Opinion
W.C. No. 4-309-813
July 1, 2002
In 1996, the claimant suffered a compensable injury to her left shoulder. On May 4, 2000, Dr. Colliton opined the injury caused 16 percent upper extremity impairment, which she converted to 10 percent whole person impairment using Table 3 of the American Medical Association Guides to the Evaluation of Permanent Impairment, Third Edition, Revised (AMA Guides). Based on Dr. Colliton's report, the respondent filed a final admission of liability for a scheduled disability award. The claimant objected and requested a Division-sponsored independent medical examination (DIME) on the issues of maximum medical improvement (MMI) and medical impairment to her shoulder, neck and back.
The DIME physician assigned a 35 percent upper extremity impairment rating which he converted to 21 percent whole person impairment. The DIME physician's "final/combined" rating was 21 percent whole person impairment.
Section 8-42-107.2(4), C.R.S. 2001 provides that:
"Within thirty days after the date of the mailing of the [Division-sponsored] IME's report, the insurer or self-insured employer shall either file its admission of liability pursuant to § 8-43-203 or request a hearing before the division contesting one or more of the IME's findings or determinations contained in such report."
Rule IV(N)(6) requires an insurer to either admit liability consistent with the DIME report or file an application for hearing within the same period. The plain and ordinary language of the statute and rule states that the prescribed conduct is mandatory.
It is undisputed the respondent timely received the DIME physician's report and neither filed an amended final admission consistent with the DIME physician's impairment rating, nor did it request a hearing to dispute the DIME physician's whole person rating. Consequently, the claimant applied for penalties.
The ALJ found the claimant proved she suffered functional impairment to the whole person and that the respondent failed to overcome the DIME's whole person impairment rating. Therefore, the ALJ awarded permanent partial disability benefits consistent with the DIME physician's whole person impairment rating.
Further, the ALJ determined the respondent's contention the claimant suffered only a scheduled disability, and, therefore, it was not required to comply with § 8-42-107.2 and Rule IV(N)(6) was objectively unreasonable. Therefore, the ALJ assessed a penalty. The respondent timely appealed the penalty order.
On review, the respondent argues the ALJ's finding the respondent violated § 8-42-107.2 and Rule IV(N)(6) is not supported by the record or the applicable law. Citing Delaney v. Industrial Claim Appeals Office 30 P.3d 691 (Colo.App. 2000), the respondent points out that the claimant has "no right" to a DIME to contest a scheduled disability. The respondent contends Dr. Colliton did not identify any injury to the whole person, or functional impairment beyond the left upper extremity. Under these circumstances, the respondent contends the claimant was not entitled to a DIME and, thus, its receipt of the DIME report created no obligation to file an amended admission or apply for a hearing. We disagree.
Section 8-43-304(1), C.R.S. 2001 provides that an insurer who fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director or panel, may be subject to penalties of up to $500 per day. The courts have held that an insurer's unreasonable failure to comply with a statute and procedural rule may be penalized under § 8-43-304(1). Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997).
The applicable law provides that the claimant is limited to a scheduled disability award if the claimant suffers an "injury or injuries" described in § 8-42-107(2), C.R.S. 2001. Strauch v. PSL Swedish Healthcare System, 917 P.2d 366 (Colo.App. 1996). In contrast, where the claimant suffers an injury or injuries not enumerated in § 8-42-107(2), the claimant is entitled to whole person impairment benefits under § 8-42-107(8), C.R.S. 2001. Mountain City Meat Co. v. Oqueda, 919 P.2d 246 (Colo. 1996). In the context of § 8-42-107(1), the term "injury" refers to the part or parts of the body which have been functionally impaired or disabled as a result of the injury. Strauch v. PSL Swedish Healthcare System, supra.
As argued by the respondent, the Workers' Compensation Act creates different legal duties for adjudication of benefits based on scheduled and non-scheduled injuries. In particular, the court has held that there is no statutory right to a DIME to assign impairment ratings for scheduled injuries, and the DIME procedures apply to whole person impairments only. See Delaney v. Industrial Claim Appeals Office, supra. However, where the issue is disputed the determination of whether the claimant sustained a scheduled or non-scheduled injury is a question of fact for the ALJ, not the rating physician. Strauch v. PSL Swedish Healthcare System, supra. Moreover, Delaney itself expresses a preference for conducting a DIME prior to a hearing where the respondents allege the claimant suffered a scheduled injury and the claimant argues she sustained a whole person injury.
Here, the claimant contested the respondent's final admission of liability for scheduled disability benefits and expressly asserted that she sustained a non-scheduled injury. Accordingly, we reject the respondent's contention that Dr. Colliton's rating was dispositive of whether the claimant was entitled to a DIME. To the contrary, there had been no factual determination by an ALJ as to whether the claimant sustained a scheduled or whole person impairment prior to the date the DIME physician's report was received by the respondent. Consequently the record does not support the respondent's assumption Rule IV(N)(6) does not apply to this claim.
Further, we are persuaded by the court's conclusions in Human Resource Co. v. Industrial Claim Appeals Office, 984 P.2d 1194 (Colo.App. 1999), that the respondent had an obligation to comply with and Rule IV(N)(6) upon its receipt of the DIME report. In Human Resource Co., the insurer, upon receipt of a scheduled impairment rating filed a final admission for the payment of a scheduled disability award consistent with Rule IV(N)(8). Under Rule IV(N)(8) an insurer is required to file an admission or request a hearing within 30 days of the date of the mailing or delivery of a scheduled impairment rating issued by a level II accredited physician. However, Rule IV(N)(5), which applies to non-scheduled injuries, requires the insurer to file an admission or request a DIME within 30 days of the date of the mailing or delivery of a non-scheduled medical impairment rating issued by a level II accredited physician. Contrary to Rule IV(N)(5), the insurer did not file an amended admission upon its subsequent receipt of a 2 percent whole person impairment rating for the claimant's psychological injury. An ALJ determined the insurer had no reasonable basis for failing to file an amended admission for whole person impairment benefits, and the insurer's failure to do so was a violation of Rule IV(N)(5). Therefore, a penalty was imposed.
In upholding the penalty, the Human Resource court rejected the insurer's argument that, having initially complied with Rule (IV)(N)(8) concerning a scheduled impairment, it had no duty to file an amended admission when it received the report of the whole person psychological impairment. Rather, the Court concluded that when the insurer "came into possession" of the whole person rating report, the insurer was required either to admit liability for whole person impairment benefits, or request a DIME as required by Rule IV(N)(5).
Although, this claim involves the application of Rule IV(N)(6), not Rule IV(N)(5), we are persuaded by court's reasoning in Human Resources that the respondent's initial filing of a final admission of liability for a scheduled disability did not relieve it of the obligation to comply with the statute and Rule IV(N)(6) upon its subsequent receipt of the DIME report containing the whole person impairment rating. Furthermore, we are unaware of any rule or interpretative bulletin of the Director of the Division of Workers' Compensation containing a contrary interpretation of Rule IV(N)(6), and the parties do not cite any such rule or bulletin. It follows, the ALJ did not err in finding that the respondent's failure to apply for a hearing to dispute the DIME physician's 21 percent whole person impairment rating, or file an amended final admission consistent with the DIME's physician's rating, violated Rule IV(N)(6).
The respondent's further arguments have been considered and are unpersuasive. One obvious purpose of the statute and Rule IV(N)(6) is to maximize judicial efficiencies and prevent delay in determining the claimant's entitlement to permanent partial disability by requiring the insurer to timely indicate whether it disputes the DIME physician's whole person rating. See Director's Interpretations of Issues Impacting the Colorado Workers' Compensation System June 13, 2001.
Further, application of the statute and Rule IV(N)(6) is not dependent on whether the DIME physician's impairment rating is ultimately determined to be correct. In fact, Rule IV(N)(6) is designed to afford the insurer the option of setting the matter for a hearing to contest the accuracy of the DIME physician's rating. Thus, the fact the insurer possesses evidence to dispute the correctness of the DIME's physician's rating doesn't excuse the failure to comply with the statute and Rule IV(N)(6).
We also reject the respondent's contention the record is insufficient to support the ALJ's finding that the insurer's violation was objectively unreasonable. It is well established that the reasonableness of the violator's actions is measured under an objective standard of what a reasonable insurer would have done under the circumstances. Specifically, the standard is whether the insurer's violation was predicated on a rational argument based in law or fact. Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996).
Here, the issue is not whether the respondent had a reasonable basis to argue the claimant did not suffer a non-scheduled injury, or that the DIME physician incorrectly rated the claimant's impairment. Rather, the issue was whether the respondent's inaction upon receipt of the DIME physician's report was predicated on a rational argument that the statute and Rule IV(N)(6) do not apply to the claim. Because the resolution of this issue is essentially a question of fact, we must uphold the ALJ's determination if supported by substantial evidence and plausible inferences drawn from the record. Section 8-43-301(8), C.R.S. 2001; Diversified Veterans Corporate Center v. Hewuse, supra; Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995).
We assume, arguendo, the ALJ erroneously determined that the claimant's work restrictions and rateable peripheral nervous system impairment put the respondent on notice the claimant suffered a whole person impairment. Regardless, it is well established that an "upper extremity" impairment rating listed in the AMA Guides does not necessarily correlate to a "loss of use of the arm at the shoulder" for purposes of § 8-42-107(2)(a), C.R.S. 2001. Langton v. Rocky Mountain Health Care Corp., 937 P.2d 883 (Colo.App. 1996). Accordingly, the ALJ could, and did, find that the respondent unreasonably relied on Dr. Colliton's "upper extremity" rating as a basis for assuming the claimant was not entitled to a DIME. In any case, the claimant disputed the respondent's assertion that there was no whole person impairment, and no ALJ had resolved the parties' factual dispute prior to the date the claimant requested a DIME. Therefore, once the claimant procured the DIME, and the DIME assessed whole person impairment, the procedural requirements of the statute and Rule IV(N)(6) were activated.
We also note that the DIME physician converted his scheduled disability rating to a whole person impairment rating and relied on the whole person rating as representing "the whole picture" of the claimant's disability. It follows that there is substantial evidence to support the ALJ's implicit determination that a reasonable insurer in similar circumstances would not have assumed the statute and Rule IV(N)(6) were not applicable. Consequently, the existence of evidence which, if credited, might support a contrary determination is immaterial on review. F.R. Orr Construction v. Rinta, 717 P.2d 965 (Colo.App. 1985) (substantial evidence is probative evidence which would warrant a reasonable belief in the existence of facts supporting a particular finding, without regard to the existence of contradictory testimony or contrary inferences). Further, the ALJ's finding that the respondent unreasonably assumed the statute and Rule IV(N)(6) do not apply supports the imposition of penalties.
In view of our conclusions we do not consider whether the ALJ erred in finding that the claimant's application for a DIME on the issue of MMI automatically entitled her to a DIME on the issue of permanent impairment.
IT IS THEREFORE ORDERED that the ALJ's Supplemental Order dated March 26, 2002, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the Court, within twenty (20) days after the date this Order is mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 2001. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this decision were mailed July 1, 2002 to the following parties:
Amy Bueling, 5441 E. 123rd Ave., Thornton, CO 80241
City Market, Inc., P. O. Box 729, W.C. Dept., Grand Junction, CO 81502
Kimberly Reiner, RSKCo, P. O. Box 5567, Denver, CO 80217
Jeff Francis, Esq., 940 Wadsworth Blvd., 4th floor, Lakewood, CO 80215 (For Claimant)
Frederick G. Aldrich, Esq., P. O. Box 40, Grand Junction, CO 81502 (For Respondent)
BY: A. Hurtado