One of the most important questions confronting disability managers is how long a disability should last. During Lynch Ryan's 20+ years in the business, we have seen the loss of a finger tip turn into a permanent total disability, while the loss of three fingers resulted in only a month of lost time. One employee injures his back and is gone forever; another with a more serious back strain is back to work on modified duty within a week. What accounts for the differences? How many days of disability are medically necessary?
What are Disability Duration Guidelines?
If you study a lot of injuries, over a long period of time, you can develop a strong sense of how long a disability should last, ranging from no time lost to years and years of disability. The data can encompass many diagnoses and can take into account the occupation of the individual (sedentary to physically demanding) as well as co-morbidities (health problems that may impact the speed of recovery). The data can reveal optimum results (minimal time away from work), average and mean durations (the middle of the bell curve) and the outlyers on the wrong side (many months of what is often medically unnecessary disability). This type of data should be very useful for claims adjusters, nurse case managers, sophisticated employers and insurers in general for setting goals in returning disabled individuals to fully productive lives. There are a number of these data bases available; the Reed Group has one that is both comprehensive and user-friendly.
Like managed care, disability duration guidelines are a hot topic, one of the new buzz words in the world of cost control. A lot of people are now using these guidelines - but are they using them effectively? I doubt it. Our esteemed colleague, Dr. Jennifer Christian, head of Webility MD, has done a great job of listing the uses and misuses of disability duration guidelines in one of her "Ask Dr. J" columns, available here in PDF format.
What not to do!
Jennifer notes that people often simply match the guideline numbers with the current length of disability for a given situation. The adjuster tends to feel that there is no need to do anything until the mid-point has been reached. And of course, the red flags really start blowing in the wind once the claim approaches the maximum durations. As happens all too often in the world of insurance, this approach results in too little being done too late. You are shutting the barn door long after the horse has wandered into the field.
Jennifer suggests that people focus on the optimal side of the distribution. Adjusters should set a goal of beating the best: returning disabled people to work faster than is normally expected for the given disability. In doing this, you ensure that the proper resources are directed with a laser-like focus on the situation. In Lynch Ryan's experience, you have to treat every disability with a sense of urgency from day one. Too many things can and often do go wrong if you sit back and wait for a situation to resolve itself.
Jennifer acknowledges that the "worst case" number might be useful for setting reserves, but absolutely not for setting the agenda. She suggests that adjusters be rewarded for taking risks early on - for drawing upon the full range of options before the claim drifts toward long-term duration. With this strategy, you are likely to find yourself spending a little more in the short run and much less in the long run.
Jennifer's column contains a lot of interesting detail. It's well thought out and very comprehensive. If you are interested not just in using disability guidelines, but in using them well, this would be a good place to begin.