Appendix two of Medical Legal

Data for this analysis come from the WCIRB Permanent Disability Survey. The survey summarizes accident claim activity, including such measures as the degree of impairment, the type and cost of specialty exams, whether the case was settled and, if so, what settlement method was employed.

Because accident claims are collected as part of an insurance policy, claims cannot be sampled directly. Instead, the WCIRB collects all policies incepting on or after July of the year prior to the accident year through July of the accident year. Using second level case reports, which value claims at 30 month after the beginning of the policy year, the WCIRB identifies accidents:

with dates of injury in the targeted accident year
defined as permanent disability claims

Individual claims are stratified by injury severity based on second level individual case reports submitted to the WCIRB. Claims with estimates of permanent disability equal to or greater than 25 percent are considered "major" disabilities, while claims with ratings under 25 percent are considered "minor" disabilities. A stratified random sample of 3,500 permanent disability claims is drawn from all Permanent Partial Disability (PPD) claims on a selected subset of policies, with 1,500 claims coming from the "major" disabilities, and 2,000 claims coming from the "minor" disabilities. This survey has been conducted on claims from the 1989 through 1993 accident years.

The sampling scheme is intentionally designed to oversample "major" disability cases. In reality, only approximately one-fifth of all cases are "major" when evaluated at thirty months after policy inception. Oversampling these "major" cases allows enough data to be gathered so that separate inferences can be drawn about this relatively small population. One negative consequence of this oversampling, however, is that the data necessary to "re-weight" the survey sample population back to the relative distribution of major/minor injuries in the full population of injured workers has to be inferred for the 1994 and 1995 accident years. Weights are available for the 1989-1993 years, but weights for the 1994 and 1995 years were calculated based on estimates of the distribution of major and minor injuries at 30 months after the beginning of the policy year.

These sampled accident claims are re-examined at 52 and again at 64 months following the start of the target year to determine whether claims have been resolved or otherwise changed. At the present time, complete 64 month data exists only for the target years 1989-91.

The data available for the 1994 and 1995 accident years come from "special panels." These were drawn at 28 months and 16 months, respectively, from the beginning of the accident year. Both of these special panels consist of only 350 claims. As a result, variances for all estimates made for these years will be much wider than for the earlier target years.

B. Methodology

In addition, because of the different "maturity" times by target year, this analysis is forced to limit comparisons between years by different degrees of case maturity. For example, 1993 claims can be compared at 40 months to 1992 and earlier claims. However, claims for 1993 can only be compared to those for 1994 at 28 months, and to claims for 1995 at 16 months.

The "final" word on the effects of reforms upon the workers' compensation system through the target year 1994 will therefore have to wait for the third report which will be collected in April 1999 and available in early 2000.

The weights for individual claims for the major and minor strata were not available from the WCIRB. The Rating Bureau creates the weights by evaluating the claims at 30 months after policy inception based on the Unit Statistical Report, second level case reports. We are required to use the PD level reported on the Permanent Disability Survey. These data are from claims when they are several months more mature than thirty months. These two data sources are likely to be very close, but not exactly the same. For future efforts, we will try to obtain the actual weights used by the WCIRB.

In most situations the analysis is done using data available on cases 28 and 40 months after the beginning of the accident year. This allows us to compare data across accident years at similar points in the average maturity of claims. It should be noted that claims occurring on January 1st will have 12 months more activity than claims for accidents occurring on December 31st of the same accident year. Consequently, in some situations we use the actual maturity of the claims in months since the date of injury. This is done, for example, with the analysis of time to resolution and the incidence of psychiatric exams.