New York Workers’ Comp Stakeholders Continue to Absorb 2007 Reform Changes

During the past year, stakeholders in the workers’ compensation system in New York have continued to absorb legislative and administrative changes initiated by the 2007 reform. Maximum indemnity rates are now indexed to two-thirds of the State Average Weekly Wage. For accidents occurring on or after July 1, 2011, the new maximum rate is $772.96 based upon the State Average Weekly Wage for 2010 announced by the Commissioner of Labor on March 31, 2011. The maximum rate will be adjusted every July 1st based upon the prior year’s State Average Weekly Wage. Meanwhile, the costs of workers’ compensation in New York have increased over the last few years, with the Insurance Department approving a substantial increase in insurance premiums in the fall of 2011.
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Perhaps the biggest substantive development has been the Workers’ Compensation Board’s promulgation, effective January 1, 2012, of long awaited 2012 New York State Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity. The Board had been criticized for the delay in adopting such Guidelines, as many considered promulgation of new guidelines to be a necessary step before the caps on permanent partial disability awards enacted by the 2007 Reform Bill could be fully implemented. The caps apply to injuries occurring on or after March 13, 2007, the effective date of the Reform Bill. The caps had long been sought by the business community and represent the major element of the Reform Bill to pay for the increase in indemnity benefits and otherwise save costs in the workers’ compensation system.
The 2012 Medical Guidelines leave unchanged the system in the 1996 Medical Guidelines for determining degrees of schedule loss of use for major members, digits, and vision and hearing loss. The 2012 Guidelines do change the method for calculating degrees of classifiable permanent partial disabilities and place far greater emphasis on loss of wage earning capacity for determining the rate and duration of permanent partial disability benefits. The new Guidelines require doctors rendering opinions on permanency to supply a great deal more information than in the past. Specific findings have to be reported regarding maximum medical improvement (“MMI”). The process permits deposition of doctors with conflicting opinions on MMI, prior to a determination of actual degree of permanent partial disability. Doctors are asked to assess the degree of permanent disability based upon a supposedly more evidenced-based standard than under the prior guidelines. Doctors are instructed in detail on how to rate the claimant’s medical impairment on a scale of zero to six. They are also instructed to incorporate findings on functional capacity into their evaluation, on the new Board C-4.3 report. Differences of opinion on degree of medical impairment may also be litigated by medical depositions on an accelerated basis. Meanwhile, claimants are directed to supply vocational data to the Board on a new VDF-1 form for final decision on loss of wage earning capacity to be made by the Workers’ Compensation Law Judge (“WCLJ”). The WCLJs are to consider opinions on medical impairment and functional capacity, but also non-medical factors affecting loss of wage earning capacity, including the claimant’s education, vocational skills, English language proficiency, age, etc. The Judge is to make this assessment after a hearing is conducted, at which the testimony of the claimant may be taken regarding loss of wage earning capacity factors.
The new guidelines take effect January 1, 2012, but in cases in which at least one medical opinion finding a permanent impairment was issued before January 1, 2012, the 1996 Medical Guidelines will continue to be employed. This means there will be two separate sets of guidelines for assessing permanency for some time to come. Except in cases involving surgery, the guidelines indicate that an assessment as to permanency may be as early as six months following the injury, as opposed to the two years that had been the general practice in New York for many years. This change was designed to speed up the classification process so that the caps on benefits apply sooner. In the past, the average time from the date of injury for classification to occur has been about four years.
The Board has offered webinars for medical providers and examiners and other stakeholders for training in the new Guidelines. Nevertheless, we expect that adjustment to the new guidelines will take some time and be a struggle for stakeholders in the workers’ compensation system, particularly medical providers and consultants, but also representatives of claimants and employers and carriers and WCLJs. It remains to be seen whether these guidelines will lead to effective implementation of the caps on permanent partial disability awards and savings in compensation costs promised in the 2007 reform.
The Board has now had a year’s experience with the Medical Treatment Guidelines (“MTG”) adopted December 1, 2010, for treatment for injuries to the back, neck, shoulder, and knee. The treatment guidelines are reported to be evidence based and go into great detail regarding mandatory standards of care. They are designed to have a substantial impact on the form and duration of treatment. The Board has received thousands of requests from providers for variances from the treatment permitted under the MTG. If such requests are not resolved by agreement between the carrier or employer and the provider, variances have by and large been referred to WCLJs for resolution at hearings at which the burden of proof is put on the treating provider to demonstrate the appropriateness and necessity of the requested treatment. The MTG also provides that by agreement, parties may have variance requests resolved by a medical arbitrator at the Board’s medical director’s office, but most carriers and employers seem to have chosen resolution by the Law Judges.
Claimants’ attorneys and medical providers expressed great concern that carriers would refuse to continue coverage of prescriptions for narcotic drugs in longstanding cases as treatment with such narcotics, including opioids, is permitted only for short term acute problems under the MTG. In response, the Chairman of the Board issued Subject No. 046-457, which states carriers should continue to pay for long term narcotics and other pain medications without a variance request because of risks associated with sudden withdrawal of such drugs. However, in cases where the initial prescription of narcotics is made on or after December 1, 2010, prescriptions must be consistent with the MTG. Thus, it appears two different standards govern narcotic prescriptions before and after December 1, 2010.
Some members of the claimants’ bar in particular have argued that the new treatment guidelines should apply prospectively only to injuries occurring on or after December 1, 2010, in effect creating two standards of care for pre- and post-December 1, 2010 injuries. At least one Article 78 action has been commenced to impose this interpretation. In an unreported decision from New York State Supreme Court—Monroe County, the challenge was rejected on procedural grounds without reaching the merits of the challenge. The case is currently on appeal. The Board recently proposed, but has not yet promulgated, an additional set of Medical Treatment Guidelines involving carpal tunnel syndrome. It is anticipated that some time in 2012 the Board will propose guidelines for palliative care and treatment of chronic pain.
The Court of Appeals finally resolved the issue as to whether the 2007 Reform Legislation’s amendment to N.Y. Work. Comp. Law § 27(4), requiring private carriers to deposit the present value of permanent partial disability awards into the Aggregate Trust Fund (“ATF”), applies to cases with dates of injury prior to March 13, 2007, the effective date of the reform legislation. Those cases involve uncapped permanent partial disability awards, such that the present value deposit is based upon the claimant’s life expectancy, whereas cases with dates of injury on or after March 13, 2007 involve the present value of awards under the durational caps. Self-insured employers and the State Insurance Fund, which administers the ATF, are not subject to this mandatory deposit. On November 15, 2011, the Court of Appeals held in Raynor v. Landmark Chrysler that the application of the amendment to pre-March 13, 2007 cases was not an improper or unconstitutional retroactive application of the statute and was in accordance with its plain language. The court also rejected other arguments advanced by the appellants. The court’s decision brought an end to the litigation on the application of the mandatory ATF deposit to uncapped cases. As a result, many private carriers are now assiduously attempting to reach Section 32 settlement agreements, many indemnity only, to avoid having to make lifetime present value deposits for indemnity benefits into the ATF.
New York’s new Governor, Andrew Cuomo, took office in January 2011. Governor Cuomo committed in his campaign to completing the reforms initiated by the 2007 reform. It appears to the workers’ compensation community in New York, however, that with fiscal and other crises to deal with, the new administration has not paid a great deal of attention to workers’ compensation matters. As of this writing, the Governor has not replaced any top level executive personnel at the Board who remain as holdovers from the Patterson and Spitzer administrations. It is not yet known who will be appointed to high level positions at the Board or what direction the Board will take in the future.
Revisions to New York Workers’ Compensation Handbook, 2012 Edition (LexisNexis)
This year’s edition of the New York Workers’ Compensation Handbook contains revisions of nearly every chapter in the Handbook to account for major changes in the law and practice noted above and many more minor changes arising from case law developments and administrative actions by the Board.
Part II of this year’s edition includes summaries of and your authors’ commentaries on approximately 128 decisions of the Appellate Division and the Court of Appeals on workers’ compensation cases handed down over the course of the past year.
Numerous minor changes to the statute and regulations are included in Parts III and IV of this year’s Handbook. The Reference Directory at the beginning of the book and the tables in Part V have also been updated.
Request for Comments
The authors of the New York Workers’ Compensation Handbook 2012 Edition recognize that in any project such as this one there is room of disagreement on individual points of the law and interpretation. Furthermore, we recognize that our research may have missed important cases. For these reasons we ask all our readers to communicate any opinions, errors noted or new cases of importance to us.
Acknowledgments
As with past editions, the 2012 edition of the New York Workers’ Compensation Handbook was brought to fruition by many individuals who supplied their time, knowledge, and hard work to this project. In this regard, Mr. Weiss wishes to express his appreciation for the support and assistance given by the partners, associates, and staff of his firm, but most especially this year his associate, Joseph DeCoursey, and his legal assistant, Carrie Wells.
Mr. Balter would like to thank the eight other members of the New York State Bar Association’s Tort Insurance and Compensation Law Section’s Workers’ Compensation Division’s Special Committee for their tireless work over the last two years in working to keep the Workers’ Compensation Board an open forum with access to justice for all parties who have business before the Board. The members are Chris Lemire, Alex Dell, John Snyder, Mark Hamberger, John Sciortino, William Crossett IV, Peter Walsh, and Paul Siminerio.
While the final product is the work of these two authors, this Handbook was built on original chapters to which other legal scholars recognized on the pages immediately following this Foreword contributed. As in years past, the authors wish to thank Thomas A. Robinson for his work in identifying cases considered in Part II of this Book. As always, we thank our editor, Robin Kobayashi, for her skills, knowledge, and gentle prodding in guiding this edition to its publication.
Ronald E. Weiss Ronald E. Weiss
rweiss@hwcomp.com
New York Workers’ Compensation Handbook

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