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New York workers comp reforms result in lower payouts

Posted On: Mar. 1, 2017 2:11 PM CST

New York workers comp reforms result in lower payouts

Workers compensation trends in New York following systematic reforms made in 2007 showed a decrease in permanent partial disability and lump-sum payments, according to a study released Tuesday by the Cambridge, Massachusetts-based Workers Compensation Research Institute.

Specifically, from 2007 to 2012 payments for PPD/lump-sum cases at an average 36 months of experience saw decreases of 16 percentage points in cases that received PPD payments only. But the data also showed a nearly 16 percentage point increase in cases with a lump-sum settlement only, according to the study. 

In its ninth year, the annual report “Monitoring Trends in the New York Workers’ Compensation System, 2005–2014” regularly tracks key metrics of the performance of the workers compensation system after 2007 legislative changes and subsequent legislative and administrative changes.

The study also found that from 2010 to 2011, reflecting up to 16 months of experience under the treatment guidelines, the number of visits per indemnity claim decreased for chiropractors and physical/occupational therapists, while there was little change for physicians. 

Also, following the increases in the statutory maximum weekly benefit — from $400 to $600 — and several years of indexing the maximum benefit to two-thirds of the statewide average weekly wage, fewer injured workers had their benefits limited by the maximum — 18% in 2014 compared with 48% prior to the benefit increases.

The study also found that since 2007, the rate of defense attorney involvement decreased by about 4 percentage points for indemnity claims at 12-, 24- and 36-month maturities, while defense attorney payments per claim increased 9% to 11 % per year on average at all claim maturities.

According to the institute, the key reform measures since 2007 increased maximum statutory benefits, limited the number of weeks of PPD, benefits, implemented medical treatment guidelines, adopted a fee schedule for pharmaceuticals, established networks for diagnostic services and thresholds for preauthorization, and enacted administrative changes to increase the speed of resolving disputes.

“The regular monitoring of system performance helps policymakers and system stakeholders focus attention on the objectives that are being met, objectives that are not being met, and any unintended consequences that have emerged,” said Ramona Tanabe, the institute’s executive vice president and counsel, in a statement.

The analysis was conducted using open and closed indemnity and medical-only claims with dates of injury from October 2004 through September 2014, with experience as of March 2015, culling data from the full insurance market of the New York system, including private insurers, self-insured employers, and the state insurance fund, according to the study.