Workers' Comp Reforms

Impact of NY Reforms Looks Promising

Sweeping changes to New York's workers' compensation system are creating gains for payers on a variety of levels.
By: | September 28, 2014 • 2 min read

Reforms seem to be impacting New York’s workers’ comp system, according to a new report. In its seventh annual assessment since reforms were adopted, the Workers Compensation Research Institute notes recent developments.

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Caps on permanent partial disability benefits, the adoption of medical treatment guidelines and a pharmacy fee schedule, and the creation of networks for diagnostic services and thresholds for pre-authorization may be responsible for recent changes cited in the report. However, more data is needed.

“It will be several more years before the full impact of the reforms will be realized,” according to WCRI. “This is especially true regarding the impact of the duration limits on PPD benefits.”

Among the reforms was a provision that limited the number of weeks of non-scheduled PPD benefits to a maximum of 10 years. Previously, lifetime benefits were allowed.

“We did observe some change in PPD/lump-sum claims in both frequency and average payments for cases after 2007, although this may or may not be associated with the PPD caps or other reform provisions,” the report said.

The report noted there was a decrease in the percentage of cases that received PPD payments only, and a “nearly corresponding increase” in the percentage of cases that had only lump-sum payments.

That change may also be due to a new requirement for carriers to pay into a special fund. For all non-scheduled PPD accepted claims on or after July 1, 2007 — regardless of the date of injury or disability — private insurers must make a lump-sum payment of the present value of any PPD benefits into the Aggregate Trust Fund, which then disperses payments to workers.

The number of visits to chiropractors per indemnity claim has “decreased notably” since the reforms, possibly due to the imposition of medical treatment guidelines. The average number of visits dropped from 32.1 per claim in 2010/11 to 24.3 in 2011/12.

For nonhospital providers, however, the number of visits per claim for physical medicine services decreased, but the number of services per visit increased. With 16 months of experience, the authors say more years of data are needed to determine the cause.

The average price per pill dropped by 10 to 20 percent, according to the report. The adoption of a pharmacy fee schedule and authorized use of pharmacy networks and/or pharmacy benefit managers is likely the cause of that change.

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A provision that increased the dollar threshold for prior authorization of physician ordered diagnostic medical tests — from $500 to $1,000 — may be responsible for increasing the number of visits for major radiology services by nonhospital providers. The percentage of indemnity claims with these services also grew between 2007/08 and 2011/12 from 45 percent to 52 percent. However, the authors noted that such increases had begun before the reforms were implemented.

Meanwhile, changes included in the reform legislation are still being enacted. Guidelines for the treatment of carpal tunnel syndrome were finalized just last year. Treatment guidelines for non-acute pain were proposed in April of 2013 but have not yet become final.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]