Key Metrics of New York Workers’ Comp System Tracked in New WCRI Study

October 31, 2017

The Workers Compensation Research Institute (WCRI) released a new tool for policymakers and system stakeholders to track the performance of the New York workers’ compensation system.

“Originally established to monitor the system following reforms in 2007, the report has evolved into a tool for tracking key metrics of system performance on an ongoing basis,” said Ramona Tanabe, WCRI’s executive vice president and counsel, in a WCRI press release. “This regular monitoring helps focus attention on policy objectives that are being met, objectives that are not being met, and unintended consequences that have emerged.”

The WCRI is an independent, not-for-profit research organization based in Cambridge, Mass. WCRI’s membership includes employers, insurers, governmental entities, managed care companies, health care providers, insurance regulators, state labor organizations and state administrative agencies in the U.S., Canada, Australia and New Zealand.

The study, Monitoring Trends in the New York Workers’ Compensation System, 2005–2015, is the 10th annual report to regularly track key performance metrics of the New York workers’ compensation system.

The analysis in this edition focuses primarily on trends in indemnity benefits, medical payments and benefit delivery expenses from 2007 to 2015 for claims at different maturities. In addition, various interstate comparisons from other WCRI studies are provided to help put the performance of the New York system into perspective, such as the frequency and amount of opioids dispensed to injured workers.

In 2007, New York passed legislation making a number of changes to the state’s workers’ compensation system. Among its provisions, the legislation increased maximum statutory benefits, limited the number of weeks of permanent partial disability (PPD) benefits and required the implementation of medical treatment guidelines and the adoption of a fee schedule for pharmaceuticals.

In subsequent years, the system underwent a number of additional regulatory and administrative changes, including electronic filing of claims data and a payor compliance initiative.

Further workers’ compensation reforms included in the 2017-2018 New York state budget, such as the requirement to adopt a pharmacy formulary and adoption of new permanent impairment guidelines, will be examined in future monitoring reports.

The following are among the study’s major findings:

  • Indemnity benefits per claim increased 7–11 percent per year from 2007 to 2015, mainly reflecting provisions of the 2007 reform and related changes in settlement behavior.
  • Medical payments per claim grew 3–6 percent per year from 2007 to 2014 for all providers, but decreased in 2015.
  • There was a decrease in visits per claim for some nonhospital providers after implementation of the medical treatment guidelines.
  • There was little change in prices paid for most nonhospital services since 2002.
  • Benefit delivery expenses per claim increased 7–8 percent per year since 2007. The components – medical cost containment, defense attorney payments and medical-legal expenses – all grew, but the relative share of the components was fairly stable.

WCRI’s Detailed Benchmark/Evaluation (DBE) database was used in the study. Analyses were performed using open and closed indemnity and medical-only claims with dates of injury primarily from October 2004 through September 2015, with experience as of March 2016. The data include a large volume of claims and represent the full insurance market of the New York system, including private insurers, self-insured employers and the state insurance fund.

The study is authored by Carol A. Telles and William Monnin-Browder.

Source: The Workers Compensation Research Institute

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