An Evaluation of California's Permanent Disability Rating by Robert T. Reville

By Robert T. Reville

Systemically evaluates the California everlasting incapacity rankings process used sooner than the state's fresh people repayment.

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Extra info for An Evaluation of California's Permanent Disability Rating System

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Vertical equity, in a narrow sense, requires that workers with differing losses of income should receive benefits proportional to their losses. If worker C has $5,000 of earnings losses and $3,000 of benefits, while worker D has $10,000 of earnings losses, then the narrow test of vertical equity requires that worker D receive $6,000 of benefits (so that the replacement rate for both workers is 60 percent). A more general test for vertical equity only requires that there be a positive correlation between losses and benefits.

The purpose of the rating system is to incorporate all the relevant information about a case and convert it into benefits. Thus, PPD benefits will be assigned in an equitable fashion only if the disabilities are rated in an equitable fashion. A large part of this study focuses on analyzing the effect to which permanent disabilities in California are rated in an equitable fashion. Another aspect of the equity criterion, in addition to horizontal and vertical equity, is the consistency with which benefits are assigned.

Given that most of the approach is the same, however, the results should be applicable, at least in a broad sense, to all injuries rated prior to the new reforms. Unfortunately, because our data include only the pre-1997 occupation categories, we are unable to provide a thorough evaluation of the effectiveness of the current occupation adjustments. We do provide a limited analysis in Appendix C. SB 899 amended Section 4660 once again, as noted above. The impairment descriptions were changed (and, thus, so too was the use of work-capacity guidelines); the descriptions were among other unique aspects of California’s system.

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