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UNDERSTANDING PERMANENT PARTIAL DISABILITY
Determining permanent partial disability benefits is one of the most complex areas of workers' compensation claims management. Many permanent partial disability cases take years to resolve; in one study, a significant fraction of claims were not closed more than three years after the injury date. A disability, unlike an impairment, represents the socioeconomic loss that an individual sustains as a result of an injury, illness or condition. A permanent impairment need not result in disability, and the same degree of impairment can result in a vastly different degree of disability for different individuals. For example, a dock worker with a shoulder injury might never be able to return to work, while an accountant with precisely the same injury and the same degree of impairment may be able to return to work quickly with little or no impact on earnings. The injury to that worker would result in a much lower degree of disability. Disability evaluation can include medical assessment, but should also take account of the person's occupation and employment history, education and training, and other demographic and labor market variables. Every state has different criteria for compensating permanent partial disability. Most states use a schedule—a list of body parts covered and the benefits paid for specific losses, such as the loss of a finger. These losses include the upper and lower extremities and may also include an eye. Most state schedules also include the loss of hearing in one or both ears. Most states typically do not schedule permanently disabling injuries to the spine, because these injuries can vary so much in severity. Nor do they schedule injuries to internal organs or head, or occupational diseases. In 2005, California changed the way it rates permanent disability injuries. If the 2005 rating schedule applies to an injury, the treating physician must rate the impairment using guidelines published by the American Medical Association (AMA). A worker with a permanent partial disability become eligible to receive the total amount of PD benefits spread over a fixed number of weeks. Those with a permanent total disability can receive PD payments for the rest of their lives. Lump-Sum Settlements Where possible, insurers prefer to close permanent disability claims with a lump settlement rather than deal with the uncertainty of the outcome and final cost of a claim. All but eight states allow insurers to close out indemnity (lost time) benefits with a lump-sum payment; a dozen jurisdictions do not permit them to close the medical benefits portion of a worker's claim. Many workers also prefer to take their benefits in a lump sum and put the compensation process behind them, even if some of the benefit is paid at a discounted rate. Perhaps more significantly, many jurisdictions allow attorneys to work on contingency, taking a percentage of their client's lump-sum payment. Attorneys can collect their fees more promptly and easily if they come directly from a lump sum paid to the worker. We can help you evaluate open permanent partial disability cases and work for a resolution. For more information, please contact the PCOC Insurance Program department of The Leavitt Group at (877) 860-7378 or, email us @ProPest@Leavitt.com. |
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