Can the Board cut NELs because of non-impairing pre existing conditions? Maybe not.

“A pre-existing condition alone, being an underlying or asymptomatic condition made manifest, in my view, is not sufficient to permit reduction of the NEL benefit.”

–Decision No. 3173 16

In Decision 3173 16, the Tribunal issued one of its first decisions about the Board’s new policies on pre-existing conditions. The decision is a limited (but hopeful) glimpse into  how the Tribunal might interpret these new policies. It holds the line on disallowing apportionment of pre existing conditions unless they impaired the worker before the injury. But it lacks clarity in its analysis. It therefore may be of limited usefulness.

We can certainly expect more decisions on this crucial unresolved issue in coming months.

The Tribunal’s decision considers whether the Board can cut a worker’s non economic loss award because the worker had an asymptomatic or minimally impairing pre-existing impairment/ condition. The Board has been cutting benefits by reducing NELs in this way since around 2012. We think this practice breaches the fundamental principle of workers’ compensation law that you take your victim as you find them (the “thin skull” rule).

A typical case is a worker with no or only occasional back pain before a workplace accident. After the accident, he has consistent and persisting pain and functional impairment. A post accident MRI shows “degenerative” changes. The Board reduces the NEL award because of the alleged impact of the pre-existing condition (ie degenerative changes) on the pre-existing impairment.

Decision 3173 16 preserves the existing position of the Tribunal in the vast majority of cases on the former policies:  that the law does not allow reduction of a NEL award because of an underlying pre-existing condition unless it caused periods of disability, impairment or illness before the injury that required treatment and disrupted employment. But, its reasoning in interpreting the policy is limited, and somewhat unclear.

Background

By way of background, in 2014, after a review and stakeholder consultation, the Board issued a new set of benefit policies. The new policies focus on “delineating” entitlement by removing compensation for the alleged impact of pre-existing conditions. Among other changes, the policies appeared to allow the Board to apportion permanent impairment benefits where workers have asymptomatic pre-existing conditions.

Even before the policy changes, the Board had already, contrary to its policies at the time, started regularly reducing NEL awards to reflect the presumed contribution of asymptomatic pre-existing conditions like age-related degeneration.

The Board’s conduct has been the subject of:

• Many successful appeals to the WSIAT. In the vast majority of the appeals to the WSIAT on this issue (38 in 2016 alone), the WSIAT decision maker said that the Board was not justified in reducing the NEL unless the pre-existing condition resulted in periods of impairment or illness requiring health care or caused a disruption in the employment.
• Media scrutiny
• An application for certification of a class action of affected workers, now proceeding to consideration of its certification motion after a successful appeal of a motion to strike.

The policy

The new policy at issue, 18-05-03, Determining the Degree of Permanent Impairment, appears to introduce a process for some apportionment for pre-existing conditions, regardless of whether the pre-existing conditions impaired the worker’s functioning before the work-related injury. The policy states that:

• The pre-existing condition can only be “factored out” if it is “contributing to the degree of impairment to the same area of the body as the work-related impairment.” To establish this, “the evidence must show that the pre-existing condition, on its own, would result in an impairment rating.”
• Unlike the previous policy, the pre-existing condition being “factored out” does not need to have produced periods of “impairment or disease requiring health care, or have caused a disruption in employment”.
• To factor out the pre-existing condition, the decision-maker rates the total impairment, rates the pre-existing condition and then subtracts the rating for the pre-existing condition.
• If the pre-existing condition “cannot be rated according to the prescribed rating schedule”, the total impairment rating is reduced based on the “significance” of the pre-existing condition based on the clinical evidence. No reduction is taken for a pre-existing condition of “minor” significance. A 25% reduction is taken for pre-existing condition of “moderate” significance. A 50% reduction is taken for pre-existing conditions of “major” significance.
• If a worker has a permanent impairment caused by permanent aggravation of a pre-existing condition, only the permanent impairment rating for the pre-existing condition that existed at the time of the work-related injury/disease is offset.

Earlier this year, IAVGO obtained an internal document about how the Board interprets the policy in particular regarding the offsetting of non-measurable conditions. See here. (2016 PEC offset internal guide)

The case

In Decision 3173 16, the Vice-Chair addressed the worker’s appeal of the Board’s decision to cut his NEL for his knee injury by 6% because the Board said he has a pre existing condition (osteoarthritis). The Vice-Chair found in favour of the worker.

In a written hearing at the WSIAT, the worker’s counsel M. Farago argued that the worker’s osteoarthritis was mild and not impairing the worker, then 36, at the time of the accident. The worker was physically active before the accident, and regularly involved in strenuous activity. He suggested that the accident might have aggravated the underlying osteoarthritic condition. Mr. Farago argued that there was no evidence to justify reducing the NEL and that the pre-existing condition did not contribute to the degree of impairment. In any event, he said the pre-existing condition was minor so there would no apportionment under the policy.

Mr. Farago also argued that the legislative states that workers are entitled to compensation for a “permanent impairment form the injury” and so there is no justification to apportion the NEL award. Mr. Farago argued that, if the WSIAT believed the policy allowed apportionment for asymptomatic pre-existing condition, it would be contrary to the statute. He said the WSIAT should in that case refer the matter to the Board under section 126(4) of the Act. Section 126(4) states that if the WSIAT thinks a policy is not authorized or is inconsistent with the Act, it must refer the policy to the Board for its review before making a decision.

The Vice Chair made the following factual findings:

• Before the accident, the worker was able to perform his duties as a carpenter and was very active outside of work
• While he had “on and off” pain in the left knee pre-accident, it was only a sprain and not indicative of an ongoing impairment.
• The arthritis only contributed to the ongoing impairment after the workplace injury, and was only mild on x ray. The worker was young, only 36 years of age.
• The workplace injury “overwhelmed the existence of any prior osteoarthritic condition”.

The Vice-Chair did not appear to think it necessary to address whether the policy was inconsistent or not authorized by the Act.

The Vice Chair stated that the policy in question provides for apportionment “in certain circumstances”. He said that the policy, however, does not refer to the term pre-existing condition but rather used “pre-existing impairment”.  The Vice Chair said that the Board policy at question did not include a definition of pre-existing impairment and that the definition of pre-existing impairment elsewhere in Board policies was a condition that produced periods of impairments/ illness requiring health care and causing disruptions in employment.

Overall, these comments appear somewhat inaccurate. As noted above, the policy does explicitly contemplate apportionment of pre-existing conditions that did not result in health care or work disruption, although it only allows such apportionment if the pre-existing condition is “contributing” to the degree of the ongoing impairment.

The Vice Chair concluded that the pre-existing condition did not contribute to the worker’s ongoing impairment until after the injury. So, he ordered the Board to reverse the reduction of the worker’s NEL.

We shall have to wait and see what more decisions follow on this critical issue for injured workers.