[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]






          DEVELOPMENTS IN STATE WORKERS' COMPENSATION SYSTEMS

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                              COMMITTEE ON
                          EDUCATION AND LABOR

                     U.S. House of Representatives

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

           HEARING HELD IN WASHINGTON, DC, NOVEMBER 17, 2010

                               __________

                           Serial No. 111-76

                               __________

      Printed for the use of the Committee on Education and Labor








                       Available on the Internet:
      http://www.gpoaccess.gov/congress/house/education/index.html



                  U.S. GOVERNMENT PRINTING OFFICE
  61-993 PDF              WASHINGTON : 2010
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001








                    COMMITTEE ON EDUCATION AND LABOR

                  GEORGE MILLER, California, Chairman

Dale E. Kildee, Michigan, Vice       John Kline, Minnesota,
    Chairman                           Senior Republican Member
Donald M. Payne, New Jersey          Thomas E. Petri, Wisconsin
Robert E. Andrews, New Jersey        Howard P. ``Buck'' McKeon, 
Robert C. ``Bobby'' Scott, Virginia      California
Lynn C. Woolsey, California          Peter Hoekstra, Michigan
Ruben Hinojosa, Texas                Michael N. Castle, Delaware
Carolyn McCarthy, New York           Vernon J. Ehlers, Michigan
John F. Tierney, Massachusetts       Judy Biggert, Illinois
Dennis J. Kucinich, Ohio             Todd Russell Platts, Pennsylvania
David Wu, Oregon                     Joe Wilson, South Carolina
Rush D. Holt, New Jersey             Cathy McMorris Rodgers, Washington
Susan A. Davis, California           Tom Price, Georgia
Raul M. Grijalva, Arizona            Rob Bishop, Utah
Timothy H. Bishop, New York          Brett Guthrie, Kentucky
Joe Sestak, Pennsylvania             Bill Cassidy, Louisiana
David Loebsack, Iowa                 Tom McClintock, California
Mazie Hirono, Hawaii                 Duncan Hunter, California
Jason Altmire, Pennsylvania          David P. Roe, Tennessee
Phil Hare, Illinois                  Glenn Thompson, Pennsylvania
Yvette D. Clarke, New York           [Vacant]
Joe Courtney, Connecticut
Carol Shea-Porter, New Hampshire
Marcia L. Fudge, Ohio
Jared Polis, Colorado
Paul Tonko, New York
Pedro R. Pierluisi, Puerto Rico
Gregorio Kilili Camacho Sablan,
    Northern Mariana Islands
Dina Titus, Nevada
Judy Chu, California

                     Mark Zuckerman, Staff Director
                 Barrett Karr, Minority Staff Director
                                 ------                                

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                LYNN C. WOOLSEY, California, Chairwoman

Carol Shea-Porter, New Hampshire     Cathy McMorris Rodgers, 
Donald M. Payne, New Jersey              Washington,
Raul M. Grijalva, Arizona              Ranking Minority Member
Timothy H. Bishop, New York          Peter Hoekstra, Michigan
Phil Hare, Illinois                  Joe Wilson, South Carolina
Gregorio Kilili Camacho Sablan,      Tom Price, Georgia
  Northern Mariana Islands
















                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on November 17, 2010................................     1

Statement of Members:
    McMorris Rodgers, Hon. Cathy, Ranking Republican Member, 
      Subcommittee on Workforce Protections......................     4
        Prepared statement of....................................     5
        Additional submissions:
            Holmes, Douglas J., president, UWC-Strategic Services 
              on Unemployment & Workers' Compensation, prepared 
              statement of.......................................    66
            Krohm, Gregory, executive director, International 
              Association of Industrial Accident Boards and 
              Commissions, prepared statement of.................    64
    Woolsey, Hon. Lynn C., Chairwoman, Subcommittee on Workforce 
      Protections................................................     1
        Prepared statement of....................................     3
        Additional submissions:
            American Medical Association, prepared statement of..    53
            Questions submitted for the record and their 
              responses..........................................    58

Statement of Witnesses:
    Burton, John F., Jr., professor emeritus, Rutgers University 
      and Cornell University.....................................    18
        Prepared statement of....................................    19
        Responses to questions submitted.........................    59
    Godfrey, Christopher James, workers' compensation 
      commissioner, Iowa Division of Workers' Compensation.......    35
        Prepared statement of....................................    37
        Additional submission: ``2008 Iowa AMA Guides Task Force 
          Process Report''.......................................    69
    Nimlos, John, M.D., occupational medicine consultant.........    26
        Prepared statement of....................................    28
    Spieler, Emily A., J.D., dean and Edwin W. Hadley professor 
      of law, Northeastern University School of Law..............     7
        Prepared statement of....................................     9
    Uehlein, W. Frederick, Esq., founder and chairman, Insurance 
      Recovery Group.............................................    32
        Prepared statement of....................................    33
        Responses to questions submitted.........................    63

 
          DEVELOPMENTS IN STATE WORKERS' COMPENSATION SYSTEMS

                              ----------                              


                      Wednesday, November 17, 2010

                     U.S. House of Representatives

                 Subcommittee on Workforce Protections

                    Committee on Education and Labor

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to call, at 8:45 a.m., in 
room 2175, Rayburn House Office Building, Hon. Lynn C. Woolsey 
[chairwoman of the subcommittee] presiding.
    Present: Representatives Woolsey, Payne, Sablan, Hare, and 
McMorris Rodgers.
    Staff Present: Aaron Albright, Press Secretary; Tylease 
Alli, Hearing Clerk; Andrea Belknap, Press Assistant; Jody 
Calemine, General Counsel; Lynn Dondis, Labor Counsel, 
Subcommittee on Workforce Protections; David Hartzler, Systems 
Administrator; Sadie Marshall, Chief Clerk; Richard Miller, 
Senior Labor Policy Advisor; James Schroll, Junior Legislative 
Associate, Labor; Michele Varnhagen, Labor Policy Director; 
Kirk Boyle, Minority General Counsel; Ed Gilroy, Minority 
Director of Workforce Policy; Barrett Karr, Minority Staff 
Director; Ryan Kearney, Minority Legislative Assistant; Brian 
Newell, Minority Press Secretary; Molly McLaughlin Salmi, 
Minority Deputy Director of Workforce Policy; Ken Serafin, 
Minority Workforce Policy Counsel; and Linda Stevens, Minority 
Chief Clerk/Assistant to the General Counsel.
    Chairwoman Woolsey. A quorum is present. The hearing of the 
subcommittee will come to order. I now will yield myself as 
much time as I may consume for my opening statement.
    Thank you for attending. I appreciate this group of 
witnesses more than you will know, and my colleagues who are 
here this morning, we have changed the time because we as 
Members of both sides of the House have a lot of organizing to 
do today and we start at 10 o'clock. So thank you for being 
flexible.
    The hearing is on developments in State workers' 
compensation systems. Here in Congress, we don't examine these 
State compensation programs very often because they are 
generally under the purview of the State legislatures. However, 
there have been some disturbing national trends that now compel 
a comprehensive re-examination of the State programs and their 
impact on injured workers.
    As most of you are aware, workers' compensation statutes 
were passed beginning in the early 20th century to establish a 
no fault system for providing efficient redress for injured 
workers. Workers' compensation was called the grand bargain. 
And of course, we all have to remember it was called workmens' 
compensation then. We have gotten modern and know that all 
workers are not men.
    Workers waive their rights to bring individual suits 
against their employers and in return receive compensation for 
work related injuries regardless of fault. Every State and the 
District of Columbia have workers' compensation programs in 
place. Most employers purchase private workers' comp policies, 
but others self-insure or purchase insurance from State managed 
compensation funds.
    Beginning in the 1990s, changes in State workers' 
compensation laws brought about by the lobbying efforts of 
employers and insurance companies have resulted in stricter 
eligibility requirements and the reduction in both the amount 
and duration of benefits, particularly for those workers with 
permanent partial disabilities. Unfortunately, this grand 
bargain of the 20th century is not so grand anymore, especially 
for injured workers.
    In addition, there are two other recent developments that 
merit our attention today. The first has to do with the 
American Medical Association's AMA's guides to permanent 
impairment. And the second concerns cost shifting away from 
State workers' compensation programs where the employer is 
responsible for an employee's injury to the Federal 
Government's medical and disability programs. The AMA guides 
have been in effect since 1971, and are now in widespread use. 
Some States even require workers' compensation programs to use 
the latest edition of the guides. These guides were originally 
designed to be used by physicians in making a scientific 
assessment of a worker's level of impairment or loss of 
function due to work related injury.
    The determination of whether a worker is permanently 
disabled and entitled to workers' compensation is based upon 
his or her impairment rating, which is then applied to the 
specific case of a given worker. For example, a worker who 
loses a hand may not suffer permanent disability if he or she 
is a teacher. But that same worker would be permanently 
disabled if he or she works in construction.
    In 2007, the AMA published the sixth edition of the guides, 
and witnesses today will describe how this new edition has 
dramatically reduced impairment ratings for many types of 
conditions without apparent medical evidence and transparency. 
The sixth edition has become so controversial that many States, 
including Iowa, Kentucky, and Vermont have decided not to adopt 
them.
    It also appears that the sixth edition was developed in 
near secrecy without the transparency and consensus which 
should necessarily accompany the development of standards that 
will have widespread use by State governments.
    In addition, it appears that the physicians who developed 
the latest edition may have ties to insurance companies and are 
making a profit training doctors on the use of sixth edition, 
which is complicated and very difficult to apply. The National 
Technology Transfer Advancement Act of 1996 sets forth minimum 
criteria for the development of voluntary consensus standards, 
openness, balance of interests, due process protections and 
consensus. The process used for developing the sixth edition 
appears to significantly deviate from these standards and is a 
focus of testimony before us today. Workers who are wholly 
dependent on the grand bargain when they were injured on the 
job are the ones paying the price. That is why the subcommittee 
invited the AMA to testify today, but unfortunately it 
declined.
    Another troubling policy issue is that as eligibility for 
workers' compensation benefits has become more restrictive, 
there has been a cost shift to Medicare and Social Security 
disability, SSDI, placing an additional burden on the taxpayer.
    In addition, costs are being shifted to private health 
insurance that should be borne by workers' compensation 
policies and the employer. This is particularly worrisome, 
especially during a time of record deficits. Chairman Miller 
and I believe that this cost shifting trend warrants further 
study. Therefore, we will be asking the Government 
Accountability Office, GAO, to do a study and issue 
recommendations.
    The testimonies today will illuminate these problems, the 
problems facing injured workers and taxpayers and I look 
forward to hearing from our witnesses.
    And now I yield to the ranking member for her opening 
statement for as much time as she may consume.
    [The statement of Ms. Woolsey follows:]

        Prepared Statement of Hon. Lynn C. Woolsey, Chairwoman,
                 Subcommittee on Workforce Protections

    Thank you all for attending this hearing on ``Developments in State 
Workers' Compensation Systems.''
    Here in Congress, we don't examine these state compensation 
programs very often because they are generally under the purview of 
state legislatures.
    However, there have been some disturbing national trends that may 
compel a comprehensive reexamination of these state programs and their 
impact on injured workers.
    As most of you are aware, workers' compensation statutes were 
passed beginning in the early 20th century to establish a no fault 
system for providing efficient redress for injured workers.
    Workers' compensation was called the `grand bargain.'
    Workers waived their rights to bring individual suits against their 
employers and in return receive compensation for work-related injuries 
regardless of fault.
    Every state and the District of Columbia have workers' compensation 
programs in place.
    Most employers purchase private workers compensation policies, but 
others self-insure or purchase insurance from a state managed 
compensation fund.
    Beginning in the 1990s, changes in state workers' compensation 
laws--brought about by the lobbying efforts of employers and insurance 
companies--have resulted in stricter eligibility requirements and the 
reduction in both the amount and duration of benefits--particularly for 
those workers with permanent partial disabilities.
    Unfortunately this `grand bargain' of the 20th century is not so 
`grand' any more, especially for injured workers.
    In addition, there are two other recent developments that merit our 
attention
    The first has to do with the American Medical Association's (AMA) 
Guides to Permanent Impairment.
    And the second concerns a cost-shifting trend away from state 
workers compensation programs, where the employer is responsible for an 
employee's injury, to the federal government's medical and disability 
programs.
    The AMA Guides have been in effect since 1971 and are now in 
widespread use.
    Some states even require workers' compensation programs to use the 
latest edition of the Guides.
    These Guides were originally designed to be used by physicians in 
making a scientific assessment of a worker's level of impairment--or 
loss of function--due to a work-related injury.
    The determination of whether a worker is permanently disabled and 
entitled to workers compensation is based upon his or her impairment 
rating, which is then applied to the specific case of a given worker.
    For example, a worker who loses a hand may not suffer permanent 
disability if he or she is a teacher, but that same worker would be 
permanently disabled if he or she works in construction.
    In 2007, the AMA published the 6th edition of the Guides, and 
witnesses today will describe how this new edition has dramatically 
reduced impairment ratings for many types of conditions, without 
apparent medical evidence, and transparency.
    The 6th edition has become so controversial that many states, 
including Iowa, Kentucky and Vermont have decided not to adopt them.
    It also appears that the 6th edition was developed in near secrecy, 
without the transparency and consensus which should necessarily 
accompany the development of standards that will have widespread use by 
state governments.
    In addition, it appears that the physicians who developed this 
latest edition may have ties to insurance companies, and are making a 
profit training doctors on the use of the 6th edition, which is 
complicated and very difficult to apply.
    The National Technology Transfer Advancement Act of 1996 sets forth 
minimum criteria for the development of voluntary consensus standards: 
openness; balance of interests; due process protections; and consensus.
    The process used for developing the 6th edition appears to 
significantly deviate from these standards and is a focus of testimony 
before us today. Workers who are wholly dependent on this `grand 
bargain' when they are injured on the job, are the ones paying the 
price.
    The subcommittee invited the AMA to testify today, but 
unfortunately, it declined. Another troubling policy issue is that as 
eligibility for workers' compensation benefits have become more 
restrictive, there has been a cost shift to Medicare and Social 
Security Disability (SSDI), placing an additional burden on the 
taxpayer. In addition, costs are being shifted to private health 
insurance that should be borne by workers' compensation policies and 
employers. This is particularly worrisome, especially during a time of 
record deficits. Chairman Miller and I believe that this cost-shifting 
trend warrants further study. Therefore, we will be asking the 
Government Accountability Office (GAO) to do a study and issue 
recommendations. The testimony today will illuminate these problems 
facing injured workers and taxpayers, and I look forward to hearing 
from our witnesses.
                                 ______
                                 
    Mrs. McMorris Rodgers. Good morning, Madam Chair, and 
welcome to our witnesses. We appreciate the time you have taken 
to be with us this morning and share your views and expertise 
with State workers' compensation systems.
    Today, nearly every American employee is covered by a 
system of workers' compensation. Disability benefits are 
available in the event of an illness or injury that occurs on 
the job to help replace lost wages and cover the cost of 
medical care when an individual is unable to return to work. 
For many within the workforce and their families, workers' 
compensation is a critical lifeline during a very difficult 
time.
    Anyone is considered disabled if they are unable to work, 
or only able to work at limited earnings levels as a result of 
an injury or illness. It may sound like a simple concept, but 
as anyone will tell you, the reality of workers' compensation 
is anything but simple. With an economy as diverse as ours, it 
is no surprise there are varying definitions and degrees of 
disabilities with their own set of rules and levels of 
compensation applied in different ways depending upon industry 
and workplace. For example, a software engineer and a 
construction worker with the same injury may face different 
challenges in performing their jobs. An engineer with a broken 
ankle may be fit to return to work while the construction 
worker may spend months away from the job site.
    The complexity of workers' compensation is why most States 
and the Federal Government rely upon the expertise of the 
American Medical Association. Since 1958, the AMA has provided 
medical professionals and policymakers with a guide to evaluate 
and quantify impairment. The AMA guide is an important part of 
the process to ensure injured workers get the assistance they 
need and taxpayer resources are spent appropriately. The AMA's 
guidance is periodically updated to ensure workers' 
compensation systems reflect the latest advances in medicine, 
science and technology.
    Perhaps a particular injury or illness that rendered an 
individual disabled 20 years ago can be overcome today, thanks 
to a new medical device or therapy.
    I look forward to hearing the testimony of Mr. Uehlein, who 
will address AMA's most recent guides.
    Another issue we will look at today is the interaction 
between workers' compensation and the Social Security 
Disability Insurance Program, and whether a decrease in demand 
for one program leads to an increase in demand for the other. 
Again, while not squarely in this committee's jurisdiction, the 
information should help provide members with a clear picture of 
the disability assistance available to those in our workforce.
    We are discussing a complex issue that has a potential to 
affect millions of people at some point in their careers. We 
all want to see that everyone gets the care and assistance that 
their families need in an unfortunate event that illness or 
injury occurs.
    State and local authorities working closely with 
knowledgeable professionals in the medical community are 
responsible for operating these systems, and we appreciate this 
opportunity to learn more about their efforts on behalf of our 
Nation's workers. Thank you, Madam Chair. And I yield back.
    [The statement of Mrs. McMorris Rodgers follows:]

           Prepared Statement of Hon. Cathy McMorris Rodgers,
    Ranking Republican Member, Subcommittee on Workforce Protections

    Good morning Madam Chair and welcome to our witnesses. We 
appreciate the time you all have spared today to share your views and 
experience with state workers' compensation systems. While most of our 
discussion will fall outside the jurisdiction of this committee, 
members of Congress always welcome the opportunity to better understand 
issues that affect America's workforce.
    Today nearly every American worker is covered by a system of 
workers' compensation. Disability benefits are available in the event 
of an illness or injury that occurs on the job to help replace lost 
wages and cover the cost of medical care when an individual is unable 
to return to work. For many workers and their families, workers' 
compensation is a critical lifeline during a very difficult time.
    Workers are considered disabled if they are unable to work or are 
only able to work at a limited earnings level as the result of an 
injury or illness. It may sound like a simple concept, but as any 
worker can tell you, the reality of workers' compensation is anything 
but simple. With an economy as diverse as ours, it is no surprise that 
there are varying definitions and degrees of disabilities with their 
own sets of rules and levels of compensation applied in different ways 
depending upon the industry and workplace.
    For example, a software engineer and a construction worker with the 
same injury face different challenges in performing their jobs. An 
engineer with a broken ankle may be fit to return to work, while the 
construction worker may spend months away from the job site.
    The complexity of workers' compensation is why in most cases states 
and the federal government rely upon the expertise of the American 
Medical Association. Since 1958, the AMA has provided medical 
professionals and policymakers with a guide to evaluate and quantify 
impairment. The AMA guide is an important part of the process to ensure 
injured workers get the assistance they need and taxpayer resources are 
spent appropriately.
    The AMA's guidance is periodically updated to ensure workers' 
compensation systems reflect the latest advances in medicine, science, 
and technology. Perhaps a particular injury or illness that rendered an 
individual disabled twenty years ago can be overcome today thanks to a 
new medical device or therapy. I look forward to hearing the testimony 
of Mr. Uehlein who will address the AMA's most recent guides.
    Another issue we will look at today is the interaction between 
workers' compensation and the Social Security Disability Insurance 
program, and whether a decrease in demand for one program leads to an 
increase in demand for the other. Again, while not squarely in this 
committee's jurisdiction, the information should help provide members 
with a clearer picture of the disability assistance available to 
workers.
    Today, we are discussing a complex issue that has the potential to 
affect millions of workers at some point in their careers. We all want 
to see workers get the care and assistance they and their families need 
in the unfortunate event that an illness or injury occurs. State and 
local authorities, working closely with knowledgeable professionals in 
the medical community, are responsible for operating these systems and 
we appreciate this opportunity to learn more about their efforts on 
behalf of our nation's workers.
    Thank you again Madam Chair and I yield back.
                                 ______
                                 
    Chairwoman Woolsey. Thank you. Without objection, all 
members will have 14 days to submit additional materials for 
the hearing record.
    Just a little education on how to use these lights. You 
each will have 5 minutes. When you first start speaking, the 
green light goes on. When the yellow light comes on you have a 
minute left. And then a red light will come on. Now we aren't 
going to eject you from the floor of the committee room, but we 
would like you to wrap up at that time. And then when we have 
questions, each member will have 5 minutes to ask and get the 
answer. So if our question takes 5 minutes then don't worry, 
you don't have to answer it.
    But we really have until, we have a good solid hour; we are 
going to get going and we will have as many questions as we can 
get in during that time period after your opening statements.
    We will start with Ms. Spieler and go down the witness 
panel. Now I will introduce each of you and then you will go in 
order. Congressman Payne is going to introduce Mr. Burton, 
because he has a great need to do that.
    All right, so we will start with Dean Emily Spieler. Dean 
Spieler is the dean and Edwin W. Hadley professor of law at 
Northwestern University School of Law. She is an expert on 
workers' compensation and has written widely on this issue. She 
also served as the commissioner of West Virginia's workers' 
compensation program and was chair of the Federal Advisory 
Committee to the Department of Energy on the Energy Employees 
Occupational Injury Compensation Program. Dean Spieler received 
her BA from Harvard College and her JD from Yale Law School. 
And now Congressman Payne.
    Mr. Payne. Thank you, Madam Chair. And it is my honor to 
introduce the gentleman from the great State of New Jersey, and 
that is where I have the privilege to call my home State. Dr. 
John F. Burton, Jr., is professor emeritus at Rutgers 
University and at Cornell University, and is a former dean of 
the School of Management and Labor Relations at Rutgers. Dr. 
Burton is the most widely recognized expert on workers' 
compensation in the country, and he served as chairman of the 
National Commission on State Workers' Compensation Laws in the 
early 1970s. He has written extensively about workers' 
compensation over the course of more than 40 years in academia. 
He received his BS from Cornell University, and his LLB and 
Ph.D from the University of Michigan.
    Chairwoman Woolsey. Thank you, Congressman. I have to 
correct. Dean Emily Spieler is professor of law at Northeastern 
University. I apologize.
    Dr. John Nimlos is a certified independent medical examiner 
and physician of occupational health. He served as the chief of 
the East Side Occupational Medicine Clinic from 1987 to 2007, 
where he evaluated the treatment of work-related injuries, 
illnesses and exposures. Dr. Nimlos received his BA and MD from 
the University of Minnesota.
    W. Frederick Uehlein is the founder and chairman of the 
Insurance Recovery Group and an attorney with over 30 years of 
experience in workers' compensation. He is also a member of the 
Workers' Compensation Trial Lawyers Association and serves on 
the advisory committee of John Burton's workers' compensation 
resources. Mr. Uehlein is a graduate of Boston College Law 
School and Trinity College. Welcome.
    Mr. Christopher Godfrey is the commissioner of the Iowa 
Division of Workers' Compensation. Before becoming 
commissioner, Mr. Godfrey was an associate attorney at Max 
Schott & Associates, where he practiced workers' compensation 
and employment discrimination law. Mr. Godfrey has a BA from 
Drake University and a JD from Drake Law School.
    We have a panel of experts. We are so honored. We will 
begin with you, Dean Spieler.

               STATEMENT OF EMILY SPIELER, DEAN,
             NORTHEASTERN UNIVERSITY SCHOOL OF LAW

    Ms. Spieler. Chairwoman Woolsey, Ranking Member McMorris 
Rodgers and members of the subcommittee, thank you for the 
opportunity to appear before you today. I appear to express my 
deep concern about the trajectory of State workers' 
compensation programs in general, and my particular concern 
regarding the sixth edition of the AMA guides to the evaluation 
of permanent impairment.
    Workers' compensation is the social benefit system designed 
to provide income replacement benefits and medical care to 
people who have been injured or made ill by their work. The 
backdrop for today's hearing is important. Analyses of trends 
in workers' compensation suggest that the adequacy and the 
availability of compensation for injured workers are declining 
and declining significantly. The AMA guides have become a 
commonly used vehicle for rating the permanent defects of 
workplace injuries, and are now used in 44 States as well as in 
the Federal Employees Compensation Act.
    The adoption of the guides has not been without 
controversy, and that controversy has increased with the sixth 
edition. The key element that the guides add to the existing 
medical literature is not new diagnostic or treatment 
techniques. Rather, it is the numeric quantification of 
impairment. There are core problems with this quantification 
system. First, the impairment numbers are not based on my 
evidence and are therefore simply numbers that have been 
created out of thin air.
    In the 40 years since the publication of the first edition 
of the guides, the AMA has made no attempt to conduct 
validation studies of these numeric ratings in terms of the 
relationship of the impairment rating numbers to the actual 
functional loss or disability of injured workers.
    Second, the process for development of the impairment 
numbers is quite opaque. The numbers are developed based upon 
consensus of a small number of physicians. The result is that 
public programs, including FECA, are tied to a publication from 
a nongovernmental organization that has been developed without 
public comment or full peer review.
    Third, workers' compensation is supposed to provide 
benefits for disability, and the guides pretend to quantify 
impairment. Impairment is often not a good predictor of the 
economic consequences of injury or disease, and there has never 
been any attempt by the AMA to correlate their percentage 
values to any ability to function at work.
    Much of the concern about adoption of the guides relates to 
the fact that the impairment ratings of the guides have become 
a proxy for the rating of disability in many State workers' 
compensation programs. The sixth edition adds to these 
problems.
    The sixth edition adopts a new definitional structure based 
on the International Classification of Functioning, Disability 
and Health, ICF, of the World Health Organization and 
diagnosis-based grids for assessing impairment. It purports to 
increase its attention to functional assessment and to reduce 
variations in ratings performed by different examiners. But a 
careful reading reveals many changes that are troubling.
    In all organ systems, actual functional limitations, the 
most lauded change in the sixth edition, have very small impact 
on the ultimate impairment rating. The concern about inter-
rater variability has resulted in an increased focus on 
objective evidence in medical pathology despite the rhetoric 
associated with the inclusion of functional assessment. This 
addition rejects subjective symptoms such as pain, range of 
motion, downgrades the role of treating physicians who would be 
most familiar with the individual's functional capacity and 
actually restricts the effect of any assessment of functional 
loss.
    While admitting the fact that there is no empirical basis 
for the impairment quantifications, the sixth edition decreases 
many of the numeric ratings, sometimes a lot. This results, in 
fact, in reduced availability of workers' compensation benefits 
for injured workers and the externalization of economic costs 
of injuries from workers' compensation systems.
    It is not true that disability is impossible to measure. 
Studies have been done on the relationship of impairment 
ratings to actual loss of earnings and loss of quality of life 
experienced by workers with work-related injuries. The AMA has 
never incorporated those studies into its guides.
    I urge that you request the National Academies of Science's 
Institute of Medicine to conduct a review of the guides and an 
assessment of permanent disability. Their review should include 
recommendations regarding the best way to develop a new system 
for rating workers' injuries as measured by the impact of those 
injuries and diseases on the extent of permanent impairments, 
work disability and noneconomic losses.
    I would be happy to answer any questions you have.
    Chairwoman Woolsey. Thank you.
    [The statement of Ms. Spieler follows:]

         Prepared Statement of Emily A. Spieler, J.D., Dean and
Edwin W. Hadley Professor of Law, Northeastern University School of Law

    Chairwoman Woolsey, Ranking Member McMorris-Rodgers and Members of 
the Subcommittee on Workforce Protections of the Committee on Education 
and Labor:
    Thank you for the opportunity to appear before you today.
    My name is Emily Spieler. I am currently the Dean of the School of 
Law at Northeastern University in Boston. In the past, I served as the 
head of the workers' compensation program in the State of West 
Virginia, I have written and spoken frequently on issues relating to 
state workers' compensation program, and I have served on committees 
relevant to this issue for the National Academy of Social Insurance, 
the National Academies of Science, and the American Bar Association. I 
served as Chair of the Federal Advisory Committee to the Department of 
Energy on the implementation of the Energy Employees Occupational 
Injury Compensation Program Act. I was a member of the seven-member 
Steering Committee appointed by the American Medical Association to 
provide advice on the development of the Fifth Edition of the AMA 
Guides to the Evaluation. That committee was disbanded before the 
edition was completed, and five of us from the committee then published 
``Recommendations to Guide Revision of the Guides to the Evaluation of 
Permanent Impairment'' in the Journal of the American Medical 
Association.\1\ I declined the opportunity to be a formal reviewer for 
the Sixth Edition of the Guides.
    I would like to acknowledge the assistance of John F. Burton Jr., 
Emeritus Professor at Rutgers University, and the nation's leading 
expert on workers' compensation, in the preparation of this testimony.
    I appear before you today to express my deep concern about the 
trajectory of state workers' compensation programs in general and my 
more particular concern regarding the Sixth Edition of the AMA's Guides 
to the Evaluation of Permanent Impairment.
    Workers' compensation is the social benefit system designed to 
provide income replacement benefits and medical care to people who have 
been injured or made ill by their work. After an injury, a worker 
generally requires a temporary period of healing, during which s/he may 
not be able to work and will collect temporary total disability (TTD) 
benefits. The length of this period may vary, but at the end of it the 
health condition will stabilize and the individual will be viewed as 
having reached maximum medical improvement (MMI). At this point, all 
workers' compensation programs have a mechanism for providing 
compensation for the permanent effects of the compensated injury or 
illness. In almost all cases, the individual is partially (not 
completely) disabled and will receive permanent partial disability 
(PPD) benefits. In severe cases, the worker may receive permanent total 
disability (PTD) benefits, generally paid for life. PTD benefits are 
extremely rare in workers' compensation systems, even if an individual 
is unable to reenter the workforce successfully. PPD benefits are 
therefore the critical benefit providing compensation for permanent 
losses.
    PPD is the most costly area of cash benefits paid by workers' 
compensation programs, although the medical costs associated with the 
programs now surpass the cost of all cash benefits paid directly to 
workers.\2\ The systems used by workers' compensation programs to award 
these benefits vary. Almost all states (43 jurisdictions) use a 
statutory schedule for a small number of injuries, such as loss of a 
limb. Most of these statutes also provide that multiple losses of body 
parts will result in a PTD award.
    Beyond this, there is large variability among jurisdictions in both 
methodology and outcome in PPD cases. In general, PPD is assessed based 
on one of three methodologies: loss of earning capacity, a predictive 
model, used by about 13 states; actual wage loss (about 10 states); 
and, most commonly, permanent impairment without direct consideration 
of actual loss of earnings. Some states use a combined approach, 
modifying the impairment rating (as in California) or assessing the 
disability differently if the worker has returned to work. In 14 of the 
``impairment'' states, the worker receives a benefit based on the 
degree of impairment, and loss of earnings is not considered at all. In 
these states, a percentage of impairment is simply converted to a 
monetary award using a formula set by statute or regulation, so that 
each percentage point can be equated to a specified number of weeks of 
weekly benefits, generally based on the individual worker's pre-injury 
wage, with a statutory wage cap.\3\
    I believe all but one state now allows cases to be settled for a 
lump sum settlement through a process called compromise and release 
agreements. This means that the worker and the payer (private insurance 
carrier, state fund or self insured employer) attempt to quantify the 
worth of the injury and eliminate any on-going obligation to pay 
benefits to the worker. In many states, this includes a settlement of 
the potential future medical costs as well.
    Analyses of trends in workers' compensation suggest that the 
adequacy and availability of compensation are declining, perhaps 
significantly. States are erecting greater barriers to compensability. 
Increasing weight is being given to impairment ratings, and fewer and 
fewer jurisdictions offer wage replacement benefits without time 
limits.
    Given this background, it is no surprise that there is a quest for 
a magic formula that quantifies the effects of injuries. At its best, 
this is a quest for an efficient, reliable and valid methodology that 
would be fair to individual workers by reflecting the true extent of 
their disabilities; would be equitable to injured workers as a group by 
providing consistent awards for similar injuries and disabilities; 
would limit transaction costs so that benefits are provided efficiently 
and without undue delay; and would provide predictive value to payers 
so that premium rates would not be unduly inflated by excessive caution 
in the face of uncertainty.
    It is for these reasons that the American Medical Association's 
Guides to the Evaluation of Permanent Impairment (Guides) has become so 
important.
    Guides for impairment rating of organ systems were initially 
developed before 1970 and were first published together as the Guides 
for the Evaluation of Permanent Impairment in 1971. Since then, the 
book has been revised repeatedly; the Sixth Edition, published in 2008, 
is the latest in the series. Each edition has been critical of prior 
editions, and each edition has made changes in the assessment 
techniques.
    Some elements have been constant. The book is organized by organ 
system, providing a methodology for examination and then rating 
(numeric quantification) of the extent of impairment, currently 
expressed as a percentage of whole person impairment (WPI). The Guides 
has specifically stated that these are impairment ratings, not intended 
for use to rate disability--economic and noneconomic loss--because 
disability reflects a combination of medical and non-medical factors. 
In fact, many of the specific WPI ratings have not changed over time, 
despite significant advances in the understanding of impairment, 
functional loss and disability.
    It is critical to understand that the key element that the Guides 
adds to the existing medical literature is the numeric quantification 
of impairment. It is this aspect of the Guides that encourages its 
expanding use. As noted below, this quantification is not, and has 
never been, evidence-based.
    The use of the Guides has increased rapidly, precisely because it 
has successfully been characterized as the best vehicle to meet the 
complex goals of fairness, reliability and efficiency in rating 
permanent impairment. The Guides is reportedly now used in more than 44 
states as well as federal compensation programs. Guides 6th p. 20. 
Increasingly, state workers' compensation programs have moved to using 
the impairment ratings as a proxy for the extent of disability. It is 
used in cases under the Federal Employees' Compensation Act, the Energy 
Employees Occupational Illness Compensation Program Act and, to a more 
limited extent, under the Longshore and Harborworkers Compensation Act. 
It is showing up for the ratings of injuries in automobile accident 
cases. It is used in Canada, New Zealand, Australia, and South Africa. 
This represents, of course, remarkable reach for a publication of a 
non-governmental organization that is developed without public comment 
or full peer review.
    It is therefore no surprise that each new edition of the Guides is 
highly scrutinized: The impairment ratings in the Guides have become 
the proxy for the rating of disability in many state workers' 
compensation programs--despite the admonition in the book that its 
purpose is to rate impairment, not disability. This poses a particular 
challenge because the extent of impairment may not be a good predictor 
for the economic consequences (work disability) or for the noneconomic 
consequences (nonwork disability or noneconomic loss) of injury or 
disease.
    When I served on the Steering Committee for the development of the 
Fifth Edition, serious issues were raised about the legitimacy of the 
Guides in terms of its use in workers' compensation systems. Since 
then, the AMA has published two additional editions, each with changes.
    The Sixth Edition explicitly acknowledges the criticisms of the 
prior editions of the Guides\4\ and attempts, for the first time, to 
draw links between impairment and functional loss by standardizing 
assessment of the ability of the patient to perform specified 
Activities of Daily Living (ADLs). It applies functional assessment 
tools and includes, to a limited extent, measures of functional loss in 
the impairment ratings. It organizes the medical examination to 
incorporate history, physical clinical studies and functional status. 
It also strives to increase inter-rater and intra-rater variability.\5\ 
These are all important and laudable steps.
    But a more careful reading of the Sixth Edition reveals many 
changes that are troubling in their scope or in their application. The 
edition also retains some of the most problematic features of the 
earlier editions.
    I will now summarize the changes in the Sixth Edition, as well as 
the areas of continuing concern that have not been addressed by this 
latest edition of the Guides.
Changes in the Sixth Edition of the Guides
    There are five key areas of changes in the Sixth Edition:
    1. Definitional structural changes in the Sixth Edition
    Adoption of the ICF definitional structure.
    The Sixth Edition purports to adopt the International 
Classification of Functioning, Disability and Health (ICF) of the World 
Health Organization, designed to describe health and disability at the 
individual and population levels. According to the Guides' authors, 
this system looks at what an individual can--can cannot--do, and it 
claims to provide ``greater weight to functional assessment than do 
prior Editions.'' Guides 6th p. 26. The ``relationships between 
impairment, activity limitations, and participation are not assumed to 
be linear or unidirectional.'' Guides 6th p. 3. The Senior Contributing 
Editor to the Sixth Edition, Dr. Christopher Brigham, has noted that 
``use of the ICF model does not indicate that the Guides will now be 
assessing disability rather than impairment. Rather, the incorporation 
of certain aspects of the ICF model into the impairment rating process 
reflects efforts to place the impairment rating into a structure that 
promotes integration with the ICF constructs for activity limitations 
and limitations in participation, ultimately enhancing its 
applicability to situations in which the impairment rating is one 
component of the `disability evaluation process.' ''\6\ This is 
described by the authors of the Sixth Edition as a `paradigm shift,' 
and the Guides now uses validated questionnaires for assessing 
function.
    But there are serious problems raised by this shift.
    First, this definitional structure is different from the prior 
definitions under the Guides, is not consistent with terminology in 
workers' compensation programs, and is quite different from definitions 
under the Americans with Disabilities Act--thus creating new confusion 
in an already confused and complex field.
    Second, although importing the ICF model and including evaluation 
of ADLs gives the Guides the appearance of improving its approach to 
functional assessment, the actual effects of the change are in fact 
extremely limited: ``Patients' responses on functional assessment 
instruments will act as modifiers of the percentage impairment they are 
awarded, but the awards will, in general, primarily reflect objective 
factors.'' Guides 6th p.39. As is discussed below, whole person 
impairment ratings are based on placement into a class, and functional 
assessment can only change the actual WPI rating by a limited amount. 
In essence, these are small adjustments within limited bands. At the 
same time, the consideration of significant indicators of function--
including range of motion assessment and pain, which were used in 
preparing the WPI ratings in the Fifth Edition--are eliminated or 
reduced in the Sixth Edition. There is real tension between the 
rhetoric rooted in the ICF model and human functioning and the reality 
of continuing a diagnosis-based approach with exclusion of critical 
subjective factors.
    Third, the use of ADLs for this purpose is troubling. The Guides 
uses both a definition of 100% (approaching death) and a functional 
assessment approach (ADLs) that is inappropriate for assessing the 
level of impairment for workers--although these may be appropriate for 
elderly patients facing self-care issues. ADLs include basic personal 
hygiene, dressing, eating, functional mobility, sleep and sexual 
activity. Guides 6th p.7, 482-484. Data from the National Health 
Interview Survey conducted by National Center for Health Statistics, 
Centers for Disease Control and Prevention indicates that the number of 
people who report inability to perform work due to disability far 
exceeds the number who report inability to perform ADLs. This is not 
surprising: ADLs represent very basic self care issues and are not a 
good match for the issues of disability that confront injured 
workers.\7\
    Fourth, the Guides now gives the appearance, but not the reality, 
of assessing function in setting the WPI ratings. This could result in 
further growth of the inappropriate use of the Guides as a proxy for 
disability.
Changes in key definitions
    Important changes and additions were made to the definitions of key 
terms in the Sixth Edition of the Guides. Some of these reflect the 
adoption of the ICF model, but others are not explained by this shift. 
Appendix 1 provides a comparison between the Fifth and Sixth Editions 
of some of these terms. A quick glance through these changes shows the 
adoption of a new definition of disability, which may be consistent 
with ICF terminology but is quite confusing in the context of U.S. 
workers' compensation, and an introduction of the word ``significant'' 
into the definition of impairment. The definition of impairment rating 
introduces the inclusion of ADLs, despite the fact that ADL assessment 
plays a very small role in the calculation of WPI in the new system. 
The Sixth Edition also introduces definitions for a series of terms 
relate directly to legal terminology. I discuss this issue below.
2. Conceptual congruity among organ systems through creation of 
        diagnosis-based grids
    The Sixth Edition developed a generic template for diagnosis-based 
grids across organ systems and attempts to graft this onto the ICF 
conceptual framework. The ICF classification system uses five 
impairment classes, and this has been imported into the Sixth Edition 
for most organ systems and diagnoses. A ``key factor'' for each organ 
system determines the placement into the class; the key factor for use 
on any grid is specified in the text. The key factor is diagnosis-
based; it can be derived from clinical presentation, objective testing 
or, less commonly, physical findings. Class is determined by 
``diagnosis and/or other specific criteria.'' Guides 6th p. 14.
    Each class is then generally divided into five grades, with 
assigned WPI ratings. The middle grade is considered the default, and 
can be modified--but only within the class--by application of ``non-key 
factors.'' These include physical findings, clinical test results and 
patients' self reports on Activity of Daily Living functional scales. 
Thus, choice of diagnosis and of impairment class are the two most 
important elements in determining the final impairment rating. The 
generic template is attached as Appendix 2.
    In all organ systems, actual functional limitations--the lauded 
change in the Sixth Edition--can have very small impact on the ultimate 
WPI rating.
3. Reducing inter-rater variability and reliability by eliminating 
        subjective factors
    Despite the rhetoric and the large amount of effort that went into 
the conversion to the ICF model and diagnosis-based grids, in fact the 
primary focus in the development of the Sixth Edition seems to have 
been on reducing inter-rater variability, irrespective of the accuracy 
of the rating in terms of the actual functional capacity of the 
individual.
    In the effort to address this concern, the Sixth Edition focuses on 
objective evidence and pathology, rejects subjective symptoms, 
downgrades the role of treating physicians who would be most familiar 
with the individual's functional capacity, and, as noted above, 
restricts the effect of any assessment of functional loss. Rater 
discretion is reduced by the diagnosis-based grid methodology, which 
narrows the bands of available WPI ratings as well as by the insistence 
on objective findings. Although this has been characterized as 
increasing `fairness,' it in fact may have the result of lowering the 
WPI rating, without any consideration for the effects of these changes 
on injured individuals.\8\
    Pain is unquestionably the most important subjective symptom. 
Because it is subjective, however, it is viewed with suspicion by the 
authors of the Guides. Under the Sixth Edition methodology, pain is 
assumed to be included in the rating for any condition covered in the 
organ system chapters. In contrast, the Fifth Edition allowed for an 
additional 3% WPI for pain. For painful conditions not subject to 
rating in the organ system chapters, the Sixth Edition allows up to 3% 
WPI. This is true despite the fact that the Guides indicate that there 
is a ``linear trend for decreasing positive outcomes (e.g. return-to-
work and work retention) as the [pain disability questionnaire] score 
categories increased.'' Guides 6th p.40. The Guides chooses objective 
factors--to ensure reliability--over accuracy in assessing the actual 
outcomes for disabled persons.
    Musculoskeletal Impairments and Range of Motion: The Sixth Edition 
eliminates range of motion as a basis for rating spine and pelvic 
impairments. Classification of these disorders is based solely on 
diagnosis, and then placed within the appropriate class. Again, the 
justification is standardization that ``promotes greater inter-rater 
reliability and agreement.'' \9\ In contrast, the Fifth Edition used 
both ROM and diagnosis-related estimate (similar to the diagnosis-based 
impairment) to determine the WPI rating. Range of motion is an 
indicator of functionality.
    Treating physician reports: According to the Sixth Edition, 
treating physicians' reports carry inherent bias, and therefore require 
great scrutiny. One of the Section Editors of the Sixth Edition, Dr. 
Kathryn Mueller, observed, ``One study noted higher impairment ratings 
by treating physicians as compared to an expert who reviewed the same 
information.'' Noting that studies show that PPD payments do not 
adequately reflect actual wage loss of individuals after MMI, she went 
on to note, ``Thus, if the treating physicians' ratings were slightly 
higher than `expert' ratings, in a social sense, this may be 
appropriate. Perhaps the treating physicians are considering the 
overall functional effects of the injury or illness on the 
individual.'' \10\ This suggestion is, of course, in sharp contrast to 
Dr. Brigham's assertions that ratings were consistently too high under 
the Fifth Edition.\11\
4. New direct links to legal issues relating to compensation
    The Sixth Edition is the first edition to openly acknowledge the 
use of the Guides for determination of economic benefits: ``The primary 
purpose of the Guides is to rate impairment to assist adjudicators and 
others in determining the financial compensation to be awarded to 
individuals who, as a result of injury or illness, have suffered 
measurable physical and/or psychological loss.'' Guides 6th p. 6. In 
fact, although this edition continues to state that it should not be 
used to create direct estimates of disability, the Sixth Edition no 
longer sets out this caution in bold in the text. It also significantly 
expands into areas of legal definitions. It adds definitions for 
causality, aggravation, exacerbation, and recurrence--all legal 
concepts in workers compensation programs--thereby usurping these 
programs' prerogative to define these terms. See Appendix 1.
    The approach to apportionment is particularly troubling. The 
traditional rule in workers' compensation programs is that an employer 
takes a worker as ``he finds him.'' Under this traditional view, the 
compensable impairment from an injury would include any underlying 
disease or degenerative process. Although some workers' compensation 
systems have moved away from this traditional approach, the majority 
have not. While noting the need to follow the rules of the local 
jurisdiction, the Guides now instructs raters on how to separate out 
the portion of the impairment that is not directly caused by the 
immediate injury. Guides 6th p.26. This may have a troubling normative 
effect on programs in which apportionment is not currently appropriate, 
and further reduce the adequacy of benefits for injured workers.
5. Specific changes in whole person impairment ratings
    The Sixth Edition specifically states that, where there was no 
compelling reason to change impairment ratings from prior editions, 
there would be consistency from the prior edition. Thus, despite the 
adoption of the ICF model and the diagnosis-based grids, the editors 
assert that very little change was to be made in impairment rating 
values.
    Despite this assertion, there are many unexplained changes in the 
WPI ratings, and the majority of these appear to lower the ultimate WPI 
rating for the injured worker.
    Examples include:
     Ratings for the most severe impairments for non-
musculoskeletal organ systems have been reduced significantly, 
including for some common occupational diseases such as pulmonary 
disease. See Appendix 2 for a comparison of the values in the Fifth and 
Sixth Editions for pulmonary impairment and hypertension: the top 
rating for the most severe category was lowered from 100% WPI to 65% 
from the Fifth to the Sixth Editions. Equivalent changes were made in 
most other organ systems. The top of the scale was lowered, and 
therefore the scale for severe and moderate disabilities was reduced 
because of the decrease in the top available rating.\12\
    There are, admittedly, some unchanged WPI values, including the 
conversion of noise-induced hearing loss to WPI and the WPI ratings for 
voice/speech impairments. And, after perusing all non-musculoskeletal 
organ chapters, I did find the following increase in values: in the 
central and peripheral nervous system, the highest impairment rating 
was increased from 90% to 100% WPI in the Sixth Edition for someone 
exhibiting a ``state of semi-coma with total dependence and subsistence 
on nursing care and artificial medical means of support or irreversible 
coma requiring total medical support.'' Guides 6th p. 327. On the other 
hand, the ranges for this category were changed: from 70-90% in the 
Fifth Edition to 51-100% in the Sixth. As a result, the next class down 
in ``consciousness and awareness'' was reduced from a range of 40-69% 
to 31-50% WPI in the Sixth Edition. It is, of course, possible that 
there are other examples of increases in the top rating or in the 
scale. In addition, some charts are new (e.g. HIV).
    One explanation for these reductions was offered by Dr. Kathryn 
Mueller, who wrote: ``[T]he editors found that the majority of the 
chapters included a 100% whole person rating even when the 100% whole 
person rating for that particular body system would not be appropriate 
[because 100% is equivalent to near death]. Therefore, the editors 
lowered the 100% whole person ratings in many of the chapters.'' She 
goes on to make the following assumptions: that these individuals will 
have other organ system impairments that will raise their total WPI, 
and that ``most individuals with severe deficits will be permanently 
totally disabled, and therefore, in most systems, a permanent partial 
disability rating relying on the AMA Guides will not be applicable.'' 
\13\ This last statement assumes an availability of PTD benefits that 
is unlikely to be correct.
     As previously noted, the pain `add-on' of up to 3% has 
been eliminated from all ratings in organ system chapters. Given that 
the overall available WPI ratings were not increased to reflect pain, 
but the Sixth Edition simply states that pain is included, this will 
result in reductions in WPI ratings for individuals with significant 
pain.
     Musculoskeletal cases: It is more difficult to assess the 
changes in the new Sixth Edition chapters for musculoskeletal disorders 
(upper and lower extremities and spine) because the methodologies of 
the chapters are quite different from the prior edition. Probably the 
most significant changes are the elimination of the Range of Motion 
assessment and the pain add-on. In addition, cases involving surgical 
intervention are all substantially reduced in terms of WPI. These 
include spinal fusion (reduced from 24% to 15% WPI), ankle replacement 
with poor result (30% to 24% WPI), total knee replacement (from 20% to 
15% WPI) and hip fracture (from 25% to 12% WPI). I believe that the 
change in ratings for these cases may be due to the fact that the Sixth 
Edition does not consider treatment of the injury in the rating.\14\ 
Attached as Appendix 3 is an overview of the WPI rating ranges in the 
Fifth and Sixth Editions for spine injuries.
    There are a few increases in ratings in these chapters, including 
for vertebral fractures, but the magnitude of these is small. 
Similarly, some previously non-ratable conditions, such as soft tissue 
and muscle/tendon injuries and non-specific spinal pain are now rated, 
all with low WPI ratings of 1-2%.
     In assessing non-orthopedic consequences of spinal 
injuries, reductions were made in WPI ratings similar to those made for 
non-musculoskeletal organ systems. For example, comparing the chapter 
on central and peripheral nervous system disorders in the Sixth with 
the spine chapter in the Fifth Edition, top WPI ratings for neurogenic 
dysfunction were reduced as follows: bladder dysfunction from 60% to 
30%; sexual dysfunction from 20% to 15%; respiratory problems from 90+% 
to 65%; station and gait disorders from 60% to 50%. Bowel and upper 
extremity dysfunction were unchanged.
    There are undoubtedly many other changes in these values that a 
careful review of each chapter would reveal.
    Notably, many of the changes in values are inadequately explained. 
Certainly, it is clear that the move to functional assessment has not 
led to any review of the adequacy of the impairment ratings for injured 
workers.
Core problems of the Guides retained in the Sixth Edition
    Before the Fifth Edition was finalized, a number of former members 
of the Steering Committee for that edition published an article in the 
Journal of the American Medical Association, raising concerns about the 
validity of the Guides.\15\ Many of the most critical problems raised 
in that article have not yet been addressed.
    1. Impairment ratings are not now, nor have they ever been, 
evidence based. The Sixth Edition acknowledges again that the WPI 
percentages are based on ``normative judgments that are not data 
driven'' that still ``await future validation studies.'' Guides 6th p. 
6, 26. In the 40 years since publication of the First Edition, the AMA 
has made no attempt to conduct validation studies. Each new edition 
claims that it is objective--and to have corrected the errors of the 
past edition(s). Each instructs that the Guides not be used for direct 
computation of benefits. Each has substantial effect on the benefits 
paid to workers. The original ratings in the First Edition did not even 
correlate with the scheduled awards that were already included in the 
workers' compensation statutes. The differences between AMA impairments 
ratings and states' statutory ratings is striking, in particular with 
regard to relative weight (e.g. loss of arm versus loss of leg). But 
despite the passage of time and the accumulation of relevant 
information from studies by economists and others, the relative 
importance of body parts in the Guides is same in Sixth as it was in 
the First Edition in 1971. Although the Sixth Edition sets up a new 
approach so that the evaluation of different organ systems is placed 
within similar diagnosis-based grids, there is also still no validation 
of percentages across organ systems.
    2. Although the Guides are predominantly used for assessment of 
work disability, there has never been any attempt to correlate the 
percentage values to work. In fact, ability to work is excluded from 
consideration in setting the percentage. To the extent the Sixth 
Edition now appears to be creating correlation by including functional 
assessment, the Guides use ADLs, which do not correlate with work 
disability, and severely limits the effects on WPI of the functional 
assessments.
    3. The process for development of these WPI numbers is opaque. The 
numbers are developed based upon consensus of a small number of 
physicians. This persists in the Sixth Edition, which gives 
``consensus-derived percentage estimate of loss.'' Guides 6th p.5. Only 
53 specialty-specific experts contributed to the Sixth Edition; the 
extent of involvement of each is unclear; the process for derivation of 
new numbers is not described. This is consistent with past editions. 
There is not, and there has never been, a possibility for public 
discussion and input into the process, despite the use of the Guides in 
federal and state governmental programs.
    4. The Guides presumes that 100% represents a state close to 
death--a scale inappropriate for assessing the impairment of workers. 
The scale used to generate WPI ratings is a critical component of the 
validity of the numerical ratings. The appropriate top of the 
impairment scale for assessing workers should reflect a level of 
functional loss related to inability to perform tasks necessary for 
independent life and capacity to work. By defining 100% as comatose or 
approaching death, and 90+% as totally dependent on others, the values 
for all impairments are inappropriately depressed. The reduction in the 
top of the scale for many organ systems in the Sixth Edition expands 
the problem, rather than solving it.
    5. The Guides combines impairments by reducing the value of each 
subsequent injury after the first injury, failing to reflect the true 
effect of multiple injuries. The scale that presumes that 100% is 
equivalent to death forces the devaluation of all injuries after the 
first. The Guides, including the Sixth Edition, therefore requires that 
each subsequent impairment be reduced in value. Thus, if the first 
impairment is valued at 25% for one limb, and the same injury occurs in 
a second limb, the value for the second limb will be less than 25%, and 
the total impairment will be less than 50%. From the standpoint of real 
life, this makes no sense whatsoever. If I were to lose the use of one 
arm, and then lose the second arm, surely I am more not less impaired 
by this second loss! We suggested in 2000 that later impairments may be 
more or less impairing than the original impairment: the Guides' system 
of combining impairments means that all additional impairments are 
viewed as less impairing.
    6. The Guides is not broadly acceptable to the many constituencies 
involved in workers' compensation. As we noted in 2000, ``Acceptability 
depends in part on the origins of the relative values and in particular 
on whether there is some scientific basis for the ratings.'' \16\ 
Plainly, this has not been achieved.
    A number of these points were raised in the JAMA article in 2000, 
prior to the publication of the Fifth Edition. They have still not been 
addressed.
    Additional concern regarding the Sixth Edition of the Guides:
    The Senior Editor of the Sixth Edition, Dr. Christopher Brigham, 
has a separate business called Impairment Resources, described at 
http://impairment.com/ as follows:
    Impairment Resources provides services designed to drive accurate 
impairment ratings. One of the greatest opportunities in workers' 
compensation is effective management of impairment ratings.
    We are best able to serve you by providing unique professional 
abilities, innovative technology solutions and offering a suite of 
services ranging from ImpairmentCheck(tm) (our unique, online resource 
to assess the accuracy of ratings) to ImpairmentExpert(tm) (expert 
physician reviews). These services are complimented by Internet-based 
educational resources and tools for all Editions of the AMA Guides to 
the Evaluation of Permanent Impairment, and expert consultation. Our 
core values are integrity, service and excellence.
    Dr. Brigham has performed surveys that have concluded that the 
ratings have been too high under the Fifth Edition; it is these 
conclusions that seem to underpin key changes in the Sixth Edition. The 
text of the Sixth Edition specifically discourages use of the Guides by 
treating physicians and tells rating physicians that they need 
``significant training.'' Guides 6th p. 35; Dr. Brigham's business is a 
primary conveyor of that training. All of this certainly raises a 
concern regarding an appearance of a conflict of interest that is 
troubling in view of the controversy surrounding the Guides.
    Status of the Guides' usage in workers' compensation programs:
    Adoption of the Guides, and particularly the Sixth Edition, has not 
been without controversy. Nevertheless, 44 state jurisdictions use one 
of the editions of the Guides. Many states as well as Ontario, FECA, 
FELA, and the Washington D.C. compensation system are mandated to use 
the most recent edition of the Guides in evaluation of workers for PPD. 
Appendix 4, drawn from Dr. Brigham's 2008 article, shows the projected 
adoption of the various editions of the Guides as of the time that the 
Sixth Edition was published.
    Disputes regarding adoption of the Sixth Edition have arisen in 
several states, including Iowa and Kentucky. In Kentucky the 
legislature voted to delay adoption of this edition. The Sixth Edition 
was not imported into the EEOICPA, perhaps because of the importance of 
pulmonary impairment ratings in that system.
    Some states continue to use the Fourth or the Fifth Edition. A few 
states have chosen to develop their own rating systems (including 
Florida, Illinois, Minnesota, New Jersey, New York, North Carolina, 
Utah and Wisconsin). Some states do not use a specified rating guide, 
although it is unclear whether physicians refer to the Guides in doing 
evaluations for workers' compensation. California now chooses to use 
the Guides, but uses a process by which the WPI rating from the Guides 
is adjusted for diminished earning capacity and modified based on 
occupation and age.
    In 2007, an Institute of Medicine Committee charged with studying 
Veterans Disability Benefits recommended that the Veterans 
Administration update its own rating schedule rather than adopting an 
alternative impairment schedule, explicitly rejecting the AMA Guides, 
because the Guides measures and rates impairment and, to some extent, 
daily functioning, but not disability or quality of life.
What is to be done?
    The critical issue in all of this technical discussion is this: The 
Guides has a direct effect on the permanent partial disability benefits 
provided by workers' compensation programs to injured workers. The 
Guides is currently the presumptive gold standard and is therefore used 
in large numbers of jurisdictions, and the authors of the Sixth Edition 
are advocating for its expanded use in the United States and elsewhere. 
While admitting the fact that there is no empirical basis for the WPI 
quantifications, the Sixth Edition decreases the availability of 
benefits and thereby increases the externalization of economic costs of 
injuries from workers' compensation systems.
    There is no question that ``achieving cost-efficient outcomes and 
both horizontal and vertical equity (equal treatment of equals and 
unequal treatment of those with varying levels of disability) remains 
elusive.'' \17\ It is not, however, true that disability is impossible 
to measure. Researchers have studied nonwork disability and compared 
the ratings in the Guides (3rd) to loss of enjoyment of life using an 
accepted methodology in the field of psychology.\18\ Studies have also 
been done on the relationship of impairment ratings to actual loss of 
earnings experienced by workers with work-related injuries.\19\
    It is true that a reliable and valid tool is challenging to 
develop, and this may require further research. The existing studies 
do, however, show an important level of consistency that can form the 
basis of a new empirically-driven rating system.
    The status quo, in which the AMA Guides to the Evaluation of 
Permanent Impairment forms the basis for these discussions, is simply 
unacceptable. With the widespread adoption of the Guides, a small 
number of physicians is designing the system based on consensus without 
validation or any real attention to justice. The Sixth Edition has only 
made this worse. We are pessimistic about the ability of the AMA to 
produce a Guides that serves the real needs of workers' compensation 
programs for impairment ratings that are accurate predictors of work 
disability.\20\
    We can improve the approach and increase by validity and 
reliability, but I doubt that we can turn to the AMA in this effort. As 
the Guides itself indicates in each edition, physicians lack the 
necessary expertise to assess non-medical issues. Moreover, they are 
driven by normative judgments of `what is right'--thus making social 
policy in the guise of medical science. Despite the availability of 
both recent studies and the historical information in workers' 
compensation statutes, the AMA has continued to publish Guides with 
ratings that do not incorporate the available data.
    I urge that you ask the National Academies of Science/Institute of 
Medicine to conduct a review. This review should include 
recommendations regarding the best way to develop a new system for 
rating workers' injuries as measured by the impact of those injuries 
and diseases on the extent of permanent impairments, limitations in the 
activities of daily living, work disability and nonwork disability (or 
noneconomic losses).
    The alternative would be for the various workers' compensation 
systems--both federal and state--to develop their own mechanisms that 
do not rely so heavily on the Guides. The current furor over the Sixth 
Edition suggests that there is considerable concern in some 
jurisdictions regarding this issue. Nevertheless, I think that there is 
strong interest in a `gold standard' for PPD evaluation, and it is 
doubtful this will be produced in any single jurisdiction.
    Thank you for the opportunity to appear before you today. I would 
be happy to answer any questions that you may have.
                                endnotes
    \1\ E. Spieler, P. Barth, J.F. Burton, Jr, J. Himmelstein, L. 
Rudolph (2000) Recommendations to Guide Revision of the Guides to the 
Evaluation of Permanent Impairment. JAMA 283 (4) 519-523.
    \2\ I. Sengupta, V. Reno and J.F. Burton, Jr. (2010) Workers' 
Compensation: Benefits, Coverage, and Costs, 2008. Washington, DC: 
National Academy of Social Insurance.
    \3\ This information is drawn from P.S. Barth (2003-2004). 
Compensating Workers for Permanent Partial Disabilities. Social 
Security Bulletin 65(4) 16-23.
    \4\ These acknowledged criticisms included: ``There was a failure 
to provide a comprehensive, valid, reliable, unbiased, and evidence-
based rating system; Impairment ratings did not adequately or 
accurately reflect loss of function; Numerical ratings were more the 
representation of `legal fiction than medical reality.' '' Guides 6th( 
2)
    \5\ The Sixth Edition adopts five new ``axioms'': (1) The Guides 
adopts the terminology and conceptual framework of disablement as put 
forward by the International Classification of Functioning, Disability, 
and Health (ICF). (2) The Guides becomes more diagnosis based with 
these diagnoses being evidence-based when possible. (3) Simplicity, 
ease-of-application, and following precedent, where applicable, are 
given high priority, with the goal of optimizing interrater and 
intrarater reliability. (4) Rating percentages derived according to the 
Guides are functionally based, to the fullest practical extent 
possible. (5) The Guides stresses conceptual and methodological 
congruity with and between organ system ratings. Guides 6th (2-3).
    \6\ C.Brigham. (2008) AMA Guides Sixth Edition: New Concepts, 
Challenges and Opportunities'' IAIABC Journal 45(1) 13- 57.
    \7\ E. Spieler & J.F. Burton. (2010)The Distressing Lack of 
Correspondence Between Work-Related Disability and the Receipt of 
Workers' Compensation Benefits. Unpublished paper.
    \8\ According to Dr. Brigham, ratings done under prior editions had 
high rates of error. He assembled a group of experts to review ratings 
by other physicians and they disagreed with 78% of the ratings: the 
average WPI of the raters was 20.4% and the re-rating was 7.3%. He 
concludes that the ratings being given to injured people were too high, 
and the Sixth Edition is specifically designed to correct for this. 
C.R. Brigham, W. F. Uehlein, C.Uejo, L.Dilbeck. (2008) AMA Guides Sixth 
Edition: Perceptions, Myths, and Insights. IAIABC Journal 45(2) 65-81. 
Compare this with the statement by Dr. Mueller regarding treating 
physicians.
    \9\ Brigham, supra n. 6.
    \10\ K. L. Mueller. (2008) The 6th Edition of the AMA Guide to 
Permanent Impairment: Its Foundation, Implications for Jurisdictional 
Use, and Possible Future Directors. IAIABC Journal 45(2) 35-47, 42.
    \11\ See note 8, supra.
    \12\ Top WPI ratings for severe impairments were lowered from the 
Fifth to the Sixth Editions of the Guides as follows: for pulmonary 
impairment and hypertension from 100% to 65% WPI; for upper and lower 
digestive tract impairments from 75% to 60% WPI; for liver or biliary 
tract disease from 95% to 65% WPI; for upper urinary tract disease from 
95% to 75% WPI; for bladder disease from 70% to 29% WPI; for urethral 
disease from 40% to 28%WPI; for penile disease from 20% to 15% WPI; for 
vulval and vaginal disease and for cervical & uterine disease from 35% 
to 20% WPI; skin disorders from 95% to 58% WPI; anemia from 100% to 75% 
WPI; hypothalamic-pituitary axis from 50% to 14% WPI; thyroid 
abnormalities from 25% to 20% WPI; for diabetes mellitus from 40% to 
28% WPI; for hypoglycemia from 50% to 6% WPI; for vestibular (balance) 
disorders from 95% to 58% WPI; facial disorders 50% to 45% WPI; air 
passage disorders 90+% to 58% WPI; episodic loss of consciousness or 
awareness 70% to 50% WPI.
    \13\ K.L. Mueller (2008) The 6th Edition of the AMA Guide to 
Permanent Impairment: Its Foundation, Implications for Jurisdictional 
Use, and Possible Future Directors. IAIABC Journal 45(2) 35-47, 37
    \14\ For a listing of additional specific changes in 
musculoskeletal ratings, using the case examples given in the Guides, 
see T. McFarren (2008), AMA Guides, Sixth Edition Arrive on the Scene, 
http://www.lexisnexis.com/Community/workerscompensationlaw/blogs/
workerscompensationlawblog/archive/2010/02/17/AMA-Guides--2C00--Sixth-
Edition-Arrive-on-the-Scene.aspx
    \15\ Spieler et al, supra, n. 1.
    \16\ Spieler et al, supra n. 1, at 523.
    \17\ Peter Barth (2010) Workers' compensation before and after 
1983. In R.Victor & L.Carrubba (Eds.), Workers' Compensation: Where 
Have We come From? Where Are We Going?. Workers Compensation Research 
Institute.
    \18\ Sinclair, S. & Burton, J.F., Jr. (1994). Measuring noneconomic 
loss: quality-of-life values vs. clinical impairment ratings. Workers' 
Compensation Monitor, 7,4, 1-14; Sinclair, S. & Burton, J.F., Jr. 
(1995). Development of a schedule for compensation of noneconomic loss: 
quality-of-life values vs. clinical impairment ratings. In T. Thomason 
& R.P. Chaykowski (Eds.), Research in Canadian Workers' Compensation, 
pp. 123-140. Kingston, ON: IRC Press; Sinclair, S. & Burton, J.F., Jr. 
(1997). A response to the comments by Doege and Hixson. Workers' 
Compensation Monitor, 10(1) 13-17.
    \19\ Berkowitz, M. &. Burton, J., Jr. (1987). Permanent disability 
benefits in workers' compensation. Kalamazoo, MI: W.E. Upjohn Institute 
for Employment Research; Boden, L.I., Reville, R.T. & Biddle, J. 
(2005). The adequacy of workers' compensation cash benefits. In. K. 
Roberts, J.F. Burton, Jr., & M. M. Bodah (Eds.), Workplace Injuries and 
Diseases: Prevention and Compensation: Essays in Honor of Terry 
Thomason. (pp. 37-68). Kalamazoo, MI: W.E. Upjohn Institute for 
Employment Research; Reville, R.T., Seabury, S.A., Neuhauser, F.W., 
Burton, J.F., Jr., & Greenberg, M.D. (2005). An evaluation of 
California's permanent disability rating system. Santa Monica, CA: RAND 
Institute for Civil Justice.
    \20\ John F. Burton, Jr. (2010) The AMA Guides and Permanent 
Partial Disability Benefits. IAIABC Journal 45 (2), 13-35.
                                 ______
                                 
    Chairwoman Woolsey. Mr. Burton.

    STATEMENT OF JOHN BURTON, PROFESSOR EMERITUS, SCHOOL OF 
 MANAGEMENT AND LABOR RELATIONS, RUTGERS UNIVERSITY AND SCHOOL 
     OF INDUSTRIAL AND LABOR RELATIONS, CORNELL UNIVERSITY

    Mr. Burton. Chairwoman Woolsey, ranking member Rodgers, 
Congressman Payne and other members of the Subcommittee on 
Workforce Protections. Thank you for the opportunity to testify 
about workers' compensation.
    As you know, each State has a workers' compensation program 
that provides cash benefits, medical care, and rehabilitation 
services. There are no Federal standards for these State 
workers' compensation programs, and as a result, there are 
substantial differences among jurisdictions in terms of level 
of benefits, coverage of employers and employees, and the rules 
used to determine which disabled workers are eligible for 
benefits.
    Over the past 100 years, there have been periods of reform 
and regression in workers' compensation. As an example, the 
level of workers' compensation cash benefits declined 
substantially in the decades immediately after World War II, 
and one consequence of this deterioration was the creation as 
part of the Occupational Safety and Health Act of 1970 of the 
National Commission on State Workmens' Compensation Laws. The 
National Commission issued its report in 1972 critical of the 
State workers' compensation programs, described them as, in 
general, neither adequate nor equitable, and the National 
Commission made a number of recommendations for State programs 
and described 19 of them as essential.
    And in the aftermath of the National Commission's report, 
there were substantial changes in a number of State laws 
improving these laws. But that improvement has come to a halt, 
and if anything, a decline. At the risk of oversimplifying the 
last 40 years, I would say the 1970s were a reformation period, 
the 1990s was a relative tranquility period, and the years 
since 1990 are the counter-reformation period.
    A number of States changed their laws during the 1990s to 
reduce eligibility for benefits in contrast to the historical 
standards for compensability and workers' compensation, and 
Dean Spieler and I have written extensively on those 
developments.
    There has also been research to quantify the impact of 
these changes in State laws, and I will mention some work that 
I have done with Professor Guo. Steve Guo and I have looked at 
changes in State laws during the 1990 and found that these 
changes in levels of benefits and in compensability standards 
were the major source of the decline in cash benefits during 
the 1990s more so than the decline in the injury rate.
    There have been changes in the current decade that continue 
this process of cutting back on State workers' compensation 
laws, and I mentioned several of these in my written testimony, 
which I will skip over here.
    Now, the Social Security Disability Insurance Program is 
the largest income replacement program for nonelderly 
Americans. And as you know, this is a Federal program with 
Federal rules that are standardized throughout the country.
    Workers' compensation and the SSDI program serve 
overlapping, although identical, populations. And Congress has 
been concerned for a long time about the relationship between 
workers' compensation benefits and SSDI benefits. Since 1965, 
there has been a provision requiring that the combined total of 
the two benefits not exceed 80 percent of pre-injury earnings. 
And Congress has continued to be concerned about this issue and 
has made some subsequent changes in these offset provisions.
    I think there are several reasons why Congress needs to be 
concerned about the possible shifting of costs from State 
workers' comp programs to the Federal SSDI program. For one 
thing, you have the 15 States which essentially reduce workers' 
compensation benefits as a way of making sure the combined 
total of SSDI and workers' compensation do not exceed 80 
percent. There are also reasons to be concerned because of the 
fact that safety incentives and workers' compensation depend 
upon the costs being charged back against employers. To the 
extent these costs are shifted, we have a reduction in the 
safety incentives from workers' compensation.
    There is some evidence about the cost shifting that is in 
the paper, again, some work that Professor Guo and I are doing 
indicating that the changes in the 1990s were, in fact, 
responsible for some portion of the increase in SSDI 
applications during the 1990s. There is mixed evidence on this 
question. We are doing additional research, but I think there 
is at least, if not a red flag, an orange flag here that is 
waving saying we need to be concerned about what is happening 
in workers' compensation because of its impact for SSDI.
    I suggest some policy changes for workers' compensation. My 
own view, Federal standards for workers' compensation are 
desirable. I note in here that the National Commission's 
recommendations were unanimous, and the members of that 
National Commission were basically Republicans appointed by the 
Nixon White House. And if it could be done in the Nixon White 
House Republicans, there is no reason why we can't do it in the 
present time.
    And I also offer some suggestions for the SSDI program. The 
Federal Government has already taken efforts to stop the 
transferring of medical costs from State workers' compensation 
programs to the Medicare program, and I propose here a modest 
piece of legislation that would also limit the ability of the 
States to shift the cash benefit portion of workers' 
compensation into the SSDI program.
    Thank you. I appreciate your toleration of my going over a 
little bit here.
    Chairwoman Woolsey. Thank you, Mr. Burton.
    [The statement of Mr. Burton follows:]

     Prepared Statement of John F. Burton, Jr., Professor Emeritus,
               Rutgers University and Cornell University

    Chairwoman Woolsey, Ranking Member Rodgers, and Members of the 
Subcommittee on Workforce Protections: Thank you for the opportunity to 
testify about ``Workers' Compensation: Recent Developments and the 
Relationship with Social Security Disability Insurance.''
    I am an Emeritus Professor at Rutgers University and at Cornell 
University. I was the Dean of the School of Management and Labor 
Relations at Rutgers from 1994 to 2000. I have conducted research and 
served as consultant on workers' compensation throughout my career. I 
was the Chairman of the National Commission on State Workmens' 
Compensation Laws, which submitted its Report to the Congress and to 
President Richard Nixon in 1972. I am Chair of the Workers' 
Compensation Data Study Panel of the National Academy of Social 
Insurance.
Workers' Compensation: Overview and Developments
    Each state has a workers' compensation program that provides cash 
benefits, medical care, and rehabilitation benefits to workers who are 
disabled by work-related injuries and diseases as well as survivors' 
benefits to families of workers who experience workplace fatalities. 
There are also several federal workers' compensation programs. However, 
there are no federal standards for state workers' compensation 
programs, and there are considerable differences among the states in 
the level of benefits, the coverage of employers and employees, and the 
rules used to determine which disabled workers are eligible for 
benefits.
    The initial state workers' compensation programs were enacted in 
1911, which makes workmens' compensation (as the program was known 
until the 1970s) the oldest social insurance program in the U.S. Over 
the last 100 years, workers' compensation programs have experienced 
periods of reform and regression.
    As an example, the level of workers' compensation cash benefits 
relative to wages deteriorated in most states in the decades after 
World War II. One consequence of the deterioration in state workers' 
compensation programs was the creation of the National Commission on 
State Workmens' Compensation Laws by the Occupational Safety and Health 
Act of 1970.
    The National Commission's 1972 Report was critical of state 
workers' compensation programs, describing them as ``in general neither 
adequate nor equitable.'' The National Commission made 84 
recommendations, and described 19 of the recommendations as essential. 
The reforms in state workers' compensation programs in the next few 
years were impressive: the average state compliance score with the 19 
essential recommendations increased from 6.9 in 1972 to 11.1 in 1976 to 
12.0 1980 (Robinson et al. 1987: Table 1). But reform of most state 
workers' compensation laws then slowed, so that by 2004 (when the U.S. 
Department of Labor stopped monitoring the states), on average states 
complied with only 12.8 of the 19 essential recommendations of the 
National Commission (Whittington 2004).
    At the risk of oversimplifying the almost 40 years since the 
National Commission submitted its Report, I would characterize the 
1970s as the Reformation Period, the 1980s as the Relative Tranquility 
Period, and the years since 1990 as the Counter Reformation Period. The 
extent of the deterioration in adequacy and equity of state workers' 
compensation programs in the last 20 years is not reflected in 
compliance scores with the essential recommendations of the National 
Commission. Rather, the slippage has occurred in other aspects of the 
program. A number of states changed their workers' compensation laws 
during the 1990s to reduce eligibility for benefits (Spieler and Burton 
1998). These provisions included limits on the compensability of 
particular medical diagnoses, such as stress claims and carpal tunnel 
syndrome; limits on coverage when the injury involved the aggravation 
of a preexisting condition; restrictions on the compensability of 
permanent total disability cases; and changes in procedural rules and 
evidentiary standards, such as the requirement that medical conditions 
be documented by ``objective medical'' evidence.
    Research indicates that these legislative changes affected the 
workers' compensation benefits received by injured workers. For 
example, in 1990 Oregon adopted legislation that required that the work 
injury be the ``major contributing cause'' of the claimant's disability 
for the worker to qualify for workers' compensation benefits. Thomason 
and Burton (2005) estimated that this and similar changes reduced the 
amount of benefits received by Oregon workers by about 25 percent by 
the mid-1990s. Guo and Burton (2010) found that changes in state 
compensability statues and rules and more stringent administrative 
practices were major contributors to the decline in workers' 
compensation cash benefits during the 1990s. More of the decline in 
workers' compensation cash benefits in the states during the 1990s is 
explained by these changes in workers' compensation provisions and 
practices than is explained by the drop in workplace injuries and 
diseases during the decade.
    The changes in workers' compensation programs in the current decade 
have not yet been analyzed using the methodology relied on by Guo and 
Burton (2010). However, my impression is that the statutory and 
regulatory changes in recent years may have carried the Counter 
Reformation Period to new levels. One traditional ``principle'' of 
workers' compensation is that ``the employer takes the worker as she 
[the employer] finds him [the employee]''. As a practical matter, this 
principle meant that if an employee had a previous medical condition 
that had not resulted in lost earnings, and if the employee had a 
workplace injury that produced a degree of disability that was due to 
the combination of the new workplace injury and the previous medical 
condition, the employer was responsible for all of the consequences of 
the workplace injury, including those that resulted from the 
interaction of the previous medical condition and the new workplace 
injury. While there were serious inroads into this principle in the 
1990s, the current decade has added a new challenge. California now 
apportions permanent partial disability awards so the employer is only 
responsible for the portion of the permanent disability that can be 
attributed to the new workplace injury.
    The current decade also appears to have unusually significant 
reductions in the amount of benefits that workers are entitled to 
receive if they qualify for permanent partial disability (PPD) 
benefits. Since 2000, workers' compensation reforms reduced PPD 
benefits in several large states. California, Florida, and New York 
accounted for almost one-third of all workers' compensation benefit 
payments as of mid-decade (2005) (Sengupta, Reno, and Burton 2010, 
Table 7). Between 2000 and 2009, California reduced permanent partial 
disability benefits by over 60 percent, Florida reduced PPD benefits by 
almost 20 percent, and New York reduced PPD benefits by about 20 
percent (NCCI 2010, Exhibit III).
Social Security Disability Insurance
    Social Security Disability Insurance (SSDI) is the largest income 
replacement program for non-elderly Americans. The coverage rules for 
employers and workers, the eligibility standards for SSDI benefits, and 
the benefit levels are determined at the federal level. The federal 
SSDI and Medicare programs provide cash benefits and health care 
coverage to disabled beneficiaries until they return to work, die, or 
qualify for Social Security Old Age benefits. The SSDI cash benefits 
are provided to former workers (and their dependents) who are totally 
disabled from any cause. In addition, Medicare benefits and 
rehabilitation benefits are provided regardless of the cause of the 
disability.
    There are important limits on SSDI and Medicare benefits for 
disabled persons. SSDI benefits are only provided to workers with an 
extended period of covered employment prior to disability. Benefits are 
paid regardless of the cause of the disability, but only when the 
disability precludes substantial gainful employment. SSDI benefits only 
begin after a five-month waiting period and Medicare benefits are only 
available twenty-nine months after the onset of total disability.
Differences Between Workers' Compensation and SSDI
    Workers' compensation differs from Social Security Disability 
Insurance and Medicare in important ways. Workers are eligible for 
workers' compensation benefits from the first day of employment. 
Workers' compensation medical benefits are paid immediately after the 
injury occurs. Temporary disability benefits are paid after a waiting 
period of three to seven days; permanent partial and permanent total 
disability benefits are paid to workers who have lasting consequences 
from injuries and diseases caused by the job; and every state pays 
benefits to survivors of workers who die of work-related injuries and 
diseases. The most expensive type of workers' compensation benefits 
involves workers with permanent, but partial, disabilities.
Relationship Between Workers' Compensation and SSDI
    SSDI (in conjunction with Medicare) is the largest source of cash 
and medical benefits for disabled workers in the U.S. and workers' 
compensation is the second largest source. Workers' compensation and 
SSDI serve overlapping, although not identical, populations. Both 
programs pay medical and cash benefits to workers' with chronic, 
severely disabling conditions. SSDI benefits are limited to workers 
whose injury or disease precludes substantial gainful employment. To 
use workers' compensation terminology, SSDI benefits are limited to 
persons who are permanently and totally disabled.
    Workers' compensation is the only significant civilian disability 
income program, either private or public, that pays benefits to workers 
who are either partially or totally disabled.\1\ However, the criteria 
used by state workers' compensation programs to determine whether a 
worker is totally disabled differ from those used by the Social 
Security Administration (SSA) for the SSDI program. Consequently, it is 
possible for an injured worker to be judged totally disabled by the 
SSA, and thus eligible for SSDI benefits, but only partially disabled 
by a state workers' compensation program. Furthermore, the criteria 
used to determine the extent of disability vary among state workers' 
compensation programs.
---------------------------------------------------------------------------
    \1\ Accidental death and dismemberment (AD&D) insurance provides 
benefits if an accident results in an employee's death or certain 
dismemberments enumerated in the insurance contract.
---------------------------------------------------------------------------
            Coordination of Benefits
    Congress has long been concerned about the relationship between 
workers' compensation benefits and the SSDI benefits since some 
individuals qualify for benefits from both programs. The payment of 
SSDI and workers' compensation benefits has been coordinated since 
1965. Specifically, if a person is receiving both SSDI and workers' 
compensation benefits, the combined benefits are limited to 80 percent 
of the claimant's preinjury wages. Federal law provides as a 
``default'' that SSDI benefits are reduced or ``offset'' in order to 
achieve the 80 percent limit. Initially, states could enact laws that 
reduced workers' compensation benefits rather than SSDI benefits (which 
are known as ``reverse offset'' laws). However, in 1981 Congress 
eliminated this option for all but the 15 states that already had 
``reverse offset'' legislation.
    Congress appears to have had several overlapping purposes with the 
offset provision. First, by limiting the combined SSDI and workers' 
compensation benefits to 80 percent of preinjury wages, the total costs 
of the programs are reduced for workers who continue to qualify for 
both programs. Second, by limiting the portion of preinjury wages that 
is replaced, workers are encouraged to engage in rehabilitation and to 
return to work rather than continue to receive disability benefits from 
the two programs. Third, the 1981 decision to prohibit additional 
states from adopting reverse offset laws was motivated by an effort to 
protect the financial status of the federal SSDI Trust Fund rather than 
allow the savings from the 80 percent limit on benefits to be returned 
to employers and carriers in state workers' compensation programs.
    As of December 2009, 7.9 percent of SSDI beneficiaries had a 
current connection to workers' compensation or public sector disability 
programs, including beneficiaries in reverse offset states, and an 
additional 7.0 percent of SSDI beneficiaries had a previous connection 
to workers' compensation (Sengupta, Reno, and Burton 2010, Table 17).
            Possible Shifting of Costs from Workers' Compensation to 
                    SSDI
    There are several reasons why Congress should be concerned about 
the possible shifting of the costs of workplace injuries and diseases 
from the state workers' compensation programs to the federal SSDI 
program.
    First, the 15 states with ``reverse offset'' provisions allow 
carriers and employers to reduce workers' compensation benefits when 
the SSDI program is paying benefits to disabled workers, thereby 
requiring the federal program to pay for some of the consequences of 
workplace injuries and diseases.
    Second, there is evidence indicating that the SSDI program is 
paying benefits to workers who were disabled at work but who did not 
qualify for workers' compensation benefits. Reville and Schoeni (2003/
2004) examined a nationally representative sample of persons aged 51 to 
61 in 1992. Among those who reported a health condition caused by their 
work, only 12.3 percent ever received workers' compensation benefits, 
while 29 percent were currently receiving SSDI benefits.
    Third, the Reville and Schoeni results pertain to a 1991 sample, 
but there have been changes in workers' compensation programs since 
then that are likely to have further increased the number of workers 
whose disabilities were caused by the workplace who do not qualify for 
workers' compensation benefits. Burton and Spieler (2001) suggested 
that these changes are likely to have a disproportional effect on older 
workers, who in turn are the most likely applicants for SSDI benefits.
    Fourth, as Sengupta, Reno, and Burton (2010:43-44) recently 
observed: ``The opposite trends in workers' compensation and Social 
Security disability benefits during much of the last twenty-five years 
raise the question of whether retrenchments in one program increase 
demands placed on the other, and vice versa. The substitutability of 
Social Security disability benefits and workers' compensation for 
workers with severe, long-term disabilities that are, at least 
arguably, work related or might be exacerbated by the demands or work, 
has received little attention by researchers and is not well 
understood.''
    Fifth, workers' compensation programs rely on experience rating of 
premiums, which are based in part on benefits paid by all firms in the 
industry and in part on the firm's own benefits compared to other firms 
in the industry. In theory, firms have incentives to improve safety in 
order to reduce premiums and to remain competitive. While the evidence 
supporting the theory is mixed, Thomason (2005: 26) concluded ``Taken 
as a whole, the evidence is quite compelling: experience rating 
works.'' To the extent that the costs of workplace injuries are shifted 
from workers' compensation to SSDI, the safety incentives provided by 
the workers' compensation program are diluted.
            Evidence on the Shifting of Costs from Workers' 
                    Compensation to SSDI
    There are several studies examining whether the changes in the 
workers' compensation programs during the 1990s resulted in more 
applications for SSDI benefits. Xuguang (Steve) Guo and I published an 
article (Guo and Burton 2008) examining the application rates for SSDI 
benefits in approximately 45 jurisdictions between 1985 and 1999.\2\ We 
found that higher levels of expected cash benefits provided by workers' 
compensation programs relative to state average weekly wages are 
associated with lower application rates for SSDI benefits. Since 
expected workers' compensation cash benefits actually declined during 
the 1990s, the variable helped explain higher SSDI application rates 
during the decade. We also found that tightening compensability rules 
in state workers' compensation programs are associated with higher 
application rates for SSDI benefits. Since the compensability rules 
were tightening during the 1990s, this variable also helped explain an 
increase in SSDI applications during the decade.
---------------------------------------------------------------------------
    \2\ Professor Xuguang (Steve) Guo and I receive support for our 
study of the relationship between the workers' compensation program and 
the SSDI program from the Program for Disability Research (PDR) in the 
School of Management and Labor Relations at Rutgers: The State 
University New Jersey. The PDR has a subcontract from the Employment 
and Disability Institute at the School of Industrial and Labor 
Relations at Cornell University, which receives support from the 
National Institute on Disability and Rehabilitation Research (NIDRR).
---------------------------------------------------------------------------
    Professor Guo and I have been refining our model and methodology in 
the last two years, including the improvement of the variables 
measuring factors other than those pertaining to the workers' 
compensation programs that help explain applications for SSDI benefits. 
Our recent (and as yet unpublished) results indicate that the aging 
population was the largest contributor of the growth in SSDI 
applications during the period we examined (1981-1999), and can explain 
more than half the growth SSDI rolls in 1990s. The share of female 
employment is another important factor, which was associated with 
almost 18 percent of the change of SSDI applications between the 1980s 
and 1990s.\3\ Our results suggest that reduction in the amounts of 
workers' compensation permanent disability benefits and the tightening 
of eligibility rules for workers' compensation permanent disability 
benefits during the 1990s accounted for about 3 to 4 percent of the 
growth of SSDI applications during the decade.
---------------------------------------------------------------------------
    \3\ The SSDI replacement rate and the Unemployment rate generally 
declined across those two decades, which inter alia would have resulted 
in fewer SSDI applications, and the change in the disability prevalence 
rate was minimal during the same period. Thus those three factors were 
not the sources of SSDI growth in the 1990s.
---------------------------------------------------------------------------
    The finding that applications for SSDI benefits during the 1990s 
were affected by changes in workers' compensation programs must be used 
with caution. Professor Guo and I received this month the data for SSDI 
applications by state for years after 2001. We do not currently have 
the values after 1999 for the workers' compensation variables we used 
to analyze the SSDI application rates during the 1981 to 1999 period. 
However, in very preliminary work, we did not find that the changes in 
other measures of the workers' compensation programs through 2006 
helped explain the changes in SSDI applications during the current 
decade. In addition, an unpublished article by McInerney and Simon 
(2010) of the determinants of SSDI applications concluded that it was 
unlikely that state workers' compensation changes were a meaningful 
factor in explaining the rise in SSDI applications and SSDI new cases 
during the period from 1986 to 2001.
    There is thus some modest, although not compelling, empirical 
evidence that changes in workers' compensation programs since the early 
1990s resulted in additional applications for SSDI benefits. The need 
for additional research on this issue is obvious.
Policy for Workers' Compensation
    The developments in state workers' compensation programs in the 
last two decades are reminiscent of the deterioration of state workers' 
compensation programs in the decades prior to 1972, when the National 
Commission on State Workmens' Compensation Laws concluded that ``State 
workmens' laws are in general neither adequate nor equitable.''
    If the plight of workers' compensation in 2010 sounds like that of 
1972, then the fundamental causes of the problems of the workers' 
compensation program also have a familiar tone. As the National 
Commission observed (1972: 124-125):
    The economic system of the United States encourages efficiency and 
mobility. These forces tend to drive employers to locate where the 
environment offers the best prospect for profit. At the same time, many 
of the programs which governments use to regulate industrialization are 
designed and applied by States rather than the Federal government. Any 
State which seeks to regulate the byproducts of industrialization, such 
as work accidents, invariably must tax or charge employers to cover the 
expenses of such regulations. This combination of mobility and 
regulation poses a dilemma for policymakers in State governments. Each 
state is forced to consider how it will regulate its domestic 
enterprises because relatively restrictive or costly regulations may 
precipitate the departure of employers to be regulated or deter the 
entry of new enterprises.
    Can a State have a modern workers' compensation program without 
driving employers away? * * * While the facts dictate that no State 
should hesitate to improve its workmens' compensation program for fear 
of losing employers, unfortunately this appears to be an area where 
emotion too often triumphs over fact. * * * it seems likely that many 
States have been dissuaded from reform of their workmens' compensation 
statute because of the specter of the vanishing employer, even if that 
apparition is a product of fancy not fact. A few states have achieved 
genuine reform, but most suffer with inadequate laws because of the 
drag of laws of competing States.
    If the current plight of state workers' compensation programs and 
the cause of the deficiencies strike a familiar chord with those from 
1972, so do the basic solutions resonate across the years. One approach 
considered and rejected by the National Commission was federalization 
of the state workers' compensation programs--that is the enactment of a 
federal workers' compensation law that would displace state laws and 
turn over the administration of a national workers' compensation 
program to federal employees. In contrast, the policy recommended by 
the National Commission to enhance the virtues of a decentralized, 
state-administered workers' compensation programs was the enactment of 
federal standards for the state programs if necessary to guarantee 
state compliance with the 19 essential recommendations of the National 
Commission
    The notion of federal standards for workers' compensation is 
probably unrealistic in the current political environment. And 
determination of appropriate federal standards for a 21st century 
workers' compensation program would probably be more difficult now than 
it was in 1972. The fact that most of the recent deterioration in state 
workers' compensation laws has involved tightening of eligibility 
standards in ways unforeseen prior to the 1990s suggests how difficult 
it would be to frame new federal standards to deal with current 
manifestations of lack of adequacy and equity. But if the National 
Commission on State Workmens' Compensation Laws, whose members largely 
consisted of Republicans appointed by the Nixon White House, could 
unanimously endorse federal standards in 1972, I do not totally despair 
that Congress or some other responsible organization could in the 
current era reaffirm the National Commission's final sentence: ``the 
time has now come to reform workmens' compensation substantially in 
order to bring the reality of the program closer to its promise.'' And 
the advantage of federal standards as a way to conserve the essential 
characteristics of the state-run workers' compensation system--however 
paradoxical at first glance--also warrants reaffirmation.
Policy for SSDI
    My research with Professor Guo provides the first evidence we have 
seen that changes in workers' compensation programs since 1990 
increased the number of applications to the SSDI program. As I 
indicated, the evidence is not conclusive and the relationship between 
workers' compensation and SSDI needs further research. But if 
additional research confirms our preliminary findings about the 
shifting of costs of workplace injuries and diseases from workers' 
compensation to SSDI, one consequence will be the aggravation of the 
financial problems of the federal program.\4\
---------------------------------------------------------------------------
    \4\ According to the latest report of the Social Security Trust 
Funds (Social Security Board of Trustees 2010, 28) ``Total DI 
disbursements, which started to exceed non-interest income in 2005, 
continue to exceed such income in 2009. In 2009, DI disbursements 
exceeded total DI income (including interest), the first time DI assets 
have declined on an annual basis since 1993.''
---------------------------------------------------------------------------
    Congress has previously enacted legislation to protect the SSDI 
program from costs being shifted from state workers' compensation 
programs. There are two types of new legislation that could serve the 
Congress's legitimate role in protecting the SSDI program from 
increased applications resulting from lower permanent disability 
benefits and more restrictive compensability standards in workers' 
compensation.
    First, Congress could enact Federal standards for state workers' 
compensation programs that require states to provide adequate permanent 
disability benefits to workers who can establish that their 
disabilities were caused by the workplace using causation standards 
that do not contain the restrictive provisions adopted by many states 
since the early 1990s.
    Second, Congress could enact legislation treating applications for 
cash benefits from the SSDI program in a manner roughly similar to the 
current Federal policy for Medicare benefits when the patient's need 
for medical care is due at least in part to a workplace injury or 
disease. Under the Medicare Secondary Payer Act, certain types of 
workers' compensation claims must set aside funds to cover medical 
expenses that might otherwise be shifted to the Medicare Program.
    The principle for medical benefits could be adapted to cash 
benefits by the enactment of the Social Security Disability Insurance 
Secondary Payer Act (SSDISPA).
    The SSDISPA would apply to all claims filed for SSDI benefits that:
     Involve injuries or diseases with consequences that last 
at least six months after the date of disablement, and
     Are compensable under the applicable state's workers' 
compensation law or would have been compensable using the work-related 
test included in the Workmens' Compensation and Rehabilitation Law 
(Revised), [Model Workers' Compensation Law], which was published by 
the Council of State Governments in 1974.
    For all claims to which the SSDISPA applies, the employer (or 
carrier) must reimburse the Social Security Administration for all SSDI 
benefits paid because the employer did not pay all of the permanent 
disability benefits required by the Model Workers' Compensation Law.
    I recognize that this proposal for the SSDISPA lacks some important 
components, such as the specification of an agency for determining 
whether the SSDI applications involve injuries or diseases to which the 
SSDISPA is applicable. And there would be additional administrative 
expenses required to implement the SSDISPA. However, there may be no 
alternative to such legislation if Congress is unwilling to enact 
federal standards for state workers' compensation programs and if 
Congress wants to protect the financial integrity of the SSDI program.
    Thank you again for the opportunity to present this testimony.
                               references
Burton, John F., Jr. 2004. ``The National Commission on State Workmens' 
        Compensation Laws.'' Workers' Compensation Policy Review. Vol. 
        4, No. 4 (July/August): 13-20. [The article can be downloaded 
        from www.workerscompresources.com]
Burton, John F., Jr. and Emily A. Spieler. 2001. Workers' Compensation 
        and Older Workers. In Peter P. Burdetti, Richard V. Burkhauser, 
        Janice M. Gregory, and H. Allan Hunt, eds. Ensuring Health and 
        Income Security for an Aging Workforce. Kalamazoo, MI: W.E. 
        Upjohn Institute for Employment Research.
Council of State Governments. 1974. Workmens' Compensation and 
        Rehabilitation Law (Revised). Lexington, KY: The Council of 
        State Governments. Portions reprinted in John F. Burton, Jr. 
        and Florence Blum, eds. Workers' Compensation Compendium 2005-
        06, Volume Two. Princeton, NJ: Workers' Disability Income 
        Systems, Inc.: 104-124.
Guo, Xuguang (Steve) and John F. Burton, Jr. 2008. ``The Relationship 
        Between Workers' Compensation and Disability Insurance.'' In 
        Adrienne E. Eaton, ed. Proceedings of the 60th Annual Meeting 
        of the Labor and Employment Relations Association. Champlain, 
        IL: Labor and Employment Relations Association.
Guo, Xuguang (Steve) and John F. Burton, Jr. 2010. ``Workers' 
        Compensation: Recent Developments in Moral Hazard and Benefits 
        Payments.'' Industrial and Labor Relations Review, Vol. 63, No. 
        2 (January): 340-55.
McInerney, Melissa and Kosali Simon. 2010. ``The Effect of state 
        Workers' Compensation Program Changes on the Use of Federal 
        Social Security Disability Insurance.'' Article currently under 
        review.
National Council on Compensation Insurance [NCCI]. 2010. Annual 
        Statistical Bulletin, 2010 Edition. Boca Raton, FL: National 
        Council on Compensation Insurance.
National Commission on State Workmens' Compensation Laws. 1972. The 
        Report of the National Commission on State Workmens' 
        Compensation Laws. Washington, DC: Government Printing Office. 
        [The Report can be downloaded from 
        www.workerscompresources.com]
Reville, Robert T. and Robert F. Schoeni. 2003/2004. ``The Fraction of 
        Disability Caused at Work.'' Social Security Bulletin, Vol. 65, 
        No. 4: 3-17.
Robinson, June M., John Anderson, Anne Giese, Jamie Goodman, and John 
        F. Burton, Jr. 1987. State Compliance with the 19 Essential 
        Recommendations of the National Commission on State Workmens' 
        Compensation Laws, 1972-84. Washington, DC: U.S. Department of 
        Labor, Employment Standards Administration, Office of Workers' 
        Compensation Programs.
Sengupta, Ishita, Virginia Reno and John F. Burton, Jr. 2010, Workers' 
        Compensation: Benefits, Coverage, and Costs, 2008. Washington, 
        DC: National Academy of Social Insurance.
Social Security Board of Trustees. 2010. The 2010 Annual Report of the 
        Board of Trustees of the Federal Old-Age and Survivors 
        Insurance and Federal Disability Insurance Trust Funds. 
        Washington, DC. Government Printing Office.
Spieler, Emily A. and John F. Burton, Jr. 1998. ``Compensation for 
        Disabled Workers: Workers' Compensation.'' In Terry Thomason, 
        John F. Burton, Jr. and Douglas E. Hyatt, eds, New Approaches 
        to Disability in the Workplace, Madison, WI: Industrial 
        Relations Research Association, 205-44.
Thomason, Terry. 2005. ``Economic Incentives and Workplace Safety.'' In 
        Karen Roberts, John F. Burton, Jr., and Matthew M. Bodah., eds. 
        Workplace Injuries and Diseases: Prevention and Compensation: 
        Essays in Honor of Terry Thomason. Kalamazoo, MI: W.E. Upjohn 
        Institute for Employment Research, 9-35.
Thomason, Terry. and John F. Burton, Jr. 2001. ``The Effects of Changes 
        in the Oregon Workers' Compensation Program on Employees' 
        Benefits and Employers' Costs.'' Workers' Compensation Policy 
        Review, 1 (4), 7-23. [The article can be downloaded from 
        www.workerscompresources.com]
Whittington, Glenn A. 2004. State Workers' Compensation Laws in Effect 
        on January 1, 2004 Compared with the 19 Essential 
        Recommendations of the National Commission on State Workmens' 
        Compensation Laws. Washington, DC: U.S. Department of Labor, 
        Employment Standards Administration, Office of Workers' 
        Compensation Programs. Reprinted in John F. Burton, Jr. and 
        Florence Blum, eds. Workers' Compensation Compendium 2005-06, 
        Volume Two. Princeton, NJ: Workers' Disability Income Systems, 
        Inc.: 91-103.
                                 ______
                                 
    Chairwoman Woolsey. Dr. Nimlos.

                STATEMENT OF JOHN NIMLOS, M.D.,
                OCCUPATIONAL MEDICINE CONSULTANT

    Dr. Nimlos. Good morning, Chairwoman Woolsey, Ranking 
Member Ms. McMorris Rodgers, and subcommittee members. I am a 
medical doctor specializing and board certified in occupational 
medicine. I treat employees for injuries and illness incurred 
in the workplace. For 24 years, I have examined workers under 
two different State workers' compensation systems as well as 
Federal employees under the Federal Employees Compensation Act 
and the Longshore and Harborworkers Act.
    I make decisions every day about impairment and disability. 
These are two different terms. Impairment refers to loss of 
function. It simply means, for example, that the grip is weak 
or that the arm has less mobility, for example. Disability is 
the effect of that impairment on the ability to perform a 
specific job.
    For example, I injured my right shoulder years ago. My arm 
was so weak I could hardly lift a gallon of milk. I couldn't 
reach higher than my shoulders. I was impaired let's say 5 
percent. I could do all my work as a doctor, so I was not 
disabled. I was zero percent disabled.
    On the other hand, if I were a carpenter with the same 5 
percent impairment, I would likely be 100 percent disabled. 
Doctors' impairment ratings are an estimate of how much loss of 
function is present. Disability is how that function loss 
affects a person's job. I have significant experience with the 
editions of the guides. I have taught doctors about impairment 
ratings and explained ratings to patients. I can state that the 
sixth edition is dramatically different from prior editions, 
and as the authors say a paradigm shift.
    It is controversial for good reason. It does not appear to 
be evidence-based. In fact, comments in the sixth edition 
reiterate that it is a consensus document and also mentioned 
when they do talk about evidence based research that it is not 
adequate at this point for doing impairment ratings. It 
produces impairment ratings far different from those in prior 
editions, most of them lower and without adequate support for 
doing so.
    In addition, it is difficult to use, requires extensive 
training of doctors and is inefficient. There are many 
unexplained rating changes in this new edition compared to the 
earlier editions. Of 35 cases that I reviewed, 21 were lower in 
the sixth edition. Several were a lot lower. In another series, 
I saw that there were 52 cases, 46 were rated lower in the 
sixth edition. In that same report, the series of 200 cases 
also showed a large number of reduced ratings by the sixth 
edition.
    One of the guide's authors presented a small series, also 
with lower editions than the sixth edition, and actually, had 
he done the math correctly, it would have been lower than he 
showed in this example.
    The impairment rating for total knee replacement with good 
result is 37 percent of the lower extremity in the fifth 
edition and 25 percent in the sixth. I didn't find any 
objective reason for making that change.
    The sixth edition is needlessly complex. For sixth edition 
ratings, I charge more because I find its methodology clumsy 
and difficult to work with. Every rating under the sixth 
edition takes several steps regardless of how straightforward 
the rating could be. After the examination, plus a required 
patient questionnaire, the doctor first goes to the chart for 
the diagnosis, then he goes to three other charts for 
examination results, test results, and claimant's function. The 
doctor gets numbers from these three and subtracts each number 
from the number assigned to the diagnosis, then adds these 
three sums together. That sum is subtracted or added to the 
number at the diagnosis chart to find out where, in a very 
narrow range, the final rating really is. That is hard.
    Fifth edition rating requires a physical examination and 
sometimes tests. The doctor goes to a table for each pertinent 
measurement and matches the claimant's measurement with an 
impairment percent from the table. For some ratings, there is 
more than one table, but even then, in most cases it is not 
that difficult. With some guidance, cases could be rated by an 
attending doctor. I have even given phone instructions to 
doctors enabling them to do accurate ratings. It is difficult 
to get those treating doctors to embrace the impairment rating 
in the guides. Most step back slowly if I bring out the book. 
But I believe they will run from the complicated multi step 
arithmetic and rules of the sixth edition.
    Doctors have become familiar with the fifth edition over 
these 10 years, and the system has some stability now. Adding 
the sixth edition, an untested and unproven departure from the 
format of 40 years doesn't seem worth the disorientation it 
will cause.
    Sixth edition ratings take more time. Experts doing 
identical sample cases average 5 minutes to rate a case by the 
fifth edition. To do sixth edition ratings, these same experts 
in same cases averaged 25 minutes per case.
    In addition, early reviews in the sixth edition ratings 
show an error rate that it similar to those of the fifth 
edition, so this new edition doesn't seem to fix the problem of 
training. The sixth edition authors suggest that there is a 
better inter-rater reliability, but that is likely due to the 
narrow range of ratings allowed.
    The sixth edition fails to grasp the essential factor of 
impairment assessment, functional losses and activities of 
daily living. Instead of being the focus for the rating, they 
are relegated to the last position of three modifying factors, 
and in some cases, actually can be thrown out.
    The validity of impairment ratings will not improve until 
direct measurement of functional loss and activities of daily 
living becomes the standard. Reduced rating values are not 
evidence-based nor is there any explanation given. The fifth 
edition, for all its shortcomings, more accurately allows 
assessments of functional losses than the sixth edition in my 
opinion. Thank you.
    Chairwoman Woolsey. Thank you.
    [The statement of Dr. Nimlos follows:]

          AMA Guides to the Evaluation of Permanent Impairment

      The 5th and 6th Editions Comparison: A Failed Paradigm Shift

                John E. Nimlos, M.D., November 17, 2010

    This presentation will show that the AMA Guides to the Evaluation 
of Permanent Impairment, Fifth Edition remains the preferred reference 
for impairment rating, as the 6th Edition is a disruptive document with 
many more disadvantages than improvements. Over the 10 years of its 
publication, the 5th Edition has effectively guided a national cadre of 
experienced physician raters. In contrast, the 6th Edition requires a 
complicated, multistep process for each rating. If the new, time-
consuming process leads to better, more scientific, and more accurate 
ratings, it might be worth it. It does not.
    The 6th edition, despite making major changes to ratings, mostly 
downward, has no more science behind it than the 5th. In fact, there 
appears to be less science. Therefore, relying on the 6th Edition will 
lead to greater expense: training doctors, system adjustment to the new 
impairments, increased litigation, and increased wage replacement cost 
due to delays in claim resolution. In contrast, if the 5th Edition 
shows consistent problems in one or another area, and some rational 
science becomes available to address those, addenda can be added 
cheaply and efficiently.
    If there are multiple areas scientifically shown to need 
improvement, a ``5th Edition-Revised'' can be provided. Until such 
time, continued use of the AMA Guides 5th Edition generates no new 
expenses, can be adjusted to reflect new science if needed, and allows 
systems using the Guides to continue the adjudication decisions, 
standards, and adjustments already in place. The simple decision to 
retain the 5th Edition eliminates the considerable time and expense of 
dealing with a new system that has no proven value or reliability.
Introduction
    I am a medical doctor specializing and board certified in 
Occupational Medicine. I treat employees for injuries and illness 
incurred in the workplace. For 24 years, I've examined workers under 
two different state workers' compensation systems, as well as federal 
employees under the FECA and Longshore and Harborworkers programs. I 
make decisions every day about impairment, and disability.
    I am familiar with all editions of the Guides, and used the 3rd, 
3rd (Revised), 4th, 5th and 6th to determine impairment ratings, as 
well as using Washington State's impairment system. I have taught 
doctors about impairment ratings and explained ratings to patients for 
many years. I can state that the 6th Edition is dramatically different 
from the prior editions, and as the authors say, a paradigm shift.
Impairment and Disability are not the same
    These two words are frequently used interchangeably, but they 
actually have importantly different meaning. Impairment refers to a 
loss of function. It simply means, for example, that the grip is weak, 
or that the arm has less mobility. Disability refers to the effect of 
the impairment on the ability to perform a job or specific task.
    For example, I injured my shoulder years ago. My arm was so weak, I 
could hardly lift a gallon of milk, I couldn't reach higher than the 
level of my chest. I was impaired. I could do all my work as a doctor, 
so I was not disabled. However, if I were a carpenter with the same 
impairment, I'd be both impaired and disabled. The AMA Guides to the 
Evaluation of Permanent Impairment have been in existence for 40 years 
and are used to rate the extent of impairment. Doctors' impairment 
ratings a measurement of how much loss of function is present. It 
refers to limits to everyday living tasks, common to all people. 
Disability is how that impairment affects a person's job. Impairment 
rating percentages are just the beginning of disability determination. 
Disability rating or compensation, depends on how each system applies 
its own rules and process to come to a monetary amount or qualification 
for benefits.
The 6th Edition greatly increases the complexity of impairment ratings
    The 6th edition uses the same structure and method for all of the 
different body parts and systems. Though this is intended to make it 
more consistent, it also makes it difficult to fit the rating process 
to the rated part, and reduces the role of the examining doctor to best 
reflect the actual limitations of the claimant. In addition, because of 
this rigid adherence to structure, impairment ratings which are easy 
and straightforward under the 5th Edition are made needlessly complex.
    For 6th Edition ratings I charge extra; I find the methodology 
clumsy and extremely difficult to work with. Every rating under the 6th 
Edition takes several steps, regardless of how straightforward a rating 
could be. After the examination, plus a required questionnaire (or two) 
to score, the doctor first goes to a chart for the diagnosis. The 
diagnosis has a number associated with it. It also has a range from A 
through E, with C being the middle, and the default impairment rating 
that is meant to represent the average impairment for that diagnosis. 
Then he must find three other charts for 1) examination results, 2) 
test results, and the 3) claimant function estimate. Applying scores 
from ``no problem'' to ``severe'' in each chart, the doctor gets 
numbers from these three tables, and subtracts each number from the 
number assigned to the diagnosis, then adds those three results 
together. The result is added or subtracted from the number on the 
diagnosis chart. This sum is the number that determines how far up or 
down the narrow A though E range that determines the final rating, as 
adjusted from the average for that diagnosis.
    By contrast, the 5th Edition rating requires physical examination 
and sometimes, tests. The doctor then goes to a table for each 
measurement or claimant characteristic, and matches the claimant's 
measurement or description with an impairment percent from the table. 
Sometimes there is more than one table, but even then, for most cases 
it's not that difficult. With some guidance, many cases can be rated by 
an attending doctor. I've even given phone instructions to doctors, 
enabling them to do ratings successfully with the patient or medical 
record in front of them.
    The 6th Edition still uses consensus-based estimates for impairment 
rating that are no more scientific, and with non-medical factors now 
present in these estimates, there is even less medical science in this 
edition than previously.
    The 6th Edition is controversial for another reason. Though it 
claims to be, it is not really evidence-based. It produces impairment 
ratings far different from those in prior editions, most of them lower 
than before, it without adequate support for doing so. In the course of 
evaluation of the 6th Edition for the state of Iowa, Mr. Matthew Daker, 
and Dr. John Kuhnlein, the authors of both evaluations that I found for 
review also concluded with the advantage of author interviews, that 
there remained too many obstacles to effective and reliable ratings. 
The authors admitted that there was no more scientific evidence brought 
to bear in the 6th edition, and noted the influence of insurance and 
adjudicators in the adding of very low, once-in-a-lifetime ratings so 
that people could qualify as having impairments, perhaps a minimal 
response to requests from plaintiff groups for at least some 
recognition of conditions previously given zero impairment.
    I suspect that Dr. Brigham's assertions that ratings are too high 
(his estimate at 8% too high) also had to do with the consensus 
estimates of the 6th Edition authors. Dr. Brigham's assertions about 
the distortion of ratings appear based on his own studies. The material 
from those studies are taken from his practice, reviewing ratings sent 
to him for analysis. Dr. Brigham's advertisements appear clearly to 
focus on the defense (employer, workers comp insurer, defense attorney) 
population, so it is likely that the only clients who would be spending 
the $150 fee would be those cases thought to be too high, and high 
enough to save that at least that amount by getting it corrected. In 
that setting, ratings thought by the insurance companies to be correct, 
or too low, would not likely show up in Dr. Brigham's numbers.
    In contrast to this, I have a series 401 consecutive independent 
medical examination (IME) reports received by me as attending 
physician, or reviewed by request from other physicians who requested 
my advice whether or not to agree with the IME. In this series, I found 
that 45% of the IME's were valid. The remaining 55% had serious flaws, 
for a variety of reasons, one of them being incorrect impairment 
ratings. The majority of errors had to do with impairment rating. In my 
series every rating but one was too low. Quite a few declared no 
impairment to be present when the examiners own findings supported an 
impairment rating. Unlike Dr.Brigham's study, mine was only selected by 
my presence in the case as attending physician, or were sent by 
physicians with only the interest in knowing the accuracy of the 
report, not by whether the rating was too high or low. In light of 
these issues, I question the validity of Dr. Brigham's generalizations 
about ratings too high. Dr. Brigham's population suggested 89% of 
ratings to be too high. Another said that 78% of ratings were 
incorrect, and again, too high. My study showed essentially 99% of 
rating errors to be too low. My data are in agreement with a series of 
17 ratings in an international journal. Though the patient number was 
disappointingly low, this was the only one I could find in a literature 
search for peer-reviewed reports on IME quality. It is a sad comment on 
the role of science in the AMA Guides, that I found more information 
about these issues in a Google search than I did by searching the 
medical literature by PubMed (The National Library of Medicine).
    Lastly, the authors of the Guides do refer to evidenced based 
research in the 6th Edition, but the only studies they reported were 
deemed unreliable for use as impairment rating information, and that 
further research was required. The only approach in the 6th Edition 
that has to do with evidence is the assertion that the diagnosis used 
for rating be made based on evidence. Perhaps this edition's authors 
somehow believe that doctors making diagnoses for prior editions' were 
not based on evidence.
    Many of the 6th Edition ratings are different, with no explanation 
of why the rating is changed. Most changes are to a lower rating, some 
are far lower.
    With regard to medical reliability, there seem to be many 
unexplained rating changes in this new Edition compared with the 
earlier editions of the Guides. Questions arise about the ratings 
recommended by the Sixth Edition. For example, why is the impairment 
rating for a total knee replacement with ``good'' result 37% in the 5th 
Edition and 25% in the 6th Edition? Is that evidence based, as the 6th 
Edition purports to be? No, the rationale for this particular rating 
is, as expressed by Dr. Chris Brigham, Senior Contributing Editor for 
the 6th Edition, who has stated that the ``improvement in medical 
technology'' is the reason for the lower rating.
    Though this suggests that some science backs up the lower rating. 
However, the actual process of rating determination is different 
between the two editions. The 5th Edition appears to actually draw more 
upon science than the Sixth. In the 5th edition, the ``good'' rating is 
defined by a numerical score derived from several measurements, and 
used by orthopedic surgeons as a recognized standard for describing and 
categorizing knee replacement outcomes. In the 6th Edition, the 
``good'' definition uses undefined degrees of outcome measures, e.g. 
``mild'', ``good'', ``severe'' usw. These are imprecise at best, and 
subject to the judgment and/or bias of the examiner.
    The total knee replacement decrease in impairment is not alone. In 
my own analysis of ratings coming from the AMA's publication, The 
Guides Casebook, 3rd Edition, selecting all the extremity ratings, as 
in Washington the Guides are prescribed for rating these, and a couple 
others due to their common occurrence as rating questions. Of the total 
of 35 ratings examined, only 6 ratings went down in the 5th compared to 
the 4th Ed. Those ratings averaged less than one fifth (19%) lower than 
the 4th Edition. In contrast, 21 of 35 ratings go down in the 6th 
compared to the 5th; 3-and-a-half times more ratings are made lower by 
the 6th Edition than were reduced in the 5th. And, in the 6th Edition, 
not only are more ratings reduced, but they are made lower by an 
average of more than one third (36%)--almost twice the magnitude of 
decrease amount of the impairment ratings.
    My analysis is not the only one that show this drop in ratings. Dr. 
Melhorn did an analysis of selected diagnoses comparing 5th and 6th 
edition ratings, demonstrating the rating averages to be lower for the 
Sixth edition, though at a less dramatic amount. However, if he'd done 
the arithmetic accurately, he'd had shown a more significant difference 
between the average rating in the 6th from the 5th than appears in his 
tables found in his article in the IAIABC Journal.
    A large number of ratings, 52, were examined by Sedgwick Claims 
Management Services for the state of North Dakota involving extremities 
and spine as well as multi-injury cases. Six ratings were the same or 
slightly higher by the 6th edition. The other 46 ratings were lower, 
many much lower. On average by body region, ratings were 0.8% higher 
for ratings of the Hand to 12.6% lower for the Cervical Spine. This 
does not mean that the rating was 12.6% lower as in lowered by about 
\1/8\ of the rating, it means that the average rating went from 24.8% 
to 12.2%--cutting that rating in half. When compared in order of 
magnitude of initial 5th edition rating, the lowering of the impairment 
rating was much more dramatic as the 5th edition ratings that were 
higher. For ratings in the highest range, the average for 5th Edition 
was 67% impairment, in the 6th Edition, the same cases averaged 44.7%. 
This is a decrease of nearly one third.
    Another 200 cases were also reviewed, showing many lower ratings in 
the 6th edition, proportions in similar to the preceding group. This is 
particularly interesting in light of my recall from Dr. Brigham stating 
that he did not think the 6th Edition would result in many reduced 
ratings, and that whether or not it would ``remained to be seen''. 
However, his own recent report in The Guides Newsletter,* was cited by, 
and provided the above statistics in the 200 cases in the Sedgwick 
report.
---------------------------------------------------------------------------
    *Brigham CR, Uejo C, McEntire A, Dilbeck L. Comparative Analysis of 
AMA Guides Ratings by the Fourth,Fifth, and Sixth Editions. Guides 
Newsletter. January--February 2010.
---------------------------------------------------------------------------
    The Sedgwick report conclusion was that North Dakota annually would 
save $1.1 million dollars in permanent partial impairment awards by 
adopting the 6th Edition. This was immediately followed by a statement 
that asserted, ``The 6th Edition of the AMA Guides to the Evaluation of 
Permanent Impairment is the latest version of the Guides and is the 
result of the evolution of medical science as well as research based 
medicine.'' As thorough as the report is in many respects, it appears 
the report authors did not investigate the assertion of science and 
research as the basis for the 6th edition, and were likely to convey to 
the decision makers for North Dakota an opinion that is not supported 
by the facts.
    It will be expensive and difficult to maintain an adequate 
population of qualified doctors for impairment ratings under the 6th 
Edition.
    In my home state of Washington, more ratings by attending doctors 
are desired by the Department of Labor and Industries. I know from my 
experience in encouraging primary and specialty doctors to do ratings 
for their own patients, that it is already difficult to get treating 
doctors to embrace impairment rating and the Guides. Most step back 
slowly if I bring out the book, but I believe they will run from the 
complicated, multistep arithmetic and rules of the 6th Edition. Doctors 
are quite familiar with the 5th Edition, and the system has begun to 
find stability with the 5th Edition. The 6th Edition's methods are 
dramatically different from the prior systems, and already throw 
controversy and error into systems relying on their use. Adding the 6th 
Edition's untested, and unproven departure from the format used for the 
past 40 years, doesn't seem worth the disorientation it will cause.
    6th Edition ratings take much more time, and likely will add to 
rating examination expense.
    Dr. J. Mark Melhorn, a contributor to the 6th Edition, conducted an 
informal study on the time consumed in ratings. He found that 7 expert 
raters who teach other doctors how to use the Guides, doing identical 
sample cases, averaged 5 minutes to rate by 5th Edition, but to do 6th 
Edition ratings they averaged 25 minutes. Because of this additional 
time and hassle, I charge an extra fee for 6th Editions ratings that 
adds between 15 and 20% to the cost of the examination. Other doctors 
who do ratings will need to pay for the additional training and 
certifications costs, and are likely to pass this cost along to their 
clients.
    Especially at the beginning, disagreement about ratings is likely 
to occur resulting in additional costs for IME's and/or legal expense.
    Physician clinical judgment remains the hallmark of impairment 
ratings, it is greatly restricted in the 6th Edition, but with no 
science to back up that decision, or the altered ratings.
    Thus, it appears that the transition from the 5th to the 6th 
Edition shows pervasive and dramatic changes to ratings compared to 
previous edition changes. I believe that the previous new editions 
generally provided improvements. The changes in the 6th edition are 
many, but are not improvements in my opinion. If adopted, the 6th 
edition of the AMA Guides will disrupt disablility systems, increase 
examination costs, increase litigation expenses and seriously threaten 
fair compensation for injured workers.
    In light of all these issues, I agree with the states of Iowa, 
Kentucky, Washington, Colorado, Utah and others, that the 5th Edition 
should remain in use, until something truly better comes along.
                                 ______
                                 
    Chairwoman Woolsey. Mr. Uehlein.

   STATEMENT OF W. FREDERICK UEHLEIN, FOUNDER AND CHAIRMAN, 
                    INSURANCE RECOVERY GROUP

    Mr. Uehlein. Thank you very much, Chairwoman Woolsey and 
Ranking Member McMorris Rodgers and other members. I am pleased 
to be here with you to discuss this topic of disability 
benefits, a subject I have been passionate about for the last 
40 years.
    The one thing I think we can agree on as members here, as 
testifying here, is that this is a, indeed, very complex 
subject. And I may be the contrarian in saying to you that the 
evidence that our company has compiled is contrary to what my 
brother has said here a second ago.
    I remained active in this field for so long because I 
believe that we can significantly help disabled Americans 
improve their health and achieve the kind of contribution that 
they are capable of by structuring our compensation systems to 
be clear, simple, and to the greatest extent possible based on 
science and fact. Employers in turn will gain when that happens 
from the reduction of friction costs associated with poorly 
designed systems.
    Let's face it. Over the next 10 years we are going to be 
faced with very difficult economic decisions. We want to make 
sure that the compensation systems that we design fairly 
allocate the funds that are available.
    The guides are used in most systems to determine an injured 
person's medical functionality. We all agree on that. That is 
what impairment refers to, medical functionality. So when you 
see the words ``guides to impairment,'' it is referring to a 
book designed to help a physician give a determination of 
medical functionality.
    What is confused, even by experts, is that the impairment 
of medical functionality determined by physicians is not now, 
nor should it ever be, synonymous with the word 
``disabilities.'' That is stated in the guide, ``disabilities'' 
meaning loss of wages. In the workers' compensation and Social 
Security fields, ``disability'' means loss of wages.
    Impairment is something that doctors seek to minimize. 
Their mission is to maximize functionability. It is obvious to 
all of us in the field that other factors are relevant such as 
age, occupation and experience.
    The problem is that these other factors, and this is a 
significant problem, are difficult to objectively and 
consistently measure. Therefore, that is the task of 
legislatures, not the AMA guides, around the country to 
determine how, once you have decided what the medical 
functionality is, what the disability payment should be.
    As I said, that is not the job of the guides. Rather, 
impairment is only the starting point, the determination of it, 
for the benefit structure.
    The guides create a consistent approach for physicians and 
for injured workers to have the same determination of 
impairment and loss of functionality. A physician who looks at 
three different injured employees with the same condition 
should arrive at the same rating for each employee. Likewise, 
three physicians who look at the same injured employee should 
come up with the same rating. The goal of the guides is to 
foster equity, fairness and objectivity to the greatest extent 
possible rather than subjectivity.
    My company, of which I am a director, has performed 
numerous comparative analyses of the guides. And our conclusion 
from these studies has been that there is not a great 
significance in the change of percentage of functionality, the 
change in ratings between the fourth, fifth and sixth editions. 
And in fact, the sixth edition extends the benefits to a 
greater number of impairments.
    What we notice in the fifth edition is that certain 
ratings, such as surgical spine cases increased without 
explanation over the fourth edition. High ratings occurred even 
with excellent outcomes. Now, these issues have been addressed 
in the sixth edition.
    So in the fifth edition, just to give you a specific quick 
example, you could find a situation in the fifth edition where 
somebody had a single level cervical fusion and get a rating of 
28 percent, but in the--have two level fusion and get a rating 
of 18 percent. I submit to you that isn't fair and that is the 
type of thing that the sixth edition addressed.
    I will just give you this one thought and leave you with my 
written submission.
    The guides are the best objective study that we have today, 
the sixth edition. It isn't perfect, but it is the best that 
they have--that we have. It is evidence-based to some extent, 
and largely consensus-based, but it is consensus-based by 
experts.
    Would you go down with a broken arm to the hospital and ask 
your orthopedic doctor to use an outdated version of the 
medical literature to operate on your arm? I don't think so. I 
recommend that you consider the facts, and not fiction, and 
that the sixth edition is the best objective test that we have 
today. Thank you.
    Chairwoman Woolsey. Thank you.
    [The statement of Mr. Uehlein follows:]

    Prepared Statement of W. Frederick Uehlein, Esq., Framingham, MA

    I am pleased to discuss with you today, injured worker disability, 
a topic that I am still passionate about after 40 years of work in the 
field of workers compensation and social security, including work as a 
plaintiff's attorney, a defense attorney, starting a social security 
advocacy company and in service companies that support disability 
claims activities. I am Chairman of Insurance Recovery Group of 
Framingham, Massachusetts, and a Director of Impairment Resources of 
San Diego, California. I am an associate editor of the American Medical 
Association Guides Newsletter. However, I am before you today as an 
individual who wishes to share what knowledge I have accumulated over 
these decades from the vantage of the many participants in this complex 
system, particularly the two primary stakeholders: injured workers 
themselves and the employers who pay for their care and benefits 
throughout their recovery.
    I have remained active in this field for so long because I believe 
that we can significantly help disabled Americans improve their health 
and achieve the kind of contributions they are capable of by 
structuring our compensation systems to be clear, simple, and to the 
greatest extent possible, based on science and fact. Employers in turn 
gain from the reduction of friction costs associated with poorly 
designed systems. The allocation of funds, then, can more equitably be 
distributed.
    My colleague, Christopher Brigham, MD, Chairman of Impairment 
Resources, is submitting written testimony for your consideration 
today, the focus of which is two-fold: first, preventing needless 
disability and, second, advocating for the use of the most current 
edition of the AMA Guides to the Evaluation of Permanent Impairment, 
the Sixth Edition. Going forward, I will refer to these as ``the 
Guides'' in my testimony.
    Dr. Brigham regrets not being able to attend in person, but is on a 
long-standing commitment in Australia. His biography and extensive 
experience are included in his Testimony. Suffice it to say that he has 
voluntarily, without pay, devoted thousands of hours to the effective 
development and utilization of the Guides, serving as the Senior 
Contributing Editor and working with physicians and other experts from 
all over the country in developing the most recent edition of the 
Guides. These Guides are based on expert consensus and the best 
science- and evidence-based medicine available today. I can attest that 
Dr. Brigham is the country's most widely recognized expert in the 
utilization of the Guides and the development of data involving their 
use. Dr. Brigham speaks from fact, and from the heart, when he says 
that the most recent version of the Guides is best for both employees 
and for the employers. It is evidence based, affords consistency and 
ease of use, and it results in fewer errors.
    Let me take a minute to give a brief, but important, primer on the 
role of the Guides in our disability systems and its relationship to 
benefit payments. An employee who has had a serious work injury and has 
improved to the maximum extent that he can is usually entitled to a 
benefit for his permanent disability. Disability means loss of the 
employee's earning capacity. He was able to earn a certain wage and now 
he cannot as a result of this injury. Thus, he is entitled to a benefit 
to replace that wage. The first step in determining this entitlement is 
to turn to the medical profession for a report on the employee's 
medical functionality (impairment). The Guides are used in most systems 
to determine an injured person's functionality. That is what impairment 
refers to, medical functionality. So when you see the title ``Guides to 
Impairment,'' it is referring to a book designed to help a physician 
give a determination of medical functionality.
    What is confused, even by experts, is that the impairment or 
medical functionality determined by physicians is not now, nor should 
it ever be, synonymous with disabilities--i.e., loss of wages. In the 
workers compensation and social security fields, disability means loss 
of wage earning capacity. Impairment is something that doctors seek to 
minimize. Their mission is to maximize medical functionality. It is 
obvious to all of us that there are many other factors than medical 
functionality--such as age, occupation and education--that determine 
loss of wage-earning capacity. The problem is that these other factors 
are difficult to objectively and consistently measure. Therefore, 
legislators all over the country and the world make different decisions 
as to how to reconcile a person's injury and functionality/impairment, 
with the amount of benefit that should be paid or that society can 
afford to pay.
    That reconciliation is not the job of the Guides, nor should the 
Guides be used as a proxy for the amount of benefits to be paid. 
Rather, impairment is only the starting point to the determination of a 
benefit structure for wage loss.
    The Guides create a consistent approach for physicians and for 
injured workers to have the same determination of impairment and loss 
of functionality. A physician who looks at three different injured 
employees with the same condition should arrive at the same rating for 
each. Likewise, three physicians who look at the same injured employee 
should come up with the same rating. The goal of the Guides is to 
foster equity, fairness and objectivity to the greatest extent 
possible, rather than subjectivity and personal opinion.
    The Guides have been updated every five or so years by the medical 
profession under the direction of the AMA in an effort to improve their 
objectivity, consistency, ease of use, and relationship to the then 
state of medical science.
    Our company, Impairment Resources, is involved in consultation on 
the use of the Guides and has reviewed many thousands of ratings. This 
experience has led to our unequivocal statement that the latest version 
of the Guides is easier to use and more consistent with the realties of 
modern medicine.
    Additionally, Impairment Resources has performed a number of 
comparative analyses of ratings. We recently looked at the same 
injuries rated by the Fourth, Fifth and Sixth Editions of the Guides. 
What these studies indicate is that the rating percentages on the whole 
are not--and I repeat not--significantly different between editions. 
The methodology and approach to reach the ratings are different, and in 
our experience the latest edition, the Sixth, extends ratings to more 
injuries than the Fifth Edition. In the Fifth Edition certain ratings, 
such as surgical spine cases, increased without explanation over the 
Fourth Edition. High ratings occurred even with excellent outcomes. 
This has been addressed in the Sixth Edition.
    In our training role and in our consultations and speaking 
engagements, we have experienced natural push back from some physicians 
around the country who, after spending years utilizing the Fifth 
Edition, are now reluctant to take the time to retrain in the Sixth.
    We have experienced, while testifying before various state 
legislators around the country, push back from the plaintiffs bar. I 
believe, in all candor, that the reason for that is that the Fifth 
Edition rates impairment in the spine higher than the Sixth Edition. 
The expert doctors who wrote the spine chapter of the Sixth based their 
ratings more on the end result and impact on the patient. All treatment 
is designed to increase functioning, ability to participate in 
activities of daily living, and, therefore, to decrease impairment. 
Therefore, impairment should reflect the outcome, not just that surgery 
was performed to improve function.
    I fear that a battle over benefit rates is being fought as a proxy 
battle using the Guides rather than directly addressing benefit rates 
before legislators. This is probably because legislators have simply 
not been educated on the purpose of the Guides and the distinction 
between impairment and disability. To the extent this may be true, this 
does a disservice to the effective functioning of compensation systems 
that are improved by the use of the Guides.
    The underlying premise of the Sixth Edition is something that you 
and I, as lay people, have been observing and reading about for a long 
time: modern medicine is improving health and functionality. That means 
that we can and should acknowledge that impairment is trending down, 
not up, and health is improving. I simply do not believe that it is 
better to use the Fifth Edition and tell an injured worker who has had 
a successful spine surgery that he has a permanent impairment of 25%; 
i.e., he has loss of one quarter of who he or she was, when in fact the 
surgery was successful. I know for myself that, if you tell me I have 
that kind of impairment, I am going to adjust my behavior to meet it.
    To be frank, as I watch testimony before state legislators across 
the country take up the issue of using the Fourth, Fifth or Sixth 
Editions, I am struck by the absence of a discussion about the purpose 
of the Guides. First the purpose should be articulated. Then the debate 
should turn to whether the latest edition, an older edition or some 
other system is best.
    Because the Fifth Edition, in relation to the other chapters and to 
medicine today, overrates the spine and because it is not as clear, 
concise and simple to use as the Sixth, it lends itself to abuse and 
error, costing employers and eventually taxpayers millions, if not 
billions of dollars annually. Furthermore, I believe the psycho/social 
burden of such errors and overrating on injured workers is harder to 
measure, but likely much costlier.
    My hope is that this committee and labor leaders, as well as 
employers, agree that the goal of utilizing the Guides is to create a 
level playing field that is based on evidence and fact or, at a 
minimum, consensus of a broad group of physicians and experts. 
Legislators should look at the facts and not the fiction.
    I would like to emphasize that the mission of our company, 
Impairment Resources, is to drive accurate impairment ratings. To 
dispel any notion that our recommendation is based on self-interest or 
profit, let me make it clear that our company stands to earn more when 
the Fifth Edition is in widespread use because the error rate for that 
edition exceeds 70%, while the error rate is significantly lower in 
reports from trained doctors using the Sixth Edition.
    I conclude with this thought as you address the issue the Guides 
further: Would you go down to the hospital with a fractured arm and ask 
your orthopedic doctor to use an outdated textbook to repair it or 
would you ask them to use the latest textbook version?
    Our conviction is based on our belief that the Sixth Edition is 
fairer to all stakeholders because physicians will not only utilize a 
new methodology more in keeping with modern medicine but with more 
consistency and less friction.
    The Sixth Edition is a reflection of the latest medicine created by 
hundreds of the leading experts in medicine in the country and put 
through a rigorous peer review process. It is clear and easier to use. 
It offers the best opportunity today to achieve the role it is designed 
for, to create a fair and equitable playing field to reflect impairment 
consistent with the advances in medicine.
    Thank you.
                                 ______
                                 
    Chairwoman Woolsey. Mr. Godfrey.

            STATEMENT OF CHRISTOPHER JAMES GODFREY,
             IOWA WORKERS COMPENSATION COMMISSIONER

    Mr. Godfrey. Thank you to members of the subcommittee, 
Chairwoman Woolsey. Thank you for the opportunity to come here 
today to speak on behalf of the people of the State of Iowa, 
and also the more broad workers' compensation community.
    My written testimony, I think, does a fair job of 
describing the way in which the--we have an interplay between 
impairment and disability. And that also explains why the sixth 
edition of the AMA guides has such an important impact upon the 
people of the State of Iowa.
    As we talked about the facts of the sixth edition, we felt 
it would be good in Iowa to have a task force. The task force 
report from the State of Iowa has been included within the 
written record, and is available online as well. The link to 
that is within my materials. I would urge you all to read 
through that material. It is fact, it is objective-based, and 
it comes from the testimony of most of the doctors whose names 
are on the book or have very important roles in creating the 
book.
    Now, why is this important to you? I think as the ranking 
member suggested, how does the decrease in the State workers' 
compensation program affect the Federal Government? I would 
urge you to look at the Medicare system. The interplay between 
workers' compensation settlements and the resulting impact on 
Medicare is very well known, and it is a significant 
controversy. We see that employers' insurance companies will 
settle a workers' compensation claim for a premium amount, and 
then liability for future medical care can be passed on to the 
Federal Government. That is an important thing for all of you 
in these times.
    When we have an impact on the level of disability benefits 
paid to injured workers through a workers' compensation system, 
which I will explain here shortly, there is a corresponding 
risk to the Federal Government that we will have increased 
applications and need for Social Security Disability benefits. 
If people are not going to get the benefits they are entitled 
to and have previously been entitled to under State workers' 
compensation laws, they will turn to an alternate system.
    Now, when we went through our task force, we came up with 
four very important ideas that we felt were at issue. First, we 
felt there was an encroachment on our legal community in the 
State of Iowa with our own laws. We are concerned about the 
consensus of the people that make up this guide. We are also 
concerned about the numerous errors, the need for an errata, 
and also a subsequent publication of the guides, and we are 
also very concerned about cultural biases.
    Now, first the encroachment of legal boundaries. Iowa has 
its own workers' compensation program. It started in 1913 and 
it is the same type of system throughout the United States 
where each State has its own system. One issue that I would 
encourage to you look at is the apportionment. In section 2.5 
of the new AMA guide, they deal with apportionment. It allows 
doctors to apportion out some rating of impairment. That is in 
direct violation to Iowa Code section 85.34(7). That was an 
apportionment statute that came about through political 
compromise. It does not allow the apportionment that is allowed 
under the AMA guide. So that is of deep concern to us.
    The consensus. Why won't the AMA tell the State of Iowa who 
is involved in writing this book and being the editors of this 
book? Within our written materials, we have posted the 
questions that we pose to the AMA. And you can see their 
responses. And I would say that they are not responses. We are 
passed off to the marketing department and given very brief 
questions. I would urge the subcommittee to ask the AMA, tell 
us who is involved in writing each of these chapters? And who 
was the editors of each of those chapters?
    In all the previous editions of the book when you open it 
up, it will tell you who wrote each individual chapter and 
edited that chapter. That is not within the sixth edition, and 
our concerns about that are summed up in our task force report.
    Now the numerous errors, as I mentioned, there is a 
reprinting of this book, which I don't have before me, but it 
is almost the same size. When you have, as a work comp judge, 
an impairment rating under the sixth edition come before you, 
how will you know, or how would I know whether this book was 
used that contains numerous errors, or the reprinted edition 
which does not have those same errors, how would I know where 
that impairment rating came from? There is no indication on the 
second printing of the book that that is the corrected version.
    So we have State workers' compensation bodies paying 
disability benefits based upon impairment ratings, and we don't 
know where they came from. That is not the way that these 
systems should be set up. This is a book for serious business 
purpose. We feel it fails to live up to that guideline.
    Lastly, the cultural biases in Iowa we have a significant 
immigrant workforce. We have Bosnians, Hispanics, Asians, 
Sudanese. Those people react to injuries differently. They 
react to pain differently. There is levels of trust which are 
different between people of various cultures. The guides which 
come out of this book are determined based upon the use of 
various tests which are included in the book. Those are not 
tested for cultural sensitivity and therefore people of 
different races and different educational backgrounds could 
have different impairment ratings.
    I would say that that is a bias which should not be allowed 
within the legal system. That is part of the reason that we 
could not endorse this book, and I think it needs further 
study. When we asked the editors of the book how you would 
address the fact that there are these cultural differences not 
cared for, they were told, we were told, well, just don't use 
the test. Well if you don't use the test you don't get your 
impairment rating either up or down, and that is treating 
people differently based upon their culture, and that is not 
allowed.
    So there are various questions. They are summed up very 
well, our answers and responses to that within our task force, 
and I would be happy to answer any additional questions. Thank 
you.
    [The statement of Mr. Godfrey follows:]

Prepared Statement of Christopher James Godfrey, Workers' Compensation 
          Commissioner, Iowa Division of Workers' Compensation

    Members of the Committee: Thank you for the opportunity to come 
before you to address the impact resulting from the publication of the 
AMA Guides to the Evaluation of Permanent Impairment, Sixth Edition on 
the Iowa Division of Workers' Compensation and other workers' 
compensation jurisdictions more generally. I also plan to testify about 
the impacts restricted workers compensation programs have on federally 
funded programs such as Medicare and Social Security Disability.
    It is a great honor personally for me to speak to the members of 
the Subcommittee today about the workers' compensation system in the 
state of Iowa and share with you the detailed findings of the Task 
Force I convened in May 2008 to study the Sixth Edition of the Guides.
    In my capacity as the Iowa Workers' Compensation Commissioner I 
plan to explain the impact the publication of the Sixth Edition has had 
on my jurisdiction, which has historically relied upon the most recent 
edition of the Guides for assignment of permanent impairment ratings. I 
can also address issues faced by other jurisdictions which are mandated 
by law to use the most recent edition of the Guides. More importantly I 
plan to share my thoughts about how the problems identified by our Task 
Force regarding the Guides can ultimately affect federal programs over 
which you have oversight responsibility.
    Each state has its own unique workers' compensation system. Iowa 
passed its Workers' Compensation Act in 1913 and it has evolved into a 
model system which is annually recognized as one of, if not the best in 
the United States.\1\ Iowa prides itself on being a national leader 
while keeping premiums low for Iowa employers and benefit rates high 
for injured workers. The workers of Iowa annually sustain 21,000 or 
more reportable workplace injuries. From those injuries the Division 
receives petitions for contested cases in approximately 4,200 cases and 
holds 600 administrative hearings. It is evident from the statistics 
that the vast majority of injury claims in Iowa resolve without 
intervention of our administrative agency. The high voluntary 
resolution statistics are driven by the self-effectuation of workers' 
compensation claims between employers and injured workers. It is 
envisioned within the Iowa Act that disability claims will be fairly 
and reasonably investigated and reasonable benefits owed pursuant to 
the Act will be paid.\2\ This compliance with voluntary payment 
obligations is necessary as the Division of Workers' Compensation is 
limited to 26 full time employees following quite extensive across the 
board cuts in state funding.
---------------------------------------------------------------------------
    \1\ Iowa ranked as best performing state for Workers' Compensation 
by Work Loss Data Institute, July 22, 2009. Iowa remains a Tier 1 state 
for performance of its Workers' Compensation system per the Work Loss 
Data Institute, March 15, 2010.
    \2\ A claim for penalty benefits can be commenced against an 
employer who fails to timely pay indemnity benefits without reasonable 
or probable cause or excuse known to the employer at the time benefits 
were not paid. Iowa Code section 86.13(4).
---------------------------------------------------------------------------
    Iowa's self-effectuating workers' compensation system relies upon 
disability payments that are reliable and consistent. For injuries that 
are considered ``scheduled'' injuries--limbs and portions of limbs--
Iowa has a specific numerical value assigned as a number of weeks for 
loss/loss of use of the particular body part. For instance, in Iowa an 
arm is worth 250 weeks of disability benefits. If a worker loses 10 
percent use of the arm the worker is entitled to payment of 25 weeks of 
permanent partial disability benefits. (250 weeks x 10 percent = 25 
weeks) For injuries that are considered ``whole body'' injuries--spine, 
head, nervous system, etc.--the minimum permanent partial disability 
rating is most often the level of permanent impairment plus, perhaps, 
additional compensation for loss of earning capacity of the worker. 
Whole body injuries are compensated on a 500 week schedule. Therefore 
if a worker has a 10 percent whole person impairment the worker is 
entitled to payment of 50 weeks of permanent partial disability 
benefits. (500 weeks x 10 percent = 50 weeks)
    Likely resulting from extensive study and political compromise, 
Iowa Code section 85.34 assigns a weekly value to the various body 
parts, the whole body, and for permanent total disability. As the 
weekly value of a disability is a constant, the assignment of 
impairment for the body part can drastically impact the extent of 
weekly benefits owed as a voluntary payment. For instance, for an arm 
the 250 week schedule is a constant. If an impairment guide modifies 
impairment from 8 percent to 4 percent for a certain condition the 
workers' disability entitlement can be reduced from 20 weeks of 
compensation to 10 weeks. An impairment level that increases following 
modification of an impairment guide would likewise greatly affect the 
obligation of the employer to compensate a worker.
    As a result, the decision of the AMA to alter the impairment 
paradigm and assign new impairment values based upon a diagnosis 
significantly impacts both Iowa employers and injured workers. This 
system-altering change occurred without open discussion or 
transparency. More troubling is that the change was made without 
consultation with the various state jurisdictions including the Iowa 
Division of Workers' Compensation or elected leaders of the many 
states. Consequently, numerous state jurisdictions were left to react 
to the Sixth Edition following publication. What Iowa uncovered 
following a comprehensive study by an appointed, independent Task Force 
was both troubling and frustrating. It is a great concern that as fewer 
benefits may be awarded to injured workers due to drastic impairment 
reductions, those workers will likely turn to state or federal programs 
for assistance.
The Iowa Task Force
    Upon publication of the AMA Guides, Sixth Edition, Iowa's workers' 
compensation community was confronted with many concerns and questions. 
Were physicians to use the Fifth or Sixth Edition; were employers to 
pay benefits using ratings from the Fifth or Sixth Edition to show 
compliance with voluntary payment obligations; was the Sixth Edition 
peer-reviewed; was the Sixth Edition compliant with Iowa laws; and what 
training was necessary to either complete or review an impairment 
rating under the Sixth Edition? These significant issues and others led 
to the convening of a Task Force comprised of two medical professionals 
who frequently practice in the Iowa Workers' Compensation system, two 
``claimant'' and two ``defendant'' attorneys who frequently practice in 
the Iowa system, two former Deputy Workers' Compensation Commissioners 
from Iowa, and one moderator to perform various administrative tasks 
and issue the final report.
    The Task Force was assigned five primary agenda items:
    1. Provide an analysis of the new paradigm for rating impairment 
contained in the sixth edition as compared to the prior editions of the 
guides as well as other rating guides. Identify advantages and 
disadvantages of the new paradigm.
    2. Document errors or areas of concern contained in the sixth 
edition of the AMA Guides.
    3. Outline an analysis that can be used to determine whether there 
is a significant impact on impairment ratings when using the sixth 
edition of the Guides as compared to prior editions of the Guides--most 
specifically the fifth edition. If possible, provide an analysis of the 
impact on ratings and corresponding benefit payments.
    4. Provide a recommendation on whether the sixth edition of the 
Guides should be used, whether parts of the sixth editions should be 
used, or what other impairment guides should be used in evaluating 
permanent impairment. Provide a further recommendation as to whether 
Iowa should create its own ``Iowa Guide'' for assigning impairment in 
Workers' Compensation claims--and if so recommended, outline what 
process and timeline would be necessary to create the new ``Iowa 
Guide''.
    5. Report back on other considerations that the task force finds 
compelling.
    The Task Force met 5 times from June 26, 2008 to August 26, 2008. 
The Task Force accepted testimony from several medical practitioners 
involved in developing the Sixth Edition including Alan Colledge, M.D., 
Mark Melhorn, M.D., Mohammed Ranavaya, M.D., Douglas Martin, M.D., 
Christopher Brigham, M.D., John Brooke, Ph.D., and James Gallagher, 
M.D. The Task Force also studied comparative data, held extensive 
discussions, and proposed administrative rule amendments for the Iowa 
system. The findings of the Task Force concluded with a vote of 7-1 
against Iowa allowing the use of the Sixth Edition. I ask that a 
complete copy of the Task Force Report be included into the Record of 
the hearing. It can also be found online at the following location: 
http://www.iowaworkforce.org/wc/amataskforce/
2008amaguidesprocessreport.pdf
A paradigm shift in the Sixth Edition--blurring boundaries between 
        medical and legal determinations
    The Task Force learned that at the heart of the Sixth Edition is a 
change in the paradigm of rating impairment. The Sixth Edition replaces 
the ``1980 International Classification of Impairments, Disabilities 
and Handicaps'' with the World Health Organization's model of 
disablement ``International Classification of Functioning, Disability 
and Health'' (ICF). The ICF model in the Sixth Edition defines 
impairment as ``a consensus derived percentage estimate of the loss of 
activity that reflects the severity of a given health condition and the 
degree of associated limitations in activities of daily living.'' The 
Task Force expressed significant concern that the Sixth Edition blurs 
the line between the level of impairment (a medical determination) and 
the level of disability (a legal determination). Dr. Mark Melhorn 
admitted that some of the Sixth Edition analysis clearly crosses into 
the area of disability as opposed to merely assigning impairment. It is 
the province of the workers' compensation jurisdictions to assign the 
extent of disability resulting from a medical finding of impairment.
    Chapter 2 of the Sixth Edition provides Iowa with a significant 
number of troublesome principles contained within the Guides which 
conflict with Iowa statutory and case law. Other jurisdictions will 
face similar conflicts.
    Section 2.5 blurs the line between medical and legal standards for 
disability by defining ``causality''. Whether an injury arises out of 
and in the course of employment is a legal determination to be made by 
an administrative law judge or a member of the judiciary, as opposed to 
a medical practitioner. The Sixth Edition states that to opine that a 
cause relates to an effect within a reasonable degree of medical 
probability, it is necessary that the event occurred, that the 
individual who experienced the event must have the possible condition, 
that is, the effect which may be related to the event, and that medical 
probability exists for the event to have caused or materially 
contributed to the condition. The Task Force noted that ``if medical 
probability means a greater than 95% relationship, this definition of 
causality differs from the more likely than not legal probability 
standard in Iowa workers' compensation law.'' If the causation standard 
is to be amended in Iowa, that change should occur through the 
political process and not through an unelected, undisclosed panel 
within the AMA.
    Section 2.5 further blurs the line between medical and legal 
standards by defining ``aggravation'', ``exacerbation'', ``recurrence'' 
and ``flare up''. An aggravation is described as a permanent worsening 
of a pre-existing or underlying condition, which results from a 
circumstance or event. It is distinguished from an exacerbation, 
recurrence, or flare up. Those three terms are said to imply a 
temporary worsening of a pre-existing condition that then returns to a 
baseline. The Task Force notes that ``Iowa workers' compensation law 
makes no such distinction between exacerbation and aggravation; each 
may be considered to result in a permanent, potentially compensable, 
substantial change in a pre-existing condition.''
    Finally, section 2.5 provides a methodology for allocating or 
``apportioning'' impairment between or among multiple factors. The 
Sixth Edition allows for a final rating which is derived by subtracting 
from current impairment any pre-existing impairment. This 
``apportionment'' of disability conflicts with the recently amended 
Iowa Code section 85.34(7) and places employers at risk of a penalty if 
they pay an impairment rating value which improperly reduces the 
impairment in violation of section 85.34(7). Likewise, for injured 
workers who are paid a reduced disability award based upon improper 
apportionment, the worker may never obtain the extent of disability 
owed pursuant to Iowa law or may be required to file a contested claim 
with the agency and incur legal expenses--both of which are to be 
avoided in the self-effectuating Iowa workers' compensation system.
    Dr. Christopher Brigham presented the Task Force with an article he 
relates is to be published. Dr. Brigham concludes his article as 
follows:
    In interpreting reactions by different stakeholders it is important 
to distinguish between the criticism of the process and the perceived 
impact on the stakeholders. The more significant problems do not lie 
with The Guides, but rather, with how impairment ratings are used by 
Workers' Compensation Systems or other systems. The AMA Guides will 
continue to evolve and improve. The systems that make use of the Guides 
must also evolve.
    With all due respect to Dr. Brigham, the Iowa Workers' Compensation 
system will evolve and improve when it is decided by the citizens of 
Iowa that it will evolve and improve. The system will not evolve at the 
whim or business opportunity of either one physician, one medical 
association, or a small consensus of the two.
    Iowa has long held that the question of how disabled an injured 
worker has become following an injury is a legal question, not a 
medical question, to be decided by the workers' compensation 
commissioner as trier of fact with the causation standards set forth in 
the Iowa Code. In violation of Iowa law, the authors and editors 
published a Sixth Edition which unquestionably and explicitly ``crosses 
the bridge into,'' ``attempts to determine,'' and ``is a surrogate 
for'' legal disability. Sixth Edition, p. 5 (defining ``impairment 
rating'' to include the disability concept of the ``degree of 
associated limitations in terms of ADL's''). Such encroachment of state 
law by an unelected body is a serious breach. Furthermore, states which 
are bound by their statutes to rely upon the most recent edition of the 
Guides will turn away injured workers who previously were entitled to 
benefits or may leave workers with benefit awards that fail to 
adequately compensate the worker to the extent as before adoption of 
the Sixth Edition. Injured workers denied coverage under a workers' 
compensation act will turn to other available venues for support--most 
likely applying for Social Security Disability benefits or federally 
sponsored medical care.
Other Sixth Edition Concerns
            Consensus
    In order to determine the basis for the paradigm shift and to 
determine who was included in the ``consensus'' for such changes, the 
Task Force submitted 5 questions to the AMA. The AMA and the medical 
practitioners questioned by the Iowa Task Force (each of whom 
specifically stated he did not speak for the AMA) either failed or 
refused to explain a legitimate rationale for the paradigm shift to the 
ICF. Such lack of transparency raises concerns about the motives and 
justifications behind the shift. Furthermore, there was a wholesale 
refusal to provide the names and qualifications of those involved in 
the decision to shift the paradigm and adopt the ICF model. Dr. Melhorn 
stated that the decision to change the assessment methodology was made 
prior to his involvement with the upper extremity committee and he did 
not believe that all chapter editors agreed with the paradigm change. 
Also, the AMA further refused to identify who ultimately assigned the 
values to the numerous impairment ratings found in the Sixth Edition, 
or why the values were changed from those found in the Fifth Edition. 
Information shared with Task Force members suggests that much of the 
construction of the book and assignment of impairment values was not 
the result of a consensus at all as much as it was the work of one 
person, Dr. Christopher Brigham. It must be noted that Dr. Brigham has 
a successful enterprise based upon reviewing, correcting, or commenting 
on other physician's ratings. Dr. Brigham further offers several 
courses to teach physicians and others how to use the Guides.\3\
---------------------------------------------------------------------------
    \3\ Dr. Brigham's company can be found on the internet at 
www.impairment.com and there one can find his education courses, rating 
review charges, and many of his primarily employer-insurance carrier 
oriented topics. It was noted by the Iowa Task Force that Dr. Brigham's 
company provides a service to evaluate impairment ratings, and charges 
$95 for correct ratings and $195 for incorrect ratings--likely making 
it in his own best interest to find incorrect impairment ratings. With 
the significant difficulty in training physicians following the 
paradigm shift it was noted that there will be a significant increase 
in impairment rating errors which would also be to Dr. Brigham's own 
financial best interest. Since the findings of the Iowa Task Force were 
published, Dr. Brigham has amended his fee schedule.
---------------------------------------------------------------------------
    The questions and responses from the Task Force to the AMA are set 
forth herein:
    When the AMA asserts that it relies upon a group/consensus process 
to assign values of impairment, it becomes important to know who 
comprised the group as it is obvious that outcomes may vary 
significantly depending upon those who are included or excluded from 
the consensus process. Without knowing the composition of the groups 
who determined the ratings in the book it is impossible to determine 
the biases which may exist or which may suggest an unfair group 
composition. Moreover, the lack of transparency furthers the belief 
that ``consensus'' may have succumbed to the decisions or opinions of 
one particular person. The Iowa Task Force continued to ask, ``Why the 
Editors and the AMA are being so vague as to who was involved in 
developing the particular chapters?'' In the Fifth Edition, the AMA 
freely shared the members involved in the development and editing of 
each chapter. It also appears that ``consensus'' may have been reached 
in the Sixth Edition because those who were initially consulted and had 
differing opinions were no longer part of the ``consensus'' by the time 
``consensus'' was reached. Such a belief is bolstered by the 
suggestions that Dr. Brigham ultimately was a consensus of one for many 
chapters of the Sixth Edition.
    Members of the Iowa Task Force were also concerned about the biases 
of the consensus itself. This concern emanates from comments and 
correspondence received from Dr. Douglas Martin, a physician from Sioux 
City, Iowa, who was one of the reviewers for the Fifth Edition of the 
Guides and is also on the Editorial Board of the Sixth Edition. In 
correspondence and in a meeting with the Task Force, Dr. Martin 
expressed concerns about ``hidden agendas and biased allegiances which 
many physicians (involved in the development of the Sixth Edition) 
cannot say.'' As noted by the Task Force members, this is an extremely 
troubling statement from a member of the Editorial Advisory Board and 
calls into question the consensus that derived the impairments to be 
assigned in this book.
            Errors and Editorial Concerns
    The limited, initial involvement of workers' compensation systems 
in the production of the Sixth Edition was quickly reduced by 
attrition. Two Medical Directors for state workers' compensation 
systems, Dr. Alan Colledge and Dr. Hal Stockbridge, withdrew from the 
editorial process of the Sixth Edition. Dr. Stockbridge apparently 
withdrew for reasons unrelated to the editorial process. However, Dr. 
Colledge testified before the Iowa Task Force that he withdrew because 
of disagreements over the content and the methodology being developed 
for the Sixth Edition. Dr. Colledge has practical experience in 
workers' compensation systems from clinical practice and impairment 
ratings to medico-legal settings, to government experience as Utah's 
workers' compensation medical director. While state Medical Directors 
were initially involved, the Iowa Task Force was not informed of any 
state commissioner or agency head being invited onto the editorial 
staff.
    Of perhaps greater concern than the editorial makeup of the Sixth 
Edition is the significant number of errors included in the initial 
publication as well as in the subsequent errata. The AMA and the 
editors have produced a product that people rely upon for serious 
business purposes that has so many identified errors that it required a 
52 page errata to publish them all, as well as an entirely new printing 
for additional changes. It is noted that the second printing is not 
identified as a corrected version. Therefore, it is perhaps impossible 
for a state workers' compensation agency, which must review an 
impairment rating, to know if it was done with the corrected version of 
the Sixth Edition, or the original flawed publication. Dr. Rondinelli 
has stated that corrections and clarifications to the Sixth Edition are 
likely to be ongoing in nature. Therefore, a workers' compensation 
agency cannot accurately rely upon the Sixth Edition as the publication 
is under continual amendment. Furthermore, a recent business 
solicitation from Dr. Brigham reports that 80 percent of impairment 
ratings are incorrect and his team of ``certified'' raters will review 
ratings and provide corrections.
    Although the Iowa Task Force detailed the numerous errors, those 
errors are too detailed and require significant explanation and will 
not be further detailed herein but can be found within the Task Force 
Report at the link previously provided.
            Cultural Bias
    The Iowa Task Force was the first body to question the scientific 
basis of and the potential for cultural bias in the questionnaires and 
tests included within the Sixth Edition. It was confirmed that the Dash 
and Quick Dash questionnaires, which were created for the Sixth 
Edition, are not culturally sensitive and they have not been tested to 
determine the reading proficiency level which a native English speaker 
must possess in order to be able to read, understand, and answer 
questions appropriately. By failing to properly test the Dash and Quick 
Dash forms it is highly possible that the questionnaires may result in 
invalid (artificially high or low) scores for any of the numerous and 
diverse non-Anglo cultures which exist in the Iowa workforce. Lack of 
reading level proficiency testing means these questionnaires may result 
in invalid scores for those of lower educational levels.
    This lack of sensitivity and proficiency testing results in a 
significant possibility of a disparate impact in the ultimate 
impairment rating assigned to persons of different cultures or 
educational levels. The Dash and Quick Dash scores are not only used as 
part of the ``net adjustment formula'' which can modify the normal 
impairment ratings, Sixth Edition, p. 11; if the scores are 
inconsistent with other modifiers by 2 or more grades then the grade 
modification process is thrown out entirely, Sixth Edition, pp. 406-
407; and if they are simply too high (above 60) then the worker may be 
classified as a symptom magnifier or in need of a psychiatric 
diagnosis, Sixth Edition, pp. 447-448.
    The only commentary from the AMA or those interviewed by the Iowa 
Task Force came from Dr. Rondinelli who suggested that given the lack 
of cultural sensitivity in these tools, the questionnaires simply not 
be utilized with members of a minority population. However, the result 
of Dr. Rondinelli's suggestion would be to endorse disparate 
methodologies for rating permanent impairment for persons of different 
cultures, ethnicities, and educational ability. Simply rejecting use of 
these modifier questionnaires would eliminate a potential mechanism for 
such a person to have her or his impairment rating legitimately 
modified. Such blatant disparate treatment is not only unfair, it is 
possibly legally discriminatory.
    Iowa has long been at the forefront of equal protection for all its 
citizens. The Iowa Division of Workers' Compensation cannot endorse the 
use of a rating system that has a high likelihood of discriminating 
against classes of persons. Other jurisdictions should refuse to do so 
as well.
            Costs to the Iowa Division of Workers' Compensation and 
                    Others
    There are numerous costs to state jurisdictions and others 
resulting from alterations of impairment guidelines. In addition to 
state workers' compensation agencies it is necessary to focus on the 
costs to unrepresented workers, medical professionals, and also the 
federal government.
    The primary cost to state workers' compensation jurisdictions will 
be borne in increased levels of litigation. Workers who are 
dissatisfied with the level of voluntary disability payments will seek 
to petition for additional benefits. There is a likelihood that those 
litigation claims may include complex issues such as whether the 
Guides' standards for causation and apportionment are applicable or 
overturn case law precedent and whether the permanent partial 
impairment ratings comport with the factors of permanent disability 
inherent in the state's own workers' compensation act. As litigation 
increases it results in longer timelines from the date a petition is 
filed until a final agency decision is produced. The longer it takes 
for litigation to occur the greater the likelihood that injured workers 
will be forced to seek alternate means of support including support 
from the federal government.
    As was previously mentioned, the Iowa system requires good faith 
claims handling to fulfill the self-effectuating payment model. Most 
workers will simply agree to the voluntary payment made by the employer 
or insurance company without seeking attorney representation. If it is 
likely that voluntary payment levels are reduced there will be a 
significant increase in applications for other benefit programs. 
Furthermore, workers in rural areas of a state may be required to 
travel greater distances for an impairment rating as the number of 
doctors trained in the use of the Sixth Edition is greatly limited. For 
significantly disabled workers the increased travel may result in 
significant hurdles to obtain benefits that should be voluntarily paid 
by the employer or insurance carrier. Such hurdles may result in 
driving greater numbers of workers to apply for social security 
disability benefits or to seek other government programs.
    Medical professionals who are called upon to provide expert 
opinions as to matters in workers' compensation claims face significant 
costs in use of the Sixth Edition. Due to the complete paradigm shift 
and the complexity of the new paradigm, it was estimated that a medical 
professional would need to attend a minimum 8 hour training course or 
spend 28-30 hours of self-study. The costs of such training are 
increased as the training often occurs out of state and requires an 
absence from day to day duties with patients. Many doctors will opt out 
of the workers' compensation system if they are required to seek 
certification or prove they have obtained extensive training. For rural 
doctors it is not cost efficient to seek training as they see so few 
workers' compensation patients that they cannot recoup their 
investments. Hence workers in rural areas will have less access to 
proper ratings under the Sixth Edition. Any increase in costs 
associated with training and increased medical examination fees will be 
passed along to employers and insurance carriers.
    As has been shown consistently throughout the testimony provided, 
when injured workers face hurdles caused by amendments to state 
workers' compensation programs they will seek assistance from the 
federal government. The cost shifting that can occur can be extensive. 
A common example of cost shifting which is already a significant 
federal concern is the shifting of medical costs from workers' 
compensation insurers to Medicare. Without strict scrutiny of 
settlements by the federal government there is the dramatic risk of 
having Medicare make medical payments that are the clear liability of 
the responsible insurer. An insurer may choose to pay a premium 
settlement to a worker with the understanding that they waive any 
further obligation to make medical payments, thus leaving the worker to 
seek Medicare coverage for future care. Likewise, if monetary value of 
injury payments is reduced either through legislative changes or 
through indirect means such as the new AMA Guides it is apparent that 
there will be a corresponding increase in the number of workers who 
will submit applications for Social Security disability benefits.
Conclusion
    Thank you for your interest in the probable impact on the state of 
Iowa, other workers' compensation jurisdictions, and the federal 
government resulting from the publication of the AMA Guides, Sixth 
Edition. The information provided will hopefully spur further interest 
in this topic that can have a significant impact on participants in 
workers' compensation systems throughout the United States. I have 
greatly appreciated the opportunity to share my thoughts with you and I 
welcome further questions on an individual basis as your investigation 
moves forward.
                                 ______
                                 
    Chairwoman Woolsey. Thank you very much. Each one of you 
brought to light a lot of what we are concerned about. I have a 
question. We have a lot of questions. Just for the record, 
assume I am a worker that got injured on the job. Why do I care 
about this at all? What difference will that make to me, 
starting with you, Dean.
    Ms. Spieler. There is some variation among States, but in 
many States, the number that is assigned to the impairment will 
be in a fairly straight line to the benefits. So there is a 
formula in State statutes. In West Virginia, the time that I 
was in charge of the program, it was a--4 weeks per each 
percentage point based upon a calculation of wages that relate 
to the preinjury wages with a cap of the State average weekly 
wage. So there is a direct line between, in many States, 
between the number that is given as a result of the guides. In 
an additional number of States, it seriously impacts the 
ultimate, although the formula may not be quite as lengthy.
    Chairwoman Woolsey. Is it the duration of coverage also, 
how long I will be covered for my injury?
    Ms. Spieler. Again, that depends a bit on States, but in 
the majority of States, yes, and it affects in particular the 
compromising release agreements that are worked out between the 
parties in these cases, because it helps in the quantification 
of the amount of money that the injured worker receives. That 
is why the numbers in the guides, as opposed to the process of 
evaluation, are so critical and should be scrutinized.
    Chairwoman Woolsey. So Mr. Uehlein, this is very important 
to the worker.
    Mr. Uehlein. This is very important to the worker.
    Chairwoman Woolsey. So my question is, if there wasn't any 
great significance from the fifth to the sixth edition, why was 
it necessary in the first place?
    Mr. Uehlein. Well, there were numerous criticisms, as we 
look at--as the AMA looks every 4 or 5 years, they keep looking 
to how to improve the system.
    Chairwoman Woolsey. But it doesn't appear it was improved. 
It went backwards.
    Mr. Uehlein. I would submit to you and my associate, Dr. 
Christopher Brigham will be submitting testimony on this, that 
the sixth edition is simpler to use. The training is easier 
when it is applied. It is more consistent and fairer, 
especially when you get--go between different body parts.
    Chairwoman Woolsey. Well, speaking of training, okay, Dr. 
Nimlos virtually has said you have to be a mathematician to be 
able to work out the formulas for the ratings. So, is it true 
that one of the developers of this rating system is now a 
trainer? Did this person set up their own future career by 
having it so complicated that now training is sort of 
necessary?
    Mr. Uehlein. Well, training, there are many companies in 
the country that perform training, including the one I am a 
director on. I would say that training is an essential function 
in any system. The fact of the matter is that what we can tell 
you about training is that we find it easier to train doctors 
under the sixth edition than we do under the fifth edition.
    And just for the record, let me make it clear, that in 
doing this, to the extent that we benefit as a company, we 
would benefit more from the higher error rates that our 
statistics demonstrate, which are very considerable statistics, 
under the fifth edition, rather than the sixth edition. 
Contrary to what I heard testified to earlier, the sixth 
edition has a lower error rate, therefore, it is fairer to 
employees across the board.
    Chairwoman Woolsey. Dr. Nimlos and Mr. Godfrey, would you 
like to respond to this?
    Mr. Godfrey. I would like to respond. Within our task force 
you will see testimony from Dr. Robert Rondinelli, whose name 
is on the front of this book. He is associated with Dr. 
Christopher Brigham. And again, you can look at Dr. Brigham's 
Web site, which is part of my written testimony. They estimated 
that it would take up to 30 hours of self-study and an 8-hour 
course.
    Now we are talking about doctors closing down their day-to-
day practice to go to a 8-hour full day course or over the 
course of 2 days, plus travel. That is a significant cost. When 
we had workers within the Iowa workers' compensation system, 
most of these people that are going to be responsible for doing 
impairment ratings are going to be local doctors that are not 
going to have the need to become actual IME doctors. They are 
going to be asked, someone came to you, broke their arm, what 
is their impairment rating?
    This new system is definitely not easier. We had two 
doctors on our task force from both sides, and they agreed that 
it is much more difficult and time consuming, and that it costs 
the employers more because it takes longer for a doctor to do 
the examination.
    Chairwoman Woolsey. Dr. Nimlos, did you want to add to 
that?
    Dr. Nimlos. Well, actually, there is an article in the 
IAIABC Journal, which 15 people read, but Dr. Reinhorn, who was 
involved in the development of the guide, wrote in his personal 
observations in the spring of 2009 edition, I think about the 
extra time taken to do AMA guides sixth edition ratings and he 
asserted that there were seven expert examiners who taught 
other people how to do sixth edition ratings, and it is from 
that study that I drew the 5 minutes and 25 minutes for the 
sixth. These were people who were teaching other people how to 
do the ratings, so I think that suggests that they do take 
longer. They are more complicated for me. I know I would have 
trouble dictating or discussing such a thing over the telephone 
with attending doctors. And I really have no trouble with that 
under the fifth.
    Chairwoman Woolsey. Thank you.
    Congressman Payne.
    Mr. Payne. Thank you very much.
    Dr. Burton, your testimony describes claimants who are 
eligible for both SSDI and State workers' compensation and 
under Federal law are limited to 80 percent of their preinjury 
earnings. SSDI reduces its liability offsetting workers' 
compensation payments from what it owes a claimant. However, in 
15 States, including our State of New Jersey, there is a so-
called reverse offset where States reduce the amount that has 
to, that has to be paid by workers' compensation, by the amount 
paid first by SSDI.
    Are these 15 States getting a competitive advantage over 
States that do not have it? And should Congress examine costs 
to the SSDI fund from the reverse offset?
    Mr. Burton. I think they are. We will probably need 
bodyguards going back to New Jersey after saying this. But I 
think it is the case that, because what the reverse offset does 
essentially is reduce the cost to the employers and the 
carriers in the States that are allowed to take advantage of 
that reverse offset. And those 15 States got a break. Congress, 
I think, woke up essentially too late on this issue and felt it 
was too late to do the right thing for those 15 States. But I 
think the logic of this would be you ought to get rid of the 
reverse offset for all States and just let Social Security 
reduce the amount of benefits that are paid by Social Security 
rather than reducing the workers' compensation benefits.
    Mr. Payne. Let me also ask you, some have described the 
desire of States to compete based on lower workers' 
compensation benefits as a ``race to the bottom.'' Can a State 
have a modern workers' compensation system which adheres to the 
recommendations made in 1972 by the National Commission without 
losing out to pressures and threats by employers to move to 
another State with lower workers' compensation insurance costs? 
Does this race to the bottom lend to inevitable pressure on the 
SSDI fund, which is running a deficit?
    Mr. Burton. No, I think it is a two-step process. The race 
to the bottom involves workers' compensation. And almost every 
State feels those pressures, regardless if a State that is 
ranked 38th or 40th in the country in terms of their cost to 
the workers' compensation program, you go to the legislative 
hearings there and they always find the 45th ranked State to 
compare themselves to and therefore justify having to cut back 
their benefits some more. So what happens is you cut back on 
workers' compensation, and the more workers' compensation is 
cut back, the more there is left to pick up by the SSDI 
program.
    Mr. Payne. Thank you. Mr. Uehlien, the new edition rejects 
ratings for what is called subjective factors such as pain, yet 
pain can be severely disabling with regards to functionality. 
The fifth edition allows for additional rating for pain, yet 
the sixth edition simply treats it as one-size-fits-all factor 
and it fails to consider how pain affects individuals.
    Does this reflect a bias against injured workers? We have 
always had this question about pain, how do you measure pain, 
and so I just wonder if you would respond to that.
    Mr. Uehlein. Absolutely. I am glad you asked that question, 
because pain, the issue of pain in disabilities systems is one 
of the most complex issues there are. If you, in fact, look at 
blind studies, and you would find that it is very difficult to 
objectively measure pain. My belief is that the sixth edition 
does address pain, but it also recognizes that it is subject to 
abuse and attempts to come up with a consistent way of 
utilizing it in the context of creating a grid for medical 
functionality.
    Mr. Payne. Mr. Godfrey, you mentioned it is interesting 
about ethnic and racial differences. And just take pain, for 
example, and you mentioned immigration from central Europe, 
say, Bosnia or from Somalia or Sudan, would you say that maybe 
pain is endured more by different ethnic groups having 
something to do with the previous experience or where they are 
from, and that, perhaps, pain is supposedly part of life and 
you endure it rather than speak out against it?
    And secondly, if it is a feeling that you may lose your 
job. In many developing countries, the rights of the workers 
certainly are not where they are here, and the fear may be that 
recrimination may be taken against a person who complains about 
a legitimate problem?
    Mr. Godfrey. I think both of those can be addressed in the 
same sort of response. I don't think that the individuals 
necessarily experience their pain differently, but the response 
to that pain is obviously different. Those who maybe do not 
speak English as their first language may want to go to a 
physician and emphasize their pain, and the only way they can 
do that is to be very reactive. It may come across as being 
overemphasizing the pain. Other cultures may have shame in 
feeling pain or reporting pain to an employer, so then they 
underreport the level of pain that they are actually 
experiencing. So that is also likewise a concern.
    One of the things that the sixth edition does that has not 
been done in previous versions, and maybe Dr. Nimlos or Dr. 
Uehlein can describe this as well, but one thing that is 
troubling to me is as we talk about these cultural biases 
within the DASH and the other testing, if there is a movement 
because of increased scores that would be considered out of the 
norm, they bring in the concept of malingering, and that is not 
a term that has been used in the previous editions of the 
guides. And I think that that speaks to discredit an entire 
claim of an individual because of the way that they react to 
their pain.
    And when we talk about the reactions based upon culture, I 
think that is a very significant concern, because if you have 
somebody that perhaps is not speaking because of their culture, 
and they overreport their pain perhaps, once you get that term 
``malingering'' in a workers' compensation case, let us say 
your claim is pretty much over with. So I think that the AMA 
guides brings up that term. I think that is a dangerous 
encroachment within the system to bring that in.
    Chairwoman Woolsey. Thank you.
    Congressman Sablan.
    Mr. Sablan. Thank you very much, and good morning.
    Commissioner, the editor of the AMA guides, Dr. Christopher 
Brigham, Mr. Uehlein's associate--did your task force, the Iowa 
task force, have concerns with the potential for conflict of 
interest here? And would you please describe this concern?
    Mr. Godfrey. Well, obviously the issue of conflict of 
interest was not our primary concern. Our primary concern is 
this sea change between the fifth edition and sixth edition. It 
was a concern as we spoke with Dr. Brigham and continued to be 
recipients of advertisements and the like from impairment.com. 
It seems as though much of this sea change came about because 
of Dr. Brigham and his associates, and it appears as though 
much of the training that is provided, many of the resource 
books and the like which are provided, and many of even the 
peer reviews tend to be articles that are either Dr. Brigham or 
his associates. I think that the authors of this book, or if we 
are enabled to have some other organization, perhaps a 
governmental organization, step up to the plate, I think the 
contributors to the book should step away from the training and 
especially the peer review of it. I think that that does lead 
to some potential for a serious conflict of interest.
    Mr. Sablan. All right. Thank you.
    I come from--I am a very simple man. I come from a very 
simple place where, if we are having a conversation and I am 
saying no to you, I would be nodding my head to you like this, 
because it means a yes. But I am beginning to get it that this 
sixth edition has actually created a situation where it is 
saying yes, and people would be turning their heads this way. 
There is a huge difference that Dr. Nimlos has even said that 
it has become complicated.
    So, Commissioner, I will go back to you. How do you respond 
to Mr. Uehlein's contention that the sixth edition is fair to 
all stakeholders.
    Mr. Godfrey. Well, I think that our task force report, if 
you read through that, it is very clear that it is not. An 
example of that, I believe, is found on page 2 of my written 
testimony. In Iowa we have a schedule where an arm is worth 250 
weeks of disability benefits. If your impairment rating under 
the fifth edition, just as a generic example, would have been 
10 percent impairment, and it is reduced to 5 percent, that can 
cut your benefits in half.
    Now, one other thing that the sixth edition does, and 
again, I am not the physician testifying here, so I would 
welcome either of the other two physicians to explain it, but I 
think it would be fair to explain how impairments of the nerves 
in the upper extremities, you can have three nerve impingements 
or three nerve involvements, and only two of them are rated, 
wherein from the fifth edition all three would be rated. I 
don't understand how that could be fair to an injured worker 
who has three nerves impacted by an injury to only get a rating 
for two of them. That is not the way that our work comp system 
in the State of Iowa has been set up, and if that is going to 
be a change, I think it should be a legislative change that is 
determined by our Representatives and our Governor.
    Ms. Spieler. May I say something?
    Mr. Sablan. Sure. I yield back my time to the Chair.
    Ms. Spieler. Yes, I know that Mr. Uehlein indicated that 
these guides are more fair in this sixth edition. And I think 
it is important to look at what ``fair'' means. There is 
fairness in that each worker might be treated the same who 
comes in to someone for an evaluation. That is a consistency 
across workers. There may be an argument that the fifth--the 
sixth edition increases that, leaving aside the complexity of 
it.
    On the other hand, ``fair'' could be viewed as the question 
of adequacy in terms of the rating and how it relates to the 
functional capacity of the individual in the office. I don't 
think that is how Mr. Uehlein is using the word ``fair,'' nor 
is it the way it is used in any of the secondary literature 
where--of the people who believe that the sixth edition is an 
improvement. There is never any correlation that is discussed 
between the numbers and the adequacy of the rating in relation 
to actual functional capacities to do the things that matter. 
And across the board where there is an attempt to increase 
consistency, it seems to be achieved by reducing numbers as 
opposed to by reexamining them and deciding what their adequacy 
is.
    And so I would suggest that this is fairness in terms of 
consistency, but not in terms of accuracy, in terms of 
adequacy.
    Chairwoman Woolsey. And, Dr. Burton, you wanted to respond.
    Mr. Burton. Yes. I want to follow up on Emily's point and 
go back to something that Mr. Uehlein said. It is true the AMA 
guides makes a clear distinction between an impairment, which 
is a medical condition, and disability, which is more simply 
measured by wage loss. And the AMA guides talk a lot about we 
are not rating disability, we are rating impairment.
    The reality is that most States use the AMA guides as if 
they were rating disability, and that is the difficulty we have 
got--one of the fundamental difficulties we have got with AMA 
guides. And when he talks about fairness, he is talking about 
fairness. As Emily said, he may get more consistent impairment 
ratings, but that doesn't mean that you are doing a better job 
of getting ratings that reflect the reality of what happens to 
workers in the labor market.
    Now, the sixth edition says you can't do that essentially, 
to oversimply. But, in fact, Emily and I have coauthored an 
article in JAMA, the Journal of American Medical Association, 
on the fifth edition in which we pointed out that there are 
data, and have been data for many years, that could be used by 
the American Medical Association if they really, seriously 
wanted to recognize what this guide is being used for, which is 
to rate disability, not impairment; there are ways they could 
make this a much more useful and much more accurate 
publication. They have essentially ignored that advice, and 
that is why my own view is I don't think the AMA is capable of 
doing a guides for disability the right way. It has to go to 
something like the Institute of Medicine.
    Chairwoman Woolsey. Mr. Uehlein.
    Mr. Uehlein. Just as I said, a lot of discussion confuses 
the issues between the adequacy of rates and the use of the 
guides. The guides are a tool for doctors. The problem that Dr. 
Burton discusses here is that legislatures have not completed 
the job of deciding what is adequate rates and how we are going 
to go from medical functionality to the determination of the 
rates. It is not the problem with the guides, it is the problem 
with deciding in individual States how we are going to get 
there.
    Chairwoman Woolsey. Dr. Nimlos, did you want to say 
anything? And then Mr. Godfrey, and then Dean Spieler, and then 
we will wrap up.
    Dr. Nimlos. Thank you. I would like to say a lot of things, 
but I will try to keep it short.
    With regard to the malingering issue, it does sound unfair 
to me to bring that up when the incidence in injured workers of 
malingering is about 1 percent. If you approach it from that 
standpoint of suspicion over malingering so intently, then 99 
percent of injured workers become treated as if they were 
malingering, which is a very bad way to deal with the claim.
    With regard to the statistics about the error rate, these 
have appeared to me to only be found in articles I found 
through Google. I haven't found anything in the medical 
literature except for 1 study where it was 17 patients 
comparing a doctor who reviewed outside exams compared to his 
own assessment, which interestingly came to the same number of 
statistics that I had on a selection of over 400 cases that I 
reviewed where the error rate overall in independent medical 
examinations was 55 percent. That didn't include only 
independent examiner errors in rating, it had other errors in 
with it. But among those errors in rating, in distinction to 
those that Dr. Brigham has reported where he essentially says 
that all of the ratings that he found that were in error were 
too high, or nearly all of them, all of the ratings that I 
found were too low, except one. I frequently found that the 
examiners came to a zero rating when plainly in their report 
there was actually evidence for a clear-cut impairment rating.
    Chairwoman Woolsey. Okay.
    Dr. Nimlos. So I don't disagree with the error rate, but I 
am concerned these ratings aren't always too high--my 
experience was too low--and that the groups that were selected 
are ones that came to Dr. Brigham's practice because there was 
some worry about them, which I think greatly would overstate 
the actual amount of errors and the degree of error.
    Chairwoman Woolsey. So that leads me, in the wrap-up with 
Mr. Godfrey and Dean Spieler, will somebody tell me what went 
wrong with this process? How did we get here?
    Mr. Godfrey. Well, I think that I can address that by kind 
of addressing what Dr. Uehlein said--oh, I am sorry, Mr. 
Uehlein said. He said, the guides are not the problem, it is 
the State workers' compensation systems which are the problem. 
And that is actually a quote that Dr. Brigham gave to our task 
force. He said, the more significant problems do not lie with 
the guides, but rather with how the impairment ratings are used 
by the workers' compensation system or systems. The AMA guides 
will continue to evolve and improve. The systems that make use 
of the guides must also evolve.
    If I was going to evolve in terms of how we compensate 
injured workers, that is a determination that should be made by 
the people in the State of Iowa. For a consensus that refuses 
to identify itself, it refuses to tell us how they come to the 
numbers which are arrived at, it refused to tell us who was 
involved in the process of how it was even determined that we 
had to have this change from one system of finding impairment 
or disability to another, those aren't decisions to be made by 
that group. They are to be made by the people of Iowa, or, more 
broadly, they should have some guidance from the Federal 
Government to tell us what boundaries should be set for each 
State so when they determine how we get to how we find 
impairment and resulting disability, that we have that 
framework there so we don't violate that. And I think perhaps 
it has been this reliance upon the AMA since the early 1970s, 
we have allowed them to play that role. And I think that with 
the sixth edition, it really brings home the fact that maybe 
that is not where we should look anymore.
    Chairwoman Woolsey. Thank you.
    Dean Spieler.
    Ms. Spieler. I wanted to make two specific comments and one 
general one, if you don't mind. One is that Mr. Uehlein just 
suggested that the guides is a tool for doctors, but, in fact, 
treating physicians have no need to quantify the impairments of 
their patients. It only becomes necessary to quantify 
impairments if you are looking at a compensation system. And so 
I think it is--the word that comes to mind is disingenuous for 
anyone who is involved in the development of the guides to 
suggest that it is only for doctors, because you wouldn't have 
a guide unless had you to quantify for compensation systems.
    So it is inevitably used within compensation systems, and 
the problem with the numbers is that they don't correlate with 
anything. They don't correlate with the original percentages in 
the original workers' compensation laws. They did not refer to 
that when the percentages were originally developed. They don't 
correlate at all with any of the economic studies in terms of 
what kinds of impairments actually lead to workplace 
disability. They don't correlate with studies that have been 
done about people's view of quality of life. They are simply 
numbers that some small group of physicians have invented.
    And on the ``what is to be done'' side of this, I think 
that at this point it is very unlikely that all States are 
going to be able to push back on this whole process. It has 
become a kind of assumed gold standard in a situation where it 
clearly should not be, and the race to the bottom encourages 
that.
    So I think that the problem is a twofold problem when you 
start looking at the costs being referred to Social Security 
Disability. One is that you need a better guide, and that 
clearly needs to be done by an independent group like the 
Institute of Medicine, perhaps with the assistance of NIOSH; 
and second, that maybe there does need to be some 
recommendations with regard to the minimum standards for State 
workers' compensation programs in order to stop the bleeding 
from workers' compensation--from workplace injuries into DI, 
which has been going on for a very long time, and not just as a 
result of this recent trend.
    Thank you.
    Chairwoman Woolsey. Thank you.
    Congressman Payne.
    Mr. Payne. Yes. Ms. Spieler, your testimony recommends that 
Congress make a request to the Institute of Medicine to review 
the AMA guides. What are your views on having the National 
Institute for Occupational Safety and Health review the AMA 
guides and develop a more evidence-based system?
    Ms. Spieler. I think if it went to the Institute of 
Medicine, it would be a more transparent process to some 
extent. And I am not certain that NIOSH has the kind of 
multidisciplinary people internally to do this on their own. It 
might make sense to have NIOSH manage an Institute of Medicine 
process, but I would leave that to the--obviously to people who 
are more familiar with the way these things work in the system.
    Mr. Payne. Mr. Burton.
    Mr. Burton. There is a model that I think suggests the IOM 
is an ideal place to assign this task. The only other ratings 
system for partial disability, that is permanent partial 
disabilities that is in widespread use in the U.S., is the one 
for veterans. And the veterans disability rating system was 
looked at.
    I happened to serve on an IOM committee about 3 years ago, 
and I think that it was an extremely useful process. I don't 
know all the consequences of those recommendations, but it was 
quite thorough. They have an excellent staff. They put together 
a really representative group of people.
    So it is not that we are picking the IOM out of ether, it 
is they have got a track record of looking at a disability 
rating system.
    Incidentally, they consider whether or not they should 
substitute the AMA guides in place of the disability rating 
system, and said with all the problems with the disability 
rating system, we are still better than the AMA guides. So it 
is another reason why I have some skepticism about the AMA 
guides.
    Anyway, that is what I would encourage you to do would be 
to try the Institute of Medicine.
    Mr. Payne. Just quickly, Mr. Uehlein, in Kentucky the 
legislature voted to delay adoption of the sixth edition, and 
Iowa has voted not to accept it. Why have States chosen not to 
accept this edition, in your opinion?
    Mr. Uehlein. Like the other members here, I am a very 
practical person who deals in the real-world practice. As I go 
around, the largest group I see advocating about the issue is 
the plaintiffs' bar. And I believe in my heart of hearts that 
that has something to do with the fact that the fine, which 
accounts for 30 to 40 percent of the rating, is rated higher 
under the fifth edition than the sixth edition.
    There is a lot of misinformation. This is a complex topic. 
I like the idea of using facts to make your determination.
    Mr. Payne. Do you agree with that, Mr. Godfrey?
    Mr. Godfrey. I would point you to the makeup of our task 
force in the State of Iowa. We had two claimant's attorneys, 
which would be considered the plaintiffs' bar. We had two 
defense attorneys. We had two doctors that work quite often 
with insurance companies. We had two former deputy 
commissioners who used to work for the Division of Workers' 
Compensation, who are no longer involved with the system, but 
had knowledge of the fifth and fourth edition and took the time 
to review the sixth edition.
    The vote was 7 to 1 to say that Iowa should not subject its 
workers to the sixth edition. That is a pretty broad consensus. 
It is not plaintiffs' bar. These are medical professionals that 
have looked at this, these are attorneys on both sides of the 
issues, these are people that are impacted day to day and know 
how this affects the Iowa Workers' Compensation System, and it 
was pretty across the board.
    Chairwoman Woolsey. All right. Unless somebody would like 
to add something to that, I think we have gotten both sides.
    Dr. Nimlos.
    Dr. Nimlos. I would just like to briefly add my endorsement 
for the National Institutes of Occupational Safety and Health, 
maybe because that is my specialty, but also because I know 
that they have had experience in human factors assessment, and 
it may be a good idea for them to team with the Institute of 
Medicine, where I am not so familiar, but I think that NIOSH 
should have a role.
    Chairwoman Woolsey. Well, I thank all of you for being 
magnificent witnesses, and I thank my subcommittee members that 
were here. This is a very important issue. And ``Developments 
in State Workers' Compensation Systems'' was the name of this 
hearing, and we have asked some of the questions. I don't think 
we have gotten all the answers, and I don't think we have come 
up with a solution that is going to turn that around, but I 
think we need to get very serious about this.
    You have illuminated the problems facing workers who must 
deal with workers' compensation systems that are increasingly 
hostile to their claims. Clearly the latest edition of the AMA 
guides only exacerbates the problem. Our witnesses, as I said, 
have made great suggestions. We need to move on that, and it is 
my hope that NIOSH and/or the Institute of Medicine will take a 
closer look at the guides and come up with a better way to rate 
worker impairment. Probably they are going to have to be 
directed by their bosses here in the Congress to do just that, 
because they have--that is not one of the things that they have 
on their agenda right now. I think that is our job to do that, 
and I will be following up on that.
    So going forward, I also recommend that the AMA develop a 
transparent and inclusive process when it engages in private 
rating so that those who are affected by it can trust the 
results, or at least know where to question them.
    And finally we need to explore the cost shifting from 
workers' compensation to the Social Security disability 
program. As I said in my opening, Chairman Miller and I asked 
the GAO to study this particular trend.
    So again, I thank you. You have been wonderful. And before 
we adjourn, I want to submit, without objection, the following 
into the record, and it is a statement from the American 
Medical Association. They were invited; they sent a statement. 
So that is it.
    [The information follows:]

         Prepared Statement of the American Medical Association

    The American Medical Association is pleased to submit this 
statement for the record of the Subcommittee's hearing ``Development in 
State Workers' Compensation Systems.''
    Over the past several months, the committee staff has inquired into 
the development of the AMA Guides to the Evaluation of Permanent 
Impairment, Sixth Edition. We have been pleased to respond to those 
inquiries and hope that the information provided to date has assisted 
the committee's understanding of the development process. We feel that 
this work has enhanced the validity, improved internal consistency, 
promoted greater precision, standardized the rating process, and 
improved inter-rater reliability.
    If we can be of further assistance or respond to additional 
questions from the Subcommittee, we would be pleased to do so.
Overview
    The American Medical Association's (AMA) Guides to the Evaluation 
of Permanent Impairment (AMA Guides) is the most commonly used tool in 
the United States for rating impairment. The precursor of the AMA 
Guides originated in 1956, when the AMA Board of Trustees (BOT) created 
an ad hoc committee on Medical Rating of Physical Impairment to 
establish a series of practical guidelines for rating impairment of the 
various organ systems. From 1958 to 1970, the Committee published a 
series of AMA Guides articles in the Journal of the American Medical 
Association (JAMA). In 1971, these were published as a single volume, 
which has been revised in five subsequent editions.
    The AMA Guides, 6th Edition, published in 2007, introduced a more 
contemporary terminology and approach. The 2001 International 
Classification of Function (ICF) developed by the World Health 
Organization was adopted in place of the previous 1980 terminology of 
the International Classification of Impairments, Disabilities and 
Handicaps (ICIDH). This new classification provided evidence-based 
concepts, terminology, definitions, and a conceptual framework. This 
framework was implemented and applied to each chapter to enhance the 
validity, improve internal consistency, standardize the rating process, 
and improve inter-rater reliability. Feedback from users of the 6th 
Edition, including the Department of Labor--which adopted the 6th 
edition in May of 2009 through the Federal Employment Compensation 
Act--indicates that these goals were achieved. In addition, users 
report that it is both easier to use and to teach.
    With advances in medical science in recent years it follows that 
some impairment ratings have changed due to improved outcomes. 
Specifics of some of the changes are detailed in the statement below. 
In addition, the 6th Edition allows for ratings for some conditions 
that earlier editions of the AMA Guides did not.
    The AMA Guides, 6th Edition also implemented a new process modeled 
after other AMA editorial processes in order to provide greater 
transparency and input from stakeholders. An Editorial Panel, Advisory 
Committee, contributors and peer reviewers comprised of over 200 
individuals had input to this most current edition. These impairment 
professionals represented various stakeholders in the impairment 
process. The goal of the AMA Guides was to develop an impairment rating 
system that is fair and equitable to all parties.
Development of the sixth edition
    On average the AMA Guides editions are updated every five to seven 
years, in response to new or emerging medical practices, research, and 
stakeholder needs. AMA staff of the Divisions on Professional Standards 
and Book Publishing, in consultation with representatives from several 
medical specialty societies, undertook the project in 2004 to develop 
the AMA Guides 6th Edition.
    Invitations were issued to national medical specialty societies, as 
well as state and county medical associations, to nominate disability 
or impairment physician experts to serve as authors, content 
contributors, and/or reviewers. Forty-five organizations submitted 
nominations. Participants were chosen based upon their past 
publications, evidence-based research experience, reputation in their 
field and the application of scientific methods to problems of 
impairment evaluation. An Editorial Panel comprised of eleven members 
was established. The members were selected based upon their reputations 
for knowledge and application of clinical medicine and science to the 
field of impairment evaluation. The Editorial Panel outlined a set of 
recommendations to revise the AMA Guides 5th Edition. The 
recommendations were disseminated to a group of sixteen additional 
physician nominees for review and input.
    Based on these recommendations, the Editorial Panel identified a 
framework and adopted a set of axioms that would form the basis of the 
6th Edition. These axioms were:
     Adopt the terminology, definitions and, conceptual 
framework of disablement of the International Classification of 
Functioning, Disability and Health (WHO, 2001) in place of the current 
and antiquated ICIDH terminology (WHO, 1980);
     Make greater use of evidence-based medicine and 
methodologies;
     Wherever/whenever evidence-based criteria are lacking, 
give highest priority to simplicity and ease of application, and follow 
precedent unless otherwise justified;
     Stress conceptual and methodological congruity within and 
between organ system ratings; and
     Provide rating percentages that are functionally based 
whenever possible, unless/until science supports otherwise.
    Six of the Editorial Panel members were selected to be Section 
Editors. These individuals were charged with developing the 6th Edition 
in accordance with the axioms identified above. The remaining five 
Editorial Panel members served in a consultative role.
    Each Section Editor was assigned to lead the revision of a section 
consisting of 2-4 related chapters. Nominees from the various state and 
county medical associations and national medical specialty societies 
were assigned to a section based on his/her specialty and expertise. 
The Section Editors worked with contributors who wrote the specialty 
specific chapters. This process assured that each chapter had 
contributors in that specialty.
    Chapters in draft form were reviewed by the assigned Section 
Editor, then by all of the Section Editors. This approach ensured 
consistency across chapters and uniform adherence to the axioms 
established by the Editorial Panel. Next, chapters were disseminated 
for expert peer review including the remaining members of the Editorial 
Panel. Peer reviewers were selected based on past experience with the 
AMA Guides, reputation in the field of impairment, and recommendations 
from medical societies and other stakeholders.
    For the 6th Edition, an Advisory Committee was established, modeled 
after other AMA editorial committees and processes. Nominations for 
this committee were solicited from the various specialty, state, and 
county societies, as well as other stakeholders. The mission of the 
Advisory Committee was to solicit comments from their various societies 
and agencies and submit them to the Editorial Panel for its 
deliberations and final decision. The Committee had a charter with 
well-defined rules and procedures in place to facilitate sound 
decision-making.
    The six Section Editors met via conference call at least monthly to 
review questions and issues that required resolution. Section Editors 
met individually with their author teams to achieve uniformity and 
consensus on individual chapters. When consensus could not be reached, 
the issue was brought to the Editorial Panel for resolution.
    The review process chart is attached to illustrate the flow of 
editorial activities.
Impairment vs. disability
    The AMA Guides, 6th Edition is very clear about differentiating 
between impairment (determined by diagnosis) and disability, which is a 
legal term. The ICF model refers to both impairment and disability, but 
section 1.3d (page 5) of the Guides 6th Edition clearly describes the 
differences between the Guides terminology and ICF terminology. 
Disability is a determination made by administrative law judges in most 
jurisdictions and may or may not have a relationship to an impairment 
(e.g., you could have an impairment but no disability).
    All editions of the AMA Guides state that an impairment rating is 
not equal to a disability rating and is not intended to be a measure of 
disability since disability has to do with limitations or restrictions 
in job function rather than the actual anatomic limitation.
Additional information on specific chapters
            Mental and Behavioral Disorders
    The Mental and Behavioral Disorders chapter now provides a method 
for rating permanent impairment resulting from mental and behavioral 
disorders. Only impairments for selected well-validated major mental 
illnesses are considered. Impairment rating under the Mental and 
Behavioral Disorders chapter is thus limited to the following 
diagnoses:
     Anxiety disorders, including generalized anxiety disorder, 
panic disorder, phobias, posttraumatic stress disorder, and obsessive-
compulsive disorder.
     Mood disorders, including major depressive disorder and 
bipolar affective disorder.
     Psychotic disorders, including schizophrenia.
    To assess impairment using the Mental and Behavioral Disorders 
chapter of the Sixth Edition, the clinician must first make a 
definitive diagnosis using standard psychiatric criteria, including 
history, and adjunctive psychological, neurological, or laboratory 
testing. The Sixth Edition also supports the use of well-standardized 
psychological tests that may improve accuracy and support the existence 
of a mental disorder. The diagnosis (with the associated factors of 
prognosis and course) will form the basis by which one assesses the 
severity and predicts the probable duration of the impairment.
    The Guides Sixth Edition also uses three scales by which mental and 
behavioral impairment is rated: 1) the Brief Psychiatric Rating Scale 
(BPRS); 2) The Global Assessment of Functioning Scale (GAF); and the 3) 
Psychiatric Impairment Rating Scale (PIRS). The BPRS measures major 
psychotic and nonpsychotic symptoms in patients with major psychiatric 
illnesses. The GAF evaluates overall symptoms, and occupational and 
social function. The PIRS assesses behavioral consequences of 
psychiatric disorders within various areas of functional impairment. 
The purpose of including all three of these scales is to provide a 
broad assessment of the patient with mental and behavioral disorders as 
the individual scales focus on symptom severity and/or function. The 
objective of making a reliable diagnosis and coupling it with the 
assessment of these three scales is to arrive at a strongly supportable 
impairment rating.
            Central and Peripheral Nervous System
    The Central and Peripheral Nervous System (CNS) chapter of the 
Sixth Edition was also revised to provide a consistent method for the 
assessment of permanent impairment. The CNS chapter provides criteria 
for evaluating permanent impairment due to documented dysfunction of 
the various parts of the nervous system, emphasizing the deficits or 
impairments that may be identified during a neurologic evaluation. 
Neurologic impairments are assessed as they affect Activities of Daily 
Living (ADLs) and correlated(?) function.
    The Sixth Edition of the Guides describes a clear method for rating 
impairments due to nervous system disorders. The first step in 
assessing CNS impairment is to assess the most severe category of 
cerebral impairment, if any, from 4 categories: 1) state of 
consciousness and level of awareness; 2) mental status evaluation and 
integrative functioning; 3) use and understanding of language; and 4) 
influence of behavior and mood. The rater then assesses impairment of 
other organ systems (due to neurogenic problems), and combines this 
impairment with the single most severe category of cerebral impairment 
to arrive at a strongly supportable impairment rating. This method of 
assessing impairment is used for nervous system-related conditions, 
including epilepsy and traumatic brain injury.
            Spine
    Significant changes were made to the spine chapter to make spinal 
evaluations consistent with current medical science and evaluation 
approaches. Among the most common lumbar and cervical spine conditions 
that require rating are intervertebral disk (IVD) herniation at one 
level with or without resolution of radiculopathy (lumbar and cervical) 
and fusion at a single level with or without resolution of 
radiculopathy.
    Impairment ratings in the Sixth Edition are both more specific and 
intended to reflect a lesser impairment in cases where symptomatology 
has improved with appropriate treatment. Sixth Edition grids include 
impairment ratings for multiple level conditions, so that an 
alternative rating system (range of motion method in the Fifth Edition) 
is not necessary. This change acknowledges that range of motion 
assessed in a clinical setting is neither an accurate assessment of 
outcome nor predictive of function. Surgery should result in functional 
improvement for patients and therefore decrease impairment (the inverse 
of function); however, with the Fifth Edition, typically spinal surgery 
would increase impairment.
    The Diagnosis-Related Estimate (DRE) Categories described in the 
Fifth Edition were modified and expanded to create the Regional Grids 
used to rate spinal impairments in the Sixth Edition. The grids are 
designed to provide clearer categorization of many conditions and to be 
more consistent with clinical outcomes. The Sixth Edition ratings 
reflect the results of treatment, rather than the method of treatment 
(e.g., non-operative or conservative care vs. surgical treatment).
    DRE Lumbar and Cervical Category 1 in the Fifth Edition includes 
conditions with no significant clinical findings resulting in the 
assignment of 0 percent whole person impairment (WPI). In the Sixth 
Edition, a similar category, e.g., Class 0 with assignment of 0 percent 
WPI, is provided in Table 17-2 Cervical Spine Regional Grid: Spine 
Impairments (6th ed, 564-566) and Table 17-4 Lumbar Spine Regional 
Grid: Spine Impairments (6th ed, 570-573).
    In the Fifth Edition, DRE Lumbar Category II (associated with a 
rating of 5-8 percent WPI) includes cases with findings such as muscle 
guarding and spasm, asymmetric loss of range of motion and non-
verifiable radiculopathy. In clinical practice it may be difficult to 
validate one physician's findings of muscle guarding and spasm at 
another examination, leading to controversy (``dueling doctors'') with 
respect to rating those patients with questionable physical examination 
findings. In the Sixth Edition, the creation of Class 1 under the 
heading ``Soft Tissue and Non-Specific Conditions'' is intended to 
provide a category for rating those patients, and notes that similar 
findings must be present on multiple occasions (1-3 percent WPI in the 
lumbar spine and 1-3 percent WPI in the cervical spine, based on 
Functional History Grade Modifier). The impairment ratings acknowledge 
an injury and persistent symptoms and also reflect that findings are 
mostly subjective. Since Functional History is the only grade modifier 
used in this Class 1 illness (page 563), the lowest possible Net 
Adjustment is -1, and the lowest possible rating is Class 1, Grade B.
    Symptomatic herniated nucleus pulposus (HNP) is defined by the 
presence of radiculopathy at a level consistent with findings on 
imaging studies or non-verifiable radicular complaints at the 
clinically appropriate level(s). In the Fifth Edition, a HNP with a 
history of radiculopathy that has responded to conservative/ non-
surgical treatment or persistent non-verifiable radicular complaints is 
rated in the same category as nonspecific findings (Category II, 5-8 
percent WPI). In the Sixth Edition, these two conditions are 
distinguished. Non-specific findings are rated in Class 1 under Soft 
Tissue and Non-Specific Conditions, with an impairment range of 1-3 
percent WPI. For IVD herniation with resolution of radiculopathy or 
persistent non-verifiable radicular complaints at the clinically 
appropriate level(s), the results of treatment are taken into account 
and regardless of the type of treatment these cases are rated in the 
range of 5-9 percent WPI in the lumbar spine and 4-8 percent WPI in the 
cervical spine. According to the Fifth Edition, non-specific findings 
would typically be rated at the lower end of the range (5 percent WPI) 
and conservatively resolved radiculopathy that had improved following 
non-operative treatment would be rated at the higher end (8 percent 
WPI). Impact on activities of daily living is also considered. The 
Sixth Edition distinguishes between these two diagnoses and provides 
different cells in the regional grids for each. In these cases, the 
actual ratings in the Sixth Edition are similar to the Fifth Edition.
    In the Fifth Edition, DRE Lumbar Category III covers a broad range 
of conditions, ranging from significant signs of radiculopathy (without 
a specific etiology) to surgically treated IVD herniation that are, as 
a result of surgery, asymptomatic. The outcomes of treatment are given 
less consideration than the treatment in the determination of 
impairment ratings in the Fifth Edition. In contrast, in the Sixth 
Edition, Classes 1 and 2 differentiate between cases in which 
radiculopathy has resolved, regardless of the treatment method and 
persistent radiculopathy after treatment. Comparing Fifth Edition 
ratings to Sixth Edition ratings, a patient with resolved radiculopathy 
would be rated typically at the lower end of DRE Lumbar Category II (5 
percent WPI) and the patient with persistent radiculopathy would be 
rated at the higher end of DRE Category III (13 percent WPI). In the 
Sixth Edition, resolved radiculopathy from an HNP, regardless of 
treatment, is rated in the range of 5-9 percent WPI, based on function. 
Persistent radiculopathy, regardless of treatment, is rated in the 
range of 10-14 percent WPI. The approach used in the Sixth Edition is 
more consistent with clinical experience, in which radiculopathy 
generally results in more functional limitation. Thus, radiculopathy 
that persists at MMI would be appropriately rated in a higher class, 
and resolution of radiculopathy would result in a lesser impairment 
rating, regardless of the treatment method.
    A more significant difference in impairment ratings occurs with 
respect to classification of diagnoses of Alteration of Motion Segment 
Integrity (AOMSI), which includes fusion and, in the Sixth Edition, 
motion preserving technologies. In the Fifth Edition, AOMSI at a single 
level is rated in higher categories, regardless of treatment outcome. 
Impairment is in either DRE Lumbar Category IV (20-23 percent WPI) when 
no radicular findings are present or DRE Lumbar Category V (25-28 
percent WPI), when there is persistent radiculopathy. Multiple level 
fusions are rated using the ROM method.
    In contrast, the Sixth Edition differentiates between treatment 
outcomes. If appropriate treatment has resulted in improvement of the 
condition and better function, regardless of AOMSI, the condition is 
rated in Class 1 (5-9 percent WPI). In the case of persistent radicular 
complaints, regardless of AOMSI, the number of levels involved is the 
differentiating factor in the Sixth Edition, and impairment ranges from 
10 percent WPI for persistent radiculopathy at a single level to 33 
percent WPI, accounting for the greater impairment presumed to be 
present in the case of multiple level radiculopathy, instability, or 
after multiple level fusion.
    Cervical disc herniations are most commonly treated with anterior 
cervical discectomy and fusion. In the Fifth Edition this catapults 
ratings into DRE Cervical Category IV (2528 percent WPI) for a 
condition that is effectively treated with fusion. The Sixth Edition 
rating methodology, which is driven by diagnosis (IVD herniation) and 
outcome, rather than treatment method (in this case fusion), takes into 
account the generally good results and improved function after 
treatment for cervical disc herniation, regardless of the treatment 
method. Therefore, in the Sixth Edition, single-level disease with 
resolution of symptoms is rated in Class 1 (4-8 percent WPI) and 
persistent radicular symptoms at a single level are rated in Class 2 
(9-14 percent WPI). Multiple level herniations or stenosis-associated 
persistent l radiculopathy is rated in Class 3 or 4 (15-30 percent 
WPI), with increased impairment assigned in multiple level disease that 
remains symptomatic after treatment. In the Fifth Edition, DRE Category 
III provides rating for persistent radiculopathy without surgery or 
improved radiculopathy with surgery, and therefore, does not 
differentiate between outcomes from intervention (although 
decompression of cervical radiculopathy is more commonly accomplished 
with an anterior fusion than a posterior decompression).
    In the Fifth Edition, DRE Cervical Category V requires 
``significant upper extremity impairment including the use of upper 
extremity external functional or adaptive devices'' with total 
neurologic loss at a single level or multiple level neurologic 
dysfunctions. In the Sixth Edition, Class 4 describes bilateral or 
multiple level radiculopathy, without requiring dysfunction to the same 
degree as DRE Category V.
    In summary, although there are some differences in the impairment 
ratings assigned to the most common spine-related conditions, the Sixth 
Edition grids are designed to permit more specific and accurate 
classification of conditions by diagnosis, to reflect the outcome of 
treatment rather than the method of treatment, and to provide the same 
rating methodology for single or multiple level conditions, 
facilitating consistency in those ratings.



                                 ______
                                 
    Chairwoman Woolsey. In order to finish this, as previously 
ordered, Members will have 14 days to submit additional 
materials for the hearing record. Any Member who wishes to 
submit follow-up questions in writing to the witnesses should 
coordinate with majority staff.
    Without objection, the hearing is adjourned. Thank you.
    [Questions submitted and their responses follow:]

                                      [Via E-Mail],
                                             U.S. Congress,
                                 Washington, DC, November 17, 2010.
Mr. John Burton, Ph.D.,
56 Primrose Circle, Princeton, NJ 08540-9416.
    Dear Dr. Burton: Thank you for testifying before the Subcommittee 
on Workforce Protections at the hearing on, ``Developments in State 
Workers' Compensation Systems'' held on Wednesday, November 17, 2010.
    Representative Lynn Woolsey (D-CA), the subcommittee chair, had 
additional questions for which she would like written responses from 
you for the hearing record:
    1. Your research has indicated a cost shifting from state workers' 
compensation to SSDI as a result of changes enacted in the 1990s. The 
Committee intends to follow-up by having the GAO conduct such an 
assessment to quantify the costs and develop policy options.
    A. What data is needed and what analytical methods could be used to 
best quantify the degree and extent to which there is cost shifting 
from workers' compensation into Social Security Disability for workers 
who cannot qualify for state workers' compensation?
    B. As part of this assessment, should there be sampling of actual 
case files?
    C. What criteria should be used in filtering cases to be used in a 
sample?
    D. What states should be selected? Should states with a reverse 
offset be included?
    E. What years should be selected? Is there a baseline time frame 
against which such cost shift should be measured?
    F. What kind of legal review should be conducted?
    G. How large should the sample be?
    2. Beyond case file reviews, are there other means to quantify the 
dollar amount of the cost shift from state workers' compensation to 
SSDI, and project what these costs might be on a going forward basis 
over the next 10 years?
    3. Are there any estimates on the annual cost to SSDI from the 
``reverse offset''?
    Please send an electronic version of your written response to the 
questions in Microsoft Word format to Lynn Dondis and Richard Miller of 
the Committee staff at lynn.dondis@mail.house.gov and 
richard.miller@mail.house.gov by close of business Wednesday, December 
1, 2010, the date on which the hearing record will close. If you have 
any questions, please do not hesitate to contact Ms. Dondis or Mr. 
Miller at 202-225-3275.
            Sincerely,
                                             George Miller,
                                                          Chairman.
                                 ______
                                 

      Responses by Prof. Burton to Questions Posed by Ms. Woolsey

    1. Your research has indicated a cost shifting from state workers' 
compensation to SSDI as a result of changes in the 1990s. The Committee 
intends to follow-up by having the GAO conduct such as assessment to 
quantify the costs and develop policy options.
---------------------------------------------------------------------------
    \1\ Helpful comments on an earlier draft of the Proposed Study were 
received from Richard Burkhauser, Xuguang (Steve) Guo, Douglas Kruse, 
Melissa McInerney, Virginia Reno, Emily Spieler, and David Stapleton. I 
express my appreciation and absolve them of any remaining errant ideas.
---------------------------------------------------------------------------
    (A) What data is needed and what analytical methods could be used 
to best quantify the degree and extent to which there is cost shifting 
from workers' compensation into Social Security Disability for workers 
who cannot qualify for state workers' compensation?

    Study Design. There are several decisions that must be made in 
designing a study to determine the extent of cost shifting from 
workers' compensation into the Social Security Disability Insurance 
(SSDI) program.
    (1) Decision one: what level of aggregation of data should be used? 
My research with Professor Xuguang (Steve) Guo relies on state-level 
data for variables such as the application rate for SSDI benefits, the 
disability prevalence rate, and the expected amount of workers' 
compensation benefits for workers with permanent disabilities. There 
are virtues of studies using this level of aggregation and I discuss 
such studies further in my answer to your question 2. However, for the 
purpose of your Question 1, I propose a study of individuals who have 
applied for and/or received SSDI benefits. The information from a study 
at this level of disaggregation will provide valuable information on 
the extent of cost shifting from workers' compensation to SSDI.
    (2) Decision two: should the study involve applicants for SSDI 
benefits, persons who were just awarded SSDI benefits, or persons who 
were awarded SSDI benefits in previous years? There are advantages and 
disadvantages of each of these choices. A study of persons who have 
just applied for SSDI benefits can more closely observe the interaction 
between the workers' compensation and SSDI programs as the case 
proceeds. However, there are disadvantages, including the long delays 
for many cases between the date of application and the date when the 
decision about the award is made. A study including persons who were 
awarded SSDI benefits in previous years provides a better estimate of 
how statutory or administrative changes in the workers' compensation 
programs affected the applications for and awards of SSDI benefits. 
However, it is more difficult to administer a questionnaire to the SSDI 
beneficiaries if they are no longer actively involved in the 
administrative process. My recommendation is a study of persons who 
have just been awarded SSDI benefits. There persons are more likely to 
be accessible to complete questionnaires from which information not 
included in the SSDI application can be obtained.
    Decision three: which persons who have been awarded SSDI benefits 
should be included in the study? Each person who is awarded SSDI 
benefits in a state included in the study would complete an initial 
brief questionnaire. A stratified sample would be drawn that includes 
(1) persons whose disabilities do not appear to be partially or totally 
caused by work\2\ and (2) persons whose disabilities appear to be 
partially or totally caused by work.\3\ For those persons whose 
disabilities appear to be partially or totally caused by work, a 
stratified sample would be drawn that includes (1) persons who are 
currently receiving or previously received workers' compensation 
benefits and (2) persons are neither currently receiving nor previously 
received workers' compensation benefits? Additional criteria for 
selecting and stratifying the sample are discussed in the answer to 
Question 1(C). Those persons who are included in the study will be 
required to complete an expanded questionnaire.
---------------------------------------------------------------------------
    \2\ I recommend including persons whose disability does not appear 
to be partially or totally caused by work in the study in order to 
allow the study to determine if persons affected by the offset are 
typical of all SSDI applicants. In addition, the legal review of the 
case folder (described below) may find some cases where the beneficiary 
is not aware that work was a possible cause of the disability.
    \3\ Any case in which the SSDI award includes an offset for 
workers' compensation benefits would automatically be included in the 
category of cases for which the disability appears to be partially or 
totally caused by work.
---------------------------------------------------------------------------
    Decision four: what information should be collected for the SSDI 
beneficiaries in the sample from administrative records or from an 
expanded questionnaire? The administrative records can provide 
information on demographic information and on the amount of benefits 
affected by the offset provision for workers' compensation and SSDI 
benefits? The expanded questionnaire can also ask questions on a 
variety of other matters. For example, for SSDI beneficiaries who are 
neither currently receiving nor previously received workers' 
compensation benefits, questions will be asked about the extent of the 
applicant's knowledge of the workers' compensation program and whether 
the person applied for workers' compensation benefits. If the worker is 
currently receiving or previously received workers' compensation 
benefits, the questionnaire can determine if the workers' compensation 
benefits were for the same disability that resulted in the award of the 
SSDI benefits. The expanded questionnaire could also obtain information 
on the reasons why the person applied for SSDI benefits. Was the 
application encouraged by the employer, the workers' compensation 
carrier, another insurance company, and/or an attorney? The expanded 
questionnaire could also ask the set of questions on the Health and 
Retirement Study (HRS) about the accommodations at work offered by the 
employer, which may affect the disabled worker's propensity to apply 
for workers' compensation and SSDI benefits.
    Analysis. One aspect of the study will be an analysis by a lawyer 
or person familiar with the workers' compensation law in the state 
where the SSDI award was made of the information from the 
administrative records and the questionnaires completed by the SSDI 
beneficiary. For those persons who had disabilities that appear to be 
partially or totally caused by work and who never received workers' 
compensation benefits, the analysis will examine how many of these 
persons (a) should have qualified for workers' compensation benefits 
using the compensability rules in the state in which they applied for 
SSDI benefits, or (b) would have qualified for workers' compensation 
benefits using the tests for compensability contained in the Workmens' 
Compensation and Rehabilitation Law (Revised), [Model Workers' 
Compensation Law], which was published by the Council of State 
Governments in 1974. For the persons in (b), to the extent feasible, 
the analyst will identify the reasons why the persons did not receive 
workers' compensation benefits (such as a restrictive definition of 
occupation disease included in the state workers' compensation 
statute). A similar analysis of persons who had disabilities that do 
appear to be partially or totally caused by work and who never received 
workers' compensation benefits will be conducted based on the 
information in the administrative records or the expanded 
questionnaires in order to identify possible cases where the 
information suggests the cause of the disability was partially or 
totally caused by work but the SSDI beneficiary was not aware the 
possible link of the disability to work.
    The analytical methods include an extended qualitative analysis of 
the legal review of the outcomes of the analysis described in the 
previous paragraph. The study will also involve examinations of the 
samples of workers included in the study using standard statistical 
methodology, including regression analysis.

    (B) As part of this assessment, should there be sampling of actual 
case files?

    Yes, there should be a sample of actual case files. At the time of 
the award, an initial questionnaire should be administered asking the 
beneficiary about whether the disability was partially or totally 
caused by work. Depending on the answers to the initial questionnaire, 
the beneficiary may be asked to complete an extended questionnaire.

    (C) What criteria should be used in filtering cases to be used in 
the sample?

    The first criterion should be whether the disability was partially 
or totally caused by work, using the definitions included in the 1992 
Health and Retirement Study (HRS). These definitions were used by 
Robert Reveille and Robert Schoeni in a recent article.\4\ This 
criterion could be subdivided into those persons who satisfied 
Definition 1 (The impairment or health problem was the result of an 
accident or injury and work was the place where the injury occurred.) 
and Definition 5 (The disability was caused by work using any of the 
four previous definitions.)
---------------------------------------------------------------------------
    \4\ Robert T. Reveille and Robert F. Schoeni. ``The Fraction of 
Disability Caused by Work,'' Social Security Bulletin, Vol. 65, No. 4 
(2003/2004). The article may be accessed at the following Internet 
address: http://www.ssa.gov/policy/docs/ssb/v65n4/v65n4p31.html
---------------------------------------------------------------------------
    The second criterion should be whether the SSDI beneficiary is 
currently receiving or previously received workers' compensation 
benefits.
    The third criterion should be whether the SSDI beneficiary is male 
or female.

    (D) What states should be selected? Should states with a reverse 
offset be included?

    The initial phase of the research could involve four states, with 
the expectation that additional states will be added based on the 
results from this phase. Two of the fifteen states with reverse offset 
provisions and two states with the normal offset provisions should be 
selected. Two states in which workers' compensation compensability 
rules have been significantly tightened since 1990 should be included, 
as well as two states in which workers' compensation compensability 
rules have not been significantly tightened since 1990. Possible 
choices are:
    Oregon: reverse offset and significant tightening of compensability 
rules.
    New Jersey: reverse offset and no significant tightening of 
compensability rules.
    California: normal offset and significant tightening of 
compensability rules.
    North Carolina: normal offset and no significant tightening of 
compensability rules.

    (E) What years should be selected? Is there a baseline time frame 
against which such cost shift could be measured?

    This study will require persons who were awarded SSDI benefits to 
complete an initial questionnaire and the results will be used to draw 
the sample. As a result it will be easier to confine the study to 
current awards since the beneficiaries will be involved with SSA 
offices as part of the benefit determination process.
    The results will allow comparisons to be made among states which 
differ in the stringency of their compensability rules and the type of 
offset provision. In all four states in the initial phase of the 
research, an estimate can be made of the extent to which SSDI 
beneficiaries who have disabilities caused by work but who neither 
currently nor previously received workers' compensation benefits.
    The possible changes over time in the extent of cost shifting from 
the workers' compensation program to the SSDI program can be examined 
by the type of study discussed under heading 2) below.

    (F) What kind of legal review should be conducted?

    Each case in the sample should be examined by an attorney or other 
person familiar with the workers' compensation law in the state in 
which the SSDI beneficiary is located to determine if there is 
information indicating that the person may have been entitled to 
workers' compensation benefits in the state either using the state's 
current compensability rules or the compensability rules used in the 
Model Workers' Compensation Law. The legal review will rely on 
administrative records and on questionnaires completed by the SSDI 
beneficiary.

    (G) How large should the sample be?

    The sample size in each state will depend on the number of 
variables (or categories) that the GAO decides should be used in the 
analysis. A study may want to distinguish within each state the 
experience of:
    (a) SSDI beneficiaries who differ by cause of the disability: (i) 
beneficiaries who do not indicate that their disability was partially 
or totally caused by work; (ii) beneficiaries who indicate their 
disability was partially or totally caused by work using Definition One 
from the HRS, but not by the other definitions; and (iii) beneficiaries 
who indicate their disability was partially or totally caused by work 
using Definition Five from the HRS;
    (b) SSDI beneficiaries who differ by their receipt of workers' 
compensation benefits: (i) beneficiaries who are currently receiving or 
who previously received workers' compensation benefits; and (ii) 
beneficiaries who never received workers' compensation benefits.
    (c) SSDI beneficiaries who differ by their sex: (i) beneficiaries 
who are male; and (ii) beneficiaries who are female.
    This sampling design will result in 12 cells (3X2X2 = 12). A 
stratified sample will be drawn in each state so each cell contains 25 
SSDI beneficiaries, in order to satisfy confidentiality and statistical 
validity requirements. The total sample for each state will contain 300 
SSDI beneficiaries (12 X 25), and the total sample for the four states 
will be 1,200 SSDI beneficiaries. Oversampling of some of the cells or 
particular interest--such as SSDI beneficiaries who indicated their 
disability was partially or totally caused by work using Definition One 
from the HRA and who never received workers' compensation benefits--may 
be desirable, which would increase the sample size.

    2. Beyond case file review, are there other means to quantify the 
dollar amount of the cost shift from state workers' compensation to 
SSDI and project what those costs might be on a going forward basis 
over the next 10 years?

    Analysis of State-Level Data. As discussed in my testimony to the 
Subcommittee on Workforce Protections on November 17, there two studies 
underway concerning the determinants of applications for SSDI benefits 
using state-level data. Professor Xuguang (Steve) Guo and I have 
preliminary results indicating that reductions in the amounts of 
workers' compensation permanent disability benefits and the tightening 
of eligibility rules for workers' compensation permanent disability 
benefits during the 1990s accounted for about 3 to 4 percent of the 
growth of SSDI applications during the decade. However, these findings 
need to be used with caution. Professor Guo and I just began to analyze 
the determinants of SSDI applications in the years through 2006 and we 
did not find that changes in the workers' compensation programs during 
the current decade are associated with more SSDI applications. In 
addition, Professors Melissa McInerney and Kosali Simon have not found 
that workers' compensation changes in the 1990s resulted in more SSDI 
applications.
    While the evidence indicating that changes in workers' compensation 
programs resulted in more SSDI applications is mixed, the studies are 
continuing and I anticipate that the recent availability of data on 
SSDI applications for the current decade will help us clarify the 
relationship between workers' compensation and SSDI applications during 
the next year or so. Once the effect of the workers' compensation 
program on SSDI applications is clarified, it should then be possible 
to quantify the impact of the changes in the compensability rules and 
level of cash benefits in the workers' compensation program on the 
costs of the SSDI program. Professors Guo, McInerney, Simon, and I will 
share our research results with you as soon as we are confident of our 
results.
    An Intensive Investigation of California. California significantly 
amended the state's workers' compensation program in the middle of the 
current decade in order to reduce costs of the program. The effects 
were so large that the National Academy of Social Insurance reports in 
recent years has shown national data with and without California 
included because of the steep decline in costs and benefits in the 
state.\5\ While some of these changes involved medical benefits and 
other provisions of the workers' compensation program that are unlikely 
to have resulted in increased applications for SSDI benefits, there 
were significant reductions in permanent partial disability (PPD) 
benefits that appear likely to have encouraged some workers to apply 
for SSDI benefits.\6\ Given the importance of California, a separate 
study of the state comparing SSDI applications in the period prior to 
the major changes in PPD benefits in 2004 and 2005 with the SSDI 
applications subsequent to these changes is warranted. The GAO should 
be encouraged to see whether a longitudinal data base using SSA 
administrative records, possibly supplemented with questionnaires sent 
to SSDI beneficiaries, is feasible.

    \5\ An example is Table 1 in Ishita Sengupta, Virginia Reno, and 
John F. Burton, Jr., Workers' Compensation: Benefits, Coverage, and 
Costs, 2010, published by the National Academy of Social Insurance in 
September 2010, which showed that employers' costs dropped by 12.1 
percent between 2007 and 2008 in California, but only 5.7 percent 
outside California.
    \6\ Major permanent partial disability (PPD) benefits were reduced 
in California by 20.8 percent on January 1, 2004, by 8.8 percent on 
April 10, 2004, and by an additional 48.1 percent on January 1, 2005. 
Somewhat smaller reductions were also made in minor PPD benefits. 
National Council on Compensation Insurance, Annual Statistical 
Bulletin, 2010 Edition, Exhibit III.
---------------------------------------------------------------------------
    3. Are there any estimates on the annual cost to SSDI from the 
``reverse offset''?

    Table 17 of Workers' Compensation: Benefits, Coverage, and Costs, 
2008, published by the National Academy of Social Insurance in 
September 2010, has information on the number of Social Security 
Disability Insurance beneficiaries who have some connection with 
workers' compensation (or public disability benefit) programs. The data 
indicate, for example, that as of December 2009, there were 57,807 SSDI 
cases with a current connection to workers' compensation programs 
involving the reverse offset provision. The National Academy does not, 
however, have information on the annual cost to the SSDI from the 
``reverse offset.'' The Office of the Actuary at the Social Security 
Administration should be able to provide this information.
                                 ______
                                 

Mr. Uehlein's Responses to Questions Submitted by Mrs. McMorris Rodgers

    1. Mr. Uehlein, you touched on this briefly in your testimony, and 
that is the issue with respect to the AMA Guides being used to make 
determinations on an individual's wage-earning capacity. Could you 
elaborate on the role of the AMA Guides as they relate to the amount of 
benefits paid?

    In workers compensation disability entitlement systems, workers are 
paid temporary benefits during periods of disability necessary for 
restoration of their functional capacity to return to the workplace. 
Upon reaching maximum medical improvement, they may have residual 
functional loss (impairment) and they may have residual loss of earning 
capacity (disability).
    Benefits are paid either for the impairment alone, usually called 
``scheduled losses'' or, more commonly, for the disability.
    The theory behind the payment of these benefits is what Chairwoman 
Woolsey describes as the ``grand bargain'' by which employees surrender 
their right to sue employers in tort in exchange for their rights to 
workers' compensation.
    Workers' compensation is primarily designed to put a financial 
safety net under injured workers while they restore themselves to 
health and the work place
    It is also used as a financial hammer to encourage employer safety 
to reduce injuries.
    When the employee is unable to recover fully from injury, 
legislatures have had great difficulty in determining how much 
employers should have to pay as part of the ``grand bargain'' to avoid 
the possibility of tort suits. That issue remains for the purview of 
legislators.
    However, in designing entitlement programs for payments for 
permanent disabilities, legislators have generally agreed that a 
process should be adopted that supports the goal of keeping such 
systems ``simple and summary'' with as little friction cost as possible 
and a process that at least begins with an analysis of the injured 
employee's functionality (impairment) at maximum medical improvement. 
This analysis should be fair and apply equally to all injured workers.
    The role of the AMA Guides has been to assist in accomplishing this 
task of keeping medical analysis of impairment fair, and as simple as 
possible, having in mind that the issues of injury and disease are 
extremely complex.
    It provides to the users, and ultimately to the judges who make 
final determinations, a consistent scale expressed as a percentage from 
0 to 100% to rate the loss of functionality. It reduces subjectivity 
that creates inequality and unfairness and it promotes objectivity.
    Thus, the AMA Guides complete the physician's role in the 
entitlement system in determining relative functionality (impairment) 
so that a benefit can be paid as determined by the legislature.

    2. Mr. Uehlein, in your written statement you noted the Guides are 
updated every five or so years by the medical profession. When there 
are criticisms of the Guides, and I understand there were some when the 
Fifth Edition of the Guides was released, are those criticisms 
addressed--or taken under consideration--as the next edition of the 
Guides is being prepared? Could you talk about what that process 
entails?

    This is a question that is best answered by those who have been 
directly involved in the process, so I refer your to their testimony 
and my answer directly borrows from comments and testimony of the AMA 
and Dr. Christopher Brigham. The Guides are an evolutionary document, 
building on constructive criticism to obtain their goals of 
representing the best medical science, ease of use, consistency and 
inter and intra-rater reliability. Each of the six editions has taken 
such criticism into account and worked to develop a better set of 
Guidelines. I am aware of no equal to the effort managed by the AMA to 
accomplish this with any other set of Guidelines in the world.
    For instance, in addressing the 6th Edition, over 500 state, county 
and specialty societies, along with other stakeholders, were invited to 
nominate an author, reviewer or contributor to the process. Over 200 
individuals were called upon in these various roles and/or to be a 
member of the Editorial Panel or Advisory Committee. These impairment 
professionals represented various stakeholders in the impairment 
process. The editorial process used an evidence-based foundation when 
possible, primarily as the basis for determining diagnostic criteria, 
and a Delphi panel approach to consensus building regarding the 
impairment ratings themselves. When there was no compelling rationale 
to alter impairment ratings from what they had been previously, ratings 
provided in prior editions were the defaults.
    Criticism and the search for improvement in the Guides are 
positive. A process exists by which such criticism is received, 
analyzed and taken into consideration for each new version of the 
Guides, and when significant, addressed between publications by the AMA 
Guides Newsletter.

    3. Mr. Uehlein, what are the alternatives to using the AMA Guides 
for impairment ratings?

    There are three alternatives to using the AMA Guides for impairment 
rating.
    The first alternative is to have no guide for physicians to use in 
addressing medical functionality (impairment). The physician is 
expected to describe medical functionality in terms he chooses based on 
his individual learning and experience. A judge or insurer would then 
assess this clinical evaluation and consider the relative weight he or 
she wishes to place on it in making a decision offering or awarding a 
benefit for permanency.
    Significant problems are apparent with respect to this choice as it 
leads to massive disparities in descriptions of functionality with 
respect to the same injury and with respect to injuries to varying body 
parts. It also relies on judges, not trained in medicine, to interpret 
the doctor's opinion and translate it into a benefit. Again, this will 
inevitably lead to conflict, cost and disparity, and places an unfair 
burden on judges. It reduces the likelihood of benefits being 
determined and paid quickly to injured employees.
    The second alternative is to develop a different guide. States such 
as Florida, Arizona and New York have done this. The problem with this 
approach is that it is grounded in a belief that a different set of 
``experts'' can come up with a better set of guidelines.
    Without going into detail, I question whether a small subset of 
state physicians, lawyers or administrators are likely to be able to 
arrive at a set of guidelines as objective, grounded in consensus of 
the best medicine, and free of politics as the AMA has in utilizing 
over 200 physicians and other experts in arriving at its Guides. 
Certainly, a state-created guide process is an alternative. But, in 
layman's terms, it is reinventing the wheel, and one that is not 
entirely round.
    Finally, another national organization could step up to provide a 
set of guidelines. Without clear evidence as to why such an 
organization would create a better process, I can see no reason to 
substitute for the process managed by the premier organization of 
physicians in the United States.
    There are those who would advocate for a comprehensive set of 
guidelines that combine a guide to assessment of medical functionality 
(impairment) with a guide to assessment of loss of earning capacity 
(disability). In essence, such suggestions seek to use science and data 
to substitute for the judgment of judges as to a person's loss of 
earning capacity. While building on the model created in California to 
address such an issue may be beneficial, it will not replace the need 
for AMA-type guidelines for physicians.

    4. Mr. Uehlein, could you explain why it is so important to have 
consistency and uniformity throughout the process of assessing 
impairment?

    It is essential to have consistency and uniformity throughout the 
process of assessing impairment because our democratic principles 
demand equality and fairness of treatment. This applies to injured 
workers no less than any other person within our court systems.
    Why should a person with a herniated cervical disc that has 
resulted in residual functional loss be treated one way by one judge or 
insurer and, if he is with another judge or insurer, be treated another 
way?
    Why should the subjective view of one physician, conservative or 
liberal, be able to influence the benefits of an injured worker?
    Why should one physician's opinion on impairment with respect to a 
specific condition be allowed to result in a higher or lower award for 
his patient than another physician looking at another patient with the 
very same condition?
                                 ______
                                 
    [Additional submissions of Mrs. McMorris Rodgers follow:]

        Prepared Statement of Gregory Krohm, Executive Director,
International Association of Industrial Accident Boards and Commissions

    The following testimony is submitted to the Members of the 
Subcommittee on Workforce Protections of the Committee on Education and 
Labor in response to the hearing held on November 17, 2010. My name is 
Gregory Krohm and I have served as the Executive Director of the 
International Association of Industrial Accident Boards and Commissions 
for the last ten years. From 1992-1998, I served as the Division 
Administrator of the Wisconsin Division of Workers' Compensation and 
prior to that I served in various capacities at the Wisconsin 
Department of Insurance.
    I am submitting these comments as my personal opinion. They are not 
an official statement of the International Association of Industrial 
Accident Boards and Commissions, any of its members or its Executive 
Committee. I am not expressing any opposition to the notion of federal 
study and review of state workers' compensation, nor consideration of 
reforms. In particular, I am sympathetic to the testimony presented on 
November 17, 2010 regarding the deficiencies of permanent injury 
impairment rating and the need for a better set of guidelines.
    Founded in 1914, the IAIABC is an association of government 
agencies that administer and regulate their jurisdiction's workers' 
compensation acts. Since its inception the IAIABC has worked to improve 
and clarify laws, identify model laws and procedures, develop and 
implement standards, and provide education and information-sharing.
    As Chairwoman Woolsey mentioned in her opening statement, workers' 
compensation in the United States is administered and regulated at the 
state level. While this system has resulted in differences across state 
lines, the various agencies do not operate in a vacuum. Organizations 
like the IAIABC regularly bring together policy-makers and 
administrators to discuss shared concerns and work toward 
harmonization.
    The mechanisms to regulate and deliver workers' compensations by 
the states have had a dynamic history over the last 100 years. Since 
the passage of the first constitutional workers' compensation act in 
1911, public policy has undergone many changes to respond to shifting 
societal attitudes toward employment, safety, return to work, medical 
treatment and more.
    Workers' compensation today covers a much broader segment of the 
workforce, more causes of injury, and offers a wider array of benefits 
than the founders could ever have imagined in the original state 
systems. For example, occupational disease was seldom covered, 
vocational and rehabilitation benefits did not exist, and medical care 
was basic and limited. As the nature of injuries shifted and social 
attitudes changed, the scope of benefits and coverage has generally 
expanded.
    While workers' compensation was founded as the ``great compromise'' 
between labor and management, determining equitable terms for both 
parties has required refinement and continued collaboration. It is 
important to understand that the standard for what is compensable under 
workers compensation has been in continuous development, mostly 
expanding but sometimes limiting the nature of rights and benefits. 
Negotiating the appropriate balance between benefits and costs for 
employees and employers is under the purview of each state's 
legislature. In addition, many states have formal mechanisms that 
require labor and management to work together to refine administrative 
and regulatory systems. Whether through labor-management advisory 
boards or labor and management representatives on agency commissions 
many states promote system changes that balance the needs of labor and 
management.
    After reviewing the testimony submitted by Dr. John Burton, I 
concur that workers' compensation systems have undergone cycles of 
legislative changes. One of the most active periods for change came 
following the 1972 National Commission Report which reported 
significant system inequities across the United States. States 
responded by making significant changes in benefit levels and the 
percentage of the workforce covered in an attempt to meet guidelines 
suggested by the commission.
    As Dr. Burton correctly notes, another period of major change began 
in the 1990's when workers' compensation was under considerable strain 
as benefit payments began to grow rapidly relative to collected 
premiums. These market conditions caused employer premiums to increase 
rapidly. At the same time it increased the number of insurance company 
insolvencies and withdrawals from the workers' compensation market. 
Pressured by employers due to rising costs of workers' compensation, 
state legislatures once again went through a period of adjustment in 
order to rebalance benefits to injured workers and costs to employers. 
As Burton notes, the clear thrust of most of these changes was to limit 
claims and the cost of benefits. Whether or not this was the only, or 
best, way to fix the challenges in the workers' compensation insurance 
system is open to debate, but the changes indisputably restored the 
private insurance mechanism to a fiscally healthy condition and 
instituted a period of decline in employer costs of workers' 
compensation.
    The opening statement to the subcommittee hearing and testimony of 
Dr. Burton offered as a statement of fact that state law changes in 
recent years have eroded access to workers' compensation benefits by 
injured workers. The principle point of my testimony is to offer an 
alternative representation of these law trends. My review of statutory 
changes from 2000-2010 shows that laws have not appreciably restricted 
access to benefits for those totally disabled by work injuries.\1\ My 
findings indicate:
---------------------------------------------------------------------------
    \1\ My review consisted of analysis using the following 
publications, IAIABC/WCRI Inventory of State Laws (2007-2010); Summary 
of Workers' Compensation Laws published in the Monthly Labor Review 
each January 2000 through 2004 by Glenn Whittington; Legislative 
Analysis Reports prepared by Todd Brown of EK Health; and various state 
legislative summaries prepared by state workers' compensation agencies.
---------------------------------------------------------------------------
     The benefit formula, limits, and length of ``Permanent 
Total'' injury benefits are very seldom mentioned in any law changes.
     Annually, most states increase the maximum weekly benefit 
because they are tied by statute to some fraction of the State Average 
Weekly Wage
     The few states that have explicitly mentioned the formula 
or limits of Permanent Total Injury benefits have produced a mixed 
change in benefit levels. For example, Florida reduced the length of PT 
benefits in 2003 and Montana increased the maximum weekly benefit in 
2009.
    State workers' compensation system are under relentless review and 
fine tuning by state legislatures. According to an analysis of EK 
Health, in 2009 there were over 161 separate bills enacted to change 
state workers compensation law; from January through July 2010 there 
were over 90 bills enacted into law. While most of the successful law 
changes are narrow in focus, some are multi-facetted reforms that 
modify coverage or benefits in many different ways. Very rarely are the 
sweeping reforms completely one sided, i.e., totally favoring labor or 
employers. To win legislative approval most reform packages must 
contain some degree of compromise and balance. Good examples of this 
were the sweeping reforms passed in Florida in 2003 and California in 
2002-03. Each of those state reforms contained a wide mix of changes 
which sometimes improved the position of the claimant, sometimes 
reduced benefits and claimant rights, and modified a host of things 
with system administration.
    Over the time studied, I found a few states modified the criteria 
for a compensable claim. These changes did reduce the number of claims 
in those states. But in my opinion these isolated law changes produced 
only a very small change in the overall volume of workers' compensation 
claims in the country as a whole. Put in perspective, these 
restrictions should be considered along with many law changes that 
expand claimant rights and penalize employers/insurers for unreasonable 
claims handling.
    In conclusion, the scope of coverage and claims handling practices 
in workers' compensation has been under continual scrutiny by state 
legislatures. Law changes and court decisions have substantially 
changed the benefits and rights over the entire history of the system. 
My study of law changes indicates that restrictions in benefits by 
states are largely an exception in the past 10 years and tend to have a 
very narrow focus. Recent trends in law have largely, though not 
entirely, helped to expand and balance the benefits paid to injured 
workers.
                                 ______
                                 

          Prepared Statement of Douglas J. Holmes, President,
     UWC-Strategic Services on Unemployment & Workers' Compensation

    Chairman Woolsey, Ranking member McMorris Rogers, and members of 
the Subcommittee on Workforce Protections, thank you for the 
opportunity to submit comments with respect to Developments in State 
Workers' Compensation Systems.
    I am Douglas J. Holmes, President of UWC--Strategic Services on 
Unemployment & Workers' Compensation (UWC), a national membership 
organization dedicated to research and policy development on behalf of 
business in the areas of unemployment and workers' compensation. UWC 
tracks developments in state and federal workers' compensation law, 
provides comparisons of state and federal workers' compensation laws 
and analyzes and researches the primary features of state and federal 
workers' compensation law, policy and administration. I am a member of 
the National Academy of Social Insurance and serve on its Workers' 
Compensation Data Study Panel.
    UWC's National Foundation for Unemployment Compensation and 
Workers' Foundation publishes an annual update of changes in state 
workers' compensation laws and a fiscal data bulletin comparing the 
costs associated with state workers' compensation laws.
    The following comments are submitted to add to the record of the 
hearing held on November 17th, with a particular focus on the issues 
that were the primary subjects of testimony during the hearing; 1) the 
use of the 6th edition of the Guides published by the American Medical 
Association to evaluate the medical impairment of individuals, and 2) 
the relationship between trends in state workers' compensation and 
Social Security Disability Insurance (SSDI).
AMA guides
    In December 2007 the American Medical Association published the 6th 
Edition of the AMA Guides to Evaluation of Permanent Impairment. The 
AMA Guides6th Edition is one of several editions that form the basis 
for impairment rating in most workers' compensation systems. Depending 
on the jurisdiction, the 3rd Edition revised, 4th Edition, 5th Edition, 
and now the 6th Edition may be required or permitted in whole or in 
part.
    The determination of whether to use the AMA Guides, which edition 
to be used, and any deviations specific to the law in a particular 
state have developed in recent years with the experience, case law and 
statutes unique to each state.
    The most recent 6th edition of the AMA Guides receives the support 
of the majority of physicians who have been trained in the appropriate 
use of this edition. As might be expected, there are differences in the 
most recent edition in comparison to previous editions and the 
practices in each state. The learning curve among physicians is a 
factor to be addressed in each state in determining which edition to be 
used.
    The AMA 6th edition is one choice available to states in setting a 
foundation for ascertaining permanent impairment, and seeks to use 
impairment as an objective basis for the determination of permanent 
disability and payment of permanent disability benefits. One of the 
uses of the Guides is to help determine monetary awards to individuals 
injured at work.
    A comparison of the various editions of the AMA Guides discloses a 
range of differences in impairment ratings. Although these impairment 
ratings do not by themselves determine the percent of partial 
disability, they form the basis for the evaluation of disability and 
therefore become controversial to the extent that the resulting 
disability is greater or lesser and therefore generates a lesser or 
greater workers' compensation monetary award.
    The workers' compensation system should strive for the most 
accurate determination of medical impairment and properly apply this 
information to the determination of disability of an injured worker 
under the applicable law.
    Studies of the AMA Guides are best performed by medical doctors who 
are expert in determining medial impairment. As methodology used in 
determinations of medical impairment improves, the information upon 
which determinations of disability should become more accurate, but 
judgment on the part of elected officials and adjudicators will still 
be required with respect to the appropriate application of impairment 
in the ultimate determination of disability.
    Such determinations as a matter of state law should be left to the 
state workers' compensation system.
Workers' compensation and Social Security Disability Insurance
    The State Workers' Compensation system is a mature social insurance 
system, with initial state workers' compensation programs enacted in 
1911. Coverage of the workforce under the state system has increased 
over the years to the point now that only 3 percent of all employees 
who worked for employers who participated in the Bureau of Labor 
Statistics National Compensation Survey (NCS) were employed in 
establishments that reported zero workers' compensation costs.
    The determination of awards for medical care and cash benefits for 
lost work time is made in each state as the workers' compensation state 
statutes, case law and practice have evolved over a period of decades. 
The terms of benefit eligibility, medical costs, indemnity, strategies 
to assist injured workers in returning to work, costs of the system and 
insurance premiums are set on a state by state basis with the 
recognition of exclusive remedy protections for employers and insurers 
in exchange for a system under which individuals are assured coverage 
and compensability if their illness or injuries are in the course of 
employment.
    It was not until the Social Security Amendments of 1965 that Social 
Security Disability Insurance (SSDI) benefits were required to be 
offset so that the combined totals of workers' compensation and social 
security disability benefits did not exceed 80 percent of the workers' 
prior earnings.
    This offset provision enacted as a savings measure for SSDI was 
overlaid on top of the already mature workers' compensation system in 
which some states had adopted provisions under which social security 
benefits were to be deducted in whole or in part from workers' 
compensation benefits.
    In both ``offset'' provisions there was also the recognition as a 
matter of policy that individuals should not receive more in income 
when disabled than when employed in their previous employment.
    It strains credulity to conclude that a federal program, SSDI, 
which was enacted in part as a federal overlay of the state workers' 
compensation system would be said to be suffering from cost shifting 
from the state workers' compensation programs. Fifteen states currently 
have ``reverse'' offset laws, including Colorado, Florida, Hawaii, 
Illinois, Louisiana, Minnesota, Montana, Nevada, New Jersey, New York, 
North Dakota, Ohio, Oregon, Washington, and Wisconsin.
    Disregarding the offsets in place in these states for decades in 
determining SSDI benefit amounts would shift costs from Social Security 
to employers and insurers doing business in these states and disrupt 
balances in state WC costs and benefits in each of these states. The 
result of such a shift would not only be to increase the costs of 
workers' compensation, discouraging employers from hiring, but also 
result in state legislative measures to reduce benefits in other ways 
to assure the solvency of workers' compensation plans and funds.
    A more appropriate analysis should review the increases in SSDI 
benefit eligibility, increased costs, and the aging workforce as the 
primary drivers of program insolvency to be addressed.
    As of December 2009, only 7.9 percent of SSDI beneficiaries had a 
connection to workers' compensation or public sector disability 
programs. The percent specific to state workers' compensation is less 
than 7.9 percent and the percent with reverse offset provisions is an 
even smaller percentage.
    As noted in the testimony of John Burton before the subcommittee, 
citing recent as yet unpublished results of a study by Mr. Burton and 
Professor Guo, ``the aging population was the largest contributor of 
the growth in SSDI applications during the period we examined (1981-
1999), and can explain more than half the growth in SSDI rolls in the 
1990s.'' Mr. Burton also notes that ``The share of female employment is 
another factor, which was associated with almost 18 percent of the 
change of SSDI applications between the 1980s and 1990s.'' Finally, Mr. 
Burton suggests, based on unpublished results of a study of data from 
1981 to 1999, that ``the reduction in the amounts of workers'' 
compensation permanent disability benefits and tightening of 
eligibility rules for workers' compensation permanent disability 
benefits during the 1990s accounted for about 3 to 4 percent of the 
growth of SSDI applications during the decade.
    This conclusion that a very small part of the growth in SSDI 
applications during a period 20 to 40 years ago is associated in some 
way with state workers' compensation is hardly compelling evidence of a 
need to rush to federal legislative action. In fact, it is just as 
likely that the relationship between SSDI applications and the state WC 
system is reversed and that reductions in WC applications during this 
period were caused in part by federal policies increasing the 
availability of SSDI.
    Professor Burton notes that in an unpublished article by McInerney 
and Simon (2010) of the determinants of SSDI applications concluded 
that it was unlikely that state workers' compensation changes were a 
meaningful factor in explaining the rise in SSDI applications and SSDI 
new cases during the period from 1986 to 2001.
    Despite the paucity of data suggesting a need for new federal 
legislation to address the relationship between the state WC system and 
SSDI, Professor Burton backs into a series of conclusions consistent 
with the underlying assumption that federal standards are needed for 
the state WC system.
    Any study of the state WC system and/or SSDI must address the costs 
and premiums and the impact on employers and job creation. A series of 
suggestions that eligibility should be expanded and/or benefit levels 
should be increased, without evaluation of costs will result in benefit 
pay-out and costs that are unsustainable. As we have seen with Medicare 
and Social Security, the expansion of entitlement to respond to 
political constituencies without addressing long term solvency creates 
an unsustainable imbalance which results in an inequitable shift of 
costs to future generations of claimants, taxpayers and businesses.
    Instead of studying the impact of state WC systems on SSDI with the 
suggestion that the state WC system should be federalized, the focus of 
research should be on the array of state WC system reforms that have 
improved the sustainability of the state WC systems and facilitated the 
rehabilitation and return to work of workers who became ill or were 
injured while on the job.
    We appreciate the opportunity to submit a statement for the record 
and would be pleased to provide further comments from employers and 
insurers with hands on experience in the review of policy options by 
the Governmental Accountability Office (GAO) or research conducted by 
the National Institute for Occupational Safety and Health (NIOSH) and 
the National Institute of Medicine.
                                 ______
                                 
    [Additional submission of Mr. Godfrey follows:]

             2008 Iowa AMA Guides Task Force Process Report

    Iowa Workers' Compensation Commissioner Christopher Godfrey 
convened a task force regarding the American Medical Association (AMA) 
Guides to the Evaluation of Permanent Impairment, Sixth Edition, in May 
2008.
Members
    The task force was comprised of eight voting members intended to 
represent a broad spectrum of the Iowa workers' compensation community. 
Members were: Donna Bahls, M.D., a physical medicine and rehabilitation 
specialist; Matthew D. Dake, attorney-at-law who generally represents 
employees in workers' compensation matters; Teresa Hillary, 
administrative law judge and former deputy workers' compensation 
commissioner; John Kuhnlein, D.O., an occupational medicine specialist; 
Marlin Mormann, administrative law judge and former deputy workers' 
compensation commissioner; R. Saffin Parrish-Sams, attorney-at-law who 
generally represents employees in workers' compensation matters; Sara 
J. Sersland, attorney-at-law who generally represents employers and 
insurance carriers in workers' compensation matters; and Peter J. 
Thill, attorney-at-law who generally represents employers and insurance 
carriers in workers' compensation matters. Helenjean M. Walleser, 
deputy workers' compensation commissioner, served as task force 
moderator and was not a voting member.
Task force objectives
    A May 8, 2008, letter of invitation from the Commissioner to 
potential members set forth the task force objectives, namely:
    a. Review the AMA Guides To the Evaluation of Permanent Impairment, 
Sixth Edition.
    b. Overview methodology for determining permanent impairment in the 
Sixth Edition.
    c. Determine if impairment assignments under the Sixth Edition 
differ substantially from impairment assignments under previous 
editions of the Guides or from other impairment rating sources.
Task force assignments
    That letter also outlined the task force assignments, namely:
    1. Analyze the Sixth Edition's impairment rating methodology.
    a. Compare and contrast it with earlier editions and other rating 
guides.
    b. Identify the Sixth Edition methodology's advantages and 
disadvantages.
    a. Identify and document potential problems and areas of concern 
within the Sixth Edition.
    2. Address errors within the Sixth Edition.
    3. Analyze the significance of using the Sixth Edition within the 
Iowa workers' compensation system.
    a. Compare impairment ratings for like conditions under the Fifth 
and Sixth Editions.
    b. Analyze the impact of ratings differences between the Fifth and 
Sixth Edition on voluntary benefit payments.
    4. Make recommendations concerning the use of impairment rating 
guides in the Iowa system.
    a. Should Iowa adopt the Sixth Edition of the Guides?
    b. Should Iowa adopt some individual chapters of the Sixth Edition?
    c. Should Iowa adopt another existing impairment guide?
    d. Should Iowa develop its own impairment guide?
    i. What would this entail?
    ii. How long would it take?
    5. Other considerations regarding the use of impairment ratings.
    The letter of invitation and assignment is Exhibit A in the addenda 
to this process report.
    The task force met on June 26 and June 27, 2008, July 30 and July 
31, 2008, and August 26, 2008. All members were present at each task 
force meeting.
    Task force proceedings on June 26 and June 27, 2008, centered on 
reviewing and contrasting the Fifth and Sixth Editions of the Guides 
and addressed task force work assignments 1, 2, and 3.
Philosophy and rationale--ICF model
    Chapter 1 in both the Fifth and Sixth Edition of the Guides sets 
forth the philosophy and conceptual rationale that underlies each 
edition. The rationale of the World Health Organization's ``1980 
International Classification of Impairments, Disabilities and 
Handicaps'' undergirds the Fifth Edition's philosophy. Under that 
system, the progression from impairment to disability and/or handicap 
is viewed as linear. Disability, the inability to perform certain 
activities or roles, directly proceeds from impairment, the loss, loss 
of use, or derangement of a body part, organ system or organ function 
that results from an identified pathology.
    The Sixth Edition replaces the 1980 model with the World Health 
Organization's more recently adopted model of disablement: ``the 
International Classification of Functioning, Disability, and Health'' 
(ICF). Adaption of its terminology and conceptual framework of 
disablement is the first axiom of the ``paradigm shift'' the Sixth 
Edition entails. The ICF model has three components, 1) body function 
and structures, 2) activity, and 3) participation. Adaption of the ICF 
terminology and conceptual framework of disablement is the first axiom 
of the Guides, Sixth Edition.
    Per ROBERT D. RONDINELLI, M.D., Medical Editor of the Sixth 
Edition, who spoke with the task force on June 27, 2008, adaption of 
the ICF model, is consistent with current international understanding 
of disablement. Adaption of the model also should facilitate funding of 
research concerning the Guides' use, and methodology. Major grant 
providers, such as the Institutes of Health, have not supported 
research proposals using the Fifth Edition of the Guides because many 
grant funders view the 1980 classification system as outdated.
    Within the Sixth Edition and consistent with the ICF model, 
impairments are losses, deviations or variations from normal health of 
body functions and body structures. Additionally, the Sixth Edition 
requires that such losses be significant before they are considered 
impairing. Activities are tasks that individuals carry out; activity 
limitations are difficulties experienced in performing tasks. 
Participation is defined as involvement in life situations; 
participation restrictions are barriers to involvement.
    The ICF model is an attempt to recognize that impairment does not 
lead directly to disability and that the relationship between having a 
health condition and becoming disabled is dynamic, with environmental 
and personal factors as well as activity limitations and participation 
restrictions impacting on overall human functioning and disability. 
Impairment rating is defined as a consensus derived percentage estimate 
of the loss of activity that reflects the severity of a given health 
condition and the degree of associated limitations in activities of 
daily living.
    Table 1--1 sets forth activities of daily living. These are basic 
self-care activities that individuals perform. Included among them are 
bathing, showering, dressing, eating, functional mobility as well as 
personal hygiene, toilet hygiene and management, sleep, and sexual 
activity. Task force members recognized that most individuals alleging 
work injuries are largely independent in activities of daily living, 
even when their health condition produces a functional disability or 
measurable loss of earning capacity. For that reason, a medical 
impairment rating may not well reflect the actual functional disability 
from a scheduled member loss and is only one of multiple factors that 
is legally appropriate to consider in determining actual loss of 
earning capacity under Iowa Code section 85.34 (2) (u).
    Additionally, consensus derived estimates may well be influenced by 
the composition of the consensus group. Therefore, knowledge of that 
composition is important. Dr. Rondinelli stated that that the consensus 
group members for each ratings chapter within the Sixth Edition 
consisted of physicians who both were members of the national group for 
that medical specialty and were interested enough in the development of 
an impairment rating process to volunteer their time and efforts. In 
order to address this concern, the task force asked the American 
Medical Association (AMA) to specify the contributing editors and 
chapter contributors to the Sixth Edition. The AMA did not do so. 
Instead, it directed the task force to pages vi-vii of the Sixth 
Edition, which set forth participants in the Sixth Edition development 
process but do not specify the precise role or level of involvement of 
each participant.
Other important sixth edition axioms
    Chapter 1 of the Sixth Edition sets forth four additional axioms 
that provided direction and set priorities in developing that edition's 
new paradigm: 2) The Guides should be diagnostic based and diagnoses 
should be evidence-based. [In contrast, the Fifth Edition and earlier 
editions of the Guides largely were anatomically-based and assigned 
impairment based on losses of motion or strength or other physical 
capacity.] 3) The Guides should be easy to use and, where applicable, 
should follow precedent in order to optimize rating reliability within 
and among persons evaluating impairment under the Guides. 4) To the 
fullest extent possible, rating percentages are to be functionally 
based. 5) The Guides should utilize congruent concepts and methodology 
within organ systems and between different organ systems. The axioms 
are intended to address perceived problems and stated criticisms of the 
Fifth and earlier editions of the Guides; namely, the Guides were not 
comprehensive, reliable or evidence-based and ratings under the Guides 
did not accurately or adequately reflect loss of function.
    Concerns were expressed within the task force that inclusion of a 
functional loss factor in assessing impairment inserts the concept of 
disability into impairment ratings and raises the possibility that 
deputies in litigated claims may give greater weight to impairment 
ratings and lesser weight to other evidence relevant to assessment of 
disability.
Impairment rating methodology
    Chapter 1 of the Sixth Edition also sets forth the impairment 
rating methodology that the edition uses in all chapters but for 
Chapter 13, the ``Central and Peripheral Nervous System'', which 
continues to use the Fifth Edition rating methodology. The rating 
methodology that the Sixth Edition generally uses is derived from the 
ICF model. That model created a that the Sixth Edition generally uses 
is derived from the ICF model. That model created a that the Sixth 
Edition generally uses is derived from the ICF model. That model 
created a that the Sixth Edition generally uses is derived from the ICF 
model. That model created a that the Sixth Edition generally uses is 
derived from the ICF model. That model created a that the Sixth Edition 
generally uses is derived from the ICF model. That model created a that 
the Sixth Edition generally uses is derived from the ICF model. That 
model created a that the Sixth Edition generally uses is derived from 
the ICF model. That model created a that the Sixth Edition generally 
uses is derived from the ICF model. That model created a that the Sixth 
Edition generally uses is derived from the ICF model. That model 
created a that the Sixth Edition generally uses is derived from the ICF 
model. That model created a that the Sixth Edition generally uses is 
derived from the ICF model. That model created a that the Sixth Edition 
generally uses is derived from the ICF model. That model created a that 
the Sixth Edition generally uses is derived from the ICF model. That 
model created a that the Sixth Edition generally uses is derived from 
the ICF model. That model created a that the Sixth Edition generally 
uses is derived from the ICF model. That model created a that the Sixth 
Edition generally uses is derived from the ICF model. That model 
created a that the Sixth Edition generally uses is derived from the ICF 
model. That model created a functionally based taxonomy that links the 
level of clinical severity of specific health conditions, as measured 
on a zero to five scale, with percentage of function lost. Table 1-3 
sets forth the taxonomy of functional levels: individuals with no or 
negligible problems as a result of their health conditions are coded at 
0; individuals with slight or low problems are coded at 1 mild; 
individuals with medium functioning at 2 moderate; individuals with a 
high degree of problems with their function at 3 severe; and 
individuals whose problems with function as a result of their condition 
is total as Table 1-4 sets forth five generic 4 complete.
    Table 1-4 sets forth five generic functional impairment classes 
also ranging from zero through four. Individuals with health conditions 
that produce no symptoms with strenuous activity are assigned to 
functional impairment class 0. Individuals who have symptoms with 
strenuous activity but do not have symptoms with normal activity are 
assigned to functional impairment class 1; those with symptoms with 
normal activity to class 2; persons with symptoms with minimal activity 
to class 3 and persons with symptoms at rest to class 4. Persons in 
classes 0 through 2 are considered functionally independent whereas 
persons in class 3 are considered partially functionally dependent, and 
persons in class 4 are considered totally dependent. Persons in classes 
1 through 3 may well be within the workers' compensation system because 
they have compensable work related disability even though they are 
functionally independent or only partially dependent. Again, a task 
force CONCERN was that the concept of medical ratable impairment not be 
confused with or substituted for the concept of legally compensable 
disability.
Diagnostic impairment class
    An evaluator is to consider an individual's clinical presentation, 
physical findings, objective testing, and associated functional losses 
when assigning the diagnostic impairment class (DIC). Proposed 
functional assessment tools for the various organ systems are set forth 
in the rating chapters. The Sixth Edition acknowledges that ``no well-
accepted, cross-validated outcomes scales exist ``for the 
musculoskeletal organ system. Self-reporting functional assessment 
tools are recommended for the spine, upper extremities and lower 
extremities. They are the Pain Disability Questionnaire (PDQ), the 
Disability to the Arm, Shoulder and Hand (DASH), and the Lower Limb 
Outcomes Questionnaire, respectively. In the Sixth Edition methodology, 
evaluators may use reliable results from these tools ``to adjust the 
impairment percentage to reflect different functional outcomes.'' 
Unfortunately, no data exists demonstrating that these tools are 
culturally sensitive. A task force concern was that self-reports 
received from members of various ethnic groups might well be skewed in 
a matter that reflected the particular groups' approach to functioning 
with pain or other limitations.
    Each diagnosis within an organ system is to be placed within one of 
the five 0 through 4 classes. An impairment percentage range has been 
assigned to each impairment class. The four criteria of clinical 
presentation, physical findings, clinical studies or objective tests, 
and functional history or assessment, all are to be considered in 
determining the impairment class. However, the Sixth Edition designates 
one of these four criteria as the ``key factor'', which is the 
``primary determinant of impairment'' [class] for each diagnosis the 
Sixth Edition rates.
Impairment grades/adjustment factors
    Each impairment class has five impairment grades within it, 
designated as A through E. A is the lowest impairment grade assignable 
within an impairment class; E the highest. C is the default assignment. 
``After the key factor has led to a preliminary impairment rating, it 
will be adjusted based on the results from rating the other impairment 
criteria (non-key factors) (adjustment factors).'' (Sixth Edition at 
page 12)
    If the evaluator judges the other criteria as in the same class as 
the key factor, the final rating generally will stay at that class and 
grade. On the other hand, if other criteria--adjustment factors--are 
either numerically higher or lower than the key factor, the impairment 
grade within the assigned impairment class may change. The impairment 
class, itself, will not change, as it was determined by the key factor, 
however. The initial assumption is that the individual being evaluated 
is in the C impairment grade for the class, which is scored as 2. The 
ultimate impairment grade within an assigned diagnostic impairment 
class is achieved mathematically. The 0 through 4 score for each of the 
three non-key/adjustment factors individually is subtracted from the 
numerical score, again 0 through 4, for the diagnostic impairment 
class. The resulting numerals are then added to determine whether any 
net adjustment in the impairment class grade is appropriate.
    As an example, the injured worker is assigned to diagnostic 
impairment class 2 based on the designated key factor of physical 
findings. At that point, the individual is placed in the C, moderate/2 
or default grade within the impairment class. The three non-key factors 
then are: the history of clinical presentation, the objective test 
results and the functional history or assessment. The clinical 
presentation is assessed at 3/severe, as the worker has constant 
moderate symptoms despite continuous treatment. The objective test 
results are assessed at 1/minimal, as over time testing has 
demonstrated only intermittent mild abnormalities. The functional 
assessment is 2/moderate, as the individual is symptomatic with normal 
activities.
    At that point, the arithmetic begins. The impairment class score of 
2 is subtracted from the clinical presentation score of 3, with a 
result of 1. Next, the impairment class score of 2 is subtracted from 
the objective test assessment of 1, with the result of -1. Finally, the 
impairment class score of 2 is subtracted from the functional 
assessment of 2, with the result of 0. The three resulting numerals are 
then added to achieve any 0. The three resulting numerals are then 
added to achieve any 0. The three resulting numerals are then added to 
achieve any net grade adjustment within the impairment class. In this 
instance, 1 plus -1 plus 0 equals 0, which indicates that no grade 
adjustment is appropriate. The worker's impairment rating would remain 
that set forth by diagnostic impairment class 2, grade C impairment.
    Suppose, in the above example, the clinical presentation had been 
assessed at 1, intermittent, mild symptoms despite continuous 
treatment, while the diagnostic impairment class remained 2 and the 
objective test assessment and functional assessment adjustment factors 
remained at 1 and 2, respectively. The clinical presentation adjustment 
score obtained by subtracting 1 from class score 2 is -1. The addition 
formula then is -1 plus -1 plus 0 or -2. As negative 2 is two grades 
lower than the default grade C, the worker's impairment rating would 
decrease to that appropriate for a diagnostic impairment class 2, grade 
A impairment. Conversely, had the clinical presentation score remained 
at 3 and the objective test assessment at 1, but the functional 
assessment score been 3, the ultimate net adjustment would be 1. ([3 -2 
] = 1 plus -1 plus 1 = 1). The grade within the class would move one 
level above the default grade C to grade D. Hence, the worker's 
impairment rating would increase to that appropriate for diagnostic 
impairment class 2, grade D.
    Simply put, a negative net adjustment score will decrease the 
overall impairment rating given for the diagnostic class; a positive 
net adjustment score will increase the overall impairment rating given 
for the diagnostic class; and a net adjustment score of zero will keep 
the individual in the middle range of potential impairment ratings for 
that diagnostic class.
    A number of the impairment rating examples in the Sixth Edition on 
their face are inconsistent with the results to be obtained using this 
methodology. Even if it is assumed that these are arithmetic and 
editorial errors, which were corrected in the AMA's August 2008 
Corrections and Clarifications to the Sixth Edition, a task force 
concern is that evaluators and reviewers will not consistently use both 
the Sixth Edition and the Corrections and Clarifications when assessing 
impairment.
    The complexity of the Sixth Edition methodology is a task force 
concern. If only physicians who have had formal course training in the 
Sixth Edition methodology can use it appropriately to assign 
impairment, both the number of treating physicians and the number of 
evaluating physicians willing to assess impairment may decrease. 
Additionally, the overall costs of obtaining impairment ratings might 
increase to reflect practitioner training cost.
    On the other hand, a standardized impairment assessment methodology 
across body organ systems theoretically qualifies practitioners who 
have learned the methodology to assess impairment within multiple organ 
systems. Dr. Rondinelli has conducted several training workshops for 
use of the Sixth Edition methodology. He acknowledged that training 
attendees initially voiced concerns regarding the Sixth Edition 
methodology. Dr. Rondinelli also expressed his belief that, after 
learning the Sixth Edition methodology, his training attendees 
preferred the generic methodology of the Sixth Edition over the 
multiple methodologies across and within body organ systems contained 
in the Fifth and other earlier editions of the initially voiced 
concerns regarding the Sixth Edition methodology. Dr. Rondinelli also 
expressed his belief that, after learning the Sixth Edition 
methodology, his training attendees preferred the generic methodology 
of the Sixth Edition over the multiple methodologies across and within 
body organ systems contained in the Fifth and other earlier editions of 
the initially voiced concerns regarding the Sixth Edition methodology. 
Dr. Rondinelli also expressed his belief that, after learning the Sixth 
Edition methodology, his training attendees preferred the generic 
methodology of the Sixth Edition over the multiple methodologies across 
and within body organ systems contained in the Fifth and other earlier 
editions of the Guides.
    The concrete and consistent Sixth Edition methodology may decrease 
the range of potential impairment ratings a worker receives from 
different evaluators. That fact potentially could reduce overall 
litigation and overall litigation costs. On the other hand, that 
different medical practitioners often arrive at different diagnoses 
when presented with similar clinical signs and symptoms is an expressed 
task force concern. It was pointed out that inconsistent diagnoses are 
very prevalent for musculoskeletal conditions, especially spinal 
problems, as well as for mental and behavioral disorders. For that 
reason, disputes over the appropriate clinical diagnosis for a worker 
may increase with use of the Sixth Edition.
    The weight given to the designated key factor in assessing the 
impairment class for any given diagnoses was also a concern. The key 
factor always determines the assigned class. This is the case even if 
the key factor's numerical score substantially differs from the 
numerical scores for all of the other three adjustment factors. For 
example, if the key factor placed an individual in diagnostic 
impairment class 2 default grade C, but each of the other three 
adjustment factors was assessed at 4, very severe problem, the 
numerical net adjustment score would be 6. [(4-2) = 2 plus (4-2) = 2 
plus (4-2) = 2 = 6] The actual allowable adjustment could only move to 
impairment class 2, grade E, however. The additional severity of the 
non-key adjustment factors could not be used to justify moving the 
individual into the higher diagnostic impairment classes of 3 or 4. 
Conversely, an individual assessed in diagnostic impairment class 2, 
default grade C with an overall net adjustment score of -6, that is, 
scores of 0 on all three of non- key criteria, would only move to 
impairment class 2, grade A. The diagnostic impairment class could not 
be changed from 2 to 1. The inability to change the impairment class is 
important, as the numeric ratings appropriate in each diagnostic class 
is narrow.
Principles underlying six edition use
    Chapter 2 of both the Fifth and the Sixth Edition is titled, 
``Practical Application of the Guides''. Chapter 2, Paragraph 1 of The 
Fifth Edition, simply states that the chapter describes how to use the 
Fifth Edition to obtain, use and communicate reliable, consistent, 
medical information. Paragraph 1 the Sixth Edition, chapter 2 makes 
very explicit that any evaluator using the Sixth Edition should be 
thoroughly familiar with its second chapter. The paragraph states:
    ``This chapter outlines the key concepts, principles and rationale 
underlying application of the AMA Guides to impairment rating all human 
organ systems.''
    It originally also had contained the sentence:
    ``Anything in subsequent chapters interpreted as conflicting with 
or modifying the content outlined [in Chapter 2] is preempted by the 
rules contained in [Chapter 2]. By analogy, [Chapter 2] is the 
``constitution'' of the Guides.''
    This sentence was deleted in the August 2008 Corrections and 
Clarifications to the AMA Guides, Sixth Edition, however. The question 
arises then as to whether Chapter 2 validly can be utilized for 
resolution of any perceived conflicts within or among the body system 
chapters.
    Table 2-1 at page 20 sets forth the 14 fundamental principles of 
the Guides, Sixth Edition, with Principle 1 reiterating that Chapter 2 
sets forth the fundamental rules of the Sixth Edition. Principles 2 
through 5 prescribe the general rating formulae. Only permanent 
impairment is ratable and only after an individual has achieved maximum 
medical improvement. The chapter relevant to the bodily system where 
the injury primarily arose or where the greatest residual dysfunction 
remains is to be used for rating impairment. Impairment across all body 
systems cannot exceed 100 percent whole person; overall impairment of a 
member or organ cannot exceed its amputation value. Impairments in the 
same organ system or member initially are combined at that level and 
later are combined with impairments to other members or organ systems 
at the body as a whole level.
    Principle 6 as set forth in the August 2008 Corrections and 
Clarifications states that impairment evaluation requires medical 
knowledge and physicians should perform assessments within their 
applicable scope of practice and field of expertise. Principle 6 had 
provided that only licensed physicians were to perform impairment 
ratings and that chiropractic physicians should rate in the spine only. 
An early clarification to the Sixth Edition eliminated the restriction 
on chiropractic rating. Chapter 2, section 2.3a states that non-
physician evaluators may analyze an impairment evaluation to determine 
if was performed in accordance with the Guides. The task force 
discussed whether permitting this was appropriate.
    Principle 7 provides that an impairment evaluation report is valid 
only if the report contains three elements: 1) a clinical evaluation, 
relevant medical history and review of medical records; 2) analysis of 
the findings as these relate to the concluded diagnosis/ses, the 
achievement of maximum medical improvement and confirmed loss of 
functional abilities; and 3) a thorough discussion of how the 
impairment rating was calculated. That an evaluator's incorporation of 
all the above elements into a report may increase the cost of obtaining 
impairment ratings and reports is a task force CONCERN. That valid 
reports would facilitate a reviewer's assessment of the accuracy of the 
diagnoses and rating has merit, however.
    Principles 8 and 9 require that evaluations be conducted by 
accepted medical scientific community standards and that ratings be 
based on objective criteria and established medical principles for the 
pathology being rated.
    Principles 8 through 11 and 13 apparently are intended to increase 
the objectivity of impairment ratings developed under the Sixth 
Edition. Nevertheless, objectivity is itself an elusive concept. 
Patients' presenting complaints are generally self-described and 
therefore subjective. Yet these are coupled with physical examination 
findings and clinical tests results to assess and diagnose. Likewise, 
patients' completed functional self-assessment tools represent their 
subjective report of abilities and limitations. Yet, the Sixth Edition 
prescribes the use of self-assessment tools, particularly so in the 
musculoskeletal chapters. Furthermore, the task force was aware of no 
current scientific rationale that undergirds medical consideration of 
functional loss. In the workers' compensation arena, assessment of 
functional loss and its impact generally has related more to the legal 
concept of compensable disability and not to the medical concept of 
physical impairment.
    Principle 12 requires that an evaluator use the method producing 
the higher rating when more than one rating method is available for a 
particular condition. Finally, principle 14 requires that fractional 
ratings be rounded up or down to the nearest whole number, unless 
otherwise specified.
Issues related to the principles
    The various sections of Chapter 2 further discuss issues related to 
the 14 principles. Section2.3b states that the doctor's role in 
performing an impairment evaluation is to provide an independent, 
unbiased assessment of the individual's medical condition, including 
its effect on function, and of limitations in the performance of ADLs. 
The section further states that, while treating physicians may perform 
impairment ratings on their own patients, such ratings may be subject 
to greater scrutiny as they ``are not independent''. Task force members 
are aware that the senior contributing editor to the Sixth Edition 
operates a substantial private business that both performs impairment 
evaluations and reviews ratings from other evaluators.
    Section 2.4d expressly states that the impairment ratings for each 
organ system include consideration of most of the functional losses 
accompanying pain [related to the impairment rating class].
    Section 2.5a contains a discussion of the differences between legal 
and medical probability. Legal probability requires a more likely than 
not or greater than 50% association between an event and an outcome to 
establish a probable relationship. In contrast, science and medicine 
require an association between a potential cause and an identified 
effect that is greater than 95% before the relationship is recognized 
as probable. The task force believes that the explicit statement of 
these medical and legal differences is helpful.
    Section 2.5b defines causality. It states that to opine that a 
cause relates to an effect within a reasonable degree of medical 
probability, it is necessary that the event occurred, that the 
individual who experienced the event must have the possible condition, 
that is, the effect which may relate to the event, and that medical 
probability exists for the event to have caused or materially 
contributed to the condition. If medical probability means a greater 
than 95% relationship, this definition of causality differs from the 
more likely than not legal probability standard in Iowa workers' 
compensation law.
    The terms, ``aggravation'', exacerbation'', ``recurrence'' and 
``flare up'', expressly are defined in section 2.5b. An aggravation is 
described as a permanent worsening of a pre-existing or underlying 
condition, which results from a circumstance or event. It is 
distinguished from an exacerbation, recurrence or flare up. Those three 
terms are said to imply a temporary worsening of a pre-existing 
condition that then returns to its baseline. Iowa workers' compensation 
law makes no such distinction between exacerbation and aggravation; 
each may be considered to result in a permanent, potentially 
compensable, substantial change in a pre-existing condition.
    Section 2.5c provides a methodology for medically allocating or 
apportioning impairment between or among multiple factors. The final 
rating for the condition being evaluated is arrived at by determining 
total impairment and then subtracting the proportion of impairment, 
which pre-existed the event that produced the overall current 
condition, from the total impairment. This type of apportionment will 
not always be appropriate under the Iowa workers' compensation law.
Pain related impairment
    Chapter 3 of the Sixth Edition discusses potential pain related 
impairment as does Chapter 18 of the Fifth Edition. The Sixth Edition 
and the Fifth Edition each allow an evaluator to assess up to 3% whole 
person impairment related to an examinee's reported pain. This is a 
departure from the Fourth Edition and its predecessors, which did not 
allow the assignment of impairment related to pain complaints. 
Significant differences exist as to how the Fifth and Sixth Editions 
approach pain, however.
    First, the Fifth Edition allows an evaluator to provide an 
impairment rating for pain as well as an impairment rating for 
identified organ system dysfunction if the evaluator believes that the 
organ system impairment rating does not adequately reflect the overall 
impairment. The Sixth Edition permits an evaluator to separately assess 
pain for impairment rating purposes only if the individual being 
evaluated fits no other diagnostic impairment class. Under the Sixth 
Edition, any rating expressly assigned for pain is a ``stand-alone'' 
rating that cannot exceed 3% whole person impairment.
    On the other hand, the Fifth Edition apparently is more restrictive 
as to the painful conditions that may be evaluated than is the Sixth 
Edition. The Fifth Edition requires that an evaluator determine whether 
pain related impairment is ratable or unratable. Under that edition, an 
individual's symptoms and physical findings are ratable for impairment 
purposes if these signs and symptoms typically are found with a known 
medical diagnosis, which physicians widely accept as having a well-
defined pathophysiologic basis. The Sixth Edition permits pain related 
impairment to be assessed if, among other things, ``the pain has a 
reasonable medical basis, for example, can be described by generally 
acknowledged medical syndromes.'' Sixth Edition, section 3.3d at page 
40. That phrase suggests that ratings for pain related impairment may 
be appropriate for myofascial or fibromyalgia syndromes, which do not 
fit within any other diagnostic impairment class.
Mental and behavioral disorders
    Chapter 14 of both the Fifth and Sixth Edition relates to mental 
and behavioral disorders. The approaches to assessing mental and 
behavioral impairment differ substantially within the Fifth and Sixth 
Editions, however. Chapter 14 of the Fifth Edition focuses on the 
process of performing mental and behavioral impairment assessment. 
Instructions are given for assessing how the disorder impacts an 
individual's abilities to perform activities of daily living. Numeric 
impairment ratings are not given. Instead, persons with mental or 
behavioral disorders are placed in one of five impairment classes, 
which are assigned based on the ability of the individual to take part 
in activities of daily living, social functioning, concentration and 
adaptation. Class 1 represents no impairment of useful functioning; 
class 3, moderate impairment, this is the ability to perform some but 
not all useful functioning; class 5, extreme impairment, indicates that 
the individual is precluded from all useful functioning.
    The Fifth Edition apparently permits classification of functioning 
of an individual diagnosed with any mental disorder described in The 
Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition 
(DSM-IV). In contrast, the Sixth Edition expressly states that it is 
not its purpose to rate impairment in all persons who may fit a DSM-IV 
diagnosis. Instead, the Sixth Edition allows ratings of only mood 
disorders, anxiety disorders and psychotic disorders. Mood disorders 
include major depressive disorder and bipolar affective disorder. 
Anxiety disorders include generalized anxiety disorder, panic disorder, 
phobias, posttraumatic stress disorder and obsessive-compulsive 
disorder; psychotic disorders include schizophrenia.
    Additionally, under the Sixth Edition, psychiatric impairment is to 
be based on Axis I pathology only. Axis II pathologies, such as 
personality disorders are considered pre-existing personality 
vulnerabilities and are not to be rated. Borderline intellectual 
functioning, which preexisted the event legally responsible for a 
ratable condition, also is not to be rated. Additionally, the sixth 
edition expressly states that the psychological distress associated 
with any physical impairment is included within the rating for that 
impairment; therefore, psychiatric reaction to pain is not to be rated. 
Page 349 of the Sixth Edition lists other disorders that are not to be 
rated.
    Unlike the Fifth Edition, the Sixth Edition does provide numeric 
impairment ratings for those mental and behavioral disorders it 
considers ratable. Three scales that are intended to provide an 
assessment of an individual's mental and behavioral disorder are 
prescribed for use in the rating process. These are: the Brief 
Psychiatric Rating Scale (BPRS), the Global Assessment of Functioning 
Scale (GAF), and a modified version of the Psychiatric Impairment 
Rating Scale (PIRS). Essentially, each of these assessment tools is 
either taken by or administered to the individual being evaluated. Each 
is then scored. The Sixth Edition assigns a numeric impairment score 
for the summed score achieved on each instrument. The middle value 
among the three impairment scores then is assigned as the mental and 
behavioral disorder impairment rating.
    The task force felt there may be some merit in attempting to 
provide numeric impairment ratings for mental and behavioral disorders. 
The task force sought input from a psychiatrist, James Gallagher, M.D., 
and a psychologist, John Brooke, Ph.D., each of whom has had experience 
within workers' compensation, in order to gain these practitioners' 
insights into both the feasibility of numerically rating impairment for 
mental and behavioral disorders and into the ease-of-use and 
appropriateness of use of the three assessment scales, across cultures 
and ethnic groups.
    Task force members expressed concerns that some long-standing 
personality vulnerabilities, which may impact an individual's response 
to an injury or be impacted by the injury itself, are considered 
unratable.
Musculoskeletal chapters
    The musculoskeletal chapters of the Fifth and Sixth Edition were 
reviewed. Dr. Rondinelli expressly advised the task force that the 
Sixth Edition editors had no intent to lower numeric impairment rating 
for any organ system. Furthermore, where ratings must be consensus-
based because objective data is lacking, the Sixth Edition purports 
generally to follow precedent from earlier editions of the Guides. The 
Sixth Edition also attempts to normalize impairment ratings and 
impairment assessment methodology across organ systems in order to 
improve that edition's internal consistency. With or without intent, 
changes in the numeric impairment ratings for a variety of 
musculoskeletal conditions and ailments have resulted.
Impairment in the spine and pelvis
    Chapter 15 of the Fifth Edition and Chapter 17 of the Sixth Edition 
relate to assessment of impairment in the spine and pelvis. Under the 
Fifth Edition, both the diagnostic related estimates (DRE) and the 
range of motion method were available for rating spinal conditions. The 
DRE method was considered the principle methodology to evaluate an 
individual who had had a distinct injury. The range of motion method 
was available for use in cases of recurrent disc herniation at the same 
spinal level and in cases of multilevel involvement within the same 
spinal region. The Sixth Edition permits final impairment to be 
assessed only with the diagnosis based impairment method. Furthermore, 
once the diagnostic impairment class has been established, selected 
treatment for the condition and treatment outcomes are considered only 
as potential modifiers of grade within the diagnostic class.
    Generally speaking, cervical spine disc or motion segment 
pathologies received higher impairment ratings in the Fifth Edition 
than these receive in the Sixth Edition. The impairment rating for 
lumbar region pathologies generally are increased from the Fifth 
Edition.
Impairment in the upper extremities
    Chapter 16 the Fifth Edition and Chapter 15 of the Sixth Edition 
treat assessment of impairment in the upper extremities. Range of 
motion tables are an assessment features in both editions. Both 
editions discuss assessment of impairment with complex regional pain 
syndrome. The Sixth Edition contains what appear to be extraneous 
comments about that syndrome's prevalence in workers' compensation 
settings.
    Appendix 15b of the Sixth Edition sets forth criteria to be used in 
interpreting electrodiagnostic testing for entrapment syndromes. The 
task force had concerns, that as a result of these criteria, doctors 
potentially would diagnose, treat and assign impairment ratings for 
work related hand and arm conditions in a manner different from the 
diagnosis and treatment of otherwise similar but non-work related 
conditions.
    Another task force concern was that the Sixth Edition's DRI 
methodology unduly complicated the assessment process for relatively 
simple upper extremity diagnoses.
Impairment in the lower extremities
    Chapter 17 the Fifth Edition and Chapter 16 of the Sixth Edition 
treat assessment of impairment in the lower extremities. Again, range 
of motion is a widely used assessment factor in both editions. The need 
to fit all upper extremity diagnoses into the Sixth Edition's DRI grid 
likely increases the time and complexity impairment assessment under 
it.
Sixth edition corrections and clarifications
    The 52 page long August 2008 Corrections and Clarifications to the 
Sixth Edition, available at www.ama-assn.org/ama1/pub/upload/mm/477/
guidesclarifications.pdf, were considered at the August 26, 2008 task 
force proceeding. The majority of the corrections and clarifications 
are to the musculoskeletal chapters. Reconciling the Corrections and 
Clarifications with the original printing of the Sixth Edition is 
difficult and time-consuming rather one does so by consulting the 
Corrections and Clarifications on line, by consulting a print copy of 
the Corrections and Clarifications placed at the front of the original 
Sixth Edition text, or by cutting and pasting the Corrections and 
Clarifications into the original text. This raises concerns as to 
whether all users of the original printing would utilize the 
Corrections and Clarifications. Given the significant extent of the 
Corrections and Clarifications, that fact raises a concern as to the 
reliability of any impairment rating achieved with use of the Sixth 
Edition original printing.
    Additionally, questions arise as to what legally constitutes the 
Sixth Edition. Arguably, the Sixth Edition could be defined as the 
original printing without more. On the other hand, it could also be 
defined as the Sixth Edition original printing and the August 2008 
Corrections and Clarifications, or even as the original printing and 
any and all corrections and clarifications to the date of impairment 
rating. An evaluator would need to explicitly state which assessment 
tools that evaluator used to arrive at an impairment assessment 
characterized as under the Sixth Edition. Potentially, a later 
correction to the Sixth Edition could invalidate a previous impairment 
assessment.
    Dr. Rondinelli revisited with the task force on August 26, 2008. He 
acknowledged that corrections and clarifications to the Sixth Edition 
are likely to be ongoing. He agreed that perhaps circulation of a beta 
draft of the Sixth Edition would have been appropriate. The publishing 
deadlines to which the AMA had committed precluded doing so, however.
Medical practitioner presentations
    On July 30 and 31, 2008, the task force devoted considerable time 
to presentations by various medical practitioners.
    ALAN COLLEDGE, M.D., medical director for the Utah Labor 
Commission, Division of Industrial Accidents, discussed the development 
and use of the Utah Supplemental 2006 Impairment Rating Guides. He 
explained that the Supplemental Guides advise use of the Fifth Edition 
of the AMA Guides in some circumstances, but provide an alternative 
impairment rating for those organ systems, where the Utah Governor's 
Workers' Compensation Advisory Council has opined that the impairment 
assessments under the Fifth Edition are not appropriate or where of the 
Fifth Edition does not assign impairment for the injurious condition.
    Dr. Colledge stated that the Utah Supplemental Guides' intent is to 
provide very objective rating criteria based on an anatomic loss while 
simplifying the rating process for physicians. Dr. Colledge is 
compensated for four hours work for the Division of Industrial 
Accidents per week. He acknowledged that his work with the Supplemental 
Guides requires considerable more time and effort than that for which 
he is compensated. Additionally, other interested parties within the 
Utah workers' compensation system volunteer their time and expertise to 
the supplemental guide process. Utah is now developing 2009 
supplemental guides that are intended to address mental injury.
    The impairment rating is the only factor considered in compensating 
permanent disability across all organ systems within the Utah workers' 
compensation system. Compensation is not made for industrial 
disability/loss of earning capacity except in cases of claimed 
permanent total disability. Utah physicians receive training in using 
the supplemental guides by way of a physician's handbook that the Utah 
division of industrial accident publishes and by way of seminars that 
the division sponsors. Additionally, Dr. Colledge presents at medical 
professional seminars and personally consults with physicians.
    Dr. Colledge was involved in the development AMA Guides, Sixth 
Edition. He chose to disassociate from that process, however. He 
expressed his belief that the Sixth Edition development process did not 
include adequate input from the industrial accident community, even 
though 80% of the overall use of the AMA Guides to Evaluation of 
Permanent Impairment is within workers' compensation settings. He also 
expressed concerns that the Sixth Edition methodology ``crossed the 
bridge'' from assessing impairment into assessing disability. He 
projected that, given the expertise and time required to properly 
evaluate impairment under the Sixth Edition model, only a limited 
number of physicians will be qualified to assess impairment under it, a 
result that raises a significant concern in rural jurisdictions, such 
as Iowa and Utah.
    MARK MELHORN, M.D., spoke with the task force via telephone 
conference. Dr. Melhorn is a board certified orthopedic surgeon, who 
was primary author of the Sixth Edition upper extremity chapter. He 
speculated that his prior published work concerning upper extremity 
medical issues as well as his active involvement in the Academy of 
Evaluating Physicians and the Academy of Occupational and Environmental 
Medicine Physicians led to his selection as primary author of the that 
chapter. Dr. Melhorn spoke as an individual physician and not as a 
representative of the American Medical Association.
    Dr. Melhorn advised the task force that the AMA appointed members 
to the upper extremity committee prior to his involvement. He was 
unaware of the organization's criteria for committee appointment. Dr. 
Melhorn stated that the decision to change the Guides' assessment 
methodology also was made prior to his involvement with the upper 
extremity committee. He did not believe that all chapter editors 
necessarily agreed with that paradigm shift/method change.
    Dr. Melhorn stated that the Sixth Edition provides ratings for many 
conditions not ratable under the Fifth Edition. He favors the diagnosis 
based rating model over rating models used in earlier editions of the 
Guides. He believes the DBR model is likely to be used in subsequent 
editions of the Guides, as that model promotes overall rating 
consistency. The doctor expressed concern that the Sixth Edition five 
grid methodology makes rating of relatively simple medical conditions, 
such as trigger finger, unnecessarily complex and time-consuming. It is 
his belief that appropriate ratings in many cases could be assessed 
simply on the basis of whether the patient had had a good, an average, 
or a poor treatment outcome. He opined that the Sixth Edition 
methodology significantly increases the burden on physicians assessing 
permanent partial impairment; he would encourage physicians to attend 
formal training before attempting to do assessments under the Sixth 
Edition.
    Dr. Melhorn acknowledged that both the Fifth and Sixth Edition of 
the Guides attempt to establish criteria as to what qualifies as carpal 
tunnel syndrome for impairment rating purposes. He explained that a 
perception exists in the medical community that the criteria for 
diagnosing carpal tunnel syndrome has become looser over time and that 
many diagnoses of carpal tunnel syndrome more properly should be rated 
as nonspecific musculoskeletal pain in the upper extremity. He agreed 
that use of rating criteria in the Guides could result in an individual 
receiving treatment for carpal tunnel syndrome while not qualifying for 
impairment rating for that condition.
    Dr. Melhorn agreed with the Sixth Edition's permitting permanent 
impairment assessment from surgically treated carpal tunnel syndrome 
after two non-eventful post operative office visits. He explained that, 
even though maximum nerve improvement may only be obtained 12 to 18 
months after surgery, early assignment of impairment was appropriate 
because early rating of impairment tends to promote early return to 
functioning and a better overall outcome for the treated individual.
    Dr. Melhorn is doing preliminary studies comparing impairment 
ratings achieved when conditions are evaluated using both the Fifth and 
Sixth Editions. His initial impression is that although the Sixth 
Edition gives higher impairment ratings for some conditions and lower 
ratings for other conditions as compared to the Fifth Edition, average 
ratings within organ systems have not changed significantly between the 
two editions. The doctor suggested that jurisdictions may wish to 
continue to use the Fifth Edition for assessing impairment in most 
conditions while also using the Sixth Edition where the Fifth Edition 
provides no means for rating a condition.
    MOHAMMED I. RANAVAYA, M.D., J. D., MS, spoke with the task force 
via telephone conference. His specialty is occupational and disability 
medicine. He is a Sixth Edition section editor and was primary author 
of its chapter 2. Additionally, he has conducted multiple training 
seminars on impairment assessment under the Sixth Edition. He spoke as 
an individual physician and not as a representative of the AMA.
    Dr. Ranavaya stated that Chapter 2 exists to arbitrate any 
conflicts as to the appropriate rating method for a given health 
condition within or among the various organ system chapters. The rule 
of liberality requires that the method producing the greater impairment 
rating be used. Dr. Ranavaya stated that Chapter 2, as originally 
written, was intended to give workers' compensation administrators 
substantial ability to modify use of the sixth edition [to meet 
individual jurisdictional needs]. He acknowledged that the deletion of 
the preemption language from principle 1 in Table 2-1 may limit that 
ability, however.
    Dr. Ranavaya stated that adopting the ICF model and changing the 
paradigm for impairment rating were editorial decisions that the AMA 
House of Delegates subsequently approved. He explained that the ICF 
model is well accepted outside of the United States, that is, in 
Europe, Australia, New Zealand and South Africa. He characterized the 
paradigm shift as ``an idea that had been taught a long time by 
default'', as instructors at impairment evaluation training courses 
have advised their physician students to look at modifiers to determine 
where a particular examinee should be placed within the impairment 
ranges set forth in earlier editions of the Guides. He characterized 
the five grid model of the Sixth Edition as a further definition of 
modifiers intended to enhance interrater reliability.
    Dr. Ranavaya opined that an impairment evaluator with eight hours 
of formal training on the Sixth Edition methodology could competently 
use that edition to assess impairment. The doctor felt that an 
individual physician would need about 30 hours of self study of the 
Sixth Edition to understand its assessment methodology sufficiently to 
competently use that edition to assess impairment.
    Dr. Ranavaya reiterated that the Sixth Edition's editors did not 
intend that ordinal impairment ratings for any medical condition be 
increased or decreased as a result of the edition's changed impairment 
assessment methodology.
    DOUGLAS MARTIN, M.D., spoke with the task force in person. Dr. 
Martin is currently president of the Iowa Academy of Family Physicians. 
He practices occupational medicine in Sioux City, Iowa and has served 
on the Board of the American Academy of Disability Examining Physicians 
(AADEP). He was that organization's official representative to the 
sixth edition advisory committee and was a reviewer of the Sixth 
Edition's pain, upper extremity, lower extremity, and nervous system 
chapters. He spoke as an individual physician and not as a 
representative of the AMA.
    Dr. Martin considers the Sixth Edition's adoption of the ICF model 
a positive change that both ``brings the United States into the rest of 
the world'' and facilitates research about impairment assessment. He 
characterized the Sixth Edition's focus on physical function as a ``big 
change'' that physicians ``would need time to process''. He agreed that 
the validity of functional assessment tools can be questioned, 
especially when those tools are administered to persons outside the 
dominant culture.
    Dr. Martin expressed his belief that adaption of a DBR impairment 
assessment model will decrease evaluator assessment errors, which have 
resulted from improperly administered range of motion or other anatomic 
function tests. He agreed that the Sixth Edition methodology increases 
both the time required for impairment evaluation and the level of 
professional training or self-study necessary needed for an evaluator 
to be proficient in using that edition. He agreed that a physician 
likely would require 25 to 30 hours of self-study to gain proficiency 
in assessing impairment under the Sixth Edition.
    Dr. Martin agreed that cervical spine fusion ratings set forth in 
the Sixth Edition generally are significantly lower than are ratings 
for like conditions in the Fifth Edition. He also noted, however, that 
the Fifth Edition ratings for those conditions generally were 
significantly higher than had been the ratings in the Fourth Edition. 
He speculated that the Sixth Edition may have ``gone overboard'' in 
attempting to correct Fifth Edition cervical spine ratings that were 
perceived to be ``too high''.
    Dr. Martin advised that the variables within occupational medicine/
work injury practice limit the possibility of controlled medical 
studies in that field. Therefore, information that can be classified as 
having a superior level of evidence basis is difficult to obtain. That 
fact impedes the goal of making any impairment assessment guide highly 
evidenced-based.
    Dr. Martin's perception was that nonmedical stakeholders had had 
limited involvement in the Sixth Edition development process. He noted 
that only two of the seven members of the editorial board practice 
clinical medicine. Given that, practical problems that could arise from 
evaluation and assessment of impairment under the Sixth Edition model 
may not have been well appreciated.
    CHRISTOPHER R. BRIGHAM, M.D., MMS, spoke with the task force via 
telephone conference. Dr. Brigham was senior contributing editor for 
the Sixth Edition. His business, Brigham and Associates, Inc., conducts 
independent medical evaluations and reviews evaluations other providers 
have performed. Dr. Brigham spoke as an individual physician and not on 
behalf of the AMA.
    Dr. Brigham stated that as senior contributing editor, he worked to 
achieve consensus among the various contributors to the Sixth Edition's 
musculoskeletal chapters and was substantially involved in the [final] 
writing of those chapters. This doctor characterized the Sixth Edition 
as a fundamental improvement in supplying accurate, unbiased impairment 
ratings. He felt that physician response to the Sixth Edition overall 
has been positive and that physicians appreciate the Sixth Edition's 
consistent impairment assessment process. Dr. Brigham acknowledged that 
some impairment ratings for surgically treated spinal conditions are 
lower in Sixth Edition. He explained that the purpose of spinal surgery 
is to improve function. That patient functioning should be decreased 
after surgical intervention and treatment is medically counterintuitive
    Dr. Brigham expressed his belief that the Seventh Edition will 
further refine the Sixth Edition paradigm shift in impairment 
assessment.
    JOHN BROOKE, Ph.D., a clinical psychologist, spoke in person with 
the task force regarding the mental and behavioral disorders chapters 
in the Fifth and Sixth Editions. He provided an outline of his 
comments, which is Exhibit B of the addenda to this process report.
    JAMES GALLAGHER, M.D., a psychiatrist provided written comments 
regarding the mental and behavioral disorders chapters in a July 10, 
2008 report, which is exhibit C of the addenda.
    Both Dr. Clark and Dr. Gallagher expressed concerns regarding the 
subjective nature of the multiple rating scales used to achieve an 
ordinal impairment rating in the Sixth Edition. Both had concerns as to 
whether and when mental and behavioral impairment could be assessed by 
assigning a particular percentage of impairment.
Recommendations re impairment guides
    The balance of time available on July 31, 2008, was devoted to task 
force assignment 4, namely:
    4. Make recommendations concerning the use of impairment rating 
guides in the Iowa system.
    a. Should Iowa adopt the Sixth Edition of the Guides?
    b. Should Iowa adopt some individual chapters of the Sixth Edition?
    c. Should Iowa adopt another existing impairment guide?
    d. Should Iowa develop its own impairment guide?
    Various recommendations were moved, discussed and voted upon. All 
members of the task force approved the following resolution:
    It is premature to determine how the Sixth Edition of the AMA 
Guides will change the ultimate impairment ratings assigned across all 
systems. Information has been presented that some ratings will go up; 
some will go down; some will stay the same. However, there is 
insufficient information to predict the overall change in ratings.
    Seven of the task force members do not recommend that the Iowa 
Workers' Compensation Commissioner adopt the Sixth Edition of the 
Guides, in whole or in part. Member, Sara Sersland, favors adoption of 
the Sixth Edition.
    Whether the Sixth Edition should be adapted in those cases where 
the Fifth Edition either does not provide impairment rating or does not 
provide an ordinal impairment rating was discussed. Piecemeal 
implementation of the Sixth Edition would increase costs and complexity 
within the Iowa workers' compensation system. Additionally, concerns 
remain about whether ordinal impairment ratings for mental and 
behavioral disorders are appropriate.
    Seven task force members approved adoption of the following 
resolution:
    The task force recommends that the Iowa workers' compensation 
commissioner consider developing a rating system, either by rule or 
legislation, for recognized medical conditions that are not rated under 
the AMA Guides, Fifth Edition.
    Member, Peter Thill, did not approve its adoption.
    On August 25, 2008, member Sara Sersland clarified her vote on the 
foregoing resolution. Ms. Sersland stated:
    I do not favor piecemeal adoption of the Sixth Edition of the 
Guides for some conditions, but not others, but, if the Commissioner 
decides not to change current rule 2.4 requiring use of the 5th Edition 
to rate conditions, I favor using the Sixth Edition to rate well-
recognized conditions not rated under the Fifth, but rated under the 
Sixth. I do not recommend the Commissioner develop a new rating system 
apart from the Sixth Edition, either by rule or legislation, for 
recognized medical conditions not rated under the Fifth.
    After Dr. Rondinelli's August 26, 2008 presentation, the task force 
completed its discussion of proposed recommendations regarding the use 
of the Guides and discussed its assignment 5, other considerations 
regarding the use of impairment ratings.
    On motion, the question of o whether Iowa should develop its own 
impairment guide was divided into discussion of whether Iowa should 
develop its own scheduled member impairment guide and into whether Iowa 
should develop its own body as a whole/whole person impairment guide.
    Two members, Marlon Mormann and John Kuhnlein, D.O., voted in favor 
of Iowa developing a state specific scheduled member impairment guide; 
the balance of task force members voted against this proposition. 
Member Matt Dake voted in favor of Iowa developing a state specific 
body as a whole/whole person impairment guide. All other members voted 
against doing so.
Other considerations--Rule 876 IAC 2.4
    The task force considered Rule 876 IAC 2.4 on August 26, 2008. That 
administrative rule adapts the Fifth Edition of the Guides to the 
Evaluation of Permanent Impairment as a guide for determining permanent 
partial disabilities under Iowa Code section 85.34(2), subsections a 
through s. The rule permits employers and insurance carriers to use the 
Fifth Edition to determine the extent of loss or percentage of 
permanent impairment resulting from an injury to any scheduled member 
and to pay weekly benefits accordingly. Benefits so paid are considered 
prima facie showing of compliance with the scheduled member 
compensation law. Within the task force, questions had arisen as to the 
overall appropriateness of this rule. The Iowa workers' compensation 
law compensates workers with scheduled injuries for the permanent 
disability that results from the loss of use or function of the injured 
member. A rating of impairment does not necessarily accurately reflect 
loss of function or loss of use. Therefore, it does not necessarily 
reflect the actual extent of permanent disability that has resulted 
from an injury to a scheduled member.
    Whether the first sentence of rule 2.4 should be amended by 
striking the word ``disability'' and inserting in lieu of that word, 
the phrase ``impairment for conditions compensable'' was moved and 
voted upon. Six task force members voted in favor of amending the rule 
in that matter. Member Marlon Mormann voted against doing so. Member 
Donna Bahls, M.D., abstained from voting on the proposed amended 
language.
    The amended first sentence would read:
    The Guides to the Evaluation of Permanent Impairment, Fifth 
Edition, published by the American Medical Association are adopted as a 
guide for determining permanent partial impairment for conditions 
compensable under Iowa Code section 85.34 (2) ``a'' to ``s.''
    Whether the January 2008 emergency amendment to rule 2.4 should be 
made permanent, with the recommended language substituted in the rule's 
first sentence, was moved and voted upon. Seven task force members 
voted to recommend that the January 2008 emergency amendment to rule 
2.4, with the proposed substitute language, become permanent. Member 
Sara Sersland voted not to so recommend.
    It was moved that rule 2.4 be amended to add language consistent 
with Miller v. Lauridsen Foods, 525 N.W.2d 417, 421 (Iowa 1994), to 
state that ``The determination of functional disability is not limited 
to impairment ratings established by medical evidence.'' Members Matt 
Dake, Saffin Parrish-Sams, Teresa Hillary and Marlon Mormann voted in 
favor of so amending the rule. Members Peter Thill, Sara Sersland and 
Donna Bahls, M.D., voted against so amending the rule. Member John 
Kuhnlein, D.O., abstained from voting on the question.
    Dr. Brigham expressed his belief that the Seventh Edition will 
further refine the Sixth Edition paradigm shift in impairment 
assessment.
    All voting members of the task force were afforded the opportunity 
to write reports summarizing the member's understanding of the task 
force proceedings and expressing the reasoning underlying that member's 
votes. Members Matt Dake, John Kuhnlein, D.O., Marlon Mormann, R. 
Saffin Parrish-Sams, Sara Sersland and Peter Thill did so. These 
statements are attached as Exhibits D through I in the addenda to this 
report. Additionally, member Sara Sersland submitted a responsive 
concurrence, which is attached as exhibit J.
Contact information
    The proceedings of the task force were digitally recorded and are 
available at the Division of Workers' Compensation, 1000 East Grand, 
Des Moines, IA 50319, for copies call 515-281-5387, for questions 
contact: HelenJean.Walleser@iwd.iowa.gov
            Respectfully submitted,
                                     Helenjean M. Walleser,
                     Iowa Deputy Workers Compensation Commissioner.
                                 ______
                                 
    [Whereupon, at 10:10 a.m., the subcommittee was adjourned.]