Return-to-Work Patterns and Programs for Injured Workers Covered by Texas Workers' Compensation Insurance (August 1993)

EXECUTIVE SUMMARY

Researchers at the Center for the Study of Human Resources conducted exploratory research on return-to-work (RTW) patterns and programs for injured workers covered by workers' compensation in Texas. This study was requested by the Legislature in passing the Texas Workers' Compensation Act of 1989. Several different methodologies were utilized in this research, including: descriptive statistical analysis of agency records for individual workers' compensation claimants provided by the Texas Workers' Compensation Commission and the Texas Department of Insurance, matched to their employment and earnings information from the Texas Employment Commission; mail/telephone surveys of RTW programs/services offered by employers, insurance carriers and private rehabilitiation providers; case studies of selected RTW efforts; and focus groups with RTW participants.

RTW Patterns

To determine RTW patterns, researchers examined the universe of individual indemnity claims filed during the 1988-1991 period, more than 607,000 claims. Both single- and multiple-indemnity claims were examined from various perspectives. Comparative analysis examined RTW pattern differences between the old (pre-1991) and new law, comparing patterns for higher-benefit (i.e., $5,000 or more), single claims filed in 1989 and in 1991. Noncomparative analysis described the patterns for all single-claim cases -- regardless of claim amount -- for each year of this period. Multiple-claim cases were analyzed for the period as a whole. For all perspectives, claims as a whole (unstratified) were analyzed, after which key stratifications of the claims cases were examined, including: age, sex, type of injury/body part, preinjury occupation and preinjury industry. Earnings were adjusted for inflation; all median earnings figures reported are in constant fourth quarter 1991 dollars.

The comparative analysis examined RTW pattern differences between the old and new law for single claims of $5,000 or more. Key comparative analysis findings include:

• Under the new law (1991), injured workers with higher-benefit single claims appear to be more likely to return to work sooner and to remain at work longer than under the old law (1989). The most common pattern under the old law was for injured workers to remain out of work in all three quarters postinjury, while under the new law, the most common pattern was to be employed in all quarters. This shift towards greater postinjury employment appears to cross sex, as well as most age, industry and other categories examined.
• Injured workers returned to work more under the new law and also experienced smaller average gross weekly earnings declines in the first postinjury quarter, and quicker, more complete returns to their preinjury earnings levels.
• Concerns over injured workers returning to work too quickly under the new law -- with the possibility of undue physical or mental stress and subsequent loss of employment and earings -- may not be warranted for most workers based on this analysis. There is a sizable group in both years -- perhaps approaching one-fifth of those injured -- for whom early return to work may not be so productive.

The noncomparative analysis presents patterns for all indemnity claims cases in each of the years 1988-1991, regardless of claim amount. Little weight should be given to apparent differences in these patterns, however, since these may simply be artifacts of the data now available. The primary problem is that postinjury employment and earnings data are abundant for 1988 and 1989, but not for 1991. Key findings from the noncomparative analysis include:

• The most common RTW pattern, regardless of year and size of claim, is for injured workers to return to steady, long-term employment.
• In all years, the most common pattern, employment in all postinjury quarters, far surpassed the next most common pattern, nonemployment in all quarters, by wide margins.
• By the fifth postinjury quarter, earnings recovery rates for all four years were in the 99-102 percent range. However, until additional quarters of earnings data become available for more recent periods, the stability and durability of these postinjury earnings recovery patterns remain unknown.

Over 71,000 covered workers filed more than one indemnity claim during the 1988-1991 period; the vast majority (84 percent) only filed two separate claims. Detailed analysis of multiple claims cases focused solely on two-claims cases over the period, whether they were filed in a single quarter or in two separate quarters. For injured workers filing two claims in separate quarters -- constituting 92 percent of two-claim cases -- the key RTW patterns were:

• Postinjury employment patterns in the period following the first quarter of injury closely resembled those of single-claim cases: the most common pattern was initial and steady employment for the entire period; the second most common pattern was initial nonemployment, followed by steady employment thereafter.
• The occurrence of a second injury leads to less stable return-to-work patterns: initial, steady employment remains the most common pattern; however, subsequent injury considerably raises the likelihood of initial, steady nonemployment.

Injured workers with two claims in the same quarter had lower preinjury earnings and sharper drops in initial postinjury earnings than those with claims in separate quarters.

RTW Programs/Services

Obtaining sufficient information on the nature and extent of RTW programs and services available in the state proved difficult. There is no central registry of such efforts, and up-to-date mailing lists of employers subscribing to workers' compensation and offering RTW programs/services, of insurance carriers writing workers' compensation policies and of potential RTW providers were not available. RTW program services survey results reported here should be viewed as explanatory only. Any conclusions about the nature and extent of RTW programs/services for injured workers covered by workers' compensation in Texas based on these results should be weighed cautiously.

Most RTW survey respondents were employers (78 percent); far fewer respondents were private providers (15 percent) or insurance carriers (7 percent). Covered employers offering RTW programs/services (38 percent of employer respondents) tended to be medium-to-large manufacturing and service-based employers who started their programs after 1985, as did most insurance carriers and private providers.

Most covered employers with RTW programs (88 percent) operate them in-house, rather than through carriers or private providers. Employer-based programs tended to offer a varying mix of services, including monitoring (87 percent), case management and alternate placement (63 percent each), direct placement and OJT (58 percent each) and counseling (51 percent). Employers offered progressive duty and job modification -- components which have received considerable attention in the literature as being particularly effective RTW services -- less frequently.

Program outcome measures, such as participation and RTW success rates, were difficult to estimate. However, the responses received suggested that employees who participated in RTW programs by and large successfully returned to work, typically at their preinjury pay rate. Although the costs of operating RTW programs by employers, carriers and private providers were difficult to determine, all three groups indicated that the benefits of operating RTW programs far outweighted their costs. Important program benefits included: reduced claim and premium costs, avoidance of costly litigation and improved public image for employers; improved morale, accelerated recovery and increased job security for injured employees; and improved employee morale, increased job security and better communication for other employees. Insurance carriers and private providers noted similar benefits, again reporting that RTW program benefits far outweighed their costs.

Five RTW case studies were completed with public- and private-sector employers and one insurance carrier. Two small focus groups were also held with injured workers who had participated in RTW programs offered by two of these organizations. Observations and insights resulting from these case studies and focus groups included:

• RTW programs were implemented initially as cost-saving measures, largely in response to rapidly rising workers' compensation premium costs in the mid-to-late 1980s.
• RTW programs were well regarded by those involved: early successes with these programs led most organizations to continue and expand their efforts.
• Close, continuing contact and early intervention on behalf of the injured worker were noted as being particularly critical to the success of any RTW program.

Most injured workers covered under the Texas workers' compensation program are returning to work and recovering their preinjury earnings levels. They are doing so more quickly and completely -- particularly those injured workers with indemnity claims valued at $5,000 or more -- since the new Texas Workers' Compensation Act of 1989 took effect. It remains unclear to what extent or which elements of that Act have contributed to the improvement in RTW patterns. Further research should be conducted on a number of topics and issues, including the extent to which participation in RTW programs -- whether operated by TRC, employers or other groups -- contributes to improvements in return-to-work patterns and identification of those groups (by injury nature/body part, demographics, occuaption) for whom early return to work is inappropriate and unproductive.

For further information, contact: PIO@tdi.state.tx.us .
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