2016 Worker’s Compensation Act Changes: Apportionment of PPD

2016 Worker's Compensation Act Changes: Apportionment of PPD

2016 has brought notable changes to the worker's compensation system in Wisconsin. Typically, worker's compensation changes are the product of the Worker's Compensation Advisory Council and have been largely outside the standard legislative process and somewhat removed from political factors. However, the most recent revisions to the Act have been more significantly influenced by legislative pressures outside of the usual negotiated process between labor and management in the Advisory Council.

The product of those changes became effective in March of this year, and three of the more significant changes to the Act demonstrate the greater influence of employers' concerns on the agreed bill process. One of these more notable changes is in the handling of permanent partial disability, particularly as relates to claims that involve a previous history of similar medical problems.

With the enactment of §102.175(3), there is now an explicit statutory mechanism for apportionment of permanent partial disability in traumatic injury cases. The newly added §102.175(3) has three main provisions: (1) apportionment of permanent disability resulting from accidental injuries is to be based on causation with the employer only responsible for the percentage of disability caused by the accidental injury; (2) a physician who prepares a report on permanent disability must address the issue of causation of the permanent disability that includes a determination of the percentage of permanent disability caused by the work-related injury and the percentage attributable to "other factors" before and after the injury; and (3) an employee who claims a work-related injury must upon request disclose all previous permanent disabilities or physical impairments and the records needed to make an apportionment determination.

Amongst most worker's compensation attorneys, there is some uncertainty regarding how the Division will be handling this change in the law. DWD 80.50 has long provided a mechanism for accounting for preexisting disability, and this new section pointedly refers to disability that was caused by "other factors," rather than the term preexisting condition. This would suggest that the revision clarifies or fine tunes current policy, but does not represent a substantial change in policy. Many commentators have indicated that since there is no clear indication that the legislature was overruling the "as-is" doctrine or the Lewellyn standards, the employer does not get a deduction for preexisting conditions, however employers are explicitly not liable for preexisting permanent disability caused by other injuries where the effects can be separated from the work injury. Examples would include prior or subsequent non-work related accidents or diseases with definable disability, and other work related accidental injuries with definable disability. The new provisions do not indicate the elimination of statutory minimums under DWD 80.32. Left unclear is the calculation of the reduction: straight subtraction of preexisting disability from the final disability rating, or using the DWD 80.50 formula, or some other mechanism altogether.

A summary provided by the ALJs in the Appleton office suggests this revision is only procedural, with what it characterizes as three minor changes: providing a new, clearer mechanism for accounting for preexisting disability, allowing evidence of same to be provided by non-traditional – but still competent – evidence, and providing explicit authority for discovery of findings of permanent disability or other impairments. It notes that language had been proposed that would have much more clearly abrogated the Lewellyn decision but did not remain in the final revisions, and thus must have been negotiated away. While not an official position of the Division, the opinions of these ALJs may be instructive of how cases involving preexisting disability may be handled.

Many of the questions circling around the community focus on the proof needed to establish preexisting disability. For cases involving a surgery with a minimum PPD rating under DWD 80.32, is an expert report required or is a surgical report sufficient? Or must an expert clearly apportion PPD due to the pre-injury surgery and PPD from the compensable work injury? For that matter, was it necessary for a qualified medical expert to have provided a disability rating prior to the subject work injury? These and many other questions remain until cases involving §102.175 begin working their way through the system. While the full extent of how the Division will apply the statute remains to be seen, there seems to be a consensus that defense attorneys, employers and carriers have a new tool in their kit to potentially reduce liability for permanent partial disability.

There are many nuances to the interpretation and application of new statutory provisions. If you have questions or are interested in a presentation on the 2016 statutory changes, please contact Kurt Anderson.