We recently received a medical-legal report written by an orthopedic specialist regularly used as an AME. Our case involved injury to the low back with degenerative changes documented by MRI. The AME assigned a level of impairment and apportioned 20% of that impairment to non-industrial degenerative changes. The AME went on to support his opinions stating that 20% of individuals with the extent of lumbar pathology as our claimant would experience symptoms. Based on that statistic, he felt there was a 20% chance our claimant suffered symptoms pre-existing the injury event. He therefore concluded that 20% of the claimant’s lumbar impairment was due to pre-existing non-industrial degenerative changes.

It’s accurate that the degenerative changes were objective and verified by MRI. The degeneration of the claimant’s lumbar spine likely constituted some apportionment to non-industrial factors. However, I was not confident proceeding to trial on the AME’s analysis and basis for apportionment. The AME’s conclusion based on a statistic and a percentage of chance was speculative and would not likely constitute substantial evidence if considered by a Workers’ Compensation Judge.

It is quite common to receive a medical-legal analysis on apportionment that falls short of the legal standard of proof to support the claim. Claims administrators and attorneys should be aware of the legal standard of proof required to support apportionment. If a medical-legal report is received with a concessionary opinion on apportionment, a supplemental report should be requested to ensure the employer is liable for only the extent of disability caused by the industrial injury.

Labor Code §4663(c) requires a medical-legal examiner to include a determination of apportionment. In order to constitute substantial evidence concerning the issue of apportionment, the medical opinion must include the reporting physician’s familiarity with the concepts of apportionment and must identify the approximate percentages of permanent disability due to the direct results of the injury and the approximate percentage of permanent disability due to other factors. (Escobedo v. Marshalls (2005) 70 Cal.Comp.Cases 604 (Appeals Board en banc).) Also, the physician must explain the nature of the non-industrial factors, how and why those factors are causing permanent disability at the time of the evaluation, and how and why those factors are responsible for the percentage of disability assigned by the physician. For example, if a physician states that 50% of an employee’s back disability is caused by degenerative disc disease, the physician must explain the nature of the degenerative disc disease, how and why it is causing permanent disability at the time of the evaluation, and how and why it is responsible for approximately 50% of the disability (Id. at 621.)

Historically, if a Workers’ Compensation Judge found that the medical-legal analysis and discussion of apportionment fell short of the standard of proof, the WCJ could disallow the apportionment altogether for a lack of substantial medical evidence and failure by the defendant to carry its burden of proof on the issue.

However, claims professionals and defense attorneys should be aware of the recent panel decision in Sutherland v. Gold Trail Union School District which may provide some relief to defendants where a WJC finds its apportionment analysis deficient. In that case, the applicant appealed a WCJ’s trial determination allowing non-industrial apportionment. The applicant asserted that the apportionment opinion did not constitute substantial evidence. On reconsideration, a panel of WCAB commissioners reviewed the apportionment analysis and agreed with the applicant that the AME failed to adequately explain “the how and why pre-existing factors were causing permanent disability at the time of the evaluation, nor how and why those factors were responsible for 50% of applicant’s right shoulder disability.”

Thankfully for defendant, the WCAB commissioners did not return the case to the trial judge with direction to disallow the apportionment. Rather, the WCAB granted the defendant an opportunity to return to the AME for a second bite at the apple and a more substantial apportionment analysis.

The commissioners noted that the Appeals Board has the discretionary authority to develop the record when it does not contain substantial evidence pertaining to a threshold issue, or when it is necessary in order to fully adjudicate the issues. (Lab. Code §§ 5701, 5906; Tyler v. Workers’ Comp. Appeals Bd. (1997) 56 Cal.App.4th 389 [62 Cal.Comp.Cases 924]; see McClune v. Workers’ Comp. Appeals Bd. (1998) 62 Cal.App.4th 1117 [63 Cal.Comp.Cases 261].) When the medical record requires further development, the record should first be supplemented by physicians who have already reported in the case. (See McDuffie v. Los Angeles County Metropolitan Transit Authority (2001) 67 Cal.Comp.Cases 138 (Appeals Board en banc).)

In summary, the WCAB allowed the parties in the Southerland case to return to the AME to request a supplemental report clarifying his opinion on apportionment of applicant’s disability.

The takeaway here is that claims administrators and defense attorneys should not take a medical evaluator’s opinion on apportionment for granted. The WCAB requires some substantial analysis and explanation on how and why the pre-existing condition was causing impairment or disability at the time of the medical evaluation. However, if the opinion on apportionment fails to qualify as substantial evidence, and before the WCJ disallows apportionment altogether, the defense may request an opportunity to return to the medical evaluator for a supplemental analysis and further support.