A. Skillful case management in the field of workers’ compensation demands a knowledge and understanding of pertinent terms, practices, and parameters not usually taught in health care settings.

B. It is essential for the case manager practicing in the workers’ compensation field of case management to be familiar with the terms used throughout the industry and how to apply them in practice.

C. Review of the history of workers’ compensation programs in U.S. business leads to an understanding of today’s health care delivery and workers’ compensation systems.

D. The industrial revolution in America that began the transformation of the workforce from agrarian to industrial in the late 19th and early 20th centuries spawned the workers’ compensation system that is taking us into the 21st century.

E. As the workplace became larger and more mechanized, the risk to workers increased. Social reformers recognized the need for legislated standards to protect individual workers and the community as a whole.

F. The first laws passed in the various states merely replaced common law with enacted laws, but the burden remained on the injured worker to prove employer responsibility.

G. In 1911, the first state workers’ compensation laws were enacted that established a no-fault system to deal with work-related injuries.

H. Today, all 50 states and several U.S. territories have workers’ compensation laws. Federal legislation has been enacted to cover federal workers in several different programs.

A. First report of injury (FROI)—This is a formal document completed by the employer—a report of a work-related injury or condition—that begins the process of a workers’ compensation claim. The report is filed with the appropriate state jurisdiction and sent to the workers’ compensation carrier or third-party administrator (claims handlers for self-insured employers). Workers’ compensation systems allow injured workers or their designee to file a report of injury directly with the relevant state or federal workers’ compensation board or industrial commission.

B. Functional capacity examination (FCE)—A systematic, objective process of assessing an individual’s physical capacities and functional ability to execute tasks (e.g., sedentary, light, medium tasks). The FCE matches human performance levels to the demands of a specific job, work activity, or occupation. The FCE is often used in determining a person’s potential for job placement, accommodation, and/or return to work after an injury.

C. Impairment rating—The basis for determining the medical outcome of a workers’ compensation claim. Many states require an impairment rating to be based on the findings of a licensed physician using an impairment rating system such as the current issue of the American Medical Association’s Guides to the Evaluation of Permanent Impairment. The final decision on a disability rating rests with the state or federal workers’ compensation board or industrial commission.

D. Indemnity payments—Monies paid as wage replacement when the injured worker is determined to be medically unfit to work. Indemnity payments are based on the worker’s usual wage, factored by a formula set by the state that has jurisdiction for the claim.

E. Maximum medical improvement (MMI), maximum medical recovery (MMR)—Terms used to indicate that the injured worker has recovered from injuries to a level at which a physician states that further treatment will not substantively change the medical outcome. If the injured worker has a medically substantiated permanent change to pre-injury health and function, an impairment rating may be done.

F. Permanent partial disability—The designation used to indicate that there is a presumptive or actual decrease in wage-earning capacity due to injury. A benefit is paid according to the severity of impairment in a formula derived by the state. Most states have scheduled injuries (benefit paid by a formula based on loss of, or loss of the use of, specific body members) and nonscheduled injuries (a benefit is based on the percentage of impairment in a formula computed by the state).

G. Permanent total disability—This evaluation is based on a medical assertion that the injured worker is precluded by the extent of his or her disability from gainful employment. Each state has guidelines on which this designation and subsequent benefits are paid (U.S. Chamber of Commerce, 2005).

H. Reasonable accommodation—Any change in the work environment or in the way a job is performed that enables a person with a disability to enjoy equal employment opportunities. There are three categories of reasonable accommodations—changes to a job application process, changes to the work environment or to the way a job is usually done, or changes that enable an employee with a disability to enjoy equal benefits and privileges of employment (such as access to training).

I. Reserves—The sum of money the insurance company or self-insured funds set aside to pay all costs associated with a claim.

J. Social insurance—Insurance that employers must provide or pay premiums as mandated by law. Social insurance programs include: unemployment insurance, state disability insurance (mandated by NY, NJ, RI, HI, CA, and the commonwealth of Puerto Rico), social security, Medicare, and workers’ compensation.

K. Temporary partial disability—Status in which impairment prevents an injured worker from returning to his or her usual job, but the worker can be employed in some capacity. A benefit is paid when the restrictions to work activity result in a decrease of usual wages.

L. Temporary total disability—Status in which indemnity is paid when an injured worker is unable to work in any capacity while treatment continues, with the expectation of recovery and return to employment. In most states, the injured worker receives benefits for the entire time he or she is medically deemed to be unable to work.

M. Vocational rehabilitation—Cost-effective case management services provided by a skilled (preferably certified as a vocational rehabilitation professional or counselor) who is knowledgeable about the implications of medical status/functional ability and vocational services necessary to facilitate an injured workers’ expedient return to gainful employment.

A. Provide injured workers prompt medical care and wage replacement for the workers, their dependents, or their survivors regardless of responsibility for the injuries

B. Establish a single, primary remedy for workplace injuries to decrease the legal costs and relieve the judicial system of heavy caseloads of personal injury cases

C. Relieve both the public and private sectors from demands on financial and medical services

D. Provide a system for the delivery of workers’ compensation benefits and services

E. Promote workplace safety and accident prevention

F. It is imperative to remember that the injuries or illnesses covered under the relevant workers’ compensation statute must “arise out of and in the course of employment.”

A. Workers’ compensation is a social insurance program, mandated by law.

B. In 2000, workers’ compensation programs covered 126.5 million workers (NASI, 2002).

C. Employers are experiencing double-digit inflation with respect to group health care benefits, averaging a 43% increase in 2001 (DiBenedetto, 2002).

D. Smaller employers are also experiencing higher premiums with limited capacity to absorb the costs of medical care. Workers’ compensation is also affected by the increase in the delivery of medical care.

E. Workers’ compensation medical costs can range from 40% to 60% of a state’s workers’ compensation experience. This variance can be attributable to factors such as:

F. Workers’ compensation program costs are born by the employer if they “self-fund” or “self-insure” their workers’ compensation program, or through purchased insurance policies, all of which must meet state requirements for these types of programs/insurance.

G. Workers’ compensation programs for state and federal employees are publicly supported.

H. The cost of workers’ compensation insurance and all costs associated with workplace injuries are reflected in the price of goods and services sold by the employer.

I. Besides the direct cost of buying insurance premiums, workers’ compensation medical care, and indemnity payments, there are other indirect costs associated with these programs that are included in the total cost of occupational disability:

J. The cost of buying workers’ compensation insurance is based on a formula of previous claims, types of workers insured (e.g., clerical personnel have less risk of injury than do truck drivers), and an element calculated by the state based on annual costs (US Chamber of Commerce, 2006).

K. The only factor that can be effectively modified by the employer is the cost associated with the number and severity of workplace injuries.

L. Workers’ compensation insurance carriers and self-insured employers have a stake in decreasing costs of claims submitted to them. A competitive marketplace demands that companies sell their products at the lowest possible price; this provides the foundation for managing the cost of risk, and, ultimately, the cost of workers’ compensation claims and experience.

M. Many strategies are employed in keeping claims costs low, including loss control, risk management, safety and health programs, and managed care arrangements, including, but not limited to medical case management (see Box 18-1).

A. Medical management processes have been involved in the periphery of workers’ compensation programs for a number of years, both medically and vocationally.

B. Societal changes and escalating medical costs have placed a larger burden on employers required to provide workers’ compensation coverage for their employees.

C. Case management strategies, as a component of managed care arrangements (see Box 18-1) are used as tools to lower medical costs, improve communication, promote best medical and claim outcomes, and maintain a stable workforce.

D. Case managers working in the workers’ compensation field encounter a greater number of stakeholders than in other areas (see Box 18-2).

E. A workers’ compensation claim can be a complicated, often protracted process in which case managers can become involved at any time.

F. Workers’ compensation laws demand the case management process be adapted to work within that structure.

A. Claims processors have attempted to provide some degree of medical management for a number of years using various legal maneuvering to limit overuse of medical services and bring compensation claims to closure.

B. The services of medical professionals in the claims-handling process were usually limited to catastrophic accidents and other injuries that would severely limit an injured worker’s prospects of returning to gainful employment.

C. In the decade between the mid-1980s and the mid-1990s, the costs of workers’ compensation exploded in the American industry (Stoddard, Jans, Ripple, & Kraus, 1998).

D. Since the 1990s, states have moved toward the implementation of managed care arrangements (see Box 18-1) to address the rising cost of workers’ compensation medical care and resultant lost time (DiBenedetto, 2006).

A. Adapting usual case management techniques and practices to the workers’ compensation field requires the practitioner to recognize the responsibilities of the various people and organizations with a role in mediating a work-related injury claim (see Box 18-2).

B. Case managers are key professionals in maintaining open lines of communication among the stakeholders in the workers’ compensation arena. The breakdown of these lines of communication may adversely impact the claim; protract worker disability; delay injured worker access to timely medical care; or delay recovery, return to function, and, ultimately, maximal medical improvement and return to pre-injury status (DiBenedetto, 2006).

A. Laws governing workers’ compensation administration are enacted by each state and territorial legislature and administered by state agencies.

B. The U.S. Congress legislates development of regulations for federal workers and all other workers in the District of Columbia. Programs that are also overseen on the federal level include:

C. Laws are written and amended frequently. Because case managers must comply with the laws in order to practice legally and ethically, a source for learning about them is essential. Comprehensive compendia of state and federal laws can be found in:

D. Each state has its own workers’ compensation act. These may vary from one state to another; however, the main aspects of workers’ compensation case management tend to be similar.

E. There are specific workers’ compensation laws that govern individuals in certain industries such as railroad workers, longshoremen, and federal employees. Some of these laws may be specific to vocational benefits and entitlements of spouses, especially when the situation involves death.

F. The workers’ compensation laws function as “no fault” laws and protect the employer from civil lawsuits. However, such laws may vary from one state to another.

G. Workers’ compensation laws dealing with claims issues have only a peripheral impact on medical management. However, knowledge of laws creating the medical system has a direct effect on the case manager’s ability to accomplish case management goals and objectives (Mullahy and Jensen, 2004).

H. Workers’ compensation case managers have a responsibility to be familiar with applicable laws but must exercise caution to avoid the appearance of giving legal advice to key stakeholders, especially injured workers, providers, employers, and adjusters, among others.

I. Arguably the most challenging laws for workers’ compensation medical managers are those that dictate the selection and use of health care providers. States may mandate the manner in which providers or medical services can be chosen (US Chamber of Commerce, 2006).

J. State regulations pertaining to the use of health care services by injured workers often reflect efforts to contain medical costs. MCOs for workers’ compensation health care providers are allowed or required in a few states.

K. Mandated managed care requirements are available from the state workers’ compensation administrative agency (see listing of Websites at the end of this chapter for relevant state and federal links).

L. Guidelines for case managers working for or with an MCO vary by state.

M. States (such as CA) mandate the use of evidence-based medical (EBM) treatment protocols (or in FL, that providers be knowledgeable about relevant EBM guidelines) to direct the medical care of injured workers by their providers. The use of EBM tools reduces unnecessary medical care, facilitates positive medical outcomes, and ultimately saves costs.

N. Sources of EBM protocols for workers’ compensation medical care includes:

O. Almost all states and territories set up second-injury funds for injured workers to assist the injured worker and provide a financial offset for the employer. Conditions covered include:

P. Vocational rehabilitation as provided by workers’ compensation regulations is sometimes coordinated concurrently with medical management.

A. The entire range of case management practices can be applied in a workers’ compensation industry setting. The skills and knowledge described are among those identified as critical for case managers by Chan and colleagues (1999).