CONTENTS

TABLES
3 Meet Robin Kelleher, DLI’s new acting commissioner 2003 Special Compensation Fund assessment methodology change Department document dilemma: duplicates Forms forum: E-FROI, the interactive First Report of Injury; Updated NOPLD, DSR forms online soon CompFact: Hospital charges, payments Avoiding boomerangs; stop documents from returning ‘Habla Espanol?’ Workers’ compensation dispute rate up in 2000, 2001 Vocational rehabilitation summary Free publications available online
2001 plan closures by employment outcome 9 7 Hospital charges and payments in general health care and workers’ compensation, 2000 Change in Medicare and Minnesota workers’ compensation conversion factors Incidence of disputes, injury years 1984-2001

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11 Claimant attorney fees paid with respect to indemnity benefits, injury years 1984-2001 12 Total legal costs as percentage of total benefits, 1995-2001 14 Percentage of paid indemnity claims with a VR plan filed, injury years 1991-2001 Time from injury to start of VR services, plan-closure years 1998-2001 15 VR service duration, plan-closure years 1998-2001 16 Return-to-work outcomes, plan-closure years 1998-2001

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FORMS
18 Basic Adjuster’s Training registration form

Department document dilemma: duplicates

Free publications available online

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D-1

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Vocational rehabilitation summary
By Brian Zaidman, Research Analyst Research and Statistics

Percentage with plan filed

In Minnesota’s workers’ compensation system, vocational rehabilitation (VR) services are provided to injured workers who need help returning to work because of their injuries and whose employers are unable to offer them suitable employment. The workers who use VR benefits tend to have long-duration workers’ compensation claims with high costs for indemnity and medical benefits. VR services are provided to expedite the injured workers’ return to work. Analysis of VR statistics for 2001 shows that while participation, service duration and total VR costs increased, average plan costs have not changed and that a slightly greater percentage of participants returned to work with their pre-injury employer. These changes most likely reflect the economic conditions of the past few years.
Background

Figure 1
Percentage of paid indemnity claims with a VR plan filed, injury years 1991-2001 [1]

20% 15% 10% 5% 0% '91 '93 '95
Injury year 1991 1993 1997 1999 2000 2001

'97
Percentage with plan 17.8% 5.3 15.1 17.0 18.7 21.2

'99

'01

Insurers (including self-insured employers) are required to provide a Disability Status Report form if a worker is not expected to return to work within 90 days of the injury, or after one of the claim parties requests VR services be provided. The purpose of the Disability Status Report form is to report that the injured worker will receive a rehabilitation consultation to determine eligibility for services or to document legitimate reasons for not providing VR services. Minnesota Rules provide that workers who are unable to return to their pre-injury job, who are unlikely to return to suitable gainful employment with their preinjury employer and who would benefit from the provision of VR services are eligible for VR services. VR services are sometimes provided proactively, to maintain the workers’ ability and motivation to return to work with the pre-injury employer. Qualified rehabilitation consultants (QRCs) registered by DLI provide VR services. QRCs determine whether injured workers are eligible for VR services,
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1. Data from DLI. Statistics for 1997-2001 are developed.

Figure 2
Time from injury to start of VR services, plan-closure years 1998-2001 [1]
15 12 Months 9 6 3 0 1998 1999 2000 Median months 2001 5.4 5.1 13.9 13.8 12.3 11.6

4.5

4.6

Average months

1. Data from DLI.

develop VR plans for those determined eligible and coordinate service delivery under these plans.
Participation

Figure 3
VR plan costs, adjusted for wage growth, 1998-2001 [1]
$8,000 $40

Average & median cost

On the basis of historical patterns of VR plan filing, an estimated 6,700 workers injured in 2001 will receive VR services. This represents 21 percent of the indemnity claims arising from 2001 injuries and illnesses. Both the number of workers and the percentage of claims receiving VR services have increased annually since 1997, after the system for determining VR eligibility was clarified.1 Approximately 5,050 workers injured in 1997 received VR services, representing 15 percent of the indemnity claims. In comparison, in 1991, when VR was eligibility was based more strictly on amount of lost work-time, approximately 7,500 injured workers received VR services, accounting for 18 percent of the claimants. Figure 1, on the previous page, shows the pattern of VR utilization from 1991 through 2001. The VR participation rate increased by 4.2 percentage points from 1999 to 2001, more than double the increase from 1997 to 1999. This may be partly related to the current recession, to the degree that scarce jobs make return to work more difficult.
Timing of service

$6,000

$30

Total cost ($millions)

$4,000

$20

$2,000

$10

$0 1998

1999

2000

$0 2001

Average cost (plan-closure year) Median cost (plan-closure year) Total cost (injury year) [2] Average cost 1998 1999 2000 2001 1. 2. $5,130 $4,880 $4,720 $4,930 Median cost $3,180 $3,060 $2,930 $3,120 Total cost ($millions) [2] $28.1 $31.1 $37.0 $37.1

Data from DLI. Costs are adjusted for average wage growth between the respective year and 2001. Developed statistics.

Figure 4
VR service duration, plan-closure years 1998-2001 [1]
12 10.6 10.9 11.4 11.9

Months

Since 1998, the average time between injury and the start of VR services has steadily declined (Figure 2, previous page). The mean number of months from the date of injury until the start of VR services declined from 13.9 months in 1998, to 11.6 months in 2001. The median duration from injury to the start of services for 2001 closures was 4.6 months.
Costs2

9

7.6

7.7

7.9

8.3

6

The expected total cost for the VR services provided to workers injured in 2001 is $37.1 million (Figure 3). This is a slight increase over the $37.0 million expected for workers injured in 2000, and an increase of 32 percent over total costs in 1998. Because mean plancosts have remained relatively stable at about $5,000 since 1998, the increase in total costs for VR is due to the increase in the number of injured workers receiving services. Summary continues ...

3

0 1998 1999 2000 Median months 2001

Average months

1. Data from DLI.

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Summary continued ...

Figure 5
Return-to-work outcomes, plan-closure years 1998-2001 [1]
Percentage of plan closures 50% 40%
30% 47% 45% 45% 48%

Duration of services

30% 20% 10% 0% 1998

28% 25% 27%

27% 25%

27% 25%

The duration of VR services has increased slightly each year since 1998. The mean duration was 10.6 months among plans closed in 1998, and 11.9 months among plans closed in 2001, a 13 percent increase. Mean and median plan-durations are shown in Figure 4 (previous page).
Service outcomes

1999

2000

2001

Job with same employer Job with different employer No job

1. Data from DLI.

Nearly three-fourths of VR plans result in the injured worker returning to work. Among plans closed in 2001, 48 percent resulted in a return to work with the preinjury employer and 25 percent resulted in the injured worker finding employment with a different employer. As shown in Figure 5, the percentage of workers returning to the pre-injury employer has increased slightly in recent years, while the percentage of workers returning to a different employer has decreased.

Among workers who return to work, the ratio of their return-to-work wage to their pre-injury wage averaged 101 percent in 2001, compared to 102 percent in 2000, and 97 percent in 1998.
Results by outcome

There is considerable variation in the measures based on the return-to-work status. Figure 6 shows, for plans closing in 2001, the mean duration from injury to start of services, duration of services, plan cost and return-towork wage ratio by employment outcome. Compared to the other plan outcomes, workers who returned to their pre-injury employer have shorter durations to the start of services, with shorter plan durations and lower plan costs, and higher wages compared to their pre-injury wage.
Figure 6
2001 plan closures by employment outcome [1] Months from injury to start of VR 8.4 15.4 14.0

Employment outcome Pre-injury employer Different employer No return-to-work
1. Data from DLI.

Plan duration (months) 8.2 14.4 14.7

Cost [2] $2,980 $7,500 $6,290

Return-towork wage ratio 105.0% 91.8%

2. Based on private QRCs employed by QRC firms.

Analysis

Since 1997, participation in VR has increased, driving up the total cost for these services. Injured workers also have started services sooner after their injuries, the duration of VR plans has been increasing, and an increased percentage of participants are returning to their pre-injury employer. The increased utilization of VR services since 1997, and the steady increase in the percentage of plans closing with a return to the pre-injury employer, indicate employers (and insurers) are increasing their use of the statutory VR benefit system to provide disability management services to their injured workers. These disability
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management services include setting up transitional work and work-hardening programs, coordinating job modifications with functional limitations, facilitating communication between health care providers and employers, and assisting the injured worker, if necessary, with the treatment plan. The increased utilization and pre-injury employer return-to-work also may be in response to economic conditions. During the late 1990s and into 2000, the unemployment rate in Minnesota was less than 3 percent, making employee retention an important concern for employers. The increased percentage of plans closing with return to work with the pre-injury employer from 1998 to 2000 shows employers’ increased incentives to provide temporary work and to make job modifications to retain injured employees. The increased utilization into 2001 may be the result of confidence in the system learned from the recent past and from employers’ desire to hold down claim costs as workers’ compensation insurance premiums threaten to increase. Injured workers may also be more willing to use VR services to retain their jobs than to risk seeking employment elsewhere. The results by plan outcome also indicate the possibility of a split flow of VR services. Injured workers who return to their pre-injury employer, or who are expected to do so, enter the VR system earlier and continue to receive services until the return-to-work occurs. In contrast, workers who do not (or are not expected to) return to their pre-injury employer enter VR later and require more services for a longer duration, resulting in higher plan costs. The extended duration and the loss of the pre-injury job provide added stress to the claim, often resulting in disputes – 30 percent of 2001 plans closed with a return to a different employer and 58 percent of plans with no return-to-work were closed with a settlement or a judge’s decision and order. It is also possible that the causal direction is reversed, with the presence of disputes indicating a break between the employer and employee, precluding a restoration of the employment relationship.
1 2

These changes at discussed in more detail in Minnesota Workers’ Compensation System Report, 1999, p. 37. Costs are adjusted for average wage growth between the respective year and 2001.

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