[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
DEVELOPMENTS IN STATE WORKERS' COMPENSATION SYSTEMS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WORKFORCE PROTECTIONS
COMMITTEE ON
EDUCATION AND LABOR
U.S. House of Representatives
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
HEARING HELD IN WASHINGTON, DC, NOVEMBER 17, 2010
__________
Serial No. 111-76
__________
Printed for the use of the Committee on Education and Labor
Available on the Internet:
http://www.gpoaccess.gov/congress/house/education/index.html
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COMMITTEE ON EDUCATION AND LABOR
GEORGE MILLER, California, Chairman
Dale E. Kildee, Michigan, Vice John Kline, Minnesota,
Chairman Senior Republican Member
Donald M. Payne, New Jersey Thomas E. Petri, Wisconsin
Robert E. Andrews, New Jersey Howard P. ``Buck'' McKeon,
Robert C. ``Bobby'' Scott, Virginia California
Lynn C. Woolsey, California Peter Hoekstra, Michigan
Ruben Hinojosa, Texas Michael N. Castle, Delaware
Carolyn McCarthy, New York Vernon J. Ehlers, Michigan
John F. Tierney, Massachusetts Judy Biggert, Illinois
Dennis J. Kucinich, Ohio Todd Russell Platts, Pennsylvania
David Wu, Oregon Joe Wilson, South Carolina
Rush D. Holt, New Jersey Cathy McMorris Rodgers, Washington
Susan A. Davis, California Tom Price, Georgia
Raul M. Grijalva, Arizona Rob Bishop, Utah
Timothy H. Bishop, New York Brett Guthrie, Kentucky
Joe Sestak, Pennsylvania Bill Cassidy, Louisiana
David Loebsack, Iowa Tom McClintock, California
Mazie Hirono, Hawaii Duncan Hunter, California
Jason Altmire, Pennsylvania David P. Roe, Tennessee
Phil Hare, Illinois Glenn Thompson, Pennsylvania
Yvette D. Clarke, New York [Vacant]
Joe Courtney, Connecticut
Carol Shea-Porter, New Hampshire
Marcia L. Fudge, Ohio
Jared Polis, Colorado
Paul Tonko, New York
Pedro R. Pierluisi, Puerto Rico
Gregorio Kilili Camacho Sablan,
Northern Mariana Islands
Dina Titus, Nevada
Judy Chu, California
Mark Zuckerman, Staff Director
Barrett Karr, Minority Staff Director
------
SUBCOMMITTEE ON WORKFORCE PROTECTIONS
LYNN C. WOOLSEY, California, Chairwoman
Carol Shea-Porter, New Hampshire Cathy McMorris Rodgers,
Donald M. Payne, New Jersey Washington,
Raul M. Grijalva, Arizona Ranking Minority Member
Timothy H. Bishop, New York Peter Hoekstra, Michigan
Phil Hare, Illinois Joe Wilson, South Carolina
Gregorio Kilili Camacho Sablan, Tom Price, Georgia
Northern Mariana Islands
C O N T E N T S
----------
Page
Hearing held on November 17, 2010................................ 1
Statement of Members:
McMorris Rodgers, Hon. Cathy, Ranking Republican Member,
Subcommittee on Workforce Protections...................... 4
Prepared statement of.................................... 5
Additional submissions:
Holmes, Douglas J., president, UWC-Strategic Services
on Unemployment & Workers' Compensation, prepared
statement of....................................... 66
Krohm, Gregory, executive director, International
Association of Industrial Accident Boards and
Commissions, prepared statement of................. 64
Woolsey, Hon. Lynn C., Chairwoman, Subcommittee on Workforce
Protections................................................ 1
Prepared statement of.................................... 3
Additional submissions:
American Medical Association, prepared statement of.. 53
Questions submitted for the record and their
responses.......................................... 58
Statement of Witnesses:
Burton, John F., Jr., professor emeritus, Rutgers University
and Cornell University..................................... 18
Prepared statement of.................................... 19
Responses to questions submitted......................... 59
Godfrey, Christopher James, workers' compensation
commissioner, Iowa Division of Workers' Compensation....... 35
Prepared statement of.................................... 37
Additional submission: ``2008 Iowa AMA Guides Task Force
Process Report''....................................... 69
Nimlos, John, M.D., occupational medicine consultant......... 26
Prepared statement of.................................... 28
Spieler, Emily A., J.D., dean and Edwin W. Hadley professor
of law, Northeastern University School of Law.............. 7
Prepared statement of.................................... 9
Uehlein, W. Frederick, Esq., founder and chairman, Insurance
Recovery Group............................................. 32
Prepared statement of.................................... 33
Responses to questions submitted......................... 63
DEVELOPMENTS IN STATE WORKERS' COMPENSATION SYSTEMS
----------
Wednesday, November 17, 2010
U.S. House of Representatives
Subcommittee on Workforce Protections
Committee on Education and Labor
Washington, DC
----------
The subcommittee met, pursuant to call, at 8:45 a.m., in
room 2175, Rayburn House Office Building, Hon. Lynn C. Woolsey
[chairwoman of the subcommittee] presiding.
Present: Representatives Woolsey, Payne, Sablan, Hare, and
McMorris Rodgers.
Staff Present: Aaron Albright, Press Secretary; Tylease
Alli, Hearing Clerk; Andrea Belknap, Press Assistant; Jody
Calemine, General Counsel; Lynn Dondis, Labor Counsel,
Subcommittee on Workforce Protections; David Hartzler, Systems
Administrator; Sadie Marshall, Chief Clerk; Richard Miller,
Senior Labor Policy Advisor; James Schroll, Junior Legislative
Associate, Labor; Michele Varnhagen, Labor Policy Director;
Kirk Boyle, Minority General Counsel; Ed Gilroy, Minority
Director of Workforce Policy; Barrett Karr, Minority Staff
Director; Ryan Kearney, Minority Legislative Assistant; Brian
Newell, Minority Press Secretary; Molly McLaughlin Salmi,
Minority Deputy Director of Workforce Policy; Ken Serafin,
Minority Workforce Policy Counsel; and Linda Stevens, Minority
Chief Clerk/Assistant to the General Counsel.
Chairwoman Woolsey. A quorum is present. The hearing of the
subcommittee will come to order. I now will yield myself as
much time as I may consume for my opening statement.
Thank you for attending. I appreciate this group of
witnesses more than you will know, and my colleagues who are
here this morning, we have changed the time because we as
Members of both sides of the House have a lot of organizing to
do today and we start at 10 o'clock. So thank you for being
flexible.
The hearing is on developments in State workers'
compensation systems. Here in Congress, we don't examine these
State compensation programs very often because they are
generally under the purview of the State legislatures. However,
there have been some disturbing national trends that now compel
a comprehensive re-examination of the State programs and their
impact on injured workers.
As most of you are aware, workers' compensation statutes
were passed beginning in the early 20th century to establish a
no fault system for providing efficient redress for injured
workers. Workers' compensation was called the grand bargain.
And of course, we all have to remember it was called workmens'
compensation then. We have gotten modern and know that all
workers are not men.
Workers waive their rights to bring individual suits
against their employers and in return receive compensation for
work related injuries regardless of fault. Every State and the
District of Columbia have workers' compensation programs in
place. Most employers purchase private workers' comp policies,
but others self-insure or purchase insurance from State managed
compensation funds.
Beginning in the 1990s, changes in State workers'
compensation laws brought about by the lobbying efforts of
employers and insurance companies have resulted in stricter
eligibility requirements and the reduction in both the amount
and duration of benefits, particularly for those workers with
permanent partial disabilities. Unfortunately, this grand
bargain of the 20th century is not so grand anymore, especially
for injured workers.
In addition, there are two other recent developments that
merit our attention today. The first has to do with the
American Medical Association's AMA's guides to permanent
impairment. And the second concerns cost shifting away from
State workers' compensation programs where the employer is
responsible for an employee's injury to the Federal
Government's medical and disability programs. The AMA guides
have been in effect since 1971, and are now in widespread use.
Some States even require workers' compensation programs to use
the latest edition of the guides. These guides were originally
designed to be used by physicians in making a scientific
assessment of a worker's level of impairment or loss of
function due to work related injury.
The determination of whether a worker is permanently
disabled and entitled to workers' compensation is based upon
his or her impairment rating, which is then applied to the
specific case of a given worker. For example, a worker who
loses a hand may not suffer permanent disability if he or she
is a teacher. But that same worker would be permanently
disabled if he or she works in construction.
In 2007, the AMA published the sixth edition of the guides,
and witnesses today will describe how this new edition has
dramatically reduced impairment ratings for many types of
conditions without apparent medical evidence and transparency.
The sixth edition has become so controversial that many States,
including Iowa, Kentucky, and Vermont have decided not to adopt
them.
It also appears that the sixth edition was developed in
near secrecy without the transparency and consensus which
should necessarily accompany the development of standards that
will have widespread use by State governments.
In addition, it appears that the physicians who developed
the latest edition may have ties to insurance companies and are
making a profit training doctors on the use of sixth edition,
which is complicated and very difficult to apply. The National
Technology Transfer Advancement Act of 1996 sets forth minimum
criteria for the development of voluntary consensus standards,
openness, balance of interests, due process protections and
consensus. The process used for developing the sixth edition
appears to significantly deviate from these standards and is a
focus of testimony before us today. Workers who are wholly
dependent on the grand bargain when they were injured on the
job are the ones paying the price. That is why the subcommittee
invited the AMA to testify today, but unfortunately it
declined.
Another troubling policy issue is that as eligibility for
workers' compensation benefits has become more restrictive,
there has been a cost shift to Medicare and Social Security
disability, SSDI, placing an additional burden on the taxpayer.
In addition, costs are being shifted to private health
insurance that should be borne by workers' compensation
policies and the employer. This is particularly worrisome,
especially during a time of record deficits. Chairman Miller
and I believe that this cost shifting trend warrants further
study. Therefore, we will be asking the Government
Accountability Office, GAO, to do a study and issue
recommendations.
The testimonies today will illuminate these problems, the
problems facing injured workers and taxpayers and I look
forward to hearing from our witnesses.
And now I yield to the ranking member for her opening
statement for as much time as she may consume.
[The statement of Ms. Woolsey follows:]
Prepared Statement of Hon. Lynn C. Woolsey, Chairwoman,
Subcommittee on Workforce Protections
Thank you all for attending this hearing on ``Developments in State
Workers' Compensation Systems.''
Here in Congress, we don't examine these state compensation
programs very often because they are generally under the purview of
state legislatures.
However, there have been some disturbing national trends that may
compel a comprehensive reexamination of these state programs and their
impact on injured workers.
As most of you are aware, workers' compensation statutes were
passed beginning in the early 20th century to establish a no fault
system for providing efficient redress for injured workers.
Workers' compensation was called the `grand bargain.'
Workers waived their rights to bring individual suits against their
employers and in return receive compensation for work-related injuries
regardless of fault.
Every state and the District of Columbia have workers' compensation
programs in place.
Most employers purchase private workers compensation policies, but
others self-insure or purchase insurance from a state managed
compensation fund.
Beginning in the 1990s, changes in state workers' compensation
laws--brought about by the lobbying efforts of employers and insurance
companies--have resulted in stricter eligibility requirements and the
reduction in both the amount and duration of benefits--particularly for
those workers with permanent partial disabilities.
Unfortunately this `grand bargain' of the 20th century is not so
`grand' any more, especially for injured workers.
In addition, there are two other recent developments that merit our
attention
The first has to do with the American Medical Association's (AMA)
Guides to Permanent Impairment.
And the second concerns a cost-shifting trend away from state
workers compensation programs, where the employer is responsible for an
employee's injury, to the federal government's medical and disability
programs.
The AMA Guides have been in effect since 1971 and are now in
widespread use.
Some states even require workers' compensation programs to use the
latest edition of the Guides.
These Guides were originally designed to be used by physicians in
making a scientific assessment of a worker's level of impairment--or
loss of function--due to a work-related injury.
The determination of whether a worker is permanently disabled and
entitled to workers compensation is based upon his or her impairment
rating, which is then applied to the specific case of a given worker.
For example, a worker who loses a hand may not suffer permanent
disability if he or she is a teacher, but that same worker would be
permanently disabled if he or she works in construction.
In 2007, the AMA published the 6th edition of the Guides, and
witnesses today will describe how this new edition has dramatically
reduced impairment ratings for many types of conditions, without
apparent medical evidence, and transparency.
The 6th edition has become so controversial that many states,
including Iowa, Kentucky and Vermont have decided not to adopt them.
It also appears that the 6th edition was developed in near secrecy,
without the transparency and consensus which should necessarily
accompany the development of standards that will have widespread use by
state governments.
In addition, it appears that the physicians who developed this
latest edition may have ties to insurance companies, and are making a
profit training doctors on the use of the 6th edition, which is
complicated and very difficult to apply.
The National Technology Transfer Advancement Act of 1996 sets forth
minimum criteria for the development of voluntary consensus standards:
openness; balance of interests; due process protections; and consensus.
The process used for developing the 6th edition appears to
significantly deviate from these standards and is a focus of testimony
before us today. Workers who are wholly dependent on this `grand
bargain' when they are injured on the job, are the ones paying the
price.
The subcommittee invited the AMA to testify today, but
unfortunately, it declined. Another troubling policy issue is that as
eligibility for workers' compensation benefits have become more
restrictive, there has been a cost shift to Medicare and Social
Security Disability (SSDI), placing an additional burden on the
taxpayer. In addition, costs are being shifted to private health
insurance that should be borne by workers' compensation policies and
employers. This is particularly worrisome, especially during a time of
record deficits. Chairman Miller and I believe that this cost-shifting
trend warrants further study. Therefore, we will be asking the
Government Accountability Office (GAO) to do a study and issue
recommendations. The testimony today will illuminate these problems
facing injured workers and taxpayers, and I look forward to hearing
from our witnesses.
______
Mrs. McMorris Rodgers. Good morning, Madam Chair, and
welcome to our witnesses. We appreciate the time you have taken
to be with us this morning and share your views and expertise
with State workers' compensation systems.
Today, nearly every American employee is covered by a
system of workers' compensation. Disability benefits are
available in the event of an illness or injury that occurs on
the job to help replace lost wages and cover the cost of
medical care when an individual is unable to return to work.
For many within the workforce and their families, workers'
compensation is a critical lifeline during a very difficult
time.
Anyone is considered disabled if they are unable to work,
or only able to work at limited earnings levels as a result of
an injury or illness. It may sound like a simple concept, but
as anyone will tell you, the reality of workers' compensation
is anything but simple. With an economy as diverse as ours, it
is no surprise there are varying definitions and degrees of
disabilities with their own set of rules and levels of
compensation applied in different ways depending upon industry
and workplace. For example, a software engineer and a
construction worker with the same injury may face different
challenges in performing their jobs. An engineer with a broken
ankle may be fit to return to work while the construction
worker may spend months away from the job site.
The complexity of workers' compensation is why most States
and the Federal Government rely upon the expertise of the
American Medical Association. Since 1958, the AMA has provided
medical professionals and policymakers with a guide to evaluate
and quantify impairment. The AMA guide is an important part of
the process to ensure injured workers get the assistance they
need and taxpayer resources are spent appropriately. The AMA's
guidance is periodically updated to ensure workers'
compensation systems reflect the latest advances in medicine,
science and technology.
Perhaps a particular injury or illness that rendered an
individual disabled 20 years ago can be overcome today, thanks
to a new medical device or therapy.
I look forward to hearing the testimony of Mr. Uehlein, who
will address AMA's most recent guides.
Another issue we will look at today is the interaction
between workers' compensation and the Social Security
Disability Insurance Program, and whether a decrease in demand
for one program leads to an increase in demand for the other.
Again, while not squarely in this committee's jurisdiction, the
information should help provide members with a clear picture of
the disability assistance available to those in our workforce.
We are discussing a complex issue that has a potential to
affect millions of people at some point in their careers. We
all want to see that everyone gets the care and assistance that
their families need in an unfortunate event that illness or
injury occurs.
State and local authorities working closely with
knowledgeable professionals in the medical community are
responsible for operating these systems, and we appreciate this
opportunity to learn more about their efforts on behalf of our
Nation's workers. Thank you, Madam Chair. And I yield back.
[The statement of Mrs. McMorris Rodgers follows:]
Prepared Statement of Hon. Cathy McMorris Rodgers,
Ranking Republican Member, Subcommittee on Workforce Protections
Good morning Madam Chair and welcome to our witnesses. We
appreciate the time you all have spared today to share your views and
experience with state workers' compensation systems. While most of our
discussion will fall outside the jurisdiction of this committee,
members of Congress always welcome the opportunity to better understand
issues that affect America's workforce.
Today nearly every American worker is covered by a system of
workers' compensation. Disability benefits are available in the event
of an illness or injury that occurs on the job to help replace lost
wages and cover the cost of medical care when an individual is unable
to return to work. For many workers and their families, workers'
compensation is a critical lifeline during a very difficult time.
Workers are considered disabled if they are unable to work or are
only able to work at a limited earnings level as the result of an
injury or illness. It may sound like a simple concept, but as any
worker can tell you, the reality of workers' compensation is anything
but simple. With an economy as diverse as ours, it is no surprise that
there are varying definitions and degrees of disabilities with their
own sets of rules and levels of compensation applied in different ways
depending upon the industry and workplace.
For example, a software engineer and a construction worker with the
same injury face different challenges in performing their jobs. An
engineer with a broken ankle may be fit to return to work, while the
construction worker may spend months away from the job site.
The complexity of workers' compensation is why in most cases states
and the federal government rely upon the expertise of the American
Medical Association. Since 1958, the AMA has provided medical
professionals and policymakers with a guide to evaluate and quantify
impairment. The AMA guide is an important part of the process to ensure
injured workers get the assistance they need and taxpayer resources are
spent appropriately.
The AMA's guidance is periodically updated to ensure workers'
compensation systems reflect the latest advances in medicine, science,
and technology. Perhaps a particular injury or illness that rendered an
individual disabled twenty years ago can be overcome today thanks to a
new medical device or therapy. I look forward to hearing the testimony
of Mr. Uehlein who will address the AMA's most recent guides.
Another issue we will look at today is the interaction between
workers' compensation and the Social Security Disability Insurance
program, and whether a decrease in demand for one program leads to an
increase in demand for the other. Again, while not squarely in this
committee's jurisdiction, the information should help provide members
with a clearer picture of the disability assistance available to
workers.
Today, we are discussing a complex issue that has the potential to
affect millions of workers at some point in their careers. We all want
to see workers get the care and assistance they and their families need
in the unfortunate event that an illness or injury occurs. State and
local authorities, working closely with knowledgeable professionals in
the medical community, are responsible for operating these systems and
we appreciate this opportunity to learn more about their efforts on
behalf of our nation's workers.
Thank you again Madam Chair and I yield back.
______
Chairwoman Woolsey. Thank you. Without objection, all
members will have 14 days to submit additional materials for
the hearing record.
Just a little education on how to use these lights. You
each will have 5 minutes. When you first start speaking, the
green light goes on. When the yellow light comes on you have a
minute left. And then a red light will come on. Now we aren't
going to eject you from the floor of the committee room, but we
would like you to wrap up at that time. And then when we have
questions, each member will have 5 minutes to ask and get the
answer. So if our question takes 5 minutes then don't worry,
you don't have to answer it.
But we really have until, we have a good solid hour; we are
going to get going and we will have as many questions as we can
get in during that time period after your opening statements.
We will start with Ms. Spieler and go down the witness
panel. Now I will introduce each of you and then you will go in
order. Congressman Payne is going to introduce Mr. Burton,
because he has a great need to do that.
All right, so we will start with Dean Emily Spieler. Dean
Spieler is the dean and Edwin W. Hadley professor of law at
Northwestern University School of Law. She is an expert on
workers' compensation and has written widely on this issue. She
also served as the commissioner of West Virginia's workers'
compensation program and was chair of the Federal Advisory
Committee to the Department of Energy on the Energy Employees
Occupational Injury Compensation Program. Dean Spieler received
her BA from Harvard College and her JD from Yale Law School.
And now Congressman Payne.
Mr. Payne. Thank you, Madam Chair. And it is my honor to
introduce the gentleman from the great State of New Jersey, and
that is where I have the privilege to call my home State. Dr.
John F. Burton, Jr., is professor emeritus at Rutgers
University and at Cornell University, and is a former dean of
the School of Management and Labor Relations at Rutgers. Dr.
Burton is the most widely recognized expert on workers'
compensation in the country, and he served as chairman of the
National Commission on State Workers' Compensation Laws in the
early 1970s. He has written extensively about workers'
compensation over the course of more than 40 years in academia.
He received his BS from Cornell University, and his LLB and
Ph.D from the University of Michigan.
Chairwoman Woolsey. Thank you, Congressman. I have to
correct. Dean Emily Spieler is professor of law at Northeastern
University. I apologize.
Dr. John Nimlos is a certified independent medical examiner
and physician of occupational health. He served as the chief of
the East Side Occupational Medicine Clinic from 1987 to 2007,
where he evaluated the treatment of work-related injuries,
illnesses and exposures. Dr. Nimlos received his BA and MD from
the University of Minnesota.
W. Frederick Uehlein is the founder and chairman of the
Insurance Recovery Group and an attorney with over 30 years of
experience in workers' compensation. He is also a member of the
Workers' Compensation Trial Lawyers Association and serves on
the advisory committee of John Burton's workers' compensation
resources. Mr. Uehlein is a graduate of Boston College Law
School and Trinity College. Welcome.
Mr. Christopher Godfrey is the commissioner of the Iowa
Division of Workers' Compensation. Before becoming
commissioner, Mr. Godfrey was an associate attorney at Max
Schott & Associates, where he practiced workers' compensation
and employment discrimination law. Mr. Godfrey has a BA from
Drake University and a JD from Drake Law School.
We have a panel of experts. We are so honored. We will
begin with you, Dean Spieler.
STATEMENT OF EMILY SPIELER, DEAN,
NORTHEASTERN UNIVERSITY SCHOOL OF LAW
Ms. Spieler. Chairwoman Woolsey, Ranking Member McMorris
Rodgers and members of the subcommittee, thank you for the
opportunity to appear before you today. I appear to express my
deep concern about the trajectory of State workers'
compensation programs in general, and my particular concern
regarding the sixth edition of the AMA guides to the evaluation
of permanent impairment.
Workers' compensation is the social benefit system designed
to provide income replacement benefits and medical care to
people who have been injured or made ill by their work. The
backdrop for today's hearing is important. Analyses of trends
in workers' compensation suggest that the adequacy and the
availability of compensation for injured workers are declining
and declining significantly. The AMA guides have become a
commonly used vehicle for rating the permanent defects of
workplace injuries, and are now used in 44 States as well as in
the Federal Employees Compensation Act.
The adoption of the guides has not been without
controversy, and that controversy has increased with the sixth
edition. The key element that the guides add to the existing
medical literature is not new diagnostic or treatment
techniques. Rather, it is the numeric quantification of
impairment. There are core problems with this quantification
system. First, the impairment numbers are not based on my
evidence and are therefore simply numbers that have been
created out of thin air.
In the 40 years since the publication of the first edition
of the guides, the AMA has made no attempt to conduct
validation studies of these numeric ratings in terms of the
relationship of the impairment rating numbers to the actual
functional loss or disability of injured workers.
Second, the process for development of the impairment
numbers is quite opaque. The numbers are developed based upon
consensus of a small number of physicians. The result is that
public programs, including FECA, are tied to a publication from
a nongovernmental organization that has been developed without
public comment or full peer review.
Third, workers' compensation is supposed to provide
benefits for disability, and the guides pretend to quantify
impairment. Impairment is often not a good predictor of the
economic consequences of injury or disease, and there has never
been any attempt by the AMA to correlate their percentage
values to any ability to function at work.
Much of the concern about adoption of the guides relates to
the fact that the impairment ratings of the guides have become
a proxy for the rating of disability in many State workers'
compensation programs. The sixth edition adds to these
problems.
The sixth edition adopts a new definitional structure based
on the International Classification of Functioning, Disability
and Health, ICF, of the World Health Organization and
diagnosis-based grids for assessing impairment. It purports to
increase its attention to functional assessment and to reduce
variations in ratings performed by different examiners. But a
careful reading reveals many changes that are troubling.
In all organ systems, actual functional limitations, the
most lauded change in the sixth edition, have very small impact
on the ultimate impairment rating. The concern about inter-
rater variability has resulted in an increased focus on
objective evidence in medical pathology despite the rhetoric
associated with the inclusion of functional assessment. This
addition rejects subjective symptoms such as pain, range of
motion, downgrades the role of treating physicians who would be
most familiar with the individual's functional capacity and
actually restricts the effect of any assessment of functional
loss.
While admitting the fact that there is no empirical basis
for the impairment quantifications, the sixth edition decreases
many of the numeric ratings, sometimes a lot. This results, in
fact, in reduced availability of workers' compensation benefits
for injured workers and the externalization of economic costs
of injuries from workers' compensation systems.
It is not true that disability is impossible to measure.
Studies have been done on the relationship of impairment
ratings to actual loss of earnings and loss of quality of life
experienced by workers with work-related injuries. The AMA has
never incorporated those studies into its guides.
I urge that you request the National Academies of Science's
Institute of Medicine to conduct a review of the guides and an
assessment of permanent disability. Their review should include
recommendations regarding the best way to develop a new system
for rating workers' injuries as measured by the impact of those
injuries and diseases on the extent of permanent impairments,
work disability and noneconomic losses.
I would be happy to answer any questions you have.
Chairwoman Woolsey. Thank you.
[The statement of Ms. Spieler follows:]
Prepared Statement of Emily A. Spieler, J.D., Dean and
Edwin W. Hadley Professor of Law, Northeastern University School of Law
Chairwoman Woolsey, Ranking Member McMorris-Rodgers and Members of
the Subcommittee on Workforce Protections of the Committee on Education
and Labor:
Thank you for the opportunity to appear before you today.
My name is Emily Spieler. I am currently the Dean of the School of
Law at Northeastern University in Boston. In the past, I served as the
head of the workers' compensation program in the State of West
Virginia, I have written and spoken frequently on issues relating to
state workers' compensation program, and I have served on committees
relevant to this issue for the National Academy of Social Insurance,
the National Academies of Science, and the American Bar Association. I
served as Chair of the Federal Advisory Committee to the Department of
Energy on the implementation of the Energy Employees Occupational
Injury Compensation Program Act. I was a member of the seven-member
Steering Committee appointed by the American Medical Association to
provide advice on the development of the Fifth Edition of the AMA
Guides to the Evaluation. That committee was disbanded before the
edition was completed, and five of us from the committee then published
``Recommendations to Guide Revision of the Guides to the Evaluation of
Permanent Impairment'' in the Journal of the American Medical
Association.\1\ I declined the opportunity to be a formal reviewer for
the Sixth Edition of the Guides.
I would like to acknowledge the assistance of John F. Burton Jr.,
Emeritus Professor at Rutgers University, and the nation's leading
expert on workers' compensation, in the preparation of this testimony.
I appear before you today to express my deep concern about the
trajectory of state workers' compensation programs in general and my
more particular concern regarding the Sixth Edition of the AMA's Guides
to the Evaluation of Permanent Impairment.
Workers' compensation is the social benefit system designed to
provide income replacement benefits and medical care to people who have
been injured or made ill by their work. After an injury, a worker
generally requires a temporary period of healing, during which s/he may
not be able to work and will collect temporary total disability (TTD)
benefits. The length of this period may vary, but at the end of it the
health condition will stabilize and the individual will be viewed as
having reached maximum medical improvement (MMI). At this point, all
workers' compensation programs have a mechanism for providing
compensation for the permanent effects of the compensated injury or
illness. In almost all cases, the individual is partially (not
completely) disabled and will receive permanent partial disability
(PPD) benefits. In severe cases, the worker may receive permanent total
disability (PTD) benefits, generally paid for life. PTD benefits are
extremely rare in workers' compensation systems, even if an individual
is unable to reenter the workforce successfully. PPD benefits are
therefore the critical benefit providing compensation for permanent
losses.
PPD is the most costly area of cash benefits paid by workers'
compensation programs, although the medical costs associated with the
programs now surpass the cost of all cash benefits paid directly to
workers.\2\ The systems used by workers' compensation programs to award
these benefits vary. Almost all states (43 jurisdictions) use a
statutory schedule for a small number of injuries, such as loss of a
limb. Most of these statutes also provide that multiple losses of body
parts will result in a PTD award.
Beyond this, there is large variability among jurisdictions in both
methodology and outcome in PPD cases. In general, PPD is assessed based
on one of three methodologies: loss of earning capacity, a predictive
model, used by about 13 states; actual wage loss (about 10 states);
and, most commonly, permanent impairment without direct consideration
of actual loss of earnings. Some states use a combined approach,
modifying the impairment rating (as in California) or assessing the
disability differently if the worker has returned to work. In 14 of the
``impairment'' states, the worker receives a benefit based on the
degree of impairment, and loss of earnings is not considered at all. In
these states, a percentage of impairment is simply converted to a
monetary award using a formula set by statute or regulation, so that
each percentage point can be equated to a specified number of weeks of
weekly benefits, generally based on the individual worker's pre-injury
wage, with a statutory wage cap.\3\
I believe all but one state now allows cases to be settled for a
lump sum settlement through a process called compromise and release
agreements. This means that the worker and the payer (private insurance
carrier, state fund or self insured employer) attempt to quantify the
worth of the injury and eliminate any on-going obligation to pay
benefits to the worker. In many states, this includes a settlement of
the potential future medical costs as well.
Analyses of trends in workers' compensation suggest that the
adequacy and availability of compensation are declining, perhaps
significantly. States are erecting greater barriers to compensability.
Increasing weight is being given to impairment ratings, and fewer and
fewer jurisdictions offer wage replacement benefits without time
limits.
Given this background, it is no surprise that there is a quest for
a magic formula that quantifies the effects of injuries. At its best,
this is a quest for an efficient, reliable and valid methodology that
would be fair to individual workers by reflecting the true extent of
their disabilities; would be equitable to injured workers as a group by
providing consistent awards for similar injuries and disabilities;
would limit transaction costs so that benefits are provided efficiently
and without undue delay; and would provide predictive value to payers
so that premium rates would not be unduly inflated by excessive caution
in the face of uncertainty.
It is for these reasons that the American Medical Association's
Guides to the Evaluation of Permanent Impairment (Guides) has become so
important.
Guides for impairment rating of organ systems were initially
developed before 1970 and were first published together as the Guides
for the Evaluation of Permanent Impairment in 1971. Since then, the
book has been revised repeatedly; the Sixth Edition, published in 2008,
is the latest in the series. Each edition has been critical of prior
editions, and each edition has made changes in the assessment
techniques.
Some elements have been constant. The book is organized by organ
system, providing a methodology for examination and then rating
(numeric quantification) of the extent of impairment, currently
expressed as a percentage of whole person impairment (WPI). The Guides
has specifically stated that these are impairment ratings, not intended
for use to rate disability--economic and noneconomic loss--because
disability reflects a combination of medical and non-medical factors.
In fact, many of the specific WPI ratings have not changed over time,
despite significant advances in the understanding of impairment,
functional loss and disability.
It is critical to understand that the key element that the Guides
adds to the existing medical literature is the numeric quantification
of impairment. It is this aspect of the Guides that encourages its
expanding use. As noted below, this quantification is not, and has
never been, evidence-based.
The use of the Guides has increased rapidly, precisely because it
has successfully been characterized as the best vehicle to meet the
complex goals of fairness, reliability and efficiency in rating
permanent impairment. The Guides is reportedly now used in more than 44
states as well as federal compensation programs. Guides 6th p. 20.
Increasingly, state workers' compensation programs have moved to using
the impairment ratings as a proxy for the extent of disability. It is
used in cases under the Federal Employees' Compensation Act, the Energy
Employees Occupational Illness Compensation Program Act and, to a more
limited extent, under the Longshore and Harborworkers Compensation Act.
It is showing up for the ratings of injuries in automobile accident
cases. It is used in Canada, New Zealand, Australia, and South Africa.
This represents, of course, remarkable reach for a publication of a
non-governmental organization that is developed without public comment
or full peer review.
It is therefore no surprise that each new edition of the Guides is
highly scrutinized: The impairment ratings in the Guides have become
the proxy for the rating of disability in many state workers'
compensation programs--despite the admonition in the book that its
purpose is to rate impairment, not disability. This poses a particular
challenge because the extent of impairment may not be a good predictor
for the economic consequences (work disability) or for the noneconomic
consequences (nonwork disability or noneconomic loss) of injury or
disease.
When I served on the Steering Committee for the development of the
Fifth Edition, serious issues were raised about the legitimacy of the
Guides in terms of its use in workers' compensation systems. Since
then, the AMA has published two additional editions, each with changes.
The Sixth Edition explicitly acknowledges the criticisms of the
prior editions of the Guides\4\ and attempts, for the first time, to
draw links between impairment and functional loss by standardizing
assessment of the ability of the patient to perform specified
Activities of Daily Living (ADLs). It applies functional assessment
tools and includes, to a limited extent, measures of functional loss in
the impairment ratings. It organizes the medical examination to
incorporate history, physical clinical studies and functional status.
It also strives to increase inter-rater and intra-rater variability.\5\
These are all important and laudable steps.
But a more careful reading of the Sixth Edition reveals many
changes that are troubling in their scope or in their application. The
edition also retains some of the most problematic features of the
earlier editions.
I will now summarize the changes in the Sixth Edition, as well as
the areas of continuing concern that have not been addressed by this
latest edition of the Guides.
Changes in the Sixth Edition of the Guides
There are five key areas of changes in the Sixth Edition:
1. Definitional structural changes in the Sixth Edition
Adoption of the ICF definitional structure.
The Sixth Edition purports to adopt the International
Classification of Functioning, Disability and Health (ICF) of the World
Health Organization, designed to describe health and disability at the
individual and population levels. According to the Guides' authors,
this system looks at what an individual can--can cannot--do, and it
claims to provide ``greater weight to functional assessment than do
prior Editions.'' Guides 6th p. 26. The ``relationships between
impairment, activity limitations, and participation are not assumed to
be linear or unidirectional.'' Guides 6th p. 3. The Senior Contributing
Editor to the Sixth Edition, Dr. Christopher Brigham, has noted that
``use of the ICF model does not indicate that the Guides will now be
assessing disability rather than impairment. Rather, the incorporation
of certain aspects of the ICF model into the impairment rating process
reflects efforts to place the impairment rating into a structure that
promotes integration with the ICF constructs for activity limitations
and limitations in participation, ultimately enhancing its
applicability to situations in which the impairment rating is one
component of the `disability evaluation process.' ''\6\ This is
described by the authors of the Sixth Edition as a `paradigm shift,'
and the Guides now uses validated questionnaires for assessing
function.
But there are serious problems raised by this shift.
First, this definitional structure is different from the prior
definitions under the Guides, is not consistent with terminology in
workers' compensation programs, and is quite different from definitions
under the Americans with Disabilities Act--thus creating new confusion
in an already confused and complex field.
Second, although importing the ICF model and including evaluation
of ADLs gives the Guides the appearance of improving its approach to
functional assessment, the actual effects of the change are in fact
extremely limited: ``Patients' responses on functional assessment
instruments will act as modifiers of the percentage impairment they are
awarded, but the awards will, in general, primarily reflect objective
factors.'' Guides 6th p.39. As is discussed below, whole person
impairment ratings are based on placement into a class, and functional
assessment can only change the actual WPI rating by a limited amount.
In essence, these are small adjustments within limited bands. At the
same time, the consideration of significant indicators of function--
including range of motion assessment and pain, which were used in
preparing the WPI ratings in the Fifth Edition--are eliminated or
reduced in the Sixth Edition. There is real tension between the
rhetoric rooted in the ICF model and human functioning and the reality
of continuing a diagnosis-based approach with exclusion of critical
subjective factors.
Third, the use of ADLs for this purpose is troubling. The Guides
uses both a definition of 100% (approaching death) and a functional
assessment approach (ADLs) that is inappropriate for assessing the
level of impairment for workers--although these may be appropriate for
elderly patients facing self-care issues. ADLs include basic personal
hygiene, dressing, eating, functional mobility, sleep and sexual
activity. Guides 6th p.7, 482-484. Data from the National Health
Interview Survey conducted by National Center for Health Statistics,
Centers for Disease Control and Prevention indicates that the number of
people who report inability to perform work due to disability far
exceeds the number who report inability to perform ADLs. This is not
surprising: ADLs represent very basic self care issues and are not a
good match for the issues of disability that confront injured
workers.\7\
Fourth, the Guides now gives the appearance, but not the reality,
of assessing function in setting the WPI ratings. This could result in
further growth of the inappropriate use of the Guides as a proxy for
disability.
Changes in key definitions
Important changes and additions were made to the definitions of key
terms in the Sixth Edition of the Guides. Some of these reflect the
adoption of the ICF model, but others are not explained by this shift.
Appendix 1 provides a comparison between the Fifth and Sixth Editions
of some of these terms. A quick glance through these changes shows the
adoption of a new definition of disability, which may be consistent
with ICF terminology but is quite confusing in the context of U.S.
workers' compensation, and an introduction of the word ``significant''
into the definition of impairment. The definition of impairment rating
introduces the inclusion of ADLs, despite the fact that ADL assessment
plays a very small role in the calculation of WPI in the new system.
The Sixth Edition also introduces definitions for a series of terms
relate directly to legal terminology. I discuss this issue below.
2. Conceptual congruity among organ systems through creation of
diagnosis-based grids
The Sixth Edition developed a generic template for diagnosis-based
grids across organ systems and attempts to graft this onto the ICF
conceptual framework. The ICF classification system uses five
impairment classes, and this has been imported into the Sixth Edition
for most organ systems and diagnoses. A ``key factor'' for each organ
system determines the placement into the class; the key factor for use
on any grid is specified in the text. The key factor is diagnosis-
based; it can be derived from clinical presentation, objective testing
or, less commonly, physical findings. Class is determined by
``diagnosis and/or other specific criteria.'' Guides 6th p. 14.
Each class is then generally divided into five grades, with
assigned WPI ratings. The middle grade is considered the default, and
can be modified--but only within the class--by application of ``non-key
factors.'' These include physical findings, clinical test results and
patients' self reports on Activity of Daily Living functional scales.
Thus, choice of diagnosis and of impairment class are the two most
important elements in determining the final impairment rating. The
generic template is attached as Appendix 2.
In all organ systems, actual functional limitations--the lauded
change in the Sixth Edition--can have very small impact on the ultimate
WPI rating.
3. Reducing inter-rater variability and reliability by eliminating
subjective factors
Despite the rhetoric and the large amount of effort that went into
the conversion to the ICF model and diagnosis-based grids, in fact the
primary focus in the development of the Sixth Edition seems to have
been on reducing inter-rater variability, irrespective of the accuracy
of the rating in terms of the actual functional capacity of the
individual.
In the effort to address this concern, the Sixth Edition focuses on
objective evidence and pathology, rejects subjective symptoms,
downgrades the role of treating physicians who would be most familiar
with the individual's functional capacity, and, as noted above,
restricts the effect of any assessment of functional loss. Rater
discretion is reduced by the diagnosis-based grid methodology, which
narrows the bands of available WPI ratings as well as by the insistence
on objective findings. Although this has been characterized as
increasing `fairness,' it in fact may have the result of lowering the
WPI rating, without any consideration for the effects of these changes
on injured individuals.\8\
Pain is unquestionably the most important subjective symptom.
Because it is subjective, however, it is viewed with suspicion by the
authors of the Guides. Under the Sixth Edition methodology, pain is
assumed to be included in the rating for any condition covered in the
organ system chapters. In contrast, the Fifth Edition allowed for an
additional 3% WPI for pain. For painful conditions not subject to
rating in the organ system chapters, the Sixth Edition allows up to 3%
WPI. This is true despite the fact that the Guides indicate that there
is a ``linear trend for decreasing positive outcomes (e.g. return-to-
work and work retention) as the [pain disability questionnaire] score
categories increased.'' Guides 6th p.40. The Guides chooses objective
factors--to ensure reliability--over accuracy in assessing the actual
outcomes for disabled persons.
Musculoskeletal Impairments and Range of Motion: The Sixth Edition
eliminates range of motion as a basis for rating spine and pelvic
impairments. Classification of these disorders is based solely on
diagnosis, and then placed within the appropriate class. Again, the
justification is standardization that ``promotes greater inter-rater
reliability and agreement.'' \9\ In contrast, the Fifth Edition used
both ROM and diagnosis-related estimate (similar to the diagnosis-based
impairment) to determine the WPI rating. Range of motion is an
indicator of functionality.
Treating physician reports: According to the Sixth Edition,
treating physicians' reports carry inherent bias, and therefore require
great scrutiny. One of the Section Editors of the Sixth Edition, Dr.
Kathryn Mueller, observed, ``One study noted higher impairment ratings
by treating physicians as compared to an expert who reviewed the same
information.'' Noting that studies show that PPD payments do not
adequately reflect actual wage loss of individuals after MMI, she went
on to note, ``Thus, if the treating physicians' ratings were slightly
higher than `expert' ratings, in a social sense, this may be
appropriate. Perhaps the treating physicians are considering the
overall functional effects of the injury or illness on the
individual.'' \10\ This suggestion is, of course, in sharp contrast to
Dr. Brigham's assertions that ratings were consistently too high under
the Fifth Edition.\11\
4. New direct links to legal issues relating to compensation
The Sixth Edition is the first edition to openly acknowledge the
use of the Guides for determination of economic benefits: ``The primary
purpose of the Guides is to rate impairment to assist adjudicators and
others in determining the financial compensation to be awarded to
individuals who, as a result of injury or illness, have suffered
measurable physical and/or psychological loss.'' Guides 6th p. 6. In
fact, although this edition continues to state that it should not be
used to create direct estimates of disability, the Sixth Edition no
longer sets out this caution in bold in the text. It also significantly
expands into areas of legal definitions. It adds definitions for
causality, aggravation, exacerbation, and recurrence--all legal
concepts in workers compensation programs--thereby usurping these
programs' prerogative to define these terms. See Appendix 1.
The approach to apportionment is particularly troubling. The
traditional rule in workers' compensation programs is that an employer
takes a worker as ``he finds him.'' Under this traditional view, the
compensable impairment from an injury would include any underlying
disease or degenerative process. Although some workers' compensation
systems have moved away from this traditional approach, the majority
have not. While noting the need to follow the rules of the local
jurisdiction, the Guides now instructs raters on how to separate out
the portion of the impairment that is not directly caused by the
immediate injury. Guides 6th p.26. This may have a troubling normative
effect on programs in which apportionment is not currently appropriate,
and further reduce the adequacy of benefits for injured workers.
5. Specific changes in whole person impairment ratings
The Sixth Edition specifically states that, where there was no
compelling reason to change impairment ratings from prior editions,
there would be consistency from the prior edition. Thus, despite the
adoption of the ICF model and the diagnosis-based grids, the editors
assert that very little change was to be made in impairment rating
values.
Despite this assertion, there are many unexplained changes in the
WPI ratings, and the majority of these appear to lower the ultimate WPI
rating for the injured worker.
Examples include:
Ratings for the most severe impairments for non-
musculoskeletal organ systems have been reduced significantly,
including for some common occupational diseases such as pulmonary
disease. See Appendix 2 for a comparison of the values in the Fifth and
Sixth Editions for pulmonary impairment and hypertension: the top
rating for the most severe category was lowered from 100% WPI to 65%
from the Fifth to the Sixth Editions. Equivalent changes were made in
most other organ systems. The top of the scale was lowered, and
therefore the scale for severe and moderate disabilities was reduced
because of the decrease in the top available rating.\12\
There are, admittedly, some unchanged WPI values, including the
conversion of noise-induced hearing loss to WPI and the WPI ratings for
voice/speech impairments. And, after perusing all non-musculoskeletal
organ chapters, I did find the following increase in values: in the
central and peripheral nervous system, the highest impairment rating
was increased from 90% to 100% WPI in the Sixth Edition for someone
exhibiting a ``state of semi-coma with total dependence and subsistence
on nursing care and artificial medical means of support or irreversible
coma requiring total medical support.'' Guides 6th p. 327. On the other
hand, the ranges for this category were changed: from 70-90% in the
Fifth Edition to 51-100% in the Sixth. As a result, the next class down
in ``consciousness and awareness'' was reduced from a range of 40-69%
to 31-50% WPI in the Sixth Edition. It is, of course, possible that
there are other examples of increases in the top rating or in the
scale. In addition, some charts are new (e.g. HIV).
One explanation for these reductions was offered by Dr. Kathryn
Mueller, who wrote: ``[T]he editors found that the majority of the
chapters included a 100% whole person rating even when the 100% whole
person rating for that particular body system would not be appropriate
[because 100% is equivalent to near death]. Therefore, the editors
lowered the 100% whole person ratings in many of the chapters.'' She
goes on to make the following assumptions: that these individuals will
have other organ system impairments that will raise their total WPI,
and that ``most individuals with severe deficits will be permanently
totally disabled, and therefore, in most systems, a permanent partial
disability rating relying on the AMA Guides will not be applicable.''
\13\ This last statement assumes an availability of PTD benefits that
is unlikely to be correct.
As previously noted, the pain `add-on' of up to 3% has
been eliminated from all ratings in organ system chapters. Given that
the overall available WPI ratings were not increased to reflect pain,
but the Sixth Edition simply states that pain is included, this will
result in reductions in WPI ratings for individuals with significant
pain.
Musculoskeletal cases: It is more difficult to assess the
changes in the new Sixth Edition chapters for musculoskeletal disorders
(upper and lower extremities and spine) because the methodologies of
the chapters are quite different from the prior edition. Probably the
most significant changes are the elimination of the Range of Motion
assessment and the pain add-on. In addition, cases involving surgical
intervention are all substantially reduced in terms of WPI. These
include spinal fusion (reduced from 24% to 15% WPI), ankle replacement
with poor result (30% to 24% WPI), total knee replacement (from 20% to
15% WPI) and hip fracture (from 25% to 12% WPI). I believe that the
change in ratings for these cases may be due to the fact that the Sixth
Edition does not consider treatment of the injury in the rating.\14\
Attached as Appendix 3 is an overview of the WPI rating ranges in the
Fifth and Sixth Editions for spine injuries.
There are a few increases in ratings in these chapters, including
for vertebral fractures, but the magnitude of these is small.
Similarly, some previously non-ratable conditions, such as soft tissue
and muscle/tendon injuries and non-specific spinal pain are now rated,
all with low WPI ratings of 1-2%.
In assessing non-orthopedic consequences of spinal
injuries, reductions were made in WPI ratings similar to those made for
non-musculoskeletal organ systems. For example, comparing the chapter
on central and peripheral nervous system disorders in the Sixth with
the spine chapter in the Fifth Edition, top WPI ratings for neurogenic
dysfunction were reduced as follows: bladder dysfunction from 60% to
30%; sexual dysfunction from 20% to 15%; respiratory problems from 90+%
to 65%; station and gait disorders from 60% to 50%. Bowel and upper
extremity dysfunction were unchanged.
There are undoubtedly many other changes in these values that a
careful review of each chapter would reveal.
Notably, many of the changes in values are inadequately explained.
Certainly, it is clear that the move to functional assessment has not
led to any review of the adequacy of the impairment ratings for injured
workers.
Core problems of the Guides retained in the Sixth Edition
Before the Fifth Edition was finalized, a number of former members
of the Steering Committee for that edition published an article in the
Journal of the American Medical Association, raising concerns about the
validity of the Guides.\15\ Many of the most critical problems raised
in that article have not yet been addressed.
1. Impairment ratings are not now, nor have they ever been,
evidence based. The Sixth Edition acknowledges again that the WPI
percentages are based on ``normative judgments that are not data
driven'' that still ``await future validation studies.'' Guides 6th p.
6, 26. In the 40 years since publication of the First Edition, the AMA
has made no attempt to conduct validation studies. Each new edition
claims that it is objective--and to have corrected the errors of the
past edition(s). Each instructs that the Guides not be used for direct
computation of benefits. Each has substantial effect on the benefits
paid to workers. The original ratings in the First Edition did not even
correlate with the scheduled awards that were already included in the
workers' compensation statutes. The differences between AMA impairments
ratings and states' statutory ratings is striking, in particular with
regard to relative weight (e.g. loss of arm versus loss of leg). But
despite the passage of time and the accumulation of relevant
information from studies by economists and others, the relative
importance of body parts in the Guides is same in Sixth as it was in
the First Edition in 1971. Although the Sixth Edition sets up a new
approach so that the evaluation of different organ systems is placed
within similar diagnosis-based grids, there is also still no validation
of percentages across organ systems.
2. Although the Guides are predominantly used for assessment of
work disability, there has never been any attempt to correlate the
percentage values to work. In fact, ability to work is excluded from
consideration in setting the percentage. To the extent the Sixth
Edition now appears to be creating correlation by including functional
assessment, the Guides use ADLs, which do not correlate with work
disability, and severely limits the effects on WPI of the functional
assessments.
3. The process for development of these WPI numbers is opaque. The
numbers are developed based upon consensus of a small number of
physicians. This persists in the Sixth Edition, which gives
``consensus-derived percentage estimate of loss.'' Guides 6th p.5. Only
53 specialty-specific experts contributed to the Sixth Edition; the
extent of involvement of each is unclear; the process for derivation of
new numbers is not described. This is consistent with past editions.
There is not, and there has never been, a possibility for public
discussion and input into the process, despite the use of the Guides in
federal and state governmental programs.
4. The Guides presumes that 100% represents a state close to
death--a scale inappropriate for assessing the impairment of workers.
The scale used to generate WPI ratings is a critical component of the
validity of the numerical ratings. The appropriate top of the
impairment scale for assessing workers should reflect a level of
functional loss related to inability to perform tasks necessary for
independent life and capacity to work. By defining 100% as comatose or
approaching death, and 90+% as totally dependent on others, the values
for all impairments are inappropriately depressed. The reduction in the
top of the scale for many organ systems in the Sixth Edition expands
the problem, rather than solving it.
5. The Guides combines impairments by reducing the value of each
subsequent injury after the first injury, failing to reflect the true
effect of multiple injuries. The scale that presumes that 100% is
equivalent to death forces the devaluation of all injuries after the
first. The Guides, including the Sixth Edition, therefore requires that
each subsequent impairment be reduced in value. Thus, if the first
impairment is valued at 25% for one limb, and the same injury occurs in
a second limb, the value for the second limb will be less than 25%, and
the total impairment will be less than 50%. From the standpoint of real
life, this makes no sense whatsoever. If I were to lose the use of one
arm, and then lose the second arm, surely I am more not less impaired
by this second loss! We suggested in 2000 that later impairments may be
more or less impairing than the original impairment: the Guides' system
of combining impairments means that all additional impairments are
viewed as less impairing.
6. The Guides is not broadly acceptable to the many constituencies
involved in workers' compensation. As we noted in 2000, ``Acceptability
depends in part on the origins of the relative values and in particular
on whether there is some scientific basis for the ratings.'' \16\
Plainly, this has not been achieved.
A number of these points were raised in the JAMA article in 2000,
prior to the publication of the Fifth Edition. They have still not been
addressed.
Additional concern regarding the Sixth Edition of the Guides:
The Senior Editor of the Sixth Edition, Dr. Christopher Brigham,
has a separate business called Impairment Resources, described at
http://impairment.com/ as follows:
Impairment Resources provides services designed to drive accurate
impairment ratings. One of the greatest opportunities in workers'
compensation is effective management of impairment ratings.
We are best able to serve you by providing unique professional
abilities, innovative technology solutions and offering a suite of
services ranging from ImpairmentCheck(tm) (our unique, online resource
to assess the accuracy of ratings) to ImpairmentExpert(tm) (expert
physician reviews). These services are complimented by Internet-based
educational resources and tools for all Editions of the AMA Guides to
the Evaluation of Permanent Impairment, and expert consultation. Our
core values are integrity, service and excellence.
Dr. Brigham has performed surveys that have concluded that the
ratings have been too high under the Fifth Edition; it is these
conclusions that seem to underpin key changes in the Sixth Edition. The
text of the Sixth Edition specifically discourages use of the Guides by
treating physicians and tells rating physicians that they need
``significant training.'' Guides 6th p. 35; Dr. Brigham's business is a
primary conveyor of that training. All of this certainly raises a
concern regarding an appearance of a conflict of interest that is
troubling in view of the controversy surrounding the Guides.
Status of the Guides' usage in workers' compensation programs:
Adoption of the Guides, and particularly the Sixth Edition, has not
been without controversy. Nevertheless, 44 state jurisdictions use one
of the editions of the Guides. Many states as well as Ontario, FECA,
FELA, and the Washington D.C. compensation system are mandated to use
the most recent edition of the Guides in evaluation of workers for PPD.
Appendix 4, drawn from Dr. Brigham's 2008 article, shows the projected
adoption of the various editions of the Guides as of the time that the
Sixth Edition was published.
Disputes regarding adoption of the Sixth Edition have arisen in
several states, including Iowa and Kentucky. In Kentucky the
legislature voted to delay adoption of this edition. The Sixth Edition
was not imported into the EEOICPA, perhaps because of the importance of
pulmonary impairment ratings in that system.
Some states continue to use the Fourth or the Fifth Edition. A few
states have chosen to develop their own rating systems (including
Florida, Illinois, Minnesota, New Jersey, New York, North Carolina,
Utah and Wisconsin). Some states do not use a specified rating guide,
although it is unclear whether physicians refer to the Guides in doing
evaluations for workers' compensation. California now chooses to use
the Guides, but uses a process by which the WPI rating from the Guides
is adjusted for diminished earning capacity and modified based on
occupation and age.
In 2007, an Institute of Medicine Committee charged with studying
Veterans Disability Benefits recommended that the Veterans
Administration update its own rating schedule rather than adopting an
alternative impairment schedule, explicitly rejecting the AMA Guides,
because the Guides measures and rates impairment and, to some extent,
daily functioning, but not disability or quality of life.
What is to be done?
The critical issue in all of this technical discussion is this: The
Guides has a direct effect on the permanent partial disability benefits
provided by workers' compensation programs to injured workers. The
Guides is currently the presumptive gold standard and is therefore used
in large numbers of jurisdictions, and the authors of the Sixth Edition
are advocating for its expanded use in the United States and elsewhere.
While admitting the fact that there is no empirical basis for the WPI
quantifications, the Sixth Edition decreases the availability of
benefits and thereby increases the externalization of economic costs of
injuries from workers' compensation systems.
There is no question that ``achieving cost-efficient outcomes and
both horizontal and vertical equity (equal treatment of equals and
unequal treatment of those with varying levels of disability) remains
elusive.'' \17\ It is not, however, true that disability is impossible
to measure. Researchers have studied nonwork disability and compared
the ratings in the Guides (3rd) to loss of enjoyment of life using an
accepted methodology in the field of psychology.\18\ Studies have also
been done on the relationship of impairment ratings to actual loss of
earnings experienced by workers with work-related injuries.\19\
It is true that a reliable and valid tool is challenging to
develop, and this may require further research. The existing studies
do, however, show an important level of consistency that can form the
basis of a new empirically-driven rating system.
The status quo, in which the AMA Guides to the Evaluation of
Permanent Impairment forms the basis for these discussions, is simply
unacceptable. With the widespread adoption of the Guides, a small
number of physicians is designing the system based on consensus without
validation or any real attention to justice. The Sixth Edition has only
made this worse. We are pessimistic about the ability of the AMA to
produce a Guides that serves the real needs of workers' compensation
programs for impairment ratings that are accurate predictors of work
disability.\20\
We can improve the approach and increase by validity and
reliability, but I doubt that we can turn to the AMA in this effort. As
the Guides itself indicates in each edition, physicians lack the
necessary expertise to assess non-medical issues. Moreover, they are
driven by normative judgments of `what is right'--thus making social
policy in the guise of medical science. Despite the availability of
both recent studies and the historical information in workers'
compensation statutes, the AMA has continued to publish Guides with
ratings that do not incorporate the available data.
I urge that you ask the National Academies of Science/Institute of
Medicine to conduct a review. This review should include
recommendations regarding the best way to develop a new system for
rating workers' injuries as measured by the impact of those injuries
and diseases on the extent of permanent impairments, limitations in the
activities of daily living, work disability and nonwork disability (or
noneconomic losses).
The alternative would be for the various workers' compensation
systems--both federal and state--to develop their own mechanisms that
do not rely so heavily on the Guides. The current furor over the Sixth
Edition suggests that there is considerable concern in some
jurisdictions regarding this issue. Nevertheless, I think that there is
strong interest in a `gold standard' for PPD evaluation, and it is
doubtful this will be produced in any single jurisdiction.
Thank you for the opportunity to appear before you today. I would
be happy to answer any questions that you may have.
endnotes
\1\ E. Spieler, P. Barth, J.F. Burton, Jr, J. Himmelstein, L.
Rudolph (2000) Recommendations to Guide Revision of the Guides to the
Evaluation of Permanent Impairment. JAMA 283 (4) 519-523.
\2\ I. Sengupta, V. Reno and J.F. Burton, Jr. (2010) Workers'
Compensation: Benefits, Coverage, and Costs, 2008. Washington, DC:
National Academy of Social Insurance.
\3\ This information is drawn from P.S. Barth (2003-2004).
Compensating Workers for Permanent Partial Disabilities. Social
Security Bulletin 65(4) 16-23.
\4\ These acknowledged criticisms included: ``There was a failure
to provide a comprehensive, valid, reliable, unbiased, and evidence-
based rating system; Impairment ratings did not adequately or
accurately reflect loss of function; Numerical ratings were more the
representation of `legal fiction than medical reality.' '' Guides 6th(
2)
\5\ The Sixth Edition adopts five new ``axioms'': (1) The Guides
adopts the terminology and conceptual framework of disablement as put
forward by the International Classification of Functioning, Disability,
and Health (ICF). (2) The Guides becomes more diagnosis based with
these diagnoses being evidence-based when possible. (3) Simplicity,
ease-of-application, and following precedent, where applicable, are
given high priority, with the goal of optimizing interrater and
intrarater reliability. (4) Rating percentages derived according to the
Guides are functionally based, to the fullest practical extent
possible. (5) The Guides stresses conceptual and methodological
congruity with and between organ system ratings. Guides 6th (2-3).
\6\ C.Brigham. (2008) AMA Guides Sixth Edition: New Concepts,
Challenges and Opportunities'' IAIABC Journal 45(1) 13- 57.
\7\ E. Spieler & J.F. Burton. (2010)The Distressing Lack of
Correspondence Between Work-Related Disability and the Receipt of
Workers' Compensation Benefits. Unpublished paper.
\8\ According to Dr. Brigham, ratings done under prior editions had
high rates of error. He assembled a group of experts to review ratings
by other physicians and they disagreed with 78% of the ratings: the
average WPI of the raters was 20.4% and the re-rating was 7.3%. He
concludes that the ratings being given to injured people were too high,
and the Sixth Edition is specifically designed to correct for this.
C.R. Brigham, W. F. Uehlein, C.Uejo, L.Dilbeck. (2008) AMA Guides Sixth
Edition: Perceptions, Myths, and Insights. IAIABC Journal 45(2) 65-81.
Compare this with the statement by Dr. Mueller regarding treating
physicians.
\9\ Brigham, supra n. 6.
\10\ K. L. Mueller. (2008) The 6th Edition of the AMA Guide to
Permanent Impairment: Its Foundation, Implications for Jurisdictional
Use, and Possible Future Directors. IAIABC Journal 45(2) 35-47, 42.
\11\ See note 8, supra.
\12\ Top WPI ratings for severe impairments were lowered from the
Fifth to the Sixth Editions of the Guides as follows: for pulmonary
impairment and hypertension from 100% to 65% WPI; for upper and lower
digestive tract impairments from 75% to 60% WPI; for liver or biliary
tract disease from 95% to 65% WPI; for upper urinary tract disease from
95% to 75% WPI; for bladder disease from 70% to 29% WPI; for urethral
disease from 40% to 28%WPI; for penile disease from 20% to 15% WPI; for
vulval and vaginal disease and for cervical & uterine disease from 35%
to 20% WPI; skin disorders from 95% to 58% WPI; anemia from 100% to 75%
WPI; hypothalamic-pituitary axis from 50% to 14% WPI; thyroid
abnormalities from 25% to 20% WPI; for diabetes mellitus from 40% to
28% WPI; for hypoglycemia from 50% to 6% WPI; for vestibular (balance)
disorders from 95% to 58% WPI; facial disorders 50% to 45% WPI; air
passage disorders 90+% to 58% WPI; episodic loss of consciousness or
awareness 70% to 50% WPI.
\13\ K.L. Mueller (2008) The 6th Edition of the AMA Guide to
Permanent Impairment: Its Foundation, Implications for Jurisdictional
Use, and Possible Future Directors. IAIABC Journal 45(2) 35-47, 37
\14\ For a listing of additional specific changes in
musculoskeletal ratings, using the case examples given in the Guides,
see T. McFarren (2008), AMA Guides, Sixth Edition Arrive on the Scene,
http://www.lexisnexis.com/Community/workerscompensationlaw/blogs/
workerscompensationlawblog/archive/2010/02/17/AMA-Guides--2C00--Sixth-
Edition-Arrive-on-the-Scene.aspx
\15\ Spieler et al, supra, n. 1.
\16\ Spieler et al, supra n. 1, at 523.
\17\ Peter Barth (2010) Workers' compensation before and after
1983. In R.Victor & L.Carrubba (Eds.), Workers' Compensation: Where
Have We come From? Where Are We Going?. Workers Compensation Research
Institute.
\18\ Sinclair, S. & Burton, J.F., Jr. (1994). Measuring noneconomic
loss: quality-of-life values vs. clinical impairment ratings. Workers'
Compensation Monitor, 7,4, 1-14; Sinclair, S. & Burton, J.F., Jr.
(1995). Development of a schedule for compensation of noneconomic loss:
quality-of-life values vs. clinical impairment ratings. In T. Thomason
& R.P. Chaykowski (Eds.), Research in Canadian Workers' Compensation,
pp. 123-140. Kingston, ON: IRC Press; Sinclair, S. & Burton, J.F., Jr.
(1997). A response to the comments by Doege and Hixson. Workers'
Compensation Monitor, 10(1) 13-17.
\19\ Berkowitz, M. &. Burton, J., Jr. (1987). Permanent disability
benefits in workers' compensation. Kalamazoo, MI: W.E. Upjohn Institute
for Employment Research; Boden, L.I., Reville, R.T. & Biddle, J.
(2005). The adequacy of workers' compensation cash benefits. In. K.
Roberts, J.F. Burton, Jr., & M. M. Bodah (Eds.), Workplace Injuries and
Diseases: Prevention and Compensation: Essays in Honor of Terry
Thomason. (pp. 37-68). Kalamazoo, MI: W.E. Upjohn Institute for
Employment Research; Reville, R.T., Seabury, S.A., Neuhauser, F.W.,
Burton, J.F., Jr., & Greenberg, M.D. (2005). An evaluation of
California's permanent disability rating system. Santa Monica, CA: RAND
Institute for Civil Justice.
\20\ John F. Burton, Jr. (2010) The AMA Guides and Permanent
Partial Disability Benefits. IAIABC Journal 45 (2), 13-35.
______
Chairwoman Woolsey. Mr. Burton.
STATEMENT OF JOHN BURTON, PROFESSOR EMERITUS, SCHOOL OF
MANAGEMENT AND LABOR RELATIONS, RUTGERS UNIVERSITY AND SCHOOL
OF INDUSTRIAL AND LABOR RELATIONS, CORNELL UNIVERSITY
Mr. Burton. Chairwoman Woolsey, ranking member Rodgers,
Congressman Payne and other members of the Subcommittee on
Workforce Protections. Thank you for the opportunity to testify
about workers' compensation.
As you know, each State has a workers' compensation program
that provides cash benefits, medical care, and rehabilitation
services. There are no Federal standards for these State
workers' compensation programs, and as a result, there are
substantial differences among jurisdictions in terms of level
of benefits, coverage of employers and employees, and the rules
used to determine which disabled workers are eligible for
benefits.
Over the past 100 years, there have been periods of reform
and regression in workers' compensation. As an example, the
level of workers' compensation cash benefits declined
substantially in the decades immediately after World War II,
and one consequence of this deterioration was the creation as
part of the Occupational Safety and Health Act of 1970 of the
National Commission on State Workmens' Compensation Laws. The
National Commission issued its report in 1972 critical of the
State workers' compensation programs, described them as, in
general, neither adequate nor equitable, and the National
Commission made a number of recommendations for State programs
and described 19 of them as essential.
And in the aftermath of the National Commission's report,
there were substantial changes in a number of State laws
improving these laws. But that improvement has come to a halt,
and if anything, a decline. At the risk of oversimplifying the
last 40 years, I would say the 1970s were a reformation period,
the 1990s was a relative tranquility period, and the years
since 1990 are the counter-reformation period.
A number of States changed their laws during the 1990s to
reduce eligibility for benefits in contrast to the historical
standards for compensability and workers' compensation, and
Dean Spieler and I have written extensively on those
developments.
There has also been research to quantify the impact of
these changes in State laws, and I will mention some work that
I have done with Professor Guo. Steve Guo and I have looked at
changes in State laws during the 1990 and found that these
changes in levels of benefits and in compensability standards
were the major source of the decline in cash benefits during
the 1990s more so than the decline in the injury rate.
There have been changes in the current decade that continue
this process of cutting back on State workers' compensation
laws, and I mentioned several of these in my written testimony,
which I will skip over here.
Now, the Social Security Disability Insurance Program is
the largest income replacement program for nonelderly
Americans. And as you know, this is a Federal program with
Federal rules that are standardized throughout the country.
Workers' compensation and the SSDI program serve
overlapping, although identical, populations. And Congress has
been concerned for a long time about the relationship between
workers' compensation benefits and SSDI benefits. Since 1965,
there has been a provision requiring that the combined total of
the two benefits not exceed 80 percent of pre-injury earnings.
And Congress has continued to be concerned about this issue and
has made some subsequent changes in these offset provisions.
I think there are several reasons why Congress needs to be
concerned about the possible shifting of costs from State
workers' comp programs to the Federal SSDI program. For one
thing, you have the 15 States which essentially reduce workers'
compensation benefits as a way of making sure the combined
total of SSDI and workers' compensation do not exceed 80
percent. There are also reasons to be concerned because of the
fact that safety incentives and workers' compensation depend
upon the costs being charged back against employers. To the
extent these costs are shifted, we have a reduction in the
safety incentives from workers' compensation.
There is some evidence about the cost shifting that is in
the paper, again, some work that Professor Guo and I are doing
indicating that the changes in the 1990s were, in fact,
responsible for some portion of the increase in SSDI
applications during the 1990s. There is mixed evidence on this
question. We are doing additional research, but I think there
is at least, if not a red flag, an orange flag here that is
waving saying we need to be concerned about what is happening
in workers' compensation because of its impact for SSDI.
I suggest some policy changes for workers' compensation. My
own view, Federal standards for workers' compensation are
desirable. I note in here that the National Commission's
recommendations were unanimous, and the members of that
National Commission were basically Republicans appointed by the
Nixon White House. And if it could be done in the Nixon White
House Republicans, there is no reason why we can't do it in the
present time.
And I also offer some suggestions for the SSDI program. The
Federal Government has already taken efforts to stop the
transferring of medical costs from State workers' compensation
programs to the Medicare program, and I propose here a modest
piece of legislation that would also limit the ability of the
States to shift the cash benefit portion of workers'
compensation into the SSDI program.
Thank you. I appreciate your toleration of my going over a
little bit here.
Chairwoman Woolsey. Thank you, Mr. Burton.
[The statement of Mr. Burton follows:]
Prepared Statement of John F. Burton, Jr., Professor Emeritus,
Rutgers University and Cornell University
Chairwoman Woolsey, Ranking Member Rodgers, and Members of the
Subcommittee on Workforce Protections: Thank you for the opportunity to
testify about ``Workers' Compensation: Recent Developments and the
Relationship with Social Security Disability Insurance.''
I am an Emeritus Professor at Rutgers University and at Cornell
University. I was the Dean of the School of Management and Labor
Relations at Rutgers from 1994 to 2000. I have conducted research and
served as consultant on workers' compensation throughout my career. I
was the Chairman of the National Commission on State Workmens'
Compensation Laws, which submitted its Report to the Congress and to
President Richard Nixon in 1972. I am Chair of the Workers'
Compensation Data Study Panel of the National Academy of Social
Insurance.
Workers' Compensation: Overview and Developments
Each state has a workers' compensation program that provides cash
benefits, medical care, and rehabilitation benefits to workers who are
disabled by work-related injuries and diseases as well as survivors'
benefits to families of workers who experience workplace fatalities.
There are also several federal workers' compensation programs. However,
there are no federal standards for state workers' compensation
programs, and there are considerable differences among the states in
the level of benefits, the coverage of employers and employees, and the
rules used to determine which disabled workers are eligible for
benefits.
The initial state workers' compensation programs were enacted in
1911, which makes workmens' compensation (as the program was known
until the 1970s) the oldest social insurance program in the U.S. Over
the last 100 years, workers' compensation programs have experienced
periods of reform and regression.
As an example, the level of workers' compensation cash benefits
relative to wages deteriorated in most states in the decades after
World War II. One consequence of the deterioration in state workers'
compensation programs was the creation of the National Commission on
State Workmens' Compensation Laws by the Occupational Safety and Health
Act of 1970.
The National Commission's 1972 Report was critical of state
workers' compensation programs, describing them as ``in general neither
adequate nor equitable.'' The National Commission made 84
recommendations, and described 19 of the recommendations as essential.
The reforms in state workers' compensation programs in the next few
years were impressive: the average state compliance score with the 19
essential recommendations increased from 6.9 in 1972 to 11.1 in 1976 to
12.0 1980 (Robinson et al. 1987: Table 1). But reform of most state
workers' compensation laws then slowed, so that by 2004 (when the U.S.
Department of Labor stopped monitoring the states), on average states
complied with only 12.8 of the 19 essential recommendations of the
National Commission (Whittington 2004).
At the risk of oversimplifying the almost 40 years since the
National Commission submitted its Report, I would characterize the
1970s as the Reformation Period, the 1980s as the Relative Tranquility
Period, and the years since 1990 as the Counter Reformation Period. The
extent of the deterioration in adequacy and equity of state workers'
compensation programs in the last 20 years is not reflected in
compliance scores with the essential recommendations of the National
Commission. Rather, the slippage has occurred in other aspects of the
program. A number of states changed their workers' compensation laws
during the 1990s to reduce eligibility for benefits (Spieler and Burton
1998). These provisions included limits on the compensability of
particular medical diagnoses, such as stress claims and carpal tunnel
syndrome; limits on coverage when the injury involved the aggravation
of a preexisting condition; restrictions on the compensability of
permanent total disability cases; and changes in procedural rules and
evidentiary standards, such as the requirement that medical conditions
be documented by ``objective medical'' evidence.
Research indicates that these legislative changes affected the
workers' compensation benefits received by injured workers. For
example, in 1990 Oregon adopted legislation that required that the work
injury be the ``major contributing cause'' of the claimant's disability
for the worker to qualify for workers' compensation benefits. Thomason
and Burton (2005) estimated that this and similar changes reduced the
amount of benefits received by Oregon workers by about 25 percent by
the mid-1990s. Guo and Burton (2010) found that changes in state
compensability statues and rules and more stringent administrative
practices were major contributors to the decline in workers'
compensation cash benefits during the 1990s. More of the decline in
workers' compensation cash benefits in the states during the 1990s is
explained by these changes in workers' compensation provisions and
practices than is explained by the drop in workplace injuries and
diseases during the decade.
The changes in workers' compensation programs in the current decade
have not yet been analyzed using the methodology relied on by Guo and
Burton (2010). However, my impression is that the statutory and
regulatory changes in recent years may have carried the Counter
Reformation Period to new levels. One traditional ``principle'' of
workers' compensation is that ``the employer takes the worker as she
[the employer] finds him [the employee]''. As a practical matter, this
principle meant that if an employee had a previous medical condition
that had not resulted in lost earnings, and if the employee had a
workplace injury that produced a degree of disability that was due to
the combination of the new workplace injury and the previous medical
condition, the employer was responsible for all of the consequences of
the workplace injury, including those that resulted from the
interaction of the previous medical condition and the new workplace
injury. While there were serious inroads into this principle in the
1990s, the current decade has added a new challenge. California now
apportions permanent partial disability awards so the employer is only
responsible for the portion of the permanent disability that can be
attributed to the new workplace injury.
The current decade also appears to have unusually significant
reductions in the amount of benefits that workers are entitled to
receive if they qualify for permanent partial disability (PPD)
benefits. Since 2000, workers' compensation reforms reduced PPD
benefits in several large states. California, Florida, and New York
accounted for almost one-third of all workers' compensation benefit
payments as of mid-decade (2005) (Sengupta, Reno, and Burton 2010,
Table 7). Between 2000 and 2009, California reduced permanent partial
disability benefits by over 60 percent, Florida reduced PPD benefits by
almost 20 percent, and New York reduced PPD benefits by about 20
percent (NCCI 2010, Exhibit III).
Social Security Disability Insurance
Social Security Disability Insurance (SSDI) is the largest income
replacement program for non-elderly Americans. The coverage rules for
employers and workers, the eligibility standards for SSDI benefits, and
the benefit levels are determined at the federal level. The federal
SSDI and Medicare programs provide cash benefits and health care
coverage to disabled beneficiaries until they return to work, die, or
qualify for Social Security Old Age benefits. The SSDI cash benefits
are provided to former workers (and their dependents) who are totally
disabled from any cause. In addition, Medicare benefits and
rehabilitation benefits are provided regardless of the cause of the
disability.
There are important limits on SSDI and Medicare benefits for
disabled persons. SSDI benefits are only provided to workers with an
extended period of covered employment prior to disability. Benefits are
paid regardless of the cause of the disability, but only when the
disability precludes substantial gainful employment. SSDI benefits only
begin after a five-month waiting period and Medicare benefits are only
available twenty-nine months after the onset of total disability.
Differences Between Workers' Compensation and SSDI
Workers' compensation differs from Social Security Disability
Insurance and Medicare in important ways. Workers are eligible for
workers' compensation benefits from the first day of employment.
Workers' compensation medical benefits are paid immediately after the
injury occurs. Temporary disability benefits are paid after a waiting
period of three to seven days; permanent partial and permanent total
disability benefits are paid to workers who have lasting consequences
from injuries and diseases caused by the job; and every state pays
benefits to survivors of workers who die of work-related injuries and
diseases. The most expensive type of workers' compensation benefits
involves workers with permanent, but partial, disabilities.
Relationship Between Workers' Compensation and SSDI
SSDI (in conjunction with Medicare) is the largest source of cash
and medical benefits for disabled workers in the U.S. and workers'
compensation is the second largest source. Workers' compensation and
SSDI serve overlapping, although not identical, populations. Both
programs pay medical and cash benefits to workers' with chronic,
severely disabling conditions. SSDI benefits are limited to workers
whose injury or disease precludes substantial gainful employment. To
use workers' compensation terminology, SSDI benefits are limited to
persons who are permanently and totally disabled.
Workers' compensation is the only significant civilian disability
income program, either private or public, that pays benefits to workers
who are either partially or totally disabled.\1\ However, the criteria
used by state workers' compensation programs to determine whether a
worker is totally disabled differ from those used by the Social
Security Administration (SSA) for the SSDI program. Consequently, it is
possible for an injured worker to be judged totally disabled by the
SSA, and thus eligible for SSDI benefits, but only partially disabled
by a state workers' compensation program. Furthermore, the criteria
used to determine the extent of disability vary among state workers'
compensation programs.
---------------------------------------------------------------------------
\1\ Accidental death and dismemberment (AD&D) insurance provides
benefits if an accident results in an employee's death or certain
dismemberments enumerated in the insurance contract.
---------------------------------------------------------------------------
Coordination of Benefits
Congress has long been concerned about the relationship between
workers' compensation benefits and the SSDI benefits since some
individuals qualify for benefits from both programs. The payment of
SSDI and workers' compensation benefits has been coordinated since
1965. Specifically, if a person is receiving both SSDI and workers'
compensation benefits, the combined benefits are limited to 80 percent
of the claimant's preinjury wages. Federal law provides as a
``default'' that SSDI benefits are reduced or ``offset'' in order to
achieve the 80 percent limit. Initially, states could enact laws that
reduced workers' compensation benefits rather than SSDI benefits (which
are known as ``reverse offset'' laws). However, in 1981 Congress
eliminated this option for all but the 15 states that already had
``reverse offset'' legislation.
Congress appears to have had several overlapping purposes with the
offset provision. First, by limiting the combined SSDI and workers'
compensation benefits to 80 percent of preinjury wages, the total costs
of the programs are reduced for workers who continue to qualify for
both programs. Second, by limiting the portion of preinjury wages that
is replaced, workers are encouraged to engage in rehabilitation and to
return to work rather than continue to receive disability benefits from
the two programs. Third, the 1981 decision to prohibit additional
states from adopting reverse offset laws was motivated by an effort to
protect the financial status of the federal SSDI Trust Fund rather than
allow the savings from the 80 percent limit on benefits to be returned
to employers and carriers in state workers' compensation programs.
As of December 2009, 7.9 percent of SSDI beneficiaries had a
current connection to workers' compensation or public sector disability
programs, including beneficiaries in reverse offset states, and an
additional 7.0 percent of SSDI beneficiaries had a previous connection
to workers' compensation (Sengupta, Reno, and Burton 2010, Table 17).
Possible Shifting of Costs from Workers' Compensation to
SSDI
There are several reasons why Congress should be concerned about
the possible shifting of the costs of workplace injuries and diseases
from the state workers' compensation programs to the federal SSDI
program.
First, the 15 states with ``reverse offset'' provisions allow
carriers and employers to reduce workers' compensation benefits when
the SSDI program is paying benefits to disabled workers, thereby
requiring the federal program to pay for some of the consequences of
workplace injuries and diseases.
Second, there is evidence indicating that the SSDI program is
paying benefits to workers who were disabled at work but who did not
qualify for workers' compensation benefits. Reville and Schoeni (2003/
2004) examined a nationally representative sample of persons aged 51 to
61 in 1992. Among those who reported a health condition caused by their
work, only 12.3 percent ever received workers' compensation benefits,
while 29 percent were currently receiving SSDI benefits.
Third, the Reville and Schoeni results pertain to a 1991 sample,
but there have been changes in workers' compensation programs since
then that are likely to have further increased the number of workers
whose disabilities were caused by the workplace who do not qualify for
workers' compensation benefits. Burton and Spieler (2001) suggested
that these changes are likely to have a disproportional effect on older
workers, who in turn are the most likely applicants for SSDI benefits.
Fourth, as Sengupta, Reno, and Burton (2010:43-44) recently
observed: ``The opposite trends in workers' compensation and Social
Security disability benefits during much of the last twenty-five years
raise the question of whether retrenchments in one program increase
demands placed on the other, and vice versa. The substitutability of
Social Security disability benefits and workers' compensation for
workers with severe, long-term disabilities that are, at least
arguably, work related or might be exacerbated by the demands or work,
has received little attention by researchers and is not well
understood.''
Fifth, workers' compensation programs rely on experience rating of
premiums, which are based in part on benefits paid by all firms in the
industry and in part on the firm's own benefits compared to other firms
in the industry. In theory, firms have incentives to improve safety in
order to reduce premiums and to remain competitive. While the evidence
supporting the theory is mixed, Thomason (2005: 26) concluded ``Taken
as a whole, the evidence is quite compelling: experience rating
works.'' To the extent that the costs of workplace injuries are shifted
from workers' compensation to SSDI, the safety incentives provided by
the workers' compensation program are diluted.
Evidence on the Shifting of Costs from Workers'
Compensation to SSDI
There are several studies examining whether the changes in the
workers' compensation programs during the 1990s resulted in more
applications for SSDI benefits. Xuguang (Steve) Guo and I published an
article (Guo and Burton 2008) examining the application rates for SSDI
benefits in approximately 45 jurisdictions between 1985 and 1999.\2\ We
found that higher levels of expected cash benefits provided by workers'
compensation programs relative to state average weekly wages are
associated with lower application rates for SSDI benefits. Since
expected workers' compensation cash benefits actually declined during
the 1990s, the variable helped explain higher SSDI application rates
during the decade. We also found that tightening compensability rules
in state workers' compensation programs are associated with higher
application rates for SSDI benefits. Since the compensability rules
were tightening during the 1990s, this variable also helped explain an
increase in SSDI applications during the decade.
---------------------------------------------------------------------------
\2\ Professor Xuguang (Steve) Guo and I receive support for our
study of the relationship between the workers' compensation program and
the SSDI program from the Program for Disability Research (PDR) in the
School of Management and Labor Relations at Rutgers: The State
University New Jersey. The PDR has a subcontract from the Employment
and Disability Institute at the School of Industrial and Labor
Relations at Cornell University, which receives support from the
National Institute on Disability and Rehabilitation Research (NIDRR).
---------------------------------------------------------------------------
Professor Guo and I have been refining our model and methodology in
the last two years, including the improvement of the variables
measuring factors other than those pertaining to the workers'
compensation programs that help explain applications for SSDI benefits.
Our recent (and as yet unpublished) results indicate that the aging
population was the largest contributor of the growth in SSDI
applications during the period we examined (1981-1999), and can explain
more than half the growth SSDI rolls in 1990s. The share of female
employment is another important factor, which was associated with
almost 18 percent of the change of SSDI applications between the 1980s
and 1990s.\3\ Our results suggest that reduction in the amounts of
workers' compensation permanent disability benefits and the tightening
of eligibility rules for workers' compensation permanent disability
benefits during the 1990s accounted for about 3 to 4 percent of the
growth of SSDI applications during the decade.
---------------------------------------------------------------------------
\3\ The SSDI replacement rate and the Unemployment rate generally
declined across those two decades, which inter alia would have resulted
in fewer SSDI applications, and the change in the disability prevalence
rate was minimal during the same period. Thus those three factors were
not the sources of SSDI growth in the 1990s.
---------------------------------------------------------------------------
The finding that applications for SSDI benefits during the 1990s
were affected by changes in workers' compensation programs must be used
with caution. Professor Guo and I received this month the data for SSDI
applications by state for years after 2001. We do not currently have
the values after 1999 for the workers' compensation variables we used
to analyze the SSDI application rates during the 1981 to 1999 period.
However, in very preliminary work, we did not find that the changes in
other measures of the workers' compensation programs through 2006
helped explain the changes in SSDI applications during the current
decade. In addition, an unpublished article by McInerney and Simon
(2010) of the determinants of SSDI applications concluded that it was
unlikely that state workers' compensation changes were a meaningful
factor in explaining the rise in SSDI applications and SSDI new cases
during the period from 1986 to 2001.
There is thus some modest, although not compelling, empirical
evidence that changes in workers' compensation programs since the early
1990s resulted in additional applications for SSDI benefits. The need
for additional research on this issue is obvious.
Policy for Workers' Compensation
The developments in state workers' compensation programs in the
last two decades are reminiscent of the deterioration of state workers'
compensation programs in the decades prior to 1972, when the National
Commission on State Workmens' Compensation Laws concluded that ``State
workmens' laws are in general neither adequate nor equitable.''
If the plight of workers' compensation in 2010 sounds like that of
1972, then the fundamental causes of the problems of the workers'
compensation program also have a familiar tone. As the National
Commission observed (1972: 124-125):
The economic system of the United States encourages efficiency and
mobility. These forces tend to drive employers to locate where the
environment offers the best prospect for profit. At the same time, many
of the programs which governments use to regulate industrialization are
designed and applied by States rather than the Federal government. Any
State which seeks to regulate the byproducts of industrialization, such
as work accidents, invariably must tax or charge employers to cover the
expenses of such regulations. This combination of mobility and
regulation poses a dilemma for policymakers in State governments. Each
state is forced to consider how it will regulate its domestic
enterprises because relatively restrictive or costly regulations may
precipitate the departure of employers to be regulated or deter the
entry of new enterprises.
Can a State have a modern workers' compensation program without
driving employers away? * * * While the facts dictate that no State
should hesitate to improve its workmens' compensation program for fear
of losing employers, unfortunately this appears to be an area where
emotion too often triumphs over fact. * * * it seems likely that many
States have been dissuaded from reform of their workmens' compensation
statute because of the specter of the vanishing employer, even if that
apparition is a product of fancy not fact. A few states have achieved
genuine reform, but most suffer with inadequate laws because of the
drag of laws of competing States.
If the current plight of state workers' compensation programs and
the cause of the deficiencies strike a familiar chord with those from
1972, so do the basic solutions resonate across the years. One approach
considered and rejected by the National Commission was federalization
of the state workers' compensation programs--that is the enactment of a
federal workers' compensation law that would displace state laws and
turn over the administration of a national workers' compensation
program to federal employees. In contrast, the policy recommended by
the National Commission to enhance the virtues of a decentralized,
state-administered workers' compensation programs was the enactment of
federal standards for the state programs if necessary to guarantee
state compliance with the 19 essential recommendations of the National
Commission
The notion of federal standards for workers' compensation is
probably unrealistic in the current political environment. And
determination of appropriate federal standards for a 21st century
workers' compensation program would probably be more difficult now than
it was in 1972. The fact that most of the recent deterioration in state
workers' compensation laws has involved tightening of eligibility
standards in ways unforeseen prior to the 1990s suggests how difficult
it would be to frame new federal standards to deal with current
manifestations of lack of adequacy and equity. But if the National
Commission on State Workmens' Compensation Laws, whose members largely
consisted of Republicans appointed by the Nixon White House, could
unanimously endorse federal standards in 1972, I do not totally despair
that Congress or some other responsible organization could in the
current era reaffirm the National Commission's final sentence: ``the
time has now come to reform workmens' compensation substantially in
order to bring the reality of the program closer to its promise.'' And
the advantage of federal standards as a way to conserve the essential
characteristics of the state-run workers' compensation system--however
paradoxical at first glance--also warrants reaffirmation.
Policy for SSDI
My research with Professor Guo provides the first evidence we have
seen that changes in workers' compensation programs since 1990
increased the number of applications to the SSDI program. As I
indicated, the evidence is not conclusive and the relationship between
workers' compensation and SSDI needs further research. But if
additional research confirms our preliminary findings about the
shifting of costs of workplace injuries and diseases from workers'
compensation to SSDI, one consequence will be the aggravation of the
financial problems of the federal program.\4\
---------------------------------------------------------------------------
\4\ According to the latest report of the Social Security Trust
Funds (Social Security Board of Trustees 2010, 28) ``Total DI
disbursements, which started to exceed non-interest income in 2005,
continue to exceed such income in 2009. In 2009, DI disbursements
exceeded total DI income (including interest), the first time DI assets
have declined on an annual basis since 1993.''
---------------------------------------------------------------------------
Congress has previously enacted legislation to protect the SSDI
program from costs being shifted from state workers' compensation
programs. There are two types of new legislation that could serve the
Congress's legitimate role in protecting the SSDI program from
increased applications resulting from lower permanent disability
benefits and more restrictive compensability standards in workers'
compensation.
First, Congress could enact Federal standards for state workers'
compensation programs that require states to provide adequate permanent
disability benefits to workers who can establish that their
disabilities were caused by the workplace using causation standards
that do not contain the restrictive provisions adopted by many states
since the early 1990s.
Second, Congress could enact legislation treating applications for
cash benefits from the SSDI program in a manner roughly similar to the
current Federal policy for Medicare benefits when the patient's need
for medical care is due at least in part to a workplace injury or
disease. Under the Medicare Secondary Payer Act, certain types of
workers' compensation claims must set aside funds to cover medical
expenses that might otherwise be shifted to the Medicare Program.
The principle for medical benefits could be adapted to cash
benefits by the enactment of the Social Security Disability Insurance
Secondary Payer Act (SSDISPA).
The SSDISPA would apply to all claims filed for SSDI benefits that:
Involve injuries or diseases with consequences that last
at least six months after the date of disablement, and
Are compensable under the applicable state's workers'
compensation law or would have been compensable using the work-related
test included in the Workmens' Compensation and Rehabilitation Law
(Revised), [Model Workers' Compensation Law], which was published by
the Council of State Governments in 1974.
For all claims to which the SSDISPA applies, the employer (or
carrier) must reimburse the Social Security Administration for all SSDI
benefits paid because the employer did not pay all of the permanent
disability benefits required by the Model Workers' Compensation Law.
I recognize that this proposal for the SSDISPA lacks some important
components, such as the specification of an agency for determining
whether the SSDI applications involve injuries or diseases to which the
SSDISPA is applicable. And there would be additional administrative
expenses required to implement the SSDISPA. However, there may be no
alternative to such legislation if Congress is unwilling to enact
federal standards for state workers' compensation programs and if
Congress wants to protect the financial integrity of the SSDI program.
Thank you again for the opportunity to present this testimony.
references
Burton, John F., Jr. 2004. ``The National Commission on State Workmens'
Compensation Laws.'' Workers' Compensation Policy Review. Vol.
4, No. 4 (July/August): 13-20. [The article can be downloaded
from www.workerscompresources.com]
Burton, John F., Jr. and Emily A. Spieler. 2001. Workers' Compensation
and Older Workers. In Peter P. Burdetti, Richard V. Burkhauser,
Janice M. Gregory, and H. Allan Hunt, eds. Ensuring Health and
Income Security for an Aging Workforce. Kalamazoo, MI: W.E.
Upjohn Institute for Employment Research.
Council of State Governments. 1974. Workmens' Compensation and
Rehabilitation Law (Revised). Lexington, KY: The Council of
State Governments. Portions reprinted in John F. Burton, Jr.
and Florence Blum, eds. Workers' Compensation Compendium 2005-
06, Volume Two. Princeton, NJ: Workers' Disability Income
Systems, Inc.: 104-124.
Guo, Xuguang (Steve) and John F. Burton, Jr. 2008. ``The Relationship
Between Workers' Compensation and Disability Insurance.'' In
Adrienne E. Eaton, ed. Proceedings of the 60th Annual Meeting
of the Labor and Employment Relations Association. Champlain,
IL: Labor and Employment Relations Association.
Guo, Xuguang (Steve) and John F. Burton, Jr. 2010. ``Workers'
Compensation: Recent Developments in Moral Hazard and Benefits
Payments.'' Industrial and Labor Relations Review, Vol. 63, No.
2 (January): 340-55.
McInerney, Melissa and Kosali Simon. 2010. ``The Effect of state
Workers' Compensation Program Changes on the Use of Federal
Social Security Disability Insurance.'' Article currently under
review.
National Council on Compensation Insurance [NCCI]. 2010. Annual
Statistical Bulletin, 2010 Edition. Boca Raton, FL: National
Council on Compensation Insurance.
National Commission on State Workmens' Compensation Laws. 1972. The
Report of the National Commission on State Workmens'
Compensation Laws. Washington, DC: Government Printing Office.
[The Report can be downloaded from
www.workerscompresources.com]
Reville, Robert T. and Robert F. Schoeni. 2003/2004. ``The Fraction of
Disability Caused at Work.'' Social Security Bulletin, Vol. 65,
No. 4: 3-17.
Robinson, June M., John Anderson, Anne Giese, Jamie Goodman, and John
F. Burton, Jr. 1987. State Compliance with the 19 Essential
Recommendations of the National Commission on State Workmens'
Compensation Laws, 1972-84. Washington, DC: U.S. Department of
Labor, Employment Standards Administration, Office of Workers'
Compensation Programs.
Sengupta, Ishita, Virginia Reno and John F. Burton, Jr. 2010, Workers'
Compensation: Benefits, Coverage, and Costs, 2008. Washington,
DC: National Academy of Social Insurance.
Social Security Board of Trustees. 2010. The 2010 Annual Report of the
Board of Trustees of the Federal Old-Age and Survivors
Insurance and Federal Disability Insurance Trust Funds.
Washington, DC. Government Printing Office.
Spieler, Emily A. and John F. Burton, Jr. 1998. ``Compensation for
Disabled Workers: Workers' Compensation.'' In Terry Thomason,
John F. Burton, Jr. and Douglas E. Hyatt, eds, New Approaches
to Disability in the Workplace, Madison, WI: Industrial
Relations Research Association, 205-44.
Thomason, Terry. 2005. ``Economic Incentives and Workplace Safety.'' In
Karen Roberts, John F. Burton, Jr., and Matthew M. Bodah., eds.
Workplace Injuries and Diseases: Prevention and Compensation:
Essays in Honor of Terry Thomason. Kalamazoo, MI: W.E. Upjohn
Institute for Employment Research, 9-35.
Thomason, Terry. and John F. Burton, Jr. 2001. ``The Effects of Changes
in the Oregon Workers' Compensation Program on Employees'
Benefits and Employers' Costs.'' Workers' Compensation Policy
Review, 1 (4), 7-23. [The article can be downloaded from
www.workerscompresources.com]
Whittington, Glenn A. 2004. State Workers' Compensation Laws in Effect
on January 1, 2004 Compared with the 19 Essential
Recommendations of the National Commission on State Workmens'
Compensation Laws. Washington, DC: U.S. Department of Labor,
Employment Standards Administration, Office of Workers'
Compensation Programs. Reprinted in John F. Burton, Jr. and
Florence Blum, eds. Workers' Compensation Compendium 2005-06,
Volume Two. Princeton, NJ: Workers' Disability Income Systems,
Inc.: 91-103.
______
Chairwoman Woolsey. Dr. Nimlos.
STATEMENT OF JOHN NIMLOS, M.D.,
OCCUPATIONAL MEDICINE CONSULTANT
Dr. Nimlos. Good morning, Chairwoman Woolsey, Ranking
Member Ms. McMorris Rodgers, and subcommittee members. I am a
medical doctor specializing and board certified in occupational
medicine. I treat employees for injuries and illness incurred
in the workplace. For 24 years, I have examined workers under
two different State workers' compensation systems as well as
Federal employees under the Federal Employees Compensation Act
and the Longshore and Harborworkers Act.
I make decisions every day about impairment and disability.
These are two different terms. Impairment refers to loss of
function. It simply means, for example, that the grip is weak
or that the arm has less mobility, for example. Disability is
the effect of that impairment on the ability to perform a
specific job.
For example, I injured my right shoulder years ago. My arm
was so weak I could hardly lift a gallon of milk. I couldn't
reach higher than my shoulders. I was impaired let's say 5
percent. I could do all my work as a doctor, so I was not
disabled. I was zero percent disabled.
On the other hand, if I were a carpenter with the same 5
percent impairment, I would likely be 100 percent disabled.
Doctors' impairment ratings are an estimate of how much loss of
function is present. Disability is how that function loss
affects a person's job. I have significant experience with the
editions of the guides. I have taught doctors about impairment
ratings and explained ratings to patients. I can state that the
sixth edition is dramatically different from prior editions,
and as the authors say a paradigm shift.
It is controversial for good reason. It does not appear to
be evidence-based. In fact, comments in the sixth edition
reiterate that it is a consensus document and also mentioned
when they do talk about evidence based research that it is not
adequate at this point for doing impairment ratings. It
produces impairment ratings far different from those in prior
editions, most of them lower and without adequate support for
doing so.
In addition, it is difficult to use, requires extensive
training of doctors and is inefficient. There are many
unexplained rating changes in this new edition compared to the
earlier editions. Of 35 cases that I reviewed, 21 were lower in
the sixth edition. Several were a lot lower. In another series,
I saw that there were 52 cases, 46 were rated lower in the
sixth edition. In that same report, the series of 200 cases
also showed a large number of reduced ratings by the sixth
edition.
One of the guide's authors presented a small series, also
with lower editions than the sixth edition, and actually, had
he done the math correctly, it would have been lower than he
showed in this example.
The impairment rating for total knee replacement with good
result is 37 percent of the lower extremity in the fifth
edition and 25 percent in the sixth. I didn't find any
objective reason for making that change.
The sixth edition is needlessly complex. For sixth edition
ratings, I charge more because I find its methodology clumsy
and difficult to work with. Every rating under the sixth
edition takes several steps regardless of how straightforward
the rating could be. After the examination, plus a required
patient questionnaire, the doctor first goes to the chart for
the diagnosis, then he goes to three other charts for
examination results, test results, and claimant's function. The
doctor gets numbers from these three and subtracts each number
from the number assigned to the diagnosis, then adds these
three sums together. That sum is subtracted or added to the
number at the diagnosis chart to find out where, in a very
narrow range, the final rating really is. That is hard.
Fifth edition rating requires a physical examination and
sometimes tests. The doctor goes to a table for each pertinent
measurement and matches the claimant's measurement with an
impairment percent from the table. For some ratings, there is
more than one table, but even then, in most cases it is not
that difficult. With some guidance, cases could be rated by an
attending doctor. I have even given phone instructions to
doctors enabling them to do accurate ratings. It is difficult
to get those treating doctors to embrace the impairment rating
in the guides. Most step back slowly if I bring out the book.
But I believe they will run from the complicated multi step
arithmetic and rules of the sixth edition.
Doctors have become familiar with the fifth edition over
these 10 years, and the system has some stability now. Adding
the sixth edition, an untested and unproven departure from the
format of 40 years doesn't seem worth the disorientation it
will cause.
Sixth edition ratings take more time. Experts doing
identical sample cases average 5 minutes to rate a case by the
fifth edition. To do sixth edition ratings, these same experts
in same cases averaged 25 minutes per case.
In addition, early reviews in the sixth edition ratings
show an error rate that it similar to those of the fifth
edition, so this new edition doesn't seem to fix the problem of
training. The sixth edition authors suggest that there is a
better inter-rater reliability, but that is likely due to the
narrow range of ratings allowed.
The sixth edition fails to grasp the essential factor of
impairment assessment, functional losses and activities of
daily living. Instead of being the focus for the rating, they
are relegated to the last position of three modifying factors,
and in some cases, actually can be thrown out.
The validity of impairment ratings will not improve until
direct measurement of functional loss and activities of daily
living becomes the standard. Reduced rating values are not
evidence-based nor is there any explanation given. The fifth
edition, for all its shortcomings, more accurately allows
assessments of functional losses than the sixth edition in my
opinion. Thank you.
Chairwoman Woolsey. Thank you.
[The statement of Dr. Nimlos follows:]
AMA Guides to the Evaluation of Permanent Impairment
The 5th and 6th Editions Comparison: A Failed Paradigm Shift
John E. Nimlos, M.D., November 17, 2010
This presentation will show that the AMA Guides to the Evaluation
of Permanent Impairment, Fifth Edition remains the preferred reference
for impairment rating, as the 6th Edition is a disruptive document with
many more disadvantages than improvements. Over the 10 years of its
publication, the 5th Edition has effectively guided a national cadre of
experienced physician raters. In contrast, the 6th Edition requires a
complicated, multistep process for each rating. If the new, time-
consuming process leads to better, more scientific, and more accurate
ratings, it might be worth it. It does not.
The 6th edition, despite making major changes to ratings, mostly
downward, has no more science behind it than the 5th. In fact, there
appears to be less science. Therefore, relying on the 6th Edition will
lead to greater expense: training doctors, system adjustment to the new
impairments, increased litigation, and increased wage replacement cost
due to delays in claim resolution. In contrast, if the 5th Edition
shows consistent problems in one or another area, and some rational
science becomes available to address those, addenda can be added
cheaply and efficiently.
If there are multiple areas scientifically shown to need
improvement, a ``5th Edition-Revised'' can be provided. Until such
time, continued use of the AMA Guides 5th Edition generates no new
expenses, can be adjusted to reflect new science if needed, and allows
systems using the Guides to continue the adjudication decisions,
standards, and adjustments already in place. The simple decision to
retain the 5th Edition eliminates the considerable time and expense of
dealing with a new system that has no proven value or reliability.
Introduction
I am a medical doctor specializing and board certified in
Occupational Medicine. I treat employees for injuries and illness
incurred in the workplace. For 24 years, I've examined workers under
two different state workers' compensation systems, as well as federal
employees under the FECA and Longshore and Harborworkers programs. I
make decisions every day about impairment, and disability.
I am familiar with all editions of the Guides, and used the 3rd,
3rd (Revised), 4th, 5th and 6th to determine impairment ratings, as
well as using Washington State's impairment system. I have taught
doctors about impairment ratings and explained ratings to patients for
many years. I can state that the 6th Edition is dramatically different
from the prior editions, and as the authors say, a paradigm shift.
Impairment and Disability are not the same
These two words are frequently used interchangeably, but they
actually have importantly different meaning. Impairment refers to a
loss of function. It simply means, for example, that the grip is weak,
or that the arm has less mobility. Disability refers to the effect of
the impairment on the ability to perform a job or specific task.
For example, I injured my shoulder years ago. My arm was so weak, I
could hardly lift a gallon of milk, I couldn't reach higher than the
level of my chest. I was impaired. I could do all my work as a doctor,
so I was not disabled. However, if I were a carpenter with the same
impairment, I'd be both impaired and disabled. The AMA Guides to the
Evaluation of Permanent Impairment have been in existence for 40 years
and are used to rate the extent of impairment. Doctors' impairment
ratings a measurement of how much loss of function is present. It
refers to limits to everyday living tasks, common to all people.
Disability is how that impairment affects a person's job. Impairment
rating percentages are just the beginning of disability determination.
Disability rating or compensation, depends on how each system applies
its own rules and process to come to a monetary amount or qualification
for benefits.
The 6th Edition greatly increases the complexity of impairment ratings
The 6th edition uses the same structure and method for all of the
different body parts and systems. Though this is intended to make it
more consistent, it also makes it difficult to fit the rating process
to the rated part, and reduces the role of the examining doctor to best
reflect the actual limitations of the claimant. In addition, because of
this rigid adherence to structure, impairment ratings which are easy
and straightforward under the 5th Edition are made needlessly complex.
For 6th Edition ratings I charge extra; I find the methodology
clumsy and extremely difficult to work with. Every rating under the 6th
Edition takes several steps, regardless of how straightforward a rating
could be. After the examination, plus a required questionnaire (or two)
to score, the doctor first goes to a chart for the diagnosis. The
diagnosis has a number associated with it. It also has a range from A
through E, with C being the middle, and the default impairment rating
that is meant to represent the average impairment for that diagnosis.
Then he must find three other charts for 1) examination results, 2)
test results, and the 3) claimant function estimate. Applying scores
from ``no problem'' to ``severe'' in each chart, the doctor gets
numbers from these three tables, and subtracts each number from the
number assigned to the diagnosis, then adds those three results
together. The result is added or subtracted from the number on the
diagnosis chart. This sum is the number that determines how far up or
down the narrow A though E range that determines the final rating, as
adjusted from the average for that diagnosis.
By contrast, the 5th Edition rating requires physical examination
and sometimes, tests. The doctor then goes to a table for each
measurement or claimant characteristic, and matches the claimant's
measurement or description with an impairment percent from the table.
Sometimes there is more than one table, but even then, for most cases
it's not that difficult. With some guidance, many cases can be rated by
an attending doctor. I've even given phone instructions to doctors,
enabling them to do ratings successfully with the patient or medical
record in front of them.
The 6th Edition still uses consensus-based estimates for impairment
rating that are no more scientific, and with non-medical factors now
present in these estimates, there is even less medical science in this
edition than previously.
The 6th Edition is controversial for another reason. Though it
claims to be, it is not really evidence-based. It produces impairment
ratings far different from those in prior editions, most of them lower
than before, it without adequate support for doing so. In the course of
evaluation of the 6th Edition for the state of Iowa, Mr. Matthew Daker,
and Dr. John Kuhnlein, the authors of both evaluations that I found for
review also concluded with the advantage of author interviews, that
there remained too many obstacles to effective and reliable ratings.
The authors admitted that there was no more scientific evidence brought
to bear in the 6th edition, and noted the influence of insurance and
adjudicators in the adding of very low, once-in-a-lifetime ratings so
that people could qualify as having impairments, perhaps a minimal
response to requests from plaintiff groups for at least some
recognition of conditions previously given zero impairment.
I suspect that Dr. Brigham's assertions that ratings are too high
(his estimate at 8% too high) also had to do with the consensus
estimates of the 6th Edition authors. Dr. Brigham's assertions about
the distortion of ratings appear based on his own studies. The material
from those studies are taken from his practice, reviewing ratings sent
to him for analysis. Dr. Brigham's advertisements appear clearly to
focus on the defense (employer, workers comp insurer, defense attorney)
population, so it is likely that the only clients who would be spending
the $150 fee would be those cases thought to be too high, and high
enough to save that at least that amount by getting it corrected. In
that setting, ratings thought by the insurance companies to be correct,
or too low, would not likely show up in Dr. Brigham's numbers.
In contrast to this, I have a series 401 consecutive independent
medical examination (IME) reports received by me as attending
physician, or reviewed by request from other physicians who requested
my advice whether or not to agree with the IME. In this series, I found
that 45% of the IME's were valid. The remaining 55% had serious flaws,
for a variety of reasons, one of them being incorrect impairment
ratings. The majority of errors had to do with impairment rating. In my
series every rating but one was too low. Quite a few declared no
impairment to be present when the examiners own findings supported an
impairment rating. Unlike Dr.Brigham's study, mine was only selected by
my presence in the case as attending physician, or were sent by
physicians with only the interest in knowing the accuracy of the
report, not by whether the rating was too high or low. In light of
these issues, I question the validity of Dr. Brigham's generalizations
about ratings too high. Dr. Brigham's population suggested 89% of
ratings to be too high. Another said that 78% of ratings were
incorrect, and again, too high. My study showed essentially 99% of
rating errors to be too low. My data are in agreement with a series of
17 ratings in an international journal. Though the patient number was
disappointingly low, this was the only one I could find in a literature
search for peer-reviewed reports on IME quality. It is a sad comment on
the role of science in the AMA Guides, that I found more information
about these issues in a Google search than I did by searching the
medical literature by PubMed (The National Library of Medicine).
Lastly, the authors of the Guides do refer to evidenced based
research in the 6th Edition, but the only studies they reported were
deemed unreliable for use as impairment rating information, and that
further research was required. The only approach in the 6th Edition
that has to do with evidence is the assertion that the diagnosis used
for rating be made based on evidence. Perhaps this edition's authors
somehow believe that doctors making diagnoses for prior editions' were
not based on evidence.
Many of the 6th Edition ratings are different, with no explanation
of why the rating is changed. Most changes are to a lower rating, some
are far lower.
With regard to medical reliability, there seem to be many
unexplained rating changes in this new Edition compared with the
earlier editions of the Guides. Questions arise about the ratings
recommended by the Sixth Edition. For example, why is the impairment
rating for a total knee replacement with ``good'' result 37% in the 5th
Edition and 25% in the 6th Edition? Is that evidence based, as the 6th
Edition purports to be? No, the rationale for this particular rating
is, as expressed by Dr. Chris Brigham, Senior Contributing Editor for
the 6th Edition, who has stated that the ``improvement in medical
technology'' is the reason for the lower rating.
Though this suggests that some science backs up the lower rating.
However, the actual process of rating determination is different
between the two editions. The 5th Edition appears to actually draw more
upon science than the Sixth. In the 5th edition, the ``good'' rating is
defined by a numerical score derived from several measurements, and
used by orthopedic surgeons as a recognized standard for describing and
categorizing knee replacement outcomes. In the 6th Edition, the
``good'' definition uses undefined degrees of outcome measures, e.g.
``mild'', ``good'', ``severe'' usw. These are imprecise at best, and
subject to the judgment and/or bias of the examiner.
The total knee replacement decrease in impairment is not alone. In
my own analysis of ratings coming from the AMA's publication, The
Guides Casebook, 3rd Edition, selecting all the extremity ratings, as
in Washington the Guides are prescribed for rating these, and a couple
others due to their common occurrence as rating questions. Of the total
of 35 ratings examined, only 6 ratings went down in the 5th compared to
the 4th Ed. Those ratings averaged less than one fifth (19%) lower than
the 4th Edition. In contrast, 21 of 35 ratings go down in the 6th
compared to the 5th; 3-and-a-half times more ratings are made lower by
the 6th Edition than were reduced in the 5th. And, in the 6th Edition,
not only are more ratings reduced, but they are made lower by an
average of more than one third (36%)--almost twice the magnitude of
decrease amount of the impairment ratings.
My analysis is not the only one that show this drop in ratings. Dr.
Melhorn did an analysis of selected diagnoses comparing 5th and 6th
edition ratings, demonstrating the rating averages to be lower for the
Sixth edition, though at a less dramatic amount. However, if he'd done
the arithmetic accurately, he'd had shown a more significant difference
between the average rating in the 6th from the 5th than appears in his
tables found in his article in the IAIABC Journal.
A large number of ratings, 52, were examined by Sedgwick Claims
Management Services for the state of North Dakota involving extremities
and spine as well as multi-injury cases. Six ratings were the same or
slightly higher by the 6th edition. The other 46 ratings were lower,
many much lower. On average by body region, ratings were 0.8% higher
for ratings of the Hand to 12.6% lower for the Cervical Spine. This
does not mean that the rating was 12.6% lower as in lowered by about
\1/8\ of the rating, it means that the average rating went from 24.8%
to 12.2%--cutting that rating in half. When compared in order of
magnitude of initial 5th edition rating, the lowering of the impairment
rating was much more dramatic as the 5th edition ratings that were
higher. For ratings in the highest range, the average for 5th Edition
was 67% impairment, in the 6th Edition, the same cases averaged 44.7%.
This is a decrease of nearly one third.
Another 200 cases were also reviewed, showing many lower ratings in
the 6th edition, proportions in similar to the preceding group. This is
particularly interesting in light of my recall from Dr. Brigham stating
that he did not think the 6th Edition would result in many reduced
ratings, and that whether or not it would ``remained to be seen''.
However, his own recent report in The Guides Newsletter,* was cited by,
and provided the above statistics in the 200 cases in the Sedgwick
report.
---------------------------------------------------------------------------
*Brigham CR, Uejo C, McEntire A, Dilbeck L. Comparative Analysis of
AMA Guides Ratings by the Fourth,Fifth, and Sixth Editions. Guides
Newsletter. January--February 2010.
---------------------------------------------------------------------------
The Sedgwick report conclusion was that North Dakota annually would
save $1.1 million dollars in permanent partial impairment awards by
adopting the 6th Edition. This was immediately followed by a statement
that asserted, ``The 6th Edition of the AMA Guides to the Evaluation of
Permanent Impairment is the latest version of the Guides and is the
result of the evolution of medical science as well as research based
medicine.'' As thorough as the report is in many respects, it appears
the report authors did not investigate the assertion of science and
research as the basis for the 6th edition, and were likely to convey to
the decision makers for North Dakota an opinion that is not supported
by the facts.
It will be expensive and difficult to maintain an adequate
population of qualified doctors for impairment ratings under the 6th
Edition.
In my home state of Washington, more ratings by attending doctors
are desired by the Department of Labor and Industries. I know from my
experience in encouraging primary and specialty doctors to do ratings
for their own patients, that it is already difficult to get treating
doctors to embrace impairment rating and the Guides. Most step back
slowly if I bring out the book, but I believe they will run from the
complicated, multistep arithmetic and rules of the 6th Edition. Doctors
are quite familiar with the 5th Edition, and the system has begun to
find stability with the 5th Edition. The 6th Edition's methods are
dramatically different from the prior systems, and already throw
controversy and error into systems relying on their use. Adding the 6th
Edition's untested, and unproven departure from the format used for the
past 40 years, doesn't seem worth the disorientation it will cause.
6th Edition ratings take much more time, and likely will add to
rating examination expense.
Dr. J. Mark Melhorn, a contributor to the 6th Edition, conducted an
informal study on the time consumed in ratings. He found that 7 expert
raters who teach other doctors how to use the Guides, doing identical
sample cases, averaged 5 minutes to rate by 5th Edition, but to do 6th
Edition ratings they averaged 25 minutes. Because of this additional
time and hassle, I charge an extra fee for 6th Editions ratings that
adds between 15 and 20% to the cost of the examination. Other doctors
who do ratings will need to pay for the additional training and
certifications costs, and are likely to pass this cost along to their
clients.
Especially at the beginning, disagreement about ratings is likely
to occur resulting in additional costs for IME's and/or legal expense.
Physician clinical judgment remains the hallmark of impairment
ratings, it is greatly restricted in the 6th Edition, but with no
science to back up that decision, or the altered ratings.
Thus, it appears that the transition from the 5th to the 6th
Edition shows pervasive and dramatic changes to ratings compared to
previous edition changes. I believe that the previous new editions
generally provided improvements. The changes in the 6th edition are
many, but are not improvements in my opinion. If adopted, the 6th
edition of the AMA Guides will disrupt disablility systems, increase
examination costs, increase litigation expenses and seriously threaten
fair compensation for injured workers.
In light of all these issues, I agree with the states of Iowa,
Kentucky, Washington, Colorado, Utah and others, that the 5th Edition
should remain in use, until something truly better comes along.
______
Chairwoman Woolsey. Mr. Uehlein.
STATEMENT OF W. FREDERICK UEHLEIN, FOUNDER AND CHAIRMAN,
INSURANCE RECOVERY GROUP
Mr. Uehlein. Thank you very much, Chairwoman Woolsey and
Ranking Member McMorris Rodgers and other members. I am pleased
to be here with you to discuss this topic of disability
benefits, a subject I have been passionate about for the last
40 years.
The one thing I think we can agree on as members here, as
testifying here, is that this is a, indeed, very complex
subject. And I may be the contrarian in saying to you that the
evidence that our company has compiled is contrary to what my
brother has said here a second ago.
I remained active in this field for so long because I
believe that we can significantly help disabled Americans
improve their health and achieve the kind of contribution that
they are capable of by structuring our compensation systems to
be clear, simple, and to the greatest extent possible based on
science and fact. Employers in turn will gain when that happens
from the reduction of friction costs associated with poorly
designed systems.
Let's face it. Over the next 10 years we are going to be
faced with very difficult economic decisions. We want to make
sure that the compensation systems that we design fairly
allocate the funds that are available.
The guides are used in most systems to determine an injured
person's medical functionality. We all agree on that. That is
what impairment refers to, medical functionality. So when you
see the words ``guides to impairment,'' it is referring to a
book designed to help a physician give a determination of
medical functionality.
What is confused, even by experts, is that the impairment
of medical functionality determined by physicians is not now,
nor should it ever be, synonymous with the word
``disabilities.'' That is stated in the guide, ``disabilities''
meaning loss of wages. In the workers' compensation and Social
Security fields, ``disability'' means loss of wages.
Impairment is something that doctors seek to minimize.
Their mission is to maximize functionability. It is obvious to
all of us in the field that other factors are relevant such as
age, occupation and experience.
The problem is that these other factors, and this is a
significant problem, are difficult to objectively and
consistently measure. Therefore, that is the task of
legislatures, not the AMA guides, around the country to
determine how, once you have decided what the medical
functionality is, what the disability payment should be.
As I said, that is not the job of the guides. Rather,
impairment is only the starting point, the determination of it,
for the benefit structure.
The guides create a consistent approach for physicians and
for injured workers to have the same determination of
impairment and loss of functionality. A physician who looks at
three different injured employees with the same condition
should arrive at the same rating for each employee. Likewise,
three physicians who look at the same injured employee should
come up with the same rating. The goal of the guides is to
foster equity, fairness and objectivity to the greatest extent
possible rather than subjectivity.
My company, of which I am a director, has performed
numerous comparative analyses of the guides. And our conclusion
from these studies has been that there is not a great
significance in the change of percentage of functionality, the
change in ratings between the fourth, fifth and sixth editions.
And in fact, the sixth edition extends the benefits to a
greater number of impairments.
What we notice in the fifth edition is that certain
ratings, such as surgical spine cases increased without
explanation over the fourth edition. High ratings occurred even
with excellent outcomes. Now, these issues have been addressed
in the sixth edition.
So in the fifth edition, just to give you a specific quick
example, you could find a situation in the fifth edition where
somebody had a single level cervical fusion and get a rating of
28 percent, but in the--have two level fusion and get a rating
of 18 percent. I submit to you that isn't fair and that is the
type of thing that the sixth edition addressed.
I will just give you this one thought and leave you with my
written submission.
The guides are the best objective study that we have today,
the sixth edition. It isn't perfect, but it is the best that
they have--that we have. It is evidence-based to some extent,
and largely consensus-based, but it is consensus-based by
experts.
Would you go down with a broken arm to the hospital and ask
your orthopedic doctor to use an outdated version of the
medical literature to operate on your arm? I don't think so. I
recommend that you consider the facts, and not fiction, and
that the sixth edition is the best objective test that we have
today. Thank you.
Chairwoman Woolsey. Thank you.
[The statement of Mr. Uehlein follows:]
Prepared Statement of W. Frederick Uehlein, Esq., Framingham, MA
I am pleased to discuss with you today, injured worker disability,
a topic that I am still passionate about after 40 years of work in the
field of workers compensation and social security, including work as a
plaintiff's attorney, a defense attorney, starting a social security
advocacy company and in service companies that support disability
claims activities. I am Chairman of Insurance Recovery Group of
Framingham, Massachusetts, and a Director of Impairment Resources of
San Diego, California. I am an associate editor of the American Medical
Association Guides Newsletter. However, I am before you today as an
individual who wishes to share what knowledge I have accumulated over
these decades from the vantage of the many participants in this complex
system, particularly the two primary stakeholders: injured workers
themselves and the employers who pay for their care and benefits
throughout their recovery.
I have remained active in this field for so long because I believe
that we can significantly help disabled Americans improve their health
and achieve the kind of contributions they are capable of by
structuring our compensation systems to be clear, simple, and to the
greatest extent possible, based on science and fact. Employers in turn
gain from the reduction of friction costs associated with poorly
designed systems. The allocation of funds, then, can more equitably be
distributed.
My colleague, Christopher Brigham, MD, Chairman of Impairment
Resources, is submitting written testimony for your consideration
today, the focus of which is two-fold: first, preventing needless
disability and, second, advocating for the use of the most current
edition of the AMA Guides to the Evaluation of Permanent Impairment,
the Sixth Edition. Going forward, I will refer to these as ``the
Guides'' in my testimony.
Dr. Brigham regrets not being able to attend in person, but is on a
long-standing commitment in Australia. His biography and extensive
experience are included in his Testimony. Suffice it to say that he has
voluntarily, without pay, devoted thousands of hours to the effective
development and utilization of the Guides, serving as the Senior
Contributing Editor and working with physicians and other experts from
all over the country in developing the most recent edition of the
Guides. These Guides are based on expert consensus and the best
science- and evidence-based medicine available today. I can attest that
Dr. Brigham is the country's most widely recognized expert in the
utilization of the Guides and the development of data involving their
use. Dr. Brigham speaks from fact, and from the heart, when he says
that the most recent version of the Guides is best for both employees
and for the employers. It is evidence based, affords consistency and
ease of use, and it results in fewer errors.
Let me take a minute to give a brief, but important, primer on the
role of the Guides in our disability systems and its relationship to
benefit payments. An employee who has had a serious work injury and has
improved to the maximum extent that he can is usually entitled to a
benefit for his permanent disability. Disability means loss of the
employee's earning capacity. He was able to earn a certain wage and now
he cannot as a result of this injury. Thus, he is entitled to a benefit
to replace that wage. The first step in determining this entitlement is
to turn to the medical profession for a report on the employee's
medical functionality (impairment). The Guides are used in most systems
to determine an injured person's functionality. That is what impairment
refers to, medical functionality. So when you see the title ``Guides to
Impairment,'' it is referring to a book designed to help a physician
give a determination of medical functionality.
What is confused, even by experts, is that the impairment or
medical functionality determined by physicians is not now, nor should
it ever be, synonymous with disabilities--i.e., loss of wages. In the
workers compensation and social security fields, disability means loss
of wage earning capacity. Impairment is something that doctors seek to
minimize. Their mission is to maximize medical functionality. It is
obvious to all of us that there are many other factors than medical
functionality--such as age, occupation and education--that determine
loss of wage-earning capacity. The problem is that these other factors
are difficult to objectively and consistently measure. Therefore,
legislators all over the country and the world make different decisions
as to how to reconcile a person's injury and functionality/impairment,
with the amount of benefit that should be paid or that society can
afford to pay.
That reconciliation is not the job of the Guides, nor should the
Guides be used as a proxy for the amount of benefits to be paid.
Rather, impairment is only the starting point to the determination of a
benefit structure for wage loss.
The Guides create a consistent approach for physicians and for
injured workers to have the same determination of impairment and loss
of functionality. A physician who looks at three different injured
employees with the same condition should arrive at the same rating for
each. Likewise, three physicians who look at the same injured employee
should come up with the same rating. The goal of the Guides is to
foster equity, fairness and objectivity to the greatest extent
possible, rather than subjectivity and personal opinion.
The Guides have been updated every five or so years by the medical
profession under the direction of the AMA in an effort to improve their
objectivity, consistency, ease of use, and relationship to the then
state of medical science.
Our company, Impairment Resources, is involved in consultation on
the use of the Guides and has reviewed many thousands of ratings. This
experience has led to our unequivocal statement that the latest version
of the Guides is easier to use and more consistent with the realties of
modern medicine.
Additionally, Impairment Resources has performed a number of
comparative analyses of ratings. We recently looked at the same
injuries rated by the Fourth, Fifth and Sixth Editions of the Guides.
What these studies indicate is that the rating percentages on the whole
are not--and I repeat not--significantly different between editions.
The methodology and approach to reach the ratings are different, and in
our experience the latest edition, the Sixth, extends ratings to more
injuries than the Fifth Edition. In the Fifth Edition certain ratings,
such as surgical spine cases, increased without explanation over the
Fourth Edition. High ratings occurred even with excellent outcomes.
This has been addressed in the Sixth Edition.
In our training role and in our consultations and speaking
engagements, we have experienced natural push back from some physicians
around the country who, after spending years utilizing the Fifth
Edition, are now reluctant to take the time to retrain in the Sixth.
We have experienced, while testifying before various state
legislators around the country, push back from the plaintiffs bar. I
believe, in all candor, that the reason for that is that the Fifth
Edition rates impairment in the spine higher than the Sixth Edition.
The expert doctors who wrote the spine chapter of the Sixth based their
ratings more on the end result and impact on the patient. All treatment
is designed to increase functioning, ability to participate in
activities of daily living, and, therefore, to decrease impairment.
Therefore, impairment should reflect the outcome, not just that surgery
was performed to improve function.
I fear that a battle over benefit rates is being fought as a proxy
battle using the Guides rather than directly addressing benefit rates
before legislators. This is probably because legislators have simply
not been educated on the purpose of the Guides and the distinction
between impairment and disability. To the extent this may be true, this
does a disservice to the effective functioning of compensation systems
that are improved by the use of the Guides.
The underlying premise of the Sixth Edition is something that you
and I, as lay people, have been observing and reading about for a long
time: modern medicine is improving health and functionality. That means
that we can and should acknowledge that impairment is trending down,
not up, and health is improving. I simply do not believe that it is
better to use the Fifth Edition and tell an injured worker who has had
a successful spine surgery that he has a permanent impairment of 25%;
i.e., he has loss of one quarter of who he or she was, when in fact the
surgery was successful. I know for myself that, if you tell me I have
that kind of impairment, I am going to adjust my behavior to meet it.
To be frank, as I watch testimony before state legislators across
the country take up the issue of using the Fourth, Fifth or Sixth
Editions, I am struck by the absence of a discussion about the purpose
of the Guides. First the purpose should be articulated. Then the debate
should turn to whether the latest edition, an older edition or some
other system is best.
Because the Fifth Edition, in relation to the other chapters and to
medicine today, overrates the spine and because it is not as clear,
concise and simple to use as the Sixth, it lends itself to abuse and
error, costing employers and eventually taxpayers millions, if not
billions of dollars annually. Furthermore, I believe the psycho/social
burden of such errors and overrating on injured workers is harder to
measure, but likely much costlier.
My hope is that this committee and labor leaders, as well as
employers, agree that the goal of utilizing the Guides is to create a
level playing field that is based on evidence and fact or, at a
minimum, consensus of a broad group of physicians and experts.
Legislators should look at the facts and not the fiction.
I would like to emphasize that the mission of our company,
Impairment Resources, is to drive accurate impairment ratings. To
dispel any notion that our recommendation is based on self-interest or
profit, let me make it clear that our company stands to earn more when
the Fifth Edition is in widespread use because the error rate for that
edition exceeds 70%, while the error rate is significantly lower in
reports from trained doctors using the Sixth Edition.
I conclude with this thought as you address the issue the Guides
further: Would you go down to the hospital with a fractured arm and ask
your orthopedic doctor to use an outdated textbook to repair it or
would you ask them to use the latest textbook version?
Our conviction is based on our belief that the Sixth Edition is
fairer to all stakeholders because physicians will not only utilize a
new methodology more in keeping with modern medicine but with more
consistency and less friction.
The Sixth Edition is a reflection of the latest medicine created by
hundreds of the leading experts in medicine in the country and put
through a rigorous peer review process. It is clear and easier to use.
It offers the best opportunity today to achieve the role it is designed
for, to create a fair and equitable playing field to reflect impairment
consistent with the advances in medicine.
Thank you.
______
Chairwoman Woolsey. Mr. Godfrey.
STATEMENT OF CHRISTOPHER JAMES GODFREY,
IOWA WORKERS COMPENSATION COMMISSIONER
Mr. Godfrey. Thank you to members of the subcommittee,
Chairwoman Woolsey. Thank you for the opportunity to come here
today to speak on behalf of the people of the State of Iowa,
and also the more broad workers' compensation community.
My written testimony, I think, does a fair job of
describing the way in which the--we have an interplay between
impairment and disability. And that also explains why the sixth
edition of the AMA guides has such an important impact upon the
people of the State of Iowa.
As we talked about the facts of the sixth edition, we felt
it would be good in Iowa to have a task force. The task force
report from the State of Iowa has been included within the
written record, and is available online as well. The link to
that is within my materials. I would urge you all to read
through that material. It is fact, it is objective-based, and
it comes from the testimony of most of the doctors whose names
are on the book or have very important roles in creating the
book.
Now, why is this important to you? I think as the ranking
member suggested, how does the decrease in the State workers'
compensation program affect the Federal Government? I would
urge you to look at the Medicare system. The interplay between
workers' compensation settlements and the resulting impact on
Medicare is very well known, and it is a significant
controversy. We see that employers' insurance companies will
settle a workers' compensation claim for a premium amount, and
then liability for future medical care can be passed on to the
Federal Government. That is an important thing for all of you
in these times.
When we have an impact on the level of disability benefits
paid to injured workers through a workers' compensation system,
which I will explain here shortly, there is a corresponding
risk to the Federal Government that we will have increased
applications and need for Social Security Disability benefits.
If people are not going to get the benefits they are entitled
to and have previously been entitled to under State workers'
compensation laws, they will turn to an alternate system.
Now, when we went through our task force, we came up with
four very important ideas that we felt were at issue. First, we
felt there was an encroachment on our legal community in the
State of Iowa with our own laws. We are concerned about the
consensus of the people that make up this guide. We are also
concerned about the numerous errors, the need for an errata,
and also a subsequent publication of the guides, and we are
also very concerned about cultural biases.
Now, first the encroachment of legal boundaries. Iowa has
its own workers' compensation program. It started in 1913 and
it is the same type of system throughout the United States
where each State has its own system. One issue that I would
encourage to you look at is the apportionment. In section 2.5
of the new AMA guide, they deal with apportionment. It allows
doctors to apportion out some rating of impairment. That is in
direct violation to Iowa Code section 85.34(7). That was an
apportionment statute that came about through political
compromise. It does not allow the apportionment that is allowed
under the AMA guide. So that is of deep concern to us.
The consensus. Why won't the AMA tell the State of Iowa who
is involved in writing this book and being the editors of this
book? Within our written materials, we have posted the
questions that we pose to the AMA. And you can see their
responses. And I would say that they are not responses. We are
passed off to the marketing department and given very brief
questions. I would urge the subcommittee to ask the AMA, tell
us who is involved in writing each of these chapters? And who
was the editors of each of those chapters?
In all the previous editions of the book when you open it
up, it will tell you who wrote each individual chapter and
edited that chapter. That is not within the sixth edition, and
our concerns about that are summed up in our task force report.
Now the numerous errors, as I mentioned, there is a
reprinting of this book, which I don't have before me, but it
is almost the same size. When you have, as a work comp judge,
an impairment rating under the sixth edition come before you,
how will you know, or how would I know whether this book was
used that contains numerous errors, or the reprinted edition
which does not have those same errors, how would I know where
that impairment rating came from? There is no indication on the
second printing of the book that that is the corrected version.
So we have State workers' compensation bodies paying
disability benefits based upon impairment ratings, and we don't
know where they came from. That is not the way that these
systems should be set up. This is a book for serious business
purpose. We feel it fails to live up to that guideline.
Lastly, the cultural biases in Iowa we have a significant
immigrant workforce. We have Bosnians, Hispanics, Asians,
Sudanese. Those people react to injuries differently. They
react to pain differently. There is levels of trust which are
different between people of various cultures. The guides which
come out of this book are determined based upon the use of
various tests which are included in the book. Those are not
tested for cultural sensitivity and therefore people of
different races and different educational backgrounds could
have different impairment ratings.
I would say that that is a bias which should not be allowed
within the legal system. That is part of the reason that we
could not endorse this book, and I think it needs further
study. When we asked the editors of the book how you would
address the fact that there are these cultural differences not
cared for, they were told, we were told, well, just don't use
the test. Well if you don't use the test you don't get your
impairment rating either up or down, and that is treating
people differently based upon their culture, and that is not
allowed.
So there are various questions. They are summed up very
well, our answers and responses to that within our task force,
and I would be happy to answer any additional questions. Thank
you.
[The statement of Mr. Godfrey follows:]
Prepared Statement of Christopher James Godfrey, Workers' Compensation
Commissioner, Iowa Division of Workers' Compensation
Members of the Committee: Thank you for the opportunity to come
before you to address the impact resulting from the publication of the
AMA Guides to the Evaluation of Permanent Impairment, Sixth Edition on
the Iowa Division of Workers' Compensation and other workers'
compensation jurisdictions more generally. I also plan to testify about
the impacts restricted workers compensation programs have on federally
funded programs such as Medicare and Social Security Disability.
It is a great honor personally for me to speak to the members of
the Subcommittee today about the workers' compensation system in the
state of Iowa and share with you the detailed findings of the Task
Force I convened in May 2008 to study the Sixth Edition of the Guides.
In my capacity as the Iowa Workers' Compensation Commissioner I
plan to explain the impact the publication of the Sixth Edition has had
on my jurisdiction, which has historically relied upon the most recent
edition of the Guides for assignment of permanent impairment ratings. I
can also address issues faced by other jurisdictions which are mandated
by law to use the most recent edition of the Guides. More importantly I
plan to share my thoughts about how the problems identified by our Task
Force regarding the Guides can ultimately affect federal programs over
which you have oversight responsibility.
Each state has its own unique workers' compensation system. Iowa
passed its Workers' Compensation Act in 1913 and it has evolved into a
model system which is annually recognized as one of, if not the best in
the United States.\1\ Iowa prides itself on being a national leader
while keeping premiums low for Iowa employers and benefit rates high
for injured workers. The workers of Iowa annually sustain 21,000 or
more reportable workplace injuries. From those injuries the Division
receives petitions for contested cases in approximately 4,200 cases and
holds 600 administrative hearings. It is evident from the statistics
that the vast majority of injury claims in Iowa resolve without
intervention of our administrative agency. The high voluntary
resolution statistics are driven by the self-effectuation of workers'
compensation claims between employers and injured workers. It is
envisioned within the Iowa Act that disability claims will be fairly
and reasonably investigated and reasonable benefits owed pursuant to
the Act will be paid.\2\ This compliance with voluntary payment
obligations is necessary as the Division of Workers' Compensation is
limited to 26 full time employees following quite extensive across the
board cuts in state funding.
---------------------------------------------------------------------------
\1\ Iowa ranked as best performing state for Workers' Compensation
by Work Loss Data Institute, July 22, 2009. Iowa remains a Tier 1 state
for performance of its Workers' Compensation system per the Work Loss
Data Institute, March 15, 2010.
\2\ A claim for penalty benefits can be commenced against an
employer who fails to timely pay indemnity benefits without reasonable
or probable cause or excuse known to the employer at the time benefits
were not paid. Iowa Code section 86.13(4).
---------------------------------------------------------------------------
Iowa's self-effectuating workers' compensation system relies upon
disability payments that are reliable and consistent. For injuries that
are considered ``scheduled'' injuries--limbs and portions of limbs--
Iowa has a specific numerical value assigned as a number of weeks for
loss/loss of use of the particular body part. For instance, in Iowa an
arm is worth 250 weeks of disability benefits. If a worker loses 10
percent use of the arm the worker is entitled to payment of 25 weeks of
permanent partial disability benefits. (250 weeks x 10 percent = 25
weeks) For injuries that are considered ``whole body'' injuries--spine,
head, nervous system, etc.--the minimum permanent partial disability
rating is most often the level of permanent impairment plus, perhaps,
additional compensation for loss of earning capacity of the worker.
Whole body injuries are compensated on a 500 week schedule. Therefore
if a worker has a 10 percent whole person impairment the worker is
entitled to payment of 50 weeks of permanent partial disability
benefits. (500 weeks x 10 percent = 50 weeks)
Likely resulting from extensive study and political compromise,
Iowa Code section 85.34 assigns a weekly value to the various body
parts, the whole body, and for permanent total disability. As the
weekly value of a disability is a constant, the assignment of
impairment for the body part can drastically impact the extent of
weekly benefits owed as a voluntary payment. For instance, for an arm
the 250 week schedule is a constant. If an impairment guide modifies
impairment from 8 percent to 4 percent for a certain condition the
workers' disability entitlement can be reduced from 20 weeks of
compensation to 10 weeks. An impairment level that increases following
modification of an impairment guide would likewise greatly affect the
obligation of the employer to compensate a worker.
As a result, the decision of the AMA to alter the impairment
paradigm and assign new impairment values based upon a diagnosis
significantly impacts both Iowa employers and injured workers. This
system-altering change occurred without open discussion or
transparency. More troubling is that the change was made without
consultation with the various state jurisdictions including the Iowa
Division of Workers' Compensation or elected leaders of the many
states. Consequently, numerous state jurisdictions were left to react
to the Sixth Edition following publication. What Iowa uncovered
following a comprehensive study by an appointed, independent Task Force
was both troubling and frustrating. It is a great concern that as fewer
benefits may be awarded to injured workers due to drastic impairment
reductions, those workers will likely turn to state or federal programs
for assistance.
The Iowa Task Force
Upon publication of the AMA Guides, Sixth Edition, Iowa's workers'
compensation community was confronted with many concerns and questions.
Were physicians to use the Fifth or Sixth Edition; were employers to
pay benefits using ratings from the Fifth or Sixth Edition to show
compliance with voluntary payment obligations; was the Sixth Edition
peer-reviewed; was the Sixth Edition compliant with Iowa laws; and what
training was necessary to either complete or review an impairment
rating under the Sixth Edition? These significant issues and others led
to the convening of a Task Force comprised of two medical professionals
who frequently practice in the Iowa Workers' Compensation system, two
``claimant'' and two ``defendant'' attorneys who frequently practice in
the Iowa system, two former Deputy Workers' Compensation Commissioners
from Iowa, and one moderator to perform various administrative tasks
and issue the final report.
The Task Force was assigned five primary agenda items:
1. Provide an analysis of the new paradigm for rating impairment
contained in the sixth edition as compared to the prior editions of the
guides as well as other rating guides. Identify advantages and
disadvantages of the new paradigm.
2. Document errors or areas of concern contained in the sixth
edition of the AMA Guides.
3. Outline an analysis that can be used to determine whether there
is a significant impact on impairment ratings when using the sixth
edition of the Guides as compared to prior editions of the Guides--most
specifically the fifth edition. If possible, provide an analysis of the
impact on ratings and corresponding benefit payments.
4. Provide a recommendation on whether the sixth edition of the
Guides should be used, whether parts of the sixth editions should be
used, or what other impairment guides should be used in evaluating
permanent impairment. Provide a further recommendation as to whether
Iowa should create its own ``Iowa Guide'' for assigning impairment in
Workers' Compensation claims--and if so recommended, outline what
process and timeline would be necessary to create the new ``Iowa
Guide''.
5. Report back on other considerations that the task force finds
compelling.
The Task Force met 5 times from June 26, 2008 to August 26, 2008.
The Task Force accepted testimony from several medical practitioners
involved in developing the Sixth Edition including Alan Colledge, M.D.,
Mark Melhorn, M.D., Mohammed Ranavaya, M.D., Douglas Martin, M.D.,
Christopher Brigham, M.D., John Brooke, Ph.D., and James Gallagher,
M.D. The Task Force also studied comparative data, held extensive
discussions, and proposed administrative rule amendments for the Iowa
system. The findings of the Task Force concluded with a vote of 7-1
against Iowa allowing the use of the Sixth Edition. I ask that a
complete copy of the Task Force Report be included into the Record of
the hearing. It can also be found online at the following location:
http://www.iowaworkforce.org/wc/amataskforce/
2008amaguidesprocessreport.pdf
A paradigm shift in the Sixth Edition--blurring boundaries between
medical and legal determinations
The Task Force learned that at the heart of the Sixth Edition is a
change in the paradigm of rating impairment. The Sixth Edition replaces
the ``1980 International Classification of Impairments, Disabilities
and Handicaps'' with the World Health Organization's model of
disablement ``International Classification of Functioning, Disability
and Health'' (ICF). The ICF model in the Sixth Edition defines
impairment as ``a consensus derived percentage estimate of the loss of
activity that reflects the severity of a given health condition and the
degree of associated limitations in activities of daily living.'' The
Task Force expressed significant concern that the Sixth Edition blurs
the line between the level of impairment (a medical determination) and
the level of disability (a legal determination). Dr. Mark Melhorn
admitted that some of the Sixth Edition analysis clearly crosses into
the area of disability as opposed to merely assigning impairment. It is
the province of the workers' compensation jurisdictions to assign the
extent of disability resulting from a medical finding of impairment.
Chapter 2 of the Sixth Edition provides Iowa with a significant
number of troublesome principles contained within the Guides which
conflict with Iowa statutory and case law. Other jurisdictions will
face similar conflicts.
Section 2.5 blurs the line between medical and legal standards for
disability by defining ``causality''. Whether an injury arises out of
and in the course of employment is a legal determination to be made by
an administrative law judge or a member of the judiciary, as opposed to
a medical practitioner. The Sixth Edition states that to opine that a
cause relates to an effect within a reasonable degree of medical
probability, it is necessary that the event occurred, that the
individual who experienced the event must have the possible condition,
that is, the effect which may be related to the event, and that medical
probability exists for the event to have caused or materially
contributed to the condition. The Task Force noted that ``if medical
probability means a greater than 95% relationship, this definition of
causality differs from the more likely than not legal probability
standard in Iowa workers' compensation law.'' If the causation standard
is to be amended in Iowa, that change should occur through the
political process and not through an unelected, undisclosed panel
within the AMA.
Section 2.5 further blurs the line between medical and legal
standards by defining ``aggravation'', ``exacerbation'', ``recurrence''
and ``flare up''. An aggravation is described as a permanent worsening
of a pre-existing or underlying condition, which results from a
circumstance or event. It is distinguished from an exacerbation,
recurrence, or flare up. Those three terms are said to imply a
temporary worsening of a pre-existing condition that then returns to a
baseline. The Task Force notes that ``Iowa workers' compensation law
makes no such distinction between exacerbation and aggravation; each
may be considered to result in a permanent, potentially compensable,
substantial change in a pre-existing condition.''
Finally, section 2.5 provides a methodology for allocating or
``apportioning'' impairment between or among multiple factors. The
Sixth Edition allows for a final rating which is derived by subtracting
from current impairment any pre-existing impairment. This
``apportionment'' of disability conflicts with the recently amended
Iowa Code section 85.34(7) and places employers at risk of a penalty if
they pay an impairment rating value which improperly reduces the
impairment in violation of section 85.34(7). Likewise, for injured
workers who are paid a reduced disability award based upon improper
apportionment, the worker may never obtain the extent of disability
owed pursuant to Iowa law or may be required to file a contested claim
with the agency and incur legal expenses--both of which are to be
avoided in the self-effectuating Iowa workers' compensation system.
Dr. Christopher Brigham presented the Task Force with an article he
relates is to be published. Dr. Brigham concludes his article as
follows:
In interpreting reactions by different stakeholders it is important
to distinguish between the criticism of the process and the perceived
impact on the stakeholders. The more significant problems do not lie
with The Guides, but rather, with how impairment ratings are used by
Workers' Compensation Systems or other systems. The AMA Guides will
continue to evolve and improve. The systems that make use of the Guides
must also evolve.
With all due respect to Dr. Brigham, the Iowa Workers' Compensation
system will evolve and improve when it is decided by the citizens of
Iowa that it will evolve and improve. The system will not evolve at the
whim or business opportunity of either one physician, one medical
association, or a small consensus of the two.
Iowa has long held that the question of how disabled an injured
worker has become following an injury is a legal question, not a
medical question, to be decided by the workers' compensation
commissioner as trier of fact with the causation standards set forth in
the Iowa Code. In violation of Iowa law, the authors and editors
published a Sixth Edition which unquestionably and explicitly ``crosses
the bridge into,'' ``attempts to determine,'' and ``is a surrogate
for'' legal disability. Sixth Edition, p. 5 (defining ``impairment
rating'' to include the disability concept of the ``degree of
associated limitations in terms of ADL's''). Such encroachment of state
law by an unelected body is a serious breach. Furthermore, states which
are bound by their statutes to rely upon the most recent edition of the
Guides will turn away injured workers who previously were entitled to
benefits or may leave workers with benefit awards that fail to
adequately compensate the worker to the extent as before adoption of
the Sixth Edition. Injured workers denied coverage under a workers'
compensation act will turn to other available venues for support--most
likely applying for Social Security Disability benefits or federally
sponsored medical care.
Other Sixth Edition Concerns
Consensus
In order to determine the basis for the paradigm shift and to
determine who was included in the ``consensus'' for such changes, the
Task Force submitted 5 questions to the AMA. The AMA and the medical
practitioners questioned by the Iowa Task Force (each of whom
specifically stated he did not speak for the AMA) either failed or
refused to explain a legitimate rationale for the paradigm shift to the
ICF. Such lack of transparency raises concerns about the motives and
justifications behind the shift. Furthermore, there was a wholesale
refusal to provide the names and qualifications of those involved in
the decision to shift the paradigm and adopt the ICF model. Dr. Melhorn
stated that the decision to change the assessment methodology was made
prior to his involvement with the upper extremity committee and he did
not believe that all chapter editors agreed with the paradigm change.
Also, the AMA further refused to identify who ultimately assigned the
values to the numerous impairment ratings found in the Sixth Edition,
or why the values were changed from those found in the Fifth Edition.
Information shared with Task Force members suggests that much of the
construction of the book and assignment of impairment values was not
the result of a consensus at all as much as it was the work of one
person, Dr. Christopher Brigham. It must be noted that Dr. Brigham has
a successful enterprise based upon reviewing, correcting, or commenting
on other physician's ratings. Dr. Brigham further offers several
courses to teach physicians and others how to use the Guides.\3\
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\3\ Dr. Brigham's company can be found on the internet at
www.impairment.com and there one can find his education courses, rating
review charges, and many of his primarily employer-insurance carrier
oriented topics. It was noted by the Iowa Task Force that Dr. Brigham's
company provides a service to evaluate impairment ratings, and charges
$95 for correct ratings and $195 for incorrect ratings--likely making
it in his own best interest to find incorrect impairment ratings. With
the significant difficulty in training physicians following the
paradigm shift it was noted that there will be a significant increase
in impairment rating errors which would also be to Dr. Brigham's own
financial best interest. Since the findings of the Iowa Task Force were
published, Dr. Brigham has amended his fee schedule.
---------------------------------------------------------------------------
The questions and responses from the Task Force to the AMA are set
forth herein:
When the AMA asserts that it relies upon a group/consensus process
to assign values of impairment, it becomes important to know who
comprised the group as it is obvious that outcomes may vary
significantly depending upon those who are included or excluded from
the consensus process. Without knowing the composition of the groups
who determined the ratings in the book it is impossible to determine
the biases which may exist or which may suggest an unfair group
composition. Moreover, the lack of transparency furthers the belief
that ``consensus'' may have succumbed to the decisions or opinions of
one particular person. The Iowa Task Force continued to ask, ``Why the
Editors and the AMA are being so vague as to who was involved in
developing the particular chapters?'' In the Fifth Edition, the AMA
freely shared the members involved in the development and editing of
each chapter. It also appears that ``consensus'' may have been reached
in the Sixth Edition because those who were initially consulted and had
differing opinions were no longer part of the ``consensus'' by the time
``consensus'' was reached. Such a belief is bolstered by the
suggestions that Dr. Brigham ultimately was a consensus of one for many
chapters of the Sixth Edition.
Members of the Iowa Task Force were also concerned about the biases
of the consensus itself. This concern emanates from comments and
correspondence received from Dr. Douglas Martin, a physician from Sioux
City, Iowa, who was one of the reviewers for the Fifth Edition of the
Guides and is also on the Editorial Board of the Sixth Edition. In
correspondence and in a meeting with the Task Force, Dr. Martin
expressed concerns about ``hidden agendas and biased allegiances which
many physicians (involved in the development of the Sixth Edition)
cannot say.'' As noted by the Task Force members, this is an extremely
troubling statement from a member of the Editorial Advisory Board and
calls into question the consensus that derived the impairments to be
assigned in this book.
Errors and Editorial Concerns
The limited, initial involvement of workers' compensation systems
in the production of the Sixth Edition was quickly reduced by
attrition. Two Medical Directors for state workers' compensation
systems, Dr. Alan Colledge and Dr. Hal Stockbridge, withdrew from the
editorial process of the Sixth Edition. Dr. Stockbridge apparently
withdrew for reasons unrelated to the editorial process. However, Dr.
Colledge testified before the Iowa Task Force that he withdrew because
of disagreements over the content and the methodology being developed
for the Sixth Edition. Dr. Colledge has practical experience in
workers' compensation systems from clinical practice and impairment
ratings to medico-legal settings, to government experience as Utah's
workers' compensation medical director. While state Medical Directors
were initially involved, the Iowa Task Force was not informed of any
state commissioner or agency head being invited onto the editorial
staff.
Of perhaps greater concern than the editorial makeup of the Sixth
Edition is the significant number of errors included in the initial
publication as well as in the subsequent errata. The AMA and the
editors have produced a product that people rely upon for serious
business purposes that has so many identified errors that it required a
52 page errata to publish them all, as well as an entirely new printing
for additional changes. It is noted that the second printing is not
identified as a corrected version. Therefore, it is perhaps impossible
for a state workers' compensation agency, which must review an
impairment rating, to know if it was done with the corrected version of
the Sixth Edition, or the original flawed publication. Dr. Rondinelli
has stated that corrections and clarifications to the Sixth Edition are
likely to be ongoing in nature. Therefore, a workers' compensation
agency cannot accurately rely upon the Sixth Edition as the publication
is under continual amendment. Furthermore, a recent business
solicitation from Dr. Brigham reports that 80 percent of impairment
ratings are incorrect and his team of ``certified'' raters will review
ratings and provide corrections.
Although the Iowa Task Force detailed the numerous errors, those
errors are too detailed and require significant explanation and will
not be further detailed herein but can be found within the Task Force
Report at the link previously provided.
Cultural Bias
The Iowa Task Force was the first body to question the scientific
basis of and the potential for cultural bias in the questionnaires and
tests included within the Sixth Edition. It was confirmed that the Dash
and Quick Dash questionnaires, which were created for the Sixth
Edition, are not culturally sensitive and they have not been tested to
determine the reading proficiency level which a native English speaker
must possess in order to be able to read, understand, and answer
questions appropriately. By failing to properly test the Dash and Quick
Dash forms it is highly possible that the questionnaires may result in
invalid (artificially high or low) scores for any of the numerous and
diverse non-Anglo cultures which exist in the Iowa workforce. Lack of
reading level proficiency testing means these questionnaires may result
in invalid scores for those of lower educational levels.
This lack of sensitivity and proficiency testing results in a
significant possibility of a disparate impact in the ultimate
impairment rating assigned to persons of different cultures or
educational levels. The Dash and Quick Dash scores are not only used as
part of the ``net adjustment formula'' which can modify the normal
impairment ratings, Sixth Edition, p. 11; if the scores are
inconsistent with other modifiers by 2 or more grades then the grade
modification process is thrown out entirely, Sixth Edition, pp. 406-
407; and if they are simply too high (above 60) then the worker may be
classified as a symptom magnifier or in need of a psychiatric
diagnosis, Sixth Edition, pp. 447-448.
The only commentary from the AMA or those interviewed by the Iowa
Task Force came from Dr. Rondinelli who suggested that given the lack
of cultural sensitivity in these tools, the questionnaires simply not
be utilized with members of a minority population. However, the result
of Dr. Rondinelli's suggestion would be to endorse disparate
methodologies for rating permanent impairment for persons of different
cultures, ethnicities, and educational ability. Simply rejecting use of
these modifier questionnaires would eliminate a potential mechanism for
such a person to have her or his impairment rating legitimately
modified. Such blatant disparate treatment is not only unfair, it is
possibly legally discriminatory.
Iowa has long been at the forefront of equal protection for all its
citizens. The Iowa Division of Workers' Compensation cannot endorse the
use of a rating system that has a high likelihood of discriminating
against classes of persons. Other jurisdictions should refuse to do so
as well.
Costs to the Iowa Division of Workers' Compensation and
Others
There are numerous costs to state jurisdictions and others
resulting from alterations of impairment guidelines. In addition to
state workers' compensation agencies it is necessary to focus on the
costs to unrepresented workers, medical professionals, and also the
federal government.
The primary cost to state workers' compensation jurisdictions will
be borne in increased levels of litigation. Workers who are
dissatisfied with the level of voluntary disability payments will seek
to petition for additional benefits. There is a likelihood that those
litigation claims may include complex issues such as whether the
Guides' standards for causation and apportionment are applicable or
overturn case law precedent and whether the permanent partial
impairment ratings comport with the factors of permanent disability
inherent in the state's own workers' compensation act. As litigation
increases it results in longer timelines from the date a petition is
filed until a final agency decision is produced. The longer it takes
for litigation to occur the greater the likelihood that injured workers
will be forced to seek alternate means of support including support
from the federal government.
As was previously mentioned, the Iowa system requires good faith
claims handling to fulfill the self-effectuating payment model. Most
workers will simply agree to the voluntary payment made by the employer
or insurance company without seeking attorney representation. If it is
likely that voluntary payment levels are reduced there will be a
significant increase in applications for other benefit programs.
Furthermore, workers in rural areas of a state may be required to
travel greater distances for an impairment rating as the number of
doctors trained in the use of the Sixth Edition is greatly limited. For
significantly disabled workers the increased travel may result in
significant hurdles to obtain benefits that should be voluntarily paid
by the employer or insurance carrier. Such hurdles may result in
driving greater numbers of workers to apply for social security
disability benefits or to seek other government programs.
Medical professionals who are called upon to provide expert
opinions as to matters in workers' compensation claims face significant
costs in use of the Sixth Edition. Due to the complete paradigm shift
and the complexity of the new paradigm, it was estimated that a medical
professional would need to attend a minimum 8 hour training course or
spend 28-30 hours of self-study. The costs of such training are
increased as the training often occurs out of state and requires an
absence from day to day duties with patients. Many doctors will opt out
of the workers' compensation system if they are required to seek
certification or prove they have obtained extensive training. For rural
doctors it is not cost efficient to seek training as they see so few
workers' compensation patients that they cannot recoup their
investments. Hence workers in rural areas will have less access to
proper ratings under the Sixth Edition. Any increase in costs
associated with training and increased medical examination fees will be
passed along to employers and insurance carriers.
As has been shown consistently throughout the testimony provided,
when injured workers face hurdles caused by amendments to state
workers' compensation programs they will seek assistance from the
federal government. The cost shifting that can occur can be extensive.
A common example of cost shifting which is already a significant
federal concern is the shifting of medical costs from workers'
compensation insurers to Medicare. Without strict scrutiny of
settlements by the federal government there is the dramatic risk of
having Medicare make medical payments that are the clear liability of
the responsible insurer. An insurer may choose to pay a premium
settlement to a worker with the understanding that they waive any
further obligation to make medical payments, thus leaving the worker to
seek Medicare coverage for future care. Likewise, if monetary value of
injury payments is reduced either through legislative changes or
through indirect means such as the new AMA Guides it is apparent that
there will be a corresponding increase in the number of workers who
will submit applications for Social Security disability benefits.
Conclusion
Thank you for your interest in the probable impact on the state of
Iowa, other workers' compensation jurisdictions, and the federal
government resulting from the publication of the AMA Guides, Sixth
Edition. The information provided will hopefully spur further interest
in this topic that can have a significant impact on participants in
workers' compensation systems throughout the United States. I have
greatly appreciated the opportunity to share my thoughts with you and I
welcome further questions on an individual basis as your investigation
moves forward.
______
Chairwoman Woolsey. Thank you very much. Each one of you
brought to light a lot of what we are concerned about. I have a
question. We have a lot of questions. Just for the record,
assume I am a worker that got injured on the job. Why do I care
about this at all? What difference will that make to me,
starting with you, Dean.
Ms. Spieler. There is some variation among States, but in
many States, the number that is assigned to the impairment will
be in a fairly straight line to the benefits. So there is a
formula in State statutes. In West Virginia, the time that I
was in charge of the program, it was a--4 weeks per each
percentage point based upon a calculation of wages that relate
to the preinjury wages with a cap of the State average weekly
wage. So there is a direct line between, in many States,
between the number that is given as a result of the guides. In
an additional number of States, it seriously impacts the
ultimate, although the formula may not be quite as lengthy.
Chairwoman Woolsey. Is it the duration of coverage also,
how long I will be covered for my injury?
Ms. Spieler. Again, that depends a bit on States, but in
the majority of States, yes, and it affects in particular the
compromising release agreements that are worked out between the
parties in these cases, because it helps in the quantification
of the amount of money that the injured worker receives. That
is why the numbers in the guides, as opposed to the process of
evaluation, are so critical and should be scrutinized.
Chairwoman Woolsey. So Mr. Uehlein, this is very important
to the worker.
Mr. Uehlein. This is very important to the worker.
Chairwoman Woolsey. So my question is, if there wasn't any
great significance from the fifth to the sixth edition, why was
it necessary in the first place?
Mr. Uehlein. Well, there were numerous criticisms, as we
look at--as the AMA looks every 4 or 5 years, they keep looking
to how to improve the system.
Chairwoman Woolsey. But it doesn't appear it was improved.
It went backwards.
Mr. Uehlein. I would submit to you and my associate, Dr.
Christopher Brigham will be submitting testimony on this, that
the sixth edition is simpler to use. The training is easier
when it is applied. It is more consistent and fairer,
especially when you get--go between different body parts.
Chairwoman Woolsey. Well, speaking of training, okay, Dr.
Nimlos virtually has said you have to be a mathematician to be
able to work out the formulas for the ratings. So, is it true
that one of the developers of this rating system is now a
trainer? Did this person set up their own future career by
having it so complicated that now training is sort of
necessary?
Mr. Uehlein. Well, training, there are many companies in
the country that perform training, including the one I am a
director on. I would say that training is an essential function
in any system. The fact of the matter is that what we can tell
you about training is that we find it easier to train doctors
under the sixth edition than we do under the fifth edition.
And just for the record, let me make it clear, that in
doing this, to the extent that we benefit as a company, we
would benefit more from the higher error rates that our
statistics demonstrate, which are very considerable statistics,
under the fifth edition, rather than the sixth edition.
Contrary to what I heard testified to earlier, the sixth
edition has a lower error rate, therefore, it is fairer to
employees across the board.
Chairwoman Woolsey. Dr. Nimlos and Mr. Godfrey, would you
like to respond to this?
Mr. Godfrey. I would like to respond. Within our task force
you will see testimony from Dr. Robert Rondinelli, whose name
is on the front of this book. He is associated with Dr.
Christopher Brigham. And again, you can look at Dr. Brigham's
Web site, which is part of my written testimony. They estimated
that it would take up to 30 hours of self-study and an 8-hour
course.
Now we are talking about doctors closing down their day-to-
day practice to go to a 8-hour full day course or over the
course of 2 days, plus travel. That is a significant cost. When
we had workers within the Iowa workers' compensation system,
most of these people that are going to be responsible for doing
impairment ratings are going to be local doctors that are not
going to have the need to become actual IME doctors. They are
going to be asked, someone came to you, broke their arm, what
is their impairment rating?
This new system is definitely not easier. We had two
doctors on our task force from both sides, and they agreed that
it is much more difficult and time consuming, and that it costs
the employers more because it takes longer for a doctor to do
the examination.
Chairwoman Woolsey. Dr. Nimlos, did you want to add to
that?
Dr. Nimlos. Well, actually, there is an article in the
IAIABC Journal, which 15 people read, but Dr. Reinhorn, who was
involved in the development of the guide, wrote in his personal
observations in the spring of 2009 edition, I think about the
extra time taken to do AMA guides sixth edition ratings and he
asserted that there were seven expert examiners who taught
other people how to do sixth edition ratings, and it is from
that study that I drew the 5 minutes and 25 minutes for the
sixth. These were people who were teaching other people how to
do the ratings, so I think that suggests that they do take
longer. They are more complicated for me. I know I would have
trouble dictating or discussing such a thing over the telephone
with attending doctors. And I really have no trouble with that
under the fifth.
Chairwoman Woolsey. Thank you.
Congressman Payne.
Mr. Payne. Thank you very much.
Dr. Burton, your testimony describes claimants who are
eligible for both SSDI and State workers' compensation and
under Federal law are limited to 80 percent of their preinjury
earnings. SSDI reduces its liability offsetting workers'
compensation payments from what it owes a claimant. However, in
15 States, including our State of New Jersey, there is a so-
called reverse offset where States reduce the amount that has
to, that has to be paid by workers' compensation, by the amount
paid first by SSDI.
Are these 15 States getting a competitive advantage over
States that do not have it? And should Congress examine costs
to the SSDI fund from the reverse offset?
Mr. Burton. I think they are. We will probably need
bodyguards going back to New Jersey after saying this. But I
think it is the case that, because what the reverse offset does
essentially is reduce the cost to the employers and the
carriers in the States that are allowed to take advantage of
that reverse offset. And those 15 States got a break. Congress,
I think, woke up essentially too late on this issue and felt it
was too late to do the right thing for those 15 States. But I
think the logic of this would be you ought to get rid of the
reverse offset for all States and just let Social Security
reduce the amount of benefits that are paid by Social Security
rather than reducing the workers' compensation benefits.
Mr. Payne. Let me also ask you, some have described the
desire of States to compete based on lower workers'
compensation benefits as a ``race to the bottom.'' Can a State
have a modern workers' compensation system which adheres to the
recommendations made in 1972 by the National Commission without
losing out to pressures and threats by employers to move to
another State with lower workers' compensation insurance costs?
Does this race to the bottom lend to inevitable pressure on the
SSDI fund, which is running a deficit?
Mr. Burton. No, I think it is a two-step process. The race
to the bottom involves workers' compensation. And almost every
State feels those pressures, regardless if a State that is
ranked 38th or 40th in the country in terms of their cost to
the workers' compensation program, you go to the legislative
hearings there and they always find the 45th ranked State to
compare themselves to and therefore justify having to cut back
their benefits some more. So what happens is you cut back on
workers' compensation, and the more workers' compensation is
cut back, the more there is left to pick up by the SSDI
program.
Mr. Payne. Thank you. Mr. Uehlien, the new edition rejects
ratings for what is called subjective factors such as pain, yet
pain can be severely disabling with regards to functionality.
The fifth edition allows for additional rating for pain, yet
the sixth edition simply treats it as one-size-fits-all factor
and it fails to consider how pain affects individuals.
Does this reflect a bias against injured workers? We have
always had this question about pain, how do you measure pain,
and so I just wonder if you would respond to that.
Mr. Uehlein. Absolutely. I am glad you asked that question,
because pain, the issue of pain in disabilities systems is one
of the most complex issues there are. If you, in fact, look at
blind studies, and you would find that it is very difficult to
objectively measure pain. My belief is that the sixth edition
does address pain, but it also recognizes that it is subject to
abuse and attempts to come up with a consistent way of
utilizing it in the context of creating a grid for medical
functionality.
Mr. Payne. Mr. Godfrey, you mentioned it is interesting
about ethnic and racial differences. And just take pain, for
example, and you mentioned immigration from central Europe,
say, Bosnia or from Somalia or Sudan, would you say that maybe
pain is endured more by different ethnic groups having
something to do with the previous experience or where they are
from, and that, perhaps, pain is supposedly part of life and
you endure it rather than speak out against it?
And secondly, if it is a feeling that you may lose your
job. In many developing countries, the rights of the workers
certainly are not where they are here, and the fear may be that
recrimination may be taken against a person who complains about
a legitimate problem?
Mr. Godfrey. I think both of those can be addressed in the
same sort of response. I don't think that the individuals
necessarily experience their pain differently, but the response
to that pain is obviously different. Those who maybe do not
speak English as their first language may want to go to a
physician and emphasize their pain, and the only way they can
do that is to be very reactive. It may come across as being
overemphasizing the pain. Other cultures may have shame in
feeling pain or reporting pain to an employer, so then they
underreport the level of pain that they are actually
experiencing. So that is also likewise a concern.
One of the things that the sixth edition does that has not
been done in previous versions, and maybe Dr. Nimlos or Dr.
Uehlein can describe this as well, but one thing that is
troubling to me is as we talk about these cultural biases
within the DASH and the other testing, if there is a movement
because of increased scores that would be considered out of the
norm, they bring in the concept of malingering, and that is not
a term that has been used in the previous editions of the
guides. And I think that that speaks to discredit an entire
claim of an individual because of the way that they react to
their pain.
And when we talk about the reactions based upon culture, I
think that is a very significant concern, because if you have
somebody that perhaps is not speaking because of their culture,
and they overreport their pain perhaps, once you get that term
``malingering'' in a workers' compensation case, let us say
your claim is pretty much over with. So I think that the AMA
guides brings up that term. I think that is a dangerous
encroachment within the system to bring that in.
Chairwoman Woolsey. Thank you.
Congressman Sablan.
Mr. Sablan. Thank you very much, and good morning.
Commissioner, the editor of the AMA guides, Dr. Christopher
Brigham, Mr. Uehlein's associate--did your task force, the Iowa
task force, have concerns with the potential for conflict of
interest here? And would you please describe this concern?
Mr. Godfrey. Well, obviously the issue of conflict of
interest was not our primary concern. Our primary concern is
this sea change between the fifth edition and sixth edition. It
was a concern as we spoke with Dr. Brigham and continued to be
recipients of advertisements and the like from impairment.com.
It seems as though much of this sea change came about because
of Dr. Brigham and his associates, and it appears as though
much of the training that is provided, many of the resource
books and the like which are provided, and many of even the
peer reviews tend to be articles that are either Dr. Brigham or
his associates. I think that the authors of this book, or if we
are enabled to have some other organization, perhaps a
governmental organization, step up to the plate, I think the
contributors to the book should step away from the training and
especially the peer review of it. I think that that does lead
to some potential for a serious conflict of interest.
Mr. Sablan. All right. Thank you.
I come from--I am a very simple man. I come from a very
simple place where, if we are having a conversation and I am
saying no to you, I would be nodding my head to you like this,
because it means a yes. But I am beginning to get it that this
sixth edition has actually created a situation where it is
saying yes, and people would be turning their heads this way.
There is a huge difference that Dr. Nimlos has even said that
it has become complicated.
So, Commissioner, I will go back to you. How do you respond
to Mr. Uehlein's contention that the sixth edition is fair to
all stakeholders.
Mr. Godfrey. Well, I think that our task force report, if
you read through that, it is very clear that it is not. An
example of that, I believe, is found on page 2 of my written
testimony. In Iowa we have a schedule where an arm is worth 250
weeks of disability benefits. If your impairment rating under
the fifth edition, just as a generic example, would have been
10 percent impairment, and it is reduced to 5 percent, that can
cut your benefits in half.
Now, one other thing that the sixth edition does, and
again, I am not the physician testifying here, so I would
welcome either of the other two physicians to explain it, but I
think it would be fair to explain how impairments of the nerves
in the upper extremities, you can have three nerve impingements
or three nerve involvements, and only two of them are rated,
wherein from the fifth edition all three would be rated. I
don't understand how that could be fair to an injured worker
who has three nerves impacted by an injury to only get a rating
for two of them. That is not the way that our work comp system
in the State of Iowa has been set up, and if that is going to
be a change, I think it should be a legislative change that is
determined by our Representatives and our Governor.
Ms. Spieler. May I say something?
Mr. Sablan. Sure. I yield back my time to the Chair.
Ms. Spieler. Yes, I know that Mr. Uehlein indicated that
these guides are more fair in this sixth edition. And I think
it is important to look at what ``fair'' means. There is
fairness in that each worker might be treated the same who
comes in to someone for an evaluation. That is a consistency
across workers. There may be an argument that the fifth--the
sixth edition increases that, leaving aside the complexity of
it.
On the other hand, ``fair'' could be viewed as the question
of adequacy in terms of the rating and how it relates to the
functional capacity of the individual in the office. I don't
think that is how Mr. Uehlein is using the word ``fair,'' nor
is it the way it is used in any of the secondary literature
where--of the people who believe that the sixth edition is an
improvement. There is never any correlation that is discussed
between the numbers and the adequacy of the rating in relation
to actual functional capacities to do the things that matter.
And across the board where there is an attempt to increase
consistency, it seems to be achieved by reducing numbers as
opposed to by reexamining them and deciding what their adequacy
is.
And so I would suggest that this is fairness in terms of
consistency, but not in terms of accuracy, in terms of
adequacy.
Chairwoman Woolsey. And, Dr. Burton, you wanted to respond.
Mr. Burton. Yes. I want to follow up on Emily's point and
go back to something that Mr. Uehlein said. It is true the AMA
guides makes a clear distinction between an impairment, which
is a medical condition, and disability, which is more simply
measured by wage loss. And the AMA guides talk a lot about we
are not rating disability, we are rating impairment.
The reality is that most States use the AMA guides as if
they were rating disability, and that is the difficulty we have
got--one of the fundamental difficulties we have got with AMA
guides. And when he talks about fairness, he is talking about
fairness. As Emily said, he may get more consistent impairment
ratings, but that doesn't mean that you are doing a better job
of getting ratings that reflect the reality of what happens to
workers in the labor market.
Now, the sixth edition says you can't do that essentially,
to oversimply. But, in fact, Emily and I have coauthored an
article in JAMA, the Journal of American Medical Association,
on the fifth edition in which we pointed out that there are
data, and have been data for many years, that could be used by
the American Medical Association if they really, seriously
wanted to recognize what this guide is being used for, which is
to rate disability, not impairment; there are ways they could
make this a much more useful and much more accurate
publication. They have essentially ignored that advice, and
that is why my own view is I don't think the AMA is capable of
doing a guides for disability the right way. It has to go to
something like the Institute of Medicine.
Chairwoman Woolsey. Mr. Uehlein.
Mr. Uehlein. Just as I said, a lot of discussion confuses
the issues between the adequacy of rates and the use of the
guides. The guides are a tool for doctors. The problem that Dr.
Burton discusses here is that legislatures have not completed
the job of deciding what is adequate rates and how we are going
to go from medical functionality to the determination of the
rates. It is not the problem with the guides, it is the problem
with deciding in individual States how we are going to get
there.
Chairwoman Woolsey. Dr. Nimlos, did you want to say
anything? And then Mr. Godfrey, and then Dean Spieler, and then
we will wrap up.
Dr. Nimlos. Thank you. I would like to say a lot of things,
but I will try to keep it short.
With regard to the malingering issue, it does sound unfair
to me to bring that up when the incidence in injured workers of
malingering is about 1 percent. If you approach it from that
standpoint of suspicion over malingering so intently, then 99
percent of injured workers become treated as if they were
malingering, which is a very bad way to deal with the claim.
With regard to the statistics about the error rate, these
have appeared to me to only be found in articles I found
through Google. I haven't found anything in the medical
literature except for 1 study where it was 17 patients
comparing a doctor who reviewed outside exams compared to his
own assessment, which interestingly came to the same number of
statistics that I had on a selection of over 400 cases that I
reviewed where the error rate overall in independent medical
examinations was 55 percent. That didn't include only
independent examiner errors in rating, it had other errors in
with it. But among those errors in rating, in distinction to
those that Dr. Brigham has reported where he essentially says
that all of the ratings that he found that were in error were
too high, or nearly all of them, all of the ratings that I
found were too low, except one. I frequently found that the
examiners came to a zero rating when plainly in their report
there was actually evidence for a clear-cut impairment rating.
Chairwoman Woolsey. Okay.
Dr. Nimlos. So I don't disagree with the error rate, but I
am concerned these ratings aren't always too high--my
experience was too low--and that the groups that were selected
are ones that came to Dr. Brigham's practice because there was
some worry about them, which I think greatly would overstate
the actual amount of errors and the degree of error.
Chairwoman Woolsey. So that leads me, in the wrap-up with
Mr. Godfrey and Dean Spieler, will somebody tell me what went
wrong with this process? How did we get here?
Mr. Godfrey. Well, I think that I can address that by kind
of addressing what Dr. Uehlein said--oh, I am sorry, Mr.
Uehlein said. He said, the guides are not the problem, it is
the State workers' compensation systems which are the problem.
And that is actually a quote that Dr. Brigham gave to our task
force. He said, the more significant problems do not lie with
the guides, but rather with how the impairment ratings are used
by the workers' compensation system or systems. The AMA guides
will continue to evolve and improve. The systems that make use
of the guides must also evolve.
If I was going to evolve in terms of how we compensate
injured workers, that is a determination that should be made by
the people in the State of Iowa. For a consensus that refuses
to identify itself, it refuses to tell us how they come to the
numbers which are arrived at, it refused to tell us who was
involved in the process of how it was even determined that we
had to have this change from one system of finding impairment
or disability to another, those aren't decisions to be made by
that group. They are to be made by the people of Iowa, or, more
broadly, they should have some guidance from the Federal
Government to tell us what boundaries should be set for each
State so when they determine how we get to how we find
impairment and resulting disability, that we have that
framework there so we don't violate that. And I think perhaps
it has been this reliance upon the AMA since the early 1970s,
we have allowed them to play that role. And I think that with
the sixth edition, it really brings home the fact that maybe
that is not where we should look anymore.
Chairwoman Woolsey. Thank you.
Dean Spieler.
Ms. Spieler. I wanted to make two specific comments and one
general one, if you don't mind. One is that Mr. Uehlein just
suggested that the guides is a tool for doctors, but, in fact,
treating physicians have no need to quantify the impairments of
their patients. It only becomes necessary to quantify
impairments if you are looking at a compensation system. And so
I think it is--the word that comes to mind is disingenuous for
anyone who is involved in the development of the guides to
suggest that it is only for doctors, because you wouldn't have
a guide unless had you to quantify for compensation systems.
So it is inevitably used within compensation systems, and
the problem with the numbers is that they don't correlate with
anything. They don't correlate with the original percentages in
the original workers' compensation laws. They did not refer to
that when the percentages were originally developed. They don't
correlate at all with any of the economic studies in terms of
what kinds of impairments actually lead to workplace
disability. They don't correlate with studies that have been
done about people's view of quality of life. They are simply
numbers that some small group of physicians have invented.
And on the ``what is to be done'' side of this, I think
that at this point it is very unlikely that all States are
going to be able to push back on this whole process. It has
become a kind of assumed gold standard in a situation where it
clearly should not be, and the race to the bottom encourages
that.
So I think that the problem is a twofold problem when you
start looking at the costs being referred to Social Security
Disability. One is that you need a better guide, and that
clearly needs to be done by an independent group like the
Institute of Medicine, perhaps with the assistance of NIOSH;
and second, that maybe there does need to be some
recommendations with regard to the minimum standards for State
workers' compensation programs in order to stop the bleeding
from workers' compensation--from workplace injuries into DI,
which has been going on for a very long time, and not just as a
result of this recent trend.
Thank you.
Chairwoman Woolsey. Thank you.
Congressman Payne.
Mr. Payne. Yes. Ms. Spieler, your testimony recommends that
Congress make a request to the Institute of Medicine to review
the AMA guides. What are your views on having the National
Institute for Occupational Safety and Health review the AMA
guides and develop a more evidence-based system?
Ms. Spieler. I think if it went to the Institute of
Medicine, it would be a more transparent process to some
extent. And I am not certain that NIOSH has the kind of
multidisciplinary people internally to do this on their own. It
might make sense to have NIOSH manage an Institute of Medicine
process, but I would leave that to the--obviously to people who
are more familiar with the way these things work in the system.
Mr. Payne. Mr. Burton.
Mr. Burton. There is a model that I think suggests the IOM
is an ideal place to assign this task. The only other ratings
system for partial disability, that is permanent partial
disabilities that is in widespread use in the U.S., is the one
for veterans. And the veterans disability rating system was
looked at.
I happened to serve on an IOM committee about 3 years ago,
and I think that it was an extremely useful process. I don't
know all the consequences of those recommendations, but it was
quite thorough. They have an excellent staff. They put together
a really representative group of people.
So it is not that we are picking the IOM out of ether, it
is they have got a track record of looking at a disability
rating system.
Incidentally, they consider whether or not they should
substitute the AMA guides in place of the disability rating
system, and said with all the problems with the disability
rating system, we are still better than the AMA guides. So it
is another reason why I have some skepticism about the AMA
guides.
Anyway, that is what I would encourage you to do would be
to try the Institute of Medicine.
Mr. Payne. Just quickly, Mr. Uehlein, in Kentucky the
legislature voted to delay adoption of the sixth edition, and
Iowa has voted not to accept it. Why have States chosen not to
accept this edition, in your opinion?
Mr. Uehlein. Like the other members here, I am a very
practical person who deals in the real-world practice. As I go
around, the largest group I see advocating about the issue is
the plaintiffs' bar. And I believe in my heart of hearts that
that has something to do with the fact that the fine, which
accounts for 30 to 40 percent of the rating, is rated higher
under the fifth edition than the sixth edition.
There is a lot of misinformation. This is a complex topic.
I like the idea of using facts to make your determination.
Mr. Payne. Do you agree with that, Mr. Godfrey?
Mr. Godfrey. I would point you to the makeup of our task
force in the State of Iowa. We had two claimant's attorneys,
which would be considered the plaintiffs' bar. We had two
defense attorneys. We had two doctors that work quite often
with insurance companies. We had two former deputy
commissioners who used to work for the Division of Workers'
Compensation, who are no longer involved with the system, but
had knowledge of the fifth and fourth edition and took the time
to review the sixth edition.
The vote was 7 to 1 to say that Iowa should not subject its
workers to the sixth edition. That is a pretty broad consensus.
It is not plaintiffs' bar. These are medical professionals that
have looked at this, these are attorneys on both sides of the
issues, these are people that are impacted day to day and know
how this affects the Iowa Workers' Compensation System, and it
was pretty across the board.
Chairwoman Woolsey. All right. Unless somebody would like
to add something to that, I think we have gotten both sides.
Dr. Nimlos.
Dr. Nimlos. I would just like to briefly add my endorsement
for the National Institutes of Occupational Safety and Health,
maybe because that is my specialty, but also because I know
that they have had experience in human factors assessment, and
it may be a good idea for them to team with the Institute of
Medicine, where I am not so familiar, but I think that NIOSH
should have a role.
Chairwoman Woolsey. Well, I thank all of you for being
magnificent witnesses, and I thank my subcommittee members that
were here. This is a very important issue. And ``Developments
in State Workers' Compensation Systems'' was the name of this
hearing, and we have asked some of the questions. I don't think
we have gotten all the answers, and I don't think we have come
up with a solution that is going to turn that around, but I
think we need to get very serious about this.
You have illuminated the problems facing workers who must
deal with workers' compensation systems that are increasingly
hostile to their claims. Clearly the latest edition of the AMA
guides only exacerbates the problem. Our witnesses, as I said,
have made great suggestions. We need to move on that, and it is
my hope that NIOSH and/or the Institute of Medicine will take a
closer look at the guides and come up with a better way to rate
worker impairment. Probably they are going to have to be
directed by their bosses here in the Congress to do just that,
because they have--that is not one of the things that they have
on their agenda right now. I think that is our job to do that,
and I will be following up on that.
So going forward, I also recommend that the AMA develop a
transparent and inclusive process when it engages in private
rating so that those who are affected by it can trust the
results, or at least know where to question them.
And finally we need to explore the cost shifting from
workers' compensation to the Social Security disability
program. As I said in my opening, Chairman Miller and I asked
the GAO to study this particular trend.
So again, I thank you. You have been wonderful. And before
we adjourn, I want to submit, without objection, the following
into the record, and it is a statement from the American
Medical Association. They were invited; they sent a statement.
So that is it.
[The information follows:]
Prepared Statement of the American Medical Association
The American Medical Association is pleased to submit this
statement for the record of the Subcommittee's hearing ``Development in
State Workers' Compensation Systems.''
Over the past several months, the committee staff has inquired into
the development of the AMA Guides to the Evaluation of Permanent
Impairment, Sixth Edition. We have been pleased to respond to those
inquiries and hope that the information provided to date has assisted
the committee's understanding of the development process. We feel that
this work has enhanced the validity, improved internal consistency,
promoted greater precision, standardized the rating process, and
improved inter-rater reliability.
If we can be of further assistance or respond to additional
questions from the Subcommittee, we would be pleased to do so.
Overview
The American Medical Association's (AMA) Guides to the Evaluation
of Permanent Impairment (AMA Guides) is the most commonly used tool in
the United States for rating impairment. The precursor of the AMA
Guides originated in 1956, when the AMA Board of Trustees (BOT) created
an ad hoc committee on Medical Rating of Physical Impairment to
establish a series of practical guidelines for rating impairment of the
various organ systems. From 1958 to 1970, the Committee published a
series of AMA Guides articles in the Journal of the American Medical
Association (JAMA). In 1971, these were published as a single volume,
which has been revised in five subsequent editions.
The AMA Guides, 6th Edition, published in 2007, introduced a more
contemporary terminology and approach. The 2001 International
Classification of Function (ICF) developed by the World Health
Organization was adopted in place of the previous 1980 terminology of
the International Classification of Impairments, Disabilities and
Handicaps (ICIDH). This new classification provided evidence-based
concepts, terminology, definitions, and a conceptual framework. This
framework was implemented and applied to each chapter to enhance the
validity, improve internal consistency, standardize the rating process,
and improve inter-rater reliability. Feedback from users of the 6th
Edition, including the Department of Labor--which adopted the 6th
edition in May of 2009 through the Federal Employment Compensation
Act--indicates that these goals were achieved. In addition, users
report that it is both easier to use and to teach.
With advances in medical science in recent years it follows that
some impairment ratings have changed due to improved outcomes.
Specifics of some of the changes are detailed in the statement below.
In addition, the 6th Edition allows for ratings for some conditions
that earlier editions of the AMA Guides did not.
The AMA Guides, 6th Edition also implemented a new process modeled
after other AMA editorial processes in order to provide greater
transparency and input from stakeholders. An Editorial Panel, Advisory
Committee, contributors and peer reviewers comprised of over 200
individuals had input to this most current edition. These impairment
professionals represented various stakeholders in the impairment
process. The goal of the AMA Guides was to develop an impairment rating
system that is fair and equitable to all parties.
Development of the sixth edition
On average the AMA Guides editions are updated every five to seven
years, in response to new or emerging medical practices, research, and
stakeholder needs. AMA staff of the Divisions on Professional Standards
and Book Publishing, in consultation with representatives from several
medical specialty societies, undertook the project in 2004 to develop
the AMA Guides 6th Edition.
Invitations were issued to national medical specialty societies, as
well as state and county medical associations, to nominate disability
or impairment physician experts to serve as authors, content
contributors, and/or reviewers. Forty-five organizations submitted
nominations. Participants were chosen based upon their past
publications, evidence-based research experience, reputation in their
field and the application of scientific methods to problems of
impairment evaluation. An Editorial Panel comprised of eleven members
was established. The members were selected based upon their reputations
for knowledge and application of clinical medicine and science to the
field of impairment evaluation. The Editorial Panel outlined a set of
recommendations to revise the AMA Guides 5th Edition. The
recommendations were disseminated to a group of sixteen additional
physician nominees for review and input.
Based on these recommendations, the Editorial Panel identified a
framework and adopted a set of axioms that would form the basis of the
6th Edition. These axioms were:
Adopt the terminology, definitions and, conceptual
framework of disablement of the International Classification of
Functioning, Disability and Health (WHO, 2001) in place of the current
and antiquated ICIDH terminology (WHO, 1980);
Make greater use of evidence-based medicine and
methodologies;
Wherever/whenever evidence-based criteria are lacking,
give highest priority to simplicity and ease of application, and follow
precedent unless otherwise justified;
Stress conceptual and methodological congruity within and
between organ system ratings; and
Provide rating percentages that are functionally based
whenever possible, unless/until science supports otherwise.
Six of the Editorial Panel members were selected to be Section
Editors. These individuals were charged with developing the 6th Edition
in accordance with the axioms identified above. The remaining five
Editorial Panel members served in a consultative role.
Each Section Editor was assigned to lead the revision of a section
consisting of 2-4 related chapters. Nominees from the various state and
county medical associations and national medical specialty societies
were assigned to a section based on his/her specialty and expertise.
The Section Editors worked with contributors who wrote the specialty
specific chapters. This process assured that each chapter had
contributors in that specialty.
Chapters in draft form were reviewed by the assigned Section
Editor, then by all of the Section Editors. This approach ensured
consistency across chapters and uniform adherence to the axioms
established by the Editorial Panel. Next, chapters were disseminated
for expert peer review including the remaining members of the Editorial
Panel. Peer reviewers were selected based on past experience with the
AMA Guides, reputation in the field of impairment, and recommendations
from medical societies and other stakeholders.
For the 6th Edition, an Advisory Committee was established, modeled
after other AMA editorial committees and processes. Nominations for
this committee were solicited from the various specialty, state, and
county societies, as well as other stakeholders. The mission of the
Advisory Committee was to solicit comments from their various societies
and agencies and submit them to the Editorial Panel for its
deliberations and final decision. The Committee had a charter with
well-defined rules and procedures in place to facilitate sound
decision-making.
The six Section Editors met via conference call at least monthly to
review questions and issues that required resolution. Section Editors
met individually with their author teams to achieve uniformity and
consensus on individual chapters. When consensus could not be reached,
the issue was brought to the Editorial Panel for resolution.
The review process chart is attached to illustrate the flow of
editorial activities.
Impairment vs. disability
The AMA Guides, 6th Edition is very clear about differentiating
between impairment (determined by diagnosis) and disability, which is a
legal term. The ICF model refers to both impairment and disability, but
section 1.3d (page 5) of the Guides 6th Edition clearly describes the
differences between the Guides terminology and ICF terminology.
Disability is a determination made by administrative law judges in most
jurisdictions and may or may not have a relationship to an impairment
(e.g., you could have an impairment but no disability).
All editions of the AMA Guides state that an impairment rating is
not equal to a disability rating and is not intended to be a measure of
disability since disability has to do with limitations or restrictions
in job function rather than the actual anatomic limitation.
Additional information on specific chapters
Mental and Behavioral Disorders
The Mental and Behavioral Disorders chapter now provides a method
for rating permanent impairment resulting from mental and behavioral
disorders. Only impairments for selected well-validated major mental
illnesses are considered. Impairment rating under the Mental and
Behavioral Disorders chapter is thus limited to the following
diagnoses:
Anxiety disorders, including generalized anxiety disorder,
panic disorder, phobias, posttraumatic stress disorder, and obsessive-
compulsive disorder.
Mood disorders, including major depressive disorder and
bipolar affective disorder.
Psychotic disorders, including schizophrenia.
To assess impairment using the Mental and Behavioral Disorders
chapter of the Sixth Edition, the clinician must first make a
definitive diagnosis using standard psychiatric criteria, including
history, and adjunctive psychological, neurological, or laboratory
testing. The Sixth Edition also supports the use of well-standardized
psychological tests that may improve accuracy and support the existence
of a mental disorder. The diagnosis (with the associated factors of
prognosis and course) will form the basis by which one assesses the
severity and predicts the probable duration of the impairment.
The Guides Sixth Edition also uses three scales by which mental and
behavioral impairment is rated: 1) the Brief Psychiatric Rating Scale
(BPRS); 2) The Global Assessment of Functioning Scale (GAF); and the 3)
Psychiatric Impairment Rating Scale (PIRS). The BPRS measures major
psychotic and nonpsychotic symptoms in patients with major psychiatric
illnesses. The GAF evaluates overall symptoms, and occupational and
social function. The PIRS assesses behavioral consequences of
psychiatric disorders within various areas of functional impairment.
The purpose of including all three of these scales is to provide a
broad assessment of the patient with mental and behavioral disorders as
the individual scales focus on symptom severity and/or function. The
objective of making a reliable diagnosis and coupling it with the
assessment of these three scales is to arrive at a strongly supportable
impairment rating.
Central and Peripheral Nervous System
The Central and Peripheral Nervous System (CNS) chapter of the
Sixth Edition was also revised to provide a consistent method for the
assessment of permanent impairment. The CNS chapter provides criteria
for evaluating permanent impairment due to documented dysfunction of
the various parts of the nervous system, emphasizing the deficits or
impairments that may be identified during a neurologic evaluation.
Neurologic impairments are assessed as they affect Activities of Daily
Living (ADLs) and correlated(?) function.
The Sixth Edition of the Guides describes a clear method for rating
impairments due to nervous system disorders. The first step in
assessing CNS impairment is to assess the most severe category of
cerebral impairment, if any, from 4 categories: 1) state of
consciousness and level of awareness; 2) mental status evaluation and
integrative functioning; 3) use and understanding of language; and 4)
influence of behavior and mood. The rater then assesses impairment of
other organ systems (due to neurogenic problems), and combines this
impairment with the single most severe category of cerebral impairment
to arrive at a strongly supportable impairment rating. This method of
assessing impairment is used for nervous system-related conditions,
including epilepsy and traumatic brain injury.
Spine
Significant changes were made to the spine chapter to make spinal
evaluations consistent with current medical science and evaluation
approaches. Among the most common lumbar and cervical spine conditions
that require rating are intervertebral disk (IVD) herniation at one
level with or without resolution of radiculopathy (lumbar and cervical)
and fusion at a single level with or without resolution of
radiculopathy.
Impairment ratings in the Sixth Edition are both more specific and
intended to reflect a lesser impairment in cases where symptomatology
has improved with appropriate treatment. Sixth Edition grids include
impairment ratings for multiple level conditions, so that an
alternative rating system (range of motion method in the Fifth Edition)
is not necessary. This change acknowledges that range of motion
assessed in a clinical setting is neither an accurate assessment of
outcome nor predictive of function. Surgery should result in functional
improvement for patients and therefore decrease impairment (the inverse
of function); however, with the Fifth Edition, typically spinal surgery
would increase impairment.
The Diagnosis-Related Estimate (DRE) Categories described in the
Fifth Edition were modified and expanded to create the Regional Grids
used to rate spinal impairments in the Sixth Edition. The grids are
designed to provide clearer categorization of many conditions and to be
more consistent with clinical outcomes. The Sixth Edition ratings
reflect the results of treatment, rather than the method of treatment
(e.g., non-operative or conservative care vs. surgical treatment).
DRE Lumbar and Cervical Category 1 in the Fifth Edition includes
conditions with no significant clinical findings resulting in the
assignment of 0 percent whole person impairment (WPI). In the Sixth
Edition, a similar category, e.g., Class 0 with assignment of 0 percent
WPI, is provided in Table 17-2 Cervical Spine Regional Grid: Spine
Impairments (6th ed, 564-566) and Table 17-4 Lumbar Spine Regional
Grid: Spine Impairments (6th ed, 570-573).
In the Fifth Edition, DRE Lumbar Category II (associated with a
rating of 5-8 percent WPI) includes cases with findings such as muscle
guarding and spasm, asymmetric loss of range of motion and non-
verifiable radiculopathy. In clinical practice it may be difficult to
validate one physician's findings of muscle guarding and spasm at
another examination, leading to controversy (``dueling doctors'') with
respect to rating those patients with questionable physical examination
findings. In the Sixth Edition, the creation of Class 1 under the
heading ``Soft Tissue and Non-Specific Conditions'' is intended to
provide a category for rating those patients, and notes that similar
findings must be present on multiple occasions (1-3 percent WPI in the
lumbar spine and 1-3 percent WPI in the cervical spine, based on
Functional History Grade Modifier). The impairment ratings acknowledge
an injury and persistent symptoms and also reflect that findings are
mostly subjective. Since Functional History is the only grade modifier
used in this Class 1 illness (page 563), the lowest possible Net
Adjustment is -1, and the lowest possible rating is Class 1, Grade B.
Symptomatic herniated nucleus pulposus (HNP) is defined by the
presence of radiculopathy at a level consistent with findings on
imaging studies or non-verifiable radicular complaints at the
clinically appropriate level(s). In the Fifth Edition, a HNP with a
history of radiculopathy that has responded to conservative/ non-
surgical treatment or persistent non-verifiable radicular complaints is
rated in the same category as nonspecific findings (Category II, 5-8
percent WPI). In the Sixth Edition, these two conditions are
distinguished. Non-specific findings are rated in Class 1 under Soft
Tissue and Non-Specific Conditions, with an impairment range of 1-3
percent WPI. For IVD herniation with resolution of radiculopathy or
persistent non-verifiable radicular complaints at the clinically
appropriate level(s), the results of treatment are taken into account
and regardless of the type of treatment these cases are rated in the
range of 5-9 percent WPI in the lumbar spine and 4-8 percent WPI in the
cervical spine. According to the Fifth Edition, non-specific findings
would typically be rated at the lower end of the range (5 percent WPI)
and conservatively resolved radiculopathy that had improved following
non-operative treatment would be rated at the higher end (8 percent
WPI). Impact on activities of daily living is also considered. The
Sixth Edition distinguishes between these two diagnoses and provides
different cells in the regional grids for each. In these cases, the
actual ratings in the Sixth Edition are similar to the Fifth Edition.
In the Fifth Edition, DRE Lumbar Category III covers a broad range
of conditions, ranging from significant signs of radiculopathy (without
a specific etiology) to surgically treated IVD herniation that are, as
a result of surgery, asymptomatic. The outcomes of treatment are given
less consideration than the treatment in the determination of
impairment ratings in the Fifth Edition. In contrast, in the Sixth
Edition, Classes 1 and 2 differentiate between cases in which
radiculopathy has resolved, regardless of the treatment method and
persistent radiculopathy after treatment. Comparing Fifth Edition
ratings to Sixth Edition ratings, a patient with resolved radiculopathy
would be rated typically at the lower end of DRE Lumbar Category II (5
percent WPI) and the patient with persistent radiculopathy would be
rated at the higher end of DRE Category III (13 percent WPI). In the
Sixth Edition, resolved radiculopathy from an HNP, regardless of
treatment, is rated in the range of 5-9 percent WPI, based on function.
Persistent radiculopathy, regardless of treatment, is rated in the
range of 10-14 percent WPI. The approach used in the Sixth Edition is
more consistent with clinical experience, in which radiculopathy
generally results in more functional limitation. Thus, radiculopathy
that persists at MMI would be appropriately rated in a higher class,
and resolution of radiculopathy would result in a lesser impairment
rating, regardless of the treatment method.
A more significant difference in impairment ratings occurs with
respect to classification of diagnoses of Alteration of Motion Segment
Integrity (AOMSI), which includes fusion and, in the Sixth Edition,
motion preserving technologies. In the Fifth Edition, AOMSI at a single
level is rated in higher categories, regardless of treatment outcome.
Impairment is in either DRE Lumbar Category IV (20-23 percent WPI) when
no radicular findings are present or DRE Lumbar Category V (25-28
percent WPI), when there is persistent radiculopathy. Multiple level
fusions are rated using the ROM method.
In contrast, the Sixth Edition differentiates between treatment
outcomes. If appropriate treatment has resulted in improvement of the
condition and better function, regardless of AOMSI, the condition is
rated in Class 1 (5-9 percent WPI). In the case of persistent radicular
complaints, regardless of AOMSI, the number of levels involved is the
differentiating factor in the Sixth Edition, and impairment ranges from
10 percent WPI for persistent radiculopathy at a single level to 33
percent WPI, accounting for the greater impairment presumed to be
present in the case of multiple level radiculopathy, instability, or
after multiple level fusion.
Cervical disc herniations are most commonly treated with anterior
cervical discectomy and fusion. In the Fifth Edition this catapults
ratings into DRE Cervical Category IV (2528 percent WPI) for a
condition that is effectively treated with fusion. The Sixth Edition
rating methodology, which is driven by diagnosis (IVD herniation) and
outcome, rather than treatment method (in this case fusion), takes into
account the generally good results and improved function after
treatment for cervical disc herniation, regardless of the treatment
method. Therefore, in the Sixth Edition, single-level disease with
resolution of symptoms is rated in Class 1 (4-8 percent WPI) and
persistent radicular symptoms at a single level are rated in Class 2
(9-14 percent WPI). Multiple level herniations or stenosis-associated
persistent l radiculopathy is rated in Class 3 or 4 (15-30 percent
WPI), with increased impairment assigned in multiple level disease that
remains symptomatic after treatment. In the Fifth Edition, DRE Category
III provides rating for persistent radiculopathy without surgery or
improved radiculopathy with surgery, and therefore, does not
differentiate between outcomes from intervention (although
decompression of cervical radiculopathy is more commonly accomplished
with an anterior fusion than a posterior decompression).
In the Fifth Edition, DRE Cervical Category V requires
``significant upper extremity impairment including the use of upper
extremity external functional or adaptive devices'' with total
neurologic loss at a single level or multiple level neurologic
dysfunctions. In the Sixth Edition, Class 4 describes bilateral or
multiple level radiculopathy, without requiring dysfunction to the same
degree as DRE Category V.
In summary, although there are some differences in the impairment
ratings assigned to the most common spine-related conditions, the Sixth
Edition grids are designed to permit more specific and accurate
classification of conditions by diagnosis, to reflect the outcome of
treatment rather than the method of treatment, and to provide the same
rating methodology for single or multiple level conditions,
facilitating consistency in those ratings.
______
Chairwoman Woolsey. In order to finish this, as previously
ordered, Members will have 14 days to submit additional
materials for the hearing record. Any Member who wishes to
submit follow-up questions in writing to the witnesses should
coordinate with majority staff.
Without objection, the hearing is adjourned. Thank you.
[Questions submitted and their responses follow:]
[Via E-Mail],
U.S. Congress,
Washington, DC, November 17, 2010.
Mr. John Burton, Ph.D.,
56 Primrose Circle, Princeton, NJ 08540-9416.
Dear Dr. Burton: Thank you for testifying before the Subcommittee
on Workforce Protections at the hearing on, ``Developments in State
Workers' Compensation Systems'' held on Wednesday, November 17, 2010.
Representative Lynn Woolsey (D-CA), the subcommittee chair, had
additional questions for which she would like written responses from
you for the hearing record:
1. Your research has indicated a cost shifting from state workers'
compensation to SSDI as a result of changes enacted in the 1990s. The
Committee intends to follow-up by having the GAO conduct such an
assessment to quantify the costs and develop policy options.
A. What data is needed and what analytical methods could be used to
best quantify the degree and extent to which there is cost shifting
from workers' compensation into Social Security Disability for workers
who cannot qualify for state workers' compensation?
B. As part of this assessment, should there be sampling of actual
case files?
C. What criteria should be used in filtering cases to be used in a
sample?
D. What states should be selected? Should states with a reverse
offset be included?
E. What years should be selected? Is there a baseline time frame
against which such cost shift should be measured?
F. What kind of legal review should be conducted?
G. How large should the sample be?
2. Beyond case file reviews, are there other means to quantify the
dollar amount of the cost shift from state workers' compensation to
SSDI, and project what these costs might be on a going forward basis
over the next 10 years?
3. Are there any estimates on the annual cost to SSDI from the
``reverse offset''?
Please send an electronic version of your written response to the
questions in Microsoft Word format to Lynn Dondis and Richard Miller of
the Committee staff at [email protected] and
[email protected] by close of business Wednesday, December
1, 2010, the date on which the hearing record will close. If you have
any questions, please do not hesitate to contact Ms. Dondis or Mr.
Miller at 202-225-3275.
Sincerely,
George Miller,
Chairman.
______
Responses by Prof. Burton to Questions Posed by Ms. Woolsey
1. Your research has indicated a cost shifting from state workers'
compensation to SSDI as a result of changes in the 1990s. The Committee
intends to follow-up by having the GAO conduct such as assessment to
quantify the costs and develop policy options.
---------------------------------------------------------------------------
\1\ Helpful comments on an earlier draft of the Proposed Study were
received from Richard Burkhauser, Xuguang (Steve) Guo, Douglas Kruse,
Melissa McInerney, Virginia Reno, Emily Spieler, and David Stapleton. I
express my appreciation and absolve them of any remaining errant ideas.
---------------------------------------------------------------------------
(A) What data is needed and what analytical methods could be used
to best quantify the degree and extent to which there is cost shifting
from workers' compensation into Social Security Disability for workers
who cannot qualify for state workers' compensation?
Study Design. There are several decisions that must be made in
designing a study to determine the extent of cost shifting from
workers' compensation into the Social Security Disability Insurance
(SSDI) program.
(1) Decision one: what level of aggregation of data should be used?
My research with Professor Xuguang (Steve) Guo relies on state-level
data for variables such as the application rate for SSDI benefits, the
disability prevalence rate, and the expected amount of workers'
compensation benefits for workers with permanent disabilities. There
are virtues of studies using this level of aggregation and I discuss
such studies further in my answer to your question 2. However, for the
purpose of your Question 1, I propose a study of individuals who have
applied for and/or received SSDI benefits. The information from a study
at this level of disaggregation will provide valuable information on
the extent of cost shifting from workers' compensation to SSDI.
(2) Decision two: should the study involve applicants for SSDI
benefits, persons who were just awarded SSDI benefits, or persons who
were awarded SSDI benefits in previous years? There are advantages and
disadvantages of each of these choices. A study of persons who have
just applied for SSDI benefits can more closely observe the interaction
between the workers' compensation and SSDI programs as the case
proceeds. However, there are disadvantages, including the long delays
for many cases between the date of application and the date when the
decision about the award is made. A study including persons who were
awarded SSDI benefits in previous years provides a better estimate of
how statutory or administrative changes in the workers' compensation
programs affected the applications for and awards of SSDI benefits.
However, it is more difficult to administer a questionnaire to the SSDI
beneficiaries if they are no longer actively involved in the
administrative process. My recommendation is a study of persons who
have just been awarded SSDI benefits. There persons are more likely to
be accessible to complete questionnaires from which information not
included in the SSDI application can be obtained.
Decision three: which persons who have been awarded SSDI benefits
should be included in the study? Each person who is awarded SSDI
benefits in a state included in the study would complete an initial
brief questionnaire. A stratified sample would be drawn that includes
(1) persons whose disabilities do not appear to be partially or totally
caused by work\2\ and (2) persons whose disabilities appear to be
partially or totally caused by work.\3\ For those persons whose
disabilities appear to be partially or totally caused by work, a
stratified sample would be drawn that includes (1) persons who are
currently receiving or previously received workers' compensation
benefits and (2) persons are neither currently receiving nor previously
received workers' compensation benefits? Additional criteria for
selecting and stratifying the sample are discussed in the answer to
Question 1(C). Those persons who are included in the study will be
required to complete an expanded questionnaire.
---------------------------------------------------------------------------
\2\ I recommend including persons whose disability does not appear
to be partially or totally caused by work in the study in order to
allow the study to determine if persons affected by the offset are
typical of all SSDI applicants. In addition, the legal review of the
case folder (described below) may find some cases where the beneficiary
is not aware that work was a possible cause of the disability.
\3\ Any case in which the SSDI award includes an offset for
workers' compensation benefits would automatically be included in the
category of cases for which the disability appears to be partially or
totally caused by work.
---------------------------------------------------------------------------
Decision four: what information should be collected for the SSDI
beneficiaries in the sample from administrative records or from an
expanded questionnaire? The administrative records can provide
information on demographic information and on the amount of benefits
affected by the offset provision for workers' compensation and SSDI
benefits? The expanded questionnaire can also ask questions on a
variety of other matters. For example, for SSDI beneficiaries who are
neither currently receiving nor previously received workers'
compensation benefits, questions will be asked about the extent of the
applicant's knowledge of the workers' compensation program and whether
the person applied for workers' compensation benefits. If the worker is
currently receiving or previously received workers' compensation
benefits, the questionnaire can determine if the workers' compensation
benefits were for the same disability that resulted in the award of the
SSDI benefits. The expanded questionnaire could also obtain information
on the reasons why the person applied for SSDI benefits. Was the
application encouraged by the employer, the workers' compensation
carrier, another insurance company, and/or an attorney? The expanded
questionnaire could also ask the set of questions on the Health and
Retirement Study (HRS) about the accommodations at work offered by the
employer, which may affect the disabled worker's propensity to apply
for workers' compensation and SSDI benefits.
Analysis. One aspect of the study will be an analysis by a lawyer
or person familiar with the workers' compensation law in the state
where the SSDI award was made of the information from the
administrative records and the questionnaires completed by the SSDI
beneficiary. For those persons who had disabilities that appear to be
partially or totally caused by work and who never received workers'
compensation benefits, the analysis will examine how many of these
persons (a) should have qualified for workers' compensation benefits
using the compensability rules in the state in which they applied for
SSDI benefits, or (b) would have qualified for workers' compensation
benefits using the tests for compensability contained in the Workmens'
Compensation and Rehabilitation Law (Revised), [Model Workers'
Compensation Law], which was published by the Council of State
Governments in 1974. For the persons in (b), to the extent feasible,
the analyst will identify the reasons why the persons did not receive
workers' compensation benefits (such as a restrictive definition of
occupation disease included in the state workers' compensation
statute). A similar analysis of persons who had disabilities that do
appear to be partially or totally caused by work and who never received
workers' compensation benefits will be conducted based on the
information in the administrative records or the expanded
questionnaires in order to identify possible cases where the
information suggests the cause of the disability was partially or
totally caused by work but the SSDI beneficiary was not aware the
possible link of the disability to work.
The analytical methods include an extended qualitative analysis of
the legal review of the outcomes of the analysis described in the
previous paragraph. The study will also involve examinations of the
samples of workers included in the study using standard statistical
methodology, including regression analysis.
(B) As part of this assessment, should there be sampling of actual
case files?
Yes, there should be a sample of actual case files. At the time of
the award, an initial questionnaire should be administered asking the
beneficiary about whether the disability was partially or totally
caused by work. Depending on the answers to the initial questionnaire,
the beneficiary may be asked to complete an extended questionnaire.
(C) What criteria should be used in filtering cases to be used in
the sample?
The first criterion should be whether the disability was partially
or totally caused by work, using the definitions included in the 1992
Health and Retirement Study (HRS). These definitions were used by
Robert Reveille and Robert Schoeni in a recent article.\4\ This
criterion could be subdivided into those persons who satisfied
Definition 1 (The impairment or health problem was the result of an
accident or injury and work was the place where the injury occurred.)
and Definition 5 (The disability was caused by work using any of the
four previous definitions.)
---------------------------------------------------------------------------
\4\ Robert T. Reveille and Robert F. Schoeni. ``The Fraction of
Disability Caused by Work,'' Social Security Bulletin, Vol. 65, No. 4
(2003/2004). The article may be accessed at the following Internet
address: http://www.ssa.gov/policy/docs/ssb/v65n4/v65n4p31.html
---------------------------------------------------------------------------
The second criterion should be whether the SSDI beneficiary is
currently receiving or previously received workers' compensation
benefits.
The third criterion should be whether the SSDI beneficiary is male
or female.
(D) What states should be selected? Should states with a reverse
offset be included?
The initial phase of the research could involve four states, with
the expectation that additional states will be added based on the
results from this phase. Two of the fifteen states with reverse offset
provisions and two states with the normal offset provisions should be
selected. Two states in which workers' compensation compensability
rules have been significantly tightened since 1990 should be included,
as well as two states in which workers' compensation compensability
rules have not been significantly tightened since 1990. Possible
choices are:
Oregon: reverse offset and significant tightening of compensability
rules.
New Jersey: reverse offset and no significant tightening of
compensability rules.
California: normal offset and significant tightening of
compensability rules.
North Carolina: normal offset and no significant tightening of
compensability rules.
(E) What years should be selected? Is there a baseline time frame
against which such cost shift could be measured?
This study will require persons who were awarded SSDI benefits to
complete an initial questionnaire and the results will be used to draw
the sample. As a result it will be easier to confine the study to
current awards since the beneficiaries will be involved with SSA
offices as part of the benefit determination process.
The results will allow comparisons to be made among states which
differ in the stringency of their compensability rules and the type of
offset provision. In all four states in the initial phase of the
research, an estimate can be made of the extent to which SSDI
beneficiaries who have disabilities caused by work but who neither
currently nor previously received workers' compensation benefits.
The possible changes over time in the extent of cost shifting from
the workers' compensation program to the SSDI program can be examined
by the type of study discussed under heading 2) below.
(F) What kind of legal review should be conducted?
Each case in the sample should be examined by an attorney or other
person familiar with the workers' compensation law in the state in
which the SSDI beneficiary is located to determine if there is
information indicating that the person may have been entitled to
workers' compensation benefits in the state either using the state's
current compensability rules or the compensability rules used in the
Model Workers' Compensation Law. The legal review will rely on
administrative records and on questionnaires completed by the SSDI
beneficiary.
(G) How large should the sample be?
The sample size in each state will depend on the number of
variables (or categories) that the GAO decides should be used in the
analysis. A study may want to distinguish within each state the
experience of:
(a) SSDI beneficiaries who differ by cause of the disability: (i)
beneficiaries who do not indicate that their disability was partially
or totally caused by work; (ii) beneficiaries who indicate their
disability was partially or totally caused by work using Definition One
from the HRS, but not by the other definitions; and (iii) beneficiaries
who indicate their disability was partially or totally caused by work
using Definition Five from the HRS;
(b) SSDI beneficiaries who differ by their receipt of workers'
compensation benefits: (i) beneficiaries who are currently receiving or
who previously received workers' compensation benefits; and (ii)
beneficiaries who never received workers' compensation benefits.
(c) SSDI beneficiaries who differ by their sex: (i) beneficiaries
who are male; and (ii) beneficiaries who are female.
This sampling design will result in 12 cells (3X2X2 = 12). A
stratified sample will be drawn in each state so each cell contains 25
SSDI beneficiaries, in order to satisfy confidentiality and statistical
validity requirements. The total sample for each state will contain 300
SSDI beneficiaries (12 X 25), and the total sample for the four states
will be 1,200 SSDI beneficiaries. Oversampling of some of the cells or
particular interest--such as SSDI beneficiaries who indicated their
disability was partially or totally caused by work using Definition One
from the HRA and who never received workers' compensation benefits--may
be desirable, which would increase the sample size.
2. Beyond case file review, are there other means to quantify the
dollar amount of the cost shift from state workers' compensation to
SSDI and project what those costs might be on a going forward basis
over the next 10 years?
Analysis of State-Level Data. As discussed in my testimony to the
Subcommittee on Workforce Protections on November 17, there two studies
underway concerning the determinants of applications for SSDI benefits
using state-level data. Professor Xuguang (Steve) Guo and I have
preliminary results indicating that reductions in the amounts of
workers' compensation permanent disability benefits and the tightening
of eligibility rules for workers' compensation permanent disability
benefits during the 1990s accounted for about 3 to 4 percent of the
growth of SSDI applications during the decade. However, these findings
need to be used with caution. Professor Guo and I just began to analyze
the determinants of SSDI applications in the years through 2006 and we
did not find that changes in the workers' compensation programs during
the current decade are associated with more SSDI applications. In
addition, Professors Melissa McInerney and Kosali Simon have not found
that workers' compensation changes in the 1990s resulted in more SSDI
applications.
While the evidence indicating that changes in workers' compensation
programs resulted in more SSDI applications is mixed, the studies are
continuing and I anticipate that the recent availability of data on
SSDI applications for the current decade will help us clarify the
relationship between workers' compensation and SSDI applications during
the next year or so. Once the effect of the workers' compensation
program on SSDI applications is clarified, it should then be possible
to quantify the impact of the changes in the compensability rules and
level of cash benefits in the workers' compensation program on the
costs of the SSDI program. Professors Guo, McInerney, Simon, and I will
share our research results with you as soon as we are confident of our
results.
An Intensive Investigation of California. California significantly
amended the state's workers' compensation program in the middle of the
current decade in order to reduce costs of the program. The effects
were so large that the National Academy of Social Insurance reports in
recent years has shown national data with and without California
included because of the steep decline in costs and benefits in the
state.\5\ While some of these changes involved medical benefits and
other provisions of the workers' compensation program that are unlikely
to have resulted in increased applications for SSDI benefits, there
were significant reductions in permanent partial disability (PPD)
benefits that appear likely to have encouraged some workers to apply
for SSDI benefits.\6\ Given the importance of California, a separate
study of the state comparing SSDI applications in the period prior to
the major changes in PPD benefits in 2004 and 2005 with the SSDI
applications subsequent to these changes is warranted. The GAO should
be encouraged to see whether a longitudinal data base using SSA
administrative records, possibly supplemented with questionnaires sent
to SSDI beneficiaries, is feasible.
\5\ An example is Table 1 in Ishita Sengupta, Virginia Reno, and
John F. Burton, Jr., Workers' Compensation: Benefits, Coverage, and
Costs, 2010, published by the National Academy of Social Insurance in
September 2010, which showed that employers' costs dropped by 12.1
percent between 2007 and 2008 in California, but only 5.7 percent
outside California.
\6\ Major permanent partial disability (PPD) benefits were reduced
in California by 20.8 percent on January 1, 2004, by 8.8 percent on
April 10, 2004, and by an additional 48.1 percent on January 1, 2005.
Somewhat smaller reductions were also made in minor PPD benefits.
National Council on Compensation Insurance, Annual Statistical
Bulletin, 2010 Edition, Exhibit III.
---------------------------------------------------------------------------
3. Are there any estimates on the annual cost to SSDI from the
``reverse offset''?
Table 17 of Workers' Compensation: Benefits, Coverage, and Costs,
2008, published by the National Academy of Social Insurance in
September 2010, has information on the number of Social Security
Disability Insurance beneficiaries who have some connection with
workers' compensation (or public disability benefit) programs. The data
indicate, for example, that as of December 2009, there were 57,807 SSDI
cases with a current connection to workers' compensation programs
involving the reverse offset provision. The National Academy does not,
however, have information on the annual cost to the SSDI from the
``reverse offset.'' The Office of the Actuary at the Social Security
Administration should be able to provide this information.
______
Mr. Uehlein's Responses to Questions Submitted by Mrs. McMorris Rodgers
1. Mr. Uehlein, you touched on this briefly in your testimony, and
that is the issue with respect to the AMA Guides being used to make
determinations on an individual's wage-earning capacity. Could you
elaborate on the role of the AMA Guides as they relate to the amount of
benefits paid?
In workers compensation disability entitlement systems, workers are
paid temporary benefits during periods of disability necessary for
restoration of their functional capacity to return to the workplace.
Upon reaching maximum medical improvement, they may have residual
functional loss (impairment) and they may have residual loss of earning
capacity (disability).
Benefits are paid either for the impairment alone, usually called
``scheduled losses'' or, more commonly, for the disability.
The theory behind the payment of these benefits is what Chairwoman
Woolsey describes as the ``grand bargain'' by which employees surrender
their right to sue employers in tort in exchange for their rights to
workers' compensation.
Workers' compensation is primarily designed to put a financial
safety net under injured workers while they restore themselves to
health and the work place
It is also used as a financial hammer to encourage employer safety
to reduce injuries.
When the employee is unable to recover fully from injury,
legislatures have had great difficulty in determining how much
employers should have to pay as part of the ``grand bargain'' to avoid
the possibility of tort suits. That issue remains for the purview of
legislators.
However, in designing entitlement programs for payments for
permanent disabilities, legislators have generally agreed that a
process should be adopted that supports the goal of keeping such
systems ``simple and summary'' with as little friction cost as possible
and a process that at least begins with an analysis of the injured
employee's functionality (impairment) at maximum medical improvement.
This analysis should be fair and apply equally to all injured workers.
The role of the AMA Guides has been to assist in accomplishing this
task of keeping medical analysis of impairment fair, and as simple as
possible, having in mind that the issues of injury and disease are
extremely complex.
It provides to the users, and ultimately to the judges who make
final determinations, a consistent scale expressed as a percentage from
0 to 100% to rate the loss of functionality. It reduces subjectivity
that creates inequality and unfairness and it promotes objectivity.
Thus, the AMA Guides complete the physician's role in the
entitlement system in determining relative functionality (impairment)
so that a benefit can be paid as determined by the legislature.
2. Mr. Uehlein, in your written statement you noted the Guides are
updated every five or so years by the medical profession. When there
are criticisms of the Guides, and I understand there were some when the
Fifth Edition of the Guides was released, are those criticisms
addressed--or taken under consideration--as the next edition of the
Guides is being prepared? Could you talk about what that process
entails?
This is a question that is best answered by those who have been
directly involved in the process, so I refer your to their testimony
and my answer directly borrows from comments and testimony of the AMA
and Dr. Christopher Brigham. The Guides are an evolutionary document,
building on constructive criticism to obtain their goals of
representing the best medical science, ease of use, consistency and
inter and intra-rater reliability. Each of the six editions has taken
such criticism into account and worked to develop a better set of
Guidelines. I am aware of no equal to the effort managed by the AMA to
accomplish this with any other set of Guidelines in the world.
For instance, in addressing the 6th Edition, over 500 state, county
and specialty societies, along with other stakeholders, were invited to
nominate an author, reviewer or contributor to the process. Over 200
individuals were called upon in these various roles and/or to be a
member of the Editorial Panel or Advisory Committee. These impairment
professionals represented various stakeholders in the impairment
process. The editorial process used an evidence-based foundation when
possible, primarily as the basis for determining diagnostic criteria,
and a Delphi panel approach to consensus building regarding the
impairment ratings themselves. When there was no compelling rationale
to alter impairment ratings from what they had been previously, ratings
provided in prior editions were the defaults.
Criticism and the search for improvement in the Guides are
positive. A process exists by which such criticism is received,
analyzed and taken into consideration for each new version of the
Guides, and when significant, addressed between publications by the AMA
Guides Newsletter.
3. Mr. Uehlein, what are the alternatives to using the AMA Guides
for impairment ratings?
There are three alternatives to using the AMA Guides for impairment
rating.
The first alternative is to have no guide for physicians to use in
addressing medical functionality (impairment). The physician is
expected to describe medical functionality in terms he chooses based on
his individual learning and experience. A judge or insurer would then
assess this clinical evaluation and consider the relative weight he or
she wishes to place on it in making a decision offering or awarding a
benefit for permanency.
Significant problems are apparent with respect to this choice as it
leads to massive disparities in descriptions of functionality with
respect to the same injury and with respect to injuries to varying body
parts. It also relies on judges, not trained in medicine, to interpret
the doctor's opinion and translate it into a benefit. Again, this will
inevitably lead to conflict, cost and disparity, and places an unfair
burden on judges. It reduces the likelihood of benefits being
determined and paid quickly to injured employees.
The second alternative is to develop a different guide. States such
as Florida, Arizona and New York have done this. The problem with this
approach is that it is grounded in a belief that a different set of
``experts'' can come up with a better set of guidelines.
Without going into detail, I question whether a small subset of
state physicians, lawyers or administrators are likely to be able to
arrive at a set of guidelines as objective, grounded in consensus of
the best medicine, and free of politics as the AMA has in utilizing
over 200 physicians and other experts in arriving at its Guides.
Certainly, a state-created guide process is an alternative. But, in
layman's terms, it is reinventing the wheel, and one that is not
entirely round.
Finally, another national organization could step up to provide a
set of guidelines. Without clear evidence as to why such an
organization would create a better process, I can see no reason to
substitute for the process managed by the premier organization of
physicians in the United States.
There are those who would advocate for a comprehensive set of
guidelines that combine a guide to assessment of medical functionality
(impairment) with a guide to assessment of loss of earning capacity
(disability). In essence, such suggestions seek to use science and data
to substitute for the judgment of judges as to a person's loss of
earning capacity. While building on the model created in California to
address such an issue may be beneficial, it will not replace the need
for AMA-type guidelines for physicians.
4. Mr. Uehlein, could you explain why it is so important to have
consistency and uniformity throughout the process of assessing
impairment?
It is essential to have consistency and uniformity throughout the
process of assessing impairment because our democratic principles
demand equality and fairness of treatment. This applies to injured
workers no less than any other person within our court systems.
Why should a person with a herniated cervical disc that has
resulted in residual functional loss be treated one way by one judge or
insurer and, if he is with another judge or insurer, be treated another
way?
Why should the subjective view of one physician, conservative or
liberal, be able to influence the benefits of an injured worker?
Why should one physician's opinion on impairment with respect to a
specific condition be allowed to result in a higher or lower award for
his patient than another physician looking at another patient with the
very same condition?
______
[Additional submissions of Mrs. McMorris Rodgers follow:]
Prepared Statement of Gregory Krohm, Executive Director,
International Association of Industrial Accident Boards and Commissions
The following testimony is submitted to the Members of the
Subcommittee on Workforce Protections of the Committee on Education and
Labor in response to the hearing held on November 17, 2010. My name is
Gregory Krohm and I have served as the Executive Director of the
International Association of Industrial Accident Boards and Commissions
for the last ten years. From 1992-1998, I served as the Division
Administrator of the Wisconsin Division of Workers' Compensation and
prior to that I served in various capacities at the Wisconsin
Department of Insurance.
I am submitting these comments as my personal opinion. They are not
an official statement of the International Association of Industrial
Accident Boards and Commissions, any of its members or its Executive
Committee. I am not expressing any opposition to the notion of federal
study and review of state workers' compensation, nor consideration of
reforms. In particular, I am sympathetic to the testimony presented on
November 17, 2010 regarding the deficiencies of permanent injury
impairment rating and the need for a better set of guidelines.
Founded in 1914, the IAIABC is an association of government
agencies that administer and regulate their jurisdiction's workers'
compensation acts. Since its inception the IAIABC has worked to improve
and clarify laws, identify model laws and procedures, develop and
implement standards, and provide education and information-sharing.
As Chairwoman Woolsey mentioned in her opening statement, workers'
compensation in the United States is administered and regulated at the
state level. While this system has resulted in differences across state
lines, the various agencies do not operate in a vacuum. Organizations
like the IAIABC regularly bring together policy-makers and
administrators to discuss shared concerns and work toward
harmonization.
The mechanisms to regulate and deliver workers' compensations by
the states have had a dynamic history over the last 100 years. Since
the passage of the first constitutional workers' compensation act in
1911, public policy has undergone many changes to respond to shifting
societal attitudes toward employment, safety, return to work, medical
treatment and more.
Workers' compensation today covers a much broader segment of the
workforce, more causes of injury, and offers a wider array of benefits
than the founders could ever have imagined in the original state
systems. For example, occupational disease was seldom covered,
vocational and rehabilitation benefits did not exist, and medical care
was basic and limited. As the nature of injuries shifted and social
attitudes changed, the scope of benefits and coverage has generally
expanded.
While workers' compensation was founded as the ``great compromise''
between labor and management, determining equitable terms for both
parties has required refinement and continued collaboration. It is
important to understand that the standard for what is compensable under
workers compensation has been in continuous development, mostly
expanding but sometimes limiting the nature of rights and benefits.
Negotiating the appropriate balance between benefits and costs for
employees and employers is under the purview of each state's
legislature. In addition, many states have formal mechanisms that
require labor and management to work together to refine administrative
and regulatory systems. Whether through labor-management advisory
boards or labor and management representatives on agency commissions
many states promote system changes that balance the needs of labor and
management.
After reviewing the testimony submitted by Dr. John Burton, I
concur that workers' compensation systems have undergone cycles of
legislative changes. One of the most active periods for change came
following the 1972 National Commission Report which reported
significant system inequities across the United States. States
responded by making significant changes in benefit levels and the
percentage of the workforce covered in an attempt to meet guidelines
suggested by the commission.
As Dr. Burton correctly notes, another period of major change began
in the 1990's when workers' compensation was under considerable strain
as benefit payments began to grow rapidly relative to collected
premiums. These market conditions caused employer premiums to increase
rapidly. At the same time it increased the number of insurance company
insolvencies and withdrawals from the workers' compensation market.
Pressured by employers due to rising costs of workers' compensation,
state legislatures once again went through a period of adjustment in
order to rebalance benefits to injured workers and costs to employers.
As Burton notes, the clear thrust of most of these changes was to limit
claims and the cost of benefits. Whether or not this was the only, or
best, way to fix the challenges in the workers' compensation insurance
system is open to debate, but the changes indisputably restored the
private insurance mechanism to a fiscally healthy condition and
instituted a period of decline in employer costs of workers'
compensation.
The opening statement to the subcommittee hearing and testimony of
Dr. Burton offered as a statement of fact that state law changes in
recent years have eroded access to workers' compensation benefits by
injured workers. The principle point of my testimony is to offer an
alternative representation of these law trends. My review of statutory
changes from 2000-2010 shows that laws have not appreciably restricted
access to benefits for those totally disabled by work injuries.\1\ My
findings indicate:
---------------------------------------------------------------------------
\1\ My review consisted of analysis using the following
publications, IAIABC/WCRI Inventory of State Laws (2007-2010); Summary
of Workers' Compensation Laws published in the Monthly Labor Review
each January 2000 through 2004 by Glenn Whittington; Legislative
Analysis Reports prepared by Todd Brown of EK Health; and various state
legislative summaries prepared by state workers' compensation agencies.
---------------------------------------------------------------------------
The benefit formula, limits, and length of ``Permanent
Total'' injury benefits are very seldom mentioned in any law changes.
Annually, most states increase the maximum weekly benefit
because they are tied by statute to some fraction of the State Average
Weekly Wage
The few states that have explicitly mentioned the formula
or limits of Permanent Total Injury benefits have produced a mixed
change in benefit levels. For example, Florida reduced the length of PT
benefits in 2003 and Montana increased the maximum weekly benefit in
2009.
State workers' compensation system are under relentless review and
fine tuning by state legislatures. According to an analysis of EK
Health, in 2009 there were over 161 separate bills enacted to change
state workers compensation law; from January through July 2010 there
were over 90 bills enacted into law. While most of the successful law
changes are narrow in focus, some are multi-facetted reforms that
modify coverage or benefits in many different ways. Very rarely are the
sweeping reforms completely one sided, i.e., totally favoring labor or
employers. To win legislative approval most reform packages must
contain some degree of compromise and balance. Good examples of this
were the sweeping reforms passed in Florida in 2003 and California in
2002-03. Each of those state reforms contained a wide mix of changes
which sometimes improved the position of the claimant, sometimes
reduced benefits and claimant rights, and modified a host of things
with system administration.
Over the time studied, I found a few states modified the criteria
for a compensable claim. These changes did reduce the number of claims
in those states. But in my opinion these isolated law changes produced
only a very small change in the overall volume of workers' compensation
claims in the country as a whole. Put in perspective, these
restrictions should be considered along with many law changes that
expand claimant rights and penalize employers/insurers for unreasonable
claims handling.
In conclusion, the scope of coverage and claims handling practices
in workers' compensation has been under continual scrutiny by state
legislatures. Law changes and court decisions have substantially
changed the benefits and rights over the entire history of the system.
My study of law changes indicates that restrictions in benefits by
states are largely an exception in the past 10 years and tend to have a
very narrow focus. Recent trends in law have largely, though not
entirely, helped to expand and balance the benefits paid to injured
workers.
______
Prepared Statement of Douglas J. Holmes, President,
UWC-Strategic Services on Unemployment & Workers' Compensation
Chairman Woolsey, Ranking member McMorris Rogers, and members of
the Subcommittee on Workforce Protections, thank you for the
opportunity to submit comments with respect to Developments in State
Workers' Compensation Systems.
I am Douglas J. Holmes, President of UWC--Strategic Services on
Unemployment & Workers' Compensation (UWC), a national membership
organization dedicated to research and policy development on behalf of
business in the areas of unemployment and workers' compensation. UWC
tracks developments in state and federal workers' compensation law,
provides comparisons of state and federal workers' compensation laws
and analyzes and researches the primary features of state and federal
workers' compensation law, policy and administration. I am a member of
the National Academy of Social Insurance and serve on its Workers'
Compensation Data Study Panel.
UWC's National Foundation for Unemployment Compensation and
Workers' Foundation publishes an annual update of changes in state
workers' compensation laws and a fiscal data bulletin comparing the
costs associated with state workers' compensation laws.
The following comments are submitted to add to the record of the
hearing held on November 17th, with a particular focus on the issues
that were the primary subjects of testimony during the hearing; 1) the
use of the 6th edition of the Guides published by the American Medical
Association to evaluate the medical impairment of individuals, and 2)
the relationship between trends in state workers' compensation and
Social Security Disability Insurance (SSDI).
AMA guides
In December 2007 the American Medical Association published the 6th
Edition of the AMA Guides to Evaluation of Permanent Impairment. The
AMA Guides6th Edition is one of several editions that form the basis
for impairment rating in most workers' compensation systems. Depending
on the jurisdiction, the 3rd Edition revised, 4th Edition, 5th Edition,
and now the 6th Edition may be required or permitted in whole or in
part.
The determination of whether to use the AMA Guides, which edition
to be used, and any deviations specific to the law in a particular
state have developed in recent years with the experience, case law and
statutes unique to each state.
The most recent 6th edition of the AMA Guides receives the support
of the majority of physicians who have been trained in the appropriate
use of this edition. As might be expected, there are differences in the
most recent edition in comparison to previous editions and the
practices in each state. The learning curve among physicians is a
factor to be addressed in each state in determining which edition to be
used.
The AMA 6th edition is one choice available to states in setting a
foundation for ascertaining permanent impairment, and seeks to use
impairment as an objective basis for the determination of permanent
disability and payment of permanent disability benefits. One of the
uses of the Guides is to help determine monetary awards to individuals
injured at work.
A comparison of the various editions of the AMA Guides discloses a
range of differences in impairment ratings. Although these impairment
ratings do not by themselves determine the percent of partial
disability, they form the basis for the evaluation of disability and
therefore become controversial to the extent that the resulting
disability is greater or lesser and therefore generates a lesser or
greater workers' compensation monetary award.
The workers' compensation system should strive for the most
accurate determination of medical impairment and properly apply this
information to the determination of disability of an injured worker
under the applicable law.
Studies of the AMA Guides are best performed by medical doctors who
are expert in determining medial impairment. As methodology used in
determinations of medical impairment improves, the information upon
which determinations of disability should become more accurate, but
judgment on the part of elected officials and adjudicators will still
be required with respect to the appropriate application of impairment
in the ultimate determination of disability.
Such determinations as a matter of state law should be left to the
state workers' compensation system.
Workers' compensation and Social Security Disability Insurance
The State Workers' Compensation system is a mature social insurance
system, with initial state workers' compensation programs enacted in
1911. Coverage of the workforce under the state system has increased
over the years to the point now that only 3 percent of all employees
who worked for employers who participated in the Bureau of Labor
Statistics National Compensation Survey (NCS) were employed in
establishments that reported zero workers' compensation costs.
The determination of awards for medical care and cash benefits for
lost work time is made in each state as the workers' compensation state
statutes, case law and practice have evolved over a period of decades.
The terms of benefit eligibility, medical costs, indemnity, strategies
to assist injured workers in returning to work, costs of the system and
insurance premiums are set on a state by state basis with the
recognition of exclusive remedy protections for employers and insurers
in exchange for a system under which individuals are assured coverage
and compensability if their illness or injuries are in the course of
employment.
It was not until the Social Security Amendments of 1965 that Social
Security Disability Insurance (SSDI) benefits were required to be
offset so that the combined totals of workers' compensation and social
security disability benefits did not exceed 80 percent of the workers'
prior earnings.
This offset provision enacted as a savings measure for SSDI was
overlaid on top of the already mature workers' compensation system in
which some states had adopted provisions under which social security
benefits were to be deducted in whole or in part from workers'
compensation benefits.
In both ``offset'' provisions there was also the recognition as a
matter of policy that individuals should not receive more in income
when disabled than when employed in their previous employment.
It strains credulity to conclude that a federal program, SSDI,
which was enacted in part as a federal overlay of the state workers'
compensation system would be said to be suffering from cost shifting
from the state workers' compensation programs. Fifteen states currently
have ``reverse'' offset laws, including Colorado, Florida, Hawaii,
Illinois, Louisiana, Minnesota, Montana, Nevada, New Jersey, New York,
North Dakota, Ohio, Oregon, Washington, and Wisconsin.
Disregarding the offsets in place in these states for decades in
determining SSDI benefit amounts would shift costs from Social Security
to employers and insurers doing business in these states and disrupt
balances in state WC costs and benefits in each of these states. The
result of such a shift would not only be to increase the costs of
workers' compensation, discouraging employers from hiring, but also
result in state legislative measures to reduce benefits in other ways
to assure the solvency of workers' compensation plans and funds.
A more appropriate analysis should review the increases in SSDI
benefit eligibility, increased costs, and the aging workforce as the
primary drivers of program insolvency to be addressed.
As of December 2009, only 7.9 percent of SSDI beneficiaries had a
connection to workers' compensation or public sector disability
programs. The percent specific to state workers' compensation is less
than 7.9 percent and the percent with reverse offset provisions is an
even smaller percentage.
As noted in the testimony of John Burton before the subcommittee,
citing recent as yet unpublished results of a study by Mr. Burton and
Professor Guo, ``the aging population was the largest contributor of
the growth in SSDI applications during the period we examined (1981-
1999), and can explain more than half the growth in SSDI rolls in the
1990s.'' Mr. Burton also notes that ``The share of female employment is
another factor, which was associated with almost 18 percent of the
change of SSDI applications between the 1980s and 1990s.'' Finally, Mr.
Burton suggests, based on unpublished results of a study of data from
1981 to 1999, that ``the reduction in the amounts of workers''
compensation permanent disability benefits and tightening of
eligibility rules for workers' compensation permanent disability
benefits during the 1990s accounted for about 3 to 4 percent of the
growth of SSDI applications during the decade.
This conclusion that a very small part of the growth in SSDI
applications during a period 20 to 40 years ago is associated in some
way with state workers' compensation is hardly compelling evidence of a
need to rush to federal legislative action. In fact, it is just as
likely that the relationship between SSDI applications and the state WC
system is reversed and that reductions in WC applications during this
period were caused in part by federal policies increasing the
availability of SSDI.
Professor Burton notes that in an unpublished article by McInerney
and Simon (2010) of the determinants of SSDI applications concluded
that it was unlikely that state workers' compensation changes were a
meaningful factor in explaining the rise in SSDI applications and SSDI
new cases during the period from 1986 to 2001.
Despite the paucity of data suggesting a need for new federal
legislation to address the relationship between the state WC system and
SSDI, Professor Burton backs into a series of conclusions consistent
with the underlying assumption that federal standards are needed for
the state WC system.
Any study of the state WC system and/or SSDI must address the costs
and premiums and the impact on employers and job creation. A series of
suggestions that eligibility should be expanded and/or benefit levels
should be increased, without evaluation of costs will result in benefit
pay-out and costs that are unsustainable. As we have seen with Medicare
and Social Security, the expansion of entitlement to respond to
political constituencies without addressing long term solvency creates
an unsustainable imbalance which results in an inequitable shift of
costs to future generations of claimants, taxpayers and businesses.
Instead of studying the impact of state WC systems on SSDI with the
suggestion that the state WC system should be federalized, the focus of
research should be on the array of state WC system reforms that have
improved the sustainability of the state WC systems and facilitated the
rehabilitation and return to work of workers who became ill or were
injured while on the job.
We appreciate the opportunity to submit a statement for the record
and would be pleased to provide further comments from employers and
insurers with hands on experience in the review of policy options by
the Governmental Accountability Office (GAO) or research conducted by
the National Institute for Occupational Safety and Health (NIOSH) and
the National Institute of Medicine.
______
[Additional submission of Mr. Godfrey follows:]
2008 Iowa AMA Guides Task Force Process Report
Iowa Workers' Compensation Commissioner Christopher Godfrey
convened a task force regarding the American Medical Association (AMA)
Guides to the Evaluation of Permanent Impairment, Sixth Edition, in May
2008.
Members
The task force was comprised of eight voting members intended to
represent a broad spectrum of the Iowa workers' compensation community.
Members were: Donna Bahls, M.D., a physical medicine and rehabilitation
specialist; Matthew D. Dake, attorney-at-law who generally represents
employees in workers' compensation matters; Teresa Hillary,
administrative law judge and former deputy workers' compensation
commissioner; John Kuhnlein, D.O., an occupational medicine specialist;
Marlin Mormann, administrative law judge and former deputy workers'
compensation commissioner; R. Saffin Parrish-Sams, attorney-at-law who
generally represents employees in workers' compensation matters; Sara
J. Sersland, attorney-at-law who generally represents employers and
insurance carriers in workers' compensation matters; and Peter J.
Thill, attorney-at-law who generally represents employers and insurance
carriers in workers' compensation matters. Helenjean M. Walleser,
deputy workers' compensation commissioner, served as task force
moderator and was not a voting member.
Task force objectives
A May 8, 2008, letter of invitation from the Commissioner to
potential members set forth the task force objectives, namely:
a. Review the AMA Guides To the Evaluation of Permanent Impairment,
Sixth Edition.
b. Overview methodology for determining permanent impairment in the
Sixth Edition.
c. Determine if impairment assignments under the Sixth Edition
differ substantially from impairment assignments under previous
editions of the Guides or from other impairment rating sources.
Task force assignments
That letter also outlined the task force assignments, namely:
1. Analyze the Sixth Edition's impairment rating methodology.
a. Compare and contrast it with earlier editions and other rating
guides.
b. Identify the Sixth Edition methodology's advantages and
disadvantages.
a. Identify and document potential problems and areas of concern
within the Sixth Edition.
2. Address errors within the Sixth Edition.
3. Analyze the significance of using the Sixth Edition within the
Iowa workers' compensation system.
a. Compare impairment ratings for like conditions under the Fifth
and Sixth Editions.
b. Analyze the impact of ratings differences between the Fifth and
Sixth Edition on voluntary benefit payments.
4. Make recommendations concerning the use of impairment rating
guides in the Iowa system.
a. Should Iowa adopt the Sixth Edition of the Guides?
b. Should Iowa adopt some individual chapters of the Sixth Edition?
c. Should Iowa adopt another existing impairment guide?
d. Should Iowa develop its own impairment guide?
i. What would this entail?
ii. How long would it take?
5. Other considerations regarding the use of impairment ratings.
The letter of invitation and assignment is Exhibit A in the addenda
to this process report.
The task force met on June 26 and June 27, 2008, July 30 and July
31, 2008, and August 26, 2008. All members were present at each task
force meeting.
Task force proceedings on June 26 and June 27, 2008, centered on
reviewing and contrasting the Fifth and Sixth Editions of the Guides
and addressed task force work assignments 1, 2, and 3.
Philosophy and rationale--ICF model
Chapter 1 in both the Fifth and Sixth Edition of the Guides sets
forth the philosophy and conceptual rationale that underlies each
edition. The rationale of the World Health Organization's ``1980
International Classification of Impairments, Disabilities and
Handicaps'' undergirds the Fifth Edition's philosophy. Under that
system, the progression from impairment to disability and/or handicap
is viewed as linear. Disability, the inability to perform certain
activities or roles, directly proceeds from impairment, the loss, loss
of use, or derangement of a body part, organ system or organ function
that results from an identified pathology.
The Sixth Edition replaces the 1980 model with the World Health
Organization's more recently adopted model of disablement: ``the
International Classification of Functioning, Disability, and Health''
(ICF). Adaption of its terminology and conceptual framework of
disablement is the first axiom of the ``paradigm shift'' the Sixth
Edition entails. The ICF model has three components, 1) body function
and structures, 2) activity, and 3) participation. Adaption of the ICF
terminology and conceptual framework of disablement is the first axiom
of the Guides, Sixth Edition.
Per ROBERT D. RONDINELLI, M.D., Medical Editor of the Sixth
Edition, who spoke with the task force on June 27, 2008, adaption of
the ICF model, is consistent with current international understanding
of disablement. Adaption of the model also should facilitate funding of
research concerning the Guides' use, and methodology. Major grant
providers, such as the Institutes of Health, have not supported
research proposals using the Fifth Edition of the Guides because many
grant funders view the 1980 classification system as outdated.
Within the Sixth Edition and consistent with the ICF model,
impairments are losses, deviations or variations from normal health of
body functions and body structures. Additionally, the Sixth Edition
requires that such losses be significant before they are considered
impairing. Activities are tasks that individuals carry out; activity
limitations are difficulties experienced in performing tasks.
Participation is defined as involvement in life situations;
participation restrictions are barriers to involvement.
The ICF model is an attempt to recognize that impairment does not
lead directly to disability and that the relationship between having a
health condition and becoming disabled is dynamic, with environmental
and personal factors as well as activity limitations and participation
restrictions impacting on overall human functioning and disability.
Impairment rating is defined as a consensus derived percentage estimate
of the loss of activity that reflects the severity of a given health
condition and the degree of associated limitations in activities of
daily living.
Table 1--1 sets forth activities of daily living. These are basic
self-care activities that individuals perform. Included among them are
bathing, showering, dressing, eating, functional mobility as well as
personal hygiene, toilet hygiene and management, sleep, and sexual
activity. Task force members recognized that most individuals alleging
work injuries are largely independent in activities of daily living,
even when their health condition produces a functional disability or
measurable loss of earning capacity. For that reason, a medical
impairment rating may not well reflect the actual functional disability
from a scheduled member loss and is only one of multiple factors that
is legally appropriate to consider in determining actual loss of
earning capacity under Iowa Code section 85.34 (2) (u).
Additionally, consensus derived estimates may well be influenced by
the composition of the consensus group. Therefore, knowledge of that
composition is important. Dr. Rondinelli stated that that the consensus
group members for each ratings chapter within the Sixth Edition
consisted of physicians who both were members of the national group for
that medical specialty and were interested enough in the development of
an impairment rating process to volunteer their time and efforts. In
order to address this concern, the task force asked the American
Medical Association (AMA) to specify the contributing editors and
chapter contributors to the Sixth Edition. The AMA did not do so.
Instead, it directed the task force to pages vi-vii of the Sixth
Edition, which set forth participants in the Sixth Edition development
process but do not specify the precise role or level of involvement of
each participant.
Other important sixth edition axioms
Chapter 1 of the Sixth Edition sets forth four additional axioms
that provided direction and set priorities in developing that edition's
new paradigm: 2) The Guides should be diagnostic based and diagnoses
should be evidence-based. [In contrast, the Fifth Edition and earlier
editions of the Guides largely were anatomically-based and assigned
impairment based on losses of motion or strength or other physical
capacity.] 3) The Guides should be easy to use and, where applicable,
should follow precedent in order to optimize rating reliability within
and among persons evaluating impairment under the Guides. 4) To the
fullest extent possible, rating percentages are to be functionally
based. 5) The Guides should utilize congruent concepts and methodology
within organ systems and between different organ systems. The axioms
are intended to address perceived problems and stated criticisms of the
Fifth and earlier editions of the Guides; namely, the Guides were not
comprehensive, reliable or evidence-based and ratings under the Guides
did not accurately or adequately reflect loss of function.
Concerns were expressed within the task force that inclusion of a
functional loss factor in assessing impairment inserts the concept of
disability into impairment ratings and raises the possibility that
deputies in litigated claims may give greater weight to impairment
ratings and lesser weight to other evidence relevant to assessment of
disability.
Impairment rating methodology
Chapter 1 of the Sixth Edition also sets forth the impairment
rating methodology that the edition uses in all chapters but for
Chapter 13, the ``Central and Peripheral Nervous System'', which
continues to use the Fifth Edition rating methodology. The rating
methodology that the Sixth Edition generally uses is derived from the
ICF model. That model created a that the Sixth Edition generally uses
is derived from the ICF model. That model created a that the Sixth
Edition generally uses is derived from the ICF model. That model
created a that the Sixth Edition generally uses is derived from the ICF
model. That model created a that the Sixth Edition generally uses is
derived from the ICF model. That model created a that the Sixth Edition
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the ICF model. That model created a that the Sixth Edition generally
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uses is derived from the ICF model. That model created a that the Sixth
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created a that the Sixth Edition generally uses is derived from the ICF
model. That model created a functionally based taxonomy that links the
level of clinical severity of specific health conditions, as measured
on a zero to five scale, with percentage of function lost. Table 1-3
sets forth the taxonomy of functional levels: individuals with no or
negligible problems as a result of their health conditions are coded at
0; individuals with slight or low problems are coded at 1 mild;
individuals with medium functioning at 2 moderate; individuals with a
high degree of problems with their function at 3 severe; and
individuals whose problems with function as a result of their condition
is total as Table 1-4 sets forth five generic 4 complete.
Table 1-4 sets forth five generic functional impairment classes
also ranging from zero through four. Individuals with health conditions
that produce no symptoms with strenuous activity are assigned to
functional impairment class 0. Individuals who have symptoms with
strenuous activity but do not have symptoms with normal activity are
assigned to functional impairment class 1; those with symptoms with
normal activity to class 2; persons with symptoms with minimal activity
to class 3 and persons with symptoms at rest to class 4. Persons in
classes 0 through 2 are considered functionally independent whereas
persons in class 3 are considered partially functionally dependent, and
persons in class 4 are considered totally dependent. Persons in classes
1 through 3 may well be within the workers' compensation system because
they have compensable work related disability even though they are
functionally independent or only partially dependent. Again, a task
force CONCERN was that the concept of medical ratable impairment not be
confused with or substituted for the concept of legally compensable
disability.
Diagnostic impairment class
An evaluator is to consider an individual's clinical presentation,
physical findings, objective testing, and associated functional losses
when assigning the diagnostic impairment class (DIC). Proposed
functional assessment tools for the various organ systems are set forth
in the rating chapters. The Sixth Edition acknowledges that ``no well-
accepted, cross-validated outcomes scales exist ``for the
musculoskeletal organ system. Self-reporting functional assessment
tools are recommended for the spine, upper extremities and lower
extremities. They are the Pain Disability Questionnaire (PDQ), the
Disability to the Arm, Shoulder and Hand (DASH), and the Lower Limb
Outcomes Questionnaire, respectively. In the Sixth Edition methodology,
evaluators may use reliable results from these tools ``to adjust the
impairment percentage to reflect different functional outcomes.''
Unfortunately, no data exists demonstrating that these tools are
culturally sensitive. A task force concern was that self-reports
received from members of various ethnic groups might well be skewed in
a matter that reflected the particular groups' approach to functioning
with pain or other limitations.
Each diagnosis within an organ system is to be placed within one of
the five 0 through 4 classes. An impairment percentage range has been
assigned to each impairment class. The four criteria of clinical
presentation, physical findings, clinical studies or objective tests,
and functional history or assessment, all are to be considered in
determining the impairment class. However, the Sixth Edition designates
one of these four criteria as the ``key factor'', which is the
``primary determinant of impairment'' [class] for each diagnosis the
Sixth Edition rates.
Impairment grades/adjustment factors
Each impairment class has five impairment grades within it,
designated as A through E. A is the lowest impairment grade assignable
within an impairment class; E the highest. C is the default assignment.
``After the key factor has led to a preliminary impairment rating, it
will be adjusted based on the results from rating the other impairment
criteria (non-key factors) (adjustment factors).'' (Sixth Edition at
page 12)
If the evaluator judges the other criteria as in the same class as
the key factor, the final rating generally will stay at that class and
grade. On the other hand, if other criteria--adjustment factors--are
either numerically higher or lower than the key factor, the impairment
grade within the assigned impairment class may change. The impairment
class, itself, will not change, as it was determined by the key factor,
however. The initial assumption is that the individual being evaluated
is in the C impairment grade for the class, which is scored as 2. The
ultimate impairment grade within an assigned diagnostic impairment
class is achieved mathematically. The 0 through 4 score for each of the
three non-key/adjustment factors individually is subtracted from the
numerical score, again 0 through 4, for the diagnostic impairment
class. The resulting numerals are then added to determine whether any
net adjustment in the impairment class grade is appropriate.
As an example, the injured worker is assigned to diagnostic
impairment class 2 based on the designated key factor of physical
findings. At that point, the individual is placed in the C, moderate/2
or default grade within the impairment class. The three non-key factors
then are: the history of clinical presentation, the objective test
results and the functional history or assessment. The clinical
presentation is assessed at 3/severe, as the worker has constant
moderate symptoms despite continuous treatment. The objective test
results are assessed at 1/minimal, as over time testing has
demonstrated only intermittent mild abnormalities. The functional
assessment is 2/moderate, as the individual is symptomatic with normal
activities.
At that point, the arithmetic begins. The impairment class score of
2 is subtracted from the clinical presentation score of 3, with a
result of 1. Next, the impairment class score of 2 is subtracted from
the objective test assessment of 1, with the result of -1. Finally, the
impairment class score of 2 is subtracted from the functional
assessment of 2, with the result of 0. The three resulting numerals are
then added to achieve any 0. The three resulting numerals are then
added to achieve any 0. The three resulting numerals are then added to
achieve any net grade adjustment within the impairment class. In this
instance, 1 plus -1 plus 0 equals 0, which indicates that no grade
adjustment is appropriate. The worker's impairment rating would remain
that set forth by diagnostic impairment class 2, grade C impairment.
Suppose, in the above example, the clinical presentation had been
assessed at 1, intermittent, mild symptoms despite continuous
treatment, while the diagnostic impairment class remained 2 and the
objective test assessment and functional assessment adjustment factors
remained at 1 and 2, respectively. The clinical presentation adjustment
score obtained by subtracting 1 from class score 2 is -1. The addition
formula then is -1 plus -1 plus 0 or -2. As negative 2 is two grades
lower than the default grade C, the worker's impairment rating would
decrease to that appropriate for a diagnostic impairment class 2, grade
A impairment. Conversely, had the clinical presentation score remained
at 3 and the objective test assessment at 1, but the functional
assessment score been 3, the ultimate net adjustment would be 1. ([3 -2
] = 1 plus -1 plus 1 = 1). The grade within the class would move one
level above the default grade C to grade D. Hence, the worker's
impairment rating would increase to that appropriate for diagnostic
impairment class 2, grade D.
Simply put, a negative net adjustment score will decrease the
overall impairment rating given for the diagnostic class; a positive
net adjustment score will increase the overall impairment rating given
for the diagnostic class; and a net adjustment score of zero will keep
the individual in the middle range of potential impairment ratings for
that diagnostic class.
A number of the impairment rating examples in the Sixth Edition on
their face are inconsistent with the results to be obtained using this
methodology. Even if it is assumed that these are arithmetic and
editorial errors, which were corrected in the AMA's August 2008
Corrections and Clarifications to the Sixth Edition, a task force
concern is that evaluators and reviewers will not consistently use both
the Sixth Edition and the Corrections and Clarifications when assessing
impairment.
The complexity of the Sixth Edition methodology is a task force
concern. If only physicians who have had formal course training in the
Sixth Edition methodology can use it appropriately to assign
impairment, both the number of treating physicians and the number of
evaluating physicians willing to assess impairment may decrease.
Additionally, the overall costs of obtaining impairment ratings might
increase to reflect practitioner training cost.
On the other hand, a standardized impairment assessment methodology
across body organ systems theoretically qualifies practitioners who
have learned the methodology to assess impairment within multiple organ
systems. Dr. Rondinelli has conducted several training workshops for
use of the Sixth Edition methodology. He acknowledged that training
attendees initially voiced concerns regarding the Sixth Edition
methodology. Dr. Rondinelli also expressed his belief that, after
learning the Sixth Edition methodology, his training attendees
preferred the generic methodology of the Sixth Edition over the
multiple methodologies across and within body organ systems contained
in the Fifth and other earlier editions of the initially voiced
concerns regarding the Sixth Edition methodology. Dr. Rondinelli also
expressed his belief that, after learning the Sixth Edition
methodology, his training attendees preferred the generic methodology
of the Sixth Edition over the multiple methodologies across and within
body organ systems contained in the Fifth and other earlier editions of
the initially voiced concerns regarding the Sixth Edition methodology.
Dr. Rondinelli also expressed his belief that, after learning the Sixth
Edition methodology, his training attendees preferred the generic
methodology of the Sixth Edition over the multiple methodologies across
and within body organ systems contained in the Fifth and other earlier
editions of the Guides.
The concrete and consistent Sixth Edition methodology may decrease
the range of potential impairment ratings a worker receives from
different evaluators. That fact potentially could reduce overall
litigation and overall litigation costs. On the other hand, that
different medical practitioners often arrive at different diagnoses
when presented with similar clinical signs and symptoms is an expressed
task force concern. It was pointed out that inconsistent diagnoses are
very prevalent for musculoskeletal conditions, especially spinal
problems, as well as for mental and behavioral disorders. For that
reason, disputes over the appropriate clinical diagnosis for a worker
may increase with use of the Sixth Edition.
The weight given to the designated key factor in assessing the
impairment class for any given diagnoses was also a concern. The key
factor always determines the assigned class. This is the case even if
the key factor's numerical score substantially differs from the
numerical scores for all of the other three adjustment factors. For
example, if the key factor placed an individual in diagnostic
impairment class 2 default grade C, but each of the other three
adjustment factors was assessed at 4, very severe problem, the
numerical net adjustment score would be 6. [(4-2) = 2 plus (4-2) = 2
plus (4-2) = 2 = 6] The actual allowable adjustment could only move to
impairment class 2, grade E, however. The additional severity of the
non-key adjustment factors could not be used to justify moving the
individual into the higher diagnostic impairment classes of 3 or 4.
Conversely, an individual assessed in diagnostic impairment class 2,
default grade C with an overall net adjustment score of -6, that is,
scores of 0 on all three of non- key criteria, would only move to
impairment class 2, grade A. The diagnostic impairment class could not
be changed from 2 to 1. The inability to change the impairment class is
important, as the numeric ratings appropriate in each diagnostic class
is narrow.
Principles underlying six edition use
Chapter 2 of both the Fifth and the Sixth Edition is titled,
``Practical Application of the Guides''. Chapter 2, Paragraph 1 of The
Fifth Edition, simply states that the chapter describes how to use the
Fifth Edition to obtain, use and communicate reliable, consistent,
medical information. Paragraph 1 the Sixth Edition, chapter 2 makes
very explicit that any evaluator using the Sixth Edition should be
thoroughly familiar with its second chapter. The paragraph states:
``This chapter outlines the key concepts, principles and rationale
underlying application of the AMA Guides to impairment rating all human
organ systems.''
It originally also had contained the sentence:
``Anything in subsequent chapters interpreted as conflicting with
or modifying the content outlined [in Chapter 2] is preempted by the
rules contained in [Chapter 2]. By analogy, [Chapter 2] is the
``constitution'' of the Guides.''
This sentence was deleted in the August 2008 Corrections and
Clarifications to the AMA Guides, Sixth Edition, however. The question
arises then as to whether Chapter 2 validly can be utilized for
resolution of any perceived conflicts within or among the body system
chapters.
Table 2-1 at page 20 sets forth the 14 fundamental principles of
the Guides, Sixth Edition, with Principle 1 reiterating that Chapter 2
sets forth the fundamental rules of the Sixth Edition. Principles 2
through 5 prescribe the general rating formulae. Only permanent
impairment is ratable and only after an individual has achieved maximum
medical improvement. The chapter relevant to the bodily system where
the injury primarily arose or where the greatest residual dysfunction
remains is to be used for rating impairment. Impairment across all body
systems cannot exceed 100 percent whole person; overall impairment of a
member or organ cannot exceed its amputation value. Impairments in the
same organ system or member initially are combined at that level and
later are combined with impairments to other members or organ systems
at the body as a whole level.
Principle 6 as set forth in the August 2008 Corrections and
Clarifications states that impairment evaluation requires medical
knowledge and physicians should perform assessments within their
applicable scope of practice and field of expertise. Principle 6 had
provided that only licensed physicians were to perform impairment
ratings and that chiropractic physicians should rate in the spine only.
An early clarification to the Sixth Edition eliminated the restriction
on chiropractic rating. Chapter 2, section 2.3a states that non-
physician evaluators may analyze an impairment evaluation to determine
if was performed in accordance with the Guides. The task force
discussed whether permitting this was appropriate.
Principle 7 provides that an impairment evaluation report is valid
only if the report contains three elements: 1) a clinical evaluation,
relevant medical history and review of medical records; 2) analysis of
the findings as these relate to the concluded diagnosis/ses, the
achievement of maximum medical improvement and confirmed loss of
functional abilities; and 3) a thorough discussion of how the
impairment rating was calculated. That an evaluator's incorporation of
all the above elements into a report may increase the cost of obtaining
impairment ratings and reports is a task force CONCERN. That valid
reports would facilitate a reviewer's assessment of the accuracy of the
diagnoses and rating has merit, however.
Principles 8 and 9 require that evaluations be conducted by
accepted medical scientific community standards and that ratings be
based on objective criteria and established medical principles for the
pathology being rated.
Principles 8 through 11 and 13 apparently are intended to increase
the objectivity of impairment ratings developed under the Sixth
Edition. Nevertheless, objectivity is itself an elusive concept.
Patients' presenting complaints are generally self-described and
therefore subjective. Yet these are coupled with physical examination
findings and clinical tests results to assess and diagnose. Likewise,
patients' completed functional self-assessment tools represent their
subjective report of abilities and limitations. Yet, the Sixth Edition
prescribes the use of self-assessment tools, particularly so in the
musculoskeletal chapters. Furthermore, the task force was aware of no
current scientific rationale that undergirds medical consideration of
functional loss. In the workers' compensation arena, assessment of
functional loss and its impact generally has related more to the legal
concept of compensable disability and not to the medical concept of
physical impairment.
Principle 12 requires that an evaluator use the method producing
the higher rating when more than one rating method is available for a
particular condition. Finally, principle 14 requires that fractional
ratings be rounded up or down to the nearest whole number, unless
otherwise specified.
Issues related to the principles
The various sections of Chapter 2 further discuss issues related to
the 14 principles. Section2.3b states that the doctor's role in
performing an impairment evaluation is to provide an independent,
unbiased assessment of the individual's medical condition, including
its effect on function, and of limitations in the performance of ADLs.
The section further states that, while treating physicians may perform
impairment ratings on their own patients, such ratings may be subject
to greater scrutiny as they ``are not independent''. Task force members
are aware that the senior contributing editor to the Sixth Edition
operates a substantial private business that both performs impairment
evaluations and reviews ratings from other evaluators.
Section 2.4d expressly states that the impairment ratings for each
organ system include consideration of most of the functional losses
accompanying pain [related to the impairment rating class].
Section 2.5a contains a discussion of the differences between legal
and medical probability. Legal probability requires a more likely than
not or greater than 50% association between an event and an outcome to
establish a probable relationship. In contrast, science and medicine
require an association between a potential cause and an identified
effect that is greater than 95% before the relationship is recognized
as probable. The task force believes that the explicit statement of
these medical and legal differences is helpful.
Section 2.5b defines causality. It states that to opine that a
cause relates to an effect within a reasonable degree of medical
probability, it is necessary that the event occurred, that the
individual who experienced the event must have the possible condition,
that is, the effect which may relate to the event, and that medical
probability exists for the event to have caused or materially
contributed to the condition. If medical probability means a greater
than 95% relationship, this definition of causality differs from the
more likely than not legal probability standard in Iowa workers'
compensation law.
The terms, ``aggravation'', exacerbation'', ``recurrence'' and
``flare up'', expressly are defined in section 2.5b. An aggravation is
described as a permanent worsening of a pre-existing or underlying
condition, which results from a circumstance or event. It is
distinguished from an exacerbation, recurrence or flare up. Those three
terms are said to imply a temporary worsening of a pre-existing
condition that then returns to its baseline. Iowa workers' compensation
law makes no such distinction between exacerbation and aggravation;
each may be considered to result in a permanent, potentially
compensable, substantial change in a pre-existing condition.
Section 2.5c provides a methodology for medically allocating or
apportioning impairment between or among multiple factors. The final
rating for the condition being evaluated is arrived at by determining
total impairment and then subtracting the proportion of impairment,
which pre-existed the event that produced the overall current
condition, from the total impairment. This type of apportionment will
not always be appropriate under the Iowa workers' compensation law.
Pain related impairment
Chapter 3 of the Sixth Edition discusses potential pain related
impairment as does Chapter 18 of the Fifth Edition. The Sixth Edition
and the Fifth Edition each allow an evaluator to assess up to 3% whole
person impairment related to an examinee's reported pain. This is a
departure from the Fourth Edition and its predecessors, which did not
allow the assignment of impairment related to pain complaints.
Significant differences exist as to how the Fifth and Sixth Editions
approach pain, however.
First, the Fifth Edition allows an evaluator to provide an
impairment rating for pain as well as an impairment rating for
identified organ system dysfunction if the evaluator believes that the
organ system impairment rating does not adequately reflect the overall
impairment. The Sixth Edition permits an evaluator to separately assess
pain for impairment rating purposes only if the individual being
evaluated fits no other diagnostic impairment class. Under the Sixth
Edition, any rating expressly assigned for pain is a ``stand-alone''
rating that cannot exceed 3% whole person impairment.
On the other hand, the Fifth Edition apparently is more restrictive
as to the painful conditions that may be evaluated than is the Sixth
Edition. The Fifth Edition requires that an evaluator determine whether
pain related impairment is ratable or unratable. Under that edition, an
individual's symptoms and physical findings are ratable for impairment
purposes if these signs and symptoms typically are found with a known
medical diagnosis, which physicians widely accept as having a well-
defined pathophysiologic basis. The Sixth Edition permits pain related
impairment to be assessed if, among other things, ``the pain has a
reasonable medical basis, for example, can be described by generally
acknowledged medical syndromes.'' Sixth Edition, section 3.3d at page
40. That phrase suggests that ratings for pain related impairment may
be appropriate for myofascial or fibromyalgia syndromes, which do not
fit within any other diagnostic impairment class.
Mental and behavioral disorders
Chapter 14 of both the Fifth and Sixth Edition relates to mental
and behavioral disorders. The approaches to assessing mental and
behavioral impairment differ substantially within the Fifth and Sixth
Editions, however. Chapter 14 of the Fifth Edition focuses on the
process of performing mental and behavioral impairment assessment.
Instructions are given for assessing how the disorder impacts an
individual's abilities to perform activities of daily living. Numeric
impairment ratings are not given. Instead, persons with mental or
behavioral disorders are placed in one of five impairment classes,
which are assigned based on the ability of the individual to take part
in activities of daily living, social functioning, concentration and
adaptation. Class 1 represents no impairment of useful functioning;
class 3, moderate impairment, this is the ability to perform some but
not all useful functioning; class 5, extreme impairment, indicates that
the individual is precluded from all useful functioning.
The Fifth Edition apparently permits classification of functioning
of an individual diagnosed with any mental disorder described in The
Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition
(DSM-IV). In contrast, the Sixth Edition expressly states that it is
not its purpose to rate impairment in all persons who may fit a DSM-IV
diagnosis. Instead, the Sixth Edition allows ratings of only mood
disorders, anxiety disorders and psychotic disorders. Mood disorders
include major depressive disorder and bipolar affective disorder.
Anxiety disorders include generalized anxiety disorder, panic disorder,
phobias, posttraumatic stress disorder and obsessive-compulsive
disorder; psychotic disorders include schizophrenia.
Additionally, under the Sixth Edition, psychiatric impairment is to
be based on Axis I pathology only. Axis II pathologies, such as
personality disorders are considered pre-existing personality
vulnerabilities and are not to be rated. Borderline intellectual
functioning, which preexisted the event legally responsible for a
ratable condition, also is not to be rated. Additionally, the sixth
edition expressly states that the psychological distress associated
with any physical impairment is included within the rating for that
impairment; therefore, psychiatric reaction to pain is not to be rated.
Page 349 of the Sixth Edition lists other disorders that are not to be
rated.
Unlike the Fifth Edition, the Sixth Edition does provide numeric
impairment ratings for those mental and behavioral disorders it
considers ratable. Three scales that are intended to provide an
assessment of an individual's mental and behavioral disorder are
prescribed for use in the rating process. These are: the Brief
Psychiatric Rating Scale (BPRS), the Global Assessment of Functioning
Scale (GAF), and a modified version of the Psychiatric Impairment
Rating Scale (PIRS). Essentially, each of these assessment tools is
either taken by or administered to the individual being evaluated. Each
is then scored. The Sixth Edition assigns a numeric impairment score
for the summed score achieved on each instrument. The middle value
among the three impairment scores then is assigned as the mental and
behavioral disorder impairment rating.
The task force felt there may be some merit in attempting to
provide numeric impairment ratings for mental and behavioral disorders.
The task force sought input from a psychiatrist, James Gallagher, M.D.,
and a psychologist, John Brooke, Ph.D., each of whom has had experience
within workers' compensation, in order to gain these practitioners'
insights into both the feasibility of numerically rating impairment for
mental and behavioral disorders and into the ease-of-use and
appropriateness of use of the three assessment scales, across cultures
and ethnic groups.
Task force members expressed concerns that some long-standing
personality vulnerabilities, which may impact an individual's response
to an injury or be impacted by the injury itself, are considered
unratable.
Musculoskeletal chapters
The musculoskeletal chapters of the Fifth and Sixth Edition were
reviewed. Dr. Rondinelli expressly advised the task force that the
Sixth Edition editors had no intent to lower numeric impairment rating
for any organ system. Furthermore, where ratings must be consensus-
based because objective data is lacking, the Sixth Edition purports
generally to follow precedent from earlier editions of the Guides. The
Sixth Edition also attempts to normalize impairment ratings and
impairment assessment methodology across organ systems in order to
improve that edition's internal consistency. With or without intent,
changes in the numeric impairment ratings for a variety of
musculoskeletal conditions and ailments have resulted.
Impairment in the spine and pelvis
Chapter 15 of the Fifth Edition and Chapter 17 of the Sixth Edition
relate to assessment of impairment in the spine and pelvis. Under the
Fifth Edition, both the diagnostic related estimates (DRE) and the
range of motion method were available for rating spinal conditions. The
DRE method was considered the principle methodology to evaluate an
individual who had had a distinct injury. The range of motion method
was available for use in cases of recurrent disc herniation at the same
spinal level and in cases of multilevel involvement within the same
spinal region. The Sixth Edition permits final impairment to be
assessed only with the diagnosis based impairment method. Furthermore,
once the diagnostic impairment class has been established, selected
treatment for the condition and treatment outcomes are considered only
as potential modifiers of grade within the diagnostic class.
Generally speaking, cervical spine disc or motion segment
pathologies received higher impairment ratings in the Fifth Edition
than these receive in the Sixth Edition. The impairment rating for
lumbar region pathologies generally are increased from the Fifth
Edition.
Impairment in the upper extremities
Chapter 16 the Fifth Edition and Chapter 15 of the Sixth Edition
treat assessment of impairment in the upper extremities. Range of
motion tables are an assessment features in both editions. Both
editions discuss assessment of impairment with complex regional pain
syndrome. The Sixth Edition contains what appear to be extraneous
comments about that syndrome's prevalence in workers' compensation
settings.
Appendix 15b of the Sixth Edition sets forth criteria to be used in
interpreting electrodiagnostic testing for entrapment syndromes. The
task force had concerns, that as a result of these criteria, doctors
potentially would diagnose, treat and assign impairment ratings for
work related hand and arm conditions in a manner different from the
diagnosis and treatment of otherwise similar but non-work related
conditions.
Another task force concern was that the Sixth Edition's DRI
methodology unduly complicated the assessment process for relatively
simple upper extremity diagnoses.
Impairment in the lower extremities
Chapter 17 the Fifth Edition and Chapter 16 of the Sixth Edition
treat assessment of impairment in the lower extremities. Again, range
of motion is a widely used assessment factor in both editions. The need
to fit all upper extremity diagnoses into the Sixth Edition's DRI grid
likely increases the time and complexity impairment assessment under
it.
Sixth edition corrections and clarifications
The 52 page long August 2008 Corrections and Clarifications to the
Sixth Edition, available at www.ama-assn.org/ama1/pub/upload/mm/477/
guidesclarifications.pdf, were considered at the August 26, 2008 task
force proceeding. The majority of the corrections and clarifications
are to the musculoskeletal chapters. Reconciling the Corrections and
Clarifications with the original printing of the Sixth Edition is
difficult and time-consuming rather one does so by consulting the
Corrections and Clarifications on line, by consulting a print copy of
the Corrections and Clarifications placed at the front of the original
Sixth Edition text, or by cutting and pasting the Corrections and
Clarifications into the original text. This raises concerns as to
whether all users of the original printing would utilize the
Corrections and Clarifications. Given the significant extent of the
Corrections and Clarifications, that fact raises a concern as to the
reliability of any impairment rating achieved with use of the Sixth
Edition original printing.
Additionally, questions arise as to what legally constitutes the
Sixth Edition. Arguably, the Sixth Edition could be defined as the
original printing without more. On the other hand, it could also be
defined as the Sixth Edition original printing and the August 2008
Corrections and Clarifications, or even as the original printing and
any and all corrections and clarifications to the date of impairment
rating. An evaluator would need to explicitly state which assessment
tools that evaluator used to arrive at an impairment assessment
characterized as under the Sixth Edition. Potentially, a later
correction to the Sixth Edition could invalidate a previous impairment
assessment.
Dr. Rondinelli revisited with the task force on August 26, 2008. He
acknowledged that corrections and clarifications to the Sixth Edition
are likely to be ongoing. He agreed that perhaps circulation of a beta
draft of the Sixth Edition would have been appropriate. The publishing
deadlines to which the AMA had committed precluded doing so, however.
Medical practitioner presentations
On July 30 and 31, 2008, the task force devoted considerable time
to presentations by various medical practitioners.
ALAN COLLEDGE, M.D., medical director for the Utah Labor
Commission, Division of Industrial Accidents, discussed the development
and use of the Utah Supplemental 2006 Impairment Rating Guides. He
explained that the Supplemental Guides advise use of the Fifth Edition
of the AMA Guides in some circumstances, but provide an alternative
impairment rating for those organ systems, where the Utah Governor's
Workers' Compensation Advisory Council has opined that the impairment
assessments under the Fifth Edition are not appropriate or where of the
Fifth Edition does not assign impairment for the injurious condition.
Dr. Colledge stated that the Utah Supplemental Guides' intent is to
provide very objective rating criteria based on an anatomic loss while
simplifying the rating process for physicians. Dr. Colledge is
compensated for four hours work for the Division of Industrial
Accidents per week. He acknowledged that his work with the Supplemental
Guides requires considerable more time and effort than that for which
he is compensated. Additionally, other interested parties within the
Utah workers' compensation system volunteer their time and expertise to
the supplemental guide process. Utah is now developing 2009
supplemental guides that are intended to address mental injury.
The impairment rating is the only factor considered in compensating
permanent disability across all organ systems within the Utah workers'
compensation system. Compensation is not made for industrial
disability/loss of earning capacity except in cases of claimed
permanent total disability. Utah physicians receive training in using
the supplemental guides by way of a physician's handbook that the Utah
division of industrial accident publishes and by way of seminars that
the division sponsors. Additionally, Dr. Colledge presents at medical
professional seminars and personally consults with physicians.
Dr. Colledge was involved in the development AMA Guides, Sixth
Edition. He chose to disassociate from that process, however. He
expressed his belief that the Sixth Edition development process did not
include adequate input from the industrial accident community, even
though 80% of the overall use of the AMA Guides to Evaluation of
Permanent Impairment is within workers' compensation settings. He also
expressed concerns that the Sixth Edition methodology ``crossed the
bridge'' from assessing impairment into assessing disability. He
projected that, given the expertise and time required to properly
evaluate impairment under the Sixth Edition model, only a limited
number of physicians will be qualified to assess impairment under it, a
result that raises a significant concern in rural jurisdictions, such
as Iowa and Utah.
MARK MELHORN, M.D., spoke with the task force via telephone
conference. Dr. Melhorn is a board certified orthopedic surgeon, who
was primary author of the Sixth Edition upper extremity chapter. He
speculated that his prior published work concerning upper extremity
medical issues as well as his active involvement in the Academy of
Evaluating Physicians and the Academy of Occupational and Environmental
Medicine Physicians led to his selection as primary author of the that
chapter. Dr. Melhorn spoke as an individual physician and not as a
representative of the American Medical Association.
Dr. Melhorn advised the task force that the AMA appointed members
to the upper extremity committee prior to his involvement. He was
unaware of the organization's criteria for committee appointment. Dr.
Melhorn stated that the decision to change the Guides' assessment
methodology also was made prior to his involvement with the upper
extremity committee. He did not believe that all chapter editors
necessarily agreed with that paradigm shift/method change.
Dr. Melhorn stated that the Sixth Edition provides ratings for many
conditions not ratable under the Fifth Edition. He favors the diagnosis
based rating model over rating models used in earlier editions of the
Guides. He believes the DBR model is likely to be used in subsequent
editions of the Guides, as that model promotes overall rating
consistency. The doctor expressed concern that the Sixth Edition five
grid methodology makes rating of relatively simple medical conditions,
such as trigger finger, unnecessarily complex and time-consuming. It is
his belief that appropriate ratings in many cases could be assessed
simply on the basis of whether the patient had had a good, an average,
or a poor treatment outcome. He opined that the Sixth Edition
methodology significantly increases the burden on physicians assessing
permanent partial impairment; he would encourage physicians to attend
formal training before attempting to do assessments under the Sixth
Edition.
Dr. Melhorn acknowledged that both the Fifth and Sixth Edition of
the Guides attempt to establish criteria as to what qualifies as carpal
tunnel syndrome for impairment rating purposes. He explained that a
perception exists in the medical community that the criteria for
diagnosing carpal tunnel syndrome has become looser over time and that
many diagnoses of carpal tunnel syndrome more properly should be rated
as nonspecific musculoskeletal pain in the upper extremity. He agreed
that use of rating criteria in the Guides could result in an individual
receiving treatment for carpal tunnel syndrome while not qualifying for
impairment rating for that condition.
Dr. Melhorn agreed with the Sixth Edition's permitting permanent
impairment assessment from surgically treated carpal tunnel syndrome
after two non-eventful post operative office visits. He explained that,
even though maximum nerve improvement may only be obtained 12 to 18
months after surgery, early assignment of impairment was appropriate
because early rating of impairment tends to promote early return to
functioning and a better overall outcome for the treated individual.
Dr. Melhorn is doing preliminary studies comparing impairment
ratings achieved when conditions are evaluated using both the Fifth and
Sixth Editions. His initial impression is that although the Sixth
Edition gives higher impairment ratings for some conditions and lower
ratings for other conditions as compared to the Fifth Edition, average
ratings within organ systems have not changed significantly between the
two editions. The doctor suggested that jurisdictions may wish to
continue to use the Fifth Edition for assessing impairment in most
conditions while also using the Sixth Edition where the Fifth Edition
provides no means for rating a condition.
MOHAMMED I. RANAVAYA, M.D., J. D., MS, spoke with the task force
via telephone conference. His specialty is occupational and disability
medicine. He is a Sixth Edition section editor and was primary author
of its chapter 2. Additionally, he has conducted multiple training
seminars on impairment assessment under the Sixth Edition. He spoke as
an individual physician and not as a representative of the AMA.
Dr. Ranavaya stated that Chapter 2 exists to arbitrate any
conflicts as to the appropriate rating method for a given health
condition within or among the various organ system chapters. The rule
of liberality requires that the method producing the greater impairment
rating be used. Dr. Ranavaya stated that Chapter 2, as originally
written, was intended to give workers' compensation administrators
substantial ability to modify use of the sixth edition [to meet
individual jurisdictional needs]. He acknowledged that the deletion of
the preemption language from principle 1 in Table 2-1 may limit that
ability, however.
Dr. Ranavaya stated that adopting the ICF model and changing the
paradigm for impairment rating were editorial decisions that the AMA
House of Delegates subsequently approved. He explained that the ICF
model is well accepted outside of the United States, that is, in
Europe, Australia, New Zealand and South Africa. He characterized the
paradigm shift as ``an idea that had been taught a long time by
default'', as instructors at impairment evaluation training courses
have advised their physician students to look at modifiers to determine
where a particular examinee should be placed within the impairment
ranges set forth in earlier editions of the Guides. He characterized
the five grid model of the Sixth Edition as a further definition of
modifiers intended to enhance interrater reliability.
Dr. Ranavaya opined that an impairment evaluator with eight hours
of formal training on the Sixth Edition methodology could competently
use that edition to assess impairment. The doctor felt that an
individual physician would need about 30 hours of self study of the
Sixth Edition to understand its assessment methodology sufficiently to
competently use that edition to assess impairment.
Dr. Ranavaya reiterated that the Sixth Edition's editors did not
intend that ordinal impairment ratings for any medical condition be
increased or decreased as a result of the edition's changed impairment
assessment methodology.
DOUGLAS MARTIN, M.D., spoke with the task force in person. Dr.
Martin is currently president of the Iowa Academy of Family Physicians.
He practices occupational medicine in Sioux City, Iowa and has served
on the Board of the American Academy of Disability Examining Physicians
(AADEP). He was that organization's official representative to the
sixth edition advisory committee and was a reviewer of the Sixth
Edition's pain, upper extremity, lower extremity, and nervous system
chapters. He spoke as an individual physician and not as a
representative of the AMA.
Dr. Martin considers the Sixth Edition's adoption of the ICF model
a positive change that both ``brings the United States into the rest of
the world'' and facilitates research about impairment assessment. He
characterized the Sixth Edition's focus on physical function as a ``big
change'' that physicians ``would need time to process''. He agreed that
the validity of functional assessment tools can be questioned,
especially when those tools are administered to persons outside the
dominant culture.
Dr. Martin expressed his belief that adaption of a DBR impairment
assessment model will decrease evaluator assessment errors, which have
resulted from improperly administered range of motion or other anatomic
function tests. He agreed that the Sixth Edition methodology increases
both the time required for impairment evaluation and the level of
professional training or self-study necessary needed for an evaluator
to be proficient in using that edition. He agreed that a physician
likely would require 25 to 30 hours of self-study to gain proficiency
in assessing impairment under the Sixth Edition.
Dr. Martin agreed that cervical spine fusion ratings set forth in
the Sixth Edition generally are significantly lower than are ratings
for like conditions in the Fifth Edition. He also noted, however, that
the Fifth Edition ratings for those conditions generally were
significantly higher than had been the ratings in the Fourth Edition.
He speculated that the Sixth Edition may have ``gone overboard'' in
attempting to correct Fifth Edition cervical spine ratings that were
perceived to be ``too high''.
Dr. Martin advised that the variables within occupational medicine/
work injury practice limit the possibility of controlled medical
studies in that field. Therefore, information that can be classified as
having a superior level of evidence basis is difficult to obtain. That
fact impedes the goal of making any impairment assessment guide highly
evidenced-based.
Dr. Martin's perception was that nonmedical stakeholders had had
limited involvement in the Sixth Edition development process. He noted
that only two of the seven members of the editorial board practice
clinical medicine. Given that, practical problems that could arise from
evaluation and assessment of impairment under the Sixth Edition model
may not have been well appreciated.
CHRISTOPHER R. BRIGHAM, M.D., MMS, spoke with the task force via
telephone conference. Dr. Brigham was senior contributing editor for
the Sixth Edition. His business, Brigham and Associates, Inc., conducts
independent medical evaluations and reviews evaluations other providers
have performed. Dr. Brigham spoke as an individual physician and not on
behalf of the AMA.
Dr. Brigham stated that as senior contributing editor, he worked to
achieve consensus among the various contributors to the Sixth Edition's
musculoskeletal chapters and was substantially involved in the [final]
writing of those chapters. This doctor characterized the Sixth Edition
as a fundamental improvement in supplying accurate, unbiased impairment
ratings. He felt that physician response to the Sixth Edition overall
has been positive and that physicians appreciate the Sixth Edition's
consistent impairment assessment process. Dr. Brigham acknowledged that
some impairment ratings for surgically treated spinal conditions are
lower in Sixth Edition. He explained that the purpose of spinal surgery
is to improve function. That patient functioning should be decreased
after surgical intervention and treatment is medically counterintuitive
Dr. Brigham expressed his belief that the Seventh Edition will
further refine the Sixth Edition paradigm shift in impairment
assessment.
JOHN BROOKE, Ph.D., a clinical psychologist, spoke in person with
the task force regarding the mental and behavioral disorders chapters
in the Fifth and Sixth Editions. He provided an outline of his
comments, which is Exhibit B of the addenda to this process report.
JAMES GALLAGHER, M.D., a psychiatrist provided written comments
regarding the mental and behavioral disorders chapters in a July 10,
2008 report, which is exhibit C of the addenda.
Both Dr. Clark and Dr. Gallagher expressed concerns regarding the
subjective nature of the multiple rating scales used to achieve an
ordinal impairment rating in the Sixth Edition. Both had concerns as to
whether and when mental and behavioral impairment could be assessed by
assigning a particular percentage of impairment.
Recommendations re impairment guides
The balance of time available on July 31, 2008, was devoted to task
force assignment 4, namely:
4. Make recommendations concerning the use of impairment rating
guides in the Iowa system.
a. Should Iowa adopt the Sixth Edition of the Guides?
b. Should Iowa adopt some individual chapters of the Sixth Edition?
c. Should Iowa adopt another existing impairment guide?
d. Should Iowa develop its own impairment guide?
Various recommendations were moved, discussed and voted upon. All
members of the task force approved the following resolution:
It is premature to determine how the Sixth Edition of the AMA
Guides will change the ultimate impairment ratings assigned across all
systems. Information has been presented that some ratings will go up;
some will go down; some will stay the same. However, there is
insufficient information to predict the overall change in ratings.
Seven of the task force members do not recommend that the Iowa
Workers' Compensation Commissioner adopt the Sixth Edition of the
Guides, in whole or in part. Member, Sara Sersland, favors adoption of
the Sixth Edition.
Whether the Sixth Edition should be adapted in those cases where
the Fifth Edition either does not provide impairment rating or does not
provide an ordinal impairment rating was discussed. Piecemeal
implementation of the Sixth Edition would increase costs and complexity
within the Iowa workers' compensation system. Additionally, concerns
remain about whether ordinal impairment ratings for mental and
behavioral disorders are appropriate.
Seven task force members approved adoption of the following
resolution:
The task force recommends that the Iowa workers' compensation
commissioner consider developing a rating system, either by rule or
legislation, for recognized medical conditions that are not rated under
the AMA Guides, Fifth Edition.
Member, Peter Thill, did not approve its adoption.
On August 25, 2008, member Sara Sersland clarified her vote on the
foregoing resolution. Ms. Sersland stated:
I do not favor piecemeal adoption of the Sixth Edition of the
Guides for some conditions, but not others, but, if the Commissioner
decides not to change current rule 2.4 requiring use of the 5th Edition
to rate conditions, I favor using the Sixth Edition to rate well-
recognized conditions not rated under the Fifth, but rated under the
Sixth. I do not recommend the Commissioner develop a new rating system
apart from the Sixth Edition, either by rule or legislation, for
recognized medical conditions not rated under the Fifth.
After Dr. Rondinelli's August 26, 2008 presentation, the task force
completed its discussion of proposed recommendations regarding the use
of the Guides and discussed its assignment 5, other considerations
regarding the use of impairment ratings.
On motion, the question of o whether Iowa should develop its own
impairment guide was divided into discussion of whether Iowa should
develop its own scheduled member impairment guide and into whether Iowa
should develop its own body as a whole/whole person impairment guide.
Two members, Marlon Mormann and John Kuhnlein, D.O., voted in favor
of Iowa developing a state specific scheduled member impairment guide;
the balance of task force members voted against this proposition.
Member Matt Dake voted in favor of Iowa developing a state specific
body as a whole/whole person impairment guide. All other members voted
against doing so.
Other considerations--Rule 876 IAC 2.4
The task force considered Rule 876 IAC 2.4 on August 26, 2008. That
administrative rule adapts the Fifth Edition of the Guides to the
Evaluation of Permanent Impairment as a guide for determining permanent
partial disabilities under Iowa Code section 85.34(2), subsections a
through s. The rule permits employers and insurance carriers to use the
Fifth Edition to determine the extent of loss or percentage of
permanent impairment resulting from an injury to any scheduled member
and to pay weekly benefits accordingly. Benefits so paid are considered
prima facie showing of compliance with the scheduled member
compensation law. Within the task force, questions had arisen as to the
overall appropriateness of this rule. The Iowa workers' compensation
law compensates workers with scheduled injuries for the permanent
disability that results from the loss of use or function of the injured
member. A rating of impairment does not necessarily accurately reflect
loss of function or loss of use. Therefore, it does not necessarily
reflect the actual extent of permanent disability that has resulted
from an injury to a scheduled member.
Whether the first sentence of rule 2.4 should be amended by
striking the word ``disability'' and inserting in lieu of that word,
the phrase ``impairment for conditions compensable'' was moved and
voted upon. Six task force members voted in favor of amending the rule
in that matter. Member Marlon Mormann voted against doing so. Member
Donna Bahls, M.D., abstained from voting on the proposed amended
language.
The amended first sentence would read:
The Guides to the Evaluation of Permanent Impairment, Fifth
Edition, published by the American Medical Association are adopted as a
guide for determining permanent partial impairment for conditions
compensable under Iowa Code section 85.34 (2) ``a'' to ``s.''
Whether the January 2008 emergency amendment to rule 2.4 should be
made permanent, with the recommended language substituted in the rule's
first sentence, was moved and voted upon. Seven task force members
voted to recommend that the January 2008 emergency amendment to rule
2.4, with the proposed substitute language, become permanent. Member
Sara Sersland voted not to so recommend.
It was moved that rule 2.4 be amended to add language consistent
with Miller v. Lauridsen Foods, 525 N.W.2d 417, 421 (Iowa 1994), to
state that ``The determination of functional disability is not limited
to impairment ratings established by medical evidence.'' Members Matt
Dake, Saffin Parrish-Sams, Teresa Hillary and Marlon Mormann voted in
favor of so amending the rule. Members Peter Thill, Sara Sersland and
Donna Bahls, M.D., voted against so amending the rule. Member John
Kuhnlein, D.O., abstained from voting on the question.
Dr. Brigham expressed his belief that the Seventh Edition will
further refine the Sixth Edition paradigm shift in impairment
assessment.
All voting members of the task force were afforded the opportunity
to write reports summarizing the member's understanding of the task
force proceedings and expressing the reasoning underlying that member's
votes. Members Matt Dake, John Kuhnlein, D.O., Marlon Mormann, R.
Saffin Parrish-Sams, Sara Sersland and Peter Thill did so. These
statements are attached as Exhibits D through I in the addenda to this
report. Additionally, member Sara Sersland submitted a responsive
concurrence, which is attached as exhibit J.
Contact information
The proceedings of the task force were digitally recorded and are
available at the Division of Workers' Compensation, 1000 East Grand,
Des Moines, IA 50319, for copies call 515-281-5387, for questions
contact: [email protected]
Respectfully submitted,
Helenjean M. Walleser,
Iowa Deputy Workers Compensation Commissioner.
______
[Whereupon, at 10:10 a.m., the subcommittee was adjourned.]