Does No Physician Report Mean No Supplemental Job Displacement Benefit?

The following is a guest blog post by Michael W. Sullivan of Michael Sullivan & Associates LLP, an aggressive workers’ compensation defense firm with offices throughout California. Mr. Sullivan is a bar-certified Specialist in Workers’ Compensation Law.

An employee who suffers residual effects from an injury and can’t return to work is entitled to a supplemental job displacement benefit. The benefit comes in the form of a nontransferable voucher, and often is simply referred to as the “voucher.” An employer’s duty to investigate liability for the voucher is triggered by a Physician’s Return to Work & Voucher report (RTW Report). If there’s no RTW Report, does that mean an employer can’t be liable for the voucher?

Before 2013, an employer was liable for the voucher if it didn’t offer permanent, modified, or alternative work meeting certain requirements within 30 days of the termination of temporary disability indemnity payments. Because temporary disability payments often ended before an employee was deemed to be permanent and stationary, the Legislature changed the point at which the benefit is triggered.

For injuries on or after January 1, 2013, Lab C §4658.7(b)(1) requires an employer to offer regular, modified, or alternative work

“no later than 60 days after receipt by the claims administrator of the first report received from either the primary treating physician, an agreed medical evaluator, or a qualified medical evaluator, in the form created by the administrative director…finding that the disability from all conditions for which compensation is claimed has become permanent and stationary and that the injury has caused permanent partial disability.”

Conforming regulations require a RTW Report (Form DWC-AD 10133.36) in which a physician must specify an injured employee’s work restrictions. 8 Cal Code of Regs §10133.31(b). This is intended to make it easier for employers to know when to begin investigating whether work is available to an injured worker and delineate the work restrictions to consider.

But physicians frequently fail to complete the RTW Report. In fact, it’s common for an injured worker to be declared permanent and stationary without the form being completed by a physician. If an employer’s duty to investigate liability for the voucher is never triggered by the report, can an employer ever be liable for the voucher?

In Fndkyan v Opus One Labs (Feb. 28, 2019, ADJ10079944) 2019 Cal Wrk Comp P.D. Lexis 51, the WCAB held that it could. The WCAB recognized that the RTW Report is described by §4658.7(h)(2) as a “mandatory attachment” to a medical report. But because it was undisputed that the defendant received the qualified medical examiner report, which informed the defendant that the applicant was permanent and stationary and of the applicant’s work capabilities and restrictions, it would “place form over substance” to also require the RTW Report. So, even though no RTW Report was sent to the defendant, the applicant was entitled to the voucher.

This decision can still be challenged because the Labor Code and administrative regulations specify that an employer’s liability for the voucher is triggered by receipt of the RTW Report. In Honeywell v WCAB (Wagner) (2005) 35 C4th 24, the California Supreme Court explained that when a statute is clear and unambiguous, the WCAB may not depart from it. Thus, because §4658.7(b)(1) specifies that the 60-day period starts on receipt of the RTW Report, employers may argue that liability for the voucher also doesn’t begin until they receive the RTW Report.

But 8 Cal Code of Regs §10109 requires a claims administrator to “conduct a reasonable and timely investigation upon receiving notice or knowledge of an injury or claim for workers’ compensation benefits.” A reasonable investigation must try to get the information needed to determine and provide benefits. So, if an employer receives information that an employee may be entitled to the voucher, it must try to get information needed to determine whether the voucher must be provided.

The bottom line: If an employer receives a permanent and stationary report from a physician, but the physician doesn’t complete a RTW Report, the employer may request one if it doesn’t have enough information to determine whether permanent, modified, or alternative work is available. On receipt of the RTW Report, the employer would then have 60 days to make an offer of work. But, if an employer receives the necessary information to make an offer of work, even if it’s not on the required form, it can’t avoid liability for the voucher by its own inaction.

Michael Sullivan’s 16-chapter treatise, Sullivan on Comp, a preeminent resource in the field, is now available online, with links to primary law, in CEB’s Workers’ Compensation OnLAW Library.

© The Regents of the University of California, 2019. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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