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California Supreme Court declines review of Almaraz, a controversial work comp case

Today's workers' compensation defense post will briefly examine recent developments surrounding State Compensation Insurance Fund v. Workers' Compensation Appeals Board, a rather controversial case that has generated significant discussion in California legal circles.

In 2004, the California State Assembly introduced comprehensive reform to the state's work comp system in an effort to lower cost for insurers/employers and introduce greater predictability in work comp awards. However, several of these key reforms have since been challenged and defeated in the state courts.

One of these defeats was State Compensation Insurance Fund v. Workers' Compensation Appeals (WCAB), or the Almaraz case as it is more commonly known.

In Almaraz, truck driver Mario Almaraz suffered a serious back injury while on the job and filed a work comp claim.

When he went to the doctor to be evaluated/receive a disability rating, his treating physician ultimately rated his permanent disability at 12 percent using the schedules outlined in the AMA Guides 5th edition.

(This strict adherence to the AMA Guides 5th edition when making permanent disability ratings was a key component of the aforementioned 2004 work comp reform.)

However, the treating physician also indicated that this 12 percent disability rating - as dictated by the AMA Guide - did not adequately cover the full extent of Almaraz's back injury.

Almaraz ultimately filed an appeal with the WCAB, arguing that treating work comp physicians must have greater leeway in treatment and the ability to deviate from the schedules outlined in the AMA Guide if they did not adequately cover the work injury in question.

In a rather surprising decision - later affirmed by the Fifth District Court of Appeals - the WCAB sided with Almaraz, holding that while treating physicians could depart from these schedules, they must remain inside in the AMA Guide when finding a medical rationale for assigning a disability rating.

Not surprisingly, the ruling was immensely unpopular among work comp insurers/employers and an appeal was eventually filed with the California Supreme Court.

However, on Wednesday, the California Supreme Court declined to review Almaraz, meaning it will remain in effect.

"It's pretty unequivocal that costs will continue to go up in California," said Jerry Azevedo, a spokesperson for the Workers' Compensation Action Network. "We have to look to other ways to restore the predictability that the legislators [who took action in 2004] were looking for."

Stay tuned for further developments in the area of workers' compensation defense law...

This post was provided for informational purposes only and is not to be construed as legal advice.

Related Resources:

Insurance Journal "California court denies appeal of closely-watched workers' comp case" Aug. 25, 2011

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