Workers Compensation Reform and the 2017 NYS Budget

A Statewide Workers’ Compensation initiative led by the NYS Business Council and industry experts is asking Legislators for their assistance this budget season. They’re hoping to influence the budget process with regard to reforming New York’s outdated and expensive worker compensation system. A number of reforms, if implemented, will reduce system costs while insuring that injured workers, especially those who are seriously injured, continue to receive exceptional medical care and appropriate financial compensation.

Here are important facts the group is sharing with legislative leaders:

Scheduled Loss of Use Awards

Many workplace injuries result in little or no lost time from work. Injuries to extremities for example, which are subject to Scheduled Loss of Use (SLU) awards, base benefits on a multiplier of statutorily designated weeks, type of injury and declared severity, rather than lost work time. This approach has led to the awarding of enormous awards for injuries that required no lost-time from work. The cost of these awards has ballooned since the 2007 reforms. In 2006, $509 million in SLU benefits were paid system-wide in New York State; by 2015, the cost of SLU awards had grown to just over $1 billion.”

Classification of Maximum Medical Improvement (MMI)

A major deficiency of the 2007 reform legislation was the lack of criteria for commencing duration caps on permanent partial disability (PPD) benefits. As a way to pay for significant increases in injured worker weekly benefits, the legislation “capped” PPD payouts at 10 years. Unfortunately, the start date of the 10-year period can vary considerably at considerable cost. To address this shortcoming, which has led to an excess payment of total temporary disability (TTD) benefits, the state should commence the durational cap at the date of injury, which would significantly decrease the cost of claims. This was the intent of the 2007 legislation, but the lack of effective implementation has resulted in significantly increased TTD costs.

KBM Management strongly supports the implementation of reforms that were approved in 2007. Our financial and claim management experience gained working on behalf of the self-insured community over the past 30 years leads us to believe that the initiatives outlined above can help the Workers’ Compensation system in New York State achieve the goal of protecting injured workers efficiently and with confidence.