was implicated. Dr. Majcher also informed the WCJ that he had consulted with a colleague (Dr. Tirmizi), who similarly was unable to find a basis to apportion impairment between the respective injuries. Thus, Dr. Majcher concluded that there was insufficient information for him to attempt to parcel out levels of permanent disability as between the two distinct injuries because they were inextricably intertwined.

Following the trial, the WCJ issued an order vacating submission and ordering further development of the record per Lab. Code § 4663(c). Specifically, the WCJ instructed the parties that because Dr. Cohen and Dr. Majcher were unable to make an apportionment determination, they were required to either consult with another physician to make such determination or refer applicant to another physician to obtain an apportionment determination. She did not find Dr. Majcher’s reference to his consultation with Dr. Tirmizi to satisfy the requirements of Lab. Code § 4663(c).

Applicant filed a petition for removal from the WCJ’s order.

The Panel’s Analysis

Most petitions for removal are summarily denied by the Appeals Board, but in this case the unanimous panel found the circumstances so compelling as to justify the exercise of the extraordinary remedy of removal.

At the outset, the panel states its agreement with applicant’s assertion that the apportionment analyses provided by Dr. Cohen and Dr. Majcher satisfy the requirements of Lab. Code § 4663, obviating the need for further development of the record. In so doing, the panel implicitly rejects the WCJ’s conclusion that the wording of subsection (c) of the statute requires the evaluating physician to consult with or refer the applicant to another physician to make the apportionment determination. The panel decision could have stopped here, but it did not do so. Instead, the decision reviews each component of Lab. Code § 4663 and concedes that a physician is required to make an apportionment determination by finding what approximate percentage of the permanent disability was caused by the direct result of the industrial injury and what approximate percentage was caused by other factors, both before and after the industrial injury, including prior industrial injuries. It summarizes these statutory requirements by acknowledging that an apportionment determination is required for each distinct industrial injury causing permanent disability regardless of when the permanent disability or the injuries themselves occurred.

Next it turns to the Court of Appeals’ decision in Benson v. Workers’ Comp. Appeals Bd. (2009) 170 Cal. App. 4th 1535, 74 Cal. Comp. Cases 113, and specifically highlights the court’s discussion regarding those limited circumstances when the evaluating physician cannot, with reasonable medical probability, parcel out the approximate percentages to which each distinct industrial injury causally contributed to the employee’s overall permanent disability. In those circumstances, the appellate court acknowledged that the employer has failed to meet its burden of proof of apportionment and a combined award of permanent disability may be justified. (Benson, supra, 170 Cal. App. 4th at p. 132).

The panel decision then applies the “Benson exception”, noted above. It points out that the reports of Dr. Cohen and Dr. Majcher in response to the WCJ’s request for a more detailed explanation of apportionment as between applicant’s two industrial injuries, each provide a reasonable explanation for their inability to make such a determination because the applicant’s injuries are inextricably intertwined. That conclusion, the panel decision emphasizes, is a valid apportionment determination under Lab. Code § 4663(c), citing Nunes v. State of California Dept. of Motor Vehicles (2023) 88 Cal. Comp. Cases 741 (Appeals Bd. en banc). Since the apportionment determinations made by Dr. Cohen and Dr. Majcher satisfy the requirements of Lab. Code § 4663(c), defendant failed to carry its burden of proof of apportionment, and the panel returned the case to the WCJ to issue a decision.

Takeaways

It is true that this decision is simply a panel decision, and as such, is not binding precedent. Nonetheless, it is significant and should serve to remind practitioners of the “Benson exception,” and those circumstances to which it may apply. Benson remains controlling and persuasive authority, not only as to the required components of an evaluating physician’s apportionment determination, but also as acknowledgment that a physician’s detailed explanation of the factors that make such an assessment speculative and not within reasonable medical probability, is a valid apportionment determination standing alone, without the necessity of consultation with or referral to another physician.

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