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The Most Common Mistake In Permanency Assessments: Evaluating Medical Records, Not Individuals

By on June 1, 2018 in Awards with 2 Comments

Assessing permanent disability is such a vital aspect of every formal workers’ compensation claim petition.  New Jersey is a loss of function state unlike the more common wage loss states.  An employee can return to his or her job following treatment or surgery, perform the very same work tasks, and still remain eligible for a substantial award of permanent partial disability benefits if the individual can show a substantial impairment of non-work activities.  In other states, if an injured worker returns to the employment, that generally ends the entitlement to workers’ compensation benefits.

New Jersey’s peculiar system of compensation raises an interesting dilemma for employers, lawyers, physicians and judges:  how does one assess the extent of permanent partial disability in one who has returned to the very same occupation with no limitations at work? And how credible is it when an employee performs very physical work without restrictions but complains about difficulty mowing the lawn at home?  Both sides in the case gather all the relevant medical records and send the injured worker for an IME, or even multiple IMEs, with physicians who specialize in assessing the extent of permanency.   The medical records tend to drive the outcome, and all stakeholders in the process focus heavily on the objective studies:  surgery records, MRIs, CT scans, EMGs, pulmonary function testing, and the like.  But there is generally too much emphasis on the treatment that occurred some time ago as opposed to current level of function.

The emphasis on medical records and operative reports is understandable, but all too often practitioners, physicians and judges forget to evaluate the overall current function of the individual and instead make assumptions of disability based on the type of surgery that took place.  One hears comments like this quite often:  “I never settle a two-level fusion surgery for less than 35% of partial permanent disability;” or, “I never pay more than 27.5% for a one level fusion surgery.”  There is a very substantial dollar difference between 30% and any percentage over 30%, so battle lines are often drawn at that particular percentage point. The focus should not be so much on the type of surgery that took place but on the level of function that the individual has at work and outside work.  The assumption that many practitioners have that all extensive fusions must be rated at higher than 30% ignores the legal standard in New Jersey.  Every case is different.

Why does this happen?  Because it is easier for practitioners to evaluate the medical records than it is the actual level of function.  We do not have depositions in New Jersey, and complaints contained in IMEs are so often cursory.  Some IME physicians spend only a line or two on the activities that the individual can now engage in or has given up, while spending 95% of the medical report on cataloguing the treatment that occurred many months ago.  Could one individual have more extensive limitations following a one level fusion than another individual after a three level fusion?  The answer is yes, but one seldom sees this reflected in awards because assumptions about the impact of surgery tend to be self-fulfilling.

Case law in New Jersey makes it reversible error for a judge to say that he or she always awards a given percentage for a certain type of surgery.  The appellate courts have consistently emphasized that when assessing permanency one must look at the impact of the injury on the work and non-work life of the claimant – not the type of surgery one has hadHas the individual returned to previous sports activities, gotten a second job, returned to work without restrictions, or taken on overtime work?  Is the individual able to enjoy jogging, horseback riding, and more vigorous sports?  These are the most important questions that apply under all three Perez decisions.

From a strictly legal standpoint, if an individual had a two-level fusion surgery and came to court to testify that he could do everything now that he could in the past and had no restrictions, no award of permanency would be warranted.  Evaluating physicians make the same fundamental mistake all the time, raising estimates of disability on individuals based on the number of herniated discs involved, or the type of shoulder surgery, without focusing on what the injured worker actually does or cannot do at home and at work.  When reserving a file, practitioners and adjusters have to focus on the medical treatment because it is early in the case, but in the end the focus must be on the actual level of function when all treatment has ended.  One can make a strong argument that the system tends to evaluate medical records too much and not the people whose records are being evaluated sufficiently.

What does this mean for employers?  If employers wish to reduce permanency awards, they need to address the following:  how has the work injury impacted the level of function at work and outside work?  If an injured worker has minimal complaints following a two-level fusion surgery, and is functioning well at home and at work, the award should be fairly modest.  It should not climb over 30% just because most similar surgeries have resulted in high awards.  If the level of function at work and at home is impressive, It should not matter that the surgery involved two levels.  It is really a mistake to assume that a given type of surgery is worth a preset percentage.  While the system has evolved that way, it is not true to the statute at all.

Surveillance can be helpful in lowering permanency awards if the surveillance shows that the individual is performing at a high level of activity outside work.  What can the employee do in terms of sports and hobbies after MMI?  We all know people who have had extensive knee, back and shoulder surgery outside workers’ compensation, and many return fully to the activities that they used to engage in.  After all, surgery does sometimes restore function completely or nearly fully.  The results of functional capacity exams done after MMI are often a great indicator of level of function and should be considered by the parties in a workers’ compensation case.

Employers should speak with supervisors to get a sense of what the individual is involved in socially and recreationally. It is very rare that an employer will bring in a supervisor or manager in the permanency phase of the case to testify regarding what an employee is able to do at work post-surgery.  But that testimony can be crucial if it contradicts statements that the injured worker cannot engage in certain physical activities.  On high exposure cases, this should be considered.  Proving a normal level of function at work and outside work is the best way to counter the pre-conceived notion that every two-level fusion or frozen shoulder case must be worth 35% to 40%.

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John H. Geaney

About the Author

About the Author:

John H. Geaney, an executive committee member and shareholder with Capehart Scatchard, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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There Are 2 Brilliant Comments

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  1. Carl Mercurio says:

    Mr Geaney

    “After all, surgery does sometimes restore function completely or nearly fully”( first time I ever heard this at any level +I Thank you.
    My answer after questioning several medical experts at different workers comp courses and lectures:
    Surgery does not result in add on value or additional impairment (percentage) for the following reasons:

    The purpose of surgery is to increase function, decrease pain and return an individual to more normal level of activity. So, if done for the right indication and without complications, should decrease the disability.

    Second” The results of functional capacity exams done after MMI are often a great indicator of level of function and should be considered by the parties in a workers’ compensation case”
    .
    My answer to this is: FCE measures tolerance and not function or risk and is not to taken as a recommendation to return to work at any level

  2. Ray Blanchfield says:

    Great article John…esp. the S/V idea….makes so much sense…. that I think the industry has lost sight a common sense practical approach…

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