Early Impact of the 2007 Reforms in New York

By Ramona P. Tanabe, Carol A. Telles

December 1, 2011 Related Topics: Indemnity Benefits, Medical Costs

The early impact of the 2007 New York workers’ compensation reforms is identified by the Workers Compensation Research Institute (WCRI) in a new study designed to evaluate whether the regulatory changes met stated objectives.   

The new WCRI study, Early Impact of the 2007 Reforms in New York, focuses on trends of performance metrics for the benefit delivery system in New York. Using these metrics, policymakers, and stakeholders will be able to track current and future progress on a myriad of issues, including but not limited to: 

  • What was the effect of the increase of the maximum statutory benefit?
  • Has the speed of first payment to workers improved?
  • Is the duration of temporary disability changing?
  • Have income benefit payments changed? Which types?
  • Has the average claim cost changed? If so, what are the main drivers?
  • Have the costs and timing of settlements changed?
  • Have medical costs risen? For which types of providers? For what types of services?
  • Has the nature of medical care for injured workers changed? If so, by which types of providers and for what types of care?
  • Have litigation and litigation-related costs risen or fallen?
  • Are medical cost containment services being used more often, and how has their cost changed?

This study does not include metrics related to the performance of the insurance mechanism. Nor does it yet include metrics of worker outcomes that the Workers Compensation Research Institute (WCRI) often provides for other state systems.

Sample of Major Findings:  

INCREASE IN STATUTORY BENEFIT MAXIMUM: The first two increases of the maximum weekly benefit reduced the share of workers affected by the maximum from 48 percent to 29 percent.  We estimate that after the third increase in the maximum, the percentage would fall further to approximately 24 percent.

PHARMACY FEE SCHEDULE: The implementation and subsequent change of the pharmaceutical fee schedule had the effect of decreasing the average price per pill 10–20 percent, depending on the drug and dosage.

DIAGNOSTIC TESTING: From 2007/2008 to 2008/2009, we observed a 6 percent increase in the number of visits for minor radiology services by nonhospital providers.

"ROCKET DOCKET": Defense attorneys were involved in over 50 percent more indemnity claims in 2008/2009 than in 2003/2004.

Early Impact of 2007 Reforms in New York. Carol A. Telles and Ramona P. Tanabe. December 2011.  WC-11-38.

Copyright: WCRI

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