WORKERS COMPENSATION GUIDE FOR EMPLOYERS

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1 Table of Contents Chapter One: Summary of workers compensation 2 Chapter 2: VML Insurance Programs CompCare 3 Chapter 3: Claim representatives and patient advocates 4 Chapter 4: Filing a workers compensation claim 6 Chapter 5: Statute of limitations 7 Chapter 6: Medical benefits a) Lifetime benefits (necessary, related, reasonable, and authorized medical treatment) b) Panel of physicians c) Payment of medical bills (reasonable and customary charges and balance billing) 8 d) Prescriptions e) Mileage reimbursement f) Specified medical equipment and home modification g) Payment of medical treatment of a denied workers compensation claim h) HIPPA privacy regulations and workers compensation Chapter 7: Wage loss benefits a) Average weekly wage b) Waiting period c) Temporary total benefits d) Temporary partial benefits e) Permanent total benefits f) Death benefits g) Maximum compensation benefits h) Awards i) Required forms j) Cost of living Chapter 8: Vocational rehabilitation 22 Chapter 9: Compensability issues a) Injury by accident b) Repetitive trauma c) Arising out of and In the course of employment Chapter 10: Occupational diseases ordinary diseases of life 28 Chapter 11: Presumption statute a) Heart/Lung/Cancer 31 b) Infectious disease Chapter 12: Exposure claims 34 Chapter 13: Independent contractors 36 Chapter 14: Denied/disputed workers compensation claims 38 Chapter 15: Virginia Workers Compensation Commission 40 Chapter 16: Filing an application or hearing and the appeal process 41 DISCLAIMER: This Guide is not a substitute for the Virginia Workers Compensation Act as found in Title 65.2, in the Code of Virginia. It is also not a substitute for competent legal advice on matters relating to workers compensation in Virginia. While every effort has been made to present the contents of the Act as accurately as possible, it should be noted that this (Handbook) includes information which may be subject to change as a result of future legislative action by the Virginia General Assembly. Case law rulings related to workers compensation may also impact on the content and interpretation of the information contained in this Guide. For a more complete resource on workers compensation law in Virginia, the reader is referred to the full text of the Virginia Workers Compensation Act

2 CHAPTER 1: Summary of workers compensation Workers compensation is a no-fault compromise between employers and employees. Employers assume the cost of medical treatment and lost wages for work-related injuries regardless of fault and employees give up the right to sue their employers, regardless of where negligence lies. The Virginia Workers Compensation Act was adopted in 1918 and has undergone several major revisions since that time. The act provides medical care, disability benefits, lost wages, and vocational rehabilitation services to employees for work-related injuries. In the event of the death of an employee, certain benefits are paid to an employee s surviving dependent(s). An employee is protected by the act if the employer has three or more employees. Failure to fund for losses does not relieve an employer from liability for work-related injuries. Employers may fund workers compensation losses in one of three ways: Purchase of traditional insurance Participation in a group self-insurance association Self-insurance The act is quite lengthy and not particularly user friendly. Explanations, definitions, and examples are contained throughout and information on any one topic can be found in various sections. While VML Insurance Programs personnel have a comprehensive and knowledgeable understanding of the act to make appropriate decisions regarding compensability, payments and legal issues, it is the intent of this guide to provide basic knowledge that will enable employers and their employees to better understand the process involved when an accident occurs. Page 2

3 CHAPTER 2: VML Insurance Programs CompCare VML Insurance Programs (VMLIP) CompCare assures that every employee injured on the job receives prompt, quality medical care, a safe and timely return to work and prompt payment of benefits and medical bills under the regulatory requirements of the Commonwealth of Virginia. The basic components of VML CompCare are: Prompt reporting of injuries; Timely, quality medical care; Attention to the needs of the injured employee; Assignment of a patient advocate to the claim to assist the injured employee through the initial evaluation process, subsequent recovery and return to work; Prompt payment of benefits and medical bills; Immediate and appropriate return to work planning; Personal attention to both the injured employee and employer; Strong loss prevention program to assist the employer in providing a safe work environment for all employees; and Claims handled in a timely fashion and managed within the requirements of the Virginia Workers Compensation Act. Page 3

4 Chapter 3: Claims representatives and patient advocates A team of VML Insurance Programs (VMLIP) staff, consisting of a safety consultant, two claim representatives, and a patient advocate are assigned to every member. The team provides guidance and assistance in both the prevention of injuries and handling of claims. VML claim representatives and supervisors have a wealth of knowledge and experience in the handling of workers compensation claims and of the workers compensation laws in Virginia. The responsibilities of the claim representatives include: Contacting the members, injured employees and medical provider within 24 hours of receiving a case involving: o Lost time from work o Serious medical condition(s) o Subrogation/restitution o Incomplete information o Questionable compensability o Untimely reporting by the employee o Occupational disease o Treatment by an unauthorized physician If the injured employee agrees, a recorded interview with the injured employee is obtained. This is part of the claim review process and helps us learn more about the employee s injury, employment, and medical history. Contact is made with the member representative to confirm the information included on the accident report, including wage information, to obtain job information, a copy of the pre-injury job description, as well as discuss modified duty possibilities. The treating physician is contacted to identify the diagnosis, plan of care, expected duration of disability and to determine causal relationship of the injury to the work accident. The claims representative will make payment for wage loss benefit within seven days or less, from the time the claim is received or 14 days from the date disability began. Compensability decisions will be made as promptly as possible, but not to exceed 30 days. (Most claims, compensability is determined within 7 days or less). In some cases, such as presumption, occupational disease/ ordinary disease of life or stress claims, compensability cannot be determined within 30 days. If this is the case, the claim representative will communicate to the member and the injured employee what is needed in order to make a decision and when they can expect a decision to be made. The claim representative has 30 days from the receipt of the claim to establish an initial reserve. When information is received to indicate a reserve change is in order, Page 4

5 the claim representative will re-evaluate the reserve within 30 days from the date that it is determined that a re-evaluation is necessary. Additionally, all open files are reviewed in June and December to ensure accuracy of the reserve for year-end and estimated billing. When a claim is denied, the claim representative will contact the member to advise and explain the reason for the denial. If settlement of a claim is being considered the claim representative will discuss this with the member prior to negotiations and / or settlement. When possible the member will be contacted prior to the employee being informed. The Patient Advocate is a registered nurse who is experienced and trained in the occupational health field. The responsibilities of the Patient Advocate include the following: Assigned to catastrophic and complex cases to develop a medical assessment of the injury, treatment and/or a return to work plan. Maintains contact with medical providers, members, and injured employees to assure recovery is progressing properly. Promptly discuss any concerns regarding the employee s treatment with the claim representative and member. Review difficult causal relationship issues. Review all requests for specialized treatment or testing. Negotiate rates of services and/or equipment. Schedule Independent Medical Evaluations (IME) and/or second opinion and prepare a written medical summary for the physician s review. Attend medical appointments with injured employees, as needed. Assist with any issues that may develop with a medical provider. Oversee the files assigned to outside rehabilitation vendors to ensure compliance with VMLIP guidelines and standards. Assist our members in creating and updating a Panel of Physicians. Assist our members in establishing and implementing Return to Work Programs The VMLIP staff is available to assist at anytime. If you need assistance or have questions, please contact us at 1 (800) or wcclaims@vmlins.org. We welcome any comments or suggestions. Page 5

6 Chapter 4: Filing a workers compensation claim An employer is required to file a completed Employer s Accident Report within 10 days of receipt of notice of an injury from an employee. The Virginia Workers Compensation Commission (VWCC) can impose penalties for a failure to file timely reports. To expedite this process, VMLIP has implemented online reporting ( reporting (newlosses@vmlins.org), Quick-Fax Reporting and Call-In Claim Service) which allows VMLI{ to complete and file the Employer s Accident Report on behalf of the member. It should be noted, however, that all required information must be provided by the member in order for VMLIP to make the necessary filings with the VWCC. It is an employee s responsibility to report any accident immediately to his/her supervisor, which prompts the completion of the Employer s Accident Report to be filed with the VWCC. However, the filing of the workers compensation claim by the employer or insurance administrator is not considered filing of the claim on the employee s behalf and does not protect the employee s rights for lifetime medical benefits. This is the employee s responsibility. The Virginia Workers Compensation Act requires that an injured employee file a claim for lifetime medical benefits with the VWCC within two years of the date of the accident or injury date. A Claim for Benefits form is the standard form for filing a claim, but it is not mandatory. A letter directed to the VWCC is sufficient and should contain some basic information including both the name of the employee and employer, the accident date and the request for lifetime medical benefits. Upon notification by VMLIP, the VWCC forwards to the injured employee a Guide for Employees which provides an overview of workers compensation and benefits the worker may be entitled to under the Virginia Workers Compensation Act. Also included is the Claim for Benefits form, which the employee can complete and submit to the VWCC requesting lifetime medical benefits and an alert message, which states: IMPORTANT WARNING TO ALL CLAIMANTS YOU MUST COMPLETE THIS FORM AND FILE IT WITH THE COMMISSION WITHIN TWO (2) YEARS OF YOUR ACCIDENT, OR YOU RISK LOSING YOUR RIGHT TO FUTURE BENEFITS NOTE: EVEN IF YOU HAVE ALREADY RECEIVED BENEFITS FOR YOUR INJURY, THIS FORM MUST BE FILED. Note: It is not mandatory that the employee file a claim with the VWCC for future medical benefits but it is their right to do so. If an injured employee is actively receiving medical care and this treatment is expected to Page 6

7 continue beyond the two years, they must request lifetime medical benefits for payment of these benefits under workers compensation. Chapter 5: Statue of limitations Under the Virginia Workers Compensation Act, there are applicable time limitations which affect payment of weekly and permanency benefits, as well as medical benefits. A: Injury by accident: An employee has two years from the date of an accident to file a claim for lost wage and or medical benefits. If a claim is not filed within this two year period, the Virginia Workers Compensation Commission (VWCC) has no jurisdiction. (See Chapter 2) B: Medical benefits: This applies to injuries/accidents which involve either medical treatment only or lost time which do not exceed the seven day waiting period. The injured employee is not automatically entitled to lifetime medical benefits. He/she has two years from the accident date to request these benefits from the VWCC. If this request has not been made prior to the end of the two-year period, the employee s benefits will cease at the two-year date. It should be noted that even with an award for lifetime medical benefits, the employer/insurance administrator is responsible for payment for only treatment, which is causally related to the original accident and injury. C. Change in condition: Once there is an award for compensation benefits, a change in condition can be applied for and review requested by the VWCC. This means there has been a change in the physical condition of the employee or a change in the conditions under which compensation was previously awarded, suspended, or terminated. The Virginia Workers Compensation Act has established the following time limitations: 1. Temporary Total Benefits and Temporary Partial Benefits: If the claim is for wage loss benefits, the employee must file a change in condition within 24 months from the last date for which compensation has been paid under an award. 2. Permanent Partial Benefits: An employee has 36 months from the last date for which compensation was paid to seek compensation for a permanent partial disability to the involved member. Once an award is made for compensation benefits as result of lost time, the injured employee is entitled to lifetime medical benefits for causally related treatment. 3. Occupational Disease: The employee must file a claim with the VWCC within two years after a diagnosis of a disease is first communicated to the employee or within five years from the last injurious exposure to the disease, whichever comes first. Page 7

8 Chapter 6: Medical benefits A. Lifetime medical benefits: An injured employee is automatically guaranteed lifetime medical benefits under a workers compensation claim in Virginia when an award is entered by the Virginia Workers Compensation Commission (VWCC). An award is entered when a properly executed Agreement to Pay Benefits is forwarded to the VWCC for a lost time claim (disability from work exceeds seven days). Lifetime medical benefits may also be awarded on a medical only claim (lost time does not exceed the seven day waiting period) if the employee specifically requests lifetime medical benefits to be granted by the VWCC. This can be done by a simple written request from the employee to the VWCC or by completing the Claim for Benefits form that is forwarded to the employee from the VWCC. (see Chapter 2) If no agreement is entered into and no request is made to the VWCC for lifetime medical benefits, benefits terminate two years from the date of accident. An award for lifetime medical benefits on either a lost time claim or a medical only claim does not guarantee that all future medical treatment will be covered. The treatment must be causally related to the original injury and it must be reasonable and necessary medical treatment. It must also be treatment by the attending physician or an authorized referral by the attending physician. B. Panel of physicians: The Virginia Workers Compensation Act gives the employer the right to decide who will treat an employee. The panel of physicians supplied by the employer is designed to assist in referring the injured employee to a physician best qualified to respond to the employee s needs. The panel of physicians allows the employer to utilize only reputable physicians that will communicate with the injured employee, member, and VMLIP, and physicians whose main interest is to provide quality care and work toward results and early return to work. A panel of physicians must be clear and unambiguous. The panel must include at least three physicians who do not share a community interest in a joint practice. The physicians may be located close to the employer s place of business or near areas where employees reside. If a clinic or physician s group is included, specific physicians must be identified. However, it is not necessary that all physicians in the group/clinic be included. Hospital emergency rooms cannot be used as a panel physician although emergency room treatment is covered, if a true emergency exists. However, once the emergency is over, the employee must select a physician from the panel. Page 8

9 The panel should be reviewed and updated annually to ensure accuracy. The patient advocate can assist our members when updating the panels. Addresses and telephone numbers must be correct and current; any physician who has retired or refused to see new patients must be removed. Effective July 1, 1999, the statute was amended to allow a chiropractor to be a panel physician if the injured employee has an injury, which may be treated, within the scope of practice for a chiropractor. Practice of chiropractic means the adjustment of the twenty-four movable vertebrae of the spinal column, and assisting nature for the purpose of normalizing the transmission of nerve energy, but does not include the use of surgery, obstetrics, osteopathy or the administration of prescribing of any drugs, medicines, serums or vaccines. The Virginia Board of Medicine limits chiropractors to the treatment of ailments originating from the spinal column. There are a couple of options to including Chiropractors on a panel: Establish a single panel that has a minimum of three non-chiropractor physicians plus at least one chiropractor; or Establish multiple panels of three physicians within one panel having at least one chiropractor. The panel with the chiropractor(s) could be offered to the injured employee for appropriate conditions. Either panel design would satisfy both the member s desire to make a chiropractor available to their injured employee as well as cover situations where the injury falls outside the scope of chiropractic practice. The law does not obligate the employer to include chiropractors on their panel. The employer must, immediately upon notification of a work related injury or occupational disease, offer the employee a panel of physicians from which the employee must choose a treating physician. When the panel is offered the employer should have the employee sign and date an acknowledgment of receipt of the panel. The employer should explain to the employee that if he or she chooses to see any physician other than the panel physicians, it will be at his or her own expense. If a panel is not provided at the time of the injury or at the time the injury was reported to the member, the employee is free to select his or her own treating physician. Even though the act requires the panel of physicians be offered at the time of the injury, it is a good practice to post the panel in a conspicuous place for all employees to see. Also, panels should be distributed to employees during safety meetings and given to new employees when hired. It is also recommended that annually, after updating your panel, a copy of the panel be placed in employee paychecks. These practices give the employee prior notice of the panel and allows the employee to become familiar with the panel. Also, these practices will help in the defense of a claim if an Page 9

10 employee seeks medical treatment prior to notifying the employer of an injury. The acknowledgement of the panel of physicians can also be used when distributing the panels in a staff meeting. The employee can be informed at this time, prior to a work-related injury, that if they choose a physician not on the panel, they will incur the cost of medical treatment. If an employee is offered an invalid panel or the employer fails or refuses to provide a panel, the employee can select a physician of his/her own choice. However, if the employee chooses not to use a panel physician, the employee can be held responsible for the cost of medical treatment. Upon request by an employee, the employer must inform the employee whether each physician on the panel is eligible to receive payment under the employee s health care coverage. C. Payment of medical bills: Immediately upon receipt an employee/employer should forward all medical bills related to a workers compensation claim to VMLIP. Submit all bills even if you believe that they have been mailed to VML. Often medical providers will indicate that the insurance carrier has been billed, when in fact they have not. All bills submitted for payment under workers compensation are reviewed to ensure that charges are reasonable and customary. The Virginia Workers Compensation Act states that an employer s responsibility for medical treatment is limited to such charges as prevail in the same community for similar treatment when such treatment is paid for by the injured person. The Virginia Workers Compensation Act contains a provision, which makes it illegal for a medical provider to balance bill an employee for any balance as result of a reduction. If the provider wishes to challenge the amount of the reimbursement, they must file for review through the VWCC. The dispute is between the medical provider, VMLIP and the VWCC. The employee s credit should not be affected by a workers compensation issue. Should an employee receive a balance billing, it should be forwarded to VMLIP for clarification with the medical provider. In addition to reviewing bills based upon procedural codes, also required are medical reports to support all charges received. The Virginia Workers Compensation Act specifically states that an employer/insurer/administrator is not responsible for charges without supporting medical documentation. If a bill is submitted without a report, the report is requested and the bill is held until the medical records are provided. Reports are necessary to make sure that the treatment is related to the claim and to make sure that the charges and procedure codes accurately reflect the level of medical services provided. While not required by the Virginia Workers Compensation Act, VMLIP has made a commitment to pay medical bills within 30 days of receipt of an itemized billing and Page 10

11 supporting medical documentation. With proper documentation, most bills are paid within two weeks of receipt. However, not all bills can be processed this quickly; the majority of the delayed payments are caused by not receiving the itemized bills and medical reports promptly. Many providers send the documentation to the member, who, in turn, mails the itemized bill and medical report to VMLIP. In many cases, several weeks pass before bills and reports are received, delaying payment beyond 30 days of the billing date. D. Prescriptions: VMLIP utilizes Modern Medical, Inc. for pharmacy services. Modern Medical provides pharmacy services for both long term (mail order) and short-term prescription services (workers compensation prescription card). Modern Medical is a prescription bill review service. They have a nationwide network with contracted prescription prices. Their pharmacy network in Virginia includes more than 1,500 pharmacies (61,000 nationwide). This network includes all major chains as well as most of the medium and small local pharmacies. Modern Medical will only authorize generic drugs unless the physician prescribes otherwise. Additionally, Modern Medical educates providers in utilizing generic drugs. Modern Medical also provides an online drug utilization review, which prevents excessive dosages, early refills, drug-to-drug interaction, therapeutic overlap, insufficient dosages etc. A First Fill prescription program is available. With this program, there are no out of pocket expenses for the injured employee. This program prevents the injured employee from using their group health prescription card, which can transfer workers compensation cost to the member s group health provider. How the First Fill Program works: The injured employee is provided with a First-Fill Prescription card. The card must be pre-filled with your VML Insurance Programs member number and name and the injured employee s name and social security number (SSN) before distribution. This card is valid for one time use only. Additional cards for the same injury should not be provided. For additional medication beyond the first -fill the injured employee must contact their VML Insurance Programs representative. The employee presents the card to the pharmacist at a network pharmacy along with their prescription(s). They will be provided with a seven to 10 day supply of medication. The claim must be immediately reported to VML Insurance Programs. Once reviewed Modern Medical is advised whether the claim was accepted or denied. If accepted, the remaining supply of medication will be filled. Any additional prescriptions for this injury will be direct billed through Modern Medical. Page 11

12 The employee will be contacted and the process explained. They will receive a permanent prescription card in the mail for future use under their claim if needed. Once the claim is closed or is inactive for 90 days the card becomes invalid. If the claim is denied, there is no financial consequence to the member or the injured employee. To view Modern Medical s pharmacy network or to find a local pharmacy, visit their Web site at: An identification and password are required. Each member is provided with an instruction letter that contains this information. If a member is unable to locate this information, they should contact VMLIP. Choose: Login (enter member specific ID and password) Pharmacy lookup Enter city, state and/or zip code to find a local pharmacy Should an employee incur the cost for any medication a receipt may be submitted to VMLIP for reimbursement consideration. The receipt must include: Name of pharmacy Name of doctor who prescribed the medication Name of medication prescribed Date prescribed Cost of medication Name of injured employee Name of employer E. Mileage reimbursement: An employee is eligible for reasonable and necessary transportation costs in connection with medical treatment. This would include going to the hospital, doctor s appointments, and physical therapy as a direct result of treatment of a compensable work injury. The cost of mileage to and from a pharmacy is not reimbursable. When requesting mileage reimbursement, the employee should provide the following information: Name of injured employee VML claim number Date of accident Date of travel Physician or other medical provider name Round trip mileage Page 12

13 The mileage reimbursement rate is established by the Virginia Workers Compensation Commission. For the current mileage rate contact VMLIP or visit the VWCC Web site at F. Specified medical equipment and home modification: The VWCC may require the employer to furnish and maintain any appliances prescribed by the treating physician as well as pay for modifications to an employee s home. This includes, but is not limited to, bedside lifts, adjustable beds, ramps, handrails, and doorway alterations. The treating physician and VWCC must determine these items are medically necessary. The maximum aggregate cost payable is $25, 000 for any one accident. Wheelchairs, walkers, canes, or crutches are excluded from this $25,000 lifetime cap. G. Payment of initial medical treatment of a denied workers compensation claim: If a workers compensation claim is denied, VMLIP will pay for initial medical treatment, if the claim is reported immediately to VMLIP (received in the VMLIP claims office within 24 hours from the date of accident) and the employee seeks treatment with a panel physician. While this is not required by the Virginia Workers Compensation Act, VMLIP provides this service to encourage prompt reporting of claims and the use of panel physicians. If the claim is received in the VML claims office within 24 hours from the date of accident and the employee seeks treatment at an emergency room and the claim is denied, initial medical treatment will not be paid. An emergency room is not a panel physician. If the employee treats with a panel physician, however, the claim is not received in the VMLIP claims department within 24 hours from the date of injury and the claim is denied, again the initial medical treatment will not be paid. This is the case, even if the employee reported the injury timely to the employer, but the employer was delayed in getting the claim to VMLIP. VMLIP must limit what is paid on denied claims. Visit our Web site ( for information on the reporting options available and the benefits of having a panel of physicians, as well as guidelines for implementing a panel of physicians. H. HIPAA privacy regulations and workers compensation: (The following is information printed from and available on the Virginia Workers Compensation Commission Web site at: The Health Insurance Portability and Accountability Act s (HIPAA s) privacy regulations went into effect April 14, These regulations limit the situations in which medical providers may release patient information, unless the information is necessary for the purpose of treatment, payment, or health care operations. The relevant HIPAA regulation is Page 13

14 Uses and disclosures for which an authorization or opportunity to agree or object is not required: Standard: disclosure for workers compensation. A covered entity may disclose protected health information as authorized by and to the extent necessary to comply with laws relating to workers compensation or other similar programs, established by law, that provide benefits for work-related injuries or illness without regard to fault. The Secretary of Health & Human Services has explained these rules more fully in the Preamble to the final privacy regulations (preamble: A portion of which follows: Section (l)-Disclosures for Workers Compensation: In the final rule, we include a new provision in this section that clarifies the ability of covered entities to disclose protected health information without authorization to comply with workers compensation and similar programs established by law that provide benefits for work-related illnesses or injuries without regard to fault. Although most disclosures for workers compensation would be permissible under other provisions of this rule, particularly the provisions that permit disclosures for payment and as required by law, we are aware of the significant variability among workers compensation and similar laws, and include this provision to ensure that existing workers compensation systems are not disrupted by this rule. We note that the minimum necessary standard applies to disclosures under this paragraph. Under this provision, a covered entity may disclose protected health information regarding an individual to a party responsible for payment of workers compensation benefits to the individual, and to an agency responsible for administering and/or adjudicating the individual s claim for workers compensation benefit. For purposes of this paragraph, workers compensation benefits include benefits under programs such as the Black Lung Benefits Act, the federal Employees Compensation Act, the Longshore and Harbor Workers Compensation Act, and the Energy Employees Occupational Illness Compensation Program Act. Since HIPAA defers to state law regarding disclosures relating to workers compensation, it is important for claimants and medical providers to know what Virginia law requires for disclosure of patient information. For health care providers who render services to injured workers, Virginia Code Section outlines requirements for furnishing reports for Virginia workers compensation cases Furnishing copy of medical report A. Any health care provider attending an injured employee shall, upon request of the injured employee, employer, insurer, or a certified rehabilitation provider as provided in Article 2 ( et seq.) of Chapter 35 of Title 54.1 providing services to the injured employee, or of any representative thereof, furnish a copy of any medical report to the injured employee, employer, insurer, or a certified rehabilitation Page 14

15 provider as provided in Article 2 ( et seq.) of Chapter 35 of Title 54.1 providing services to the injured employee, or to any representative thereof, or to each of them upon request for such medical report. B. Whenever any health care provider attending an injured employee refers the employee or transfers responsibility for his care to another health care provider, the referring or transferring provider, upon receipt of a request therefore, shall promptly transfer or cause to be transferred to the new or succeeding provider, or to the employee or someone acting on behalf of the employee, copies of all diagnostic test results, x-ray photographs, and other medical records pertaining to the employee s injury for which further treatment is to be sought from the succeeding provider. In the event of such referral or transfer, the succeeding provider, if given any such diagnostic test results, x-ray photographs and other medical records pertaining to the employee s injury which were performed or recorded within the preceding 60 days by a referring or transferring provider, shall not repeat any such diagnostic tests or procedures previously conducted without making a good faith attempt to use them unless there is a medical necessity to do so as certified by a qualified physician on behalf of the succeeding provider. If the succeeding health care provider violates the requirements of this paragraph, such succeeding provider shall not be entitled to compensation or reimbursement from the injured employee s employer or the employer s insurer for any repeated test or procedure not so certified to be medically necessary, nor may the succeeding provider require the employee to bear any cost associated with the repeated test or procedure which would have been the responsibility of the employer or his insurer but for the provisions of this subsection. C. As used in this section, the term health care provider shall have the same meaning as set forth in , except that state-operated facilities shall also be considered health care providers for the purposes of this section. Page 15

16 Chapter 7: Wage loss benefits A. Average weekly wage/compensation rate: All benefits involving lost wages or loss of earnings (including permanent partial/total disability benefits) are based on the employee s pre-injury gross wages. The average weekly wage is determined by totaling the employee s actual earnings, including overtime, for the 52 weeks immediately preceding the injury. This figure is divided by 52. If the employee has worked less than 52 weeks, divide by the number of weeks worked unless employed for only a relatively short period. In this case, the earnings of a similarly employed individual can be used. If the injured employee has a second or part time job, determination will be made as to whether this employment is similar or not. This decision will be made by the claim representative and if deemed similar employment, these wages will be included in the computation of the average weekly wage. If the injured employee performs two dissimilar jobs for the same employer, the wages for both jobs are combined when calculating the average weekly wage. Often times, because of overtime, varied work hours, non-salaried employee, etc., a wage chart (VWC form) must be completed in order to calculate an accurate average weekly wage. Once the average weekly wage has been established, the weekly compensation rate is determined based on 66 2/3 percent of the employee s gross average weekly wage. Example: $10,400 gross annual earnings, divided by 52 = $200 average weekly wage $200 average weekly wage x $ compensation rate Page 16

17 The maximum compensation rate an employee is eligible for is established by law and changes annually, effective July 1. If an employee s wages, upon calculating the compensation rate is still greater than the maximum allowed, the employee will receive only the maximum amount. Also, applicable is a minimum compensation rate, again established by law and set annually, effective July 1. If an employee s wage, after calculating the compensation rate is less than the minimum, the employee is entitled to either their full average weekly wage or the minimum rate, whichever is the lesser amount. For the current maximum and minimum compensation rates contact VMLIP. B. Waiting period: An employee is not entitled to compensation for the first seven days of incapacity resulting from an injury. The seven days is referred to as the waiting period. The seven-day waiting period begins on the first day the employee begins losing time from work due to the injury. If an employee is disabled beyond the sevenday period, compensation begins on the eighth day of disability. If the employee returns to work within the waiting period, he/she is not entitled to lost time benefits. If the employee is disabled for more than twenty-one days (need not be consecutive), they are then entitled to compensation for the seven-day waiting period. C. Temporary total disability benefits: When an employee is injured and taken out of work by the authorized attending physician for more than seven days, he/she is entitled to wage compensation benefits. As previously outlined, this compensation rate is based on 66 2/3 percent of the employee s gross average weekly wage. These benefits are non-taxable and the maximum compensation is 500 weeks. These benefits are generally paid to the employee every two weeks unless this proves a hardship for the employee and then, other arrangements can be made. Example: $200 employee s gross pre-injury average weekly wage x $ temporary total compensation rate D. Temporary partial disability benefits: When an injured employee has a decreased average weekly wage after returning to work in a modified, light duty or part-time job, the employee is entitled to benefits in the amount of 66 2/3 percent of the difference between the pre-injury average weekly wage at the time of the accident and the gross wage he/she is able to earn after the accident. This is true only if the employee still has restrictions placed on him/her by the attending physician. If there is a release to the pre-injury position, no temporary partial benefits are due, whether the employee is earning his pre-injury wage or not. As the employee receives salary increases, the temporary partial benefits are reduced accordingly. These benefits are non-taxable. Again, the maximum compensation is 500 weeks, or until the employee is back to his pre-injury average weekly wage, whichever comes first. Example: $ employee s gross pre-injury average weekly wage gross average weekly wage, due to change in earning capacity Page 17

18 $ 50 difference between pre-injury average weekly wage and current earning capacity x $ temporary partial compensation rate E. Permanent partial disability benefits: When there is loss of a member by amputation or permanent loss of use of a member, the employee is entitled to financial compensation for the functional loss. The VWCC assigns a value to each member, in terms of a number of weeks of compensation for the loss of the whole member. The employee s permanency benefits are based upon the percentage of functional loss of the member. The rate of compensation for permanent partial disability is calculated at 66 2/3 percent of the gross average weekly wage at the time of the injury. The percentage of loss is usually determined by medical evaluation however; the VWCC will occasionally make this determination. Permanent partial and permanent total loss and disfigurement are compensated as follows (rate is equal to 66 2/3 percent of the average weekly wage): TABLE OF SCHEDULED MEMBERS LOSS WEEKS Thumb 60 Index finger 35 Second finger 30 Third finger 20 Little finger 15 First phalanx of thumb or any finger One half of above Great toe 30 Any other toe 10 First phalanx of any toe 10 Hand 150 Arm 200 Foot 125 Leg 175 Eye total vision loss 100 Ear total hearing loss 50 Severe disfigurement 60 (up to) Pneumoconiosis Example: 10% loss of use rating to the injured leg 175 weeks (scheduled number of weeks for the loss of the whole leg) x 10% permanent partial rating provided by the attending physician 17.5 This rating entitles the employee to 17.5 weeks of compensation Page 18

19 17.5 x $ compensation rate at the time of the injury $2, total permanent partial compensation to the employee Before permanent partial disability benefits are awarded, it must appear from medical evidence that the partial incapacity is permanent and the employee must be at maximum medical improvement (MMI). MMI occurs when the medical records indicate no further surgery or treatment would improve the employee s condition. Permanency cannot be predicted. Where an injury is confined to a specific member, the permanent partial disability rating is determined for only the specific member that was injured. (i.e. if the employee suffered an injury to only the index finger, the index finger would be rated, not the hand). An injury to a specific member cannot receive two ratings. (i.e. an injury to the ankle must either be rated on the foot or the leg, not both members) The loss of use does not need to result from an injury that occurred directly to a scheduled member. The Virginia Workers Compensation Act will allow compensation for any work related injury which manifests itself in a scheduled member. (Example: an injury to a back caused permanent partial disability to a leg even though there was no direct injury to the leg.) A permanent partial disability rating may factor in pain that causes impaired function, resulting in disability. Pain alone is not compensable. There must be evidence that the pain interferes with the functional use of the member. There are no permanent partial disability ratings for the neck, back or whole person. When rating a wrist injury, generally this is considered to be loss of the hand. Injuries above the wrist are generally considered loss of use of the arm. There is no distinction between the loss of or loss of use of the dominant member and the non-dominant member. When rating an ankle injury, generally this is considered to be loss, or loss of use, of the foot. Injuries below the knee or above constitute loss of the leg. Visual impairment is based upon deviation from normal visual acuity, ocular motility, and vision fields. (See Visual Loss Chart, page 45 in the back of this booklet) In determining the percentage of hearing loss, the VWCC uses the American National Standards Institute (ANSI) as a guideline. There is no binding rule of the VWCC requiring the use of the ANSI standard for measuring hearing loss. The Virginia Workers Compensation Act does not provide compensation for hearing loss less Page 19

20 than 27 decibels. Hearing loss is determined without a hearing aid. (See Hearing Loss Chart, page 44 in the back of this booklet) The determination of disfigurement is a legal opinion and is determined by the VWCC. In order for benefits to be awarded, there must be severely marked disfigurement that is conspicuous or noticeable. An award for disfigurement will be made only where an award for the same member has not previously been made. F. Permanent total disability benefits: These benefits entitle an employee to lifetime compensation benefits. In order for an employee to be a candidate for permanent and total disability, the employee must meet one of the following criteria: 1. Loss of both hands, both feet, both legs, both eyes, and any two of these in the same accident. 2. Injuries resulting in total paralysis. 3. Severe brain injury, which renders an employee permanently unemployable in gainful employment. In determining the extent of loss or loss of use of each member, the ability of the employee to use the affected member to engage, to a substantial degree, in any gainful employment must be considered. These benefits are payable after the expiration of 500 weeks of temporary total disability benefits upon application to the VWCC. These benefits are non-taxable. G. Death benefits: The employee s dependent(s) are entitled to a maximum 500 weeks of compensation benefits at two-thirds of the employee s average weekly gross earnings (up to the maximum). These benefits continue to the widow/widower for the maximum 500 weeks unless he/she should remarry. Benefits for dependent children continue until age 18, or 23 if enrolled in school as full time student. In addition, compensation of $10,000 maximum is provided for funeral expenses and $1,000 maximum for body transportation. Reasonable medical expenses, causally related to the fatal injury are also paid. H. Maximum compensation benefits: The Virginia Workers Compensation Act states that the maximum period of compensation benefits payable is 500 weeks. Included in these 500 weeks are any weekly benefits paid under temporary total, temporary partial and/or permanent partial disability benefits. However, as explained above, if an injured employee is deemed to be permanently and totally disabled, they may be eligible for lifetime compensation benefits. I. Awards: An award is a written notice that sets forth the terms and conditions of payment of compensation. This is triggered by the filing of an Agreement to Pay Benefits or Supplemental Agreement to Pay Benefits with the VWCC and continues Page 20

21 until such time as a modification occurs through the filing of a Termination of Wage Loss Benefits or through the litigation process. An award can also be a denial of benefits or compromised settlement ordered by the VWCC. Before an award is entered, the VWCC is of the clear opinion that the best interests of the employee will be served. Once an award is entered by the VWCC, it is binding and cannot be disturbed. J. Required forms: Three forms prompt and/or modify an award. These are state required forms, which have been drafted by the VWCC. The Agreement to Pay Benefits initiates compensation benefits under a claim. It is only filed once during the life of a claim. The employer/insurance administrator and the injured employee agree on the employee s description of the accident, date of accident, injuries, disability, average weekly wage, and compensation rate. The Termination of Wage Loss Award documents the amount of compensation an employee received, sets forth the dates and terminates the award under which benefits were being paid. This form is required once the injured employee has returned to work at regular or modified duty or when the employee is released to return to work. Failure by the employee to sign and return the form within a reasonable time period (10-14 days) will result in VMLIP filing an application for hearing with the VWCC. The Supplemental Agreement to Pay Benefits notifies the VWCC of a change in status of the employee s disability and compensation benefits. This form is filed any time there is a recurrence of disability or change in earnings and compensation rate or a permanent partial disability rating is given to the employee. Before the VWCC will recognize the Supplemental Memorandum of Agreement, there must be an Agreed Statement of Fact concluding the disability period immediately preceding the requested change. K. Cost of Living Adjustment (COLA): Cost of Living Adjustments (COLA) are applicable on awards entered for temporary total, permanent total, or death benefits. The percentage of the increase is determined by the Virginia General Assembly and is effective on October 1, of every year. However injuries which occur after July 1, are not eligible for a COLA increase for the year of injury. The employee/dependent must request an adjustment and produce evidence regarding the status of his/her social security disability benefits. In order for an employee/dependent to be eligible for COLA, the combination of the workers compensation benefits and social security benefits must be less than 80 percent of Page 21

22 the pre-injury average monthly earnings. Therefore, an employee/dependent who is receiving social security benefits may not be eligible to receive a COLA increase. Effective July 1, 1997, when determining the monthly amount of combined disability received by an employee/dependent, a deduction may be made for the monthly amounts paid for Medicare. For the current COLA percentage please contact VMLIP. Chapter 8: Vocational rehabilitation Private sector vocational rehabilitation companies arose in the early 1970 s due to vocational issues arising out of an injured employee s inability to return to his/her pre-injury position. VMLIP will assign a trained vocational counselor to assist the injured employee in securing employment when the injured employee is unable to return to his/her pre-injury position. In most cases, the primary reason the employee is unable to return to his/her preinjury occupation is the fact that the employee has permanent physical restrictions as a result of his/her workers compensation injury. When the employer is unable to accommodate the permanent physical restrictions then a vocational counselor will be utilized. A vocational counselor is a highly trained individual who assists the injured employee in all aspects of securing gainful employment. Initially a thorough intake interview is arranged between the injured employee and the rehabilitation counselor. It is during this interview that a complete vocational history is obtained along with an interest inventory. From this interview, the rehabilitation counselor evaluates the injured employee s transferable skills. The vocational counselor will also assist the injured employee with the writing of resumes and interviewing skills. Once the transferable skills are determined and coordinated with realistic interests of the injured employee, job search begins. Job search continues until a position is secured that accommodates the injured employee s permanent physical restrictions and is within his/her skill level. Once it is determined by the treating physician that an employee is unable to return to his/her pre-injury position, but has been released to work with permanent physical restrictions, the employee is required to cooperate with reasonable vocational placement efforts. If an employee does not cooperate with return to work efforts compensation will be suspended. Examples of non-cooperation with vocational efforts include: An employee s failure to keep appointments with the rehabilitation counselor; Page 22