1 Overview of Recent Workers’ Compensation Research Findings Amy Lee, Director Texas Department of...

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Overview of Recent Workers’ Compensation Research

Findings

Amy Lee, DirectorTexas Department of Insurance, Workers’ Compensation Research and Evaluation

Group

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This presentation will highlight: • Return-to-work rates using Texas

Workforce Commission (TWC) wage data;

• Updates on WC network participation;

• Recent pharmacy descriptive statistics; and

• Descriptive statistics on recipients of permanent impairment income benefits.

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Return-to-Work Rates Using

Texas Workforce Commission (TWC)

Wage Data

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Initial Return-to-Work RatePercentage of Injured Workers Back At Work for the First Time

6 Months to 3 Years Post-Injury

Source: Texas Department of Insurance, Workers’ Compensation Research and Evaluation Group, 2007. Note 1: The study population includes 329,986 workers injured in 2001-2005 who also received temporary income benefits (TIBs).Note 2: Although the increases of initial RTW rates were small, they were statistically significant at the 0.01 significance level. While this reflects a improvement in the percentage of workers who have initially returned to work, the difference is not big enough to conclude that the WC system improved substantially during this time.

Injury Year Within6 Months

Post Injury

Within1 Year

Post Injury

Within1.5 Years

Post Injury

Within 2 Years

Post Injury

Within3 years

Post Injury

2001 70% 79% 83% 85% 88%

2002 71% 80% 84% 86% 89%

2003 72% 81% 85% 87% 90%

2004 74% 83% 86% 88%

2005 75% 84%

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Sustained Return-to-Work Rate

Injury Year

Within6 Months

Post Injury

Within1 Year

Post Injury

Within1.5 Years

Post Injury

Within 2 Years

Post Injury

Within3 years

Post Injury

2001 61% 68% 73% 76% 80%

2002 62% 70% 74% 77% 81%

2003 64% 71% 76% 79%

2004 66% 73% 78%

2005 68%

Percentage of Injured Workers Back At Work and Remained for ThreeSuccessive Quarters Beginning With the Initial RTW Quarter

6 Months to 3 Years Post-Injury

Source: Texas Department of Insurance, Workers’ Compensation Research and Evaluation Group, 2007.

Note 1: The study population includes 329,986 workers injured in 2001-2005 who also received temporary income benefits (TIBs).

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Mean and Median Days Off Workfor Injured Workers Who RTW At Some Point Post

Injury, Injury Years 2001-2004

InjuryYear

Mean days off work

Median days off work

2001 150 32

2002 142 32

2003 139 31

2004 111* 26*

Source: Texas Department of Insurance, Workers’ Compensation Research and Evaluation Group, 2007.Note1: The mean and median days off work in 2004 may be under-estimated due to data maturity and should be viewedwith caution.Note2: “Days Off Work” was defined as days from the injury date to the initial RTW date. Please note that these numbers do not take into account any additional time off work that may have occurred after the initial RTW date. Note3: The analysis was based on the claimants who returned to work, and did not include those who did not return by the end of 2006. Injury year 2005 was excluded because of insufficient data.

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Updates on WC Network Participation

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Carrier Data Calls• In Sept 2006, March 2007 and November 2007 TDI

issued a data call to the top 13 insurance carrier groups (in terms of premium market share) to ask about WC health care network participation;

• The top 13 groups represent approximately 82% of the WC premium written in Texas;

Network Data Call• In February 2007, October 2007 and February 2008

TDI issued a data call to all WC certified networks;

• Data call included two parts:

1) Info on how many workers have been treated in network;2) Info on how many insurance carriers the network has

contracted with and for how long; and

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Results of Carrier Data Call• 12 out of 13 carrier groups have contracted with or established a

certified WC network (an increase from 9 in Sept 2006);

• 11 of the 12 carrier groups with a network have already begun offering it to policyholders along with a premium credit;

• Most premium credits offered for network participation are 10-12%;

• Network participation among policyholders varies widely for carriers – as of March 1st, 2007– approx 29,000 policyholders agreed to

participate in networks compared to only 7,500 as of Sept 1st, 2006

– Most of these policyholders (81% were small and mid-sized employers)

– These carriers estimated that the number of claims treated in network would grow to over 100,000 by CY 2009.

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Results of Network Data Call• 18 of the 31 networks certified by TDI had treated injured

workers as of Feb 1st, 2008;

• A total of 39,991injured workers treated by these 18 networks (2 networks alone treated 77% of these workers);

• About 6 percent of the workers treated in network had legacy claims (i.e., injuries prior to the network cert date);

• About 40 percent of the workers treated in network had “lost-time” claims, meaning at least one day of lost time was recorded

• As of Feb 1st, 9 of the 31 networks certified by TDI did not have any insurance carrier contracts in place;

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Geographic Distribution of Lost-Time Claims Treated by TDI-Certified Networks as of February 1, 2008

DWC Field Office Percentage of Lost-Time Network Claims

DWC Field Office Percentage of Lost-Time Network Claims

Abilene 1% Lubbock 1%

Amarillo 2% Lufkin 1%

Austin 6% Midland/Odessa 5%

Bryan/College Station 1% Missouri City 1%

Beaumont 1% San Angelo <1%

Corpus Christi 2% San Antonio 10%

Dallas 11% Tyler 3%

Denton 4% Victoria 5%

El Paso 3% Waco 3%

Fort Worth 14% Weslaco 4%

Houston 20% Wichita Falls <1%

Laredo <1%

Source: Texas Department of Insurance, Workers’ Compensation Research and Evaluation Group, 2008.Note: “Lost-time” claims are claims in which at least one day of lost-time was recorded.

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Pharmacy Descriptive Statistics

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Distribution of Medical Payments in the Texas Workers’ Compensation System, Service Years 2005 - 2006

Source: Texas Department of Insurance, Workers’ Compensation Research and Evaluation Group, 2008.Note 1: Percent of Total Payments may not add up to 100% because of rounding. Note 2: The California Workers’ Compensation Institute (CWCI) estimates that in 2005 California’s Pharmacy cost was 7 percent of that state’s medical costs.

Medical Type

Service Year2005

Service Year2006

TotalPayments

Percent ofTotal

Payments1

TotalPayments

Percent ofTotal

Payments1

Professional $626,309,000 62% $535,603,000 57%

Hospital $250,938,000 25% $275,923,000 29%

Pharmacy $132,973,000 13%2 $131,647,000 14% 2

Dental $580,000 <1% $1,049,000 <1%

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Injured Employees Receiving Prescriptions in the Texas Workers’ Compensation System

Prescription Years 2005 - 2006

171,330

171,146(50%)

176,127

168,225(49%)

0%

20%

40%

60%

80%

100%

2005 2006

Injured Employees Without Prescriptions Injured Employees With Prescriptions


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Distribution of Pharmaceutical Utilization and Payments by Injury Year

Prescription Year 2006

Injury Years

% ofInjured

Employees

% ofPrescriptions

% of Drug Days

% ofPayments

1991 - 2000 13% 33% 40% 46%

2001- 2004 15% 28% 31% 29%

2005 14% 15% 14% 11%

2006 58% 24% 15% 13%


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Distribution of Pharmaceutical Prescriptions by Therapeutic Classification Group

Prescription Year 2006Therapeutic

ClassificationGroup

Number ofPrescriptions

Cum%

TotalPayments

Cum%

ANALGESICS -OPIOID

522,521 32% $43,046,837 33%

ANALGESICS – ANTI- IFLAMMATORY

257,092 48% $18,637,705 47%

MUSCULOSKELETALTHERAPY

225,173 62% $17,141,168 60%

ANTIDEPRESSANTS 99,189 68% $9,164,644 67%

ANTICONVULSANTS 96,298 73% $14,362,712 78%

HYPNOTICS 64,116 77% $6,315,282 82%

ANTIANXIETYAGENTS

40.668 79% $2,030,153 84%

OTHER GROUPS * 343,509 100% $20,948,958 100%

Source: Texas Department of Insurance, Workers’ Compensation Research and Evaluation Group, 2008.Note*: Texas WC prescriptions in 2006 were for 6,001 unique Drug Names from 626 Subclasses. The Subclasses fall into 89 distinct Therapeutic Classification Groups as defined by the Medi-Span classification system

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Generic Substitution Rate Where Generics Were Available *


28%

72%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Brand Name Generic

Source: Texas Department of Insurance, Workers’ Compensation Research and Evaluation Group, 2008.Note* : Approximately 85,000 prescriptions (5 percent) did not have generics available

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Generic Substitution RatesTherapeutic Classification Groups


Antidepressants, 50%

Hyponotics, 11%

Other, 55%

Anti-anxiety Agents, 94%

Analgesics -Opioids, 91%

Musculoskeletal Therapeutic Agents, 82%

Anticonvulsants, 55%

AnalgesicsAnti-Inflammatories, 68%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percentage of Prescriptions


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Descriptive Statistics on Recipients of Permanent Impairment Income Benefits in

the Texas WC System

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Five types of income benefits are payable under the Texas Workers’ Compensation Act

• Temporary Income Benefits (TIBs) – paid during the period of temporary disability (lost time from work) while the worker is recovering from an on-the-job injury;

• Impairment Income Benefits (IIBs) – paid to injured workers for permanent impairment (impairment evaluations are currently based on the Guides to the Evaluation of Permanent Impairment, 4th Edition, published by the American Medical Association);

• Supplemental Income Benefits (SIBs) – paid to injured workers for ongoing disability after IIBs have been exhausted, with all eligibility for SIBs ending at 401 weeks after the date of injury; Only workers with a 15 percent impairment rating and who are unemployed or underemployed as a result of their work-related injuries are eligible to receive SIBs;

• Lifetime Income Benefits (LIBs) – paid for the life of the injured worker for specific catastrophic injuries as set forth in Section 408.161 of the Texas Labor Code; and

• Death Benefits (DBs) and Burial Benefits – paid to the deceased workers’ spouse or eligible beneficiaries as a result of a death from a compensable injury.

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Purpose of This Analysis

This study aims to provide basic descriptive information regarding the frequency and amount of Impairment Income Benefits (IIBs) and Supplemental Income Benefits (SIBs) received by injured workers in the Texas workers’ compensation system from 1996 to 2005.

This analysis focuses on IIBs and SIBs since these benefits are paid to severely injured workers who generally have the hardest time going back to work after an injury.

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Total Number of Injured Workers Who Received IIBs* Injury Years 1996-2005

Source: Texas Department of Insurance Workers’ Compensation Research and Evaluation Group, 2008.Note 1: Injury year 2005 data should be interpreted with caution since data may not be complete.Note 2: Claims that did not have a valid claim, benefit and impairment rating record on file with the Division of Workers’ Compensation were excluded from this analysis.

39,24338,561

37,119 36,608

40,602 40,860

37,288

31,916

27,827

22,814

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Nu

mb

er o

f In

jure

d W

ork

ers

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Injury Years

*

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Percentage of Workers Receiving Medical Services in 2003

Who Also Received IIBs or SIBsType of Injured Worker

Percent of Workers

Receiving Medical Services

Average Medical Payment Per Worker

for Services Rendered in 2003

Total Medical Payments for

Services Rendered in 2003

Percent of Total Medical

Payments

IIBs and SIBs Recipients

25% $6,930 $706,735,380 57%

All Other Injured Workers

75% $1,759 $533,691,850 43%

Source: Texas Department of Insurance Workers’ Compensation Research and Evaluation Group, 2008.Note: Medical services include professional and hospital services rendered during 2003. Pharmacy services are excluded from this analysis since pharmacy data was not available for 2003.

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Average IIBs Duration Per Worker Injury Years 1996-2005

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2726 26

24

2220

1817

15

0

5

10

15

20

25

30

35

Ave

rag

e N

um

ber

of

Wee

ks

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Injury Years

*


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Distribution of Most Recent Impairment Rating Received by IIBs Recipients, Injury Years 1996-2005

0 1 - 5 6 - 10 11 - 14 15 - 20 21 - 50 51 and More

392434% 39% 30% 14% 8% 5% <1% 100%

385613% 39% 30% 14% 8% 5% <1% 100%

371193% 39% 30% 14% 8% 6% <1% 100%

366083% 37% 31% 14% 9% 6% <1% 100%

406022% 38% 33% 13% 9% 5% <1% 100%

408602% 47% 31% 9% 7% 4% <1% 100%

372881% 54% 29% 7% 6% 3% <1% 100%

319161% 58% 27% 6% 5% 3% <1% 100%

278271% 61% 25% 6% 5% 2% <1% 100%

228141% 63% 24% 5% 4% 2% <1% 100%

Total 8111 163128 103307 37790 25118 14698 686 352838

Total

2004

2005

2002

2003

2000

2001

1998

1999

1996

1997

Injury Years

Impairment Ratings

*


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IIBs Recipients Who Received Statutory Maximum and Minimum Weekly IIBs

• The statutory maximum IIBs benefit payable to injured workers is 70% of the State Average Weekly Wage (SAWW)

• The SAWW for WC purposes is based on 88% of the average weekly wage for all covered employment as calculated by the Texas Workforce Commission (TWC)

• As of 2006, approximately 21% of workers receiving IIBs were capped at the statutory maximum weekly IIBs rate – currently $498/week

• As of 2006, approximately 2% of workers receiving IIBs received the statutory minimum weekly IIBs rate – currently $107/week

• Statutory changes made by HB 7 in 2005 to the calculation of the statutory maximum weekly benefit increased the maximum weekly IIBs payment from $378 in FY 2006 to $498 in FY 2008, which should result in a lower percentage of workers being capped at the statutory maximum in future years

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Total Number of Injured Workers Who Received SIBs* Injury Years 1996-2004

995 1,002

1,1771,221

1,104

814

562

320

186

0

200

400

600

800

1,000

1,200

1,400

1996 1997 1998 1999 2000 2001 2002 2003 2004

Injury Years

*

Source: Texas Department of Insurance Workers’ Compensation Research and Evaluation Group, 2008.Note 1: Injury year 2004 data should be interpreted with caution since data may not be complete. Injury Year 2005 was excluded from this analysis since few workers injured in 2005 have exhausted their IIBs and are eligible to receive SIBs.

Note 2: Claims that did not have a valid claim, benefit and impairment rating record on file with the Division of Workers’ Compensation were excluded from this analysis.

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SIBs Recipients Who Received Statutory Maximum SIBs

• The statutory maximum SIBs benefit payable to injured workers is 70% of the State Average Weekly Wage (SAWW)

• The SAWW for WC purposes is based on 88% of the average weekly wage for all covered employment as calculated by the Texas Workforce Commission (TWC)

• As of 2006, approximately 19% of workers receiving SIBs are currently capped at the statutory maximum weekly SIBs rate – currently $498/week

• There is currently no minimum weekly SIBS rate payable to injured workers

• Statutory changes made by HB 7 in 2005 to the calculation of the statutory maximum weekly benefit increased the maximum weekly SIBs payment from $378 in FY 2006 to $498 in FY 2008, which should result in a lower percentage of workers being capped at the statutory maximum in future years

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Estimated Number and Percent of SIBs Recipients Who Reached 401 Weeks Statutory Benefit Maximum

Duration, Injury Years 1996-2000

Injury Years Number of SIBs Number of Workers Reached

401 weeks

Percent

1996 995 95 10%

1997 1002 87 9%

1998 1177 106 9%

1999 1221 116 10%

2000 1104 52 5%*

Source: Texas Department of Insurance Workers’ Compensation Research and Evaluation Group, 2008.

Note 1: Injury year 2000 data should be interpreted with caution since data may not be complete. Injury Years 2001-2004 was excluded from this analysis since workers injured in 2001-2004 have not had the opportunity to receive 401 weeks of SIBs.

Note 2: Claims that did not have a valid claim, benefit and impairment rating record on file with the Division of Workers’ Compensation were excluded from this analysis.

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Upcoming Research Reports• Update on claim and medical denial rates;

• Update on use of medical peer reviews (results from recent data call);

• Analysis of access to care for non-network claims;

• Update of employer participation estimates in the Texas WC system and employee coverage rates;

• Next WC network report card (due in Sept);

• Biennial report on impact of HB 7 on affordability and availability of WC insurance for Texas employers (due December 1, 2008);

• Biennial report on impact of HB 7 on medical costs, quality of care and medical dispute resolution (due December 1, 2008).

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