Pity the workers’ compensation claims coordinator who needs to know the impairment rating systems of several (or even all) of the states. While there are some similarities between the states, each state has its own interpretation as to how an impairment rating is both determined and applied.
To complicate things, some states use “impairment” and “disability” interchangeably, while other states make a distinction between impairment and disability. To be medically precise, using the fifth edition of the American Medical Association’s Guides to the Evaluation of Permanent Impairment, (AMA Guide):
An impairment is “an alteration of an individual’s health status, a deviation from normal in a body part or organ system and its functioning.”
A disability is “an alteration of an individual’s capacity to meet personal, social, or occupational demands because of an impairment.”
For our purpose, we combine the two definitions to define an impairment rating as the alteration of an employee’s body function impacting the ability of employee to meet the occupational demands of the job.
An impairment rating is given when the treating physician feels the injured employee has recovered to maximum function and the current medical condition will not improve further in the future. The terminology for maximum recovery varies with “maximum medical improvement” (MMI) and “permanent and stable” (P&S) being used in most states.
Thirty-seven states use the AMA Guide to establish an impairment rating for a permanently injured employee.
Click Link to Access Free PDF Download
“8 ‘Think Outside the Box’ Tactics to Settle Workers’ Comp Claims”
Simple. You Think?
- Two states, Oregon and Colorado use the Third Edition of the AMA Guide published in 1990.
- Eight states use the Fourth Edition of the AMA Guide published in 1993.
- Sixteen states use the Fifth Edition of the AMA Guide published in 2000.
- Ten states use the Sixth Edition of the AMA guide published in 2007.
- Connecticut requires the AMA Guide to be used without specifying which edition.
- Thirteen states do not use the AMA Guide for the establishment of an impairment rating.
- Seven states use their own state specific guidelines
- Six states do not specify how an impairment rating is to be determined.
For an excellent chart showing what each state uses for establishing its impairment rating see www.impairment.com.
Most states specify the injured employee be given an impairment rating based on the specific injured body part. For instance, if in the workplace accident the employee tore a ligament in the knee and requires surgery to repair the knee, the impairment rating is given as a percentage of the loss of use of the leg. The employee then makes an excellent recovery following the surgery. Once the employee reaches MMI, the physician assigns a 5% impairment rating to the knee.
A few states specify the impairment rating be given on the “body as a whole” and the physician might assign a 2% impairment rating for the whole body following the knee surgery.
Whether in the states allowing the employer to select the physician or in the states where the employee selects the physician, the usual process is for the physician to state an impairment rating when the employee has reached MMI. If the employee and the adjuster agree the impairment rating assigned by the treating doctor is accurate, then the employee and the adjuster move the claim forward to compensating the employee for the impairment.
The resolution of the impairment rating is different if the employee and the adjuster do not agree on the percentage given for the impairment rating. If the employer selected the treating physician, the employee often obtains a second opinion, known as an independent medical examination (IME). If the employee selected the treating physician, the employer often obtains the IME. [In a few states, if the employee or employer does not agree with the treating physician impairment rating, the state provides or selects a physician to do the IME.]
If both doctors are using the same AMA Guide or state specific guidelines, you would think they would calculate the same impairment rating for the employee. It rarely happens.
Both physicians, the treating physician and the IME doctor, use their clinical judgment to determine what is normal for the employee and how much has changed from the pre-injury condition to the post-injury condition. Each physician determines a range of impairment. Both physicians may place the employee in the same range, for example 15% to 25% of the body as a whole for a surgically repaired back injury.
However each physician has to select a number within the impairment range he/she believes is most correct based upon his/her own interpretation of the state guidelines and his/her own clinical judgment. The conservative employer’s physician estimate of the severity of the medical condition could result in a 15% whole body rating while the liberal employee’s physician may state the impairment rating is 25% of the whole body.
As plaintiff attorneys know the doctors giving liberal impairment ratings, defense attorneys know the doctors giving conservative impairment ratings. More often than not, the impairment ratings are different, sometimes significantly different, in claims where the employee has obtained an attorney. The states vary in how the final determination of the impairment rating is reached:
- In some states the Workers’ Comp Board averages the two ratings, or splits the difference to determine the impairment rating.
- In some states, the Workers’ Comp Board has their own board appointed physician perform an IME to establish the impairment rating.
- In other states the Workers’ Comp Board averages the impairment rating of the employee’s doctor, the employer’s doctor and the state’s own doctor.
- And, of course almost all Workers’ Comp Boards will approve a negotiated rating agreed to by the employee’s attorney and the adjuster.
Just as the states vary in how an impairment rating is determined, they also vary in how the impairment rating will be applied.
Most states use an Income Benefits ($) for Schedule Injuries chart. If the employee’s rating is 100% of a body part the employee gets a set dollar amount (X) as a lump sum award. If the employee rating is 15% of the body part, the employee gets 15% of X. The same approach applies to the body as a whole.
Other states use a similar schedule, but pay out the award amount in weekly installments, instead of a lump sum. A few states allow the employee to accept a slightly smaller lump sum instead of weekly installments.
Eight states do not use a Schedule, but pay the benefits based on the degree of impairment. Within these eight states there are states using one of the editions of the AMA Guidelines and there are states using their own state specific guidelines.
When the impairment rating to the body as a whole is less than 100%, the insurer pays out the rating as a lump sum or in weekly (or bi-weekly or monthly) installments until the dollar amount for the impairment rating is paid in full. The installments in most states equal the weekly income benefit previously paid to the employee while the employee was classified as temporary disabled prior to reaching MMI.
However, there are states that adjust the installments amount downward for permanency benefits and there are states that adjust the installments upward for permanency benefits.
When the impairment rating to the body as a whole is 100% [permanent total disability (PTD)], the states again vary significantly in how the employee is paid. An impairment rating of 100% is normally paid out for a specific number of weeks or is paid as a lifetime benefit. In the states that pay the 100% whole body rating over a specific number of weeks, the number of weeks for PTD vary tremendously by state from 104 weeks to 700 weeks. A few states allow the employee to be paid from the state’s Subsequent Injury Fund after the employee exhausts the maximum number of weeks of benefits available from the insurer.
The states also disagree on what a the definition of a “lifetime benefit.” In some states a lifetime permanency benefit means until the employee dies. Other states end lifetime permanency benefits on the day the employee reaches the age for full social security retirement benefits.
As both the methods of determining the impairment rating and compensating the employee for the permanent impairment varies significantly among the states, the workers’ compensation claims coordinator for the employer has a tough job in keeping track of impairment-rating systems in multiple states.
The U.S. Chamber of Commerce publishes an Analysis of Workers’ Compensation Laws with excellent tables showing how impairment ratings are paid in each state. We would also be pleased to assist you with any questions you have on impairment ratings.
Author Rebecca Shafer, J.D.Consultant, has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ ReduceYourWorkersComp.com or 860-553-6604.
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.php
