New York Labor Codes 126 147

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§ Pilot program for workers' compensation medical and health care cost containment



1. Legislative intent. Rising costs, quality of

care and timeliness of service associated with medical treatment of occupational diseases and accidental injury arising out of and in the course of employment are a concern to employees and employers in New York state. We believe that employers should have an option to elect to permit employees to participate in managed care at no cost to participating employees. By utilizing managed care and continuing workplace injury prevention efforts, employers and employees may benefit from safer working conditions, better medical treatment, a swifter return to work and workers` compensation cost containment. An important aspect of this pilot program is to reduce and stabilize premium rates through the use of managed care and by passing the savings to employers participating in the pilot program. Participation in the managed care program for workers` compensation shall in no way diminish or limit the indemnity benefit to which an injured worker would otherwise be entitled, nor shall any employee be penalized, discriminated or retaliated against for exercising his or her rights pursuant to this chapter. Nothing in this section shall modify statutory rights granted to public employees under section 207-a and 207-c of the general municipal law. We also believe, however, that the use of managed care must be carefully studied before it is made a permanent part of the workers` compensation system. Accordingly, the managed care pilot program herein authorized shall be in full force and effect only until December 31, 1997, unless extended through legislation.


2. Notwithstanding any other provision of this chapter, a pilot program administered by the chair, with advice and recommendation from a labor-management committee, shall be established for the purpose of determining whether medical, and other health care costs, incurred in the treatment of an accidental injury arising out of and in the course of employment and occupational disease, can be reduced by use of managed care.


(a) The labor-management committee shall consist of the chair and six members to be appointed by the governor as follows:

(i) a representative of organized labor in the private sector appointed upon recommendation of the New York State American Federation of Labor-Congress of Industrial Organizations;

(ii) a representative of organized labor in the public sector appointed upon recommendation of the New York State American Federation of Labor-Congress of Industrial Organizations;

(iii) a representative of private sector employees appointed upon recommendation of the New York State American Federation of Labor-Congress of Industrial Organizations;

(iv) a representative of the business community appointed upon recommendation of the Business Council of New York State, Incorporated;

(v) a representative of small business employers appointed upon recommendation of the National Federation of Independent Business; and

(vi) a representative of public employers in New York state. The chair shall serve as chair of the labor-management committee. The commissioner of health and the superintendent of insurance shall serve as ex-officio members of the labor-management committee. The labor-management committee shall serve at the pleasure of the governor and shall receive no compensation except for reasonable and necessary expenses incurred in the course of performing official duties. Such expenses shall be paid from the fees charged for certification of managed care organizations and for authorization of employers to participate in the managed care pilot program. (b) Employer certification. The chair, upon recommendation of the labor-management committee, shall implement the pilot program by the authorization of participating employers or groups of employers to contract with providers of medical and other health care services required pursuant to this chapter for all necessary treatment and care of accidental injury arising out of and in the course of employment and occupational disease. All employees of an employer which is participating in the managed care pilot program pursuant to this chapter shall participate in the managed care pilot program as herein provided. The total number of employees of employers participating in the managed care pilot program shall not exceed fifty percent of the state labor force. The date for determining the state labor force for the purpose of applying each of such percentages shall be October 1, 1995. The labor-management committee, in consultation with the New York State School of Industrial and Labor Relations at Cornell University, shall commence a study of the efficacy of the pilot program, and shall make a report of their findings, including but not limited to: (a) whether the pilot program has accomplished the legislative intent; (b) the existence of a waiting list; (c) whether the pilot program has achieved geographic balance; (d) whether there is sufficient employer diversity; (e) whether any competitive advantage inures to employers participating in the pilot program; (f) comparisons to other states` managed care systems; (g) effectiveness of the opt-out period; and (h) a comparison between medical modalities. On or before the twenty-fourth month after the pilot program takes effect, such report shall be submitted to the governor and the legislature. The labor-management committee, after consideration of the report, may thereafter vote by a two-thirds vote of the committee to limit participation in the pilot program to fifteen percent of the state labor force. To the extent possible the labor-management committee shall choose employers, seeking to participate in the pilot program, from various geographic regions of the state. Upon recommendation of the labor-management committee, the chair shall approve applications by employers which are located in areas where there is not more than one choice of various models of providers of certified managed care.Employers shall in no other case be permitted to offer less than two choices of providers. Employers may offer more than two choices of provider and may include among the additional providers a managed care organization in which the employer has a finan- cial interest or an employer-owned medical bureau provided that all such financial interests must be disclosed to all employees of the participating employer. No insurance carrier which provides workers` compensation coverage to the employer shall have a financial interest in a managed care organization or provider of services pursuant to this section which provides medical treatment to the employees of such employer. The chair, upon recommendation of the labor-management committee, shall determine the criteria to be utilized in determining whether an adequate number and variety of managed care organizations are available in a given geographic area. The chair, upon recommendation of the labor-management committee, shall ensure that a representative sample of the state workforce participates in the pilot program so as to ensure an accurate study of the pilot program. The chair upon recommendation of the labor-management committee shall promulgate rules and regulations as necessary for implementation of the pilot program. (c) Selection of participating employers. Participants shall be chosen to broadly represent the following categories: (i) employers who have collectively bargained or negotiated an agreement with their organized employees to participate in this pilot program; (ii) employers comprising a safety group as that term is defined pursuant to rules and regulations of the state insurance fund; (iii) multi-employer associations which self-insure for workers` compensation and/or provide general health insurance coverage for participants; (iv) multi-employer associations of employers of fifty or fewer employees; (v) employers who are self-insured and who provide general health insurance coverage; (vi) any employer or employer group which does not qualify in any of the above categories. To the extent possible, the chair, upon recommendation of the labor- management committee, shall choose participants representing comparable industries within or among the categories listed above. The chair, upon recommendation of the labor-management committee, shall also, to the extent possible, choose participants from various and diverse geographic regions through the state. The chair, upon recommendation of the labor-management committee, shall choose only those participants who have met their statutory duty to collectively negotiate regarding participation in this pilot program. The chair shall have forty-five days from the date of receipt of the application to rule on the application. The labor-management committee shall have twenty days from the date of receipt of the application to recommend to the chair approval or rejection of an application. 3. Employer applications to participate. Each employer application to participate in the pilot program shall be accompanied by a proposed managed care program detailing its significant features, methods and procedures including but not limited to a statement of the number of workers the program will cover and the names of the two or more certified managed care organizations in the geographic region from which the employees may choose to receive treatment for an injury arising out of and in the course of employment or occupational disease. The chair, upon recommendation of the labor-management committee shall, by regulation, prescribe a reasonable fee which shall accompany each application, which shall be used to defray the administrative costs of the pilot program. The comptroller is hereby authorized and directed to receive for deposit to the credit of the miscellaneous special revenue fund any revenues which are received by the chair from applicants and shall authorize the use of such funds for the exclusive purpose of funding expenditures related to the pilot program. Participants may use only managed care organizations certified by the commissioner of health or his or her designeein consultation with the chair in accordance with the provisions herein. All employees of an employer participating in the managed care pilot program must receive treatment for occupational disease or an injury arising out of and in the course of employment as provided herein. No employee of an employer participating in the managed care pilot program shall be required to pay for any medical or other health care services provided in relation to treatment of any injury arising out of and in the course of employment or occupational disease. 4. Managed care organization certification. Each application by a managed care organization to participate in the pilot program shall be accompanied by information prescribed in regulation which shall include but not be limited to the following: (a) the names and credentials of all individuals or organizations that will provide service under the managed care program, together with appropriate evidence of compliance with all licensing or certification requirements for such individuals or organizations to practice in this state; (b) a description of the times, places and manner of providing services under the managed care program; (c) a description of the times, places and manner of providing other related optional services the applicant may wish to provide; (d) a description of any final disposition of professional misconduct charges against any of the individuals or organizations which will provide medical or other health care services under the managed care program; The commissioner of health, upon recommendation of the labor manage- ment committee, shall, by regulation, prescribe a reasonable fee which shall accompany each application for certification as a managed care organization, which shall be used to defray the administrative costs of the pilot program. The comptroller is hereby authorized and directed to receive for deposit to the credit of the miscellaneous special revenue fund any revenues which are received by the commissioner from applicants and shall authorize the use of such funds for the exclusive purpose of funding expenditures related to the pilot program. (e) the name and professional qualifications of the individuals who will respond on behalf of the managed care organization to a request for treatment from injured employees. 5. Notwithstanding any other provision of law, and for the purposes of this subdivision and subdivision 4 of this section only, the commissioner of health in consultation with the chair shall certify as a managed care organization any persons, corporate or otherwise, which meet the requirements of this section and regulations promulgated by the commissioner thereto to participate in the pilot program if criteria, including but not limited to the following, are met: (a) quality, continuity and other treatment standards, including standards to provide treatment in a timely, effective and convenient manner to employees who suffer an injury arising out of and in the course of employment or occupational disease; (b) a sufficient number, and in no case less than two, in each category of specialization throughout the service area to provide employees adequate flexibility to choose a provider from the managed care organization; (c) adequate financial incentives or other cost reduction efforts which will not compromise the quality of service; (d) adequate methods of peer review, service utilization review, and dispute resolution, to exclude from participation providers who violate reasonable treatment standards and provide for the resolution of medical disputes, including access to a second opinion as prescribed herein and in regulations; (e) a timely and accurate method of reporting to the labor-management committee necessary information regarding medical and other health care service cost including but not limited to information concerning utilization to permit the labor-management committee to monitor the effectiveness of the managed care program. Reporting shall include but not be limited to providing information on quality of care, accessibility of care, cost of care, adequacy of care, the type of injury or occupational disease, the date of injury, the date of return to work and any direction for continuing care; (f) a mechanism for an employee to obtain treatment at a cost which deviates from the fee schedule at the expense of the employer, outside the medical care pilot program with the permission of the chair if such treatment is unavailable or inaccessible within the managed care program, including treatment for occupational disease which permits employees to choose to obtain treatment from the New York state occupational health clinics network; (g) evidence of compliance with any other requirements, in regulations, which are necessary to provide quality health care to employees of an employer participating in this pilot program; and (h) a certification that no participating employer has a financial interest in the managed care organization which provides services under this pilot program to such employer`s employees unless such interest is disclosed to such employees prior to permitting employee enrollment in the managed care pilot program. 7. Decertification. The commissioner of health may revoke, suspend or amend certification of any managed care organization participating in this pilot program if the commissioner finds that the managed care organization providing medical or other health care services fails to meet the requirements of this section or that service under the managed care pilot program is not being provided in accordance with its terms as described in the application for certification. Decertification of a managed care organization shall preclude the organization and its principals from providing managed care pursuant to this section for a period of not less than three years from the date of decertification or until expiration of this section, whichever is earlier. The chair may in accordance with the procedures and reasons set forth in section 13d, subdivision 10 of section 13k, subdivision 10 of section 13l and subdivision 11 of section 13m of this article disqualify a particular medical or other health care provider who is a participant in a managed care organization, provided, however, that disqualification of an individual provider does not render the entire managed care organization decertified unless so directed by the commissioner of health. The commissioner of health shall promulgate such regulations as deemed necessary to effectuate this decertification process. 8. Participation by a medical or other health care provider in a managed care organization shall not affect authorization to render medical or other health care in accordance with section 13b, 13k, 13l or 13m of this chapter. 9. Utilization review, quality assurance and peer review activities pursuant to this section shall be subject to review by the commissioner of health and the labor-management committee. 10. Findings against a managed care organization, or any provider therein, of professional misconduct by any agency or department other than the department of health shall be reported to the commissioner of health. 11. Provisions of this section shall not affect the confidentiality or admissibility of an employee`s treatment records. 12. Second medical opinion. (a) An employee receiving medical or other health care services for treatment of an accidental injury arising out of and in the course of employment or occupational disease may seek an opinion from a medical or other health care provider otherwise authorized pursuant to and consistent with this article to provide treatment pursuant to the fee schedule, at the employer`s expense, from outside the managed care organization with respect to the employee`s medical or health condition and/or degree of disability. (b) Such opinion shall be rendered by a member of the panel created pursuant to this section to render second opinions on employees` medical or health condition and/or degree of disability from an injury arising out of and in the course of employment or from an occupational disease at a rate consistent with the fee schedule. Such second opinion rendered by a member of the panel shall be binding on the employer and the employee in any subsequent proceeding before the board unless, thereafter, the employee seeks a subsequent opinion, to which neither the employer nor the employee shall be bound. (c) Such second opinion may alternatively be rendered by a provider who is not a member of the panel but who is authorized pursuant to this chapter to provide medical or other health care services pursuant to the fee schedule or who provides medical or other health care services as part of a certified managed care organization pursuant to this section. Such second opinion when rendered by a provider who is not a member of the second opinion panel established herein shall not be binding on either party. (d) The chair shall, prior to the approval of the second opinion panel and upon recommendation of the labor-management committee, provide the commissioner of health with a list of the specialties that are presently authorized to treat injured employees. Such list shall be provided within thirty days of enactment of this section and shall be used by the commissioner of health to determine the membership of the panel. (e) The commissioner of health shall after consultation with the chair and the labor-management committee approve a statewide panel whose purpose shall be to render second opinions when they are requested by an employee. In order to be approved for rendering a binding second opinion, the panel must meet the following criteria: (i) The panel shall employ or otherwise secure the services of adequate numbers of medical and other health care providers in each geographic area to be served who are professionally qualified by training to render a second opinion on any injury arising out of and in the course of employment or occupational disease; (ii) The panel shall demonstrate the ability to perform the examinations needed to render an opinion on the employee`s condition and/or degree of disability in a timely manner; (iii) The panel shall have strict guidelines with respect to the time period in which the second opinion provider is required to file a report on the employee`s condition with the workers` compensation board. Unexcused failure on the part of the second opinion provider to adhere to those guidelines shall be grounds for removal of that provider as a member of the panel; (iv) Members of the panel shall not have conflicts of interest with respect to rendering such second opinion based upon insurance, hospital, employer, or professional affiliation; (v) The panel shall identify individuals who are professionally qualified by training and experience who will respond on behalf of the panel to a request from an employee for a second opinion; (vi) The panel shall agree to abide by the fee schedule established in regulation pursuant to this chapter; and (vii) The panel must meet such other performance and efficiency standards of conduct as the commissioner of health shall by regulation require. The commissioner of health may remove a provider from the second opinion panel if such provider fails to meet the requirements of this section. Such removal shall not by itself render inoperative the existence of the entire second opinion panel. (f) The commissioner of health shall by regulation establish a reasonable fee which shall be paid by the employer for each request for a second opinion from the panel. The fee shall be paid to the commissioner of health. All money received pursuant to this subdivision shall be paid to the commissioner of taxation and finance and comptroller for deposit in the miscellaneous special revenue account. The monies in such account shall be used for the cost of maintaining and administering the second opinion panel. 13. Permission to seek alternative care. An employee receiving treatment pursuant to a managed care program as provided herein shall be required to utilize his or her initial choice of a certified managed care organization for an injury arising out of and in the course of employment and occupational disease but, at the employee`s request, the employee shall be referred to the New York state occupational health clinics network. Nothing in this section shall prevent an employee dissatisfied with his or her choice of managed care organization, after twenty-one days (or after thirty days if collectively bargained by the employer with the authorized collective bargaining agent of its employees) from receiving initial treatment by his or her initial choice of certified managed care organization, from choosing another certified managed care organization for the purpose of receiving medical or other health care services pursuant to this section or opting out of managed care to a medical or other health care provider otherwise authorized to provide treatment pursuant to this chapter. 14. Emergency care. An employee receiving medical or other health care services pursuant to the managed care pilot program may receive emergency care from any duly licensed medical or other health care provider after the sudden onset of an injury which arose out of and in the course of employment or occupational disease. Emergency care means medical or other health care, treatment, services, products or accommodations provided to an injured or ill employee for a sudden onset of a medical condition of such nature that failure to render immediate care would reasonably result in deterioration of the injured employee`s medical condition. The chair upon recommendation of the labor-management committee shall set forth criteria regarding emergency and urgent care. 15. An employee receiving managed care pursuant to the pilot program may continue to receive necessary care from a medical or other health care provider authorized pursuant to subdivision one of sections 13b, 13k, 13l and 13m of this chapter to provide such care if that provider has a documented history of treatment of the employee for the specific injury which arose out of and in the course of employment or occupational disease. The provider must agree to refer the employee to the managed care organization for any other required treatment and must agree to abide by the terms of the managed care plan under which the employee is covered. 16. Non-physician testimony. Notwithstanding any other provision of law, when testimony is required before a referee regarding medical or other health care provided on behalf of a managed care organization, such testimony may be provided by a non-physician representative of the managed care organization who is professionally qualified by training and experience and is knowledgeable about and capable of responding to questions with respect to the medical or health condition, treatment and degree of disability that is the subject of such hearing. The chair upon recommendation of the labor management committee shall by regulation set forth the professional qualifications which are required to permit such non-physician to testify as specified above. Fourteen days prior to the date of the prehearing conference the parties shall exchange, by return receipt requested mail, all evidence that is required to be provided pursuant to subdivision 2-a of section 25 of this chapter. The prehearing conference shall take place no more than thirty days prior to the hearing. If an objection is made at the prehearing conference to presenting testimony through the non-physician representative, arguments shall be presented to the referee as to the need for the physician to testify. No later than fourteen days before the scheduled hearing the referee shall make a decision as to whether the physician shall be required to testify and shall so notify both parties. Any such decision shall be interlocutory and shall not be reviewable by the board under section 23 of this chapter until the conclusion of the trial of the controverted issues. In the event that the managed care organization does not provide for the exchange of information as required above, it shall waive its right to present evidence through non-physician testimony, unless it can demonstrate to the satisfaction of the referee why such exchange did not take place in a timely manner. In the event that a claimant is unrepresented, the managed care organization shall waive its right to present testimony through a non-physician representative. The board shall be required to maintain records, for each referee, with respect to the number of cases in which (a) a physician has been required to testify and (b) where a non-physician has been permitted to testify. 17. Improper influencing of selection of uncertified managed care organization; improper provision of medical care. Any employer that improperly influences an injured employee`s selection of a managed care organization which is not certified by the department of health in accordance with subdivision four of this section, and any such managed care organization that provides medical care to an injured employee that knows or should have known that such employee`s selection of its care was improperly influenced by the employer, shall be guilty of a misdemeanor, and shall not be eligible to receive any premium credits and investment credits as authorized by this chapter. 19. Employee notification. Employers who are participating in the pilot program and offer managed care hereunder shall give notice to all affected employees at least sixty days prior to initiating a managed care program, annual notice to all employees detailing the choice of providers available to provide managed care, and such other information, including but not limited to the employee`s right to a mandatory referral for treatment of a occupational disease at a clinic in the New York state occupational health clinics network as the chair may prescribe by regulation. 20. Duty to bargain or negotiate collectively. Where there is an existing collective bargaining agreement in effect, employers, public and private, prior to receiving approval to participate in the managed care pilot program, shall fulfill their statutory duty to collectively negotiate or bargain and reach agreement with the certified or recognized employee organization or labor union which represents employees affected by the implementation of the managed care pilot program with respect to implementation of a managed care pilot program. Where a duty to negotiate or bargain collectively exists and there is no existing collective agreement, the managed care pilot program shall not be implemented until and unless agreement is reached concerning implementation of the managed care pilot program. Any provision hereof to the contrary notwithstanding, this section shall not be deemed to modify or impair the provisions of any collectively bargained or negotiated agreement and no public employer, as that term is defined in article fourteen of the civil service law or subdivision (g) of section 12-303 of the administrative code of the city of New York, or any employer who employs personnel whose salary is paid in whole or in part by state or local funds, may enter into a written agreement with a managed care organization to provide medical or other health care services required under this chapter without the express negotiated agreement of the employees` certified or recognized representative dated after the effective date of the chapter of the laws of 1993 which added this subdivision and signed by the employees` certified or recognized representative. 21. Complaint review. The labor-management committee shall review complaints filed by employers, employees, managed care organizations, insurers, employee organizations or labor unions, and others regarding the pilot program. 22. Reporting requirements. Each participating employer, insurance carrier, and managed care organization shall provide to the chair and the labor-management committee relevant data excluding information protected by the Personal Privacy Protection Law, to ascertain whether injured or ill employees are receiving all necessary and proper care, and whether the managed care pilot program is resulting in cost containment. The labor-management committee, in consultation with the New York state school of industrial and labor relations at Cornell University shall prepare and submit to the governor and the legislature a report of their findings on or before June 1, 2000. The report shall include findings as to the savings achieved or stabilization of workers` compensation premiums rates as a result of utilization of managed care. 23. Duration of pilot program. The pilot program shall continue until December 31, 2001.

  • NB Repealed December 31, 2001