COMPACT

The Newsletter for Workers’ Compensation Professionals February 2002

Minnesota Department of Labor and Industry 443 Lafayette Road N. St. Paul, MN 55155

Inside ...
Articles
Department’s settlement action program .. 5 Adjuster training sessions announced ....... 5 Highlights: Workers’ Compensation System Report ..................................... 6 Certified managed care organizations: Role of nonparticipating providers ............ 9 DHS ‘Rule 101’; workers’ compensation health care providers ............................ 10 Claims for slips and falls slide upward in winter months ................................... 11 CompFact: Teachers and assaults .......... 12 Department action on medical issue complaints ................................... 13 Common misperceptions about workers’ compensation coverage ............. 18 Workers’ compensation indemnity claimants’ age, 1990-2000 ..................... 20 Amputation claims: Worker and injury characteristics ............................. 23 Analysis of independent medical exams filed with DLI .............................. 25 Rehabilitation provider conduct and accountability ................................ 27

Tables
• Paid claims per 100 full-time-equivalent workers, injury years 1984-2000 ........... • System cost per $100 of payroll, 1984-2000 ........................................ • Percentage of paid indemnity claims with a vocational rehabilitation plan filed, injury years 1991-2000 ................ • Incidence of disputes, injury years 1984-1999 ........................................ 6 7 7 8

• Slip and fall claims as a percentage of all indemnity claims, annual average, 1996-2000 ........................................ 12 • Assault claims as a percentage of indemnity claims, teachers compared to all other occupations, 1995-2000 ...... 12 • 2001 medical issue complaint cases closed ..................................... 13 • Mean and median age by gender and injury year .................................. • Distributions of age groups by injury year ........................................ • Mean age by occupation, injury year 2000 ................................. • Mean age by industry, injury year 2000 ................................. • Mean age by employment status, injury year 2000 ................................. 20 21 22 22 22

• Most common events producing amputations, 1999 and 2000 ................ 24 • Most common sources of amputation injuries, 1999 and 2000 ....................... 24 • Percentage of claims with a filed-adverse IME report ...................... 26

COMPACT is a publication of the Minnesota Department of Labor and Industry. Its purpose is to provide department news and workers’ compensation case information to professionals who work within Minnesota’s workers’ compensation system. Correspondence should be sent to: COMPACT editor, Minnesota Department of Labor and Industry, 443 Lafayette Road N., St. Paul, MN 55155; by e-mail at DLI.Communications@state.mn.us. Subscription requests should be sent to Customer Assistance Publications, Workers’ Compensation Division, 443 Lafayette Road N., St. Paul, MN 55155; by e-mail at DLI.brochure@state.mn.us. Visit www.doli.state.mn.us/compact.html to view this publication on the Web.
Upon request to the editor, COMPACT will be made available in alternative formats such as Braille, large print or audiotape.

Forms
Level 1 Adjuster Training registration ....... 35 Publications order form .......................... 37

Summaries of decisions
Workers’ Compensation Court of Appeals ........................................... D-1 Minn. Supreme Court decisions................ D-23

Highlights: Workers’ Compensation System Report
By David Berry, Research Scientist Research and Statistics

These numbers have been stable since the mid-1990s, The Department of Labor and Industry (DLI), Research with a slight downward trend for temporary partial and Statistics unit, recently issued the 2000 Workers’ and stipulated benefits. Compensation System Report. The report presents statistics through 2000, about claims and costs, vocational rehabilitation, and disputes and dispute • The average durations of total disability and temporary partial disability benefits were 10 weeks and 18 resolution. It features a new format that moves quickly weeks for injuries in 2000. These durations were stable through the statistics, with an emphasis on recent during 1995 through 1998, but were up 13 to 14 developments. The report is available on the DLI percent from 1998 through 2000. Web site at www.doli.state.mn.us/research.html and from DLI Customer Assistance at (651) 284-5030. • After adjusting for wage growth, average weekly total Following are the highlights of the recent report. disability and temporary partial disability benefits have been steady since the mid-1990s. Claims and costs: Overview • Claim rates fell during most of the 1990s. The latest figures indicate 8.2 paid claims per 100 full-time- • Driven primarily by the increase in duration, average indemnity benefits per indemnity claim (adjusting for equivalent (FTE) workers for injuries in 1999, and 1 wage growth) rose 5 percent between 1999 and 1.7 paid indemnity claims per 100 FTE workers for 2 2000. The 2000 figure, $10,600, is still low by 1999 and 2000. (Figure 1, at right) historical standards. • After a half-decade of decline, total system cost per $100 of payroll leveled off at $1.37 for 1999 and Figure 1 2000; this is down 45 percent from an average of Paid claims per 100 full-time-equivalent workers, injury years 1984-2000 [1] $2.51 for 1989 through 1994. (Figure 2, page 7)
Claims per 100 FTE workers

• After falling by nearly half during the middle and late 1990s, pure premium rates3 increased for 2002. The 2002 rates are up 1.4 percent from 2001. • Indemnity and medical costs — measured per claim4 and relative to payroll — declined steeply during the early 1990s, but fell more slowly or leveled off later in the decade. Indemnity costs — per claim and relative to payroll — increased in 1999 and 2000. (See COMPACT, November 2001, regarding indemnity and medical costs per claim.)
Claims and costs: Detail

10 8 6 4 2 0 '84 '86 '88 '90 '92 '94 '96 '98 '00

Indemnity Total [2] Medicalonly claims 7.4 7.0 6.8 6.5 [2]

Medical-only [2]

• Among paid indemnity claims for injuries in 2000: ° 85 percent received total disability benefits (temporary or permanent); ° 30 percent received temporary partial disability benefits; ° 21 percent received permanent partial disability benefits; ° 15 percent received stipulated benefits.
COMPACT 6

Injury year 1984 1990 1998 1999 2000

Indemnity claims 2.9 2.6 1.6 1.7 1.7

Total claims 10.3 9.6 8.4 8.2 [2]

1 Developed statistcs from DLI data and other sources. 2 Not available at time of publication.

February 2002

Vocational rehabilitation

Figure 2
System cost per $100 of payroll, 1984-2000 [1] $2.50 $2.00 $1.50

• After a period of major fluctuation resulting from a law change, court decisions and DLI administrative initiatives, vocational rehabilitation began a period of relative stability in 1997. (Figure 3, at right below) • About 17 percent of paid indemnity claimants injured in 2000 (about 5,300 individuals), received vocational rehabilitation services as of October 2001. This represents a gradual increase from 15 percent for 1997. • The total cost of vocational rehabilitation services was about $19.7 million in 2000; this is about 2 percent of total workers’ compensation system cost. • Adjusted for average wage growth, the average cost of vocational rehabilitation services declined 10 percent during 1998 through 2000. • About three-quarters of vocational rehabilitation participants have a job at the time of plan closure, a majority of these are with their pre-injury employer. • The average vocational rehabilitation participant returning to work receives a wage about the same as their pre-injury wage, but this varies widely among individuals.

$1.00 $ .50 $ .00 '84 '86 '88 '90 '92 '94 '96 '98 '00

1984 1990 1994 1999 2000

Cost per $100 of payroll $1.74 2.46 2.57 1.37 1.37

1 Data from several sources; includes insured and self-insured employers.

Figure 3
Percentage of paid indemnity claims with a vocational rehabilitation plan filed, injury years 1991-2000 [1] Percentage with plan filed 20% 15% 10% 5% 0% '91 '93 '95 '97 Percentage with plan 17.8% 5.3 14.9 16.3 16.9 '99

After a half-decade of decline, total system cost per $100 of payroll leveled off at $1.37 for 1999 and 2000; this is down 45 percent from an average of $2.51 for 1989 through 1994.

Injury year 1991 1993 1997 1999 [2] 2000 [2]

1. Data from Department of Labor and Industry. 2. Preliminary.

System report, continued on page 8

COMPACT

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February 2002

System report, continued

Figure 4
Incidence of disputes, injury years 1984-1999 [1]
20%

Disputes, dispute resolution

Dispute rate

• The incidence of all types of disputes, after peaking for 1991 injuries, declined rapidly in the early 1990s, but changed relatively little during the second half of the decade. (Figure 4, at right) • Claim petition disputes — usually about primary liability and benefit issues — are the most common type of dispute. • The rate of denial of filed indemnity claims, after increasing in the 1980s, has remained from 14 to 16 percent since 1991. • The percentage of paid indemnity claims with claimant attorney fees decreased from 17 percent for 1991 injuries to 12 percent for 2000 injuries. • For 2000, total attorney fees were roughly 16 percent of indemnity benefits and 6 percent of total workers’ compensation system cost.

15%

10%

5%

0% '84 '86 '88 '90 '92 '94 '96 '98

Claim petitions [2] Medical requests [4] [7] Any dispute [6] [7]

Discontinuance disputes [3] [7] Rehabilitation requests [5] [7]

Injury year 1984 1989 1990 1991 1995 1998 1999

Claim petitions [2] 8.5% 11.5 12.4 12.6 10.2 10.1 10.0

Discontinuance disputes [3] [7] 7.7% 8.1 8.2 6.3 6.2 5.9

Dispute rate Medical requests [4] [7] 6.2% 7.3 6.9 3.6 2.9 3.0

Rehabilitation requests [5] [7] 4.7% 5.2 5.1 3.1 3.6 3.6

Any dispute [6] [7] 17.4% 19.0 19.0 14.4 14.1 13.7

1 Developed statistics from DLI data. 2000 data is not presented because it is not yet sufficiently reliable. 2 Percentage of filed indemnity claims with claim petitions. (Filed indemnity claims are claims for indemnity benefits, whether ultimately paid or not.) 3 Percentage of paid wage-loss claims with discontinuance disputes. 4 Percentage of paid indemnity claims with Medical Requests. 5 Percentage of paid indemnity claims with Rehabilitation Requests. 6 Percentage of filed indemnity claims with any disputes. 7 Not available before 1989.

1 Indemnity claims are claims with indemnity benefits — benefits that compensate the injured worker or survivors for wage loss, permanent functional impairment or death from the injury.

2

Most statistics in the report are presented by year of injury. An issue with such data is that the originally reported numbers for more recent years are not mature, because of long claims and reporting lags. In the report, all injury-year data is “developed” as needed to a uniform maturity, so the statistics are comparable over time. The technique uses “development factors” (projection factors) based on observed data for older claims.

3 Pure premium rates are expected indemnity and medical losses per year, per $100 of covered payroll. They are determined annually by the Minnesota Workers’ Compensation Insurers Association on the basis of insurer premium and loss experience and statutory benefit changes. Insurers use the pure premium rates when determining their rates.

4

Adjusted for wage growth.

COMPACT

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February 2002