COMPACT

The Newsletter for Workers’ Compensation Professionals May 2001

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

Inside ...
Articles
DLI Web site medical fee schedule updates .............................................. 4 Assigned Risk Plan surplus; settlement opportunities for SCF cases .................... 5 More than $3 million of reimbursements unclaimed ............................................ 5 Assault-injury indemnity claim numbers level since 1997 ................................... 6 Musculoskeletal-disorder claims in Minnesota ........................................ 8 New work comp poster available ............. 10 Payment of permanent partial disability in lump sum ......................................... 11 Voc Rehab unit statistics, 1997-1999 ....... 12 Attorney costs in the workers’ compensation system ............................ 15 Rehabilitation provider professional conduct and accountability outcomes ...... 21 Roy v. Gas Supply, Inc. – summary to date ............................................... 24 Notices of request for comment .............. 43

Tables
Number of injuries due to assaults ........... 6 Number of assault indemnity claims for selected industry groups ........................ 7 MSD indemnity claims ............................ 8 Types of MSDs, 1999 indemnity claims ..... 9 Industry of MSD claimants among 1999 indemnity claims ................................... 9 Occupation of MSD claimants among 1999 indemnity claims ........................... 10 Voc rehab plans closed 1997-1999 [1] ..... 13 Voc rehab plans closed 1997-1999 [2] ..... 14 Defense attorney costs by six-month interval ................................. 16 Fees to attorneys compared with associated service fees by six-month interval ........... 17 Insurer/defense attorney fees ................ 18 SCF reimbursements and assessments ..... 25

Forms
Annual Statement of Defense Attorney Fees ................................................... 19

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.

Level 1 Adjuster Training, Day 1 .............. 35 Level 1 Adjuster Training, Day 2 .............. 37 Publications order form .......................... 39 ‘Rule 101’ order form ............................. 41

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

Vocational Rehabilitation unit statistics, 1997 through 1999
By Brian Zaidman, Senior Research Analyst Research and Statistics

The Minnesota Department of Labor and Industry (DLI), Vocational Rehabilitation unit (VRU) operates as a vocational rehabilitation firm. VRU files vocational rehabilitation plans for approximately 300 injured workers every year. The vocational rehabilitation statistics presented in the Workers’ Compensation System Report1 do not provide a complete characterization of VRU outcomes. This article presents statistics comparing VRU outcomes with those of private firms. The VRU was established by the 1983 Legislature to provide vocational rehabilitation services to workers’ compensation claimants when there is a dispute regarding medical causation or primary liability. The legislative rationale was labeled “early (vocational rehabilitation) intervention” to provide needed assistance to injured workers prior to, rather than after, a determination of liability by the courts, in accordance with Minnesota Statutes §176.102. By statute, eligible employees are notified of the availability of VRU services. The VRU also receives referrals from insurers, attorneys, other agencies and commissioner-ordered consultations.

Statistical comparison

After a period of significant change, 1992 through 1996, the vocational rehabilitation system in Minnesota entered a period of relative stability in 1997. From 1997 through 1999, the VRU had an annual average of 258 closed rehabilitation plans, comprising approximately six percent of all closed plans. The statistics for the VRU and the private vocational rehabilitation firms for plans closed during the years 1997 through 1999 are presented in Figure 12. These comparisons show: • VRU clients started receiving vocational rehabilitation services, on average, more than 200 days later than the others. • After vocational rehabilitation services started, the duration of services for VRU clients were similar to that of clients of private firms. For plans that closed due to completion of services, both the mean and median plan durations were nearly identical for VRU and private firms.

• More than two-thirds of VRU plans were closed before By working with people while they are in the litigation service completion, as a result of a settlement or decision process and returning them to work, VRU tries to reduce and order, compared to only one-third of the private firm the duration injured workers are off work, reduce the closures. liability for temporary total disability and mitigate the effects of the collateral issues related to not having an • The average costs of VRU plans were less than half the income. VRU performs retraining evaluations when cost of private firm plans. The ratio varied by plan closure reason – completed VRU plans cost 58 percent of the needed, but the emphasis is on return-to-work. mean for private firms, while VRU plans closing due to a VRU employs 13 qualified rehabilitation consultants settlement or decision and order cost only 29 percent of (QRCs) and two placement coordinators, located in the mean for private firms. Bemidji, Duluth, Fergus Falls, Hibbing, Mankato, Rochester, St. Cloud and St. Paul. A full range of • Because of disputes about the work-relatedness of their rehabilitation services is provided. VRU is a registered injuries, VRU clients were very unlikely to return to their rehabilitation firm, billing for services or intervening at pre-injury employer. Fifty-one percent of VRU clients had settlements or hearings to recover costs. Fees collected not returned to work at plan closure, a finding consistent with the high percentage of closures due to settlements. are returned to the Special Compensation Fund.

1 The 1999 system report is available on the DLI Web site at http://www.doli.state.mn.us/rsreport.html, by ordering a paper copy from (651) 297-2631 or by using the report order form in this edition (see page 39). 2 Approximately two percent of the plans for both firm types were provided to clients with earlier vocational rehabilitation plans. General claim information statistics use information about each client only once, while vocational rehabilitation plan statistics count each plan separately. COMPACT 12 May 2001

Figure 1
Comparison of private QRC firms and the Vocational Rehabilitation unit: Vocational rehabilitation plans closed 1997-1999
Measure Number of plans closed Percentage of all plans Days from injury to start of vocational rehabilitation [1] mean median Plan duration (days) mean median Plan closure reason plan completed settlement or decision & order agreement of parties Plan cost mean median Return-to-work same employer different employer not employed Ratio of return-to-work wage to pre-injury wage same employer different employer Total indemnity paid [1] mean median Attorney involvement [1] Private QRC firms 12,215 94.0% VRU 773 6.0%

benefits were the same. • Nearly all VRU clients had an attorney involved with their claim, compared to less than half the private firms’ clients. This is expected, as most VRU clients were referred to the VRU as a result of legal disagreements early in the claim process. These findings highlight some fundamental differences between VRU clients and privatefirm clients that affect outcomes. Closer study suggests many of the outcomes are the result of different case mixes. To provide a closely matched comparison of similar cases, a database was built of clients who: had injuries in 1984 or later (when VRU was in operation), had an attorney, started vocational rehabilitation at least 180 days postinjury and did not return to work with the preinjury employer.3 This process resulted in the selection of 24 percent of private-firm clients (2,858 clients) and 71 percent of VRU clients (532 clients). The results of this analysis are shown in Figure 2 (on page 14). This figure shows: • After vocational rehabilitation services started, the duration of services for VRU clients was shorter than for private-firm clients – 162 fewer days using the mean duration and 118 fewer days using the median duration. • The majority of VRU and private-firm plans closed before service completion as a result of a settlement or decision and order.

434 171 303 207 65.8% 24.6% 9.7% $4,190 $2,560 45.7% 30.1% 24.2%

655 387 293 224 30.4% 56.3% 13.3% $1,890 $1,130 6.0% 42.7% 51.4%

103.0% 88.5% $31,200 $14,600 48.1%

90.7% 87.3% $25,300 $14,600 96.0%

• The average costs of VRU plans were less • Among clients who were employed with a different employer at than one-third the cost of private-firm plans. the close of their vocational rehabilitation plans, there was little difference in the ratio of the return-to-work wage to the pre-injury • The return-to-work outcomes were very wage between clients of the VRU and private-sector firms. similar. Slightly more than half the private-firm clients returned to work; slightly less than half • Clients of private vocational rehabilitation firms had a greater the VRU clients returned to work. mean total indemnity benefit payment, although median indemnity Voc Rehab, continued on page 14
While the claims may be similar on certain characteristics, it is possible that the clients for the two firm types may differ on the reasons for the delayed start of vocational rehabilitation. Any discussion of the differences would be highly speculative, and analysis would require a thorough review of the claim file documents. COMPACT 13 May 2001
3

1. Calculated on a per-client basis, rather than per plan. Source: Minnesota Department of Labor and Industry workers’ compensation claims database.

Voc Rehab, continued from page 13

Figure 2
Vocational rehabilitation statistical comparison for similar claims only [1] Vocational rehabilitation plans closed 1997-1999
Measure Number of plans closed Number of clients Percentage of clients by firm type Days from injury to start of vocational rehabilitation [2] mean median Plan duration (days) mean median Plan closure reason plan completed settlement or decision & order agreement of parties Plan cost mean median Return-to-work different employer not employed Ratio of return-to-work wage to pre-injury wage [3] Total indemnity paid [2] mean median Private QRC firms 2,911 2,858 23.8% VRU 543 532 70.2%

• Among clients who were employed at the close of their vocational rehabilitation plans, the VRU clients averaged slightly higher wages compared to their pre-injury wages. • Clients of private vocational rehabilitation firms had much greater total indemnity benefit payments. Many VRU clients do not receive any weekly benefit payments – their indemnity benefits are paid in a lump sum following a settlement agreement.

864 509 454 344 34.8% 52.1% 13.1% $6,760 $4,990 54.6% 45.4% 80.9% $62,900 $44,000

757 512 292 226 28.7% 56.7% 14.5% $1,890 $1,140 47.0% 53.0% 86.9% $26,500 $15,000

1. All clients with an attorney, who did not return to work with a pre-injury employer, who started vocational rehabilitation services at least 180 days post-injury and who were injured in 1984 or later. 2. Calculated on a per-client basis, rather than per plan. 3. Return-to-work with different employer. Source: Minnesota Department of Labor and Industry workers'compensation claims database.

COMPACT

14

May 2001