Improving Hiring Procedures

Start Managing Claims Before You Say, ‘You’re Hired’

Post-offer medical exams have much to offer employers, as long as they steer clear of pitfalls.
By: | March 7, 2014

Picture this scenario. A worker in a loss-of-function state injures his rotator cuff during the course of his job. Despite his quick return to work, he is entitled to $40,000 based on his loss of function as determined by his physician and the state’s schedule of benefits.

Now suppose this same worker had sustained a similar injury three years before he was hired. The payer in this case could be entitled to a credit for part or even all of the $40,000 if an effective post-offer medical exam had been undertaken before the worker actually began his job.

“In New Jersey, when we get a case, the first question I ask is, ‘Do you have a post-offer medical?’ It’s part of our standard review of every new file,” said attorney John H. Geaney, an executive committee member of the firm Capehart Scatchard. “We check to see if they had a problem before. And, if so, use it to our advantage.”

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There are many benefits to workers’ comp payers with access to post-offer medical exams, as long as they are done appropriately and with caution. As a recent case demonstrated, the inappropriate request for medical information can result in hefty penalties and even disaster for a company.

Consider the Benefits

“It’s interesting. These are really ignored by employers because they don’t realize how valuable they can be,” Geaney said. “The first clear benefit is that you get medical information that could directly bear on whether the applicant can perform the essential functions of the job.”

That is important for any employer since a job that involves physical labor may be beyond the abilities of the particular applicant. Geaney advises his employer clients to have a broad-based questionnaire for the post-offer medical exam.

“You have to look at it from the standpoint of trying to determine if someone can do the job,” he said. “So it’s not enough just to ask, ‘Can you do the job?'”

Among the questions, for example, would be whether the person has been on pain medications. “Very often [pain] is the cause of a work injury,” Geaney said. “In our state, a very high percentage of pain management is workers’ comp-related. … The questions are designed to flesh out whether the person has a medical problem that could affect the job.”

But there are additional advantages of post-offer medical exams from a workers’ comp standpoint.

“Even if you do hire 10 employees after this process, in a number of years many of them will have injuries,” Geaney said. “If you have post-offer medical exam information and you have retained it confidentially, you can look at that data and try to determine if this problem has come up … if it is due to work, or a continuation of a preexisting condition.”

In addition, there is the issue of the payer potentially recouping money through a credit. While many states pay workers’ comp benefits according to the amount of time an injured worker is off the job (so-called wage loss states), about half of states base their benefits on a rate chart based on the person’s loss of function. Post-offer medical exams are especially helpful in the states that utilize a functional loss component to determine workers’ comp benefits.

Legal Issues Can Arise

Despite their advantages, post-offer medical exams cannot be done haphazardly. For example, payers should understand that the Americans with Disabilities Act eliminated the potential for discrimination by changing the timing of the medical exam.

“We call them post-offer medical exams. That was the whole point of the ADA; an employer could not ask any questions preemployment,” Geaney explained. “But they can make an offer and condition it on getting a medical exam, and potentially withdraw the offer if they have a valid basis.”

A “valid basis” for withdrawing an offer means it must be a business reason, he explained. There must be a direct business relationship between the evidence seen and the job offer.

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“The employer can withdraw the job offer if it can show that the employee cannot perform the essential job functions or if he poses a direct threat of harm to oneself or others,” Geaney said. “Reasonable accommodations need to be considered for an applicant with a disability.”

The medical exams must be consistent, meaning everyone in the same job category must be asked the same questions. But the post-offer medical exam can include questions on nearly anything.

“The Equal Employment Opportunity Commission says that there is no real limit on questions that can be asked,” Geaney said. “For example, if you’re being hired for a physical job, I could ask if you’ve had car accidents or chiropractic treatment — indicating neck, back or shoulder [problems]. I could ask if you have had an MRI. All this information could be very helpful.”

Family Medical History Is Off Limits

Attorney John H. Geaney advocates the use of post-offer medical exams by employers. However, he does not recommend employers ask questions that are related to family medical history.

“The idea that you need to know someone’s family medical history is a fallacy,” Geaney said. “You don’t.”

A New York-based rehabilitation center found that out the hard way. A case by the Equal Employment Opportunity Commission resulted in a penalty of $370,000 against the facility for allegedly violating the Genetic Information Nondiscrimination Act, the Americans with Disabilities Act Title I, and Title VII.

The EEOC said the company required employees and applicants to complete a family history section on an occupation and environmental health services patient history form. The EEOC claimed the company terminated two employees it regarded as having a disability, terminated another after it failed to provide her a reasonable accommodation during her probationary period, and retaliated against several others because they were pregnant.

GINA generally prohibits employers from requesting, requiring, or purchasing genetic or family medical information about employees or applicants.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]