A COMPARISON OF SYSTEM FEATURES: 14 STATES

Transcription

1 A COMPARISON OF SYSTEM FEATURES: 14 STATES CAROL A. TELLES RUI YANG RAMONA P. TANABE With the Assistance of Stacey O Brien February 2007 WORKERS COMPENSATION RESEARCH INSTITUTE CAMBRIDGE, MASSACHUSETTS

2 COPYRIGHT 2007 BY THE WORKERS COMPENSATION RESEARCH INSTITUTE ALL RIGHTS RESERVED. NO PART OF THIS BOOK MAY BE COPIED OR REPRODUCED IN ANY FORM OR BY ANY MEANS WITHOUT WRITTEN PERMISSION OF THE WORKERS COMPENSATION RESEARCH INSTITUTE. PUBLICATIONS OF THE WORKERS COMPENSATION RESEARCH INSTITUTE DO NOT NECESSARILY REFLECT THE OPINIONS OR POLICIES OF THE INSTITUTE S RESEARCH SPONSORS. ii

3 TABLE OF CONTENTS List of Tables iv Introduction 1 Workers Compensation Law / 2 Administrative Organization / 3 Medical Benefits and Medical Management Tools / 3 MEDICAL BENEFITS / 3 MEDICAL COST CONTAINMENT STRATEGIES / 3 Indemnity Benefits / 6 TEMPORARY TOTAL DISABILITY BENEFITS / 8 PERMANENT DISABILITY BENEFITS / 9 Vocational Rehabilitation Benefits / 13 Initiating a Claim / 13 Initiating Payment / 14 Terminating Temporary Total Disability Benefits / 15 Dispute Resolution / 15 Attorney Fees / 16 References 17 iii

4 LIST OF TABLES 1 Coverage under the Workers Compensation Act, 2006 / 24 2 Administrative Organization, 2006 / 26 3 Medical Benefits, 2006 / 28 4 Medical Cost Containment Strategies, 2006 / 30 5 Maximum and Minimum Temporary Total Disability Benefits, / 34 6 Temporary Disability Benefits, 2004 / 38 7 Maximum and Minimum Permanent Partial Disability Benefits, / 40 8 Permanent Partial Disability Benefits, 2004 / 44 9 Determining Permanent Partial Disability Benefits, 2006 / Vocational Rehabilitation Benefits, 2004 / Claim Initiation and Reporting Requirements, 2006 / Initiating Payments, 2006 / Terminating Temporary Total Disability Benefits, 2006 / Dispute Resolution Mechanisms, 2006 / Attorney Fees, 2005 / 61 iv

5 INTRODUCTION This report describes the structures and practices in the 14 workers compensation systems we studied in the seventh edition CompScope multistate benchmarking series. 1 The states in the study are Arkansas, California, Florida, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, North Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin. In this report, we focus on structures and practices that are closely related to the system performance measures presented in the individual CompScope state reports and in the companion statistical reference book. Those measures cover a number of areas, including time from injury to notice and first payment, average total cost per claim and average payments per claim for medical and indemnity benefits (and the components of each), vocational rehabilitation use and costs, benefit delivery expenses and defense attorney involvement, and duration of disability and indemnity payments. This report provides a context for understanding and interpreting the findings of those studies, particularly when states show large variation on a particular measure. It is also useful by itself to policymakers and others who want to examine similarities and differences in state structures and processes. There is a lot of information here, but statistical tables alone cannot reflect all the nuances of a particular jurisdiction. For a more comprehensive examination of each state s workers compensation system, please refer to WCRI s series of Administrative Inventories and other studies noted in the References section or to the statutes for each state. 1 The seventh edition of the CompScope benchmarking study comprises a series of separate publications, including 11 individual state reports (for California, Florida, Illinois, Louisiana, Maryland, Massachusetts, Michigan, North Carolina, Pennsylvania, Tennessee, and Wisconsin); a reference book of statistical tables (CompScope Benchmarks, 7th Edition: The DataBook [ and the Technical Appendix (CompScope Benchmarks: Technical Appendix, 7th Edition [

6 Generally, we describe the state systems as of mid However, because we want to tie in the system features to trends in system performance from 1999 to 2005 in the CompScope studies, we also note major changes in state processes during that time frame. In some cases, we also note very recent legislative changes that will become effective in the near future. For the most part, the tables are self-explanatory. We have divided the material into short sections by topic, each containing brief descriptions of the contents of the tables and a summary of the points that are particularly noteworthy. WORKERS COMPENSATION LAW The workers compensation statutes in the 14 states were enacted between 1910 and Table 1 shows the scope of coverage in each state. Scope of coverage can affect the frequency of claims and/or cost per claim and thus can influence system costs. Workers compensation insurance is compulsory for private employers in all the states studied except Texas. 3 As of 2003, Florida required that all construction employers with one or more employees purchase workers compensation coverage a more restrictive requirement than in previous years. 4 Tennessee requires coverage for employers with five or more employees and for all employers in construction, regardless of the number of employees. Coverage for most public employment is also compulsory. Several states do allow exemptions from mandatory coverage for farm laborers, domestic workers, and casual workers, but if employers of those workers elect to buy workers compensation insurance, the workers are limited to remedies under the workers compensation law. 2 See the References section for the citation for each statute. 3 According to estimates by the Texas Department of Insurance, approximately 38 percent of employers in Texas elected not to buy workers compensation coverage in Employees of nonsubscriber employers represented approximately 24 percent of the workforce that year (Texas Department of Insurance, 2004). 4 Previously, coverage was required for employers with four or more workers and for all employers in the commercial construction trade. In accordance with Senate Bill 108, effective July 1, 2002, employers in commercial construction were exempt from workers compensation coverage when the job was valued at less than $250,000; residential construction contractors continued to be exempt. Effective October 1, 2003, the exemption for projects valued at less then $250,000 was repealed. 2

7 ADMINISTRATIVE ORGANIZATION In general, the agency with primary responsibility for administering the workers compensation law in each state functions as (1) a division or other subsidiary of a department-level state agency with an administrative director or (2) a freestanding multimember commission or board with a chair and an executive director. Table 2 describes the structure of the administrative agency in each state we studied. MEDICAL BENEFITS AND MEDICAL MANAGEMENT TOOLS MEDICAL BENEFITS In general, the states we studied pay medical benefits to workers who sustain an occupational injury, disease, or disability (Table 3). Statutory benefits are similar across the states, covering medical, surgical, hospital, and other treatments, as well as medicines and supplies. Most of the states pay medical benefits as long as they are reasonable and necessary. No state places a dollar limit on total medical benefits, but fee schedules set reimbursement levels for individual services and are reviewed and adjusted periodically. MEDICAL COST CONTAINMENT STRATEGIES All 14 states use multiple strategies to contain medical costs. Table 4 describes those strategies. The following are the major points in the table: Managed care: Managed care is allowed in 13 states and regulated in 5. Public officials in Pennsylvania note that the statute is silent on the issue of managed care and that silence does not assume authority. No state in the study currently mandates managed care for all injured workers. 5 Choice of provider: The initial choice of a treating provider and the worker s ability to change providers can play critical roles in the claim process, particularly when the treating physician s opinion is the basis for benefit-related decisions. The worker 5 Effective October 1, 2001, the use of managed care in workers compensation was made voluntary in Florida, rather than mandated. 3

8 chooses the treating provider without employer or insurer limitation in five states (Illinois, Louisiana, Maryland, Massachusetts, and Wisconsin), although in Massachusetts, when an insurer has entered into a preferred-provider arrangement, the worker s first scheduled appointment may be required to be with a provider in the plan. In Florida, the employer or insurer has the initial choice for non-managed-care arrangements; within managed care, the worker has the right to choose within the managed-care network. In California, the employer can direct care for the first 30 days unless the worker has predesignated a treating physician or unless the employer or insurer has established a medical provider network. 6 Recent legislation in Texas (House Bill 7) allowed insurers and self-insured employers to establish health care networks; workers are required to receive medical care within the network if their employer or insurer has contracted with a certified network. The Texas Department of Insurance began accepting applications for certification of health care networks beginning January 1, If no certified network is in place, the worker can choose the treating provider, as was the case before the legislation. In Michigan, the employer has the initial choice of medical provider for ten days after the inception of medical care, after which the worker can choose. In two other states (Pennsylvania and Tennessee), the employer may post a panel of health care providers from which the worker chooses. Pennsylvania allows a limited period of directed care (90 days), after which the worker can change treating providers. In Arkansas, Indiana, and North Carolina, the employer selects the treating provider. Medical fee schedules: As of 2006, all CompScope states except Indiana and Wisconsin use medical fee schedules and some form of hospital payment regulation to set reimbursement levels for medical services. 7 Tennessee enacted a fee schedule 6 Medical provider networks were first permitted in California effective January 1, 2005; previously, predesignation was allowed only for injured workers whose employers provided nonoccupational group health care through a health management organization, health care plan, health care organization, or other such entity. If a worker did not predesignate a treating provider, the employer could direct care for the first 30 days. 7 For a detailed discussion of medical fee schedules, hospital payment regulations, and other medical cost containment programs, see Managed Care and Medical Cost Containment in Workers Compensation: A National Inventory, (Tanabe and Murray, 2001). Under managed-care arrangements, medical fee schedules often are used as benchmarks in setting reimbursement rates with providers. 4

9 effective July 1, 2005, and recent legislation in Illinois created a fee schedule effective February 1, Since 1992, Wisconsin has relied on division-certified databases that list formula amounts for medical reimbursement. Fees below formula amounts are considered reasonable. 8 Utilization review: Nine study states mandate some form of utilization review, most within managed-care arrangements or under specific circumstances. Florida and Massachusetts mandate utilization review for all workers compensation claims. In states where utilization review is not mandated (Illinois, Indiana, Maryland, Texas, and Wisconsin), it is often conducted in disputed cases or at the request of the employer, the insurer, or the worker. Medical bill review: Review of medical bills is mandated in Arkansas, Florida, Louisiana, Michigan, and Texas. It is authorized but not mandated in Indiana, Massachusetts, North Carolina, Pennsylvania, and Tennessee. 9 In those states and in California, Illinois, Maryland, and Wisconsin, payors commonly review bills voluntarily to determine compliance with the fee schedule or reasonableness of the charges under a usual and customary standard. Treatment guidelines: Three of the study states (California, Florida, and Massachusetts) have developed treatment guidelines or use established treatment guidelines. In Arkansas and North Carolina, treatment guidelines are authorized for managed-care organizations. Illinois, Indiana, Louisiana, Maryland, Michigan, Pennsylvania, Tennessee, and Wisconsin neither require nor endorse treatment guidelines. 10 Recent legislation in Texas requires the commissioner of the Division of Workers Compensation (for nonnetwork care) and medical provider networks to 8 Interested readers can turn to the WCRI study Benchmarks for Designing Workers Compensation Medical Fee Schedules: (Eccleston, Laszlo, Zhao, and Watson, 2002) for more information on how workers compensation fee schedules compare among 40 states and how those fee schedules compare with the Medicare fee schedule. 9 On request, the North Carolina Industrial Commission reviews medical bills for proper charges in cases in which there is more than one day of lost time or more than $2,000 in medical bills. Effective February 1995, employers and insurers can apply the fee schedule themselves (nonhospital), subject to specific requirements. 10 Texas House Bill 2600, Article 6, effective June 17, 2001, abolished mandatory treatment guidelines. If treatment guidelines are adopted, the statute requires that they be nationally recognized, scientifically valid and outcome-based. The statute allows the adoption of guidelines that are not nationally recognized if there are no guidelines available that meet that criteria, but any guidelines have to be scientifically valid and outcome-based. 5

10 select treatment and return-to-work guidelines; treatment guidelines must be evidence-based, scientifically valid, and outcome focused. INDEMNITY BENEFITS When a covered worker suffers a work-related injury or disease, he or she is entitled to specific income benefits (known as indemnity benefits) as specified in the statute of each jurisdiction. Indemnity benefits are paid to an injured worker or to dependents of a diseased worker whose claim meets statutory requirements. Generally, that means the claim has been deemed compensable, and the worker has lost time from work beyond the specified waiting period for benefits. The amount of these benefits and the period over which they may be paid differ significantly from state to state. Common terms used for indemnity benefits are temporary disability, which includes both temporary total disability and temporary partial disability; permanent partial disability, which includes both permanent partial disability and permanent total disability; fatality benefits, which includes funeral benefits and dependency benefits paid when a worker dies from a work-related injury or occupational disease; and vocational rehabilitation benefits (also known as maintenance benefits) paid while an injured worker is participating in a formal vocational rehabilitation plan to provide training or skills needed for return to work. The payment for lost wages resulting from to an occupationally related injury or disease usually begins with the payment of temporary total disability (TTD) benefits, paid when the injured worker cannot work at all while recovering from the injury. TTD benefits are paid as a portion of the worker s preinjury wage (the TTD benefit rate), subject to maximum (and often minimum) weekly benefit amounts. Some states also limit the number of weeks over which TTD benefits can be paid. Temporary partial disability (TPD) benefits are paid when a worker is able to return to work following a workplace injury but with some physical limitations and loss of earnings, often because 6

11 the worker is working fewer hours, has returned to a different job that pays less, or is looking for work within the physical restrictions. TPD benefits are generally calculated as a percentage of the difference between the preinjury wages and what the worker is able to earn with the physical limitations. TTD and TPD benefits typically continue until the worker is released to work without restrictions, the worker is earning the same as the preinjury wage, the worker has received benefits for the number of weeks allowed by statute, or there is an administrative or judicial determination that the worker is no longer eligible for these benefits. After an injured worker returns to work, reaches the maximum temporary disability benefits payable, or a physician has determined that the worker s physical condition is stable and not likely to improve, he or she may be eligible for permanent disability benefits. Permanent disability benefits are paid when a worker has a permanent loss of physical function or, in some states, a loss of future earning capacity. There are two types of permanent disability benefits: permanent total disability (PTD) benefits and permanent partial disability (PPD) benefits. PTD benefits are typically paid when a worker has suffered a very severe injury that precludes an expectation that the worker will be able to return to work. State statutes often specify conditions that create a presumption of entitlement to PTD benefits (e.g., loss of two body members, paralysis, or severe head injury). PTD benefits are generally paid for life or until the worker returns to work. PPD benefits are paid to compensate an injured worker for a permanent but partial loss of physical function or disability or, in some states, partial loss of future earnings. Thus, PPD benefits are more complicated and diverse than PTD benefits, both in design and application. Like temporary disability benefits, PPD benefits are often paid as a percentage of the worker s preinjury wage, subject to a maximum weekly amount and paid for a limited number of weeks. In some states, the benefit rate and/or maximum weekly benefit for PPD benefits is the same as for TTD benefits; in other states, weekly PPD benefits may be lower. There are two types of PPD benefits: scheduled and unscheduled. Scheduled PPD benefits typically involve body members and are listed in the statute, with a specified number of weeks of benefit payments for each total loss or loss of use (e.g., 200 weeks 7

12 for the loss of an arm). Payments for partial loss of use are based on the degree of impairment, as determined by a physician. Unscheduled PPD benefits typically involve injuries not specified in the statute, often including back and soft tissue injuries. The states use various approaches to unscheduled PPD benefits: Impairment approach: considers only the actual physical and psychological loss caused by the injury or illness, rated by a medical provider using a rating guide such as the American Medical Association Guides to the Evaluation of Permanent Impairment (AMA Guides) or similar guide. Loss-of-earning capacity approach: attempts to estimate the injured worker s future wage loss using factors such as the worker s age, education, training, skills, and degree of impairment, and labor market conditions. Wage-loss approach: calculates the worker s actual weekly wage loss, based on the difference between the worker s preinjury wage and what the worker is able to earn with the permanent disability. Combination of the above approaches, typically depending on whether or not the worker has returned to work: under many state systems that use this approach, workers who have returned to work at or near the preinjury wage receive PPD benefits based on impairment only; workers who do not return to work receive benefits based on a loss of earning capacity. Tables 5 and 6 focus on TTD benefits, and PPD benefits are covered in Tables 7, 8, and 9. TEMPORARY TOTAL DISABILITY BENEFITS Table 5 reports the benefit rates and levels for temporary total disability benefits from 1996 through With the exception of Michigan, each study state applies a benefit rate, which ranges from 60 percent to 70 percent, to the worker s gross preinjury average weekly wage (AWW). In Michigan, the benefit rate is 80 percent of the worker s spendable (after-tax) income. The maximum statutory weekly benefit in mid-2004 ranged from $429 in Louisiana to $1,020 in Illinois. The benefit rate, the maximum benefit (and 8

13 the percentage of the statewide average weekly wage that the maximum benefit represents), and the worker s preinjury AWW are the key variables in the calculation of weekly TTD benefits across states. Table 6 shows several other dimensions of TTD benefits in In 11 states, benefits automatically go up each year, usually with increases in the state average weekly wage. In Illinois, the maximum benefit is adjusted semiannually. In California, Indiana, and Texas, benefit levels are set by legislation. 11 In all states, TTD benefits are paid for the duration of the total disability or incapacity or until some other event triggers termination: (1) the statutory limit (in weeks of benefits) has been reached, (2) a medical report indicates the worker has reached maximum medical improvement or is able to work with or without restriction, or (3) the worker has been released to work but has refused gainful employment. 12 Illinois, Louisiana, Maryland, Michigan, North Carolina, and Wisconsin do not limit the duration of benefits. Duration of disability caps vary from 104 weeks in California (except for specified injuries), Florida, and Texas to 500 weeks in Indiana. 13 PERMANENT DISABILITY BENEFITS In most study states, the PPD rate is the same as the TTD rate (see Table 7). An exception is Massachusetts, where the statute sets dollar amounts for scheduled benefits. We find greater variation across states in the maximum weekly PPD benefit payments relative to the TTD maximum weekly benefit. In Illinois (for amputation and enucleation of an eye), Indiana, Louisiana, Michigan, North Carolina, Pennsylvania (for scheduled benefits), and 11 Beginning in 2006, the weekly maximum TTD benefit in California will be indexed to the statewide average weekly wage. In Texas, the statewide average weekly wage for workers compensation purposes was set by legislation for fiscal years beginning from September 1, 2003, and through September 1, In addition to a 500-week limit on income benefits, Indiana imposes a maximum dollar amount, which is increased annually by statute. 13 In Pennsylvania, since June 24, 1996, a worker who has received benefits for 104 weeks can be evaluated for permanency. If the worker is found to have a permanent impairment of less than 50 percent, his or her eligibility for total disability benefits ends, but the worker may be entitled to up to 500 additional weeks of partial disability benefits. If the worker s permanent impairment is greater than 50 percent, benefits can continue for the period of disability without limitation. In practice, however, the use of the American Medical Association Guides to the Evaluation of Permanent Impairment to assess impairment in Pennsylvania is rare, with parties apparently preferring compromise-and-release settlements to formal evaluations. 9

14 Tennessee, the maximum weekly benefit for permanent partial disabilities is the same as the TTD maximum. 14 In the other states, the maximum weekly PPD benefits as a percentage of the TTD maximum range from 15 percent (in Maryland, for the lowest benefit tier) to 70 percent (in Texas) as of The relationship between TTD and PPD benefit levels may be important. 15 When TTD benefits are higher than PPD benefits, the system may be creating incentives for workers to continue collecting TTD benefits and for employers and insurers to contest those benefits, increasing litigation and its attendant expenses. Another source of litigation is workers efforts to increase and payors efforts to contain the amount of PPD benefits. Another possible response is that workers may return to work sooner, with the PPD benefit becoming a supplement to, rather than a replacement for, earnings. The maximum number of weeks that PPD benefits can be paid (under a state s schedule or the body as a whole concept) is also an important factor in PPD payments. Table 8 shows other dimensions of PPD benefits in Several states set a time frame for initiating PPD benefits at maximum medical improvement, for example, or when TTD benefits end. Louisiana, Massachusetts, Michigan, and Pennsylvania pay PPD benefits only for injuries listed in the states schedules (generally, loss or loss of use of a body member or disfigurement). Workers in those four states are compensated for unscheduled impairments only if they actually experience a wage loss or a loss of wageearning capacity. Michigan and Pennsylvania further limit PPD benefits by paying compensation only for total loss or loss of use; those states have no provision for partial losses. In Louisiana, PPD benefits are reduced by the number of weeks of TTD, TPD, and PTD benefits paid. The ten non-wage-loss study states represent several different approaches to permanency benefits for unscheduled injuries: Some states base benefits on impairment only (Florida, Indiana, and Texas); other states use a disability concept, based on a loss of earnings capacity (California and Illinois); and some states use a bifurcated or dual 14 For 2004 and 2005, Tennessee s maximum weekly PPD benefit remained at 100 percent of the statewide average weekly wage, but the maximum weekly TTD benefit was set at 105 percent and 110 percent of the statewide average weekly wage for those years, respectively. 15 We use the term PPD benefits generically to describe permanency benefits for a worker who is not permanently and totally disabled. 10

15 approach (Arkansas, Maryland, Tennessee, and Wisconsin). North Carolina is unique among these 14 states in that it has attributes of both a PPD system and a wage-loss system. Workers who do not return to work at maximum medical improvement can receive PPD benefits or ongoing TTD benefits, yet North Carolina also pays PPD benefits for workers with permanent impairments who have returned to work. Table 9 describes the processes the states used in 2006 to determine PPD benefits. Here too we find considerable variation. All study states except Florida and Texas base the amount and duration of permanent disability benefits on a schedule. Florida uses its own rating guide, titled the Florida Impairment Rating Guide, to assign ratings for specific impairments; Texas uses the AMA Guides. In Texas (and Florida until 2003), the number of weeks of PPD benefits is three times the impairment rating. Under 2003 legislation in Florida, the number of weeks of PPD benefits varies from two to six for each impairment rating point, according to a graduated schedule. In California, North Carolina, and Tennessee the schedules are comprehensive, covering almost all conditions and impairments. The California permanent disability schedule was recently revised and impairment ratings are now based on the fifth edition of the AMA Guides, as required under legislation passed in Medical impairment alone is the basis for ratings in most study states except California, Illinois, and Tennessee. In California and Illinois, the nature of the injury and the worker s age and occupation are also considered. California takes into account the worker s diminished future earning capacity. Legislation passed in 2004 made major revisions to the PPD benefit structure and determination process in California, as listed in the notes for Tables 8 and 9. In Tennessee, ratings are based on medical impairment plus the worker s age, education, training, occupation, loss of present and future wage-earning capacity, and local labor market conditions. Twelve states require the use of rating guides (the exceptions are Illinois and Michigan), and all except Pennsylvania use them extensively. Michigan does not use medical impairment ratings. Florida, North Carolina, and Wisconsin have developed their own rating guides; the other states use one or more editions of the AMA Guides The 2004 legislation in California requires use of the AMA Guides; previously California used its own guide. 11

16 In all the study states, impairment ratings are issued by a physician, generally the treating physician but sometimes an independent medical examiner or impartial physician. In Texas, an independent physician from the agency s list performs evaluations. 17 Disability ratings in California are determined by staff members in the Disability Evaluation Unit of the Division of Workers Compensation, by the parties, or by private raters. In all states except California, Indiana, Massachusetts, Maryland, Pennsylvania, and Texas, the treating physician s rating is given special weight when multiple ratings have been made. All study states except Michigan authorize the use of medical panels or neutral doctors in disputes over impairment ratings. Panels and neutral doctors must be used in Massachusetts, Pennsylvania, and Texas when medical issues are disputed. In California, if the worker is not represented by an attorney, a panel-qualified medical examiner must be used; the 2004 legislation extended this requirement to represented workers as well. The amount of PPD benefits often is resolved through a lump-sum settlement, particularly when an impairment rating is in dispute. Texas prohibits lump-sum settlements but allows lump-sum payments under certain circumstances. In Massachusetts, Tennessee (under some circumstances), and Texas, lump-sum settlements cannot terminate future liability for medical benefits. In California (before 2003), future liability for rehabilitation benefits could not be closed out. 18 No other state has similar limitations. 17 In accordance with House Bill 2600, Section 5, effective June 17, 2001, when the insurer requests an examination related to maximum medical improvement (MMI) or the impairment rating, or if MMI or the impairment rating is disputed by either party, an injured worker is sent to an independent doctor. The doctor is selected from the Texas Workers Compensation Commission s list of designated physicians for assignment of an impairment rating or determination of attainment of MMI. Treating doctors often provide impairment ratings. 18 The 2002 legislation in California permitted a compromise and release of the mandatory vocational rehabilitation obligation with a $10,000 one-time cash grant for self-directed vocational rehabilitation. The 2003 legislation repealed the existing vocational rehabilitation statute and implemented a new supplemental job displacement benefit for injuries occurring on or after January 1, The 2004 legislation restored vocational rehabilitation for pre-2004 injuries. 12

17 VOCATIONAL REHABILITATION BENEFITS In several of the states we studied, an injured worker may be entitled to vocational rehabilitation benefits under some circumstances; in others, the payor provides vocational rehabilitation services voluntarily (Table 10). The workers compensation agency often plays a critical role in identifying workers who might benefit from vocational rehabilitation services and in monitoring the provision of those services. In most study states, workers continue to receive indemnity benefits, often at the weekly TTD rate, while undergoing vocational rehabilitation. Rehabilitation benefits are limited in duration, ranging from 26 weeks in Florida and Louisiana (both with a possible extension to 52 weeks) to 104 weeks in Maryland and Massachusetts. In the CompScope multistate benchmarking studies, the expenses of providers services for vocational rehabilitation are reported separately; the costs of ongoing indemnity benefits while a worker is receiving services are included in indemnity costs. INITIATING A CLAIM Table 11 shows claim initiation and reporting requirements. In all 14 states, once a workplace injury or illness occurs, the worker must notify the employer. The notification period varies from immediately to 90 days. A worker s failure to notify the employer within the required period generally does not bar a claim unless the employer has been prejudiced. However, the worker must file a claim within the statutory period, which varies from one to four years in the states we studied. The duration of a state s reporting and claim-filing periods can influence the volume and nature of claims in a system. Once an employer has been notified of a workplace injury or illness, usually it must complete a First Report of Injury and file it with the workers compensation agency within a specified period. Some states require that all injuries be reported. Other states require that only injuries with so many days of lost time be reported. In many states, the First Report of Injury triggers the agency s involvement. A claim file is opened, and the agency may begin monitoring the claim. In California and Maryland, however, the worker must file a separate claim for compensation. Some states set specific notice 13

18 requirements from the employer to the insurer. Generally, however, insurers set reporting guidelines for their policyholders. INITIATING PAYMENT The statute in each state spells out the requirements for initiating the payment of indemnity benefits (Table 12). The waiting period for benefits ranges from three to seven days. The retroactive period ranges from seven days to six weeks. A worker who is unable to work throughout the retroactive period receives benefits for the waiting period. Clearly, the duration of the waiting period and the retroactive period can have a significant effect on the volume and costs of indemnity claims in a state: some portion of claims that would qualify for indemnity benefits in a state with a three-day waiting period would not be eligible in a state with a seven-day waiting period. By statute in the 14 states that we studied, the payor must begin payment within a specified period or deny the claim. A payor that fails to take action within that period can be assessed a penalty and sometimes interest on the amount due. In most of the states we studied, payment must start within 14 to 21 days of the employer s knowledge or notice of a workplace injury or disability. Six study states allow payment without prejudice for a specified period; the exceptions are Arkansas, Illinois, Maryland, and Indiana, which do not allow payment without prejudice, 19 and Louisiana, Michigan, Tennessee, and Wisconsin, which allow it without specified time limits. In Wisconsin, the first payment or denial is required within 14 days of injury. Wisconsin payors can voluntarily begin payment without accepting liability for the claim pending a decision on compensability. Payment of a claim in Louisiana, Michigan, and Tennessee does not constitute acceptance of the claim. The pay-without-prejudice period varies from 60 days in Texas to 180 days in Massachusetts. A payor can terminate benefits at any point within the pay-withoutprejudice period by issuing a denial. Claims that are not denied within the pay-without- 19 In Indiana, an employer or insurer has 30 days after the employer has knowledge of a claim to pay or deny the claim; on request, the Indiana Workers Compensation Board may allow another 30 days. 14

19 prejudice period usually are deemed accepted. To use the pay-without-prejudice option, a payor must begin payment within the statutory period. Each of the 14 states penalizes late payments, but there is considerable variation in both the amount of penalties and the mechanisms in addition to hearings by which they are imposed. In addition, the state can impose penalties when an audit indicates late payments or when a judge determines that payments were delayed unreasonably. Some state agencies monitor payments and routinely assess penalties administratively. In other states, penalties are addressed most often at hearings. TERMINATING TEMPORARY TOTAL DISABILITY BENEFITS The termination of TTD benefits can influence benefit payments and costs per claim significantly, particularly when the termination is contested and litigation time frames are an issue. In Table 13, we compare the TTD termination process in the 14 states. In all states, TTD benefits end when the injured worker has returned to work. In states where the statute limits the duration of TTD benefits, length of the benefits is a factor. In all states, a physician s report indicating that the worker s condition has stabilized or that the worker is able to work may be reason for terminating benefits. Payors can unilaterally suspend or terminate TTD benefits without a hearing, at least under certain circumstances, in all states except Massachusetts. Generally, the worker must be notified of the proposed action and must be given a time frame to object to it. In all states, generally when a worker contests the benefit change (and under other specified circumstances), TTD benefits cannot be terminated until the issue is resolved at a hearing. Some states do allow the suspension of benefits pending a hearing and decision on termination. To relieve the burden on the worker, several states expedite the hearing process. DISPUTE RESOLUTION Table 14 compares the dispute resolution processes in the 14 states. Although we do not report dispute resolution measures in CompScope benchmarks, the methods and time frames for resolving disputes can affect benefit payments and the costs and duration of 15

20 claims. 20 In Tennessee, formal hearings on workers compensation disputes are conducted in civil court, not within the workers compensation agency. ATTORNEY FEES In the 14 states we studied, the workers compensation statute usually spells out the basis of attorney fees and maximum fees (Table 15). Generally, workers pay claimant attorney fees out of their weekly benefits or lump-sum settlements. Several study states limit fees to a scheduled amount, either a percentage of the total award or a tiered percentage. In Texas, workers attorneys are paid an hourly fee set by rule that cannot exceed 25 percent of the worker s payable income benefits. Massachusetts is the only state that distinguishes between awards and settlements in the process for setting attorney fees; it uses a schedule for awards and a percentage for settlements. In most of the states, claimant attorney fees must be reviewed and approved by an adjudicator. In Texas, defense attorney fees are also subject to an adjudicator s approval, as they are in Tennessee when the fee exceeds a maximum amount. 21 In Texas, rates are limited to $150 per hour for both claimant and defense attorneys and guidelines specify the maximum number of hours allowed for various legal services. In the CompScope multistate benchmarking studies, we report payments to defense attorneys; we are unable to report payments to workers attorneys because of data comparability concerns and other data limitations. 20 An analysis of dispute resolution outcomes requires data that generally are not available in automated form. In future CompScope reports, we plan to supplement the data we currently collect with information from claim files and litigation databases. 21 The amount is adjusted annually on July 1, according to changes in the statewide average weekly wage. The threshold for the period July 1, 2005, to June 30, 2006, is $13,

21 REFERENCES American Medical Association. Multiple years. Guides to the evaluation of permanent impairment. Chicago, IL. Arkansas Workers Compensation Commission Biennial report for the fiscal years 2003 and Little Rock, AR. Ballantyne, D Workers compensation in North Carolina: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute Revisiting workers compensation in Pennsylvania: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute Dispute prevention and resolution in workers compensation: A national inventory, Cambridge, MA: Workers Compensation Research Institute Workers compensation in Louisiana: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute Workers compensation in Tennessee: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute Workers compensation in Arkansas: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute. Ballantyne, D., and K. Joyce Workers compensation in Illinois: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute. Ballantyne, D., and L. Shiman Revisiting workers compensation in Michigan: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute. Ballantyne, D., and C. Telles Workers compensation in Wisconsin: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute. Barth, P Workers compensation in Florida: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute. 17

22 Barth, P., and S. Eccleston Revisiting workers compensation in Texas: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute. Barth, P., and M. Niss Permanent partial disability benefits: Interstate differences. Cambridge, MA: Workers Compensation Research Institute. California Commission on Health and Safety and Workers Compensation (February). Workers compensation in California: A guidebook for injured workers, second edition. San Francisco, CA. California Department of Industrial Relations California Department of Industrial Relations biennial report. San Francisco, CA. Department of Labor, Office of Workers Compensation Administration Louisiana Office of Workers Compensation Administration: 2001 annual report. Baton Rouge, LA Louisiana Office of Workers Compensation Administration: 2002 annual report. Baton Rouge, LA Louisiana Office of Workers Compensation Administration: 2003 annual report. Baton Rouge, LA Louisiana Office of Workers Compensation Administration: 2004 annual report. Baton Rouge, LA. Eccleston, S., A. Laszlo, X. Zhao, and M. Watson Benchmarks for designing workers compensation medical fee schedules: Cambridge, MA: Workers Compensation Research Institute. Fanning, R Worker s compensation handbook, third edition: A comprehensive guide to worker s compensation in Indiana. Indianapolis: Indiana Chamber of Commerce. Florida Division of Workers Compensation Annual report. Tallahassee, FL a. Annual report. Tallahassee, FL b. Statistical supplement to the 1999 annual report. Tallahassee, FL Annual report. Tallahassee, FL Annual report. Tallahassee, FL Annual report. Tallahassee, FL. 18

23 Herlick, S California workers compensation handbook: A practical guide to the workers compensation law of California. 19 th ed. Charlottesville, VA: Lexis Law Publishing. Illinois Industrial Commission Illinois Industrial Commission fiscal year 2000 annual report. Chicago, IL Illinois Workers Compensation Commission fiscal year 2004 annual report. Chicago, IL Illinois Workers Compensation Commission fiscal year 2005 annual report. Chicago, IL. Maryland Workers Compensation Commission Annual report, fiscal year Baltimore, MD Annual report, fiscal year Baltimore, MD Annual report, the eighty-sixth edition, July 1, 2000 June 30, Baltimore, MD Annual report, the eighty-seventh edition, July 1, 2001 June 30, Baltimore, MD Annual report, the eighty-eighth edition, July 1, 2002 June 30, Baltimore, MD th Anniversary , Annual report fiscal year 2004, July 1, 2003 June 30, Baltimore, MD. Massachusetts Department of Industrial Accidents Fiscal year 1998 annual report: The Massachusetts workers compensation system, working towards the 21st century. Boston, MA. Massachusetts Workers Compensation Advisory Council The state of the Massachusetts workers compensation system: Annual report fiscal year Boston, MA The state of the Massachusetts workers compensation system: Annual report fiscal year Boston, MA The state of the Massachusetts workers compensation system: Annual report fiscal year Boston, MA. 19

24 The state of the Massachusetts workers compensation system: Annual report fiscal year Boston, MA The state of the Massachusetts workers compensation system: Annual report fiscal year Boston, MA. Michigan Department of Labor and Economic Growth (April). An overview of workers compensation in Michigan. Lansing, MI Workers compensation agency, 2004 annual report. Lansing, MI Workers compensation agency, 2005 annual report. Lansing, MI. Pennsylvania Bureau of Workers Compensation Pennsylvania work injuries and illnesses, Harrisburg, PA Pennsylvania work injuries and illnesses, Harrisburg, PA Pennsylvania work injuries and illnesses, Harrisburg, PA Pennsylvania work injuries and illnesses, Harrisburg, PA Pennsylvania work injuries and illnesses, Harrisburg, PA Pennsylvania work injuries and illnesses, Harrisburg, PA. Pennsylvania Department of Labor and Industry Pennsylvania workers compensation and workplace safety, annual report fiscal year 2003/2004. Harrisburg, PA Pennsylvania workers compensation and workplace safety, annual report fiscal year 2004/2005. Harrisburg, PA. Tanabe, R., and S. Murray Managed care and medical cost containment in workers compensation: A national inventory, Cambridge, MA: Workers Compensation Research Institute. Telles, C., and S. Fox Revisiting workers compensation in California: Administrative inventory. Cambridge, MA: Workers Compensation Research Institute. Telles, C., A. Laszlo, and T. Liu CompScope benchmarks: Multistate comparisons, Cambridge, MA: Workers Compensation Research Institute. 20

25 Telles, C., T. Liu, A. Kowalczyk, and R. Tanabe CompScope benchmarks: Multistate comparisons, Cambridge, MA: Workers Compensation Research Institute. Telles, C., D. Wang, and R. Tanabe CompScope benchmarks: Multistate comparisons, 4th edition. Cambridge, MA: Workers Compensation Research Institute a. A comparison of system features: 12 states. Cambridge, MA: Workers Compensation Research Institute b. CompScope benchmarks for California, 5th edition. Cambridge, MA: Workers Compensation Research Institute c. CompScope benchmarks for Florida, 5th edition. Cambridge, MA: Workers Compensation Research Institute d. CompScope benchmarks for Louisiana, 5th edition. Cambridge, MA: Workers Compensation Research Institute e. CompScope benchmarks for Massachusetts, 5th edition. Cambridge, MA: Workers Compensation Research Institute f. CompScope benchmarks for North Carolina, 5th edition. Cambridge, MA: Workers Compensation Research Institute g. CompScope benchmarks for Pennsylvania, 5th edition. Cambridge, MA: Workers Compensation Research Institute h. CompScope benchmarks for Tennessee, 5th edition. Cambridge, MA: Workers Compensation Research Institute i. CompScope benchmarks for Texas, 5th edition. Cambridge, MA: Workers Compensation Research Institute j. CompScope benchmarks for Wisconsin, 5th edition. Cambridge, MA: Workers Compensation Research Institute a. A comparison of system features: 13 states. Cambridge, MA: Workers Compensation Research Institute b. Baselines for evaluating the impact of the reforms in California: CompScope benchmarks, 6th edition. Cambridge, MA: Workers Compensation Research Institute. 21

26 . 2006c. Baselines for evaluating the impact of the 2003 reforms in Florida: CompScope benchmarks, 6th edition. Cambridge, MA: Workers Compensation Research Institute d. CompScope benchmarks for Louisiana, 6th edition. Cambridge, MA: Workers Compensation Research Institute e. CompScope benchmarks for Maryland, 6th edition. Cambridge, MA: Workers Compensation Research Institute f. CompScope benchmarks for Massachusetts, 6th edition. Cambridge, MA: Workers Compensation Research Institute g. CompScope benchmarks for North Carolina, 6th edition. Cambridge, MA: Workers Compensation Research Institute h. CompScope benchmarks for Pennsylvania, 6th edition. Cambridge, MA: Workers Compensation Research Institute i. Baselines for evaluating the impact of the 2004 reforms in Tennessee: CompScope benchmarks, 6th edition. Cambridge, MA: Workers Compensation Research Institute j. Baselines for evaluating the impact of the 2005 reforms in Texas: CompScope Benchmarks, 6th edition. Cambridge, MA: Workers Compensation Research Institute k. CompScope benchmarks for Wisconsin, 6th edition. Cambridge, MA: Workers Compensation Research Institute. Tennessee Workers Compensation Advisory Council. August Annual report calendar year Nashville, TN. Texas Department of Insurance Employer participation in the Texas workers' compensation system: 2004 estimates. Austin, TX. U.S. Chamber of Commerce analysis of workers compensation laws. Washington, DC analysis of workers compensation laws. Washington, DC analysis of workers compensation laws. Washington, DC analysis of workers compensation laws. Washington, DC analysis of workers compensation laws. Washington, DC. 22

27 WORKERS COMPENSATION STATUTES 22 Arkansas Code, Title 11, Chapter 9. California Labor Code, Sections 3201 ff. Florida Statutes, Chapter 440. Illinois Workers Compensation Act, 820 ILCS 305. Indiana Statutes, Title 22, Article 3, Workers Compensation Code. Louisiana Revised Statutes, Title 23, Chapter 10. Maryland Workers Code Annotated, Labor and Employment Section 9-101; Code of Maryland Regulations (COMAR), Title 14, Section et seq. Massachusetts General Laws, Chapter 152. Michigan Workers Disability Compensation Act of 1969; Act 317 of Pennsylvania Workmen s Compensation Act, Article 1, Sections 101 ff., Title 77 of the Pennsylvania Consolidated Statutes. Tennessee Code, Annotated, Workers Compensation Law, Chapter 6, Title 50. Texas Labor Code, Annotated Section ff. Workers Compensation Act of North Carolina, Chapter 97. Worker s Compensation Act of Wisconsin, Chapter The citations provided are the basic workers compensation statutes. Amendments are not listed, and other state statutes may relate to workers compensation requirements and processes. 23

28 Table 1 Coverage under the Workers' Compensation Act, 2006 General provisions Private employment Compulsory for employers with 3 Compulsory. or more employees (see note). Compulsory. Compulsory for employers with 4 or more employees and for 1 or more employees in construction or construction-related trades (see note). Compulsory for specified "extrahazardous" employment and for all employment with a payroll of $1,000 per year. Compulsory, including corporate Compulsory (see note). executives. Compulsory, including corporate officers, except under specific circumstances. Compulsory for employers with 3 or more employees, or less than 3 if 1 is employed for 35 hours per week for 13 weeks by the same employer (see note). Compulsory. Compulsory for employers with 5 Voluntary (see note). Compulsory for employers if or more employees and for those in construction, regardless of the number of employees. payroll is greater than $500 per calendar quarter for services in the state. Compulsory for employers with 3 or more employees and all employment with exposure to radiation. Public employment Compulsory for state agencies, Compulsory, except for clerks Compulsory for employees and Compulsory, except for members Compulsory for state workers and departments, institutions, and deputies serving without pay, volunteers in state and political of fire and police departments in employees in municipal counties, and cities and towns. and for employees of regional subdivisions. cities with populations exceeding corporations and political centers, programs, or school districts that offer training to students outside their attendance area. 200,000 (see note). subdivisions; includes state legislators, elected and appointed officials. Compulsory, except sheriffs' deputies and officials. Compulsory for state employees; Compulsory for state, counties, voluntary for counties, cities, and cities, and their agencies (see Subdivisions may cover elective districts that have the power of note). and appointive officials. Coverage taxation. Municipalities are for volunteer firefighters is required to indemnify police and elective. firefighters. Compulsory for all public employees; also, for trainees in federally funded training programs deemed employees of the sponsoring public entity. Compulsory, including workers at public and quasi-public corporations and elected officials. Compulsory, except for elected Voluntary for employees of state Compulsory (see note). Compulsory, including state officials. and political subdivisions. legislators and certain vocational education students. Selected exemptions from coverage Farm laborers Exempt. None. Exempt for farms with 5 or fewer Certain farm laborers are exempt. Exempt. regular laborers or 12 or fewer casual workers. Exempt for certain farm workers and crews of crop spraying None. Exempt for seasonal, migratory farm laborers within 25 miles of None. Exempt. aircraft while acting as contractors, or employees of persons principally engaged in agriculture. residence who work no more than 13 weeks per year and who do not operate machinery or equipment; farmers with fewer than 3 employees or a full-time payroll less than $15,000. Exempt unless employer is Exempt. Generally exempt for migrant, Exempt for farmers with fewer otherwise covered, pays more seasonal, and other farm workers than 6 employees who work than $1,200 in wages per year, or furnishes employment for more than 30 days. under payroll limit or for farms with fewer than 3 workers (see note). fewer than 20 days per year. 24

29 Table 1 Coverage under the Workers' Compensation Act, 2006 (continued) Domestic workers Exempt. Exempt if employed fewer than 52 hours in preceding 90 days or if earned less than $100. Exempt. Exempt. Exempt. Exempt. Exempt if employed fewer than Exempt. 16 hours weekly. Exempt if earnings less than $750 in cash in a calendar quarter from a household. Exempt. Exempt. Exempt for employment incidental Exempt. to personal residence. Exempt if employed less than 35 hours a week for 13 weeks a year. Casual workers Exempt. None. Exempt. Exempt for certain labor not in usual course of employer's business. Exempt. None. Exempt. Exempt for maintenance workers None. Exempt. not employed for 30 consecutive days around a private home. Exempt for certain labor not in course of employer's business. Exempt. Exempt for employment incidental Exempt. to personal residence. Notes: AR: Partners or sole proprietors may opt out of coverage for themselves only. Coverage is compulsory for places of employment in which two or more employees are engaged in building or building repair work, in which one or more employees of a contractor who subcontracts any part of a contract, and in which one or more employees are employed by a subcontractor. FL: Previously, coverage was required for employers with four or more workers and for all employers in the commercial construction trade. In accordance with Senate Bill 108 effective July 1, 2002, employers in commercial construction were exempt from workers compensation coverage when the job was valued at less than $250,000; residential construction contractors continued to be exempt. Senate Bill 50-A repealed the exemption for projects valued at less than $250,000. MA: Among employment exceptions to compulsory coverage are commission-paid salespersons and independent taxi drivers. MD: Compulsory for paid firefighters in certain counties, prisoners working for county roads boards, forest wardens; jockeys, crewpersons and firefighters for Department of Forest and Parks, jurors for nonfederal courts, and the state militia during both training and active duty. MI: Excluded from compulsory coverage are professional athletes whose average weekly wage is more than 200% of the statewide average weekly wage and licensed real estate salespersons. TX: In a 2004 survey of employers, the Texas Department of Insurance found that 38 percent of employers in Texas did not carry workers' compensation coverage; that group mostly smaller companies employed about 24 percent of the workforce in the state. Texas self-insures employees of the state highway department, the University of Texas, Texas A&M University, and state employees. Other public employers are self-insured, risk-pool insured, or insured through commercial regulated carriers. The level of nonparticipation had been declining, from 44 percent in 1993 to 39 percent in 1996 down to 35 percent in Under House Bill 2600, Article 16, employers who do not have workers' compensation insurance cannot take a preinjury waiver of an injured worker's right to sue for damages under the common law. Previously, a worker who signed a waiver could not sue his or her nonsubscribing employer in case of an injury. Sources: Texas Department of Insurance, 2004; U.S. Chamber of Commerce,

30 Table 2 Administrative Organization, 2006 Agency structure Workers' Compensation Workers' Compensation Worker's Compensation Board. Commission. Commission. Headed by chairperson. Division of Workers' Compensation within Department of Industrial Relations. Division of Workers' Compensation within Department of Financial Services. Headed by chairperson. Headed by chairperson. Headed by administrative director. Headed by director. Office of Workers' Department of Industrial Workers' Compensation Workers' Compensation Industrial Commission. Compensation Administration. Accidents. Commission. Agency within Department of Labor & Economic Growth. Headed by chairperson. Headed by assistant secretary of labor/director. Headed by administrative director (commissioner). Headed by chairperson. Headed by director. Bureau of Workers' Compensation within Department of Labor and Industry. Workers' Compensation Division within Department of Labor and Workforce Development. Division of Workers' Compensation. Headed by director. Headed by administrator. Headed by 6 part-time commissioners and executive director. Division of Worker's Compensation within Department of Workforce Development. Headed by administrator. Appointing authority Governor (commissioners). Governor. Insurance commissioner or treasurer. Governor. Governor. Governor. Governor. Governor (commissioners). Governor. Governor. Secretary of labor and industry. Commissioner of labor, with governor's approval. Governor (commissioners). Governor appoints secretary of Department of Workforce Development. Term of agency head 6 years. At will. At will. 4 years. 4 years. At will. Concurrent with governor's term. At will. At will. 6 years. At will. 12 years. 3 years. Up to 6 years (members serve 6-year terms). Number of ancillary offices 2 regional offices; 35 hearing sites downstate offices; 33 hearing sites. None (see note). 10 district offices. 4 None; 7 hearing sites. 14 hearing locations. None regional offices; 24 field 2 regional offices; 29 hearing offices. locations. 26

31 Table 2 Administrative Organization, 2006 (continued) Funding basis Assessment on insurance Assessment on insurance premiums or equivalent. premiums or equivalent. Assessment on insurance premiums or equivalent (see note). Assessment on insurance premiums and against selfinsured employers as a percentage of payroll (see note). Primary funding basis is through the state's general fund. Assessment on workers' Assessment on insurance Primary funding basis is compensation benefits paid by premiums or equivalent. insurance carriers and selfinsured through the state's general fund (see note). employers. Assessment in proportion to aggregate payrolls of employers insuring with each insurance carrier and against self-insurers in proportion to payrolls. Primary funding basis is through the state's general fund. Assessment on earned premium (insured employers) or compensation paid (self-insurers). Assessment on insurance premiums or equivalent. Assessment on insurance premiums or equivalent. Pro rata assessment on indemnity benefits paid on cases first closed in prior year. Full-time equivalent staff positions 139 (2004). 1,172 (FY 2005). 354 (FY 2004). 173 (FY 2005). 44 (FY 2002). 158 (as of June 1999). 267 (FY 2005). 135 (FY 2004). na 130 (FY 2004). 583 (FY 2003; see note). 161 (2004). 951 (FY 2004). 114 (FY 2003). Annual expenditures $10,709,965 (FY 2004). $135,300,000 (FY 2005). $274,100,000 (FY 2004; see $14,880,660 (FY 2005). $1,824,470 (FY 2002). note). $10,318,415 (FY ). $18,747,435 (FY 2005). $12,699,300 (FY 2004). na $8,676,371 (FY 2004). $57,525,000 (budget FY 2005). $9,932,000 (2004). $49,295,754 (FY 2004). $11,241,200 (FY 2003). Notes: CA: Senate Bill 899 passed in April 2004 established 100 percent user funding of the workers' compensation administration. Previously, 80 percent of the division's funding was by appropriation and 20 percent from premium assessments or the equivalent. FL: Includes expenditures from the Administration Trust Fund (a source of funds for the operating expenses of the Division of Workers' Compensation) and the Special Disability Trust Fund, which includes approximately $169 million in reimbursements to insurance carriers for Administration Trust Fund assessments also cover expenses for the Office of the Judges of Compensation Claims, a portion of the Agency for Health Care Administration, a portion of the Department of Education, and a portion of the Bureau of Workers' Compensation Fraud. IN: Judges travel to all 92 counties in the state on a regular schedule. IL: Prior to 2003, the primary funding basis was through the state's general fund. MI: Annual assessment of 0.75 percent of compensation levied on insurers and self-insurers of compensation paid to be used for the safety education and training fund. PA: Staffing and budget include the Bureau of Workers' Compensation, the Office of Adjudication, Appeal Board, Legal, and Office of Information Technology. Key: na: not available. Sources: State statutes and workers' compensation agencies listed in table; Ballantyne, 1993, 1997, 1999, 2003, 2005; Ballantyne and Joyce, 1996; Ballantyne and Shiman, 1997; Ballantyne and Telles, 1992; Barth, 1999; Barth and Eccleston, 1995; Telles and Fox,

32 Table 3 Medical Benefits, 2006 Benefit basis Compensable occupational Occupational injury, disease, or Compensable occupational Occupational injury, disease, Occupational injury, disease, or injury, disease, or disability. disability. injury or disease. or disability. disability. Occupational injury or disease. Occupational injury, disease, or Accidental personal injury, disability. Compensable injury or occupational disease. compensable hernia, or occupational disease. Occupational injury, disease, or Occupational injury, disease, or Compensable occupational Occupational injury or disability. disability. injury or disease. disease. Occupational injury, disease, or disability. Statutory coverage Reasonable and necessary Reasonable and necessary Medical, surgical, and other Reasonable medical; surgical; Medical, surgical, hospital, and medical, surgical, and hospital care to cure or relieve the treatment; nursing and hospital hospital; and physical, mental, nurse service. services and medicines, or other attendance or treatment recognized by the laws of Arkansas as legal, when needed. effects of the injury (see note). services; and medicines and supplies required by the nature of the injury or the process of recovery. and vocational rehabilitation. Necessary medical, surgical, or Adequate and reasonable Necessary medical, surgical, or Reasonable and necessary Medical and medical hospital services and medical and hospital services other attendance or treatment. medical care, including rehabilitation services, medicines or any nonmedical and medicines and related medical, surgical, and hospital including, but not limited to, treatment recognized by Louisiana law as legal. expenses. services and medicines for work-related injuries. necessary palliative care, physical therapy treatment, psychological therapy, chiropractic services, medical rehabilitation, and attendant care. Reasonable and necessary surgical and medical services and medicines and supplies. Reasonable and necessary Medical and surgical treatment, medicine, hospital care, medical and surgical supplies, nursing, and other services made reasonably necessary by accident. care to cure or relieve the effects of injury, promote recovery, or prevent lost time. Reasonable and necessary medical, surgical, and hospital care and medicines and supplies. Benefit adjustments Fee schedule may be adjusted Conversion factors must be Fee schedule may be adjusted Fee schedule implemented None. annually; most recent major update was in reviewed every 2 years (see note). annually. Statute calls for studies to evaluate the adequacy of the fee schedule and the impact of medical fees on access to care and on carrier costs. The Health Care Provider Reimbursement Manual, 2005 edition is effective May 19, 2005 (see note). February 1, 2006 (see note). Fee schedule may be adjusted annually; most recent update was in March Fee schedule must be updated every 2 years; most recent update was in June 2004 (effective September 2004). Fee schedule must be reviewed every 2 years; most recent update was in September Fee schedule is adjusted annually to reflect changes in SAWW (see note). Fee schedule implemented July 1, 2005 (see note). Fee schedule must be updated every 2 years; most recent update was in April 2002 (effective August 1, 2003; see note). Fee schedule may be adjusted annually; most recent update was March 10, 2006 (also updated February 10, 2005, and February 20, 2005). Certified databases of fees charged by providers are certified for 1 year; updates are required every 6 months. Fee schedule may be adjusted periodically; most recent update was in May 1,

33 Table 3 Medical Benefits, 2006 (continued) Method of payment Reimbursement rate Reimbursement rate determined by fee schedule. determined by fee schedule. Reimbursement rate determined by the Health Care Provider Reimbursement Manual (see note). Reimbursement rate determined by medical fee schedule as of February 1, 2006 (see note). No medical fee schedule has been adopted. Reimbursement rate determined by fee schedule (see note). Reimbursement rate determined by fee schedule (see note). Reimbursement rate determined by fee schedule. Reimbursement rate determined by fee schedule. Reimbursement rate determined by fee schedule. Reimbursement rate Reimbursement rate determined by fee schedule. determined by fee schedule. Reimbursement rate determined by fee schedule as of July 1, (see note). Reasonableness of fees determined by comparison with certified databases of fees charged by providers, sorted by CPT code. Duration As long as reasonable and As long as reasonable and As long as medically As long as reasonable and As long as reasonable and necessary. necessary. necessary. necessary. necessary. As needed. As long as reasonable and necessary. As long as reasonable, necessary, and causally related to the accidental injury or occupational disease. As long as condition is related to a compensable injury or occupational disease. As long as reasonable and necessary. As and when needed. As long as reasonable and As long as reasonable and As long as reasonable and necessary (see note). necessary (see note). necessary. Notes: CA: The 2004 legislation defines medical treatment required to cure or relieve as that which is based on treatment guidelines adopted by the administrative director or, prior to adoption of those guidelines, that which conforms to the American College of Occupational and Environmental Medicine's Occupational Medicine Practice Guidelines. The 2003 legislation made changes to certain reimbursement rates under the medical fee schedule. FL: The manual updates the fee schedule to reflect the 2005 Medicare rates and is based on changes made by the 3-member panel in 2004 incorporating the decision to include additional providers under the fee schedule. IL: Until July 20, 2005 balance billing was permitted, meaning the injured worker could be billed for charges for medical services that were not paid by the insurer or employer under the "usual and customary" standard. Prior to the legislation enacted in 2005, which established a fee schedule effective February 1, 2006, payments for medical services were usually made at usual and customary rates. LA: A $750 limit is imposed on employer's or insurer's liability for nonemergency diagnostic testing or treatment, unless prior approval is granted to exceed that amount. MA: Fees above or below the fee schedule can be negotiated. PA: The fee schedule is updated twice a year. The most recent updates were made in January 15, 2004, and July 15, TN: Prior to implementation of the fee schedule, medical services were reimbursed based on usual and customary charges. Medical benefits may not be settled under certain circumstances. TX: On April 25, 2002, the Workers' Compensation Commission adopted a fee schedule based on a conversion factor of 125 percent of Medicare's resourcebased relative value scale. Implementation was delayed as a result of a legal challenge; a court ruling in May 2003 upheld the fee schedule effective for all services performed on or after August 1, The fee guide it replaces is equivalent to percent of Medicare on average. Future medical benefits may not be settled. Key: CPT: Current Procedural Terminology; SAWW: statewide average weekly wage. Sources: State statutes; Ballantyne, 1993, 1997, 1999, 2003, 2005; Ballantyne and Shiman, 1997; Ballantyne and Telles, 1992; Barth, 1999; Barth and Eccleston, 1995; Tanabe and Murray, 2001; Telles and Fox,

34 Table 4 Medical Cost Containment Strategies, 2006 Managed care Regulated but not mandated Allowed but not regulated. Allowed but not regulated. (see note). Regulated but not mandated, under contracts with certified HCOs or approved MPN (see note). Regulated but not mandated, through MCAs approved by the Agency for Health Care Administration (see note). Allowed but not regulated. Regulated but not mandated; Division of Insurance must approve PPAs. Allowed but not regulated. Allowed but not regulated. Regulated (by Department of Insurance) but not mandated. See note. Allowed but not regulated (see note). Allowed but not regulated. The agency's policy is to ensure quality of care by most efficient and fiscally sound means. Allowed but not regulated. The division's position is that employee choice can coexist with managed care. Initial choice of provider Employer. Employer for first 30 days, unless worker predesignated a Worker from list of physicians within MCA; employer or insurer Worker. Employer. treating physician or unless the for non-mcas. employer or insurer established an MPN (see note). Worker (see note). Worker; if a PPA exists, worker Worker. Employer and insurer for 10 Employer; worker choice if may be required to have first appointment with provider from plan. days after inception of medical care, then worker can choose provider. employer does not direct care. Employer directs choice for first Worker from employerdeveloped Worker from commissionapproved Worker from any provider 90 days by posting list of six or more designated health care providers; worker choice if no panel is posted. panel of 3 or more providers; worker choice if no panel is posted (see note). list; nonsubscribers typically write into the plan that the employer chooses the provider (see note). licensed and practicing in the state. In an emergency, employer/insurer may select a provider; choice of provider reverts to the employee after the emergency has passed. Employee change of provider Worker can change once, to either the worker's regular Worker may choose a treating physician within an MPN after Once per injury (see note). Worker can change once without restriction; additional Employer can change without restriction; worker cannot change treating provider or to a provider the initial visit, once after 30 changes by employer approval providers. associated with the insurer or days if no MPN exists, or after or employer selects the new self-insurer's MCO (if a contract 90 to 365 days under an HCO provider. exists) or with any MCO (if no arrangement (see note). contract exists; see note). Worker needs employer/insurer Once within the same specialty. Worker can change without Worker can change without Employer may change at any approval to change within the restriction within reason; restriction but must notify the time, but all provider choices are same specialty or field. employer/insurer cannot change employer of the change. providers. subject to the decision of the Industrial Commission if opposing party petitions. Worker may change with employer approval. After 90 days without restriction (if a panel is posted) or at any time (if no panel is posted). With commission's approval using stated criteria. Worker has unlimited changes with employer/insurer authorization. After authorizing treatment, employer/insurer cannot change providers but can require an IME. Once without restriction; subsequent changes require agreement among the employee, employer, and insurer. 30

35 Table 4 Medical Cost Containment Strategies, 2006 (continued) Medical fee schedule Yes, since 1992; may be reviewed and updated annually. Yes, since Reviewed and updated periodically with public input; last updated July 1, 2004 (see note). Yes. The Health Care Provider Fee Schedule was last updated effective May 9, 2005 (see note). Medical fee schedule implemented effective February 1, 2006 (see note). No medical fee schedule has been adopted. Yes, since 1992; may be Yes, since late 1960s. Fees Yes, since 1970; reviewed every Yes; since 1989; may be Yes, since Reviewed and reviewed annually. above or below fee schedule 2 years; last update was in June reviewed and updated annually. updated periodically; last update can be negotiated was in May Yes, since Since 1995, Medical fee schedule Yes, since Reviewed Since 1992, databases certified updated annually to reflect implemented effective July 1, every 2 years by law (see note). by the Worker's Compensation changes in SAWW; fees can be 2005 (see note). negotiated. Updated every six months. Division list "formula amounts" by CPT code for each region, updated semiannually; fees are considered reasonable if below formula amounts (see note). Hospital payment regulation Yes. Reimbursement paid on Yes. DRG-based fee schedule Yes. Reimbursement paid on Yes. Hospital fee schedule No hospital fee schedule has per diem basis according to hospital size. for inpatient services. per diem basis (see note). implemented effective February been adopted. 1, 2006 (see note). Yes. Reimbursement paid on per diem basis. Yes. Hospital-specific percentage discounts established annually; alternative rates and services can be negotiated. No hospital fee schedule has been adopted; the Hospital Services Cost Review Commission regulates hospital payments for all payors. Yes. Regulated by formula, based on a cost-to-charge ratio for each hospital. Yes. DRG-based fee schedule for inpatient services. Yes. Based on 113% of Medicare plus pass-through costs. Yes. Fee schedule implemented Yes. Reimbursement paid on effective July 1, 2005 (see note). per diem basis. Yes, using CPT-based formula amounts. Utilization review Mandated for all MCOs. Mandated for all employers, under 2003 legislation (see note). Mandated. None required (see note). None. Review performed in all nonemergency hospitalization and in cases with more than $750 in medical costs; mandatory precertification, continued stay, discharge planning, and dispute resolution for all nonemergency hospital services. Mandated. None required (see note). Required in inpatient cases, cases in which medical expenditures (excluding inpatient care) exceed $5,000, and cases where care is alleged to be "inappropriate, insufficient, or excessive." Mandated. Mandated for CCOs; otherwise, at request of employer, insurer, or worker. None required; UR provided at the request of the employer, the insurer, or the worker. Required preadmission review of inpatient hospital care in nonemergency cases; also applied to outpatient services when costs exceed $5,000 (see note). Prospective review prohibited. Retrospective review permitted in disputes over hospital length of stay and physician and chiropractor visits. 31

36 Table 4 Medical Cost Containment Strategies, 2006 (continued) Bill review Mandated. Voluntary review of bills for compliance with fee schedule is common. Mandated. Statutes do not address medical Authorized. bill review. Mandated (see note). Authorized but not mandated. Statutes do not address medical Mandated. Authorized but not mandated (see bill review. note). Authorized but not mandated; providers can challenge amount or timeliness of payments. Mandated; commission has developed medical-billing database. Authorized and encouraged but not mandated except when medical costs are $5,000 or more or inpatient hospitalization occurs. Voluntary review of bills for compliance with formula amounts is common. Treatment guidelines Authorized for MCOs. Yes (see note). Yes (see note). No. No. No. Yes; used in conjunction with UR program; 28 guidelines in place, developed through consensus-based, multidisciplinary effort. No. No (see note). Authorized for MCOs. Limits on the number of chiropractic and physical therapy visits. No. No. No (see note). No. Notes: AR: Managed care rules (which cover employer or insurer-owned MCOs and independent MCOs) became effective July 1, 1994, and were revised in 1999; Arkansas had 14 commission-certified managed care entities as of October A worker's regular treating provider is defined as one who maintains the worker's medical records and with whom the worker has a history of treatment before the injury. CA: Senate Bill (SB) 899 allows employers to establish medical treatment networks effective January 1, 2005; an injured worker who does not predesignate a treating physician must receive care only through the network. Under SB 899, an employee may be treated by a predesignated physician from the date of injury if all of the requirements for predesignation are met; predesignation is allowed only for employees whose employers provide nonoccupational group health coverage through an HMO, health care plan, HCO, or other such entity described in the statute. Under a medical network, the employer must arrange for the initial medical evaluation; after the first visit, the employee can select a new physician from the network. The 2003 legislation (SB 228) provided for a 5 percent reduction to the fee schedule rates for physician services in the aggregate but no reduction to physician services currently below the Medicare fee schedule rate, effective January 1, SB 228 mandated adoption of utilization guidelines effective January 1, 2004 and attached a presumption of correctness to the guidelines; required use of American College of Occupational and Environmental Medicine (ACOEM) practice guidelines, second edition, until the administrative director established other guidelines. Subsequently, the administrative director did adopt the ACOEM guidelines. Further, the legislation required the administrative director in consultation with the Commission on Health and Safety and Workers' Compensation (CHSWC) to adopt a medical treatment utilization schedule by December 1, 2004, based on CHSWC study recommendations. All employers are required to adopt UR systems consistent with the utilization schedule. Emergency regulations governing UR standards became effective December 13, 2004 and were readopted effective April 12, Previously, 9 advisory treatment guidelines were in place. FL: Effective October 1, 2001, managed care is no longer mandatory. Effective July 1, 2002, employers can opt out of mandatory managed care regardless of the date of accident. Use of managed care is optional, but if an authorized MCA is used, specified guidelines must be followed. The 2001 legislation reduced the number of worker changes of physician to one per injury; previously, the worker was permitted one change within the same specialty within the MCA. Under 2003 legislation, an insurer must authorize a change of physician within 5 days of the request; if the insurer fails to respond on time, the worker may select the physician. The second edition of the Health Care Provider Fee Schedule is effective September 4, The hospital fee schedule was updated July 4, 2004; proposed revisions have been withdrawn following a rules challenge. Legislation in 2003 resulted in increased reimbursements for osteopaths and physicians and for surgical procedures (effective January 1, 2004). For these providers and services, fees are a percentage of Medicare rather than being based on usual and customary charges. At the same time, reduction in fees for certain hospital services and hospital outpatient services was mandated. Treatment guidelines identify typical courses of intervention; they are not a a fixed protocol. Guidelines are not available for all diagnoses. The 2003 legislation required that practice parameters and protocols mandated under the act be those adopted by the U.S. Agency for Healthcare Research and Quality in effect on January 1, IL: House Bill 2137 (2005) created a medical fee schedule effective February 1, The fee schedule sets fees at 90 percent of the 80th percentile of actual charges within a geographic area based on geozip (a geographic area with the same first three digits of a zip code), utilizing information contained in employers and insurers national databases. The fee schedule will be adjusted yearly based on changes to the Consumer Price Index. Previously, medical reimbursement was based on usual and customary charges. The legislation also required establishment of fee schedules for hospital services. Previously, hospital reimbursement was regulated on a case-by-case basis, usually through analysis of usual and customary charges. The 2005 legislation also defined utilization review and established qualifications for individuals who conduct utilization review within the workers compensation system; utilization techniques may include prospective review, second opinions, concurrent review, discharge planning, peer review, independent medical examinations, and retrospective review. Utilization review may be considered in the same way as other evidence in determination of the reasonableness and necessity of medical bills or treatment. 32

37 Table 4 Medical Cost Containment Strategies, 2006 (continued) LA: The worker has the right to select one treating provider in each field or specialty. Before a 1997 law change, injured workers were required to seek all medical treatment within the state. The law was amended to permit out-of-state medical care when the services are not reasonably available within the state or when they can be provided at comparable cost. The Office of Workers' Compensation Administration is authorized to audit medical records and has established audit procedures that have been built into the utilization review procedures. The 2003 legislation provided that an employee who is directed to the employer's physician can be required to either choose that physician as the treating physician (after the first visit) or declare his or her own choice. MD: The statute does not address utilization review. Any issues relating to the appropriateness of medical care are resolved by a commissioner after a hearing. MI: The development, use, and enforcement of treatment guidelines are the responsibility of the insurance carriers. NC: Effective February 1995, employers and insurers can review bills for compliance with the medical fee schedule, subject to requirements specified by the Industrial Commission. PA: Regarding managed care, public officials indicate that "The Act is silent, and silence does not assume authority." TN: Effective December 31, 2001, the medical panel of 3 providers was expanded to 4 if the worker suffers a back injury; the fourth provider must be a chiropractor. Fo injuries on or after July 1, 2004, the employer must provide the panel of physicians in writing and the employee must document his or her selection of the treating physician. Prior to implementation of medical and hospital fee schedules required as of July 1, 2005, medical fees were limited to prevailing charges. As of July 1, 2004, case management is no longer mandatory and if utilized is at the employer's expense and the employee must cooperate. Previously, utilization review was mandated for all insurers. TX: House Bill (HB) 7 (2005) permitted insurers and employers to establish or contract with health care networks, which must be certified by the Texas Department of Insurance, with certification commencing January 1, 2006; established other provisions concerning networks. HB 2600 called for an introduction of regional provider networks; injured workers were not required to choose a doctor participating in a network, but must choose a provider who is on the Workers' Compensation Commission's Approved Doctor List (ADL). As of September 1, 2003, all health care providers practicing in the workers' compensation system must be on the ADL, which means that they must be trained, have applied, and been approved to practice workers compensation. HB 7 continued use of the ADL until September 1, 2007 (or earlier date, if determined by the commissioner); network doctors not required to be on the ADL. In practice, the fee schedule is reviewed every 4 to 6 years. A new medical fee guideline was adopted in April 2002, but a legal challenge delayed its implementation until August 1, The use of treatment guidelines became optiona as of June 17, 2001; if elected, guidelines have to be nationally recognized, scientifically valid, and outcome based. HB 7 requires that the commissioner and networks select treatment and return-to-work guidelines. WI: The formula has been changed, reducing reimbursement rates. Key: CCO: coordinated-care organization; CPT: current procedural terminology; DRG: diagnostic related group; HCO: health care organization; IME: independent medical examiner; MCA: managed-care arrangement; MCO: managed-care organization; MPN: medical provider network; PPA: preferred-provider arrangement; SAWW: statewide average weekly wage; UR: utilization review. Sources: State statutes; Ballantyne, 1997, 1999, 2003, 2005; Ballantyne and Shiman, 1997; Barth, 1999; Tanabe and Murray,

38 Table 5 Maximum and Minimum Temporary Total Disability Benefits, Effective Date TTD Benefit Rate Maximum Benefit Minimum Benefit (not to exceed AWW or percentage of AWW, as noted) AR (see note) 1/1/96 12/31/96 66⅔% of AWW $ $ /1/97 12/31/97 66⅔% of AWW $ $ /1/98 12/31/98 66⅔% of AWW $ $ /1/99 12/31/99 66⅔% of AWW $ $ /1/00 12/31/00 66⅔% of AWW $ $ /1/01 12/31/01 66⅔% of AWW $ $ /1/02 12/31/02 66⅔% of AWW $ $ /1/03 12/31/03 66⅔% of AWW $ $ /1/04 12/31/04 66⅔% of AWW $ $ /1/05 12/31/05 66⅔% of AWW $ $20.00 CA (see note) 7/1/95 6/30/96 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/1/96 6/30/97 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/1/97 6/30/98 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/1/98 6/30/99 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/1/99 6/30/00 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/1/00 6/30/01 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/1/01 12/31/02 66⅔% of AWW $ $ or worker's AWW, whichever is less 1/1/03 12/31/03 66⅔% of AWW $ $ /1/04-12/31/04 66⅔% of AWW $ $ /1/05-12/31/05 66⅔% of AWW $ $ FL (see note) 1/1/96 12/31/96 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less 1/1/97 12/31/97 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less 1/1/98 12/31/98 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less 1/1/99 12/31/99 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less 1/1/00 12/31/00 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less 1/1/01 12/31/01 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less 1/1/02 12/31/02 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less 1/1/03 12/31/03 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less 1/1/04 12/31/04 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less 1/1/05 12/31/05 66⅔% of AWW $ $20.00 or worker's AWW, whichever is less IL (see note) 7/15/95 1/14/96 66⅔% of AWW $ $ or worker's AWW, whichever is less 1/15/96 7/14/96 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/15/96 1/14/97 66⅔% of AWW $ $ or worker's AWW, whichever is less 1/15/97 7/14/97 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/15/97 1/14/98 66⅔% of AWW $ $ or worker's AWW, whichever is less 1/15/98 7/14/98 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/15/98 1/14/99 66⅔% of AWW $ $ or worker's AWW, whichever is less 1/15/99 7/14/99 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/15/99 1/14/00 66⅔% of AWW $ $ or worker's AWW, whichever is less 1/15/00 7/14/00 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/15/00 1/14/01 66⅔% of AWW $ $ or worker's AWW, whichever is less 1/15/01 7/14/01 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/15/01 1/14/02 66⅔% of AWW $ $ or worker's AWW, whichever is less 1/15/02 7/14/02 66⅔% of AWW $ $ or worker's AWW, whichever is less 7/15/02 1/14/03 66⅔% of AWW $ $ or worker's AWW, whichever is less 1/15/03 7/14/03 66⅔% of AWW $1, $ or worker's AWW, whichever is less 7/15/03 1/14/04 66⅔% of AWW $1, $ or worker's AWW, whichever is less 1/15/04 7/14/04 66⅔% of AWW $1, $ or worker's AWW, whichever is less 7/15/04 1/14/05 66⅔% of AWW $1, $ or worker's AWW, whichever is less 1/15/05 7/14/05 66⅔% of AWW $1, $ or worker's AWW, whichever is less 7/15/05 1/14/06 66⅔% of AWW $1, $ or worker's AWW, whichever is less 34

39 Table 5 Maximum and Minimum Temporary Total Disability Benefits, (continued) IN (see note) 7/1/95 6/30/96 66⅔% of AWW $ $ /1/96 6/30/97 66⅔% of AWW $ $ /1/97 6/30/98 66⅔% of AWW $ $ /1/98 6/30/99 66⅔% of AWW $ $ /1/99 6/30/00 66⅔% of AWW $ $ /1/00 6/30/01 66⅔% of AWW $ $ /1/01 6/30/02 66⅔% of AWW $ $ /1/02 6/30/03 66⅔% of AWW $ $ /1/03 6/30/04 66⅔% of AWW $ $ /1/04 6/30/05 66⅔% of AWW $ $ /1/05 6/30/06 66⅔% of AWW $ $50.00 LA (see note) 9/1/95 8/31/96 66⅔% of AWW $ $88.00 or worker's AWW, whichever is less 9/1/96 8/31/97 66⅔% of AWW $ $91.00 or worker's AWW, whichever is less 9/1/97 8/31/98 66⅔% of AWW $ $93.00 or worker's AWW, whichever is less 9/1/98 8/31/99 66⅔% of AWW $ $98.00 or worker's AWW, whichever is less 9/1/99 8/31/00 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/00 8/31/01 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/01 8/31/02 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/02 8/31/03 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/03 8/31/04 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/04 8/31/05 66⅔% of AWW $ $ or worker's AWW, whichever is less MA (see note) 10/1/95 9/30/96 60% of AWW $ $ or worker's AWW, whichever is less 10/1/96 9/30/97 60% of AWW $ $ or worker's AWW, whichever is less 10/1/97 9/30/98 60% of AWW $ $ or worker's AWW, whichever is less 10/1/98 9/30/99 60% of AWW $ $ or worker's AWW, whichever is less 10/1/99 9/30/00 60% of AWW $ $ or worker's AWW, whichever is less 10/1/00 9/30/01 60% of AWW $ $ or worker's AWW, whichever is less 10/1/01 9/30/02 60% of AWW $ $ or worker's AWW, whichever is less 10/1/02 9/30/03 60% of AWW $ $ or worker's AWW, whichever is less 10/1/03 9/30/04 60% of AWW $ $ or worker's AWW, whichever is less 10/1/04 9/30/05 60% of AWW $ $ or worker's AWW, whichever is less MD (see note) 1/1/96 12/31/96 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less 1/1/97 12/31/97 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less 1/1/98 12/31/98 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less 1/1/99 12/31/99 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less 1/1/00 12/31/00 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less 1/1/01 12/31/01 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less 1/1/02 12/31/02 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less 1/1/03 12/31/03 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less 1/1/04 12/31/04 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less 1/1/05 12/31/05 66⅔% of AWW $ $50.00 or worker's AWW, whichever is less MI (see note) 1/1/96 12/31/96 80% of spendable (after-tax) income $ N/A 1/1/97 12/31/97 80% of spendable (after-tax) income $ N/A 1/1/98 12/31/98 80% of spendable (after-tax) income $ N/A 1/1/99 12/31/99 80% of spendable (after-tax) income $ N/A 1/1/00 12/31/00 80% of spendable (after-tax) income $ N/A 1/1/01 12/31/01 80% of spendable (after-tax) income $ N/A 1/1/02 12/31/02 80% of spendable (after-tax) income $ N/A 1/1/03 12/31/03 80% of spendable (after-tax) income $ N/A 1/1/04 12/31/04 80% of spendable (after-tax) income $ N/A 1/1/05 12/31/05 80% of spendable (after-tax) income $ N/A NC 1/1/96 12/31/96 66⅔% of AWW $ $ /1/97 12/31/97 66⅔% of AWW $ $ /1/98 12/31/98 66⅔% of AWW $ $ /1/99 12/31/99 66⅔% of AWW $ $ /1/00 12/31/00 66⅔% of AWW $ $ /1/01 12/31/01 66⅔% of AWW $ $ /1/02 12/31/02 66⅔% of AWW $ $ /1/03 12/31/03 66⅔% of AWW $ $ /1/04 12/31/04 66⅔% of AWW $ $ /1/05-12/31/05 66⅔% of AWW $ $

40 Table 5 Maximum and Minimum Temporary Total Disability Benefits, (continued) PA (see note) 1/1/96 12/31/96 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/97 12/31/97 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/98 12/31/98 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/99 12/31/99 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/00 12/31/00 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/01 12/31/01 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/02 12/31/02 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/03 12/31/03 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/04 12/31/04 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/05 12/31/05 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less TN (see note) 7/1/95 6/30/96 66⅔% of AWW $ $ /1/96 6/30/97 66⅔% of AWW $ $ /1/97 6/30/98 66⅔% of AWW $ $ /1/98 6/30/99 66⅔% of AWW $ $ /1/99 6/30/00 66⅔% of AWW $ $ /1/00 6/30/01 66⅔% of AWW $ $ /1/01 6/30/02 66⅔% of AWW $ $ /1/02 6/30/03 66⅔% of AWW $ $ /1/03 6/30/04 66⅔% of AWW $ $ /1/04 6/30/05 66⅔% of AWW $ $ /1/05 6/30/06 66⅔% of AWW $ $99.45 TX (see note) 9/1/95 8/31/96 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/96 8/31/97 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/97 8/31/98 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/98 8/31/99 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/99 8/31/00 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/00 8/31/01 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/01 8/31/02 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/02 8/31/03 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/03 8/31/04 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/04 8/31/05 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) 9/1/05 8/31/06 70%; if hourly wage more than $8.50 per hour, then 75% of AWW (for 26 weeks) WI $ $72.00 $ $74.00 $ $76.00 $ $78.00 $ $80.00 $ $80.00 $ $80.00 $ $81.00 $ $81.00 $ $81.00 $ $ /1/96 12/31/96 66⅔% of AWW $ $ /1/97 12/31/97 66⅔% of AWW $ $ /1/98 12/31/98 66⅔% of AWW $ $ /1/99 12/31/99 66⅔% of AWW $ $ /1/00 12/31/00 66⅔% of AWW $ $ /1/01 12/31/01 66⅔% of AWW $ $ /1/02 12/31/02 66⅔% of AWW $ $ /1/03 12/31/03 66⅔% of AWW $ $ /1/04 12/31/04 66⅔% of AWW $ $ /1/05 12/31/05 66⅔% of AWW $ $20.00 Notes: AR: The maximum weekly benefit amount is set at 85 percent of the SAWW, which is determined annually on June 1 by the Employment Security Department. CA: Maximum and minimum benefits are changed by legislation; from 1994 to 1996, changes took effect on July 1. California has three benefit tiers: Worker receives 100 percent of the AWW up to $126, then $126 up to an AWW of $189, and then two-thirds of the AWW up to the maximum. Under legislation signed into law February 15, 2002, maximum temporary disability benefits were increased to $602 a week effective January 2003 and to $840 a week by Beginning in 2007, the maximum weekly benefit will be indexed to the SAWW. 36

41 Table 5 Maximum and Minimum Temporary Total Disability Benefits, (continued) FL: The annual increase in the maximum benefit takes effect on January 1. Florida pays temporary total catastrophic benefits to workers who suffer the loss of a hand, arm, leg, or foot, or the loss of sight in both eyes, or is rendered paraplegic or quadriplegic. Benefits are set at 80 percent of the worker's preinjury AWW, subject to a weekly maximum of $700, and are payable for up to six months. IL: Increases in maximum benefits go into effect on January 15 and July 15 each year. IN: Maximum and minimum benefits are changed by legislation and go into effect on July 1. LA: Annual increases in maximum and minimum benefits go into effect on September 1. MA: Annual increases in maximum and minimum benefits go into effect on October 1. MD: Annual increases in maximum and minimum benefits go into effect on January 1. MI: The agency publishes tables that determine 80 percent of the after-tax value of a given wage. Factors included in this calculation include the tax filing status, the number of dependents, and the state and federal tax rates. Annual increases in maximum go into effect on January 1. The value of most discontinued fringe benefits, including the cost of health insurance, pension benefits, and holiday and vacation pay are included in the calculation of AWW, provided they do not raise the AWW above two-thirds of the SAWW for the year of injury. PA: If the statutory benefit rate is less than 50 percent of the SAWW, the benefit must be calculated using the lower of 50 percent of the SAWW or 90 percent of the worker's AWW. The minimum benefit is the point at which benefits computed using the statutory rate are subject to recalculation. Annual increases in benefits go into effect on January 1. TN: Annual increases in maximum and minimum benefits go into effect on July 1. TX: Temporary total disability benefits are called temporary income benefits in Texas. For workers who earn less than $8.50 an hour, the benefit rate is 75 percent of their AWW for the first 26 weeks; the benefit rate reverts to 70 percent after 26 weeks. The minimum weekly benefit for temporary disability is 15 percent of the SAWW for manufacturing production workers. The SAWW was set by legislation for fiscal years beginning from September 1, 2003, and through September 1, The SAWW, used to calculate the maximum weekly compensation income benefits, was set at 88 percent of the AWW in covered employment as computed by the Texas Workforce Commission (TWC) effective on or after October 1, HB7 allows the Commissioner to raise the SAWW to no more than 100% of the TWC rate. Key: AWW: average weekly wage; SAWW: statewide average weekly wage; TTD: temporary total disability. Source : State statutes. 37

42 Table 6 Temporary Disability Benefits, 2004 Benefit basis More than 7 days of lost time. More than 3 days of lost time. More than 7 days of lost time. More than 3 days of lost time. More than 7 days of lost time. More than 7 days of lost time. More than 5 days of lost time. More than 3 days of lost time (see More than 7 days of lost time. More than 7 days of lost time. note). More than 7 days of lost time. More than 7 days of lost time. More than 7 days of lost time. More than 3 days of lost time. Benefit rate 66⅔% of AWW. 66⅔% of AWW. 66⅔% of AWW. 66⅔% of AWW. 66⅔% of AWW. 66⅔% of AWW. 60% of AWW. 66⅔% of AWW. 80% of spendable (after-tax) 66⅔% of AWW. 66⅔% of AWW. 66⅔% of AWW. 70% of AWW (see note). 66⅔% of AWW. Weekly benefit (as of June 30, 2004) Maximum $ (85% of SAWW); adjusted annually. $728.00; by statute, adjusted periodically (see note). $ (100% of SAWW); adjusted annually (see note). $1, (133⅓% of SAWW); adjusted semiannually. $588.00; by statute; adjusted periodically. $ (75% of SAWW). $ (100% of SAWW); $ (100% of SAWW); $ (90% of SAWW); $ (110% of SAWW); adjusted adjusted annually (see note). adjusted annually. adjusted annually. annually. $ (100% of SAWW; see $ (100% of SAWW); $ by statute; adjusted $ (110% of SAWW); note). adjusted annually (see note). periodically (see note). adjusted annually. Minimum $ $126.00; by statute, adjusted periodically. Lower of $20.00 or worker's AWW. Lower of $ to $ (depending on number of dependents) or worker's AWW; adjusted semiannually. $ Lower of $ (20% of SAWW) Lower of $ (20% of SAWW) Lower of $50.00 or worker's None. $30.00; by statute. or worker's AWW; adjusted annually. or worker's AWW; adjusted annually. AWW; by statute, adjusted periodically. Lower of $ or 90% of worker's AWW (see note). $ $81.00 (15% of SAWW for manufacturing production workers). $20.00; by statute. Cost-of-living adjustment None. None. None. None. None. None. None. None. None. None. None. None. None. None. First payment Due within 15 days of employer knowledge or date of disability, whichever is later. Within 14 days of employer knowledge or notice of the injury or disability. Within 14 days of employer knowledge or notice of the injury. Due 14 days after the disability begins. Due 14 days after the disability begins (see note). Within 14 days of employer or insurer knowledge of the injury. Within 14 days of insurer receipt of first report of injury. Within 21 days after a claim is filed Within 14 days of employer or with the commission (see note). Within 21 days of employer or insurer knowledge of the injury. Due within 15 days after the employer has knowledge of any disability or death (see note). Within 15 days of employer knowledge or notice, or within 7 days of insurer notice of injury. insurer notice or knowledge of injury (see note). Within 14 days of employer receipt of notice of injury. Within 14 days after employer has written or actual notice of the injury or death. 38

43 Table 6 Temporary Disability Benefits, 2004 (continued) Duration of benefits 450 weeks of benefits, or until 104 weeks (except for specified 104 weeks of benefits, or until Duration of disability. 500 weeks from injury or statutory RTW, physician releases worker injuries) or until RTW or condition RTW or MMI, whichever occurs dollar limit has been reached, or until to suitable work, or MMI, whichever occurs first. determined permanent and stationary (see note). first. RTW or the worker refuses to accept suitable employment (see note). Until worker returns to work or reaches MMI (see note). 156 weeks from injury, or until RTW or treating or impartial physician approves RTW and worker refuses suitable job. Duration of disability. Duration of wage loss and disability. Duration of disability. Duration of disability, unless 400 weeks. 104 weeks of benefits, or until Until RTW; or worker reaches end adjudicated or agreed to; since RTW, MMI, or physician approves of healing period (condition is June 24, 1996, 104 weeks for workers with less than 50% permanent impairment; no limit for workers with greater than 50% RTW and worker has bona fide offer of employment at preinjury wage (see note). stabilized and no longer improving); or worker is offered a job and refuses it without good cause. Notes: CA: Beginning in 2006, the maximum weekly temporary total disability benefit is indexed to the SAWW. The 2004 legislation set a limit of 104 weeks of paid temporary disability benefits within 2 years of the first temporary disability payment except for specified injuries that usually require extended recuperation (the limit had been 5 years). FL: Florida pays temporary total catastrophic benefits to workers who suffer the loss of a hand, arm, leg, or foot, or the loss of sight in both eyes, or is rendered paraplegic or quadriplegic. Benefits are set at 80 percent of the preinjury AWW, subject to a weekly maximum of $700, and are payable for up to six months. IN: Compensation becomes due at the end of the second full week of disability and becomes payable 15 days later. Benefit limits are as follows: 500 weeks on temporary total disability (TTD) benefits; 300 weeks on temporary partial disability benefits, but included in the 500-week limit on TTD if TTD benefits paid first; any TTD benefit paid over 125 weeks is credited against permanent impairment benefits which may be payable. The statutory maximum compensation changes periodically ($294,000 in 2002). LA: A worker who returns to work at less than 90 percent of preinjury wages is entitled to supplemental earnings benefits for up to 520 weeks (after any already-paid temporary total disability or permanent partial disability benefits have been deducted). MA: Dependency benefits are paid at the rate of $6 per dependent per week to workers who receive less than $150 per week, up to a total payment of $150 per week. MD: Waiting period for benefits applies to temporary total disability. The worker must file a claim for benefits with the commission; filing the first report of injury does not begin the claims process. MI: Penalties are not assessed until 30 days after the due date of payment. PA: If the maximum benefit at the statutory rate is less than 50 percent of the SAWW, the benefit must be calculated using the lower of 50 percent of the SAWW or 90 percent of the worker's AWW. The minimum benefit is the point at which benefits computed using the statutory rate are subject to recalculation. The 1996 legislation allows the employer to have the worker's permanency evaluated when total disability benefits have been paid for 104 weeks; it is not an absolute cap on benefits. Workers who have a permanent impairment rating of less than 50 percent may be eligible to receive partial disability benefits for up to 500 additional weeks. See Table 13 for other conditions for terminating benefits. TN: The 2004 legislation set the temporary disability maximum at 105 percent of the SAWW for injuries occurring on July 1, 2004, through June 30, 2005, and 110 percent of the SAWW for injuries which occur on or after July 1, The 2004 legislation requires the Department of Labor and Workforce Development to assess a penalty when an employer or insurer fails to pay temporary benefits (or does not pay promptly) 20 or more days after the employer had knowledge of the injury. TX: For a worker who earns less than $8.50 an hour, the benefit rate is 75 percent of the AWW for the first 26 weeks; the benefit rate reverts to 70 percent after 26 weeks. The 75 percent rate cannot be applied if the benefit would exceed 100 percent of the worker's actual earnings in the year preceding the injury. Benefits are payable for life in cases of amputation or paralysis of two limbs, loss of vision in both eyes, or permanent insanity, at a rate of 75 percent of the worker's average weekly wage. Lifetime income benefits are also paid for claims of third-degree burns that cover at least 40 percent of the body and require grafting, or third-degree burns covering the majority of either both hands or one hand and the face. The SAWW was set by legislation for fiscal years from September 1, 2003, through September 1, 2005; previously, it was based on 100 percent of the AWW of manufacturing production workers. The SAWW, used to calculate the maximum weekly compensation income benefits, was set at 88 percent of the AWW in covered employment as computed by the Texas Workforce Commission (TWC) effective on or after October 1, House Bill 7 allows the commissioner to raise the SAWW to no more than 100% of the TWC rate. Key: AWW: average weekly wage (preinjury); MMI: maximum medical improvement; RTW: return to work; SAWW: statewide average weekly wage. Sources: State statutes; Ballantyne, 1993, 1997, 1999, 2003, 2005; Ballantyne and Joyce, 1996; Ballantyne and Shiman, 1997; Barth, 1999; Barth and Eccleston, 1995; and U.S. Chamber of Commerce,

44 Table 7 Maximum and Minimum Permanent Partial Disability Benefits, Effective Date PPD Benefit Rate (percentage of AWW) Maximum Benefit Minimum Benefit (not to exceed AWW or percentage of AWW, as noted) AR (see note) 1/1/96 12/31/96 66⅔% of AWW $ $ $ /1/97 12/31/97 66⅔% of AWW $ $ $ /1/98 12/31/98 66⅔% of AWW $ $ $ /1/99 12/31/99 66⅔% of AWW $ $ $ /1/00 12/31/00 66⅔% of AWW $ $ $ /1/01 12/31/01 66⅔% of AWW $ $ $ /1/02 12/31/02 66⅔% of AWW $ $ $ /1/03 12/31/03 66⅔% of AWW $ $ $ /1/04 12/31/04 66⅔% of AWW $ $ $ /1/05 12/31/05 66⅔% of AWW $ $ $20.00 CA (see note) 7/1/95 6/30/96 66⅔% of AWW $ $ $ /1/96 6/30/97 66⅔% of AWW $ $ $ /1/97 6/30/98 66⅔% of AWW $ $ $ /1/98 6/30/99 66⅔% of AWW $ $ $ /1/99 6/30/00 66⅔% of AWW $ $ $ /1/00 6/30/01 66⅔% of AWW $ $ $ /1/01 12/31/02 66⅔% of AWW $ $ $ /1/03 12/31/03 66⅔% of AWW $ $ $ /1/04-12/31/04 66⅔% of AWW $ $ $ /1/05-12/31/05 66⅔% of AWW $ $ $ FL (see note) 1/1/96 12/31/96 66⅔% of AWW 50% of average TTD benefit paid na 1/1/97 12/31/97 66⅔% of AWW 50% of average TTD benefit paid na 1/1/98 12/31/98 66⅔% of AWW 50% of average TTD benefit paid na 1/1/99 12/31/99 66⅔% of AWW 50% of average TTD benefit paid na 1/1/00 12/31/00 66⅔% of AWW 50% of average TTD benefit paid na 1/1/01 12/31/01 66⅔% of AWW 50% of average TTD benefit paid na 1/1/02 12/31/02 66⅔% of AWW 50% of average TTD benefit paid na 1/1/03 12/31/03 66⅔% of AWW 50% of average TTD benefit paid na 1/1/04 12/31/04 66⅔% of AWW 75% of average TTD benefit paid na 1/1/05 12/31/05 66⅔% of AWW 75% of average TTD benefit paid na IL (see note) 7/1/95 6/30/96 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/96 6/30/97 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/97 6/30/98 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/98 6/30/99 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/99 6/30/00 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/00 6/30/01 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/01 6/30/02 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/02 6/30/03 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/03 6/30/04 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/04 6/30/05 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less 7/1/05 6/30/06 60% of AWW $ $80.00 $96.90 or worker's AWW, whichever is less IN 7/1/95 6/30/96 66⅔% of AWW $ $ /1/96 6/30/97 66⅔% of AWW $ $ /1/97 6/30/98 66⅔% of AWW $ $ /1/98 6/30/99 66⅔% of AWW $ $ /1/99 6/30/00 66⅔% of AWW $ $ /1/00 6/30/01 66⅔% of AWW $ $ /1/01 6/30/02 66⅔% of AWW $ $ /1/02 6/30/03 66⅔% of AWW $ $ /1/03 6/30/04 66⅔% of AWW $ $ /1/04 6/30/05 66⅔% of AWW $ $

45 Table 7 Maximum and Minimum Permanent Partial Disability Benefits, (continued) LA (see note) 9/1/95 8/31/96 66⅔% of AWW $ $88.00 or worker's AWW, whichever is less 9/1/96 8/31/97 66⅔% of AWW $ $91.00 or worker's AWW, whichever is less 9/1/97 8/31/98 66⅔% of AWW $ $93.00 or worker's AWW, whichever is less 9/1/98 8/31/99 66⅔% of AWW $ $98.00 or worker's AWW, whichever is less 9/1/99 8/31/00 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/00 8/31/01 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/01 8/31/02 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/02 8/31/03 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/03 8/31/04 66⅔% of AWW $ $ or worker's AWW, whichever is less 9/1/04 8/31/05 66⅔% of AWW $ $ or worker's AWW, whichever is less MA (see note) 10/1/95 9/30/96 na For scheduled benefits, statutory amount na based on the SAWW at time of injury 10/1/96 9/30/97 na For scheduled benefits, statutory amount na based on the SAWW at time of injury 10/1/97 9/30/98 na For scheduled benefits, statutory amount na based on the SAWW at time of injury 10/1/98 9/30/99 na For scheduled benefits, statutory amount na based on the SAWW at time of injury 10/1/99 9/30/00 na For scheduled benefits, statutory amount na based on the SAWW at time of injury 10/1/00 9/30/01 na For scheduled benefits, statutory amount na based on the SAWW at time of injury 10/1/01 9/30/02 na For scheduled benefits, statutory amount na based on the SAWW at time of injury 10/1/02 9/30/03 na For scheduled benefits, statutory amount na based on the SAWW at time of injury 10/1/03 9/30/04 na For scheduled benefits, statutory amount na based on the SAWW at time of injury 10/1/04 9/30/05 na For scheduled benefits, statutory amount na based on the SAWW at time of injury MD (see note) 1/1/96 12/31/96 33⅓% - 66⅔% of AWW $94.20-$405 $50.00 or worker's AWW, whichever is less 1/1/97 12/31/97 33⅓% - 66⅔% of AWW $94.20-$415 $50.00 or worker's AWW, whichever is less 1/1/98 12/31/98 33⅓% - 66⅔% of AWW $94.20-$430 $50.00 or worker's AWW, whichever is less 1/1/99 12/31/99 33⅓% - 66⅔% of AWW $94.20-$452 $50.00 or worker's AWW, whichever is less 1/1/00 12/31/00 33⅓% - 66⅔% of AWW $114-$473 $50.00 or worker's AWW, whichever is less 1/1/01 12/31/01 33⅓% - 66⅔% of AWW $114-$501 $50.00 or worker's AWW, whichever is less 1/1/02 12/31/02 33⅓% - 66⅔% of AWW $114-$525 $50.00 or worker's AWW, whichever is less 1/1/03 12/31/03 33⅓% - 66⅔% of AWW $114-$542 $50.00 or worker's AWW, whichever is less 1/1/04 12/31/04 33⅓% - 66⅔% of AWW $114-$555 $50.00 or worker's AWW, whichever is less 1/1/05 12/31/05 33⅓% - 66⅔% of AWW $114-$578 $50.00 or worker's AWW, whichever is less MI (see note) 1/1/96 12/31/96 80% of spendable (after-tax) income $ $ /1/97 12/31/97 80% of spendable (after-tax) income $ $ /1/98 12/31/98 80% of spendable (after-tax) income $ $ /1/99 12/31/99 80% of spendable (after-tax) income $ $ /1/00 12/31/00 80% of spendable (after-tax) income $ $ /1/01 12/31/01 80% of spendable (after-tax) income $ $ /1/02 12/31/02 80% of spendable (after-tax) income $ $ /1/03 12/31/03 80% of spendable (after-tax) income $ $ /1/04 12/31/04 80% of spendable (after-tax) income $ $ /1/05 12/31/05 80% of spendable (after-tax) income $ $ NC 1/1/96 12/31/96 66⅔% of AWW $ $ /1/97 12/31/97 66⅔% of AWW $ $ /1/98 12/31/98 66⅔% of AWW $ $ /1/99 12/31/99 66⅔% of AWW $ $ /1/00 12/31/00 66⅔% of AWW $ $ /1/01 12/31/01 66⅔% of AWW $ $ /1/02 12/31/02 66⅔% of AWW $ $ /1/03 12/31/03 66⅔% of AWW $ $ /1/04 12/31/04 66⅔% of AWW $ $ /1/05 12/31/05 66⅔% of AWW $ $

46 Table 7 Maximum and Minimum Permanent Partial Disability Benefits, (continued) PA (see note) 1/1/96 12/31/96 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/97 12/31/97 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/98 12/31/98 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/99 12/31/99 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/00 12/31/00 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/01 12/31/01 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/02 12/31/02 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/03 12/31/03 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/04 12/31/04 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less 1/1/05 12/31/05 66⅔% of AWW $ $ or 90% of worker's AWW, whichever is less TN 7/1/95 6/30/96 66⅔% of AWW $ $ /1/96 6/30/97 66⅔% of AWW $ $ /1/97 6/30/98 66⅔% of AWW $ $ /1/98 6/30/99 66⅔% of AWW $ $ /1/99 6/30/00 66⅔% of AWW $ $ /1/00 6/30/01 66⅔% of AWW $ $ /1/01 6/30/02 66⅔% of AWW $ $ /1/02 6/30/03 66⅔% of AWW $ $ /1/03 6/30/04 66⅔% of AWW $ $ /1/04 6/30/05 66⅔% of AWW $ $ /1/05 6/30/06 66⅔% of AWW $ $99.45 TX (see note) 9/1/95 8/31/96 70% of AWW $ $ /1/96 8/31/97 70% of AWW $ $ /1/97 8/31/98 70% of AWW $ $ /1/98 8/31/99 70% of AWW $ $ /1/99 8/31/00 70% of AWW $ $ /1/00 8/31/01 70% of AWW $ $ /1/01 8/31/02 70% of AWW $ $ /1/02 8/31/03 70% of AWW $ $ /1/03 8/31/04 70% of AWW $ $ /1/04 8/31/05 70% of AWW $ $ /1/05 8/31/06 70% of AWW $ $81.00 WI (see note) 1/1/96 12/31/96 66⅔% of AWW $ $ /1/97 12/31/97 66⅔% of AWW $ $ /1/98 12/31/98 66⅔% of AWW $ $ /1/99 12/31/99 66⅔% of AWW $ $ /1/00 12/31/00 66⅔% of AWW $ $ /1/01 12/31/01 66⅔% of AWW $ $ /1/02 12/31/02 66⅔% of AWW $ $ /1/03 12/31/03 66⅔% of AWW $ $ /1/04 12/31/04 66⅔% of AWW $ $ /1/05 12/31/05 66⅔% of AWW $ $30.00 Notes: AR: The weekly maximum is $ if the worker's weekly temporary total disability (TTD) amount is less than $ and 75 percent of the weekly TTD amount if the weekly TTD amount is $ or more. CA: For a disability rating of greater than 70 percent, worker receives a lifetime pension, an additional benefit paid for life. The benefit is 1.5 percent of the worker's AWW for each percentage point rating over 60 percent, up to the maximum earnings limit for the date of injury. PPD weekly payments, $140 a week through 2002, will increase to $230 a week in Legislation passed in April 2004 made a number of changes to permanent disability benefits, including increasing benefits paid to severely injured workers (70 percent rating or higher) by nearly doubling the number of weeks per rating point and reducing the benefits paid to workers with a rating of 15 percent or less by reducing the number of weeks per rating point. FL: For injuries occurring prior to October 1, 2003, PPD benefits are paid at half the worker's temporary total disability (TTD) benefit; effective for injuries occurring on or after October 1, 2003, PPD benefits are paid at 75 percent of the worker's TTD benefit. For injuries occurring prior to October 1, 2003, a worker may receive a supplemental income benefit once permanent impairment benefits end. Three conditions must be met: (1) the worker's impairment rating must be at least 20 percent; (2) the worker must be unable to earn at least 80 percent of his or her preinjury AWW; and (3) the worker must make a good-faith effort to find suitable work. The supplemental income benefit is 80 percent of the difference between the worker's preinjury wage and his or her earning ability, and the benefit cannot exceed two-thirds of the preinjury AWW or the maximum TTD compensation rate. Eligibility for supplemental income benefits is reviewed regularly and terminates at 401 weeks from the date of injury. Senate Bill 50-A eliminated supplemental benefits for injuries occurring on or after October 1, IL: PPD benefit rate is 60 percent of the AWW. If a worker suffers amputation or enucleation of an eye, maximum weekly benefits are 133 ⅓ percent of the SAWW. Minimum PPD benefits vary according to the number of dependents of the injured worker. 42

47 Table 7 Maximum and Minimum Permanent Partial Disability Benefits, (continued) LA: Table entries are for scheduled benefits only. PPD benefits are reduced by the number of weeks of temporary total disability (TTD), permanent total disability, and temporary partial disability benefits paid. Additional PPD benefits (one-time payment of $30,000) paid for specified catastrophic injuries. Louisiana does not pay benefits for unscheduled permanent disability. Instead, the state pays supplemental earnings benefits (SEBs) to a worker unable to earn a wage equal to 90 percent of the preinjury wage. These benefits are paid at 66⅔ percent of the difference between the worker's average monthly wage (AMW) at the time of injury and the worker's current actual AMW or the AMW the worker is able to earn. SEBs are payable up to 520 weeks (including any TTD and PPD benefits already paid). MA: Massachusetts does not pay benefits for unscheduled permanent disability. Instead, the state pays benefits for wage loss or loss of wage-earning capacity through partial disability benefits. These benefits are paid at 60 percent of the difference between a worker's preinjury and actual wages or earning capacity, but not more than 75 percent of what the worker would receive for total disability benefits if eligible, or two times the SAWW. MD: Maryland has adopted a three-tier system for scheduled PPD benefits. In general, for permanency awards of less than 75 weeks, the compensation rate equals one-third of the workers' AWW, up to a maximum set yearly. This "minor" disability rate does not apply to public safety employees or to injuries to fingers or the great toe. For awards of 75 up to 249 weeks, the benefit rate is two-thirds of the worker's AWW, not to exceed a maximum set annually (which is one-third of the SAWW). For awards of 250 weeks or more (a "serious" disability), the number of weeks of benefits is increased by one-third, and the compensation rate is two-thirds of the worker's AWW, not to exceed 75 percent of the SAWW. If an impairment is rated below 75 weeks, the rating may be based on the greater of either "industrial loss" or the American Medical Association Guides to the Evaluation of Permanent Impairment. PPD awards for unscheduled losses are based on industrial loss of use, expressed as a percentage of loss of use of the whole body (500 weeks). Factors considered in determining industrial loss of use include the nature of the physical disability and the age, experience, occupation, and training of the injured worker. MI: Table entries are for scheduled benefits only. Scheduled benefits are called specific loss benefits in Michigan. The minimum benefit for specific loss benefits is 25 percent of the SAWW. PA: Table entries are for scheduled benefits only. Scheduled benefits are called specific-loss benefits in Pennsylvania. There are two periods of payments under specific loss: for the healing period and for the specific loss itself. By statute, benefits are paid for the healing period before benefits are paid for the specific loss. The healing period ends when the worker returns to work at the preinjury wage or the period specified in the statute ends. Pennsylvania does not pay benefits for unscheduled permanent disability. Instead, the state pays benefits for wage loss or loss of wage-earning capacity through partial disability benefits. Those benefits are paid at 66 ⅔ percent of the difference between the preinjury and current actual or imputed wages, subject to the total disability maximum. If the benefit at the statutory rate is less than 50 percent of the SAWW, the benefit must be calculated using the lower of 50 percent of the SAWW or 90 percent of the worker's AWW. The minimum benefit column in the table lists the point at which benefits computed using the statutory rate are subject to recalculation. TX: PPD benefits in Texas are called impairment income benefits (IIBs). A worker may receive a supplemental income benefit (SIB) when IIBs end. Four conditions must be met: (1) the worker's impairment rating must be at least 15 percent; (2) the worker has not taken an advance payment of benefits due (commutation); (3) the worker has not returned to work or is unable to earn at least 80 percent of the preinjury weekly wage; and (4) the worker has made a good-faith effort to find suitable work. The SIB is calculated at 80 percent of the difference between 80 percent of the worker's average weekly wage and the worker's earnings over the reporting period and cannot exceed 70 percent of the SAWW. Eligibility for SIB terminates at 401 weeks after date of injury. WI: PPD benefits in Wisconsin are paid for a period of weeks (according to the worker's disability rating) as a percentage of 1,000 weeks. The statute prescribes monthly payments for permanent disability benefits. Key: AWW: average weekly wage (preinjury); na: not applicable; PPD: permanent partial disability; SAWW: statewide average weekly wage. Sources: State statutes; Arkansas Workers' Compensation Commission; California Division of Workers' Compensation; Florida Division of Workers' Compensation; Illinois Workers' Compensation Commission; Indiana Worker's Compensation Board; Louisiana Office of Workers' Compensation Administration; Maryland Workers' Compensation Commission; Massachusetts Department of Industrial Accidents; Michigan Workers' Compensation Agency, North Carolina Industrial Commission; Pennsylvania Bureau of Workers' Compensation; Tennessee Workers' Compensation Division; Texas Division of Workers' Compensation; and Wisconsin Division of Worker's Compensation. 43

48 Table 8 Permanent Partial Disability Benefits, 2004 Benefit basis Permanent physical impairment; Permanent disability rating under Permanent physical impairment; Permanent physical disability; Permanent physical impairment; determined when the worker 100%; determined once condition determined once MMI has been determined once MMI has been determined once MMI has been returns to work or once MMI has been reached (see note). is permanent and stationary (see note). reached. reached. reached. Wage loss, plus compensation for Wage loss, plus compensation for scheduled losses. scheduled losses. Wage loss, plus compensation for specific injuries (similar to scheduled losses in other jurisdictions). Permanent physical impairment, determined once MMI has been reached (see note). Permanent physical impairment; determined once MMI has been reached. Wage loss, plus scheduled losses Vocational disability; determined Permanent physical impairment; Permanent physical impairment, (determined after healing period has ended; see note). once MMI has been reached. determined once MMI has been reached. once healing period has ended (see note). Benefit rate Percentage of disability converted Percentage of disability converted 3 weeks of benefits for each Percentage of disability converted Impairment rated according to to weeks of payment; weekly payment is 66⅔% of worker's AWW. to weeks of payment; weekly payment is 66⅔% of worker's AWW. percentage of permanent impairment; payable weekly at 50% of worker's TTD benefit rate (see note). to weeks of payment; weekly payment is 60% of worker's AWW. degrees; values per degree vary. Schedule sets weeks of payment Scheduled dollar amounts for total Percentage of disability converted Schedule sets weeks of payment Percentage of disability converted for total loss or loss of use; weekly loss or loss of use; impairment to weeks of payment; weekly for total loss or loss of use; weekly to weeks of payment per schedule; payment is 66⅔% of worker's percentage applied for partial loss. payment is 33⅓ to 66⅔% of payment is 80% of worker's weekly payment is 66⅔% of AWW (see note). worker's AWW. spendable (after-tax) income (see worker's AWW. note). Schedule sets weeks of payment Percentage of disability converted 3 weeks of benefits for each Scheduled number of weeks for for total loss or loss of use; weekly to weeks of payment; weekly percentage of permanent total loss or loss of use; payment is 66⅔% of worker's AWW. payment is 66⅔% of worker's AWW. impairment; weekly payment is 70% of worker's AWW. impairment percentage of 1,000 weeks applied for nonscheduled injuries; weekly payment is 66⅔% of worker's AWW. Weekly benefit (as of June 30, 2004) Maximum $ $ (see note). $ $250.00; varies with $ (75% of TTD maximum; $ (see note). $ (TTD maximum). permanent disability rating. see note). $ (TTD maximum). For scheduled benefits, statutory amount based on SAWW at time of injury (see note). $ $555.00; varies with rating. $ (TTD maximum) $ (TTD maximum). $ (TTD maximum). $ (TTD maximum). $ $ Minimum $ $ na $80.00 $96.90, depending on the 50 number of dependents of the injured worker. Lower of $ (20% of SAWW) na Lower of $50.00 or worker's $ $ or worker's AWW; adjusted annually. AWW. Lower of $ (50% of TTD maximum) or 90% of worker's AWW. $ $ $

49 Table 8 Permanent Partial Disability Benefits, 2004 (continued) Cost-of-living adjustment None. None. None. None. na None. na None. None. None. None. None. None. None. Payment schedule Biweekly until the required number First benefit payment due no later First benefit payment due the day Weekly or as close to predisability of weeks is reached or until the schedule as possible. claim is settled. than 14 days after last TTD payment and every 2 weeks thereafter or in a lump-sum settlement (see note). after the worker reaches maximum medical improvement or the expiration of temporary benefits, whichever occurs earlier and at regular intervals thereafter (see note). Weekly unless otherwise approved by the Workers' Compensation Board. Weekly. Weekly or in a lump sum. Weekly. Weekly. Weekly (monthly, quarterly, or in a lump sum with the approval of the Industrial Commission). Weekly. Semimonthly. Entitlement begins the day after MMI is reached, payable at same interval at which wages were paid. Monthly. Maximum duration of benefits Determined by schedule or 450 weeks for whole body. Determined by formula. Determined by formula (see note). Determined by schedule or 500 weeks for whole body. Total amount divided by weekly benefit (see note). Determined by schedule. Determined by schedule. Determined by schedule or 500 Determined by schedule. Determined by schedule. weeks for whole body. Determined by schedule. Determined by schedule or 400 weeks for whole body. Determined by schedule or 401 weeks from date of injury, whichever is first (see note). Determined by schedule or 1,000 weeks for whole body. Notes: AR: The weekly maximum is $ if the worker's weekly TTD amount is less than $ and 75 percent of the weekly TTD amount if the weekly TTD amount is $ or more. However, effective January 1, 1996, amputation or permanent total loss of use of a scheduled member is paid at the TTD rate. If the worker has an unscheduled condition and an earnings loss, PPD benefits are based on the degree of impairment and other factors, including the worker's age, education, and work experience. However, if a preexisting condition is a "major cause" of the disability, the PPD benefit is based only on the degree of functional impairment. According to case law, the Arkansas Workers' Compensation Commission is charged with the duty of determining disability based on a consideration of medical evidence and other matters affecting wage loss, such as the claimant's age, education, and work experience. CA: For a disability rating of greater than 70 percent, worker receives a lifetime pension, an additional benefit that is paid for life. The amount of the benefit is 1.5 percent of a worker's AWW for each percentage-point rating over 60 percent, up to the maximum earnings limit for the date of injury. SB 899 passed in April 2004 made a number of changes to permanent disability benefits, including increasing benefits paid to severely injured workers (70 percent rating or higher) by nearly doubling the number of weeks per rating point and reducing the benefits paid to workers with a rating of 15 percent or less by reducing the number of weeks per rating point. FL: For injuries occurring on or after October 1, 2003, PPD benefits (impairment income benefits in Florida) are paid at the rate of 75 percent of the worker's average weekly temporary total disability benefit, not to exceed the maximum; however, benefits are reduced by 50 percent for each week in which the worker's income is equal to or exceeds his or her average weekly wage. The number of weeks of benefits paid per impairment rating point varies based on the impairment rating, from 2 weeks for each percentage point of impairment from 1 percent to 10 percent to 6 weeks for each percentage point of impairment of 21 percent and higher. Also effective for injuries on or after October 1, 2003, entitlement to these benefits begins the day after the worker reaches maximum medical improvement or the expiration of temporary benefits, whichever occurs earlier. Previously, the first benefit payment was due no later than 20 days after the insurer learns of the worker's permanent impairment rating. For injuries occurring prior to October 1, 2003, a worker may receive a supplemental income benefit once permanent impairment benefits end. Three conditions must be met: (1) the worker's impairment rating must be at least 20 percent, (2) the worker must be unable to earn at least 80 percent of his or her preinjury average weekly wage, and (3) the worker must make a good-faith effort to find suitable work. The supplemental income benefit is 80 percent of the difference between the worker's preinjury wage and his or her earning ability, and cannot exceed two-thirds of the preinjury average weekly wage or the maximum TTD compensation rate. Senate Bill 50-A eliminated supplemental benefits for injuries occurring on or after October 1, IL: PPD benefit rate is 60 percent of the AWW. If a worker suffers amputation or enucleation of an eye, the maximum weekly benefit is 133⅓ percent of the SAWW. Minimum PPD benefits vary according to the number of dependents of the injured worker. IN: If the period of TTD is longer than 125 weeks, any amount paid beyond 125 weeks reduces dollar for dollar the value of any PPD award. Benefits paid singly or as any combination of TTD, temporary partial disability, PPD, and permanent total disability benefits expire after 500 weeks or when the dollar limit on maximum indemnity benefits payable on a claim is reached ($294,000 in 2002). 45

50 Table 8 Permanent Partial Disability Benefits, 2004 (continued) LA: Three restrictions are placed on scheduled PPD benefits: (1) any weeks of TTD benefits or supplemental earnings benefits (SEBs) are credited toward the amount entitled for PPD benefits (before August 15, 1999, the credit was for the dollar amount of benefits paid); (2) worker who suffers a hearing loss receive PPD benefits (up to 100 weeks) only if the hearing loss is due solely to a single traumatic incident; and (3) for claims arising before August 15,1999, no PPD benefits were payable unless the anatomical loss, or loss of use, exceeded 25 percent as established in the AMA Guides to the Evaluation of Permanent Impairment. Louisiana does not pay benefits for unscheduled permanent disability. Instead, the state pays SEBs to workers who are unable to earn wage equal to 90 percent of preinjury wage. SEBs are paid at 66 ⅔ percent of the difference between the worker's average monthly wage (AMW) at the time of injury and the worker's current actual AMW or the AMW the worker is able to earn. SEBs are payable up to 520 weeks (including any TTD and PPD benefits already paid). Louisiana pays additional PPD benefits (a one-time payment of $30,000) for specified catastrophic injuries. MA: Permanency benefits are paid for loss or loss of use or function of body members or for scarring or disfigurement only. Those benefits are called supplemental or specific compensation and are similar to scheduled PPD benefits in other jurisdictions. Massachusetts does not pay benefits for unscheduled permanent disability. Instead, the state pays benefits for wage loss or loss of wage-earning capacity through partial disability benefits. Partial disability benefits are paid at 60 percent of the difference between a worker's preinjury and actual wages or earning capacity, but not more than 75 percent of what the worker would receive for total disability benefits if eligible, or two times the SAWW. MD: PPD benefits for unscheduled losses are based on industrial loss of use, expressed as a percentage of loss of use of the whole body (500 weeks). Factors considered in determining industrial loss of use include the nature of the physical disability and the age, experience, occupation, and training of the injured worker. MI: Permanency benefits are paid for loss or total loss of use or function of body members as listed in the statute. Those benefits are called specific loss benefits and are similar to scheduled PPD benefits in other jurisdictions. Michigan does not have a healing period. Michigan does not pay benefits for unscheduled permanent disability. Instead, the state pays benefits for wage loss or loss of wage-earning capacity. PA: Scheduled benefits are called specific-loss benefits in Pennsylvania. There are two different periods of payments under specific loss: for the healing period and for the specific loss itself. By statute, benefits are paid for the healing period before benefits are paid for the specific loss. The healing period ends when the worker returns to work at preinjury wage or the period specified in the statute ends. Pennsylvania does not pay benefits for unscheduled permanent disability. Instead, the state pays benefits for wage loss or loss of wage-earning capacity through partial disability benefits. Those benefits are paid at 66⅔ percent of the difference between the preinjury and current actual or imputed wages, subject to the total disability maximum. If the benefit at the statutory rate is less than 50 percent of the SAWW, the benefit must be calculated using the lower of 50 percent of the SAWW or 90 percent of the worker's AWW. The minimum-benefit row in the table lists the point at which benefits computed using the statutory rate are subject to recalculation. TX: Under certain circumstances, a worker may receive a supplemental income benefit (SIB) when impairment benefits end. Four conditions must be met: (1) the worker's impairment rating is at least 15 percent, (2) the worker has not taken an advance payment of benefits due (commutation), (3) the worker has not returned to work or is unable to earn at least 80 percent of the preinjury AWW, and (4) the worker has made a good-faith effort to find suitable work. The SIB is calculated at 80 percent of the difference between 80 percent of the worker's average weekly wage and the worker's earnings over the reporting period and cannot exceed 70 percent of the SAWW. Eligibility for SIB terminates at 401 weeks after the date of injury. WI: Scheduled injuries involve limbs, eyes, and ears. Injuries or conditions listed in the schedule are compensated based on functional impairment ratings only, without regard to loss of earning capacity. The number of weeks listed in the schedule for each body part is paid for total impairment; loss of use is determined as a percentage of the total. Nonscheduled injuries include those to the head, back, or torso that are not specified in the schedule, as well as psychological claims. Compensation for nonscheduled injuries can be based on functional impairment only or on loss of earning capacity. Nonscheduled injuries are rated as a percentage of loss to the body as a whole. Functional impairment benefits for nonscheduled injuries are paid to a worker rehired by the former employer at 85 percent or more of his or her preinjury AWW. Workers who do not return to work, or who are rehired at less than 85 percent of their former wages, can receive earning capacity benefits, which are much larger than functional impairment benefits. Earning capacity benefits are determined by comparing the effect of the impairment on the worker's earning capacity with the worker's permanent and total disability for occupational purposes. Key: AWW: average weekly wage (preinjury); MMI: maximum medical improvement; na: not applicable; PPD: permanent partial disability; SAWW: statewide average weekly wage; TTD: temporary total disability. Sources: State statutes; Ballantyne, 1993, 1997, 1999, 2003, 2005; Ballantyne and Joyce, 1996; Ballantyne and Shiman, 1997; Ballantyne and Telles, 1992; Barth, 1999; Barth and Eccleston, 1995; Barth and Niss, 1999; Telles and Fox,

51 Table 9 Determining Permanent Partial Disability Benefits, 2006 Comprehensiveness of permanent disability rating guide or schedule Schedule covers loss or loss of use of extremities, vision, and Rating guide covers most conditions; weeks of benefits Schedule covers loss or loss of use of extremities, vision, and hearing; unscheduled losses rated equal impairment rating multiplied hearing; unscheduled losses rated in proportion to whole body (450 weeks); determined once MMI has been reached. by a number from 2 through 6, depending on the impairment rating. in proportion to whole body (500 weeks); determined once MMI has been reached. Schedule provides disability ratings for most impairments; number of weeks for each 1 percent of disability varies according to permanent disability rating. Determined once condition is permanent and stationary (see note). Schedule provides number of degrees for extremities; unscheduled losses rated in proportion to whole body (100 degrees); determined once MMI has been reached (see note). Schedule covers loss or loss of use of fingers, toes, arms, feet, legs, and eyes; unscheduled losses rated according to wage loss; determined once MMI has been reached (see note). Schedule not used; statute and department guidelines provide formulas for determining loss of function benefits; unscheduled losses rated according to wage loss; determined once MMI has been reached. Schedule covers loss or loss of use of extremities, vision, and hearing; unscheduled conditions rated in proportion to whole body (500 weeks) based on industrial loss; determined once MMI has been reached. Schedule covers loss or total loss of use of fingers, toes, hands, arms, feet, legs, and eyes; unscheduled losses rated according to wage loss. Schedule covers most impairments. Schedule covers loss or loss of use of extremities, vision, and Schedule covers loss or loss of use of extremities, vision, and Impairment rated using AMA Guides ; weeks of benefits equal Schedule covers extremities, vision, and hearing; unscheduled hearing; unscheduled losses rated hearing; unscheduled conditions whole person impairment rating injuries rated in proportion to body according to wage loss; determined once healing period has ended. rated in proportion to whole body (400 weeks); determined once MMI has been reached (see note). multiplied by 3. as a whole (1,000 weeks; see note). Rating components Medical impairment (scheduled injuries; see note). Medical impairment. Medical impairment plus nature of injury and worker's age and occupation (see note). Medical limitations plus worker's age, skill, training, occupation, pain, range of motion, stiffness. Medical impairment (scheduled injuries). Medical impairment (scheduled Medical impairment (scheduled Medical impairment (scheduled injuries). injuries; see note). injuries, see note). Medical impairment (scheduled injuries); plus worker's loss of wage-earning capacity and age, experience, occupation, and training for determining industrial loss of use for unscheduled injuries. Medical impairment (scheduled injuries). Medical impairment (scheduled Medical impairment. injuries). Medical impairment plus worker's age, education, training, occupation, loss of present and future wage-earning capacity, and local labor market conditions. Medical impairment (scheduled injuries). Rating schedule or guide used AMA Guides, 4th edition, required AMA Guides, 5th edition, required Florida Impairment Rating Guide None (see note). AMA Guides, latest edition. (see note). (see note). for listed conditions; AMA Guides for unlisted conditions. AMA Guides, latest edition. AMA Guides, required. AMA Guides, 4th edition, required. None (see note). State's own guide. AMA Guides, latest edition, required. AMA Guides, latest edition, and Manual for Orthopedic Surgeons. AMA Guides, 4th edition, required. State's own guide. Responsibility for issuing ratings Treating physician. Treating physician rates impairment; disability ratings are made by the Division of Workers' Compensation's Disability Evaluation Unit, the parties, or private raters (see note). Treating physician; IME (in disputes; see note). Treating physician; Workers' Compensation Commission. Treating physician. Treating physician. Treating physician; IME; impartial Treating physician; insurerselected na Treating physician. doctor. physician from department's list (in disputes). Impairment rating evaluation (IRE) Treating physician. Treating doctor; insurer-selected Treating physician. physician from a bureau panel (see note). doctor; independent doctor selected from Division of Workers' Compensation's list of designated doctors (effective January 1, 2002). 47

52 Table 9 Determining Permanent Partial Disability Benefits, 2006 (continued) Treating physician's rating given special weight in claims with multiple ratings Yes, by custom and case law. No (see note). Yes, by custom (see note). Yes, by custom and case law. No. Yes, by case law. No. No. na Yes, by custom and case law (see note). No. Yes, by custom and case law (see No, by statute (see note). Yes, by custom. note). Use of medical panels/neutral doctors in impairment-rating disputes Authorized. Authorized. Authorized, by judge's order. Authorized. Authorized. Authorized. Required when medical issues are Authorized. na Authorized (see note). in dispute; assigned from department list (see note). Required when medical issues are Authorized. in dispute. Authorized. Parties may request that a neutral physician be appointed by the court, with the expense shared equally by both parties (see note). Independent doctor selected from Workers' Compensation Commission's list of designated doctors. Opinion of designated doctor carries "presumptive weight" in a dispute (see note). Limitations on lump-sum settlements for PPD benefits None. Rights to future vocational rehabilitation benefits can be settled only under certain conditions (see note). None (see note). None. None. None. Future liability for medical benefits None. None None. cannot be terminated if liability for claim has been accepted or determined by a judge. None. Settlement amount, when the Future liability for medical benefits Most lump-sum settlements are award does not exceed the compensation for 6 months' disability, is final and cannot be readjusted (see note). cannot be terminated. Lump-sum settlements are prohibited, but lump-sum payments may be made under specific circumstances (see note). prohibited (see note). Notes: AR: If the worker has an unscheduled condition and an earnings loss, PPD benefits are based on the degree of impairment and other factors, including the worker's age, education, and work experience. The required use of the AMA Guides, 4th edition, is exclusive of any sections which refer to pain and exclusive of straight leg raising tests or range of motion tests. CA: Under the 2004 legislation, the treating physician writes a Permanent and Stationary (P&S) Report when the worker's condition is permanent and stationary that is, when the medical condition is not improving and not getting worse. The P&S Report must include an impairment rating (using the AMA Guides, 5th edition) and the treating physician's estimate of how much of the disability is caused by the job injury compared with other factors, as well as a description of specific medical problems, work restrictions, future medical care, the ability to return to the preinjury job, and other pertinent information. The Disability Evaluation Unit within the Division of Workers' Compensation may review the report and assign a disability rating, or the rating may be determined by the parties or by private raters. Previously, the treating physician was not required to rate the impairment and impairment was based on state's rating guide. The 2004 legislation repealed the presumption of correctness of the treating doctor's opinion for all cases, regardless of the date of injury. A worker who was injured on or after January 1, 2003 and is represented by an attorney can settle prospective vocational rehabilitation benefits with a lump-sum payment not to exceed $10,000, to be used in self-directed vocational rehabilitation; a worker who is not represented can settle future vocational rehabilitation benefits only if certain conditions are met. Settlement of supplemental job displacement benefits (for injuries on or after January 1, 2004) is permitted. Prior to these legislative changes, vocational rehabilitation benefits could not be settled. FL: When a worker with a compensable condition sustains a permanent impairment, the worker is rated at the time of maximum medical improvement or within 6 weeks of the date when the worker is scheduled to reach the 104-week threshold for temporary disability benefits, whichever occurs first. Judges of compensation claims can consider only the testimony of the treating physician, an independent medical examiner, and the expert medical advisor. If multiple treating physicians submit impairment ratings, the insurer is required to calculate the impairment rating of the body as a whole. Arrearages for past child support obligations must be deducted from a settlement. 48

53 Table 9 Determining Permanent Partial Disability Benefits, 2006 (continued) IL: PPD benefits are calculated on a case-by-case basis. Illinois does not use written standards, relying instead on the experience of adjusters, attorneys, arbitrators, and a summary of commission appeal decisions. IN: Maximum medical improvement is also termed medical quiescence. LA: Permanency benefits are paid for loss or loss of use or function of body members (called scheduled PPD benefits) and for disfigurement and scarring. Louisiana does not pay benefits for unscheduled permanent disability. Instead, the state pays supplemental earnings benefits (SEBs) to workers who are unable to earn wages equal to 90 percent of preinjury wages. These benefits are paid at 66 ⅔ percent of the difference between the worker's average monthly wage (AMW) at the time of injury and the worker's current actual AMW or the AMW the worker is able to earn. SEBs are payable up to 520 weeks (including any temporary total disability and PPD benefits already paid). MA: Permanency benefits are paid for loss or loss of use or function of body members or for scarring or disfigurement only. Those benefits are called supplemental or specific compensation and are similar to scheduled PPD benefits in other jurisdictions. Massachusetts does not pay benefits for unscheduled permanent disability. Instead, the state pays benefits for wage loss or loss of wage-earning capacity through partial disability benefits. Partial disability benefits are paid at 60 percent of the difference between a worker's preinjury and actual wages or earning capacity, but not more than 75 percent of what the worker would receive for total disability benefits if eligible or two times the statewide average weekly wage. An impartial physician's report is required once a case has been appealed to the hearing level; the report becomes prima facie evidence and is the only medical testimony allowed unless the hearing judge determines that the report is inadequate or biased. MI: Permanency benefits are paid for loss or total loss of use or function of body members as listed in the statute. Those benefits are called specific loss benefits and are similar to scheduled PPD benefits in other jurisdictions. Michigan does not pay benefits for unscheduled permanent disability. Instead, the state pays benefits for wage loss or loss of wageearning capacity. Unscheduled benefits are paid solely on the basis of wage loss, at 80 percent of the difference between the worker's preinjury and postinjury net wage to a maximum of 90 percent of the statewide average weekly wage. Michigan does not use medical impairment ratings. NC: The worker has a statutory right to a second opinion paid for by the employer or insurer. PA: Scheduled benefits are called specific-loss benefits in Pennsylvania. There are two different periods of payments under specific loss: for the healing period and for the specific loss itself. By statute, benefits are paid for the healing period before benefits are paid for the specific loss. The healing period ends when the worker returns to work at the preinjury wage or the period specified in the statute ends. Pennsylvania does not pay benefits for unscheduled permanent disability. Instead, the state pays benefits for wage loss or loss of wage-earning capacity through partial disability benefits. Those benefits are paid at 66 ⅔ percent of the difference between the preinjury and current actual or imputed wages, subject to the total disability maximum. If the benefit at the statutory rate is less than 50 percent of the statewide average weekly wage (SAWW), the benefit must be calculated using the lower of 50 percent of the SAWW or 90 percent of the worker's average weekly wage. The minimum benefit section in Table 8 lists the point at which benefits computed using the statutory rate are subject to recalculation. If the exam indicates an impairment rating of less than 50 percent, total disability status ends; partial disability benefits may continue (at the temporary total disability rate) pending determination of the worker's new earning capacity. TN: Tennessee uses a two-part approach to calculate benefits for unscheduled losses. If a worker has returned to work at or above the preinjury wage, the benefit can be set as high as 2.5 times the permanent impairment rating (injuries prior to July 1, 2004). Workers who reach MMI and have not returned to work at earnings at or above their preinjury wage can be compensated at up to six times the permanent impairment rating. In both cases, the permanent partial rating is based on vocational disability the impairment rating is the starting point, and other factors, including age and education, are considered. Lump-sum settlements are based on the best interest of the injured worker and his or her ability to wisely manage and control a commuted award. The 2004 legislation established an Independent Medical Examination Registry to settle disputes concerning an injured worker's impairment rating, effective for all injuries occurring on or after July 1, 2005; the opinion of the independent examiner is presumed to be correct; employer pays for the examination regardless of who requests it. The 2004 legislation also established a cap of 1.5 times the permanent impairment rating for claims in which the worker returns to work with the same employer at the same or greater rate of pay; applicable to all body as a whole impairments and scheduled member impairments worth 200 weeks of benefits or greater and effective for injuries occurring on or after July 1, When the worker has not returned to work, the legislation retains the 6-times cap on body as a whole injuries and also applies the 6-times cap for scheduled members worth 200 weeks or more. Further, the legislation prohibits a worker from settling the right to future medical benefits until 3 years after the date of settlement approval or trial order on injuries to scheduled body members with a value of 200 weeks or more and to body as a whole injuries for injuries on or after July 1, Treating physician ratings are given special weight at the discretion of the court. TX: Beginning in 2002 (based on statutory changes enacted in 2001), the insurance carrier first requests a designated doctor be assigned to address questions on the maximum medical improvement or impairment rating (MMI/IR) status of an injured worker. The designated doctor's determination is given presumptive weight. Prior to 2002, an insurance carrier could request examination by a doctor of its choice (Required Medical Exam doctor) to make a determination on MMI/IR and, if the determination was disputed by the worker, a designated doctor was then assigned by the commission for an objective assessment. Lump-sum payments may be made when (1) payment for past-due benefits can be made in a lump sum, (2) the worker can request an advance payment of future benefits if he or she can demonstrate hardship, or (3) the worker and payor can agree that impairment income benefits will be commuted in cases when the worker has returned to work for at least 3 months and is earning at least 80 percent of his or her preinjury average weekly wage (a worker who elects a commutation gives up the right to collect further income benefits). WI: Wisconsin uses a two-part approach to calculate benefits for unscheduled losses. If a worker has returned to work and is earning at least 85 percent of the preinjury wage, the rating is based solely on the degree of medical impairment. If the worker has reached MMI and has not returned to work or is earning less than 85 percent of the preinjury earnings, the rating is based on the loss of earning capacity the impairment rating is the starting point, and other factors, including age and education, are considered. Lump-sum settlements are prohibited for PPD benefits; however, if compensation is due for a PPD or death benefit, advanced payment of unaccrued compensation can be directed by the division on determination that it is in the best interest of the worker or dependents. Lump-sum settlements are made only for the amount of incurred medical expenses plus sums accrued as compensation or death benefits up to the date of the agreement. Unaccrued benefits of $5,000 can be advanced and paid in a lump sum when the compromise settlement in a claim, other than for death benefits, involves a dispute over the extent of permanent disability. Key : AMA Guides : American Medical Association's Guides to the Evaluation of Permanent Impairment ; IME: independent medical examiner (evaluator); MMI: maximum medical improvement; na: not applicable. Sources: State statutes; Ballantyne, 1993, 1997, 1999, 2003, 2005; Ballantyne and Joyce, 1996; Ballantyne and Shiman, 1997; Ballantyne and Telles, 1992; Barth, 1999; Barth and Eccleston, 1995; Barth and Niss, 1999; Telles and Fox,

54 Table 10 Vocational Rehabilitation Benefits, 2004 Benefit basis Generally voluntary (see note). Required under statute in some circumstances before 2004 (see note). Insurers and Division of Workers' Compensation have statutory responsibilities regarding reemployment of injured workers; workers must be accepted into VR program by division to receive rehabilitation benefits from the division. Injured worker may be entitled to VR services when he or she cannot return to the preinjury work. Injured worker is entitled to VR services necessary to restore worker to useful employment. Referrals are made to the Office of Vocational Rehabilitation, which determines eligibility and implements the rehabilitation plan. Injured worker is entitled to VR Generally voluntary; Office of Injured worker may be entitled to Injured worker is entitled to VR Division of Vocational services when he or she suffers a compensable injury that Education and Vocational Rehabilitation determines VR services when he or she cannot return to preinjury services necessary to restore worker to useful employment Rehabilitation determines if VR services are needed. precludes earning wages equal whether VR services are occupation as a result of the workrelated when he/she is unable to perform to the preinjury wage. injury (see note). necessary and feasible for worker (see note). work for which he/she has previous training or experience. Not required under statute. Voluntary, but the commissioner requires the Workers' Not required under statute, but commission screens injury Not required under statute, but worker who cannot return to work Compensation Division to refer all reports to identify potential previously performed may be feasible cases for vocational candidates for VR and refers to eligible for VR services. rehabilitation to the Department of Texas Rehabilitation Commission Education. for VR assistance. Services na Counseling, training, education, or self-employment (see note). Focus of most services is job placement; retraining is last resort. The act requires the employer to pay for treatment, instruction, and training necessary for the physical, mental, and vocational rehabilitation of the employee, including all related incidental maintenance costs and expenses. Vocational counseling, medical treatment, training, rehabilitation services, placement assistance and follow-up, and other services determined to be necessary for the individual to prepare for, enter, engage in, or retain employment. Services needed to return the Focus of most services is job Job development and placement; Counseling, vocational Job placement, guidance and injured worker to work, with a minimum of retraining, as soon as possible; services may include testing and evaluation, job placement, guidance and counseling, job training, and retraining. placement; retraining is last resort. vocational assessment, evaluation, counseling, and plan development and monitoring; training. assessment, on-the-job training, short-term training, and job placement. counseling, restoration, training, and postemployment support. na See note. na Services to restore injured worker to preinjury earning capacity and potential. Retraining if indicated. Benefits paid na Maintenance allowance benefits and reasonable living expenses (see note). Same as TTD benefit. See note. na TTD benefit. TTD benefit. TTD benefit (see note). TTD benefits, plus cost of transportation and other expenses. na na Voluntary. Workers do not receive TTD benefits while receiving VR services. na TTD benefits, plus cost of specialist services. 50

55 Table 10 Vocational Rehabilitation Benefits, 2004 (continued) Maximum weekly benefit na See note. $626 (TTD maximum). See note. na $429 (TTD maximum). $ (TTD maximum). $740 (TTD maximum). $671 (TTD maximum). na na na na $687 (TTD maximum). Duration of benefits na See note. 26 weeks (extension up to 52 na na weeks with judge's order). 26 weeks (additional 26 weeks of 104 weeks. Up to 24 months (104 weeks) for 52 weeks (additional 52 weeks na retraining may be authorized). training. may be authorized by director, after review). na na na 80 weeks (additional training may be authorized by the department). Notes: AR: The commission may order the insurer or self-insurer to pay the worker the difference between the employee's AWW and benefits received for up to 1 year when the employer (without reasonable cause) refuses to return the employee to work and a suitable job is available within the employee's physical and mental limitations. In addition, the worker may file a request for a vocational rehabilitation program with the commission before the amount of PPD benefits is determined. When the employer has not offered the employee an opportunity to return to work and/or reemployment assistance, the commission may order the insurer or self-insurer to pay vocational rehabilitation program expenses for up to 72 weeks if it finds that the program is reasonable. CA: Before 2002, after 90 days of temporary disability benefits, claim administrator had to notify worker of possible eligibility for vocational rehabilitation and arrange evaluations; after 365 days of temporary disability benefits, worker was automatically eligible for vocational rehabilitation. The maximum weekly mainenance allowance was $246 per week (for up to 52 weeks) but this amount could be supplemented with advances on permanent disability benefits up to the worker's TTD rate. The 2002 legislation allowed termination of vocational rehabilitation benefits via settlements of up to $10,000 for preapproved, self-directed vocational rehabilitation plans. The 2003 legislation repealed the existing vocational rehabilitation statute and implemented a new supplemental job displacement benefit for injuries occurring on or after January 1, 2004; maximum voucher benefit varies by permanent disability rating, between $4,000 and $10,000. The 2004 legislation restored vocational rehabilitation for pre-2004 injuries. Pre-2004 vocational rehabilitation benefits are limited to $16,000, including fees paid to a rehabilitation counselor, costs of training or education, and maintenance allowance IL: The commissioner orders rehabilitation when a reasonable and cost-effective plan is established and will likely lead to a job, increase the employee's earning capacity, and improve his/her job security. By separate enactment, Illinois accepted the benefits and provisions of the Federal Vocational Rehabilitation Act (Chapter 20, sec. 2405/5a). The 2005 legislation defined maintenance benefits to be not less than the worker's TTD rate and to include costs and expenses incidental to the vocational rehabilitation program. MA: A lump-sum settlement does not close out a worker's right to rehabilitation if the claim is accepted, but services must be requested within 2 years of the settlement date. MD: The insurer or Workers' Compensation Commission must approve a worker's request for vocational rehabilitation services. To request such services, the worker must provide a current medical report indicating that he or she is unable to return to the former job duties. Rehabilitation services may be provided by the State Department of Vocational Rehabilitation or by a private vendor. The worker may be entitled to maintenance of up to $40 weekly during the period of vocational rehabilitation services. TN: The statute requires the Division of Workers' Compensation to refer cases in which vocational rehabilitation is feasible to the department of education. In practice, vocational rehabilitation is voluntary, with services provided by private rehabilitation companies. Key: na: not applicable; RTW: return to work; TTD: temporary total disability; VR: vocational rehabilitation. Sources: State statutes; Ballantyne, 1993, 1997, 1999, 2003, 2005; Ballantyne and Joyce, 1996; Ballantyne and Shiman, 1997; Ballantyne and Telles, 1992; Barth, 1999; Barth and Eccleston, 1995; Telles and Fox,

56 Table 11 Claim Initiation and Reporting Requirements, 2006 Employer notice due Immediately. Within 30 days of injury. Within 30 days of injury or death. Within 45 days after the accident; As soon as practical, in writing. within 90 days after worker knows or suspects he or she received an excessive dose of radiation. Within 30 days. As soon as practical, in writing. Within 10 days after injury (30 days for hernia); within 30 days after death. Within 90 days (see note). Immediately, but no later than 30 days after the occurrence unless reasonable excuse is made. Within 21 days (see note). As soon as possible, but no later than 30 days after the injury. Within 30 days. Within 30 days. Injury reports Requirements More than 7 days of lost time At least one day's lost time or Form completed for all injuries; Absence from work for more than Absence from work for more than and/or indemnity payments medical treatment beyond first filed with the Division of Workers' 3 days. 1 day. and when a claim is controverted, including medical-only claims (see note). aid. Compensation for claims with more than 7 days of lost time. More than 7 days of lost time or death. At least 5 days of lost time. More than 3 days of lost time. Report filed with Workers' Compensation Agency when an injury results in death, a specific loss, or a disability of 7 days or more. Form completed for all Report filed with the Workers' Form completed for all injuries; More than 3 days of lost time. injuries; filed with the Bureau Compensation Division for all of Workers' Compensation for claims regardless of lost time. claims with at least 1 day of lost time. filed with the Division of Workers' Compensation for claims with more than 1 day of lost time or for an occupational disease. Notice of accident must be given to employer immediately or as soon as practical, unless employer has knowledge of the accident. Filing process Employer must report to the Workers' Compensation Employer must complete within Employer must notify insurer 5 days of notice; payor must file within 7 days of notice or Commission within 10 days of with Department of Industrial receiving notice of accident. Relations. knowledge; insurer must file with the Division of Workers' Compensation within 14 days of notice. Employer must notify the Workers' Compensation Commission between the 15th and 25th of each month for jobrelated injuries and within two working days for job-related accidental deaths. Employer must notify the insurer within 7 days of the occurrence or 7 days of knowledge of the injury or death. The insurance carrier must file with the Worker's Compensation Board no later than 7 days after receipt of the report or 14 days after the employer's knowledge, whichever is later. Employer must send to insurer Employer files with Department Employer must report to the Employer must report to the and file with the Office of of Industrial Accidents within 7 Workers' Compensation Workers' Compensation Agency Workers' Compensation calendar days of notice of Commission within 10 days of immediately any injury that Administration within 10 days workers' inability to earn full receiving notice of disability or involves more than 7 consecutive of the 7th day of disability. wages for at least 5 calendar death (when accidental personal days of lost time, specific loss, or days. injury causes disability for more than 3 days or death). death. Employer must immediately report any injury or occupational disease to its carrier. Within 5 days of knowledge of injury, the employer or carrier must file with the Industrial Commission. Employer must notify insurer Employer must notify the Employer must report an injury to Employer must notify insurer immediately and file with the insurer within 1 working day of the insurer not later than the 8th within 7 days of notice or Bureau of Workers' knowledge of the injury; where day after 1 day of lost time or knowledge; payor must file with Compensation no later than the injured person does not after notice of an occupational the Department of Workforce 10 days but no sooner than 7 return to employment within 7 disease. The insurer must then Development within 14 days of days from date of disability. days after the accident, insurer report to the Division of Workers' injury. must file with the Workers' Compensation within 7 days of Compensation Division as soon notice (see note). as possible, but no later than 14 days (see note). 52

57 Table 11 Claim Initiation and Reporting Requirements, 2006 (continued) Claims begin with Injury report Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes, but modified agreement Yes. Yes. Yes. system for payment. Other process Worker files claim for compensation with employer. See note. Worker files claim application with the commission. Claim requirements Accident: within 2 years after Disability: within 1 year of injury Accident: within 2 years of injury or death or 1 year after or last payment. last payment of compensation, whichever is later. Death: within 1 year of death or Occupational disease: within 2 years from last injurious exposure (see note). 240 weeks of injury. accident or 1 year from last period of indemnity or authorized medical treatment, whichever is later. Occupational disease: within 90 days of manifestation. Within 3 years after an injury or disablement from an occupational disease, or within 2 years following the last workers' compensation payment, whichever is later (see note). Within 1 year from accident, death, or last payment of Within 4 years of date worker learns of a causal relationship Accident: Within 60 days after disability begins; excusable to 2 Within 2 years after injury, death, recovery from incapacity, or compensation. If the injury has between the disability and the a delayed development, claim employment, or within 4 years years; within 18 months after death. worker knows/should know relation of disease to must be made within 1 year from the date the injury develops, but in no case more than 2 years from the date of accident (see note). of death. employment. Occupational disease: within 3 years of date worker knew or should have known of a causal relationship between the disease and the employment and within 300 weeks of last exposure to the hazard Occupational disease: within 2 years (3 years for pulmonary dust disease) of date of disablement or when the employee first has actual knowledge that the disablement was caused by the employment. Within 3 years of injury, death, Within 1 year after the accident Disability: within 1 year of injury. or last payment. resulting in injury or death. Occupational disease: within 1 year of date worker knew or should have known of a causal relationship between the disease and the employment. Notes: Within 2 years from date of injury or death, or from date worker knew or should have known about the disability and its relation to the employment. Within 2 years from the date of injury. If employee's condition has changed, must file within 2 years from the date for which compensation was last paid. Increase in payments must be filed within 1 year from the date for which compensation was last paid. Within 2 years after accident, death, or disablement. AR: Medical-only claims are reported monthly. A claim for silicosis or asbestosis must be filed within 1 year of disablement, and the disablement must be within 3 years from the last injurious exposure. A claim for a condition or disease caused by exposure to X rays, radioactive substances, or ionizing radiation must be filed within 2 years of the date the employee knows of the condition, following an examination and diagnosis by a doctor. IL: In cases of pneumoconiosis, the employee has 5 years to file a claim from the date of last exposure or payment and 25 years after the date of last exposure for radiation or asbestos exposure. If death is caused by the injury or occupational disease, the claim must be filed within 3 years of death or 3 years of the date of last compensation, whichever is later. LA: If indemnity payments other than supplemental earnings benefits (SEBs) were paid, the worker has three years from last payment of those benefits to assert a claim for SEBs. All claims for medical benefits are barred unless within 1 year the parties agree on the payments to be made or a claim is filed with the Office of Workers' Compensation Administration. The 2003 legislation requires that occupational disease claims must be filed within one year of when the disease becomes manifest, the employee is unable to work as a result, and the employee knows or has reasonable grounds to believe that the disease is occupationally related. MA: The worker must file a claim only when the employer fails to file a first report promptly, the employer controverts the claim within the statutory 14-day period, or the employee received no payment of compensation or notice of denial within the 14-day period. MI: The statute does not require that notice be in writing. PA: Compensation is disallowed if the worker does not report an injury within 120 days. TN: Reports of accidents causing 7 days of disability or less and/or causing no permanent impairment must be submitted on or before the 15th day of the month following the month covered by the report. TX: Since 1992, both subscribing and nonsubscribing employers have been required to file injury reports with the commission. Sources: State statutes and North Carolina Industrial Commission Rule 104; Ballantyne, 1993, 1997, 1999, 2003, 2005; Ballantyne and Joyce, 1996; Ballantyne and Shiman, 1997; Barth, 1999; Barth and Eccleston, 1995; Telles and Fox,

58 Table 12 Initiating Payments, 2006 Waiting period a 7 days. 3 days, including day of injury unless full wages paid for that day (see note). 7 days. 3 days. 7 days. 7 days. 5 days. 3 days. 7 days. 7 days. 7 days. 7 days. 7 days. 3 days, excluding Sundays unless worker typically works Sundays Retroactive period 14 days. 14 days. More than 21 days. 14 days. 21 days. 6 weeks. 21 days. 14 days. 14 days. 21 days. 14 days. 14 days. 4 weeks. 7 days. Time to initiate payment or deny benefits 15 days after employer is aware of the alleged incident 14 days after employer knowledge or notice of the injury 14 days after employer knowledge or notice of the injury 14 days after employer knowledge or notice of the injury 14 days after the disability begins (see note). or within 15 days of date of disability, whichever is later (see note). or disability. (see note). or disability. 14 days after employer or insurer knowledge of injury or death. 14 days after insurer receives first report of injury. 21 days after a claim is filed. 14 days after employer notice or knowledge of disability or death (see note) 21 days after employer knowledge or notice of worker's disability. 15 days after employer knowledge of any disability or death (see note). 15 days after insurer notice of injury (see note). 14 days after first day of lost time due to injury. Pay-without-prejudice option b None. For 90 days. For 120 days. None. None. No limit. Payment does not constitute acceptance of the claim. For 180 days (see note). None. No limit. Payment does not imply acceptance of liability for a claim. For 90 days (see note). No limit. Payment does not constitute acceptance of the claim. For 60 days, if benefits are initiated promptly. None (see note). Late-payment penalty 18% of compensation payable Automatic, self-imposed 10% $10 per day for each day that a without an award (20% under an award) payable to worker and added to the first payment. penalty payable to worker; additional penalties through audit and when judge finds payments were unreasonably delayed (see note). weekly compensation payment has been withheld or refused, provided payment does not exceed $2,500. Automatic, self-imposed 20% penalty for late payments paid to worker when payment is more than 7 days late; administrative penalty imposed by division for late first payments on all indemnity claims; administrative penalty for late subsequent payments following audit (see note). 14 days after employer notice of injury or death. For 90 days (see note). $50 penalty may be imposed for the late payment of compensation. $50 per day or 12% (whichever is greater) for late voluntary payments when $200 to worker if claim is not paid or denied within 14 days; $1,000 after 45 days; $2,500 after 60 Additional $50 per day penalty if uncontested benefits are unpaid after 30 days, up to a maximum claim has not been reasonably days; $10,000 after 90 days (see of $1,500. controverted, up to $2,000. note). A penalty of up to 20% may be assessed by the commission if an award is not paid within 15 days of any order, and up to a 40% penalty if payment is not made within 30 days of the order (see note). Up to 10% of the amount Penalty of 25% on any unpaid or Penalty set by statute, up to 10% penalty payable to worker; awarded plus accrued interest late TTD benefits (see note). (see note). $5,000 (see note). additional interest through audit and when judge finds payments were unreasonably delayed. 10% payable to worker if any installment of compensation is not paid within 14 days after it becomes due. 54

59 Table 12 Initiating Payments, 2006 (continued) a Benefits are paid for the waiting period if the worker is out of work for the retroactive period; days listed are calendar days unless otherwise noted. b Under a pay-without-prejudice option, the employer or insurer can pay benefits without accepting liability for the claim and retains the right to deny benefits and stop payment within the pay-without-prejudice period. To use this option, payment must start within the statutory period. Notes: AR: Commission rule 29 sets forth claims-handling standards, including the timely filing of two-thirds of all required forms and notices and timely first payment of 80 percent of noncontroverted claims. CA: The 3-day waiting period includes the day of injury unless the employer pays full wages for that day. The waiting period is waived if the worker is hospitalized. The audit unit imposes a flat-rate penalty for each late payment it uncovers. If a judge decides that a payment was unreasonably delayed, a "5814 penalty" applies, amounting to 10 percent of the entire class of benefits (for example, temporary disability or medical benefits). The 2004 legislation based penalties for unreasonable delay or refusal of payment on the amount of the late payment rather than the entire benefit; capped penalty at 25 percent of the late payment or $10,000, whichever is less. FL: If the first 7 days of disability are not consecutive, the first payment is due on the 6th day after the first 8 calendar days of disability. The Division of Workers' Compensation imposes penalties for late payments of compensation that are below a 95 percent timely payment performance standard for an insurer. The payment is $50 for each installment of compensation below the 95 percent timely payment performance standard and equal to or greater than a 90 percent timely payment standard and $100 per installment of compensation paid below a 90 percent timely performance standard. IN: Compensation becomes due at the end of the second full week of disability and becomes payable 15 days later. An agreement to compensation must be provided to the employee no later than the 29th day of disability, and all compensation due at that time must be tendered. MA: The pay-without-prejudice period can be extended up to one year with the approval of a conciliator, administrative judge, or administrative law judge. If the payor fails to pay or deny a claim within 60 days, an additional $2,000 is paid to the Department of Industrial Accidents; if no action is taken within 90 days, the additional penalty is $10,000. MD: Worker must file a claim for benefits. A claim must be paid or denied within 21 days of filing with the Workers' Compensation Commission; a commissioner awards benefits through an order if the claim is not denied within 21 days. MI: Employers and insurers may dispute claims by filing a notice of dispute (Form 107); this form is also used if further investigation is required or additional information is needed from the worker, so filing the form does not necessarily indicate a denial. Once a Form 107 is filed on a claim no further action is required on the part of the employer or insurer, that is, they are not required to pay or deny the claim within a specified time frame. A worker can initiate a request for agency intervention by filing an application for mediation or hearing. NC: The pay-without-prejudice period can be extended an additional 30 days with the approval of the Industrial Commission. PA: The pay-without-prejudice period was extended from 6 weeks to 90 days under legislation signed into law June 24, In cases of unreasonable or excessive delay, penalties of up to 50 percent of the compensation due can be assessed. TN: The 2004 legislation requires the Department of Labor and Workforce Development to assess a penalty against an employer or insurer who fails to make a payment or who makes an untimely payment of temporary disability benefits to which the injured worker is entitled. The penalty is assessed when the temporary benefits are unpaid or not promptly paid 20 or more days after the employer had knowledge of the injury. The penalty amount is 25 percent of not promptly paid or unpaid temporary disability benefits and is made payable to the injured worker, effective for injuries occurring on or after July 1, For injuries occurring prior to July 1, 2004, a penalty of up to 6 percent on any unpaid installments could be assessed. TX: For injuries occurring prior to September 1, 2003, the insurer must begin payments within 7 days after notice of injury is received. Penalty amounts for late payment were established by statute in Beginning in 2004, administrative penalties are assessed based on payment information submitted through insurance carriers' Electronic Data Interchange transmissions. The Texas Division of Workers' Compensation runs monthly reports to identify all late payments for the assessment of penalties. WI: First payment or denial is required within 14 days of injury. Any delayed payment is subject to a 10 percent penalty. Sources: State statutes; Ballantyne, 1993, 1997, 1999, 2003, 2005; Ballantyne and Joyce, 1996; Ballantyne and Shiman, 1997; Ballantyne and Telles, 1992; Barth, 1999; Barth and Eccleston, 1995; Telles and Fox,

60 Table 13 Terminating Temporary Total Disability Benefits, 2006 Statutory limit on duration 450 weeks. 104 weeks (see note). 104 weeks (see note). None. 500 weeks. None. 156 weeks. None. None. None. Evaluation may occur at 104 weeks or any time thereafter; worker may receive partial disability benefits (at temporary total disability rate) for 500 additional weeks after evaluation. None. 104 weeks. None. Cause for termination RTW; medical provider releases worker to suitable work; doctor determines that worker has reached MMI. RTW; statutory duration has run; or physician report indicating worker has reached MMI. RTW; medical provider releases worker to full duty or to light duty work; when the worker reaches MMI. RTW; physician report indicating ability to work or that disability is permanent and stationary; or other evidence that temporary disability has ended. RTW; physician report indicating that worker has reached MMI. RTW; statutory duration has run; physician report indicating ability to work and employer report indicating a suitable job was offered and refused; worker refuses payor's written request for vocational evaluation. RTW; when the worker has reached MMI, based on a medical exam or other good faith reason (for example, surveillance); when the worker is awarded permanency. RTW; statutory duration has run and there has been a finding of impairment below 50 percent; physician report indicating full recovery or partial recovery with work capacity. RTW; statutory duration has run; or physician report indicating worker has reached MMI or is able to return to work and evidence of a bona fide job offer at the preinjury wage. RTW at preinjury or a higher wage; treating physician determines that the employee has reached MMI; duration of payments has been exhausted; employee fails to submit to examinations by the treating physician. RTW; physician report indicating ability to work without restriction or with restrictions and worker has been offered a job that was refused without good cause. RTW; physician report indicating worker has reached MMI; physician report indicating ability to work without restriction or with restrictions and worker has been offered a job that was refused without good cause. RTW; refusal to accept suitable employment; refusal to undergo a medical exam; statutory duration has run; employee is unable or unavailable to work for reasons unrelated to the compensable injury. RTW; refusal to accept suitable employment or to undergo a medical exam. Unilateral termination allowed Yes, if worker has returned to Yes, if benefits paid voluntarily Yes. Yes, when worker has reached Yes, if worker does not dispute work, reached MMI, or been released to suitable work by a doctor. and worker is not in approved vocational rehabilitation plan. MMI. the Report of Claim Status/Request for Independent Medical Examination prior to proposed date of termination. Yes, if worker has returned to No. Yes, if worker has returned to work or reached MMI. work or reached MMI. Yes, if benefits have been paid voluntarily and one of the following criteria are met: worker has returned to work; physician release to work without restrictions; physician release to work with restrictions, provided that a real job exists for which the worker is likely to be hired; employer or insurer denies liability for the injury (see note). Yes, if worker has returned to work or does not contest the employer's notice of proposed termination or suspension. Yes, if worker has returned to work and signs a final receipt or supplemental agreement or does not contest the suspension or reduction (see note). Yes. Yes, at MMI (see note). Yes, if worker has reached MMI and is released to work. 56

61 Table 13 Terminating Temporary Total Disability Benefits, 2006 (continued) Hearing required Yes, if worker contests Yes, if worker contests amount termination. or termination of benefits. Yes, if benefits paid pursuant to referee's order and worker contests termination. Yes, if worker contests termination and statutory informal dispute and mediation processes are exhausted (see note). Yes, if worker disputes independent medical examination findings or termination. Yes, if worker contests termination and mandatory mediation does not resolve the dispute. Yes. Yes, if worker contests termination. Yes, if worker contests termination. Yes, if worker contests termination. Yes, if worker contests suspension or reduction of benefits. No (see note). Yes, if worker contests suspension. Yes, if worker contests suspension. Priority hearing Within 10 to 30 days after objection is filed. After 10 days' notice. Scheduled first available date in the county in which the injury occurred, an adjacent county, or the county in which the employer is located. Yes, cases involving termination of benefits are heard within 60 days of request (see note). Within 25 days of request. Yes, a supersedeas hearing Yes, the court must schedule a Yes, expedited informal must be held within 21 days of objection (decision must be rendered within 7 days of hearing). hearing no more than 15 days after a Show Cause petition is filed. (benefit review) conference held within 2 to 4 weeks of worker's objection. Notes: CA: The 2004 legislation set a limit of 104 weeks of paid temporary disability within 2 years of first temporary disability payment, except for specified injuries that usually require extended recuperation. Previously the limit was 5 years. FL: Some parties argue that the law can be interpreted to mean that the 104-week limit begins on the date of injury; however, most believe that it pertains to the period in which temporary disability benefits were received. If a judge of compensation claims finds that the insurer terminated benefits prematurely, benefits can be restored retroactively and the payor penalized. MI: Employers and insurers who are required to pay ongoing benefits through the ruling of a magistrate or commissioner (known as an open award) may not terminate benefits unilaterally; they must obtain the permission of a magistrate in a formal hearing to terminate benefits. Hearings over termination of benefits are required by statute to occur within 60 days, which has been interpreted as 60 days between the date of the pretrial conference and a formal hearing. PA: If a disability recurs within three years of the last weekly benefit payment, a worker who has signed a final receipt can reopen the claim, and he or she still is entitled to reasonable and necessary medical benefits. A worker who signs a supplemental agreement to indicate that he or she is able to return to work with no wage loss but is not fully recovered from the injury can ask for the reinstatement of benefits within 500 weeks. TN: Civil court trials are much like formal hearings in other jurisdictions, although procedures are more formal and rules of evidence more stringent. TX: The statute makes a presumption of MMI at 104 weeks from the date income benefits began to accrue. According to the Texas Division of Workers' Compensation, when a determination of MMI is disputed, a payor cannot unilaterally suspend payments citing its doctor's finding but must continue to make payments until a benefit review officer authorizes the suspension of payments or issues an interlocutory order to continue payments. Key: MMI: maximum medical improvement; RTW: return to work. Sources: State statutes; Ballantyne, 1993, 1997, 1999, 2003, 2005; Ballantyne and Joyce, 1996; Ballantyne and Telles, 1992; Barth, 1999; Barth and Eccleston, 1995; Telles and Fox,

62 Table 14 Dispute Resolution Mechanisms, 2006 Informal dispute resolution a Multiple issues Form: mediation (see note). Form: voluntary mediation. Form: mediation required after formal-hearing request. Private None. Form: voluntary mediation. Statutory time frame: none. Statutory time frame: none. mediation also authorized prior to Statutory time frame: none. the date of mandatory mediation (see note). Typical session/number: 30 minutes/1 2. Typical session/number: 30 minutes/1. Statutory time frame: within 40 days of hearing request. Typical session/number: 90 minutes/1 2. Typical session/number: 15 minutes/1 2. Form: mediation mandatory before a Form: mediation required before None (see note). Form: mediation (see note). Form: mediation. formal hearing (see note). formal hearing. Statutory time frame: 15 days from request. Typical session/number: 60 minutes/1 3. Statutory time frame: none. Typical session/number: 20 minutes/1 2. Statutory time frame: none. Typical session/number: minutes/1 2. Statutory time frame: 55 days to select mediator or file motion to be excused (see note). Typical session/number: na Form: voluntary mediation (see Form: mediation; mandatory before Form: mediation required before Form: mediation. note). a formal hearing (see note). formal-hearing request (see note). Statutory time frame: none. Statutory time frame: within 35 days of request. Typical session/number: na Statutory time frame: 30 days. Typical session/number: 2 3 hours/1. Statutory time frame: within 40 days of request. Typical session/number: 45 minutes/1 3. Typical session/number: 30 minutes/1. Specific issues Administrative determination on medical bills. Administrative determination or conference on medical issues (e.g., provider change); conference on vocational rehabilitation services. None. See note. Administrative determination on medical bills, disputes over termination of TTD benefits. None. None. None. Health care rules hearings and vocational rehabilitation hearings are conducted by mediators. Administrative determination worker's entitlement to ongoing TTD benefits, medical bills, change of medical provider, appropriateness or necessity for treatment and rehabilitation services. Administrative determination on medical bills. Administrative determination on initial compensability, AWW, appropriateness and necessity for medical treatment, and initiation or continuation of TTD benefits. Mediation on issues related to PPD benefits (see note). Administrative determination on medical bills and services (see note). Administrative determination on medical issues (treatment necessity) and termination of TTD benefits, MMI, and suitable employment. External dispute resolution Mediation. Arbitration (mandatory for certain disputed issues); collective bargaining to establish ADR. Mediation; collective bargaining to establish ADR. Voluntary arbitration. Mediation by a neutral mediator selected by the parties. None. Mediation; arbitration; collective None. Arbitration is permitted. Mediation. bargaining to establish ADR. Collective bargaining to establish Mediation. Arbitration (see note). Mediation (subject to approval of ADR. division). 58

63 Table 14 Dispute Resolution Mechanisms, 2006 (continued) Prehearing conference Preparation: exchange of reports Required: declaration of readiness Required: exchange of reports, Preparation: no specific and other evidence; filing answers to to proceed. prehearing questionnaire. stipulation sheet, completion of discovery, depositions. preparation required. Adjudicator: same as formal hearing. Typical session/number: minutes/1 2. Adjudicator: same as formal hearing. Typical session/number: minutes/1. Disposition: can end with pretrial order. Adjudicator: same as formal hearing. Typical session/number: 15 minutes/1. Adjudicator: same as formal hearing. Typical session/number: 5 30 minutes/1. Required: no specific preparation, but some judges require that parties stipulate as to facts not in dispute. Adjudicator: same as formal hearing. Typical session/number: 5 minutes/1 5. Required: exchange of reports, Required: exchange of reports, None. Preparation: none. Preparation: none. stipulation sheet, prior mediation. stipulation sheet. Adjudicator: usually same as formal hearing. Typical session/number: 15 minutes/1 2. Adjudicator: same as formal hearing. Typical session/number: 20 minutes/1 2. Disposition: can end with pretrial order. Adjudicator: same as formal hearing. Typical session/number: length determined by judge /1. Adjudicator: same as formal hearing. Typical session/number: minutes/1. Required: exchange of reports. None. None. Preparation: none. Adjudicator: can be same as formal hearing. Typical session/number: varies by judge (see note). Adjudicator: same as formal hearing. Typical session/number: 30 minutes/1 (see note). Formal hearing Required: prehearing documentation. Typical session/number: 60 minutes/1, held within 4 weeks of request. Decision: no formal time frame (see note). Required: prehearing conference, declaration of readiness to proceed. Typical session/number: minutes/1, held within 30 days of request. Decision: within 90 days. Required: exchange of reports, stipulation sheet, completion of discovery, depositions. Typical session/number: 90 minutes/1 3. Decision: within 14 days. Required: exchange of reports, completion of discovery, prehearing conference. Typical session/number: 30 minutes/1. Decision: within 60 days. Required: exchange of medical reports, completion of formal discovery, submission of depositions, and stipulation of facts not in dispute. Typical session/number: 60 minutes/1. Decision: no formal time frame. Required: prior mediation and prehearing conference, exchange of reports, completion of formal discovery, submission of depositions, and stipulation of facts not in dispute. Required: prehearing conference. Typical session/number: 90 minutes/1. Decision: within 28 days. Required: documentary evidence organized under an exhibit list; medical evidence almost always introduced in the form of reports. Required: exchange of reports, mediation or pretrial conference. Typical session/number: 4 hours/1. Typical session/number: 2.5 hours/1. Decision: within 30 days. Typical session/number: 20 minutes/1 2. Decision: no formal time frame. Decision: within 42 days after close of hearing record. Required: pretrial agreement usually required, medical evidence in the form of depositions. Typical session/number: 2 hours to several days/1. Decision: within 180 days of the close of the formal hearing record. Required: exchange of reports. Typical session/number: minutes/2 3. Decision: within 90 days. Required: medical evidence is usually introduced by deposition; defendant must file an answer to the petition on or before the date specified in the summons. Required: exchange of reports, completion of discovery, benefit review conference. Typical session/number: 3 hours/1 2. Required: exchange of reports. Typical session/number: 2.5 hours/1. Decision: within 90 days. Typical session/number: 1 2 hours/1. Decision: within 10 days. Decision: no statutory time frame. 59

64 Table 14 Dispute Resolution Mechanisms, 2006 (continued) Administrative appeal Forum: 3-commisioner panel (full None. commission). Forum: 3-member panel from Workers' Compensation Appeals Board (see note). Process: de novo review of transcripts, briefs, and all documents Process: review of law and fact; made part of the record. review of record and briefs. Forum: 3 member panel from Workers' Compensation Commission. Process: review of law and fact; review of record and briefs; oral argument (5 10 min. each side). Forum: full 7-member board at agency headquarters. Process: review of law and fact; review of record and briefs; oral argument (5 10 min. each side with 2 min. rebuttal). None. Appeals go directly to circuit Forum: 3-member panel from None. Appeals go directly to county Forum: 3-member panel from Forum: full 7-member Industrial courts of appeals and ultimately the state supreme court. Reviewing Board. circuit courts (see note). Workers' Compensation Appellate Commission. Commission. Process: review of law only; review of record and briefs; oral argument (rare). Process: review of law and fact (based on substantial evidence); review of record and briefs. Forum: 2- or 3-member panel from Workers' Compensation Appeal Board. None. Forum: 3-member panel from Appeals Panel. Forum: 3-member panel from Labor and Industry Review Commission. Process: review of law and fact; review of record and briefs; oral argument. Process: review of law and fact; review of record and briefs. Process: review of law and fact; review of record and briefs. Process: review of law and fact based on the record; oral arguments (20 min. each side); may opt to take additional evidence. a The terms mediation, nonbinding arbitration, and binding arbitration describe general types of informal dispute resolution. Successful mediation results in agreement of the parties. In nonbinding arbitration, the convener may offer a recommendation or advisory opinion that generally is not made part of the case record. In binding arbitration, the convener can issue a binding decision if no agreement is reached; that decision usually is made part of the case record. Notes: AR: By statute, mediation is required when the amount in dispute is $2,500 or less. Commission data show an average of 54 days from the date of the hearing to issuance of an opinion in calendar year CA: Under the 2004 legislation, a worker who disputes provider diagnosis or treatment must obtain a second and third medical opinion within a medical provider network (if the worker's care is provided through a network). After that, the worker may appeal to an independent medical reviewer who will decide whether the disputed medical services meet the guidelines. A reconsideration process is followed before an appeal can be heard. Cases may be heard en banc if four of the seven board members agree. FL: Committee Substitute for Senate Bill 108 eliminated mandatory request for assistance effective July 1, 2002, and authorized the Division of Workers' Compensation to contact the injured worker or the worker's representative directly on receipt of the notice of injury or death to provide information and facilitate resolution. By statute, the Employee Assistance Office in the Division of Workers' Compensation must be utilized in disputes. If a dispute is not resolved informally within 30 days, the worker may complete a petition for benefits, which is sent to the docketing judge to schedule a mediation hearing within 40 days from the date the petition was received. Hearings are conducted by the Office of the Judges of Compensation Claims, a separate entity from the Division of Workers' Compensation and staffed by quasi-judicial appointed officers exempt from state civil service rules. The office's funding comes from the Administrative Trust Fund. IL: Under informal dispute resolution the Workers' Compensation Commission holds settlement conferences in which parties attempt to narrow the issues and resolve them by agreement. The outcome of a conference usually is a compromise lump-sum settlement. LA: Objections to an independent medical examiner, motions to compel a worker's choice of doctor, and motions to compel an examination by a defense physician are set immediately before a judge, rather than going first to mediation. MD: No informal dispute resolution mechanisms are used on a regular basis; commissioners may call ad hoc mediation, settlement, and prehearing conferences. Appeals to Circuit Court are reviewed de novo; each Circuit Court requires some form of alternative dispute resolution, mediation, or settlement conference before trial. MI: Mediation hearings are held for cases that involve a closed period of time where the worker has returned to work, cases which involve only a claim for medical benefits, cases in which the worker is not represented by an attorney, and any case in which the agency determines that the claim might be settled by mediation. Small claims hearings (held by magistrates or judges) address disputes over claims involving less than $2,000; neither side may be represented by an attorney. Employers who appeal an award granted by a magistrate are required to pay the worker 70 percent of the ongoing benefits pending the results of the appeal; if the worker eventually loses the case, the employer is reimbursed from the second injury fund, but the worker is not required to repay. NC: Starting October 10, 1996, the Industrial Commission refers all contested cases to mediation. Once a request for formal hearing is filed, the commission generates an order requiring the parties to participate in mediation and giving them 55 days to select a mediator or file a motion to be excused from mediation. The deadline for the conference is usually 75 to 80 days after a request or 120 days after an automatic referral. Extensions of up to 60 days are freely granted. PA: Norms for the duration and number of sessions are not available because informal conferences are relatively new. Prehearing conferences are held at the judges' discretion. The Bureau of Workers' Compensation has expanded the availability of alternate dispute resolution by making judges available to conduct settlement conferences and mediation, TN: The 2004 legislation prohibits filing a case in court until after the benefit review conference process has been exhausted, effective for injuries occurring on or after January 1, TX: If no agreement is reached, benefit review officers can issue an order to pay or suspend income benefits pending a formal hearing. For medical dispute resolution, the Division of Workers' Compensation does use external sources such as independent review organizations in disputes over preauthorization and medical necessity and the State Office of Administrative Hearings (SOAH) for appeals of medical dispute decisions. The 2005 legislation repeals the provision for appeals of medical dispute resolution decisions to SOAH and provides for such decisions to be appealed to district court. In 2003, the Legislature authorized the commission to implement an alternative medical dispute resolution process for disputes over care costing less than the Independent Review Organization fee; rules have been proposed but not yet finalized. WI: Prehearing conferences are infrequently held. Key: ADR: alternative dispute resolution; AWW: average weekly wage (preinjury); MMI: maximum medical improvement; na: not applicable; PPD: permanent partial disability; TTD: temporary total disability. Sources: State statutes; Ballantyne, 1998,

65 Table 15 Attorney Fees, 2005 Responsibility for fees Paid equally by the insurer or self-insurer and by the worker when a claim is controverted; otherwise, payable by the worker (see note). Payable by worker; lien claim allowed for fees (all benefits are paid to worker). Generally payable by worker (see note); fees are lien on compensation (all benefits are paid to worker). Payable by worker from award. Payable by worker from award as set by the Worker's Compensation Board. Payable by worker. Exception: Generally payable by worker An employer or insurer whose (see note); attorney cannot Payable by worker from award. Payable by worker. Generally payable by worker. Exception: if an appeal is brought by action is found to be arbitrary, capricious, and without probable cause is subject to all reasonable attorney fees for the prosecution and collection of the claim. charge for 21 days after worker files claim for benefits. the insurer and ruling is to continue payments to the injured employee, the Industrial Commission may include reasonable attorney fees with settlement. Generally payable by worker Payable by worker from Generally payable by worker. Payable by worker. from award. Exception: unreasonable defense. amount recovered or awarded. Exception: The payor pays reasonable fees incurred by the worker in a dispute over supplemental benefits. Maximum/typical percentage of benefits awarded Maximum of 25% of indemnity benefits payable. No statutory limit, but guideline of 12%; fees typically range from 12 18% depending on jurisdiction. By statute, fees based on "benefits secured": 20% of first $5,000, 15% of next $5,000, and 10% of remainder during 10-year period after claim is filed. Maximum of 20% of the amount of compensation recovered and paid. Maximum of 33⅓% of the amount of the award. Maximum of 20% of the amount of compensation recovered (see note). Maximum of 30% of accrued Maximum of 25% of award. By statute, according to schedule (see note); an administrative law judge may increase or decrease fees based on the complexity of the dispute or attorney's effort. Up to 20% of first 75 weeks of benefits awarded; 15% of the next 120 weeks; 10% of the amount in excess of 195 weeks, to a maximum of 20 times the statewide average weekly wage (see note). Maximum of 20% of weekly benefits for duration of claim. Maximum of 20% of the amount of the recovery or award. By rule, an hourly fee that in total cannot exceed 25% of worker's benefits (see note). compensation for cases tried to completion, after deducting costs of litigation (see note). Maximum of 20% of amount in dispute. Maximum/typical percentage of lump-sum settlements Maximum of 25% of settlement No statutory limit, but fees Fees are based on "benefits Maximum of 20% of settlement Maximum of 20% of the first $10,000; (see note). typically range from 12 18%. secured": 20% of first $5,000, 15% of next $5,000, and 10% of remainder during 10-year period after claim is filed. (see note). 15% of the next $10,000; 10% of the award in excess of $20,000; minimum fee is $100 (see note). Maximum of 20% of settlement In disputed cases, 15% of Up to 20% of first $10,000 of For cases settled before a trial Maximum of 25% of settlement. (see note). gross settlement amount plus costs; in undisputed cases, 20% plus costs. compensation awarded; 15% is completed, the fee is limited to 15% of the first $25,000 and of the next $15,000; 10% of the remainder in excess of $25,000, to a maximum of $7, % of any amounts over $25,000. For cases tried to completion but settled prior to a magistrate's decision, attorneys may charge up to 20% of the total settlement (see note). Maximum of 20% of settlement Maximum of 20% of the By rule, an hourly fee that in Maximum of 20% of amount, but judge can increase. amount of the recovery or award. total cannot exceed 25% of settlement amount (see note). settlement. 61

66 Table 15 Attorney Fees, 2005 (continued) Adjudicator's approval of fees required Claimant attorney Yes, by the Workers' Yes, by workers' compensation Yes, by judge of compensation Yes, by the Workers' Yes, by Worker's Compensation Compensation Commission. judge. claims. Compensation Commission. Board. Yes, by workers' compensation Yes, by reviewing board when Yes, by the Workers' Yes, by a magistrate. judge. Compensation Commission. employee prevails in decision by that board. Yes, by Industrial Commission (see note). Yes, by judge or commissioner, for all fees agreed to between the worker and attorney, whether or not allowed as part of a judgment, providing fees do not exceed 20% of award. Yes, by court, when fee is in excess of $10,000 (see note). Yes, by Division of Workers' Compensation or court. Yes, by judge. Defense attorney No. No. No. No. No. No. No. No. No. No. No. Yes, by court when fee is in excess of annual threshold (see note). Yes, by Division of Workers' Compensation or court. No. Notes: AR: Before 1986, the entire amount of the worker's attorney fee was paid by the insurer or self-insurer. If the worker prevails on appeal, the worker's attorney is entitled to an additional $500 fee that is paid equally by the insurer or self-insurer and by the worker. System participants indicate that it is common for the insurer or self-insurer to pay the entire fee on the full settlement amount as consideration for the worker agreeing to close the claim. FL: The payor is responsible for claimant attorney fees when (1) the worker successfully asserts a claim for medical benefits only or (2) the payor denies compensability but the worker prevails. Effective July 1, 2002, attorney fees would not attach until 30 days after the date the carrier or employer received the petition for benefits. Under Senate Bill 50-A, effective October 1, 2003, claimant attorney fees are limited to the schedule; the only exception is that for medical-only cases, a judge may approve a fee not to exceed $1,500 if the judge determines that the fee schedule, based on the benefits secured, fails to fairly compensate the attorney. IL: If a written offer is made to the worker before he or she is represented by an attorney and an attorney is subsequently hired, the attorney can charge only 20 percent of the difference between the written offer and additional amount awarded. IN: Attorney fees are computed only on compensation obtained, not the amount of medical expenses. A fee of 10 percent of medical expenses may be awarded at a hearing if the worker's attorney makes a request. LA: The 2004 legislation provided that workers' compensation claimant attorney fees cannot exceed 20 percent of the amount received. Previously, the maximum was 20 percent of the first $20,000 and 10 percent of any amount above $20,000. MA: The payor is responsible for claimant attorney fees in the following amounts and circumstances (as of October 1, 2004): $ plus expenses if payor denied liability and then agreed to pay the claim before a conference; $ plus expenses in cases other than initial liability; $1, plus expenses if the payor contests liability and is ordered to pay the claim after a conference order; $ plus expenses for last-best offer on earning capacity if the worker's figure prevailed, $0 if the payor's figure prevailed, and $ if the administrative law judge set the amount; $4, plus expenses if the payor agreed to pay benefits after a hearing; $1, plus expenses if the payor appealed to the reviewing board and the worker prevailed; if the worker appealed and prevailed, the worker paid the attorney fee. MD: Generally this schedule applies to permanent partial disability benefits awarded following a hearing for services performed on or after March 17, 2003; see Code of Maryland Regulations (COMAR) for attorney fee schedules for other types of benefit awards. Before March 17, 2003, the attorney fee schedule was the same as that shown for lump-sum settlements. The amount of the attorney fee may be increased if the attorney establishes, by petition, just cause to pay in excess. MI: The maximum attorney fee cannot be based on a rate of benefits that is higher than two-thirds of the statewide average weekly wage. Full and final lump-sum settlements in Michigan are known as redemptions. NC: Approval of settlements requires that the settlement be fair and just and that the interests of all parties and persons, including a health benefit plan that has paid medical expenses of the worker, have been considered. TN: The amount is adjusted annually on July 1. The threshold for the period July 1, 2004, to June 30, 2005, is $13, The threshold for the period July 1, 2005, to June 30, 2006, is $13, The specific amount by year is published on the Labor Department s Web site at TX: The state also limits defense attorney fees to $150 an hour for an attorney's time and $50 an hour for a legal assistant's time. Under HB2600 (effective June 27, 2001), the insurer is liable for the claimant attorney fee in a court appeal of the Division of Workers' Compensation final decision if the claimant prevails at trial. Sources: State statutes; Ballantyne, 2005; Ballantyne and Shiman, 1997; Ballantyne and Telles, 1992; Barth, 1999; Telles and Fox,