PBM Press Release

WCA COMMENTS ON PROPOSED PBM REGULATIONS

On November 14, 2016, the WCA wrote to the Workers’ Compensation Board commenting on the Board’s recent proposals to create a formulary for prescription medications and to require insurers to contract with pharmacy benefit management companies.  The WCA expressed concerns about the impact the proposal would have on the availability of appropriate treatment for injured workers in a timely manner, as well as with the potential for increased system costs as yet another insurer-side “cottage industry” is developed to divert employer premium dollars from injured workers.

The WCA comments can be read here.
PBM Comments

NY Workers’ Compensation Alliance Position Paper on Pataki Bill

NY WORKERS’ COMPENSATION ALLIANCE (WCA)

Position On Governor Pataki’s Proposed Changes To
The Workers’ Compensation System
Budget Bill Article VII A.9561/S.6461

The New York workers’ compensation system is in need of changes to keep pace with the cost of living and to effectively deliver the basic medical benefits promised to injured workers by the State Constitution. In recent years it has become commonplace to accuse the current workers’ compensation system of providing too little in the way of benefits to injured workers while costing employers too much. Both of these criticisms are well founded. Unfortunately the legislation currently proposed by Governor Pataki will not provide the promised relief either to injured workers or to business.

The Governor’s proposal is INADEQUATE. It provides too little in benefit increases to injured workers and contains no guarantees that it can deliver relief from the high cost of workers’
compensation insurance.

The Governor’s proposal is INSENSITIVE to the real needs of injured workers and to the plight of small businesses in New York.

The Workers’ Compensation Alliance (WCA) is made up of legal professionals with extensive background working within the New York workers’ compensation system. We are comprised of over thirty law firms and corporations throughout the State that represent and provide service to injured workers We believe the workers’ compensation system can be successfully modified to
meet the needs of New York’s injured workers and at the same time deliver cost savings to New York business.

– The WCA strongly favors a genuine benefit increase to injured workers. The WCA strongly opposes any attempt to reduce current benefits to injured workers by limiting the
scope of permanent disability benefits
.

– The WCA strongly favors changes in the way medical benefits are delivered injured workers that will also yield significant cost savings to employers. The WCA believes
that real cost savings are possible but that they should not be found at the expense of the injured workers the statute has always served.

– The WCA strongly favors the absolute right of the injured worker to have his or her day in Court before a Judge. The WCA thus strongly opposes efforts to erode the due process guaranteed in the statute.

This paper will explore each of these areas in some detail. We will show (1) why a benefit
increase is needed and what would be necessary to provide genuine economic relief to injured workers. We will show (2) why cost savings should not be achieved by reducing basic economic benefits to injured workers, but should be focused on control of the real cost drivers of the system. Finally,we will show (3) why it’s important not to take away the injured workers’ due process right to a hearing before a Judge, currently guaranteed in the State Constitution.

Why the Governor’s Benefit Increase is Inadequate

In his proposal Governor Pataki seeks to raise the maximum rate of workers’ compensation benefits from the current $400 per week to $500 per week by increasing the maximum rate by $25 per year between now and January 1, 2009. The Governor’s proposal is both misleading and inadequate. It will actually leave injured workers in a position worse than they were on July
1, 1992 when the last increase in the workers’ compensation maximum took effect.

Currently,the maximum workers’ compensation rate in Connecticut is $931 per week and in New Jersey is $891 per week. Injured New York workers deserve benefits that will not force them into poverty.
A maximum rate of $500 in 2009, when adjusted to 1992 dollars will be significantly below what is necessary for the workers’ compensation rates to keep pace with increases in the Consumer
Price Index (CPI). As computed by the Federal Reserve Bank, in order for the maximum compensation rate in 2004 to have the same purchasing power as it had in 1992 the rate should already have been raised to $538.56. The proposed maximum rate that would not become
effective until 2009 is only 92.8% of what the rate should have been in 2004 to keep pace with inflation. As prices continue to rise between now and 2009 the Governor’s proposed rate increase will represent less and less real purchasing power to injured workers.

Any real increase in workers’ compensation maximum benefits should be tied to the state average weekly wage. Workers’ compensation lost wage benefits are calculated as a percentage of average weekly wage. From the beginning of the New York workers’
compensation system in 1914 it has been widely acknowledged that workers’ compensation benefits should equal two-thirds of a person’s actual average weekly wage. The last benefit
increase in 1992 was calculated to achieve this goal
. Any current modification of the workers’ compensation maximum rate should do the same. According to the New York State Department of Labor, in 1992 the state average weekly wage was $623.22. This meant that in 1992 the maximum workers’ compensation rate was approximately 64.2% of the state average weekly wage. By 2004 the state average weekly wage had increased to $960.64 leaving the maximum workers’ compensation rate of $400 to represent only about 41.6% of the state average weekly wage. To keep pace with the increase in the state average weekly wage the rate in 2004 should have been increased to $616.57. If the governor’s proposal is enacted by 2009 the maximum workers’ compensation rate of $500
will be only about 52% of the 2004 state average weekly wage.

The Governor cynically claims that his proposal constitutes a 25% increase in the maximum workers’ compensation rates. In
fact, under his proposal the injured workers of New York State will be worse off in real dollars in 2009 than they were in 1992.
It has been 16 years since the Legislature addressed the question of the maximum benefit in workers’ compensation. In the last 12 years achieving an increase of the maximum benefit has been a stumbling block for other real reforms in the workers’ compensation system. The only way to avoid this type of deadlock in the future is to permanently tie the maximum workers’
compensation benefit directly to the state average weekly wage
.

For this reason the Workers’ Compensation Alliance asks the Legislature to consider permanently linking the maximum benefit level for workers’ compensation to two thirds of the state average weekly wage as computed by the New York State Labor Department.

Why basic economic benefits to injured workers should not be reduced

The most objectionable aspect of the Governor’s proposal is the drastic reductions in benefits paid to permanently disabled injured workers. Under the Governor’s proposal persons who have become permanently disabled due to a workplace injury would be completely cut off from wage loss benefits after a given number of years.

The Governor’s proposal offers no alternative source of benefits to permanently disabled injured workers. It offers no help in rehabilitating permanently disabled injured workers. It simply tells injured workers who have lost their livelihood that they are out of luck. After the prescribed period of benefits, the economic security of the injured worker will become the responsibility of county and local government
welfare systems
.

The apparent rationale for these proposed cuts to wage loss benefits is that paying benefits to persons who have a permanent disability is expensive. There is no doubt that such payments are expensive, but it is also the right thing to do. The Workers’ Compensation Law in New York has historically promised workers who have been severely and permanently injured they will not
die in poverty
. The Governor’s proposal is nothing short of a cruel abandonment of the most seriously injured.

To understand how the Governor’s proposal would affect permanently disabled workers consider the case of Mark, a 35-year-old pipe fitter. Mark was working at a high wage construction job making more than $1200 a week when a hose from a compressor broke loose and struck him in the back of the head. Mark suffered a severe traumatic brain injury. Even
after the best medical treatment available Mark will never be able to return to work
. Indeed, Mark has been granted Social Security disability benefits because the federal government has
decided that he’s unemployable. Under the current wage loss limits in the Workers’ Compensation Law Mark receives $400 a week, the maximum possible. He has lost his home, his vehicle and his marriage. He had to declare bankruptcy. Once he started receiving Social Security disability benefits he was able to begin rebuilding his life because when combined with his continuing workers’ compensation benefits he could now afford a basic standard of living. If he loses his weekly workers’ compensation benefit, even the most basic lifestyle will be
unaffordable.

Or consider the case of Anne, a 45-year-old Emergency Medical Technician who worked at Ground Zero for three months after 9/11. Anne was earning more than $1000 a week and was a member of the EMT union. She was a “first responder” and is considered a hero by all accounts. In 2003, Anne developed a persistent cough that would not go away. She sought treatment from pulmonary specialists who informed her that she has Chronic Obstructive Pulmonary Disease as a result of the toxins she inhaled at Ground Zero. Anne was prescribed multiple medications and tried to continue to work. However, as her disease progressed, and given the physical nature of the job, she soon had to stop working as an EMT permanently. If
she ever works again it will be for much less of a wage that she made as an EMT. Anne needs the permanent reduced earnings benefits provided by Workers’ Compensation to survive.

Under the Governor’s proposal Mark’s and Anne’s benefits would be ended after somewhere between 5 and 10 years of payments. The Governor’s proposal would simply take away
necessary income replacement benefits from these permanently disabled workers. This loss of benefits will render these permanently disabled workers poverty-stricken and require them to
seek assistance from the welfare system. How fair is that to these seriously injured workers?
How fair is the cost shifting to the average taxpayer?

Until and unless some solution is proposed that would guarantee the economic security of permanently injured workers, they should not be asked to fund insurance company profits or to
make an enormous sacrifice so that workers’ compensation insurance can be slightly more affordable.

While there is no question that workers’ compensation insurance needs to be made more affordable in New York, it is simply not right to ask the most seriously injured workers to be the
source of lower insurance premiums
. The Legislature should seriously investigate other ways to lower premium costs. Some such ways are proposed in the Governor’s legislation. The WCA
supports the proposed measures to lower medical costs by imposing new fee schedules and by reducing the amount of time it takes to get approval for medical services
. The WCA also supports increasing innovative occupational safety programs and tax incentives for the safest employers. Surely there are more innovative ways to reduce the cost of workers’ compensation
insurance that do not demand the impoverishment of hard working New Yorkers who have had the unfortunate luck to be injured on the job.

Why the due process right to a hearing should not be reduced

Given the urgency and gravity of the lost wage and medical concerns that face a worker who is injured on-the-job, injured workers and those who employ them are currently guaranteed an
adjudicatory hearing
, held at a meaningful time and in a meaningful manner. Section 20(1) of the Workers’ Compensation Law provides that a hearing “shall” be ordered “upon application of
either party.”

The Governor’s proposal would eliminate this absolute right to a hearing by amending Section 20 of the Workers’ Compensation Law to allow for the scheduling of a hearing before an administrative law judge only after it is determined that the dispute cannot be resolved by undergoing non-binding “conciliation” procedures. This proposal is inconsistent with the due
process rights of both injured workers and employers. Not only does the governor’s proposal eliminate a fundamental right of the parties in workers’ compensation litigation, it does so for no real reason. This change will not result in any savings and will only prolong the time needed to resolve central issues; not a good bargain.

Not only does this proposal violate fundamental due process rights but it proposes to require use of a system of non-binding conciliation meetings that has already shown itself to be a failure
in resolving the common controversies that exist in many workers’ compensation cases. The conciliation process was instituted as part of the reforms of 1996. Since that time experience with the conciliation process shows it is inappropriate for resolving any true controversy. In fact, the Workers’ Compensation Board currently uses the conciliation process only after the Board itself has determined that no true controversy exists. For this reason any statistics about the so called success of the conciliation process are deeply misleading. In fact, each and every time the conciliation process has been applied when a true controversy exists it has failed.

There’s no doubt that there is a place in the workers’ compensation system for the conciliation process. Conciliation can be used effectively where the parties are in fundamental agreement.
However, is not uncommon that diametrically opposed positions that are not susceptible to negotiation and compromise are raised on fundamental issues in a case. To require that such fundamental disputes first undergo non-binding “conciliation” before being allowed an adjudicatory hearing imposes on the injured worker the burden of undergoing a wasteful and time-consuming layer of proceedings before any real opportunity for relief can be reached.

Take the common example of a construction worker who falls on-the-job and injures his shoulder. Because the treating physician believes the injury to be a rotator cuff tear, the
diagnostic test typically ordered is an MRI. If the MRI is positive, the injured worker will undergo surgery; a negative test means a course of intensive physical therapy. Any delay in diagnosis
risks a frozen shoulder.

If the MRI is granted shortly after the injury, the recovery time is usually six weeks or less. If the carrier refuses to authorize the MRI, the injured worker’s only practical recourse is to request an adjudicatory hearing. The precious time spent first attempting to
“conciliate” the matter will cost the claimant at least a four-month delay in being allowed the only practical opportunity he has to achieve a successful resolution of the dispute at an evidentiary
hearing. Unfortunately, during all of this time, the injured construction worker will have had little or no use of his painful arm, will be out of work and suffer a dramatic reduction in his wages, and ultimately have a diminished opportunity to completely heal. This unfortunate scenario will be played out time and again if the Governor’s proposal is passed into law.

The fundamental requisite of procedural due process is the opportunity to be heard, by way of a hearing provided at a meaningful time and in a meaningful manner. There are few instances where the urgency to obtain relief is as profound as in a Workers’ Compensation case. Unimpeded access to an adjudicatory hearing is the only effective means available to an injured
worker to obtain the lost wage and medical benefits that are so desperately needed.

Detailed analysis of the proposal

For the above reasons, the WCA takes the following positions on the Governor’s proposed Article VII legislation, A.9561 and S. 6461, to amend the Workers’ Compensation system:

The WCA FAVORS:

1. An increase in the maximum weekly benefit, and believes that benefits should be permanently set at two thirds of the state average weekly wage. We also support the
proposed increase in the disability insurance benefit level.

2. Cost savings that can be generated by the imposition of a fee schedule for medication as well as other medical services and the development of networks of providers so long as the injured worker continues to have the right to free choice of medical providers .

3. A raise in the prior authorization limit to $1000 thereby reducing the time needed to obtain necessary medical tests and treatment .

4. A reduction from 60 to 45 days for the Board to schedule a preliminary hearing in a controverted case.

5. The revision of the Workers’ Compensation Board Medical Guidelines by a panel of medical experts working in consultation with legal practitioners .

THE WCA OPPOSES:

1. An inadequate increase in the maximum lost wage benefit.

2. A cap on benefits for those permanently disabled.

3. The elimination of the right to a hearing to resolve controversies.

4. The development of a pilot program for voluntary delivery of benefits outside of the Workers’ Compensation Board.

5. Development of networks of medical providers controlled by insurance companies without right to free choice of providers by injured workers.

6. Elimination of the stenographic recording for evidence in workers’ compensation matters.

THE WCA takes no position on the other provisions in the Governor’s proposal.

For further information please contact:

Richard D. Winsten, Esq.
Meyer, Suozzi, English & Klein, PC

One Commerce Plaza, Suite 1102
Albany, New York 12260
Phone: (518) 465-5551

Troy Rosasco Esq., Co-Chair Legislative Committee
Turley, Redmond, and Rosasco LLP

3075 Veterans Memorial Highway
Ronkonkoma, NY 11779
Phone: (631) 582-3700 ext. 123

John Sciortino, Esq., Co-Chair Legislative Committee
Segar & Sciortino, LLP

400 Meridian Centre – Suite 320
Rochester, NY 14618
Phone: (585) 475-1100

BUSINESS COUNCIL LAUNCHES NEW ASSAULT ON WORKER BENEFITS

In 2007, the Business Council of New York State finally achieved the goal it had sought for over a decade – putting time limits on payments for permanently disabled workers.  At the time, the Business Council and the state claimed the change would save employers over $1 billion.  Ten years later, employers’ workers’ compensation costs are still lower than they were before the “reforms.”

Huge savings for employers came at huge expense to workers, especially the most vulnerable – low wage workers and immigrants.  Those who were permanently disabled as the result of workplace injuries and illness faced two certainties:  they would never be able to return to their jobs, and their wage loss benefits would be cut off as soon as four years and at most ten years after they were “classified.”  Many of these workers face a lifetime of disability without any income from their employer’s workers’ compensation insurance.

Still not satisfied, the Business Council has threatened to renew its assault on benefits for injured workers – and implies that it has influenced the state’s Workers Compensation Board to participate in the campaign.  Lev Ginsburg, director of government affairs for the Business Council, was recently quoted as stating that despite the 2007 reforms “We have been calling for significant workers’ compensation reform almost daily for a number of years.”

In particular, the Business Council wants to reduce benefits for permanently disabled workers even further by starting the time limitations “from the date of injury,” instead of the date of permanency.  Moreover, it wants to slash awards for accidents that result in amputated limbs, artificial joints, broken bones and more, known in the system as “schedule loss” cases.  According to Ginsburg, the state Workers’ Compensation Board has been working on new guidelines to reduce schedule loss awards.  Needless to say, the Business Council thinks this would be “a very significant and meaningful first step” in cutting worker benefits.

According to Ginsburg, the state’s existing guidelines are based on “1983 science” and changes are needed “to stymie the runaway costs of schedule loss of use awards.”  Both of these claims are false.

The state’s current guidelines were issued in 2012, without objection from the Business Council.  The 2012 guidelines cover the calculation of awards for both permanent disability and schedule loss.  Ginsburg’s claim about “1983 science” is difficult to square with guidelines that were issued less than four years ago.

In addition, because workers’ compensation benefits depend largely on the worker’s salary, schedule loss awards have not increased for workers who earn less than $600 per week since 1992, nearly a quarter-century ago.  These low-wage and largely immigrant workers suffer about one-third of all workplace accidents.

Moreover, for workers who earn up to $1,000 per week, schedule loss awards today are lower than they would have been if benefits had simply kept pace with inflation for the past twenty-five years, instead of remaining stagnant from 1992 until 2007.  Nearly two-thirds of injured workers fall into this category.

If the Business Council gets its wish, low wage and immigrant workers, whose benefits were already slashed in 2007, would face a second round of benefit cuts.  Every one of these workers who suffers a permanent disability or schedule loss would receive less benefits in 2017 than they would have gotten in 1992.  Workers with higher wages, whose awards for temporary disability and schedule loss improved slightly in 2007 at the expense of drastic cuts in permanent disability benefits, would give back most of their limited gains.  In short, the Business Council once again seeks to enrich business at the expense of injured workers.

The Governor, the Legislature, and the Workers’ Compensation Board should reject the Business Council’s campaign, and should instead seek to preserve and improve benefits for injured workers.

Data about schedule loss awards can be found here.
Lev Ginsburg’s statements to WorkCompCentral can be found here.

WCA, NYCOSH Release State of the System 2016

On June 21, 2016 the WCA and the New York Committee for Occupational Safety and Health released Workers’ Compensation in New York State:  State of the System 2016.  This is the fourth in a series of white papers released by the two organizations in the past decade.

State of the System 2016 is based primarily on data obtained from the Workers’ Compensation Board in several areas, although there were many data points about which the Board declined to provide information.

 The conclusions and recommendations of the paper are:

  1. It appears that workers are generally able to file claims, although the Board’s inclusion of extraneous forms in its FOIL response precludes an accurate assessment of how many individual claims are being filed.  It is clear from the data, however, that workers who are not fluent in English face significant obstacles in claim filing.
    Recommendation:  The Board should review its compliance with the Governor’s Executive Order regarding language access.  Printed and electronic forms should be more readily accessible in multiple languages.  Outreach efforts to immigrant communities and worker centers should be significantly expanded to increase the visibility and accessibility of the workers’ compensation system to workers who are not fluent in English.
  2. The Board’s division of its file creation process into “assembly” and “indexing” sows confusion among injured workers and delays insurer response to claims.  It seems likely that the Board is simply not indexing many of the claims that are filed, notwithstanding its regulation to the contrary.  This defers the insurer’s obligation to accept or contest claims.  An additional issue is presented by the Board’s issuance of these complex notices in English, without regard to the injured worker’s language or literacy issues.
    Recommendation:  All claims should be indexed immediately upon receipt of a claim or employer’s report of injury and the filing of a medical report.  The language used on a Notice of Indexing should be simplified, and the information about rights and benefits under the law should be expanded.  Notices should be issued in the language spoken by the injured worker as indicated on his or her claim form.
  3. The Board’s use of Administrative and Proposed Decisions is instrumental in denying benefits to injured workers.  These documents do not provide adequate information to injured workers either about the benefits being awarded or their entitlement to further benefits.  They also suffer from the same deficiency as Notices of Assembly and Indexing, in that they use complex language and are issued only in English.  This has a significant impact on access to benefits by workers with language or literacy issues.  These issues are exacerbated by the Board’s recently adopted policy to issue no decision at all in certain cases and its apparent disregard of the statutory requirement that it schedule conciliation meetings prior to issuing Proposed Decisions.
    Recommendation:  The use of Administrative and Proposed Decisions should be discontinued.  Injured workers should be afforded a hearing before a WCL Judge in every case so that information about their rights and available benefits can be communicated to them in a meaningful fashion and in an appropriate language.
  4. The Medical Treatment Guidelines have resulted in a flood of variance requests, creating an enormous administrative burden for health care providers, employers, carriers, attorneys and the Board, while causing the widespread delay and denial of medical care.
    Recommendation:  The use of the Medical Treatment Guidelines should be restricted to the purpose outlined in the law, which is to “pre-approve” medical care.  The MTG should not be used to pre-determine or pre-deny the need for treatment, which is governed by existing statutory provisions.  This interpretation of the law would eliminate the extensive bureaucratic procedure created by the current regulations, and would enable workers to receive needed treatment while preserving the ability of employers and carriers to contest medical bills.
  5. Despite increases in the maximum weekly benefit rate and periodic one-time increases in the minimum benefit rate, wage replacement benefits remain inadequate.  Workers who are injured on the job suffer from significant uncompensated wage loss due to the inadequacy of workers’ compensation benefits, especially in cases of permanent partial disability under the caps.
    Recommendation:  The minimum benefit rate should be set at 25% of the maximum benefit rate.  This will reduce uncompensated wage loss for low wage workers.
  6. Schedule loss of use awards have not increased since 1992 for workers who earn less than $600 per week, and have not increased since 2009 for workers who earn less than $900 per week.  From July of 2015, the value of schedule loss awards will only improve for the 25% of workers who earn more than $1,200 per week.  Meanwhile, payments for time lost from work are deducted from these awards.  This includes wage payments that are returned to employers out of the injured worker’s award.
    Recommendation:  Schedule loss awards should be payable additional to wage loss benefits, as is currently the case under the Longshore and Harbor Workers Compensation Act and in many other states.
  7. The PPD caps have slashed payments to injured workers by 70% or more.  The impact of this was intended to be assessed by the issuance of an annual Safety Net Report to consider the impact of the PPD caps on return to work.  Regrettably, the Safety Net Report has not been publicly issued since 2008, the recommendations of the Return to Work Task Force have never been implemented, and the Board declined to provide any information on its policies or implementation of the statutory safety net provision.
    Recommendation:  The Safety Net Reports for the years 2009 through 2015 should be issued.  The recommendations of the Return To Work Task Force should be implemented.  The threshold for safety net eligibility should be reduced to 50% loss of wage earning capacity, and the Board should issue meaningful guidelines for safety net eligibility as suggested in the 2014 White Paper.
  8. The number of settlements under Workers’ Compensation Law § 32 is increasing for private carriers, especially as a percentage of PPD claims.  This creates savings for insurers as injured workers settle their claims out of economic necessity created by the PPD caps.  However, this trend does not apply equally to the State Insurance Fund and self-insured employers, who settle relatively few claims.  This is likely due to their exemption from liability to the Aggregate Trust Fund.
    Recommendation:  The Board should enforce the statutory requirement for employers and carriers to make mandatory settlement offers.  The Aggregate Trust Fund deposit requirement should be expanded to the State Insurance Fund and to self-insured employers.

WCA Opposes 9.3% WC Rate Hike; Business Council Supports It

On June 28, 2016, the New York State Department of Financial Services held a public hearing on the Compensation Insurance Rating Board’s request for a 9.3% hike in workers’ compensation costs.  The WCA, NYCOSH and others submitted testimony opposing the request, and WCA Chair Robert Grey appeared to testify against the insurer group’s request.

The bulk of CIRB’s filing was based on supposed increases in insurer costs related to permanent partial disability and schedule loss cases.  The WCA pointed out that the facts show that PPD costs have plummeted because of the PPD caps that were part of the 2007 reforms.  The WCA also showed that schedule loss awards have not increased for the vast majority of workers in five years.  For the past several years, only 25% of workers have seen increases in their schedule loss awards as a result of increases in the maximum benefit rate – and those increases have been small and incremental.

NYCIRB contends that indemnity claims are 40% of the claims in the system, and that 28% of indemnity claims involve schedule loss.  This means that schedule loss cases are about 11% of the cases in the system (.40 x .28 = 11.2).  Only 25% of those cases have seen increases in the past four years, which is 2.8% of the claims in the system.  Those increases have averaged about 2%.  As a result, cost increases in schedule loss cases are about one-half of one percent (2.8 x. 02).

Meanwhile, the Business Council of New York State also appeared at the hearing and testified in favor of increasing its own member’s insurance costs.  Ken Pokalski stated that “the system costs what it costs,” and that employers’ rates should be increased to account for those costs.  Pokalski also advocated for drastic reductions in awards for schedule loss and in payment for temporary disability from work, claiming that employers’ rates can always be scaled back later, after benefits are taken away from injured workers.

Real Business Groups Oppose Rate Hike

Last week, WCA posts observed that the Business Council of New York State was inexplicably supporting a 9.3% increase in workers’ compensation costs for the members it supposedly speaks for – New York State employers.  The WCA also noted that there is no credible data showing that claims by injured workers support the rate filing supported by the Business Council.  To the contrary, claim costs are down.  We can only conclude that the “employers” the Business Council speaks for are really insurance companies, and not Main Street businesses.

This week, two groups that represent real New York employers publicly objected to the very same rate filing the Business Council supports.  In a press release on its web site, the Retail Council called for “an industry-wide actuarial study before DFS considers any further rate increases,” citing specific concerns it has with lack of data provided by the State Insurance Fund.  The Retail Council’s press release can be found at:

Retailers bash bid for 10% workers’ comp rate hike

Meanwhile, the Business and Labor Coalition of New York (BALCONY) also opposed to rate filing.  In its press release, BALCONY said that it “oppose[s] the request filed by the New York Compensation Insurance Rating Board for a 9.3% increase … [because] there is no justification for such a steep increase.”  BALCONY also noted that “workers’ compensation insurance is a relatively small part of our business members’ costs,” but that there is no “reasonable or proven justification” to increase rates.  The BALCONY press release can be found at:

http://www.balconynewyork.com/2016/07/05/12242/

The WCA applauds the Retail Council and BALCONY for giving voice to the interest of New York employers over the multinational insurance industry.

WCA and NYCOSH Issue a New Report on Uncompensated Wage Loss

On February 1, 2016 the Workers’ Compensation Alliance and the New York Committee for Occupational Safety and Health released a report showing the stark consequences of on-the-job injury for workers.

The report outlines the consequences of the 2007 workers compensation “reforms” for injured workers.  Among its conclusions, the report finds that (1) the 2007 “reforms” offered no benefit to low-wage workers; (2) even workers who benefited from the 2007 reforms continue to suffer high rates of uncompensated wage loss; and (3) the workers’ compensation system now replaces less than 10% of the lost wages of permanently disabled workers.

The report further concludes that proposals made by the Business Council, some of which are included in the 2016 Executive Budget, would render the workers’ compensation virtually meaningless as a source of wage replacement benefits for injured workers.

The report can be found here.

WORKERS’ COMP COSTS REMAIN STABLE, CONSISTENT WITH IMPROVING ECONOMIC CONDITIONS

New York, NY – July 16, 2015 – The New York State Department of Financial Services (DFS) has approved a 5.9% increase in workers’ compensation premiums.  The DFS approval is consistent with improving economic conditions in New York State and stable workers’ compensation claim costs.

An employer’s workers’ compensation costs depend largely on payroll, although industry type and loss history also play a role.  Last month, the New York State Department of Labor’s Research and Statistics Division announced that the New York State Average Weekly Wage for 2014 was $1,266.44, a 4.3% increase over the 2013 figure of $1,212.98.  Today, the Department of Labor announced that New York’s private sector job count has reached an all-time high, while unemployment is at its lowest level in eight years.

“It is clear that the DFS approval of a small increase in workers’ compensation premiums is consistent with the improved economic conditions reflected in more jobs, increased wages, and less unemployment,” said Robert Grey, chair of the New York Workers’ Compensation Alliance.  “It also demonstrates that there has been no increase in workers’ compensation claim costs, which remain stable as previously reported by the WCA.”

A letter confirming the 5.9% increase can be found here:
http://go.nycirb.org/tr_rcb/rcb/rc2395.pdf

The Department of Labor reports can be found here:
http://labor.ny.gov/stats/pressreleases/pruistat.shtm

http://www.labor.ny.gov/stats/avg_wkly_wage.shtm

The WCA report on workers’ compensation costs can be found here:
http://www.nyworkerscompensationalliance.org/pdf/CostsWhitePaper.pdf

The Demolition of Workers’ Compensation

The WCA has issued the following press release regarding the ProPublica series on The Demolition of Workers’ Compensation:

WORKERS’ COMP COSTS DOWN ACCORDING TO NEW ANALYSIS BY PROPUBLICA / NPR

Despite Reduced Costs, Insurers and Business Interests
Seek to Slash Protection for Injured Workers

New York, NY – March 6, 2015 – Workers’ compensation costs are down nationally and in New York State, according to a dramatic new analysis from ProPublica and NPR.

The New York Workers’ Compensation Alliance, a coalition of injured workers and those committed to protecting the rights of injured workers, hailed the analysis, which reveals a system in which insurers and business interests are seeking to slash injured worker benefits despite reduced costs.

“For years, insurers have promoted a false narrative that workers’ comp costs are out of control and that they have to reduce benefits to maintain competitiveness,” said Robert Grey, Chair of NYWCA.  “This is simply not the case.  New York is not a high-cost state and costs are at a 25-year low nationally.  Nonetheless, insurers and business interests are attempting to destroy the safety net for injured workers.”

Meanwhile, a new report from OSHA reveals that the cost for workplace injures has been shifted from employers onto the backs of taxpayers and injured workers. According to the report, 50 percent of the costs for worker injuries come from the injured workers themselves, while 29 percent comes from federal, state and local governments, and only 21 percent is paid by workers’ compensation insurance.

“Workers gave up their right to sue employers for personal injury in exchange for medical coverage and speedy and adequate wage replacement benefits,” said Grey. “This basic ‘bargain’ has been broken, and the system has been twisted to create profits for insurance companies at the expense of injured workers.”

Workers’ compensation costs in New York State have declined dramatically in the past two decades and workers’ compensation is also a declining portion of overall employer costs.  Employers’ workers’ compensation premiums were cut nearly 25% in 2007 and 2008 as a result of 2007 legislation. After moderate increases from 2009-2011, there have been no further increases in premiums in two of the past three years. Meanwhile, since 2011, employers’ workers’ compensation assessments have dropped more than a third from 20.2% to 13.2%.

As employer costs have been reduced, however, benefits for lost wages have remained inadequate for both the maximum and minimum rates. Nevertheless, business and employer interests continue their efforts to further cut worker benefits, pursuing employer managed care and attempting to cut benefits for permanent injury.

 

To read full copies of the reports:
http://www.propublica.org/article/the-demolition-of-workers-compensation
http://www.dol.gov/osha/report/20150304-inequality.pdf

http://www.propublica.org/article/how-much-is-your-arm-worth-depends-where-you-work

These and other workers’ compensation issues have been covered in detail in a recent NYCWA white paper: http://www.nyworkerscompensationalliance.org/pdf/STATE%20OF%20THE%20SYSTEM%202014%20-%20Release.pdf

WCA Comments on Proposed Changes to Medical Fee Schedule

On July 28, 2014 the Board released a “discussion document” proposing significant changes in the workers’ compensation medical fee schedule, which has not been significantly updated in two decades. The Board’s document proposes a transition of the fee schedule to the “resource-based relative value scale” (“RBRVS”) used by Medicare.[1]

The Board’s proposal raises serious questions about access to quality care for injured workers.  Rather than creating incentives for specialists and high quality health care providers to enter the system, it is likely to drastically reduce the number and quality of specialists available to treat injured workers.

The proposed RBRVS fee schedule also fails to fully consider the bureaucratic burden on health care providers in the workers’ compensation system.  Physicians are now required to be fully familiar with hundreds of pages of Medical Treatment Guidelines (covering five separate body parts and chronic pain), over 100 pages of Medical Impairment Guidelines, the principles of functional loss evaluation, the variance procedure, the procedure to obtain authorization where a variance is not required and the treatment is not covered by the Medical Treatment Guidelines, principles of causal relationship, reporting, billing, testifying and more.

The inadequate medical fee schedule, multiplicity of forms, limitations of the Medical Treatment Guidelines, complexity of the Medical Impairment Guidelines, and the many other burdensome obligations of the workers’ compensation process have increasingly deterred providers from participating in the system.

The proposed revision of the medical fee schedule would only serve to exacerbate the existing set of disincentives for specialists and high-quality physicians to participate in the system.  Instead we recommend that reimbursement rates for specialists be increased, and the bureaucratic burden reduced in order to attract more quality physicians to provide health care to injured workers.

The full text of the WCA’s comments to the Workers’ Compensation Board regarding the proposed fee schedule can be found here.

The deadline for submission of comments to the Board is October 1, 2014.  Comments may be submitted by email to feeschedule@wcb.ny.gov.

[1] Subject Number 046-710, 7/28/14, available at http://www.wcb.ny.gov/content/main/SubjectNos/sn046_710.jsp; also http://www.wcb.ny.gov/content/main/hcpp/MedFeeSchedules/MedicalFeeScheduleDiscussionDocument.pdf