CONTENTS

3 3 4 5 6 7 9 14 18 25 Online resource: Research Reporter New work comp directors named CompFacts: Non-Minnesotan claims; child labor in the 1800s; medical fee schedule Under construction: Administrative changes New additions to www.doli.state.mn.us Research highlights: Minnesota Safety Report Will the recession affect work comp costs? Return-to-work policies and average claim duration Explaining claim denials Case update: Certification of medical disputes under Jorgenson v. Novak-Fleck, Inc., 638 N.W.2d, 760 (Minn. 2002) Free publications available online

TABLES
4 7 8 Estimated fee schedule coverage of work comp medical payments Injury and illness case incidence rates, Minnesota, 1985-2000 Industry groups and detailed industries with the highest total case rates, Minnesota, 1998-2000

11 Short-term effect of change in hours on work comp costs per hour 12 Changes in hours worked and predicted changes in annual work comp costs 15 Average claim duration for establishments by employee size, 19952000 15 Average claim duration for establishments by insurance type, 1995-2000 16 Distribution of average claim duration for manufacturers with more than 250 employees, 1995-2000 17 Distribution of average claim duration in weeks 20 Estimated effects of different factors on the denial rate

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FORMS
27 Level 1 Adjuster Training

New online: Research Reporter

Under construction: Administrative changes

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D-1

Return-to-work policies and average claim duration
Grant Martin, Research Analyst Research and Statistics

heavily influenced by extreme cases. Establishments with one or two claims with extremely long durations will have a relatively high average claim duration. Average claim duration for this analysis is the average duration in which claimants received temporary total disability (TTD), measured in weeks. Average claim duration for each establishment is also divided into average claim duration for claims with and without permanent partial disability (PPD), in an attempt to separate these averages into groups by claim severity. The goal of the analysis is to see what patterns emerge in the data and whether these patterns can be related to return-to-work practices. This analysis is exploratory and supports additional research being done that will attempt to control for other employer, claimant and injury characteristics that affect claim duration.
Average claim duration by employment numbers

Most people agree effective return-to-work programs benefit both injured workers and employers. The worker is brought back to work as soon as possible and the employer sees reductions in costs from a prompt recovery. But is it possible to identify whether a particular employer is doing a good job returning injured workers to work? And, if so, what signals indicate an employer could use help improving return-to-work results? Is it possible to target some sort of return-to-work program development to employers that need it? One possible measure of return-to-work effectiveness is the employer’s average claim duration. All things equal, employers with shorter average claim durations are doing a more effective job at returning workers to work than those with longer claim durations. An analysis shows that employers with more employees and employers that are self-insured tend to have shorter average claim duration. It also shows average claim duration for employers varies widely, even within industry and employer size-groups. This suggests average claim duration may be a good measure of return-to-work and that employer effectiveness may vary dramatically. Return-to-work programs are employer- and insurer-sponsored policies that provide on-the-job transition from disability, back to work. These practices range from finding light-duty work for an injured worker to the creation of special work areas to accommodate groups of injured workers. They may include an official return-to-work policy or simply an attitude of the management that getting injured workers back on the job is a priority. This preliminary analysis looks at average claim duration for the 33,000 establishments identified from claims with dates of injury between 1995 and 2000 in the workers’ compensation database. The establishment is the worksite where the injured employee was working when the injury occurred. Large employers may have several establishments around the state and some employers may have only one site. Averaging claim duration for all claims from a particular establishment may be somewhat problematic, because approximately 46 percent of the establishments had only one claim and these establishments may be
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• COMPACT • May 2002

Figure 1 (next page) shows the average mean claim duration by establishment size, measured by the number of employees, for all claims and for claims with and without PPD. Establishments with larger numbers of employees have shorter claim durations, on average. The differences can be seen most dramatically in average mean durations of claims with PPD, which range from an
Return-to-work, to page 16

Figure 1 Average claim duration for establishments by employee size, 1995-2000 [1]
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All claims Claims without PPD
Average claim duration in weeks 20

Claims with PPD

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10

5

0 Fewer than 10 10 to 50 50 to 100 Number of employees 100 to 250 More than 250

1. Data from DLI.

Figure 2 Average claim duration for establishments by insurance type, 1995-2000 [1]
30 All claims 25 Average duration in weeks Claims without PPD Claims with PPD 20

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10

5

0 Self-insured Voluntary market Insurance type [2] Assigned Risk Plan

1. Data from DLI. 2. The same establishment may be counted under two different insurance types if it changed insurance arrangement. Only claims under particular arrangement are counted.

May 2002 • COMPACT •

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Return-to-work, from page 14

average of 20.4 weeks for establishments with fewer than 10 employees to 12.9 weeks for establishments with more than 250 employees. Average claim duration for claims without PPD range from 7.2 weeks for smaller employers to 5.4 weeks for larger employers. These results would be expected, assuming larger employers would have advantages in return-to-work efforts. Larger employers may be more likely to have light-duty work opportunities and more professional human resources management practices that would result in shorter durations. Other factors may also explain these results, such as differences in claim filing, employee health programs and safety practices, that would not have anything to do with return-to-work management.
Average claim duration by insurance type

the ARP program. Self-insured employers, that bear the cost of the claim directly, have the lowest average claim durations; ARP employers have the highest average claim durations.
Distribution of average claim duration for manufacturers with more than 250 employees

Figure 2 (previous page) shows the average claim duration for establishments by insurance type. The most common insurance arrangement is to purchase insurance in the voluntary market, named because an insurer may choose whether to insure any particular employer. Employers unable to insure in the voluntary market may do so through the Assigned Risk Plan (ARP), the insurance program of last resort administered by the Minnesota Department of Commerce. Employers meeting certain financial requirements may self-insure. Eleven percent of the establishments were self-insured, 76 percent carried voluntary market insurance and 12 percent were insured under
with more than 250 employees, 1995-2000 [1]
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Figure 3 (below) shows the distribution of average claim duration for claims without PPD for manufacturing establishments with more than 250 employees, divided into self-insured and voluntary-market employers. The measure is the number of establishments at each level of average claim duration. This figure shows the wide spread of average claim duration within a particular industry and employersize group. The average claim

Figure 3 Distribution of average claim duration for manufacturers

50 Number of establishments Self-insured [2] Voluntary market [2] 30

40

20

10

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 20 Average claim duration in weeks

1. Data from DLI. 2. The same establishment may be counted under two different insurance types if it changed insurance arrangement. Only claims under particular arrangement are counted.

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• COMPACT • May 2002

duration for self-insured employers in this group is 5.5 weeks and for voluntary-market employers is 5.6 weeks. But the values for individual establishments range from less than one week to more than 20 weeks.
Distribution of average claim duration

Figure 4 (below) shows the distribution of average claim duration for all claimants, all establishments and establishments broken down by number of employees and industry. Establishments with larger numbers of employees have much less variation in average claim duration than establishments with smaller numbers of employees.

Figure 4

Distribution of average claim duration in weeks [1] 25th percentile 1.0 1.7 Median 2.4 3.8 Mean 7.5 8.3 75th percentile 6.8 8.7

All claimants All establishments Establishments by number of employees Fewer than 10 10 to 50 50 to 100 100 to 250 More than 250 Establishments by industry Agriculture Mining Construction Manufacturing Transportaion Wholesale trade Retail FIRE [2] Services Public admininistration 1. Data from DLI. 2. Financial, insurance and real estate.

1.4 1.6 1.9 2.5 3.4

3.7 3.5 4.0 4.7 5.4

10.0 7.9 7.0 6.9 6.8

10.1 8.2 8.0 8.5 8.2

1.6 2.4 2.0 2.1 2.2 1.7 1.3 1.4 1.6 1.6

3.8 7.3 5.0 4.4 5.2 3.7 2.9 3.4 3.6 3.8

8.6 13.6 10.4 7.7 10.3 8.3 6.9 8.7 8.0 6.7

8.4 14.5 12.0 8.6 10.9 8.4 6.8 9.2 8.0 7.4

May 2002 • COMPACT •

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