Division's Policy Relating to Hip & Shoulder Injuries While the Case of Hagen v. LIRC is on Appeal to the Supreme Court

June 21, 1996

TO: Worker's Compensation Insurance Carriers, Self-insured Employers

FROM: Gregory Krohm, Administrator
Worker's Compensation Division

Purpose: Division's Policy Relating to Hip and Shoulder Injuries While the Case of Hagen v. LIRC is on Appeal to the Supreme Court

On March 14, 1996, the District IV Court of Appeals held in Hagen v. LIRC (No. 94-9384) that shoulder injuries are not scheduled. If the decision stands, the permanent partial disability rating for shoulder injuries would be applied to 1,000 weeks rather than 500 weeks and the possibility of loss of earning capacity claims would arise in a number of cases. The holding reverses more than 80 years of statutory interpretation and is currently on appeal to the Supreme Court. It is generally agreed that the Court of Appeal's reasoning regarding the shoulder is equally applicable to the hip.

Each year, there are more than 5,000 hip and shoulder injuries reported to the Worker's Compensation Division. Moreover, unlike changes enacted by statute, the impact of the court's decision is retroactive. Assuming a significant number of these injuries will result in loss of earning capacity claims, the appellate court's decision could have a serious workload impact on the Division. Equally important is the likelihood that litigation costs will escalate in a significant number of cases due to expanded use of vocational reports and expert testimony by all parties to a claim.

In the past, to avoid scheduling problems for the Division and litigation expenses for the parties, the Division has occasionally delayed scheduling cases involving certain issues until the final resolution of those issues through the appeals process. Assuming the Supreme Court agrees to accept the Hagen case on appeal, it could be another year or so before we have their decision. In the meantime, it is unreasonable and contrary to sound public policy to delay worker's compensation hearings on all hip and shoulder injuries for that length of time due to the serious financial hardship it may cause for many injured workers and their families.

Rather than delay hearings in such cases, the Division's administrative law judges recommend that we implement the following policy for handling shoulder and hip claims until the final outcome of the Hagen case is known:

I concur and strongly encourage all parties to disputed claims to voluntarily agree to present their respective cases pursuant to this policy until the Supreme Court reaches a decision in the Hagen case.

For purposes of claims monitoring and preparing worksheets on permanent partial disability, the Worker's Compensation Division will continue to treat shoulder and hip injuries as scheduled, i.e., maximum permanent partial disability of 500 weeks, until a decision is reached in the Hagen case. Shoulder and hip injuries clearly involving unscheduled parts of the body will be treated as having scheduled and unscheduled components according to the circumstances of the particular case as they are under current procedures. It is our intention not to change the Division's internal practices and procedures until the Supreme Court reaches a decision in the Hagen case.

If you have any questions, please feel free to contact the Worker's Compensation Division. Thank you.

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