Opinion
W.C. No. 4-610-941.
March 28, 2006.
FINAL ORDER
The claimant seeks review of an order dated November 14, 2005 of Administrative Law Judge Harr (ALJ) that denied penalties against the employer and upheld the award of permanent partial disability benefits (PPD) under an admission of liability filed by the employer. We affirm.
The claimant sustained an admitted injury to her right wrist when lifting a gallon of milk. The authorized treating physician (ATP) placed the claimant at maximum medical improvement (MMI) and found no impairment to the left wrist, but impairment of 8 percent of the right upper extremity.
The employer filed a final admission of liability (FAL) on November 18, 2004, consistent with the ATP's report. The claimant objected and requested a Division-sponsored independent medical examination (DIME). The DIME physician agreed with the ATP's determination that the claimant had reached MMI, but rated the claimant's permanent impairment at 3 percent instead of the 8 percent of the right upper extremity as found by the ATP. The DIME physician also found 2 percent impairment of the claimant's left upper extremity.
The employer filed an FAL on May 11, 2005, admitting liability for PPD benefits based on both of the DIME physician's upper extremity ratings. The claimant arranged for an independent medical examination (IME). The IME expressed the opinion that the claimant had not reached MMI. The claimant sought a hearing challenging the DIME physician's determination of MMI, seeking additional PPD and penalties against the employer for an alleged unauthorized attempt to withdraw the first admission which had admitted for the 8 percent right upper extremity based on the ATP's rating.
The ALJ found that the claimant failed to overcome the DIME physician's opinion by clear and convincing evidence on the issue of MMI. The ALJ, noting that the DIME provisions of § 8-42-107(8)(c), C.R.S. 2005, only apply in the cases of whole body impairment under Mountain City Meat Co. v. Industrial Claim Appeals Office, 904 P.2d 1333 (Colo.App. 1995), found that the DIME physician's impairment rating correctly reflected the claimant's permanent medical impairment from her bilateral upper extremity injuries. The ALJ concluded that the employer's FAL based on the DIME physician's impairment rating should be upheld.
The ALJ denied the claimant's claim for penalties based on the assertion that the respondents had unilaterally withdrawn their initial FAL for 8 percent scheduled injury to the right upper extremity, and filed a second FAL for only 3 percent right upper extremity and 2 percent left upper extremity, based on the DIME physician's opinion. The ALJ determined that the respondents had complied with the provisions of § 8-42-107.2(4), C.R.S. 2005, and the then-current Rule of Procedure IV(N)(6), 7 Code Colo. Reg. 1101-2. (Since the time of the hearing in this matter, the rules of procedure have been renumbered and amended effective January 1, 2006. The present version of Rule IV(N)(6), is found in Office of Administrative Courts Rules of Procedure. See OACRP5-5(f).)
The claimant argues that the ALJ erred by allowing the employer to admit for the 3 percent rating of the DIME physician after unilaterally withdrawing the 8 percent scheduled rating of the ATP. We disagree.
Section 8-42-107.2 (4) provides that: "Within thirty days after the date of the mailing of the IME's report, the insurer or self-insured employer shall either file its admission of liability pursuant to section 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." In addition, at the relevant time Rule IV(N)(6) provided that: "Within 30 days after the date of mailing of the IME'S report determining medical impairment pursuant to section 8-42-107(8), the insurance carrier shall either admit liability consistent with such report or file an application for hearing."
In resolving this issue, we view City Market v. ICAO 68 P.3d 601 (Colo.App. 2003) as persuasive, if not dispositive. In that case the insurance carrier failed to file a new admission following receipt of a DIME report. In defending against a claim for penalties the carrier asserted that it had relied upon its conclusion that the DIME report's impairment finding was a nullity since the treating physician's report supported a scheduled rating rather than a whole person rating. Therefore, the carrier argued that the claimant was not entitled to a DIME to dispute impairment. The court in affirming the imposition of penalties noted that in interpreting § 8-42-107.2(4), "the General Assembly's requirement is clear: an insurer or a self-insured employer must respond to a DIME physician's report and elect either to admit or to contest the report." City Market, 68 P.3d at 603 (emphasis in original).
The claimant seeks to distinguish City Market and avoid the application of § 8-42-107.2 (4) and Rule of Procedure IV(N)(6), by contending that since the opinion of a DIME physician on impairment in scheduled injuries holds no particular weight, the employer could not rely on the DIME physician's rating to reduce the previously admitted amount of scheduled impairment. The claimant correctly states that scheduled and non-scheduled impairments are treated differently under the Act. The opinion of the DIME physician regarding permanent impairment need only be overcome by clear and convincing evidence on non-scheduled impairments. The ALJ, however, recognized this and citing Mountain City Meat Co. v. Industrial Claim Appeals Office, supra, determined the percentage rating for scheduled benefits based upon the preponderance of the evidence.
It does not follow, however, from the different burdens of proof applicable to scheduled and whole person injuries that the DIME procedures do not apply to a scheduled injury. As we read City Market the court stated that whether a claimant sustained a scheduled or nonscheduled injury does not change the effects of § 8-42-107.2(4) and Rule IV(N)(6). Those require the insurer to respond to a DIME report by either admitting liability or initiating the process by which such questions as whether the claimant sustained a scheduled or nonscheduled injury are resolved by the ALJ. The court's reasoning in City Market v. ICAO supra was in part based on the rule that the determination whether a claimant sustained a scheduled or nonscheduled injury is a question of fact for the ALJ, not the rating physician. Strauch v. PSL Swedish Healthcare System, 917 P.2d 366 (Colo.App. 1996). The court in City Market noted that, precisely for this reason, § 8-42-107.2(4) and Rule IV(N)(6) require employers to respond and either admit liability or initiate the process by which disputes can be resolved.
In the present case the employer followed the procedure required by the court in City Market. The employer filed an admission based on the ATP's rating. The claimant sought a greater award of benefits by requesting a DIME. However, the DIME physician's estimate of the claimant's impairment was lower than that of the ATP. The employer on receiving the report from the DIME physician followed Rule IV(N)(6), which required it to file an amended admission based upon the DIME physician's impairment rating. The claimant then was at liberty to and did file an application for hearing seeking a whole person impairment rating for her bilateral injuries. Exhibit D at 12. The ALJ found that the DIME physician's impairment rating accurately reflected the claimant's impairment from her injuries and did not award a whole person impairment rating.
The claimant's argument notwithstanding, we find nothing in Rule IV(N)(6) that allows an insurer to combine the impairment rating from the ATP with the rating from the DIME physician and then file a new admission. Under Rule IV(N)(6) the respondents have only two choices upon receipt of the DIME physician's impairment rating. The respondents must either admit liability consistent with the rating of the DIME physician or file an application for hearing. Here, the record supports the ALJ's determination that the respondents filed an admission of liability consistent with the DIME physician's rating. We agree with the ALJ's determination that the employer's final admission dated May 11, 2005 based on the DIME physician's upper extremity ratings did not violated Rule IV(N)(6), and is consistent with § 8-42-107.2(4).
In reaching our conclusions we note that Rule IV(N)(7) allows an insurer to modify "an existing admission regarding medical impairment," where the impairment rating is changed pursuant to a binding independent medical examination, a DIME, or an order. A DIME exists here and therefore the actions of the employer are consistent with Rule IV(N)(7). Excum v. Southwest Memorial Hospital, W.C. No. 4-395-163 (January 5, 2001)
The claimant sought penalties under § 8-43-304(1), C.R.S. 2005, which authorizes an ALJ to impose a penalty of up to $500 per day for each day a party violates any provision of the Workers' Compensation Act, fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director, or refuses to obey any lawful order made by the director or the panel. The imposition of penalties under § 8-43-304 is a two-step process, first requiring the ALJ to determine if the respondents' conduct violated the Act, a rule, or an order. If a violation occurred, the ALJ must determine whether the party's actions were objectively reasonable. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d (Colo.App. 1995). Here, the ALJ found that the actions of the employer in filing the FAL complied with Rule IV(N)(6), and is consistent with § 8-42-107.2(4) and so no violation of the Act, a rule, or an order had occurred. We agree with the ALJ's reasoning.
The language governing the DIME process is part of a comprehensive statutory scheme designed to ensure "prompt payment of compensation to an injured worker without the necessity of a formal administrative determination in cases not presenting a legitimate controversy." Dyrkopp v. Industrial Claim Appeals Office, 30 P.3d 821, 822 (Colo.App. 2001). The DIME process itself was enacted as a method of reducing litigation. Colorado AFL-CIO v. Donlon, 914 P.2d 396 (Colo.App. 1995). Here, in our view the respondents' conduct was consistent with City Market and the applicable law, and we perceive no error in the ALJ's refusal to impose penalties on the employer.
IT IS THEREFORE ORDERED that the ALJ's order dated November 14, 2005, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Curt Kriksciun
____________________________________ Thomas Schrant
Christiana Ishakbayev, Denver, CO, King Soopers, Inc., Denver, CO, Barbara Jones, Sedgwick CMS, Denver, CO, Mark D. Elliott, Esq., Arvada, CO, (For Claimant).
James B. Buck, Esq., Denver, CO, (For Respondent).