Reform of the New York workers' compensation system shouldinclude an increase in payments to injured workers and changes tomake the process of securing benefits less adversarial, accordingto an agent group study.

The findings by the Professional Insurance Agents of New YorkState Inc. in Glenmont, N.Y. were unveiled today as proposals forlegislative reform are in legislative limbo.

Republican Gov. George Pataki had included a revision of thecomp system among his January budget proposals, but they wereremoved in the course of negotiations with the Democrat-controlledAssembly and Republican-dominated Senate.

“New York should look at a number of areas to preserve workers'comp as a true 'no-fault' system providing workers' sole remedy foremployment-related injury or illness. We should strive to preserveand enhance worker benefits, prevent work-related disability andreduce inefficiency and fraud,” said PIANY's president, J. Carlos“Shawn” Via?a.

The year-long study was overseen by PIANY's president-elect,David Dickson, who developed its recommendations in discussionswith parties from diverse groups affected by workers'compensation.

“We decided to look at the system objectively, with a freshperspective. As agents, we know how insurance policies are supposedto work,” Mr. Dickson explained. “Compared to other policiesdelivering similar benefits–such as auto insurance no-faultpayments, life, health and disability insurance–New York workers'compensation policies function very inefficiently.”

The PIANY study recommends that the state study several areas tosave and contain costs, starting with workplace safety.

PIANY noted that two safety-oriented programs were enacted inthe state's comprehensive 1996 workers' comp reform package, butwere never implemented.

According to PIANY, both programs could have saved employersmoney on their premiums for adopting safety programs and investingin safety equipment.

Currently, New York's only safety plan provisions function as apunishment for poor experience, not an incentive, according toPIANY. The best win-win imaginable would be measured in reducedoccupational injury and illness, the group said.

PIANY also called for the state to tone down the confrontationalnature of its system. The study found that compared to otherjurisdictions, New York's workers' comp system is extremelyadversarial.

PIANY reported that the New York comp adjudication structurepits insurers against claimants, which the group said is notappropriate for a no-fault system.

According to PIANY, too many claims are controverted and theprocess dragged out, leaving workers feeling betrayed and employersmarginalized, leading to less-than-optimum outcomes.

The PIANY report found an extraordinary level of mistrustprevails among all parties associated with workers' comp.

PIANY urged the state to look at cases brought under Sections240 and 241 of the state's Labor Law in the context of the “soleremedy” principle of the workers' comp system. Injuries covered bySections 240 and 241 of the Labor Law can lead to suits in whichemployers cannot even assert reasonable defenses, according toPIANY.

In the association's view, these sections of law originally weredesigned to protect workers from neglect of safety procedures incertain workplace conditions. Thus, it would make sense to considerchanges to their provisions in conjunction with potentialincentives contributing to a greater emphasis on safety, the groupsaid.

PIANY's study also pointed to what it said is a lack ofoversight and transparency in the collection of data and the ratefiling process, as well as outright fraud.

Significant levels of fraud occur among certain members of allgroups associated with workers' comp, PIANY reported.

PIANY said the system could benefit from more advancedtechnology. “One third-party administrator that PIANY spoke withsays it finds errors in approximately 60 percent of workers'compensation billings,” Mr. Dickson noted.

In his view, safeguards should be built into electronic billingsystem software so that charges for coded procedures must match thereimbursements provided for in the workers' comp medical feeschedule.

He also said patterns of errors or questionable treatmentprotocols can be tracked more efficiently using an electronicsystem. PIANY recommended that medical providers should be requiredto move quickly toward electronic billing for workers' compclaims.

A number of bills are in the legislature now–including Gov.Pataki's failed effort–but none of those from individuallegislators are comprehensive in nature or seem to have anymomentum, according to Ellen Keihl, PIANY's assistant executivedirector for government and industry affairs.

The PIANY, she noted, has not been involved in drafting anymajor reform legislation at this point because “we're trying tostay objective,” she said.