DWC Compares Fourth and Sixth Editions of AMA Guides

The Texas Department of Insurance, Division of Workers’ Compensation, through its Workers’ Compensation Research and Evaluation Group, has issued a new report titled AMA Guides Study: Impairment Rating Comparison of the Fourth and Sixth Editions, examining how impairment ratings would differ if Texas moved from the AMA Guides Fourth Edition to the AMA Guides Sixth Edition, 2024.

The study reviewed 363 claims drawn from 2022 impairment rating cases, with new ratings assigned by qualified reviewers under the Sixth Edition and then compared to the ratings originally assigned under the Fourth Edition. According to the Division, the central finding is that use of the Sixth Edition would generally produce lower impairment ratings across the sample.

The report states that the average impairment rating in the sample fell from 5.4% under the Fourth Edition to 3.8% under the Sixth Edition, which the Division describes as a 30% decrease. Overall, 59% of cases received a lower rating under the Sixth Edition, 30% received a higher rating, and 11% remained unchanged. The report attributes the general downward shift to updates in medical knowledge, treatment protocols, and diagnosis-based methodologies incorporated into the newer edition, which the AMA views as more consistent with current medical practice and functional outcomes.

The Division found that the reduction was not limited to one category of injury. Average ratings declined across all body-part groupings studied, including upper and lower extremities, combined extremity-and-spine cases, spine cases, other musculoskeletal cases, and other body-part cases. The report also found that the higher the original impairment range, the more likely the claim was to move downward under the Sixth Edition. For claims originally rated at 6% or greater, 86 out of 104 cases received a lower rating, and among claims originally rated above 20%, nine of ten were rated lower under the Sixth Edition.

One notable exception involved certain spine claims. The study included 24 spine cases that had originally been rated at 0%, and half of those cases received a 1% to 4% rating under the Sixth Edition. Even so, the overall trend for spine claims remained downward, with the average spine rating decreasing from 5.1% under the Fourth Edition to 2.6% under the Sixth Edition.

From a Carrier perspective, the most significant part of the report is the Division’s discussion of income-benefit consequences. Because impairment income benefits are tied directly to the impairment rating, the report concludes that lower ratings under the Sixth Edition would reduce both duration and total dollars paid. In the subset of 308 cases that had an impairment income benefit payment and an impairment rating above 0%, the average rating dropped from 5.73% to 4.01%, a difference of 1.72 percentage points, which translated to an average reduction of 5.16 weeks of impairment income benefits. Extrapolating to the broader 2022 claim population, the Division estimated that use of the Sixth Edition would have reduced impairment income benefit payments by about $42.83 million, or 31.07% of IIBs paid, and by 11.6% of total benefits paid to those claims.

The report also highlights possible effects on supplemental income benefits eligibility. Because an employee generally must have an impairment rating of at least 15% to qualify for SIBs, downward movement across that threshold could materially affect eligibility in some cases. The Division found that, among the 22 sample cases originally rated at 15% or more, 10 were rated below 15% under the Sixth Edition. It further estimated that, among the 500 injured employees in 2022 who qualified for SIBs based on their impairment rating under the Fourth Edition, use of the Sixth Edition would have resulted in half receiving a lower rating, with an estimated reduction of about $185,250 per week in system costs.

It must be emphasized that the Division’s report does not announce a change in Texas law, and Texas doctors currently still use the AMA Guides Fourth Edition for impairment ratings. Even so, the study is significant because it quantifies how a move to the Sixth Edition would likely affect claim values and benefit exposure. Its overall conclusion is straightforward: while some individual cases would rate the same or higher, the Sixth Edition would, on average, produce lower impairment ratings and correspondingly reduce income-benefit exposure across the system.

The report itself is located here: https://tdi.texas.gov/wc/reg/ama2026.html

Please reach out to the attorneys of FOL with any questions or comments: GQS@fol.com.