Hikida: A Seismic Change in Medical Treatment and Apportionment of Permanent Disability

The dilemma of determining apportionment of permanent disability arising directly from employer furnished medical treatment necessitated by both preexisting industrial and nonindustrial causes and conditions.

In a decision certified for publication, the Court of Appeal in Hikida v Workers’ Comp. Appeals Bd., (2017) 12 Cal.App.5th 1249, held that an employer is entirely responsible for both medical treatment and permanent disability arising “directly” from unsuccessful medical intervention without apportionment even in situations where the need for the surgery or medical treatment was necessitated by both preexisting industrial and nonindustrial factors or conditions. The Courts holding is a radical departure from prior case law and is arguably inconsistent with the California Supreme Court’s decision in Brodie v Workers’ Comp. Appeals Bd., (2007) 40 Cal.4th 1313, holding there is a valid legal basis for apportionment under Labor Code sections 4663 and 4664 when permanent disability is attributable to aggravation and compensable consequence factual and medical scenarios.

Factual and Procedural Overview and Discussion: Applicant was a long-term employee. The WCJ found she suffered a number of industrial injuries and conditions including cervical spine, thoracic spine, upper extremities, carpal tunnel syndrome, psyche, fingers, elbows, headaches, memory loss, sleep disorder and deconditioning.  In May of 2010, applicant stopped working and had carpal tunnel surgery. Due to a bad surgical outcome, she developed chronic regional pain syndrome (CRPS).  The CRPS caused applicant debilitating pain in her upper extremities and severely impaired her ability to function. She never returned to work and became permanent and stationary in May of 2013.

One of the reporting physicians was an AME in Orthopedics. The AME indicated that with respect to the applicant’s carpal tunnel syndrome, the permanent disability was 90% industrial and 10% nonindustrial. However, he also found applicant’s permanent disability was due entirely to the effects of the CRPS applicant developed as a result of the failed carpal tunnel surgery. He determined applicant was permanently totally disabled.

After the first trial, the WCJ found applicant’s permanent disability was 90% industrial and 10% nonindustrial. Applicant filed a petition for reconsideration. In a split panel decision, the WCAB affirmed the WCJ’s apportionment of 90% industrial and 10% nonindustrial. In doing so, the WCAB reasoned there was a basis for nonindustrial apportionment because the CRPS was caused by the surgery to treat applicant’s industrial carpal tunnel syndrome which itself was 10% nonindustrial. In affirming the WCJ’s apportionment determination the WCAB cited the California Supreme Court's decision in Brodie. However, based on other grounds, the WCAB remanded the case for further development of the record related to psychiatric permanent disability. Following remand, the WCJ issued another decision finding applicant 98% permanently disabled but still apportioned applicant’s orthopedic disability related to the carpal tunnel syndrome and resulting surgery to 90% industrial and 10% nonindustrial. Applicant filed a second petition for reconsideration on a number of grounds asking the Board to revisit and reconsider the appropriateness of apportionment. Once again the WCAB in a split panel decision denied reconsideration finding 10% nonindustrial apportionment valid.  Applicant filed a writ with the Court of Appeal.

Procedural Issue: Defendant argued that applicant’s writ was untimely since applicant did not file a writ within 45 days of the WCAB’s initial February 8, 2016 opinion which defendant characterized as a “final decision.” However, the Court ruled the WCAB’s initial decision on apportionment was not final and did not involve a threshold issue that would have necessitated the filing of an immediate writ. “The fact that an issue is significant or important to the litigation is not sufficient to support a finding that it is a threshold issue.”  The Court held that the WCAB’s February 8, 2016 decision was not a final order disposing of the case especially as it related to apportionment or other issues.

The Apportionment Issue: In Hikida the court initially discussed the significant changes in the law of apportionment engendered by SB 899 and Labor Code section 4663 as discussed by the California Supreme Court in Brodie. The court noted that both Labor Code sections 4663 and 4664 eliminated the bar against apportionment based on pathology and asymptomatic conditions ushering in a new regime of apportionment based on causation. However, the court did not discuss in detail or at length that both Labor Code sections 4663 and 4664 allow for apportionment where an industrial injury aggravates, accelerates or lights up an underlying disease process, condition, or injury. The court ruled that applicant’s permanent total disability was not caused by her carpal tunnel syndrome but by the CRPS that was caused by the medical treatment the employer provided. The court framed the issue as “….whether an employer is responsible for both the medical treatment and disability arising directly from unsuccessful medical intervention, without apportionment.” They concluded the employer was responsible for both the medical treatment and the permanent disability in such a situation. The important caveat was the resulting permanent disability had to arise directly from the unsuccessful medical intervention.

The court indicated that when there is an aggravation of an industrial injury by medical treatment, it is a foreseeable consequence of the original compensable injury. Accordingly, “….an employee is entitled to compensation for a new or aggravated injury which results from the medical or surgical treatment of an industrial injury, whether the doctor was furnished by the employer, his insurance carrier, or was selected by the employee.”  The court construed Labor Code sections 4663 and 4664 by stating “…the Legislature did not intend to transform the law requiring employers to pay for all medical treatment caused by an industrial injury including the foreseeable consequences of such medical treatment.” The court stated: “Nothing in the 2004 legislation had any impact on the reasoning that has long supported the employer's responsibility to compensate for medical treatment and the consequences of medical treatment without apportionment.”

Commentary:  There is no dispute an applicant is entitled to compensation for a new or aggravated injury which results from the medical or surgical treatment of an industrial injury (South Coast Framing, Inc. v. WCAB (2015) 61 Cal.4th 291, 300).  It is undisputed that reasonable medical treatment costs related to an industrial injury are also not subject to apportionment based on contributing industrial and nonindustrial causal factors, even if the need for medical treatment is partially caused by the industrial injury.  The employer must pay for all of the injured worker’s reasonable medical treatment (Granado v. WCAB) (1968) 69 Cal.2d 399).  There is also no apportionment of temporary disability indemnity between industrial and nonindustrial causes.  (California Ins. Guarantee Assn. v. WCAB (Hernandez) (2007) 153 Cal.App.4th 524.  Both medical treatment and temporary disability are nonpermanent disability benefits.  In contrast, permanent disability benefits must be apportioned in accordance with the medical evidence and Labor Code sections 4663 and 4664.

In Hikida due to the unsuccessful carpal tunnel syndrome surgery, applicant’s industrial carpal tunnel syndrome was aggravated to the extent it evolved into a much more serious and disabling condition, chronic regional pain syndrome (CRPS).  With respect to the Court of Appeals “aggravation” analysis, prior to SB 899 and the enactment of Labor Code §§4663 and 4664 in 2004, there was no basis for apportionment where an industrial injury aggravated or accelerated an underlying disease process or industrial injury.  (Brodie v. WCAB 2007) 40 Cal.4th 1313).  The question is whether any resulting increase in permanent disability based on an “aggravation” due to the failed carpal tunnel surgery causing CRPS is subject to apportionment under Labor Code §§4663 and 4664 which in the Supreme Court’s decision in Brodie “were intended to reverse these features of former §§4663 and 4750” baring apportionment related to aggravation and acceleration. (Brodie v. WCAB (2007) 40 Cal.4th 1313, 1327).

The Hikida court’s “novel” interpretation and construction of Labor Code §§4663 and 4664 seemingly negates any basis for apportionment of permanent disability directly and wholly attributable to the CRPS that developed as a result of the unsuccessful carpal tunnel surgery.  The court’s holding appears to be at odds with the Supreme Court’s decision in Brodie construing Labor Code sections 4663 and 4664 as well as other cases finding a basis for valid legal apportionment in compensable consequence injury and aggravation scenarios even in unsuccessful surgery cases. Based on the medical evidence in Hikida, it is difficult to comprehend that all of applicant’s permanent disability is “directly and wholly” attributable to the CRPS, since the carpal tunnel surgery itself was not successful.  Applicant’s carpal tunnel syndrome was not cured or relieved by the surgery and consequently it would appear to be either a factor or component of the CRPS with any resulting permanent disability attributable to both the CRPS and carpal tunnel syndrome.  Since the carpal tunnel syndrome itself was 10% nonindustrial, then arguably some portion of the resultant CRPS should also be nonindustrial.

In Costa v WCAB (2011) 76 Cal.Comp.Cases 261 (writ denied) Applicant suffered a specific lumbar spine injury.  MRI diagnostic testing done shortly after the injury confirmed the existence of nonindustrial severe asymptomatic congenital lumbar spinal stenosis. Applicant’s condition gradually worsened resulting in lumbar decompression surgery at multiple levels. There were serious adverse complications directly attributable to the surgery resulting in applicant being paralyzed from the waist down, complete loss of bowel and bladder control as well as impotence. Following surgery he was also diagnosed with cauda equina syndrome requiring emergency surgery.  Both the applicant’s treating physician and the QME in neurology found applicant to be 100% PTD, but also determined 20% of applicant’s permanent disability was attributable to the preexisting nonindustrial asymptomatic congenital lumbar spinal stenosis.

In Costa, even though the lumbar surgery increased applicant’s permanent disability, the WCAB and the Court of Appeal found a basis for valid legal apportionment of 20% since even taking into consideration the failed back surgery, the underlying nonindustrial congenital spinal stenosis made applicant’s permanent disability more severe or worse than it would have been in the absence of the nonindustrial condition. It is also difficult to understand how the Hikida holding would change the result or analysis on Costa and similar cases where a diagnostically confirmed nonindustrial factor is a contributing causal factor of the increased permanent disability even after an unsuccessful surgery.

In Hikida both applicant and amicus curiae, California Applicant’s Attorneys Association (CAAA) cited and argued to the Court of Appeal a number of cases including Steinkamp v. City of Concord (2006) 71 Cal.Comp.Cases 1203 (writ denied) to support their argument there should not be any nonindustrial apportionment even where the need for the surgery in question was itself necessitated by both industrial and nonindustrial factors. However, it appears applicant, CAAA and defendant failed to cite, discuss or distinguish a veritable legion of cases subsequent to Steinkamp where valid nonindustrial apportionment was found where the resultant surgery and permanent disability was caused by both industrial and nonindustrial factors.  (see, Gunter v. WCAB (2008) 73 Cal.Comp.Cases 1699 (writ denied), Malcom v. WCAB (2008) 73 Cal Comp.Cases 1710 (writ denied), Williams v. WCAB (2009) 74 Cal.Comp.Cases 88, at 94, Campos v. The Vons Companies 2010 Cal.Wrk.Comp.P.D. LEXIS 402, Shadoan v. San Diego Community College 2015 Cal.Wrk.Comp.P.D. LEXIS 448, Gallegos v. Groth Brothers Chevrolet 2016 Cal.Wrk.Comp. P.D. LEXIS 455 (WCAB panel decision) (50% valid apportionment in a knee replacement case is indicated “where the medical evidence establishes the preexisting condition results in the need for surgery.” but cf., Burbank Unified School District v WCAB (Kline) (2016) 82 Cal.Comp.Cases 98 (writ denied) (reporting physician’s opinion on apportionment in a knee replacement case did not constitute substantial medical evidence since inadequate explanation of apportionment opinion based on Gatten.

© Copyright 2017 Raymond F. Correio, Esq. All rights reserved. Reprinted with permission.