Industry sign banking arizona claim later
hello and thank you for joining us today my name is Greg Morgan and today we're going to cover unscheduled permanent disability Awards which are known as LEC awards loss in earning capacity in today's session our agenda will include scheduled versus unscheduled injuries bindings and Award for loss of earning capacity apportionment credits process how to use on scheduled closure process of the ICA annual report of income rearrangement of an LEC award scheduled injuries they are defined in the statute ARS 23 1044 be found in your statutes book beginning on page 71 scheduled injuries include specific body parts such as fingers and arm toes foot leg eye ear or ears loss of one or more teeth or patient facial disfigurement about the head or face or it can be both within one claim based on the opinion of this commission unscheduled injuries you're going to find these in your seminar manual covered on pages 74 through 95 and they're defined under ARS 23 1044 C it's for injuries not listed under 1044 B unscheduled injuries include injuries to the head psycho lab psychological conditions spine including the neck and back shoulders hip or hips internal or bilateral wrists arms knees legs or combination thereof unscheduled injuries are injuries to the head spine shoulder and are unscheduled all on their own body parts like the knee foot elbow are scheduled injuries and do not become unscheduled injuries on their own two separate injuries each resulting in a scheduled injury result making the second injury become unscheduled second injury converting to unscheduled discovered under 1065 be in your statute book what is the claimant entitled to with an unscheduled injury well they're entitled to a findings and award for loss of earning capacity or an LDC determination issued by the ICA after the claimant is discharged from medical care unscheduled impairment is paid on loss of earning capacity supportive medical maintenance benefits after MMI is achieved may be needed as indicated not all permanent impairment requires supportive medical maintenance benefits what is a loss of earning capacity determination it's an award determining whether the claimant has or has not sustained a permanent awesome earnings due to the industrial injury and it's based on information in the file including but not limited to the carrier and claim it position papers and icas review of the file and we'll get into more of these details as we go through this session here today what's the duration of an unscheduled benefits well an LEC is payable monthly for life except the earning capacity is rearranged under a RS 23 1044 F or there's a subsequent award from the ICA or a settlement agreement considerations when handling unscheduled closure wages may be payable for a modified a RS 23 1048 a reasonable accommodations earning capacity determination this is what it says wages payable for a modified job position shall be included in determination of any temporary partial or permanent partial learning capacity notwithstanding that the modified job is not available in the open competitive labor market in other words the ICA will consider a modified job when determining an LEC it used to be that if an employer modified the position that was not readily available to the open competitive labor market meaning anyone off the street that it was considered guarded guarded in employment and we could not consider it but under 1048 a we do wage rollback the Commission factors le C's based on date of injury value for current earnings for example if there was an injury in 1987 and the claim is reclosing in 2018 if the LEC is based on the ability to earn minimum wage in 2018 the wages rolled back to minimum wage at date of injury you must roll back all real or hypothetical earnings when issuing loss of earning capacity Awards and this is done by using the Consumer Price Index apportionment known to many as the Second Injury Fund it offsets it the employers liability and exposure when there is a pre-existing injury or disability this is offset with annual reimbursement from our IC a special fund on loss of earning capacity payments request your reimbursement by November 1st of every year there are three kinds of apportionment ARS 2310 65 B and credits pursuant to 23 1044 e ARS 23 10 65 c ARS 23 10 65 B apportionment and ARS 23 1044 e credits apportionment pursuant to 10 65 B applies to a current scheduled impairment type injury when there are prior scheduled Awards in history credits pursuant to a RS 23 1044 e applied to prior scheduled Awards and this is case law of RG Roth construction company vs. the Industrial Commission a memory trick it takes two scheduled injuries meaning both to apply to apportionment and credits ARS 2310 65 B apportionment and ARS 23 1044 e credits continued if there is no loss of earning capacity the claimant is awarded permanent impairment at the value of a scheduled award known as a vocational rehabilitation bonus if there is a loss of earning capacity the claimant is awarded normal loss of earning capacity dollars and the carrier is entitled to a credit the value of the prior scheduled award known as a roth credit again the carrier is entitled to annual portion reimbursement the carrier must pay the monthly entitlement until the scheduled value of the current injury is exhausted at 75% of the average monthly wage once exhausted the carrier is eligible for annual reimbursement vocational rehabilitation bonus calculation so basically what we're going to do is calculate it as a scheduled award the worker was released with no physical work restrictions and 10% permitted impairment of the right lower extremity the average monthly wage is four thousand two hundred twenty six dollars and eighty cents the lower extremity is worth fifty months it is a vocational rehabilitation bonus because there are no physical work restrictions the average monthly wage will be calculated at 50% determine the number of months of entitlement by multiplying the impairment rating times the number of months for the body part so a right lower extremity is considered a leg and right lower extremities are worth 50 months and the impairment rating is 10% so we take 10% times 50 and we get five months of entitlement there is no loss of earning capacity the person is able to return to date of injury occupation or earn equal or greater monies than prior to injury so the wage is calculated at fifty percent take the average monthly wage times 50 percent in this case it results in a monthly entitlement of 2,100 $13.40 and if we want to see the value of our total award we simply multiply that monthly entitlement times the number of months of entitlement and we see that it is ten thousand five hundred sixty seven dollars to be paid in one lump sum as a vocational rehabilitation bonus things to remember about a RS 2310 sixty-five B apportionment 1044 e the credits the credits are spread out over the injured workers lifetime and you can also use permit awards from other states if there's an industrial injury in another state that you are aware of and you can gather this information that can be used the carrier makes the LEC payments and requests 50 percent of payments for reimbursement from special fund every year in October like I indicated earlier it does have to be done prior to November 1 helpful hint a good new claim investigation includes a request for priors from the ICA in writing or through our interested party portal also on your contacts list you can find interested party portal information the phone number the person to call apportionment / ARS 23 10 65 C this is for non-industrial pre-existing impairment as defined in 10 65 see things like epilepsy diabetes arthritis etc the impairments must present a hindrance or an obstacle to employment and the impairment has to equal or exceed a 10% permanent impairment rating according to the AMA guides the employer must also have had knowledge of permanent impairment at the time of hire or the employee continued in employment after the employer acquired such knowledge memory trick C equals condition condition listed in ARS 23 1065 see something else that i should adhere to is if you're going to request 1065 see you must do it on the 107 it cannot be done in a position paper it can be mentioned but legitimately for us to present it to the special fund it has to be on a 107 form the carrier process this is an unscheduled closure checklist you need to establish the average monthly wage even if you feel it's in the loss of earning capacity average monthly wage must be established any time there is permanent impairment and you need to be able to provide medical for all the injuries or body parts within this injury that are accepted as part of the claim with impairment and/or restrictions and limitations you use the form 104 with number 6 and date of termination remember rule 18 you can't back date that termination date more than 30 days from your actual mailed on date and you'll check number 8 indicating permanent impairment you will need a form 107 appropriately marked supporting medical records as I indicated and if you're requesting apportionment here's where you would do it and make sure you include the supporting documentation and if you have a position paper please submit it and we have this list in our manual on page 90 okay about the average monthly wage it's required on all unscheduled closures even if there was no time loss or there's no loss of earning capacity and you can see the average monthly wage section for instructions and we have average monthly waste sessions in this webinar presentations that we have available to you at this time so remember right first thing on your checklist is the average monthly wage next up we're going to cover it in detail the 100 or with the correct boxes marked remembering rule 18 when the applicant reaches an MMI status issue the 104 for permanent impairment selecting box 6 with the termination date and box 8 indicating there is permanent impairment and remember your termination date on line 6 cannot be more than 30 days prior to your mailed on date next up proper appropriately marking the form 107 box 1a you can find a little more information on this on page 74 of your manuals but basically you check box 1a when the worker is discharged with a general disability rating meaning that it is unscheduled all on its own it will be to the head shoulder spine hip internal etc you check box 1b when there is a prior scheduled award and a current scheduled type injury with permanent impairment you can find information on this on page 74 in the manual as well you check box 1c if the injured worker has been discharged with a general disability and has a history of a non industrial medical condition or disability and you can find information on this in your manual on page 74 through 75 in your statutes book there on pages 91 and 92 and you check one D for apportionment requested for injuries prior to January 1 1986 also found in your manual on page 75 I doubt if you'll ever use this but if you do we have samples for it okay back to our checklist the next step is supporting medical records supporting medical documentation your closing medical reports they must be thorough and if medical states that they are being discharged from active care with permanent impairment rating to an unscheduled body part or part of the body common wording you're going to see is maximum medical improvement or MMI discharged from active care follow-up PRN permanent and stationary status the medical must also provide clear work restrictions or state no work restrictions another thing is that you must have medical to support all of the body parts injured multiple reports over time are acceptable but a claim cannot be closed until all body parts are at permanent and stationary status and our checklist continues if you're requesting apportionment includes supporting documents if you're requesting apportionment pursuant to 1065 B and credits pursuant to 1044 e submit proof of prior scheduled injuries you're going to need the prior 104 or closing notice the prior award if it's an in-state scheduled award it will be on a notice of permanent disability or death benefits or we call it a 106 and you'll need medical documentation or other states Awards if you're presenting awards from other states you're going to need this kind of information like how much money did they get what's the body part when did they receive it and position papers they should include scheduled calculations for apportionment calculations at 75% of the wage when you're requesting loss of earning capacity and they should be calculated at 50% when recommending no loss of earning capacity per ARS 2310 65 C you need to submit supporting documentation along with your 107 that substantiates this type of apportionment again it's a non industrial pre-existing impairment as defined per 2310 65 C like epilepsy diabetes and arthritis the impairment presents a hindrance or obstacle to employment and the impairment equals or exceeds a 10% permanent impairment rating according to I am a guides the employer had knowledge of permanent impairment at the time of hire or the employee continued in employment after the employer acquired such knowledge this must be marked on your 107 back to our checklist now we're going to discuss position papers what is a position paper it is an earning capacity recommendation for the injured worker and when you terminate benefits you should submit a position paper with your closing notices again it's going to be your recommendation and the claimant usually sends their recommendation from their attorney we'll have some examples of these as we progress through this presentation the position papers can be written by an adjuster for the carrier or it can be written by a labor market specialist or an attorney as it indicates here who creates labor market consultants attorneys and adjusters who submits a position paper carriers and claimant what to include in a position paper you need demographics like the date of injury the date of birth and age educational background employment at the date of injury and the employment history makes sense right we get an idea of educational background along with employment skills and knowledge you're also going to need the location of residents on the date of injury location where employment was being performed at the date of injury and current location of residents that's the three labor markets that will be considered and we will consider the best labor market of those three you'll need physical work restrictions related to the industrial injury criminal history vocational rehabilitation did it occur or not and if so what were they trained to do and you'll need details of return to work with the insured employer or different employer okay vocational rehab has seen on page 89 in your manuals did the injured worker participate in vocational rehabilitation program if so did he complete the program and what occupation were they trained for if they returned to work for the insured employer you need to follow these steps or provide this information if they've been offered regular duty or modified work for the insured from the insured employer verifying the offer modified employment or regular duty work to include occupation offered or available to the injured worker did the injured worker accept the return to work offer a best practice is to get a signed job offer indicating whether they accept or deny the return to work and then the number of hours are working per week and the rate of pay and specify if the employer is accommodating or modifying the job tab if they return to work for a different employer you're going to still need the same kind of information we're just going to approach gaining that information in a different manner can submit written documentation such as pay stubs most recent monthly status report forms w-2 form or a form letter filled out by the injured worker verifying the occupation they're performing number of hours they're working rate of pay if the injured worker is working less than 40 hours per week please explain the reason the reason that we ask for this type of information if they're working for a different employer is that employer m
y not have knowledge of this industrial injury and it's to everyone's benefit that this individual did return to work and is performing work if you contact the employer directly and they have no knowledge of this they could dismiss this worker so this is the reason that we're asking for these types of documents the ICA process who issues a loss of earning capacity award the Industrial Commission of Arizona claims division this is a loss of earning capacity questionnaire that we send out to the injured worker in your form 107 is received here this must be received back here in 30 days when it comes in we will consider this just like we would a position paper there is a place here for the injured worker to date and sign this as well but it asks general information like if they have an attorney are you right or left-handed do you have a driver's license are you working and if you are what job duties are you performing and what's the rate of pay it's just useful information for us to consider no loss of earning capacity this can be found on page 91 of your manuals this sample we have here we have type of injury as a back 10% whole person impairment and it says after conservative medical treatment the injured worker was released from medical care with no physical work restrictions upon review of this the ICA found the injured worker sustained no loss in earning capacity when they're released with no work restrictions going to result in the loss of earning capacity this is a sample of an actual findings and award is in this format it looks like this that's a protest bowl award just like scheduled awards are it's got a 90 day protest period this one is a no loss of earning capacity award and you'll see here on this page it does have a 90 day protest period there's also a page to the applicant in this page is sent to the applicant it informs them that the injury is not affecting their earning ability at this time it assures them that if they have difficulty in the future and their earning capacity is lessened because of their injury they do have a right to reopen their claim and the forms are available for that application okay this is on page 91 of your manuals this is a no loss of vocational rehabilitation bonus sample here you have a prior date of injury of October 1106 5% permanent impairment of the left upper extremity see that's a scheduled injury and a current date of injury of 10% permanent impairment of the right lower extremity another scheduled injury therefore the second injury becomes unscheduled and loss of earning capacity must be determined this individual was a pipe fitter released from medical care with no physical work restrictions therefore ICA found sustained the loss of earning capacity however pursuant to a RS 23 1065 B 1 the injured worker was found to be entitled to a vocational rehabilitation bonus in the amount calculated pursuant to a RS 23 1044 B to be paid in a lump sum which is credit against any permanent compensation benefits awarded in any subsequent proceeding so we're going to calculate what the current award would be if it were scheduled 10% right lower extremity that's 50 months for the lower extremity times 10% five months of entitlement there's no loss of earning capacity so the wage is calculated at 50 percent meaning the monthly entitlement would be 2100 $13.40 but since it's a rehab bonus we have to know what the total award is because they get it in one lump sum in this case 2100 $13.40 times five months would give us a total award of ten thousand five hundred sixty seven dollars loss of earning capacity so on page 92 of your manuals here we have a person with a right shoulder injury 15% whole person impairment the person was a firefighter and was unable to return to his duties as a firefighter therefore ICA found he could perform the duties of a customer service rep which was readily available in the open competitive labor market on the date of injury this position was found to have paid fifteen dollars and 86 cents per hour or two thousand seven hundred forty eight dollars and eighty six cents per month which results in a forty point five eight percent reduction in earning capacity entitling the injured worker to the monthly sum of one thousand thirty-two dollars and 38 cents this is how we calculate this week the average monthly wage we subtract the hypothetical earnings of two thousand seven hundred forty eight dollars and 86 cents and we get a difference of one thousand eight hundred seventy seven dollars and six cents we then multiply that difference times fifty five percent or 0.55 and get a monthly entitlement of one thousand thirty two dollars and thirty eight cents how to calculate loss of earning capacity award well we just went over it briefly but we'll put the numbers in position for you here with a title now we see the average monthly wage at four thousand six hundred twenty-five dollars ninety two cents and we see the earnings real or hypothetical at two thousand seven hundred forty eight dollars and 86 cents we have a difference of one thousand eight hundred seventy seven dollars and six cents this results in a forty point five eight percent LEC multiplied times the 0.55 or fifty-five percent the monthly entitlement is 1032 thirty-eight loss of earning capacity with apportionment and credit Porsche met pursuant to 1065 be credits pursuant to 1044 e and you can find this sample on page 93 of your manuals here we have a prior scheduled current scheduled with a loss of earning capacity our prior injury was thirty five percent left lower extremity the current twenty percent permanent impairment right major upper extremity that person is a carpenter the LEC determination was made when I see a found the worker was unable to return to the date of injury duties of a carpenter and found he could perform the duties of a driver which was readily available in the open competitive labor market on the date of injury this position was found to have paid ten dollars and fifty two cents an hour or 1800 $23.33 per month which would result in a fifty five point six six percent reduction in earning capacity in titling the injured worker to the monthly sum of one thousand two hundred fifty eight dollars and seventy seven cents and there you can see the calculations they have requested apportionment remember that's going to apply to our current injury so we calculate its value as a scheduled award at 75% of the average monthly wage the major right upper extremity is worth 60 months 20% of that would result in 12 months of entitlement and the wage will be calculated as 75 percent because he's unable to return to date of injury occupation result in three thousand eighty four dollars a month we take that times 12 month 12 months excuse me and you would have apportionment valued at thirty seven thousand eight dollars now let's go to the bottom of the page insurance carrier is to pay the injured worker one thousand two hundred fifty eight dollars and seventy seven cents per month until the sum of thirty seven thousand eight dollars has been fully paid twenty nine point four months after which the monthly entitlement of one thousand two hundred fifty eight dollars and seventy seven cents will be paid or shared on an equal basis between the insurance carrier and the I see a special fund now you see the asterisk and page there it says because the applicant is unable to return to the date of injury employment due to the industrial injury the amount the carrier must pay first before being eligible for reimbursement under ten sixty five B is calculated using a seventy five percent factor if the injured worker is unable to return back to the applicant's usual and customary occupation due to the industrial injury and a combination of other factors the value of the scheduled award is to be paid at 50 percent of the average monthly wage what does that mean exactly well let's let's suppose this person - carpenter right major upper extremity injury let's suppose that they had a couple surgeries the physician makes a statement something to the effect of would like to see him get into work hardening program perhaps in another five or six weeks at this time we do not know if you'll be able to return to date of injury occupation and let's suppose that the person has the unfortunate luck to have a heart attack a couple days later and it doesn't kill them but puts them in a wheelchair well they'll never never be a carpenter now it won't be able to return to their date of injury occupation so there's other factors in that case the wage on your apportionment would be calculated at 50 percent instead of 75 percent on page 94 we're going to go over the credit portion of this the loss of earning capacity with apportionment and credit pursuant to 1065 B and 1044 e the applicants prior injury of January 309 was terminated as of october 3 2009 in which the applicant was paid a scheduled award of thirty three thousand three hundred dollars per the notice of permanent disability or death benefits issued on October 3rd 2009 the applicants life expectancy in accordance with the life tables contained in the United States life tables thirty four years or four hundred and eight months based on the applicants age of forty six years at the time of termination of that prior injury and again this is case law of RG Roth construction company versus the Industrial Commission so what we do is we take the value of that scheduled prior scheduled award and we divide it by the number of months of life expectancy which was 408 and get a credit of eighty one dollars and sixty two cents per month for a period of four hundred and eight months after you have the LACC entitlement of one thousand two hundred fifty eight dollars and seventy seven cents you subtract this credit of eighty one dollars and sixty two cents leaving a monthly entitlement of one thousand one hundred seventy seven dollars and fifteen cents for a period of four hundred and eight months thereafter it would revert to 1250 8.77 cents on page 95 this is for apportionment on a second injury sustained between July 31 of 1980 and December 30 of 1985 so it's prior to January 1 of 86 I doubt if you're ever going to have one of these open reopen but if you do this sample is in your manuals here and you can also call us if you need help a total loss of earning capacity on page 94 we wanted to point out the difference here this individual has a neck injury and a 24% whole person in impairment unable to return to any form of gainful and employment due to the industrial injury therefore was determined it was totally disabled take note here that the average monthly wage on a total loss of earning capacity is calculated as 66 and 2/3 percent so this monthly entitlement would be three thousand eighty four dollars and ten cents another note here I don't think you'll ever use it but total injuries prior to August 8th of 73 were paid at sixty-five percent whereas you noticed on our prior examples permanent partial was calculated at fifty-five percent of the difference totals are calculated is 66 and two-thirds percent when does an LEC award become final 90 days any interested party can protest this the annual report of income the claimant has a responsibility to report their annual earnings if the carrier is paying them monthly entitlements for permanent partial disability the applicant is to report their annual earnings so the carrier has the right to know what earnings are claimed and reported each year and the worker's annual report of income form 110 a is filed on an anniversary date of the claimants LEC award this is what that award looks like 110 a this is what this form looks like it's sent by the carrier to the workers receiving permanent compensation benefits one month prior to the anniversary date of their reward they are to report their earnings for the prior twelve months this also has a fraud clause on it as you can see with the red border around it false statements or misrepresentations for payments they're guilty of a Class six Elleni and subject to one and a half years in prison $50,000 fine for feature of benefits hopefully that keeps people on the straight and honest route if you don't get this back in 30 days send them this form the 110b notice of intent to suspend it also had the as the fraud clause and we hope to prevent fraud this form when they receive this it tells them that their benefits will be suspended if it's not received within 30 days if you don't receive that form within 30 days then you can issue the form 105 the notice of suspension of benefits and suspend their benefits for failure to submit the required annual report of income usually when you send the notice of intent to suspend they will comply rearrangement of loss of earning capacity award when an LEC award is final any interested party may request a rearrangement of the LEC award this is that 110a the worker's annual report of income and it's returned and it looks like if we look at our little red rectangle up there on top the average monthly wage was $2,400 and the earning capacity was supposed to be one thousand seven hundred thirty three dollars and 20 cents and the person's monthly entitlement was three hundred and sixty $6.74 we go down below and we see that over the past year joan jackson earned thirty one thousand eight hundred thirty-eight dollars and 32 cents when divided by twelve months in a year that would come out to two thousand six hundred fifty three dollars and 19 cents which is considerably more than the one thousand seven hundred thirty three dollars and 20 cents of capable earnings in the original ward and so as you can see here we have taken those earnings at two thousand six hundred fifty three dollars and 19 cents and we have rolled them back to date of injury of 2004 and it's $2,094.72 which is still greater then the projected earnings of 1733 dollars and 20 cents at the time of the award also this would put the LEC award at 167 dollars and 90 cents a month versus 366 dollars and 74 cents a month so in this case the carrier would want to recommend a petition for rearrangement or adjustment of compensation okay create a criteria for rearrangements per AR s 23 1044 F if there is a change in the physical condition of the employee due to the industrial injury resulting in reduced or an increased earning capacity if there is a reduction in the earning capacity of the employee where there is no change in the employee's physical condition after the findings and award or the employees earning capacity has increased after the findings and award this is a petition for rearrangement or readjustment of compensation you can find this form on page 152 of your seminar manuals again any interested party in the claim can file a petition for rearrangement here's some helpful hints and reminders yes an average monthly wage is required on all unscheduled closures this is our number one reason for sending solicitations rule R 20 - 5 - 118 ensure the claim is closed within 30 days of the closing medical or the 104 is not backdated more than 30 days this is our number 2 reason for solicitations and do not wait to get a position paper if it is not received at the time the LEC award is issued it cannot be considered and the ICA cannot consider surveillance we are not doctors we can consider a doctor's written opinion at work restrictions based on surveillance that brings us to the end of this presentation again I'd like to thank you for joining us if you have questions at any time feel free to call us at 6:02 five four two four six one
