In the context of workers' compensation, the term “impairment rating” refers to the quantified assessment of a worker's permanent loss of function after an injury or illness.

Key Takeaways

• Impairment ratings are used to quantify the permanent loss of function after a work-related injury or illness.
• The impairment rating will serve as a significant component based on which the amount of compensation an injured worker will receive is determined. 
• The determination of an impairment rating occurs after the injured worker’s condition has stabilized and no further significant improvement is expected (i.e., reached maximum medical improvement).

Impairment and Disability Distinguished 

Although in the context of workers' compensation, the terms impairment and disability are often used interchangeably, they refer to different aspects of a worker's condition. Where the term impairment refers to a qualifiable loss of physical or mental function resulting from an injury or illness, the term disability refers to the impact of the impairment on the worker's ability to perform work-related tasks. As such, two workers might have the same impairment rating for a similar injury, but their disability levels could differ depending on the nature of their jobs and the demands of their work. For example, a manual laborer with a significant impairment in their hand might be considered more disabled than an office worker with the same impairment simply because the laborer’s job relies more heavily on manual dexterity.

The Role of Maximum Medical Improvement (MMI)

MMI refers to the point at which an injured worker's condition has stabilized, and no further significant improvement is expected with medical treatment. Once MMI is determined, an impairment rating can be assigned. Note that reaching MMI does not necessarily mean that the worker has fully recovered. Instead, it means that the worker's condition is unlikely to change significantly, even with continued medical care, at which point, the focus shifts from treatment to evaluating the long-term impact of the injury or illness on the worker’s life.

Types of Impairment Ratings

There are several types of impairment ratings used within the workers' compensation framework, each corresponding to different levels and types of impairment

• Permanent Partial Impairment (PPI) Ratings: PPI refers to cases where an employee has sustained a permanent injury that partially impairs their ability to perform work or other daily activities. This type of impairment does not fully incapacitate the worker but results in a lasting reduction in function. PPI ratings are typically assigned when a worker has reached MMI but still experiences lasting effects from their injury. For example, an employee who suffers a serious hand injury might regain most of their function but still have a partial loss of mobility or strength. PPI ratings are expressed as a percentage that reflects the degree of impairment, and upon which the amount of compensation will be based. 
• Permanent Total Impairment (PTI) Ratings: PTI applies when a worker is completely unable to return to any form of gainful employment due to the severity of their injury or illness. This type of impairment is rarer, and perhaps represents the most severe level of disability recognized in the workers' compensation system, and is used in cases where the worker’s condition is so debilitating that they are unable to perform any type of work. Workers with a PTI rating are usually entitled to receive benefits for the rest of their lives, with the benefits being calculated based on a percentage of the worker’s average weekly wage (AWW). 
• Temporary Impairment Ratings: These are assigned when a worker is temporarily unable to perform their regular job duties due to an injury, but is expected to recover fully with time. The temporary impairment ratings may be further broken down into two categories: temporary total disability (TTD) and temporary partial disability (TPD). TTD applies when a worker is completely unable to work for a temporary period due to an injury. In these cases, TTD benefits are provided until the worker recovers sufficiently to return to work or reaches MMI. TPD refers to situations where a worker can return to work but only in a reduced capacity, earning less than they did before the injury, and therefore, the TPD benefits service to compensate the worker for the difference in wages during the recovery period.

How Are Impairment Ratings Determined?

Impairment ratings are determined through a medical evaluation by an Independent Medical Examiner (IME), who assesses the severity and permanence of a worker’s condition after an injury or illness. The IME conducts a thorough examination, reviews the worker’s medical history, and may order additional tests. The findings are compared against guidelines, such as the American Medical Association (AMA) Guides, which are widely used to assign a numerical percentage to the impairment. Some states have their own guidelines or versions of the AMA Guides. The IME then prepares a report detailing the impairment rating, which will be used to determine the extent of compensation as detailed above.