AMA Guides Impairment Ratings Erroneously Elevated: California Study Confirms Best Practices Approach is Expert Review of all Impairment Ratings

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Most impairment ratings are incorrect and often readers of these reports are unaware of the significance of these errors. Assessment of impairment according to the AMA Guides to the Evaluation of Permanent Impairment, Fifth Edition is the first step in defining Permanent Disability for State of California workers' compensation cases. A review of California cases revealed the vast majority of the ratings were incorrectly elevated. Often these evaluations are performed by physicians who are either unskilled or biased in performing impairment evaluations. Claims management best practices must include expert review of all ratings.

Most impairment ratings are incorrect and often readers of these reports are unaware of the significance of these errors. Assessment of impairment according to the AMA Guides to the Evaluation of Permanent Impairment, Fifth Edition is the first step in defining Permanent Disability for State of California workers' compensation cases. A review of California cases revealed the vast majority of the ratings were incorrectly elevated. Often these evaluations are performed by physicians who are either unskilled or biased in performing impairment evaluations. Claims management best practices must include expert review of all ratings.

Brigham and Associates, Inc. (http://www.impairment.com) provides both expert consultation on impairment evaluation and extensive national data analysis of permanent impairment critiques. In July 2006 the organization implemented a new web-based database system with extensive tracking capabilities, including that for diagnoses (by ICD-9 code), impairment numbers (California Permanent Disability Rating Schedule), and physician performance.

One of the purposes of this system is to provide a better understanding of impairments and the etiology of erroneous ratings. The developer of this system is Christopher R. Brigham, MD, CIME, FACOEM, FAADEP; Dr. Brigham is Editor of the Guides Newsletter, a Senior Advisor to Sixth Edition of the AMA Guides, and the author of several texts.

Reports are provided for review and analyzed by a team of highly trained professional claims and medical staff who are very experienced in the use of the AMA Guides. If a report is incorrect a detailed written narrative report is prepared explaining the errors in the original rating and what the correct rating is. These reports are then used by clients for case management, as feedback to the original rating physician, as evidence, in negotiation, or to assist in preparing an effective cross-examination.

Of 658 California impairment critiques performed between July 2006 and February 2007, 571(87%) were incorrect, with the average original rating 18.7% whole person permanent impairment (WPI) and the average revised (corrected) rating 4.9% WPI. Although most ratings were incorrectly elevated, some evaluations underrated impairment. Impairment ratings are typically expressed on a whole person scale where 0% WPI represents normal functioning and 100% WPI represents death.

The high error rate cannot be attributed solely to selection bias, i.e. a client only referring cases suspected of being erroneous. Clients have recognized the value of having every rating screened by Brigham and Associates, Inc. and having detailed critique reports prepared on ratings that were significantly incorrect. Review of 73 consecutive cases from one client revealed an error rate of 82% among the ratings performed, with the average original rating of 12.3% WPI and the revised (corrected) rating of 3.7% WPI. Of the 18% of the reports that were found to be correct the average rating was 2.2% WPI.

The financial impact of incorrect ratings is significant. In the State of California the whole person permanent impairment is used as the initial basis to define permanent disability (PD), with the rating being adjusted per California Permanent Disability Rating Schedule for Future Earning Capacity, occupation and age. Using the data observed in 73 sequential ratings (i.e. without selection bias) with the findings of an original rating of 12.3% (12%) WPI and a corrected rating of 3.7% (4%), depending on the modifiers, this would result in approximate original PD ratings in the range of 18% to 19% PD and corrected PD ratings of 6% to 7% PD.

Assuming a January 2005 date of injury and maximum weekly wages, the California PD benefit award based on the original ratings would be between $14,410 and $15,510 and the corrected ratings between $3,960 to $4,620, i.e. a difference of between $10,450 and $10,890 per case. Utilizing the data obtained and assuming lower values for derived PD awards, per 100 cases involving suspected PD, if ratings were based on the original impairment rating, the total cost would be approximately $1,236,048, however upon correction the cost is $368,698, i.e. a difference of $867,350.

The practice of having every impairment evaluation reviewed by external experts results in a very high return on investment. Analysis of the resulting data is essential to continuous quality improvement, provides a basis for profiling individual physician performance, and provides information on the extent of impairment associated with specific diagnoses.

The assessment of impairment evaluations requires a unique skill set and must be performed by evaluators with knowledge, skills and abilities in both clinical medicine and the use of the AMA Guides to the Evaluation of Permanent Impairment. It is very cost-effective to have every impairment rating reviewed by an AMA Guides expert to determine if the rating is accurate and to utilize the clinical data provided to reassess the impairment. Evaluation and feedback is essential to quality improvement and review of every rating reflects best practice.

About Brigham and Associates:

Brigham and Associates, Inc. (http://www.impairment.com) was founded in 1995, and is recognized as the nation's leading resource on impairment, disability and causation evaluation. Their well-trained and highly credentialed professional staff utilize advanced Web-based technology and database systems to provide high quality, cost-effective consultation services, including impairment report critiques and case reviews. The firm also provides evaluation resources, publications and training in live, web-based and online education formats (http://www.guidesiq.com).

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Mindy Brigham
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