NEWSWIRE

March 7, 2013: This week’s news joins our weekly postings of news reports, press releases, legislative updates, and background stories of concern to those who participate in the State of New York Workers Compensation system: injured workers, carriers and employers, their attorneys, Workers Compensation Board staff, and third party vendors. This page also posts ‘insider’ information about proposed changes in practice and procedures at the NYS Workers Compensation Board, information not available anywhere else. If you would like to be added to our weekly e-mail alert list or have any submissions or suggestions, they can be sent to me at TheInsider@InsideWorkersCompNY.com.

COMMENTARY

The Board’s Continuing “Disfunctionality”

DECISIONS

WCB gets 3 Reversals this week.

Understanding Section 32 settlements: A detailed guide

Ever wonder why Appeals take so long? Read the answers here.

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SIF Mourns Loss of Commissioner Robert Hurlbut

March 5, 2013: New York State Insurance Fund Chief Executive Deputy Director Dennis J. Hayes today announced the passing of long-time NYSIF commissioner and former Chairman of the Board Robert H. Hurlbut.

Mr. Hurlbut died unexpectedly at his home in Honeoye Falls on Monday, March 4. He was 77 years old.

A highly-respected Rochester, New York, businessman and philanthropist, Mr. Hurlbut was the longest-serving NYSIF commissioner in continuous service to the workers’ compensation and disability benefits insurance fund.

Mr. Hurlbut was appointed to NYSIF’s Board of Commissioners in 1989 by then-Governor Mario M. Cuomo. For 24 years as a NYSIF commissioner, he rarely missed a board meeting, serving as vice chairman from 1995 to 2006, and as chairman from 2006 to 2012. True to form, he attended the Board’s most recent meeting in February 2013.

Born in Rochester, NY, Mr. Hurlbut earned a degree in hotel administration from Cornell University in Ithaca, NY. In 1964, Mr. Hurlbut became president of ROHM Services Corporation, which he founded in Rochester, providing management and consulting services for nursing homes in western New York exceeding 1,000 beds. Most recently, he founded and served as president of the Hurlbut Trust since 1994, offering financial and consulting services for healthcare facilities and rental properties.

In 1964, Mr. Hurlbut became president of ROHM Services Corporation, which he founded in Rochester, providing management and consulting services for nursing homes in western New York exceeding 1,000 beds. In 1992, he became chairman of the board of ROHM Services Corp. In 1968, Mr. Hurlbut founded and became president of Vari-Care, Inc., overseeing the operation of 24 long-term health care facilities with a capacity of over 2,600 residents and retirement complexes located in Alabama, Arizona, Florida and Texas. He served as a member of the board of directors of the Houston-based Living Centers of America, which purchased Vari-Care, Inc., in 1993 and operated over 20,000 beds in the United States.

A New York state-licensed home administrator and a fellow in the American College of Health Care Administrators, he served as chairman of the board of the University of Rochester Medical Center, a trustee of the University of Rochester, and vice chairman of the University of Rochester Eastman Dental School and Foundation Board. He was a life member of the Cornell University Council and served on the boards of trustees of St. Mary’s Hospital and Foundation, the Roberts Weslyn College and St. John Fisher College, from which he received an honorary Doctorate of Law Degree. He also served on the board of directors of the Rochester Area Foundation, Blue Cross, the Monroe County Long Term Care Program, Lifespan, the Finger Lakes Health Systems Agency, and HSBC Bank, and as chairman of the Rochester Chamber of Commerce.[33220-5360]

Cuomo’s Detailed Plans for the WCB

February 7, 2013: New York State Senate Majority Coalition has just published its 262+ page analysis of the 2013-14 Executive Budget. Below are some of the highlights as they pertain to workers compensation.

Of the most interest are reform of GSIT’s, the ATF, and the specifics of the ‘raid’ in the New York State Insurance Fund.

• State Insurance Fund (SIF) The Executive Budget would change the method of calculating reserves from a liability basis to a pay-as-you-go basis. According to the Executive, this eliminates the need for the assessment based reserve, allowing it to justify the transfer $2 billion in reserves from the SIF.
• Aggregate Trust Fund (ATF). The intent of the ATF was to protect a claimant in the event a carrier defaulted in its payments. The Executive proposes to eliminate mandatory deposits that are required of Workers’ Compensation insurance carriers, the self insured, and the SIF, and to shift the responsibility of the ATF to the Workers’ Compensation Guarantee Fund. Further details regarding expenditures from the fund are pending.
• Close The Reopened Case Fund. The Reopened Case Fund will be closed effective January 1, 2014; however, a provision is included that allows the Board to make a finding after such date if an appeal for an existing case was filed in a timely manner.
• Group Self Insured Trusts (GSITs). The Executive Budget contains a provision that would allow the remaining GSITs to maintain custody of reserves required to pay claims pursuant to WCL §50(3) by depositing them into a trust fund that allows them to invest and generate returns on the reserve balances. In addition, the Executive proposal would establish a program to authorize the issuance of bonds to finance loss portfolio transfers (LPTs) as a means of settling approximately $900 million in outstanding GSIT liabilities. The bonds would be issued by the New York State Dormitory Authority and backed by a new Workers’ Compensation assessment on solvent self pay claims for defaulted GSITs.
• Audits: Expands the scope of the Board’s authority to conduct audits from being limited to self insurers, insurance carriers and the SIF to having audit authority over all employers. Also the scope of the audits is expanded from conducting audits of special disability fund financing agreements to having the authority to conduct audits of any matter falling under the Workers’ Compensation Law. [ED. NOTE: Like they were supposed to have done years ago to GSIT’s.
• Minimum Compensation Benefit Increase the minimum weekly payment to claimants from $100 per week to $150.

For more details, see the attached link.[32216-5359]

CMS Changes help expedite §32’s

February 6, 2013: In January of this year, President Obama signed into law H.R. 1845, better known as the SMART Act: Strengthening Medicare and Repaying Taxpayers Act.

This new bill includes a number of provision sought after for many years by those who do workers compensation settlements,: carriers, medical providers, and attorneys for both sides.

SMART Act supporters say the bill will help the settlement of claims by requiring CMS to issue its final demand for reimbursement prior to a workers comp or liability settlement agreement. It also establishes a minimum threshold for settlements in which CMS can seek Medicare reimbursement, and includes a three-year statute of limitations for CMS to seek reimbursement from a settled claim.

In particular, the SMART ACT:

• Allows appeals of CMS determinations to be made not, as now, just by the plaintiff but, in the future, also by primary payers as well as other parties to the agreement.
• Eliminates the ‘required’ use of Social Security numbers and other federal health ID numbers. Some “responsible reporting entities” currently do not have access to that information, and, as some injured workers are not required to submit that information, the result in the past has been that theses “responsible reporting entities” have unable to access Medicare records to determine an individual’s Medicare status, making them subject to penalties of $1,000 per day. This change in the law avoids the penalties for ‘good faith’ efforts to ascertain this information.
• Establishes a statute of limitations by which CMS can seek a medicare reimbursement only within three years from the date that Medicare receives notice of a settlement, judgment, award, or other payment. under the Section 111 reporting process. It also requires that CMS issue a final demand for reimbursement prior to a workers comp or liability settlement agreement.
• Requires CMS to annually publish a Medicare Secondary Payer compliance threshold amount so that any settlement, payment, etc, which is less than that threshold would exempt the claim from MSP obligations pertaining to Section 111 reporting, among other requirements that previously existed.

Among the many people commenting on the SMART Act is Jay Fahrer, Washington-based government relations director for the Self-Insurance Institute of American Inc., who stated that the SMART Act will help insurers and self-insureds to know how much money should be paid to CMS for reimbursement at the time of settlement, rather than waiting for CMS to send a bill before a claim is closed.[32216-5358]

NY Daily News: Fire Fenster

October 23, 2012: Bill Hammond, political reporter for the New York Daily News, has just written an opinion piece agreeing with what I have been writing for over a year:

Fire Jeffrey Fenster, the Workers’ Comp Board’s executive director

Hammond writes about the ‘high cost of dysfunction’ at the New York State Workers Compensation Board and then state that as one of Cuomo’s first acts to make NYS a more attractive place in which to do business, “He should start with a performance review of the Workers’ Comp Board’s executive director, Jeffrey Fenster.”

The article then goes on to point out the many facts highlighted in this column since Fenster was first appointed

Fenster was 29 year old, with only four years of work experience as an a litigation associate with the Manhattan firm of Stroock & Stroock & Lavan. And he had absolutely no management experience of any kind. Yet, when looking for an explanation as to why he was appointed to “lead a notoriously sluggish bureaucracy with more than 1,400 employees and a budget of $200 million:, it was noted that he key, in fact sole, qualification was his personal relationship with then-Brooklyn Democratic boss and Assemblyman Vito Lopez.

May this Daily News article added to the one by James Odata of the Albany Times Union and my many critiques of Board management will be the straw that breaks the camel’s back.[2A201-5357]

WCRI: 2007 Amendments Do Work, Partially

October 10, 2012: A study by the Workers Compensation Research Institute (WCRI) shows that the 2007 reforms have had a positive impact.

The study pointed out that as a result of the increase in maximum statutory benefits, these increases in maximum weekly benefits have brought New York closer to national norms and reduced the percentage of workers whose benefits were limited by the maximums.

The study also reported that the implementation and subsequent change of the pharmacy fee schedule resulted in decreasing the average price per pill by ten to 20 percent.

However, the study did not review the increased length of time that it takes the New York State Workers Compensation Board to issue a decision on request for medical variances nor on the delays encounted by those seeking a review of an administrative law judge decision. Thus it can be assumed that an increase in maximum benefits could well be offset by the months or years before the injured workers actually receives them, if is that increase which is subject to an appeal.

It is noted that this report by the WCRI did not review any internal procedural changes required by the 2007 Amendments but just those aspects of changes in the law that are take place in the system but are outside the control of the Board.[2A200-5356]

WCB Special Fund’s Bonds get AA+ Rating

October 8, 2012: Fitch Ratings has affirmed the “AA+” rating which is in effect for the bonds issued by the NYS Dormitory Authority on behalf of the New York State Workers Compensation Board which are to be used to settle claims related to the Special Disability Fund in the state’s workers’ compensation program through lump sum settlements to individual injured workers. The financing program was developed to reduce the volatility and cost of workers’ compensation insurance coverage, which is mandatory for New York employers, although the size of issuance is well below the levels originally expected.

This report gives details on the bonds, how the security rating was determined, and background on the finances of the bonds.2A200-5355]██

New NYSIF Billing Program

October 09, 2012: New York State Insurance Fund (NYSIF) has selected iHCFA for Electronic Billing Services. iHCFA is to provide state-of-the-art processing for the electronic submission of medical bills and supporting documents to NYSIF for 5 years. This program purports to validate the submission of bills and expedites payments to medical providers, reducing more than 50% of phone calls inquiring about the status of bills.

iHCFA was the first company in the industry to be certified by the New York Workers’ Compensation Board as an EC-4 NARR XML Submission Partner and is the only company certified by the NY Workers’ Compensation Board to submit the Ancillary Medical Report (AMR) electronically to the Board.[2A200-5354]██

NYSIF a Winner

October 15, 2012: The American Association of State Compensation Insurance Funds (AASCIF) announed that the New York State Insurance Fund has won a number of awards for its publications. The AASCIF is an association of workers’ compensation insurance companies from 26 different states, plus 8 workers’ compensation boards in Canada.

With judging done by the Public Relations Society of America – Colorado Chapter, NYSIF won:

• Excellence in Writing: First Place - NYSIF Workers’ Comp Advisor First Quarter 2012
• External Brochure: Third Place - NYSIF Online Service

There were a total of 13 categories. The overall winner was the Texas Mutual Insurance Company - Pinnacol Assurance.[2A200-5353]███

BULLETIN

New Chairman for NYSIF

October 5, 2012:The New York State Insurance Fund has a new ‘acting’ chairman: Sidney Holmes III. The change in the first page of their web site is so new that at this time, the link for his name does not connect to anything but he is listed as a Corporate Partner at Winston & Strawn LLP.

Donald T. DeCarlo, a registered Republican, who was the chairman and a registered Republican has had his name removed for the site.

Details to follow as soon as they are available.[2A198-5352]

NYIA Calls NY WC Rate Market ‘Defective

September 26, 2012: The workers’ compensation market in New York state is “defective,” said Ellen Melchionni, president of the New York Insurance Association. “Workers’ compensation rates have been artificially suppressed and only compound the problems with a system that is already deficient.”

One problem plaguing the market is the New York State Insurance Fund, which was created as the market of last resort, but “in actuality is not,” Melchionni said. She said the state fund is able to offer reduced rates because of unfair competitive advantages, such as a reduced assessment and not paying agent commissions. The state fund “routinely writes business that could be readily placed within the voluntary market.”

Brian O’Larte, senior financial analyst with A.M. Best Co. Noted that the economy is also an issue for workers’ comp writers nationally, O’Larte said. “One of the keys to workers’ comp is getting the injured worker back to work. But a lot of injured workers don’t have a job to go back to.”

Another issue impacting the workers’ comp market in New York is the premium assessed to fund the workers’ comp system, Melchionni said. Thirty-one states use a premium tax or assessment to fund their state systems, according to a study by the Workers’ Compensation Policy Institute. As reported in this website last week, New York’s surcharge is nearly five times the national average.

Full details on these points can be found in the complete press release, written by Meg Green, senior associate editor, BestWeek ( Meg.Green@ambest.com) at BestWeek’s web site at:

fpn.advisen.com/articles/article1851974761522624597.html

[2A198-5351]

NYS WC Tax/Assessement US’s highest

September 10, 2012: A surcharge added to workers’ compensation costs for all New York State employers remain the nation’s highest. It is nearly five times the average of the same surcharge imposed in other states, according to the annual study conducted by the Workers’ Compensation Policy Institute.

New York’s 18.8 percent surcharge is more than double the 8.3 percent tax in Minnesota – the state with the second highest surcharge. These surcharges, called assessments, are essentially a tax on workers’ compensation premiums and are used by state governments to fund the system.

The study made some interesting analyses regarding the implementation of the 200& Workers Compensation Reform Act which was supposed reduce costs:

• While assessments in New York decreased by 6.9 percent in 2012, assessments nationwide were actually down by an average of 9.5 percent.
  
• This year’s 18.8 percent assessment is the second highest New York has seen since undertaking reform.
• The Institute’s new analysis shows that assessments are continuing to be a larger part of increasing costs, and employers pay nearly 50 percent more of their compensation dollars in assessments to fund the system than they did four years ago
  
• A 3.1 percent tax of premium to pay for the state to administer the Workers’ Compensation Board exceeds the total cost of assessments in all northeastern states except Connecticut.

In summary, the report noted that the slight relief from this burden offered this year was not enough to change the fact that New York continues to have the highest administrative costs in the country.

For further details on or a copy of the report, contact Paul Jahn at the Institute: pjahn@wcpinstitute.org (518-220-1111).[2A198-5350]

New “Best” Medical Provider List

October 2, 2012: Karen Wolf of MedMetrics Health Partners has announced that they now have a Master Provider Index to enable a quick-search for the best medical providers for Workers’ Comp by specialty and geo-zip directly from the Internet anytime, including individuals, clinics, and facilities.

However, in order for Master Provider Index to display only the best medical providers, MedMetrics applies important technical underpinnings and analytics. MedMetrics does the technical heavy lifting and analytics so you can easily find the right doctors, those who are scored best based on the data. The Index, continually updated, includes three major technical service components, all critical to the result:

1. Technical services
2. Medical performance analytics
   
3. Online search

Wolfe can be contacted at karenwolfe@medmetrics.org to get information on accessing this database, which is done on a licensing basis.[2A198-5349]

Board Hires Help to Speed Decisions

September 26, 2012: The NYS Workers Compensation Board is finally taking steps to reduce the backlog of cases that have been piling up in the Administrative Review Division’s offices (ARD).

Apparently, some new writers have been added to the ARD to increase the number of writers to work on the proposed Memorandum of Decisions (PMODs) that have been piling up and now average probably 6-8 months rather than the 2-4 months as during the late 1990’s and early 2000’s.

Equally important, the Commissioners have been told that they must ‘empty’ their work queues by Friday every week. And the writers who prepare these PMOD’s have been told that they must follow-up with the Commissioners who have not done their work and/or report to the appropriate supervisors (theirs or the Vice-Chair I do not yet know).

While this does not mean that those commissioners who used to sign their PMOD’s one a month or so without reading them will now read them, they will at least follow my admonition listed so many times in this website, most recently in my New 2012 Legislative Agenda for the Board:

If you are not going to read the decisions, the main responsibility for which you have been appointed to review, at least sign them on a timely basis.

Apparently the Second Floor (the name used when referring to the Governor’s offices and his executive staff) has decided, for whatever reason, that the current state of affairs at the Workers Compensation Board is an embarrassment and must be corrected.

However, at this time, I am unable to ascertain if the new writers will be brought in from another agency or transferred/promoted from elsewhere from within the Board’s offices. Be that as it may, claimants, carriers, employers and their respective attorneys should start to feel the speed up within the next two or three months . . . hopefully.[29197-5348]

Cuomo’s Republican Appointees

September 23, 2012: James Odato, chief political reporter for the Times-Union, reported that, “When it comes to appointments on some state bodies, it could be argued that Gov. Andrew Cuomo favors Republicans.”

Odato noted that Cuomo’s first appointment to the NY Workers Compensation Board was Republican David Dudley who had served as Bruno’s chief counsel and had been the former Rensselaer County GOP Committee chairman.

Cuomo then reappointed to the WCB Board Ellen O’Mara Paprocki, daughter of John O’Mara, Gov. George Pataki’s good friend and one-time Public Service Commission chief. She was originally appointed in 2001 with her first term expiring in 2008 but, in 2006, she had her term switched with the term of another commissioner in order to add three more years to her term in office¹. Then only just a few months after her term expired on December 31, 2011, she was reappointed to another full seven-year term. Her brother is recently elected NY State Senator Tom O’Mara (R-C, Big Flats).

In addition, Cuomo has left a Republican in place as the vice chairman of the WC Board, Frances Libous, a Pataki appointee, whose husband is Senator Tom Libous (R-C-I: Binghamton) who serves as the Deputy Majority Leader for the New York State Senate. Paprocki and Dudley earn $90,800 a year while Libous is paid $101,600.

At the New York State Insurance Fund, Cuomo appointed as the Chairman of the Board Donald T. DeCarlo, a registered Republican, who had been on the SIF board from 1997 to 2008, when Gov. David Paterson replaced him and other Pataki appointees. DeCarlo was voted in as chairman of the SIF board in February at Cuomo’s recommendation. DeCarlo serves without pay.

There are also several other Boards with vacancies and Republic holdovers. The New York State Parole Board has two holdovers, Walter Wm Smith appointed by Governor Pataki and Jared Brown appointed by Governor Paterson. (Odata says there are five vacancies but there are 14 seats and the Agency’s website shows 14 board members). Also, the Unemployment Insurance Appeal Board has one Pataki holdover and one vacancy.

The question has arisen as to when Governor Cuomo will fill those spots. But it is expected that he may use some of them to reward loyal members of the state legislature, both Republican and Democratic, who have or may lose their position in the upcoming elections, such as Senator Roy McDonald (R-Saratoga) who lost in a Republican primary.[29197-5347]

¹For the record, I was that commissioner that was switched with Paprocki. As a result, Paprocki got the balance of five years from my term and I got the two years remaining on her original term of office, thus leaving the Board in 2008. Other beneficiaries of ‘term switching’ were Candace Finnegan and Frances Libous. As to whether or not Cuomo would also resort to ‘term switching’ to protect his appointees remains to be seen but there would be no reason to do so until well into his second term.

New Board “Dead Letter’ PO Box

September 17, 2012: Under Subject Number 046-91, NYS Workers Compensation Board Chairman Robert Beloten announced that all upstate mail, rather than being sent to individual Board offices, now be sent to the Board’s central mail processing unit in Binghamton.

In the past, only mail from the New York City area was to be sent to Binghamton.

As Beloten states in the Subject Number, “. . . , to further improve service and expedite the claims process, the centralized mailing address in use in the downstate area should now begin to be transitioned to and used for all claims-related mail for the entire state.”

[ED. NOTE: Considering how long is it currently taking for appeals on administrative law decisions to be issued after the appeals are filed and how long it takes for medical variances to be reviewed once they are filed, it seems that the net effect of this new administrative change is that the Post Office will now be delivering to one ‘dead letter’ address rather than two. Also, since the scanning/mail facility is a privately owned business, this will increase private sector employment in Binghamton, coincidentally the home of Vice Chair Frances Libous and her husband State Senator Tom Libous (Deputy Majority Leader for the New York State Senate) while possibly giving the Board a rational to cut public sector staff (mail rooms) at the district offices.
[29196-5346]

NYS WC Assessment US’ Highest
And three reasons why!

September 14, 2012: A report issued by the Workers’ Compensation Policy Institute confirms what everyone thought: New York’s 18.8 percent surcharge is more than double the 8.3 percent tax in Minnesota – the state with the second highest surcharge.

This 18.8% surcharge is used to fund the New York State Workers Compensation Board’s 1550 employee staff and systems is substantially higher than the average assessment of 32 states: 3.8%. And the Board’s increase in assessments in 2010 and 2011 were higher than the increases in other states and the decrease this year, Mandated by Governor Cuomo, was less than other states.

In an article in WorkersCompensation.com, attorney Ted Ronca outlines the three reasons comp in NYS is so expensive:

Reason #1: Bigger is Better. NYS has by far the biggest bureaucracy, the most hearings, the most open cases, etc. As Ronca reports, “The number of hearings was so great that a research institute studying the NY comp system at first concluded that the number of hearings had an extra zero added by mistake. (Hearings are currently at 200,000/yr, or less.)”

Reason #2: Second Injury Fund Payments. “What drove the payments to the highest in the nation was the NY board’s stunning number claims for ‘permanent partial disability’.”

Reason #3: Reopened Cases. Since so many cases in the New York system could be closed without awards but then reopened at a later date, more often than not, as Ronca explains, “When the worker retired, the claim would be reopened and considered for permanent partial disability settlement since, it was claimed, the worker had retired in part due to the disability.”

Although the Second Injury Fund is being eliminated, the claims still exist but are paid directly out of the carriers’ pockets rather than having the carrier pay that same amount of money in to the Second Injury fund who would then pay the claim.

And the Board seems to spend most of it time, increasing the paper work demands on all the panties to a claim while thinking of ways to spend tens of millions of dollars adding a new computer system to handle the Board’s ever increasing demands for more paperwork.

[ED. NOTE: While the Board has taken steps to increase the number of cases it closes every year, there has been a substantial increase in the number of cases being reopened every year. But, more important, if you speak to all the parties who use the system, claimant issues are not being resolved and far too often medical treatment (and payments for same) takes months if not years longer to get resolved. Thus despite all the ‘factors’ that look good in the Board’s annual reports and press release, the one factor neither measured nor apparently of no concern to the Board is the human factor: the injured worker. [29195-5345]

New Maximum AWW

Since July 1, 2010, the maximum weekly benefit rate for workers’ compensation has been two-thirds of the New York State average weekly wage for the previous calendar year, as determined by the New York State Department of Labor. Workers’ Compensation Law §§ 2(16);15(6). On April 2, 2012, the Department of Labor Link to External Website reported to the Superintendent of the Department of Financial Services that the New York State average weekly wage for 2011 was $1,188.10. Accordingly, for workers’ compensation claims with dates of accident or dates of disablement during the period from July 1, 2012 through June 30, 2013, the maximum weekly benefit rate will be $792.07.

The maximum weekly benefit rates in prior years were:

• 07-01-2011 to 06-30-2012 $772.96 ($1,159.44 NYS Average Weekly Wage)
• 07-01-2010 to 06-30-2011 $739.83 ($1,109.75)
• 07-01-2009 to 06-30-2010 $600.00 ($900.00)
• 07-01-2008 to 06-30-2009 $550.00
• 07-01-2007 to 06-30-2008 $500.00
• 07-01-1992 to 06-30-2007 $400.00

[28189-5344]

Beloten, Not Legislature, rewrites WCL

August 1, 2012: Today, under subject number 150-13, NYS Workers Compensation Board Chairman Robert Beloten announced the Board’s position on the interpretation of ‘wages’ as defined under WCL §2(9).

Beloten has proclaimed that “the reasonable value of board, rent, housing, lodging or similar advantage received from the employer” shall be included in the calculation of average weekly wage if they are provided by the employer as remuneration for work, labor or services of the employee in the employment.

Citing Practice Commentaries by Martin Minkowitz, a 1978 Court decision and a 2006 Board Memorandum of Decision, today’s announcement, per Chairman Beloten, is an update of Subject Number 150-13 dating back to July 14, 1988..

Seeing that it has taken Chairman Beloten only 24 years to update this interpretation of the law, ir is no wonder that hundreds of appeals in the Administrative Review Division take more than one year to be reviewed.

[ED. NOTE: Yes, the 2012 subject number “150-13″, at least in this Board memo, is the same subject number “150-13″ as it was 24 years ago. [28189-5343]

WCB’s June 2012 Regulatory Agenda

July 26, 2012: The New York State Workers Compensation Board has published its ‘wish list’ of new laws and rules and regulations.

Covering the gamut from fee schedules to establishing guidelines for timely filing of first reports of injuries, this ‘wish list’ adds to the Boards long term agenda of speeding up the administrative hearing process by placing more demands on carriers, claimants, and third-party participants to produce their documents.

Unfortunately, none of these proposals deal with the inner workings of the Board and the Board’s own need to do its jobs and, among other issues, reduce the back log of appeals in the Administrative Review Division (ARD). Unlike cheese whose smell only improves as it ages, claimant and carrier appeals ‘stink’ when they are held in the bowels of the ARD for more than a few months, let alone the hundreds of appeals that are now over a year old.

For a list of the full agenda 2012 ‘wish list’, click here. [27188-5342]

The Insider’s WCB Regulatory Agenda: June 2012

Good for the Goose? Good for the Gander!

Jul 26, 2012: Pursuant to section 202-d of the State Administrative Procedures Act, notice is hereby provided of the following rules which are being recommended to the Workers’ Compensation Board, rules which should be adopted to make the Board more receptive to its raison d’être: serving injured workers and their employers.

The Board is not required to adopt any rule summarized in this agenda. In addition, the Board may propose a rule for adoption which was not under consideration in this list but makes the Board more receptive to the suggestions of its constituency. In case they do not know who that is, the Board’s constituency is injured workers, their employers, the carriers, attorneys for both sides, and the medical providers).

This notice is also intended to provide small businesses, local governments, and public and private interests in rural areas with the opportunity to participate by contacting the Board and the State Legislature to further promote the adaption of these measures.

In view of the fact that the Board does have to authority under the WCL and NYCRR to assess penalties to parties not providing data, documents, or performing certain acts on a timely basis, it is proposed that a number of amendments to the NYCRR be added penalizing the Board for the same types of unnecessary and inexcusable delays.

• Amend Section 300.18 by adding section 300.18(a) which requires the Commissioners/panel members who are reviewing a proposed Memorandum of Decision (PMOD) to complete their initial review within ten calendar days of its submissions by either accepting, rejecting, or modifying the PMOD.
• Amend Section 300.18 by adding section 300.18(b) which states that in the event that a Commissioner/panel member is incapable of reviewing a PMOD within the above time limit that that decision be transferred to another Commissioner for review.
  
• Amend Section 300.27 by adding another section 300.27(I) which would require the Board to publish each month a status report on the number of appeals being reviewed by the Administrative Review Divisions (ARD) as well as listing them by how old they are. In addition, it would publish the number of cases signed by each commissioner as well as a list of those transferred due to the commissioner’s failure to sign
• Amend Section 300.6 by adding section 300.6(a) which states, pursuant to the information generated under Section 300/27(i), the Board shall pay a penalty of $100 per month for each month greater than eight months that an appeal has been held at the ARD, payable to the party making the appeal as well as to the party rebutting.
• Amend Section 300.6 by adding section 300.6(b) which states that if the NYS Appellate Court reverses or rescinds a Board Panel decision because it is, in the Court’s own words, “Capricious, arbitrary, contradicting an earlier decision, and/or incoherent’, the Board shall pay a penalty of $250 to the prevailing party and a penalty of $50 to the losing party.

While the Board will continue to review its rules in an effort to provide for clearer and more accurate references to Board policies and procedures, while also eliminating typographical errors and obsolete forms/practices, etc., these proposed new rules will help speed up the Board’s internal processes, equalize the often arbitrary penalty-assessing authority of the Board, and make the commissioners more accountable to the community it is supposed to serve.

The public is welcome to send written comments on this Agenda to TheInsider@InsideWorkersCompNY.com or to Heather M. MacMaster, Associate Attorney, Workers’ Compensation Board, 328 State Street, Schenectady, NY 12305-2318, telephone: (518) 486-9564, e-mail: regulations@wcb.ny.gov.

[27188-5341]

Board Passes Electronic Transcription Resolution

July 19, 2012: On July 17, at the New York State workers compensation board’ s monthly dog-and-pony-show board meeting, the Board, in a carefully orchestrated proceeding with no discussion on the topic, voted to adopt a Board regulation providing that the Board shall keep a verbatim record of all hearings and proceedings in a readable, viewable, or audible format.

The resolution passed 11-1. Apparently, someone from Gov. Cuomo’s office called the board prior to the vote instructing them that the governor wanted this resolution passed because he was going to veto the bill passed by the New York State Assembly and Senate that prohibited the use of electronic transcription and the replacement of the verbatim reporters.

The dissenting vote was Commissioner Sam Williams, previously UAW Region 9 CAP Director and Western New York Working Families Party President who one can assume was given a “pass” on this vote to satisfy his constituency, with the Governor’s office knowing that the resolution was going to pass despite this one dissent.

Commissioner Frieda Foster was absent and therefore did not participate in the vote although one can assume that she would have voted in favor of the resolution.

The specific Rules and Regulations that were amended are 12 NYCRR §§ 300.7(c), 300.9, 300.13(d), 300.18(f), 325-4.6(c), 326-1.5(b), 326-2.7, 330.4(b), 340.4(b) and 345.4(b). [27187-5340]

Shh..More WCB Staff are leaving!

July 19, 2012: If you call the press office and ask for Brian Keegan, you will not get the normal response “He will call you back.” He resigned from the Board, taking a new position in the private sector. Now his calls are being taken by Executive Director Jeffery Fenster whose office responds to all phone inquires with the same prompt response as did Keegan’s: “He will call you back.”

Also leaving the Board but retiring is long-time Board fixture Sandra Olson, the Secretary to the Board. I had the opportunity to work with Olson on a number of occasions and she typifies that endangered species at the Board’s Executive Offices: hard working, attentive, and committed to serving both injured workers and their employers, and to the Board staff.

As to who will be given to opportunity to fill these two patronage positions remains to be seem but rest assured the jockeying for these jobs began several weeks ago.

As to whether or not the Board had planned to make a public announcement on these two members of the executive staff leaving remains to be seen, although they may do so now. Board staff has told me that until my NEWSWIRE report of July 2, 2012, probably only three or four people at the Board knew that Paprocki had been reappointed.[27187-5339]

500 More Staff to Move
Lic Rep Interviews Affected

July 19, 2012: Representatives for the landlord at the Workers Compensation Board’s new headquarters in Schenectady have been telling people that they had been advised that a total of 500 members of the Board’s staff will be relocated to the new office, located at 328 State Street, Schenectady, NY 12305-2318.

Considering that the Board has between 1,400 and 1,500 employees, one must question how it is that the Board can find 500 people to move to their new offices. The office at 80 Park Street had nowhere that many employees so, unless the landlord is misinformed, it would seem that the Board intends to continue its plans to close down district offices as well as satellite offices and move all the support staff to Schenectady. For example, Hauppauge and Hempstead are now listed as ‘Long Island’ on the Board’s list of district offices and Hempstead is really just a ‘satellite‘ office. In addition, there are several other offices on the ‘hit’ list.

As mentioned in the NEWSWIRE last week, it seems that a number of people, such as Sandra Olson and possibly even Brian Keegan, took into account in determining their future at the Board the fact that had been walking to work and do not drive. How many others will follow suit? And does anyone in the executive offices really care?

Licensed Rep Interviews

Also, as another part of the Board’s program to reduce the workload for the Commissioners, it was decided that interviews for §24 Licensed Representatives and §50-3-b/-d legal representatives will be done only in Albany and only once a month. The interviews will be done the Wednesday following the monthly Tuesday Board meeting. And rather than inconveniencing three commissioners and overburdening them with work, in the future the interviews will be with one commissioner (who will have the ignominy of staying in Albany an extra night), someone for the Office of the General Counsel and a third person from the Office of the Secretary. At this time, the Board plans to allow those being interviewed to appear by video from any of the Board’s district offices that have a video feed to the Menand’s district office, as there is no longer a Board office in Albany proper. See WCL §146: “The principal office of the board shall be in the city of Albany”.[27187- 5338]

Workers Comp Rates increase 11.7% Decrease 1.2%

July 19, 2012: Shortly after the New York Compensation Insurance Rating Board (NYCIRB) announced an increase in workers compensation insurance rates of 11.7%, Governor Cuomo announced that the rates will decrease by 1.2%

NYCRIB, a non-government organization, is a non-profit, unincorporated association of insurance carriers, including the State Insurance Fund. In conjunction with the New York Workers’ Compensation Law and the Insurance Law provides, the Superintendent of Insurance has historically designated NYCRIB as the independent rate service organization to collect the loss, premium and payroll data from each carrier, summarize this information and develop an adequate rate structure, something it has done for nearly 93 years.

For years, when increases have been announced, those affected complained abut the formulas being used by NYCRIB and argued about the amount of the increase, almost always unsuccessfully. But this seems to be the first time its ‘independence’ has been overruled.

According to the governor’s office, the Workers’ Compensation Board earlier this year delivered on reforms from the 2007 Workers’ compensation Reform Law, such as capping the number of years for benefits and creating treatment guidelines. These reforms, the governor’s office said, affected the decision to decrease rates.

More detailed information as to the ten delineated responsibilities of NYCRIB can be found on its website.

As to the impact that this will have on carriers’ profits and ability to survive financially will be made apparent in the next year.[27187-5337]

Shhhh…..Don’t Tell Anyone: the Bd Moved

July 12, 2012:In a simple four line memo stuck in the middle of its webpage, the Board formally notified visitors to its website that the Board will be closed tomorrow (Friday) so that it can move its Park Street office to its new location at 328 State Street in Schenectady which will open on Monday.

This story was first reported in the NEWSWIRE February 16, 2012 when Executive Director Executive Director Jeffrey Fenster sent out an email to Board Staff on February 13 stating that there were only “preliminary discussions’ taking place, only to then send out another e-mail two days later stating that a lease for new space had been signed. The Times-Union also reported that the WCB was moving into office space soon-to-be vacated by the Department of Transportation whose staff would be moving from Schenectady to a DOT building on Wolf Road which is in Albany.

As an additional note, The Board also posted the following: PUBLIC NOTICE PURSUANT TO PUBLIC OFFICERS LAW SECTION § 104(4) NOTIFICATION OF CHANGE TO LOCATION OF JULY 17, 2012 FULL BOARD MEETING: The regular monthly meeting of the Workers’ Compensation Board previously scheduled to be held on July 17, 2012, at 10:00 a.m., at the Board’s Executive Office located at 20 Park Street, Albany, New York 12207, in Room 406, will now be held at the Board’s Albany District Office located at 100 Broadway, Menands, New York 12241, in Room 505. How unfortunate it would have to be that the Commissioners should have to drive to and spend the evening in Schenectady.[27186-5336]

[ED. NOTE – This was also in my February 12, 2012 Posting: WCL §146 states “The principal office of the Board shall be in the city of Albany.” So it will be interesting to learn who of the current Park Street staff will remain in Albany. Perhaps the Chairman, the Secretary, and a small office for Fenster, who as Executive Director, mainly works out of Brooklyn. Equally of interest is where will that office be located. Prior to the administration of Gov. George Pataki, the Workers Compensation Board’s main office was at 180 Livingston Street in Brooklyn; Menands, where the Board still maintains an office, was at that time represented as being within the Albany city limits in order to comply with §146. Perhaps, as has been rumored for years, the Board’s executive offices in Albany will be located somewhere in the bowels of the New York State Department of Labor.

Inmates Collecting Comp ..Still!

July 12, 2012: On May 4, 2012, New York State Comptroller Thomas P. DiNapoli reported that the New York State Insurance Fund – surprise .. Surprise – has been paying seven inmates workers compensation benefits while they were in prison, contrary to Workers Compensation Law. On August 11th, 2009, I reported on a press release, also from DiNapoli’s office regarding exactly the same problem: Prisoners collecting WC benefits.

[ED. NOTE: To paraphrase George Santayana, who, in his Reason in Common Sense, The Life of Reason, Vol.1, wrote “Those who cannot remember the past are condemned to repeat it.”, “Those who ignore the past are welcome at the WCB.”

This problem is not new in that it was first addressed when Robert Snashall was Chairman of the Workers Compensation Board. Over the complaints of those who felt it was an invasion of the privacy of inmates, the audit fund a large umber of inmates and/or their relatives collecting workers compensation checks on a regular basis. The plan was to do these audits on a regular basis not only for NYSIF but also to work out a program with the private carriers.

DiNapoli made the following recommendations in his May 4, 2012 report.:

1. Assess the feasibility of conducting periodic matches of approved claimants against the DOCCS file for reporting to insurance carriers, including the State Insurance Fund.
2. Report the 193 incarcerated inmate matches to the private insurance carriers and self-insurers so they can identify and recover potential inappropriate payments.
3. Ensure Board records include the correct SSNs for claimants.
4. Follow up to determine the correct identity and SSN of the two claimants who used inmate SSNs.

The audit makes note of the errors in inmate social security numbers. The Board’s database is sufficient to do this and find claimants with multiple names and social security numbers. For years, I used to put together a mailing list of 5,000 names compiled from lists supplied by 20+ different organizations (a total of 12,000 names) , many with duplicate but not identical names: Jim Jones, James Jones, Senator Jones, etc. With a DOS-database last updated in 1992, it took only a few hours to find and remove all the duplicates and ear-duplicates. Certainly this can not be beyond the capability of the IT Department. All it takes is a willingness on the Board’s leadership to take some steps to really represent the workers comp community. After all, fraud not only costs employers more money, but it makes people cynical about how fair the Board is in its decision making process, particularly when someone who is properly denied comp then sees someone who has cheated and gets away with it.[27186-5335]

Errors & Omissions v. WC Insurance

July 12, 2012: Curtis M. Pearsall, president of Pearsall Associates Inc, recently wrote an article for insurancejournal.com in which he explained why every year, errors and omissions (E&O) claims arising out of the placement of workers’ compensation account for approximately 10 percent of all claims.
Of the six leading issues, the first involves coverage for sole proprietors, partnerships or single-member LLCs and another is ensuring employees in all states are covered.

Based on the number of companies that the NYS Workers Comp Board is suing for either not having WC insurance or not reporting the proper payroll, it seems that these are two serious issues that the Board should be addressing. And they should be addressing these issues, not by threatening small business owners with both corproarte and personal bankruptcy but helping them to recognize that there is a problem that should be addressed.

Pearsall’s complete commentary is a must-read for all brokers as well as those attorneys who come into contact with small business owners.[27186-5334]

Paladino Attacks Libous: Both Husband & Wife

July 5, 2012: In a rather scathing open e-mail/letter to the 222 Committeemen in Senate District 22 [Buffalo area], Carl Palladiono ends his memo about NYS continuing down the slippery slope into the abyss with criticism of various Republican leaders.

After detailing how the Republican leadership in the State Senate has failed to stand up for the principles of the party which nominated and then helped elect them for their current offices, Palladino focuses his attention on Senator Tom Libous. One of his main points related to Senator Libous’ wife, Fran Libous, Vice Chairman of the NYS Workers Compensation Board. Palladino writes, “Libous takes care of only his friends and family club. He had no trouble getting his wife a $110,000 job at the Workers Compensation Board and she doesn’t even have to go into the office leaving her plenty of time to visit one of their 2 Florida homes.”

While I have no problem with the concept of patronage (that is how I got my position at the WC Board and then that is how I lost it to someone better connected), a patronage appointment is not supposed to be a form of retirement, in terms of either work effort or where one spends most of one’s time. It is a process by which someone connected to an important politician is hired to do a job. Unfortunately, as alleged by Palladino, Libous seems to represent a number of those commissioners at the Board (as well as in many other state agencies and departments) who do not do justice to the taxpayers or the constituency whom they have been appointed to serve. And it is not that these appointees are unqualified: they have the educational background and intellectual skill to do a good job . . . well nearly all of them.

I do know that Libous does read cases before signing them but unfortunately, although she is supposed to be in charge of the commissioners, there are a few (as there always has been) who do not read the decisions for signing them. I have often commented that the only thing they read before signing is the dinner check.

While Carl Palladino may be on the “outside” looking in with envy, his position in the political arena does not diminish the accuracy of his complaints. As for Vice Chairman Libous, it is her choice as to the legacy she wishes to leave behind.[27185-5333]

Shhhh….Paprocki Reappointed

July 2, 2012: In an well-orchestrated maneuver, the New York State Senate’s Labor Committee had a last-minute addition to its June 21, 2012 schedule; the reappointment of Ellen Paprocki for another full 7-year term, expiring in 2018. With her earlier reappointment in 2006 arranged through her father John O’Mara, the well-connected lobbyist, Paprocki now has a new political heavyweight in her corner: her brother, Thomas F. O’Mara, State Senator from Big Flats, NY (R-C). In fact it is surprising that her reappointment took so long. Paprocki is well-known for her strident legal positions on a number of key issues such as the controversial new law on mandatory payments to the Aggregate Trust Fund.[27184-5332]

WCB Employee & Stolen Injured Workers’ ID’s

Jul 2, 2012: Until this story is published by Michael Whitely, Eastern Bureau Chief for WorkCompCentral, the few people outside the Board not in law enforcement that know about identity theft of injured workers by a board employee are those who got letters from the Board telling them that their identities had been stolen.

Allegedly, Court reporter Gerard C Fahy used the names he stole to hide money he was earning in a second job, by using those ID’s for the checks with which he was paid.

According to Whiteley, “There was no indication on the board’s website that the board alerted victims to the identity thefts. SWCB also did not respond on Wednesday to a request for information filed under the New York Freedom of Information Law (FOIL).” The full story and a lot more details, including more information about Fahy, can be found at WorkCompCentral.com. [27184-5331]

Injury during Sex Get Workers Comp

April 19, 2012: It has been reported that Federal Court Justice John Nicholas over ruled the Workers Compensation Bard by determining that a woman, injured while having sex in a motel room while on a work trip, qualified for workers compensation.

The judge’s decision was based on the fact that the injury occurred out of and in the course of employment.

“If the applicant had been injured while playing a game of cards in her motel room she would have been entitled to compensation, even though it could not be said that her employer induced or encouraged her to engaged in such an activity. . . . In the absence of any misconduct or an intentionally self-inflicted injury, the fact that the applicant was engaged in sexual activity rather than some other lawful recreational activity does not lead to any different result.”

While this case took place in Australia, similar such cases, with the same result, have occurred throughout the U.S. [24174-5330]

Cuomo picks Peters to preside over AD’s Third Dept.

April 12, 2012: As reported over the weekend by Casey Seiler, Times-Union Capitol bureau chief, Governor Cuomo has announced the appointment of Justice Karen K. Peters to serve as the Presiding Justice of the Appellate Division of the Supreme Court for the Third Judicial Department. In 1994, Peters was the first woman elected a Supreme Court Justice in the Third Department, and will now be the first woman to preside over the department.

In addition to performing the duties of an Appellate Division Justice, incoming Presiding Justice Peters will be responsible for serving as the Third Department’s Chief Administrator. As Presiding Justice, she will help shape statewide judicial policy as a member of the Administrative Board. For a sense of her position in the past, I have listed below the six cases in 2011 in which she authored the majority/unanimous decision of the Court.

Prior to joining the Appellate Division since 1994, she was a Justice of the Supreme Court, Third Judicial District from 1991-1992 and served on the Family Court, Ulster County, from 1984-1991. Prior to serving on the bench, Justice Peters worked for the Assembly in as the Director of the Standing Committee on Governmental Operations in 1983 and prior to that was Counsel to the State Division of Alcoholism and Alcohol Abuse from 1979-1983. Prior to formerly joining public service, Justice Peters was a visiting Assistant District Attorney in Dutchess County in 1979 and in private practice concentrating on criminal defense and family law from 1973 to 1979 at the law firm Peters and Weiner. Justice Peters received her Bachelor of Arts degree from The George Washington University in 1969 and her Juris Doctor from New York University School of Law in 1972.

Some of Peters’ Prior Opinions

Dickerson v Thompson, 2011 NY Slip Op 06009 [88 AD3d 121], July 21, 2011: Approved dissolution of a same sex marriage performed in Vermont. Key position: “While plaintiff lacks a remedy at law, the dissolution of a civil union falls squarely within the scope of Supreme Court’s broad equity jurisdiction.“

Matter of Doe v O’Donnell, 2011 NY Slip Op 04804 [86 AD3d 238], June 9, 2011: Confirmed that the legal requirement under NYS Law to register as a sex offender under the Sex Offender Registration Act is not negated by another state’s determination that registration is that state is no longer required.

Signature Health Ctr., LLC v State of New York, 2011 NY Slip Op 09058 [92 AD3d 11], December 15, 2011: Affirmed a decision by a medical provider that there is no authority in the Medicaid statutes, either express or implied, for the recovery of interest for delayed or wrongfully withheld reimbursement payments

Matter of Soares v Herrick, 2011 NYSlipOp 511105, 08/04/2011: In an Article 78 proceeding rejected a lower court’s ruling which stated that District Attorney Soares could not enforce two orders which, among other things, disqualified Soares and his staff from further prosecuting a criminal case against respondents

Matter of Bowman v Bowman, 2011 NY Slip Op 01101 [82 AD3d 144], February 17, 2011: Ruled that the NYS Family Court possessed jurisdiction to modify a Washington State child support order due to change in residency of the parties, thus resolving differences between FFCCSOA and UIFSA.

Hurrell-Harring v State of New York, 2011 NY Slip Op 00072 [81 AD3d 69], January 6, 2011: After a lower court denied a putative class action alleging that the current system of public defense is systemically deficient and poses a grave risk that indigent criminal defendants are being or will be denied their constitutional right to counsel., this decision reversed the lower court on the basis that the unique circumstances of this case render a class action superior to other methods of adjudicating this controversy. [24173-5329]

Budget Relief for GSITs

April 4, 2012: New York State Workers’ Compensation Board Chairman Robert Beloten today announced that the newly adopted New York State budget includes more than $200 million in assessment relief for thousands of small businesses who are members of a defaulted or inactive Group Self-Insurance Trust (GSIT).

In addition to getting $200 Millions, the budget requires that the Board, this time, takes steps necessary to insure that the trusts remain solvent. And the Board itself is now required to make a formal report to the Governor and legislature every six months as to the total amount of claims liability of insolvent group trusts; the degree to which each qualifying group trust is fully funded; and the actions the Board has taken to extinguish outstanding liabilities thorough settlements, loss portfolio transfers, and collections from defaulted group trust members. Apparently, this oversight, as in the past, does not appear to include trusts which are, for the current time, solvent.

Also, the Board has approved a private carrier’s assumption of one trust’s liabilities through an Assumption of Workers’ Compensation Liability Policy (ALP). ALPs mitigate self-insurers’ long term liabilities associated with both claims and assessments by transferring that liability to a private insurance carrier. This remedy allows businesses that were part of a defaulted GSIT to settle long term exposure for a fixed price.

Not mentioned in the press release is the fact that although ALP’s have been proposed for several years, Board management had been unable to come to any internal understanding of how to proceed and/or approve this solution as an alternative to forcing many of the trust members (both employers and the business owners) into bankruptcy.[24173-5328]

Gov Names Comm of Labor
Can the WCB Be next?

March 26, 2012: According to the Casey Seiler, Capitol bureau chief of the Albany Times-Union, Gov. Andrew Cuomo, appearing Saturday night, March 24, 2012, at the Somos El Futuro gala, announced the nomination of Assemblyman Peter M. Rivera, D-Bronx, to serve as Commissioner of the state Department of Labor. Colleen Gardner, a holdover from the Paterson administration, had been serving as commissioner at Labor. Assemblyman Rivera’s nomination is subject to confirmation by the New York State Senate. He will serve in the Assembly for the remainder of the 2012 legislative session, during which Commissioner Gardener will continue to serve in her current role.

A number of people who are involved in these political machinations have been telling me since last year that the Department of Labor and the Workers Compensation Board are near the bottom of the list of Governor Cuomo’s interests. But it seems he has finally arrived.

Now that he has selected someone to run labor, albeit not until this summer when the current legislative session ends (June, July, August ??), can the WCB be far behind? And in the remaining few months, how many more monuments will be erected by the current staff so that they can show their great successes before leaving for another agency or the private sector just before the facades of the Potemkin Village they have left be find fall to the ground?[23170-5327]

John Sciortino, 1959 - 2012

March 22, 2012: I regret to inform you of the passing of John Sciortino.

John Sciortino passed away suddenly, at much too young an age, Monday evening, March 12, at his home in Penfield. John was born in Buffalo and grew up in Schenectady where he graduated from Mohonasen High School in 1977. John is deeply mourned by the many he so profoundly touched. He was a man of many varied and diverse passions and talents. He loved life and lived it large in every way. He possessed the rare qualities of a good listener and great storyteller. He was funny. Above all, he was a loving husband to Michele and a doting father to his teenage daughter Andrea.

John served was chair of the Parish Pastoral Council and led an involved and successful expansion project at St. Joseph’s Catholic Church of Penfield. He is past Chairman of the Board of Governors for Seniors First Communities & Services, is a member of Wakan-Hubbard Lodge No. 154 F.&A.M. He served for almost 25 years on the Boards at Valley Manor and Kirkhaven Nursing Home and was recently appointed to the Board of Trustees at his alma mater, Union College.

After graduating from Union, John earned his law degree from Albany Law School , he was a founding partner in the law firm of Segar & Sciortino. At the time of his death, he was President of the New York State Injured Workers’ Bar Association, a founding member of the Board of Governors of the New York Injured Workers’ Alliance and founding member and former State Co-Chair of the New York Workers’ Compensation Alliance. He was a member of the Board of Directors of the Triangle Shirtwaist Factory Fire Memorial.

Described as “one of the foremost advocates for Workers’ Compensation reform”, John was invited in 2006 to participate as a panelist at a NYS Senate Workers’ Compensation Reform Round Table to offer insight into ways to improve the Workers’ Compensation system. In 2007, John served as an advisor to the New York State Department of Insurance Task Force. In 2008, he was awarded a Clara Lemlich Public Service Award for his outspoken efforts on behalf of the rights of injured workers in New York State. John has been annually recognized by Super Lawyers. Last weekend he was inducted as a Fellow of the College of Workers’ Compensation Lawyers.

The full obituary can be found at the web site of Segar & Sciortino.[23170-5326]

More Board Forms: too Many?

March 22, 2012: The New York State Workers Compensation Board has just announced six new substantially changed forms, under Subject Number 046-1.16, bringing the total number of new and revised forms issued since January 2011 to a total of 86 forms.

And yet while the Board develops new, and required, forms to expedite the handling of claims, the Board itself it getting slower and slower in meeting one of its primate duties: the adjudication of cases.

As noted on the DECISIONS page, in the Matter of Pelaez v Sliverstone, the decision on an appeal for a full Board review of a Board panel Memorandum of Decision dated March 1, 2010 was not issued until March 13, 2011. And, more to the point, this document required the signature of only one Board Member: Vice Chairman Fran Libous. If the person allegedly in charge of the Commissioner takes that long to sign a denial, it is no wonder it can take up to a year when three commissioners are required to review an appeal of a Law Judge decision.

The new forms this week are:

• C-4.3 was modified to accommodate the 2012 Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity.
• PH-16.2 was modified to accommodate implementation of the 2010 New York State Construction Industry Fair Play Act (Labor Law § 861).
• RFA-1LC and RFA-2 were reorganized to allow parties to identify the issue involved and to instruct parties as to what evidence is required for further development of the issue.
• SI-10.1 was updated to reflect cumulative compensation payments through 9/30/11.
  
• VDF-1 was created to accommodate the 2012 Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity.
• W-32R was updated to reflect changes within the Board’s WAMO office.

The complete list and links to all these forms can be found on the Board’s site.[23170-5325]

Triangle Shirtwaist Factory Fire Memorial

March 6, 2012: The Directors of the Triangle Shirtwaist Factory Fire Memorial have announced that its annual dinner, marking the 101st year anniversary of the Triangle Shirtwaist factory fire, will be held in New York City on March 22, 2012. It was on March 25, 1911 that New York’s landmark industrial disaster killed 146 of the factory’s 500 employees, most of them young immigrant women and girls of Italian and European Jewish descent.

Proceeds from the dinner in 2011 enabled TSFFM to provide 25 scholarships to the Triangle Scholars Class of 2012 and brought the total of awards to over $300,000 since 2002. John Sciortino, a Rochester attorney and Chair of the Scholarship Committee, noted that 11 of this year’s recipients have been previous recipients and 6 are in their fourth year of study. “We are proud of the students and believe that those completing their degree studies represent the aspirations of their families who are dependent upon workers’ compensation to survive in this dreadful economy,” Sciortino said. “The arithmetic is simple: these students range in age from 17 -21 which means their families may be receiving compensation benefits as little as $200-300 per week,” he continued referring to the benefit limits in effect in previous years.

This year’s class of scholars pursues studies in institutions of higher education from Buffalo, to Rochester, to Potsdam, to St. John’s on Staten Island, to SUNY at Stony Brook and is in attendance at six private colleges and eight public institutions.

Tickets are $450 per person. The dinner includes Cocktail Reception; Hors d’oeurves; Museum Exhibits; Sounds of Old New York Klezmer Music; NYFD Pipes & Drums; Five Star Dinner and cabaret songs and performances. Payment for Eleventh Annual Dinner Tickets, Memorial Journal Ad Placement, and Triangle Scholarships can be placed online using EpochReg.com. For additional information please contact James M. McCarthy (718-830-3200) jmccarthy@nycomplawyers.com or Barbara B. Levine at Barlaw8@aol.com.[23168-5324]

NYS Workers’ Comp Assessments: The Hidden Tax

March 7, 2012: On February 22, 2012, the Workers’ Compensation Policy Institute reported that the surcharge added to workers’ compensation costs for all New York State employers is nearly five times the average of the same surcharge imposed in other states and twice as high as the assessment in the nation’s second highest state.

These surcharges are the assessment made by the New York State Workers Compensation Board against all carriers, self-insureds, and the New York State Insurance Fund (SIF) to fund the operations of the Board. The report goes on to state that this ‘tax’ was increased by 10.4% in 2010 and 27% in 2011. Just one part of the assessment burden, a 10.1 percent tax on premium, is assessed to support just one fund, the Second Injury Fund, which although closed to new claims will continue over the next few years to pay out on existing claims.

While the reforms of 2008 were supposed to reduce the costs of insurance, by reducing the Workers Compensation Board’s administrative costs, the reverse has been the case as the Board sets forth more and more increasingly complex maze of rules and regulations.[23168-5323]

[ED. NOTE:And these assessments do not include the costs added to the carriers , TPA’s, medical providers, and attorneys’ administrative expenses in trying to comprehend and then adhere to these new ‘cost cutting’ measures, while being hit by the Workers Compensation Board with ever more frequent procedural penalties. And this report does not even reference the above average staff salaries at the Board as noted in the following news item.]

WCB Salaries: A Big $100K+ Club

March 7, 2012: While most of us worry about keeping our jobs and earning as much this year as we did last year, those at the New York State Workers Compensation Board are doing better than even.

The website seethroughny.net lists the salaries for the last four years of tens of thousands of state workers and it is from their website that I learned that there were just over 130 people, approximately 10% of the WCB workforce, who earn more than $100,000. It is interesting to note that other than the Chairman ($120,800) and Vice Chairman ($101,600 ), none of the other commissioners nor the writers in the Administrative Review Division (other than top managers) are in the $100K+Club. While many of the salaries are covered by either union contracts and legislation, there are a few who managed to get a nice increase last year. In fact, the highest paid employee also got the biggest raise - Jeffrey Fenster who earned $146,637 in 2011 was the recipient of a 3.5% increase from 2010.

Attached is a list of job titles and, where it exists, a range of pay. I have not included any names as well as having removed from the list positions in computer services as they usually have skill levels and therefore pay levels that would be pretty much the same in any other state agency. For those of you who wish to look up the full details, be forewarned: the website,which does list names, is not easy to navigate.[23168-5322]

Is SIF Being a Bully in Amherst?

March 6, 2012: On February 8, 2012, the Appellate Court, Fourth Department heard the arguments in the Matter of Bissell v Town of Amherst, et al., whose misleading title obscures the fact that it is really the New York State Fund (SIF) who is being sued by the Town of Amherst.

According to an editorial in the the Buffalo News, the Town of Amherst has brought this action to retrieve $23 million in court-ordered personal injury payments from SIF. Two courts have ruled that the State Insurance Fund, one of the largest workers’ compensation insurers in the country, must reimburse the town for a $23.4 million judgment paid to a Sanborn man, Peter E. Bissell, who suffered crippling injuries when he fell from a ladder while examining the roof of a town-owned building in 2002.

Amherst’s carrier covered $10 million, and the town borrowed the rest - $13.4 million - to pay the award in 2008 without significant extra charges or damage to its credit rating. Amherst, in turn, sued Bissell’s employer, McGonigle & Hilger Roofing, and two separate courts ruled that the company - not the town - was responsible for Bissell’s severe spinal injuries, including paralysis in both legs. This past December, State Supreme Court Justice Paula L. Feroleto ordered the claim be covered by the Fund, per its insurance agreement with the roofing company. But, apparently, the Fund just is not paying but appealing every lower court decision.

The editor then adds:

The Attorney General’s Office entered the picture last week, requesting more time from the state Court of Claims to examine the town’s charges that SIF was engaging in deceptive acts and unlawful practices. But the AG’s Office wasn’t weighing in to represent the interests of Amherst taxpayers, as town officials had hoped. In fact, the state’s primary legal watchdog was doing just the opposite. Because SIF is considered a state agency, the AG’s Office is required by state law to defend it in litigation, as opposed to exploring whether town taxpayers were being taken for a ride. Given the clear facts of the case and the exhaustion of all liability appeals, we [the newspaper] would expect AG Schneiderman to recommend that SIF dig into its considerable coffers, reimburse the town and move on.[23168-5321]

Per Fenster: WCB move is just rumors!

Oops! It’s True!

February 16, 2012: In response to rumors circulating at the Workers Compensation Board and Park Street in particular, Executive Director Jeffrey Fenster sent an e-mail to the staff Monday, February 13 stating, in part, “While there have been preliminary discussions about the Board’s future at Park Street, no decision has been reached as to whether the Board will remain here, move to another downtown Albany location, or move some of its administrative operation outside the City of Albany. However, no move is imminent.”

Then just two days later on Wednesday, February 15, Fenster sent out a second e-mail stating, “the Board has decided to move our primary administrative offices from 20 Park Street to 328 State Street in Schenectady. A specific time frame for the move has not yet been determined.”, adding “Pursuant to the Workers’ Compensation Law, the Board will continue to maintain a presence in the City of Albany.”

This e-mail was copied in its entirety in a story issued by the Albany Times-Union just a few hours later that afternoon. The Times-Union also reported that the WCB is moving into office space soon-to-be vacated by the Department of Transportation whose staff is moving from Schenectady to a DOT building on Wolf Road which is in Albany.

[ED. NOTE: WCL §146 states “The principal office of the Board shall be in the city of Albany.” So it will be interesting to learn who of the current Park Street staff will remain in Albany. Perhaps the Chairman, the Secretary, and a small office for Fenster, who as Executive Director, mainly works out of Brooklyn. Equally of interest is where will that office be located. Prior to the administration of Gov. George Pataki, the Workers Compensation Board’s main office was at 180 Livingston Street in Brooklyn; Menands, where the Board still maintains an office, was at that time represented as being within the Albany city limits in order to comply with §146. Perhaps, as has been rumored for years, the Board’s executive offices in Albany will be located somewhere in the bowels of the New York State Department of Labor.

I am sure that the Park Street staff will be given notice of the date of the move when they show up at Park Street to find the moving trucks busy loading up for the move to the new office, which according to Google maps is approximately a 30 minute drive almost due west from Albany although Google does not note as to whether or not this is during rush-hour. Interestingly, the DOT office is moving approximately a 30-minute drive in the exact opposite direction.[22165-5320]

On Feb 7th 12th, 2012,
Board publishes 2009 fee schedules

February 12, 2012: One week after its February 7, 2012 announcement of the 2009 REVISED reimbursement rates for inpatient hospital care with discharge dates of January 1, 2009 through November 30, 2009, the NYS Workers Compensation Board is announcing a revision of the revisions. These rates are determined using the Medicaid inpatient methodology, All Patients Refined – Diagnostic Related Groups (APR-DRG). These rates also apply to treatment provided under the Comprehensive Motor Vehicle Reparations Act, Volunteer Firefighters’ Benefit Law, and Volunteer Ambulance Workers’ Benefit Law. The new rates are now posted on the Board’s website located under Health Care Information, Medical Care Fee Schedules, under 2009 Medical Fee Schedules.

[ED. NOTE: Considering that it has only taken just over two years to get this revised fee schedule completed, albeit with an almost immediate corrected, is it any wonder that it takes 12 months to 18 months to compete reviews of claimant and carrier appeals of administrative law decisions? Yes, it is correct that the Workers Compensation Board had to await the revisions from another state agency. But I bet had the information that the Board had been awaiting covered salary increases for the commissioners and executive staff, the Board would have been on the phone in January 2010 and not waited until February 2012.[22165-5319]

Wrynn resigned as NYS Superintendent of Insurance

February 9, 2012: Goldberg Segalla LLP is pleased to announce James J. Wrynn will join the law firm March 5. He will run the firm’s New York office and will be a senior partner in its Global Insurance Services Practice Group. Wrynn served as the 40th and last Superintendent of Insurance in the State of New York until it merged with the New York State Department of Banking to form the new Department of Financial Services. He then served as the first Deputy Superintendent of the new department. Prior to serving as Superintendent, Wrynn served as the Executive Director of the New York State Insurance Fund, New York’s largest workers’ compensation and disability benefits carrier. [22165-5318]

Time for a Virtual Office?

February 7, 2012: The New Jersey Law Journal reports that a committee of the New Jersey Supreme Court is considering changing the requirement that attorneys have a ‘brick and mortar’ office and, instead, to have a virtual office. This change in the rules has recently been published for comment. Can New York be far behind?[22165-5317]

The State Taketh (SIF)
& The State Taketh (GSITs)

December 13, 2011: According to the financial people helping solve New York State’s budget woes, the plan is to balance the State’s budget deficit and cover up its fiscal misjudgement and oversight failures by using premiums from those firms who are required to have workers compensation insurance.

According to James M. Odato, of the Albany Times Capitol Bureau, “the Division of Budget has changed its tune whether the surplus funds at the State Insurance Fund can be used for budgeting.” According to them, the surplus at the State Insurance Fund is an asset of the state to be used at the discretion/whim of those who are given the responsibility to balance the budget. As previously pointed out in this website, Gov. Cuomo has just recently ordered the private health insurance companies to repay to its policyholders funds that were collected in excess of what would have been the appropriate premium rate. Today no distinction has been made as to why premiums collected in excess of the premium rate belonging to policyholders of health insurance and not to policyholders of workers compensation insurance of which 55% of the payouts are for medical expenses.

At the same time it is looking at taking a $1.3 billion asset from one insurance company, it is now taking steps to attach the assets of thousands of small businesses who were victims of the fraud perpetrated by a number of group self-insured trusts whose financial worthiness was regularly affirmed by the New York State Worker’s Compensation Board and other state agencies. As a result of the fraud perpetrated, insufficient premiums were collected to offset liabilities from the workers compensation claims the trusts were established to manage. Yet the amount of money being demanded by the Worker’s Compensation Board was less than that which the State is looking to take from the State Insurance Fund.

Unfortunately, the Worker’s Compensation Board’s responses are, “All of this will be avoided if they simply contribute towards the workers’ compensation obligations of their own employees.” and “That’s kind of what they signed up for.”

Small businesses facing judgments say they are victims of a corporate Ponzi scheme and shouldn’t be asked to pay more than they already have in premiums.

Unlike some of the investment Ponzi schemes we are seeing, such as those perpetrated by Madoff and allegedly Corzine, the government who failed in its responsibility to oversee the insurance fraud also manages a fund which has also set premium levels incorrectly although in this case that error generated a surplus.

One could argue, certainly on a moral and ethical level, that since the State of New York failed in its supervisory capacity regarding the premium rates charged by various entities, that its “windfall” in one failure to supervise premium rates should be offset by the losses incurred by its failure to supervise premium rates in another.

Phillips Lyle in Albany, under the direction of Rich Honed, currently represents many of the businesses being sued by the state of New York.

Although the media has been filled with stories as to how one trust administrator, Compensation Risk Managers, formerly of Poughkeepsie, accounted for a majority of the bankruptcies and has since gone bankrupt, it appears that no legal action has been taken against the principles of CRM and its parent company who allegedly made several millions of dollars in salary, benefits, and dividends as a result as their work as trust administrators.[1D155-5316]

Board Agrees on Med Guidelines’ Fee:
You Must Pay to Play

November 24, 2011: Michael Whiteley, Eastern Bureau Chief of WorkCompCentral, has written a detailed article about the story I published last week concerning the requirement that users pay a licensing fee to access the new Medical Treatment Guidelines whose use is mandated by the New York State Workers Compensation Board (Board).

The issue came to light when the American College of Occupational and Environmental Medicine (ACOEM) who worked with the Board in the development of the guidelines, in coordination with its commercial partner, the Reed Group, sent letters to nearly 300 New York carriers, third-party administrators, and large employers asking for a $99 licensing fee for each user of the guidelines.

The objection to the licensing fee was first raised by the New York Insurance Association, whose Vice President, Marc Craw, stated, “NYIA firmly believes that carriers should be allowed to use the medical treatment guidelines without incurring any additional costs. The cost of doing business in New York State is already high enough without having additional fees and assessments imposed on insurers.“

As was noted in my posting last week, the Workers Compensation Board continues to respond to formal requests for information by not returning phone calls, so it has been difficult to find out the Board’s official position on this issue. But the record speaks for the Board:

According to Whitely’s investigation, ACOEM released a letter, dated April 21, 2008, from ACOEM Executive Director Barry Eisenberg to Cheryl Wood, former general counsel for Board whose most recent responsibility was to make sure that the Group Self-Insured Trusts met their financial obligations. The letter granted the Board the right to use all or portions of the guides but prohibited the Board from allowing use of the guides for commercial applications.

And, yes, the Workers Compensation Board’s website does state that the guides are limited to ‘fair use.’

Dr. Jon Seymour, president of guidelines for the Reed Group, has indicated that since insurance companies can save money using the guidelines, they should be expected to pay to use them. Left unmentioned is access by law firms, medical providers, and even pro-se claimants. Interestingly, Seymour did state that Reed/ACOEM have signed agreements with the State Insurance Fund and one medical society to allow them free access to the guides.

This leaves open a number of questions:

• Since no one in the workers comp community works for free, does this mean they are all using the guidelines for commercial application and must pay a fee?
• Even pro-se claimants trying to get an increase in their award?
• Does this mean that individual law firms, medical practitioners, etc. must directly negotiate to get free access to the guides?
• Does this mean that when the New York State Legislature passes a law mandating use of certain medical, technical, or legal guidelines which are developed under the direction of a state agency, that practitioners, users, and licensees who by law are mandated to use those guidelines must pay a fee for the sole purpose of accessing what is, in essence, access to state rules and regulations?
• From where did ACOEM get that mailing list? Are the Board’s lists available to anyone? Free or at what cost?
• How could the executive staff and legal counsel at the Workers Compensation Board sign such an agreement? Did they actually understand what they were signing or did they feel they would get credit for having developed the guidelines but then get out of town before the reality of what they did hit the pocketbooks of the New York State workers compensation community? As John Sciortino, president of the New York Injured Workers’ Bar Association, said, “If the guidelines are going to be made part of the law, then everybody should have access.”

Whitely then quotes Seymour as saying, “This might have been resolved with a little more clarification (by SWCB) in the early days of the discussions. But the discussions are ongoing right now, and we feel like New York is really on the right track.”

I.P.F. Owens, a behavioral psychologist, noting that his field was being overwhelmed with ideas but no results, observed that “key theoretical models [and policy decisions] seem to be produced at a much faster rate than empirical studies can test them [for practical results].“ Same for the current staff at the Board who appear to be running theoretical models as to how to run the Board but without any practical experience to know what works and what does not. This debacle on a mandated fee to access Board mandated guidelines poses the question:

When will Governor Cuomo put adults in charge of the Board?

Whiteley’s article has links to the ACOEM letter to carriers et al asking for the fee as well as its April 21, 2008 letter to Cheryl Wood.[1N153-5315]

Nature vs Nuture vs Hiring Tests

November 21, 2011: A recent article in Medical Xpress.com indicates that it may be possible to anticipate which individual from a group may be subject to significantly increased risk of developing abnormal lung function.

In a study of 327 non-smoking members of the New York Fire Department who worked at Ground Zero, their blood serum was taken and stored five to six months after exposure. Substantial differences were later found in the members of this control group. “Study participants with dyslipidemia, elevated heart rate or elevated leptin levels had a significantly increased risk of developing abnormal lung function during follow-up,” said Anna Nolan, MD, MS, assistant professor of Medicine and Environmental Medicine at NYU Langone Medical Center. “In contrast, elevated amylin levels reduced the risk of developing abnormal FEV1 levels.”

“Most people who are doing this type of work are always looking for things that can be simply measured in people’s blood that can be used to eventually predict a medical outcome—in this case, bad lung disease. One of the reasons why we want to find those things is we can potentially treat those individuals earlier,” said Dr. Nolan.

Does this mean that genetic testing will be used to determine which individuals have a lower risk of occupational diseases and thus have a higher probability of being hired for jobs which historically have higher level of specific occupational disease than other jobs or the general population? And does the mean that the balance of individuals in that group will not be hired?

Much has been written in the past few years about the threats posed by health insurance companies using genetic markers and access to individuals’ health histories to learn which of their applicants for health insurance have a significantly increased risk of developing medical conditions which are expensive to treat.

But can and should these same tests be used in the workplace?

Aside from the issue of discrimination against job seekers, the question rises, “Would the job seeker want to take the job after being made aware of the higher than average risk of developing a serious if not fatal medical condition.”

Also, will the next set of medical guidelines allow or require similar tests of all workers filing claims for lung disease? And if you, as new tests develop for stress, heart conditions, etc., will those also be allowed or required?

An abstract of “Inflammatory Biomarkers Predict Airflow Obstruction After Exposure to World Trade Center Dust” is available for free from Chest Journal of the American College of Chest Physicians; the full text is available for a fee.[1N153-5314]

Medical Treatment Guidelines: Pay to Play?

November 17, 2011: Apparently there is a question as to whether access to the Medical Treatment Guidelines to be required by the New York State Workers Compensation Board (NYS WCB) requires a formal licensing agreement.

Apparently the American College of Occupational and Environmental Medicine (ACOEM) or one of its business partners has been sending letters to insurers stating that, per the agreement that ACOEM has with the NYS WCB, access to the WCB’s treatment guidelines, developed by the NYS WCB with ACOEM, will be on a licensing basis only.

However, sources have reported that Jeffery Fenster, Executive Director of the NYS WCB, has indicated that the Board not only did not authorize ACOEM to charge a fee for access to these guidelines but that the Board was unaware of the proposed fee schedule until complaints starting pouring in from carriers.

The American Insurance Association has been in contact with both the Board and ACOEM in order to get a quick resolution to this issue.

One carrier stated that he was under the impression that, while the fee was not authorized by the WCB, the WCB never stated in its agreement with ACOEM that they could not charge a fee for access. So, apparently ACOEM is sending out the letter calculating that, while they can not require payment of a fee for access to these guidelines, that they may be able to ‘bluff’ some carriers into paying it.

While as one carrier stated, if there is no fee, then this has just been an exercise in spinning wheels, it would seem that whoever at the WCB drafted the contract with ACOEM either had no experience drafting a contract with an outside party to develop resources for the Board or just didn’t pay enough attention to what was going on.

As of the date of this posting, there are various interpretations being offered as to what was the agreement, in wiring or verbally, between the NYS WCB and ACOEM. Hopefully, this matter will be resolved in the next few days.[1N152-5313]

PEF Approved Contract - Layoffs Averted

Furloughs still in Effect?!?

Nov 10, 2011: As has been noted in all the media, the PEF members have voted to accept the contract on the table, after having voted ‘no’ a few weeks ago.

This means that the proposed layoffs at the Workers Compensation Board, along other agencies, have been cancelled.

But, the WCB staff is still subject to the same furloughs as all the staff whose agencies are paid for out of the state budget. So the question remains, “Why doesn’t the executive staff at the Workers Compensation Board ask for a waiver?” Unfortunately, as is the case with every question asked of the Board, the answer to that question remains, not “No Comment”, but “no answer.”

Since the furloughs appear not to extend to the political appointees, who are not members of PEF, it seems that the generals are adding more medals to their chests by making some sacrifices: of their staff.[1N155-5312]

When Reform Doesn’t Reform

November 8, 2011: As noted in the headline above, Albany Time Union’s Rick Karlin detail’s another failure of the New York State Workers Compensation Board to fulfill its stated obligations.

“New York’s workers’ compensation system has long been criticized as slow, costly and unresponsive to the needs of employees and employers alike. More than three years after the latest dose of reform, things haven’t markedly improved.”

In this article, Karlin explains that the Board’s failure to hold hearings and resolve cases has resulted in a staggering 12,000 case backlog leaving thousands of injured workers in a “legal limbo” while costing employers millions of dollars that the legislation on compensation caps was supposed to save. Add this to the Board’s back log of thousands of requests for medical variances and one has to question if the leadership of the Board understands what is the purpose of their employment.

As I wrote in my commentary of September 22, 2011, The Board’s Not Working, this backlog is due solely to incompetence and lack of leadership at the Board and the focus on the future careers and the political fortunes of those who run the board while the interest of injured workers and the employers is secondary.

This article in the Times Union by Rick Karlin gives additional support for my recommendation to Governor Andrew Cuomo that he take a broom to the Workers Compensation Board. [1N150-5311]

New Disability/Impairment Guidelines

November 3, 2011: The New York State Workers Compensation Board today announced the publication of its 125-page 2012 New York State Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity for use by medical professionals, carriers, attorneys, and the Board in the evaluation of permanent disabilities. The 2012 Guidelines will replace the existing 1996 Medical Impairment Guidelines and will take effect January 1, 2012.

However, for claims that already have at least one medical opinion finding a permanent impairment with a rating based on the 1996 Guidelines on or before January 1, 2012, the Workers Compensation Board will determine the claimant’s degree of permanent disability using the 1996 Guidelines.

The 2012 Guidelines address the evaluation of both schedule loss of use awards and non-schedule permanent disabilities. The portion devoted to schedule loss of use awards (Chapters 2-8) is taken unchanged from the 1996 Guidelines. The non-schedule permanent disability sections (Chapters 9-17) are largely based on the work of the Insurance Department’s Workers’ Compensation Reform Task Force and Advisory Committee (Task Force). It includes guidance for medical professionals on how to evaluate medical impairment and physical function and guidance for the Board on how to determine loss of wage earning capacity. It is expected that attorneys, claims professionals, and others will utilize these new standards in an attempt to evaluate and settle claims.

The balance of the Workers Compensation Board’s announcement can be found at the following link: Board’s Announcement.[1N150-5310]

Board Layoffs: Legal Or Political?

Layoff 27 to save 1

October 25, 2011: According to an article in Crain’s, today there is a question about the validity of the 27 layoffs in process at the New York State Workers Compensation Board, an issue that has been raised to me directly by some of my contacts at PEF and the Board.

The Board is funded by assessments against carriers and does not come from the New York State Budget.

As for proof positive of this fact, consider that during the Pataki’ years, when the New York State Legislature was late in submitting a budget to Governor Pataki, he simply stopped all payments including payroll to all state employees, state employees paid out of the state’s budget.

What did this mean? Every state employee whose agency/board/etc. was funded by the state budget had their salary checks withheld. The Workers Compensation Board’s staff, on the other hand, got their paychecks because the funding did not come out of the state budget. So while the state does review the Board’s budget, it does not fund it.

The same is true now.

In fact, the Workers Compensation Board could easily have, as did the State Insurance Fund, asked for a waiver for the layoffs. It did not. As Crain reports,

The appointment last year of Fenster, then 29, drew criticism because he was put in charge of an organization in crisis although he had no workers’ comp experience. Among the challenges was a spate of bankruptcies among the state-regulated, self-insured trusts that have a liability that may reach $1 billion. Cuomo has yet to replace Fenster with his own hire. An administration official said earlier this year that the governor is still “going through appointments … and evaluating existing employees.” An insider said, “I think Fenster is so afraid for his job [that] he agreed to have layoffs.” [ED. NOTE:]I am not that insider, although I have said the same to others when discussing this issue.

In addition, the article goes on to state that early this year the Board transferred $80,000,000 into the State’s General Fund in December 2010.

In the past I have questioned this as the funds that Workers Compensation Board gets are not from the State or the taxpayers but from carriers. So it seems that the Board has this program of “If there is a surplus, use it to buy favor with the Governor and State Legislature. If there is a deficit, make the carriers pay up the difference.”

Let’s see: Save money on payroll and get rid of reporters. Save money on administration and cut down on hearings. Save Money on travel and do more and more videos. And what do we do with the money that we save. Cut fees to the carrier and hope that workers compensation insurance rates will decrease and reduce the cost to doing business in New York State for employers? No, use it to buy favor.

[1N148-5309]

Medicare Secondary Payer Program

Important Updates

October 18, 2011: On September 30, 2011, the Centers for Medicare & Medicaid Services (CMS) made several important announcements that impact liability settlements involving Medicare beneficiaries.

As part of the Centers for Medicare & Medicaid Service (CMS) efforts to continuously improve its Medicare Secondary Payer (MSP) program; CMS has posted the following information to the MSP websites:

1. An ALERT delaying the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) Section 111 MSP reporting requirement for certain liability insurance (including self-insurance) settlements, judgments, awards, or other payments is posted posted at www.cms.gov/MandatoryInsRep on the Additional NGHP Alerts section page.

2. Policy guidance related to Exposure, Ingestion, and Implantation issues, and December 5, 1980, is now posted at www.cms.gov/MandatoryInsRep/NGHP Alerts section page and www.cms.gov/COBGeneralInformation.

3. An ALERT related to Qualified Settlement Funds, under Section 468B of the Internal Revenue Code, is now posted at www.cms.gov/MandatoryInsRep/MMSEA 111 Alerts section page.

4. A policy memorandum, for liability insurance (including self-insurance), on the acceptance of the treating physician’s certification, and its impact on the issue of protecting Medicare’s interests with respect to future medicals is now posted at www.cms.gov/COBGeneralInformation.

In addition, on September 30, 2011, the Medicare Secondary Payer Recovery Contractor will implement a self-service information feature to its customer service line. This feature gives callers the ability to get the most up-to-date Demand/Conditional Payment amounts, and the dates that those letters were issued, without having to speak to a customer service representative. The self-service feature will be available for extended hours, and callers will have the option of requesting information on multiple cases during one phone call.

Beginning in October 2011, CMS will implement an option to pay a fixed percentage of certain physical trauma-based liability cases with settlement amounts of $5000 or less. Detailed information on this option will be posted as an ALERT, on or before October 21, 2011, on the MSPRC website at www.MSPRC.info.

Upcoming improvements to the MSP program, expected within the next 3-9 months, include the following:

• The implementation of a MSPRC portal, where the beneficiary/representative can obtain information about Medicare’s claim payments, demand letters, etc., and input information related to a settlement, disputed claims, etc.
• The implementation of an option that allows for an immediate payment to Medicare for future medical costs that are claimed/released/effectively released in a settlement.
• The implementation of a process that provides Medicare’s conditional payment amount, prior to settlement in certain situations.

[ED. NOTE:]I will report next week how much of this has been covered at the New York State Bar Association’s CLE lecture being held Friday October 21, 2011 in Manhattan.[1n148-5308]

Still time for NYS Bar Assoc CLE Classes

October 13, 2011: It is not too late to register for the Workers’ Compensation Law Update – 2011 prepared by the New York State Bar Association and sponsored by the Torts, Insurance and Compensation Law Section and the Committee on Continuing Legal Education of the New York State Bar Association.

Details on the October 18 (Rochester) and October 21 (NYC) are noted below.

Medical Treatment Guidelines For CTS

October 4, 2011: Workers Compensation Board Chairman Robert Beloten announced that the proposed medical treatment guidelines for carpal tunnel syndrome (TS) Guidelines from Superintendent of Insurance James Wrynn they are now ready for review.

The Workers Compensation Board anticipates promulgating regulations to adopt the 20-page CTS Guidelines. Before doing so, however, the Board would like to receive specific feedback from stakeholders on the carpal tunnel syndrome guidelines to produce final proposed CTS Guidelines. All stakeholders, including medical providers, are encouraged to review the proposed guidelines and to submit any comments, with supporting medical literature, to the Board’s Medical Director’s Office. Please send your comments in electronic form to the Board at CTSGuidelines@wcb.state.ny.us on or before December 1, 2011.

The CTS guidelines have been done in accordance with the Workers’ Compensation Reform Legislation of 2007 and the former Governor’s letter of March 13, 2007, to develop quality standards for medical care of injured workers and that should encourage accelerated delivery of that care with an accompanying reduction in disputes and costs. The Guidelines were developed in cooperation with an Advisory Committee designated in the March 13th letter. The labor and business designees selected as advisors highly-qualified medical professionals to participate in the development process.

The process for developing medical treatment guidelines for CTS was similar to that employed for the earlier Guidelines, using the same medical and other professionals that participated in developing the earlier guidelines.

The working group considered three state-developed guidelines, a guideline developed in the private sector and used by other states, and a guideline from the American College of Occupational and Environmental Medicine (ACOEM). The state guidelines of Colorado and Washington were selected for development of the NYS guidelines. Various parts of the two guidelines were selected and combined into a single NYS guideline. The medical professionals recognize that medical science and practice may change over time and that medical opinions may differ on various subjects. The guidelines should keep pace with these changes.

The working group also recommends that all medical care consistent with the NYS CTS Medical Treatment Guidelines costing more than one thousand dollars be included on the pre-authorized procedures list, except for the three instances in these CTS Guidelines that specifically provide otherwise. All these details can be found in the Guidelines.

For the original documents, click on the following link: Beloten’s announcement, Superintendent of Insurance James Wrynn’s cover letter, and the complete Guidelines.[1N146-5306]

The Board’s Closing Too Many Cases!

October 6, 2011: The statistics published two weeks ago under the story The Board’s Not Working, were the basis of a story by Michael Whiteley, Eastern Bureau Chief of www.workcompcentral.com titled “ Former Workers Compensation Board Member Says SWCB’s Handling of Appeals Slowing.”

Whiteley reported that the troubling trend indicated by the above statistics was supported by Robert Grey, a claimant’s attorney and chairman of the New York Workers’ Compensation Alliance, who stated, “Under the old system, the case was either closed or it was continued. What this means is that the board is closing cases it shouldn’t be closing. This is a philosophical shift from the board being motivated to ensure people get the treatment they’re entitled to.”

Grey said the Workers Compensation Board is closing some cases by declaring them as requiring no further action (NFA). For example, he said, cases are closed once a judge approves surgery for a worker who probably will need to reopen the claim later to establish future medical benefits and lost wages.

John Sciortino, president of the Injured Workers’ Bar Association, said the number of reopened cases will grow even more because of the state’s new medical treatment guidelines, which WCB implemented last Dec. 1. Both carriers and workers are seeking to reopen cases to get rulings from judges on disputes over limits to chiropractic treatment and other services in cases predating the guidelines, which include all injuries regardless of the date of occurrence. “What we’re seeing is that cases that have been closed are now being reopened in what in my experience is an unheard of pace,” Sciortino said. “We’re seeing a lot of closed cases that used to sit in closed filing cabinets being dusted off.”

The Board’s response to the points raised by Grey and myself was in keeping with its standard practice: “WCB spokesman Brian Keegan did not return a call for comment on Wednesday.”

The full text of the article is attached.[10146-5305]

New CLE Courses Available

October 7, 2011: Belatedly, The Insider is posting information on the last two CLE classes for its Workers’ Compensation Law Update – 2011 prepared by the New York State Bar Association and sponsored by the Torts, Insurance and Compensation Law Section and the Committee on Continuing Legal Education of the New York State Bar Association.

In addition to receiving 7.0 credit hours in New York, this program has been approved for MCLE credit by the State Bar of California and the Pennsylvania Continuing Legal Education Board for 5.0 credit hours of substantive law and 1.0 credit hour of ethics.

The program’s last two dates are set for Rochester October 18 and New York City October 21. Full details and ‘sign-up’ information are in the attached brochure from the NYSBA.

Among the many items are on the agenda are:

• Basic issues encountered in all cases
• Navigating the sea of forms and information to be produced by claimants and and employers
• Understanding and applying the new Medical Treatment Guidelines
• Negotiating settlement of claims, including Medicare Setaside Agreements
• Compensation liens: the interplay of Workers’ Compensation, No-Fault and Personal Injury practice
• Ethical issues faced in workers’ compensation cases

Full details and applications forms are in the attached brochure for the NYSBA.[10146-5304]

Carl Copps Moves on

September 8, 2011: I am pleased to report that Carl Copps, former head of the Office of Appeals/Review Bureau at the NYS Workers Compensation Board, has recently become Staff Attorney at the New York State Bar Association in the Continuing Legal Education (“CLE”) Dept.

His new position at the Bar Association involves coordinating seminars on multiple topics to be presented statewide. Fittingly, the first program he is coordinating is entitled “Workers’ Compensation Law Update-2011.” The program will be given at 6 locations across the state beginning September 27th in Melville and concluding October 21st in NYC. He will be one of the speakers at the October 7th presentation in Albany, discussing Third Party Actions

From 2008 to 2011 he was the Director of the Waiver Agreement Management Office (WAMO) at the Workers Compensation Board. In 1988,just prior to the move of the Board’s executive and state-wide administrative offices from Brooklyn to Albany, he recruited, trained and supervised a staff of 70 in creating the Office of Appeals. Staff included over 40 attorneys serving as law clerks to the Commissioners, reducing the pending case count from approximately 13,000 to just over 4,000 cases; thereby reducing time between submission of appeal to resolution from 14 months to 4.5 months.

Prior to joining the Board in 1988, he was at the State Insurance Fund which he joined after earning his JD from the Albany Law School in 1980.

He stated, “It was an honor and privilege to have worked for NYS for those 31 years. My years in the Board’s Office of Appeals were most satisfying, as I, along with a dedicated staff and the strong leadership of Chairman Robert Snashall, was presented with the opportunity to truly make an impact on the adjudication of WC claims. Dealing with the cases arising from the tragedy of 9/11/01 may have been our finest hour, though it goes without saying that we all wish that the events of that day had never occurred.”

His departure from the Board ends 31 years of public service all in the Worker’s Compensation field. As he explains it, “my involvement with WC actually dated back to 1958, when my father was nearly killed as the result of an industrial accident. He was actually given last rites, but he survived. Moreover, he exceeded his doctors’ expectations and resumed walking in a relatively short time; and he was able to return to work and worked continuously until his retirement at age 65. His WC benefits helped keep our family afloat following his injury and his third party recovery was the nest egg for college educations for my brother and me. Thus, I always considered myself to be a “return on investment” for the Board. I leave it to others to decide whether the Board “invested” wisely.”

Having worked with Carl during my entire tenure at the Workers Compensation Board, I can say that not only did the Board “invest’ wisely, but once again this year it has lost an important member of its executive staff.[19146-5303]

New WC Med Rules Compromises Claimants’ Health

September 1, 2011: According to Glenn Bain from the Albany Bureau of the NY Daily News, the recent change in the medical guidelines puts the health of injured workers at jeopardy.

Bain writes that “New treatment guidelines quietly enacted by the Workers Compensation Board late last year limit coverage to therapies that yield ‘functional improvement’ in patients - leaving out people with chronic pain conditions, say labor leaders and care givers.”

The push to publicize this issue comes from the New York State Chiropractic Association’s President Bruce Silber who stated “They basically tried to throw out all injured workers with chronic conditions,” a position agreed to by Robert Grey, a lawyer who specializes in workers’ compensation cases who told Bain, “The agency now views itself as the protector of insurers and employers. Clearly, someone thinks cutting off medical treatment will save money for employers and insurance companies.”

In defense of the Workers Compensation Board’s position, Board spokesman Brian Keegan replied, “In the past, there was no objective and consistent standard for determining whether the care was effective, which can lead to potential fraud, delay and mismanagement of the system.” He noted that people denied coverage can appeal for a variance so long as they can show “objective evidence that a treatment medically benefits their patient.” Keegan said 78,178 variance requests have been filed, and more than two-thirds were approved, although no reference was made to the time it took for the variance request to be approved by the Board.

In order to push its lobbying efforts the Chiropractic Association has a form on its website and, presumably available at the offices of all its members, a WORKERS COMPENSATION COMPLAINT FORM.

Legislation that would have stopped the Workers Compensation Board from applying its new guidelines retroactively was approved by the Assembly this spring but stalled in the GOP-controlled Senate. Upstate Republican Sen. George Maziarz, the bill’s sponsor, said he’s pressing to have the Senate take up the measure at a yet-to-be-called session this fall - or in January. “People are being denied care that is inexpensive and that I think helps them,” Maziarz said.[19141-5302]

NYS Injured Workers
High on Narcotics Usage

September 1, 2011: According to a new study, Interstate Variation in Use of Narcotics, by the Workers Compensation Research Institute (WCRI), New York State is among those ranked highest in what appears to be the over reliance on narcotics prescriptions.

The report states that many physicians who prescribed narcotics to injured workers were not using the recommended tools to monitor use, abuse, and diversion as recommended by medical treatment guidelines.

WCRI’s study also identified certain states where patients who began treatment with narcotics were more likely to end up using narcotics on a longer-term basis—California, Louisiana, Massachusetts, New York, North Carolina, Pennsylvania, and Texas. For example, in Louisiana 1 out of 6 injured workers who were given narcotics initially still received 3 or more narcotics prescriptions 6 months after the injury. In the typical state, the figure was 1 out of 20. The study examined interstate differences in the use of narcotics, based on nonsurgical workers’ compensation claims that had more than seven days of lost time and received prescription pain medications, to help state officials and system stakeholders better target their efforts to address issues related to the use of narcotics. The 17 states included in this study are: California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin.

WCRI is based in Cambridge, MA and is a nonpartisan, not-for-profit membership organization supported in its public policy research by employers, insurers, insurance regulators and state regulatory agencies as well as several state labor organizations. The report is available by PDF for $75 to non-members.[19141-5301]

Rating Board Increases
WC Rates 9.1%

September 1, 2011: New York State Insurance Superintendent James J. Wrynn announced an average 9.1% increase in the workers compensation loss-cost rate, to take effect on October 1.

The New York Insurance Compensation Rating Board had initially proposed a 10.4% loss-cost increase in May, but reduced it to the amount approved by the superintendent. The superintendent cited several factors including increased benefits and medical fees in his order calling for the increase.

To justify these increases, supporting documents were issued on two dates (attached as one document):

July 27, 2011

• Explanatory Memorandum
• Percentage Loss Cost Change by Classification

August 4, 2011

• Table I – Revised Expected Loss Rates and D-Ratios for each employment classification
• Table II – Revised Weighting (W) values
• Table III – Revised Ballast (B) values

 

Since October 2000, New York state’s workers compensation insurance rates have decreased an average of 10%, according to the New York State Insurance Department.[19141-5300]

Public Hearings set for NYCIRB 10.4% Rate Increase

May 26, 2010: The New York State Insurance Department will hold a public hearing on Thursday, June 23, 2011 to consider the application of the New York Compensation Insurance Rating Board (NYCIRB) for a workers’ compensation loss cost increase of 10.4 percent which is used by workers’ compensation insurance companies in setting rates, which would be effective October 1, 2011.

The rate application, submitted by NYCIRB, was based on statistics sent by all workers’ compensation insurers to the NYCIRB, which compiles and evaluates data and proposes loss cost changes that are subject to the Insurance Department’s prior approval.

Information about the hearing and the complete loss cost increase application is available at the Department’s website, www.ins.state.ny.us. Testimony can be scheduled and written testimony submitted through the website. Written comments for the hearing record also may be submitted to Workers’ Compensation Loss Cost 2011 Hearings, Public Affairs Bureau, New York State Insurance Department, 25 Beaver Street, New York, NY 10004, or e-mailed to PublicHearingsComments@ins.state.ny.us with the subject line “WORKERS’ COMPENSATION LOSS COST 2011 HEARINGS.”

The hearing will begin at 11 a.m. in the Neil Levin Hearing Room (Room 510) at the Manhattan offices of the Insurance Department, 25 Beaver Street.[15127-5299]

Board Loses Two Key Staff

May 19, 2011: According to Workers Compensation Board sources in Albany, Jean Kneiss is leaving the Workers Compensation Board to become a judge in the New York State court system. Kneiss has served the Board in a number of capacities as a member of the executive staff in Albany, including, during my term at the Board, as the director of the law judges.

A great loss for those of us who have worked in Brooklyn is the pending departure of Law Judge Jack Russak who is becoming a judge in the New Jersey Court System. New Jersey’s gain is the Board’s loss. Judge Russak was,in my opinion, one of the best law judges with whom I have ever worked, whose counsel helped contribute to my own contributions to the Board.[15126-5298]

Proposed NY Senate Laws Protect Workers, & Stenographers, Too

May 3, 2011: There are a number of bills that have been presented to the NYS Senate Standing Committee on Labor: saving stenographers, submission of IME reports, medical treatment guidelines, unfair labor practices, and medical reimbursement rates.

Senator Diane Savino (D, IP, WF) sponsored S4112 which is an act to amend the workers’ compensation law, in relation to requiring hearings and pre-hearing conferences to be recorded by a stenographer in the employ of the wWorkers Compensation Board, referred to the Finance Committee.

Senator Savino also sponsored S2138 which is an act to amend the workers’ compensation law, in relation to eliminating the requirement that copies of the report of independent medical examination must be submitted to all parties in the same manner.

Senator George Marziarz (R) sponsored S3741, an act to amend the workers’ compensation law, in relation to application of guidelines for medical treatment for injured workers, also referred to the Finance Committee.

Senator Martin Golden (R,C) sponsored S4016, an act to amend the labor law, in relation to powers of the public employment relations board to investigate unfair labor practices.

And Senator Joseph Robach (R,C,IP) sponsored S4559A, an act to amend the workers’ compensation law, in relation to the rates of payment for the treatment and care of injured employees; and providing for the repeal of such provisions upon expiration thereof, referred to the Rules Committee.[15124-5297]

AWW Maximum for Coming Year

May 3, 2011: FINALLY, the NYS Workers Compensation Board published the maximum weekly benefits for the coming year. The $1,159.44 figure has been public for months and everyone knows that the maximum rate is 2/3’s of that amount: $772.96. Perhaps it has taken the Board all this time to do the arithmetic. The formal announcement:

Beginning July 1, 2010, the maximum weekly benefit rate for workers’ compensation is two-thirds of the New York State average weekly wage for the previous calendar year, as determined by the New York State Department of Labor. Workers’ Compensation Law §§ 2(16); 15(6). On March 31, 2011, the Department of Labor reported to the Superintendent of Insurance that the New York State average weekly wage for 2010 was $1,159.44. Accordingly, for workers’ compensation claims with dates of accident or dates of disablement during the period from July 1, 2011 through June 30, 2012, the maximum weekly benefit rate will be $772.96.[15123-5296]

Maximum AWW for 07/01/2011 - 06/30/2012

April 14, 2011: The information necessary for the Workers Compensation Board to post the maximum AWW for the year running from July1, 2011 to June 30, 2012 has a March 31, 2011 deadline for its submission by the Department of Labor to the Superintendent of Insurance, which was done just a week ago. The formal notice should be forthcoming from the WCB no later than the end of next week. [14121-5295]

Law Suit vs Queens Soc Sec Law Judges

New York Times writer Sam Dolnick reports that The Queens office that hears appeals of Social Security disability cases is well known to lawyers, judges and many other New Yorkers as an inhospitable place to seek benefits. This office which had the 10th highest rejection rate in the U.S. has been the subject of a class-action lawsuit filed on Tuesday in Federal District Court in Brooklyn, aimed at five administrative law judges: David Z. Nisnewitz, Michael D. Cofresi, Seymour Fier, Marilyn P. Hoppenfeld and Hazel C. Strauss.

The law suit claims that these judges are “not just difficult, but also biased against the applicants — many of whom are poor or immigrants —and have systematically denied benefits to the disabled by making legal and factual errors.” Well-know workers compensation attorney, Troy G. Rosasco, who also handles disability cases but is not involved in the case stated, “Queens is not just far and away the worst: It would be the Social Security system’s Superfund site.”

Together, the five have rejected an average of 63 percent of the cases they have heard in the fiscal year that began in September, compared with a national average of 36 percent, according to an analysis of data by The New York Times.

For a detailed list, go to my October 7, 2010 posting listing the statistics for the Social Security Law Judges in New York.

[ED. NOTE:]If publishing this information is good enough for the Federal Government, why does not the NYS WCB also publish similar statistics on its law judges? And why not internally on the writers in the Administrative Review Bureau where I kept such stats and had some writers with a 25% reject rate for their proposed Memorandums of Decisions. Yes I know, while the Federal Government does pay attention to the Sunshine laws, the only ‘shine’ we get from the WCB is from the ‘moon’.[14121-5294]

UPDATE New Law on GSIT’s Passed

April 1, 2011 (UPDATE) the NYS Legislature has just passed Senate Bill S2807 which addresses the the state’s group self insured trust workers’ compensation system, which has amassed about $800 million in unfunded liabilities. The language is in Part G of a 25-page budget bill, Part G requiring 11 pages; the actual text of Part G is attached.

Art Wilcox, a consultant on workers’ comp issues for the New York State AFL-CIO, has stated that the new law will give an incentive to these groups, many of which are underfunded, to alleviate their liabilities through loss portfolio transfers. The legislation, Wilcox says, would put in recess for three years all assessments the group trusts would be mandated to pay over that time period. Group trusts that are able to become fully funded in those three years or eliminate their liabilities through loss portfolio transfers would be exempt from paying back those assessments. Group trusts that cannot transfer those liabilities would have to pay back the assessments to the state. “So there is a real incentive for folks to do a loss portfolio transfer,” Wilcox says.[14119-5293]

New Law on GSIT’s Passed

April 1, 2011 Apparently a bill which addresses the the state’s group self insured trust workers’ compensation system, which has amassed about $800 million in unfunded liabilities has been passed by the State Legislature late yesterday.

Art Wilcox, a consultant on workers’ comp issues for the New York State AFL-CIO, has stated that the new law will give an incentive to these groups, many of which are underfunded, to alleviate their liabilities through loss portfolio transfers. The legislation, Wilcox says, would put in recess for three years all assessments the group trusts would be mandated to pay over that time period. Group trusts that are able to become fully funded in those three years or eliminate their liabilities through loss portfolio transfers would be exempt from paying back those assessments. Group trusts that cannot transfer those liabilities would have to pay back the assessments to the state. “So there is a real incentive for folks to do a loss portfolio transfer,” Wilcox says.

Details on the State Senate’s S2807-2011 can be read here.

E-Mails: Neither Safe nor Protected by Law

March 4, 2011: This week a new Workers Compensation Board rule, an Appellate Court decision, and an editorial should raise the caution flag to those practicing workers compensation law, or for that matter involved in any legal, business, or financial activity.

In an editorial dated February 23, 2011, Bob Wilson, President & CEO of WorkersCompensation.com, LLC, “seriously question[s] the wisdom” of the new rules regarding the use of e-mails to submit documents to the WCB, under the recently published guides.

What makes his warning apropos is the recent Appellate Court decision in the Matter of Parnes v Parnes (Appellate Court, Third Department January 13, 2011) in which the wife supplied her attorney with confidential e-mails she ‘acquired’ from her husband’s e-mail account between him and his divorce attorney, Van Ryan. The husband moved to, inter alia, preclude his wife from using any privileged communications between defendant and his attorney Van Ryn, strike the portions of the amended complaint based on privileged information, and disqualify plaintiff’s counsel. The Supreme Court found that the e-mails between Van Ryn and defendant were protected by the attorney-client privilege, prohibited plaintiff from using those documents or any information gleaned from them, struck the offending paragraphs of the amended complaint, quashed the subpoena issued to Van Ryn and disqualified plaintiff’s counsel. But the Appellate Court ruled that, “[c]onsidering all of the circumstances here, we find that Supreme Court abused its discretion in imposing the harsh sanction of disqualification of plaintiff’s counsel in addition to suppressing the confidential e-mails.” Of course, there are more details and explanation in this five-page decision.

Wilson writes that, “Standard email [currently envisioned by the Board] is by no means a secure method to transmit critical, sometimes highly sensitive data. Unless an email transmission is secured with acceptable encryption methods, it is potentially accessible to prying eyes with less than honorable intent. Encrypted email is considered safe, but only works if both parties, sender and receiver, have access to the same ‘key’ to encode and authenticate messages. The New York WCB announcement makes no such mention of encryption, and clearly it is not set up to be so protected.” He then adds, “The announcement mentions forms that do not contain the most critical elements necessary for identity thieves, such as birth date and social security numbers. However, the program allows for all documents related to a claim. These documents could include court documents, medical records and more, any of which could contain critical, personal data; the transmission of which, in my view, exposes said claimant to unacceptable risk.”

It is not just a question of medical reports but sending e-mails can result in embarrassing disclosures in a WCB case, such as internal notes about financial issues and legal strategies.

So while the Appellate Court in Parnes v Parnes stated that such documents and the information therein can not be used in a trial/hearing, it would be impossible for someone who has read such a document to erase that information from their minds. One initially obvious solution would be to recuse the particular attorney from handling the case. And while this may well work for a carrier’s or self-insured’s attorney, it could wreck havoc on a claimant’s attorney who often has a personal relationship with their client.

This is another case of when”The devil is in the details.”[13119-5292]

>Insurance Company Fines: Whose money is it?

December 30, 2010: New York Attorney General Andrew M. Cuomo said four insurers agreed to pay almost $120 million to settle claims they collected too much in workers compensation fees.

The Workers’ Compensation Board charges annual fees to workers’ compensation insurers, and insurers cover these costs by collecting a surcharge on premiums from policyholders. The Board changed its formula for calculating surcharges in 2000, Mr. Cuomo said, with the result that some insurers collected too little in surcharges from their policyholders, while others–including ACE, Zurich, Pennsylvania Manufacturers, and CNA–collected too much.

Although laws were changed to prevent the overcharging, a change in the law in 2009 and 2010 allowed the state to recover the excess funds that the insurers had collected.

[ED. NOTE: So why does the State get to keep this $120 million? If a class action suit for prescription drugs that I used to take just settled and could find and then pay me $15.65, me out of hundreds of thousands of users of that drug, why can’t these insurers be told they must reimburse the policy holders that $120 million. As for those who say, “What’s $20 in the overall scheme of things?”, please note my POB to the left - I will take cash or check for that $20. [0D1065291]

Additional Definition of Employee: Exotic Dancers

December 30, 2010: In a case that may have further implication for the issue of independent contractor, in a case heard before the United States District Court for the Southern District of New York, it was determined that exotic dancers are employees of their clubs where they work, not independent contractors. Although this case involved the issue of wagers, it is undoubtedly the case that an individual deemed to be an employee for wage purposes will also be deemed to be an employee in the case of a workers compensation/injury claim.

In the Matter of Hart v. Rick’s Cabaret Int’l Inc., 09 Civ. 3043, Judge John G. Koeltl has certified a class complaining of several violations of state and federal law committed by Rick’s Cabaret International Inc., the parent company of an adult club on West 33rd Street, and rejected the parent company’s claim that it was not an employer, and thus the dancers were not employees entitled to the laws’ protection.

The class certification could cover as many as 1,700 exotic dancers under New York Labor Laws §190 et seq., §650 et seq. and the federal Fair Labor Standards Act (FLSA). This decision mirrors that of Morse and Bennington v M E R Corporation (Filed October 14, 2008 in the Indiana Southern District Court).

While there are basic indicia that should be used in determining if an injured worker is an employee or an independent contractor,, having specific indicia list by type of business will help insure a consistency in decision making, a consistency referenced by the New York State Appellate Court, Third Department in its decision this past week in the Matter of Cardone v Interstate Drywall. [0D106-5290]

Fraud Investigator’s a Fraud

December 21, 2010: This week, it was announced that two years ago, an investigator for the Office of the Workers’ Compensation Board Fraud Inspector General had his employment terminated for knowingly fabricating entries in reports he filed with OFIG regarding investigations he had conducted.

According to a report issued by the state Inspector General’s office, OFIG investigator Brian Cody had admitted fabricating information in his investigative reports addressing allegations of fraud by employees, health care providers, and others

According to the story in the North Country Gazette, Cody had remarked to colleagues that in order to close cases, they should do what he does and “make up” information. Based upon that remark, OFIG reviewed a sample of 41 of Cody’s closed cases from the previous year, and memorialized its findings in a report dated Sept. 29, 2008. The review revealed that in eight cases Cody had manufactured information about his investigations in official reports. OFIG also determined that, in seven of the 41 cases, Cody had entered incorrect or misleading, though not materially false, information.

Workers’ Compensation Board Fraud Inspector General William Gurin stated, “Cases that Cody investigated and closed over the past several years are being examined by OFIG to determine whether or not they should be reopened and processed anew.”

This is no information in this article as to whether or not, in the past two years since Cody was terminated, any of the individuals found guilty of fraud have been contacted. Or for that matter whether any of those who did not commit fraud were told that the prosecution of their case was based, apparently, on fraudulent evidence.[0D106-5289]

Higher WC Med Rates =
High Auto Insurance Costs

November 24, 2010: As an interesting by-product of the Workers Compensation Board’s plans to increase medical fees for workers’ comp doctors, the Property Casualty Insurance Association of America stated that this could result in high car issuance rates for New Yorkers.

In a Nov. 8 letter to the New York State Workers Compensation Board, the association said the workers compensation fee schedule for medical, podiatry and chiropractic services is applicable to services rendered under the state’s no-fault car insurance system. As a result, proposed changes, such as a 30 percent increase in evaluation and management fees, as well as changes to the way chiropractic services are billed, would impact auto insurance rates. More details are included in their recent press release.[0N101-5288]

Workers’ Com A ‘Time Bomb’ For Insurers

November 18, 2010: According to an article in the Wall Street Journal, Edmund Kelly, Liberty Mutual’s chief executive, is quoted as call workers compensation insurance a “Time Bomb”that will become even more costly for insurers when inflation shoots up, perhaps a public forewarning that more CRM’s may not be far behind.>

Kelly complains that workers’ compensation coverage is already being sold at a loss, with a combined ratio of 119, Kelly said. Combined ratios are a measure of underwriting profit, and numbers over 100 indicate the company is paying more in claims that it is taking in via premiums. Insurers, until just the last few years, been making more than enough money on their investment to make up for the shortfall in revenue from premiums. But with the increase I medical expenses, well out pacing inflation, unless carriers start to increase their rates, there will be severe financial problems.[0N101-5287]

A History of CRM

November 14, 2010: Craig Wolf in a lengthy article in the Poughkeepsie Journal gives an indepth history of the failure of CRM, detailing the internal problems created when CRM management realized there was not enough money to pay their bills.

As previously noted in this website, CRM, now known as Majestic Capital Ltd., has announced a proposed settlement of a lawsuit by the state Workers’ Compensation Board and an investigation by the Attorney General’s Office that it values at $41 million.

The lawsuit filed by the Workers’ Compensation Board in December asserts the company routinely discounted too far the insurance premium rates it set for the eight self-insurance trusts that it managed on behalf of thousands of employers who used CRM to arrange workers’ compensation insurance, the kind that pays workers injured on the job. The board was seeking $472 million in damages to cover bills for the former CRM trusts it had taken over. The board claims CRM charged “inadequate member contribution rates” and that it recruited as members employers “with known poor loss histories and failed to maintain adequate reserves to cover such losses.” The suit claims CRM “failed to promptly investigate claims,” that CRM “engaged in dilatory tactics,” that it “failed to pay awards and installments of compensation to injured workers in a timely fashion” and that it “delayed claims proceedings and settlements.”[0N101-5286]

Legal Fee Meeting was #%#&!$@

November 11, 2010: I understand that the first meeting of the committee established by Chairman Beloten to review attorney fees was not particularly ‘successful’. In fact, one participant described it as a total ‘melt down’ and that, as of today’s date, the next meeting has not been scheduled. Perhaps this should await the installation of the new governor and his new choices to lead the Workers Compensation Board.

Does anyone know if the Department of Labor, for example, is planning meeting to discuss how much attorneys who practice before them will make?.[0N99-5285]

New Commissioner in Holding Pattern

November 12, 2010: It appears that in what may be one of this last acts as governor, Paterson is trying to appoint as a commissioner at the NYS Workers Compensation Board a Republican who is not only a lobbyist but a former counsel to Senator Joe Bruno, when Bruno headed the State Senate, as wella s having been the former Rensselaer County Republican chairman. Interestingly, Dudley was one of the lobbyist who worked for the long sought after raises for the Court’s judges, a raise the WCB’S commissioner have also sought for years. But whether Dudley or many of the other 143 nominees are confirmed is up in the air at this point. Even setting aside the disputed results of last week’s elections, there has been no indication of when the Senate may return to the Capitol between now and Jan. 1 — and whether they will take up the nominations if they do. Dudley graduated 40 years ago from the Albany Law School.[0N99-5284]

Florida Compliance Deadline

November 8, 2010: In what may soon impact in New York, Frances Ford writes that November 8, 2010 is the effective date for all Florida carriers, self insureds and TPA’s to comply with the Department of Education’s (DOE) administrative rules to begin electronic filling of all case management and rehabilitation provider invoices.

While the rule became effective 18 months ago, it still has some caught off guard. Some carriers are still struggling to establish internal processes. First, they have to designate someone in their company to be the contact person to retrieve notification of electronically filed invoices for case management and rehabilitation services. Then that individual must find a way to send it to the claim processor to pay the bill off the claim file and once payment is completed, they must complete the electronic filing process to the state. More confusing still are the dozens of independent case managers and vocational rehab specialists that know nothing about the process of how to enter a bill in the web portal. They will continue mailing in their bills but this could create a huge problem. Add to that the administrative burden for small businesses and independent providers to comply with the electronic filing rules and enter every service line by line into a web portal.

Many question the need for such an arduous process for the DOE to collect data electronically that puts great economic stress on small independent case managers and vocational professionals. Yet, the obvious reason is to get on the penalty assessment bandwagon.”

The NYS Workers Compensation Board should take a close look at the impact this is having are small medical providers and other small stakeholders as Board considers the new computerized system it envisions for the Board and its stakeholders over the next few years.[0N99-5283]

The Rise and Fall of Second Injury Funds

November, 2010: In an interesting article in MoneyWatch.com, Robert K. Briscoe and Robert J. Meyer, actuaries with Milliman, write that he history of so-called second injury funds demonstrates, among other things, how unintended consequences can thwart even the best intentions of workers’ compensation policymakers.

The July 1, 2007, closure by New York state to new claims against its second injury fund , often referred to as the Special Disability Fund or the 15-8 Fund in reference to its section in the controlling statute, illustrates this phenomenon and highlights the financial and administrative issues common to most states looking to close their second injury funds.

The second injury fund story in New York should also capture the attention of public-policy decision-makers across the country, at least some of whom may face similar choices and outcomes down the road.

Each state that enacted a second injury fund created unique rules. One such rule was that the prior permanent physical impairment must also have “hindered” the claimant’s employment, a provision thought to be unique to New York. The expansion of the definition of first injuries to include soft-tissue medical problems, which are often neither obvious nor acknowledged by workers, made it difficult to meet another requirement of the law–that employers have knowledge of an employee’s first injuries. Inevitably, the ambiguity over what constituted “employer knowledge” gave rise to extensive litigation. However, one thing became clear. When employer knowledge is held to a high standard of proof, second injury funds have low claim-acceptance rates.

Such was the case in New York until 1987, when the state removed the requirement for employer knowledge of first injuries. Since then, the scope of the SDF has greatly expanded and with it, the number of claims submitted. From 1945 to 1987, the average annual number of claims submitted was less than 500. Since 1990, the SDF has averaged approximately 4,000 submitted claims annually. As of January 2007, there were 214,500 pending claims.

The article continues with its analysis of how changes in legislation and the interpretation of that legislation led to the need to end the second injury fund in New York[0N98-5282]

NYSIF Announces Medical Provider Network

October 28, 2010: New York State Insurance Fund Chief Deputy Executive Director Francine James announced that NYSIF has begun offering a Recommendation of Care (ROC) program for the treatment of workers’ compensation claimant injuries through a medical provider network. NYSIF is providing the ROC program through the MetraComp medical provider network. MetraComp is a solely owned subsidiary of Coventry Workers’ Comp Services, whose focus is to reduce workers’ compensation costs with potential savings of as much as 15% on the medical cost of claims.

In order to participate in this program, which is expected to reduce the medical costs of workers compensation claims, interested NYSIF policy holders should go to the NYSIF website to register and get the appropriate forms necessary to join this program.[5281]

A Chapter in GSIT’s ends: CRM Sold

September 21, 2010: Majestic Capital, Ltd. (Majestic Capital) (Nasdaq: MAJC) today announced that it has entered into a definitive agreement to be acquired by Bayside Capital Partners LLC (Bayside Capital Partners). Completion of the transaction, which is expected to occur in the first quarter of 2011, is subject to the approval of Majestic Capital’s shareholders, regulatory approvals, and adoption of certain amendments to the governing documents of Majestic Capital’s Trust Preferred Securities, among other issues.

Majestic Capital, Ltd., through its subsidiaries, is a specialty provider of workers’ compensation insurance products. The Company seeks to provide quality products and services that fit the needs of its insureds and is dedicated to developing and maintaining a mutually beneficial, long-term relationship with them. The Company’s workers’ compensation insurance coverage is offered to employers in California, New York, New Jersey, Arizona, Nevada, and other states. Further information can be found on the Company’s website at http://www.MajesticCapital.com.

What impact this will have on the members of the various group self-insured trusts previously managed by CRM has yet to be disclosed publicly.[5280]

The Board’s Continuing Inconsistency

October 20, 2010: Joni Yoswein, on behalf of the Empire State Harness Horsemen’s Alliance, sent a letter to Susan John, Chair of the New York State Assembly Labor Committee, referencing an October 15, 2010 Workers Comp Board decision, contending that this decision is a continuation of inconsistent Board decisions.

Her complaint was that:

[T]he attached decision by the New York State Workers Compensation Board on 10/15/2010 revers[es] an earlier 2009 ruling by a Workers Compensation Law Judge and confirming the position of New York’s harness horsemen that harness drivers and other industry participants are, in fact, independent contractors and not “employees” under workers comp laws. The attached 10/15/2010 decision in the case of an injured harness driver confirmed that he was not an employee of either the horse’s trainer or the track at which the injury occurred (in this case, Yonkers Raceway) for workers compensation purposes, and specifically found that “the claimant was an independent contractor.”

As you know, the Standardbred Owners Association of New York (SOA) has long argued that the Workers Comp law needs to be clarified in the face of inconsistent opinions, decisions and enforcement when it comes to the harness industry. In light of this new opinion, we are hopeful that the Legislature and the Workers Comp Board might now consider moving forward on such an initiative, as detailed in Bill #A10309/S7072: “Excludes from the definition of ‘employee’ such services rendered by a harness race driver, only a groom or caretaker of a temporary designated trainer of a harness race horse, a shipper or transporter of a harness race horse, a farrier of a harness race horse, or a veterinarian to a harness race horse.

While it is nice to see that the Board plans to spend several tens of millions of dollars upgrading its computer system (see the following story), a great deal of the controverted cases could be avoided if the Board would only make up its mind once on an issue and then stick with that decision. And for the argument raised by a former Commissioner at a pre-board meeting that he likes to keep an open mind on many of these issues, I once commented that if you put your ear next to his ears, you could hear the wind whistling through that totally open mind.[5279]

Board’s RFI to replace ECF/CIS

October 12, 2010: The New York State Workers Compensation Board has announced the publication of an RFI (Request for Information) for the:

Business Process Re-eningeering (BPR)
for the
New York State Workers’ Compensation Board

The Claims Management System Redesign Project (Redesign Project) is the first phase in an envisioned multi-phased project that will ultimately deliver new systems that address New York’s Workers’ Compensation system requirements and WCB processing. This Redesign Project will enable the WCB to learn from system stakeholders how to improve the system by making it more responsive to the needs of our customers while driving efficiencies within the WCB and for the system’s participants to reduce overall system cost wherever possible.

This RFI is the first step in gathering information that will enable the WCB to conduct a formal requirements gathering and envisioning exercise involving representatives from all of the system participant groups and the WCB lines of business.

This RFI is intended to inform a RFP process to acquire a vendor to substantially assist the WCB in eliciting, detailing and documenting a re-engineered workers¡| compensation system. At the conclusion of the requirements gathering, the WCB will have the ability to make informed decisions for moving forward with implementing changes identified in the target environment. The goals of this RFI include:

• Identify vendors who have conducted Business Process Reengineering projects of this type and magnitude.
• Identify how vendors have conducted projects of this type and magnitude.
• Identify what deliverables vendors produced attendant to projects of this type and magnitude.
• Identify when vendors concluded re-engineering studies relative to the start of the exercise.
• Identify where vendors have successfully deployed BPR methods and where target environment reports or other deliverables have successfully informed the subsequent deployment of technical solutions.
• Identify through vendor experience the deliverables that should be acquired as part of a major business process reengineering study.
• Identify through vendor experience the types of resources (from a reengineering partner as well as those provided by the WCB) that should be deployed to participate in a major reengineering study.

I will have more on this next week although even now one can raise the following questions:

Why is such an enormous project being put out to bid only two weeks before the election at which a new governor will be chosen, a new governor in another two months sweep out a lot of the deadwood at 20 Park Street, the WCB headquarters?

Is this an attempt to start something so ‘complex’ that the originators have to be kept at the Board as they will claim to be the only ones who understand it?:[5278]

Board’s New Committee on Attorney Fees

October 7, 2010: The New York State Workers’ Compensation Board Chair Robert Beloten announced the creation of an advisory committee that will review attorneys’ fees in the state’s workers’ compensation system. The members of the committee are experts in issues impacting workers’ compensation, labor, business and legal ethics. The committee will be headed by the Board’s General Counsel Ken Munnelly.

“For too long, attorney fees have been a blind spot in the workers’ compensation system,” Beloten said. “My hope is that this committee will shine some light on this area and make recommendations that will promote quality representation for all parties.”

Members of the committee include:

Neil Abramson, Rubin, Abramson LLP
Paul Cardinal, First Cardinal LLC
Kevin Graham, Hinman, Howard & Kattell
Robert Grey, Grey & Grey, LLP
James Hall, Liberty Mutual
Mark Hamberger, Hamberger & Weiss
Susan John, Member of Assembly
E. Tammy Kim, The Urban Justice Center
Christopher Lemire, Lemire Johnson, LLC
Martin Minkowitz, Stroock & Stroock & Lavan LLP
Margaret Moree, NYS Business Council
Michael Ross, Law Offices of Michael S. Ross
Art Wilcox, AFL-CIO

“I am grateful that such a distinguished group of experts are lending their talents to this committee,” Beloten added.

And I would like to add, “Fortunately, there are no current or former law judges on the committee.”

Hopefully, as previously discussed in this website, some recognition will be given to the need for payment of legal fees when the issue of medical coverage is the sole issue being controverted.[5277]

California Workers Comp Funds go BUST!!

October 21 2010: It has been reported in several news sources that Susan Gard, chief of legislation and policy for the California Division of Workers’ Compensation, that the Division only has about one or two more weeks of cash remaining to pay injured workers as well as the medical and other service providers covered by the Uninsured Employer Benefit Trust Fund (UEBTF) and Subsequent Injuries Benefits Trust Fund (SIBTF). Letters were sent to the approximately 2,700 workers covered by these two special funds to make them aware of the situation, she said.

The Uninsured Employer Benefits Trust Fund and the Subsequent Injuries Benefits Trust Fund administered through the state Division of Workers’ Compensation are out of money, after claims were more numerous or costly than expected. Employers statewide are assessed to cover claims within these two funds, and assessments are based on past claims experience.

“We didn’t assess enough last year to cover all our expenditures for claims in the fund,” said Susan Gard, division chief of legislation and policy. When there’s a shortfall, normally the Division of Workers’ Compensation can borrow the money from its own budget. But because a state budget hasn’t been passed, there’s no money to borrow, she said.

Considering how carefully the New York State Department of Insurance and the New York State Workers Compensation Board, along with Silver-appointee State Comptroller Thomas P. DiNapoli, have audited and overseen the group self-insured trusts, one has to wonder if anyone is looking at the books of the NYS Uninsured Employers Fund and the 2nd Injury Fund to make sure that there is money still there. One need only to read the headlines about the disfunctionality of California’s state government to see it is quite similar to that which we have here in New York.

Can we hold our breath until January 2011?

An additional source for this information is are: www.insurancejournal.com/news/west/2010/10/01/113720.htm.[5276]

CA State Fund Pres.:$450,000 a year, plus perks

EDITOR’s NOTE: I did not plan to publish this but in view of the above article, this certainly is relevant.

March 21, 2010: After its president was ousted in a scandal, California’s government-run insurance company hired Janet Frank to clean up the mess, offering her a salary and benefits far beyond the reach of most state workers. As the new president of California’s largest provider of workers’ compensation coverage, the insurance industry veteran received a $450,000 annual salary plus a signing bonus of nearly $140,000 to help her move from Colorado. But Frank never moved to California. She decided to commute weekly from her Denver-area home and to telecommute on Fridays. State Fund added a $99,000 annual stipend for her, partly to cover thousands of dollars in monthly commuting costs. For her first 2 1/2 months on the job, starting in 2007, she was paid a $40,000 performance bonus by the insurer. Overall, she earned more than $1.6 million, then quit after two years.

Frank was not the only executive hired to turn State Fund around, nor the only one paid highly and allowed to commute from another state.Doug Stewart, the chief risk officer and current interim president, earns $488,000 a year, not including his performance bonus, and flies in from Washington state. Becky Wanta, the chief information officer who resigned last year, earned $430,000 and traveled from Nevada.

Ipsa loquitur [5275]

State by State WC Coverage for Household Employees

October 21, 2010: I thought it would be interesting to see how the other states deal with the issue of workers compensation coverage for those employed in a private home. It is interesting to note that 27 states do not require such coverage. And, among these states, are four from New England as well as Pennsylvania, bastions of liberal cradle-to-grave coverage for everything.

The source for this and other related information can be found in “Workers Compensation: Exposure, Coverages, Claims,” ISBN #0-923240-12-8. Standard Publishing Corp., Boston, MA..[5274]

Injured Workers Bar’s Legislative Agenda

October 8, 2010: At its annual Fall meeting this past weekend in Albany, the Injured Workers Bar Association adopted a sweeping legislative and regulatory agenda for 2010-2011.

John Sciortino, IWBA President, said, “While to some our platform may appear overly ambitious, its content reflects the many concerns of our members since passage of the Spitzer reforms and the work product of the several task forces the former Governor initiated. So, for example, one of our regulatory issues is an increase in the medical fee schedule which the NY WCB has already placed in motion.” “The March 2007 reforms created some awful glitches, such as its effective date of March 13, 2007 that excluded a cohort of injured workers from the July 1, 2007 benefit increase,” added Bill Crossett, an IWBA officer.

Among other statutory planks in the IWBA platform are demands for a presumption of permanent total disability related to social security findings; support for pending legislation guaranteeing an injured worker’s right to a hearing and requiring “live” reporters at all hearings; creation of a “whistleblower” protection provision; elimination of Social Security survivor offset reductions against workers’ compensation benefits; and an increase in the NY WCB judiciary personnel to meet increased needs for hearings prompted by the reform changes and many of the task force recommendations.

“The IWBA also issued a formal resolution opposing the NY WCB’s Streamlined Adjudication program,” Sciortino concluded, “which will be forwarded to interested groups.”[5273]

Op-ed by James McCarthy, Esq.

September 28, 2010: Published in the website of the NY Inured Workers’ Alliance

The Park Street Gang: They Were Blind and Deaf .. Now They Are Lame.

While it is essential to sustain a dialogue and cooperative relationship with the New York State Workers’ Compensation Board, it is unfortunate that the current administration, as well as its predecessors, have been largely “deaf and blind” to the rights of injured workers. Now, a lame duck administration appears poised to implement “legacy” policies and procedures. Might these actions be about protecting political job at the Board?

Since the 1996 Omnibus Reform Act, the bureaucracy that has settled and propagated itself at the WCB headquarters in Albany (20 Park Street) has created a hegemony over the state’s workers’ compensation system. An entrenched junta of anti-claimant civil servants has continued to impose its vision of a legal system that defies legislative purpose and compromises the rights of injured workers.

Within the last month, Park Street issued its list of items for its Streamlined Conciliation Process after its leadership met with a NYS Bar Committee of claimant and defense attorneys. This list was never discussed with the committee members. At the same time, a proposed draft of regulations surfaced concerning cross-examination procedures, an issue that certainly should have been discussed with the State Bar committee.

This behavior has also been evident recently in the Park Street revision of the procedure for decisions concerning schedule loss of use claims. Without consultation, the WCB gang has determined – by administrative fiat – how to implement permanency benefits without a hearing and in ways that violate existing law.

These documents are in the context of previous intransigent conduct. Despite strong objections from state legislators and their committees, the Park Street gang has spent nearly $1 million for a digital recording system to replace live stenographers; defied the legislature’s interpretation of the right to a hearing; failed to create a process for WAMO settlements; failed to seek advice and counsel from claimant and defense attorneys; diminished the independence of its judiciary; and radically altered the system’s jurisprudence, among others.

Now, with only a few months remaining in the present state leadership, the Park Street gang is preparing a series of “legacy” proposals to encumber the system into the future. These proposals appear as lame as the ducks who author them. It’s axiomatic that bureaucratic cleansings are most thorough upon the succession of the same party to leadership.

This may be the major motivation that surrounds the secrecy that the Park Street gang’s behavior. On one day, it meets with a NYS Bar group to discuss an issue and, on the next, it releases a different set of agenda items. At the same time, the gang is developing regulations for cross-examination without seeking consideration of the attorneys who are to be bound by them. There is no reason to believe the gang does not understand what it is doing. This behavior has typified Park Street’s modus operandi since the mid-1990’s.

Those in the Park Street bureau who may survive in the post-November era will be a signal as to the direction of the new administration. Who guards the guardians?[5272]

Stats on Social Security Judges, including Firestone and Weiss

October 7, 2010: There is an interesting set of statistics available from the Social Security Administration on Hearings and Appeals which lists:

• Hearing Office Workload Data
• ALJ Disposition Data
• Hearing Office Dispositions Per ALJ Per Day Rate Ranking Report
• Hearing Office Average Processing Time Ranking Report
• Hearings Held In-Person or Via Video Conferencing

It is the ” ALJ Disposition Data” that is most interesting as it lists the ALJ’s by name.

One can see that there are a number of former NYS WCB employees who now serve as ALJ and I understand that many more have passed the test but await an opening in cities of their choice. Although one NY ALJ did decide to go to the mid-west as a federal ALJ rather than remain as an up-state WCB employee (salary also substantially higher as a federal ALJ), it seems that those from the City prefer to stay here.

The two most recent ALJ in the NYC area are former Chairman Zach Weiss and former Commissioner Scott Firestone. Perhaps it is because they are still new but their stats show, for the New York State ALJ’s, that they are below average on cases disposed of and decisions issued although they are above average on cases I which they give awards. I have attached the list for the NY ALJ’s, in alphabetical order. The Federal list can be sorted but even the numbers are not in number order so it is kind of useless if you need to sort it to get information. For that reason I have linked this page to an Excel spreadsheet I put together for the NY ALJs so that you can play with the numbers if you would like.

For those of you who are interested in finding out how other former WCB employees are doing, you can go to the Social Security site: http://www.ssa.gov/appeals/DataSets/03_ALJ_Disp.html

These numbers are published regularly which raises the question of why the NYS WCB can not do this..[5271]

NY lawyers Allowed to Stalk on Facebook

September 30, 2010: Although the media has featured stories about injured workers being found guilty of fraud because of their activities as seen on YouTube, Facebook, Twitter and other social networks, both the New York State Bar Association and the New York City Bar Association issued guidelines allowing lawyers to scour these and other social networks for incriminating evidence against an opposing party in a lawsuit.

New York City Bar guidelines, issued Wednesday, said a lawyer (or lawyer’s agent), may send a “friend request” for the purpose of gaining access to a private profile as long as he identifies himself as a lawyer and makes his intentions clear, according to Samuel Seymour, president of the association. The state bar, on the other hand, advised that lawyers should not “friend” another party

What will be of interest is whether or not the use of such evdience will be subject to the same rules as is the use of videos taken by investigators, per Waldbaum’s Supermarket, 97 NYWCLR 1174 (August 6, 1997) and DeMarco v. Millbrook Equestrian Center, 287 A.D.2d 916, 732 N.Y.S.2d 121 (3rd Dept. 2001). [5270]

NYS WCB: Efficient or Careless?

Random Thoughts by Nance L. Schick, Esq.

September 23, 2010: I just received a Board Panel Decision in which I was chastised for not attaching a Memorandum to an Application for Board Review. Silly me. I actually read the mandatory cover sheet, which reads:

“Attach additional sheets only when there is not enough room to supply the information on the cover sheet.“

I mistakenly thought that meant I should not attach additional sheets (such as an unnecessary Memorandum restating the arguments on the cover sheet) when there was enough room for me to supply the information on the cover sheet.

This is not the first time the Board has failed to read its own forms. In Vinovrksi, the Board rejected a carrier’s claim for Section 15(8) reimbursement because there was an incomplete section on the C-250 form. Both the Board and the Appellate Division, Third Department decided the form was defective despite specific language printed on the form, which indicates the claim is filed “without precluding the right to establish further facts as may be developed.” See Vinovrski v. Innovative Chemical Corp. et al., 843 N.Y.S.2d 199 (3d Dep’t 2007). Although the carrier gave the information it had at the time of filing the form and the form suggested amendments were allowed as new information was available, the printed form was not amended or given sufficient credibility. Thank goodness written contracts in most forums are given greater consideration, especially when the reviewing tribunal is the one that wrote it!

Maybe the majority doesn’t care what happens to insurance carriers or employers in these forums because they are viewed as big and nasty corporations who screw over the little guy and deserve to be squeezed. I’ve met plenty of Judges who, although commissioned to be impartial, have this prejudice. Yet they see small businesses struggling to do the right things in their court rooms everyday, and these same Judges and Commissioners are the first to whine when their insurance rates go up.

Newsflash! None of these cases occurs in a vacuum. We know you’re human and will make mistakes, but you will make fewer of them if you give each case and all parties sufficient time and attention. There is really no excuse for failing to read your own forms.

Nance L. Schick, Esq. is a counselor at law, business and conflict resolution. She advises actors, authors, construction contractors, designers, fitness and yoga instructors, film and stage producers, models, and other small businesses on a variety of operational issues, and she defends employers of all sizes in workers’ compensation claims. For more information, go to www.nschicklaw.com.[5269]

Hempstead Update: Movin’ Along

September 23, 2010: Based on the claim, detailed below, that shutting down most of Hempstead will save several millions dollars by getting a lease for less space, the plan is to turn Hempstead into a satellite office of Hauppauge.

At the meeting held with the Hempstead staff, Nassau (since the office may not remain in Hempstead) will retain some judges and reporters (until the electronic system replaces them) and maybe two or three service people. All the examiners and other support staff will be moved.

The effected staff will be asked if they prefer Queens or Hauppauge although the Board will make the final decision based on length of the individual’s service (not just at the WCB). As a result someone with 10 years experience at the Dept of Motor Vehicles and then one year at the WCB doing §32’s will be given preference, as a §32 examiner at the city of their choice over someone who has only 9 years experience, even if all nine were at the WCB doing §32’s. There is also the possibility of ‘blue cards’ but it appears that WCB employees will not be given a preference over employees from other agencies. Apparently it is not legal to given WCB employees preference because it is against civil service rules — contrary to when the Board gave WCB employees preference when they downsized the Brooklyn office.

But apparently the main emphasis from Albany is to save the Board money and the fate and financial impact on the employees at Hempstead is a secondary consideration. For employees who will have to drive to Queens, the only way for most Hempstead employees to get there, they will have to pay $15 a day for parking: $300 a month after taxes. Some quick math. 20 staff at $300 a month after taxes each for parking = $72,000 a year. Add 20 miles each way for driving at 20mpg at $3.00 a gallon for 2 gallons/$6 a day = $28,800 a year. So employees will be paying about $100,000 a year so that the Board, by its own estimate, based on the high rents they contracted for year ago, will save $400,000 a year (Exec. Dir. Fenster’s estimated 10 years saving of $4 million over 10 years).

When asked if a new governor may change this plan, Fenster answered that this planned move, to close downsize Hempstead rather than Queens or Hauppauge is not political — see NEWSWIRE articles below.

But nothing has been formalized and it would seem that this rush is somewhat inappropriate since there will be a new governor in January, possibly even one from the Republican Party who might consider closing Queens (Democratic country) or maybe even Brooklyn (see NEWSWIRE article below) and enlarge Hempstead/Nassau (Republican country). Considering the state of the real estate market and that the offices will remain in Hempstead past the end of the current lease, it is highly unlike that the landlord will take steps to evict the Board.

So what’s the rush?[5268]

Fenster: Tougher Than He Looks?!

Jul 21, 2010: They say a picture is worth a thousand words - What’s a video worth?

See WCB Executive Director Jeffrey Fenster, show on the left, in a video acting as Vito Lopez’ muscle. The following story, which quotes this website, is by Adam Lisberg of the Daily News which also provides the link to the video. Watch out Hempstead![5267]

Protecting Workers By Day, Protecting The Boss By Night

September 21, 2010 - New York Daily News: If you enjoyed watching the video of Brooklyn Democratic boss Vito Lopez’s thugs shoving reporters last night, you might have wondered who the bearded guy in the nice suit is, leading the pack of muscle pushing us around, and trying to block the [Daily New’s] camera. [To see the video link, click here.]

A helpful reader identifies him (at right, directing Lopez) as Jeffrey Fenster, the executive director of the state Workers Compensation Board. When Gov. Paterson appointed him in January, it was so stunning as to merit a story in the NY Times by the great Sonny Kleinfeld: Fenster was a 29-year-old with no experience in workers compensation — or in management, for that matter.

So how does an underqualified guy three years out of law school get a $141,730-a-year job like that? Through Vito Lopez, of course. The legal blog Above The Law reported in January that Fenster’s girlfriend from the University of Michigan is Debbie Feinberg — now Lopez’s chief of staff. The blog Inside Workers Comp NY fleshed it out:

Lopez’s need to place somebody in a job came up at the same time there was a vacancy at the Workers Comp Board for a “short-timer” as everybody understands that come the first month or two of Governor Andrew Cuomo’s administration, this job will be filled with someone with real experience.

We’ve put in a request for comment to Fenster at the Workers Compensation Board, where a spokesman (who had seen the video) told us he’d pass the message along. Feinberg answered the phone at Lopez’s office by saying she had no comment, then repeated it when we asked about her boyfriend.[5266]

Another municipality bites the GSIT Bullet

September 11, 2010: The Poughkeepsie Journal reports that the Town of Fishkill will pay $2,638.87 a month on half of a bill of $288,339.50 stemming from its former membership in a failed workers’ compensation trust under a deal the Town Board approved September 10. The other half of the bill is under dispute.

The Town Board accepted an agreement with the state Workers’ Compensation Board that calls for paying off half of that assessment over 60 months with 3.75 percent interest. The bill represents what the Workers Compensation Board feels is due on underpayment of premiums from a now defunct group self-insured trust managed by CRM.

Oh, that the Board was as attentive to reviewing the trusts when they were running as the Board is in chasing down municipalities for these funds.[6265]

Good News – Good Job
Disability Duration Guidelines

September 17, 2010: After several years of contentious meetings, The New York State Workers Compensation Board’s Advisory Committee and Task Force has completed a major step towards meeting the goal of the 2007 Amendment to the Workers Compensation law: the 108-page Disability Duration Guidelines.

Under the 2007 amendments, for claims involving non-schedule permanent partial disability under WCL §15(3) (w), compensation is payable for a specified maximum number of weeks depending on the percentage of loss of wage-earning capacity (Duration Maximums). These Disability Duration Guidelines provide part of the methodology for determining the percentage of loss of wage-earning capacity for individuals who are subject to Section 15(3)(w) and are not working.

The original concept was for the Disability Duration Guidelines to be comprised of three inter-related segments, intended to foster consistency, predictability, and reliability for determining impairment. For now, the Board has published an and Residual Functional Abilities/Losses Guidelines. However, the final member of the triumvirate, Loss of Wage-Earning Capacity Guidelines, was subject to several alternatives but still await completion as no consensus was reached on a methodology. Specifically:

Medical Impairment Guidelines (MIG) For an individual who has reached maximum medical improvement (MMI), the 85-page MIG provides the physician with accurate and objective tools to document an individual’s work-related impairment. By following the detailed steps outlined for this analysis, the physician determines the appropriate Medical Impairment Class and the related severity ranking for the permanent impairment condition. This class and severity ranking provide a foundation for evaluating the impact of the injury or illness on the individual’s functional abilities that is an input for determining loss of wage-earning capacity. The Guidelines are quite clear, however, that the Medical Impairment Class and severity ranking should not be used as a direct translation to loss of wage earning capacity, that although medical impairment is generally predictive of residual functional ability/loss, it cannot be directly translated to loss of wage earning capacity.

Functional Guidelines FIG A 5-page Functional Assessment Form is to be completed by the treating physician and the IME, to measure an individual’s residual functional abilities and losses in relation to the diagnosed work-related medical impairment and the likely requirements in the workplace. In the event of material differences between the findings of the treating physician and the IME, the parties or the Judge may request a functional capacity evaluation by an impartial Designated Health Care Professional who shall follow a standard protocol and actually calculate functional abilities according to metrics from the U.S. Department of Labor Dictionary of Occupational Titles.. The results from the Functional Guidelines are an input to and inform the determination of loss of wage-earning capacity.

The Loss of Wage Earning-Capacity Guidelines is supposed to utilize the results from the Functional Guidelines together with vocational factors, such as the education, skill level and age of the injured worker, to determine loss of wage-earning capacity. Information regarding vocational factors should be collected from the individual using the attached, newly created Vocational Data Form, and may be supplemented by the employer.

Four approaches were considered for determining loss of wage-earning capacity, the first two of which were discussed extensively:

1. Grid Approach: the design of a grid that assigned percentage points of loss of wage-earning capacity depending on various factors, including the injured worker’s loss of functional exertional ability, age, skill level, and education;
2. Vocational Specialist Approach: the use of an impartial vocational specialist to provide an expert opinion on the injured worker’s residual wage-earning capacity;
3. Hybrid Approach: the use of a combination of the two preceding approaches; and
4. Litigation Approach: the injured worker and insurer would submit such evidence regarding the injured worker’s earning capacity and loss of wage-earning capacity as they deem relevant for the Judge’s consideration.

Because a consensus could not be reached by the Advisory Committee about the approach for determining loss of wage-earning capacity, this third segment of the Guidelines is referred to the Board for development and determination.

In an attempt to clarify the procedural steps, the Guidelines include two pages of flow charts.

The full 108-page report is available by clicking here.[5264]

A Thanks To The Task Force

September 17, 2010: Of course, no report can be done without the participation of many people for whom a great deal of thanks is due. While there were several members from the insurance and medical communities on the three task forces, I have listed below those who are active practitioners in the handling of cases before the Workers Compensation Board.
THE ADVISORY COMMITTEE

• Colleen Gardner, Commissioner, NYS Department of Labor
• Mark Humowiecki, Deputy Executive Director, Policy & Program Development, Workers Comp Board
• Margaret Moree, Director of Federal Affairs, Business Council of New York
• Kenneth J. Pokalsky, Senior Director of Government Affairs, Business Council of New York
• Arthur N. Wilcox Jr., Director, Public Employees Division, NYS AFL-CIO

While there were several members from the insurance and medical communities on the three task forces, I have listed below those who are active practitioners in the handling of cases before the Workers Compensation Board.
DEVELOPMENT OF THE MEDICAL IMPAIRMENT GUIDELINES and DEVELOPMENT OF RESIDUAL FUNCTION ABILITIES/LOSSES GUIDELINES

• James McCarthy, Esq., Injured Workers’ Bar Association
• Alexander Rosado, Esq., Rosado, Chechanover & Bayrasli, LLP
• Stephen Levin, M.D., Co-Medical Director, Mount Sinai - Selikoff Center for Occupational & Environmental Medicine and Former Interim Medical Director of the Workers’ Compensation Board
• Jaime Szeinuk, M.D., ssistant Professor, Community & Preventive Medicine, Co-Medical Director, Mount Sinai - Selikoff Center for Occupational & Environmental Medicine and Former Interim Medical Director of the Workers’

DEVELOPMENT OF LOSS OF WAGE EARNING CAPACITY

• Susan Duffy, Hamberger & Weiss
• Robert E Grey, Esq, Grey & Grey, LLP
• William S. Jones, Esq. Jone Jones, LLP
• James McCarthy, Esq, Injured Workers Bar Assocation
• Alexander Rosado, Esq., Rosado, Chechanover & Bayrasli, LLP
• Richard Winsten, Esq, Meyer, Suozzi English & Klein, P.C
• Steven Levin, M.D. (see above)

A detailed list of all the participants can be read by clicking here. [5263]

Board to (Shhhh) Close Hempstead Office

September 9, 2010: The New York State Worker’s Compensation Board today, in a nonpublic announcement issued by Executive Director Jeffrey Fenster, sent e-mail to the entire staff announcing that has begun plans to implement the downsizing and consolidation of the Hempstead District Office.

This consolidation will involve closing the Hempstead District Office and transferring employees and services to the Queens and Hauppauge District Offices, with the exception of staff managing the hearings. There will be no staff reductions. The Board will still maintain a Customer Service Center with several hearing parts in Nassau County. It is projected that the downsizing will provide substantial savings in lease and utility costs over the next 10 years, while still offering the same level of service to injured workers.

At this time, there is no definitive date when the Hempstead District Office will be officially closed and employees will transition to other work locations. However, it is anticipated that this move will occur between Spring-Fall 2011.

As we noted in the e-mail alert published Thursday morning, this e-mail notice was distributed Wednesday afternoon shortly before the beginning of the major holiday, Rosh Shoshona, which started at sundown thus necessitating the expected early departure of many of the downstate employees would be impacted by this change. There are far too many questions that need to be answered before this plan should be implemented.

The Board states that the closing of the Hempstead office will not be and inconvenienced because of the close proximity of the Queens and Hauppauge offices. According to Google maps, Hauppauge is 27 miles away and should take 35 minutes to drive (Long Island Expressway) and Queens is only 10 miles and 18 minutes away using the Hempstead Turnpike. Well, assuming that there is no traffic on the L.I.E. (usually only from 3am to 5am), you would have to exceed the speed limit of 60 MPH unless you maintained a steady 48 MPH door-to-door. As for Queens in 18-22 minutes, not even at 3am to 5am. Fenster may be from Brooklyn but my guess is he has never driven to these offices at hours designated by a computer but at hours he has selected as being, according to those he asked, the least busy. As for those in Albany, I doubt if most have been below Bear Mountain Bridge.

If there is a need to save money by closing off those, why not close the Queens office which is in “close proximity” to Hempstead office even close proximity to the Brooklyn and Manhattan offices.

And I’m sure that this decision has nothing to do with the fact that Nassau County in which the Hempstead office is located has recently elected a Republican as County executive, replacing a Democrat, and returning the County Legislature to Republican control for the first time in years. After all, could one possibly think that the Oligarchic Cabal running the Board would be that shallow and vindictive?

Well, I have shown you what is ‘behind the closed doors’ and now it is time for you, the workers’ compensation community, to step into the room and turn on all the lights.[5262]

Parole Bd. Commissioners ain’t Too Swift Either

September 9, 2010: For those who think that I pick only the NYS Workers Compensation Board and its commissioners for their constant inconsistencies, you are correct as it is a Board with which I am familiar, although the lack of consistency exists elsewhere.

Today I point out an egregious (and that is a mild term) act of inconsistency by a Board of Commissioners (this time Parole). Then again too many people are overwhelmed and beholden to those who face a flash from a camera as a part of their life than they are to ones who face the flash of a gun as part of their job. To wit:

• “I wish there was some way I could go back to the moment I decided to enter the store,” [the murdered] said in front of a packed courthouse. “I’m not an animal. Believe me, I regret that day and will regret it the rest of my life. I understand the pain I caused.” “It was unjustifiable,” he told the parole board in 1997. “I am ashamed of it. I brought a lot of shame and hurt to people, in particular to the [murder victim’s] family. I feel their loss and have been feeling their loss for years. I am very sorry. That’s all I can say.” Link
• The panel said [the murderer’s] “premeditated senseless and selfish act of tragic consequence” makes his release “inappropriate at this time and incompatible with the welfare of the community.” Releasing him would “would so deprecate the seriousness of [the] crime as to undermine respect for the law,” the panel said. . . .[even though] he works as a porter and assists other inmates in one of the prison’s law libraries.Link

One is David Chapman who murdered John Lennon and the other is Shu’aib Raheem who murdered a policeman during a store robbery and held several hostages at gun point for many hours.

I guess, by comparison, a little inconsistency by the Workers Comp Board does not seem so bad.[5261]

NYS Workers Com Alliance 2010-2011 Legislative Agenda

August 2010: The New York Workers’ Compensation Alliance rolled out a 2010-2011 legislative agenda this week that includes calls for shutting down the state’s troubled group self-insured trust system and guaranteeing workers’ rights to hearings in noncontroverted cases.

The Alliance, a group of New York claimants’ attorneys, released the package after the New York Legislature finished the bulk of its business for 2010.

The Alliance’s call for a change in the hearings process also could play into compromise talks ongoing this week between the AFL-CIO and the New York State Workers’ Compensation Board (SWCB) over a board plan to expedite its hearings process and divert many cases from hearings to informal review by administrative law judges. The judges in those cases would issue proposed orders – or “desk” orders – that could be challenged by attorneys demanding a formal hearing. Robert Grey, chairman of the Alliance, said his group is backing Assembly 11337, which deals with uncontested claims. Filed in June, the bill would guaranty that a worker with an uncontroverted claim can get a hearing within 20 days of filing an application. [5260]

What Lawyers Need to Know About Search Tools

August 21, 2010: It will come as no surprise to anyone who has handled complex litigation during the past five years that the volume of electronically stored information that must be reviewed in the course of discovery can be staggering. It may be more surprising to learn that keyword search is not nearly as effective at identifying relevant information as many lawyers would like to believe based on a report showing lawyers estimated their search had identified 75 present of the relevant documents when only about 20 present were found.

Litigators today face severe challenges in identifying and producing documents responsive to requests for production, on time, within budget and without waiver of privilege. To assist lawyers in these efforts, there are a dizzying array of vendors and search tools on the market, each claiming to offer the “silver bullet.” For time-strapped lawyers who have little — if any — interest in technology, sorting through the options can be overwhelming. But the consequences of getting it wrong — and using a shovel when one really needs a crane — can be severe, in terms of cost and otherwise.

Are all search tools and methods created equal? Do they all achieve the same results? How can attorneys become sufficiently comfortable using search tools so they can certify that, “to the best of [their] knowledge … formed after a reasonable inquiry,” their response to a document request is “complete and correct,” and that they have produced everything — or as close to everything as possible — that is responsive to the request?

The proper search technology, coupled with a sound process, can make a huge difference to the quality, cost, and speed of production. But to leverage technology, match the right tool to the right problem, and implement a defensible process that is likely to yield the optimal result, it is necessary to understand something about how different search methods work and their strengths and weaknesses.

For a complete copy of this document and all its citations and further problem solving techniques, link here: [5259]

Taxpayers get stuck with GSIT underfunding

September 3, 2010: The following two stories illustrate how the failure of the Workers Compensation Board and the State Insurance Department to audit the Group Self-Insured Trusts (GSIT) will ultimately cost the taxpayers millions of dollars, both directly and indirectly. The hundreds of millions of dollars that were never collected but are necessary to fund both awards of compensation and medical expenses have to come from somewhere. And despite the New York State Appellate Courts interpretation of recent ATF cases, trust members of past and present will be required to make up the difference - but, if they have no money, to taxpayers will pay.

In the first case, Plattsburg NY taxpayers will pay because it is their municipalities who fell victim to the State’s failure to audit. So these taxpayers must either pay an increase in taxes of about 2¼ of their gross income or see $1,200,000 in other city services cut.¹

In the second case, the owners of a small business find themselves liable for an additional $53,003 to cover the shortfall from 2001 through 2007 as a member of the trust. The business has since closed and the state is now demanding they make their monthly minimum payment of $845.74 out of their sole source of income: Social Security. If these business owners are forced to seek government aid when they lose this portion of their Social Security benefits, the government aid is paid by taxpayers.

This ongoing saga further demonstrates what happens when government bureaucrats whose paycheck is in no way related to or jeopardized by poor decision-making and unrealistic planning design programs to compete in the private sector and then fail to follow through, audit, or even legitimately evaluate results of their misguided thinking.[5258]

¹ 8,031 households with an average income in 2009 of $39,699 = $150 per household http://www.city-data.com/city/Plattsburgh-New-York.html and http://www.city-data.com/housing/houses-Plattsburgh-New-York.html

EDITORIAL: City made right decision to pay off Workers Comp debt

August 22, 2010: City of Plattsburgh Mayor Donald Kasprzak and the Common Council have been working for the past four years to repair their city’s finances and eliminate debt. Unfortunately, their membership in a group self-insured trust, unaudited bys agencies of the State of New York, forcing a reassessment of $1.2 million, to pay off a debt for Workers Compensation claims that accrued from 2000 through 2007.

As reported in an editorial in the Press-Republican, the debt is the product of the city’s decision to enter a self-insured trust fund along with 12 other municipalities. The fund was supposed to allow the city to cover its Workers Compensation debts in a cost-saving, self-insured arrangement. But the fund was grossly mismanaged, to the point where it went bankrupt. In fact, the city, Plattsburg was the second-largest municipality in the trust behind Kenmore, near Buffalo.

In this editorial, it was noted that the city managers appeared not to pay too much attention either the apparently low premium rates or excessively high fees charged by the trust. They then added the following comment:

We also wonder if the New York State Workers Compensation Board provided enough insight and oversight to the trust’s members.[5257]

Workers’ Comp Crisis May Be Costly

August 23, 2010: The Albany Times Union reports that a growing insolvency crisis in workers’ compensation insurance, born from years of lax oversight by state regulators, is threatening to leave thousands of small businesses owing $600 million or more to New York insurance pools they trusted to pay claims from workplace death and injury.

Already, the little-publicized crisis has forced otherwise stable companies to lay off workers and curtail hiring plans during a critical point in the state’s economic recovery. And at some point, taxpayers could be forced to pick up the tab for whatever can’t be recovered through lawsuits or other means.

New York’s Workers’ Compensation Board, which regulates the trusts, received its first audited reports in May 2003, nearly a decade after these group insurance pools first surged in popularity. Those reports showed more than a dozen trusts with financial shortfalls, according to a task force report released earlier this summer.

The recently issued report details the reasoning on the original legislation as well as discussing all of the failures of oversight from the New York State Worker’s Compensation board, other state agencies, and in many cases the members of the trusts themselves.

One question that does appear to remain unanswered is why when a self-insured trust goes bankrupt, its members (those who pay insurance premiums to the trust) are held responsible to make up the premiums but when an independent insurance company, i.e. Reliance, goes bankrupt for not having enough money to pay its claims, it is not the customers of reliance who are forced to pay additional assessments but other solvent carriers in the system who are assessed to make up for the losses. [Yes, ultimately a higher costs incurred by the solvent carriers will be reflected in higher premiums to their customers, assuming the CRIB allows high rates.)[5256]

Late Paying HMO’s Pay Fines

August 24, 2010:: The New York State Insurance Department today announced that 20 health insurers and health maintenance organizations (HMOs) have been fined $716,800 for violating New York’s Prompt Pay Law. The violations and subsequent fines stemmed from complaint files that were closed by the Insurance Department between Oct.1, 2008 and Sept. 30, 2009.

New York’s Prompt Pay Law requires health insurers and HMOs to pay undisputed health insurance claims within 45 days of receipt, ensuring timely payment. By agreeing to pay the fines imposed by the Insurance Department, the companies are acknowledging that they failed to pay certain claims within the state-mandated time frame.

The Prompt Pay Law has been extremely effective in ensuring that consumers and health care providers are paid in a timely fashion and it remains an excellent deterrent against entities slow to pay undisputed claims,” Superintendent James Wrynn said.

EDITOR’s NOTE: I did not see Verizon or many of the other late (if ever) paying SEI’s in the workers compensation system listed here. During my years as a commissioner, I attended three of four dinners a month during which, when other guests discovered I was a WC Commissioner, would ask for my help I getting undisputed bills paid. The WCB and NYS Insurance Department can not only institute fines but can cancel SIE’s rights to self-insure. Who watching? See GSITs - same problem: no one looking, no one cares, . . . [5255]

Typo does NOT costs $1.6 Billion

August 11, 2010: In November of this year, this website reported on a court case based on an apparent typo in a ERISA plan that was redrafted after Bell Atlantic became Verizon. It was estimated this mistake could have cost Verizon an estimated $1.6 billion.

On August 11, 2010, the 7th U.S. Circuit Court of Appeals in Chicago ruled that Verizon Communications Inc. shouldn’t be penalized for a drafting error in the preparation of a cash balance pension plan, affirming a 2009 decision by a federal district court judge in Chicago.

The appeals court noted the cash balance plan went through six rough drafts before a final document was produced. The fourth introduced the error, which “survived unnoticed in the fifth, sixth, and final drafts of the plan,” the appeals court said.[5254]

Fight over MAP Continues

August 2, 2010: The Workers’ Compensation Alliance is concerned by news that the Workers’ Compensation Board continues to study elements of the “MAP” program (now known as the Streamlined Conciliation Process) for possible implementation. The WCA stands for the right of injured workers to a hearing before a Workers’ Compensation Law Judge. This program has been the subject of discussion between the Board and the New York State Bar Association, which properly opposes administrative procedures that may threaten due process for participants in the workers’ compensation system.

The WCA Position.

The WCA calls on the Board not only to abandon the ill-advised MAP/Streamlined Conciliation program, but to sharply reduce its use of non-hearing decisions to decide legal issues in workers’ compensation claims. This is not a radical proposal, but would simply represent a return to a method that was proven effective for over eight decades. We recognize that the Board has limited resources and that some issues in some established cases may be suitable for non-hearing decisions, and the WCA will work with the Board to identify and address these issues. It is essential, however, that an initial hearing be held in each case in order to preserve benefits and due process for injured workers.[5253]

Welcome to New Comm Lobban

July 22, 2010: Newly appointed Board Member/Commissioner Loren Lobban is now sitting as a member of the Board.

And, contrary to the impression that certain executives at the Board wished to convey, the 300 to 400 proposed Memorandums of Decisions the presented to you each month are yours not to simply sign but to read and review. And if you find any errors, be they grammatical or factual or misinterpretation or improper application of the workers compensation law, you not only have the right but also the responsibility to reject the draft decision and insist that it be done correctly. After all, it is your name that will be forever linked to that decision and not the signature of the person who drafted it and who may have other concerns.

I used to ask this of my colleagues all the time, unfortunately frequently to no avail, “Are you prepared to stand in front of the appellate court record of appeals and justify both the quality and final determination of the decision you have signed? Or are you satisfied with one of the many rebukes issued by the appellate court in the past year basically admonishing the board and those who signed the decision for poor judgment, lack of judgment, or just plain sloppiness.“[5252]

Next Commissioner: Arda Nazerian?

Jul 21, 2010: As previously reported, the name of the possible next Board Member/Commissioner is Arda Nazerian, who most recently served as senior policy advisor and communications director to Nassau County executive Tom Suozzi, where she managed large scale initiatives related to government efficiency, health and human services and regional planning, according to her bio. She had previously served as head of media and public relations at the American Stock Exchange. She came to Wall Street following a ten-year career in public service working for former New York Governor Mario Cuomo, including serving as director of his New York press office. Nazerian is a founding member of the advisory board for the master’s program in strategic communications at Columbia University and an active member in the Armenian General Benevolent Union As to whether her four years with Suozzi will outweigh her time with Governor Mario Cuomo remains to be seen. And perhaps, her appointment will just sit at the Labor Committee until the ext Governor Cuomo takes office in January 2011.[5251]

Picking up WC checks at employer: Illegal or Not?

Jul 28, 2010: The New York State Worker’s Compensation Board has ruled that Buffalo County Executive Chris Collins’ policy requiring injured workers receiving workers compensation are required to pick their checks up from their supervisors.

Collins’ office indicated that this would apply to only a very small number of injured workers and could save taxpayer money. “We need to be able to explain to them every two weeks opportunities to come back to work on light duty, so they can transition back to their jobs. It’s not punitive.“

The Board, voting unanimously, not only feels that this is illegal but, according to claimant attorney Anne Dimatteo, will consider seeking in order from the State Supreme Court to enforce the board’s ruling. The Board used as its basis for this determination WCL §25: Compensation, how payable, which reads in part “(1) The compensation herein provided for shall be paid periodically and promptly in like manner as wages, ...”

EDITOR’s NOTE: But the Board decision appears not to address the issue of what is the rule for those employees who were paid by check at their place of employment and not by a direct deposit to their checking/savings account. According to the Board’s interpretation, does this mean Erie cannot make direct deposits but must require those workers to continue to show at their place of employment to pick up their check?]

In response, Collins office replied in part, “(The Board) can express displeasure, but they have no control in this. We are well within the law to say that people need to pick up their checks.”[5250]

New Law on Hearing transcriptions

Jul 28, 2010: State Senator Diane Saving, a member of the NYS Labor Committee, has had her bill to “amend the workers’ compensation law, in relation to recording of investigation transcripts” approved by the State Senate and passed on to the State Assembly’s Labor Committee. Savino’s bill adds two words to WCL §122 Transcripts: “A copy of the testimony, evidence and procedure of any investigation, or a particular part thereof, recorded and transcribed by a stenographer in the employ of the Board.“[5249]

WA State: Privatizing WC Insurance?

Jul 29, 2010: It appears as if another state is looking allowing the private sector to compete, in workers compensation insurance, with what has previously been a state operated monopoly.

In Washington State, only one of four states that maintains a strict state monopoly, ballot Initiative 1082, sponsored by the Building Industry Association of Washington which is a politically conservative construction trade group, will go to the voters this coming November, with the sponsors having collected 150% of the required signatures. According to balletpedia.org, the Secretary Of State certified the measure by a 3% random signature check. The initiative also would cut the employee share of workers’ comp premiums.[5248]

Major Federal Case on Independent Contractor v Employee
NYS Legislature Does, Too

July 22, 2010: In a case involving the use of workplace contracts to define certain individuals as independent contracts, the 9th U.S. Circuit Court of Appeals in California filed a ruling on July 13, 2010, that the use of these contracts can not automatically be used as a defense by employers seeking to avoid California’s law. What makes this case of interest in New York is that one of the three judges participating in this decision was New York’s Eastern District’s Senior District Judge Edward Korman, sitting by designation, who wrote the final decision.

In the Matter of Narayan; Rahawi and Heath v RMW EGL, INC.; Eagle Freight Systems, Inc., three California truck drivers, who signed such agreement, then claimed that they were denied employee benefits in contravention of various California labor laws. Although a state court ruled in favor of the employer, the federal court reversed the decision, sending it back to a jury to determine whether the facts in the case supported the plaintiffs of the defendants.<

As to what the implications may be for such litigation in New York State, particularly in view of Judge Korman’s participation, will remains to be seen. In fact, State Senator George Onorato (D-Queens), the chairman of the Senate Standing Committee on Labor, on June 30, 2010 announced that the State Senate and Assembly have given final approval to his legislation (S.5847-F/A.8237-D) that cracks down on the practice of employee mis-classification in the construction industry and will help to prevent the siphoning off of tens of millions of dollars in state tax revenue each year into New York’s underground economy.[5247]

Labor Comm Fight Over New Commissioner?

Jul 21, 2010: A few weeks ago, I noted that there is another name in the hopper for one of the vacancies as a Board Member/Commissioner of the New York State Workers Compensation Board, a woman who held a key position in Tom Suozzi’s administration, although rumor also has it that some members of the Senate Labor Committee are not happy with the choice - maybe because Suozzi was not kind to the Democratic members of the State Legislature in some of his remarks about the problems in New York State. Well, the newspapers have confirmed my alert. According to the New York Daily News:

That person appears to be Gov. Paterson’s last hurrah of political patronage is not confined to the state Parole Board. Paterson recently nominated a former aide to ex-Nassau County Executive Thomas Suozzi to the state Workers’ Compensation Board - at the urging of the state Democratic Party boss. The cushy job for Charo Ezdrin pays $90,800 a year - and comes with a six-year term, lasting well past the four-year term of the next governor.[5246]

AIG Sues its Competitors

July 3, 2010: U.S. District Judge Robert Gettleman of the Northern District of Illinois today has authorized AIG to pursue a lawsuit against Hartford Financial Services, Liberty Mutual, and Travelers Insurance for alleging conspiring to damage AIG’s position in the workers compensation insurance market. But he also dismissed a number of other actions sought by AIG against these same parties. (American International Group Inc et al v. ACE INA Holdings Inc et al, U.S. District Court, Northern District of Illinois, No. 09-02026)[5245]

Coventry Health Fined $262M for WC Fraud

July 3, 2010: Coventry Health Care, Inc. (NYSE: CVH) announced today that the Court Of Appeal, Third Circuit for the State of Louisiana has affirmed the trial court’s decision to grant summary judgment against First Health Group Corp., Inc. (a wholly-owned subsidiary of Coventry) for $262 million in previously-disclosed provider class action litigation in Louisiana state court. The suit involves claims of alleged violations of notice provisions of Louisiana’s Any Willing Provider Act in connection with providers providing services to injured workers with workers’ compensation claims. More specifically, a number medical/service providers have successfully argued that Coventry’s method of taking discount from the bills, in accordance with the contracts signed with these providers, submitted violates Louisiana Law.

This link will take you to link will take you to the statement on the potential liability included in Coventry’s Annual Report (Form 10-K) for the year ended December 31, 2009. In its statement regarding the Court’s decision, Coventry stated that it does not believe the decision is supported by the facts or the law and intends to file a motion for rehearing and explore other avenues of appeal. The Company believes that it has available resources to pay any final unappealable judgment in this litigation.[5244]

New Commissioner Disappears, Another to the Ready?

July 2, 2010: If a tree falls in the forest and there is nobody around, does it make a sound?

If the WCB does not announce new appointments of Commissioners to the Board and one who is confirmed won’t take the oath of office, does anyone know?

On April 16, 2010 I announced the confirmation hearings of two of Governor Paterson’s newest appointees as commissioners to the Workers Compensation Board: Sam Williams and Loren Lobban.

Commissioner Williams, although not formally introduced by the Board as a new member, has been busy at work fulfilling his duties.

Loren Lobban, on the other hand, although logically approved by the State Senate, did not take his oath of office as there were a few pending “personal matters” which had to be settled before he could/would be able to take his oath of office and become an employee of the Board. Although I know of nothing negative that would have delayed Lobban’s completion of the process, this is not the first time one of Governor Paterson’s nominees has been approved by the State Senate failed to take office. In early 2009, Dr. Geraldine M. Chapey also apparently was confirmed by the state Senate but did not take the all of office, the final step in becoming a Commissioner.<

One has to ask two questions: (1) to the Governor’s office properly ‘vet’ the nominee and (2) in the nominee fully understand what would be the responsibilities and accompanying rejections and other activities? Is this a reflection on the quality of decision-making in the Paterson administration or a reconsideration by these nominees when after being affirmed to a close look at the Board and decide to run the other way.

On the other hand, there is a new potential nominee being discussed: a woman from Nassau County who was involved in the administration of a former Democratic County Executive Tom Suozi.[5243]

Don’t Forget the poll on GSIT’s

July 1, 2010: it’s not too late to cast your opinion in my poll about the Group Self-Insured Trusts.

Perhaps the most interesting comment to date is:

I am still reading up on this issue, so I do not yet want to lay blame. But I believe this is a case of res ipsa loquitur, and I suspect the Board and the State fell asleep at the wheel–in much the same ways as when auditing the Special Disability Fund for ample funding. Yet before we start creating new rules and regulations that there might not be enough personnel to enforce, perhaps we should start simplifying and reviewing the glitches in the current system. Past attempts to put a band-aid on a cancer have only made things worse.

All I know about the writer is that they checked off the box that they represent carriers and/or employers. Feel free to add your two cents - your anonymity is guaranteed. [5242]

SFCC Data Loss Cost Vendor $60K in penalties

June 29, 2010: webtechnologyresources has posted an article regarding the issue of privacy of employee information and identity theft. Whether electronic or paper, employee files deserve to be treated with great care. Establishing security and end-user privileges calls for a balance of incorporating, HR policy, system knowledge and day-to-day operations.

One company that failed this test was CS Stars, LLC, A subcontractor for the New York State Special Fund Conservation Committee, one of whose employees on May 9, 2006 notice a computer was missing that held personal information, including the names, addresses, and Social Security numbers of recipients of workers’ compensation benefits. But CS Stars waited until June 29, 2006, to notify Special Funds and the FBI of the security breach. New York’s Information Security Breach and Notification Law, effective in December 2005, requires businesses that maintain computerized data which includes private information to notify the owner of the information of any breach of the security of the system immediately following discovery, if the private information was, or is reasonably believed to have been, acquired by a person without valid authorization. The law affects not only businesses in their dealings with their customers, but employers in their role as custodians of employees’ personal data.

As a result of an investigation by the office of Attorney General Andrew Cuomo, CS STARS agreed to comply with the law and ensure that proper notifications will be made in the event of any future breach, and will pay the Attorney General’s office $60,000 for costs related to this investigation.

click here to go to the complete report. [5241]

And You Thought I was Tough!

June 28, 2010: Tyler Murphy, Staff writer for the Evening Sun in Chenago County in central New York State, published an article about an Afton business man, Edward J. Panus, was found guilty by a Chenango County jury of six felonies after prosecutors argued you to forward it is Worker’s Compensation benefits.

District Attorney Joseph McBride said Panus now faces a possible maximum sentence of 24 years in state prison. Panus was convicted of all six charges against him, three counts of first degree offering a false instrument for filing, an E Class felony and three counts of committing a fraudulent practice under the Worker’s Compensation Law, also an E Class felony. Each E felony carries with it a possible maximum sentence of four years in prison, explained McBride.

24 years in jail - and we commissioners would be castigated for stopping benefits![5240]

Couldn’t say it better myself!

June 30, 2010: What follows is a posting from the website of Markoff & Mittman:

What the %$#@$ is going on in the world of New York Workers Compensation?

6/11/2010: Two things came across my desk today and I am floored, stumped, miffed and cannot believe how injured workers are going to take another shot in the stomach!

FIRST - as we all know, the New York State Goverment is in denial and dysfunctional and has not passed a budget. Well, quietly, on the front page of the New York State Workers Compensation Board website the Board quietly announced the following:

YEP! - absolutely NO CONTINGENCY plans for the injured workers. (And lets not forget that although the NYS WCB is a State entity, it is funded from assessments on insurance carriers!) This is atrocious!

SECOND - My colleagues upstate started to get weird feed back from some clients that their Third Party Administrator (the company that pays the checks) was going to require the injured worker to pick up his or her check on specific days and times at the employer. Huh? Okay, so in order to save 44 cents postage and a 5 cent envelope the insurance carrier will print the checks, deliver them to the employer and have the employers employee distribute them…perhaps they just want to do it to follow the injured workers?

WHAT IS GOING ON!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!![5239]

Is the WCB Staff’s Paranoia Warranted?

June 18, 2010: In its first ruling on the privacy of workplace texting, the U.S. Supreme Court on Thursday said that a city audit of an employee’s messages on a city-owned pager was a reasonable search under the Fourth Amendment.

The unanimous ruling was issued in the Matter of the City of Ontario, California v. Quon. Essentially, the Court ruled that the employer offers a proper rationale they have the right to read not only all e-mails but even information transmitted by “texting”.

Justice Anthony Kennedy, writing for a unanimous Court, said the city’s search — aimed at determining whether city employees in general needed a higher number of minutes on their pagers — was reasonable under any view of the Fourth Amendment right to protection from unreasonable searches. Even though the case involved a public workplace where the Fourth Amendment would be in full force, employment lawyers on Thursday said the ruling underscores the need for policies on privacy in private work settings as well.

When I was at the board, memos were distributed as to the limitations placed on my usage of the boards e-mail system, my access to the Internet, and my usage of board cell phones. I do not remember anything detailing how much of my privacy they could invade if they so wanted.

Makes you wonder what they are really doing in Albany. [5238]

Up-Dated List: WINNINGEST & TOUGHEST Attorneys

June 26, 2010: As we approach the mid-year mark for 2010, it is time to up-date my list of the ‘WINNINGEST’ attorneys and the ‘TOUGHEST’ attorneys who have appeared in workers compensation cases at the New York State Appellate Court, 3rd Department. To date there have been 62 cases and 72 attorneys, with only 81% of these cases having had the Board’ s decisions affirmed by the Court. Reversals, Rescinds, and mixed decisions were each 6% of the total number of cases.

This list, which will be periodically updated, can be used to settle cocktail party arguments and to answer various trivia questions but, in reality, is no way reflective of the quality of the attorneys listed (or not listed) or their arguments. As for those whose arguments did not prevail, they are not listed: many take on cases which they know have a very small likelihood of winning and they certainly should be neither criticized or publicized for that. It was pointed out by one of my readers that a great deal of the credit also goes to the legal staffs of these attorneys. But I do not know who they are and they are not the ones with their names being etched into legal history due to the result of their arguments.

Excluding those who work in the offices of the Attorney General and Special Funds, the ‘Winningest” attorney so far this year are Susan Duffy, David Faber, and Gary Tyler, with Ms Duffy also taking the honors as the “Toughest” attorney along with James Buckley with two Reversals to their credit.

And for this year we do have two pro-se claimants who represented their cases before the Appellate Court: Phyllis Hulbert and Edip Kaja. [5237]

3rd Department Changed Mind on ATF Decision

June 17, 2010: The New York State Appellate Court, Third Department on Thursday June 17, 2010 granted a motion sought by the New York State Workers Compensation Board to vacate its January 15, 2009 decision. The motion itself can be read by linking here ….

In that case, William Held Jr., as Chair of Contractors Compensation Trust, et al., group self-insured trusts (hereinafter GSITs), commenced that earlier proceeding to annul certain assessments levied against them by respondent New York State Workers’ Compensation Board.

So, as that great philosopher Yogi Berra stated, “It ain’t over till it’s over!”[5236]

2nd Injury Fund Deadline Approaches

June 12, 2010: The NYS Workers Compensation Board has issued a notice to the effect that Workers’ Compensation Law (WCL) Section 15(8)(h)(2)(A), enacted as part of the 2007 reform legislation (L. 207, Ch. 6 § 76, effective March 13, 2007), directed the closing of the Special Disability Fund for all claims for reimbursement with a date of accident on or after July 1, 2007. (See Subject Number 046-194 dated June 26, 2007.)

As to claims with dates of accident or disablement before July 1, 2007, the statute further provides:

“No carrier or employer, or the state insurance fund, may file a claim for reimbursement from the special disability fund after July first, two thousand ten, and no written submissions or evidence in support of such a claim may be submitted after that date.”

The Board may continue to schedule and hold hearings to determine Section 15(8) liability after July 1, 2010. Workers’ Compensation Law Judges, while prohibited from directing or accepting any written submissions or evidence in support of a claim after that date, may permit appropriate cross-examination of medical witnesses consistent with the statute and applicable Board regulations. More details on this matter can be found on the Board’s website.[5235]

U.S. Supreme Court Overrules “honest Services” Law

June 24, 2010: Some of the commissioners and other political appointees at the New York State Workers Compensation Board can breathe a bit easier now that the United States Supreme Court in the Matter of Skilling v United States No. 08–1394 (argued March 1, 2010) has issued an opinion limiting the use of federal fraud law which has used the “honest services” law to convict various executives for what is alleged to be mistakes and minor transgressions or perhaps not doing an honest day’s work, nor anywhere for that matter.

In this time of budget squeezes in the potential of large scale layoffs of public-sector employees it is absolutely essential that everyone feeding out of the public trough do an honest day’s work, something I found all to liken during my 12 years as a Commissioner at the Workers Compensation Board. [5234]

New NYSIF Commissioner in process

June 22, 2010: At the request of Governor Paterson, Steven P. Polivy is being considered as a Commissioner of the State Insurance Fund (NYSIF) , to be considered at a meeting of the Senate Standing Committee on Insurance, chaired by Senator Neil D. Breslin, in an off-the-floor meeting.

A Co-Office Managing Shareholder of the law firm Akerman Senterfittof New York City, Polivy’s practice focuses on economic development, real estate finance, and transactional real estate matters. He has represented various charitable organizations and private schools in connection with various tax-exempt financings, including the New York headquarters of the American Cancer Society. His practice includes representation of financial institutions that act as lenders, underwriters, and placement agents, or that serve the function of letter of credit issuers, liquidity providers, or trustees, with respect to tax-exempt and taxable debt for real estate, industrial and economic development projects, and municipal financing generally. He has also represented various Fortune 500 companies and many closely held industrial companies with respect to their obtaining of economic development benefits from governmental agencies on a state and local level.

After serving as an Assistant District Attorney for Kings County, New York, Mr. Polivy joined Baskin & Sears (a predecessor to Berger & Steingut), where he specialized in real estate and public finance. He received an A.B. from Vassar College and a J.D. from the Benjamin N. Cardozo School of Law of Yeshiva University. Mr. Polivy was admitted to the New York State Bar and the U.S. District Courts for the Southern and Eastern Districts of New York in 1981. He also serves as a Business Advisory Council Member of the TD Banknorth, N.A., and as a member of the Executive Committee of The Jewish Braille Institute, Board of Directors. [5233]

Let’s Tax Everything

June 16, 2010: First published by Jennifer Wilkins, this short anecdote goes to the heart of what is wrong with people in power in government and those in academia to whom they listen:

I asked my friend, Cornell economics professor Robert Frank, at a recent dinner party, what he thought of proposals to tax soda. I prepared myself to settle in, eyes glazed over, for some dense econ-speak about why it shouldn’t be done and why it wouldn’t work. Instead, I was surprised.

Without missing a beat and with a calm, matter of fact demeanor, Frank responded, “We have to tax something. It might as well be soda.”[5232]

SIIA Rejects New York Task Force Findings Regarding SIGs

June 16, 2010: The Self-Insurance Institute of America, Inc. (SIIA) today denounced the findings of a task force created by the New York state Legislature concluding that all group self-insured workers’ compensation funds (SIGs) operating in the state should be shut down by the end of the year and encourages the state to consider industry-backed alternative solutions.

“Clearly there were some New York SIGs that were operated in a negligent way, but we believe the task force recommendation is an overreaction,” said SIIA Chief Operating Officer Mike Ferguson. “The industry is prepared to work with the state to develop a new regulatory structure which would greatly reduce the possibility of future failures and also assist the state is addressing the financial deficit associated with the failures.”

Ferguson noted that “the report also acknowledges the benefit that groups have offered their members: particularly the emphasis on safety and loss prevention, aggressive return to work programs and rate stability. However, it seems the Task Force made its recommendations based solely on the actions by the SIGs that become insolvent, while failing to consider the benefits that groups offer to more than 4000 employers in New York State.”

Moreover, active New York SIGs have successfully complied with ever increasing regulatory standards. The report concludes that these efforts have resulted in these groups having an overall funding ratio of 109% and surplus of more than $64 million. Such results compare favorably to the traditional insurance industry.

As the task force report points out, SIG legislation passed in 2008 was designed to ensure that groups have increasing financial stability and accountability. That legislation was aimed at ensuring transparency among the groups’ key agents and to ensure proper group administration. SIIA supported this legislative initiate and now calls on the New York Legislature and governor to give the new laws a chance to work, by implementing the appropriate rules and regulations. There are currently 34 other states that permit group self insurance workers’ compensation funds and are able to successfully regulate such regulations.

EDITOR’s NOTE: Monday I will have a poll on this subject as well as including comments from the New York Workers’ Compensation Forum in LinkedIn which deal with the issue “New York’s Self Insured Workers’ Compensation Trusts May Become a Thing of the Past” [5231]

WCB Report on Group Self-insurance

June 15, 2010: The New York State Worker’s Compensation Board has just issued a Report to Governor Paterson and the New York State Legislature title “Task Force on Group Self-Insurance”. In order to understand the reasons for these defaults and assess the long term viability of the group model, legislation signed by Governor Paterson on June 30, 2008 created a Task Force on Group Self-Insurance, Consisting of members of the staff of the Workers Compensation Board, Department Of Labor, Superintendent of Insurance, AFL-CIO, the state legislature and other interested parties

Under current New York State Law, employers who wish to self-insure workers compensation can join together and form a group self-insured trust (GSIT). Workers’ Compensation Law (WCL) includes a provision which requires the Workers’ Compensation Board (WCB) to assess all self-insured employers for all expenses incurred by the WCB relative to self-insured business. It has been the WCB’s interpretation that this includes the WCB’s administrative and regulatory costs and for the costs of any unmet obligations incurred by an insolvent individual or group self-insurer and that these costs are assessed pursuant to WCL §50-5 (50-5 assessment).

Although prior to 2007 there had never been a group default in New York State, starting in 2007 several groups were closed including some of which have become an insolvent. The report states that “Due to a growing level of unfunded claims costs related to these insolvent groups, the 50-5 assessment for 2007/08 almost doubled. As additional groups defaulted, and as their projected level of unreserved claims has grown, this assessment has grown even higher.”

Among the recommendations were to speed up the collection of premiums and Legislation for Assumption of Workers’ Compensation Liability Insurance Policy (to allow for the purchase of a policy to transfer the tail of workers’ compensation claims and the risk of claims development to a carrier, absolving the self-insurance program from any further exposure).

Excerpts from the Recommendation can be found by clicking here. The entire 187-page report can be found at: http://www.wcb.state.ny.us/content/main/TheBoard/SelfInsuranceTaskForceReport.pdf[5230]

Board Releases New Manual to ‘Help’ Businesses Stay Compliant

June 17, 2010: The Board has created a new manual for businesses that bid on government contracts and also revised an existing document for all employers. Both publications explain to businesses how to remain compliant with workers’ compensation and disability requirements.

The Prove It to Move It 43-page long manual is directed toward employers applying for a government permit, license or contract. Since those businesses must prove they’re complying with New York workers’ compensation and disability benefits requirements, the manual explains the forms and processes necessary to move those applications toward completion. Sample forms are included. Prove It to Move It also explains to governments how to handle the forms, and the information they should see.

The revised 127-page Employers’ Handbook provides New York’s employers with general information regarding their rights and responsibilities under the state’s workers’ compensation and disability programs. The manual covers who needs insurance, the claim process, details on insurance, how to determine an independent contractor, handling penalties, and many common questions and scenarios.

Each manual is available on the Publications page of the Board’s web site, under Reference Guides. The manuals were created and edited by the Office of Regulatory Affairs and the Public Information Office.

EDITOR’s NOTE: While municipalities and government agencies may have enough lawyers on staff were under contract to read a rather detailed and technical explanation in “Prove It to Move It”, I would be very surprised if any business owner a member of his executive staff in a company with less than a few hundred employees would have the time to read 127 pages of rather detailed information regarding the responsibilities and requirements. In fact I’m quite sure that you’re a small business owner get such a book, it would put her on a table of bookshelves someplace to get to later. It appears as if this book was written not to clarify the need for workers compensation but to allow the New York State Worker’s Compensation Board and other state entities to be able to say, just like the fine print warning you get when you upload new software, that they have given you your rights and it is your fault if you do not read them.

Furthermore, if an employer or his advisers are astute enough to know to ask for this handbook, I would give odds of 100-1 that they already know enough to get workers compensation insurance for which reason for them this book serves no purpose. So, unless the State plans to mail this book to every employer or alleged employer in the State of New York, I am at a loss to understand how the Board plans to distribute this document.[5229]

NYSIF Warns of Legal Package Hoax

June 2, 2010: New York State Insurance Fund Chief Deputy Executive Director Francine James warned the New York legal community of a hoax involving NYSIF that has victimized several New York City law firms recently

The scam involves a person who has called approximately two dozen law firms in the past 30 days, identifying himself only by first name, usually “Jimmy, ” and saying he is visiting from out-of-state, usually Maryland.

The caller claims to have found a package on the subway, a US Post Office flat rate envelope addressed to the law firm from the New York State Insurance Fund. The package appears to be of some weight, but is nothing more than multiple identical copies of a NYSIF certificate of insurance.

You should be aware that the package and its contents do not originate with NYSIF, and that the envelope and any correspondence contained therein do not have anything to do with official NYSIF business.

The caller offers to deliver the package personally to the law firm, whereupon the caller presents a taxi receipt. Victimized law firms have reimbursed the caller for the taxi fare, up to $80 round trip in some instances, and, on occasion, given him a reward for delivering the package.

NYSIF anti-fraud investigators advise that law firms contacted in such a manner ask the caller for a first and last name, suggest that the caller place the package in the mail, and do not reimburse the caller for any expenses until determining the contents of the package. This matter is under investigation by the New York County District Attorney’s Office and NYSIF’s Division of Confidential Investigations. If you are a victim of this scam, please call NYSIF’s fraud hotline at 1-877-WCNYSIF (926-9743) [5228]

NYCIRB recommends a 7.7% premium increase

May 14, 2010: The New York Compensation Insurance Rating Board has just announced its recommendation for an average increase in premium costs of 7.7%. And while they do attach to their letter a 52-page document explaining their justification for this increase, I cannot reprint any of that data lest I violate copyright law as this document which affects the entire workers compensation community in the State of New York and written by a state authorized agency has, on page 2, stated “All rights reserved. No portion of this filing may be reproduced by any means, or stored in a retrieval system for subsequent reproduction, without the written permission of the New York Compensation Insurance Rating Board.”

But since the copyright appears to refer to the report and not their cover letter I reprint the text of their cover letter:

Pursuant to Article 23 of the Insurance Law of the state of New York, and in accordance with the authorization of the Board of Governors, we are filing for your approval, on behalf of the members and subscribers of the New York Compensation Insurance Rating Board, revised workers compensation loss costs to become effective October 1, 2010 on new and renewal business.

Included with this filing letter is an explanatory memorandum which contains the methodologies and actuarial exhibits underlying the development of the proposed loss cost change based upon the latest available statistical data. A schedule of classification loss costs and related rating values and their derivations will be submitted under a separate cover.

The proposed loss cost revision contemplates both increases and decreases for individual classifications, resulting in an average loss cost increase of 7.7%.

Please note that we are not including a revised New York State Assessment in this filing. Information necessary to calculate this policy charge is not yet available from the Workers’ Compensation Board. Once this information is received, we will forward the October 1, 2010 assessment percentage to you under a separate cover. We respectfully request your earliest possible review and approval of this filing.[5227]

Man Mauled After Smoking Pot Can Get Workers’ Comp

June 5, 2010: A Montana judge says it’s not a worker’s fault he got mauled by a grizzly bear at a tourist attraction, even if he smoked marijuana before trying to feed the animal.

Brock Hopkins acknowledged smoking pot before arriving to work at Great Bear Adventures on Nov. 2, 2007. When he entered the bear’s pen, he was attacked and had to be hospitalized.

The owner of the attraction near Glacier National Park says Hopkins was a volunteer and that his use of marijuana caused the accident. But Judge James Jeremiah Shea of the state Workers’ Compensation Court ruled last month that Hopkins is eligible for benefits. Shea found that Hopkins was paid, and therefore he’s an employee. The judge also concluded Hopkins’ use of marijuana was not the main cause of the attack.[5226]

State Bar Association Announces Opposition to “Managed Adjudication Path” Program

May 20, 2010: The New York State Bar Association announced its opposition to the Managed Adjudication Path (MAP) program currently being proposed by the New York State Workers’ Compensation Board, arguing that the initiative would severely limit due process rights traditionally afforded to workers, employers and insurance companies in workers’ compensation claims.

The issue of settling disputes outside the Law Judge Hearing Process has been closely monitored by the Workers’ Compensation Law Division of the State Bar’s Torts, Insurance and Compensation Law Section, chaired by Christopher Lemire, Esq. (Lemire Johnson LLC of Malta). Members of the section division expressed their concerns and opposition to representatives of the Workers’ Compensation Board at a recent section division meeting in Albany. A webinar describing the Managed Adjudication Path program hosted earlier this month by the Board erroneously suggested the division and the State Bar were in favor of the MAP program

The implementation of the MAP program will divert an undetermined number of cases with disputed issues away from Law Judge Hearings to an informal process that allows decisions to be issued without notice to or appearance by the involved parties, without the benefit of legal counsel, and without any development of the record.

“The MAP program represents a major departure from the Board’s longstanding practice of resolving disputed issues through adjudicatory hearings. Simply put, it would erode the due process rights of injured workers and employers,” said State Bar Association President Michael E. Getnick (Getnick Livingston Atkinson & Priore, LLP of Utica and of counsel to Getnick & Getnick of New York City). “The rights of both injured workers and employers will be protected, and the timely resolution of disputed issues accomplished, only by affording both parties a prompt hearing before a Law Judge. The State Bar Association continues to urge the Board to remove this proposal and work toward what should be the common goal of achieving efficiency with justice.”[5225]

Various States Eye Surplus Work Comp Insurance Funds

May 15, 2010: Sean P. Carr writing in ambest.com reports that state-backed workers’ compensation insurers share the same challenges as their private-carrier counterparts: rising ratios, falling premiums, higher medical costs. Like some insurers, state funds also have an uneasy, and sometimes hostile, business relationship with a partner — in their case, state government itself.

The approximately 20 state funds operating in the United States take many forms. Generally, they are the insurer of “last resort,” the guaranteed issuer, and often compete in the private market as well. In a few states, they are monopoly writers. Some funds consider themselves fully independent, others are hanging on to tax breaks and other considerations and still others have moved toward going fully private.

The relative health of state funds makes their reserves “very tempting” for cash-strapped state governments, said Laurence Hubbard, president and CEO of the Montana State Fund. “As long as there’s a political affiliation, they could become a target,” said Hubbard, also the new president of the American Association of State Compensation Insurance Funds.

Carr then lists several states which have failed in their attempt to access these funds.

He also quotes Bruce Wood, associate general counsel and director of workers’ compensation for the American Insurance Association, who stated “Lawmakers can also be liberators of state funds”. In addition to “an interest in grabbing money from anywhere,” states are showing an interest in privatizing their way out of the insurance business.

For the complete text of this very illuminating article, click here. [5224]

Finally, Two New Workers Comp Commissioners

May 13, 2010: Senator George Onorato, Chairman of The New York State Senate Standing Committee on Labor, announced that at next Monday’s May 17, 2010 Committee meeting, they will be considering the nominations of Loren D. Lobban and Samuel G. Williams as Commissioners/Members of the Workers’ Compensation Board.

As reported here on April 16, 2010:

• Samuel G. Williams who is the director of the United Auto Workers CAP and is also Co-Chairman of the Western New York Chapter of the Working Family Party. As a very active leader in the labor movement, Williams was also co-chairman of the Western New York Area Labor Federation and has been a frequent contributor to the opinion pages of various Buffalo newspapers on labor related issues.
• Loren D. Lobban has been a member of the NY Bar since 1976, practicing insurance and criminal law. He graduated from Northern Michigan University with a BA and got his JD at Suny Buffalo. Like Williams, Lobban is involved in Democratic/WPF politic as an active contributor to Democratic candidates for national and statewide offices. As a matter of interest, Lobban has contributed to Brian Higgins for Congress ($5000 in 2006), the brother of current Commissioner Mark Higgins, but with enough left over for State Senate President Malcom Smith, among other state democratic office holders.

As often as not, if these two nominees are approve by the Labor Committee, the nominations will move either that day or the next day to the Finance Committee after whose approval then move to the Senate floor for a vote. Therefore, it is possible that Williams and Lobban will be confirmed by the end of the next week, assuming budget negotiations or some Senator getting their ‘nose out of joint’.[5223]

The Webinar

May 13, 2010: The Workers’ Compensation Board hosted an informational program on Wednesday, April 21, 2010 to discuss issues related to inpatient rate reform which went into effect on December 1, 2009.

The new system is based on All Patient Refined Diagnostic Related Groups (APR-DRG) and incorporates a new rate methodology for inpatient hospital care for patients covered by workers’ compensation and no-fault auto insurance beginning December 1, 2009.

In response to questions rasied by hospitals and carriers, the program provides a basic introduction to the new system. Representatives from the Department of Health (which prepares the rate schedule), 3M Health Information Systems (the Department of Health’s contractor on APR-DRG), and the Hospital Association of New York State answered from the audience. The webinar also covered issues related to reconciling previously paid bills from January to November 2009 when the DOH releases January 2009 rates.[5222]

Majestic/CRM considers options

May 6, 2010: Roberto Ceniceros reports in in the website Business insurance that CRM Holdings Ltd. is exploring “strategic alternatives” that could include a sale, merger or shedding operations, the troubled workers compensation management firm said Thursday.

“There can be no assurance that the exploration of strategic alternatives will result in any transaction, or that, if completed, any transaction will be on attractive terms,” the company said in announcing its first-quarter results. It stock traded at 36 cents share Thursday morning, down from 48 cents at the close Wednesday. Among other reasons, CRM said the decline in revenue occurred because its Majestic Insurance Co. unit could not retain or compete for certain rating-sensitive business because A.M. Best Co. Inc. downgraded its financial strength rating from A- to B++ last year.[5221]

Appellate Judges Reveal Pet Peeves, Winning Strategies

April 22, 2010: Shannon Henson, in LAW360, lists the many do’s and don’ts discussed by a panel of Judges at the annual conference of the American Bar Association’s litigation section when arguing before an appellate court the most important of which is just common sense: “Don’t interrupt.”

“I’m allowed to interrupt you. You aren’t allowed to interrupt me,” said Judge Robert Smith of the New York Court of Appeals one subject of which was how attorneys can make a judge’s job easier, the importance of a well-crafted brief and their pet peeves. The judges agreed that attorneys should take pains to answer their questions during oral arguments, even hypothetical situations.

Judge Raggi said lawyers should welcome hypothetical situations because the process of talking through the various implications of a ruling is part of the court’s work. “We are inviting you to play a role in that process,” she said.

Judge Greenaway said an attorney should never pass up an opportunity to offer a last thought if a judge allows it at the end of the lawyer’s allocated time. “Be prepared to take advantage of that entreaty by a judge,” said Judge Greenway. He also said attorneys would be smart to answer the question a judge asked and not the question the lawyer thinks the judge should have asked.

Smith and the other judges stressed the importance of preparation, saying it is imperative for an attorney to know the facts of the case. “The worst thing to think is that the panel knows the case better than you,” Judge Raggi said. That said, attorneys would be wise to give the court an accurate and responsible reading of the underlying case law as well as the background of the case at hand.

Lawyers are not expected to give a neutral perspective of the case or the issues, Judge Smith said, but attorneys also should not misjudge how one-sided they should be. “Part of your job is to be partisan, but not too partisan,” he said. [5220]

NYSIF Elects Chair and Vice Chairs

May 5, 2010: The New York State Insurance Fund announced that during its January 20, 2010 monthly meeting, its Board of Commissioners reelected Robert H. Hurlbut as chairman of the Board and the elected H.Sidney Holmes, III as Vice Chairman

Chairman Hurlbut received his initial appointment to the Board in 1989 by then Governor Mario Cuomo. He became vice-chairman in 1995 and was unanimously elected to succeed the late-NYSIF Chairman Terrnce Morris on May 17, 2006. Governor Paterson recognized chairman Hurlbut last December for 20 years of exemplary service to the Board with the proclamation setting is “dedicated leadership and compassion.”

Vice Chairman Holmes received his initial appointment to the board in June 2008 by Governor Paterson. A corporate partner of Winston and Strong LLP, he has served as a bond counselor, underwriters’ counsel and bank counsel in virtually every type of municipal bond financing throughout the United States and its territories. He also serves as a Commissioner of the Port Authority of NY & NJ, and a board member of the NYS urban league. the Greater Jamaica Development Corporation and the Brooklyn Navy Yard Development Corporation.

Where are the FBR’s

April 30, 2010: A few months ago, the Workers Compensation Board proudly announced that it would be publishing on its website selected Full Board Reviews and some regular Board Panel memorandum of decisions.

However, it did so only once.

So I would like to offer my services:

If the board would send me, even on paper, a variety of FBR’s, I will print whatever they send me.

Or is it possible that the two services (Lexis-Nexis and Westlaw) objected to the Board giving away for free what these two companies can charge for?

Senate Bill Adds COLA to WCB Awards

April 29, 2010: the New York State Labor Committee is expected to approve some time next month Senate Bill S1970B which provides for cost-of-living adjustments to death benefits and increasing certain wage percentages for calculation of benefits. Whether or not it gets approved on the floor is uncertain. The official summary of the bill reads:

An act to amend the workers’ compensation law, in relation to providing for cost-of-living adjustments to death benefits and increasing certain wage percentages for calculation of benefits AN ACT to amend the workers’ compensation law, in relation to providing for cost-of-living adjustments to death benefits and increasing certain wage percentages for calculation of benefits.

To read the specific details of this bill, go to http://open.nysenate.gov/legislation/bill/S1970.

Emergency Adoption of New Medical Fee Schedule

April 29, 2010: Although no formal announcement has been issued by the New York State Workers Compensation Board, There was a March 22, 2010 Notice of Emergency Adoption and accompanying documents relating to a new set Subchapter M. consisting of Parts 440 and 442 entitled “Pharmacy and Durable Medical Goods Fee Schedules and Appendices” will be published in the April 7, 2010, edition of the State Register.

What’s up, Doc? A 2nd WCB Doctor<

April 26, 2010: The Board will welcome in the near term, Elain Sobol Berger, MD JD, as its new full-time Associate Medical Director. She will serve under Dr. Levin, the Board’s Interim Medical Director, who serves in a part-time capacity. Dr. Berger has been an integral part of the 2007 Reform Task Force, and her hands-on knowledge of that work will hopefully provide for continuity at the Board as that the recommendations get translated into guidelines and regulations. Dr Berger was a member of the task force which helped develop the medical treatment guidelines.

New Maximum Weekly Benefit Rate Effective July 1, 2010

April 19, 2010: On July 1, 2009, the statutory maximum benefit was raised to $600 per week, which resulted in a maximum payroll limitation of $900.

On July 1, 2010, and annually thereafter, the maximum workers compensation weekly benefit will increase to two-thirds of the statewide average weekly wage, as determined by the New York Department of Labor, in accordance with the provisions of the 2007 Workers Compensation Reform Act. This change in the maximum weekly benefit will result in a corresponding increase in the payroll limitation amount, which will now, in effect, be the average weekly wage as calculated by the Department of Labor.

Consequently, please be advised that, for policies with effective dates on and after July 1, 2010, the payroll limitation cap will be $1,109.75 per week. This information is also available from Subject No. 046-416 issued by the Workers Compensation Board on April 22.

Close Bars to Save on WC claims?!?

April 20, 2010: As reported by cbs6albany, the Saratoga City Council is considering a proposal to require that all bars close at 2AM rather than the 4AM allowed under New York State Law, in order to cut down on workers compensation claims.

According to John Franck who serves as the accounts commissioner for the city, between 2007 - 2009 Saratoga dealt with 80 workers comp claims in which 18 of those came between the hours of 2 a.m. - 4 a.m. He tells CBS 6 that the city will save on overtime and insurance premiums by just closing the bars two hours earlier.

However, there is nothing which explains what the City will save on workers comp claims since one has to assume that the employees of the bars work for private companies and any injured patrons would not be covered by workers compensation. The only explanation is that local law enforcement officers are being injured as a result of the bars staying open these extra two hours.

What does not make sense is that the Council plans that the new rule should not be in effect during the busy summer months (Memorial Day to Labor Day) so I guess that an injured city worker is less valuable during the summer than the winter.

Board has Educational Webinar

April 17, 2010: As an expression of the Board’s concern over the importance of its new programs, the Board on April 16 gave five days notice to members of the workers compensation community that the Board would be hosting an informational program to discuss issues related to inpatient rate reform which went into effect on December 1, 2009. The new system is based on All Patient Refined Diagnostic Related Groups (APR-DRG) and incorporates a new rate methodology for inpatient hospital care for patients covered by workers’ compensation and no-fault auto insurance beginning December 1, 2009.

In view of the fact that representatives from the Department of Health (which prepares the rate schedule), 3M Health Information Systems (the Department of Health’s contractor on APR-DRG), and the Hospital Association of New York State were to be participants in this program, it is surprising (or is it) that the Board did not give earlier notice to the community.

I would be interested in receiving any comments from those who participated which could be sent to my attention at TheInsider@InsideWorkersCompNY.com.

Judge bans WCB raids to pay unfunded injury claims

April 16, 2010: As reported by James Odata of the Albany/Times Union, Acting State Supreme Court Justice Kimberly A. O’Connor ruled Wednesday the NYS Workers Compensation Board can no longer raise its assessments on self-insurance groups to make up for the unfunded liabilities of a series of defaulted self-insurance trusts.

The Judge ruled that the Board has been unconstitutionally taxing healthy self-insurance groups, leaving the state’s workplace insurance system stuck with a nearly half-billion-dollar bill for unfunded injury claims.

As soon as I can access the actual decision, I will make it available.

Another Supreme Court decision, this time from NY County, also involving underfunded liabilities, was issued by Justice Carol R. Edmead with the two parties in this case being RBG Management and CRM regarding “a certain Indemnification Agreement, [under which] plaintiffs each agreed to be jointly and severally liable for expenses and obligations concerning workers’ compensation liability while they remained a ‘Participating Employer.’ ” To read this case, click here ….

New Commissioners (Corrected)

April 15, 2010: I now have the correct name of the second nominee for Commissioner on the New York State Workers Compensation Board.

I previously reported that the first nominee is Sam Williams who is the director of the United Auto Workers CAP and is also Co-Chairman of the Western New York Chapter of the Working Family Party. As a very active leader in the labor movement, Williams was also co-chairman of the Western New York Area Labor Federation and has been a frequent contributor to the opinion pages of various Buffalo newspapers on labor related issues.

The correct name of the second nominee is Loren Lobban, not Warren Logan. Loren D Lobban has been a member of the NY Bar since 1976, practicing insurance and criminal law. He graduated from Northern Michigan University with a BA and got his JD at SUNY Buffalo. Like Williams, Lobban is involved in Democratic/WPF politic as an active contributor to Democratic candidates fr for national and statewide offices. As a matter of interest, Lobban has contributed to Brian Higgins for Congress ($5000 in 2006), the brother of current Commissioner Mark Higgins, but with enough left over for State Senate President Malcom Smith, among other state democratic office holders. His partner, H. Todd Bullard, served as a Monroe County legislator.

It is expected that these names will be sent to the New York State Labor Committee and then the Finance Committee for the next few weeks.

These two individuals will fill two of three vacancies on the Board. It is expected that Robert Beloten will remain as chairman, certainly through the end of his friend, Governor Paterson’s, term of office and that Francis levels will remain as Vice Chairman as long as the governor’s office, be it Patterson or Cuomo, need the assistance of her husband, Republican State Senator Thomas Libous, to pass legislation.

Impairment/Wage Loss Task Force Delayed

April 15, 2010: It appears that the Impairment/Wage Loss Task Force is having some internal differences of opinion making it likely that the proposed guidelines to be used to determine lost wages will not be done by the end of April but delayed to some time in late May. There should be a lot of pressure placed on the parties in the Task Force as two upcoming events should be based on the new methods of calculating degree of functional disability in return to work.

First, the New York Compensation Insurance Rating Board will be publishing its rates shortly and the opportunity will be lost for lower premiums based on projected savings from the new functional disability schedules and return to work programs.

Second, the new average weekly wage for injuries occurring on or after July 1, 2010 will be $1,109.75 as calculated by the New York State Department of Labor’s Research and Statistics Division, pursuant to Workers’ Compensation Law § 2(16).

[ED. NOTE: I have not seen any the documents being used to produce the guidelines or any the guidelines themselves, I do have concerns as to their applicability in the real world known as the “hearing part” where the law judges and on occasion commissioners are required to make decisions regarding the degree of disability and the dollar amount of compensation. I also do not know who are the members of the Task Force. But I’m reminded of an incident which I regularly recount regarding the fact that too many of the policymakers have no experience working in the trenches of workers compensation, too “important” to even visit a hearing. When I invited one such person to attend the hearing I was conducting on §32 settlements, the response was, “I’m too busy writing the new regulations for conducting §32 hearings to attend them.”

Having been on the number of boards over the years as well as having been CEO of a number of private-sector companies, I am well aware of the dichotomies that exist between theory, policy, and practice. And while the Task Force is responsible for setting the policy, once the parties can agree on their philosophy, there must be somebody with hands-on experience to make sure that the policies can in fact be “practiced”.

I therefore make the following recommendations.

A law judge or commissioner, if not both, should be included in the discussions of the task force to make sure that the proposed guidelines have a practical application in the hearing parts. However, I’m aware of the fact that no sitting law judge would want to put up with the backroom pressures which they would be subjected, and I don’t think that those commissioners who would be competent enough to participate would want to put up with the potential political heat.

However, I can think of four individuals with real-world experience with these issues and would make excellent additions to Task Force for this purpose. Please note that the people being mentioned had not been given any forewarning of their inclusion in this recommendation. They are, in no particular order, Robert Snashall, former Board Chairman; Mark Solomon, former deputy general counsel and senior law judge and now a Social Security judge; Carol McManus, former Commissioner and still active as a consultant in workers compensation field; and, if I may be so bold, me.

I’m sure that the Task Force can think of others who have “on the ground experience” and have reputations for fairness and objectivity despite whatever philosophies they may have.

The functional equivalency guidelines and the return to work programs are far too important to be tied up in political or bureaucratic infighting. More importantly, these new Guidelines will put New York State in the national forefront of the treatment and rehabilitation of injured workers and prove that, despite the economic uncertainties faced by our state, New York can still lead the nation.

WCB Buffalo Office Lease Political Controversy

April 14, 2010: Nearly 9 months after signing a new lease to move the Workers Compensation Board’s Buffalo office to space owned by companies owned by Carl Paladino, the State of New York has suddenly discovered that the landlord, Paladino, has made what they consider to be politically incorrect statements. As reported in this website in July 2009 the Board’s former landlord was going into bankruptcy and the State selected the building owned by Paladino which coincidentally contains a number of other state agencies.

But no matter how objectionable the landlord’s statements may be, most people agree that the lease is a legally binding document and, unless there is a morality clause in the contract, it is hard to see how those leases can be broken.

The following was reported by Tom Precious in the Buffalo News but the main question which nobody seems to ask is why was this space rented for an agency which serves injured workers when the office is accessible only by a small elevator going to the fourth floor and the closest parking the building is far enough away that valet parking must be provided by the landlord. And despite finger-pointing at the Pataki administration, is important to note, as reported in the Buffalo News, that although the Pataki administration signed many of the leases, additional leases were signed by the subsequent administrations. And before the administration or the state legislature get too aggressive on seeking the automatic termination of otherwise legal contracts with landlords whose statements and or behavior is “inappropriate”, someone should remind them of the articles in the New York City press about some of the pork that was handed out in Queens, Brooklyn, and the Bronx.

On April 14, 2010, The Buffalo News reported “that Paladino has more than two dozen contracts — about $85 million in value — with various state agencies that lease space in buildings owned by him or partnerships in which he is a member. The current contracts, dating back to 1999,. . . . include the State University of New York; the departments of Education andMotor Vehicles; and the Office of Children and Family Services.

“The Paladino camp countered this morning, saying the Paterson administration for more than a year — long before Paladino became a gubernatorial candidate — has been trying to kill his contracts with the state. ‘They have been looking for any reason to pull the leases from landlords to give them to their political cronies,’ said Michael Caputo, Paladino’s campaign manager. ‘Carl has been in disagreement with the Paterson administration for quite some time. This is actually just the next step in the process,’ Caputo said of the administration’s move since the e-mails surfaced this week.”

Friend or Foe? Pay or No!

April 14, 2010: The New York State Workers Compensation Board today issued Subject Nbr 046–413 regarding billing procedures for unpaid penalties.

To quote Subject Nbr., “In 2009, as part of the development of an updated billing process for these penalties, all parties with unpaid procedural penalties received a bill for past-due penalties dating back to 2003. These bills contained an offer of settlement for those who did not wish to research and appeal each individual penalty because the Board recognized that a small number of invalid penalties might be included in those bills. This process of resolving old penalties is currently being concluded.”

Yet last summer, the Board boasted that it had sent bills to nearly 10,000 employers who failed to have had workers compensation insurance. It was widely reported in the press that many of those getting bills were employers who had been out of business for 10 or 15 years, churches and other nonprofits that had long since gone out of business, and a wide variety of entities who probably did not need to have insurance. Some of these claims went back well beyond the time frame for which most companies keep business records, thus making them unable to prove whether they had insurance or even if they had employees. Yet the Board boasted how tough they were going to be on all these small business owners.

Now the Board acknowledges that it is waiving substantial portions of penalties that could have been and should have been collected against carriers who are still doing business in the State of New York.

Perhaps the Board’s policy is a reflection of state bureaucracy in general: chase and beat up on the small employers and taxpayers but be very nice to your friends who are the big businesses because they can fight back and even make contributions to the political leadership.

Perhaps the Board would be so kind as to publish some statistics on the 10,000 firms it was chasing to let us know how many of these 10,000 firms even responded, how much money was due, and how much was collected. And when the New York State Worker’s Compensation Board puts in a request in their next budget for another $50 million for upgraded computer systems, perhaps they should be told that if they bothered using their current systems properly, that they probably have collected several million dollars for these past due penalties.

Two New Commissioners on the Way

April 8, 2010: It has been learned that negotiations between the Patterson administration and the leadership of the New York State Senate have resulted in an agreement on the next two nominees to the New York State Worker’s Compensation Board. The two anticipated nominees are from the Buffalo region, one of whom has been previously mentioned in this website although I do not currently have information as to which of the individuals it is. And, finally, one of the two is a practicing attorney.

It is expected that the names will be placed before the Senate Labor and Finance committees within the next six weeks, although with the current state of affairs in Albany one can never be certain of anything until the gavel comes down on the Speaker’s podium. This leaves one vacancy on the current board which can be filled by Governor Paterson with two terms, Mona Bargnesi (Buffalo) and Candace Finnegan (Peekskill), expiring December 31, 2010 which would then be filled by the next governor.

New Impairment/Wage Loss Guidelines Almost Done

April 8, 2010: Two years after it was first constituted during the Spitzer administration, the Impairment/Wage Loss Task Force will be submitting its guidelines to the New York State Workers Compensation Board on April 25, 2010.

The Board will then have the opportunity to review these guidelines and can either propose changes or recommend its adoptation by the Board.

These guidelines will dramatically change the way that injured workers have been compensated for lost wages as well as establishing various methods of assisting injured workers in returning to the workplace, with their employer of record, a new employer, or in a different occupation/trade.

It has long been recognized that two people with identical injuries can be impacted in two dramatically different ways in terms of wage loss. For example, a law judge and a court reporter can both break several bones in their nondominant hand requiring not only the wearing of a cast for several weeks but also losing the use of their fingers on that hand for a few months. The law judge may be incapacitated from doing their work for a few days whereas a court reporter may be unable to return to work for several months, if ever. And yet from a medical/disability perspective, both could be determined to have a mild-to-moderate disability. Under the new guidelines, it is the wage loss and earnings impairment that will be measured such that, after the first week or so, the law judge’s compensation would be minimal if anything whereas the court reporter,s award could come close to the maximum compensation allowed and continue for several weeks if not longer.

Another key element of the new guidelines for long-term wage loss would be in part determined by the availability of other occupations or trades. As was explained to me by one party familiar with the discussions on the guidelines, those whose work involves physical labor would gain greater benefits under the new guidelines than they currently have while office workers and other professionals, whose return to work in the same capacity as prior to their injury is far less limited, would be getting less benefits.

As a personal note, I do remember that as new commissioners would join the Board, after a few months of reviewing decisions and attending hearings, most ask why it was that two people with the same injury would get the same amount of money even though one could not return to their former trade while the second, if kicked hard enough in rear end, could return to work even if with some discomfort.

These long-awaited guidelines offer the current Board the opportunity to usher into the system an entirely new concept which addresses and hopefully corrects the inequities found in the workers compensation system in the past. One can only hope that the Commissioners and other top executives at the Board act upon these new guidelines as soon as they are received in order to allay the ever growing suspicions that this current Board and its executives have no concern for the injured workers or their employers.

NY Woman Gets Fed’s ‘Goat’ for WC Fraud

April 6, 2010: In the plea announced Tuesday, U.S. Attorney Richard Hartunian for the Northern District of New York announced that an upstate woman pleaded guilty in U.S. District Court to making false statements to the U.S. Department of Labor, while admitting that she sold goats while collecting more than $60,000 in federal workers compensation. As a result of a guilty plea, she faces up to five years in prison and a fine up to $250,000.

For those who think that the penalties imposed by the New York State Workers Compensation Board under WCL §114-a or those imposed by New York State Supreme Court under WCL §114 should note the penalties in the above federal case and recognize, in comparison, how minimal are the penalties for cheating in New York State’s workers compensation system.

For those who think that the penalties imposed by the New York State Workers Compensation Board under WCL §114-a or those imposed by New York State Supreme Court under WCL §114 should note the penalties in the above federal case and recognize, in comparison, how minimal are the penalties for cheating in New York State’s workers compensation system.

[ED. NOTE: She worked for the U.S. Postal Service which is the reason this was a federal case, a point noted in the press release issued by the U.S Attorney’s office but omitted by the AP and other entities reporting this story.]

NYSIF Discusses WC Insurance Rates

April 5, 2010: In a just released document, the New York State Insurance Fund (SIF) explains why its annual rates are lower than those of its competitors in the private sector.

SIF writes that “A simple explanation is that the amount charged for your type of business is derived from the most recent total amount paid on claims for similar types of businesses statewide. This determines the loss cost for your class of business. The New York Compensation Insurance Rating Board (NYCIRB) promulgates these loss costs, reflecting data from all insurance companies, which become official upon approval by the New York State Insurance Department. As part of workers’ comp. reform, all insurance companies, including NYSIF, apply their own Loss Cost Multiplier (LCM) to the official loss costs in arriving at a manual rate for any given classification.”

The document then goes on to explain why it is that SIF’s rates are lower.

[ED. NOTE: Not to be judgmental, but isn’t that the same thing that CRM did?]

NY’s Workers Comp System among the Nation’s Worst

April 2, 2010: New York State’s workers compensation system ranks as one of the worst in the 2010 State Report Cards for Workers’ Comp in a report issued by the Work Loss Data Institute (WLDI). This report is based on eight years of data from 2000 through 2007 and covers 43 states plus Puerto Rico, Palm, and the Virgin Islands.

Minnesota performed the best of all the states for 2007 and Nevada and Arizona came in a close second and third. All three states received a grade of “A+” based on an average of their 2007 scores in the five categories above. A summary of each grade for all states is shown on a map of the United States. The worst performers for the years 2000-2007 were: New York, Illinois, Kentucky, Oklahoma, and Wyoming.

The 2010 State Report Cards, based on data from OSHA Forms 300 and 200, provide five different outcome measures compared among the states for each year: (1) Incidence Rates, (2) Cases Missing Work, (3) Median Disability Durations, (4) Delayed Recovery Rate; and (5) Key Condition: Low Back Strain. An essential requirement for production of this report was the proprietary crosswalk program that has been developed by Work Loss Data Institute, which converts OSHA-reported data into an ICD9 code format.

The WLDI special report, entitled 2010 State Report Cards for Workers’ Comp provides complete detail on all cases for the 46 participating states and territories, based on all cases reported to OSHA for the years 2000-2007 as a 79-page report with narrative, plus over 50 spreadsheet files with complete detailed backup data that is referenced in the narrative. It is available in both electronic and hardcopy formats for $250 each. Note: The electronic format is recommended to facilitate links to the electronic spreadsheet files and the supporting data and can be ordered over the internet at www.worklossdata.com

CRM Lays Off 15% of Staff

March 31, 2010: CRM, which specializes in workers compensation insurance, announced that it has eliminated 30 jobs, 15% of its total workforce, the majority at its Poughkeepsie offices. CRM stated that although it will record a one-time charge of the $417,000 with the termination benefits, annual savings should be $2.6 million. Nonetheless, CRM reported on March 9 that its net loss for 2009 was $45,000,000. And CRM again confirmed that the Office of New York State Attorney General Cuomo is continuing its investigation into CRM’s alleged mishandling of various self-insured trusts which managed.

As reported on August 18, 2009 by Roberto Ceniceros of Businessinsurance, among others, the list of victims of the underfunding of self-insured trusts continues to grow. Ceniceros reported that a New York State Workers’ Compensation Board spokesman reported that nearly 2,000 companies insured under group trusts formerly operated by CRM Holdings Ltd. have been billed $133 million to cover unfunded workers compensation claims.

Yet despite all financial problems that CRM Holdings, Ltd (NASDAQ: CRMH) currently has, and despite the fact that its stock has dropped from $5.00 a share two years ago to $.33 a share on March 30, 2010, approximately 1,000,000 shares of stock have been purchased by Ivan (John) Mihaljevic, either directly or through Mihaljevic Capital Management LLC and Mihaljevic Capital Management LLC, according to the Schedule 13G filed March 26, 2010.

Colorado’s Sale of its WC Insurance Fund is Cancelled

March 30, 2010: After nearly a year of discussions, arguments, and lobbying, Colorado Governor Bill Ritter has canceled a proposal to sell Pinnacol Assurance, thus denying Colorado the opportunity to sell the state-chartered workers compensation insurance fund and raise between $200 million and $500 million to help balance a budget shortfall estimated at between $212 million and $1.3 billion.

Originally, the Democratic-led legislature considered tapping $500 million from Pinnacol’s roughly $2 billion in assets but, when that plan failed, the next plan was to convert the company into a private entity after a payment of $330 million to the state.

Fortunately for the employers and injured workers of Colorado, the financial stability of this workers compensation insurance fund remains intact, perhaps a signal to other states who would also consider withdrawing assets from their state-chartered workers compensation insurance funds

[ED. NOTE: I would be most appreciative if one of my readers could explain to me why it is that if the reserve funds of a workers compensation insurance fund are too low because of actuarial errors that the carrier and its management are subject to potential criminal and civil penalties whereas, if the reserve funds are too low because the money was “confiscated” by a political entity ,that is considered to be legitimate, i.e. CMR v Pinnacol.]

Ohio Proposes: No WC benefits for Illegal Aliens

March 16, 2010: Ohio Senator Bill Seitz introduced Senate Bill 238 to the Ohio General Assembly. If passed, this bill would amend Ohio’s Revised Code to prohibit illegal and unauthorized aliens from receiving compensation and benefits under Ohio’s Workers’ Compensation Law.

Currently, in Ohio, illegal and unauthorized aliens are afforded the same benefits under Workers’ Compensation Law that other workers are. In other words, illegal and unauthorized workers who are injured in the course of and arising out of their employment are allowed to file workers’ compensation claims and receive benefits and treatment for their injuries.

Senate Bill 238 adds to existing legislation two additional categories of individuals who would no longer be qualified as “employees”: illegal aliens or unauthorized aliens. The legislation would require injured workers to submit along with their claim documentation proving they were covered under the amended law. The law also would prevent Ohio courts from having jurisdiction over claims for damages suffered by an illegal alien or an unauthorized alien in the course of employment but does give courts jurisdiction over these claims if the employer employed the illegal alien or unauthorized alien knowing that the illegal alien or unauthorized alien was not authorized to work under the Immigration Reform and Control Act.

The legislation defines an illegal alien as an alien who is deportable if apprehended because of one of the following:

1. The alien entered the United States illegally without the proper authorization and documents.
2. The alien once entered the United States legally and has since violated the terms of the status under which the alien entered the United States, making that alien an “out of status” alien.
   
3. The alien once entered the United States legally but has overstayed the time limits of the original legal status.

Additional details can be found at www.employerlawreport.com or www.daytondailynews.com.

Legal Fees for WTC Settlements Unreasonable

March 26, 2010: In a press release issued today, I agreed with Federal Judge Alvin K. Hellerstein of United States District Court in Manhattan rejection of the proposed Ground Zero Settlement, particularly with regards to the legal fees which are excessive when compared to other jurisdictions.

I stated that the fees being sought in the settlements in the amount of 30% to 40% are excessive when compared to the fee structure that exists in the New York State workers compensation system. I ended my statement by suggesting that Judge Hellerstein consider hiring the services of those law firms specializing in the handling of workers compensation for injured workers. These attorneys are accustomed to handling large numbers of cases at a time but still have the ability to provide the injured workers and their families with the care and attention necessary to not only do financial justice to their clients but also to make them feel like human beings.

The full text of my statement can be found on the COMMENTARY & REPORTS page under the heading “Legal Fees for WTC Settlements Unreasonable”.

▼ Posted Friday March 26, 2010 ▼

WC Attorney Defeats Negligence Claim

March 4, 2010: An injured worker’s action against her workers compensation attorney, Alan M Cass, to win in civil court after she did not win at the New York State Worker’s Compensation Board was rejected by the First Department of the New York State Appellate Term of the Supreme Court. The Court in granting Cass’ motion for summary judgment reversed the decision of the Civil Court of the City of New York, New York County, which denied that motion.

In bringing her complaint, Elaine Lupo contended that the defendant was negligent in the handling of her claim, for his failure to present evidence and cross-examine opposing witnesses. The defendant made a prima facie showing that his firm was not negligent and, further, that “their claimed negligence did not proximally cause plaintiffs alleged damages”. The Appellate Court wrote in its decision that the allegations “amount[ed] to nothing more than criticism of defense’s considered tactical strategy of how best to pursue plaintiffs claim . . .” In its decision the Court was quite clear that it would not second-guess Lupo’s attorney, that some of her claims were based purely on speculation.

This decision follows a line of cases in which the Courts have refused to second-guess the strategies of the attorneys representing injured workers, essentially taking the position that not every case and every issue raised by claimants will be affirmed by the Board, regardless of the efforts of their legal representatives.

Details of the Court’s opinion can be found on our DECISIONS page or by linking to the actual decision: Lupo v Cass 2010 NY Slip Op 50310(U).

[ED.NOTE: perhaps a sign referencing the language in this decision should be posted over the door of every hearing part.]

A Vaccine for Malignant Mesothelioma?

February 17, 2010: The American Journal of Respiratory and Critical Care Medicine has accepted for publication an article about tests that show inoculations prevent Malignant Mesothelioma.

A group of scientists working out of the Netherlands demonstrated that dendritic cell-based immunotherapy induced protective antitumor immunity with prolonged survival in mice. Then now they then embarked on a trial of 10 patients with malignant pleural mesothelioma who received vaccinations at two-week intervals after chemotherapy. This study demonstrated that autologous tumor lysate-pulsed dendritic cell-based therapy is feasible, well-tolerated, and capable of inducing immunological response to tumor cells in mesothelioma patients.

Because the study is in the early stages, no mention was made of the time frame for its availability to the public at large nor is there any indication of the impact this could have on the thousands of cases of pleural mesothelioma currently in the workers compensation system not just in New York but throughout the United States as well as the tens of thousands of cases being fought over in civil courts throughout the country.

A summary of the study, titled “Consolidative Dendritic Cell-Based Immunotherapy Elicits Cytotoxicity Against Malignant Mesothelioma”, can be found at http://ajrccm.atsjournals.org/cgi/content/abstract/200909-1465OCv1. More information on the actual trials can be found at www.clinicaltrials.gov NCT00280982.

Our Newest Poll Now Ready

March 15, 2010: As a result of changes in the Board’s requirements for the issuance of medical reports, more medical providers have decided to no longer treat injured workers. As previously noted in my website as well as other sites, the Board acknowledges a shortage of medical providers in the Rochester area. But the problems occasioned by the shortage in Rochester are being found throughout the state. There are complaints that so many doctors, including IME’s, are dropping out that the Board’s list of doctors in woefully out-of-date, claimants cannot get timely medical treatment, and their return to health and decisions on their case are unnecessarily delayed.

This poll is now up and running - you are welcome to give your opinion by participating in this poll:

Questions on the Board’s Medical Procedures

Thank you for your participation. Results will be published Monday March 22, 2010.

Medical Guidelines Pilot

March 4, 2010: The New York State Worker’s Compensation Board has again revised its medical treatment guidelines, as a part of its continuing effort to meet the deadlines of the 2007 statutory reforms.

The ‘content changes’ are discussed in the “Substantive changes in the Proposed Medical Treatment Guidelines January 19, 2010 revision” document. The reformatting changes “Formatting changes in the Revised Medical Treatment Guidelines” are designed to make guidelines easier to use and more consistent.

In 2009, the Board requested public comments to the Draft Guidelines. Based on those comments and exhaustive reviews of recent medical literature, the Board revised the Draft Guidelines in January 2010. The Board anticipates issuing proposed regulations to adopt the Revised Guidelines in the near future.

On Monday, November 30th, the Board started a Medical Treatment Guidelines Pilot with both Providers and Payers. The pilot program is designed to test the process for implementing the adopted Guidelines. Participants in this pilot will have a unique opportunity to provide feedback that will help shape the final procedures. The pilot will run until the proposed Guidelines are formally adopted by regulation and the delivery of the comprehensive training program has been completed. The Board encourages both providers and payers to participate in this pilot program. It is our hope that a successful pilot program will help accelerate delivery of quality medical services to injured workers, reduce disputes and cut system costs. If your organization is interested in participating or has questions regarding the pilot, please contact the Medical Director’s Office at 1-800-781-2362 or WCBMedicalDirectorsOffice@wcb.state.ny.us.

The Board’s Regulatory Wish List

MARCH 4, 2010: The January 2010 Regulatory Agenda was published in the January 6, 2010, edition of the State Register , allegedly to provide small businesses, local governments, and public and private interests in rural areas with the opportunity to participate in the rule making process, as provided for in State Administrative Procedures Act sections 202-b and 202-bb.

The Workers’ Compensation Board agenda included 20 different items ranging from medical issues to the management of self-insured trusts.

Also among these items are a plan to amend Parts 390 and 393 regarding the Aggregate Trust Fund to conform to the amendments to Workers’ Compensation Law §27, the decisions of the Board and the recent decision by the 2nd Circuit Court of Appeals. The Board also proposes to repeal and readopt Part 302 regarding the rules governing licensed representatives. The amendments will separate the provisions that apply to third-party administrators from those of licensed claimant representatives and address applications, duties, standards of conduct and licensure.

However, a careful review of some of the proposed changes would suggest that the Board is seeking to bypass the state legislature and institute changes to the Workers Compensation Law by changing the rules and regulations that define how the laws are managed by the Board

You can read the entire regulatory agenda by linking here.

Spine stimulation may not help after failed surgery

February 17, 2010: Reuters Health today summarized a study which showed that a commonly used treatment for patients who still suffer chronic back and leg pain after having back surgery is essentially no better than specialized pain treatment or standard medical treatment.

But the findings do not mean that the procedure — spinal cord stimulation — will not help some people, Dr. Ajay D. Wasan of Brigham and Women’s Hospital and Harvard Medical School in Boston notes in a written commentary published with the study in the journal Pain.V(olume 148, Issue 1, January 2010, Pages 3-4 )

Spinal cord stimulation, in which implanted electrodes send small electrical impulses into the spine, has been used since the 1960s for patients with so-called “failed back surgery syndrome,” Dr. Judith A. Turner of the University of Washington in Seattle and her colleagues note in their report. However, questions remain about the procedure’s risks and long-term effectiveness. Also, they point out, no studies done to date have included patients on workers’ compensation, who are known to fare worse with any type of pain treatment.

To investigate, Turner and her team studied a group of patients with a workers’ compensation claim who had persistent low back and leg pain following previous back surgery.

They compared the outcomes of 51 people who had at least a trial of spinal cord stimulation (27 went on to have the electrodes implanted permanently) with those of 39 people who underwent evaluation at a pain clinic, and 68 who received neither spinal cord stimulation nor specialized pain treatment. Fewer than 10 percent of the patients in any of the groups showed notable improvements in leg pain and function, or were able to step down from daily use of opioid painkillers, the researchers found. While the spinal cord stimulation group showed slightly better improvements in leg pain and function at six months, these patients used more opioids than patients in the other two groups. At 12 and 24 months, there were no differences among the three groups.

While the researchers did not compare the outcomes for people who only had a trial of spinal cord stimulation and those who went on to have electrodes implanted permanently, Wasan points out, results for these two groups were “distinctly different,” with 30 percent of people who underwent permanent implantation showing improvement in leg pain and function at two years.

The full report is available from sciencedirect.com for a small fee.

Triangle Shirtwaist Group
Names Award Recipients for 2010

February 16, 2010: The Triangle Shirtwaist Factory Fire Memorial (TSFFM) announced that four individuals have been named to receive a Clara Lemlich Public Service award for their work and efforts in calling attention to and participating in the reform of workers’ compensation and improvement of occupational safety in New York State.

Those named to the Class of 2010 are: M. Patricia Smith, recently approved by the US Senate as Solicitor at the US Department of Labor and previously Commissioner of the NYS Department of Labor; Lillian Roberts, Executive Director of NYC’s District Council 37; Veronica Montgomery-Costa, President of DC 37; and Richard D. Winsten, Esq., a partner at Meyer, Suozzi, English and Klein.

Lee Clarke, a member of the Board of Directors of TSFFM and Director of Health and Safety at DC 37, in announcing the awards, observed, “Although history is supposed to be a great teacher, we too often are not familiar with its many heroes who slug it out day to day for working men and women. Clara Lemlich, a young Jewish immigrant, was among those who rose to the occasion and inspired many with her voice and her actions. The Lemlich Class of 2010 represents this ideal.“

In the early 1900’s, Lemlich participated in efforts to improve the working conditions of her co-workers in the garment industry. Despite a number of severe beatings by goons hired by factory owners, Lemlich continued her organizing efforts. On November 22, 1909, after hours of speeches from labor representatives mostly men, she mounted the stage at Cooper Union and addressed the workers in Yiddish. Her words inspired 20,000 workers to strike, one which lasted until February 10, 1910 and resulted in better wages and working conditions for members of the ILGWU.

“But,” noted Clarke, “the Triangle factory owners did not participate in the reforms of the 1909 labor action and it was the tragic fire of March 25, 1911 that woke up the entire nation. We need to be reminded of that. So, I am proud to honor these men and women and recognize their connection to, not only labor history, but to all who enjoy safer and better working conditions.“

The awards will be presented at TSFFM’s Eighth Annual Memorial dinner to be held at the NYC Fire Museum in lower Manhattan on March 25. Proceeds from the dinner and a journal are dedicated to a scholarship program for children of injured workers. Attendees are treated to cocktails, a four-star dinner, and entertainment with themes relating to the 1900’s, the Triangle era, and performed by an amateur theatre group. “In this way,” offered Jim McCarthy, President of TSFFM, “we fulfill TSFFM’s mission to commemorate the Triangle tragedy and remind the public of the need for vigilance in workplace safety. The Lemlich awards and our scholarship program are concrete testimonials to these ends.“

And their work continueth,
Broad and deep continueth,
Greater than their knowing!

For additional information contact James M. McCarthy (TSFFM) at 718-830-3200 or jmccarthy@nycomplawyers.com or www.trianglememorial.org.

Chief Justice Lippman’s Court of Appeals

February 17, 2010: The New York Times has today published a review of the first year of Chief Justice Jonathan Lippman’s stewardship of the New York Court of Appeals, having been appointed to that position by Governor Paterson in January 2009.

According to the author of the article, William Glaberson, “the parameters of the Lippman court are coming into focus. He has helped turn the Court of Appeals into a scrappier, more divided and more liberal panel, its rulings and court statistics show. the past year, the court has issued a series of sharply divided decisions that have been surprising from a judicial body with a clear 4-to-3 conservative majority. They have included decisions favoring criminal defendants and injured workers, expanding environmental challenges and extolling individual rights against the police.”

“The message he is sending is he doesn’t mind fighting for a much more progressive direction at the court,” Vincent M. Bonventre, a professor at Albany Law School who studies the court, said of Judge Lippman.

According to Bonventre, a professor at Albany Law School who studies the court, “The message he is sending is he doesn’t mind fighting for a much more progressive direction at the court.” As noted in my NEWSWIRE posting of February 13, 2009, Bonventre’s blog makes reference to Lippman’s one workers compensation case. “In Bellamy v. Columbia University, Lippman wrote for a 3 - 2 majority, refusing to dismiss a lawsuit brought by a worker who hurt himself slipping and falling in one of the University’s kitchens where he worked. He rejected the University’s position that it was necessarily immune from this negligence claim under the Workers’ Compensation Law.”

At that time I noted that it would be interesting to see if Bonventre’s analysis of Lippman appearing to be pro-plaintiff proves to be correct. It is.

According to Glaberson,

The Lippman court has also shifted ground on worker injury suits, saying that in the past the court too rigidly limited some of them. It has also signaled a new interest in arguments from criminal defendants, sharply increasing, at Judge Lippman’s urging, the number of appeals it is considering. Early in his tenure, he wrote a 6-to-1 decision in favor of an injured patient against two doctors, a ruling that the dissenter, Judge Smith, called a “gross injustice” to the doctors.

In early December, Judge Lippman went further, indicating that he planned some changes in injury cases. He “reluctantly” agreed with the dismissal of a damages suit against New York City by a public school teacher who was injured by a student , saying an earlier ruling limiting such suits should be changed.

A couple of weeks later, he got all seven votes in the case of an injured worker, declaring that the court in the past had too narrowly construed a law originally intended to help workers win suits against employers. Legal commentators have noted the change from Judge Kaye’s court, which had voted 7 to 0 the opposite way in at least one case involving an injured worker.

The protection of the law for injured workers, Judge Lippman wrote, had “been construed to be less wide than its text would indicate.” In the coded language of the courts, that was a hand grenade tossed at the old Court of Appeals, before the arrival of Chief Judge Lippman.

In 2009, there were 4 cases in which the Court of Appeals issued decisions regarding injured workers although the New York State Workers Compensation Board was not a party of interest in any of them. In one pro-injured worker decision, the Matter of Passante v Agway Consumer Products, the dissenting Justice wrote “Decisions like today’s can only make things worse.”

The New York Times article covers far more detail as well as adding graphs and charts regarding the increasing divisiveness of the Lippman Court. As to the impact on any workers compensation claims that make their way to the Court of Appeals, only the future can tell.

Board Publicity: Selective at Best

February 18, 2010: Since January 1 of this year, the New York State Workers Compensation Board has published 16 Subject Numbers listing 16 doctors and one medical company whose practice of workers compensation medicine has been limited or ended.

Over the last few years the Workers Compensation Board has been very aggressive in investigating fraud, malpractice, malfeasance, misfeasance, and several other patterns of behavior by medical providers which deny both the injured worker and the carrier/employer proper medical treatment that an appropriate cost. In the Board, by issuing all of these Subject Numbers is taken steps to make sure that the people in the State of New York as well as those in the workers compensation community are aware of Boards steps to improve the system.

The Board’s interest in promoting its activities is substantiated by nearly 100 medical providers whose names were listed in Subject Numbers published in 2009.

Unfortunately, it is only the activities of outside parties whose actions impact on the Board that the Board wishes to publicize and not the Board’s own plans for changes in procedures. Interesting to note the fine line that the Board has drawn between changes in some procedures which are done secretly and announced after-the-fact and those which, by law, require advance publication in the NYCRR to allow public comment.

CO Legislature: “Video Surveillance Unfair”

February 18, 2010: Colorado’s House Judiciary Committee has approved a bill that would prohibit employers or insurers from conducting surveillance, including videos, of employees who have filed a workers’ compensation claim, unless there is “a reasonable basis to suspect that the employee has committed fraud.” According to Business Insurance, companies who break the proposed law face a $1,000-a-day fine.

The Colorado movement to curb insurers comes at a time when carriers are cracking down on employees who take extended sick leave or file disability claims. SmartMoney reports that an insurance case manager called a Washington state woman who has breast cancer at 7 a.m. to ask probing questions about her health, such as “Did she feel well enough to exercise?” The magazine says that insurers are cutting back coverage where possible and “putting employee complaints under a microscope.”

But insurers also have an argument. Workers’ compensation payments, along with no-fault medical fraud costs are “spiraling out of control,” according to the New York Insurance Association. Among the NYIA’s concerns are lawyers who hire “runners” to set up fake accidents, and then send the “injured” for medical treatment at prearranged doctors and chiropractors who split inflated fees. Over the last three years, suspected fraud cases have jumped 33 percent in New York State.

Further details on the story written by Bnet reporter Ed Leefeldt can be found at: http://industry.bnet.com/financial-services/10007029/smile-youre-on-your-insurers-candid-camera/

WCB’s Appearance Before Senate Finance Committee

February 11, 2009: On Wednesday February 10, 2010, the New York State Senate Budget Committee met to discuss issues dealing with the New York State Workers Compensation Board and spent nearly 2 hours discussing three subjects:

• The Board’s plans to eliminate hearing
• The Board’s Plans to Eliminate Verbatim Reporters
• The $100 million in the “excess fund”

Speaking on behalf of the New York State Worker’s Compensation Board was Chairman Robert Beloten assisted by General Counsel Kenneth Munnelly and Budget Director Mary Beth Wood.

Other speakers included Stephen Zinone, President of New York State Court Reporters Association, and Peter Walsh and William Crosset, representing a special Workers Compensation Committee of the New York State Bar Association.

ELIMINATING HEARINGS

After number of introductory remarks, Senator Honorato asked the Board could have more law judges but less hearings and what happens to Due Process under §25(2)(b). Munnelly noted that the Legislature in 1991 authorized a conciliation process and the Board has been aggressive in moving many cases to conciliation, He added that 80% of the proposed decisions made at conciliation are accepted, substantiating the Board’s position that many hearings are not needed. Chairman Beloten gave an example of a disputed medical bill, the resolution of which does not need an injured worker to take time off from work to attend the hearing. [ED. NOTE: His response ignores the fact that on many issues of this nature claimants are told by their attorneys that their attendance is not necessary.]

Senator Honorato asked for a further clarification of Project 2015. Mary Beth Wood explained that the idea was to reduce the number of hearings by using more conciliators but also stated that the plan was to give a “slight” $10,000 raise to the approximately 20 conciliators which then prompted a follow-up question as to why more conciliators and judges are needed if the Board plans to have less hearings. [ED. NOTE: only someone on the public payroll could consider a $10,000 raise to be “slight”.]

Senator Honorato then asked why was the Board planning on moving ahead with Project 2015 and the plan to reduce hearings without any legislative approval to which Chairman Beloten responded that these two changes were necessary to streamline the process as research has shown that injured workers who do not return to work for four months never return to the workplace so it was a goal of the Board to get cases settled in less than that time.

ELIMINATING VERBATIM REPORTERS

The Finance Committee then moved to the issue of digital recording, asking how was it that the Board could continue on this process when, after the October 2009 hearings, the Legislature in a letter signed by Senate Labor Committee Chairman Senator Honorato, stated its displeasure and disapproval of the project. Munnelly replied that they are not eliminating verbatim reporters and moving ahead with the project, but that they are simply doing a pilot program using both digital recording and verbatim reporters and plan to report to the Legislature when the pilot project is done. He then stated that “§142 (5) states that there is an obligation to keep records but does not state they must be verbatim.”

Senator Honora reminded Munnelly the Labor Committee’s strong objection to the refusal of the Board and the firms bidding on the project, who also testified at the October hearing, to give any costs. Munnelly responded that the bidders were afraid to disclose the proposed costs of their bids prior to the formal opening of those bids lest they be in violation of New York State law but, because the bids had just been opened, he would then give copies of those bids to the Senate Finance Committee.

In response to Senator Dianne Savino’s questions as to the cost, Chairman Beloten noted that it would be $35,000 for the pilot run for the four units, two upstate and two downstate. Beloten added that it is important to pursue this new process lest one day there are not sufficient reporters to attend hearings. Senator Savino reminded Chairman Beloten that he had testified in October 2009 there was no record of any hearing having been canceled for lack of reporters.

Senator Honorato then noted that the contracts that were just submitted by Munnelly showed that there was a contract, not for $35,000 for a one year pilot program, but for $917,000 for a three-year program. Munnelly responded that §8A of the contract allowed the Board to cancel at any time but the Board felt that having a three-year contract for all the hearing parts throughout the state was the best way to approach this program. Wood added that the $917,000 was not in the budget ‘per se’ but the contract had been approved by the State Controller and the cost was going to be $140,000 for the pilot program. It was then noted that, minutes earlier, Beloten stated that the cost was $35,000. [Apparently a misunderstanding: $35,000 for the entire project or was it the cost for each of the four pilot sites and not for the entire pilot program.]

EXCESS FUNDS

The next issue addressed dealt with an item one of the committee members referred to as “Excess Funds” which amounted to slightly over $100 million.

Wood explained that this money came as a result of higher than necessary assessment charge to the carriers. And, of course, the higher than necessary assessments were passed on to employers such that at the end of the year there was a surplus in the fund. Under Article 7 for the state budget, Governor Paterson took all but $20 million of that by sweeping it into the general fund with the Board keep that balance. When Wood was asked if that was fair to keep the over-assessment rather than return it to the employers in the State of New York who paid it, we would replied “It would be too difficult to figure out how to return the money and it was easier to keep it.” When the follow-up question asked if this was unfair, “an insult” to the employers of the State of New York, and what would keep the Insurance Rating Board from continuing to over assess the employers/carriers, she replied (1) the new assessment system would avoid these excess charges and (2) it was just too difficult to return the money to the people who paid it.

ADDITIONAL SPEAKERS

Next address to the Finance Committee was Stephen A Zinone, President of the New York State Court Reporters Association, who brought to the Finance Committee’s attention the same concerns raised to the State Senate Labor Committee in October 2009. One additional point raised by Zinone was that the very same concept of using electronic transcription was tried in a pilot project in 1995 and 1996 and was rejected by the Board. He noted that the Board has failed to explain why the new proposed project is any different from the earlier one.

Peter Walsh and William Crosset, representing a special Workers Compensation Committee of the New York State Bar Association, made reference to their appearances and comments at the October 6, 2009 hearings by the the Senate Labor Committee and made the observation that no matter what studies, reports, or communications there may be, the Board tends to look in one direction while the Bar and State Legislature look the other. They also noted that there is a total lack of communications from the Board on these projects until such time as the Board announced their implementation, that the only advance notice that the Bar or any of the other participants receive is from outside sources [this website, perhaps!] and not from the Board itself.

The entire hearing is available on video at http://www.nysenate.gov/event/2010/feb/10/joint-legislative-budget-hearing-workforce-issues. As a guide to finding specific appearances you will find that Chairman Beloten’s appearance started at 2:07, at 2:14 the issue of Project 2015 is raised, 2:18 starts a discussion of verbatim reporters, 2:23 Senator Savino asks why Chairman Beloten said the pilot project would cost $35,000 for one year but the contract is for $916,000 and three years, the issue of excess funds starts at 2:34, Stephen Zinone’s appearance start’s at 2:40 and Peter Walsh and William Crossest start their remarks at 3:58.

WCB Ignores State Senate Decision

February 3, 2010: State Senator George Onorato (D-Queens), Chairman of the New York State Senate Standing Committee on Labor, today took issue with the recent decision by the New York State Workers’ Compensation Board to move forward with a digital-audio recording pilot program in violation of state law. Under the plan, the Board is seeking to replace stenographers with recording equipment at some workers’ compensation hearings – a move the Senator contends is not authorized by law, will jeopardize the accuracy of transcripts, and will otherwise compromise workers’ compensation proceedings.

On October 6, 2009, the New York State Senate Standing Committee on Labor held hearings on this subject as referred to in this website in its October 8, 2009 postings.

In an apparent snub (as polite word as I can find), the Oligarchic Cabal at the Board decided to go ahead with this project, signing a contract shortly after Senator Onorato issued the Senate’s report stating that the consensus of the Labor Committee was that the Board should not proceed with this project on the grounds that (1) there were substantial technical problems with the project, (2) Chairman Beloten and other speakers promoting the Board’s position were unable to even guess at the proposed financial cost, and (3) there were a number of legal issues that had to be addressed before live court reporters could be taken out of the process.

The full text of Senator Honorato’s statement is available at the Senate website, using the following link . . .

[ED. NOTE: I guess this shows the attorneys and other members of the workers compensation community that they are not the only ones whose concerns and/or recommendations are being ignored by the Oligarchic Cabal running the Board who apparently feels omnipotent enough to “bite the hand that feeds it”: the New York State Senate. With budget hearings on a number of state agencies soon coming up, including the Workers Compensation Board, it will be interesting to see if the Senate has “teeth” and will be used them.]

NYSIF Distributes $173.3 Million in Dividends

February 2, 2010: The New York State Insurance Fund today announced the return of $173,323,008 in dividends for 2009 to approximately 34,025 policyholders in 98 NYSIF safety groups as a reward for exceptional record of workplace safety and sound business practices. The average 2009 dividend of 29.98% is the largest in recent years, surpassing the 28.20% in 2008 and 27.47% in 2007. All members of a safety group are eligible for the approved dividend with the percentage returned to the group applied to the individual policyholder’s earned premium. The dividends are in addition to very competitive up-front discounts applied earlier.

NYSIF Chief Deputy Executive Director Francine James said. “It clearly demonstrates the importance of a strong commitment to workplace safety and loss prevention. The dividend distribution underscores the strength of NYSIF’s safety group partners and the work they have done to ensure their groups are on sound financial footing.” NYSIF notes that past and present dividends are not a guarantee of future dividends.

About Time: Legal Training for Commissioners

February 3, 2010: At its regular monthly meeting in Albany, held on January 26, 2010, an announcement was made that effective next month the Commissioners and those members of the legal staff involved in drafting decisions of memorandum will be required to attend legal training.

The sessions will be similar to those offered for Continuing Legal Education (CLE) and may possibly count as CLE credits. My understanding is that these will be conducted Tuesday mornings prior to the beginning of the public meeting, this time having been chosen to avoid excuses from the few Commissioners notorious for finding excuses for not attending the Monday afternoon pre-board meetings at which the substantive discussions, such as they may be, are held covering decisions made prior to the pro forma discussions and votes seen at the public session.

CLE’s for commissioners or similar legal training is something I have been promoting for years, originally as a member of the Board and most recently in my book Behind The Closed Doors in Chapter 7 “The Monthly Board Meeting - Recommendations.”

Far too often in the past, even for those few commissioners who wanted to learn about the laws they were entrusted to enforce, there was no means to learn anything other than reading, as often as not, faulty decisions or by relatively brief conversations with writers. As a result, it could be months or even years before commissioners developed understanding of some of the issues with which they were faced which often meant that the pre-board discussions of cases set down for Full Board Review were monopolized by the few commissioners who were fortunate enough to have learned the law and one or two lawyer/Commissioners who felt admission to the bar automatically granted them extensive knowledge on the entirety of workers compensation law. Having attended CLE’s given by Board staff and some CLE’s outside the jurisdiction of the Board, I can only hope that the future presentations given to the Commissioners and legal staff will be as interesting and at least half as accurate as those given by Ronald Balter to the members of the Injured Workers Bar Association.

Project 2015 Still Lives

January 28, 2010: In the NEWSWIRE of October 8, 2009, I detailed some information from internal e-mails at the Worker’s Compensation Board which explained the process by which they planned to eliminate hearings while resolving controverted cases.

It seems the Board is continuing to push aggressively in this direction as copies of those same e-mails, which I did not publish, now make their way around the State has various parties fight with the Board on this issue.

One of the justifications given by the Board is that there is a shortage of law judges and that they just do not have the personnel to handle these hearings. But it seems that the number of hearings in the last 10 years has been cut in half even though the number of law judges has increased, even despite some of the current vacancies.

In addition to eliminating hearings, Chairman Beloten has suggested the invocation of Workers Compensation Law §150 (c) which would allow him to pick, from among board staff, people to act in the capacity of law judges or conciliators. But why do that if you are eliminating hearings?

There is apparently a great deal of controversy among the parties involved in this discussion concerned with the Boards intention to increase the authority given to conciliators to “make decisions” rather than to conciliate and allowing examiners to make decisions on the quality of medical evidence and levels of disability. It appears that the Board has decided that the interests of justice for injured workers are best served by a prompt resolution of the cases even if the decisions reached are made by unqualified people who are held to production quotas as if they’re punching out toasters and not dealing with real live people.

WAMO and the Dept. of Insurance

January 28, 2010: It seems that the January 28, 2010 meeting between staff from the Department of Insurance and the New York State Worker’s Compensation Board’s WAMO dealt not with §32 waiver agreements per se but with the money in the Second Injury Fund that could be used to settle these claims.

Apparently the plan is under consideration to have qualified financial institutions, be they insurance companies, banks, investment firms, or those financial wizards who pop-up whenever there is money to be made raise the funds to settle claims and then get repaid from the annual assessments to the Second Injury Funds. Formal details are not forthcoming at this time nor do I expect that there will be any unless publication in this website causes/prompts participating parties to shine a little light on this project.

If in fact this is what the discussion centered around, in view of the recent debacle at the federal level with the sale of assets and transfer of risks between financial institutions by the federal government, all behind closed doors, this brings concern that similar machinations and ultimately, the transfer rest of all the risk to the public could be the result of these “behind the door discussions.”

Shortage of Doctors Upstate for Injured Workers

January 26, 2010: Workers Compensation Board Chairman Robert Beloten announced changes in procedures medical reporting requirements due to the fact that there is a shortage of authorized providers in the Rochester area.

[ED. NOTE: the Board explained this shortage by stating “In the past two years a number of physicians have voluntarily surrendered their authorizations to treat workers’ compensation claimants.” Physicians do not voluntarily surrender their authorization unless it is the lesser of two evils, that second evil usually the threat of legal sanctions being taken at the request of the Board and /or the New York State Medical Licensing Board. Does this mean that the only physicians willing to practice in the Rochester area were those who could survive financially only by performing and/or billing in a manner which was not legal? The shortage of qualified physicians is the real issue with which the Board should be dealing.]

In Subject No. 046-398, due to the temporary shortage of authorized physicians in the counties of Monroe, Livingston, Steuben, Allegheny, Wyoming and Ontario, the Board has listed the specific forms that must be filed and the procedures to be followed in the list of prescribed medical report forms the CMS-1500 (or HCFA-1500) form with detailed narrative reports or office notes. Authorized physicians, podiatrists, chiropractors and psychologists in the Provider Shortage Area may submit a CMS-1500 with a detailed narrative report or office notes in lieu of one of the prescribed C-4 forms. If a CMS-1500 is submitted without the detailed narrative report or office notes, it is not a prescribed form. A narrative report or office notes are considered detailed when they contain the necessary information in sufficient detail so the insurance carrier can properly process the submission. More details are available by linking to the Board site here …

Best Attorneys for 2009

January 21, 2010: Today I formally announce the Insider’s top Appleatte Court attorneys for 2009:

John Clennan and David W. Faber

as well as a number of attorneys who have won Honorable Mention. Details can be found by clicking here.

Fenster’s Path to His Appointment

January 21, 2010: I have received a number of communications indicating that Fenster got his resume submitted for this position with the help of an old college buddy from the University of Michigan, Debra Feinberg, and their mutual friend, Stephen Levin. Levin, who ran successfully for City Council from Brooklyn this past November was former Chief of Staff to Assemblyman Vito Lopez, who happens to be the chairman of the Brooklyn Democratic Party. Feinberg, who was a legislative aide to Assemblyman Lopez, was the campaign manager for Levin.

Lopez’s need to place somebody in a job came up at the same time there was a vacancy at the Workers Comp Board for a “short-timer” as everybody understands that come the first month or two of Governor Andrew Cuomo’s administration, this job will be filled with someone with real experience.

Although I do not know Fester and assume that he is coming to the Board with good intentions, his statements as quoted in the New York Times to the effect that “My feeling was I was an attempt at getting fresh blood in here. The same sort of retread in the executive director’s position was not the way they wanted to go.”, exhibits either a great deal of ignorance of the qualifications of his two predecessors or a great deal of hubris.

To paraphrase an old quote, “you can lead a horse to water but can’t make him drink”, the Governor’s office may be able to force him onto the Board, but the Board doesn’t have to pay any attention to him, something easily accomplished since the Board in the last three years has been centralizing all the administrative responsibility and authority in Albany and Fester is going to work out of Brooklyn. Perhaps that is why, according to the New York Times, “Mr. Fenster, at least initially, will have narrower responsibilities than did previous executive directors. The board furnished a list of 10 duties assigned by the chairman, mainly membership on various committees and things like deciding appeals from denials of Freedom of Information requests and assisting with leases for hearing sites.”

Two NYSIF Board Appointments

January 21, 2010: Governor Paterson submitted the names of Robert H. Hurlbut and Eileen A. Frank as commissioners on the Board of the New York State Insurance Fund. They will be appearing before the Senate Standing Committee on Insurance Monday, January 25, 2010.

Hurlbut, the first appointed to the Board as a Commissioner 1989, is currently acting as its chairman. In 1994, Mr. Hurlbut formed and became president of the Hurlbut Trust, which offers financial and consulting services for healthcare facilities and rental properties. He also has served as a director of a number of educational organizations.

Frank, President of J.P. West Inc. since February 2000, is a 23 year veteran in the Insurance industry. Frank is a licensed Property Casualty broker, Life-Health agen, and an NASD Series 7 registered securities representative. She is also an active contributor to the Democratic Party including the recent campaigns of Barak Obama and Hillary Clinton.

WCB Signs New Lease for Harlem District Office

January 20, 2010: New York State renewed two large office leases for a total of 71,751 square feet in Harlem, taking advantage of a weak market to renegotiate and extend the terms. The state’s Workers’ Compensation Board renewed 45,205 square feet on the fourth and fifth floors of 215 West 125th Street and the state’s Department of Labor took 26,546 square feet on the fourth floor of the same building, Arthur Stern, CEO of building owner Cogswell Realty, said. The six-story, 170,841-square-foot building near Adam Clayton Powell Boulevard was built in 1971, according to data from PropertyShark.com. The landlord provided a rent reduction in exchange for re-signing the leases — initially set to expire in a year and a half — for another 10 years, a source close to the deal said.

WC Research Provides Insight into Curbing Health Care Costs

January 11, 2010: Analyzing physicians’ practice patterns may hold valuable clues about how to curb the nation’s rising health care costs, according to a study by researchers at the Johns Hopkins University School of Medicine.

According to a Johns Hopkins study published in the January edition of the Journal of Occupational and Environmental Medicine, the practice patterns of physicians participating in a workers’ compensation system had a profound impact on the ultimate cost of claims. After analyzing five years of claim data from the Louisiana Workers’ Compensation Corp. from 1998 to 2002, the researchers found that a small group of physicians, only 3.7 percent, accounted for more than 72 percent of the workers’ compensation costs. These were termed cost-intensive providers, or CIPs.

“Across the board, we’ve found that most physicians practice prudently,” says Edward J. Bernacki, M.D., M.P.H., director of the Johns Hopkins University School of Medicine’s Division of Occupational Medicine and principal investigator of the study. “But there are physicians who engage in cost-intensive practices. As we continue to debate the nation’s healt and if you are in the health care system, it makes sense to analyze how practice patterns drive costs before instituting sweeping reform.”

While some of differences between physician groups were related to injury severity, the analysis controlled for International Classification of Disease group, claim duration and other potential surrogates for severity. The analysis concluded that CIP status had a significant cost impact that is independent of severity.

Further details on this study can be found at the following link: http://www.hopkinsmedicine.org/Press_releases/2010/01_11a_10.html

Board Reduces Performance Standards For Carriers

January 12, 2010: The Workers Compensation Board’s reduced performance standards it expects from carriers now goes into effect, to an 85% rate for this year rather than the prior standard of 90%.

Specifically, the Board had originally established a 2010 performance standard of 90 percent for timely filing of Proof of Coverage (POC). Those workers’ compensation carriers meeting or exceeding this rate in any quarter of 2010 would have their POC penalties waived for that quarter.

Given that carriers have begun to implement process changes related to POC and in a further spirit of cooperation, the Board will reduce the carrier performance standard to 85 percent for 2010. Moreover, the Board will also delete two rewrite/reissue IAIABC transaction codes (00-50-01 and 00-50-80) from the performance standard as the Board recognizes these represent replacement filings which should be on file with the Board. In the second half of 2010, the Board will determine the standard for 2011, which will be announced via a subject number

CMS Liens: No Statute of Limitations

January 10, 2010: As reported by John Gelman in his website, CMS (Centers of Medicare and Medicaid Services) has expressed an opinion that there is no specific time limit in its ability to seek recovery.

Barbara Wright, speaking on behalf of CMS, indicated that the widely accepted six year statute of limitations does not apply to CMS litigation to recover payments from carriers or employers who should have been paying the medical expenses rather than CMS.

This website has previously commented on the difficulties that the Workers Compensation Board has in allowing Medicare language to be inserted into §32 waiver agreements in that no one at the Board really understands the entirety of Title 42-Public Health, Chapter IV-Centers for Medicare and Medicaid Services, Department Of Health And Human Services, Part 411-Exclusions from Medicare and Limitations on Medicare Payment. The Board recently sent out a Subject Number which indicated it would not allow any language in the waiver agreement which would protect the carriers from liability on potential Medicare claims. This statement by Barbara Wright further complicates the Board’s acceptance of language in a contract, a contract that is the Board’s responsibility to approve but yet does not understand much of the language inserted at the request of another jurisdiction.

Paterson Announced New Exec Dir for the Workers Comp Bd

January 8, 2010, 2009: Late today, Governor Paterson announced the appointment of Jeffrey R. Fenster as Executive Director of the Workers’ Compensation Board, replacing Joe Pennisi who resigned suddenly last fall.

Mr. Fenster served as a litigation associate with the New York law firm of Stroock & Stroock & Lavan, LLP. While at Stroock & Stroock & Lavan, LLP, Mr. Fenster represented institutional clients in complex commercial litigations, arbitrations, and federal and State government investigations. Prior to working at Stroock & Stroock & Lavan, LLP, Mr. Fenster worked at WR Capital Management LP, a hedge fund based in Stamford, CT. Mr. Fenster received his bachelors and Juris Doctorate from the University of Michigan.

As Executive Director of the Workers’ Compensation Board, Mr. Fenster’s salary will be $141,730. This appointment is not subject to Senate confirmation. Mr. Fenster will begin serving as Executive Director on January 11, 2009, working of the Brooklyn office.

Are Dist Mgrs Going the way of the Dist Admins?

January 7, 2010: according to the usually reliable rumor mill, wrong only once this past year, the Oligarchic Cabal at the New York State Workers Compensation Board is planning to do away with district managers.

Whether this is a cost-saving plan or just a further attempt to centralize power in the hands of the bureaucrats in Albany, the net effect will be that there will be no one with direct responsibility in the district offices. I cannot speak for all of the offices throughout the state but I’ve had the opportunity to work with two district managers and three district administrators in Brooklyn. Only the current district administrator, Joyce Perry, and the district manager, Tom Agostino, actually leave the sanctity of their offices and walk through the building reviewing the troops and letting everyone know that there is someone in charge. This compares quite favorably to some of their predecessors who were either never in the building or were locked in their offices, removing from the workforce the kind of managerial oversight necessary in any organization.

As an example of the potential boondoggle this will create is an incident that occurred the year before I left the board. At about five o’clock one afternoon, after the district manager and district administrator and senior law judge had left of the day, I and the person in the office next to me smelled a great deal of smoke, went to the lunchroom, and founded filled with acrid smoke. We phoned the fire department and then tried to reach someone in Albany. The next day, I was castigated for not having gone up the chain of command in Albany and that I should not call the fire department without authorization from Albany. I explained to them (1) the NY Fire Department insists we call them first and (2) since I and the other person were not supposed to be involved in the operational aspects of the Brooklyn office, we had no idea whom to call in Albany nor either of us wished to spend 10 minutes trolling through Rolodexes while a potential fire could have sealed off our access to the fire exits.

This oversight problem would belie the proposed advantages of centralized power in Albany and one major incident that got out of hand because there was no on-site supervision would certainly cost far more than the alleged savings of replacing district managers in the district offices with additional support staff in Albany.

The Success of TENS units questioned

December 31, 2009: ScienceDaily reports that a new guideline issued by the American Academy of Neurology finds that transcutaneous electric nerve stimulation (TENS), a widely used pain therapy involving a portable device, is not recommended to treat pain that has persisted for three months or chronic low-back pain because research shows it is not effective. longer. The guideline is published in the December 30, 2009, online issue of Neurology®, the medical journal of the American Academy of Neurology. The studies to date show that TENS does not help with chronic low-back pain but evidence showed that TENS can be effective in treating diabetic nerve pain.

NYS Sues CRM Civilly and Criminally

December 10, 2009: Andrew Cuomo, Attorney General the state of New York, has filed a lawsuit leg and fraud in seeking $405 , million in damages from CRM as well as a separate lawsuit next week charging the company with business fraud and security fraud, asserting that CRM engaged in deceptive and illegal practices to attract business, .He as reported by Steven Greenhouse in December 10, 2009 in the New York Times.

Andrew Cuomo, Attorney General the state of New York, has filed a lawsuit leg and fraud in seeking $405 , million in damages from CRM as well as a separate lawsuit next week charging the company with business fraud and security fraud, asserting that CRM engaged in deceptive and illegal practices to attract business, as reported by Steven Greenhouse in December 10, 2009 in the New York Times.

Both the New York State Workers’ Compensation Board and the attorney general’s office say that CRM deliberately underestimated the workers’ compensation liabilities of many companies to help drum up business, enabling CRM to charge artificially low premiums, ultimately leaving the companies with inadequate reserves to cover liabilities.

According to statement issued by CRM, “The Company is disappointed by the Attorney General’s decision to bring the lawsuit and dismayed that the Attorney General’s office chose to disclose the Notice before the indicated window for discussion had expired. The Company denies the Attorney General’s allegations and believes that its business and management practices in connection with the New York trusts were proper and that all material information was disclosed during its initial public offering. The Company believes that the Attorney General’s allegations are without merit, but is committed to resolving the Company’s legal issues in the best interests of its shareholders, employees, clients and other stakeholders.

“According to the Notice, the Attorney General intends to file civil claims against the Company, certain of its subsidiaries, and certain directors and officers to seek redress of allegedly unlawful practices, unless an acceptable settlement can be reached within five days. The Attorney General’s Notice follows over 19 months of investigation, during which time the Company has cooperated fully with the Attorney General’s office.”

Unfortunately, no mention is made of the enormous financial impact that the closing of CRM will have on the hundred plus firms were members of its many groups. The fact that the State of New York failed to audit CRM for over five years and still has not done similar audits on other trusts does not seem to weigh in the decision of the State of New York that the members must pay up five years worth of premiums shortfalls.

‘Illegal Immigrant’ or ‘Undocumented Immigrant’?

December 8, 2009: During Justice Sonia Sotomayor’s first appearance at the United States Supreme Court, Justice Sotomayer, in the words of New York Times writer Adam Liptak, “did introduce one new and politically charged term into the Supreme Court lexicon. Justice Sotomayor’s opinion in the case, Mohawk Industries v. Carpenter, No. 08-678, marked the first use of the term ‘undocumented immigrant,’ according to a legal database. The term ‘illegal immigrant’ has appeared in a dozen decisions.”

I guess in the future when they say “political correctness reigns supreme” going to have to capitalize ‘supreme.’

Carriers to ‘voluntarily’ give
money to the State(?)

December 2, 2009: A number of newspapers have been reporting on some of the changes to the budget being planned by Governor Paterson if the state legislature fails to present its own budget proposal. All the press releases had the same language:

Workers Compensation Surplus Recapture ($49 million) - Certain insurers have indicated their intention to remit excess funds under legislation enacted as part the 2009-10 budget.

As of last night I was unable to get any details from the State Legislature’s website (which apparently crashed from too many people seeking information). I was unable to get any details on who these insurers may be but I cannot imagine that any publicly owned insurance company would voluntarily give money to the State rather than distribute it as bonuses to its executive staff or, as a last resort, distribute it as additional dividends to its stockholders. Hopefully I will have more details in the near future.

Ohio Senator wants illegal workers
banned from workers comp

November 30, 2009: Ohio State Senator Bill Seitz of Cincinnati wants to prohibit the nation’s largest state run furn for workers insurance programs from providing benefits to illegal immigrants. The Senator said he was shocked to learn during a recent committee meeting that the Ohio Bureau of Workers’ Compensation doesn’t require injured workers to document their status before providing benefits. Ohio law enables “aliens and minors” to receive workers compensation benefits.

As in the New York State, Ohio does not draw a distinction between “legal” and “illegal” aliens.

While this is not a new story to those of us in workers compensation, it did generate an enormous amount of interest in a discussion group of which I am member at LinkedIn: WORKERS’ COMPENSATION FORUM.

The concensus of all the comments seems to be:

1. Undocumented workers should get basic workers comp coverage as this would otherwise give their employers an unfair advantage as well as being unfair from a humanitarian perspective.
2. The federal government has failed miserably to keep all illegal visitors, not just undocumented workers, out of this country.

This topic will be the subject of next week’s poll.

Higher Unemployment = Higher Comp Claims

November 22, 2009: In their recent press release, Lewis & Lewis P.C., the law firm that handles more workers’ compensation and personal injury cases than any other in Western New York, has found that despite the recession, people here in the last four months filed increased numbers of claims through the firm with the state Workers Compensation Board. Even though the Western New York unemployment rate is almost 9 percent, the Lewis & Lewis Jamestown office processed claims at record levels in July, August, September and October.

In a number of articles I have read over the years, the general consensus is that workers comp claims decrease when business is bad as workers are afraid of losing their jobs while claims increase when business is good because employers find it difficult to replace qualified employees. But, with unemployment rates in parts of the state approaching 10%,the fact that workers comp claims are increasing makes sense: not only are more people than ever before out of work, there are no jobs and unemployment benefits for most people will soon run out.

Annsville man pleads not guilty
to shooting investigator

December 2, 2009: A number of upstate newspapers reported yesterday that an Annsville man, accused of shooting a private investigator with a shotgun after mistaking him for a turkey earlier this year, pleaded not guilty to assault charges in Oneida County Court Wednesday morning.

William Wehnke had been collecting workers compensation for some time and private investigator Matthew Brady was sent to check up on him. Unfortunately Brady dressed himself in comouflage at the same time Wehnke was out hunting for wild turkey, mistook Brady for one, and shot him.

Wehnke was arraigned on a three-count grand jury indictment including charges of felony second-degree assault, misdemeanor fourth-degree criminal possession of a weapon, and unlawful manner of taking, a violation that alleges Wehnke was using an inappropriate type of ammunition for turkey hunting.

Oh, to be a fly on the wall on what may well be a WCL §114-a hearing before a law judge.

More WCB Staff Changes

November 19, 2009: Just as a chef occasionally changes on the ingredients to see if he can make food taste better, the Board has apparently made some executive staff changes.

Madeline Pantzer, the head of the Administrative Review Division’s office and the former Senior Law Judge in Albany, is now in charge of all the law judges, a position previously held by Elizabeth Lott who has moved over to operations. And Dave Wertheim, formally Elizabeth Lott’s assistant, has now become of the head of the Administrative Review Division (ARD).

Madeline Panzer made some very key changes in procedures at the ARD. Dave Wertheim was one of the most highly respected writers when he was in the office of appeals (now the ARD) and when he was with the Office of the General Counsel. One can expect that under his leadership, while there will always be occasional reversals, there will be far less and perhaps even no more “rescind and send back for further development.”

WCB: Some Medicare wording
in §32’s not acceptable

November 19, 2009: Under Subject No. 046-372 dated November 13, 2009, the Workers Comp Board has stated that it will not approve agreements which contain indemnification or hold harmless provisions in Section 32 agreements to protect a carrier or employer from liability for Medicare payments related to the established workers’ compensation claim.

The memo continues:

Workers’ Compensation Law (WCL) §32(b)(1) directs the Board to disapprove unfair agreements. As such, it is the Board’s position that a Section 32 agreement that contains hold harmless language that shifts liability to a claimant for Medicare payments for services provided before execution of the Section 32 agreement is unfair. Pursuant to WCL §23, insurers may seek administrative review and full Board review if a Section 32 agreement containing hold harmless language is disapproved by a workers’ compensation law judge.

[ED. NOTE: I am at a loss to understand why this memo is now being issued. It has been the informal policy of the commissioners for years now to reject any agreements that had hold harmless language this point was made quite clear to all the attorneys who appeared at the hearings. In addition to that, in my last few years of the Board as well is in my book, Behind the Closed Doors, I recommended that neither Medicare offsets nor any other Medicare language be included in the §32 agreements.

These agreements are drafted under the laws of the State of New York and, in my opinion, should deal strictly with the laws of the State of New York. The inclusion of language relating to Medicare not only adds anywhere from one paragraph to as many as three pages to a §32 agreement but as often as not includes incorrect citations or provisions from the Title 42, Chapter IV, Part 411 of the Medicare law. In addition because there are a variety of sections which may or may not apply to the settlement, when I was at the Board and, my sense is it still continues, there are few in the decision-making capacity who understand which sections of part 411 applied to which cases.

So rather than disapproving agreements which contains hold harmless language, the Board should reject any agreements which contain any Medicare language.]

In Memoriam: Joseph Tauriello

November 18, 2009: Former State Sen. Joseph A. Tauriello, a major figure in local and state Democratic politics for more than 40 years, died November 17 at Elderwood Senior Care in Cheektowaga after a long illness. He was 75.

A West Side native and former Buffalo firefighter, Tauriello served on the old Erie County Board of Supervisors, advanced to become a leading Democratic member of the State Senate, and capped his career with a gubernatorial appointment to the state Workers Compensation Board.

“Lazy” Judge on trial before Court of Appeals

November 18, 2009: In an interesting case which should have ramifications at the Workers Comp Board, the Court Of Appeals heard arguments as to whether or not Kingston City Court Judge James Kilpatrick should suffer penalties or be disciplined for delays in issuing decisions.

According to the article written by Tim O’Brien and the Albany Times Union, “the state Office of Judicial Conduct admonished of Patrick over his failure to stay within required legal deadlines for handling cases while he was a part-time judge in Kingston. The position later became full time. Gilpatric had previously received a letter cautioning him that he needed to abide by the deadlines.”

Certainly, the Board does not need a decision from the Court Of Appeals to force the one or two commissioners who don’t do their work to meet the “obligation and duty owed to the litigants”, a point made in the above case by Court of Appeals Judge Victoria Graffeo.

Over the past few years they been occasions when such admonitions were directed by Chairman Weiss to one particular Commissioner and Vice Chairman Sweet to two other commissioners (one long since gone) whose work queues would normally collect up to 200 cases, but sometimes as many as 300. Since there are between 15 and 20 cases added each day to the work queue, you can calculate how long claimants are having their cases delayed due to the misconduct of certain commissioners. And signing cases, let’s forget about reading them, is basically the only job function left the commissioners these days. So if a commissioner is going to sign a misspelled, legally unsustainable decision, why take three weeks to do so? Why can’t they rubber stamp it within a day or two of getting it?

In my book, Behind the Closed Doors, I make reference to WCL §147 which allows removal of a Commissioner with cause. It seems that whenever several commissioners are replaced at the Board and one of them was a “slow” signer, one of the new commissioners fills that slot.

Now that Chairman Weiss is no longer the Board, the question is, “who has the ‘juice’ to discipline commissioners who do not work.”

In Memoriam: Louis R. Salvo

November 11, 2009: Louis R.. Salvo, 73, of Tottenville, a former NYS Workers Compensation Administrative Law Judge, died November 9, 2009 in the Monmouth Medical Center, Long Branch, N. J. A senior counsel with Weiss, Wexler and Warnow in Manhattan, Mr. Salvo had previously served as a Workers Compensation law judge from 1973 to 1981. He has also served as trial counsel for major insurance companies both in the field of workers compensation and liability defense as well as having lectured in all aspects of Workers Compensation Law. Mr. Salvo and his wife, the former Kathy Adams, celebrated their 50th wedding anniversary this past July, with a party thrown by their four children.

CA Insurance Commissioner
Rejects WC Rate Increase

November 10, 2009: As reported by staff reporter Chris Rizo from Legal Newsline, California’s State Insurance Commissioner Steve Poizner, citing his state’s weak economy, on Monday rejected an industry request that he back a proposed a 22.8 percent increase in benchmark workers’ compensation premiums.

Poizner, who is seeking the 2010 Republican gubernatorial nomination, rejected the request presented by the Workers Compensation Insurance Bureau and justified his decision by stating:

“One in eight Californians is unemployed. Countless others are also suffering and have either given up looking because they cannot find work or have taken part time jobs while they seek full time work. Any increase in costs for employers will only make our already dire economic situation worse.”

California’s unemployment topped 12% in September. Poizner said the WCIRB request lacked evidence that warranted an increase.

Could this portend the decision in New York for future requests for approval of rate increases from the NYCIRB? Afterall, Poizner is not the only one who has announced that he is running for governor.

Public WC Insurance Funds
Better Run Than Private Ones

November 9, 2009: In this issue of the Business Examiner, Breanne Coats & Hilary Reeves report on a number of issues. One is a study released last month by a Connecticut-based research and consulting firm has concluded that states with public or public-private workers’ compensation plans actually fare better financially in some aspects than states whose workforce coverage is left to the more competitive, expectation-rich free market.

“Workers’ Compensation State Funds now control a quarter of the insured workers’ compensation market, despite the fact that they only write in 25 states,” said Mark Jablonowski, analyst at Conning Research & Consulting. “In comparison to the industry as a whole, state funds’ loss ratios are higher, but they compensate with lower expenses and increased investment income. Overall, operating results are on par with the rest of the workers’ compensation industry.”

The study looked at the combined experience of workers’ compensation programs in 25 states: Arizona, California, Colorado, Hawaii, Idaho, Kentucky, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Washington, West Virginia and Wyoming. Four of these states – including Washington – have state-operated monopoly funds that are most employers’ only option for buying coverage. The remaining 21 states have organizations that compete with private insurers.

Robert Malooly, assistant director for insurance services at the state Department of Labor and Industries, said Washington’s system is virtually free of the constraints of a private company: “Unlike a private company, our state fund system doesn’t have to make a profit, run marketing campaigns to get new customers, pay taxes, pay brokerage fees and commissions, and so on,” he said. “The program provides some of the best benefits in the country to injured workers and their families at rates that are lower than over half the other states for state fund employers.”

---

►CORRECTION◄

November 5, 2009: Steve Licht informed me that he did not have any meetings or dinners with the NYSWCB or Joe Pennisi. To the extent my information was not accurate I apologize.

Lobbyists Lose on ATF in Federal Court

November 4, 2009: This week I have listed on the DECISIONS page a decision issued eight months ago at the New York Southern District Court in The Matter of Liberty Mutual Insurance Company et al v. Hurlbut et al in which the District Court dismissed the claim brought by certain workers= compensation insurers against the state workers compensation board challenging the constitutionality of ATF amendments to the New York State Workers Compensation Law.

The amendments modified insurers’ ability to settle claims by empowering an aggregate trust fund (ATF) to settle claims following the required deposit by the insurer of the present value of the claim. The ATF under the amendments was not required to obtain an insurer’s approval before entering into a settlement, and was not required to refund to insurers deposit amounts in excess of settlements.

The District Court dismissed defendants motion for lack of subject matter jurisdiction also noting that in this case the plaintiffs had an adequate opportunity for judicial review of their claims of the state level.

Thus it seems that while lobbyists may have input on the Board, justice prevails and, at least in this case, they go home with their mission defeated by the Courts.

Typo not worth $1.6 Billion, this time!

November 5, 2009: What most people would consider to be a minor typing mistake could have cost Verizon an estimated $1.6 billion.

After Bell Atlantic became Verizon, its ERISA plan was redrafted during which time the phrase “transition factor multiplier” was moved in a sentence without the first instance of that phrase being deleted from that same sentence. To have left it in would have meant that benefits were subject to a double multiplication factor. The judge in the case ruled “The phrase calling Verizon a second multiplication was a drafting error. No evidence exists to suggest that any plan participant relied upon the error. In fact, the course of dealing between defendants and the plan participants shows that benefits were consistently calculated by multiplying the transition factor once. To enforce the erroneous plan provision now would result in an enormous windfall to the class participants.”

And, while some could argue that such an error could be expected in a document will as Verizon’s ERISA plan, it certainly can not be argued in typing errors in your are acceptable in the Worker’s Compensation Board’s decisions. In one case, I saw the average weekly wage for a bus driver determined to be $46,000 a week.

The devil is in the details but fortunately in this case common sense ruled although the plaintiff is considering an appeal.

[ED.NOTE: Yes, there are typos in my postings but these postings tend to be very time sensitive. I do not have the luxury of editing and rewriting for an extra day or so nor are there many people up and sufficiently alert at the time of night I finish these postings to act as my editor.]

NYSIF Introduces State-of-Art
Medical Bill Inquiry System

October 21, 2009: The New York State Insurance Fundannounced a state-of-the-art online medical bill inquiry service with the expansion of its electronic Explanation of Benefits (EOB) for doctors treating workers’ compensation injuries covered by NYSIF. The new EOB service gives providers a more detailed explanation of medical bill payments made by NYSIF, alerts them to bills that have not been received, or reasons why a bill hasn’t been paid.

NYSIF introduced its online EOB for workers’ compensation medical providers in 2007, an Oracle based system built in-house by NYSIF system developers. The Fund followed soon thereafter with giving providers the option to submit medical bills electronically to NYSIF. According to NYSIF medical claims team, some of the more common reasons for non-payment of workers’ compensation medical bills submitted to NYSIF include pending claim status, claim disallowance, claim settlement, invalid jurisdiction, lack of proper medical records, and duplicate billing of paid procedures. All of this information is now accessible to medical providers and their staffs 24/7/365 days a year, spelled out clearly in one location for all medical bills submitted on every claim.

Medical bill inquiries made online at nysif.com provide users with NYSIF’s claim number, the claimant’s name, date of injury, complete contact information for the NYSIF case manager and office assigned to the case, the NYSIF assigned bill number, bill date, date received and bill status for every claim on record. As an insurance carrier, NYSIF assigns its own claim number to workers’ compensation claims. The New York Workers’ Compensation Board assigns a different number to the claim. NYSIF lists both numbers in the summary to avoid potential confusion for administrative personnel not familiar with the state workers’ compensation system. The summary includes billing codes, total charges and amounts paid, along with a reason why only partial payment may have been made for certain billed procedures.

No New Commissioner under Consideration

October 29, 2009: Contrary to my earlier report that Cumminosa Balbutio is being considered as a new Commissioner, I’ve been informed by reliable sources that this was not the name of a commissioner but the name of a secret project under which specific guidelines were given the Governor’s office with qualifications sought by the Oligarchic Cabal and that the name Cumminosa Balbutio was a Latin pseudonym for the qualifications of the person(s) which they are seeking.

NYS to Confiscate §25a fund?

See November 5, 2009 correction

October 22, 2009: Rumor has it that recent meetings between Joe Pennisi, former Executive Director of the Worker’s Compensation Board and now Secretary of the New York State Finance Committee, and Stephen Licht of the Special Funds Conservation Committee Had Informal Discussions regarding the subject of moving “surplus” funds from the §25-a Fund to the State’s general funds.  [5151]

Oklahoma considers confiscating
surplus workers comp funds

October 21, 2009: In a related story , Oklahoma’s legislators should find out whether the state or policyholders will get the money if the state’s workers’ compensation carrier is sold to a private insurance company, members of a task force looking at privatizing CompSource Oklahoma said Wednesday.

The co-chairman of the task force said a bill will be filed in the upcoming session stating that the financial assets of CompSource belong to the state. Its intent will be to draw a lawsuit that would allow the courts to settle the matter. However, Oklahoma’s state Supreme Court already ruled in 1975 that lawmakers could not use cash reserves from CompSource and appropriate that for state operations, leaving some task force members to believe money obtained through a sale of the agency would go to policyholders.

But it seems that in Oklahoma, when it comes to balancing the budget, state legislators will not take “NO” for an answer, even from their own Courts.

As previously reported in the NEWSWIRE, in the past, New York State “borrowed” from surplus workers compensation funds paid for by the carriers and employers, not for the benefit of the taxpayers or Legislators, but for the benefit of injured workers. And that money has never been repaid.  [5150]

New Commissioner being considered

October 22, 2009: Apparently as part of PROJECT 2015, the Oligarchic Cabal at the Board has been in contact with the Appointment Office at the Governors office to explain to them the qualifications they seek in new commissioners. As has been reported in this website and many other places, the Board is interested in expediting the hearing process and getting decisions signed as quickly as possible, with as little interference as possible by the Commissioners.

One of the names I’ve heard mentioned is Cumminosa Balbutio, whose background is in education. Balbutio has been involved in literature, primarily the classical languages such as Latin, from which his name is derived. I have been unable to get any more details on this person but understand that as the head of a department dealing with what many consider to be “dead languages”, he has some of the qualifications sought by the Oligarchic Cabal. I also understand in order save time from the very busy Administrative Review Division, the training of new commissioners will be conducted by one of two commissioners currently at the Board who the demise the new goals of the Board once some time can be found in the very busy schedules.  [5149]

WC Law Suits v Fed Ex on Drivers

October 21, 2009: New York State Attorney General Andrew Cuomo is being joined by Anne Milgram and Steve Bullock, the attorneys general of New Jersey and Montana, in any suit against FedEx Corp, accusing the second-largest U.S. package delivery company of violating labor laws by illegally classifying drivers as independent contractors rather than employees to save money.

According to a letter sent to FedEx and released by Cuomo, misclassification causes the drivers to be deprived of the workers compensation coverage and the protection of state antidiscrimination and labor laws. “By blatantly misclassifying its drivers, FedEx has denied these individuals the employment rights they guaranteed by law.” To support his position, Cuomo noted that FedEx subjects the drivers to strict work rules, down to the colors of their socks, and to thousands of dollars of expenses to buy or lease trucks and use company uniforms and scanners.

This issue of classification has previously been addressed by the Workers Compensation Board in cases involving drivers for UPS as well as for drivers for potato chip and soda companies who supply vending machines on routes which they have purchased. FedEx has been given until October 27 to show why a lawsuit should not be filed.  [5148]

Nebraska Waives Settlement Hearings

October 20, 2009: Effective May 27, 2009, the Nebraska Workers’ Compensation Act was amended to eliminate court review of certain lump-sum settlements. Legislative Bill 630 provides that in cases where lump-sum settlements are not required to be submitted for approval by the compensation court, a release shall be filed. LB 630 further provides that the release shall be made on a form approved by the compensation court.

A release form has been approved by the Workers’ Compensation Court Administrator and is accessible at the link below. The approved form was written in accordance with the language found in LB 630. However, additional provisions or documentation pertaining to the release of liability may be added or attached when the release is filed.

A review of the legislation indicates that there are a very limited number of cases which qualify with this new procedure and one of the qualifications is that the claimant must submit what the legislation references as “Addendum 3, Personal and Financial Account Information”.

For detailed information on this legislation, click here …  [5147]

WCB Exec. Dir. Pennisi Resigns

October 15, 2009: This posting adds additional details to last Friday’s e-mail Bulletin.

On October 9, 2009, Joseph Pennisi, executive director of the Workers Compensation Board, announced that he was reigning his position to become Senate Finance Secretary, as confirmed in a later press release by Senator Carl Kruger, Finance Committee chairman.

Prior to his service with the Workers’ Compensation Board, Mr. Pennisi worked in local government as a Deputy County Executive for Albany County, and Commissioner for the Department of Housing and Community Development for the City of Albany. He also previously served as an Assistant Secretary/Staff Director with the former Senate Minority’s Finance staff, and as a Senior Legislative Budget Analyst with the Assembly’s Ways and Means Committee.

As Senate Finance Secretary, Mr. Pennisi will earn an annual salary of $180,000. He will officially start with the Senate on October 29th.  [5146]

NYS Issues Bonds for 2nd Injury Fund

October 15, 2009: dBusinessNews.com reports that the $804 million worth of bonds issued by the Dormitory Authority of the State of New York (DASNY), set for sale the week of November 9, 2009, have been given an ‘AA’ rating by Fitch Rating, one of the three major bond rating companies.

These bonds had been issued to settle claims related to the Special Disability Fund and the goal is to reduce the volatility and, ultimately, the cost of workers compensation insurance. The article then goes on to note that “New York workers compensation costs are the highest in the nation.”

The report continues, “The bonds are secured by assessments on workers’ compensation insurers and self-insured employers. There is a pledge by the state not to take any action that would impair the ability of the Workers Compensation Board to levy and collect assessments. Bondholders have a priority security pledge on revenues, the funds pass through a segregated account maintained by the New York State Dept of Taxation and Finance, and are not subject to bankruptcy risk of DASNY. Initial and expected coverage is very strong considering the historically high collection rate, but could theoretically be diluted down to 1.1 times debt service if the full authorization is issued by 2010 or if statutes are changed to increase the authorized level of debt.”  [5145]

NYCIRB Analysis: COLA Increase
in WCB Rates = Higher Rates

October 15, 2009: The New York Compensation Insurance Rating Board has done a cost analysis of proposed Senate bill S. 1970-A which requires that workers compensation benefits be adjusted periodically for a cost of living allowance.

The bill has various provisions depending on the date of the accident and the level of permanent disability.

The NYCIRB estimates that if this bill is enacted in its current form it may well result in an overall workers compensation system cost of somewhere between 1.9% and 5.0%. As with great deal of the legislation proposed by both the State Assembly and State Senate, while there is some degree of specificity in the language of the proposed bill, they also tend to leave out very important information. For example, “the cost-of-living adjustment” is based on the increase in the Consumer Price Index has propagated by the US Department of Labor, but the build fails to specify which of the many Consumer Price Indexes are supposed to be used for this under the terms of this legislation.

This table represents the basic additional costs expected to be incurred by carriers if the legislation id passed. A full copy of the report is available by ► clicking here.   [5144]

WCB’s Executive Staff Changes

October 8, 2009: According to the grapevine, Elizabeth Lott has been moved from adjudicative management where she held the formal title “Chief, Adjudication Division”, and placed in charge of operations.

Former Senior Law Judge John Barry, who most recently had been in a Key administrative position and had the ear of former Chairman Zach Weiss, has been moved to a position, although I have been unable to find anyone who can tell me his new title or, for that matter, delineate his new authority and responsibility.  [5143]

PROJECT 2015 Still Lives

October 8, 2009: Although Chairman Robert Beloten has expressed serious reservations about the previously top-secret PROJECT 2015, the project appears to be moving ahead, although the recent changes in key staff at the Park Street offices of the Board may result in substantive changes to the program and/or its timing.

There is a new Board memo which reads “We need to increase referrals to conciliation for two reasons. First, this is a new environment which we will be working in once the reclassification takes place, and, two, in order to relieve some of the pressure from the current hearing calendars.” The memo continues, “Under the new plan everything but the following cases will be considered appropriate for conciliation:”

• Illegal employment of a minor
• fraud under WCL §114 –a
• penalty objections or issues
• waiver agreements under WCL §32
• issues in a death case
• C-7 or controverted cases where the claim has not been established or resolved
  
• cases referred by the Board Panel to the hearing process (Rule 300.13 (F) ) or for the testimony of an impartial specialist (Rule 300 .11)
• request to suspend or reduce continuing payments under Rule 300.23 (B) (2)
• requests for a non-schedule adjustment under WCL §15 (5–b) (Rule 300.24)
• cases/issues expedited under WCL §25 (3-d) (Rule 300.34) or WCL §142 (7)
• cases heard at a formal hearing where in the WCLJ has continued the case for another formal hearing
• UEF cases
• authorization for special medical services for termination of treatment under C-8 Part A where there is a current conflicting medical report

But ommitted from this list are a number of other issues which, based on my 12 year experience as a Commissioner, seem to require, more often than not, a formal hearing to resolve:

• §14.6
• §15.8(d)
• §25-a
• apportionment
• SLU
• WISK
• independent contractor
• special/general employer
• Jurisdiction
• Voluntary withdrawal from the labor market
• §120 discrimination cases
• legal fee disputes

And I am sure that you practitioners can name more.

What is interesting is that the people involved in this project understand that there are certain cases which should never go to conciliation primarily because of the statutory restrictions that require hearings, e.g. controverted cases and cases involving illegal employment of a minor.

However, I am reminded of the case of Hart v Pageprint/Dekalb in which the Appellate Court reminded the Board it could not arbitrarily disregard the laws, rules and regulations under which the Board is supposed to operate; this case came about because the Board , in order to expedite the hearing process, decided to do §32’s administratively and ignore both the legislative and the Board’s own rules that the settlements be done in a formal hearing.

And as one can see from New York State Senator George Onorato’s statement of October 8, 2009 regarding electronic transcription, the Board is seeking to redefine the fine print and the legislative intento f the workers compensation laws in order to eliminate hearings altogether, which was the goal of PROJECT 2015.  [5142]

Electronic Transcriptions: DOA

October 8, 2009: In my April 10, 2009 NEWSWIRE, I quoted a firm who claimed that they had already embarked on a plan with the Workers Compensation Board to replace all the live reporters with digital audio recording equipment.

Late yesterday Thursday, October 8, the Committee Chairman, Senator George Onorato, issued a statement which for all practical purposes has killed this project.

The headline of his press release is:

Workers’ Compensation Board May Not Electronically Record Hearings Unless Legislature Changes Current Law Requiring the Use of Stenographers

The only persons who spoke in favor of this new project were Board Chairman Robert Beloten, who actually had very little information about this project, and the marketing directors of the three firms who are bidding on the project.

The general impression on the future prospects for this project were best summarized by Senator Diane Savino who questioned, “Since the attorneys for the claimants, the attorneys for the carriers, the law judges and other staff are against the system, and the only person favoring it is Chairman Beloten who had no idea what was the cost, why is the Board pursuing this project?”

Probably the best answer to that question was from one speaker: “This project is only of interest to the administrators and of no interest to those involved in adjudication.” And by “administrators”, I assume that speaker was referring to those I call the Oligarchic Cabal.

For those of you will have an interest in further details on the hearings and the testimony, I have the following two links:

• October 6, 2009 Labor Comm. Testimony
• Sen. Onorato’s 10/08/2009 Press Release  [5141]

New Medicare Offset Guide

September 26, 2009: CMS (centers for Medicare and And Medical Services) has recently published a 38-page booklet giving up-to-day information on how to fill out the Medicare Set-Aside §32 agreements. For years I and a number of the engaged commissioners tried to figure out how the Medicare set-aside was being calculated, but nobody seemed to be able to give us that information.. After approving one section 32 settlement with the rows of $55,000 fee of $5000 in the Medicare set-aside of $49,600.. I asked for and was given a copy of the Medicare set-aside to determine how it was the claimant was left with $400. What I saw was that Medicare had calculated that somebody who had a permanent partial disability for carpal tunnel syndrome on one wrist was calculated as having a potential medical exposure of $50,000.

That made no sense to me until I took a look at page 15 of this booklet and found what they call “Life Care Plan - Future Medical Care Medicare” covered items and services and prescription drugs. This document was prepared for a hypothetical claimant, and it was estimated based on information supplied by various third parties that at the age of 67, she would have a life expectancy of 17 more years. , it was on the basis of the 17 year life expectancy that they calculated her future medical expenses and prescription drugs to treat medical conditions with which she was diagnosed. Out of As curiosity, I looked up these drugs on the Internet and found that at the corner drugstore, some of these items could be bought for 1/6 of the price that had been used in these calculations.  [5140]

Injured Workers Alliance Scholarship Fund

September 29, 2009: The Triangle Shirtwaist Factory Fire Memorial (TSFFM) has named twenty-two Triangle Scholars for the Academic Year 2009-2010. Each grant is in the amount of $2,000 bringing TSFFM’s total awards to $218,000 since inception of the program in 2002. Scholarship funds are raised through the organization’s annual memorial journal and dinner which is planned for March 25, 2010 in New York City at the Fire Museum on Spring Street in lower Manhattan. TSFFM was founded by attorneys from the NYS Injured Workers Bar Association (IWBA) which counts members throughout NYS.

John Sciortino, a Rochester attorney and Chair of the Scholarship Committee, stated that 13 of this year’s class of Triangle scholars were previous recipients and 8 are in the fourth year of study. “We are proud of the students and believe that those completing their studies represent the aspirations of their families who are dependent upon workers’ compensation to survive in this dreadful economy,” Sciortino said. “Their families may be receiving compensation benefits as little as $200-300 per week,” he continued referring the benefit limits in effect in previous years, “so these awards are significant and we wish we could do more for them.”
This year’s Triangle scholars pursue studies in institutions of higher education across the state from Buffalo, to Rochester, to Albany, to Pleasantville, to Potsdam, to St. John’s on Staten Island. They are in attendance at sixteen private colleges and six public institutions including community colleges in fields of study including teaching, forestry, pharmacy, liberal arts, and science. “Sixty-three individuals have received scholarships and some of the students,” Sciortino noted, “have been in the program for all four undergraduate years.”  [5139]

How Much Money
Do Insurance Companies Make?

September 30, 2009: Uwe E. Reinhardt , a professor at the economics at Princeton University, writes an interesting article about how much money insurance companies make, using as an example the recent income statement of WellPoint found in the annual report called a 10-K , which all public companies must file with the SEC.

Among the various topics that he discusses are Revenues, Revenues from the “Float” the Health Benefit Ratio, Which in the Past Was Called Medical Loss Ratio, Marketing and Administrative Cost,s and The Profit Margin. This analysis goes to show that in some years net income is derived not from the premiums collected but from the interest and other investment income derived from those funds which have been collected on premiums but not yet spent on the benefits for which those premiums were collected. And this in part explains why, in those years in which the stock market goes down, the premium costs for insurance go up, not because the revenues from premiums are down but because the investment income is down.

But it is not just the explanations and definitions offered in this article that are interesting, but some of the comparative analyses that he does with these numbers, as well as comparisons to other large insurance companies. This article explains the relationship between benefits paid out in premiums collected and why the more demands are made from more benefits the higher the premiums must be, be it for workers compensation insurance life insurance or general health insurance.  [5138]

Win Workers Comp and then Win under ADA

September 24, 2009: In a case decided by the U.S. District Court, Northern District of New York in the case of Fowler v. Kohl’s Department Stores, Inc., No. 1:07-CV-1197 (GLS/RFT) (N.D.N.Y. 07/16/09), the Court decided that having a case at workers’ compensation does not preclude also bringing a case under the Americans with Disabilities Act (ADA).

As reported in Business Management Daily, Madeline Fowler worked for Kohl’s Department Stores as a customer service supervisor. She was expected to help run registers as needed and to work the sales floor.

Fowler injured her back at work, and her doctor placed her under medical restrictions. Eventually, he concluded that she had a degenerative spinal condition and should never stoop, bend, twist, squat, kneel, pull or use stairs. She asked for accommodations, but Kohl’s concluded none was possible and discharged her. Fowler sued under the ADA and the New York Human Rights Law, claiming disability discrimination.

Kohl’s argued that, because she was also receiving workers’ compensation benefits for the injury, she couldn’t also sue for accommodations. It said the workers’ comp law trumped other claims and was the exclusive remedy. The court disagreed. It said that as long as Fowler wasn’t telling the workers’ comp system she was completely unable to work, even with accommodation, she could collect workers’ comp and sue for disability discrimination.   [5137]

Exotic dancers are employees,
not independent contractors

September 24, 2009: The Montana Supreme Court, the State’s highest court, fund that exotic dancers were employees of the establishment where they worked and were not independent contractors.

Even though the dancers had to sign agreements which indicated that they were independent contractors and laid out all the terms of their employment, the Court looked at their actual working conditions. Most important, they looked at other aspects of the agreements the dancers had to sign to work at the club, found that there were several violations of Montana’s labor and tax laws, and thus determined that due to the invalidity of those agreements, the dancers were employees.

The case is the Matter of the Wage Claims of Renne L. Smith, et al. v. TYAD, Inc., No. 07-0305 (Mont. 05/20/09).

I do remember a case on this same issue at the WCB many years ago. And although I was not on the panel with Commissioner McManus, I do remember her talking to me about this at great length before she, and her panel, made a final decision.  [5136]

Va. drops Facebook fine
in workers comp case

September 21, 2009: The on-line site Business Insurance reports that an official of the Virginia Workers’ Compensation Commission has vacated a $200-per-day fine on Facebook Inc. for failing to reveal information from a subscriber’s account. Virginia imposed the fine Aug. 28 after Facebook did not respond to a workers comp defense attorney’s subpoena seeking information about an employee for Colgan Air Inc. Facebook responded later and argued that federal law prohibited it from responding to the subpoena. A deputy commissioner agreed and vacated the $200-per-day fine, the state agency said. -The case reportedly involved the airline’s attempt to obtain vacation photos of an employee to counter a workers comp claim.  [5135]

Daycare Worker: Get Flu shot or you’re Fired

September 24, 2009: Dozens of media outlets, including the Albany TimesUnion, issued a story about a daycare worker employed by Northeast Health in Albany New York who was told she would be fired if she did not take a flu shot. And other stories are being circulated that taking the H1N1 flue shot will be a condition of employment.

But the story is not this work but the issue of the flu, the shots, and their relationship to workers compensation. I noted last week, in story below, about the potential pandemic H1N1, there is a lot of discussion by those in Human Resources and various carrier claims departments what to do when claims start to come in from those who get the flu.

But I do not think that there is a problem with those getting sick from taking the flu shot if it is a requirement of employment.

The issue of whether or not someone can be fired for refusing the shot is another story and, fortunately for most of us, does not involve workers’ compensation.  [5134]

H1N1 Pandemic: Compensable?

September 18, 2009: If an employee contracts H1N1 in the workplace - how will the workers compensation system respond?

This is a question that has been raised by a group of professionals in the WC field.

The majority of those answering feel that, in ordinary course of business activity, the employee would not be covered.

Part of the problem, as I have seen in NYS in cases dealing with hepatitis and HIV, for example, is to prove that the exposure came strictly from within the work place. But with the potential widespread prevalence of H1N1 that is being forecast, it will be impossible to ascertain for 99.99% of employees where was the contact point. After all, who lives in a sterile home and commutes in a sterile environment - certainly not anyone who takes the subway or bus to work.

But there seems to be a consensus that certain classes of employees may be covered. But unlike HIV or hepatitis which are relatively rare are in the population at large, it may be difficult even for a nurse in an emergency ward dealing with patients with severe cases of H1N1 to prove that she did not have exposure on the way to work.

Also what happens if an employee comes to work who is obviously sick, thus substantially increasing the risk to others in the office? And what responsibility does the employer have to keep sick employees out of the office? And how can the employer know at what point the employee is sufficiently ill that they risk infecting others in the office?

Well, if the pandemic is as bad the Washington forecast, we will soon find out. [5133]

Weight Loss surgery covered by WC

September 18, 2009: This month, the State of Indiana has joined with the State of Oregon (July 2009) by upholding the ruling of the state’s workers’ compensation board that an employee at a pizza restaurant is eligible for treatment for obesity under a workers’ compensation policy.

Courts in both states determined that the weight gain was the result of the injuries that the claimant had received, injuries that had already been accepted as appropriate workers compensation claims.

As a commissioners in NYS, I remember one case in which the claimant sought to have weight loss program paid for by the carrier as the surgeon would not operate on her until such time as she lost weight. The fact that she was at the weight before the injury was not an issue as the weight made no difference until such time as she had her accident and needed surgery. The argument was that, had it not been for the surgery necessitated by the injury, the weight loss would not have been required. If memory serves correct, we returned the case to get more information about the need for the weight loss, the types of programs available, and what were to happen had the weight loss program not been successful.

The Indiana case is Boston’s Gourmet Pizza vs. Adam Childers and can be found at http://www.in.gov/judiciary/opinions/pdf/08060901cld.pdf. The Oregon case, SAIF v. Sprague, can be found at http://www.publications.ojd.state.or.us/A133701.htm [5132]

Upcoming Appellate Court Decisions

September 11, 2009: Although the Appellate Division 3rd Department has not issued any workers compensation related decisions in the last few weeks, other than D’Errico, between this week and next week, 24 cases will be in the process of having decisions written. This list has been updated on the DECISIONS page and therefore the list posted here has been deleted. [5131]

Conrad Lower: The New Commissioner

September 10, 2009: On May 8, 2009, I reported that Governor Patterson has just named his third nominee this year, Conrad W. Lower, for appointment as a commissioner to the Workers Compensation Board. He was scheduled to be interviewed by the Senate Finance Committee, yesterday Thursday September 10, 2009. At this time I write this, I assume he will be/has been confirmed by the entire State Senate.

As I wrote on May 8, Patterson’s newest appointee, Conrad W Lower, of Brooklyn, has been a staff attorney at the New York State United Teachers where he specialized in employment law. Prior to becoming a member of the New York State Bar in 1988, he practiced employment law in Indiana where he was also admitted to practice before the U.S. Federal Court, where he has successfully argued a number of cases on behalf of employees, just as he has been doing in New York for teachers and other employees of the educational system. He received his J.D. at Northeastern University School of Law in Boston in 1983 after receiving his B.A. from Antioch University in Ohio in 1976.

he will be the second Paterson appointee whose practice prior to joining the Board was to represent employees against their employers, Higgins being the first. [ED. NOTE: Although Higgins is not an attorney, he worked with members of his union in representing their claims for workers compensation.]

Lower would also be the second attorney by Paterson, which would give the Board four: Chairman Beloten, Commissioners Bargnesi and Ferrara. [5130]

NYS Senate Labor Committee meeting on Electronic Transcription

September 9, 2009: The Senate Labor Committee has announced that on October 6, 2009 it will conduct a hearing the subject of the recording of workers’ compensation hearings for the purpose of studying the proposed use of a digital-audio recording system instead of a stenographer to record workers’ compensation hearings.

Stenographers have always recorded the testimony of injured workers and other parties at workers’ compensation hearings in New York. Their training provides the skills needed to accurately capture the diverse dialects and limitations of witnesses who testify. The ability of stenographers to provide a prompt read back of testimony also helps attorneys and judges by eliminating delays during the hearing and ensures the accuracy of the recorded testimony in the event of an appeal. As a result of the growing interest in the stenography profession, the number of court reporting schools in New York State has increased in recent years.

The New York State Workers’ Compensation Board has proposed a pilot program to use an audio-digital recording system instead of stenographers to record certain workers’ compensation proceedings. The use of electronic devices to record testimony in certain other jurisdictions has been criticized or rejected following complaints of recording inaccuracies that jeopardized the fairness of hearings and appeals.

The Senate Labor Committee will receive testimony to study the proposed use of digital-audio recording by the Workers’ Compensation Board for its proceedings.

Public input is requested concerning:

(1) The accuracy of digital-audio recording systems to record and transcribe witness testimony. (2) The experience of other jurisdictions that have used electronic devices to record witness testimony. (3) The impact on attorneys, judges and witnesses if a stenographer is not present during a workers’ compensation hearing to record testimony. (4) The impact on New York’s court reporting profession from the proposed use of digital-audio recording for workers’ compensation hearings. [5129]

Commissioners’ Retirement Party Canceled. Again!

September 9, 2009: Earlier this year it was announced that the Customary ‘retirement’ party honoring Commissioners Karl Henry and Edel Groski, who had just left the Board, would be held June 21, 2009.

Because a number of people had a problem attending that June 21 date, a new date was set for Monday night September 14. And this time, two additional commissioners were to be added to those already listed as being honored: former Chairman Zach Weiss and former Commissioner Scott Firestone, both of whom had become administrative law judges for the Social Security Administration, initially serving in the Jericho, Long Island office.

The new date, September 14, 2009, has just been cancelled for the same reason: not enough people would be able to attend, including three of the four honorees who had other commitments. [5128]

NYCIRB Estimates $ Impact of LaCroix

September 1, 2009: Nothing is for free and the New York Compensation Insurance Rating Board has presented their estimate of the financial impact of the LaCroix Bill signed into law by Governor Paterson August 27, 2009.

Calculated in June 2009, in anticipation of the S-2776B being passed into law, they reported that will have no direct impact on the value of benefit costs, but may result in increased premiums to compensate for lost investment income by insurance carriers.

According to their actuarial analysis, the ultimate value of benefits will not change under this proposal. However, the manner of payments will change from bi-weekly installments to one lump sum. Ordinarily, lump sum settlements are made for less than the full value of payments to account for the time value of money. However, S. 2776-B requires that the payments be made as a lump sum “without commutation for present value”. Thus, insurance carriers would potentially lose investment income on the reserves for such claims.

For example, if an employee loses an arm, the schedule stipulates that he or she is entitled to 312 weeks, or 6 years of compensation. If we assume a weekly benefit of $400 per week, then the total payment for this injury would be $124,800 (400 x 312). The present value of this hypothetical claim, assuming a 3.5% discount rate, would be $112,500. Paying this claim over time allows the insurer to earn investment income, which in theory, would fund the difference between the discounted amount of $112,500 and the ultimate claim value of $124,800. If the insurer pays the entire amount up-front as a lump sum, there is a negative impact on the insurer’s cash flow and the opportunity to earn the investment income on this claim is lost.

Since the ultimate value of the claims will not change, there will not need to be a change in the loss costs. However, carriers may opt to increase the value of their loss cost multipliers (LCM), in order to recoup the loss of investment income. Different carriers may choose different LCMs based on their own experience and investments. [5127]

NYSIF Declares First Year of eCHECK a Success!

August 28, 2009: The New York State Insurance Fund today announced that in its first year of use, more than 17,000 policyholders paid $52.3 million in premium using NYSIF eCHECK – the free, quick and easy way for policyholders to pay workers’ compensation and disability premiums by electronic funds transfer. Over 6,000 policyholders were repeat customers.

Since July of last year, more than 70 percent of electronic payment transactions made by NYSIF policyholders utilized eCHECK, which transfers funds from the customer’s bank account. Use of eCHECK is outpacing payments via credit card, which incur a service fee, more than 3-to-1. More than 5,000 eCHECK transactions are completed each month, with the average eCHECK payment totaling $1,300. Electronic payments overall are up 141 percent.

Both workers’ compensation and disability benefits policyholders can take advantage of eCHECK by visiting nysif.com. Click on “Pay Your Bill” and have available the policy number, premium amount, bank account information and bank routing number. When the transaction is complete, the system will display total payment amount and issue an on-screen confirmation and printable receipt. Policyholders can also make an eCHECK payment by phone by calling 877-309-6028. Policyholders should note that using the eCHECK option for their premium payment is a one-time deduction and does not establish a monthly payment. [5126]

New Head for NY Liquidation Bureau

September 1, 2009: Acting New York State Insurance Superintendent James J. Wrynn has announced the appointment of Dennis J. Hayes as Special Deputy Superintendent of the New York Liquidation Bureau (NYLB). Hayes has been a senior executive at the Liquidation Bureau since 1996, most recently serving as Assistant Special Deputy Superintendent. He replaces Mark Peters, who served as head of the NYLB since April 2007.

Mark Peters, in charge of the Liquidation Bureau since April 2007, will continue serving as a Special Advisor.

Hayes brings to the position of Special Deputy Superintendent 27 years experience as an attorney specializing in insurance, reinsurance and receivership matters. As an NYLB Assistant Special Deputy Superintendent, for example, he oversaw the Reinsurance and Estate Management Divisions. In his previous NYLB position as Executive Director for Receivership Operations, Hayes developed the final plan for the successful rehabilitation of Interboro Mutual Indemnity Insurance Company and its conversion to Interboro Insurance Company. He also managed the rehabilitation of Rochdale Insurance Company. From 2001 to 2003, Hayes served as Executive Vice President and General Counsel to Recovery National Corporation in Tarrytown, N.Y., a company specializing in identifying and recovering unrealized reinsurance.

Hayes started his career in the insurance industry in 1982 as an attorney for the New York Insurance Exchange. As an attorney in private practice from 1987 to 1996, he specialized in insurance, reinsurance and regulatory matters. A longstanding member of the Insurance Law Committee of the Association of the Bar of the City of New York, Hayes has participated as a panel member in various CLE programs on reinsurance recoveries and is the author of scholarly articles in the field. Hayes is a 1974 magna cum laude graduate of Saint Leo University, where he received the school’s general excellence award, and a 1981 graduate of St. John’s University School of Law. He and his wife, Marianne, have two children. [5125]

Paterson Signs The LaCroix Bill

August 27, 2009: Governor Paterson’ office announced that among the 68 bills that he signed earlier that Thursday was A.2021B / C.351, a amendment to Section 1. Paragraph (b) of subdivision 1 of section 25 of the workers’ compensation law, as amended by chapter 635 of the laws of 1996.

In the legislative summary this new law, fostered by the New York Court of Appeals reversal in LaCroix v. Syracuse Executive Air Service, 8 N.Y.3d 348(2007) provides that certain workers’ compensation payments may be made in one lump sum without commutation to a present value amount.

Specially the language in the bill, capitalized for emphasis, states AWARD OF COMPENSATION PAYABLE FOR PERMANENT PARTIAL DISABILITY UNDER PARAGRAPHS A THROUGH T, INCLUSIVE, OF SUBDIVISION THREE OF SECTION FIFTEEN OF THIS ARTICLE, SHALL BE PAYABLE IN ONE LUMP SUM, WITHOUT COMMUTATION TO PRESENT VALUE UPON THE REQUEST OF THE INJURED EMPLOYEE.

While the legislative history of the bill states “FISCAL IMPLICATIONS: To be determined.”, I do pose one question. And I must first note that I have no opinion this subject although I wish my wife had this option about two years ago.

If the claimant is awarded an SLU and does not immediately ask for a single payment, how is the insurance company supposed to calculate its reserves? At present cash value which is how reserves are normally calculated or must it use the amount of the single payout as if it were to be done at one time?

This does pose an interesting question. If I had such an SLU and I could earn 4.5% tax free (VWAHX), I would want to know what the carrier’s interest rate was in calculating their reserves if I did not take the lump sum up front and maybe cut a deal with them to split the difference if they were able to make more money than me. Also, does the claimant have to sign a document, let alone be made aware of one, that states that if he successfully attempts to change his SLU in the future to a classification, the carrier gets a credit?

As the bill states “FISCAL IMPLICATIONS: be to determined. POLITICAL DETERMINATIONS: fully calculated.” [5124]

CAL SIF to Sue State over Raid on Funds

August 27, 2009: California’s Insurance Commissioner Steve Poizner announced that he will file a lawsuit to have the $1 billion sale of State Compensation Insurance Fund (SCIF) assets declared unconstitutional, saying that such a transaction could lead to skyrocketing workers’ compensation insurance costs for California’s construction firms, agricultural industry and other small businesses.

The lawsuit will ask a judge to rule that the Budget violates Article XIV, Section 4 of the California Constitution., which requires the Legislature to enact “appropriate legislation” to establish a “complete system of workers’ compensation.” The system specifically includes SCIF as a self-supporting entity whose assets must be devoted solely to providing compensation to injured employees and their dependents. Selling SCIF’s assets for the purpose of benefitting the General Fund is not “appropriate legislation” within the meaning of Article XIV, Section 4. The statute authorizing the sale therefore violates that provision of the state constitution.

The press release also noted that similar efforts like this have been attempted in other states and have failed. In both Colorado and Utah, legal authorities have determined that funds could not be transferred from their respective insurers to the states’ general funds.

Obviously, they did not research what had happened in New York State. [5123]

The book “Liens & Subrogation” and Medicare

August 27, 2009: As Medicare continues to the a stumbling block in agreeing on medical estimate sin §32a waiver agreements, care mus be taken to look at the legal rights of Medicare and other government and insurance providers of medical are that there legal rights are protected and that neither the agreement not settlement dollars are affected.

Upstate attorney J. Michael Hayes, in his book “Liens vs. Subrogation”, has written:

“Recent developments have changed the way that lien law is applied given Arkansas Department of Health and Human Services v. Ahlborn, 126 S.Ct. 1752 (2006) and Fasso v. Doerr, MD, et al., 12 NY3d 80, 875 NYS2d 846 (2009). Medicare, Medicaid and Workers’ Compensation carriers claim they are entitled to full recovery of their expenses under the lien statutes. The reality is that recent decisions in Ahlborn and Fasso, combined with New York’s shift to comparative negligence and itemized verdicts since the 1970s, confirm that at best, they have a right of apportionment for their “subrogation” claims.

Whether the right is a lien or subrogation affects the relationships between the co-claimants and the attorney as well as his fees. If these constitute subrogation rights then the attorney is clearly representing two claimants, negotiating an aggregate settlement and taking a fee from each. A conflict arises because the attorney must reduce/assign part of his client’s recovery to the insurance carrier for medical expenses. Ethically, an attorney is barred from representing more than one party where there may be a lump sum award that has to be divided/allocated.” [5122]

Medicare: The Damocles Sword over §32’s

August 18, 2009: Katie Fox, compliance and resolution manager for MSP Med Insights, described problems that are caused when Medicare makes conditional payments for medical treatment of injured workers who are Medicare eligible but awaiting workers’ comp settlement monies to arrive.

When those payments do come to pass, Medicare looks to recover what it has shelled out, she explained. “If we pay, Medicare doesn’t want to pay.”

What was also pointed out is that if the beneficiary of the settlement does not pay Medicare, the Medicare can go after any of the parties to the agreement, and usually the one’s with the deepest pockets are the attorneys and carrier, not the claimant.

Ms. Fox also pointed out that improperly reporting the status of a claim by a Medicare-eligible worker can result in a fine of $1,000 a day and that settlements of more than $25,000 require notification for anyone within 30 months of qualifying for Medicare.

Yet, as reported on this page on May 28, 2009, in “FUBAR: The New Medicare Offset Rules”, Medicare has yet to determine what happens when the claimant either fails to advise his attorney and/or the carrier of the Medicare status or misleads them on this matter.

As an attorney for both the claimant and the carrier, this is certainly an interesting point to consider when signing off on a §32 waiver agreement. I wonder if that means they can go after the law judge who approved an waiver agreement that failed to adequately protect Medicare. [5121]

The NYS Comp Alliance Pushes the LaCroix Bill

August 19, 2009: The New York State Compensation Alliance has been actively lobbying to push for the passage of the ‘La Croix’ bill, named after the Matter of LaCroix v Syracuse Exec. Air Serv., Inc. decided by the Appellate Court Jan 19, 2006 and the Court of Appeals on March 29, 2007. The New York State Assembly transmitted the LaCroix Bill (A2021-B/S2776-B) to Governor David Paterson on August 14, 2009 for either his signature or veto. He has 10 days to sign the bill into law if he agrees with both the New York State Assembly and New York State Senate that this bill not only helps injured workers, but also reduces transactional costs to employers and insurance carriers throughout the State.

The Alliances efforts included a visit this week with members of Governor Paterson’s staff .

As the Court of Appeals in its LaCroix decision stated, “The question before us is whether, as a matter of policy under the Workers’ Compensation Law, compensation for loss of use of a body part due to permanent partial disability—known as a ‘schedule loss of use’ award—is payable as a lump sum, or must be made over time. We conclude that the statute’s directive that payments be made ‘periodically’ precludes a policy of lump-sum payment of schedule loss of use awards.”

The Court of Appeals reversed both the Board and the Appellate Court stating that a lump sum payment was not their interpretation of the WCL and that it should be up to the State Legislature to decide the interpretation. [5120]

Firefighter’s Widow Finally Wins her Death Claim

August 12, 2009: As reported by Victor Whitman in the Timesrald-Report, the wife of a fallen Sullivan County firefighter will get benefits under workers’ compensation.

Sullivan County dropped its objections to a claim brought by Claudia Davidson, the widow of volunteer firefighter George Davidson, during a hearing Tuesday in Monticello.

George Davidson, a 38-year veteran of the Youngsville Fire Co. and former deputy county fire coordinator, died on April 25, 2007, after suffering a heart attack a few hours after leading a training exercise. Claudia Davidson filed a claim with workers’ compensation, seeking a benefit available to volunteer firefighters who die in the line of duty.

The county denied the claim, saying she was late in filing and could offer no proof that the heart attack was brought on by the training exercise. Davidson filed the claim roughly two years after her husband died. She was late in filing because she pursued a federal benefit first and was not initially aware that she qualified, Davidson’s lawyer, Craig S. Fine stated.

The feds have recognized Davidson’s death as in the line of duty. The National Fallen Firefighters Foundation, a partner with several federal agencies, determined that Davidson did die in the line of duty and she was entitled to a federal Bureau of Justice Assistance Grant. They recognized that stress and exertion caused the heart failure.

Carl Houman, an advocate for the foundation and a professional Monticello firefighter, said he told Davidson that she also qualified for a death benefit under workers’ compensation and she filed at that time.

But after an hour into the hearing, which was closed to the public, the county dropped its objections. Fine, Davidson’s lawyer, said he county, which is the insurer, will pay Davidson a lump sum of $56,000 and $887 a week for life, and up to $6,700 in funeral expenses. [5119]

NYS WCB’s Enforcement Efforts Applauded

August 16, 2009: In an interesting article in the Hartford (Ct) Business Journal Online written by Diane Weaver Dunne, New York State’s efforts to stop employee misclassification and “under-the-table” cash payments by issuing ‘stop-work’ orders is pointed out as a goal to which Connecticut’s efforts should be directed, the article points out that altough Connecticut has issued 220 stop-work orders during the past 22 months, the state lags significantly behind in the collection of back taxes compared with neighboring states that have developed a comprehensive, multi-agency approach to tackling the problem.

New York has taken the lead in the Northeast in its battle against the underground economy, establishing its task force in September 2007. It has identified more than $4.8 million in unpaid unemployment taxes, issued more than $1 million in unemployment insurance fraud penalties, and issued more than $1.1 million in workers’ compensation fines and penalties. The task force also discovered more than $12 million in unpaid wages. Notably, New York’s crackdown included just 27 stop-work orders. But it collects much more in fines and back taxes because each order triggers additional action not generally taken in Connecticut. Key to New York’s success was coordinated enforcement sweeps, coordinated assignments and systematic referrals and data sharing between 15 state agencies.

Massachusetts, which modeled its task force after New York’s, reported in June that it had “recovered” $1.4 million in fines, unpaid wages and tax assessments within its first 12 months. Its collection of fines associated with workers’ compensation was $24,750, less than a third of the $90,000 collected by Connecticut. However, Massachusetts collected about $238,000 in unpaid taxes.

Although in some of it efforts the NYS WCB may be a bit overzealous, (see our June 1, 2009 NEWIRE on this subject ), this is one case when The Board has taken some good steps to stop abuse by unscrupulous individual in NY, in this case some dishonest employers. [5118]

Employers billed $133M to cover unfunded workers comp claims

August 18, 2009: As reported by Roberto Ceniceros of Businessinsurance, among others, the list of victims of the underfunding of self-insured trusts continues to grow.

Ceniceros reports that a New York State Workers’ Compensation Board spokesman said Tuesday that nearly 2,000 companies insured under group trusts formerly operated by CRM Holdings Ltd. have been billed $133 million to cover unfunded workers compensation claims.

In a related story and typical of the problems inflicted on small businesses throughout the State, In its Quarterly Report for the period ended 2009-06-30, CVD Equipment Corp. reported that during the six months ended June 30, 2008, we incurred additional workers’ compensation costs of $168,000 as result of a shortfall in a self-insured workers’ compensation trust fund, in which they were a member from January 2000 through March 2006.

And as reported here last week, several upstate municipalities have worked out settlements on their underfunding.

[5117]

New State by State WC Report Cards Released New York State gets an “F”

August 12, 2009: Work Loss Data Institute (WLDI) announces the release of the much-anticipated 2009 State Report Cards for Workers’ Comp, using the most current data available at this time. The report cards help employers, insurers, TPA’s, state governments and consultants answer the questions, “Who is doing well and why?”

WLDI’s State Report Cards are based on data from OSHA Form 300’s and 200’s, which cover all OSHA recordable injuries and illnesses and provide the basis for rating state-by-state workers’ compensation performance. The 2009 release adds four more years worth of data (2003-2006) to the rankings, which makes for a total of seven years of data since it includes statistics collected in the last publication, which was released in 2004. There is data available for 43 states, plus Puerto Rico, Guam and the Virgin Islands. Iowa performed the best of all the states for 2006 and Minnesota came in a close second. Both states received a grade of “A+” based on an average of their 2006 scores in the five categories above. Illinois came in last, with Wyoming, Rhode Island and New York very close to the bottom. In total, nine of the 43 states received a grade of “F” in 2006, including New York. A map is available at http://www.odg-disability.com/pr_src2009_us.htm. The WLDI special report, entitled 2009 State Report Cards for Workers’ Comp provides complete detail on all cases for the 46 participating states and territories, based on all cases reported to OSHA for the years 2000-2006 as a 79-page report with narrative, plus over 50 spreadsheet files with complete detailed backup data that is referenced in the narrative. It is available in both electronic and hardcopy formats for $250 each. Note: The electronic fomat is recommended to facilitate links to the electronic spreadsheet files and the supporting data. Click here to order: http://www.odg-disability.com/SRC_Order_Form_2009.htm. [ED. NOTE: Undoubtedly the NYS WCB spokesman, if he can be found and pressured to give a response will say something to the effect, “That may have been true though 2006, but based on the 2007 and 2008 reforms, New York State’s performance will have improved substantially and we can look forward to be in the top 10 in the next report.” This press release is on Form PR-100 and is a fill-in the blank for the many states on the bottom of the list with blank spaces for the state’s name and the date/name of legislation that will have turned things around.] [5116]

Prisoners Collecting Unemployment Benefits

August 11, 2009: What took so long? According to an audit released today by New York State Comptroller Thomas P. DiNapoli, eleven prisoners inappropriately collected about $30,000 in Unemployment Insurance (UI) benefits. His office stopped another $18,000 in payments before they were made to these same individuals. Auditors found another 14 prisoners who also may have received benefits while in jail. Auditors recommended the Department of Labor and the Department of Corrections work together to determine how the prisoners were certified for UI benefits while incarcerated in a state facility, identify individuals who collected benefits but did not respond to requests for information and share information in the future to prevent this from happening again. When Robert Snashall was chairman of the NYS WCB, he had such audits done, audits which found well in excess of 100 individuals serving time in state prisons who were illegally collecting workers compensation payments. The Audit itself can be found at http://www.osc.state.ny.us/audits/allaudits/093009./08bse3a002.pdf [5115]

Frankfort agrees to settle with county

August 7, 2009: The aftermath of the self-insurance debacle reported here earlier with the stories on CRM have reached a resolution in some small upstate communities effected by these underfunded trusts. David Robinson of the Herkimer Telegram/ Evening Telegram reported that The Frankfort Village Board on Thursday voted to pay for a buyout from the county’s workers’ compensation plan instead of continuing to pursue the matter in court, with the village to pay a total of just under $585,000 by Sept. 30 in order to free itself from the county’s embattled self-insurance plan. An ongoing legal battle between the remaining three local municipalities (the village of Ilion and Herkimer and town of Frankfort) and the county over the issue is headed to Oneida County Supreme Court for a jury trial. The legal battle involves members of the county’s self-insurance plan, which was created in 1956 based on Workers’ Compensation Law. The four municipalities each attempted to withdraw from the plan effective January 1, 2005. The municipalities took the issue to court, claiming the self-insurance and abandonment plans violated the New York Constitution and Workers’ Compensation Law. The suit further claimed the county mismanaged the insurance plan. And the municipalities have also since refused to pay toward their continuing liabilities under the plan for 2006 and 2007. Details on the litigation, the legal issues, and the result of same can be found at http://www.herkimertelegram.com/news/x262902052/Frankfort-agrees-to-settle-with-county [5114]

FL tells WC insurer: Return your profits

August 12, 2009: The Florida Office of Insurance Regulation on August 11, 2009 , after deciding that Hartford Financial Services Group Inc is making too much money, ordered Hartford to return $48.2 million to Florida businesses because profits on some workers’ compensation policies from 2004 to 2006 exceeded state law. Florida had demanded the return of $64.8 million but reduced the sum after Hartford protested the higher amount, according to a consent agreement between the state and the property and casualty insurer. This story was reported by Jonathan Stempel for Thomson Reuters. [ED. NOTE: So, it seems that, if last year, a carrier made too much money, it had to refund the excess. But what if last year it lost too much money, however the State wishes to define that? Does the carrier get to retroactively charge back its policy holders?] [5113]

NYSIF CEO Wrynn Moving On

August 5, 2009: The website of the National Underwriter Property & Casualty has published a story to the effect that Attorney James J. Wrynn, who was recently named head of New York’s state-run workers’ compensation insurer, is now in line to be the state’s new insurance superintendent. According to NU’s staff writer, Daniel Hays, industry sources, who declined to be identified told NU Online that Mr. Wrynn, who in April was installed as executive director to clean up problems at the New York State Insurance Fund, would be replacing Acting Superintendent Kermitt J. Brooks. Mr. Brooks took a spot vacated by Eric Dinallo on July 4. Melissa Shorenstein, a spokesperson for the office of Gov. David Paterson, who will nominate a new superintendent, would not deny that Mr. Wrynn is in line for the post, but said she could “not confirm.” [5112]

No-Work State Worker Wins Hearing

August 5, 2009: In an interesting case which baffles this writer, a state employee who said he is paid $94,000 a year to do nothing has won a public hearing in his quest to prove the State Insurance Fund discriminated and retaliated against him. Regardless of the merits of his case, it seems that this person is suing (and will most likely win) because he did not work since the 1990’s but did get paid his $94,000 and undoubtedly added 20 years worth of credit to his pension account. There were some of the commissioners at the Board who did want to do more work were not allowed to do so. Perhaps they, too, could bring suit and win more money. There is also an August 6, 2009 editorial from the Albany Times Union which feels that this hearing will be an opportunity to delve into the political appointment process of the Pataki administration. While they are doing that they can also look into the hit list from the Patterson administration whose techniques of finding every political appointee of the other party and putting them on the hit list is not too different from prior administrations. For the record, I am not taking sides. That is how I got into the NYS WCB and that is how I got ‘out’. It’s just that the Times Unions should be an equal opportunity ‘abuser’. For full details, read the story here…. and the editorial here … [5111]

Independent Contractor Issue Heats Up

August 4, 2009: Andrew R. McIlvaine, writing for Human Resources Executive Online, reports that “Desperate for revenue, state and federal officials are increasingly looking at the potential misclassification of employees as independent contractors. At the same time, employers may be revisiting the area as well in an effort to reduce costs. Such classifications are complex and should be reviewed carefully, experts warn.” “At least six states — Colorado, New Jersey, New York, Washington, Pennsylvania and Maryland — have recently enacted or are considering new legislation designed to halt independent-contractor misclassifications. In Maryland, the Workplace Fraud Act of 2009, recently signed into law by Gov. Martin O’Malley, imposes fines up to $5,000 per employee on companies that “knowingly misclassify” workers as independent contractors. “At the federal level, the “Employee Misclassification Prevention Act,” introduced last year by Rep. Rob Andrews, D-N.J., would make misclassification a prohibited act under the Fair Labor Standards Act. In addition to imposing employer penalties, the bill would require firms to keep records of employee or independent-contractor classifications as well as notify workers of their classification and their right to challenge that classification.” It is quite obvious that this is being done for three reasons:

• To increase coverage under workers compensation and increase premiums for the state run State Insurance Fund which has about 60% but ever growing share of the market.
• To enhance federal government control over healthcare by not allowing independent contractors to decide on their own what type of private health/accident insurance they want to buy for themselves, if any.
• To enhance government control over business by further determining how they can operate.

As reported on this page on March 17, and April 14, The NYS WCB is being so aggressive that they have defined an independent contractor in its ‘procedures’ and instructed the law judges to proceed accordingly. But as I have noted, this would make your plumber your ‘employee’. [5110]

3rd Circuit Upholds Bar to Litigation Over Litigation

July 31, 2009: An arbitrator cannot sue a lawyer for wrongful use of civil proceedings, the 3rd U.S. Circuit Court of Appeals has ruled, even if the lawyer allegedly lodged false accusations in court papers to have the arbitrator disqualified, because lawyers enjoy an “absolute privilege” that immunizes them from liability over any communication made in the course of litigation. The decision in Naythons v. Stradley Ronon Stevens & Young upholds the dismissal of a suit brought by Edwin E. Naythons, a former federal magistrate judge who now works as a private arbitrator. In the suit, Naythons claimed that Stradley Ronon and one of its partners, Andre L. Dennis, lodged false charges of bias against Naythons after he issued his decision in an ugly battle over the control and finances of the Philadelphia-based Church of the Lord Jesus Christ of the Apostolic Faith. The 3rd Circuit has issued a five-page unpublished opinion that adopts U.S. District Judge Renee Marie Bumb’s decision that, “An arbitrator cannot sue a lawyer for wrongful use of civil proceedings even if the lawyer allegedly lodged false accusations in court papers to have the arbitrator disqualified, because lawyers enjoy an “absolute privilege” that immunizes them from liability over any communication made in the course of litigation.” Not quite sure how this could impact on workers compensation hearings in New York but it certainly would make the hearings more interesting. Full details on the issues in this case can be found at http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=1202432670982. [5109]

U.S. Judge Okays Delphi Sale to Lenders

July 30, 2009: U.S. Judge Robert Drain ruled on Thursday that auto parts maker Delphi Corp can sell itself to a group of lenders, bring to a conclusion a fair resolution of this massive bankruptcy and resolving the issues that have plagued employees and suppliers, among others. There will be three new companies.

• General Motors [GM.UL], what is left of the original company, will consist of a few supplier assets and plants in Michigan, Indiana and New York.
• “New Delphi” will consist of all the other manufacturing facilities
• DPH Holding Co, which will dispose of other Delphi businesses.

Although the plan requires a $70 million payment and a share of future earning payable to the federal government and supposedly honors a pension plan for retirees, but only some, the Judge approved the plan over almost 2,000 objections from union workers and from state tax and workers compensation authorities. The case is In re Delphi Corp, U.S. Bankruptcy Court, Southern District of New York (Manhattan), No. 05-44481. [5108]

Upstate WC Attorney Runs for Congress

July 29, 2009: Michael Oot, well-known workers compensation attorney from Munnsville, New York, has recently announced that he is a candidate for New York’s 23rd District congressional seat currently held by U.S Representative John McHugh who has been nominated by President Obama as Secretary of the Army.

“As soon as I heard what the process was, I filed my papers,” said Michael Oot of Munnsville, who unsuccessfully ran against McHugh in 2008. Oot said he wasn’t sure what the next step in the selection process will be and that he is “watching and waiting.”

“I’ve spent 33 years working and representing people throughout the Congressional District,” said Oot, who specialized in workers’ compensation and Social Security claims as an attorney. “I’m conversant with the issues up there. I’m conversant with Federal issues. I consider myself the best candidate, and somebody who’s willing to do the work.”

Oot will be one of five people running in the Democratic Party primary to be held September 15, 2009

This information comes from the Adirondak Daily Enterprise.

The Big Boss Syndrome

July 30, 2009: In my book, Behind The Closed Doors, I make reference to a commissioner as one who practices the “Potemkin Village legal argument”.

Today I post part of an article entitled “Beware of the Boss Man (or Boss Lady) Syndrome” which considers the Potemkin Village a sub-set of the characteristics of the Boss Man/Lady. The writer describes this person as:

Mr. Boss Man and Ms. Boss Lady do not fool around. They can be spotted by their confident swagger, puffed chest inflated by an air of self-importance and their adamant tone. They hold their heads high as they briskly walk the halls of Big Law[NYSWCB] on their way to an oh-so-important meeting.

Big Law’s love for blind over-confidence and arrogance may even inflict this syndrome on otherwise normal lawyers I suspect that is because those suffering from these delusions of self-importance can only hold up the façade for so long before a client or a more senior partner discovers they are all talk and no walk. But you must avoid being a victim of their rampage before they are discovered. One of the worst manifestations of Boss Man Syndrome is Adamant Ignorance. When asked a question about a topic for which they have no substantive knowledge or basis for opinion, both Mr. Boss Man and Ms. Boss Lady will immediately pipe-up with a firmly held opinion.

My position is that one need not be an attorney to suffer from this syndrome but be a political appointee. Read and enjoy. And watch your back.

NYCIRB Approved WC Loss Rate Increase

July 27, 2009: The New York State Insurance Department has approved an increase of 4.5% in workers compensation loss costs to become effective on policies with rating anniversaries October 1, 2009 and thereafter. The 4.5% increase is comprised of an average change in classification loss costs of +4.6% and no change in the catastrophe provisions for terrorism, natural disasters and catastrophic industrial accidents.

Specific details can be found on their web site or by contacting Rasa McKean, Actuarial Manager, (212) 697-3535 Ext. 164, Fax: (212) 972-1393, rmckean@nycirb.org

Brooks Named to Head Key Committee by the NAIC

July 27, 2009: Acting New York Insurance Superintendent Kermitt J. Brooks has been named Chair of the Life Insurance and Annuities Committee, a key working committee of the National Association of Insurance Commissioners (NAIC), the organization of insurance regulators from the 50 states, the District of Columbia and the five U.S. territories.

The mission of the Life Insurance and Annuities Committee is to consider issues relating to life insurance and annuities, review new life insurance products and establish priorities of the Life and Health Actuarial Task Force. The Committee oversees working groups devoted to annuity disclosure, indexed annuities and the suitability of annuity sales. Brooks recently announced the New York Department will hold public hearings statewide on the suitability of the sales of life and annuity products during August and September. Other Committee priorities include overseeing the development of the principles-based reserving system for life insurance companies, and reviewing and considering changes to the NAIC’s Annuity Disclosure Model Regulation to improve the disclosure of information provided for annuity products, both generally and specifically, and to provide insurers uniform guidance in developing disclosure information and documents and monitoring the distribution thereof in order to better inform annuity consumers about the annuity product purchased and how it works.

New NYSWCB Commissioner Still Pending

July 16, 2009: In my June 3, 2009 NEWSWIRE, I wrote that Governor Paterson’s newest nominee to the NYSWCB, Conrad Lower, was being fast tracked for formal confirmation by the State Senate before they closed for the summer. His June 10, 2009 appearance before the Senate Finance Committee was canceled at the last minute, I assume, as a part of the debacle that has finally ended today (hopefully).

Whether nor not the Senate will rush to vote on only a few key issues necessary to keep the State and its many counties and cities in business, but on nothing else until the Fall, remains to be seen. But one can assume that the hard working, highly valued public servants will not stick around to make any decisions regarding the dozens of Paterson’s nominees that have been piling up.

But odds are that Lower’s name will ultimately go before the Senate and he will be the next new board member/commissioner, certainly before the upcoming election cycle.

Commissioner Scott Firestone Resigns

July 17, 2009: Commissioner Firestone formally announced his resignation yesterday, July 16, 2009 as a commissioner at the NYS WCB although he had told a number of people earlier in the week about his decision.
Originally appointed as a member of the Independence Party in March 2000, when his term of office was up, he became a district administrator until he was able to secure, as a member of the Conservative Party, another appointment to the Board in August 2005 and is leaving now in 2009 in order to become an administrative law judge for the Federal Social Security System. Apparently he will be assigned to the Plainview NY office with another newly appointed judge at the Social Security Court: Chairman Zachary Weiss who announced his resignation from the Board in June. Both resignations appear to be effective next Monday, which coincides with the next public Full Board Meeting.

Resignation of Weiss & Firestone
= 2 less Attorneys = Chaos?? 5097

July 17, 2009: Because the NYSWCB has, since 2004, followed the policy of requiring an attorney to sit on each panel that reviews Memorandums of Decision, there will be some problems next week when there will be only two attorneys on the Board to review decisions, increasing their personal workloads by 50%, likely resulting in delays of decisions being issued. For more details on this potential problem and the Board’s mistaken interpretation of WCL §142, ready my commentary in COMMENTS & REPORTS.

Workers Comp Rates Leap for Some Firms

July 18, 2009: While the NYSWCB trumpets lower workers compensation insurance rates, as noted in past issues of the NEWSWIRE, this does not hold true for many employers, particularly those in the any self-insured trusts which the State has failed to supervise all these many years.

One such example is the member of the Elite Contractors Trust of NY whose individual members have been hit with assessments ranging from a few thousand dollars up to six figures due to improper rate calculations by the Trust Fund.

This information comes from the website “Ask Tim - Got an insurance technical question on your mind? Join IIABNY’s resident insurance geek for the answer” (Independent Insurance Agents & Brokers of New York, Inc.).

Former members of the Elite Contractors Trust of New York, a group self-insured trust for workers’ compensation, have received bills totaling $37 million to close the trust’s deficit. Trust administrator FCS Administrators began issuing assessment notices to affected employers on June 30. FCS assumed management of the trust last year after the original administrator, Compensation Risk Managers, LLC, forfeited its license under pressure from the New York Workers’ Compensation Board.”

Could it be that the rating board’s determination of rates is based not on the reality of the financial conditions of the carriers and their reserve funds but on other political considerations? And what will happen now that the State Insurance Fund does not have to contribute to the Aggregate Trust Fund but the private carriers do, thus increasing there financial burdens and the cost of the insurance?5096

Facebook Helps Prove A Claimant Was Lying

July 18, 2009: Jim Reed, in his website, NYInjuryLawBlog.Com, explains how many defense firms are using Facebook and other such personal internet file sharing to help discover which claimants are lying about their disabilities.

He reports, “I was made aware of this Facebook issue by attorney Jason Lee Paris. A friend of his who is a defense attorney told him how she had participated in a case where the plaintiff claimed severe mental and physical problems. The plaintiff claimed he: “had no life, cannot do anything, doesn’t go out of the house except to the doctor or to work, is depressed, is physically limited, used to love to dance and play sports and now does neither at all anymore, has not gone outside the state of New York since his accident, etc etc.”

This defense attorney then changed her county of residence on her Facebook profile (Wonder if that was unethical conduct on the part of this lawyer?) so that she could secretly view the plaintiff’s Facebook page without being his “friend” - and lo and behold: There were recent photos of the plaintiff dancing at a wedding in Puerto Rico and playing soccer last summer. He’d also posted lots of information about his activities and feelings. His case was blown by his own Facebook profile.”

I am sure that a lot of defense attorneys who were unaware of this tool now are. But as Reed also states, “This plaintiff was dishonest, and as a personal injury attorney I don’t want anything to do with representing dishonest people. In fact, I tell my clients, I can always deal with the truth but a single lie can kill an otherwise good case.”

Fortunately, the majority of attorneys that I have met in the WC comity take the same position on the issue of truthfulness of the claimants.

Brooklyn Doctor Charged With WC Fraud

July 10, 2009: The following story was written by Steven Greenhouse on July 10, 2009 for the New York Times.

Federal prosecutors charged in an indictment Friday that a Brooklyn doctor defrauded workers’ compensation insurers by seeking reimbursement for procedures he did not perform, including some that he said he had done in his office at times when he was actually in Latin America.

State officials who operate the workers’ compensation system and cooperated with the federal investigation said the indictment was a result of new efforts to aggressively pursue fraud by doctors in a compensation system often criticized for ineffectiveness.

The indictment said the doctor, Slobodan Aleksic, had also sought reimbursement for many procedures — more than any one doctor could possibly perform — on a single day.

In the indictment, the United States attorney in Brooklyn also accused Dr. Aleksic of seeking money from two different insurers for treating the same patient with the same procedure on the same day. Dr. Aleksic, who practiced internal medicine with a specialization in neurology on Graham Avenue in Brooklyn, falsely sought reimbursement for performing physical therapy on patients “when, in fact, such physical therapy was performed by individuals” whom he knew to be unlicensed, the indictment said.

I had a §32 in which, in response to the question, “When was the last time you had any medial treatment?”, replied something to the effect “Six months ago.” So I asked him why his file had C-4 Medical Reports indicating three doctor visits a week every week for the last six months through the week before the hearing?. I had him swear on the record as to his not having had any medical treatment such that his could (and was used) to help investigate and possibly prosecute fraud changes against the offending doctor. I was obviously not alone in my concern.

How to save on insurance premiums

July 16, 2009: Neil M. Gilberg, assistant director of public information for the NYSWCB, recently had an a article published in the website LongIslandBusinessNews.com in which he writes that “It is every employer’s responsibility to provide workers’ compensation insurance for their workers. This protects both the worker and the employer in the event of an on-the-job injury. Legally keeping workers’ compensation premiums as low as possible is also in everyone’s interest. While there have been significant reforms and insurance cost reductions over the past few years in workers’ compensation insurance, there are many things you can do now to lower your costs further.”

Neil M. Gilberg, assistant director of public information for the NYSWCB, recently had an a article published in the website LongIslandBusinessNews.com in which he writes that “It is every employer’s responsibility to provide workers’ compensation insurance for their workers. This protects both the worker and the employer in the event of an on-the-job injury. Legally keeping workers’ compensation premiums as low as possible is also in everyone’s interest. While there have been significant reforms and insurance cost reductions over the past few years in workers’ compensation insurance, there are many things you can do now to lower your costs further.”

Ronald Balter Commentary on Chmura v T&j Painting Co., Inc.

July 10, 200: Ronald Balter has written an excellent analysis on the 3rd Department’s ruling yesterday (on our DECISIONS page) of the Chumra v. T & J Painting Company case.

The Appellate Division Third Department recently ruled on whether or not an employer who obtains a workers’ compensation policy in New Jersey through the assigned risk pool has coverage under the New York State Workers’ Compensation Law when a claim is made against the employer before the New York State Workers’ Compensation Board. For his complete analysis, please …. link here

Without Good Reason, NYSWCB closes Rockland office

June 2009: In June, 2009 Kristina Dillon of lohud.com reported that the NYSWCB closed its New City office in April to save money in the state budget.

Gail Kizner, a lawyer who represented many workers at the New City board prior to its closing, expressed concern for her clients traveling from Rockland to the Peekskill office in Westchester for their hearings. “My clients would have to travel over the Tappan Zee Bridge, which is constantly under construction - that was a major issue to me,” said Kizner. “To travel a great distance to attend a hearing out of Rockland County causes [concerns]. If a claimant was stuck in traffic, they may not appear in time for their hearing.” Attendance for a hearing is often mandatory, she said. “And this is all assuming my claimant has a car.”

Joe Cavalcante, a spokesperson for the Board, stated that in 2008 the New City office held 3,041 workers’ compensation hearings, less than 1% of the statewide hearings. Cavalcante said there was no way to determine how many were affected while the New City office was closed. “As of April 15, the claimants were automatically directed to the hearing sites closest to where they live. Therefore, it’s not possible to tell how many would have went to New City.”

In response to a request by Dillon for my opinion on this closing, I was quoted, “I find Cavalcante’s statement hard to believe. The Board will not give out that information because they never studied it. If the Board doesn’t know how many individuals in Rockland were affected, then how could they have enough backing to open a new one?”

The four closest hearing sites to Rockland County are Peekskill, White Plains, Yonkers and Newburgh.

NYSWCB: “Workers Comp Rates Decline”

July 4, 2009: Neil Gilberg, the advocate for business for the NYS WCB, wrote a guest essay in the democratandchronical.com contending “that there is a misperception that New York’s workers’ compensation premium costs put us at the top of the chart. In fact, New York ranks 19th among the 50 states. We fell from 10th most expensive a few years ago.”

He writes that, “Since the 2007 reforms, the rates used to calculate premiums were reduced by nearly 25 percent. That happened because the state of New York brought business and labor together, to come to an agreement that reduced costs while simultaneously increasing the benefits for injured workers for the first time in 15 years.”

It will be interesting to see what happens when the full impact of the higher rates and the yet-to-be determined medical guidelines have been in place for a year or two.

Beloten Is New WCB Chairman

July 1, 2009: On July 1, 2009, Gov. David A. Paterson has chosen newly appointed Commissioner Robert E. Beloten to be the chairman of the Workers Compensation Board when current Chairman Zachary Weiss’ July 15, 2009 resignation becomes effective. In fact, in the recent poll conducted earlier this week on this website, 80% of the participants predicted that Beloten would be the next chairman.

Beloten was first nominated to the Board in May of this year, after having served as a workers compensation law judge from 1988 to 1996 in Hempstead and then again from 2000 until his appointment as a commissioner. As noted earlier in this website, because Beloten, who was a law student with Mr. Paterson at Hofstra University, is already a commissioner, he does not need to be confirmed by the State Senate for this new position.

During the four years between his stints as a compensation judge, Mr. Beloten worked for Keating & Klein, a law firm on Long Island that specializes in health care law. From 1985 to 1988, he was an assistant counsel for the New York State Racing and Wagering Board. He has lectured extensively on workers’ compensation and medical law.

[Editor’s note: for additional details, read the New York Times article by Steven Greenhouse.]

SIF has new Deputy Exec Director

June 30, 2009: According to James Odata’s June 30, 2009 article in the Times Union, State Appointments Secretary Francine James is taking a top job at the embattled New York State Insurance Fund as chief deputy executive director and secretary. Her transfer to the SIF means James will join an organization she has helped restructure in recent months with the elimination of some of the Pataki-era people in key top posts.

She takes the job lost in March by Chris Barclay, one of several casualties to leave the SIF after the Times Union reported about Randall Hinton, a $94,000 per-year employee who has been doing nothing for years. Barclay’s salary had topped out at $158,300. James had been among a few on Paterson’s staff who knew of the no-work SIF employee and had done nothing about it, according to Hinton.

GM Bankruptcy: So Where’s NY State?

July 2, 2009: Today both Ohio’s and Michigan’s Attorneys General agreed to the proposed sale of GM after they received formal assurances when New GM agreed to assume all of Old GM’s obligations.

These two consents should help make U.S. Judge Robert Gerber’S final ruling on this matter all the easier. As reported by Roberta Yafie in the business-journal.com, “The automaker has a July 10 deadline to conclude its business or risk losing the federal financing backing the Section 363 asset sale. Today’s session in U.S. Bankruptcy Court for the Southern District of New York was devoted to final oral arguments by objectors to the pending asset sale that will result in New GM, the restructured company unencumbered by debt and an overburdened corporate structure.”

The one issue that has not been addressed, nor even raised is “What is the State of New York doing?” Considering all the financial problems that exists with a number of other insurers/self-insureds, does the WCB have that much money to pay off GM’s outstanding workers comp claims that this issue need not be addressed? Or has an arrangement already been made but apparently so secret no one is supposed to know?

9/11 Worker Protection Task Force
Issues 2009 Annual Report

June 30, 2009: The 9/11 Worker Protection Task Force announced today that it has issued its 2009 Annual Report and that it is working with the Governor’s Office to implement its legislative recommendations for this year. All six legislative changes recommended by the Task Force in its 2008 Interim and Annual Reports were passed by the State Legislature last year. These six recommendations expanded the eligibility criteria in disability law for public employees, in order to:

• eliminate the requirement for pre-employment physicals.
• include injured workers whose exposures were limited to the first hours of the attack.
  include workers who suffered significant exposure-related health effects but whose work locations were not within the boundaries for World Trade Center sites set by law.
• allow workers who have retired or who are on non-World Trade Center-related disability to file for World Trade Center-related disability benefits if they otherwise qualify.
• Include law enforcement officers from outside New York City who were deployed to the World Trade Center sites.
• acknowledge the extended time limit for workers’ compensation claims by allowing workers who became disabled after 9/11/03 (the prior time limit for filing a workers’ compensation claim) an opportunity to file.

In addition, the Task Force made recommendations for the coming year. For details, you can read the full story by clicking here.

WCB Enforcement program: Useful or Abusive

June 1, 2009: In a series of articles printed by the Syracuse Post-Standard, they contend that the WC Board’s enforcement efforts in bringing judgments against employers who do/did not have workers compensation insurance borders on the abusive.

The articles cite some examples:

• Hot dog vendor Bob Luongo, who owns a stand in Lyncourt, was stunned to learn a $128,000 judgment has been filed against him for not having workers’ compensation insurance — even though he hasn’t had workers since at least 2003.
• Another former businessman, who had owned a landscaping business, ended up on the list, too. He hadn’t done any business in 10 years.
• The list also includes two closed churches. One of them, Calvary Episcopal Church — listed as owing $130,000 — closed in 1996.
• Darrell Controls dissolved in 1996. It’s listed as owing $128,000.
• American Logistics, which owes $139,000, went out of business in 2005.

WCB Spokesman Brian Keegan said there was a backlog dating to 2006 that was just cleared. He didn’t know the total dollar amount of the 10,000 judgments, but roughly 50 filed in Onondaga County alone in a week totaled more than $5 million. Keegan said the judgments come out of comp board’s automated system, and most of the cases go back to 2006. “That was likely when a first letter was sent to each business. If there’s no response to that letter and subsequent ones, the case is sent to a collection agency. If the agency can’t find the business, then the Workers’ Compensation Board files a judgment. That’s what happened to these 10,000 cases.“

As Post-Standard staff writer Marnie Eisenstadt reported, the NYSWCB filed judgments against about 10,000 companies just in the past 10 weeks for failing to have workers’ compensation insurance for employees.

Trouble is, some of the companies never had employees. They’re small enterprises like hot dog vendors or house painters in which the owner is the only person doing the work. And many of the businesses have been shut down for more than a decade. The NYSWCB fails to verify who legally owes money and who doesn’t, a stunning display of incompetence. It just sends out thousands of fine notices [ED.NOTE: ‘fine’ as in $$, not ‘fine’ as in quality] and hopes some are right. If a mistake was made, too bad. The burden of proof is on the business owners, who often have to find documentation going back years to make their case.

Editor’s Note: In my opinion this is another case of the NYSWCB seeking “good stats’ to show how great a job it is doing, regarding less of whom among the 10,000 does not belong there. In fact, I know of a case in which a California firm which the NYSWCB claimed had one person working in NY for one year got billed for $10,000 unless that firm could prove there were no employees in NY. When the firm stated that year in question was 15 years ago, the Board position is “You’re guilty unless you can prove otherwise.”

And while I agree that it is essential that firms who cheat on their WC insurance must be penalized, there has to be some common sense in the process. People have to make decisions on these cases and not have Board executives decide to run a computer program that takes away all human discretion and common sense.

More complete details can be found in the following links.

• http://blog.syracuse.com/opinion/2009/06/workers_comp_system_targeted_e.html
• http://blog.syracuse.com/opinion/2009/06/terrible_aim.html
• Marnie Eisenstadt can be reached at meisenstadt@syracuse.com or 470-2246.

My Open Letter to the Chairman

June 1, 2009: What follows is the e-mail I sent to Chairman Weiss on Wednesday June 3, 2009, with a copy to all my readers.

Dear Chairman Weiss,

Chrysler and HartMarx (maker of men’s clothes out of Rochester), both major New York State employers and both self-insured, are in the process of filing for Chapter 11.

Several weeks ago, Sedgewick had stopped paying claims in its capacity as the TPA (third party administrator) for Chrysler.

The concerns that have been raised are that, in the bankruptcy sale of both these firms, the new owners will have no legal obligation to pay any outstanding workers compensation claims. And, although the State of Michigan has apparently just made a deal with one of the possible new owners of Chrysler, nothing has yet been heard from the State of New York.

According to one of the NY State workers compensation claimant attorneys with whom I have been in contact, it does not seem that the State of New York, neither the Department of Insurance nor the WCB, have issued any public announcements to ally the fears of the injured workers of these two firms, although based on its May 29, 2009 press release stating that “New Rochelle Doctor Arraigned on Insurance Fraud Charge.”, the WCB does appear to have the mechanism to address this issue. And I have just looked at both the press releases and subject numbers on the Board’s website. And, yes, I am as are 99% of those who will read this e-mail aware of the Liquidation Bureau but I am equally sure that 99% of the injured workers are not, so they are unaware of what fate awaits them.

At the cost of $1 or so to the WCB to mail each one a letter, the anxiety levels of these injured workers will be greatly diminished by some sort of assurance from the State and the Board and go a long way to proving that the WCB does, in fact, care about the injured workers as human beings and not just a set of stats to show how effective the Board has been.

Michael T. Berns
Former Commissioner 1996-2008
New York State Workers Compensation Board.

I Defend the WCB’s Chairman & IG

June 1, 2009: James Odato of the Albany Times Union reports that two top officials at the Workers’ Compensation Board have arranged for their offices to be near where they live, allowing them to bill the board for weekly stays at Albany hotels on days they join the rest of central staff at headquarters. But Board Chairman Zachary Weiss and Fraud Inspector General William Gurin say they’re saving money by having their work stations more than 140 miles away from headquarters. Albany has routinely been where their predecessors have been stationed, even those who lived outside the Capital Region, although a spokesman said former Chairwoman Donna Ferrara, who rarely worked in Albany, had her work station designated near her Long Island home.

I responded to the Times Union in their defense with the following comment.

As a former member of the Workers Compensation Board, I feel strongly that your characterization of Chairman Weiss and IG Gurin are way off mark.

The fact that they may work out of a district office rather than the main Albany office is meaningless in terms of how the Workers Compensation Board (WCB) works. During the late 1990, under the leadership of Chairman Robert Snashall, the Board became highly computerized such that virtually every injured worker’s claim, WCB memos, and administrative activities are done electronically. The use of e-mail and video conferencing, and the phone, has allowed instant communication between offices.

I worked with these two gentlemen during the last year of my service at the Board and can assure you that they, Like Commissioner Ferrara whom you also mention, are highly effective using the new electronic media.

It is not them about whom you should be writing but the insouciants among some of the other commissioners who do not even go to their local district offices but spend an hour or so at home on the internet access to the WCB cases where they simply rubber stamp legal appeal decisions, often poorly written or legally incorrect, by staff writers.

As I am sure that you, too, often work from home, it is not ‘where the head is’ but ‘where the heart is.” Weiss, Gurin and many other have their heart in service of the injured workers. It is some other commissioners whose both heads and hearts are in locations I for one prefer not to contemplate but is it certainly not in serving the interest of injured workers.

Florida Now Limits WC Fees for Claimant Attorneys

May 28, 2009: According to WEAR/TV, Gov. Charlie Crist has signed a bill to restore caps on fees for lawyers representing workers in compensation appeals for on-the-job injuries. The new law will undo a Florida Supreme Court opinion by removing an existing provision saying such fees must be reasonable. [See the May 11, 2009 NEWSWIRE posting below.]

Business interests hailed the governor’s decision Friday. They said the new law will lower workers’ compensation insurance rates paid by employers. They’d been lobbying Crist to sign the bill while trial lawyers urged him to veto the measure. The governor signed the bill without ceremony or immediate comment.

The fee limits do not apply to lawyers who represent insurance companies and employers.

[EDITORS’S NOTE: This will definitely reduce rates for employers because there will be no more claimants’ attorneys left to help injured workers win their cases.]

Governor’s New Appointee on the Fast Track

June 3, 2009: As forecast in last week’s NEWSWIRE, Governor Paterson’s newest nominee to the Workers Compensation Board, Conrad W Lower, met with the Senate Labor Committee on Monday June 1, 2009 and then met two days later, Wednesday June 3, 2009, with the Senate Finance Committee. In view of the fact that the NYSWCB has in the past never announced appointments of new commissioners until weeks after the fact, Lower may be a commissioner by the time you read this e-mail, although next Tuesday June 9th is more likely for his approval by the State Senate.

Board Has New Medical Director

June 3, 2009: The New York State Workers’ Compensation Board announced Stephen M. Levin MD, a nationally recognized expert in occupational medicine and the health effects of the World Trade Center disaster, will serve as its interim medical director.

Dr. Levin is the medical co-director of the Mount Sinai–I.J. Selikoff Center for Occupational and Environmental Medicine at Mount Sinai Medical Center. He was the principal investigator for the Mount Sinai World Trade Center Data and Coordination Center, and is an associate professor at The Mount Sinai School of Medicine.

Dr. Levin will help design and create the Board’s Office of the Medical Director, provide guidance, advice and assistance with respect to medical treatment and medical impairment guidelines, and meet with interested parties to discuss medical issues relating to workers’ compensation.

“Dr. Levin is a world-class physician with a unique set of skills and extensive experience in our field,” Chair Zachary S. Weiss said. “I am grateful that he will use his talents to help the Board better serve injured workers and employers.”

A widely published practitioner with more than 40 years experience in medicine, Dr. Levin also testified before Congress on the health effects of the September 11th attacks. He received his medical degree from New York University Medical Center, and did residencies in surgery, community medicine and psychiatry.

“I have spent my career dedicated to improving the health of ill and injured workers,” Dr. Levin said. “I will bring the same focus and dedication to the medical director position at the Board.”

Another Nominee to the WC Board

May 28, 2009: Governor Patterson has just named his third nominee this year for appointment as a commissioner to the Workers Compensation Board, to be interviewed by the Senate Finance Committee, next Monday, June 1, 2009.

Patterson’s newest nominee, Conrad W Lower, of Brooklyn, is currently a staff attorney at the New York State United Teachers where he specializes in employment law. Prior to becoming a member of the New York State Bar in 1988, he practiced employment law in Indiana where he was also admitted to practice before the U.S. Federal Court, where he has successfully argued a number of cases on behalf of employees, just as he has been doing in New York for teachers and other employees of the educational system. He received his J.D. at Northeastern University School of Law in Boston in 1983 after receiving his B.A. from Antioch University in Ohio in 1976.

Assuming that he is approved by the Labor Committee, which is likely, he will most likely be fast-tracked to the Senate Finance Committee so that he can appear before the full Senate before they recess for the summer holidays.

If he is approved, he will be the second Paterson appointee whose practice prior to joining the Board was to represent employees against their employers, Higgins being the first. [ED. NOTE: Although Higgins is not an attorney, he worked with members of his union in representing their claims for workers compensation.]

Lower would also be the third attorney appointed by Paterson, which would give the Board seven: with the current six being the highest number of attorneys sitting at any one time, since at least 1996 when I first joined the Board: Chairman Weiss, Commissioners Bargnesi, Ferrara, Higgins, Beloten, and Firestone.

[ED.NOTE: Effective in July 2009, both Chairman Wiess and Commissioner Firestone resigned from the NYSWCB].

It will be interesting to see, with one vacancy left, how accurate was the rumor mill about which I reported in May 7, 2009 when Jim Eagan or Dan Ward were mentioned as possible appointees.

State Insurance Commissioner Dinallo Resigns

May 28, 2009: Governor David A. Paterson today announced that the Superintendent of the New York State Insurance Department, Eric R. Dinallo, will resign his position and become the Henry Kaufman Visiting Professor of Finance at New York University’s Stern School of Business

Superintendent Dinallo’s resignation will become effective on July 3, 2009. No official reason has been given for the resignation.

However, Irene Jay Liu of the Albany TimesUnion reported late today that Dinallo is reportedly considering a run at attorney general should Andrew Cuomo decide to run for governor in 2010. If Cuomo moves on, Dinallo would enter a crowded field where fundraising would be a key factor in winning the Democratic line. In his current position, Dinallo would not have been able to seek office or raise money in anticipation of running for office.

FUBAR: The NewMedicare Offsets Rules

May 28, 2009:As I reported in my April 17, 2009 posting on this page, beginning July 1, 2009, many employers and insurance companies will be required to report claims for workers’ compensation claimants that are also Medicare beneficiaries to the Centers for Medicare and Medicaid Services (CMS).

Michelle Landers, Esq. Executive Vice President—General Counsel, KEMI writing for the American Association of State Compensation Insurance Funds, has raised some significant questions about issues which have made it nearly impossible for the Responsible Reporting Entity (RRE) to comply with the new regulations. In fact, just this morning, I received a phone call from an executive at a state agency in the Mid-West who, after visiting my website, asked if I knew what were the reporting requirement or if I had a name of someone to contact.

My caller stated that he is willing to comply but does not know what are the standards or data required by CMS nor does he know what to do if the claimant refuses to give any information and/or if the injured worker’s status regarding Medicare changes two weeks after the injured worker has submitted his original form.

The problem is that the RRE is required to submit computerized data but no one seems to know exactly what is the data and what types of claimants or cases require the reporting of data. For example, if a carrier is only paying replacement wages but no medical, are they required to collect and submit that data?

As Ms Landers reports,

Planning for implementation of the new reporting requirements continues to be difficult, at best, because the process being established by CMS is ongoing. CMS has been holding conference calls (referred to as Town Hall Teleconferences) on a regular basis to allow carriers and industry representatives to ask questions and seek clarification about the requirements. However, numerous questions still remain to be answered. One of the most significant unknowns which is hampering preparation for compliance is the final list of data fields that CMS will require to be reported. Although CMS has already identified and proposed more than 100 different data fields for reporting, the list is not complete and CMS has indicated that it does not expect to finalize the details until sometime in February or March 2009.

As of May 9,2009 the most recent document on the CMS website is dated May 12, 2009 and does not seem to say anymore than “we are working on it.” The document link is:http://www.cms.hhs.gov/MandatoryInsRep/Downloads/RevisedImplementationTimeline050909.pdf

We Need Your Help

Does anyone know a human being at CMS? In fact, based on the phone calls that many people have made there trying to get information, with response limited to computerized telephone operators, does anyone know if there are human being who work there?

Please send that information to my attention at TheInsider@InsideWorkersCompNY.com. and I will post it in both my next Newswire as well as my next E-Mail Alert.

Up-Date: Commissioner Bios

May 28, 2009: Although her presence on the State Fair Board was not widely known nor mentioned in her official biography, Commissioner Paprocki did receive an approval from the Pataki administration and a confidential authorization from the State Ethics Commission to take this second State appointment, after she resigned her position as an employee of the State Fair Board in order to join the Workers Compensation Board, thus being able to use her influence on two State Boards.[EDITORS’ NOTE: The Biographies on the COMMENTARY & REPORTS page have been corrected.]<

A “Motion” is in Motion on FBR’s

May 22, 2009: I have just received information that the continuing practice of Vice-Chairman Frances Libous to be the sole signer in the denial of Full Board Reviews is under appeal on the grounds that this practice is a violation of WCL §142.

In my January 2009 Commentary entitled “FULL BOARD REVIEWS: Political or Legal?” I answered a question from a reader:

Why is it that Commissioner Libous has the sole authority to deny a full board review rather than having a panel of commissioner review the denials like they do the ones that are changed?

I expressed my opinion that this practice, started by Vice Chairman Sweet, was illegal under WCL §142 and I suggested that the Board review this process. They apparently did not and the issue will now be decided by the Appellate Division, 3rd Department.

New Commissioners Finally Confirmed

May 21, 2009: As previously forecast on this page, Governor Paterson’s two nominees for the position of Commissioner of the Workers Compensation Board have had their appointments confirmed by the State Senate and are already planning to take their place in the decision-making process of the Commissioners.
And I am sure that I can speak for the workers compensation community when I take this opportunity to formally thank both Commissioner Henry and Commissioner Groski for their years of service to the injured workers and employers of the State of New York as well as to the Board itself.

As of today’s date, no other names have been submitted to the State Senate Labor or Finance Committees.

Commissioners’ Biographies

May 21, 2009:A number of readers who asked if it would be possible for me to give them the type of background information on the sitting commissioners that I did on potential nominees for Commissioner/Board Member. I have. And now both the official and background biographies of the current eleven board members can be found on the new COMMENTARY & REPORTS page.

TX Court Says no WC suits allowed against GC’s

May 14, 2009: In the April 10, 2009 issue of The Austin Chronicle, Lee Nichols reports that the Texas Supreme Court reaffirmed its decision in the Entergy v. Summers workers’ comp case.

After a 2007 decision interpreted state law so that the owner of a work-site premises could receive the same shield from liability granted to insured general contractors under workers’ comp laws, legislators cried foul, stating that they never intended the law to be used that way. The court agreed to rehear the case and deliberated in October, but ultimately it stood by its decision. “Today’s majority has simply declared after the fact that the workers’ compensation law means the opposite of what it has always been held to mean when it comes to premises owners,” said Texas AFL-CIO President Becky Moeller. “As a result, more workers – like those injured in the BP explosion of 2005 – will be limited to meager workers’ compensation protections.”

The actual decision was affirmed 6-3, with two concurring opinions by three of the justices and one dissent signed by all three dissenting justices. The full opinion can be found by clicking here …

Former WCB Employee Agrees to Pay $3,000 Fine

May 14, 2009: According to the Midhudson News, Paul Wolfle, a former examiner for the State Workers’ Compensation Board, has agreed to pay $3,000 for violating the post-employment restrictions of the ethics law, the State Commission on Public Integrity announced Thursday, May 14, 2009.

Wolfle, a former examiner for the State Workers’ Compensation Board, is paying $3,000 for appearing before his former agency as a representative of Gallagher Bassett of New York. Wolfle submitted six applications for workers’ compensation insurance benefits for the company in 2007 within two years of leaving state service.

Utah’s workers comp provision unconstitutional: Court

May 12, 2009: A Utah state law’s “offset provision” that reduces workers compensation benefits for Social Security recipients over the age of 65 is unconstitutional, Utah’s Supreme Court ruled Friday.

The decision in Nathan H. Merrill vs. Utah Labor Commission and Vermax of Florida Inc., reverses an appeals court finding that legislators legitimately enacted the law to reduce employers’ workers comp costs while assuring injured employees adequate wage recovery, court records state. Mr. Merrill, who suffered a back injury while working for Vermax when he was 64, had been found by the Utah Labor Commission to be permanently and totally disabled. The commission ordered that he receive $395 a week, but his employer challenged the award, arguing it should be offset, court records state.

The high court said the statute—which reduces work comp benefits by 50% after 6 years—is unconstitutional because it singles out people over age 65.

As posted in Business Insurance.com on April 27, 2009 by Roberto Ceniceros.

CA Seeks Large WC Insurance Rate Hike

May 12, 2009: As the State of California’s financial situation continues to deteriorate, this has been reflected in the request by the California’s Workers’ Compensation Insurance Rating Bureau to request an increase effective this summer in the amount of ….. 23.7%.

Rumor has it that carriers in New York are hoping that the management skills exhibited by the Patterson administration are duplicated at New York Insurance Rating Board: then there will be no change in rates until after the next gubernatorial election in 2010.

FL Again Approves WC Legal Fee Limit
May 11, 2009: On March 6, 2009, on this page, I reported that the Florida Supreme Court had ruled that the State legislature’s attempt under HB 903 to limit attorneys’ fees in workers compensation cases was unreasonable.

This week, the law has been rewritten to address this concern and just passed the Florida State Senate 22-16 and the State House 84-35. It now awaits the signature of Governor Charlie Crist.

The law, in part, reads,

Any attorney’s fee approved by a judge of compensation claims for benefits secured on behalf of a claimant must equal to 20 percent of the first $5,000 of the amount of the benefits secured, 15 percent of the next $5,000 of the amount of the benefits secured, 10 percent of the remaining amount of the benefits secured to be provided during the first 10 years after the date the claim is filed, and 5 percent of the benefits secured after 10 years. The judge of compensation claims shall not approve a compensation order, a joint stipulation for lump-sum settlement, a stipulation or agreement between a claimant and his or her attorney, or any other agreement related to benefits under this chapter which that provides for an attorney’s fee in excess of the amount permitted by this section.

The full text of the bill can be found by clicking here ….

UPDATE ON NEW COMMISSIONERS:
Comings and Goings

May 7, 2009: It appears but one can never be certain until the final swearing in takes place, that:

• Soon-to-be new Commissioner Beloten will take the slot currently occupied by Commissioner Edel Groski (appointed 1998) for a full seven year term.
• Soon-to-be Commissioner Foster-Colbert will fill one of the two vacancies which would give her either three or four years.
• Retiring Commissioner Karl Henry’s slot will go to a third soon-to-be named candidate - see below.

Beloten and Foster-Colbert have both been approved by the Senate Labor Committee and have now been scheduled to appear before the Senate Finance Committee.

Rumor has it that either one or possibly both of the following have their names under serious consideration:

• Jim Eagan, a West Seneca financial executive, who is the County Legislature’s appointee to the Niagara Frontier Transportation Authority, was part of Senate Majority Leader Malcolm Smith’s “transition committee” and is now vice chairman of Smith’s statewide fund raising effort headed by Donald Carey, son of former Gov. Hugh Carey. (Buffalo News).
• Dan Ward, Amherst Town Board member, running for re-election in November 2009, and an unsuccessful candidate in the Democratic Primary for the NY State Senate 61st District seat vacated by the retirement of Senator Mary Lou Rath.

Commissioner Edel Groski Leaving the Board

May 7, 2009: Commission Agatha Edel Groski’s 11 years of service at the Workers’ Compensation Board now comes to an end.

Working out of the Albany District office, Groski brought to the Board a unique combination of legal and medical experience to the Commissioners’ deliberations and was one of the few commissioners who participated, in person rather than video, at hearings all over the State. Using her years of experience at a similar post at the NYS Department of Labor, her familiarity with the appeals process helped with the transition of the Board from its paper filing system to the current computerized ECF/CIS system.

Appointed in 1998 by Governor George Pataki, she worked for the New York State Department of Labor as an Administrative Law Judge for Unemployment Insurance and as a Reviewer at the Appeal Board before her appointment as Commissioner. Mrs. Groski has also worked in private law practice gaining experience in personal injury and family law. In addition to her legal experience, Mrs. Groski has a strong background in health. She worked as Nursing Home Administrator for Eden Park Nursing Home in Cobleskill. She also has an R.N. degree and served as the Director of Nurses for a period of time. Mrs. Groski is a graduate of the Western New England School of Law, Russell Sage College in Troy and Marymount College in Tarrytown. She resides with her family in Cobleskill, New York

Chrysler/Sedgewick Stops Comp Payments to Injured Workers

May 6, 2009 UPDATE: On Wednesday, May 6, 2009, Judge Arthur Gonzales overseeing Chrysler LLC’s Chapter 11 bankruptcy protection proceedings has ruled that the automaker can start taking steps toward selling the vast majority of its assets to Italy’s Fiat Group SpA. The case is In re. Chrysler LLC, 09-50002 and is being heard in the U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Although these proceedings were precipitated by a motion filed by the State of Michigan, it also impacts as noted below on injured Chrysler employees in New York State.

Michigan State Attorney General Mike Cox filed papers (see below) in bankruptcy court in New York on Tuesday, May 5, on behalf of the State of Michigan Workers’ Compensation Fund and Funds Administration. The filing objects to the sale of Chrysler assets to automaker Fiat contending the sale could leave Chrysler unable to make yearly $25 million payments. The State of Michigan worries it’s Self-Insurers’ Security Fund could become insolvent and leave all eligible injured workers at larger companies without benefits.

As noted in my News Alert Tuesday May 5, one of my readers just informed me that their Chrysler employees have been calling attorneys indicating that their indemnity checks were late. Upon investigation, one firm was advised by Sedgwick Claims that payment of these claims in New York State has been “frozen” due to Chrysler’s filing for reorganization under Chapter 11.

One must assume that at some time in the near future, the WC Board will make some pronouncement as to its plan to protect the workers, or did someone forget that, although Chrysler may based in Michigan, they have employees and VOTERS in New York State.

The “First Day” Motion

A “First Day” motion was filed to permit the debtors in possession to continue to pay these claims. The Motion was filed by:

JONES DAY
222 East 41st Street, New York, New York 10017
Telephone: (212) 326-3939, Facsimile: (212) 755-7306
Corinne Ball, Veerle Roovers

And it reads:

Motion Of Debtors And Debtors In Possession, Pursuant To Sections 105(A) And 363(B) Of The Bankruptcy Code, For An Order (A) Authorizing The Debtors To (I) Continue Their Existing Workers’ Compensation Programs And (Ii) Pay Certain Prepetition Workers’ Compensation Premiums, Claims And Related Expenses; And (B) Granting Certain Related Relief.

You can read the original motion documents, undated and consisting of 23 pages, by clicking here >….

Patterson Nominates Two New Commissioners

May 1, 2009: Governor Patterson has named two people to become his second and third appointments as Commissioners for the Workers Compensation Board, nominees who are to appear before the Senate Labor Committee Monday, May 4, 2009.

As previously reported in the Newswire on this site, one of the nominees is Robert Beloten who I have been told is one of the better and hard working administrative law judges from Queens. It will be important to see if his many years of experience in the trenches will have any impact whatsoever on the Board’s policies and practices.

Freida D. Foster-Tolbert, a graduate of Borough of Manhattan Community College, was appointed in 2006 as a CUNY Trustee by Governor George Pataki, for whom who she previously worked as Director for Community Affairs in the state Executive Chamber (where I had the occasion to work with her). Governor Pataki also appointed her to serve on the Harlem Community Development Corporation’s Board of Directors. Leaving that position shortly after the election of Governor Spitzer, she took a position in a non-profit before becoming a manager at the public relations firm of Burson-Marsteller, which provides services to government, corporate, and community clients. Foster-Tolbert holds a BA in Communications, Sociology, and Speech from Hofstra University and received an MS in Corporate Communications from the University of Wisconsin-Whitewater. More information about her can be found on her Facebook page.

Either Beloten or Foster-Tolbert will fill the vacancy created by the retirement of Karl Henry, as reported last week. Whether the other will fill one of the two long-standing vacancies or take over the seat filled by Commissioner Edel Groski whose term, like that of Henry, ended December 31, 2008, won’t be known until and unless both nominees are approved by the State Senate.

NYSIF Chooses New Executive Director

April 29, 2009: The New York State Insurance Fund Board of Commissioners has announced the appointment of James J. Wrynn as NYSIF Executive Director.

A partner in the law firm of MacKay, Wrynn & Brady, LLP, with offices in Douglaston, Queens, New York and Hoboken, New Jersey, Mr. Wrynn’s appointment was approved unanimously by the board at its monthly meeting on April 22, 2009 and became effective the same day.

Mr. Wrynn’ s law firm specializes in the areas of civil litigation and appellate practice with an emphasis on insurance law. Designated as both an Associate in Risk Management (ARM) and Associate in Captive Insurance (ACI), he has an extensive legal background in insurance, counseling agents, brokers, risk retention groups and insurance companies in most lines of insurance and excess insurance, reinsurance, self-insurance and captive insurance.

Mr. Wrynn began his legal career in 1982 in the Manhattan office of McCormick, Dunne & Foley and has litigated cases in the areas of life insurance, accident and health, property and casualty, general liability, insurance coverage disputes, professional malpractice and product liability. Mr. Wrynn serves on the Board of Managers and the Grievance Committee of the Queens County Bar Association, and is a member of the New York and New Jersey State Bar Associations, the New York State Trial Lawyers Association and the Network of Bar Leaders, among others. He also served as a board member of the New York City Economic Development Corporation and the New York City Business Relocation Assistance Corporation.

Why Claimant Attorneys appeal losing cases

April 21, 2009: Sometimes when reviewing a case that is before us, either in our work queue or in oral argument, the commissioners would ask each other, “Why is this case on? It’s a loser for sure.”

One explanation can be found in an April 21, 2009 decision issued by the Appellate Division 2nd Judicial Department: the Court heard and then dismissed an action by a pro-se claimant to recover damages, inter alia, for legal malpractice by his workers compensation attorney.

The attorneys did everything by the book but the evidence was not there to support the claimant’s case, which claim was denied by a law judge, a board panel, and a Full Board Review. His attorneys then gave the claimant an option to proceed at the Appellate Division, which according to their retainer agreement, was not a service they provided.

As a result, in addition to losing the case and thus receiving no fees for their work (part of the risks claimant attorneys take all the time), this firm was saddled with the additional costs of hiring a defense at the Supreme Court and then, after winning there, having to hire defense at the Appellate level. As the Appellate decision was unanimous, it is unlikely that the claimant/plaintiff will be able to pursue this at the Court of Appeals.

So when someone wonders why some claimant attorneys pursue appeals on an obvious losing cases, this is why. And it is not the only one. The Appellate Division, First Department On October 21, 2008 also issued a dismissal of a complaint of malpractice in the Matter of Silverman v Reisman. And there is another similar and equally unworthy case now wending its way through Supreme Court in New York, which after several adjournments has its first hearing set in June.

The case decided April 21, 2009 can be found on the DECISIONS page and the pro-se claimant’s name is James R Turner, III.

CA. Workers’ comp ‘reforms’ failed to protect workers

April 20, 2009: As reported by Todd McFarren in today’s issue of Capitol Weekly, “The newspaper of California government and politics”, reports that five years after passage of Gov. Schwarzenegger’s SB 899, the evidence is clear that the law has failed Californians who are injured on the job.

While SB 899 has delivered billions in savings to employers and tens of billions in record-high profits to insurance companies, it has plunged tens of thousands of working Californians into pain, misery, poverty and despair. Since SB 899 was implemented by the Schwarzenegger Administration, Californians injured at work receive among the lowest disability compensation in the nation. If an ear, hand, leg, eye, or foot is lost in a workplace accident, Californians receive a pittance compared to other states and even the average of U.S. states.

Just one example tells the story. According to the U.S. Chamber of Commerce, loss of a hand at work is valued at $249,000 in Iowa, $162,000 in Oregon, $238,700 in Illinois, $134,000 in New York, and just $79,000 in California. That is the total compensation injured workers receive for the lifetime loss of that hand. They can’t sue for more. The Schwarzenegger Administration places lower value on your body than virtually any other state in the nation. This is what the governor touts as his signature success. It begs the question, “Success for whom?”

It is folly to believe insurance industry claims that the reforms are no longer reducing costs. Statutory limits on physical therapy and chiropractic treatment are still in place, medical treatment authorization requests are still judged against nationally developed treatment guidelines and are subject to utilization review, outpatient facility fees are still subject to the Medicare fee schedule, injured workers can still receive a maximum of 104 weeks of temporary disability, penalties for unreasonable delay are still minuscule, and permanent disability awards are still subject to apportionment.

To read the full article, click here ….

Retroactive ATF Deposits are Legal

April 22, 2009: As mentioned in the NEWSWIRE of April 10, 2009, a motion had been filed with the Appellate Court on a case in which a Board Panel, with one dissent, had determined that mandatory payments to the Aggregate Trust Fund (ATF) can be retroactively applied. That motion had been withdrawn at the request of all parties because the Board had scheduled a similar case for Full Board Review. In fact they had a total of 84 such cases.

At the Full Board Meeting Tuesday this week, the Board, with one dissent, affirmed that the mandatory payment to the ATF, included in the 2007 Amendment to the Workers Compensation Law, could and should be applied retroactively.

The lead case on which this decision was made is WCB#0012-4050 (NY Presbyterian Hospital).

However, no final decisions have been issued because of the manner in which all Board decisions are done and it is possible that the last of these decisions will not be formally issued for anywhere from 4-6 weeks (unless the Board reads this NEWSWIRE.) In those cases decided at the Full Board which require a final rewrite, the revised decision is entered into the work queues of the panel of three commissioners. If that is true with any of these cases, once it is in the work queue, it must be signed by all three of the members before it can be filed. And since some commissioner like to sign their cases only every few weeks, the ATF case in their work queue, like all the other cases they have, will languish until such time as they have a few minutes in their personal schedules to attend to their work.

If there is no change to the original MoD, then a form letter would be sent out by the Office of the General Counsel and those are usually done relatively quickly.

My experience has been that on some substantive issues, and this certainly should be one, even though the Full Board is affirming the individual panel decisions in all 84 cases (I am just assuming this as I do not have access to the other 83 cases), the Board would rewrite the decision to clarify its position on the issue under appeal, knowing that the case(s) would be going to the Appellate Court. And I know from talking to one carrier’s attorney that at least one of these decisions will be appealed.

Coincidentally, there were a number of other ‘bulk’ decisions made at the Full Board Meeting Tuesday. There were 11 cases on WCL §142 which I was told have their basis in a WCL §25-a issue (WCB #0031-4672, 0072-4430, 0995-1776, 2050-6812, 4030-3134, 6010-8531, 6880-5120, 6911-1903, 6940-1126, 6980-4047, and 6980-8732) as well as three cases brought individually under WCL §23 (WCB #5070- 8085, #5060-6061, #0074-8821) which is the same section of the law under which the 84 ATF cases were listed.

But as I have no access to the Board files, I am at this time unable to give any details of what was done and why. Any information, attributed or anonymous, would be appreciated.

Up-Date on Colorado’s Insurance Fund Raid

April 23, 2009: Just off the phone with a contact in Colorado regarding the currents status of that state’s Legislature’s attempt to confiscate the $500M surplus funds held by Pinnacol Assurance, its equivalent to our State Insurance Fund.There were a number of parliamentary procedures that delayed the passage of the bill long enough for the Legislature to come to its senses and not pass it. In its place, the Legislature is now considering a bill with two parts: 1) provisions for performance and financial audits to be conducted by the state auditor and paid for by Pinnacol and 2) an interim committee to study the Colorado workers’ compensation system and Pinnacol and make recommendations on future operations. Unfortunately, in New York, there is a precedent for raiding New York’s State Insurance Fund: Governor Mario Cuomo was successful in getting the Court to agree to allow him to ‘borrow’ a billion dollars for the fund on that promise that if ever needed it would be repaid. We’re still waiting.

Commissioner Karl Henry to Retire

April 22, 2009: It is with very mixed feeling that I confirm the upcoming retirement of my good friend and a great Commissioner Karl Henry, effective the end of this month, formally announced by him at the April 22, 2009 Full Board Meeting in Albany.

Karl is the last of the four Horsemen of the Apocalypse, as some called us. He was the second appointee of Governor Pataki, joining the Board in April 1995, the same day as Vice Chairman Jeffrey Sweet. Along with Commissioner Carol McManus (1996-2005) and myself, all under the leadership of Chairman Robert Snashall, we were charged with the responsibility of not only rendering fair and expeditious decisions but also helping bring the Board into the computerized world of the 21st Century.

Although Karl resided in Buffalo, he was willing to take on more than his fair share of traveling such that he became, for all practical purposes, the resident commissioner in Queens for §32’s and a frequent visitor to Brooklyn, where he joined me on innumerable panels hearing oral arguments.

For those of you who had the pleasure of appearing before Karl, I am sure you will miss, as I did when I left the Board, the pleasant banter when talking to him but applaud the seriousness with which he dealt with every case and issue that came before him.

As his 13th year as a commissioner brings to an end his career at the Board, I take this opportunity to say: Thanks for everything and best wishes.

New Commissioner(s)

April 23, 2009: Now that Commissioner Henry has formally announced his retirement, it is time to bring to the fore all the rumors that have been circulating regarding new commissioner appointments. There are currently, excluding the vacancy to be created by Henry’s retirement, two very old vacancies dating back a few years. And there is one commissioner, Edel Groski, whose term of office ended, as did Henry’s, on December 31, 2008.

To date there is one name that has surfaced as a new and probable appointee: Queens Administrative Law Judge Robert Beloten, supposedly an old college buddy of Governor Patterson. It has also been rumored that there is, and always has been, a long list of potential nominees supplied by every country chairman and major contributor and union. This would be no different from the days of the Pataki administration, although at that time other than maybe Local 1199 in the later years of his administration, there would have been no union recommendations on Pataki’s lists.

Now that the State Senate is back after the Easter recess, it is only a matter of time before Beloten’s name and those of others appear on the hearing schedules for the Senate Committees. Normally, the nominee is first interviewed by the Labor Committee, then by Finance, and finally to the full Senate. But this can all be done in one day, so on occasion the names of nominees do not appear on the Senate Hearing Schedules until the day or afternoon of their confirmation hearings.

What will be most interesting is if Patterson will fill all four slots. Two have been vacant for over two years. Nonetheless, the remaining commissioners have less work than ever: no more §32 hearings and the oral arguments are down to one or two panels a month as compared to the 6-7 when I first came to the Board. In fact there is so little work and with telecommuting and signing cases only once or twice a month, it is easy to see why some commissioners travel (live?) out of state and one can even be found overseas quite frequently. So unless more REAL work is given to them, why fill the spots? (See the news article that follows.) A $5 ink stamp saying APPROVED would do as well if not better than some of the current insouciants: it would always be at the ready to ‘sign’ a decision.

So with all the job cuts Governor Patterson is instituting statewide and his request that the Board eliminate 92 jobs, perhaps keeping two of the Commissioners spots vacant at $90,800 a year and keeping for example two reporters and still saving money, would make sense. Then again, since Patterson has not ruled out running for Governor in 2010, filling four highly sought-after commissionerships may endear him to a few county chairman sufficiently to gain their support in what may be a bruising Democratic brawl for the nomination.

“Minimum work” Judge Censured

April 16, 2009: The LA Times reported a story from a state judicial watchdog group that a Riverside County judge who was censured for working only a few hours a day has agreed to resign with a pledge to never work again for a state court. The San Francisco-based Commission on Judicial Performance publicly censured Riverside County Superior Court Judge Christopher J. Sheldon, 60, after determining that he routinely left court before noon for nearly two years without authorization or notifying his supervisors. Occasionally another judge handled Sheldon’s work in his absence, the commission found.

“Judge Sheldon has demonstrated a flagrant disregard for his obligations to his fellow judges, the public and the reputation of the judiciary,” the commission said in announcing Sheldon’s censure.

I don’t know if the NYS Workers Compensation Board has its own judicial watchdog group, but is does have WCL §147.

The original notice of the inquiry can be found at http://cjp.ca.gov/userfiles/file/Notice_FP/Sheldon_NFP_1-09-09.pdf

Colorado Raids its own ‘State Insurance Fund’

[ED.NOTE: KKTV 11 Colorado Springs just reported late Wednesday that at the last minute the Colorado State Legislature has backed off its plan to present the bill to the Governor. No reason has been given. But this story is being included here as a warning to the carriers in New York that they had better be prepared lest our legislature pass such a bill and NOT change their minds, for the recipients of NY’s Legislature’s largess are far stronger in fighting for their (really our) money than their counterparts in Colorado.]

April 16, 2009: The Colorado State Legislature has this week passed a new bill SB 281 which allows them to tap into the surplus funds held by Pinnacol Assurance, Colorado’s equivalent of the New York State Insurance Fund.

Pinnacol President and Chief Executive Ken Ross (formerly Executive Director of NYSIF) called this an ‘unconstitutional raid’ on the fund’s assets. In 1991 Colorado passed legislation making the insurer a quasi-public authority but the newly passed legislation changes that status. Ross also noted that Colorado’s attorney general accepted a legal opinion from the solicitor general “stating that a plan by Colorado lawmakers to raid Pinnacol Assurance assets is unconstitutional and impairs a vested interest our policyholders have in Pinnacol’s assets.”

Senator Brandon Shaffer (D-Longmont), a sponsor of the bill justified this ‘raid’ stating, “We still have a huge hole in our budget and are in a position where we may need to cut $300 million from higher education. That is simply unacceptable. Pinnacol Assurance is a division of the state. It pays no taxes and its massive surplus can be better spent on higher education in Colorado.”

As reported here in our March 20, 2009 Newswire, Connecticut considered raiding its surplus WC funds to balance its general budget. Colorado has now done it. Considering our own Legislature’s proclivity for developing new methods of converting (taxing) other people’s monies into funds for their own pet projects and those of their favorite lobbyists, how safe are the funds at SIF, or the UEF, ATF, or the Second Injury Fund, etc?

Carriers face $1000 per diem penalty on WC/Medicare

April 16, 2009: As reported April 15 2009 in Mondaq by John Cerilli and Ryan Grenn, beginning July 1, 2009, many employers and insurance companies will be required to report claims for workers’ compensation claimants that are also Medicare beneficiaries to the Centers for Medicare and Medicaid Services (CMS) and become subject to a $1,000 per day per claimant penalty for failure to comply with this mandatory reporting requirement.

While in theory this makes sense, does this not require that the injured worker alert the employer and/or carrier to the fact that he/she is already enrolled in Medicare? And if the claimant does not notify them, is the claimant subject to a $1,000 a day penalty?

As John Rummel stated, “In theory, theory and practice are the same. In practice, they are not.”

WCB Has no response to the NY Times

April 16, 2009: As noted earlier in this site, it seems that no one from the Board has yet to reply to the three articles in the New York Times about “A World of Hurt: the New York State Workers Compensation System”. And while some have been critical of the Times from using the following edited quote from Chairman Zachary Weiss on the front page of the Times , “There are millions of things I would like to correct . . . and I can’t.”, Chairman Weiss’ only public statement has been his April 6, 2009 remarks to the State Senate Labor Committee, as reported in several upstate Gannet newspapers.

The state Workers’ Compensation Board has reduced the waiting period for disputed claims and appeals but has more progress to make in this and other areas, the head of the board said Monday. “I think what’s very, very clear that’s happened in the last year is that we’ve implemented streamlined adjudication standards,” Zachary Weiss, chairman of the board, told the Senate Labor Committee. As a result, the waiting period for disputed claims is much shorter, he said.

For the record, Chairman Weiss’ quote on the front page did leave out one word. The complete quote, further down in the article, was, “There are millions of things I would like to correct immediately and I can’t.“

Bar Group Creates Model Code for NY’s Administrative Law Judges

April 15, 2009: The New York State Bar Association has created its first-ever model code for administrative law judges, hearing officers, referees and others who interpret and apply laws and regulations for New York state agencies. The new ethics canons, five in all, were developed over the past two years by the State Bar’s subcommittee on the Administrative Law Judiciary. Approved without opposition by the Bar’s executive committee and the House of Delegates during the group’s April meeting in Albany, the model code will be submitted to state agencies and the Legislature for their proposed adoption.

Currently only one state agency, the Workers’ Compensation Board, has a model code in place for its administrative law judges (ALJs), though most agencies have rules against law judges engaging in conduct that creates potential conflicts of interest.

And when will they do them for the Commissioners? Like setting some minimal work standards. There is a rumor that one commissioner, one of the insouciants, has over 200 unsigned cases on their computer. Maybe someone should post this person’s name so that the 200+ claimant waiting for a decision know what is holding up their lives for a few weeks while the commissioner in question pursues other activities.

The WCB Formally Defines Independent Contractor

April 14, 2009: As noted in the March 20, 2009 Newswire, the Oligarchic Cabal at the Board had taken upon itself the legislative prerogative to define an independent contractor in the Bulletin it prepares for municipalities when they do outsourcing.

The Cabal has now taken that prerogative one step further by including this definition in its website under Definitions of Terms.

As noted in the March 20 Newswire, the plumber who comes to your house to install a new sink or tub meets the definition of being your employee as are any assistants he may need to do the work. So probably is the painter and most of the other contractors you used to think were ‘contractors’ but the Oligarchic Cabal in its infinite wisdom knows these workers are really your employees for whom you are trying to avoid responsibility.

It will be interesting if any of the Commissioners (the ones who read the MoDs since the insouciants probably do not even read this website) or Law Judges, until now, were unaware of this change and whether or not they, or even the Appellate Court, will pay any attention to it.

Consumer Reports: Relief for Aching Backs & 173 Fixes

April 9, 2009: In its May 2009 Article, Consumer Reports states “About 80% of U.S. adults have at some point been bothered by back pain.”

They surveyed more than 14,000 readers. And the consensus was that “58% who tried chiropractic manipulation said it helped a lot.” Second at 55% were physical therapists and, in third place with 53%, acupuncturists. They also did a survey of an additional 10,000 readers who had had back surgery within the past five years. The results can be found in the May 2009 issue.

While this article has a lot of interesting information, there is another excellent article in The Spine Journal’s Volume 8 (2008) 1-7. Titled “A supermarket approach to the evidence-informed management of chronic low back pain”, the article also contains a chart of 173 modalities of treatment for back pain, from over-the-counter medicines to therapy to surgery.

I was told about this journal at a clinic run by Dr Lewis G. Maharam, MD, FACS Medical Director, of the New York Road Runners and The New York City Marathon. Unfortunately, there is no more access to the article or the modality chart on the web site of this journal, a division of ELSEVIER who is the world’s leading publisher of science and health information. However, I do have copies of the table and some of the medical information from the article. In April of 2008, I had sent these to Chairman Weiss suggesting that he invite Dr Maharam to address either the Commissioners and the writers at ARD or the Law Judges on this topic which effects about 20% of the injured workers seen at the Board. If you would like copies of either, please send your request to TheInsider@InsideWorkersCompNY.com.

ATF Case Sent Back To The Board

April 9, 2009: A motion to appeal was made to the Appellate Division on an ATF case regarding the legality of retroactive application of the new funding requirements. The Court stated that the Board must consider all the facts in the case before a proper decision can be rendered. However, this case is not in the DECISIONS page because no formal decision has yet to be issued by the Court. Full details should be available in this site next week.

Gov Patterson: WCB Must Cut 92 Jobs

April 9, 2009: In a recent press release, the Governor Paterson announced that among that staff cuts that he expected each agency to make are 92 cuts to be made at the Workers Compensation Board. The decision as to which jobs will be eliminated will be made by the Oligarchic Cabal and are expected to be announced shortly. It will be interesting to see if they fill the two commissioner vacancies in view of the fact that they have been empty for a number of years and the current commissioners’ work load gets less by the month.

Do Those 92 Jobs Belong to the Reporters?

April 9, 2009: Although this story was first published in February 19, 2009 in a self-promotional piece in the Internet by escribers, it is only now being put into this web site as, until now, there has been no independent verification that the Board was planing to replace live court reporters with electronic equipment.

It is now a plan that is being put into place.

Since there are about 50-70 court reports currently employed by the Board, will the elimination of these jobs made up most of the 92 cuts? The fact is that according to the press release from escribers, the firm who claims that they are already working at the Board, the equipment to be used will require a human to monitor it. So it looks like the 92 jobs may well be outsourced. And eventually, the electronic records will have to be transcribed. Will these also be outsourced? Out sourced outside of New York? Outside the U.S.?

According to the press release,

Electronic reporting uses professional-level audio recording systems to register court proceedings. For over thirty years it has been a successful reporting method in federal and other jurisdictions. The United States Supreme Court employs E-Reporting exclusively to capture and preserve its historic public records.

E-Reporting includes two elements: first and foremost, the electronic court reporter who oversees the process and who may be responsible for a subsequent transcript, and secondly, the sound recording equipment itself.

The electronic reporter faces certain challenges, especially when assigned to a remote location that is not equipped for electronic recording. The reporter may only have a few microphones and may not be able to adequately record people far away from the microphones. Before the proceeding begins, the e-reporter will explain to the participants the logistics of the microphone placement and request that they get close to the microphones to speak, but once the proceeding starts, the e-reporter will not interrupt unless absolutely necessary. It’s important that the electronic reporter not become part of the transcript. The electronic reporter should be a “fly on the wall”.

Speaking for myself, how do you deal with someone calling in on the telephone? How do you deal with a translator in the room, particlarly if it is a simultaneous translator? Who will tell everyone in the room to “SHUT UP! I can only listen to one person at a time.” Or, “Would you mind slowing down so I can understand what you are saying?” [NOTE: Those complaints by live reporters were warranted.]

Stay tuned.

The New York Times Articles

April 2, 2009: By now everyone knows about the three articles in the New York Times about the NY State Workers Comp Board, written by Steven Greenhouse and N.R. Kleinfield and I assume that most of you have read them.

• March 31, 2009 “For Injured Workers, a Costly Legal Swamp”
• April 1, 2009 “Exams of Injured Workers Fuel Mutual Mistrust”
• April 2, 2009 “System to Resolve Workplace Injury Leaves Ill Will on All Sides”

You may not be aware of the fact that these articles generated about 125 to 150 blog comments each, from people as varied as the eminent Professor John Burton of Rutgers, whom I often quote, to doctors, adjusters, lawyers from both sides and angry claimants and employers.

As to whether or not the Board is listening will be the subject of Monday’s poll.

Our Current Poll on §32’s

April 2, 2009: The results so far are quite unexpected in terms of who should do the §32’s as well as who is answering the poll. The results will be published Monday so you still have a few days left to vote at POLLS.

National Workers Comp and Illegal Aliens

April 1, 2009: Call them ‘illegal aliens’ or ‘undocumented workers’ or anything else, their presence in the workers compensation system has impacted all 50 States.

For those who need a quick guide to how New York State’s handling of claims by this category of workers is handled as compared to the other 40 states, you need only go to a study that was prepared by the Independent Insurance Agents and Brokers. There is also a chart that has been prepared by state. It lists the major statutes or regulations that cover illegal aliens as well as major case law and a commentary overview. I was pleased to see that the case I often cite (because I helped write it), Ramroop v Flexocraft Printing, is the only case in their chart of all 50 states that has a link to the actual decision.

A quick review of the chart seems to indicate that on a scale of 0 to 100, with 0 being Wyoming which appears to include only ‘legally employed’ aliens to a 100 for the states that treat them 100% equal, NY would rank about a 40 to 45. It Is noted that some members of the North Carolina legislature want to block all benefits as has been done in Wyoming.

For a look at the chart itself, click here…

Skydiving and Comp Awards

April 2, 2009: The Schenectady Daily Gazette reported that a Hudson Falls man who collected $83,000 in workers’ compensation benefits by claiming a back injury prevented him from working was arrested after investigators found that his reported injuries didn’t stop him from skydiving.

It reminded me of a case, in which I was in the dissent, for someone claiming a back injury which I felt was highly suspicious since he said immediately after the accident, and there was an OSHA inspector there, that he had no injury. But he did file a claim the next Monday for a serious back injury which required him to go to the emergency room the prior Saturday afternoon. At Pre-Board for this mandatory FBR, the tentative vote was 12 to 1 to allow the claim. But the next day, after combing through about 80 to 90 pages of medical reports, I quoted from the discharge report, “Injuries have healed sufficiently that patient can return to his weekend hobby of skydiving.” The 12 changed their votes.

Will a §25-a Case go to the Court of Appeals?

March 26, 2009: After losing a decision on §25-a in the case of Lauritano & Consolidated Edison Co. Inc v Special Funds, the Fund has sent a letter to the Appellate Court asking for the Appellate Court, which on February 5, 2009 unanimously affirmed the Board’s finding that §25-a applied, to either reconsider its decision or for its permission to proceed to the Court of Appeals. All papers have been submitted as of today’s date and a ruling on this motion is expected shortly.

Because of the number of other legal issues effecting the Special Funds, a case such as this may have significant financial impact on the losing side so it will be interesting to see what happens. So, for those who had expected a quick white flag from the Fund on such cases, they had better be prepared for a few more weeks of waiting time until the 3rd Department decides what to do.

I also understand that a motion has been filed on an ATF case but, as of now, I have no details. This may be an even more portentous case because of the ongoing fight, even within the Board, as to the real intent of the Amendment of 2007.

Value of Structured Settlements Jumps by 25%

March 25, 2009: Amanda Bronstad writes today in The National Law Journal that the total value of structured settlements jumped by 25 percent during the fourth quarter of 2008, compared to the previous quarter.

Randy Dyer, a consultant in Rockville, Md., and former executive vice president of the National Structured Settlement Trade Association, stated that this occurs in times of financial turmoil, such as in 2000 and 2001. “With a cash settlement, a poor investment could obliterate a plaintiff’s income from the lawsuit . . . The tendency in tougher economic times is to start thinking: ‘What is the securest way I can take care of myself and my family?‘”. Apparently the answer is a structured settlement rather than lump sum which the injured workers can invest ..where?

My question is: “What will this mean for §32’s?”

The Board has a new Database

March 25, 2009: Since 1997, a year after I joined the Board, I complained to the legal staff about the lack of any database with which we as commissioners could review prior cases for reference. In 2000 or so, they developed a system called MOD SEARCH which I describe in my book, Behind The Closed Doors, as useless at best, while offering them my own expertise to develop a real database.

They also had a list, in another database, of Appellate Decisions sorted by date and you had to click on each one to see the issue with which it dealt.

For years I told them that I had already written both a database which complied this information by issue, date, case name, etc., as well as a case handbook which listed both relevant Board decisions and Appellate Court decisions, within two days after they were issued.

I am pleased to learn that the Board has just recently introduced such a feature which they call called “The Source”. It is a subject matter search and it is not limited to MOD’s. It also contains Appellate Court and Court of Appeals case references. I am told that it is a good, quick search but does not eliminate the need to go to Lexis if more detail is required. Depending on how current they keep this database, the result may be a few more consistent decisions.

But, and this is not only true for the Board but also for some of the attorneys who have appeared before me at Oral Arguments or in written appeals, a citation should only be used after it is read in its entirety and not be based on a quick summary. As I recounted in two cases on page 142 of my book, the failure to read the entirety of the case but simply its summary can result in a lost case, if not also a rebuke from the Court.

But a TIP OF THE HAT to the Board for this new resource.

The Board does have new Law Judges

March 18, 2009: The Board has just announced the appointment of two new law judges in New York City, one for Manhattan and one for Brooklyn.

After having served as a conciliator for eight years in Manhattan, Rohan Marshall has been moved up to the position of law judge in that same office.

And as a further clarification of last week’s Newswire, it is John Laughlin who was, like Keith Longden still is, a senior attorney in the Office of General Counsel who has become Brooklyn’s newest law judge.

Gentlemen, welcome to the trenches and good luck.

Autopsy Barred in Asbestos Death Claim

March 18, 2009: A New Jersey Appeals Court has denied the defendants the right to an autopsy of the worker who died of allegedly asbestos-related causes.

The judges in the case of St. John v Affina Group, which includes Chrysler Corp. and Honeywell, pointed out that if St. John had not died right before trial, Chrysler and Honeywell would have gone ahead and defended without autopsy evidence. The Appeals Court also “affirmed a trial judge’s finding that defendants Chrysler Corp. and Honeywell failed to show that examination of the dead man’s lung tissue would produce significant evidence.”

The lower court judge stated that the defendants failed to show a “sufficient showing of need, on the family’s religious objections and on the compelling public necessity standard set forth in the law governing autopsies by medical examiners.”

This does raise a number of interesting questions that should be of concern to those who feel that the NYS WCB is becoming more claimant-friendly.

• Should all defendants in asbestos and other such disease related claims demand an autopsy as a part of the standard defense even while the claimant is alive? (And you can interpret this either way.)
• Is this autopsy of no ‘compelling public necessity’ because it is a private company who will pay if the case is lost but if it were a government agency, the autopsy would have been allowed as a ‘compelling public necessity’?
• Can the Courts deny the defendant the right to have the claimant undergo invasive or even non-invasive medical exams and treatment if the claimant objects on religious grounds?

For full details on this analysis of this case, link here to the March 18, 2009 article by Mary Pat Gallagher in the New Jersey Law Journal.

Did the Board secretly define an Independent Contractor?

March 17, 2009: For many year, there has been an issue which the law judges and the commissioners faced in cases regarding the employment status of injured workers: were they self-employed - independent contractors or were they employees (General/Special, etc)?

(For the purposes of this and future commentaries, I will be using the phrase Oligarchic Cabal to refer to those select few at the Board and maybe one or two policy makers from outside who make all the real decisions.)

In a 38-page document issued in December 2008 ane entitled [take a deep breath] STATE & MUNICIPAL AGENCY REQUIREMENTS UNDER GENERAL MUNICIPAL LAW §125, & WCL §57 & §220 FOR WORKERS’ COMPENSATION AND DISABILITY BENEFITS, the Board’s Oligarchic Cabal has defined an independent contractor. And it states that:

To be considered an independent contractor, and thus not an employee,an individual must meet and maintain All ten of the following conditions

So aside for the fact that the Oligarchic Cabal is insisting on a definition that would effect legal decisions by law judges and commissioners but has not seen fit to tell anyone about them, this list as presented is RIDICULOUS. The list:

1. Obtain a Federal Employer Identification Number from the Federal Internal Revenue Service (IRS) or have filed business or self-employment income tax returns with the IRS based on work or service performed the previous calendar year.
2. Maintain a separate business establishment from the hiring business
3. Perform work that is different than the primary work of the hiring business and perform work for other businesses
4. Operate under a specific contract, and is responsible for satisfactory performance of work and is subject to profit or loss in performing the specific work under such contract, and be in a position to succeed or fail if the business’s expenses exceed income
5. Obtain a liability insurance policy (and if appropriate, workers’ compensation and disability benefits insurance policies) under its own legal business name and federal employer identification number
6. Have recurring business liabilities and obligations
7. If it has business cards or advertises, the materials must publicize itself, not another entity
8. Provide all equipment and materials necessary to fulfill the contract
9. Control the time and manner in which the work is to be done
10. The individual works under his/her own operating permit, contract or authority

So when your plumber comes over to fix a broken pipe, you better have your multi-page questionnaire prepared with all these questions as well as a lawyer on retainer to insure that he submits proper documentation and your accountant to make sure he has a proper list of ‘business liability and obligations’. Because if he, like my plumber, does not have business cards nor advertises nor has he submitted a financial statement to me and I rather than he buys the sink to be installed, he could be considered an employee.

Oh, it is so nice for us peasants that we have such bright people in this Oligarchic Cabal looking out for us.

Conn. Tries to Balance Budget with WC Funds!

March 16, 2009: According to Gregory Hladky’s article in the New York Times on March 15, 2009, the pressure of a looming multibillion-dollar state deficit has produced a plethora of ideas from legislators and Gov. M. Jodi Rell for ways to reduce spending or raise new revenue.

But Governor Rell and a few others are unhappy with various portions of the legislature’s package, including a proposal to take $220 million from various “off-budget” state programs, one of which is the ‘excess’ cash in Connecticut’s Workers’ Compensation Fraud Unit.

No wonder the NY State Workers Comp Board doesn’t include any information on how much money is in its many funds, such as the Second Injury Fund. The Legislature may want some of that money to subsidize the MTA. After all, there are more commuters who vote than there are injured workers.

No More District Adminstrators

March 14, 2009: The political appointee positions of District Administrators have gone the way of the paper files.

In their place there will be two Regional Administrators. Joyce Perry who has been the Brooklyn DA for the last two years is now the Downstate Regional Administrator and Ray Struzik who has been the Buffalo DA is now the Upstate Regional Administrator.

Over the 12 years that I was at the Board, some of the DA’s, like Frank Vernuccio (Manhattan) and Alida Carey (Peekskill), were excellent, as dedicated as the engaged commissioners. And I have been told by my fellow Commissioners that some of the other district administrators upstate were also excellent. But there were also many who were not. I remember one who was in the office only two or three hours a day but could easily be found sitting on a stool in a location just around the corner from the office. And another who may have been in the office more hours than that but always had the door to his office locked.

I also know that some of the really good ones had a positive impact on Board operations and could be counted on to give feedback to Albany, even if Albany did not listen. For the districts who had ‘insouciant’ DA’s, the lucky ones had really good District Managers.

Some staffers have told me that the changes have been done for budgetary reasons ($1,000,00 a year saved: 9 less DA’s at about $100,000 a year in salary, benefits, support, etc). Others claim it is another step in insuring 100% control by a few executives in Albany. And perhaps it is both.

In about six months I will have a poll asking if this change was for the better. In the meantime, good luck to Ms. Perry and Mr. Struzik.

A New Law Judge! (☹W/corrections)

March 14,2009: An apology is due to Keith Longden as it is John Laughlin who is the new law judge. Seems that both of my ‘unimpeachable sources’ got confused. Of course it still would have been nice if Keith Longden or someone else in his position could spend some time in the trenches. But there is one person who has.

That person, high up the food chain, has spent time in the trenches and has, in my dealings with her, used that experience to make the system more reflective of reality, in so far as the work of the commissioners is concerned. Elizabeth Lott was in the OGC in Albany when I first met her and later moved to the Queens District where she handled most of the WTC cases. Chairman Weiss had the foresight to bring her back to Albany where she is now in charge of all the law judges.

As originally reported:
March 12, 2009: Keith Longden, a former member of the staff of the Office of the General Counsel (OGC) of the WCB, has just become a law judge in New York.

For many years, he was the person to whom the Commissioners were told to direct any questions that they had on §32’s. And he was the person who was the pointman for the OGC at the pre-board meetings (held Monday before the monthly public meeting) at which time he would present the reasoning behind the proposed Full Board Reviews (FBR) that were being accepted that month. Longden was also the person who would give the annual review of the prior year’s Appellate and Court of Appeals decisions to the Commissioners. For a more complete account of some of his activities as a senior member of the OCG, read pages 52-54 in my book, Behind The Closed Doors.

So it will be interesting to see what are his thoughts now that he will be out of the ivory tower of Park Street in Albany and down in the trenches, facing claimants and attorneys from both sides, having to make decisions that will be subject to review not only by the Commissioners but also by his former colleagues in Albany.

I suggest that, in five or six month, he be a guest speaker at one of the public Full Board Meeting and let us know what are his thoughts on the process now. And how much better the food is in Brooklyn than Albany.

Welcome to Brooklyn!

NY Workers’ Comp Alliance has New Leaders

March 8, 2009: Today New York Workers’ Compensation Alliance announced that John Sciortino and Troy Rosasco completed two full terms as the Alliance’s Co-Chairs and turned leadership of the organization over to well known attorneys Brian Mittman and Victor Pasternack. Both Sciortino and Rosasco will remain on the Board of Governors. Also joining the Board of Governors are James Buckley, Robert Helbock and Robert Grey. For details on the announcement and other important information from the Alliance, please link here.

SIF Chairman Defends His Agency

March 12, 2009: In an editorial today in the Albany Times Union, SIF Chairman Robert H. Hurlbut challenged allegations in the Times Union with regard to whether one employee at the New York State Insurance Fund has been given enough workload or properly carried out his responsibilities. Another employee contends that certain employees are not properly qualified.

Hurlbut addressed his comments to the Albany Times Union, writing,

“We will cooperate with the state inspector general to investigate these matters. We strongly disagree with the blithe presumption of your most recent editorial that paints with a broad brush, tarring the organization — and therefore its work force — with regard to carrying out its mission.”

The full text of his remarks can be found on the Albany Times Union web site.

March 12, 2009

New Fee Schedule for Dentists

On March 9, 2009, eight days after it goes into effect, the WCB has announced in Subject No. 046-298 the new schedule of fees for dental treatment and procedures will be effective eight days prior to the issuance of the subject number.

The new dental fee schedule is applicable to dental treatment and procedures performed on or after March 1, 2009, for the necessary care and treatment of an injured employee, regardless of the date of accident or date of disablement. Dental treatment and procedures performed prior to March 1, 2009, shall be reimbursed at the usual and customary rate in the location where the claimant resides.

Copies of the fee schedule may be obtained from the Board by writing to the Bureau of Health Management, New York State Workers’ Compensation Board, 100 Broadway-Menands, Albany, N.Y. 12241, by telephone at 1-800-781-2362 or by e-mail at general_information@wcb.state.ny.us. Copies can also be viewed at each district office of the Workers’ Compensation Board and other State offices described in part 442.2(2) of the regulations. Electronic access is limited to those parties involved in billing, or paying, for a dental procedure: in a workers’ compensation case. Self-insured employers, third-party administrators, insurance carriers and dentists.

Wanna Buy a Carrier?? Cheap, too!

March 5, 2009: For all those who say carriers make too much money, here’s your chance.

The New York Liquidation Bureau (NYLB), which manages more than 60 insolvent insurance company estates on behalf of the New York State Insurance Superintendent, has issued for public comment draft Request for Proposal (RFP) documents seeking bids from private investors to buy the billion-dollar Midland Insurance Company in Liquidation, NYLB Special Deputy Superintendent Mark G. Peters announced today.

I personally suggest that the regulators in the Department of Insurance along with members of the State Assembly and Senate and some of the staff at the Workers Comp Board pool their resources, not on the Mega Millions lottery ticket, but to buy Midland and show us how its done. After all, they’ve been telling all the carriers what they should be doing. Or are they all examples of George Bernard Shaw’s observation, “Those that can do. Those that can’t become [regulators].”

Fla Legislatures revisits Legal Fees

March 6, 2009:A few months ago, I listed on the DECISIONS page what I felt was a key case regarding legal fees as determined by the courts in the State of Florida, Murray v Mariner Health No. SC07-244 (Fla. 10/23/08) which stated that the Legislature’s fee schedule for claimants’ attorneys was too low.

It has been reported that this ruling will pit attorney’s and workers’ rights advocates against business and insurers. And then explains what steps are being taken by both sides of the issue to have the State Legislature change the law. One legislator suggests that the law be changed by striking the word ”reasonable” from the law while retaining the same fee schedule. Details can be found at JDJOURNAL.COM as well as the Miami Herald.

NY’s Got Crooked Doctors, too

March 6, 2009: In my February 19, 2009 NEWSWIRE, I noted how Orange County California set up a sting and caught a lot of crooked doctors. Such prescience.

On March 1, 2009, the New York State Insurance Department’s reports that it, too, has recovered $9 million from among the significant cases investigated by the Bureau last year.The money was recovered from five medical providers. The providers submitted inflated claims to the New York State Health Insurance Program for treating state and local government employees. The medical providers also paid fines totaling $78,551.

The complete report can be found on the Insurance Department’s website, www.ins.state.ny.us.

But Beats Up On An Honest One

March 6, 2009:For those of you now in New York City, this may be old news. A New York City doctor’s attempt at value pricing has put him at odds with state insurance regulators. Dr. John Muney (MOON’-ee) says he’s been told to stop his flat-fee, $79-a-month medical practice. The state says the arrangement amounts to illegal insurance. Dr Muney stated he can afford to do this with all the savings he has from not having to hire staff to do all the insurance filings that would otherwise have required him to substantially increase his fees.

Fees too high or fees to low. You can’t seem to win.

State’s IG investigates SIF’s patronage jobs

[This is a breaking story was in a special HOT NEWS Alert sent out March 4, 2009.]

March 4, 2009: James Odato of the Albany Times Union today reports that,

Inspector General Joseph Fisch has ordered an independent investigation of the State Insurance Fund in the wake of a slew of allegations of mismanagement, abuse and waste at the agency, which is being described by a whistle-blower as a landing spot for political patronage appointees.

Prominently mentioned in this story as well as Fred Dicker’s February 6, 2009 New York Post column are:

- Randall Hinton, $93,803 a year, who complains he has not been allowed to do any work in years.
- Edward Obertubbesing, an insurance fund lawyer who once managed Randall Hinton.

As a former political appointee of the WCB, I am, to quote Captain Louis Renault of Casablanca fame, “Truly Shocked!” at this revelation. Coincidentally, I already set up in my BOOK page an excerpt from Chapter 19 that deals with patronage but at the WCB.

Rocket Docket Fizzles a Little

February 26, 2009: In the Workers’ Compensation Board’s Subject Number 046-283, the Board has announced that it will delay the imposition of penalties for employers failing to submit the new form C-2 (Employer’s Report of Work-Related Injury/Illness) until April 1, 2009, this after the Board received complaints that the original January 1, 2009 deadline presented significant challenges, including the need to inform over 600,000 employers in the State and the time it takes to implement the revised form into their office software and/or business practices.

To paraphrase John Rummel, “In theory, policy and practice are the same. In Practice, they’re not!.”

Does anyone hear another shoe dropping from one of the ‘mad scientists’ who designed this ‘rocket’?

Wyoming Now Has COLA for Comp benefits

February 21, 2009: On February 21, 2009, the Casper (Wyoming) Star Tribune reported that a Senate committee approved a bill Friday that would expand benefits for people injured on the job, including cost-of-living adjustments for workers on permanent disability. And who said cowboy country is anti-labor?

Who says the Assembly’s not busy?

February 26, 2009: At last count, the New York State Assembly has 19 bills dealing with Workers Compensation issues in committee, with enough co-sponsors to convince every labor group that each member of the assembly is working hard for them. Maybe they think of the bills as a whine wine in that they age with time because many of these have been around for years. If you’d like a list, contact me at TheInsider@InsideWorkersCompNY.Com.

SC: No Comp for Undocumented Workers?

February 26, 2009: According to some reports from a few lawyers in South Carolina, legislators there have come up with a truly bad idea. They are proposing to reduce the Workers Compensation benefits for illegal aliens. While the bill would still have the WC system pay for medical costs for injured illegals, it would deny them disability payments.

This would certainly flies the face of the intent of workers compensation which is to give not just medical but compensation to those injured on the job. In Chapter 21 ‘Other Recommendation’ in my book, Behind The Closed Doors, I have a recommendation that proposes a penalty but not o the inured work. After all many of them do not speak English and certainly would not know that there exists a law that specifically discriminate against them. But my suggestion one that goes to the heart of the matter: cost advantages to employers who hire (and underpay) illegal workers. Details are in my OPINIONS & REPORTS.

Workers moving from Jones Act to Workers Comp

February 27, 2009: According to a recent article in the MegaYachtNews, the Longshore and Harbor Workers’ Compensation insurance requirement for recreational marine service and repair businesses has been removed.

The move may save small businesses more than $100,000 a year in insurance premiums, allowing them instead to be covered under state comp systems.

As a part of the American Recovery and Reinvestment Act (HR 1), members of the U.S. Congress voted to implement a no-cost modification to the Longshore Act. Business operators should contact their insurance agent to determine if their coverage is affected.

The New York Times Article on the WCB

February 19, 2009: Starting in the spring of 2008, two top reporters from the New York Times began a series of interviews with key members of the WCB staff including Chairman Zachary Weiss and former Chairman Donna Ferrara as well as several former board members. I know because I was in the WCB office in Brooklyn the day they interviewed Ferrara. And I was told by another person from Park Street (main WCB office in Albany) that they had planned to interview several others at the Board, some of who subsequently told me about their interviews. The reporters even called me up to ask questions

But those of us who were interviewed were asked such a diverse selection of questions we were and still are unable to figure out the general direction of the article.

As you know from my having starting and continuing to manage this website, I have an interest in seeing the Board improved. I and some of those who are aware of the article assume that this is the purpose of the New York Times article. But we are not sure. No one knows if it is an exposé or a comparative analysis with other states’ workers’ compensation systems. The writers are Steven Greenhouse and Sonny Klein, both of whom specialize in labor issues. Maybe a tidbit or two from you can be just what is needed to help get the article published.

A 100% Salary increase at the WCB by Patterson?!?

February 19, 2009: When Governor Patterson got caught by the press increasing his staff’s salaries by as much as 100%, the Governor argued that these were necessary and that he cut the budget for his own office by $2,000,000.

But the Albany Times-Union political blog, Capital Confidential, reports that Patterson also increased the salaries in a few other agencies as well. There was one formerly lowly staffer at the Workers Comp Board who got an increase in salary from $38,724 to $77,454 which was defined as a ‘salary correction’. Oh well, who needs an office in Orleans anyway! Click here for the link..

Boy, Did They Catch Some Crooked Doctors

February 2, 2009: On February 2, 2009 Brandon Poole of the Los Angeles Business Journal writes about a fraud sting in California. Based on a list compiled by the National Insurance Crime Bureau, the Orange County (California) District Attorney’s office sent 248 letters to medical providers suspected of engaging in fraudulent practices or billing.

The letter outlined opportunities for medical professionals to engage in an illegal fee-splitting scheme with a fake attorney’s storefront office set up by the district attorney’s office. The scheme involved medical professionals agreeing to pay up to 30 percent of specific patient billings to district attorney undercover investigators posing as law-office administrators in exchange for that patient’s referral. Undercover investigators also posed as patients who claimed to be suffering from soft-tissue damage from car accidents. Of the 248 letters, 20 inquired about the scheme and 12 were netted by the DA’s office.

So how far behind are Andrew Cuomo, SIF, or the WCB Inspector General in doing the same?

A Tip of the Hat to the ARD

February 13, 2009: During my many years at the Board and in my book Behind The Closed Doors, I have complained about several problems with the writing of the Memorandum of Decisions issued by the Board.

A major step has been taken in resolving some of the problems I discussed.