Therapist and client working through a job coaching session.

Therapist and client working through a job coaching session.

By John Lowe, PT

Success in any field requires having an understanding of how business is attracted and how payment is received. In the case of physical therapists treating injured workers, knowing how the system works and applying that information correctly can generate referrals and minimize reimbursement delays.

Playing Field Primer

Workers’ compensation is defined as a system of insurance that reimburses an employer for damages that must be paid to an employee for injury occurring in the course of employment.1 According to the Department of Labor, the number of claims submitted in the United States for the week ending May 19, 2016, was 280,000, down from 294,000 the previous week. Not all these claims were for musculoskeletal injuries, nor are all employees claiming workers’ compensation benefits referred for physical therapy. However, an average of well over more than a quarter million a year are.2

Workers’ compensation insurance developed primarily during the industrial revolution as workplaces became larger, more automated, faster, and more dangerous. Workers’ compensation is a no-fault system. The employee cannot sue the employer. The insurance the employer carries is required to provide income and cover medical expenses. Workers’ compensation therefore protects both parties.3

Workers’ compensation laws are state-specific. A commission, board, or other state agency oversees the system to monitor reimbursement, fraud, settlements, case management, hearings/mediation, and fee schedules. Each state agency’s website can be a good reference for fee schedules, rules, free publications, etc.

Employers are required to carry workers’ compensation insurance. They can obtain it by purchasing a policy from an insurance company, by choosing to be self-insured (this requires approval from the state), or combine with similar employers to establish a fund or association to share the costs. It is important to understand how employers may administer their workers’ compensation programs:

• They may have their insurance carrier do it. The employer reports injuries to an insurance adjuster, who then handles the claim.
• They let a Third Party Administrator (TPA) handle it. A TPA administers claims for companies that are self-insured but do not want to administer the program in-house. TPAs look like insurance companies and, in fact, many of them are sister companies to insurance companies.
• The employer employs adjusters to handle the claims working with other departments such as safety and human resources.
• Employers who belong to a fund or association that provides the insurance can let adjusters employed by the fund administrate the cases.

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Meet the Stakeholders

Workers’ compensation cases have a number of parties involved. Every case has an injured worker, an employer, an insurance adjuster, and a treating physician. There may also be case managers, attorneys (for the employee, employer, or both), or an administrative law judge or arbitrator. Each of these parties desires specific information. Knowing what their purpose and motivations are can aid in communication and possibly help establish relationships for future business referrals.

Insurance adjusters are responsible for administering the entire claim according to the laws of that state. They project what the claim will cost and set aside reserves to cover the projected costs. The adjuster is the financial decision-maker in a case. They determine whether an injury is compensable and whether to pay for services. Adjusters either manage cases or vend cases to case managers. If an adjuster is managing a case, communicate with that person concisely. Time frames and costs are critical to an adjuster. Workers’ compensation adjusters may manage hundreds of cases concurrently. They tend to be overworked, are usually not healthcare providers, and do not like surprises.

Case managers are hired to manage the medical aspects of the case. They work to identify and solve any barriers that may be inhibiting recovery. Case managers are paid to coordinate the case and need communication from treating physical therapists. Many prefer updates as often as weekly. Do not wait to be asked. Case managers refer to clinicians who help them with the case by communicating a patient’s progress (or lack thereof).

Treating physicians decide the general course of treatment, refer to other health care providers—such as physical therapists—for additional treatment as necessary, determine return to work parameters, and determine levels of any permanent disability. Physicians also refer to physical therapists who make their jobs easier by providing information about details such as current ability to perform job-specific tasks and patient progress toward performing the essential functions of the job to which the injured worker is to return.

Attorneys may be hired by an employer or employee to represent their interests. Injured workers typically hire attorneys when there has been poor communication from the employer, when the insurance company is not paying, or when the whole system seems too confusing or intimidating.

Treatment Considerations

Recovery from work-related injuries at times is slowed by what are known as barriers to recovery. These barriers may be medical (medical complications, surgery, secondary medical conditions, failed surgery), psychological (fear, anger, lack of control, depression, anxiety), real-life barriers (no transportation, limited education, low socio-economic status, language or cultural barriers, poor familial/spousal support, wage loss), or case barriers (unwilling employer, volatile job, attorneys, multiple medical barriers). These often affect the outcome of physical therapy treatment and should be recognized and communicated to the case manager and/or adjuster.

The goal of treatment of workers’ compensation is to return the injured worker to her or his condition at the time of the injury.4 Care is directed according to the laws of each state. Some states are employee choice, meaning the injured worker may choose healthcare providers. On the other hand, in employer choice states, the employer directs medical care. Knowing how it works in your state is important. The state workers’ compensation commission website may help provide this information.


Build a Reputation That Gets Referrals

Building a reputation as a clinician to refer injured workers requires three primary abilities in addition to clinical skills:

1) Understanding the unique needs of the injured worker: knowing the physical demands specific to the job the worker is to return to so treatment can be structured appropriately.
2) Understanding the wants and needs of the other parties in the case. Communicate progress, barriers, and requests in a prompt, easy-to-understand manner. Do not wait to be asked.
3) Communicate consistently, constantly, and objectively within the parameters of your professional role. People will send patients to a physical therapist who helps them look good.

Cultivating a reputation for having specialized equipment to evaluate, treat, and track workplace-based injuries can also be helpful in positioning a clinic as a preferred provider for this client population. Making sure a practice is equipped with technologies that provide optimum performance in this is part of this strategy. For example, measurement and assessment tools provide metrics that are essential for tracking progress and gauging work readiness.

Physical therapists who are interested in learning more about this subject may find the APTA’s Orthopaedic Section a good reference for clinical guidelines and continuing education opportunities. The section can be accessed at Information specific to occupational health can be found under the Occupational Health Special Interest Group. PTP

John Lowe, PT, is a physical therapist with more than 20 years of occupational health experience. He is currently employed by WorkWell Prevention & Care as an on-site and implementation specialist partnering with employers to develop and implement strategies to minimize lost time days. For more information, contact [email protected].


3. Guyton GP. A brief history of workers’ compensation. Iowa Orthop J. 1999;19:106-110.
4. Carr JD. Workers’ compensation systems: purpose and mandate. Occup Med. 1998 Apr-Jun;13(2):417-422.