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QME Complicated Apportionment II - Pain, Psych, and Previous Compromise and Release

by William W. Deardorff, Ph.D, ABPP.

6 Credit Hours - $159
Last revised: 02/15/2017

Course content © Copyright 2017 - 2023 by William W. Deardorff, Ph.D, ABPP. All rights reserved.


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Table of Contents


Introduction and overview of the course

Overview of the case example

Learning objectives

Apportionment under SB899

Apportionment after Compromise and Release

Apportionment Analysis Related to the Case Example

Report Writing Tips and Comments

Case example reports


Introduction and Overview of the Course


This course begins with a review of apportionment under SB899 along with subsequent cases including: Pasquotto v. Hayward Lumber (2006); Juan Antonio Perez Garcia (Jaun Antonio Perez) v. Tapia Brothers; and, Kopping v. WCAB (2006). The course then reviews evaluation and report-writing “tips” followed by a case example.


The case illustrates how to handle apportionment to a previous Order Approving Compromise and Release (OACR) in which psychiatric injury was claimed and impairment was part of the OACR settlement, but no specific percent impairment was documented.  The psychiatric impairment going forward then overlaps (is in part causative) relative to a new psychiatric injury.  This requires a review of the following cases: Pasquotto v. Hayward Lumber (2006); Juan Antonio Perez Garcia (Jaun Antonio Perez) v. Tapia Brothers, and Kopping v. WCAB (2006)


Overview of the Case Example


This course involves reviewing a case example of a psychiatric injury that was derivative of an orthopedic injury. In the initial evaluation, the claimant was found to have a derivative psychiatric injury as follows: Mr. Williams suffered a derivative psychiatric injury on an industrial basis including: Major Depressive Disorder, Single Episode, Mild without Psychotic Features, and a Pain Disorder Associated with Psychological Factors and a General Medical Condition. These psychiatric conditions were in response to his orthopedic injuries and subsequent disability as established by the Orthopedic AME. He was found to be permanent and stationary with a GAF of 64 (WPI = 9%). There was apportionment to non-industrial factors of 10%, with an open question about additional apportionment to a previous OACR. The previous OACR did not specify an exact psychiatric permanent impairment (although psychiatric injury and impairment were included in the total). Records documenting the previous psychiatric treatment, upon which some component of the OACR was based, were requested.  These were reviewed and a supplemental report was issued addressing the apportionment to the previous psychiatric impairment under the OACR. An objective basis for determining this number was developed.


Learning Objectives



Learning Objectives



Explain apportionment under SB899

Discuss apportionment and derivative psychiatric injuries

Explain the apportionment problem of a previous OACR

Discuss the three legal cases that apply to apportionment and OACR



Apportionment under SB899


Only permanent disability (PD) can be apportioned. Medical treatment, temporary disability, and death benefits cannot be apportioned. SB 899 made major changes to apportionment of permanent disability. Labor Code §4663 was revised to provide "Apportionment of permanent disability shall be based on causation." The leading Escobedo en banc case defined "other factors" to include "pathology, asymptomatic prior conditions, and retroactive prophylactic work preclusions, provided there is substantial medical evidence establishing that these other factors have caused permanent disability."


SB 899 added Labor Code §4664 to announce the policy that "The employer shall only be liable for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment." If there was a prior permanent disability award, "it shall be conclusively presumed that the prior permanent disability exists at the time of any subsequent industrial injury." This was intended to prevent claims of rehabilitation as a way to avoid apportionment. Body regions were listed, so that awards over a lifetime could not exceed 100 percent, unless the case fell under Labor Code §4662.


Please review a more detailed discussion of apportionment under SB899 can be found in the following: Understanding the Effect of SB899 and Section by Section Summary of SB899.  


Apportionment after Compromise and Release


Under SB899, apportionment is addressed in Labor codes 4663 and 4664.  Elements of these codes relevant to the current issue are as follows:


Labor code 4663(a) states, “Apportionment of permanent disability shall be based on causation.”


Labor code 4664(a) states that the employer "shall only be liable for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment.”


Labor code 4664(b) states that "if the applicant has received a prior award of permanent disability, it shall be conclusively presumed that the prior permanent disability exists at the time of any subsequent industrial injury."


Labor codes 4663 and 4664 address apportionment based on causation.  Labor code 4664(b) specifically addresses the issue of a prior award of permanent disability relevant to apportionment. However, Pasquotto must be taken into account relevant to this issue [Pasquotto v. Hayward Lumber (2006); Appeals Board en banc opinion]. In this case, the applicant previously had entered into a Compromise and Release for the same body parts that were at issue in his pending claim. The prior C&R had settled those (and other) body parts for $30,000.00. Defendant sought apportionment pursuant to Labor Code §4664. The WCAB was reticent to apply Labor Code §4664, arguing that it would be "entirely speculative" for a WCJ to determine how much, if any, permanent disability had been paid in the prior C&R for the various body parts that were now at issue in the pending matter. 


At issue in Pasquotto was whether an Order Approving a Compromise and Release (OACR) is a "prior award of permanent disability." The WCAB unanimously held that it could not be, at least not "without more...", presumably negating the mandate of Labor Code §4664 apportionment when the injured employee's prior industrial injury was resolved via a Compromise and Release rather than a Findings and Award or Stipulated Award.  However, the WCAB failed to explain “without more”, stating "we need not and will not address the universe of circumstances, if any, under which an OACR might constitute a prior award of permanent disability under §4664(b)."


It is important to note that, in Pasquotto, the prior C&R did not specifically state the amount of permanent disability that was being resolved. Analysts speculated that the proviso of “without more…” was intended to later permit Labor Code §4664(b) apportionment to a prior OACR where the earlier Compromise and Release explicitly spelled out the permanent disability percentage being resolved by that C&R.


The apportionment to previous permanent impairment under a Compromise and Release was addressed further in Juan Antonio Perez Garcia (Juan Antonio Perez) v. Tapia Brothers. In distinguishing this case from Pasquotto v. Hayward Lumber, it was held that an order approving compromise and release constituted a "prior award of permanent disability" for purposes of Labor Code § 4664 apportionment, because there was an express clause regarding agreed permanent disability rating and a statement that rating was based upon AME's report.


However, even taking into account the above findings, it would seem medically reasonable that in appropriate cases, apportionment to a prior permanent impairment settled by OACR without an express clause regarding agreed permanent disability might be completed under Labor code 4663 (even if a permanent disability rating was not included in a Compromise and Release). 


Apportionment Analysis related to the case example


In the case example, there was a derivative psychiatric injury as a result of his orthopedic injuries sustained in 2006.  As a result of those orthopedic injuries, he experienced a Major Depressive Disorder and other psychiatric conditions.  He was found Permanent and Stationary with psychiatric impairment.  However, this level of impairment was determined by his treating psychologist.  An AME or QME was never completed.  The case was settled by OACR, and this included some psychiatric impairment but no specific percentage was documented. Relative to the new derivative psychiatric injury, and the apportionment analysis, there certainly appeared to be the required overlap of the prior psychiatric impairment and the current psychiatric impairment (It is not that there are unique derivative psychiatric injuries in both cases). This analysis is consistent with Kopping v. WCAB (2006).


With respect to the Labor Code §4664 issue, the WCAB noted that under the Kopping decision (Kopping v. WCAB) (2006) 142 Cal. App. 4th 1099, 71 Cal. Comp. Cases 1229), the defendant retains the dual burden not only of proving the existence of a prior award, but also the factors of disability related to the prior award either totally or partially overlapped applicant’s current permanent disability. “The burden of proving overlap is part of the employer’s overall burden of proving apportionment…” A defendant must always prove overlap of disability the defendant seeks to subtract from the current permanent disability award under Labor Code §4664(b). Given this directive, it is appropriate for the QME to address the possibility of “overlap”.


In the clinical evaluation, the applicant clearly stated that he had ongoing back and shoulder symptoms from his 2006 injury (settled by OACR) and this caused, in part, his ongoing psychological distress.  Therefore, the chronic pain in these body parts would continue to impact him in terms of his psychological sequelae and overlap with his new orthopedic injuries and associated psychological sequelae. 


In an effort to provide some objectivity to this apportionment determination, and apply similar “standards” to the assessments, I used GAF and WPI determinations for psychiatric impairment from the OACR and the current injury.  To develop these values, I relied primarily on the results of the objective (and standardized) psychological test results (these are documented in the case examples).


The applicant’s current GAF was found to be 64 yielding a WPI of 9%.  To obtain a reasonable apportionment value relative to his previous derivative psychiatric injury, I accepted as medically reasonable the percentage contribution of the previous WPI (determined by the objective test results) to the current WPI or 22% (2 is 22% of 9).  Therefore, 22% of the current psychiatric impairment was apportioned to his previous permanent psychiatric disability from the injury of 2006 that was settled by OACR. The case example reports provide a detailed discussion of the reasoning behind these conclusions.  


Report Writing Tips and Comments


I would like to mention a few things that I have found useful in terms of producing a report that is not likely to be challenged by either side. I believe that these approaches to completing the evaluation and report-writing are why I am very rarely deposed relative to my QME/AME conclusions. The evaluation should attempt to fully answer all questions and issues in dispute, and provide a solid empirical basis for the conclusions.


Include comments in the text. As can be seen in the report, I am fan of including “comments” throughout.  In the section entitled, “Presenting Problem as Reported by the Applicant” I will often comment about what is being reported versus other data that is available (e.g. the medical records).  I believe that commenting throughout the report helps the reader understand the basis for conclusions or the reason for issues that are not addressed.


Review the records before the interview. Related to making comments in the report, I also believe it is important to review the medical records before seeing the claimant for the clinical interview.  Reviewing the records can help guide the clinical examination and help the examiner delve into areas that might be overlooked absent the information from the records. If the records are reviewed after the interview, and there are discrepancies or previously unknown information, it is very difficult to have the claimant return for an additional interview. It is not always possible to get the records reviewed beforehand, but it is highly recommended.


Comments in the review of records.  I will also often make comments in the review of records (ROR).  This can address such issues as whether the ROR information is consistent with what the applicant reported, whether previous psychological/psychiatric results are consistent, etc.


Psychological testing. The psychological test battery should be tailored to the presenting problem. I have peer reviewed countless reports in which it was clear that the examiner used the same tests on all individuals no matter what.  I also include a description of the test along with the test data. As is well known, there can be great latitude in how test data is interpreted. By providing the test data, along with my interpretations, there is no question about where the conclusions are emanating from.  Also, it is important to have at least one test that has some measure of validity and response-bias. 


Psychiatric diagnoses.  After listing the diagnoses, I think it is important to discuss why the applicant meets the criteria for the disorder(s). To highlight certain decision-making issues, I use comments for further explanation.


ACOEM work-relatedness approach.  I use the six-step approach to assess work-relatedness (AOE/COE) as can be seen in the report. This helps the parties understand how the causation issues was approached and determined (versus just reporting the conclusion that the disorders were or were not work-related).


Credibility of the claimant.  I always include some discussion of the claimant’s credibility.  If symptom amplification is found, then it is important to discuss the ramification of the finding (e.g. due to stress, due to impression management to communicate suffering, due to malingering, etc.).


Causation.  It is important to discuss whether there is a primary psychiatric injury, derivative psychiatric injury, or both. This is essential post-SB863.


GAF determination.  Similar to all other conclusions, it is important to discuss how the GAF was determined (versus just reporting a number). This will allow the parties to see that there was some objective approach to the GAF (and WPI) determination.


Apportionment.  Similar to other areas, there should be some discussion about how apportionment values were determined. This should include any possible area of apportionment, no matter how small, even if the apportionment to the area is 0%. This shows the parties that all areas of possible apportionment were considered. The special case of apportionment between primary and derivative psychiatric injuries (and associated impairment) should be discussed.


Discuss relevant legal cases.  If the evaluation involves anything out of the ordinary, I will also research and discuss relevant legal cases.  This case example demonstrates how this process might work. This was a very unusual case and investigating how to handle apportionment to a previous OACR was appropriate.


References.  I think it is important to use references and research related to various conclusions. In this case, there was the special case of PTSD – delayed.  Since this is rather unusual, the references discussing the condition are included. Other references support the report’s conclusions.


Case Example


Please review the following case example. The initial evaluation can be found HERE.  The follow up supplement report can be found HERE.


NOTE: All of the identifying information related to the case has been changed. The reports include information from a variety of cases to develop this fictitious example


NOTE:  The test question help-prompts do not work for information contained in the case example reports.



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