Jan 18, 2024

Understanding Impairment Ratings

Injuries that occur at work are treated through workers' comp insurance. All stakeholders in a workers’ comp claim including employers, health care providers, and insurers want to return injured workers to work as soon as possible. For an insurance company, the faster the injured worker can return to work, the faster they can stop paying that workers’ compensation claim.

When an injured worker files a claim and the injury is severe enough that the employee is not capable of performing the duties of that job, or is placed in a restricted duty position, they are compensated with temporary total disability benefits or TTD. The injured worker is paid these TTD benefits, which vary by state, during the medical treatment for that injury and until the injured worker can return to work. However, what happens when an injured worker’s injuries don’t heal completely and there are residual physical limitations, or when the injured worker suffers permanent or total disability?

When this occurs, the last step is a physician or medical provider must rate the injured workers' permanent impairment. The impairment rating or Permanent Partial Disability (PPD) helps to determine the length of time you can receive workers’ compensation benefits, and how much you receive monetarily. The degree of impairment matters in that impairment has a specific dollar amount. The insurance company then uses the impairment rating to determine the financial benefits paid out to the worker at the closure of the workers’ compensation claim.

In this blog, we are not going to go into specific details on how to calculate an impairment rating. However, rehab professionals need to understand what an impairment rating is, when it is appropriate, and the criteria used in each state to determine impairment ratings. Each state has its own laws and regulations, so it is important that you understand your specific state's requirements for determining the impairment rating of an injured worker for PPD purposes.

What is impairment? It is defined as a loss of use or derangement of any body part, organ system, or organ function. The impairment is considered permanent when the individual has reached maximum medical improvement (MMI). MMI is defined as an impairment that is unlikely to change substantially in the next year with or without medical treatment. Impairment ratings are designed to reflect functional limitations, not disability. It is important to consider both anatomic and functional loss when you are evaluating impairment. It’s important to note that impairment is a measure of the client’s ability to perform Activities of Daily Living (ADL). It is not used to determine their ability to perform their job.

As rehabilitation professionals, once the client is at MMI, a functional capacity evaluation is generally recommended, so it is best to do the impairment rating in conjunction with an FCE. However, impairment rating evaluations can be done alone without an FCE.

In most states, a physician will calculate the impairment rating after a licensed medical professional performs a Functional Capacity Evaluation. However, there are some states where a licensed rehabilitation professional (PT/OT), can perform impairment ratings, so if you are in one of those states, you may want to determine if performing impairment ratings is a service you want to provide. This is a separate service with specific CPTs codes so if you do decide to offer this service with FCE referrals, then make sure you are billing separately for this additional service. The states where a licensed PT/OT can perform impairment ratings are Maine, Georgia, North Carolina, Alabama, Florida, Nebraska, South Carolina, and Virginia. In all other states, a physician is the provider who will perform the impairment rating.

Impairment ratings are determined from the American Medical Association, Guides to the Evaluation of Permanent Impairment. These guidelines were first published in 1971. The AMA has periodically issued new editions to the Guides to keep pace with advances in medical treatment and diagnoses. The goal of the updated Guides is to stay current with the most recent medical advances. The most recent update is the 6th edition. It is important that you know which edition your state utilizes before performing an impairment rating evaluation. The Division of Federal Employee Compensation (DFEC) requires the 6th edition no matter which state you are in.

The 6th edition is the most recent, and it is utilized in the following states:

  • Alaska
  • Arizona
  • Connecticut
  • District of Columbia
  • Idaho
  • Illinois
  • Indiana
  • Kansas
  • Louisiana
  • Mississippi
  • Montana
  • New Mexico
  • Oklahoma
  • North Dakota
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • South Dakota
  • Tennessee
  • Virginia
  • Wyoming
  • Puerto Rico
  • All DOL cases

The 6th edition of the Guides utilizes the Diagnosis Related Estimate (DRE) when determining the impairment rating. No AROM measurements are utilized when determining the extremity impairments and whole-body impairments. The only exception to that is for a distal UE diagnosis, where AROM measurements are utilized.

States that utilize the 5th edition of the Guides to the Evaluation of Permanent Impairment are:

  • California
  • Delaware
  • Georgia
  • Hawaii
  • Iowa
  • Kentucky
  • Massachusetts
  • Nevada
  • New Hampshire
  • Ohio
  • Utah
  • Vermont
  • Washington

States that utilize the 4th edition of the Guides to the Evaluation of Permanent Impairment are:

  • Alabama
  • Arkansas
  • Maine
  • Maryland
  • Texas
  • West Virginia

States that utilize the 3rd edition of the Guides to the Evaluation of Permanent Impairment are:

  • Colorado
  • Oregon

The 3rd through the 5th editions of the Guides to the Evaluation of Permanent Impairment utilize both the Diagnosis Related Estimates (DRE) and Range of Motion Method (ROM) in determining extremity impairments and whole-body impairments. Therefore, your FCE or impairment rating evaluation must include in the musculoskeletal evaluation a detailed AROM of the injured body part, and it is important to measure both sides if the diagnosis is an extremity.

States that have state specific statutes for impairment rating are:

  • Florida
  • Michigan
  • Minnesota
  • Mississippi
  • Nebraska
  • New Jersey
  • New York
  • North Carolina
  • Wisconsin

As mentioned, earlier Impairment Ratings are often done with an FCE, but an impairment rating can be done alone without the FCE. It is important that if you are in a state that utilizes the Range of Motion Method, for determining extremity impairments you do AROM measurements as part of your medical evaluation.

Impairment ratings are billed with the CPT codes of 99455 or 99456.

99455 is utilized when the impairment evaluation is performed by the treating physician, while 99456 is utilized when the impairment evaluation is performed by someone other than the treating physician. Impairment rating evaluations generally reimburse between $150 to $300.

For those states where the rehabilitation professional can perform impairment ratings, then make sure you obtain authorization for CPT code 99456 in addition to the Functional Capacity Evaluation CPT code 97750 if you receive a referral for an FCE with an impairment rating.

If you have any questions regarding impairment ratings and your state statutes, please do not hesitate to reach out to us here at OccuPro.

Paige Shafer, MS, OTR/L, CFCE, CEAS
Clinical Account Executive