CAMBRIDGE, MA – The early impact of the 2007 New York workers’ compensation reforms is identified by the Workers Compensation Research Institute (WCRI) in a new study, Early Impact of the 2007 Reforms in New York, designed to evaluate whether the regulatory changes met stated objectives.
The key regulatory changes increased maximum statutory benefits, limited the number of weeks of permanent partial disability (PPD) and developed a fee schedule for pharmaceuticals. This report is the fourth in a series monitoring the performance of the New York workers’ compensation system benefit delivery system.
“This report is a significant tool for assessing the performance of the New York workers’ compensation system following the implementation of major reforms,” said Ramona Tanabe, WCRI’s Deputy Director and Counsel. “It will help public policymakers, employers, insurers and other stakeholders determine whether the changes were successful in meeting their goals and identify any unintended consequences.”
The increase in the maximum weekly benefit resulted in the increase of the average temporary total disability benefit by 19 percent after the implementation of the second of three increases in the benefit rate.
As planned, these increases in maximum weekly benefits have brought New York closer to national rates and reduced the percentage of workers whose benefits were limited by the maximums. For example, the percentage of injured workers whose benefits were limited by the maximum benefit fell from 48 percent prior to the first increase to 29 percent after the second increase. WCRI estimates that the third increase in the maximum will reduce this percentage to 24 percent.
The study found a shift for PPD/lump sum cases at an average of 12 months experience – a 10 percentage point decrease in claims that received PPD payments only (no lump sum) and an 11 point increase in claims with a lump sum settlement only (no PPD payments).
WCRI observed that although the limitation on the weeks of PPD wage replacement benefits is expected to result in significant savings, it will likely be several years before the effect is reflected in the data.
The study also reported that the implementation and subsequent change of the pharmacy fee schedule had the effect of decreasing the average price per pill by 10 to 20 percent.
The report is available for purchase at WCRI’s website here: WCRI Early Impact of the 2007 Reforms in New York