New York Workers’ Compensation 2018 Update

By Ronald E. Weiss, Hamberger & Weiss LLP, and Ronald Balter, Caruso, Spillane, Leighton, Contrastano, Savino & Smollar, P.C., co-authors, New York Workers' Compensation Handbook

2018 was an election year for state offices in New York and, when compared to the numerous legislative reforms enacted in 2017, turned out to be a relatively quiet one legislatively for the Workers’ Compensation Law. Democratic Governor Andrew Cuomo was reelected and both Houses of the New York State Legislature came under Democratic Party control. Workers’ compensation was not a prominent issue in the 2018 campaign. As of this writing, no new workers’ compensation initiatives have been announced by the state administration or incoming legislature. Stakeholders nevertheless anticipate some new proposals from the governor and legislature to be forthcoming. Conflicting pressures for workers’ compensation reform arise from New York’s workers’ compensation costs remaining among the highest in the nation but insurance premiums decreasing while workers’ compensation carrier profits increased over the last few years.

The most significant changes in the Workers’ Compensation Law and practice came about as a result of Workers’ Compensation Board administrative action and decisions of the Appellate Courts.

Process Changes

Virtual hearings

Virtual hearings have now been implemented statewide, in all district offices of the Workers’ Compensation Board, except for a few limited hearing locations because of technical issues with the location. Virtual hearings allow parties and their attorneys or representatives to appear at hearings via video conference without actually being at offices of the Workers’ Compensation Board. Even the attorneys physically appearing at Workers’ Compensation Board hearings must now sign in electronically, while claimants are still signed in by Workers' Compensation Board employees.

Concurrent with implementation of virtual hearings, the Board no longer employs live hearing reporters to appear at and transcribe minutes of the hearings. Rather, recording of hearings is now performed digitally. While parties may listen to the recordings after hearings, the Board will not transcribe these recordings into written minutes for use by Law Judges or the parties. Such written transcription occurs only once an appeal is taken. This change in process has been challenging to practitioners preparing briefs to Law Judges and in support of appeals to the Board, as well as Law Judges themselves who have to rely on the record in rendering decisions.

Appeals

In October 2016, the Board adopted a new and detailed rule regarding forms and formatting of Applications for Board Review of Law Judge decisions [N.Y. Comp. Codes R. & Regs. tit. 12, § 300.13]. In 2018, the Board has begun denying appeals based on what the Board views as failure to properly complete Board coversheets (RB-89s) and many other technical defects under that rule. The Board has announced that the RB-89, which formerly was considered only a coversheet, will now be considered the Application for Review rather than the brief which is attached to that form. The forms were updated again by the Board in November 2018 and only the new version will be accepted by the Board as of February 1, 2019. Board perceived technical defects in appeals have resulted in denial of many Applications for Review without consideration of the merits. Such defects include failure to complete all items on the coversheet with proper dates, full repetition of objections and cites to the record by document number, and even supporting briefs exceeding the Board prescribed length despite the fact that explanation, as permitted by the Board rule, for exceeding that length is given. The Board also announced it will automatically deny an appeal by any party who did not appear at the hearing before the Law Judge. Judicial relief is being sought on many of these appeal denials as in the Johnson v. All Town Cent. Transp. Corp. case discussed later in this Foreword and in Chapter 12 of this edition.

Rule changes made by the Appellate Division and the Court of Appeals, also discussed in Chapter 12, have affected appeals from decisions of the Workers’ Compensation Board. The time within to perfect such appeals to the Appellate Division has been shortened, from nine to six months, and different filings are now required with the Courts.

Medical Matters

The Workers’ Compensation Board has proposed regulations to be effective April 1, 2019 which adopt a new Pharmacy Fee Schedule and Drug Formulary discussed in Chapter 6 of this edition. The formulary categorizes drugs in phases including drugs that require no prior authorization but are for limited durations. The formulary also rather uniquely designates drugs in different classes with different pricings depending on the procedural status of the claims. The new Fee Schedule requires that Pharmacy Benefit Managers pass along rebates on drugs to carriers and employers.

The Board also proposed to increase fees for most medical providers with the amended fee schedule to implemented sometime in 2019. The Board has likewise announced that it plans to replace all the Board C-4 form reports by medical providers with the CMS-1500 form used in Medicare and Medicaid cases. The form change is to be implemented in phases during 2019. Many stakeholders are concerned that this changeover may not give adequate information to properly manage and adjudicate claims because the CMS-1500 form as presently constituted does not account for information such as degree of disability or medical determination of causal relationship.

Special Funds

The Special Funds Conservation Committee, which formerly was responsible for administration and defense of both the Special Disability Fund under §15-8 and §14-6 as well as the Reopened Case Fund under §25-a, has been deactivated by the Board. The Special Funds’ Group of attorneys and administrators within the Workers’ Compensation Board has taken over administration and defense of claims for reimbursement from the Special Disability Fund under §15-8 and §14-6. The Board has revised both forms and the procedure for reimbursement on claims adjudicated the liability of the Special Disability Fund, requiring greater detail and stricter adherence to time limits for reimbursement. Meanwhile, in the latter half of 2018, the Board transferred responsibility for defense for administration of claims against the Reopened Claim Fund under §25-a to four different Third Party Administrators. These Third Party Administrators in turn have engaged private attorneys to defend Reopened Case Fund cases at hearings and proceedings before the Workers’ Compensation Board. These changes are discussed in Chapter 2 of this edition.

Attorneys Fees

Court decisions have recently affirmed the Board’s tightened standards for applications by claimant’s attorneys for fees which serve as liens on workers’ compensation awards. The Board now requires a breakdown on the attorney fee application of tasks performed and time spent on those tasks, as outlined in Chapter 12.

New York Paid Family Leave Act

The New York Paid Family Leave Act administered by the Workers’ Compensation Board as part of employers’ disability benefits program has now completed a full year of operation. In 2019, the duration and maximum amount of Paid Family Leave benefits will incrementally increase and continue to do so through 2021. See Chapter 14 of this Handbook for details.

Maximum Rate and Insurance Premiums

The maximum weekly indemnity rate increased to $904.74 effective July 1, 2018, based upon the annual indexing of that rate to the state average weekly wage enacted as part of the 2007 Workers’ Compensation reform legislation. Meanwhile, the Department of Financial Services announced an 11.7% premium decrease effective October 1, 2018.

Case Law Developments

Over 70 new decisions on workers’ compensation issues from the Appellate Division and Court of Appeals are summarized and analyzed in Part II of this year’s Handbook. Some of the decisions having the most significant impact on the Workers’ Compensation Law and practice are referenced below.

Schedule Loss of Use Awards

The Appellate Division handed down a number of significant decisions regarding schedule loss of use awards.

In Taher v. Yiota Taxi, Inc., 162 A.D.3d 1288 (3d Dept. 2018), the Court held that a claimant classified with a permanent partial disability may also receive a schedule loss of use award for another body part injured in the same accident in the limited circumstance when no award is made (claimant is not losing time from work or incurring reduced earnings) attributable to the permanent partial disability. This ruling ran contrary to the general rule that permanent disabilities arising from an accident are amenable to either a schedule loss of use or permanent partial disability classification, but not both. This result contrasts with that in Tobin v. Finger Lakes DDSO, 162 A.D.3d 1286 (3d Dept. 2018) where the claimant was found entitled only to an award for a permanent partial disability and not a schedule loss of use award as well as he was losing time from work due to his nonscheduled disability.

In another break with common wisdom, the Court held that the Board itself can determine a schedule loss of use by comparing claimant’s physical findings with the Impairment Guidelines, even though that determination may be different than opined by any of the doctors. See Parody v. Old Dominion Freight Line, 157 A.D.3d 1118 (3d Dept. 2018).

The Court affirmed that findings of limitations in abduction and anterior flexion are duplicative and cannot be added together to produce the dramatically larger schedule awards which had been claimed in recent years. See Maloney v. Wende Corr. Facility, 157 A.D.3d 1155 (3d Dept. 2018).

Finally, in Genduso v. New York City Dept. of Educ., 164 A.D.3d 1509 (3d Dept. 2018), the Court reminded practitioners that schedule loss of use awards are made only for body parts enumerated in the statute, i.e., arms, legs, hands, feet, etc. There are no awards specifically for knees, ankles, elbows or wrists. Thus, the employer was able to take credit for a leg schedule based on injury to the ankle even though the later schedule was based on an injury to the knee.

Loss of Wage Earning Capacity

The Appellate Division affirmed that a claimant who has returned to work at the same or higher wages at the time of classification (and thus has no current entitlement to reduced earnings awards) is still entitled to a finding as to loss of wage earning capacity to determine the duration of benefits he or she could receive in the event of future loss of earnings. See, Oyola v. New York City Dept. of Sch. Food & Nutrition Servs., 157 A.D.3d 1145 (3d Dept. 2018).

Attachment to the Labor Market

In O’Donnell v. Erie County,162 A.D.3d 1278 (3d Dept.2018) the Appellate Division held that the 2017 amendment to N.Y. Work. Comp. Law § 15(3)(w) relieving claimants entitled to benefits at the time of classification with a permanent partial disability of the obligation to demonstrate attachment to the labor market to remain entitled to benefits applies retroactively to such classifications made before the enactment of the amendment. Unanswered by the Appellate Division was if the amendment applies when the issue of attachment was raised but not resolved before classification. Perhaps that question will be answered by the Court of Appeals which has granted appellants leave to appeal.

Classification – Standard for Permanent Total Disability

An Appellate Division majority attempted to set a new standard for permanent total disability, finding that the claimant was permanently totally rather than just partially disabled if he or she is unable to engage in “gainful employment, not some undefined type of limited sedentary work” due to the injury. The Court of Appeals reversed and returned to the traditional standard for permanent total disability wherein the claimant is only permanently partially disabled if there is any form of work in the labor market he or she can perform. See, Wohlfeil v. Sharel Ventures, LLC, 32 N.Y.3d 981 (Ct. of App. 2018), rev’g, 155 A.D.3d 1264 (3d Dept. 2017). This brought it into agreement with Burgos v. Citywide Cent. Ins. Program, 30 N.Y.3d 990 (2017) which the Court of Appeals decided the same day as the Appellate Division issued its decision in Wohlfeil.

Stress Claims by First Responders

The Appellate Division held that the 2017 amendment to N.Y. Work. Comp. Law § 10(3) that a first responder stress claim could not be disallowed because the stress was not greater than normally experienced in that line of work applied retroactively to claims brought before the amendment’s effective date. See, McMillan v. Town of New Castle, 162 A.D.3d 1425 (3d Dept. 2018).

Independent Medical Examiners

A claimant’s doctor who renders only an opinion on disability and causal relationship but does not treat the claimant will be bound by the Board rules regarding reports of IME, and subject to preclusion if the report does not comply with the rules. See, Esposito v. Tutor Perini Corp., 158 A.D.3d 912 (3d Dept. 2018).

Board Denial of Appeal Based on Current Form

The Appellate Division held that the Board’s denial of an appeal without considering its merits because appellant used a Board prescribed RB-89 form which had recently been replaced was improper as no one was prejudiced due to used of the expired form. Johnson v. All Town Cent. Transp. Corp., 2018 N.Y. App. Div. LEXIS 7179 (3d Dept. Oct. 25, 2018). It remains to be seen what effect this decision may have on the legions of appeals being denied by the Board without considering the merits based on failure to properly complete the RB-89 form or abide by Board formatting rules.

© Copyright 2019 LexisNexis. All rights reserved.