In an effort to curtail delays in initial payments made to injured employees, the New York State Workers’ Compensation Board launched the Payor Compliance initiative. The stated goals of Payor Compliance are to increase efficiency, reduce costs, and improve the overall claims administration process. This project was launched in response to a comprehensive Business Process Re-engineering (BPR) review completed in 2014. As a result of the findings from the BPR review, and in accordance with the best industry practices, the Board announced the implementation of procedures for the periodic review and analysis of payor compliance with claims handling statutory and regulatory requirements.
The full implementation of this Payor Compliance Project was completed by the fourth quarter of 2015. As a result, all “Payors,” which includes carriers, self-insured employers, the State Insurance Fund and third-party administrators, now receive a quarterly report which measures and ranks their performance and provides performance goals in 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.
Expectations and performance goals will be based upon the requirements set out in the Workers’ Compensation Law and corresponding regulations. For a more detailed analysis of how payors are scored, click here.
Under this initiative, in all accepted claims, carriers, self-insured employers and third-party administrators are required to make prompt payments in a manner similar to the injured worker’s wages which has been interpreted to mean within a 14-day period, with a 4-day grace period.
The Payors are obligated to report this initial payment to the Chair of the Board within 18 days of the disability or within 10 days when the employer gains knowledge of the disability, whichever period is greater. This is also known as the “18 and 10 Rule”. This initial payment is reported by filing a FROI, or a First Report of Injury.
The content, timing and format of this FROI 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”).
As such, all initial payments are due within 18 days disability or within 10 days of notice to the employer, which ever period is greater.
In instances where the right to compensation is controverted and the claim is denied, 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 the Notice of Controversy within 25 days of the mailing of the Notice of Indexing by the Board, payors are required to comply with the 18 and 10 Rule timing requirements of Section 25(2)(a). Failure to comply with the timing requirements and late filings of notices of controversy currently carry a $300 fine.
In instances where liability is uncertain and additional time is necessary to ascertain facts and investigate the claim, rather than automatically controvert the claim, under Section 21-a of the Workers’ Compensation Law, payors can file a SROI-IP, which indicates “without liability” in the “Agreement to Compensate” field, which 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. Doing so will provide benefits to injured claimants, while preserving the right of an employer or carrier to later controvert a claim based on the results of its investigation.