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Everyone even remotely involved in the California Workers’ Compensation system knows how significantly SB 228 and SB 899, together with case law, and recently enacted regulations have changed the landscape for injured workers, employers, insurance carriers, physicians, attorneys and others. Recent decisions such as Pendergrass, Baglione, Knight, Babbitt, Sierra Pacific, Welcher, Romero, Costa, Benson, and many others, are bringing the physician into the legal environment more than ever. This includes, but is not limited to decisions as to rating, apportionment, medical control, retroactive application of the American College of Occupational and Environmental Medicine’s, Occupational Medicine Practice Guidelines, 2nd Edition (ACOEM), and Guides to the Evaluation of Permanent Impairments, 5th Edition, (AMA Guides), future medical care, and even affecting issues such as diminished future earning capacity also known as DFEC.

It is presumed that when the legislature passed SB 228 and SB 899 that they intended that both ACOEM and the AMA Guides would be closely and correctly followed by physicians. This became even more important with the introduction of Medical Provider Networks (MPN). But it is well known to the State through the Disability Evaluation Unit (DEU), that nearly 80% of the reports it reviews are not AMA compliant, and it is presumed that even more of those reports would not be ACOEM compliant. This could not have been the intent of the legislature. At the end of the day, artificially low disability rating as a result of doctors who either do not know, or do not correctly apply ACOEM and the AMA Guides cause cases to remain open longer, increased and unnecessary litigation, and unfair compensation for the injured worker.

The PTP in post reform workers’ compensation is in significantly more legal peril than ever before (LC §4068) thereby necessitating an increased devotion to “total case management” that closely adheres to the strictures of SB 228 and SB 899, hence, ACOEM compliance. Significantly more attention to detail and focused attention are now compulsory with a resultant demand for increased “face-to-face” time and interaction with a patient.

Nearly five years after the passage of SB 228, and four years after SB 899, the solution to obtaining an accurate recovery for the injured worker resides in training a corps of Primary Treating Physicians (PTPs). Those PTPs must be prepared to spend the necessary time with the injured worker so that ACOEM paradigms are correctly used. As the patient approaches Permanent and Stationary (P&S)/Maximum Medical Improvement (MMI), it is the position of this article that PTPs must have available to them AMA experts who can be designated by the PTP to complete the MMI/P&S examination and report under the authority of LC §4061.5; 8 CCR §9785:3(c) and State of California Instructional Document IMC §81556.

Leading attorneys in California have presented five building blocks that are essential for applicant attorneys to follow in order for the injured worker to receive a fair and correct award in the post SB 899 era.

• The first building block is a good working knowledge of ACOEM.

• The second building block, which may or may not be practical, is taking and maintaining medical control (taking the patient out of the MPN for treatment).

• The third building block is making sure the treating physician follows the mandates of ACOEM by utilizing the services of other specialists and
addressing all of the injured worker’s complaints (developing the record).

• The fourth building block is obtaining a Functional Capacity Assessment (FCA). ACOEM, p. 137 gives the authority for the FCA to be ordered by the employer, claims administrator or the treating or evaluating physician.

• The fifth building block is a good working knowledge of the AMA Guides.

If these five building blocks are followed, with the caveats that the PTP is thoroughly knowledgeable in ACOEM, is prepared to take the time necessary to follow ACOEM guidelines, and at the appropriate time designates an expert in the AMA Guides to prepare the MMI/P&S report, (P&S and MMI are the same for rating purposes, 8 CCR §§9785, 101520) then the injured worker should receive the Whole Person Impairment (WPI) and eventual disability they deserve.

The purpose of this paper is to review the role of ACOEM, AMA Guides, FCAs, Employability Screening Studies (©2007, AMARC), Diminished Future Earning Capacity (DFEC), and the criteria for reports to be substantial evidence as required by recent laws, regulations and cases.

The Case for Seizing and Maintaining Medical Control

Clearly, getting the best doctor for the injured worker, whether in or out of the MPN, should be the highest priority for both the attorney and the patient. However, the key question, as set forth by these attorneys, is whether the MPN doctor will address all issues, including potential compensable consequences resulting from the work related injury, especially those associated with internal medicine, sleep, or psychological issues. There is ACOEM licensed technology in California which insures that entire treatment plans are absolutely 100% ACOEM compliant. Whether the patient is kept in the MPN, or taken out, ACOEM-licensed treatment plans should substantially reduce problems with UR, and will be very helpful if the matter goes to court, especially for penalties for failure to pay self-procured medical costs (LC §§5814; 5814.6; 8 CCR §§ 9792.11 – 9792.15 (Effective June 7, 2007) 8 CCR §§10225 – 10225.2 (Effective May 26, 2007).

Some of the most prestigious lawyers in the State believe that the only way to get fair and accurate rating for their client is to remove them from the MPN. They believe, rightfully or wrongfully, that the doctor in the MPN is in contract with the insurance company and will not follow ACOEM, nor look regularly at compensable consequences of the injury for fear that such actions may jeopardize their MPN contract, and consequently negatively affect their patient flow and/or their cash flow. According to these lawyers, in order to achieve a fair resolution of the case for the client and to survive in the post SB 899 environment, it is extremely important that the applicant attorney seize and maintain control of medical treatment as soon as possible.

Clearly the decision to work inside or out of the MPN is crucial to the case. How the case starts is often times, fortunately or unfortunately, how it finishes. The WPI at the end of the case depends upon how the case was managed by the PTP. Did the PTP follow ACOEM algorithms and refer the patient to appropriate specialists for evaluation and treatment in an ACOEM compliant manner? Blood pressure, problems with medication, diabetes, addiction or dependency, sleep disorders, depression, to name a few, cannot be rated under the AMA Guides, if those problems are not identified and treated during the case.

ACOEM, AMA Guides and Substantial Evidence

Treatment protocols are promulgated by ACOEM; therefore, to a large degree ACOEM is the precursor to an appropriate WPI rating. It is perhaps axiomatic that if ACOEM is not used correctly by the PTP or ACOEM protocols are not insisted upon by the Qualified Medical Examiner (QME) or the Agreed Medical Examiner (AME), that it is virtually impossible to achieve an appropriate AMA Impairment rating.

The greatest change affecting treatment by doctors comes from the enactment of Labor Code §4604.5 which gives the Administrative Director the charge of adopting a medical treatment utilization schedule pursuant to Labor Code §5307.27. Until this is accomplished, ACOEM shall be presumptively correct on the issue of extent and scope of medical treatment, regardless of the date of injury (LC §4604.5; 8 CCR §9792.8).

The State has mandated that all treatment must be ACOEM compliant and all reports, whether that of the PTP, QME, or AME, address the issue of extent and scope of medical treatment. ACOEM requires avoidance of costly, ineffective and time-wasting therapy; it necessitates appropriately reasoned and well-timed diagnostic and specialist referrals as well as active care treatment protocols. In addition, an accurate, specific initial working diagnosis is the key. Outcomes Assessment monitoring with Patient Inventories and Functionality Examinations are now the absolute required standard under ACOEM for substantiation of continued care and/or referral. These are time intensive evaluative processes that require constant and diligent follow-up, evaluation and monitoring. To be more specific, ACOEM requires the physician to address all complaints, and inquire about psychological, sleep and sexual problems, as well as addressing the injured worker’s functional capacity. Both for issues of compliance, and to avoid any potential liability to the PTP or evaluating physician for failure to provide diagnosis and/or treatment required by code(s), it is important for the PTP, QME, or AME to be ACOEM compliant in their treatment and/or report recommendations. Accordingly, it is no longer the role of the QME or AME to decide whether the treating physician was correct on the matter of treatment issues, but whether the PTP correctly followed ACOEM, and if ACOEM was not followed it is the responsibility of the QME or AME to bring the treatment of the injured worker within the ACOEM Guidelines. (For a parallel as applied to MPNs see LC §4616.4 (b) and (e)).

Beyond ACOEM, a report, whether it is a report of the PTP, QME, or AME must constitute substantial evidence. Failure to follow the mandates of ACOEM could render the medical report inadmissible as lacking in substantial evidence. Substantial evidence is best described by the court in Escobedo vs. Marshalls (2005) En Banc, 70 CCC 604. Escobedo holds that medical opinion is not substantial evidence, if within the report, there are “surmise, speculation, conjecture or guess,” or if a physician does not set forth the reasoning that supports their conclusions. (Escobedo, pp. 620- 621).

In addition to ACOEM, and being substantial evidence, the report must also be AMA compliant. It is well known, but not always followed by many physicians, that the AMA Guides require the physician to address the entire body or as the AMA Guides call it the “whole person.” Failure to evaluate the whole person could also render the medical report inadmissible as lacking in substantial evidence. For a report to be AMA compliant it must meet the standards set forth by Section 2.6 of the AMA Guides and 8 CCR §10606. (Note: For a good explanation of substantial evidence and how the AMA Guides apply to California law, the doctor is directed to The Lawyer’s Guide to the AMA Guides and California Workers’ Compensation, 2007, by Robert G. Rassp, available through LexisNexis Press by calling 800-833-9844).

ACOEM requires significantly more attention to detail, and focused attention is now compulsory with a resultant demand for increased “face-to-face” time and interaction with a patient.

A busy orthopedist or medical doctor may simply not have the time, emotional preparedness, or even, perhaps, the financial ability to limit his/her practice time to these extremely time consuming efforts.

Specifically, the post reform PTP must be willing to accomplish an exceedingly detailed ‘New Patient Intake and Consultation’ that identifies potential case complicating risk factors; in addition, a thorough ‘ACOEM based Examination’ that also identifies risk factors is required. Identifying these risk factors is critical for early interdiction of chronicity and notification of possible complicating case factors that could result in delayed recovery, inaccurate disability and less than optimal treatment and/or psychosocial outcomes. ACOEM, p. 83, notes “Thus, primary prevention, early detection, and secondary prevention of delayed recovery are key parts of the occupational health practitioners’ role.”

These outcome assessments are critical, because as previously stated, ACOEM “shall be presumptively correct on the issue of extent and scope of medical treatment, regardless of the date of injury” (LC §4604.5; 8 CCR §9792.8), and failure of a physician to follow the mandates of ACOEM could render the medical report inadmissible as lacking in substantial evidence.

ACOEM licensed treatment plans should substantially reduce problems with UR, and will be very helpful if the matter goes to court, especially for penalties for failure to pay self procured medical costs (LC §§5814; 5814.6; 8 CCR §§ 9792.11 – 9792.15 (Effective June 7, 2007) 8 CCR §§10225 – 10225.2 (Effective May 26, 2007).

Assessing Functional Capacity

An FCA is a comprehensive battery of performance-based assessments used to determine an individual’s ability for work and the Activities of Daily Living (ADLs), as the ADLs apply to the injured worker’s ability to work (Five out of Eight ADLs can affect work (Table 1-2, AMA Guides, p. 4). It is very important for the PTP or QME/AME to recognize that the assessment of the ADLs start at the beginning of the case with ACOEM, regularly assess ADLs throughout treatment, as opposed to having the ADLs assessed for the first time at the MMI (which, unfortunately, is what is currently being done in the vast majority of cases throughout the State).

An FCA is recommended by ACOEM (ACOEM, p. 137; also see ACOEM pp. 21, 34), the AMA Guides (§2.6(a)), the AMA Master Guides (p. 11), and is required by the State of California to make a report AMA compliant (The Lawyers Guide to AMA Guides and California Workers’ Compensation, §4.03 [1] and [2] citing 8 CCR §§ 10606, 9785.4 and AMA Guides §2.6). In addition, the Employability Screening Study (©2007, AMARC), incorporated into the FCA, allows attorneys to determine whether a vocational expert (VE) is needed to develop a case for DFEC.

To be more specific, functional limitation is defined as the limit in the ability to perform basic activities of daily living, including work. The Residual FCA is a general FCA, as opposed to a job specific FCA, and is a tool used to obtain objective information about a patient’s current functional and physical abilities despite the existence of impairment.

An FCA is required for a report to be substantial evidence. The Lawyer’s Guide to the AMA Guides and California Workers’ Compensation (2007), Robert Rassp §3.02, 4.03; 8 CCR 10606; AMA Guides, 5th Edition, §2.6.

Every injured worker who the physician believes is going to have impairment, or the physician believes cannot return to their usual and customary job, requires an FCA. This is important, because the role of the physician is no longer to determine disability but to determine impairment as set forth in the AMA Guides. The Guides are clear that they do not determine disability, and to determine disability, the evaluator must go beyond the Guides and evaluate factors such as work experience, transferable skills, knowledge, and education which are outside the scope of the Guides.

The AMA Guides mandate that a physician assess the medical impairment’s impact on the individual’s ability to work. To do this the physician needs to understand the essential functions of the occupation of the injured worker and their specific job, as well as how the medical condition and/or the impairment interact with their occupational demands. The AMA Guides state that a physician may need to obtain additional expertise to define functional abilities and limitations, as well as vocational demands. (AMA Guides, p. 18). In addition, ACOEM mandates that a physician understands and recognizes the limitations of their own ability to either predict an individual’s functional capacity or define what is safe and/or reasonable for an individual to do. (ACOEM, p. 34).

Following the Escobedo rule for determining whether a report constitutes substantial evidence, the FCA study is primarily a computerized assessment that provides much greater accuracy and reproducibility than manual measurements performed by many physicians, and the report provides a solid basis for the opinion of the physician completing the MMI/P&S, QME, or AME, rather than a physician’s “educated guess” as to matters of the functional capacity of an individual.

Thus, an FCA is indicated for all PTP MMI reports, and for all QME and AME reports. The purpose of the FCA report is, by the use of bio-measuring computer technology, to take the guesswork out of measurements (See generally: Escobedo vs. Marshalls 70 CCC 604, 620-621) and provide to the evaluator, (PTP, panel QME, or AME), data that can be adopted and incorporated into their report, thus making their report ACOEM and AMA compliant and admissible as substantial evidence.

The first objective of the FCA is to provide reproducible computer generated measurements, with a built in validity test, for AMA Impairment Ratings. With regard to the spine there are two methods of measurement: diagnosis related estimate (DRE) and, the second and more difficult, range of motion (ROM). DRE is relatively new to the AMA Guides, introduced in the 4th Edition, because physicians found the ROM method overly time consuming and reviewers found the ROM measurements not to be consistent, accurate or reproducible.

In the 5th Edition, the DRE method must be utilized in certain circumstances such as a corticospinal tract involvement, while the ROM must be utilized when the disorder involves more than one level within a sub-region. (See Guides, 5th Edition, p. 402). In certain circumstances utilizing DRE, as opposed to ROM, results in a higher rating. However, in the vast majority of cases ROM results in a higher impairment rating. This result occurs because DRE only rates diagnostic impairments, while ROM rates three items: diagnostic impairment(s), loss of range of motion, and nerve damage (sensory and motor).

When either the DRE or ROM can be used, the injured worker is entitled to the highest rating. Throughout the United States many physicians, who utilize the 4th or 5th Edition, default to DRE because ROM measurements remain cumbersome and unreliable. This leads to many unnecessary depositions and increased litigation. By providing detailed and accurate measurements, together with the WPI calculation for the musculoskeletal component of the injury, it is hoped the FCA measurements will save the evaluator a significant amount of time and frustration, and provide to all parties and State agencies, information which will help make reports AMA compliant, and lessen the amount of disputes as the case moves through the system.

The FCA also provides information on the residual functional capacity of the injured worker as applied to work related activities, since the AMA Guides“permit an evaluating doctor to compare a person’s pre-injury capacity to the residual functional capacity post-injury.” The Lawyer’s Guide to the AMA Guides and California Workers’ Compensation (2007), Robert Rassp §3.02, 4.03.

For this reason, the FCA is particularly good for rating by analogy using the ADLs. Assume for an upper extremity tendonitis the Functional Capacity shows a 50% loss of the pre-injury capacity. Since the upper extremity has a 60% value (Table 16-3, p. 439) in the AMA Guides, a 50% loss of pre-injury capacity represents a 30% WPI. Regarding rating by analogy, Linda Cocchiarella, Editor AMA Guides, 5th Edition has said “The doctor has the flexibility to use their clinical judgment to help determine what an accurate impairment rating is….If you have a functional loss that would qualify for an impairment rating, then you (the doctor) are justified in discussing why you think an impairment listed in the AMA Guides may be too low, and by analogy, to use some other type of impairment number in the Guides or some analogous condition to give a different rating for that particular disorder.”

Most doctors will default to the DRE method as opposed to the ROM, as it difficult to correctly perform the measurements for ROM, and is time consuming. Obtaining the FCA solves this problem. The doctor who refers for the FCA, because of the complexity of the FCA, it usually takes an hour to review the record.

It is important for the physician to know that the role of the FCA is to provide measurement, and that the FCA does not provide any diagnosis, nor recommend any treatment for the injured worker.

Specifically, the FCA utilizes computer-aided testing systems (called ‘static’ testing) that employ AMA Guides testing criteria as well as information from national agencies (National Institute of Occupational Safety and Health) in order to evaluate the patient’s spine and extremities for objective orthopedic information that the FCA can compare to population normals, or to the AMA Impairment Tables in order to assist the referring doctor in making judgments as to functional capacities, ADL restrictions and/or the impairment rating. Each static test is repeated several times in order to establish a ‘CV’, a number based on internal consistency which assists in determining the validity of an individual’s effort.

Static testing is augmented by “Dynamic Testing”, which has the patient actively bend, lift from floor or at a bench, reach, kneel, squat, crawl, and perform dexterity testing, etc.

These measurements are what the PTP, or AME/QME, needs to correctly complete the ‘FCA’ portion of the state PR-4 form (see pp. 5, 6) and to provide the Residual FCA necessary to make the final MMI report or the PQME or AME report AMA compliant, and as such, provide a report that meets the substantial
evidence requirements of reports submitted as evidence in a workers’ compensation proceeding.

Static and dynamic information is then drawn together into narrative form (including charts, estimates for occasional and frequent lifting capacity, etc.) and summarized for review and interpretation by the referring physician.

Finally, the FCA and ADL analysis is also a good way to avoid 0% WPI. When the ADLs are significantly affected it is impossible to get a 0% WPI. For this reason, and for a fair outcome for the injured worker, the physician must make sure the ADLs are properly addressed and rating by analogy is considered.

For all the above reasons, it is only a matter of time before the courts, State Agencies, adjusters and attorneys for both sides ask: where is the FCA?

The Employability Screening Study

The Employability Screening Study (©2007, AMARC) is incorporated into the FCA, and allows attorneys to determine whether a VE is necessary to calculate DFEC as part of his/her case development. Designed by perhaps the leading VE in the State of California, Robert Hall, PhD, the Employability Screening Study reviews key factors such as earnings, language and other transferable skills and provides the attorney a final screening number. The lower the score is below 12, the more likely that injured worker is to prevail on a DFEC claim. If the score indicates that a DFEC workup is needed, the next step is for the attorney (not the doctor), to utilize a VE, who will evaluate the injured worker and the FCA and prepare the DFEC analysis.

DFEC is well known to workers’ compensation lawyers in California, but is less known to doctors. It is a vital concept to resolution for some injured workers. A doctor or lawyer need only look at the number of low impairment ratings when the patient is unable to return to their usual and customary job to understand the critical importance of DFEC as a safety net for these people who otherwise would have nowhere else to turn for an appropriate award (see the article by Robert Hall, PhD accompanying this article).

While the Employability Screening Study is only a tool, and does not replace an attorney’s assessment of the entire DFEC evaluation of their client, it is hoped that this screening evaluation will save time for all parties and bring into the court system only those DFEC cases which are well founded.

In conclusion, the FCA is a necessary component of any P&S/MMI report where the injured worker cannot return to their usual and customary work without restriction. Use of the FCA can lead to making the report both ACOEM and AMA compliant, and without the FCA the report is not substantial evidence. By the use of computer assisted bio-metric measurements and other studies included in the FCA, cases can be closed much earlier with the correct award for the injured worker.

Accurate Medical Assessment Rating Centers performs FCAs at locations throughout California. For further information on obtaining an FCA for an injured worker, contact Melissa Melgosa at 800-479-0643.

ACOEM, AMA Guides and
Functional Capacity Assessments

By Syd Shaber, DPM.

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