COMPACT

The Newsletter for Workers’ Compensation Professionals May 2001

Minnesota Department of Labor and Industry

443 Lafayette Road N.
St. Paul, MN 55155
Inside ...
Articles
DLI Web site medical fee schedule
updates .............................................. 4
Assigned Risk Plan surplus; settlement
opportunities for SCF cases .................... 5
More than $3 million of reimbursements
unclaimed ............................................ 5
Assault-injury indemnity claim numbers
level since 1997 ................................... 6
Musculoskeletal-disorder claims
in Minnesota ........................................ 8
New work comp poster available ............. 10
Payment of permanent partial disability
in lump sum ......................................... 11
Voc Rehab unit statistics, 1997-1999 ....... 12
Attorney costs in the workers’
compensation system ............................ 15
Rehabilitation provider professional
conduct and accountability outcomes ...... 21
Roy v. Gas Supply, Inc. – summary
to date ............................................... 24
Notices of request for comment .............. 43
COMPACT is a publication of the Minnesota Department of Labor
and Industry. Its purpose is to provide department news and workers’
compensation case information to professionals who work within
Minnesota’s workers’ compensation system.
Correspondence should be sent to: COMPACT editor, Minnesota
Department of Labor and Industry, 443 Lafayette Road N., St. Paul,
MN 55155; by e-mail at DLI.Communications@state.mn.us.
Subscription requests should be sent to Customer Assistance
Publications, Workers’ Compensation Division, 443 Lafayette Road
N., St. Paul, MN 55155; by e-mail at DLI.brochure@state.mn.us.
Visit www.doli.state.mn.us/compact.html to view this publication
on the Web.
Upon request to the editor, COMPACT will be made available in
alternative formats such as Braille, large print or audiotape.
Tables
Number of injuries due to assaults ........... 6
Number of assault indemnity claims for
selected industry groups ........................ 7
MSD indemnity claims ............................ 8
Types of MSDs, 1999 indemnity claims ..... 9
Industry of MSD claimants among 1999
indemnity claims ................................... 9
Occupation of MSD claimants among
1999 indemnity claims ........................... 10
Voc rehab plans closed 1997-1999 [1] ..... 13
Voc rehab plans closed 1997-1999 [2] ..... 14
Defense attorney costs by
six-month interval ................................. 16
Fees to attorneys compared with associated
service fees by six-month interval ........... 17
Insurer/defense attorney fees ................ 18
SCF reimbursements and assessments ..... 25
Forms
Annual Statement of Defense Attorney
Fees ................................................... 19
Level 1 Adjuster Training, Day 1 .............. 35
Level 1 Adjuster Training, Day 2 .............. 37
Publications order form .......................... 39
‘Rule 101’ order form ............................. 41
Summaries of decisions
Workers’ Compensation Court
of Appeals ........................................... D-1
Minn. Supreme Court decisions................ D-23
Vocational Rehabilitation unit statistics, 1997 through 1999
By Brian Zaidman, Senior Research Analyst
Research and Statistics

The Minnesota Department of Labor and Industry (DLI), Statistical comparison

Vocational Rehabilitation unit (VRU) operates as a After a period of significant change, 1992 through 1996,
vocational rehabilitation firm. VRU files vocational the vocational rehabilitation system in Minnesota entered
rehabilitation plans for approximately 300 injured a period of relative stability in 1997. From 1997 through
workers every year. The vocational rehabilitation statistics 1999, the VRU had an annual average of 258 closed
presented in the Workers’ Compensation System rehabilitation plans, comprising approximately six percent
Report1 do not provide a complete characterization of of all closed plans. The statistics for the VRU and the
VRU outcomes. This article presents statistics comparing private vocational rehabilitation firms for plans closed
VRU outcomes with those of private firms. during the years 1997 through 1999 are presented in
Figure 12.
The VRU was established by the 1983 Legislature to
provide vocational rehabilitation services to workers’ These comparisons show:
compensation claimants when there is a dispute regarding • VRU clients started receiving vocational rehabilitation
medical causation or primary liability. The legislative services, on average, more than 200 days later than the
rationale was labeled “early (vocational rehabilitation) others.
intervention” to provide needed assistance to injured
workers prior to, rather than after, a determination of • After vocational rehabilitation services started, the
liability by the courts, in accordance with Minnesota duration of services for VRU clients were similar to that
Statutes §176.102. By statute, eligible employees are of clients of private firms. For plans that closed due to
notified of the availability of VRU services. The VRU completion of services, both the mean and median plan
also receives referrals from insurers, attorneys, other durations were nearly identical for VRU and private firms.
agencies and commissioner-ordered consultations.
• More than two-thirds of VRU plans were closed before
By working with people while they are in the litigation service completion, as a result of a settlement or decision
process and returning them to work, VRU tries to reduce and order, compared to only one-third of the private firm
the duration injured workers are off work, reduce the closures.
liability for temporary total disability and mitigate the
effects of the collateral issues related to not having an • The average costs of VRU plans were less than half the
income. VRU performs retraining evaluations when cost of private firm plans. The ratio varied by plan closure
needed, but the emphasis is on return-to-work. reason – completed VRU plans cost 58 percent of the
mean for private firms, while VRU plans closing due to a
VRU employs 13 qualified rehabilitation consultants settlement or decision and order cost only 29 percent of
(QRCs) and two placement coordinators, located in the mean for private firms.
Bemidji, Duluth, Fergus Falls, Hibbing, Mankato,
Rochester, St. Cloud and St. Paul. A full range of • Because of disputes about the work-relatedness of their
rehabilitation services is provided. VRU is a registered injuries, VRU clients were very unlikely to return to their
rehabilitation firm, billing for services or intervening at pre-injury employer. Fifty-one percent of VRU clients had
settlements or hearings to recover costs. Fees collected not returned to work at plan closure, a finding consistent
are returned to the Special Compensation Fund. with the high percentage of closures due to settlements.

1
The 1999 system report is available on the DLI Web site at http://www.doli.state.mn.us/rsreport.html, by ordering a paper copy from
(651) 297-2631 or by using the report order form in this edition (see page 39).
2
Approximately two percent of the plans for both firm types were provided to clients with earlier vocational rehabilitation plans. General claim
information statistics use information about each client only once, while vocational rehabilitation plan statistics count each plan separately.
COMPACT 12 May 2001
 Figure 1 benefits were the same.

• Nearly all VRU clients had an attorney

Comparison of private QRC firms and the Vocational involved with their claim, compared to less
Rehabilitation unit: than half the private firms’ clients. This is
Vocational rehabilitation plans closed 1997-1999 expected, as most VRU clients were referred
to the VRU as a result of legal disagreements
Private QRC early in the claim process.
Measure firms VRU
Number of plans closed 12,215 773 These findings highlight some fundamental
Percentage of all plans 94.0% 6.0%
differences between VRU clients and private-
Days from injury to start of firm clients that affect outcomes. Closer study
vocational rehabilitation [1]
mean
suggests many of the outcomes are the result
434 655
median 171 387 of different case mixes.
Plan duration (days)
To provide a closely matched comparison of
mean 303 293
median 207 224
similar cases, a database was built of clients
who: had injuries in 1984 or later (when VRU
Plan closure reason
was in operation), had an attorney, started
plan completed 65.8% 30.4%
settlement or decision & order 24.6% 56.3%
vocational rehabilitation at least 180 days post-
agreement of parties 9.7% 13.3% injury and did not return to work with the pre-
injury employer.3 This process resulted in the
Plan cost
mean
selection of 24 percent of private-firm clients
$4,190 $1,890
median $2,560 $1,130 (2,858 clients) and 71 percent of VRU clients
(532 clients). The results of this analysis are
Return-to-work
shown in Figure 2 (on page 14).
same employer 45.7% 6.0%
different employer 30.1% 42.7%
not employed 24.2% 51.4% This figure shows:
• After vocational rehabilitation services
Ratio of return-to-work wage to
pre-injury wage started, the duration of services for VRU
same employer 103.0% 90.7% clients was shorter than for private-firm clients
different employer 88.5% 87.3% – 162 fewer days using the mean duration and
Total indemnity paid [1] 118 fewer days using the median duration.
mean $31,200 $25,300
median $14,600 $14,600 • The majority of VRU and private-firm plans
Attorney involvement [1] 48.1% 96.0%
closed before service completion as a result
1. Calculated on a per-client basis, rather than per plan. of a settlement or decision and order.
Source: Minnesota Department of Labor and Industry workers’ compensation
claims database.
• The average costs of VRU plans were less
• Among clients who were employed with a different employer at than one-third the cost of private-firm plans.
the close of their vocational rehabilitation plans, there was little
difference in the ratio of the return-to-work wage to the pre-injury • The return-to-work outcomes were very
wage between clients of the VRU and private-sector firms. similar. Slightly more than half the private-firm
clients returned to work; slightly less than half
• Clients of private vocational rehabilitation firms had a greater the VRU clients returned to work.
mean total indemnity benefit payment, although median indemnity Voc Rehab, continued on page 14
3
While the claims may be similar on certain characteristics, it is possible that the clients for the two firm types may differ on the reasons for the
delayed start of vocational rehabilitation. Any discussion of the differences would be highly speculative, and analysis would require a thorough
review of the claim file documents.
COMPACT 13 May 2001
Voc Rehab, continued from page 13
• Among clients who were employed at the
close of their vocational rehabilitation plans,
the VRU clients averaged slightly higher
wages compared to their pre-injury wages.
Figure 2
Vocational rehabilitation statistical comparison for
similar claims only [1]
Vocational rehabilitation plans closed 1997-1999

Private QRC
• Clients of private vocational rehabilitation firms
Measure VRU
firms had much greater total indemnity Number of plans closed 2,911 543
benefit payments. Many VRU clients do Number of clients 2,858 532
not receive any weekly benefit payments – Percentage of clients by firm type 23.8% 70.2%
their indemnity benefits are paid in a lump Days from injury to start of
sum following a settlement agreement. vocational rehabilitation [2]
mean 864 757
median 509 512

Plan duration (days)

mean 454 292
median 344 226

Plan closure reason

plan completed 34.8% 28.7%
settlement or decision & order 52.1% 56.7%
agreement of parties 13.1% 14.5%

Plan cost
mean $6,760 $1,890
median $4,990 $1,140

Return-to-work
different employer 54.6% 47.0%
not employed 45.4% 53.0%
Ratio of return-to-work wage to
pre-injury wage [3] 80.9% 86.9%

Total indemnity paid [2]

mean $62,900 $26,500
median $44,000 $15,000

1. All clients with an attorney, who did not return to work with a pre-injury employer,
who started vocational rehabilitation services at least 180 days post-injury and who
were injured in 1984 or later.
2. Calculated on a per-client basis, rather than per plan.
3. Return-to-work with different employer.
Source: Minnesota Department of Labor and Industry workers'compensation
claims database.

COMPACT 14 May 2001