What does it cost to run a workers' compensation system?
New York and Florida make for interesting comparisons. Last December, according to the United States Census Bureau, The Florida population surpassed New York, becomming the third most populous state. Florida now has 19.9 million residents to New York's 19.7 million. The states are quite similar, from the standpoint of population.
Population distribution is another similarity. In terms of physical size, according to the Census Bureau, Florida is 53,624 square miles. New York is 47,126 square miles. Reasonably similar. New York is about 88% the size of Florida. Florida is a bit more spread-out; the 12.6 hour, 832 mile, drive time from Pensacola to Key West illustrates this. By comparison, the drive from Manhattan to Jacksonville, Florida is only 13.5 hours, 932 miles. It can be a great distance between two points in Florida.
According to New York's proposed 2016 Budget, it cost $187.24 million to run that state's workers' compensation program in 2015. New York's Governor currently proposes an increase of $60 million, that is about 32%. The 2016 budget would be $247 million. That is for one year. New York has all of the regulatory and adjudicatory functions in one agency.
In Florida, we have a less integrated workers' compensation system. Here we have the Division of Workers' Compensation (DWC) for the regulatory processes and the Office of Judges of Compensation Claims (OJCC) for the adjudicatory processes. Thus, any comparison has to aggregate the Division and the OJCC.
The Florida DWC budget in 2014-15 was $28.47 million. The OJCC budget was $17.44 million. The total is right at $46 million. New York spent over four times more to run their workers' compensation system last year, $187.24 million to $46 million.
Florida's Governor recommends a reduction in both workers' compensation budgets for 2015-16. The recommended reduction for the DWC is a half million dollars, a one and one-half percent reduction, to $27.97 million. The recommended reduction for the OJCC is $71,683, a less than one percent reduction, to $17.37 million. The Proposed Florida budget would total $45.33 million in 2015-16.
If both budget plans were adopted, New York's would be $247 million and Florida's would be $45 million. New York's increase would propel them to 5.5 times the Florida expenditure. Their proposed 2015-16 increase alone would cover the entire Florida workers' compensation budget.
Florida has a reputation for innovation and leveraging technology. We have been in the vangaurd of electronic filing for litigation, electronic data interchange (EDI) for carrier filing and compliance, the use of digital recording for proceedings, and video-teleconference.
New York plans to use their 2016 proposed $60 million increase to: (1) Create an electronic medical bill submission platform. This would allow collection of vast amounts of data. (2) Enhance tracking of electronic payments. To assist with measuring and enforceing regulatory compliance. (3) Establish an RVRBS (Resource-Based Relative Value Scale) fee schedule. These are admirable goals.
Florida already has an RVRBS fee schedule. Florida does not have electronic medical billing. According to the International Association of Industrial Accident Boards and Commissions (IAIABC), few states have electronic medical billing for workers' compensation. The referenced article says that Texas was a pioneer, and that California and Minnesota have also moved to implement this innovation. Louisiana reported at the 2012 Southern Association of Workers' Compensation Administrators (SAWCA) Convention that it has also implemented a program.
Will New York be the next state to implement this innovation? Could or should Florida be the next? When you consider what Florida workers' compensation has accomplished on a comparatively modest budget, I hope you are proud. I am.
|Population||2014-15 Budget||2015-16 Proposed|
|New York||19,700,000||$ 187,240,000||$ 247,240,000|
|Florida||19,900,000||$ 45,909,507||$ 45,337,824|
|Budget per Resident|
|2014-15 Budget||2015-16 Proposed|
|New York||$ 9.50||$ 12.55|
|Florida||$ 2.31||$ 2.28|