Dinallo: N.Y. Should Centralize Work Comp Data

New York State should centralize its workers’ compensation data in a comprehensive information bank that then could be used to analyze, benchmark and improve the system, Insurance Superintendent Eric Dinallo recommended this week. The secure information bank would correlate and translate detailed medical and other claim-related costs as well as measurements of quality of and access to care into a common language. This can be used to provide policymakers with the information necessary to make proper policy decisions.

This is one of several recommendations contained in a report Dinallo sent to Gov. Spitzer pursuant to the historic Workers’ Compensation Reform Act of March 2007. That Act fundamentally reformed the workers’ compensation system and has resulted in an estimated savings for New York businesses of $1 billion this fiscal year.

The report summarizes currently available workers’ compensation system data and benchmarks the system. It notes, for example, that the data indicate that New York has a competitive market for workers’ compensation coverage, and that, pre-Reform, overall claims were decreasing, but cost per claim was growing significantly.

“As Governor Spitzer said when he signed the Reform Act, there can be no accountability without data,” Dinallo said. “Implementing the recommendations contained in this Workers’ Compensation Reform Task Force report will improve and refine industry-wide data collection, research and analysis so that we may track costs, monitor the system and make appropriate policy judgments.”

Gov. Spitzer created the Workers’ Compensation Reform Task Force as part of the Reform Act, and requested a series of reports and recommendations. In addition to securing the $1 billion in cost reductions this fiscal year, the Task Force proposed New York’s first ever medical treatment guidelines and recommended measures to dramatically reduce the time for resolving disputed cases. This should significantly accelerate the delivery of benefits to injured workers. Other recommendations resulted in a revamped ratemaking process, including a new “loss costs” method of determining premiums that should increase ratemaking transparency and price competition in the New York market.

“Gov. Spitzer noted last March that workers’ compensation reform efforts had been hampered by a lack of basic data,” Dinallo explained. “The Governor asked for annual data reports beginning this March so that never again will a simple task like calculating the cost of increasing benefits be made difficult because data is unavailable or unusable.

“This report, delivered once again on deadline, addresses existing data limitations throughout the system and makes thoughtful recommendations for improvement, including the development of a research structure for public policy,” Dinallo said.

Task Force recommendations include creating an independent research division at the Workers’ Compensation Board (WCB) reporting directly to the WCB Chair. This division will use the data collected both to conduct ongoing research and for special projects. That research, the Task Force recommended, should be guided by the advice of a research advisory committee, appointed by the Governor and including representatives of the Legislature, state agencies, labor, business, academia and industry.

The research division should explore the potential of building a partnership with a university in New York, the report says.

The Workers’ Compensation Board and the Insurance Department would be able to better collect relevant workers’ compensation data from various sources if the report’s recommendations are implemented.

The report was prepared by the Insurance Department’s Workers’ Compensation Reform Task Force led by Executive Director Bruce Topman and Project Coordinator Elizabeth Miller. The Task Force met with representatives of the Legislature, organized labor, business and other state agencies about various aspects covered by the report.