Decision #108/10 - Type: Workers Compensation

Preamble

This appeal deals with a decision made by the Workers Compensation Board ("WCB") which determined that the accident employer was not entitled to cost relief on the grounds that there was insufficient evidence to conclude that the worker's pre-existing psychological condition delayed his recovery from the compensable injury. The employer's representative disagreed with the decision and an appeal was filed with the Appeal Commission. A file review was held on November 8, 2010 to consider the matter.

Issue

Whether or not the employer is entitled to cost relief.

Decision

That the employer is not entitled to cost relief.

Decision: Unanimous

Background

On January 3, 2007, the worker was injured in a work related accident and suffered a fracture of the right calcaneous as well as a fracture of the T12 region. His claim for compensation was accepted and various types of compensation benefits have been paid to the worker such as a permanent partial impairment award and vocational rehabilitation assistance.

On January 20, 2010, a WCB case manager determined that the accident employer was not entitled to cost relief.

On April 1, 2010, the employer's representative appealed the decision to deny cost relief to the accident employer. The representative made reference to certain file information to support the following compensable diagnoses: "Aggravation of long term diagnoses of Chronic Adjustment Disorder and intermittent Explosive Disorder." He stated that this statement was very clear in advising that the workplace injury consisted in part of an aggravation of the worker's pre-existing conditions and this was precisely what the WCB's cost relief policy was designed for. He stated that the employer should be eligible for 50% cost relief under the policy.

On April 27, 2010, a WCB sector service manager wrote to the employer's representative stating that he agreed that the pre-existing conditions had been impacted by the workplace injury but did not feel that cost relief was currently indicated under WCB policy 31.05.10, Cost Relief/Cost Transfers ("the Cost Relief Policy"). He noted that the fundamental principle of that policy guiding the provision of employer cost relief in pre-existing condition scenarios is "where the claim is either caused by a pre-existing condition or is significantly prolonged by the pre-existing condition." He stated that the claim duration had not been significantly prolonged by the pre-existing psychiatric conditions although it was fully recognized they have at times factored into the management of the claim alongside the ongoing management of the physical injuries. The manager attributed the claim duration to the significance of the physical injuries sustained and subsequent medical interventions. He noted that maximal medical improvement had been opined in recent months and the relative or net impact of the pre-existing conditions may be an issue requiring further consideration in the future.

In an e-mail dated April 28, 2010, the employer representative indicated that Schedule A of policy 31.05.10 should be considered when determining cost relief. He stated "The policy directs that Schedule A's rules must apply and Schedule A states that cost relief shall be granted where the pre-existing condition has affected duration "and/or associated costs"…in this particular case, the evidence on file makes it seem quite clear that the clmt was treated for both his compensable and non-compensable pre-existing psychological conditions. As such, the claim costs have been affected because of the pre-existing condition. Schedule A does not dictate to what degree the costs have to be increased, it simply dictates that the costs have be affected by the pre-existing condition. As such, the unique circumstances of this claim certainly seem to meet Schedule A."

In an e-mail response dated May 5, 2010, the sector service manager indicated that Schedule A considerations only came into play when the required precursor had been satisfied, namely section 3(a)(i). He stated that at this point in time, he did not feel the worker's claim had been significantly prolonged by the pre-existing condition. The manager indicated that the costs incurred because of the pre-existing condition had been relatively modest in comparison to the overall claim costs.

On May 5, 2010, the employer representative appealed this decision to Review Office. He submitted that the claim most definitely met the criteria of the WCB cost relief policy. He noted that the worker's recovery and vocational rehabilitation had been negatively affected by his documented multiple pre-existing psychological conditions and the costs of the claim had been inflated by the need to treat the joint effects of his pre-existing conditions and his workplace injuries.

On June 16, 2010, Review Office upheld the sector services manager's decision that the employer was not entitled to cost relief. Review Office agreed that the worker's pre-existing psychological condition had at times factored into the management of the claim alongside with the ongoing management of the physical injuries. In Review Office's opinion, the worker's claim had not been significantly prolonged by the pre-existing condition. On July 7, 2010, the employer's representative appealed Review Office's decision to the Appeal Commission and a file review was arranged.

Reasons

Applicable Policy

The Cost Relief Policy describes certain specific circumstances when a claim cost may be transferred from an accident employer to a shared cost pool. This process is called “cost relief.” Section 3(a)(i) of the Cost Relief Policy provides that cost relief may be available to eligible employers: “Where the claim is either caused by a pre-existing condition or is significantly prolonged by the pre-existing condition.”

Schedule A to this policy deals with pre-existing conditions and provides that "For claims where a pre-existing condition has affected the disability duration and/or associated costs, the WCB may provide cost relief."

Employer's Position

The employer was represented by an advocate who provided a written submission to the Appeal Commission. The advocate advised that the employer disagrees with the Review Office decision. He stated that the Cost Relief Policy allows the granting of cost relief on this claim, as the weight of evidence indicates that the worker's pre-existing psychological conditions have both prolonged this claim and inflated its costs.

The advocate argued that the Review Office has interpreted the policy too narrowly, relying on the statement in the policy that cost relief will be granted in cases where the claim is caused or significantly prolonged by the pre-existing condition. He notes that Schedule "A" states that cost relief is to be granted "where a pre-existing condition has affected the disability duration and/or associated costs".

The advocate submitted that all the evidence on file indicates that the costs of this claim have been inflated due to the worker's pre-existing psychological conditions. He also submitted that the pre-existing conditions have prolonged the claim.

In support of the employer's position, the advocate referred to WCB staff and medical advisor opinions regarding the relationship of the pre-existing condition and the injury, including the following opinions:

· WCB staff member's memo which identified the diagnosis as an aggravation of the long term Chronic Adjustment Disorder and Intermittent Explosive Disorder.

· WCB medical advisor memo to file on January 21, 2009 that the accepted compensable injury was an aggravation of long term diagnoses of Chronic Adjustment Disorder and Intermittent Explosive Disorder.

· WCB psychological advisor who noted that the worker's psychological condition was deteriorating due in part to the worker's pre-existing psychological conditions.

The advocate submitted that "The WCB's Cost Relief Policy does not require that one must ascertain or measure the impact of a pre-existing condition vs. the impact of the compensable injury when deciding whether cost relief applies. Rather, it is enough to simply make the case that a pre-existing condition has helped prolong an injury claim."

The advocate noted that the worker has pre-existing psychological conditions which have contributed to his assessment of permanent restrictions and that the conditions have added to claims costs and made any attempts at vocational rehabilitation difficult, thereby prolonging the resolution of the claim. He stated that the costs of the claim have been inflated by the need to treat the joint effects of the pre-existing conditions and the workplace injuries.

Analysis

The issue before the panel is whether the employer is entitled to cost relief due to the impact of the worker's pre-existing condition on his claim. For the reasons that follow, the panel finds that the employer is not entitled to cost relief at the current time.

The employer through its advocate has argued that under the Cost Relief Policy and related Schedule, "…it is enough to simply make the case that a pre-existing condition has helped prolong an injury claim." The employer asserts that it is not necessary to ascertain or measure the impact of a pre-existing condition versus the impact of the compensable injury when determining an application for cost relief.

The panel does not agree with the employer's interpretation. The panel finds that the policy and schedule, read together, require that the pre-existing condition have a significant impact on duration and/or costs. That a pre-existing condition has "helped prolong" an injury claim is not sufficient for entitlement to cost relief. In addressing the question of significant impact, the panel finds that it is necessary to consider the effect of the pre-existing condition in relation to the compensable injury.

The panel notes that the worker sustained significant physical injuries due to a traumatic fall at work. As a result he underwent multiple surgeries and was assessed a permanent impairment rating of 10%. Due to the physical injury, the worker is unable to return to his prior occupation as a painter and requires further rehabilitative assistance.

The panel acknowledges that the worker has a pre-existing condition and that the condition has been a factor in the worker's treatment and resulted in increased claim costs. However, looking at the claim in its entirety, the panel finds that the pre-existing condition has not significantly impacted the claim. The panel does acknowledge, as have earlier levels of adjudication on this issue, that the relative or net impact of the worker's pre-existing conditions may be an issue requiring further consideration at some point in the future. The panel finds that the employer is not entitled to cost relief on this claim at the current time.

The employer's appeal is dismissed.

Panel Members

A. Scramstad, Presiding Officer
A. Finkel, Commissioner
M. Day, Commissioner

Recording Secretary, B. Kosc

A. Scramstad - Presiding Officer

Signed at Winnipeg this 18th day of November, 2010

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