Disability insurance and workers’ compensation both concern illness or injury in the context of work. These terms are sometimes (erroneously) used interchangeably, but in actuality they refer to very different concepts. Disability insurance provides benefits to an eligible claimant whose ability to work is compromised by injury or illness. The cause of the injury or illness need not be related directly or indirectly to the work setting. In contrast, workers’ compensation is designed to provide financial relief to an employee who is injured or becomes ill as a direct result of work-related factors. Thus, the key issue in disability evaluations is functional capacity, while the key issue in workers’ compensation evaluations is causality.
When assessing disability or workers’ compensation claimants, it is critical for the evaluator to use a variety of data sources. Psychological and/or neuropsychological tests are usually considered an integral component of the evaluation, and test selection should be determined by the specific referral questions and the nature of the claimed impairment. Owing to the possibility of secondary gain on the part of the claimant, all disability and workers’ compensation evaluations should include an assessment of symptom validity to rule out exaggeration or other forms of dissimulation. Conclusions expressed by the evaluator should focus on the specific referral questions, and statements regarding ultimate issue determinations should be avoided.
Disability, used in the context of disability claims, is a legal rather than a psychological or medical term. Its definition is determined by the terms of the policy, contract, or entitlement program under which the claimant has applied for benefits. Sources of disability benefits include private disability insurance policies, public and private sector employee benefits, and federal entitlement programs (Social Security Disability). Each of these sources of benefits is subject to different federal, state, and local laws. For example, Social Security Disability and private sector employee benefits are regulated by federal law (the Social Security Act and the Employee Retirement Income Security Act of 1974, ERISA). Private disability policies are usually governed by the laws of the state in which the policyholder resides. State and local government employee benefits are exempt from ERISA regulation and are defined by state statutes, local ordinances, and (when applicable) collective-bargaining agreements.
Although policies and entitlement programs vary, there are some concepts common among all disability sources. Disability refers to functional capacity, not diagnosis. To be eligible for benefits, the claimant must meet the specific definition of disability determined by the policy or program under which benefits are sought. Regardless of the source, most definitions of disability include two prongs: (1) The claimant must have sustained an injury or illness that (2) renders him or her unable to perform the substantial and material duties of his or her occupation (or, in some cases, to be able to perform any work at all). Thus, a valid disability claim requires both the substantiation of the presence of a condition as well as proof that this condition creates impairment in the claimant’s functional abilities to perform his or her occupation. It also must be established that the absence from work is, in fact, due to the illness or injury and not to circumstantial factors (e.g., being laid off) or choice (e.g., job dissatisfaction, the desire to relocate).
When a policyholder files a claim for disability benefits, the insurance company initiates an evaluation of the claim to determine if the policyholder is entitled to benefits. Mental health claims are particularly difficult to adjudicate as they are based on subjective symptoms. During the course of the claim investigation, psychologists and psychiatrists are often called on to perform independent medical examinations (IMEs) to assist the insurance company in assessing the objective basis of the claim. If the claim is denied or terminated, the claimant may request an appeal of the decision by the company. If this decision is unfavorable to the claimant, the claimant may initiate legal proceedings against the company.
In the assessment of disability claims, the key issue is functionality; specifically, has the claimant’s ability to function in his or her occupation been impaired? Thus, in the IME, three questions must be addressed:
- Does the claimant have a psychiatric condition?
- Are there functional impairments related to this condition?
- Do these functional impairments affect work capacity?
It is important that the concepts of diagnosis, symptoms, and functional capacity not be confused. Diagnosis refers to the presence of a specific psychiatric condition (e.g., bipolar disorder, panic disorder with agoraphobia). Symptoms refer to the subjective experience of the condition (e.g., loss of interest, anxiety). Functional capacity, however, refers to the ability to perform specific tasks or activities—for example, interacting appropriately with the public, remembering pertinent information, adding a column of numbers.
It is the loss of functional capacity that is critical in the evaluation of a disability claim. Thus, it is necessary for the evaluator to draw logical connections between diagnosis, symptoms, and functional impairment, for example, establishing how depression—manifested by symptoms such as insomnia, diminished concentration, and feelings of fatigue—leads to a reduced capacity to stay alert and focused over the course of an 8-hour workday, compromising the claimant’s ability to do his or her job.
Workers’ Compensation Claims
Workers’ compensation is essentially a no-fault system of compensating employees for losses due to accidental injury or illness sustained in the course of employment. Whether the injury is due to the employer’s negligence or the employee’s, the compensation is the same. This reduces the need for protracted litigation, allowing employers to contain costs and employees to obtain the needed benefits in a timely manner. The benefits provided by workers’ compensation include both lost wages and medical care to treat the injury or illness.
The laws governing workers’ compensation differ in each state. In all states, employees are compensated for physical injuries, such as a knee injury caused by lifting a heavy piece of equipment. Employees in most states are also compensated for physical injuries originating out of mental stimuli (e.g., ulcers attributed to job stress) and mental injuries that accompany a physical injury (e.g., posttraumatic stress disorder following the loss of an eye). In only a few states are employees compensated for purely mental injuries, such as panic attacks resulting from a stressful work environment.
Unlike disability, in workers’ compensation, the key issue is causality. To be compensable, the claimant’s injury or illness must be the result of his or her employment. From the standpoint of assessment, this requires both establishing the existence of an illness or injury and ruling out non-work-related causes of the employee’s difficulties. In the workers’ compensation system, independent evaluations are referred to as qualified medical examinations (QMEs). The questions the QME is typically asked to address include the following:
- Did work cause or contribute to the illness or injury?
- Are there preexisting conditions contributing to the disability?
- Is there a need for current or future medical care?
- Is the condition stable and not likely to improve?
- Is there permanent impairment?
- Can the claimant return to his or her regular job?
Evaluation of Disability and Workers’ Compensation Claims
Given the subjective nature of psychological conditions, it is critical for the evaluator, when assessing disability or workers’ compensation claimants, to use a variety of data sources in forming opinions. These sources may include (a) a review of relevant medical, psychological, educational, and occupational records; (b) collateral information obtained directly from third parties, such as treating providers, family members, or coworkers; (c) information obtained from the claimant during the clinical interview; (d) information obtained during the claim investigation; and (e) psychological and/or neuropsychological test data. It is important that the evaluator not rely solely on the claimant’s self-report but view it as one, among many, of the sources of evaluation data.
Psychological and/or neuropsychological tests are usually considered an integral component of a disability or workers’ compensation evaluation. Test selection should be determined by the specific referral questions and the nature of the claimed impairment. Although most disability and/or workers’ compensation disputes are resolved without litigation, as with any forensic evaluation admissibility issues should be a consideration in test selection. Depending on the jurisdiction, Frye (general acceptance) or Daubert (testable, peer-reviewed, known error rate, and general acceptance) standards should be taken into account. Therefore, the best practice is to use tests that are standardized, objective, valid, and reliable.
Evaluators are typically asked to rule in or rule out symptom exaggeration or malingering, as claims for disability and workers’ compensation benefits present the possibility of secondary gain in terms of financial remuneration and/or avoidance of work. Although base rates are difficult to establish, it has been estimated that malingering occurs in 7.5% to 33% of all disability claims. Methods for assessing symptom validity include using multiple sources of data, analyzing patterns of psychological and neuropsychological test performance, employing the validity scales included in standardized psychological tests (e.g., the F scale on the Minnesota Multiphasic Personality Inventory-2 [MMPI-2]), administering specifically designed measures of symptom validity (e.g., the Test of Memory Malingering, Validity Indicator Profile), and using structured interviews (e.g., Structured Inventory of Reported Symptoms, Miller Forensic Assessment of Symptoms Test). The use of multiple methods is preferable.
It is important to fully respond to the referral questions and not add information that is unrelated to or goes beyond the scope of these questions. Ultimate issue decisions—such as whether the claimant meets the policy definition of disability or has a compensable workers’ compensation claim—should not to be made by the evaluator. The evaluator’s role is to provide the referral source with information related to the functional capacity of the claimant or the causality of the claimant’s condition. Conclusive statements such as “The claimant is disabled” or “This is a compensable claim” should be avoided in favor of statements such as “The claimant’s inability to follow multistep directions would significantly limit her ability to perform complex surgical procedures” or “The claimant’s acute distress disorder was likely precipitated by the armed robbery that occurred in the workplace.”
At the conclusion of the evaluation, a written report should be provided to the referral source. This report should be well organized with data sources clearly identified. It is helpful to have separate sections summarizing the materials reviewed, the self-reported history provided by the claimant, information obtained from collateral sources, behavioral observations, psychological test data, and any other data used by the evaluator. This should be followed by a discussion of the evaluator’s impressions and interpretation of the data. Inconsistencies and gaps in the data should be noted. Finally, the evaluator should explicitly respond to each referral question.
It is important to keep in mind that the consumers of the IME or QME report are insurance company personnel and attorneys, not mental health professionals. Professional jargon, acronyms, and undefined scientific or medical terms should be avoided. Clear, concise language should be used, so that the report is useful to the reader and not subject to misinterpretation.
- Hadjistavropoulos, T., & Bieling, P. (2001). File review consultation in the adjudication of mental health and chronic pain disability claims. Consulting Psychology Journal: Practice and Research, 53(1), 52-63.
- Piechowski, L. D. (2006). Forensic consultation in disability insurance matters. Journal of Psychiatry & Law, 34(2), 151-167.
- Samuel, R., & Mittenberg, W. (2005). Determination of malingering in disability evaluations. Primary Psychiatry, 12(12), 60-68.
- Vore, D. A. (2007). The disability psychological independent medical evaluation: Case law, ethical issues, and procedures. In A. M. Goldstein (Ed.), Forensic psychology: Emergingtopics and expanding roles (pp. 489-510). Hoboken, NJ: Wiley.