Best Practices for Permanent Total Disability Claims

Claims involving “permanent total disability” (PTD) benefits are costly and need to be taken seriously. If a workers’ compensation claimant is adjudicated PTD, they will be entitled to weekly wage loss benefits with various compensation adjustments typically through their anticipated retirement.

Members of the claim management team and other interested stakeholders need to take caution when confronted with cases that potentially meet this threshold. This also includes the adoption of best practices to defend PTD case and mitigate exposure.

What is Considered Permanent Total Disability?

The definition of PTD varies from state to state. There are also mitigating factors or retirement presumptions that could impact a judicial finding of PTD. Before you begin to investigate a case it is important to know the law and consult an attorney.

In most instances, a finding of PTD will occur when the injured worker meets the following criteria:

The work injury results in permanent restrictions;
The employee is not able to return to their pre-injury position, or perform similar positions after a diligent job search;
Retraining is not a viable option, which can include the employee’s vocational skills, age, physical disability, education or other factors; and
The employee meets other specified criteria in the applicable workers’ compensation statute. In some instances, this can include a requisite percent of permanent partial disability (PPD).

Other Special Considerations

Successfully defending a case involving PTD also includes the use of experts. These experts can include an independent medical examination (IME) and functional capacity examination (FCE). Each expert will exam a different part of the claim.

When scheduling an IME, it is important to consider a number of factors. Considerations for a successful IME starts with the credibility of the doctor you select. Additional matters must include the skill, training and expertise of that doctor. The doctor will likely be giving live expert testimony in the form of a deposition or at hearing. Make sure this doctor is a great witness.

The FCE is also important when defending a PTD claim. The expert you select for this evaluation should have the same credibility as any other technical witness you select. The purpose of this evaluation is to rebut evidence presented by opposing counsel regarding the employee’s transferable job skills and employability.

Best Practices for Defending PTD Cases

The list of best practices in defending these cases in long. Here are some few tips that you can include in your practice.

Use of surveillance. While this tool can be expensive, it is important to remember its cost is far less than the future exposure on a claim. Timing is key. During colder or winter months, everyone tends to spend less time engaging in outdoor activities. If possible, time the use of surveillance when you know the subject will likely be outside. It is also important to have it conducted for several days in a row and possibly on multiple occasions.

Retirement issues. In most jurisdictions, retirement is an event that triggers the termination of PTD and all other wage loss benefits. Due to this factor, it is important that you investigate when the claimant was planning on retiring, the withdrawal of 401(k) or pension funds and other motivations to leave the active labor market.

Create special case units. While each PTD case is not the same, it does require a higher level of understanding from the claims handler. Some more successful claim management teams have created special internal units that draw upon the skills of the more experienced claim managers to handle these complex cases.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a monthly basis working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: [email protected].

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.