In April 2004, California implemented workers’ compensation reforms to reduce workers’ compensation premiums for California employers while speeding medical treatment for injured workers. The new law requires the use of the AMA Guides to the Evaluation of Permanent Impairment (AMA Guides), Fifth Edition, particularly regarding apportionment analysis for impairment; the AMA Guides does not directly evaluate disability. Under the new California law, the following are clear: apportionment of permanent disability is based on a) causation and requires both the overall percentage of permanent disability caused by the industrial injury, and b) the percentage of permanent disability due to all other factors, including previous injuries. Less clear about the new law are the following: does apportionment to “causation” mean the physician should apportion out preexisting “pathology” even if it was not disabling prior to aggravation; what happens if a worker fails to disclose a prior injury; and are the standards of the AMA Guides on apportionment similar to those in California's new Labor Code? In the AMA Guides, the discussion of causation, apportionment analysis, and aggravation is different from the legal precedent for disability in California. New in the law is the explicit statement that the employer shall be liable only for the percentage of permanent disability directly caused by the industrial injury. Legal decisions are expected to clarify the interpretation of apportionment.

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