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Workers' Compensation Board

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New York State
Workers' Compensation Board
OFFICE OF THE CHAIR
328 State Street  Schenectady, New York 12305
Governor Andrew M. Cuomo


Subject No. 046-760

Payor Compliance

Date: April 17, 2015

To:   All Employers; Employees; Insurance Carriers providing benefits under the Workers’ Compensation Law; Attorneys and Licensed Representatives appearing before the Board

I.   Overview

The Payor Compliance project is one of the Workers’ Compensation Board’s (Board) Business Process Re-engineering (BPR) initiatives. It is designed to increase system efficiency and reduce costs for all system participants. The goal of the Payor Compliance Project is to educate payors, monitor performance, and provide periodic reports to encourage and ensure that established goals are met. The purpose of this subject number is to educate all system payors, their representatives, and other system participants about the project.

In recent years, the Board has renewed its focus on improving the claims administration process for the benefit of all stakeholders. As part of that effort, the Board identified the claims administration process to be reviewed during the comprehensive BPR. The BPR was completed in 2014, and, as a result of the findings and an examination of best industry practices, the Board will implement procedures for the periodic review and analysis of payor compliance with claims handling statutory and regulatory requirements.

II.   Program Description

The first phase of the Payor Compliance Project, as described herein, will be fully implemented by the fourth quarter of 2015. Please see below for a general description of Phase 1, and please visit the Workers’ Compensation Board’s website, www.wcb.ny.gov, to obtain detailed educational materials, including webinars and other training.

  1. Data to Be Measured. All payors (including carriers, third party administrators [TPAs], self-insureds, self-insured trusts/groups and governmental subdivisions) will receive a quarterly report of their performance in each of the following areas:
    • Timeliness of the First Report of Injury Filing;
    • Timeliness and Reporting of Initial Payment of Compensation;
    • Timeliness of Notice of Controversy Filing; and
    • Percentage of Claims Controverted.

    The quarterly report will include the payor’s score, the state-wide average score, and the performance goal for each particular measure. Additionally, the report will include a link to a website listing the individual late filings that influenced the score.
  2. Performance Goals and Basis for Measurement. Expectations and performance goals will be based upon the requirements set out in the Workers’ Compensation Law and corresponding regulations. The following is a general description of the measurement goals and their basis in statute and regulation.
    1. First Report of Injury (FROI). Section 110 of the Workers’ Compensation Law requires all employers or their designated representatives to file a mandatory first report of injury with the Board. The content, timing and format of this report are set forth in 12 NYCRR § 300.22, which states that the carrier, Special Fund, self-insured employer or TPA shall electronically file a FROI with the Board (a) on or before the 18th day after the disability event, (b) within 10 days after the employer has knowledge of the disability event, or (c) 10 days from the initial date of disability, whichever period is greater (“18 and 10 Rule”).

      The performance score for each payor will be determined by dividing the total number of timely FROIs filed by a payor for claims with lost time by the total number of FROIs received from the payor.
    2. Initial Payment of Compensation. When the right to compensation is not controverted, Section 25(1) of the Workers’ Compensation Law requires payors to promptly remit payments to claimants, in a like manner to wages, and report to the Chair of the Board within 18 days of the disability or within 10 days after the employer gains knowledge of the disability, whichever period is greater.

      The performance score for each payor will be determined by dividing the total number of timely initial payments in non-controverted cases by the payor by the total number of non-controverted cases with lost time. For Timeliness of Initial Payment the score is actually on the timeliness of the filing of the form showing the first payment.
    3. Timely Filing of Controversy. When the right to compensation is controverted, Section 25(2)(a) of the Workers’ Compensation Law requires payors to electronically file a Notice of Controversy (FROI-04/SROI-04) with the Board within a time period consistent with the 18 and 10 Rule.

      While Section 25(2)(b) of the Workers’ Compensation Law permits payors to file a Notice of Controversy within 25 days of the mailing of a Notice of Indexing by the Board, payors must nevertheless comply with the timing requirements of Section 25(2)(a). Failure to do so could lead to the imposition of late payment penalties, and a $300 late controversy penalty. It bears mention that Section 21-a of the Workers’ Compensation Law allows payors to pay compensation and provide medical benefits without prejudice to its right to controvert and without admitting liability for the claim for one year from the inception of payments. (See Subject Number 046-696).

      The performance score for each payor will be determined by dividing the total number of timely Notices of Controversy by the total number of Controverted Cases.
    4. Rates of Controversy. Payors will also be scored on the frequency with which claims are controverted. This score is included solely as a measure of relative system performance and as a possible indicator of areas that may need additional examination. In the near future, success rates in controversy will be included.
  3. Enforcement. Payors will be provided with a significant period of time to adapt to the performance goals that will be expected. Upon the passage of a sufficient amount of adjustment time, the Board will begin to notify payors of systemic violations of statutory and regulatory filing, paying, reporting, and controverting requirements. (See section D, below). It is anticipated that any resulting penalties will be handled through an administrative process to be developed. The Board will establish and publish the administrative process for penalties through a Subject Number in the future.
  4. Timetable. The Payor Compliance Program was developed through careful consideration and stakeholder engagement. Specifically, in November of 2014, a select focus group from the payor community was briefed on the program to solicit input and ensure that concerns from the community are addressed. The Board is committed to continuing to work with the payor community, including those represented on the focus group.

    The Board will issue monthly sample reports to all payors to evaluate performance for the second and third quarters of 2015. The purpose of these sample reports is to enable payors to become familiar with report contents and gauge their performance prior to full implementation. There will be no penalties issued under this program for poor performance during the trial period (i.e., the second and third quarters of 2015).

    The program will be considered fully implemented by the beginning of the fourth quarter of 2015. This means that payors will be evaluated on the four measures discussed above, and will be subject to administrative consequences for poor performance. While monthly trial reports will no longer be provided, it is anticipated that payors will be able to view their performance on an ongoing basis through a web portal provided by the Board.

    Payors can expect to receive their initial first quarterly report in January of 2016; this report will detail payor performance for the fourth quarter of 2015. The Board will implement a procedure to facilitate review and feedback on scoring and individual transactions.

Questions regarding this release may be addressed to the Bureau of Compliance, Monitoring Unit, 328 State Street, Schenectady, New York, 12305; email to Monitoring@wcb.ny.gov.

 

Robert E. Beloten
Chair

 

¹ If a $300 § 25(2)(a) penalty is assessed in an individual claim via the hearing process, it will not be duplicated in an administrative process.