2018 Kansas Work Comp Law Update
2018 Kansas Legislature. The 2018 Kansas legislature enacted several substantive workers compensation law changes related to death benefit claims. Highly summarized, while the overall $300,000.00 death benefit cap remains, key death benefit statute changes include: 1) the funeral benefit cap was increased from $5,000.00 to $10,000.00; 2) the up-front lump sum payment increases from $40,000 to $60,000.00; 3) clarification of statutory language regarding cut off of payments to minor dependent children when still in high school; 4) increase in caps for dependents, if any, where employee leaves no legal spouse or dependent children; and 5) increase in allowable Conservator expenses for minor dependents up to maximum of $2,500.
Constitutionality of Statute Requiring Use of AMA Guidelines 6th Ed. – Pardo Kansas Court of Appeals Ruling. The 2013 Kansas Legislature amended the Kansas Workers Compensation Act to require use of the AMA Guides to the Evaluation of Permanent Impairment 6th Ed. to determine an award of permanent partial disability compensation based on the extent of functional impairment. Prior to January 1, 2015, the statutorily required AMA Guides edition was the 4th Ed. The change from use of the AMA Guides 4th Ed. to the 6th Ed. became effective for all injuries occurring on or after January 1, 2015.
Since 2015, Kansas claimants and the claimant’s bar have been heard to complained that the AMA Guides, 6th Ed. so significantly reduces impairment ratings and resulting compensation awards, as to effectively eliminate an adequate quid pro quo substitution of a work comp remedy for the workers’ original civil tort damage remedy. In the original grand bargain, Kansas injured workers relinquished their common law civil court tort remedy of uncapped damage award potential from a jury of their peers, in exchange for a no-fault benefit remedy system that was intended to adjudicate work injury disputes and deliver medical treatment more quickly and predictably, but with capped disability benefit recovery potential for injured workers and lower costs to employers.
On June 1, 2018, the Kansas Court of Appeals (Kansas’ intermediate appellate court) handed down its ruling in the case of Pardo v. United Parcel Service, Inc., No. 116,842 concerning the constitutionality of the Kansas Workers Compensation Act’s 2015 adoption of the AMA Guides 6th Edition in calculating permanent partial disability compensation benefits.
Claimant Pardo was a thirteen-year employee of UPS operating trucks, picking up and delivering loads, and working in the yard with a spotter. The accidental work injury which was the subject of this claim occurred on March 18, 2015 while climbing on a piece of equipment. Mr. Pardo slipped on an oil and grease buildup, causing his left arm to jerk, and he felt a pop and pull in his left shoulder.
The focus of Pardo’s constitutional challenge of the legislative requirement that permanent partial disability be computed based on the AMA Guides, 6th Ed. was a unique 6th Ed. rating limitation for shoulder injuries. The 6th Ed. specifies for a certain type of rotator cuff tear, a 0% -2% permanent impairment rating can be given. However, the 6th Ed. also adds the provision not found in the AMA Guides 4th Ed. that a rating in the range of 0% to 2% for these types of shoulder injuries can only be given once in an individual’s lifetime (AMA Guides, 6th Ed., Table 15-5, Page 402).
Pardo’s unique fact situation was that he had suffered a prior left shoulder rotator cuff tear in a previous 2013 work related injury, which resulted in a previous left shoulder surgical repair and disability compensation recovery.
When applying the AMA Guides 6th Ed. to this 2015 claim of left shoulder re-injury, the employer’s argument was that Pardo was entitled to no additional permanent partial disability compensation for this 2015 shoulder work injury. This is in stark contrast to what permanent disability compensation Pardo would have received had the law allowed Pardo’s impairment and disability compensation to have been based on the old AMA Guides 4th Ed. language.
Under the previously required AMA Guides 4th Ed. shoulder rating provisions, had they still been in place in 2015, Pardo would likely have been awarded, for the 2015 re-injury, permanent disability compensation of an additional 10% permanent impairment above the previous 15% permanent impairment Pardo had been awarded for his first left shoulder work injury.
In short, because Kansas required the AMA Guides 6th Ed. to be used to determine his permanent disability compensation for the 2015 left shoulder re-injury, Pardo is now entitled to zero dollars ($0) additional permanent disability compensation above his previous 2013 original shoulder injury award. Contrast the $0 permanent partial disability compensation award under the AMA Guides 6th Ed. for the Pardo 2015 re-injury claim, with the approximate $13,000.00 award he would have received for that 2015 re-injury claim had the old 4th Ed. version of the AMA Guides still been in place in the statute.
This compensation recovery differential under the AMA Guides 6th Ed. left Pardo with the obvious legal argument that as applied to his case the legislative change from the AMA Guides 4th Ed. to the 6th Ed. was unconstitutional because not only was the amount of his permanent disability compensation significantly reduced for this second work related shoulder injury, he was actually completely denied any permanent disability compensation remedy under the 6th Ed. requirement applicable to his 2015 accidental re-injury claim. Therefore, the quid pro quo basis of the original grand bargain was lost to Pardo as the amended law requiring the use of the 6th Ed. was applied to his 2015 re-injury claim situation.
The Pardo Kansas Court of Appeals decision reversed the Appeals Board denial of permanent disability compensation benefits. In doing so, the Court of Appeals held that as applied to Mr. Pardo, the use of the AMA Guides 6th Ed. was unconstitutional and remanded the case back to the administrative agency for a determination of permanent impairment and disability compensation entitlement based on the AMA Guides 4th Ed.
Interestingly, neither the employer nor Pardo filed with the Kansas Supreme Court, a timely Petition for Review by the Supreme Court of this Pardo Court of Appeals decision. This is because while the outcome of the Pardo Court of Appeals decision to reverse the Appeals Board favored claimant Pardo, the very narrow and limited rationale for the decision used by the Court in its opinion to reach that result could be seen as actually potentially benefiting employers in future AMA Guide 6th Ed. rating disputes. It appears each side calculated the risks of further appealing this particular Court of Appeals outcome and decided the risks of further appeal to the Kansas Supreme Court were greater than simply living with the outcome of the Court of Appeals decision as written in Mr. Pardo’s case.
Claimant Pardo prevailed in the outcome of this decision in that his case will now return to the Appeals Board and instead of receiving $0 additional permanent disability compensation for the 2015 re-injury, he will likely receive a modest award of some additional permanent disability compensation. Yet this is a far cry from what claimant Pardo argued for before the Kansas Court of Appeals in this appeal.
Pardo’s basic request to the Kansas Court of Appeals was that the Court determine the entire Kansas Workers Compensation Act unconstitutional and allow Kansas injured workers to regain their original civil tort remedy in Kansas general civil courts, before a jury of their peers. Pardo argued that his $0 permanent disability compensation award was unconstitutional as it denied him due process, violated equal protection, violated separation of powers and was an unlawful delegation of the State’s legislative powers.
The rationale of the Pardo Court’s ruling did not grant claimant Pardo with the sweeping evisceration of the Kansas Workers Compensation Act his counsel requested of the Kansas Court of Appeals. The Court rejected Pardo’s recommendation that he be allowed to purse civil tort damages for his 2015 work injury because the requirement of use of the AMA Guides 6th Ed. denied him a remedy under the Act. The Court potentially limited the scope and future application of its decision to other Kansas injured workers through its holding that the Act’s use of the AMA Guides 6th Ed. was unconstitutional, by carefully restricting its determination of unconstitutionally to this particular claimant’s fact situation as opposed to the entire Kansas Workers Compensation Act as applied to all other current and future injured worker claims.
The current and future impact of this limited Pardo Court of Appeals decision will be closely followed. Undoubtedly, this will not end the claimants’ bar challenges to the constitutionally of the AMA Guides 6th Ed. in other fact situations, and other more general constitutional challenges as to the broader pro-employer 2011 reform amendments to the Act. While other pending and future shoulder re-injury claims in Kansas will likely be resolved by the parties with a compromise consideration of AMA Guides 4th Ed. impairment ratings for specific rotator cuff re-injury claims, whether this Pardo Court of Appeals decision will impact the routine resolution of Kansas claims involving body part problems beyond just certain shoulder injury conditions is yet to be determined.
Constitutionality of Statute Requiring Use of AMA Guidelines 6th Ed. – Johnson Kansas Court of Appeals Ruling. Further evidencing the emerging nature of the Kansas issue of constitutionality of the AMA Guidelines 6th Ed., on August 3, 2018, just two months after the above described Pardo decision was issued, a separate three-judge panel of the Kansas Court of Appeals issued a broader constitutional rejection of Kansas’ use of the AMA Guides 6th Ed. to determine permanent partial functional impairment.
In Johnson v. U.S. Food Serv., No. 117,725, LEXIS 44 (Aug. 3, 2018), the Kansas Court of Appeals ruled across the board striking down all 2013 Kansas act amendments which substituted the use of the AMA Guides 6th Ed. for the AMA Guides 4th Ed. to both scheduled and general body disabilities. Unlike Pardo, the Court’s ruling this time broadly applies to all injured workers and all body part ratings. In colorful literary prose, the Johnson Court focused in on the question of whether the 2013 legislative substitution of the 6th Ed. for the 4th Ed. finally so tipped the scales that the Act’s workers compensation legislative remedy is no longer an adequate substitute for the loss of the injured employee’s original common law tort remedy. The Court held that the use of the 6th Ed. over the 4th Ed. so drastically cut the remedy and monetary recovery of Kansas’ injured workers, that there is no longer an adequate quid pro quo for injured workers suffering a permanent impairment of function for their work injury.
Approaching the issue from a historical perspective, the Court noted that multiple pro-employer legislative revisions to the Kansas Act over the years has resulted in injured workers seeing a gradual erosion of the fair exchange between rights granted under the Act verses the recovery rights lost under common law, equivalent to “death by a thousand paper cuts” for the permanently disabled worker in Kansas.
Thus, regarding the constitutionality of Kansas requiring the use of the AMA Guides 6th Ed. in awarding permanent partial disability compensation, the law in Kansas has evolved in a matter of just a few months from the more limited Pardo decision striking the 6th Ed. application to a single claimant with a scheduled impairment to the shoulder, to the Johnson decision just two months later striking any use of the 6th Ed. across the board as applicable to all claimants and involving all injured body parts.
Note that Kansas never adopted the AMA Guides 5th Ed., going directly from use of the 4th Ed. to the required use of the 6th Ed. under the 2013 legislative paper cut. Thus, the ultimate outcome of this issue will be the binary choice between whether the law mandates use of the 4th Ed. or the 6th Ed. of the AMA Guides.
It is unknown at the time of this writing whether the Johnson decision of the Kansas Court of Appeals will be timely appealed to the Kansas Supreme Court. Most learned observers expect an appeal to the Kansas Supreme Court to occur. In the meantime, for injured workers, employers and carriers in Kansas there will exist some uncertainty in pending cases likely requiring that impairment ratings will need to be procured under both the 4th Ed. and the 6th Ed. until a final determination is made concerning the constitutionality of Kansas’ 2013 amendments requiring the use of the 6th Ed.