Permanent partial disability (PPD) benefits are payable for the permanent functional loss of use of the body based upon a disability schedule.
Prior to 1984, PPD ratings were given to each body part, such as the back, arm or leg. The ratings were multiplied by a specific number of weeks and again multiplied by the compensation rate to determine the amount payable. If the employee injured more than one body part, the amount owed for each body part was increased by 15 percent. Payment of benefits was usually made in a lump sum.
Since 1984, PPD ratings have been assigned as a percentage of disability to the body as a whole and there have been rules (usually called the PPD schedule) that are required to be used when determining the rating. The total percentage rating is multiplied by a specific dollar amount or a number of weeks to determine the benefits that are payable. Ratings cannot exceed 100 percent of the whole body for any one injury. Permanent partial disability benefits can be paid concurrently with TPD and PTD, but not with TTD.
Determining the proper permanent partial disability rating and payment amount for a claim can be complicated. This section will primarily focus on dates of injury since 1984, and will explain:
how to compute the amount due;
the basics of using the PPD schedule;
how to combine multiple ratings;
when and how PPD is payable;
how to apportion pre-existing PPD; and
what the insurer needs to do when PPD is or is not payable.
176.101 Compensation Schedule (1995)
Subd. 2a. Permanent partial disability.
(a) Compensation for permanent partial disability is as provided in this subdivision. Permanent partial disability must be rated as a percentage of the whole body in accordance with rules adopted by the commissioner under section 176.105. The percentage determined per the rules must be multiplied by the corresponding amount.
|Injuries from Oct. 1, 1995, through Sept. 30, 2000|
|Impairment rating %||Amount||Impairment rating %||Amount|
|Injuries on or after Oct. 1, 2000|
|Impairment rating %||Amount||Impairment rating %||Amount|
For example, if the rating is 11 percent, find the 11- to 15-percent range on the table and multiply 11 percent by $85,000. The amount owed is $9,350.
Note: For ratings that fall between ranges, simple rounding rules for selecting the correct range are to be followed (Herrley v. Brunner Trucking, WCCA 8/31/1989). For example, if the rating is 5.49 percent, multiply 5.49 percent by $75,000. However, if the rating is 5.51 percent, multiply 5.51 percent by $80,000.
The first two PPD schedules apply to injuries occurring from Jan. 1, 1984, through June 30, 1993. For injuries occurring on or after July 1, 1993, a revised PPD schedule has been in effect (Minnesota Rules Parts 5223.0300-5223.0650). Both the older and revised rules are available from Minnesota's Bookstore or online through the Minnesota Office of the Revisor of Statutes. Be sure to use the rules in effect on the date of injury when determining percentage of disability owed. This section will primarily focus on the most recent PPD schedule.
The PPD schedule is structured to allow the user to find the rating for a given loss based on the "end organ impairment." For instance, all amputation ratings are separated into two parts (one for the upper extremity and one for the lower extremity). Musculoskeletal losses have separate parts based on the area of the body involved, i.e., cervical spine, thoracic spine, lumbar spine, shoulder and upper arm, etc.
Within each part, the categories are generally grouped by the type of impairment being rated and then structured in a hierarchical manner starting with the smallest functional loss. Using this method, ratings for certain impairment sometimes include lesser included impairments. For instance, the rating for a total arthroplasty (surgical removal and/or replacement) of a joint (such as the knee) already includes the smaller ratings given for other partial surgical removals in that joint (such as cartilage removal).
When using the musculoskeletal and peripheral nervous system parts in the schedule, the maximum rating allowed for loss to any member of the body is the rating given for amputation of that member. So, when rating loss of function, it is important to compare the rating(s) in total for each member to make sure they do not exceed the amputation rating. For fingers and toes, each joint is not a separate member of the body. A finger or toe in its entirety is considered a member of the body.
In some situations, a single category is used to rate each separate impairing condition. However, in many other situations, multiple categories must be used to determine the total rating for the functional loss.
Each mutually exclusive impairing condition needs to be rated. This means an injury to one member of the body can cause, in many cases, multiple separate types of impairments and each separate impairment must be rated. For instance, one knee injury can cause permanent impairment to the cartilage, ligaments and bones of the knee. Each of these impairments are rated separately.
When rating limitation of motion, passive (forced) range of motion is used, not active (voluntary) range of motion.
Ratings may be rounded to four decimal points.
Final ratings can always be done at the time of MMI (unless otherwise specified in schedule) and should be based on the permanent functional loss at that time. Also, there are times where there is a rating assigned based on a permanent anatomical change (such as surgical removal/replacement of parts of the body) even though functional loss has been restored (through treatment).
As previously mentioned, there are many situations in which multiple categories from the schedule must be used to determine the total rating for the functional loss. When that is necessary, the schedule requires that you either combine (using a statutory formula), add (not using the statutory formula) or multiply the individual ratings together to determine overall rating. If the schedule does not tell you to add or multiply the ratings together, assume that you use the formula to combine the ratings. The statutory combining formula is used to ensure the total rating never exceeds 100 percent of the body as a whole and is as follows:
A + B(1-A).
"A" is the largest percentage and "B" is the lesser percentage. If more than two ratings are involved, the formula is used again, and "A" becomes the result of the previously applied formula. To simplify calculations, first convert the percentage ratings to decimals.
For example, if the three ratings are 10 percent, 3 percent and 2 percent, start with A = .10 and B = .03 and combine the ratings using the formula as follows:
.10 + .03(1-.10)
.10 + .03(.90) = .10 +.027 = .127 or 12.7% (converting back to a percentage).
The two ratings to be combined are now 12.7 percent and 2 percent (the third rating given). Now A = .127 and B = .02. Use the formula a second time as follows:
.127 + .02(.873) = .127 + .01746 = .14446 rounded to .1445 or 14.45% (converting back to a percentage).
Note: The results should be calculated out to at least the fourth decimal place. In this example, the employee is entitled to payment of 14.45 percent of the body as a whole.
There is another formula that is the algebraic equivalent to the statutory formula that is usually simpler to use. This formula takes fewer steps when combining more than two ratings and is as follows.
1 - [(1-A) x (1-B) x (1-C) etc.]
Step 1: Convert the percentages to decimals.
Step 2: Do the calculations within the parentheses -- ( ) -- first.
Step 3: Do the multiplication within the brackets -- [ ] -- next.
Step 4: Do the subtraction of one minus the product of the numbers within the brackets -- [ ].
Step 5: Change the decimal answer back to a percentage.
For example, use the same three ratings -- 10 percent, 3 percent and 2 percent -- that were used above when combining ratings using the statutory formula. Using this alternate formula: A = 10 percent; B = 3 percent; and C = 2 percent.
Step 1: 10 percent = .10; 3 percent = .03; and 2 percent = .02
Step 2: 1- [(1 - .10) x (1 - .03) x (1 - .02)] = 1 - [(.90) x (.97) x (.98)]
Step 3: 1 - [(.90) x (.97) x (.98)] = 1 - [.85554]
Step 4: 1 - [.85554] = .14445 rounded to .1445
Step 5: .1445 = 14.45 percent
For injuries occurring from Jan. 1, 1984, through Sept. 30, 1995, the PPD rating is expressed as a percentage of the whole body and benefits are paid as either impairment compensation or economic recovery compensation. The primary factor in determining which of the two is payable is whether the employee returned to or was offered suitable employment within 90 days after being served a medical report of maximum medical improvement (MMI) or having ended retraining.
Impairment compensation is due if the employee returned to or was offered suitable employment prior to the end of the 90-day period described above. IC is calculated by multiplying the PPD rating by a specified dollar value found in a table in the statute.
For example: If the rating is 10 percent, the employee is entitled to IC in the amount of $7,500 ($75,000 x 10 percent).
In most cases, IC is payable in a lump sum 30 days after an employee has returned to suitable employment. There are some situations in which IC would be paid periodically, such as retirement or when paying PTD benefits.
Economic recovery compensation is due if the employee has not returned to nor was offered suitable employment prior to the end of the 90-day period. ERC is determined by multiplying the PPD percentage rating of the body by the number of weeks in a table found in the statute, and then again by two-thirds of the employee's gross weekly wage at the time of the injury (subject to the maximum compensation rate, but not the minimum).
At a minimum, ERC must be at least 120 percent of the amount that would be payable as IC. This makes the calculation of ERC a three-step process. First, the actual ERC is calculated as stated above. Then the amount of IC should be determined and multiplied by 120 percent. Finally, the two results are compared and the higher of the two is payable.
For example: Assuming a 10 percent PPD rating and a gross weekly wage of $200, ERC benefits are calculated as follows.
10 percent x 600 weeks = 60 weeks x 133.33 (two-thirds of $200) = $7,999.80.
Minimum ERC amount is $75,000 x 10 percent = $7,500 x 120 percent = $9,000
When comparing the two amounts, the employee is entitled to the higher of the two amounts (or $9,000) for ERC benefits.
ERC benefits are generally paid weekly at the same intervals and rate as the TTD payments were initially made. If an employee returns to work after ERC payments have begun, any remaining ERC benefits are paid in a lump-sum 30 days after the return to work.
Note: Remember the ERC and TTD are not payable concurrently.
Benefits are calculated using the same method as IC (see above for injuries occurring from Jan. 1, 1984, through Sept. 30, 1995). Benefits are payable after TTD has been discontinued and at the same weekly rate and interval as the TTD rate at the time of the injury.
Benefits are still calculated using the same method as IC (see above) and are still payable after TTD has been discontinued, but the insurer must use the new statutory table in effect for these injuries when calculating benefits. In addition, if an employee requests payment of PPD benefits in a lump sum, the lump-sum payment must be made within 30 days. The lump-sum payment may be discounted to the present value up to a maximum five-percent basis. If the employee does not request that the compensation be paid in a lump sum, benefits are payable at the same weekly rate and interval as the TTD rate at the time of the injury.
Generally, the entire condition affected by a work-related injury is compensable under workers' compensation. However, the amount of PPD payable on a claim may be reduced by pre-existing PPD in certain situations.
For injuries prior to 1984, that reduction was only allowed if:
the pre-existing PPD was for the same body part and
the pre-existing PPD was previously paid on a prior work-related injury.
For example, there is currently a 20-percent rating to the right arm for a 1983 injury. If there was a pre-existing 5-percent rating to the same arm and if that rating was paid on a prior work-related injury, the pre-existing 5-percent rating could be apportioned and only 15 percent would be paid on the current claim. However, if the pre-existing rating was for another body part, such as the left arm, no apportionment would be allowed. Likewise, if the 5-percent to the same arm had arisen from a non-work-related injury, no apportionment would be allowed.
For injuries since 1984, a statutory change makes it possible for the insurer to reduce the rating by the amount that is attributable to a pre-existing permanent disability in many other situations. See Minnesota Statutes 176.101, Subd. 4(a) and Minnesota Rules Part 5223.0315 (for dates of injury July 1, 1993 and after) or Minnesota Rules Part 5223.0250 (for dates of injury Jan. 1, 1984 through June 30, 1993). However, before the apportionment is allowed, all of the following criteria must be met.
The date of injury must be on or after Jan. 1, 1984.
The pre-existing permanent disability must be clearly documented in medical reports or records. (Note: A copy of this information must be sent to the employee at the time the insurer begins to pay PPD.)
This medical documentation must have existed prior to the date of injury.
The pre-existing disability must be either a congenital condition or the result of a traumatic injury or incident. But it does not need to be caused by a previous workers' compensation injury.
The pre-existing disability must be a contributing factor to the current PPD rating.
For example, if the current PPD rating is for an arm disability and the pre-existing disability is for a leg condition, the deduction is not allowed because the leg condition did not contribute to the current PPD rating for the arm.
Also, if a PPD rating is reduced due to a pre-existing disability, the insurer still must use the appropriate dollar amount in Minnesota Statutes 176.101, Subd. 2(a) that corresponds to the full (unreduced) rating to determine the amount of PPD owed.
For example: Assuming an Oct. 1, 2000, date of injury, if the total PPD rating is 28 percent, but the amount owed is reduced by an 8-percent pre-existing disability that meets the requirements, the insurer would make payment of the remaining 20 percent, based on the dollar amount that corresponds to the full 28-percent rating, which is $100,000. They would owe 20 percent of $100,000, or $20,000.
If the conditions allowing the apportionment are met, the rules cited above explain how to do the calculation in three different situations:
when the pre-existing disability has not been previously rated;
when the pre-existing disability has been previously rated as a percentage of the body as a whole; or
when the pre-existing disability has been previously rated as a percentage of a particular body part.
Using the following example, the calculations for the above three situations are described below.
Example: The current date of injury is Oct. 1, 2000. The current rating for the total condition is 27 percent under Minnesota Rules Part 5223.0370, Subp. 4D and 5 for herniated discs at levels C-2 and C-3 where there was a multiple level fusion performed and pain or paresthesia persisted despite the treatment. There is a pre-existing permanent partial disability clearly documented in a medical report or record before the current injury. This was a herniated disc at the C-2 level that was treated without surgery and had good results, with no persistent pain or paresthesia.
Note: If the pre-existing disability is at a level other than C-2 or C-3, there is no deduction since the current rating for the C-2 and C-3 levels is probably not attributable to the pre-existing disability rating for a different level. Likewise, if the pre-existing disability at level C-2 did not involve ratings under 4D and 5 (for a herniated disc with fusion surgery), the deduction would be questionable because the current rating at the C-2 level probably is not attributable to the pre-existing disability rating.
Situation 1: The pre-existing disability was not work-related and was never previously rated. Use the PPD schedule in effect for the current injury to determine a rating for the pre-existing disability. The pre-existing disability rating would be 9-percent under Minnesota Rules Part 5223.0370, Subp. 4D. The total amount of PPD owed would be 18 percent (27 percent - 9 percent) of $100,000, or $18,000.
Situation 2: The pre-existing disability was previously rated as 14 percent of the body as a whole. The total amount of PPD owed would be 13 percent (27 percent - 14 percent) of $100,000, or $13,000.
Situation 3: The pre-existing disability was previously rated as 15 percent of the back. Using Table 1 in Minnesota Rules Part 5223.0315 C, the 15-percent rating to the back is converted to 10.65 percent of the body as a whole by multiplying 71 percent (the maximum of whole body value for the back) by .15 (15 percent). The total amount of PPD owed would be 16.35 percent (27 percent - 10.65 percent) of $100,000, or $16,350.
There may be times when the insurer knows minimum PPD is rateable even though a rating might not yet have been received from the treating doctor. This is true in cases where there is medical data showing a condition for which the PPD schedule has a rating.
For example, there has been an amputation of part of a finger. Another example is surgery on the knee where up to 50 percent of a meniscus is removed.
In these situations, the final PPD rating from the treating doctor may be higher than the minimum rating appears to be now. Nevertheless, the insurer is expected to pay PPD benefits as soon as permanency is apparent and payable (for example the date of injury is on or after Oct. 1, 1995, and the employee has returned to work). This means that they must pay the current minimum rating (called the minimum ascertainable PPD) now and then pay any remaining PPD that is due when the doctor gives a final rating.
PPD must be paid at the time specified in Minnesota Statutes 176.021 and 176.101. If the benefits are being paid periodically following the payment of TTD, or concurrently with the payment of TPD, the payments must be continued without interruption at the same intervals that the TTD benefits were paid. If a rating has not been received when an employee reaches MMI, the insurer must request an assessment of PPD from the treating doctor.
When the extent of the PPD is not disputed, the insurer must, within 30 days of the knowledge of a minimum rating or receipt of a medical report containing a rating:
make at least a minimum lump-sum payment or begin periodic payments to the employee and
inform the employee in writing of the PPD rating and the number of weeks the PPD payments will be made under the statute.
When the extent of the PPD is disputed, the insurer must, within 30 days of the receipt of a medical report containing a rating:
make at least the minimum lump-sum payment or begin periodic payments, based on any undisputed portion of the rating,
notify the employee in writing that an independent medical examination has been scheduled and the date, time and place of the examination, and
determine and pay any remaining PPD within 120 days of receipt of the initial medical report that contained the PPD rating.
If the PPD benefits are not currently payable, the insurer must, within 30 days of the knowledge of a minimum rating or receipt of a medical report containing a rating:
inform the employee in writing of the rating and
advise the employee when the PPD will be payable.
If an employee dies prior to commencement or completion of payment of PPD, payment of the remaining PPD may be payable to the employee's dependents or legal heirs (if no dependents) depending on the law on the date of injury. See Minnesota Statutes 176.021, Sub. 3 regarding vesting of these benefits.
|PPD ratings and calculations based on date of injury|
Jan. 1, 1984
|Jan. 1, 1984, through
Sept. 30, 1995
|Oct. 1, 1995, through
Sept. 30, 2000
|Oct. 1, 2000, to present|
|Ratings||To specific part of body||To body as a whole using a PPD schedule||To body as a whole using a PPD schedule||To body as a whole using a PPD schedule|
|Amount due||Rating percentage multiplied by specific number of weeks, times the weekly rate; if more than one body part, each rating increased by 15 percent||Impairment compensation (IC): percent times the dollar amount
Economic recovery compensation (ERC): percentage times the number of weeks, times the weekly rate (must be at least 120 percent)
|Calculated the same as IC||Calculated the same as IC (change in the dollar value of ranges in table)|
|Payable||Generally paid in a lump sum||IC: generally paid in a lump-sum 30 days after return to work
ERC: paid weekly at the initial TTD rate after TTD ceases
|After TTD ceases, paid at the same interval and weekly rate as TTD||After TTD ceases, paid at the same interval and weekly rate as TTD. Employee can request payment in a lump sum; the lump sum can be discounted by up to 5 percent of present value|