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Until the passage of SB 899 Vocational Rehabilitation provided a significant return-to-work benefit to injured workers and played a primary role in the management of workers’ compensation claims and the settlement of those claims. Now, as the result of SB 899 a new role for vocational rehabilitation in California’s workers’ compensation system is emerging.

Much attention has recently been devoted to the emerging role of vocational rehabilitation professionals in the determination of diminished future earning capacity (DFEC) per LC section 4660. The 12/7/06 WCAB en banc decision in Costa v. Hardy Diagnostic and State Compensation Insurance Fund (2006) concluded that the California Legislature intended to allow rebuttal evidence regarding PD ratings and that the effect of such evidence will be decided on a case by case basis. The payment of fees for vocational rehabilitation counselors or DFEC experts was affirmed by the WCAB (en banc) on 11/13/07.

The Need for a Comprehensive Vocational Rehabilitation Evaluation
The Costa decision is of obvious importance and the role of VR professionals in determination of DFEC will continue to evolve as DFEC itself becomes better defined both administratively and through case law. However, it is this author’s belief that determination of DFEC is only one process that VR professionals should be assisting in as part of the California workers’ compensation system. SB 899 also contains provisions dealing with the determination of return to work options with the employer of record, and, where that does not occur, a Supplemental Job Displacement Benefit or “voucher”. As it is becoming increasingly clear, both of these additional benefits are being underutilized and both workers and employers are paying a significant price for that. Involvement of VR professionals to facilitate these processes makes sense and should be part of an expanded role for VR professionals.

A comprehensive vocational rehabilitation evaluation that facilitates these three separate processes, i.e. return to work, the voucher, and DFEC determination would provide a very useful benefit to workers and employers and facilitate equitable resolution of claims. These three separate but closely linked processes will be briefly discussed and the components of a relevant comprehensive vocational VR evaluation will be discussed below.

The Return to Work Benefit
SB 899 provides a significant financial incentive to employers and workers to develop return to work plans. Employers with 50 or fewer workers who make modifications to a workplace to bring an employee injured on or after January 1, 2004 back to the job can be reimbursed for expenses as follows:

(1) $1,250 in expenses incurred to allow a temporarily disabled employee to perform modified or alternative work within physician-imposed temporary work restrictions while recovering;

(2) $2,500 in expenses incurred to bring a permanently disabled employee back to sustained modified or alternative work within physician-imposed permanent work restrictions.

In addition, employers with 50 or more workers who offer injured employees regular, modified or alternative work will pay 15 percent lower weekly permanent disability benefits once the offer is made. Conversely, employers with 50 or more workers who don't make a return to work offer will pay 15 percent more in weekly permanent disability benefits. The return to work offer must be made within 60 days of the permanently disabled worker being determined permanent and stationary . The worker has 30 days to accept the offer.

It is no wonder that this incentive and benefit appears to be underutilized. Many, if not most employers, are ill equipped to effectively respond to this challenge, especially within the tight time frames. Additionally, because this process overlaps with the employer’s Fair Employment and Housing and American’s with Disabilities Act reasonable accommodation responsibilities, insurance carriers and claims administrators have historically been reluctant to get too involved and typically provided little support to the employer in the return to work process. Many smart employers have, for some time, been hiring independent third party VR providers to facilitate the “interactive process”, as required under AB 2222.

Per the EEOC, a four part process is required:

  • analyze the essential functions and purpose of the particular job at issue;
  • consult with the employee to determine the job-related limitations;
  • consult with the employee to identify potential accommodations and the effectiveness of such accommodations in enabling the employee to perform the essential functions of the position; and
  • select and implement the accommodation that is most appropriate for both the employee and the employer, taking into consideration the employee’s preference.

Clearly, it makes sense that VR professionals be involved with this process and should be the first step in conducting a comprehensive vocational rehabilitation evaluation. This is nothing new. Under the “old” L.C. section 139.5, vocational rehabilitation services were mandated by statute to be delivered according to a “hierarchy”, beginning with a determination of the worker’s ability to return to their employer in modified or alternate work. This was good practice then and it still makes sense.

The Supplemental Job Displacement Benefit
Per SB 899, employees injured on or after Jan. 1, 2004, who are permanently unable to do their usual job, and whose employer does not offer other work, may qualify for this benefit. This “voucher” helps pay for educational retraining or skill enhancement, or both, at state-approved or state-accredited schools. The law (Labor Code section 4658.5) says that employees who do not return to work for their employer within 60 days of the end of temporary disability payments will receive a voucher. The amount of the voucher is based on the percentage of the injured worker's disability:

Permanent partial disability of less than 15 percent = $4,000 voucher
Permanent partial disability between 15 and 25 percent = $6,000 voucher
Permanent partial disability between 26 and 49 percent = $8,000 voucher
Permanent partial disability between 50 and 99 percent = $10,000 voucher

A comprehensive vocational rehabilitation evaluation should include assistance to the injured worker in mapping out how best to utilize this benefit. It is clear that injured workers are being given little help in this regard, especially with respect to how the funds could be integrated with other educational, vocational, and rehabilitation services that exist within their community. This is potentially very wasteful and injured workers are at risk of getting little value from this albeit limited benefit. For those permanently disabled workers unable to return to work with their employers, a comprehensive vocational rehabilitation evaluation would greatly facilitate their understanding of their options and how best to utilize the resources that exist in the community. This makes a great deal of sense, given that the basics of the evaluation that are needed for a worker to understand how best to use their voucher are also needed to evaluate the impact of their injuries on employability and earning capacity, as is evolving in response to the DFEC issues.

Determining DFEC
Per SB 899, the new Schedule for Rating Permanent Disabilities (California Division of Workers’ Compensation, 2005) was developed as required by Labor Code section 4660. The Schedule includes an adjustment for diminished future earning capacity (DFEC) that is designed to increase the permanent disability rating because of diminished future earning capacity caused by the work injury. The current DFEC adjustment factor varies from 10% to 40% according to injury category, with the lowest adjustment factor being applied to hand, finger, and vision injuries having the lowest adjustments and the highest adjustment being applied to hearing and psychiatric impairments.

SB 899 also mandated use of the A.M.A. Guides to the Evaluation of Permanent Impairment, 5th Edition. As discussed in the Guides, they cannot be used to make direct estimates of “work disability”, but are intended for more general use as an estimate of “whole person impairment” and an “individual’s overall ability to perform activities of daily living”. The Guides do describe a process for determining functional limitations or “work restrictions”, i.e. what a worker can and cannot do and how activity might aggravate the medical condition.

The A.M.A. Guides and the A.M.A.’s Disability Evaluation, 2nd Edition identify the larger issues surrounding determination of “disability” and “earning capacity”. These factors are listed as follows:

  • an individual’s age, education, acquired skills, knowledge, and work performance;
  • an individual’s motivation and adaptation to change;
  • work requirements;
  • work environment;
  • state of the job market;
  • local economic conditions;
  • past earnings and future potential earnings.

Thus, per the A.M.A., the role of the “Vocational Rehabilitationist” is to “bridge the gap” between “work limitations” and “disability” as reflected in diminished employability and earning capacity. In order to form opinions regarding employability and diminished earning capacity, the Vocational Rehabilitationist must sequentially evaluate an individual in terms of what they can offer a potential employer.

This article will not go into a detailed discussion of the DFEC process. Readers can refer to this author’s prior article on the SEDEC process. However, the determination of DFEC requires a VR professional who can carefully evaluate the residual impact of mental and/or physical impairment upon an individual’s ability to utilize their global skills and abilities and perform specific occupations and work tasks then apply that information to the relevant labor market to determine issues of earnings capacity over the worklife of the individual. A comprehensive vocational rehabilitation evaluation is required to do this.

The Comprehensive Vocational Rehabilitation Evaluation

To adequately address the three above processes, the evaluation must be comprehensive. So, what should be included in such an evaluation? This is an important question as the evaluation should be properly sequenced to address the range of issues, focusing first on the return to work options, but with an eye on the eventual need to address the more global employability and earnings capacity issues.

Of course, some natural variability will always exist due to unique individual factors such as age, education, language skills, work history, job skills, geographic location, and the nature & severity of the impairment(s) and disability. For instance, testing does not always need to be done, but should be accompanied by explanation, i.e. no testing was done because of the age of the individual.
The following steps would typically provide the foundation for all three processes:

  1. Through medical opinion and/or functional capacity testing, determine what functional limitations exist for the individual (including pre-existing impairments) that may impact employment capabilities;
  2. Conduct the interactive process (see above) regarding return to work options, including the consideration of job accommodation needs;
  3. Perform a comprehensive assessment of work skills and abilities (using standardized occupational information) as they relate to present and future employability;
  4. Conduct career, vocational and/or educational testing to determine individual skills and abilities as basis for job placement and/or education/training, should a change of occupation be required;
  5. Determine employment and career options, including short and longer-term goals/objectives;
  6. Assess job accommodation needs relative to vocational goals and objectives;
  7. Determine eligibility for and feasibility of educational, vocational, and rehabilitation services, including retraining and job placement.
  8. Research the labor market relative to goals and objectives to determine likelihood of job placement and employment demands/conditions.
  9. Determine the availability and cost of future educational and/or vocational services.
  10. Analyze standardized wage data (including benefit data) as basis for estimating of prior and future earning capacity.
  11. Determine impact of work disability on past and future labor force participation and worklife, using appropriate statistical data.

Practical Considerations
Practical issues of the cost of such an evaluation and the choice of the VR provider will always exist. It is this author’s opinion that there is inherent efficiency in choosing an Agreed Vocational Evaluator to provide the above services. A list of credentialed AVEs already is maintained by the Division of Workers’ Compensation and a subset of persons on that list (and others that could be on the list) are actively providing DFEC evaluations at present. Both sides, in unusual cases, could still retain their own expert to evaluate the DFEC issues, but this should be the exception, rather than the rule.

Costs will vary as each individual that is evaluated will be different, i.e. is modified or alternative work available and what services are provided to develop it? What are the testing needs? Is there a viable DFEC issue present? However, providers who provide a solid, independent evaluation and can effectively integrate their services at reasonable cost will eventually be the providers of choice.

In summary, due to changes in the California workers’ compensation system, a new approach to the use of vocational rehabilitation is now needed. Facilitating return to work while at the same time evaluating the impact of work disability on alternative employment options and earning capacity can be accomplished through an integrated comprehensive vocational rehabilitation evaluation.

About the Author
Robert Hall, Ph.D., CRC, CDMS
Certified Rehabilitation Counselor
Certified Disability Management Specialist
(619) 463-9334
Fax (619) 463-9337

For a complete CV, click here.

Dr. Robert Hall has practiced as a Vocational Rehabilitation consultant in California since 1980. He has served as Director of the Work & Health Technologies Center at San Diego State University and as Adjunct Professor in SDSU’s graduate Rehabilitation Counseling Program since 1993. Dr. Hall has conducted extensive research and training activities in disability, rehabilitation, and return-to-work programs. Dr. Hall has consulted with and provided training to a variety of health and human service organizations in the areas of rehabilitation program development & evaluation. He has consulted with several large employers and insurance organizations regarding proactive compliance programs with the employment provisions of the FEHA and ADA. Dr. Hall has developed SEER software, an occupational information and analysis system that utilizes the O*NET database. Dr. Hall is also a principal in AtWork Resources, Inc., a human resource management consulting software and services company.



The "New" Role for Vocational
Rehabilitation in the California
Workers' Compensation System:
A Comprehensive Vocational
Rehabilitiation Evaluation
by Robert Hall, Ph.D. CRC, CDMS

Robert B. Hall, Ph.D., is a vocational rehabilitation professional, consultant, and teacher who created the “SEDEC” method of analyzing diminished future earning capacity [DFEC].

> Big Case How-To-Guide
> Computer Corner: Med Manager
> Surviving SB 899
> Getting Best Treatment & Evidence
> Structured Settlement Tips
> New Role for Voc Rehab Eval
> The Nurse Case Manager
> The Physical Therapist
> The Metamorphosis of WC