Texas Impairment Schedule: An Alternative Model to the American Medical Association's
In the spring of 1991, the chair of the Legislative Oversight Committee on Workers' Compensation (LOC) asked staff to prepare plans for the development of an impairment schedule based on Texas experience. These plans were presented at the LOC's August meeting. The LOC members realized that there was a possibility that the Texas Supreme Court might find use of the statutorily mandated version of the Guides unconstitutional and endorsed the plans for an alternative schedule.
The LOC staff has developed an alternative model -- the Texas Impairment Schedule (TIS). This model was based upon reviews of other impairment schedules (American Medical Association's, Minnesota's, Wisconsin's, California's, Social Security Administration's, and Veterans' Administration's) and of nearly 600 books and articles. It was prepared in consultation with experts in workers' compensation, medicine, engineering, and evaluation. The schedule could be used to calculate impairment ratings, which are one factor used to determine the amount of impairment income benefits and the eligibility for supplemental income benefits.
If the use of the AMA Guides to the Evaluation of Permanent Impairment is found unconstitutional, the TIS could be adopted by either the legislature or by the TWCC as a replacement schedule. Even if the Guides are not found unconstitutional, the legislature may still wish to adopt the TIS.
Volume I -- The Report
The report defines three possible systems available to calculate income benefits:
- wage loss system;
- loss of wage-earning capacity system; and
- benefit schedule system.
Since January 1, 1991, income benefits in Texas have been paid based on a hybrid system that combines a wage loss system and a benefit schedule system. Because Texas incorporates the use of a benefit schedule in its workers' compensation system, the report also includes a description of the four types of schedules:
- impairment schedule;
- disability schedule;
- adaptation schedule; and
- loss of wage-earning capacity (LWEC) schedule.
The Texas Legislature chose to use a benefit schedule because it:
- increases objectivity;
- increases predictability;
- increases uniformity;
- reduces disputes;
- encourages prompt return-to-work;
- reduces need for expert assistance; and
- increases administrative efficiency.
Texas currently uses an adaptation schedule. An adaptation schedule translates a doctor's evaluation of an injured employee's medical condition into an adaptation benefit by:
- providing three weeks of benefits post-healing for each percentage point of impairment;
- paying benefits based on 70% of the employee's pre-injury wage; and
- providing additional wage loss benefits to employees with permanent conditions that preclude work.
The TIS has been developed as an alternative for the schedule currently being used -- the Guides. The development of the TIS was predicated on eight goals:
- assign impairment ratings for the loss of function of a body part or body system (impairment), not for the loss of the ability to work (disability)
- assign impairment ratings that reflect the effects of an injury on the employee's activities of daily living;
- assign impairment ratings for loss of function (e.g., loss of strength or loss of hearing) caused by a medical condition, not simply for the presence of the condition;
- be unisex in the assignment of impairment ratings, except for upper body strength;
- individualize impairment ratings through the use of modifiers;
- develop a comprehensive schedule which provides a mechanism to deal with all possible injuries;
- remove guesswork from assigning impairment ratings; and
- organize the schedule so it is easy to use for doctors and other participants in the workers' compensation system.
In order to ensure that implementation of the TIS would be actuarially neutral, the LOC staff conducted an actuarial study of 2,051 injured employees to whom income benefits were paid. The study shows that:
- the total cost of impairment income benefits (IIBs) will increase by no more than 5.4%; and
- the implementation of the TIS will have no impact on total workers' compensation costs, of which IIBs are only one part.
While the TIS is actuarially neutral, the allocation of impairment income benefits has changed. Impairment income benefits paid to employees with minor injuries will decrease, so that employees with serious injuries receive increased IIbs under the TIS.
Volume II -- The Statute
Volume II presents an annotated statute. This volume could be used by the Legislature to implement the TIS. The annotations provide information used by staff to develop impairment ratings contained in the TIS.
The statute contains mandates for the implementation of the TIS. These mandates include:
- a biennial review and revision of the TIS. The revisions will maintain actuarial neutrality;
- development of a Taxonomy of Chronic Pain for Texas, which will establish criteria for giving an impairment rating for chronic pain. The taxonomy will be revised regularly to reflect the latest medical research on chronic pain;
- development of the most effective and cost efficient method to mechanically measure strength of the arms and legs;
- adoption of additional validity tests as they become perfected;
- implementation of the Battery of Health Improvement as a validity test for mental health, when it is released; and
- adoption of additional mental health DSM-III-R codes.
Volume III -- The Rule Book
Volume III is the "how to" manual for assigning impairment ratings in Texas. It contains step-by-step instructions for measuring, validating, and assigning impairment ratings.
Volume III has eight basic parts:
- general provisions;
- back, and upper and lower extremities;
- body parts, organs, and systems;
- body systems evaluated by medical panels;
- chronic pain;
- miscellaneous information, including: sample cases, contacts for more information, and definitions; and
- an appendix containing a copy of the Sickness Impact Profile.
The discussion in Chapter 1 centers on defining "impairment" and explaining how an impairment rating is used in Texas' workers' compensation system. As defined by the Act, impairment means "any anatomic or functional abnormality or loss existing after maximum medical improvement (MMI) that results from a compensable injury and is reasonably presumed to be permanent." An impairment rating is the percentage of permanent impairment to the body resulting from a compensable injury. The rating is used to compute income benefits under the Act.
Once the employee has reached MMI, the doctor uses the TIS to measure, computer, and report an injured employee's impairment. In order to personalize the impairment rating, it is modified based on the injured employee's age and education.
Chapter 2 provides an overview of the structure of the book including such topics as how to use the TIS; processes needed to arrive at an impairment rating; how to deal with abandonment of or refusal of health care; and a discussion of degenerative occupational disease.
Chapter 3 explains how a doctor rates an injured employee who has had a previous or subsequent injury resulting in a loss of function (impairment).
Chapters 4 through 20 are all self-contained chapters which provide detailed step-by-step instructions for evaluating individual body parts or systems. Each chapter tells the doctor:
- how to evaluate the injured employee;
- what tests to perform; and
- how to compute the impairment rating and report it.
The chapters also include impairment rating tables and work sheets for the doctor to fill out and return to the TWCC.
Chapter 21 describes how to assign an impairment rating for chronic pain. It includes:
- classifications of pain;
- definitions of chronic pain;
- criteria necessary to assign an impairment rating for chronic pain;
- a preliminary taxonomy of chronic pain; and
- instructions on how to assign impairment ratings for chronic pain.
Chapter 22 explains how an impairment ratings is personalized based on the age and education of the injured employee. Older, less educated employees receive higher modifiers than younger, more educated employees.
In Chapter 23, six examples of injures are evaluated using the TIS. Each sample case shows how a doctor would compute a basic impairment rating, modify it based on the employee's age and education, and arrive at a total modified impairment rating.
Chapter 24 presents possible sources to contact for information about the TIS, if it is adopted.
Chapter 25 defines terms specific to the TIS.
The Appendix provides a copy of the Sickness Impact Profile, with specific instructions for administering and scoring the test.
The Texas Impairment Schedule is a MODEL which can be updated and enhanced. The LOC staff anticipates that changes will be made continually because the Texas Workers' Compensation Commission is mandated to review and revise the schedule based on current medical research at least once every two years. We believe that future changes must continue to reflect actuarial neutrality.
The TIS model is sound; it is technically correct, and the impairment ratings assigned will benefit the more severely injured employees.
For more information contact:
Last updated: 11/25/2013