Robert Beloten, chairman of the New York State Workers' Compensation Board (SWCB), issued a highly critical bulletin on the non-scheduled permanent partial disability (PPD-NSL) rating process Tuesday that blames carriers, claimants' attorneys and treating physicians for "bad faith" delays that slowed implementation of a key piece of the 2007 reforms signed into law by former Gov. Eliot Spitzer on March 13, 2007.
The bulletin notes that prior to 2007, PPD-NSL benefits were considered "lifetime" benefits. Approximately 8,700 injured workers were classified as having a PPD-NSL claim each year, the bulletin states, which accounted for approximately 40% of the lost wage benefits paid annually. The average time from date of injury to maximum medical improvement (MMI) was 4.8 years.
The Spitzer reforms of 2007 put caps on the PPD-NSL process and was expected to save about $1 billion per year - but this didn't happen.
While the SWCB took some time to introduce new guidelines for the determination of benefits (the 2012 NYS Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity, aka 2012 Guidelines) along with a new process effective January 2012, SWCB is expressing its disappointment with the lethargy the industry in adopting and utilizing the 2012 Guidelines and processes.
Beloten says private insurance carriers are the worst because they lose control over the funding of the PPD-NSL benefit:
"Data shows that despite these efforts, carriers have not achieved the level of PPD-NSL classifications that were expected. As of March 13, 2013, only 2,062 claims with accident dates from March 13, 2007 – March 12, 2008 have been classified, compared to 6,102 claims from 2002 at the same five year point. Private carriers are slowest – perhaps deterred by the requirement to deposit the present value of the PPD-NSL benefits into the Aggregate Trust Fund (ATF) if they cannot settle the claim within six months of classification. While increased Section 32 settlements prior to classification may account for some of the reduction in classifications, it is not sufficient to account for all of it. The average time from accident to classification has been increasing steadily and is now 6.4 years."
Taking aim at physicians, Beloten's bulletin says:
"The classification process has been plagued by non-compliance and bad faith delays. Many providers fail to provide the required medical documentation using the Form C-4.3, even when specifically directed and despite the significant fee payable to the provider. In some cases, parties have delayed classification by falsely claiming that they are in settlement discussions or by disputing that the claimant has reached MMI many years after the injury. These claims are based on alleged new injuries or the possibility of surgery, when none exists. These tactics result in prolonged temporary disability and forestall the classification process and imposition of caps, thereby driving up the cost of workers' compensation for all employers and undermining the legislative bargain on the 2007 Reform."
And with respect to attorneys introducing new injury claims or other tactics designed to prolong TTD status, Beloten says, "These tactics result in prolonged temporary disability and forestall the classification process and imposition of caps, thereby driving up the cost of workers' compensation for all employers and undermining the legislative bargain on the 2007 reform."
Beloten didn't criticize his own board, however, for taking 5 years to figure things out - Spitzer signed the reform law in 2007, and SWCB didn't issue its new guides and procedures until 2011, effective January 2012. That is a shame, because if Beloten wants any credibility at all with the participants in the New York system he must also accept part of the blame for the system failing to respond to legislative mandate.
In response to these delays, SWCB has issued a new program to speed up the process of impairment ratings, including the creation of "specialized parts in each district to handle the classification of PPD-NSL claims."
But some think that this process may violate another part of New York law that requires judges to handle cases from cradle to grave - I don't see it that way because the bulletin makes it clear that this is a voluntary program for the parties.
While SWCB chastises doctors on reporting, doctors say that the form, C 4.3, is unreasonably complex and difficult to complete.
This is a problem that is common in workers' compensation system in the bigger states - the complexity of the forms that are required to be used by participants increases errors, decreases compliance, and generally makes a mess out of things, not to mention that complex forms just take more time to complete.
But let's get to the heart of the matter - leadership. Beloten's bulletin points to a significant problem: delays in resolving disputed claims on PPD-NSL claims increased, rather than decreased, following the Spitzer reforms and this has created additional burden and expense on the system.
While it may be true that SWCB "has diligently enforced the duration caps since their enactment" the fact remains that the Board did not act diligently in the balance of its obligations under the act, and failure to accept part of the blame in a public manner is a failure in leadership.
New rules, new guides, new forms, new processes - all are great. But if SWCB can not accept responsibility for taking so long to implement these actions, how can it, after only one year, blame others for non-compliance?
If SWCB wants to be taken seriously, it must also look at itself, accept that it failed in its primary responsibility of timely issuing guidelines and procedures, THEN lay the foundation for others to follow the path towards improvement.
The Board should not blame others for a failure in the system to correct a deeply ingrained culture where the leadership itself didn't change.