A Curious Journey: Apportionment in Workers' Compensation Today
| Publication year | 2009 |
| Pages | 69 |
| Citation | Vol. 38 No. 3 Pg. 69 |
2009, March, Pg. 69. A Curious Journey: Apportionment in Workers' Compensation Today
March 2009
Vol. 38, No. 3 [Page 69]
Workers' Compensation articles provide information about topics of interest to workers' compensation practitioners and updates on Colorado case law.
Coordinating Editors
Thomas L. Kanan, Jr., Denver, of McElroy, Deutsch, Mulvaney & Carpenter, LLP, (303) 293-8800, tkanan@mdmlawco.com; Ralph Ogden, Denver, of Wilcox & Ogden, (303) 399-5005, irishcorky@aol.com
About the Author
Curt Kriksciun is a claims examiner with the Industrial Claim Appeals Office (Panel). Nothing in this article should be interpreted as an official pronouncement of the Panel, as legal advice applicable to a specific claim, or as anything other than the author's personal interpretation.
When and how to apportion workers' compensation benefits historically has been a contentious and sometimes unsettled issue. This article surveys the law of apportionment in the workers' compensation system and discusses the possible effect of the most recent development in the area, the passage of Senate Bill 08-241.
In Waddell v. Industrial Claim Appeals Office,(fn1) Judge Briggs, then sitting on the Colorado Court of Appeals, reluctantly concurred in a majority opinion affirming the apportionment of permanent total disability benefits. He wrote separately to "voice [his] distress with the undue personal toll being exacted from permanently and totally disabled workers" and to urge the Colorado Supreme Court to revisit the law of apportionment. Judge Briggs set forth the legal developments that had compelled him to affirm the apportionment of benefits, a history he called "a curious journey."
Ten years after Judge Briggs's concurrence in Waddell, apportionment of compensation and benefits remains a difficult and controversial issue in the workers' compensation system. The most recent development is the passage of Senate Bill (S.B.) 08-241, which became effective on July 1, 2008, and which significantly amended CRS § 8-42-104, the statute governing the "effect of previous injury or compensation." S.B. 08-241 amended the statute with respect to the apportionment of both permanent partial and permanent total disability benefits.
Perhaps more important, S.B. 08-241 also legislatively overruled a line of cases decided by the court of appeals authorizing the apportionment of temporary disability benefits and medical benefits. The basis for this form of apportionment is the allocation of causes of the disability or need for treatment, and it potentially reduces the claimant's benefits to only a percentage of temporary disability benefits or the cost of medical treatment.
This article provides a brief overview of the forms of apportionment in workers' compensation claims, and examines their present status. It also discusses the active area of the law of apportionment, the apportionment of both compensation and benefits based on concurrent causes of the disability or need for medical treatment. Like the historical developments described by Judge Briggs, the road to the "apportionment of causes" is in some ways just as curious a journey.
Every Colorado employer is required by the Workers' Compensation Act (Act) to insure its employees against the risk of work-related injuries and diseases.(fn2) When an employee sustains a compensable injury or contracts a compensable occupational disease, the Act requires the payment of medical benefits to cure and relieve the compensable condition. In appropriate cases, it also requires payment of temporary disability benefits and permanent disability benefits.
Temporary total disability benefits are payable where: (1) the injury or occupational disease causes disability; (2) the injured employee leaves work as a result of the injury; and (3) the temporary disability is total and lasts more than three working days.(fn3) Temporary disability benefits also may be partial. Depending on the wage loss and whether total or partial, the benefits are paid during the pendency of the injured worker's temporary disability. Temporary total disability benefits are paid at a rate equal to two-thirds of the claimant's average weekly wage.(fn4)
Permanent disability benefits are payable following the claimant's attainment of maximum medical improvement, which is defined in the Act as the point at which "any medically determinable physical or mental impairment as a result of injury has become stable and when no further treatment is reasonably expected to improve the condition."(fn5) At the point of maximum medical improvement, any temporary disability has ended and the issue of permanent disability is ripe for determination. Permanent disability may be partial or, if the "employee is unable to earn any wages in the same or other employment," he or she may be entitled to permanent total disability benefits.(fn6)
Permanent total disability benefits are paid for the remainder of the injured worker's life at a rate equal to two-thirds of the average weekly wage. Permanent partial disability benefits are based on the permanent medical impairment caused by the compensable injury. Permanent partial disability benefits are calculated by the use of one of two statutory formulas, depending on the body part injured.(fn7)
Any form of compensation or benefits is, theoretically at least, subject to apportionment.(fn8) The Act provides for certain other benefits, such as disfigurement benefits and dependents' benefits, both of which might theoretically be apportioned in an appropriate claim. In any event, medical benefits, temporary disability benefits, and permanent disability benefits are the most important of the benefits and compensation provided by the Act. One or another of those (and sometimes all) is the subject of every apportionment case.
The two most important questions in any apportionment case are:
1. What benefits or compensation are sought to be apportioned?
2. What is sought to be apportioned "out" of the benefit or compensation?
Thus, different legal standards apply depending on whether the employer or insurer is seeking to apportion permanent disability benefits, temporary disability benefits, or medical benefits. Further, different standards may apply depending on whether the employer or insurer is seeking to apportion preexisting impairment or disability caused by a work-related injury, a non-work-related injury, or a condition that may have been asymptomatic or latent.
The apportionment of permanent total and permanent partial disability benefits is statutory and is governed by CRS § 8-42-104. The applicable principles are different, depending on whether the date of injury was before or after July 1, 2008, the effective date of S.B. 08-241.
Prior to the amendments enacted by S.B. 08-241, CRS § 8-42-104 provided that permanent partial disability benefits were apportioned based on prior impairment. In 1999, the following language was added: "When benefits are awarded pursuant to section 8-42-107, an award of benefits for an injury shall exclude any previous impairment to the same body part."
Before 1999, to be apportioned from permanent partial disability benefits, the prior condition had to be independently disabling.(fn9) After the 1999 amendment, the apportionment of prior impairment became a medical question. Thus, a Division of Workers' Compensation (Division)-sponsored independent medical examination (DIME) report that apportions prior impairment must be overcome by clear and convincing evidence under the statute.(fn10) Because the legislative purpose of the amendment was to preclude a claimant from recovering medical impairment benefits for impairment that already resulted in the payment of compensation, both the extent and nature of the impairment and the body part affected probably are to be determined by a medical expert interpreting the AMA Guides to the Evaluation of Permanent Impairment.
S.B. 08-241 deleted the language excluding previous impairment to the same body part and substituted the following language:
(5) In cases of permanent medical impairment, the employee's award or settlement shall be reduced:
(a) When an employee has suffered more than one permanent medical impairment to the same body part and has received an award or settlement under the "Workers' Compensation Act of Colorado" or a similar act from another state. The permanent medical impairment rating applicable to the previous injury to the same body part, established by award or settlement, shall be deducted from the permanent medical impairment rating for the subsequent injury to the same body part.
(b) When an employee has a non-work-related previous permanent medical impairment to the same body part that has been identified, treated, and, at the time of the subsequent compensable injury, is independently disabling. The percentage of the non-work-related permanent medical impairment existing at the time of the subsequent injury to the same body part shall be deducted from the permanent medical impairment rating for the subsequent compensable injury.
The Director of the Division has promulgated a rule of procedure that addresses apportionment.(fn11) The rule, entitled "Permanent Impairment Rating Guidelines," has two provisions, one dealing with injuries occurring before July 1, 2008, and the other with injuries occurring after...
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