WCRI Report Examines Trends in New York Workers’ Comp System

February 26, 2016

The Workers Compensation Research Institute (WCRI) has published its eighth annual report examining the trends in the performance of the New York workers’ compensation system following reforms enacted in 2007.

WCRI said the metrics in this report, “Monitoring Trends in the New York Workers’ Compensation System, 2005–2013,” provide the information necessary to observe the possible effects of some of the 2007 legislation and related administrative changes.

WCRI said the data that underlie some of the measures in this report are of sufficient maturity to begin to see changes in some metrics addressed by the statutory revisions and other changes. The changes have various effective dates and have been instituted over time. As a result, it will still be several more years before the full impact of the reforms could be realized.

The key reform measures raised maximum statutory benefits, limited the number of weeks of permanent partial disability (PPD) benefits, created medical treatment guidelines, adopted a fee schedule for pharmaceuticals, established networks for diagnostic services and thresholds for preauthorization, and enacted administrative changes to increase speed of case resolution.

“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, executive vice president and counsel for WCRI.

The following are among the study’s findings:

  • Medical Treatment Guidelines: In 2011 claims evaluated in 2012 (reflecting 16 months of experience under the treatment guidelines), the number of visits per indemnity claim decreased for chiropractors and physical/occupational therapists when compared with the prior year, while there was little change for physicians.
  • Increase in Indemnity Payments per Claim: From 2007 through 2009, indemnity payments per claim increased at double-digit rates at all claim maturities. Since 2009, indemnity payments per claim continued to grow, at about 6 percent per year for claims at 12 months of experience and somewhat faster (7-9 percent per year) at the longer claim maturities.
  • Duration Limits on Permanent Partial Disability (PPD) Benefits: From 2007 to 2011, for PPD/lump-sum cases at an average 36 months of experience, there was a 14 percentage point decrease in cases that received PPD payments only (with no lump-sum payment) and a nearly corresponding 13 percentage point increase in cases with a lump-sum settlement only (with no PPD payments). This may suggest earlier settlements for some types of cases. Over that same period and claim maturity, the average PPD/lump-sum payment rose at double-digit rates in most years for cases with only a lump sum and for cases with both PPD payments and a lump-sum settlement. WCRI observed similar patterns in PPD/lump-sum frequency and payments by type at other claim maturities.
  • Diagnostic Testing and Networks: Raising the dollar threshold from $500 to $1,000 for prior authorization of physician-ordered diagnostic medical tests was aimed at reducing hearings over the medical necessity for these services. From 2007 to 2013 for claims at 12 months of experience, WCRI observed little change on average in the number of visits for major radiology services by nonhospital providers.
  • “Rocket Docket”: There was little change in the average defense attorney payment per claim in 2010, but an increase of nearly 10 percent per year from 2011 to 2013 for claims at 12 months of experience.

The study uses open and closed indemnity and medical-only claims with dates of injury from October 2004 through September 2013, with experience as of March 2014. The data are representative of the New York system.

WCRI is an independent, not-for-profit research organization based in Cambridge, Massachusetts.

Source: WCRI

 

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