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Goldberg Segalla’s Workers’ Compen-sation Quarterly newsletter provides a timely summary of decisions from across New York concerning workers’ compensation matters. It also provides information regarding the latest news regarding litigation, changes in inter-pretive language used by the courts, permanency determinations, and more. We greatly appreciate your interest in our newsletter and ask for your com-mentary as well as questions. Please feel free to share this publication with your colleagues. If others in your or-ganization are interested in receiving the publication, if you wish to receive it by regular mail, or if you would like to be removed from the distribution list, please contact Damon M. Gruber at dgruber@goldbergsegalla.com.

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Click the headline below to jump to that article.The WCB Holds Claimants Who Are Forced to Involuntarily Retire Are Required to Search for Employment eClaims: Bringing Workers’ Compensation Claims Into the 21st Century

The WCB Sets Guidelines to Govern Maintenance Care for Chronic Conditions

Major Victory for Personal Injury Defendants Adds Leverage for A Workers Comp Defense

Loss of Wage Earning Capacity Case Law Update

Third Department Limits WCL Section 123 Applicability

Section 25-a Fund to Close January 1, 2014

Caps on PPDs Begin With Date of Classification

Claimant Sustains Injury From Opening Door; Third Department Affirms

Third Department Denies Travel Reimbursement for Out-Of-State Treatment

New York Still Has Highest Workers’ Comp Assessments in Nation

Second Department Affirms That Undocumented Aliens Can Receive Workers’ Compensation Benefits

Death Claims From Overdose Are Compensable – Can They Be Prevented?

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Workers’ Compensation QuarterlyA workers’ compensation litigation newsletter | Spring 2013

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Workers’ Compensation Quarterly | Spring 2013

The WCB Holds Claimants Forced to Involuntarily Retire Are Required to Search for Employment

In the landmark decision issued by the Court of Appeals in Zamora v. New York Neurologic Associates, 79 A.D.3d 1471 (2012) 912 N.Y.S.2d 816, the Court of Appeals ruled that the Workers’ Compensation Board (WCB) is not required to infer that a permanently partially disabled claimant’s post-accident loss of wages is attributable to physical limitations caused by the work injury when it has been determined the claimant was required to withdraw from employment due to the work injury.

In this case the claimant was employed as a registered nurse when she sustained multiple injuries in 2008 after slipping and falling on ice in the employer’s parking lot. The claim was established for injuries to the neck, back, and elbows and the workers’ compensation law judge eventually determined the claimant was forced to involuntarily retire from her employment. As a result of the involuntary retirement, the claimant was awarded ongoing lost wage benefits at a weekly rate of $400 per week.

In the subsequent appeal, the employer argued that the lost wage benefit should be suspended because the claimant voluntarily withdrew from the labor market upon retiring. In rebuttal the claimant argued that she remained entitled to lost wage benefits because she was forced to retire due to her work-related disability.

In choosing to rescind the awards for ongoing lost wage benefits the board panel cited the standard set forth in Zamora and confirmed that injured workers are not entitled to an automatic inference that their loss of earnings following an involuntary retirement is due to the work-related disability. As a result of the claimant’s failure to demonstrate with sufficient credible documentary evidence that she remained

attached to the labor market after retiring by actively seeking work within her restrictions or by actively participating in vocational rehabilitation, it was determined that the claimant voluntarily withdrew from the labor market and is not entitled to lost wage benefits.

From an employer’s/carrier’s perspective the above decision represents a welcome application of the standard set forth by the Court of Appeals in Zamora. In choosing to suspend lost wage benefits to the claimant, the board panel has sent a clear message that even permanently disabled claimants who are forced to involuntarily retire from their employment will be required to conduct a good-faith search for employment within their restrictions in order to remain eligible for ongoing wage replacement benefits. It is hoped that the board will continue to follow this standard.

eClaims: Bringing Workers’ Compensation Claims into the 21st Century

As part of the New York Workers’ Compensation Board’s attempt to modernize its operations, the eClaims system is on its way in 2013-2014 pursuant to last year’s WCB mandate. Gaining familiarity with this system should be a priority for both insurance claims representatives and legal practitioners alike as significant changes are forthcoming to how insurance carriers communicate with the WCB. The changes will not yet directly effect reporting by medical professionals and claimants or their representatives.

The most useful starting point for becoming familiarized with the upcoming changes is the blue box in the lower right corner labeled “eClaims” at the home screen of the WCB’s website (www.wcb.ny.gov). Numerous updates were issued on February 28, 2013. As the board’s website advises:

The board is adopting a

national standard for claim administrators to electronically submit employer claims data. The standard is the International Association of Industrial Accident Boards and Commissions’ (IAIABC) Claims Electronic Data Interchange (EDI) Release 3.0. This electronic filing of claims data will be implemented in phases, beginning in spring 2013, and will provide timely, accurate, and credible electronic reporting.

Over 30 states have adopted similar claims systems, and projected benefits of the update include faster reporting of claims, a paperless submission form (if the submission is accepted, claims information may appear in eCase in less than 24 hours), a streamlined case assembly process, and the reduction of duplicative filings.

The goal of eClaims is to replace the First Report of Injury (FROI) forms submitted by insurance carriers, including the C-2 Employer’s Report of Work-Related Injury/Illness and C-7 Notice that Right to Compensation is Controverted, as well as the Subsequent Report of Injury (SROI) forms, also including the C-7, the C-669 Notice to Chair of Carrier’s Action on Claim for Benefits, and C-8/8.6 Notice That Payment of Compensation Has Been Stopped or Modified. Employers will, however, be permitted to file paper C-2 forms. Upon submission of an accepted FROI, the WCB will automatically assemble the claim.

Although the following discussion will not be an exhaustive discussion of all changes that will be accompanying eClaims, a few key alterations are worth noting.

First, reporting will occur online and will rely upon Maintenance Type Codes (MTC). Tables have been compiled with

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the necessary summaries of reporting codes. Examples include MTC “FROI — 4 — Denial” in controverted claims, “FROI — AU — Unreported Claim Acquired” by the carrier, and MTC “CA — Change in Benefit Amount” in the reporting of a change in a claimant’s benefit amounts. Additional codes have also been created to correspond to the defenses currently listed on C-7 controversy forms, and defense counsel will be required to certify the C-7 by submission of an OC-400.5 form. PH-16.2 pre-hearing conference statement forms will still be required. Updates will be required in each significant event in a claim, including the first report of injury, acceptance/denial of the claim, changes in payments, and settlements.

Second, risk that the board will reject incomplete filings will be increased. While it is somewhat routine for C-2 employer reports to be filed in paper format with several pieces of information missing (e.g., payroll information, details regarding claimant’s medical treatment, and personal information regarding claimant’s biographical information), FROI submissions which lack basic details may be rejected. Other incomplete submissions such as FROI denials must also have all pertinent portions completed. Corresponding Element Requirement tables have been compiled showing what information must or may be submitted on each form. It is important to note that rejected submissions will not appear in eCase and this can have important implications in terms of the timeliness of submissions and denials with respect to penalties.

Third, an “SROI-SA Sub Annual Report” will now be required of carriers. In short, a synopsis of the claim must be submitted to the WCB every 180 days, regardless of whether or not there has been any action on the claim. Again, this is another area where potential penalties for late reporting

may be assessed against carriers for failure to submit such a report.

Planned rollouts for eClaims are anticipated for the spring of 2013. To get ready for the eClaims update, we strongly recommend:

• Ensuring that your insurance company, third-party administrator, or self-insured employer has an assigned “T” number to be permitted to submit electronic data, is registered with the WCB, and is familiar with your implementation date.

• Reviewing internal data collection processes and requiring insureds to complete all sections in the C-2 form.

• Having claims representatives review the WCB’s training materials and taking the offered online training courses which offer an introduction to eClaims.

• Continued monitoring of the WCB’s eClaims website, including all updated news and tables.

Certainly, eClaims represents a significant change on the carrier’s part in the reporting of claims and claims litigation. Preparation for these upcoming changes is strongly encouraged.

The WCB Sets Guidelines to Govern Maintenance Care for Chronic Conditions

Effective March 1, the Workers’ Compensation Board instituted changes to the Medical Treatment Guidelines. One of the changes was to add guidelines for treatment of carpal tunnel syndrome, which was arguably overdue, and another was to make modest changes to streamline the variance process.

But perhaps the most interesting change is that the board is prescribing guidelines to govern maintenance care for chronic conditions. One change in the original guidelines that was proposed to provide a significant cost benefit for employers and carriers was the limitation on chiropractic care and physical therapy. However, since the implementation of the 2010 guidelines, three-fourths of all variance requests have been for maintenance care, as chiropractors and physical therapists have increasingly justified requests by observing that there has been an “exacerbation,” justifying continued maintenance care. This flood of variance requests has had the effect of bogging down the entire adjudication system set up for the guidelines.

The recent changes allow for 10 annual visits for claimants who have reached maximum medical improvement. In exchange for this, there is no variance allowed from that 10-visit maximum. This is, in effect, the board forcing a compromise solution on all sides, with the goal of reducing the caseload created by the guidelines. This may well be a positive solution, given the cost of litigating courses of chiropractic and physical therapy compared to authorizing a limited number of those sessions.

The guidelines continue to distinguish “maintenance care” from “exacerbations.” To establish an exacerbation, the provider must document:

• When and how the exacerbation occurred

• Objective changes from baseline function

• Expected type and frequency of treatments anticipated to return the patient to baseline function

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• Patient’s response to treatment through documented measures of objective functional improvement.

The board goes on to spell out exactly what is, and what is not, functional improvement. To that end, it would seem the board intends to begin cracking down on the endless claims of exacerbations as a means of continuing treatment. It is important to note, however, that a variance is not required for the initial treatment of an exacerbation that is consistent with MTG recommendations and meets the exacerbation criteria, but a variance is required when treatment of an exacerbation is not consistent with the MTG (for example, when treatment extends beyond the maximum duration).

Major Victory for Personal Injury Defendants Adds Leverage for A Workers’ Comp Defense

In Auqui v. Seven Thirty One Ltd. Partnership, 2013 NY Slip Op 950 (N.Y. Feb. 14, 2013), the Court of Appeals reversed the First Department and held that the doctrine of collateral estoppel bars a plaintiff from litigating duration of disability in New York State Supreme Court when the plaintiff previously litigated the same issue to a full and final decision as a claimant in a corresponding matter before the Workers’ Compensation Board.

The plaintiff, Jose Verdugo, was employed as a food service deliveryman. In an accident arising out of the course of his employment on December 24, 2003, the plaintiff was injured when a sheet of plywood fell from a building under construction owned by Seven Thirty One Limited Partnership. The plaintiff sustained injuries to his head, neck, and back. Additionally, the plaintiff developed post-traumatic stress disorder and depression. The plaintiff commenced a third-party personal injury action in Supreme Court against Seven Thirty One Limited Partnership; Bovis Lend Lease LMB, the

construction manager; and Northside Structure Inc., the concrete superstructure subcontractor. At the same time, the plaintiff filed a claim for benefits against his employer’s workers’ compensation insurance carrier and appeared as a claimant before the WCB.

While the personal injury action was pending in Supreme Court, the claimant litigated his degree of disability in connection with his claim before the WCB. In 2006, the workers’ compensation carrier moved the board to find that the claimant had no ongoing disability from work. Following litigation involving medical testimony, the Administrative Law Judge (ALJ) presiding over the case ruled that the plaintiff was no longer disabled from work as of January 24, 2006, and required no additional medical treatment for any of his injuries except for post-traumatic stress disorder. A full panel of the WCB affirmed the ALJ’s findings.

In April 2009, the defendants in the personal injury action moved the trial court to preclude the plaintiff from relitigating the duration of his causally related degree of disability on the grounds that the issue had been fully litigated and ruled on as part of the workers’ compensation administrative proceeding. The trial court granted the motion. However, while the motion was pending, the plaintiff’s attorney had commenced a Mental Hygiene Law Article 81 petition. Based on uncontested evidence of incapacity, Jose Verdugo’s wife, Maria Verdugo, and his sister-in-law, Maria Auqui were appointed coguardians. With the guardianship order in hand, the plaintiff’s attorney moved for leave to renew and/or reargue the defendants’ collateral estoppel motion in Supreme Court on the grounds that the guardianship order raised a triable issue of fact regarding the plaintiff’s ability to work.

While the trial court granted the plaintiff the requested relief, the court ultimately

adhered to its original decision in finding issue preclusion. The plaintiff appealed to the First Department, which reversed, holding that the WCB’s determination regarding degree of disability was an ultimate conclusion involving a mixed question of both fact and law ingrained with policy considerations along with the board’s expertise, as opposed to a mere evidentiary fact. Therefore, the First Department reasoned, the board’s ruling on the issue was not entitled to preclusive effect. Auqui v. Seven Thirty One Ltd. Partnership, 83 A.D.3d 407, 408 (N.Y. App. Div. 1st Dep’t 2011). In a 5-1 decision (Judge Pigott dissenting), the Court of Appeals reversed, holding:

The determination of the WCB should be given preclusive effect as to the duration of plaintiff’s disability, relevant to lost earnings and compensation for medical expenses. The issue of continuing benefits before the administrative agency necessarily turned upon whether Jose Verdugo had an ongoing disability after a certain date, which is a question of fact, as distinguished from a legal conclusion and a conclusion of mixed law and fact. We also find that the plaintiff had a full and fair opportunity to litigate the issue of ongoing disability in the 2006 WC proceedings. The plaintiff was represented by counsel, submitted medical reports, presented expert testimony, and cross-examined the defendants’ experts regarding the issue of whether or not there was an ongoing disability. Auqui v. Seven Thirty One Ltd. Partnership, 2013 NY Slip Op 950, 2-3 (N.Y. Feb. 14, 2013)

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Obviously, the decision represented a major victory for the personal injury defendants, who not only had their exposure significantly limited, but also avoided the cost of expensive protracted litigation in New York State Supreme Court. The bigger picture, of course, is that the decision leaves opens the possibility to other pertinent WCB determinations having an impact on the accompanying third-party liability actions. For example, the board is vested with broad fact-finding power in determining the source of an injured worker’s loss of wage earning capacity. In some instances, the board has determined that a partially disabled injured worker is not entitled to wage replacement benefits where the loss of wage earning capacity was not caused by the claimant’s causally related disability, but rather a refusal to make reasonable efforts to search for work within his or her medical restrictions. Matter of Zamora v. New York Neurologic Assoc., 19 N.Y.3d 186 (N.Y. 2012).

An injured worker can sufficiently prove that he or she is looking for work in a number of different ways, which include enrolling in Access Vocational Rehabilitation Training (formerly known as VESID) or by actively participating in the New York State Department of Labor’s “One Stop” program, which, of course, is available to injured workers who file suit under the Labor Law. The court’s recent holding in Auqui begs the question: If the board rules that an individual is not working because he or she simply is not looking for work or attempting to re-enter the labor force through free vocational rehabilitation, then why should the individual be afforded an opportunity to be heard on the issue in New York State Supreme Court? In any event, it would certainly be good practice for third-party defendants and their counsel to remain apprised as to the status of the workers’ compensation case.

For workers’ compensation carriers and their defense counsel, the decision undoubtedly provides additional negotiating leverage inasmuch as the stakes in litigating degree of disability have been astronomically raised for compensation claimants. However, compensation carriers must keep in mind that their interests are often aligned with claimants with respect to the outcome of the claimants’ liability actions. Pursuant to Workers’ Compensation Law § 29, in the event that a claimant recovers in a third-party action, the compensation carrier is granted a lien on the amount of the recovery proceeds equal to the amount of past medical expenses and indemnity payments, with interest, subordinate to deduction for plaintiffs’ litigation expenses and attorney fees. See, e.g., Kelly v. State Ins. Fund, 60 N.Y.2d 131, 136 (N.Y. 1983).

Depending on the nature of the injuries claimed and consequential entitlements, the gross value of the lien may include calculation of prospective liability. See, generally, Burns v. Varriale, 9 N.Y.3d 207 (N.Y. 2007). As such, depending on the value of the compensation carriers’ lien and the status of the plaintiffs’ third-party action, it may actually be in the workers’ compensation carrier’s best interest to settle rather than take an issue to a full and final decision before the board. The reasoning being simple; you don’t what to cut your nose off to spite your face.

For claimants, the decision continues a trend of growing uncertainty regarding their rights and obligations which has characterized the WCB’s proceedings over the last several years. For their attorneys, it certainly raises new substantive and ethical issues that will need to be addressed prior to selecting a particular course of action in pursuing their clients’ benefits. As a matter of good practice, claimants’ attorneys would be wise to discuss these issues with their clients and their clients’ personal injury attorneys. In most if not all cases, attorneys

should also have their clients sign a written acknowledgement that litigating degree of disability before the WCB may result in a reduction in their third-party recovery, that the client fully understands this concept, and that the client wishes to prosecute the issue anyway.

If nothing more, the decision compels all interested parties to give pause and consider the new consequences associated with litigating rather than resolving disputes (or vice versa) and underscores the importance of obtaining fully informed and knowledgeable counsel in connection with both liability and compensation actions.

Loss of Wage Earning Capacity Case Law Update

When the Workers’ Compensation Board issued the Impairment Guidelines, it declined to specify how the medical impairment class, the functional impairment and the vocational factors would come together, leaving this to the law judges and the board panel to make case law. We have been tracking these decisions, and while no clear formula has emerged, we at least have some cases to which we can look for guidance.

• P. Cooper Village Stuyvesant, WCB No. G0073945 — The claimant had a claim for contact dermatitis and consequential cataracts, and suffered from allergic reactions from common activities. His doctor said he could work if he avoided exposure to epoxy, rubber, and PPD dyes. The claimant was a career painter and vocational rehabilitation did not believe he was a suitable candidate for services. IME indicated a 50 percent PPD, but the board noted that the IME could only determine impairment, and found the claimant permanently totally disabled.

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• Catholic Homecare Services, WCB No. G0020923 — The claimant was found to have a 71 percent medical impairment due to positive objective findings and diagnostic studies, and met a majority of the guidelines for a marked disability, but not a total disability. The claimant was 55 years old and an LPN. The board found her to have a 75 percent loss of wage earning capacity (LWEC).

• St. Francis Hospital, WCB No. G0008658 — The claimant had a long history of chronic radicular pain with positive findings, including atrophy, but could perform ADLs. The claimant was an RN with a master’s degree. The board found a 50 percent medical impairment and 50 percent LWEC.

• German Masonic Home Corp., WCB No. 30706177 — The 60-year-old claimant has a five-pound lifting restriction, uses a cane, muscle relaxants, and narcotics, cannot sit or stand for extended periods, is subject to exacerbation, and has a spinal cord stimulator. The judge found a 75 percent LWEC, and the claimant appealed. The board found a 75 percent medical impairment and directed functional capacity evaluation.

• Tully Construction Co, Inc., WCB No. G0028753 — The 56-year-old claimant had lumbar disc herniation with radiculopathy, a five-to-ten pound lifting restriction, no repetitive bending, no ladder climbing, no walking over two hours per eight hour shift, or prolonged sitting. The claimant was a high school graduate with a career in manual labor. The judge found 80 percent LWEC and 80 percent medical impairment. The claimant appealed, seeking an increased LWEC, and the board noted that his ability to read and

write, and lack of other hindrances to employment, did not justify a higher LWEC.

• Gowanda Correctional Facility, WCB No. 80708148 — The 56-year-old claimant had spinal stenosis and degenerative disc disease in the lower back. The claimant was a high school graduate who had worked as a corrections officer for 17 years before the injury on file. The carrier’s IME indicated a 75 percent medical impairment, while the claimant’s treating physician only opined a 50 percent medical impairment, and said that the claimant had great potential for retraining. The claimant argued for total industrial disability based on his use of narcotic pain medication making him unable to focus at work. The judge found an 85 percent LWEC and excused the claimant from participation in the labor market. The board upheld the 85 percent LWEC, but found that the claimant had an obligation to remain attached to the labor market.

The Third Department Limits WCL Section 123 Applicability

In Matter of Runge v. National League of Baseball, 2013 N.Y. App. Div. LEXIS 1129 (N.Y. App. Div. 2013), the Third Department ruled that a carrier may not use WCL Section 123 to bar a claim where the carrier has voluntarily paid for medical treatment.WCL Section 123 states that “no claim for compensation … that has been disallowed after a trial on the merits, or that has been otherwise disposed of without an award after the parties in interest have been given due notice of hearing or hearings and opportunity to be heard and for which no determination was made on the merits, shall be reopened after a lapse of seven years from the date of the accident.”

In this matter, the claimant sustained an injury in March 1997, and the carrier accepted the injury by filing a C-669 form. The claimant did not attend the subsequent hearing in April 1998, and the case was closed. The carrier continued to pay medical benefits on the claim until 2002. In 2004, the claimant opted to pursue the claim, as a total knee arthroplasty was indicated by his doctors. The law judge found that Section 123 barred the claim and the Workers’ Compensation Board affirmed. The Third Department reversed, however, noting that the carrier had made payments for medical treatment for five years and that the carrier could not then avail itself of the Section 123 defense.

There is certainly some logic to the Third Department’s decision; if medical treatment is being paid without incident, the board may not have any reason to schedule a hearing and, thus, formally establish the case as it would likely have done here. If a carrier has made payments of medical expenses, those are usually treated as an acceptance of the claim. Nevertheless, in those cases where a claim is over seven years old, and has never been formally established, a carrier cannot count on Section 123 barring the claim if there has been extensive medical bill payment to date. With the pending demise of Section 25-a, this gives carriers and employers one fewer avenue to dispose of old claims.

Section 25-a Fund to Close January 1, 2014

The Special Fund for Reopened Cases (also known as the Section 25-a Fund) will be closing effective January 1, 2014. The only exception will be for timely filed appeals for transfers into the fund.

The benefit of this is that New York’s highest-in-the-nation workers’ compensation assessments should decrease over time as the 25-a caseload decreases. The

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downside, however, is that carriers who have settled indemnity on claims with a Section 32 agreement, and were counting on getting Section 25-a relief for future medical costs, will no longer be able to do so. Save for the exception for timely-filed appeals, the January 1 deadline is hard and fast.

For the remainder of 2013, carriers and employers need to make it a priority to transfer whatever eligible cases they can to the Section 25-a Fund. This means tying up all outstanding issues, such as old opinions on permanency or apportionment that were never addressed, or periods of lost time that were held in abeyance. Many times, cases that appear to be eligible for 25-a transfer at first blush, i.e. are seven years old and have not seen a payment of indemnity benefits in at least three years, have these types of old issues that prevent transfer. A thorough file review is often needed to uncover these issues and make sure they are addressed at a hearing. Ideally, since these cases should involve claimants who are not claiming lost time, a resolution can be reached with the claimant to resolve any outstanding issues and place the claim on footing for 25-a transfer. However, in most cases, it will probably require filing an RFA-2 and having the issues resolved at a hearing, and then requesting 25-a transfer with the next medical bill received.

For cases that appear to meet all the requirements for a Section 25-a transfer, we do not recommend applying to the Special Funds for a voluntary transfer of liability. Special Funds has been denying these applications almost as a matter of course, and with the fund now closing as of January 1, 2014, that will surely continue. The best course of action is to file an RFA-2 upon receipt of a medical bill, requesting 25-a transfer.

Caps on PPDs Begin With Date of Classification

When the caps on permanent partial disabilities were announced, one of the questions that arose was the date at which the caps would begin to run. Would it be the date of the first medical opining classification? The hearing at which classification was raised as an issue? Or the date of the decision in which the claimant was finally classified?

The Workers’ Compensation Board has clearly articulated that the caps on permanent disabilities begin to run as of the date of classification, not the date of medical evidence opining a permanent disability. See, Clancy Moving Systems, WCB No. G007 0019, Target, WCB No. G0059924, citing Buffalo Auto Recovery, WCB No. 80703905. This is an important distinction, given that it may take several weeks, or months, of litigation from the time a doctor opines permanency to the time of classification. With permanent partial disabilities now capped, claimants have every incentive to delay classification as long as possible. This policy by the board is the best-case scenario for claimants.

The case of Island Jeep, WCB No. 40802430, found that the effective date of permanency was the date of the claimant’s treating physiatrist. However, this case is rarely applied due to its unusual fact pattern. In that case, the fact that the claimant had a permanent disability was not disputed; the only dispute was one of degree. It is also noteworthy that Island Jeep was decided prior to the implementation of the 2012 Medical Impairment Guidelines, which marked a significant change in how permanency is to be determined. It is, therefore, not a case to be relied upon for the general proposition that the caps apply to any time but the date of classification.

The practice tip that one can derive from this is that the carrier and employer need to be actively pushing the issue of permanency. An IME should be scheduled as soon as it appears the claimant may have reached maximum medical improvement, and then an RFA-2 filed as soon as an opinion on permanency is indicated. Further, as the claimant will have incentive to delay classification, the carrier and employer need to be prepared to litigate the issue aggressively and not be content with a judge’s finding that the claimant has an open-ended opportunity to obtain medical on permanency.

Claimant Sustains Injury from Opening Door; Third Department Affirms

The requirement that a claimant must sustain an injury as a result of a unique feature of their employment took another hit in the Matter of Laib v. State Ins. Fund, 2012 N.Y. App. Div. LEXIS 8568 (N.Y. App. Div. 2012). A claimant alleged an injury to her right shoulder from repeatedly opening and closing the heavy front door to the building over a five-year period. The claimant asked for permission to use the office’s handicapped door and obtained a doctor’s note to that effect.

The employer’s controversy was predicated in large part on testimony from the supervisor and an investigator that no one else had a problem navigating the door. The Workers’ Compensation Board found that the evidence from the investigator was not sufficiently persuasive, noting that he did not observe the claimant opening the door, and did not take note of the size of the various individuals coming and going.

Historically, a claimant has had to demonstrate that their injury resulted from a unique feature of their employment, and this has usually been associated with an accidental injury. The Third Department,

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citing Matter of Duncan v. John Wiley & Sons, Inc., 54 AD3d 1124, 1125, 864 N.Y.S.2d 210 [2008], said, “While an accidental injury must arise from unusual environmental conditions or events assignable to something extraordinary, it need not result suddenly or from the immediate application of some external force but may accrue gradually over a reasonably definite period of time.”

The end result is that this case opens the door for more “ergonomic” type claims. If a claimant can sustain a compensable injury from opening the front door to the office, it would seem that almost anything is possible.

Third Department Denies Travel Reimbursement for Out-Of-State Treatment

In workers’ compensation, a claimant is generally entitled to treat with whatever medical provider he or she deems best, subject to the New York fee schedule, and any arrangements the carrier has made for diagnostic or pharmaceutical networks. If a claimant moves out of state, medical providers are still subject to New York’s fee schedule, but the claimant is not barred from treatment.

The Appellate Division, Third Department faced an interesting, and for carriers and employers, potentially costly situation in Matter of Bland v. Gelman, Brydges & Schroff, 2012 N.Y. App. Div. LEXIS 8145 (N.Y. App. Div. 2012). The claimant had two separate cases for carpal tunnel syndrome, one in 1993 and one in 2009.

Despite living in Lewiston, New York, the claimant sought treatment with providers in Colorado, and the judge granted this, directing the carriers to reimburse her for travel expenses. This was despite the fact that the carriers submitted evidence that there were physicians in nearby Buffalo

who performed the type of surgery the claimant required, and that there were diagnostic networks available locally that could also accommodate her.

The Workers’ Compensation Board reversed the law judge on this point, and the Third Department affirmed that reversal, finding that “while a claimant has the option to treat with an out-of-state physician, a carrier is not required to reimburse for related travel expenses unless the claimant demonstrates that similar treatment could not be obtained from a physician in New York.”

Had the Third Department ruled differently, this could have opened the door for claimants to seek treatment elsewhere, even where there is a competent local provider. It does not take much imagination to surmise that many of those out-of-state visits might have been social in nature as much as medical.

New York Still Has Highest Workers’ Comp Assessments in Nation

A recent study by the Workers’ Compensation Policy Institute has confirmed what employers have likely expected: New York has the highest workers’ compensation assessments in the United States. And it’s not particularly close.

These assessments are enforced by a surcharge on every workers’ compensation policy, representing a tax that is intended to fund New York’s workers’ compensation system. They include administrative costs for the Workers’ Compensation Board, and funding for the Special Funds Conservation Committee (SFCC), which administers stale claims under WCL section 25-a, as well as the second injury fund under section 15-8 and contributes to concurrent employment cases under section 14-6.

The 2007 Workers’ Compensation Reform Act mandated that the SFCC would receive no new cases under sections 15-8 or 14-6 and set up a separate entity, the Waiver Agreement Management Office (WAMO), to settle active 15-8 cases, thus reducing the legacy costs from older 15-8 cases. The goal was to reduce the assessment burden. However, that has not been the case. In 2007, policy premiums were surcharged 18.6 percent for assessments. They are now 18.8 percent. For comparison, Minnesota has the second highest assessment surcharge, at 8.3 percent, and the national average is 3.8 percent.

There are several reasons that employers and carriers have not been seeing the reduction in assessments that was intended. WAMO has not been nearly as successful at settling cases as hoped, and an attempt to get carriers to take back the liability on 15-8 cases predictably failed. While the 2007 Reform Act set out a streamlined litigation process, it was accompanied by new regulations regarding disputed medical treatment that ultimately required just as much oversight as before. As it stands, administrative costs in New York exceed the total cost of assessments in every northeastern state save Connecticut. Section 15-8 cases account for 51 percent of assessments; there is thus a 9.6 percent tax on premiums that funds these cases. Over time, this will eventually decline, as cases settle, or claims otherwise close with no further benefits. However, this will take a significant amount of time, and it is now apparent that the 2007 Reform Act has not had the intended effect of reducing assessments.

Second Department Affirms That Undocumented Aliens Can Receive Workers’ Compensation Benefits

In New York Hospital Medical Center of Queens v. Microtech Contracting, 2012 NY Slip Op. 06287, the Second

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Department faced the question of whether undocumented aliens could be covered by the Workers’ Compensation Law. Microtech employed two undocumented aliens to do work at New York Hospital; they were injured on the job, and were provided with workers’ compensation benefits. The workers then in turn sued the hospital, and New York Hospital sued Microtech demanding contribution and indemnification. Microtech moved for dismissal pursuant to WCL §11, which states that the “liability of an employer … shall be exclusive and in place of any other liability whatsoever, to such employee … or any person otherwise entitled to recover damages, contribution or indemnity.”

The Second Department affirmed the Supreme Court’s dismissal of the action for contribution/indemnification.

It has generally been accepted that a third party cannot seek contribution/indemnification from an employer, save limited exceptions such as grave injury or contractual obligation, but New York Hospital argued that Microtech had violated the Immigration Reform and Control Act of 1986 (IRCA) and thus should lose their protection under §11. However, the Second Department found that there was no statutory language in IRCA that pre-empted the Workers’ Compensation Law and found that the purpose of IRCA was not incompatible with that of §11. Further, the Second Department noted that to strip the employer of their §11 rights would have the effect of removing any incentive for New York Hospital, or any similarly situated party, to ensure a safe workplace.

It has been well settled that an undocumented alien may recover workers’ compensation benefits and that this is not in contravention to IRCA. See, Ramroop v. Flexo-Craft Print, Inc., 11 NY3d 160, et al. However, this appears to be the first attempt to circumvent §11 by using IRCA.

It remains to be seen whether the Court of Appeals may consider an appeal from this decision, but it would be a bit surprising if they did so, given how firmly the Second Department ruled on this issue.

Death Claims From Overdose Compensable — Can They Be Prevented?

New York’s Appellate Division restated a long-standing, but unfortunate, doctrine: a workers’ compensation claimant who has an established injury, and who overdoses on medication prescribed for said injury may bring a death claim against the employer. Fayo v. Crystal Run Health Care, LLP, 80 AD3d 1025 (2011). As long as a claimant has a doctor who can credibly opine that the claimant’s overdose was causally related to prescription drugs being taken for their injury, the death claim can be found compensable.

This result runs counter to the initial intent of the 2010 Workers’ Compensation Board Medical Treatment Guidelines (MTG). The MTG was initially designed to dramatically curb the prescription of narcotic pain medication, limiting use to two weeks duration in most cases. However, the board quickly backtracked from this; Subject Matter 046-457 stated:

It is critical to note that the MTG do not require, and are not intended to recommend, the immediate cessation of prescription narcotics or other medication for claimants who have been using such medication long term. There are very significant health risks associated with the sudden withdrawal of narcotics and other pain medications. The MTG allow for the use of pain medication beyond the maximum duration. Therefore,

carriers should continue to pay for these medications without a variance request.”

The board thus gave carte blanche for doctors to continue prescribing narcotic pain medications to claimants with long-standing injuries.

However, the board went on to say that for cases after December 1, 2010, the new guideline could be enforced. Thus far, many insurance carriers and employers are not enforcing these, in light of the passage quoted above. This is a mistake. The long-term cost of prescription narcotics is a significant cost driver, and the possibilities of a finding of compensable overdose mean that carriers and employers should seek to minimize the use of narcotics at the earliest opportunity. Perhaps little can be done for cases with a pattern of narcotic prescriptions, but for newer cases, carriers and employers should seek to enforce the MTG as written, and utilize pharmaceutical records reviews and independent medical exams as a means of avoiding a long-term dependency in these cases.

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Workers’ Compensation Quarterly | Spring 2013

recent victories

An Injured Worker’s Act of Fraud Leads to Harsh Penalties

Damon Gruber, a partner in the Buffalo office, recently obtained a favorable decision from the board panel in a case involving the imposition of a discretionary penalty issued after a determination that a claimant had committed fraud by violating the provisions of WCL114-a(1) by collecting wage replacement benefits while simultaneously working under the table as a child care provider. In the initial decision issued by the law judge it was determined that the claimant had committed fraud, and as a result had also forfeited two years worth of lost wage benefits that had previously been awarded.

In addition to the imposition of the mandatory penalty forfeiting the lost wages benefits during the period of employment, the law judge also imposed an additional future discretionary penalty worth three times the amount that had been improperly paid by the carrier to the claimant. However, in a strange attempt to help the claimant avoid having to repay more than $22,000 in improperly obtained lost wage payments, the law judge determined that the payments made to the claimant during the period in which she was working would be held by the carrier as a credit against future lost wage or permanency benefits.

In choosing to apply the harshest penalty allowed for under the statute, the three-member board panel imposed a lifetime ban on lost wage and permanency benefits and more importantly, rescinded the law judge’s directive that the carrier hold as a credit the more than $22,000 paid to the claimant during her period of undisclosed self-employment. As a result, the carrier is now entitled to pursue recovery of the overpayment by taking a judgment against the claimant and pursing collection.

This decision represents another in a long line of favorable decisions in which the board has chosen to impose harsh penalties in situations where injured workers commit acts of intentional fraud. As a result, if the law judges do not follow through with the proper penalties after a fraud determination is rendered, appeals should be pursued to the board panel in order to ensure that the fraud violators are properly sanctioned.

A Thorough Investigation Assists an Insurance Carrier’s Defense

Paul J. Kilminster is leading the Goldberg Segalla team in representing a hotel employer and its workers’ compensation insurance carrier in defense of a claim for benefits set forth by one of its housekeepers. The claimant had submitted a medical report from her physician attributing her bilateral carpal tunnel syndrome to the repetitive use of her hands that her job requires. Based

on this report, the administrative law judge set the matter for trial.

Over the course of an investigation in which we interviewed the claimant’s coworkers and thoroughly reviewed the Workers’ Compensation Board’s insurance compliance records, we discovered that the claimant had full employment at a bakery and also had a previous workers’ compensation claim. In analyzing the medical reports for the prior claim, we discovered that the claimant’s physician diagnosed bilateral work-related carpal tunnel syndrome almost two years before the insurance carrier’s policy went into effect. As a result, we were able to convince the board to place the claimant’s concurrent employer on notice as a party of interest, along with the insurance carrier who previously insured the hotel. Due to our representation, the insurance carrier is now in a very strong position to have the claim either time-barred or to be removed and discharged from notice as the liable carrier.

Case Disallowed Because of a Claimant’s Credibility

Bryan Richmond, an attorney in the Albany office, recently succeeded in getting a case disallowed because of the claimant’s questionable credibility. The claimant worked for a mill working company delivering wooden doors and alleged that he injured his back while unloading a door from a truck. The claimant subsequently

Prior results do not guarantee a similar outcome.

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Workers’ Compensation Quarterly | Spring 2013

underwent surgery and remains totally disabled, according to his doctors. Upon extensive review of the claimant’s medical records and various written statements, it became clear that claimant made multiple prior reports of this incident to his medical providers in which the claim was not reported as work related. In fact, it was repeatedly reported to have occurred on a day in which the claimant was not working.

The claimant and his physicians were thoroughly cross examined and confronted with the many differing versions of when and how this accident occurred. One of his doctors was ultimately forced to concede that based upon the history he was given, he could not state that this was a work-related incident. Upon a thorough confrontation of the claimant regarding the previous versions of the incident documented by his treating physicians, he was ultimately only able to claim that each of the doctors he saw in his early treatment of the injury incorrectly reported the history he gave. The law judge agreed that the claimant lacked credibility in his subsequent reporting of the claim as work related.

Judge Finds No Causal Connection Between Medication and Accident

Bryan Richmond also recently succeeded in getting a case disallowed because there was no causal connection between the claimant’s injuries and any work-related incident. The claimant worked for a veterinary hospital and had a pre-existing seizure disorder for which she was on medication. She claimed that during a seizure a hospital employee gave her medication without her consent. The claimant subsequently got into her car and began to drive home. She had a motor vehicle accident while driving home and sustained significant injuries. It was indicated that the claimant had another seizure episode while driving home and blacked out. The claimant alleged that the medication caused her to have a seizure.

Richmond worked closely with the employer and the many witnesses to the events that transpired on the day of the incident. He visited the employer and conducted interviews of many employees, several of which were ultimately presented as witnesses at the trial. At trial, he presented the testimony of multiple favorable employer witnesses and conducted a thorough cross examination of the claimant, in which the claim that the claimant was given medication without her consent was sharply contested. Attorney Richmond also conducted an examination of the claimant’s seizure doctor.

Upon cross examination, the claimant’s doctor was forced to concede that the medication taken by the claimant could not have caused her to have a seizure. Thus, Attorney Richmond argued that even if claimant was somehow forced by her employer to take a medication, there was no causal connection between the taking of the medication and the claimant’s car accident. The law judge agreed, and found the claim not compensable.

Meeting With Employer Witnesses in Advance Results in a Case Disallowed

Philip Unwin, special counsel in the Rochester office, recently succeeded in getting a case disallowed based on a lack of claimant credibility. The claimant worked for a garage door company and

alleged that he injured his shoulder pulling on a door spring. However, after extensive consultation with the employer, it was clear that the claimant’s account of when and where he was injured did not match with his work schedule for the days in question, nor did his initial report to a co-worker seem to match the date he alleged. The employer also had prior conversations with the claimant regarding a separate injury he sustained to his forearm while assisting a friend. While the forearm was not at issue, here too, the claimant’s account of the event did not match the employer.

By putting together enough instances where the claimant lacked credibility, the presumptions of WCL sec. 21 were overcome, and the case was disallowed. One of Goldberg Segalla’s Best Practices is to meet with employer witnesses in controverted claims well in advance. In this case, Unwin had multiple conversations with the employer well in advance of the trial hearing, and was able to have the entire background story, along with the supplemental materials from the employer.

Prior results do not guarantee a similar outcome.

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Workers’ Compensation Quarterly | Spring 2013

Featured article

Goldberg Segalla Welcomes Stacy A. Tees and Todd M. Jones to Its Workers’ Compensation Team

We are pleased to announce that two attorneys have recently joined our Workers’ Compensation and Labor and Employment Practice Groups. Stacy A. Tees is special counsel in our Philadelphia office, while Todd M. Jones is an associate in our Garden City office.

Stacy focuses her practice on all aspects of workers’ compensation law, including conducting and participating in the deposition of medical experts and fact witnesses, advising clients in preparation for litigation, and the presentation of matters before workers’ compensation judges, the Workers’ Compensation Appeal Board, and Commonwealth Court. She represents employers, insurance carriers, and third-party administrators throughout the Commonwealth of Pennsylvania.

Stacy is a member of the American Bar Association’s Tort Trial and Insurance Practice Section and Workers’ Compensation and Employers’ Liability Committee; she is membership vice chair and chair elect designee of the latter committee. She was elected to a three-year term on the Board of Governors of the Philadelphia Bar Association and has

held numerous positions with the Workers’ Compensation Section of the organization, including co-chair, secretary, silent auction chair, and section representative to the Board of Governors. She was a member of the executive committee of the Philadelphia Association of Defense Counsel from 2009 to 2012.

Stacy received a B.A. from Indiana University of Pennsylvania and her J.D. from Duquesne University School of Law.

As a workers’ compensation claimant’s attorney, Todd handles accidental, occupational, and death claims at with all stages of litigation, including trials, depositions of medical experts, and appeals.

He has made presentations to local organizations and authored articles for the Young Lawyers Section of the New York State Bar Association (NYSBA). Todd serves as a NYSBA Executive Committee liaison between the Young Lawyers Section and the Torts, Insurance, and Compensation Law Section, and is a member of the Brehon Law Society of Nassau County.

He received a B.S. degree from the University of Scranton and his J.D. from Touro Law Center.

Labor & Employment UpdatesThe Goldberg Segalla Labor and Employment Practice Group also distributes timely legal updates covering significant developments and evolving trends in labor and employment law. Please let us know if you are interested in subscribing.

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Sean J. McKinley

To learn more and view biographies, please click on the attorney’s name and be directed to www.GoldbergSegalla.com.

Partners

Jennaydra D. ClunisCory A. DeCresenzaLisa M. Diaz-OrdazTodd M. Jones

Paul J. KilminsterGary A. Marshall, Jr.Bryan D. Richmond

Associates

Goldberg Segalla is a Best Practices law firm with offices in Philadelphia, New York, Princeton, Hartford, Buffalo, Rochester, Syracuse, Albany, White Plains, Long Island, and London. The Workers’ Compensation Practice Group is comprised largely of seasoned trial attorneys who routinely handle all matters of workers’ compensation litigation, with an emphasis on cases involving both major and minor injuries, in both the “accident” and “occupa-tional disease” context.

The Workers’ Compensation Practice Group routinely practices before the New York Workers’ Compensation Board, and is prepared to handle regular and trial hear-ings, testimony of claimants, employer witnesses and medical experts, stipulation settlement conferences, per-manency determinations, and §32 agreements. For more information on Goldberg Segalla’s Workers’ Compensa-tion Practice Group, please contact Damon M. Gruber at dgruber@goldbergsegalla.com.

Damon M. Gruber

Chair

our Workers’ compensation team:

Stacy A. Tees S. Philip Unwin

Special Counsel