New York's Workers Comp reform
It looks like NY Gov. Eliot Spitzer (D) has done in two months what his predecessor couldn't do in two terms - reform the New York workers comp system. If early reports bear out, this will be a huge win for injured workers, employers, insurers, and managed care firms.
That could be a rather significant "if"... but the inclusion of labor, business, and members of the opposition party in the reform process make it highly likely the package will pass.
Early guesstimates are the reform measures will result in a reduction of 10% to 15% in employers' workers comp costs. Here are the highlights of the refomr package agreed to by Gov. Spitzer.
A fee schedule for drugs, medical devices, and lab tests.
A doubling of the maximum weekly indemnity benefit (which have not increased since 1997)
Strengthening of the state's anti-fraud department and enforcement of anti-fraud measures.
A cap on the partial disability time period.
Eliminate the Second Injury Fund
Eliminate the state's rate-setting agency, the Compensation Insurance Rating Board, which has set employers' premium levels. This may indicate a move towards an open market, where insurers set prices.
Reports also indicate medical guidelines may be adopted along with streamlined claims handling and hearing procedures. These last measures could well be the best news to come out of Albany in many a year; the hearing process is unbelievably complex, time-consuming, frustrating, and ineffective. And those are its good points.
Having just completed audits for two clients with significant books of business in NY, I can attest to the dire circumstances facing the state's employers. While we will have to wait and see, on the surface this looks like very good news indeed.
