The Sixth Appellate District of the Court of Appeal of the State of California affirmed a ruling last month that physicians are not limited to the strict application of the American Medical Association (AMA) Guides when measuring an injured worker’s impairment.

The underlying February 2009 decision in the Milpitas Unified School District v. Workers’ Compensation Appeals Board  and Joyce Guzman case was one of three key board decisions on the issue of permanent disability ratings.  Guzman is likely the first ruling in an ongoing discussion of this issue in the California appellate courts.   

The AMA Guides were designed to define standard methods for evaluating injuries.  However, as the ruling provides doctors leeway in interpreting them, open and closed claims with permanent disability ratings may now be subject to re-evaluation.  As a result, Guzman, and related rulings, may impact not only the cost of future claims, but also the rate of litigation, claim duration, and pending indemnity claims. 

While the Guzman ruling may apply to the “complex or extraordinary cases,” in which a physician may use his or her “entire range of clinical skill and judgment” to supplement or rebut the traditional tools, California employers fear it will continue to transform disability rating into a murkier, less consistent, and potentially more costly process, according to Marsh Risk Consulting (MRC).

MRC's Claim Consulting Practice can help Marsh clients with operations in California affected by this decision to identify, analyze, and reduce their exposure to the cost of risk and their collateral requirements.