Two Important Decisions Involving Use of AMA Guides and Diminished Future Earnings Capacity
On September 3, 2009, the Workers’ Compensation Appeals Board (WCAB) of California issued two important en banc decisions regarding the use of the AMA Guides to the Evaluation of Permanent Impairment (AMA Guides) and the determination of the so-called “Diminished Future Earnings Capacity.” In both cases, the WCAB had already rendered decisions adjudicating the rights of the litigants but, because of the important issues involved had granted applicants’ and defendants’ petitions for reconsideration and allowed additional time for interested parties to file amicus briefs on the issues addressed in the appeals.
Almaraz/Guzman II [Almaraz - ADJ 1078163 (BAK 0145426); Guzman - ADJ 3341185 (SJO 0254688)]
The core issue in these companion cases was the application and interpretation of California Labor Code § 4660, which states in relevant part (a) that in determining the percentages of permanent disability, “account shall be taken of the nature of the physical injury or disfigurement, the occupation of the injured employee, and his or her age at the time of the injury, consideration being given to an employee’s diminished future earning capacity,” (b) that the “nature of the physical injury or disfigurement” shall incorporate the descriptions and measurements of physical impairments and the corresponding percentages of impairments published in the AMA Guides (5th Edition), and (c), that “[t]his schedule … shall be prima facie evidence of the percentage of permanent disability….”
In Almaraz/Guzman I, the WCAB had determined, in relevant part, that schedule determinations utilizing the AMA Guides were rebuttable, that schedule determinations utilizing the AMA Guides could be rebutted by showing that an impairment rating based on the AMA Guides would result in a permanent disability award that would be “inequitable, disproportionate, and not a fair and accurate measure of the employee’s permanent disability,” and that once an impairment rating based on the AMA Guides had been rebutted, the WCAB was free to consider medical opinions that were not based upon or were only partially based upon the AMA Guides.
In its September 3, 2009 Decision After Reconsideration, the WCAB modified its earlier decision, holding that the language of Labor Code section 4660(c) unambiguously meant that a permanent disability rating established by the Schedule was rebuttable, that the burden of rebutting the scheduled permanent disability rating resided with the party disputing that rating, that a method of rebutting a scheduled permanent disability rating was to challenge one of the component elements of that rating-for example, the employee’s whole person impairment (WPI) under the AMA Guides, and that in determining an employee’s WPI, it was not permissible to go outside the “four corners” of the AMA Guides. The WCAB indicated that in offering a medical opinion a physician could make use of any chapter, table, or method within the AMA Guides that most accurately reflected the employee’s impairment. The WCAB specifically rejected the “inequitable, disproportionate, and not a fair and accurate measure of the employee’s permanent disability” standard set forth in its earlier Almaraz/Gulman I opinion.
Ogilvie II [ADJ 1177048 (SFO 0487779)]
The decision also involved the interpretation of California Labor Code § 4660, specifically the portions defining the Diminished Future Earnings Capacity (DFEC) portion of the § 4660 schedule. In Ogilvie I, the WCAB had determined, in relevant part, that the DFEC portion of the schedule was rebuttable, that the DFEC portion of the schedule was not ordinarily rebutted by establishing the percentage to which an employee’s future earning capacity has been diminished, that the DFEC portion of the schedule was not rebutted by taking two-thirds of the injured employee’s estimated diminished future earnings and then comparing the resulting sum to the permanent disability money chart to approximate a corresponding permanent disability rating, and that ordinarily, the DFEC portion of the schedule could be rebutted only in a manner consistent with Labor Code section 4660 – including section 4660(b)(2) and data from empirical studies, such as the RAND Institute for Civil Justice.
In its September 3, 2009 Decision After Reconsideration, the WCAB modified Ogilvie I and, consistent with Almaraz/Gusman II, held that the language of § 4660(c) unambiguously meant that a permanent disability rating established by the schedule was rebuttable, that the burden of rebutting the scheduled permanent disability rating resided with the party disputing that rating, and that one method of rebutting a scheduled permanent disability rating was to challenge one of the component elements of that rating, such as the injured employee’s DFEC adjustment factor, which could be accomplished by establishing that an individualized adjustment factor most accurately reflected the injured employee’s DFEC. The WCAB indicated that the individualized DFEC adjustment factor not only must be consistent with § 4660(b)(2), the RAND data to which section 4660(b)(2) referred, and the numeric formula adopted by the Administrative Director in the § 4660 schedule, it must also constitute substantial evidence that the WCAB determined was sufficient to overcome the DFEC adjustment factor component of the scheduled permanent disability rating. The WCAB indicated that in other respects it affirmed Ogilvie I.
Tom Robinson, J.D. is the primary upkeep writer for Larson’s Workers’ Compensation Law (LexisNexis) and Larson’s Workers’ Compensation, Desk Edition (LexisNexis). He is a contributing writer for California Compensation Cases (LexisNexis) and Benefits Review Board – Longshore Reporter(LexisNexis), and is a contributing author to New York Workers’ Compensation Handbook(LexisNexis). Robinson is an authority in the area of workers’ compensation and we are happy to have him as a Guest Contributor to Workers’ Comp Kit Blog. Tom can be reached at: compwriter@gmail.com.
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6 Steps to Take When Asking the Adjuster for a Physician Peer to Peer Review
You can request a peer-to-peer or a peer review from your adjuster when occasionally the information provided to you by the doctor treating your injured employee just doesn’t make sense.
What’s the difference between a peer-to-peer or peer review: Here are the definitions:
1-Peer-to-peer is a discussion between two doctors usually about the treatment or condition of the injured worker.
2-Peer Review is one doctor reviewing the treatment or work of another doctor, but not a discussion. It is more of a second opinion of the file.
When you need to ask for a peer review, remember, it’s business. No one is accusing anyone of not doing a proper job and the company is not suggesting the employee is manipulating the treating physician to stay out of work or to achieve a settlement.
What the injury coordinator is doing is trying to make sense of the gray areas of medicine. Very often two physicians can examine the same patient and come up with two different opinions. You may want someone to review your claim file.
An injury coordinator is familiar with some of the medical information involved in complex employee injuries and will be on the lookout for things not understood or not adding up. If this occurs, there is nothing wrong with asking for a peer review, a second opinion on the medical portion of the file.
An email to your adjuster requesting a review can include:
1. All contact information, claim number and copy to the supervisor.
2. Explanation stating the company’s medical director has found discrepancies between the treating physician’s documentation and the doctor’s evaluation – this could include, but is not limited, to previous injuries having nothing to do with the workplace event.
3. A detailed explanation of the discrepancy, using proper medical terminology.
4. A note stating the employee’s treating physician’s diagnosis is keeping the employee from resuming work.
5. Ask for the claim is sent for peer review. (workersxzcompxzkit)
6. A request for you to remain in the communication loop.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-786-8286.
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©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
9 Telephone Questions for the Physician
Leaving no stone unturned is critical to managing your workers’ compensation costs. With the number of steps from injury to resolution; the number or people involved from physicians to adjusters; and the number of possible outcomes from a band-aid to a large insurance settlement you just cannot leave any single step to memory.
Certain questions must be asked. Certain forms must be filled out. Certain precautions must be made. Your form should include all the questions one should ask the physician on the telephone to be sure every “t” is crossed, so to speak. Formalize your questions in a checklist so these questions are asked uniformly; it’s not something that should be done on an ad hoc basis.
Your physician’s telephone checklist should include:
1. Introduce yourself and give the injured employee’s name, mentioning the employee has authorized you to speak with the doctor.
2. Get and give all contact information.
3. Offer to FAX authorization so the doctor may discuss the employee’s condition.
4. Ask for diagnosis and whether it is work related.
5. Ask how the employee is responding to treatment.
6. Ask if prescribed medications could interfere with the employee’s job.
7. Does the physician recommend any significant limitations?
8. Can the employee perform a transitional duty job? If yes, FAX a work ability form (WAF). (workersxzcompxzkit)
9. Is there anything else that I should know, that would help our employee recover more quickly?
This open-ended question gives the doctor an opportunity to provide information that is additional and helpful to the employer or the employee.
Keeping up with all these details assists your company in getting your employee healthy and back to work. Here’s an example of what your checklist can look like.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-786-8286.
We are accepting short articles* (200-300 words) on WC cost containment. Non-salesy, written from employer’s viewpoint. To: Info@ReduceYourWorkersComp.com. Subject Line: “Blog Submission.” Name/Title, Company, Phone/Cell, Short Bio. See http://www.reduceyourworkerscomp.com/. We will contact you. *Non-compensable.
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker about workers’ comp issues.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Tips for Working with Medical Personnel
Nurse case managers as advocates for injured workers, often need assistance from other medical personnel such as clinic managers, receptionists, nurses, medical record clerks and medical assistants, who are busy, often over worked and underpaid. Many simply do not care and only interested in a paycheck. Others care deeply, but do not have the time or patience to provide the effort that is required.
Handling complex problems requiring assistance from these medical personnel can be most frustrating at times, but by offering concrete suggestions and providing assurance more is accomplished.
8 Tips for Handling Medical Personnel
1. Provide your personal contact information so the person(s) whose help you need can look directly to you if problems arise.
2. Stand up straight.
3. Give a firm handshake.
4. Clearly state the facts.
5. Be direct and to the point.
6. Never embellish for effect.
7. Respect the providers’ time and efforts.
8. Remember to be gracious, appreciative and thank the person for their time. (workersxzcompxzkit)
The key to success is the delivery method. Be respectful and you will receive respect.
Victoria Powell is the President of VP Medical Consulting, LLC located in Central Arkansas. VP Medical Consulting is a nurse consulting firm providing services to employers, insurance companies, attorneys and the general public. Services include case management, life care planning, legal nurse consulting, ergonomics and patient advocacy. Ms. Powell holds specialty certifications in a variety of nursing specialties. She can be reached through the web at http://www.vp-medical.com/ or at 501-778-3378.
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The Three Headed Monster
At times your workers’ compensation claims can be complicated by FMLA requirements. FMLA or the Family and Medical Leave Act is a federal law allowing employees to take up to twelve weeks of unpaid leave per year to care for themselves, or for a seriously ill family member, or for a new child without losing their job or health insurance.
When dealing with these complex issues, remember to look at each individual item separately. It is as if the one injured body has three heads; one for work comp benefits, one for FLMA, and another for ADA (Americans with Disabilities Act). Review the laws specific to your workers’ compensation claim separate from FMLA or ADA. My point is, that it is okay if an injured workers falls into one, two or even all three categories, but each should meet the criteria on its own merits and not because of the workers compensation claim.
Do not combine the issues, but rather compare and contrast the benefits of each and making sure you meet the criteria of each, noting where there is overlap between them. Many companies give notice of FMLA notification at time of injury.
For more information on FMLA contact the Department of Labor at (866) 487-9243 or check out their website at http://www.dol.gov/esa/whd/fmla
For information on the Americans with Disabilities Act of 1990 see http://www.eeoc.gov/types/ada.html
For information on workers compensation benefits check out your state specific information. Iinformation for each state which you can find on their website at STATE LAWS http://reduceyourworkerscomp.com//laws_and_regulations.php or www.workerscompensation.com
Victoria Powell is the President of VP Medical Consulting, LLC located in Central Arkansas. VP Medical Consulting is a nurse consulting firm providing services to employers, insurance companies, attorneys and the general public. Services include case management, life care planning, legal nurse consulting, ergonomics and patient advocacy. Ms. Powell holds specialty certifications in a variety of nursing specialties. She can be reached through the web at http://www.vp-medical.com/ or at 501-778-3378.
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©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
A Nurse Case Manager’s Experience
As a nurse case manager working in workers’ compensation, most of my patients think my questions and recommendations regarding a return to work are just about saving the company money. While there is a cost-savings with the claimant returning to work, there are also other benefits.
Every day I see depression related to a prolonged period away from work and the regular work routine. This is particularly a problem with men. Men tend to define themselves as “the worker,” the one providing for the family. There is a loss of identity when injured workers can no longer identify themselves by their job. Financially they suffer. Their regular routine is disturbed. Many fail to even dress for the day since they have no place to go. Throw in the pain of an injury and the frustration with the system and soon you see clinical depression.
5 Reasons to Return-to-Work Quickly
1. Reduced recovery time. Working light duty or transitional duty helps the body to keep moving.
2. Reduced medical costs. RTW keeps depression at bay. It can also prevent costs associated with work hardening programs and the like.
3. Improved employer relations. If a worker is allowed to return they feel valued, while the alterative of sitting at home without contact from the employer can make them feel devalued.
4. Transition back into work. A return to work program allows for a transition to reacquaint the body with the essential job functions and minimizes reinjury. (workersxzcompxzkit)
5. Reduces potential for fraud and abuse-Prevents rewarding the worker financially without the benefit of work.
Author: Victoria Powell is the President of VP Medical Consulting, LLC located in Central Arkansas. VP Medical Consulting is a nurse consulting firm providing services to employers, insurance companies, attorneys and the general public. Services include case management, life care planning, legal nurse consulting, ergonomics and patient advocacy. Ms. Powell holds specialty certifications in a variety of nursing specialties. She can be reached at 501-778-3378 or through the web at http://www.vp-medical.com/
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©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Workers’ Compensation Research Institute (WCRI) Report Michigan Payments per Claim among Lowest of 14 States Studied
Medical payments per workers’ compensation claim in Michigan were among the lowest of 14 states, largely the result of lower utilization and lower prices paid for some services, according to a new study from the Workers Compensation Research Institute (WCRI) based in Cambridge, Massachusetts.
The study, CompScopeTM Medical Benchmarks for Michigan, 9th Edition, reported medical costs per claim in Michigan increased 6% in 2006 for claims at an average 12 months of experience-similar to the increase for the median study state, but at a slower pace compared to the previous five years.
WCRI observed medical payments per claim in Michigan were 23% lower than the 14-state median. The lower-than-typical medical cost per claim raised the question of what lower payments meant for injured workers, such as whether they had problems accessing the care they desired and how satisfied they were with the care they received.
Comparing Outcomes for Injured Workers in Michigan, a new WCRI study, examined these and other questions and found Michigan injured workers reported outcomes in the middle of the range on nearly all measures, compared with worker responses in 10 other states
For example, Michigan workers had fewer problems accessing desired medical care. Their satisfaction with the overall medical care and the rate and speed of return to work were in the middle.
The study found Michigan had a combination of lower prices paid and lower utilization for some services. Payments per claim were lower for physicians and for hospital inpatient episodes compared to the typical study state, but were closer to typical for providers of physical medicine services (chiropractors and physical/occupational therapists) and for hospital outpatient services.
For example, payments per claim to physicians were 21% lower in Michigan than in the typical study state. The main reason was the services provided by Michigan physicians were less resource intensive, i.e., physicians billed less often for the most complex new and established patient office visits.
But neither the utilization nor the prices paid were consistently lower across all service types, according to the study. For example, prices paid to non-hospital providers were lower than typical for surgery and radiology, but were slightly higher than what was paid in the median state for evaluation and management and physical medicine services. These differences are aligned with Michigan’s fee schedule, observed WCRI.
Utilization (number of visits and services per visit) was somewhat lower than typical in Michigan for evaluation and management, major radiology (MRIs and CT scans), and surgery, but higher than typical only for physical medicine services.
In addition, fewer claims in Michigan involved some specialty services, such as major radiology, physical medicine, and supplies and equipment, although the surgery rate was typical.
The share of claims with chiropractic care was lower in Michigan than typical and decreasing over the study period, raising possible questions about worker access to such care.
The study also found average payment per hospital inpatient episode was among the lowest of the study states, although the share of claims with inpatient care was like the median study state. Hospital outpatient payments per service were consistently lower than in the median state across all service categories, while fewer services per claim were provided for clinic evaluation and management and relatively more services for outpatient laboratory and physical medicine.
A key reason for the recent growth in medical payments per claim in Michigan was the higher payments per claim to hospital providers; payments to non-hospital providers were generally stable.
Overall payments, however, for hospital outpatient services increased an average of nearly 9% per year from 2004 to 2006, and grew for all important outpatient services. By contrast, prices paid for non-hospital services were mostly stable in 2006 (consistent with no fee schedule changes). (workersxzcompxzkit)
Overall non-hospital utilization changed little from 2005 to 2006, but decreases were observed for some services, 3% for physical medicine and 4% to 5% for radiology.
To order this report, visit: http://www.wcrinet.org/.
Author: Robert Elliott, J.D.
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Medical Costs in PA Consistent With Other States
Medical costs per claim for workers’ compensation claims in Pennsylvania were typical compared with other states, but rising, a new study said.
Workers’ Compensation Research Institute (WCRI) (Cambridge, Mass.) reported typical but rising medical costs per workers’ compensation claim in 2006/2007 in Pennsylvania fell into two categories, as compared to the median state in a 14-state study, CompScopeTM Medical Benchmarks for Pennsylvania, 9th Edition.
1. Lower costs per claim were a result of services billed by physicians and hospitals, driven by lower to typical prices paid to physicians and lower payments per service for hospital outpatient services.
2. Higher costs per claim were a result of services billed by chiropractors and physical therapists, stemming from higher utilization of these services due to more visits per claim offset by typical prices paid. These payments accounted for 13% of total medical claims dollars with seven plus days of lost time in the study year.
The study reported in Pennsylvania:
1. More claims received clinic/evaluation and management (office visits), physical therapy (modalities and procedures), and minor radiology (X-rays) services in a hospital outpatient setting than in other study states.
2. Suggesting more routine procedures were delivered in a hospital outpatient setting than provided by non-hospital providers in other states.
3. More frequent use of hospital outpatient services may mean physicians and physical/occupational therapists might have billed more often for their services under hospital ownership than in the typical state.
4. Although more care was delivered in a hospital outpatient setting, the average medical cost per claim in was substantially lower than other study states.
Example:
1. Medical costs per claim for operating/treatment/recovery room services were 41% lower than the typical state.
2. Major radiology services (MRIs and CT scans) were 20% lower.
3. Minor radiology services (X rays) were 18% lower.
Overall lower payments per claim were primarily driven by lower payments per service; services per claim were generally typical of the study states.
1. Medical costs per claim grew by 11% in.
2. Non-hospital providers grew by 8%, driven mainly by an increase in utilization for services billed by physicians and chiropractors. (workersxzcompxzkit)
3. Hospital outpatient payments per claim were not a significant cost driver in the latest year.
The study noted in 2006/2007, the average hospital inpatient payment per episode increased significantly although the median or typical payment per episode showed little change. The average payment per episode is very sensitive to the number of episodes and length of stay. Hence, the median or typical payment per episode is a more meaningful measure to observe changes in the trend.
To order this report, go to the WCRI Web site: www.wcrinet.org.
Author: Robert Elliott, J.D.
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©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Study Finds Medical Costs Rise
Medical costs per workers’ compensation claim in Wisconsin shifted from being lower than other study states to being typical. A study by Workers’ Compensation Research Institute (WCRI) (CompScopeTM Medical Benchmarks for Wisconsin, 9th Edition) found Wisconsin employers paid lower costs per claim than the median of 14 study states 2001 injuries with experience through the first quarter of 2004.
However, by 2004/2007 Wisconsin employers paid typical medical costs per claim compared to the other 14 study states.
WCRI attributed Wisconsin’s shift in the average medical costs per claim compared to the study states to:
1. Faster growth in the medical costs per claim.
2. Being among the highest non-hospital prices paid and hospital outpatient payments per service.
3. Medical costs per claim rose more rapidly.
4. Over a period of five years (2001/2002 to 2006/2007) Wisconsin experienced a 70% growth in medical costs per claim vs. a rise in study states of 47% to 54%.
5. The main cost drivers were rapid growth in prices paid for non-hospital services and hospital outpatient services.
It was found employers paid among the highest prices for many procedures performed in a non-hospital setting, such as:
WI: Nonhospital established patient office visits: $95. (Most frequently billed service.)
SS: 62, median study state.
DIFF: $33.
WI: Arthroscopic knee surgery: $3,035 (most common procedure).
SS: $1,336, typical study state.
DIFF: $1,699.
WI: MRI: $1,997.
SS: $805, median study state.
DIFF: $1,192.
Not only did the study find Wisconsin paid substantially higher prices in the typical study state, but, compared to Iowa and Indiana (study states not regulating prices) they were also higher. In general, higher non-hospital prices were offset by lower utilization of medical services. Similar conclusions apply to hospital outpatient services.
Despite these higher prices workers reported faster recovery and return to work and better access and satisfaction with care.
WCRI observed might be reasonable for an employer to pay higher costs if workers experience improved outcomes over time. WCRI is currently conducting a survey of injured workers in Wisconsin to address this question.
For the period 2006/2007 WCRI reports:
1. Medical costs per claim increased by 11%, driven by growth in costs per claim to both non-hospital and hospital providers.
2. Medical cost per claim for non-hospital services grew as a result of a 5% increase in prices paid and a 5% increase of medical services utilization. (workersxzcompxzkit)
3. Hospital outpatient cost per claim grew 10%, driven by a 6% increase in the average payment per service and 4% growth in number of services per claim. These growth rates were similar to the rates in previous years.
To order this report, go to the WCRI Web site: www.wcrinet.org.
Author: Robert Elliott, J.D.
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An analytic study by Options and Choices, Inc. (OCI) found that over 4% of all workers’ compensation claims have a duplicate bill sent to a group health plan.
OCI conducted the analyses on a large employer from their proprietary Reference Database on duplicate workers’ compensation and healthcare payments. The purpose of the study was to determine how frequently and how much greater costs occur if and when providers are billing both workers’ compensation and healthcare providers for the same services, patient or claimant.
The results of the study were presented at a recent meeting of the Fraud Assessment Commission, under the California Department of Insurance Fraud Program. The study found the following:
1. 4.2% of ALL workers’ comp claims have a duplicate healthcare claim.
2. Over half of the duplicate claims filed received payment.
3. The employer paid over $1.2 million dollars in duplicate payments.
4. One-third of the duplicate claims filed were paid more than what was billed.
5. The employer paid over $100,000 in overpayments on duplicate claims
“There is an occurrence of duplicate billing on the exact same workers’ comp claim, same date of service, same ICD-9, same billing codes, same provider also billing to group health,” says Archie Anderson, president of OCI. “This was an aged claim analysis, meaning all the payments have been made. This particular employer was not even aware.”
The cause of duplication cannot be determined from the data, however the claim set is easily identified for follow up. (workersxzcompxzkit)
According to OCI, to prevent duplicate claims, an employer or organization must commit to integrating its workers’ comp and healthcare billing and claims data to identify where the duplicate billing and payments occur.
Author: Robert Elliott, J.D.
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