LexisNexis® CLE On-Demand features premium content from partners like American Law Institute Continuing Legal Education and Pozner & Dodd. Choose from a broad listing of topics suited for law firms, corporate legal departments, and government entities. Individual courses and subscriptions available.
Many of the new developments in Workers’ Compensation Law and Practice in New York in 2015 were in the area of administrative and regulatory changes resulting from the Workers’ Compensation Board’s Business Process Re-engineering Project (BPR). There were very few legislative developments, but the appellate courts handed down numerous decisions affecting almost all issues under the Workers’ Compensation Law this past year.
Important Notice for 2016: Since the Foreword for the New York Workers’ Compensation Handbook (LexisNexis), 2016 Edition, was written, there frankly been more significant developments in workers' compensation in New York. The Governor proposed massive procedural and substantive “reforms” which have so far failed in the Legislature. The Board has implemented a desk decision procedure and new forms for Section 32 settlements. The Voluntary Binding Review process has also been implemented. Biggest news of all is that last week the Appellate Division 1st Department found the legislation closing the Stale Claim Fund under WCL Sec. 25-a to new claims to be unconstitutional, in effect reopening that Fund to shift liability for reopened claims. Our 2015 summary of trends and developments is set forth below:
No significant legislation affecting workers’ compensation was enacted this past year. The New York State legislature was roiled by the arrest and trial on federal corruption charges and eventual replacement of both of the Speaker of the Assembly and the Majority Leader of the Senate. Twelve nuisance fees involving arbitration requests and various licensings, costing New Yorkers less than $100,000.00 a year, were removed by the 2015–2016 State budget. The Chairman of the Workers’ Compensation Board was charged with making interim assessments of money owed by members of failed Group Self-Insured Trusts at 120 days after default, and no-fault carriers were authorized to provide workers’ compensation benefits to New York livery service drivers.
The maximum compensation rate was raised to $844.29 per week effective July 1, 2015. This increase resulted from the annual indexing based upon the state average weekly wage enacted as part of the 2007 reform legislation. The increase in the maximum rate of more than $36.00 from 2014 is the largest increase since the first indexed maximum rate became effective and reflects improvement in New York’s economy over the preceding year. Meanwhile, the Department of Financial Services approved an average increase of 5.9% in workers’ compensation loss costs for new or renewals of workers’ compensation insurance policies, effective October 1, 2015. The premium increase was reported to be due in part to changes in job classifications and extra risks attending terrorism.
Administrative and Regulatory Change
On the administrative and regulatory front, the Board has been proceeding aggressively with its BPR project which shows signs of greatly reshaping workers’ compensation practice in New York. The legislature approved $60 million dollars for BPR largely to fund its Medical Portal and the Board’s computer system overhaul. The Medical Portal is being designed to be the single vehicle for all communications involving healthcare providers and workers’ compensation payors. Medical reports, requests for treatment authorization, requests for and denials of authorization and billing disputes and the like are all to be funneled electronically through the Medical Portal. The portal is expected to foster resolution of issues much more quickly and directly than with paper filings or even other electronic communications in the past. The Board has begun a training program on the portal limited to the submission of C-4 AUTH requests for authorization for treatment and responses to same.
Another major initiative in its BPR project is the Board’s program for Payor Compliance and Monitoring which has become somewhat controversial. The compliance project is based upon studies that suggested that New York compensation payors were slow to pay compensation benefits when compared to other states. Some in the industry dispute the studies on the basis that they fail to account for numerous wage continuation programs in New York. The program, implemented in the latter part of 2015, measures each carrier, third-party administrator or self-insured’s timeliness in these areas: filing first reports of injury; making and reporting initial payments of compensation; and filing notices of controversy. The project will also measure the number of claims controverted and the success rate on controversies. The project will phase in performance goals for all payors covering these four categories and begin issuing quarterly reports regarding performance in early 2016. Penalties for failure to meet the Board’s performance levels are promised.
The most controversial aspect of the project is the Board’s pronouncement regarding initial payments of compensation, that indemnity for lost time following accepted injuries must be paid whether or not medical evidence of a causally related disability is produced. Such payments are expected to be continued for 30 days if no medical evidence is produced. Payors failing to comply with these directions will be penalized. This pronouncement is contrary to the practice in existence since the enactment of the Workers’ Compensation Law over 100 years ago. Many in the workers’ compensation practice maintain there is no statutory, regulatory or decisional law authority for this direction to require payment without medical evidence of causally related disability. Many think this reversal of practice stems from the exodus of healthcare providers from treatment of workers’ compensation claimants and the difficulties providers face with the preparation of increasingly complicated Board required reports. There is some hope that the Medical Portal will remedy this difficulty but the Board nonetheless is going forward this program. The payor compliance project is discussed in a new section of the New York Workers’ Compensation Handbook (LexisNexis) [see Part I, Ch. 5, § 5.03].
The Board has also proposed numerous changes to its regulations to be effective in early 2016. Significant changes are made to regulations regarding applications for review from Workers’ Compensation Law Judges’ decisions. It appears that most of the changes are attempts to address the Board’s chronic, long delays in addressing appeals. New regulations limit the length of briefs that can be submitted to support applications for review and provide numerous procedural and technical bases for the Board to reject applications for review without considering their merits. The regulations mandate that specific objections or exceptions to all rulings and awards to preserve issues for appeal. The Board is also establishing a process of Voluntary Binding Review whereby parties’ applications on indemnity only issues may be subject to a kind of binding arbitration. The Board’s amended rules also tighten up written stipulation process and apparently permit stipulations to become binding without the necessity of a hearing. These proposed rule changes are discussed in Part I, Ch. 1 and 2 of the New York Workers’ Compensation Handbook (LexisNexis).
The new Board rules also make slight changes in procedures involving variance requests from the Medical Treatment Guidelines and the optional prior approval process, and are considered in Part I, Ch. 6. Proposed rules provide that the maximum reimbursement for funeral expenses in cases of death on and after April 1, 2016, is more than doubled to $12,500.00 in the greater New York City area and $10,500.00 in the remainder of the state. The Board has also announced that it is limiting its adjudicatory role in the interest of efficiency, advising that it will no longer issue Administrative Decisions in accepted claims involving no lost time. The Board aborted a process in 2015 whereby it sought to approve WCL § 32 settlement of cases via desk decisions rather than the WCLJ hearing process. It can be expected to revive that effort in the coming year. The Board also has embarked upon a process of allowing “Virtual Hearings,” whereby parties and their representative can be connected electronically without the need to be present at a hearing point before the Judge.
As of this writing, quite a number of vacancies exist in the Board’s executive personnel structure. Recently appointed Executive Director, Mark Wade, a former insurance company executive and Deputy Superintendent of the State Department of Financial Services, resigned his position to return to private practice. The position of Board General Counsel remains without a permanent replacement since former General Counsel Kenneth Munnelly was appointed to be a commissioner in 2013. Meanwhile, two commissioners’ seats on the Workers’ Compensation Board, including that of Vice Chair, remain vacant. As of January 1, 2016, the terms of more than half of the Commissioners of the Board, including the Chairman, will have expired. It is notable that over the last couple of years, the Board appears to have ceased scheduling oral arguments for consideration of applications for review before three member Board Panels. Based upon a recent rule change the Board members may be permitted to attend their monthly Board meetings via electronic linkup rather than personal appearance at the Board’s offices in Schenectady.
Case Law Developments and Case Summaries
The Court of Appeals rendered no decisions in workers’ compensation cases over the course of the year covered by the New York Workers’ Compensation Handbook (LexisNexis). The New York State Supreme Court Appellate Division Third Department is charged under law with considering all appeals from decisions of the Workers’ Compensation Board. The other three Appellate Division departments render decisions on workers’ compensation topics arising out of other actions, typically civil actions against so-called third-parties brought by plaintiffs otherwise covered by workers’ compensation. Approximately 117 decisions were rendered by the Appellate Divisions over the last year on workers’ compensation topics. In the authors’ opinion, few of these decisions broke significant new ground but are interesting and elucidate numerous legal points under the Workers’ Compensation Law. Part II of this edition contains summaries of and your authors’ commentaries on these recent decisions. Some noteworthy decisions issued in 2015 include:
Mental Stress: In Demperio v. Onondaga County, 126 A.D.3d 1250, 6 N.Y.S.3d 690 (3rd Dept. 2015), the court had occasion to consider the active participant versus mere bystander test for compensability of a mental injury due to mental stress as work. The court held that the claimant-secretary’s participation in events in the aftermath of suicide of a patient made the claimant more than a bystander to the suicide and permitted her resulting mental injury to be compensable. In Cox v. Saks Fifth Ave., 130 A.D.3d 1236, 13 N.Y.S. 3d 681 (3rd Dept. 2015), the court held that the direction by the employer to file false reports more than met the threshold of greater than the usual amount of stress to permit the claimant’s mental injury to be considered compensable. See Part II, § 50.31, , respectively.
Apportionment: In Levitsky v. Garden Time, Inc., 126 A.D.3d 1264, 6 N.Y.S.3d 697 (3rd Dept. 2015), reversing the Board, the court held there was no legal basis for apportioning the claimant’s current disability to an old workers’ compensation injury as it found there was no “disability in a compensation sense” because claimant worked for years after without apparent restrictions. In recent years it has been very difficult to obtain apportionment to prior non-compensable injuries or conditions, but easier when the prior injury was compensable. In Levitsky, the court made clear that the ultimate test for apportionment, “disability in a compensation sense,” applies whether or not the prior injury or condition was compensable. See Part II, § 50.24.
Occupational Disease: In Phelan v. Bethpage St. Park, 126 A.D.3d 1276, 6 N.Y.S.3d 702 (3rd Dept. 2015), the court reiterated that a disease must arise from a distinctive feature of the claimant’s class of employment; causal relationship to something in the employment is not enough. In Phelan, the claimant’s exposure to cold in his job as a grounds keeper was not a distinctive feature of his employment sufficient to establish his diabetic ulcer and osteomyelitis as occupational diseases. See Part II, § 50.32.
Workers’ Compensation Liens: In Ronkese v. Tilcon N.Y., Inc., 129 A.D.3d 1273, 11 N.Y.S.3d 717 (3rd Dept. 2015), the court held that the employer retains his workers’ compensation lien against a recovery by the claimant under the Federal Jones Act, even though the recovery was against the employer itself rather than a true third-party. This case followed the lead of the Court of Appeals decision in Beth v. N.Y. State Office of Children and Family Services, 22 N.Y.3d 80 (2013) reviewed in the 2014 edition of the New York Workers’ Compensation Handbook (LexisNexis). See Part II, § 50.60.
Lump Sum Settlements: In Francis v. Jewelry Box Corp., 128 A.D.3d 1292, 13 N.Y.S.3d 252 (3rd Dept. 2015), the court held that the “extreme hardship” provision added under N.Y. Work. Comp. Law § 35 by the reforms enacted 3/13/07, which permits a continuation of permanent partial disability benefits after the cap on those benefits have been exhausted, does not apply to lump sum settlements of PPD cases under N.Y. Work. Comp. Law § 15(5-b). See Part II, § 50.40.
Stale Claim Fund Under § 25-a: The court continued to go to great lengths to avoid transfer of liability to the Stale Claim Fund. In Kettavong v. Livingston County SNF, 128 A.D.3d 1318, 10 N.Y.S.3d 662 (3rd Dept. 2015), a prior finding that Stale Claim Fund relief under N.Y. Work. Comp. Law § 25-a applied was rescinded based upon a later finding of a permanent partial disability in the case, even though the original § 25-a finding had not been timely appealed. In Holley v. Syracuse Utilities, 127 A.D.3d 1540, 8 N.Y.S.3d 694 (3rd Dept. 2015), the court held that the date of last payment of compensation, which triggers the three-year waiting period for § 25-a to apply, was to be measured from the date the last payment for lost time would have been made, had the employer not been allowed to credit a prior balance paid for a schedule loss of use award. See Part II, § 50.43.
This volume is the 16th edition of the New York Workers’ Compensation Handbook. As with the prior works on which it was built, this edition is the product of work by many individuals who diligently supply their time, knowledge and effort to this project. Mr. Weiss once again wishes to acknowledge and express his gratitude for the effort and assistance given by the partners, associates, and staff of this firm and in particular, his associate, Matthew DeMarco, and of course his devoted legal assistant, Brenda McGraner.
Mr. Balter would like once again to thank the attorneys in his firm, Caruso, Spillane, Leighton, Contrastano, Savino & Smollar, P.C., who allow him the time to be able to edit this book every year. Additionally I would like to dedicate this year’s book to my mother, Eva Balter, and my uncle Ivan Majdrakoff who both passed away this year within two days of each other. My mother was the one who pushed me academically growing up when I did not want to do the work that was assigned. As for my uncle, who was a long time professor at the San Francisco Art Institute, his painting of various law enforcement agency names has put a little fear into my clients for years to make sure they tell me the truth when they talk about their cases.
This volume is the final product of the authors, but we recognize that it was built on original chapters to which legal scholars identified in the pages following this Foreword contributed. Once again, the authors wish to thank the prolific Thomas A. Robinson for his work in identifying cases considered in Part II of this book and also, as from the very start of this book, our editor, Robin Kobayashi, for all her efforts, knowledge, and patience in guiding this edition to publication.
Ronald E. WeissRonald BalterDecember 2015