N.Y. Aims to Cut Costs, Time of Workers Comp Dispute Resolution

New York State Insurance Superintendent Eric Dinallo has issued a plan to reform the resolution of disputed workers’ compensation claims. According to officials, the plan “substantially speeds” the resolution of disputed claims from over 6-months to 90-days.

Dinallo outlined the reforms in a June 1 letter to Gov. Eliot Spitzer along with a set of regulations.

Faster dispute resolution faster is one part of the recent 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.

On March 13, Governor Spitzer announced legislation to reduce the state’s high workers’ compensation costs for business, while increasing the weekly payments to injured workers. By 2010 maximum benefits will rise to nearly $700 per week from only $400 today. The governor asked 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.

“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,” Spitzer said.

Currently, it takes more than 200 days to adjudicate claims, according to officials, during which time the injured worker may be receiving no cash payments or medical benefits.

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, according to the state. 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.

According to Dinallo, the newly proposed process will 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 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.

One change 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 further accelerate claim resolution through earlier factual disclosure and assist injured workers in filing claims with all necessary information.