New York State
Insurance Department


ISSUED 6/4/2007

FOR IMMEDIATE RELEASE

System Developed for Quick Resolution of Workers’ Compensation Disputes Delivers on First Promise to Reduce Costs

        New York State Insurance Superintendent Eric Dinallo today issued a plan to reform the resolution of disputed workers’ compensation claims. The plan substantially speeds the resolution of disputed claims from over 6-months to 90-days and was submitted in a letter sent on June 1, the deadline set by the Governor. The Superintendent outlined the reforms and their benefits in the letter and submitted an accompanying set of regulations. Resolving disputes faster is one part of the historic agreement between business, labor and government to reduce system costs to employers while increasing benefits to injured workers and getting employees back to work faster.

        "We are delivering on our promise to reform workers’ compensation in ways that both reduce costs to employers and increase benefits. This reform is an essential part of reviving the State’s economy and encouraging businesses to create more jobs here," Governor Eliot Spitzer said.

        "These reforms will significantly increase the efficiency and fairness of the system and accelerate the time it takes to get benefits to injured workers. Workers will be able to return to work earlier, system costs will fall and premiums will become more affordable for business owners. This is truly a win-win for employees and employers," Insurance Superintendent Dinallo said. "I would like to thank my staff and our advisors for their excellent and speedy work. We trust that we will be able to continue to find ways to improve the workers’ comp system thanks to the highly collegial and productive dialogue and process that we have with our advisors."

        On March 13, Governor Spitzer announced legislation to reduce the State’s high workers’ compensation costs for business, while increasing the State’s weekly payments to injured workers. By 2010 maximum benefits will rise to nearly $700 per week from only $400 today. The Governor asked Superintendent Dinallo to lead several reform efforts that further the legislative goals. The first task was reforming the adjudication process with a goal of reducing the time it takes to resolve disputed claims to 90 days.

        Currently, it takes more than 200 days. During this period, the injured worker may be receiving no cash payments or medical benefits. Delays in cash payments can cause serious financial hardship. Delays in receiving medical benefits and treatment can affect workers’ long-term medical prognosis and the ability to return to work.

        Under the current system, it is often not until the pre-hearing conference – an average of 75 days from the start of the claim – that the parties have sufficient information to evaluate their claims and defenses. It takes almost three more hearings for a typical claimant to establish a disputed claim and start the flow of benefits. In the 20 percent of cases that take more than three hearings, the average number of hearings is five. It can take up to 90 days to schedule each additional hearing.

        The newly proposed process will significantly accelerate resolution of disputed cases to within 90 days or less of the dispute. This will cut the time by more than half for the resolution of disputed claims.

        The reformed process was developed by the Workers’ Compensation Task Force led by Executive Director Bruce Topman after consultation with advisors designated by the Governor drawn from business labor, the legislature and executive departments. It sets specific time benchmarks for each stage of the proceedings, accelerates the time when evidence must be submitted and testimony taken, and requires professional representatives and medical providers to meet their responsibilities in a timely fashion, with consequences for not doing so. A major improvement will require employers, claimants and doctors to submit complete information up front. Early information substantially increases the opportunities for settling cases at an accelerated mediation session and at the pre-hearing conference. It also makes the trial-ready claim quicker and the initial evidentiary hearing follows within minutes of the pre-hearing conference. The proposed regulations accelerate claim resolution through earlier factual disclosure and assist injured workers in filing claims with all necessary information.

        Link here to the June 1 letter and the regulations.


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