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What Happens After Impairment Ratings in Arizona Workers’ Comp Cases

Published August 26, 2024 by Matt Fendon Law Group | Workers' Compensation

Under Arizona workers’ compensation law, an impairment is a health issue that affects your physical or neurological condition. When a doctor classifies an injury as an impairment, it will be considered scheduled or unscheduled.

A disability, however, refers to the limitations and restrictions an injury places on your ability to do your job.

In short, your disability rating refers to whether you can return to your pre-injury job. In contrast, an impairment rating is based on a whole-body level of impairment that does not consider your job duties.

What are the AMA Guides, and What Effect Do They Have on Your Impairment Rating?

When your doctor finishes treating you for your work-related injury or condition, Arizona Administrative Code R20-5-113(B) requires your doctor to use the most recent version of the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment when setting your impairment percentage.

The most recent version of the AMA Guides is the 6th Edition.

How the AMA Guides Work

The AMA Guides help your doctor assess whether your disability is temporary or permanent and evaluate its impact on your ability to work and perform daily activities.

More specifically, the AMA Guides help your doctor assess what parts of your body have been injured, such as your upper body, lower body, internal organs, or brain injuries.

The Guides also supply conversion rates to disabilities and classes for impairment that range from one to four in increasing degrees of seriousness.

Converting Impairment Ratings

The Guides provide a methodology for converting a single body part rating, or a combination of ratings, into a “whole body” (or “total body”) rating.

For example, if you have an 8% impairment rating for a disability affecting your thumb, the AMA Guides convert this rating into a 3% impairment of your hand. The hand impairment rating is then converted into a 3% impairment of your arm. Ultimately, you will receive a 2% impairment rating for your whole person.

A graphic showing how to convert impairment ratings according to the AMA guides for combining ratings.

Combining Impairment Ratings

If you have more than one impairment rating evaluation, the AMA Guides provide an impairment rating chart to combine these ratings into a whole-body rating. If the individual combined impairment ratings are in the same upper or lower extremity, the chart will supply a new numerical combined rating.

These combined ratings also determine if an injury is considered “scheduled,” or written about explicitly in the workers’ compensation statutes or regulations, or “unscheduled,” meaning they are not expressly listed and can be considered more complex. 

  • If the individual ratings are for separate body extremities, such as one upper and one lower, the combined impairment rating is treated as an unscheduled injury instead.
  • If you suffer from a prior industrial scheduled impairment rating and then experience a later impairment to a scheduled body part, the second impairment will automatically be “unscheduled.”
  • If your medical records include an earlier impairment that is not work-related but is serious enough to hinder your ability to keep or gain a job, the ICA may treat it as an unscheduled injury even if it would otherwise be a scheduled one.

Arizona Statutory Impairment Ratings

In some cases, Arizona statutory law provides impairment ratings. When this happens, these ratings take priority over those provided in the AMA Guides. Body parts that have their statutory impairment ratings include:

  • Fingers and toes
  • Eyes
  • Scars and teeth

Additional Impairment Rating Evaluation Guidance

In some cases, Arizona judicial decisions have held that doctors can use relevant impairment rating criteria other than the AMA Guides, such as when the AMA Guides do not address your impairment.

The Industrial Commission of Arizona considers both scheduled and unscheduled impairments for monthly payments. The amount and length of those payments depends on the type of impairment the injury is.

How Do Insurance Companies Calculate Impairment Rating-Based Payouts?

Workers’ comp insurance companies calculate compensation income based on multiple factors, including:

  • Your permanent impairment rating
  • Your average monthly wage was before the accident
  • The maximum compensation amount you can receive under Arizona’s workers’ comp laws

For permanent impairments, you can receive monthly benefit payments for both scheduled and unscheduled injuries.

Scheduled Impairment Ratings

Scheduled impairments are listed explicitly in the workers’ compensation statutes ARS 23-1044(B). 

The compensation for scheduled injuries is predetermined and based on a schedule that assigns a specific number of weeks of benefits for each type of injury, regardless of the individual’s actual wage loss or disability.

For example:

  • If a scheduled body part has been totally impaired, the injury is compensated at the rate of 55% of your average monthly wage.
  • If the body part has been only partially impaired, the scheduled compensation is 50% of the average monthly wage.
  • If you cannot return to the work you were doing before the work-related injury or condition occurred, then a partial or total loss of use of a scheduled body part will result in you receiving 75% of your average monthly wage.

Scheduled awards are paid monthly for a fixed period based on the affected body part. Here are some examples:

Presumed Total Disabilities

InjuryCompensation Duration
Injury to a thumb15 months
Injury to your index finger9 months
Injury to your second (middle) finger7 months
Injury to your third (ring) finger5 months
Injury to your little finger4 months
Injury to your big toe7 months
Injury to any other toe2.5 months
Injury to your major (dominant) hand50 months
Injury to your other hand40 months
Injury to your major (dominant) arm60 months
Injury to your other arm50 months
Injury to a foot40 months
Injury to the leg50 months
Injury to an eye requiring removal (enucleation)30 months
Loss of sight in an eye without enucleation25 months
Loss of hearing in one ear20 months
Loss of hearing in both ears60 months

Arizona workers’ comp law treats some permanent injuries as being presumptively totally and permanently disabling. These include:

  • The total and permanent loss of sight in both eyes
  • The loss of both feet or both hands by separation
  • A spinal injury that results in permanent and complete paralysis of both legs or both arms, or one leg and one arm, or one hand and one foot
  • A head injury that results in incurable imbecility or insanity
  • The loss of one hand and one foot

It is also possible for your employer’s insurance company to overcome this presumption by presenting evidence to the contrary.

Scheduled Impairment Rating Example

Here is an example of how your impairment rating evaluation affects how you receive workers’ compensation disability payments:

Imagine you were making an average monthly wage of $5,000 and injured your dominant hand while working. You receive a permanent impairment rating of 8% from your doctor that does not prevent you from going back to work at your pre-injury job. Your benefits are calculated as follows:

  1. Your $5,000 average monthly wage is multiplied by 50% ($2,500 monthly benefit)
  2. 8% of your 50-month maximum for a dominant hand injury is four months
  3. Four months of $2,500 in benefits gives you a $10,000 total workers’ comp award.

Unscheduled Impairment Ratings

Unscheduled injuries include head, mental, shoulder, hip, and back injuries, as well as work-related diseases. The ICA will determine whether you will receive compensation for any unscheduled injuries.

Unlike scheduled injuries, determining how much you can receive in monthly workers’ compensation benefits for unscheduled injuries relies on more than a straightforward calculation like the example above. The ICA will also consider non-numerical factors, like your education, physical limitations, work experience, and current and past average monthly wage.

If you are awarded permanent compensation for an unscheduled injury, you will be compensated, possibly for the rest of your life, for the difference between what you earned before the injury and what you can earn now.

Every year you receive unscheduled workers’ compensation payments, the insurance provider will provide you with an Annual Report of Income and review your case. Based on this review, the insurance company may make a Petition for Rearrangement to the ICA if it believes your benefits should be adjusted downward or stopped.

You also have the right to petition for rearrangement if you believe your benefits should stay or increase.

A custom graphic listing 3 main factors that are used to determine an impairment rating.

Talk to a Phoenix Permanent Disability Attorney Now

Applying for permanent disability benefits after a work injury under Arizona’s workers’ compensation system can be complicated and time-consuming. Hiring an experienced attorney will make the application process with the insurance company easier and improve your ability to receive workers’ compensation benefits.

This will also give you the best chance of getting the maximum dollar amount of monthly benefits for a permanent or total disability that you are entitled to as an injured worker.

Contact the Phoenix workers’ compensation disability lawyers at Matt Fendon Law Group today to set up a free and confidential consultation for your workers’ comp case. We represent injured workers like you to help you understand Arizona’s complex laws, regulations, and court cases affecting your impairment ratings and what you can expect to receive in financial compensation.

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