Did workers’ compensation changes go too far? Kansas Supreme Court to decide
Soon after Howard Johnson suffered a spinal cord injury in October 2015 while working as a delivery driver for U.S. Food Service, he suffered a financial one: His workers’ compensation award was nearly $47,000 less than what he would have received if the injury had occurred a year earlier.
Johnson hurt himself while trying to dislodge a partially frozen trailer door and sought remedy through the Kansas Workers’ Compensation Act — the only option for employees hurt at work.
The significant difference in his compensation was the result of a change in the guidelines doctors follow to assess impairment, attorneys said. A new state law adopted the Sixth Edition of American Medical Association Guides, rather than the previous Fourth Edition.
“The Sixth Edition ratings are lower across the board,” said Mark Kolich, Johnson’s attorney. “They’re not even just lower, there’s testimony on the record that they are 40 to 70% lower than the earlier editions.”
The disparity ultimately led Johnson and his attorney to appeal the workers’ compensation award by asking the Kansas Court of Appeals to consider the constitutionality of the state law requiring use of the new guidelines. Johnson argued it was the last straw in a series of changes to state workers’ compensation that have chipped away at benefits so greatly, the system no longer operates fairly.
In August 2018, the Kansas Court of Appeals ruled in Johnson’s favor, but that decision never took effect because the Kansas Attorney General and U.S. Food Service appealed it again to the state Supreme Court.
Specifically, Kolich believes the discrepancy in awards stems from how the new guidelines allow doctors to weigh an injury.
“The real reason is that the author of this book changed the way they defined impairment,” Kolich said in oral arguments to the Kansas Supreme Court. “Now impairment has to do with the activities of daily living. There’s no mention of work activities at all.”
Jan Fisher, a workers’ compensation attorney at McCullough, Wareheim and LaBunker who represents injured workers, said the case could change the value of a worker’s injury.
“We’re talking about how we measure the impact this injury has on a person’s ability to earn a living,” Fisher said.
Now, the Supreme Court is considering the constitutionality of what seems like a small shift in state benefits for injured workers but has the potential to look beyond it and decide if workers’ compensation is doing its job in Kansas.
Justices could hand down a decision anywhere from several weeks to several months.
Where do worker, employer attorneys stand?
A doctor issued Johnson a 6% impairment rating using the Sixth Edition, as required by the new state law. That meant Johnson’s reward from the state would total about $14,810.
However, Johnson had asked two doctors to rate him using the Fourth Edition for other opinions. When they assessed Johnson’s condition using the earlier AMA Guides, they found a different outcome: a 25% impairment rating leading to a $61,713 reward.
The disparity is so great that the low rewards under the Sixth Edition make its use unconstitutional, Kolich argued. Combined with other changes, the rewards are so pared down that they are no longer an adequate remedy for injured workers who can’t otherwise seek compensation through a jury trial.
However, there are some cases in which the compensation is higher under the Sixth Edition than the Fourth, said Kim Martens with Martens Work Comp Law LLC, a Wichita-based firm representing employers and insurance companies.
Even under the Sixth Edition, injured workers still have their medical costs covered, said Michelle Haskins, attorney for U.S. Food Service, in oral arguments. Aaron Greenbaum and his father, Fred Greenbaum, both of MVP Law, agreed, adding that medical bills are the largest cost in workers’ compensation.
Haskins also said the Sixth Edition is the newest version and represents scientific advancement.
“Just as technology has changed and advanced, so has medicine,” Haskins told justices last month. “I would ask the court to keep Kansas in the 21st century and affirm the use of the Sixth Edition and not send us back to using a 27-year-old, out-of-date medical text, one that’s used by only a handful of states.”
At least seven states use the Fourth Edition, according to state-by-state charts from the AMA. More than 15 states use the Sixth Edition and about a dozen use the Fifth Edition. Attorneys on both sides of the system said Kansas never adopted the Fifth Edition because it was arguably better for injured workers than the Fourth.
Kolich countered that the Sixth Edition is not based on science. In Johnson’s case, he said, there were no medical advances in his surgery between the Fourth and Sixth editions.
Why does the Sixth Edition result in lower rewards?
A key distinction between the two guides is how the authors defined impairment, Kolich said. In the Fourth Edition injured workers’ impairments were based upon their ability to perform activities at work. In the Sixth Edition impairment isn’t determined by the capacity to work but rather to go about living: eating, sleeping, taking care of personal hygiene.
“He’s able to take care of himself, he can eat, he can sleep. But the problem he’s going to have is with activities of working,” Kolich said of Johnson. “He can no longer perform unrestricted activities of lifting, bending, all those things.”
That shift in definition matters, because an impairment rating should ultimately be based on employees’ abilities to do their jobs, said Phil Slape, a Wichita-based attorney representing injured workers with Slape & Howard.
“The AMA Guides are a way to value workers’ compensation claims,” Slape said.
Worker advocates have long testified against the adoption of the Sixth Edition, he added. The topic arose in the Legislature again in 2017, when Republican and then-Secretary of State Kris Kobach argued against the Sixth Edition, too.
Martens, the defense attorney, said doctors had more leeway under the Fourth Edition to find a greater range of impairment ratings. He maintained the Sixth Edition offers less discretion to doctors, which streamlines the system and makes it more straightforward.
How does workers’ compensation operate?
The Court of Appeals decision used a Monty Python reference to make a point about how the Sixth Edition combined with past revisions weakened workers’ compensation over the years.
In the 1975 film “Monty Python and the Holy Grail,” the Black Knight famously said it was “just a flesh wound” as he tried to resume battle despite being left with no limbs after a series of one-at-a-time cuts to his arms and legs.
The Court of Appeals wrote that “adoption of the Sixth Edition of the AMA Guides leaves the injured worker who suffers a permanent impairment in a situation not unlike that of Monty Python’s Black Knight.”
Since Kansas employees injured on the job can’t sue their employers, cases must first make their way through the Kansas Workers’ Compensation Board before reaching the Court of Appeals, said Jon Voegeli, also an attorney with Slape & Howard.
“There’s a compromise in workers’ compensation,” Voegeli said. “In order to give up your right to a jury, there should be an adequate substitute remedy.”
Essentially, the workers’ compensation system must reward them fairly. Attorneys referred to this as the “quid pro quo,” an exchange of benefits.
In his case, Johnson argued the Sixth Edition no longer offers injured workers an adequate benefit in exchange for their right to a trial.
It isn’t the Sixth Edition alone that renders the act bereft, worker attorneys contended. Rather, it’s all the past adjustments over the years that have slowly chipped away at workers’ compensation benefits.
This is like “death by a thousand paper cuts,” or “just a flesh wound” as in Monty Python, the Appeals Court wrote.
What past changes were made?
In order for the Supreme Court to decide whether the Sixth Edition is constitutional, justices should consider past revisions to workers’ compensation in Kansas that depleted benefits over the years, Fisher, Slape and Voegeli said.
“It’s certainly not in a vacuum,” said Fisher. “If you look at the Court of Appeals decision, it makes clear that you have to look at this in the history of the Workers’ Compensation Act.”
One of the most controversial changes was the inclusion of “prevailing factor” language added in 2011. Attorneys on both sides of the system negotiated a slew of modifications to state workers’ compensation after then-Gov. Sam Brownback took office.
“We are one of the worst states (in which) to get hurt at work by far,” Voegeli said of Kansas. “We’re the only state that has implemented a prevailing factor and a Sixth Edition at the same time. Those work in conjunction to reduce benefits.”
Before prevailing factor was added, employees injured on the job were eligible for workers’ compensation if their injuries aggravated a preexisting condition.
The prevailing factor rule made it that the work injury had to be the primary, or prevailing, cause of the injury in order for an employee to be eligible for workers’ compensation.
For example, if workers over the age of 60 have preexisting back pain or conditions made worse in the course of work, they would no longer be eligible for workers’ compensation for those conditions because of prevailing factor, Slape said.
That shift reduced the number of instances in which employees injured on the job were eligible for workers’ compensation, said Voegeli.
Not everyone agrees about the impacts of the prevailing factor. Fred Greenbaum, of MVP Law, was on the team of lawyers who negotiated the various changes in 2011, including the prevailing factor language.
Prior to adding prevailing factor, personal conditions such as arthritis fell under workers’ compensation and clogged the system with cases that didn’t need to be there, he said.
To fall within workers’ compensation, the injury should be primarily work-related. Other states typically have some language to ensure this, even if they don’t write in “prevailing factor,” he added.
“It was a favorable change for employers, but it was the right thing to do, in my opinion.”
Will the Supreme Court’s decision open new doors?
Kansas is not the first state to see a challenge to the Sixth Edition of the AMA Guides. The Oklahoma Supreme Court decided a case in June 2018 upholding the use of the Sixth Edition as the latest version.
One year prior, the Pennsylvania Supreme Court struck the use of the Sixth Edition. The court found it was unconstitutional to delegate the rating to any edition of the AMA, and impairment ratings were no longer performed by doctors.
While other state supreme courts heard cases regarding the Sixth Edition, Fred Greenbaum thinks the Kansas case is one of the most comprehensive challenges. He’s seen other instances in which the reward difference wasn’t as great as Johnson’s.
Johnson’s case deals with the Fourth and Sixth editions. However, Fred Greenbaum said defense attorneys will watch closely for what the justices write and if they open the door to future discussion on past revisions. For Greenbaum, that’s a concern.
One of the Supreme Court justices asked Kolich during oral arguments: How should they know when the Kansas Workers’ Compensation Act has been so emasculated that it’s no longer an adequate remedy?
Kolich drew a comparison: “It seems to me it’s a lot like the definition of pornography. Nobody knows how to define it; it’s one of those things the court has said, ‘You know it when you see it.’”
This story was originally published October 18, 2020 at 5:07 AM with the headline "Did workers’ compensation changes go too far? Kansas Supreme Court to decide."
