New York Workers’ Compensation Reforms Show Promising Results

by Guest injury law blogger on November 13, 2012

New York’s 2007 statutory reforms are starting to show positive workers’ compensation changes according to the fifth annual report published by the Workers’ Compensation Research Institute (WCRI). Each year, WCRI assesses the performance of the workers’ compensation system, evaluating the effects of the statutory changes and looking for any unintended consequences.

In 2007, statutory changes to New York’s workers’ compensation program included the following six major components:

  • Maximum weekly benefit increase
  • Limits to the number of weeks of permanent partial disability benefits
  • Development and implementation of medical treatment guidelines
  • Fee schedule for pharmaceuticals
  • Diagnostic services networks and preauthorization thresholds
  • Administrative changes for speedier case resolution

How is New York doing so far as it implements the reforms to its workers’ compensation program? Below are a few of the more notable findings:

  • Maximum Weekly Benefit Increase – According to the study, the maximum weekly New York workers’ compensation benefit increased from $400 (prior to July 1, 2007) to $600 two years later. These planned increases have brought New York closer to national averages. Every year on July 1st, the maximum benefit is reset to two thirds of the average weekly wage for the state.
  • Permanent Partial Disability Benefits Limits – The percentage of permanent partial disability (PPD) cases where no lump-sum payments were issued dropped 13.5 points from 2007 to 2008. Those with lump-sum settlements (but no PPD payments) increased by 12 points. According to WCRI’s 2012 Annual Report and Research Review, this shift could be attributed to earlier settlements for some cases and may be related to Aggregate Trust Fund reform provisions. The limits placed on the number of weeks of PPD wage replacement benefits are expected to yield significant savings, but WCRI does not expect to see those results in the data for several years.
  • Fee Schedule for Pharmaceuticals – WCRI reported a 10 to 20 percent decrease in the average price per pill due to the pharmacy fee schedule changes mandated by the reforms.
  • Diagnostic Services Networks / Preauthorization Thresholds – WCRI observed a six percent increase in minor diagnostic service visits from 2007/2008 to 2008/2009 and suspects this is due to the increased preauthorization limit which went from $500 to $1,000.

How WCRI Researchers Analyze Data

WCRI’s used its Detailed Benchmark/Evaluation (DBE) database in this study with data representative of New York’s workers’ compensation system. The DBE contains over 29 million claims from insurers, self-insurers, and state funds. According to WCRI, this database represents roughly 80 percent of the nation’s workers’ compensation benefits paid. The fifth annual report evaluated open and closed indemnity and medical-only claims with injury cases that originated between October 2003 and September 2009.

About the author

This guest post was contributed by Joseph A. Ginarte. He is a specialist New York construction accident lawyer and leads a team of attorneys and managers at Ginarte. He enjoys writing and sharing his insights on various legal blogs. To find a construction accident attorney, click the link.

Previous post:

Next post: