Thursday, July 19, 2012

AMA 6th Study Doesn't Answer the Big Question

An interesting thing happened when three states migrated to the Sixth Ed. of the AMA Guides to the Evaluation of Permanent Impairment - the average impairment ratings declined.

That is what the National Council on Compensation Insurance (NCCI) reported on Wednesday.

Impairment ratings for injured workers dropped significantly in Montana, New Mexico and Tennessee after they switched to the Sixth Edition NCCI found.

The study also compared some changes to impairment ratings in Georgia and Kentucky, which are continuing use of the AMA fifth edition.

NCCI found a direct correlation between ratings declines and use of the sixth edition in New Mexico, Montana and Tennessee. But there were also some declines in Georgia and Kentucky which NCCI attributes to other factors including the economy and law changes.

"While the impact of and the direction of the changes in Kentucky and Georgia are worth noting, the mere presence of change itself has an impact on average impairment ratings from factors unrelated to which edition of the AMA guides was used to determine impairment," NCCI said in the report.

For the three states examined, NCCI found:
  • In Montana, whole-body impairment ratings dropped by an average of 28% when comparing workers who reached maximum medical improvement (MMI) during accident years 2006-2007 and those who reached MMI during 2008 or 2009.
  • In New Mexico, whole-body impairment ratings dropped by 32% and impairment ratings for individual body part dropped by 6% for workers who reached MMI during 2008 and 2009, compared to those who reached MMI during accident years 2006-2007.
  • Average whole-body impairments dropped by 25% and impairments for individual body parts dropped by an average of 16% in Tennessee for workers who reached MMI in 2008 or 2009, compared to those who reached MMI in 2006-2007.
The Sixth Edition generated much controversy when it was introduced. The AMA released the tome at the end of a year that caused an uproar in some states because they had statutes that required an automatic conversion to the new edition - but there was insufficient time for the adoption process so legal and legislative maneuvers ensued to retard the adoption process in those states.

In addition many observed that there would be significant reduction in ratings - and of course it turns out that they were correct. This would not necessarily pose a problem for those states that have formulas to adjust impairment ratings to disability ratings (the former describes "whole person" bodily function, the later describes the financial affect). But those states that don't have a conversion system and translate an impairment directly into money essentially discriminate against workers injured after the adoption date of the 6th.

The sixth edition of the AMA guides is used in 12 states and for the administration of the U.S. Longshore and Harbor Workers' Compensation Act: Alaska, Arizona, Illinois, Louisiana, Mississippi, Montana, North Dakota, New Mexico, Pennsylvania, Rhode Island, Tennessee and Wyoming.

How those states use the guides however is dramatically different from state to state.

The biggest driving factor of the sixth edition from prior editions is the attempt to make ratings as predictable and stable as possible so that injuries generate the same rating across the nation regardless of where, when, how, who and what.

In my opinion, while the NCCI reports the obvious and predictable, what NCCI should really study (if possible) is whether adoption of the sixth edition resulted in more consistency in impairment ratings.

The issue isn't how much money an impairment rating generates - that can be adjusted by the conversion to a disability rating.

The issue is whether a back injury in Alaska generates the same impairment rating as a back injury in Wyoming. If that is the case, then the sixth edition accomplishes its goal and legislatures can adjust now much money an impairment is worth.

While NCCI's study is interesting, it is not terribly relevant.

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