UNISEA, INC. and ALASKA NATIONAL INSURANCE COMPANY, Appellants and Cross-Appellees,
v.
SOFIA MORALES de LOPEZ, Appellee and Cross-Appellant.
Appeal
from the Alaska Workers' Compensation Appeals Commission
No. 16-011.
Constance E. Livsey, Barlow Anderson LLC, Anchorage, for
Appellants/Cross-Appellees.
Selena
Hopkins-Kendall and Eric Croft, The Croft Law Office,
Anchorage, for Appellee/Cross-Appellant.
Before: Bolger, Chief Justice, Winfree, Stowers, Maassen, and
Carney, Justices.
OPINION
WINFREE, JUSTICE.
I.
INTRODUCTION
The
primary issue in this workers' compensation appeal is the
answer to this question: When must an employer pay
compensation related to permanent partial impairment ratings
if doctors in different medical specialities provide
different dates of medical stability and separate impairment
ratings for injuries to different body systems arising out of
one work-related accident?
An
employer asked medical specialists to evaluate a worker with
injuries to different body systems arising out of one
work-related accident. The doctors gave two separate
opinions, almost a year apart, about final medical stability
and relevant permanent impairment ratings in their separate
specialities. The employer paid no compensation based on the
impairment ratings until almost three months after the second
impairment rating. The worker asked the Alaska Workers'
Compensation Board to order a penalty for late payment of
impairment-related compensation benefits, but the Board
agreed with the employer that no impairment-related
compensation was payable until the employer obtained a
combined impairment rating. The Alaska Workers'
Compensation Appeals Commission reversed the Board's
decision, concluding that initial impairment-related
compensation was payable upon notice of the first impairment
rating and further impairment-related compensation was
payable upon notice of the second impairment rating.
The
employer appeals. For the reasons that follow, we affirm the
Commission's decision.
II.
FACTS AND PROCEEDINGS
A.
The Claimant's Injury
In June
2013 Sofia Morales de Lopez, age 54, was employed by Unisea,
Inc. as a fish sorter at a Dutch Harbor processing plant.
While working she fell about 15 feet from a platform onto a
concrete floor and suffered several fractures. After
stabilizing in Unalaska, she was medivaced to Anchorage; she
received medical treatment there for a few weeks before
returning home to California, where she was in a
rehabilitation facility for several months. In addition to
her orthopedic problems, she developed depression and
post-traumatic stress disorder (PTSD) symptoms. Morales's
treating psychiatrist later diagnosed her with PTSD;
Unisea's psychiatrist thought she did not meet the full
criteria for PTSD.
B.
Relevant Statutory Sections And Related Workers'
Compensation
Because
this appeal raises issues related to workers'
compensation benefits paid under several interrelated
statutory sections, we describe the statutory framework here
to provide a better understanding of this case's factual
development.
1.
Temporary total disability compensation
Temporary
total disability (TTD) compensation is payable while a worker
temporarily is totally disabled by a work-related injury;
disability is defined as "incapacity because of
injury to earn the wages which the employee was receiving at
the time of injury."[1] A worker's TTD eligibility ends at
the date of medical stability.[2] Medical stability is
statutorily defined as
the date after which further objectively measurable
improvement from the effects of the compensable injury is not
reasonably expected to result from additional medical care or
treatment, notwithstanding the possible need for additional
medical care or the possibility of improvement or
deterioration resulting from the passage of
time.[3]
2.
Reemployment benefits
An
injured worker also may be eligible for reemployment
benefits, as set out in AS 23.30.041, if a work-related
injury results in certain permanent impairments preventing
return to the worker's prior employment.[4] The reemployment
process is intended to provide the injured worker training
for alternative remunerative employment.[5] If the injured
worker is unable to return to the worker's prior
employment for 90 consecutive days, the Reemployment Benefits
Administrator[6] is required to evaluate whether the worker
is eligible for reemployment benefits.[7] Eligibility
requires a doctor's prediction that the injured worker
will have "permanent physical capacities that are less
than the physical demands" of the worker's job at
the time of injury (as described in a specific U.S.
Department of Labor reference book) or any other job the
worker had in the ten years preceding the
injury.[8] An injured worker initially found eligible
for reemployment benefits may later be found ineligible if,
"at the time of medical stability, no permanent
impairment is identified or expected."[9]
In 2005
the legislature created a new and alternative job dislocation
benefit for injured workers who qualify for reemployment
benefits but who do not want to engage in the reemployment
process.[10] The job dislocation benefit is a fixed
amount based on the worker's permanent partial impairment
(PPI) rating; the maximum job dislocation benefit is $ 13,
500.[11] Reemployment benefits, in contrast,
include formulation of and payment for an approved
reemployment plan[12] along with stipend benefits to the
injured worker if other specified benefits, including PPI
compensation, end during the plan's
implementation.[13] An injured worker found eligible for
reemployment benefits must select one of the two options -
the job dislocation benefit or the reemployment benefits -
within 30 days of the eligibility notification.[14]
3.
PPI compensation
Alaska
Statute 23.30.190 authorizes PPI compensation; subsection (a)
provides:
In case of impairment partial in character but permanent in
quality, and not resulting in permanent total disability, the
compensation is $177, 000 multiplied by the employee's
percentage of permanent impairment of the whole person. The
percentage of permanent impairment of the whole person is the
percentage of impairment to the particular body part, system,
or function converted to the percentage of impairment to the
whole person as provided under (b) of this section. The
compensation is payable in a single lump sum, except as
otherwise provided in AS 23.30.041, but the compensation may
not be discounted for any present value considerations.
Alaska
Statute 23.3 0.190(b) requires using a specific medical
reference, the American Medical Association Guides to the
Evaluation of Permanent Impairment (the Guides), to calculate
compensation: "All determinations of the existence and
degree of permanent impairment shall be made strictly and
solely under the whole person determination as set out in
[the Guides], except that an impairment rating may not be
rounded to the next five percent." Subsection .190(d)
requires the Board to update the Guides as new editions are
issued. PPI is not linked to medical stability in
the statute.
The
sixth edition of the Guides was adopted by the Board in
January 2008.[15] The Guides has consistently evaluated
different organs and body systems separately, using medical
testing and examination to estimate the extent a particular
organ or body system impairment limits a person's
activities of daily living.[16]
An
evaluation using the Guides is done when the injured worker
reaches maximum medical improvement (MMI), defined as
[t]he point at which a condition has stabilized and is
unlikely to change (improve or worsen) substantially in the
next year, with or without treatment. While symptoms and
signs of the condition may wax and wane over time, further
overall recovery or deterioration is not anticipated.
However, both the name given to and exact definition of this
status vary depending on the jurisdiction. Among the numerous
synonyms for MMI are . . . medical stability . . .
.[17]
The
Guides's MMI definition differs from AS 23.3 0.3 95's
definition of medical stability because the MMI
definition centers on a condition's stabilization, not on
whether further medical care would lead to objectively
measurable further improvement from "the effects of the
compensable injury."[18] Because a single work-related
injury can affect more than one body system or cause more
than one condition, medical stability and MMI may not always
be coextensive. And the MMI definition does not indicate that
all separate conditions need to have stabilized before any
single condition can be evaluated using the Guides.
A
rating of an organ or body system under the Guides generally
shows how the loss affects the whole person, even though
ratings are performed on organs or body systems
separately.[19] The Guides also provides a method for
combining different body system impairments, set out in both
the text and the Combined Values Chart
appendix.[20] Essentially the greatest impairment
value is combined with the next largest remaining value by
looking to where the numbers intersect on a
chart.[21] "The method of combining
impairments is based on the idea that a second or a
succeeding impairment should apply not to the whole but only
to the part that remains after the first and other
impairments have been applied."[22] The Combined Values
Chart's values are derived from a mathematical formula;
using the Chart requires that each organ system's
impairment "must first be expressed as a whole person
impairment percent."[23]
The
Guides sets out a three-step rating process consisting of
"clinical evaluation, analysis of the findings, and
discussion of how the impairment rating was
calculated."[24] According to the Guides, "[t]he
first 2 steps must be performed by a licensed physician, and
if the clinical findings are fully described, any
knowledgeable observer may check the findings against the
Guides'[s] criteria."[25] The Guides
also "emphasize [s]" that "nonphysician
evaluators may analyze an impairment evaluation to determine
if it was performed in accordance with the
Guides."[26]
C.
Morales's Claim Process And Administrative
Proceedings
The day
after Morales's June 2013 injury, Unisea began paying her
TTD compensation; it continued to do so through early August
2015, when it controverted the TTD compensation for reasons
unrelated to this appeal.
In
October 2013 Unisea initiated the reemployment process
paperwork, notifying the Reemployment Benefits Administrator
that Morales had been totally unable to return to her
employment for 45 consecutive days.[27] After Morales remained
unable to return to her work for 90 consecutive days, an
eligibility evaluation was ordered in California.
Reemployment Benefits Administrator staff wrote to Morales,
with a copy to Unisea, telling her she was eligible for
reemployment benefits and within 30 days she needed to choose
whether to go through the reemployment process or receive a
job dislocation benefit. Morales had not yet been rated for a
permanent impairment, and a rating would have been necessary
to calculate the job dislocation benefit.[28] Morales
returned the signed and notarized form electing the job
dislocation benefit, and Unisea was served a copy of the form
in April 2014. At no time did Unisea contest Morales's
entitlement to reemployment benefits in general or the job
dislocation benefit in particular.
In
early November 2014 Morales traveled to Seattle for an
employer's medical evaluation (EME) by a panel of three
doctors - a neurologist, an orthopedist, and a psychiatrist -
all working for the same organization. The psychiatrist gave
an opinion that the work injury was the substantial cause of
her psychiatric condition, but he did not think her
psychiatric condition was medically stable. The other two
doctors evaluated Morales's physical condition and
determined that her orthopedic problems caused by the
accident were medically stable. Using the Guides, they rated
her as having a 5% whole person permanent impairment. In
February 2015, relying on the orthopedic and neurology EME
report, Unisea controverted further medical care for
Morales's neck, back, and right foot conditions, as well
as any related personal-attendant care. The controversion
notice mentioned neither PPI compensation nor the job
dislocation benefit. Unisea continued paying Morales TTD
compensation, now based solely on her psychiatric condition.
Morales
- representing herself- filed her first workers'
compensation claim in June 2015, seeking continued medical
care and other benefits. Later that month Unisea filed its
first medical summary with the Board, listing the two
November 2014 EME reports.[29] Unisea answered Morales's
claim, admitting that she was entitled to continued TTD
compensation and psychiatric care but denying that she was
entitled to continued physical medical care. In early August
Morales obtained the counsel who would ultimately represent
her before the Board. About the same time, Unisea scheduled a
second psychiatric EME, but Morales did not attend. In
September Morales filed a compensation claim for continued
medical costs, continued TTD compensation (which Unisea had
discontinued when Morales did not attend the second
psychiatric EME[30]), penalties for Unisea's late
payments, [31] interest, and attorney's fees.
Morales
attended a second psychiatric EME in November 2015; the EME
psychiatrist determined her psychiatric condition was
medically stable and rated her as having a resulting 10%
impairment. Unisea later communicated with the EME
psychiatrist - although the communication itself is not in
the record - seeking clarification of the November 2015
rating. In a February 8, 2016 addendum the psychiatrist
explained that the 10% psychiatric impairment was a whole
person rating that, when combined with the 5% orthopedic
impairment, would be a 15% whole person impairment rating. On
February 17 Unisea then paid Morales a job dislocation
benefit and PPI compensation based on the 15% permanent
impairment rating.
In
March Morales filed a compensation claim for penalty and
interest on the PPI payment. She also sought a Board ruling
invalidating her job dislocation benefit election because of
Unisea's delay in paying her that benefit. Unisea's
controversion response covered all of Morales's requests:
The [employee] signed an Election to Waive Reemployment
Benefits and Receive a Job Dislocation Benefit Instead form
on 03/03/14. Payment has been issued. ... No penalty is owed
on PPI payments as the [employer] & carrier did not have
a completed combined whole body rating until the report...
dated February 8, 2016 was provided to the carrier.
The [employee] was not entitled to receive her job
dislocation benefit until after she was medically stable
& rated for her whole body PPI.
The
Board held two hearings and issued three decisions, one on
reconsideration, related to Morales's claims. No
witnesses testified at either hearing. The first hearing
primarily concerned a penalty on Morales's PPI
compensation. Unisea relied on a Commission decision,
Lowe's HIW, Inc. v. Anderson[32] to argue that
it had timely paid PPI compensation, in part because it had
continued to pay TTD compensation after receiving the
orthopedic impairment rating. Morales contended that
Anderson did not apply to her case. She argued that
Unisea should have paid her lumpsum PPI compensation related
to the 5% orthopedic impairment rating within weeks of
receiving the EME report and should have paid her the
remaining 10% PPI compensation after the November 2015
psychiatric EME report. Unisea maintained that it was
justified in waiting until February 2016, when it received
the addendum from its EME psychiatrist showing the combined
whole person impairment rating.
The
Board first decided that no penalty was owed on the PPI
compensation payment. The Board reasoned that PPI
compensation should be paid in a single lump sum and that
Unisea did not have "a true 'whole person'
rating" until the February 2016 addendum from the EME
psychiatrist. The Board also reasoned that because TTD
compensation is "not payable after the date of medical
stability" and because Morales was paid TTD compensation
from June 24, 2014 through August 7, 2015, Unisea "was
not obligated under the Act to issue [Morales] a PPI benefit
concurrently with ongoing TTD payments." Morales asked
the Board to reconsider its decision; the Board denied
reconsideration.
The
Board's second hearing considered the job dislocation
benefit. Morales sought a ruling from the Board that
Unisea's delay in paying the job dislocation benefit made
her election invalid, thus freeing her to pursue reemployment
benefits. Alternatively she asked the Board to consider a
penalty on the job dislocation benefit.
The
Board decided there had been no undue delay in paying the job
dislocation benefit even though the delay "was unusually
long." The Board thought delay in paying job dislocation
benefits was common "because of the difference between
the statutory requirements for eligibility for reemployment
benefits and the calculation of the amount of the dislocation
benefit." According to the Board's analysis, job
dislocation benefit payment is dependent on a PPI rating that
includes all conditions; because the Board earlier had
decided that Unisea did not have a complete PPI rating until
February 2016, the Board decided the job dislocation benefit
was timely paid.
Morales
separately appealed the Board's decisions to the
Commission; the Commission consolidated the appeals.
The
Commission first considered the job dislocation benefit and
decided that Unisea had not timely paid that benefit. The
Commission looked at the language of AS 23.30.041(g),
requiring payment to an employee "who has been given a
[PPI] rating by a physician," and decided that Unisea
was required to pay Morales at least an initial payment after
the first PPI rating by the EME doctors. The Commission
indicated its decision was based in part on Unisea's
failure to controvert, writing, "Perhaps, more
importantly, Unisea never bothered to tell Ms. Morales why it
was not paying the dislocation benefit."
The
Commission next discussed PPI compensation and decided that
Unisea also had not timely paid that compensation. The
Commission considered statutory language in the Alaska
Workers' Compensation Act, our decisions in Sumner v.
Eagle Nest Hotel[33] and Hammer v. City of
Fairbanks, [34] and information in the Guides. The
Commission decided that nothing in the Guides requires all
body systems or organs to reach MMI at the same time for a
final PPI rating. The Commission decided that under our
precedent PPI compensation became due when Unisea received
the EME reports with the impairment ratings. The Commission
distinguished its Anderson decision by interpreting
it to apply only to claimants actively engaged in the
reemployment process. Finally, the Commission agreed with the
Board that Morales could not rescind or otherwise avoid the
consequence of her election to receive a job dislocation
benefit in lieu of reemployment benefits and that Unisea was
"not estopped from relying on the Election Waiver by Ms.
Morales."
Unisea
appeals the Commission's decision about the timeliness of
Unisea's PPI compensation and job dislocation benefit
payments. Morales cross-appeals the Commission's decision
that she cannot avoid her job dislocation benefit election.
III.
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