New York State Senate Labor Committee
Workers’ Compensation Board’s “Managed Adjudication Path” Program
February 24, 2010
Good Morning Chairman Onorato and committee members. I am Margaret Moree, Director of Federal Affairs for The Business Council of New York State. The Council is a business trade organization representing over 3,000 members with over one 1 million employees in all sectors across New York. Our members range from the smallest to the largest of New York’s employers and our organization’s public policy interest in workers’ compensation dates back to our founding in 1917 – almost as long as the statute has been in existence. Our members access workers’ compensation coverage through commercial carriers, through group self-insured trusts, through the State Insurance Fund and as self-insured entities.
Among my responsibilities at the Business Council, I am staff director of our workers’ compensation committee, and I currently serve as a business representative on several of Governor Paterson’s Administration workgroups advancing recommendations for implementation of the 2007 workers’ compensation reform legislation.
I appreciate the opportunity you have provided through this hearing to discuss the Workers’ Compensation Board’s “Managed Adjudication Path” program, or MAP, a process being implemented by the Board with the stated goal of reducing backlogs and more effectively using the hearing process for those cases which require a greater degree of attention to achieve resolution.
The Board has described MAP as an internal business process improvement; however, we and our members have concerns that MAP has implications that reach far beyond the Board’s internal workings.
Based on input from our members to date, I cannot today give you a final position regarding MAP. In large part that is because MAP is not widely known, there is little readily available information about MAP, and much of what is known has not been presented in a context that would allow employers to fully understand the Board’s objectives. The Board has not yet clearly articulated MAP to the employer community, nor has it made clear what if any changes employers may need to make to accommodate MAP.
Here is what The Business Council can testify to with certainty: Conciliation is a very important tool, and one that when used within the parameters set forth in the statute, provides a path to resolution that serves the interests of all parties in disputes regarding workers’ compensation claims. Our members supported the statutory changes which brought conciliation into the law in the 1990s and we supported the expansion of the claims eligible for conciliation review from those claims with an expected eight week benefit duration to claims with an up to fifty-two week benefit duration.
Conciliation is clearly a tool that is being used – and used effectively -- not just to manage workloads within the Board, but to resolve cases. According to the 2009 “Joint Report to the Governor from the Superintendent of Insurance and Chair, Workers’ Compensation Board, Summarizing and Benchmarking Workers’ Compensation Data and Examining Progress on Prior Recommendations for Improvements in Data Collection”, thirty percent of the established claims in 2006 – or 30,802 claims – were handled through the conciliation process. This is a significant increase from 2001 – when approximately 14% of established claims were handled through the conciliation process. The Board’s data in this report shows a significant increase from 2004 to 2005 in claims handled through conciliation – and that number then increased again in 2006. It would appear from the Board’s data that the statutory provisions for conciliation are having their desired effect, and that the Board’s internal processes are operating effectively within the statutory provisions.
While the Board’s data would suggest that the conciliation provisions are moving almost one-third of its cases to timely resolution, the data does not give you context for whether or not these cases are moving efficiently within the Board, and it is that “through put” within the Board where MAP is purportedly focused. As it is New York’s employers which pay for the entire cost of the Board’s operations, it is laudable that the Board is reviewing its internal processes to identify areas where process improvements can be made without compromising outcomes. Business Council members do this as a matter of routine – because they do not have the luxury of surviving in the competitive marketplace if they are not operating in both an efficient and an effective manner. And achieving efficiencies within the delivery of governmental agencies is also consistent with The Business Council’s broader public policy agenda.
The business focus on efficiency is never divorced from the concept of quality and effectiveness, because it is the end user, the customer, who is buying or using the product that will be the ultimate arbiter on whether or not to acquire the product. In this instance, there are two “customers” whose interests must be first and foremost if the Board intends MAP to be a process improvement on conciliation: the injured worker and the employer. It is here where the lack of clarity around MAP raises the most concerns among our members. It is not clear that either employers or their employees/claimants have been considered – let alone informed – about why these internal business improvement processes are needed and how they will ultimately protect the integrity of the process and ensure the customers’ interests have not been compromised.
Our members believe and understand the workers’ compensation process to be an adjudicatory process – that is the examining and settling of a set of facts to reach resolution through a judicial procedure. This is not an eligibility driven process akin to say unemployment benefits or public assistance - but rather one where the review of the set of facts can result in the long term award of medical and indemnity benefits. It is also a process where the employer’s ability to establish the facts has imposed limitations. In that same 2009 report cited earlier, it states “Conciliation is a WCB process established to resolve, in an expeditious and informal manner (e.g. through meetings or telephone conferences), issues involving non-controverted claims in which the expected duration of benefits is fifty-two weeks or less. Failure to reach an agreement through the conciliation process results in the case being scheduled for a hearing.” The very important part of this citation for our members is the meetings and telephone conferences – that is the interaction among the parties necessary to establish facts, rather than presuming a desk review or case file review is sufficient to determine whether a conciliation path makes sense for case resolution.
In what literature is available on MAP, it is not clear whether MAP is intended as a business improvement process to improve conciliation or whether it is intended to serve another purpose. Is MAP intended to apply to case reviews beyond that which the statute permits, or is it merely implementing new internal work processes to ensure conciliation cases with an expected 52 week benefit duration or less are considered appropriately for conciliation? And from what material is available on MAP, it is not clear to the parties in this adjudicatory process – which includes our 3,000 employers – that the business case has been made for the need for a conciliation process overhaul. That is not to say that the business case cannot be made – it is merely to underscore the dearth of information available to parties with a vested stake in knowing and applying the rules of engagement.
It is easy as we sit in Albany to believe that the universe revolves around the work we do every day – whether it’s legislating or working in an agency carrying out the laws and regulations for the workers’ compensation system. In truth, employers are focused each and every day on their business operations, not the Workers’ Compensation Board’s business operations. So when a change of this potential magnitude is proposed and implemented, it may often go unnoticed by most employers in the State until they have the unfortunate circumstance which brings them face to face with this “new reality”. Process improvement is all about communication – from the top of an organization to the bottom – and to the external customers. For process improvement to reach its intended goal, all need to have a vested stake in the outcome and all need to be clear on what is changing, why it’s changing, and how their unique role in the process is changing.
The lack of information and clarity around MAP, and the questions raised by our members on MAP, would indicate that even if MAP is well-intended, its rollout has been poorly executed and is not understood by the very stakeholders the process is hoping to benefit. Our members need better and real-time information on MAP, and need to understand how Board process improvement may impact internal employer operations relative to the handling of workers’ compensation cases. We have asked for – and the Board has agreed – to make key staff available to meet with the Business Council’s Worker’s Compensation Committee members and to other interested parties to allow for the opportunity to thoroughly explore the Board’s rationale for MAP, where and how it fits into the conciliation process, and whether or not this is something which changes the adjudicatory process as it currently operates.
In closing, The Business Council thanks the Senate Labor Committee for the opportunity to present and we look forward to having the opportunity to have key staff from the Workers’ Compensation Board meet with our members to explain MAP and the employers’ role in ensuring this business improvement process is warranted. We understand and appreciate our members’ concerns and the concerns of this legislative committee; and we remain optimistic that continued open discussion between the Board and our members will ensure a process which respects the integrity of the statute.