|
|
|
Opinions & Reports
Rocket Docket
“Sock It To The Pocket”
When I first met Zachary Weiss in the summer of 2007, he came to the Board in his official capacity as a member of the study group established by Governor Spitzer to determine how best to improve the adjudicative process at the WCB.
He and I sat together in some of the hearings parts in Brooklyn and then after he spoke at length to Brooklyn Senior Law Judge Mark Solomon to discuss hearing procedures, the three of us went to lunch to discuss these subjects in further detail.
One of the key problems that he recognized was that many hearing were held to collect facts that should have been in the WCB files before the case had its first hearings. This was an issue that was also close to the heart of a number of the ‘engaged’ commissioners who were being asked to review recommended Memorandum of Decisions or hear oral arguments in which basic facts were missing because no one had to submit them in order to file an appeal, let alone get a hearing in the first place.
My book, Behind The Closed Doors, has two chapters devoted to this subject: Chapter 15 “Consistency versus Speed - The Problem” and Chapter 16: “Consistency Versus Speed - The Solution” and the many failed attempts to fix this problem that the ‘engaged’ commissioners suffered through. The arrival of Chairman Weiss was we what had hoped would be the “light at the end of the tunnel!”
Shortly after his appointment as Chairman of the Board, recommendations were made to change some of the initial documents used to start a claim (C-2, C-3, C-7) as well as those needed to continue the resolution of further casually related disability, such as the C-4.
These new forms and changes in procedure were announced under the code name “Rocket Docket”.
However, as I often do when the Board sets forth new policies, I again must quote John Rummel:
“In theory, theory and practice are the same but in practice they are not.”
In the twelve years I served at the Board I have never seen a set of regulations subject to so many ‘discussions’, blog entries, and the topic of lectures at so many conferences, including the New York Self Insurers Association meeting being held this week and the Injured Bar Association meeting being held at the end of January (details in the Newswire).
Next week’s column on this page will be devoted to a review of the Rocket Docket and some of the issues raised by both the claimants’ and carriers’ bar from the perspective of someone who was inside the system for 12 years and, unlike many of those who were involved in developing the Rocket Docket, was actually was involved in making decisions about cases, thus understanding the difference between policy and practice.
To help me more fully address your specific concerns, I would appreciate any comments, complaints, or recommendation from all those who visit this site. They can be sentby e-mail to me or can be submitted as a comment.
Whether your concern be the allegations that it is examiners now making medical determinations once reserved only for law judges or that the new procedures place an unfair burden on one of the parties or that the procedures are being used to cut attorney fees, I would like to hear from you.
Your comments will NOT appear on the web pages until after they have been reviewed by me. While your comment will show whatever name you wish to use, it will not show your e-mail address; I will not only delete your e-mail address from the posting but I will delete it from my own editing files. I am not interested in who you are nor why you are participating in my planned review as long as your comment is coherent and helps move the discussion along.
Chairman Weiss recognized that changes need to be made, changes that had been fought for by a few of the ‘engaged’ commissioners and a few members of the staff, not so that we would have better statistics with which to impress the Governor or State Legislature or the media or to “lord over our predecessors” but changes that would speed up the system without sacrificing fairness and consistency.
I look forward to your input.
January 15, 2009
COURT DECISIONS
NEW POSTINGS: 3rd Department for January 15, 2009
| These decisions have all been transferred from the Newswire page |
Plus prior decisions from January 2009, December, November , and October 2008
Queens County Civil Court (11/05/08), Appellate Division 1st Dept (10/21/08), Erie County Supreme Court (10/16/08), NY Supreme Court (Kings County) for December 17,2008, Florida Supreme Court (10/23/08). No Court of Appeals for January.
January 15, 2009 Appellate Division 3rd Judicial Department
Held/Contractors Compensation Trust, et al. v Workers Compensation Board
Prevailing party: Because of the nature of the case and the decision, one can consider that everyone won and everyone lost - see the link below for the names of the attorneys.
In a kind of legal Pyrrhic victory, the Workers Compensation Board (WCB) argument prevailed to the extent that the appeal by the Contractors Compensation Trust (CCT) for a declaratory judgment was denied. CCT appealed “(1) from an order of the Supreme Court in Albany County, which, in a combined proceeding pursuant to CPLR article 78 and action for declaratory judgment, denied petitioners’ motion for leave to serve certain discovery requests, and (2) from a judgment of said court which, among other things, partially granted CCT’s application to vacate certain assessments made pursuant to Workers’ Compensation Law § 50(5) (former [f]).” The Appellate Court primary ruling found that the ultimate relief CCT sought was a judgment declaring that the assessments made against them are invalid. The petition did not explicitly request a declaration that the statute is invalid. Inasmuch as Supreme Court found the assessments to be invalid and annulled them, albeit on one of the alternate grounds asserted by petitioners, they received the relief requested and are not aggrieved. In effect, the 3rd Department considered the matter closed. Bottom line is the WCB was overruled in its attempt to increase assessments. Issues: Article 78, Assessments §50(5). Click here to read the full decision of the Court…
PRIOR POSTINGS
January 9, 2009 Appellate Division 3rd Judicial Department
Ruper v Transport System of Western NY
Prevailing party represented by: Jared L Garlipp of counsel to Williams & Willams (Buffalo) for Transport Systems of Western NY and another, respondents
Affirmed the WCB decision, which reversed the law judge, that the presumption of a casually related death pursuant to WCL §21 had been rebutted. After no one had seen or heard from the decedent during the day, a search ensued and his body was found slumped against a flatbed trailer in the employer’s parking lot. The employer presented decedent’s death certificate, the results of an autopsy, and the report and testimony of a cardiologist who concluded that his death was not work related but due to a preexisting heart condition. “Inasmuch as the record evidence supports the Board’s determination that decedent’s death was not work related,” the A.D. declined to disturb it. Issue : §21(1) Unwitnessed Death. Click here to read the full decision…
December 31, 2008 Appellate Division 3rd Judicial Department
Bonner V Brownell Steel
Prevailing party represented by: Theresa Wolinksi of counsel to Foley, Smit, O’Boyle & Weisman (Hauppauge) for Brownell Steel, Inc and another, respondents
Affirmed the WCB and the law judge decision that (1) the claimant had no further causally-related disability (FCRD) and (2) the claimant did not establish a consequential psychiatric disability. Regarding both issues, the Court affirmed the Board’s discretion to resolve conflicting medical opinions. As to the consequential disability, the Court affirmed the Board’s decision to preclude some of the claimant’s medical evidence submitted with the appeal to the Board as it was never presented to the law judge, per 12 NYCRR 300.13 [e] [1] [iii]. Issues: FCRD, Procedural Issued not raised before the appeal. Click here to read the full decision and the specific citations used by the Court…
Young v Pentax Precision Instrument Corp.
Prevailing party represented by: Lawrence Komsky (Cedarhurst) for Pentax Precision Instrument Corporation and another, respondents
Affirmed the WCB and law judge denial of an accidental injury allegedly due to anxiety and stress from repeated episodes of harassment. The Court affirmed the Board’s discretion to resolve conflicting medical opinions. WCL §2(7) was not cited in the Court’s 3-page decision. Issue: Causal relationship. Click here to read the full decision and the specific citations used by the Court…
Early & Verizon v Special Fund For Reopened Cases
Prevailing party represented by: John Oliver of counsel to Sullivan, Keenan, Oliver & Violando (Albany) for Verizon (New York Telephone Company) and another, respondents
Affirmed the WCB which ruled that the liability shifted to the Special Fund for Reopened Cases pursuant to WCL §25a. The Board determined that the last compensation for this 1992 injury was paid in 1996 after a finding of a 10% SLU although in December 2004 the claimant successfully appealed on the issue of wage reimbursement (see the Matter of Staruch v NY Telephone 277 AD2d 830, 833 [2000]). The Board ruled that the December 2004 date was the true closing of the case even though surgery was performed on the claimant in 2005. Issue: §25-a true closing Click here to read the full decision and the specific citations used by the Court…
December 24, 2008 Appellate Division 3rd Judicial Department
Zucker v Port Authority of NY & NJ
Prevailing party represented by: David Faber of counsel to Cherry, Edson & Kelly (Hempstead) for Zucker v Port Authority of NY & NJ
Affirmed the WCB decision, which reversed the law judge, that claimant’s filing of a claim in 1996 for post traumatic stress disorder resulting from the 1993 bombing of the Word trade Center was time-barred under WCL §28. According to the record, (1) there had been no lost time prior to the 1996 claim and (2) there was no prior payment for medical treatment related to the claim. As a result there was no advance payment of compensation or medical treatment which would have waived the two-year §28 time limit. The simultaneous filing for smoke inhalation was not controverted by the employer but no benefits were awarded as the claimant did not have any related lost time or continuing treatment. Issue: §28 time bar. Click here to read the full decision and the specific citations used by the Court…
Giello v Providence Fire District
Prevailing parties represented by: Michael Joseph of counsel to James Trauring & Assoc (Schenectady) for Giello and Steven Segall of the Office of Andrew Cuomo, Attorney General of the State of New York, for the WCB
Affirmed the WCB decision that WCL §114-a Fraud is inapplicable to Volunteer Firefighters’ Benefit Law (VFBL) §10. The WCB modified the law judge’s decision as the law judge rejected the employer’s contention as untimely; the WCB said it was timely but inapplicable. The Court ruled that contrary to the employer’s contention, when the Legislature in 1996 added §114-a, no such amendment was made to the VFBL. The Court stated that §114-a “unambiguously limits the application of the outlined penalties to wage replacement benefits awarded pursuant to WCL §15. If the legislature had intended WCL §114-a to apply to wage replacement, generally, it could have employed less restrictive language.” Issues: §114a Fraud, VFBL. Click here to read the full decision and the specific citations used by the Court…
December 18, 2008 Appellate Division 3rd Judicial Department
Cronk v Lyndaker Excavating
Prevailing parties represented by: Robert E. Geyer of counsel to Wolff, Goodrich & Goldman (Syracuse) for Lyndaker Excavating.
Affirmed the decision of the WCB, who reversed the law judge, that claimant’s February 2006 injuries were not work-related. The WCB stated that the record reflected two key facts: none of the claimant’s medical reports for the first few months (April and May 2006, even after he filed his claim) had any mention of the work-related nature of his injury and the claimant’s own practitioner testified to his inability to find causal relationship. Therefore the Board determined, and the court agreed, that it had the discretion to reverse the law judge and disallow the claim. Issue: Causal Relationship. Click here to read the full decision…
Richter v Ramistain Systems #504774
Prevailing party represented by: Estelle Krausher of the Office of Andrew Cuomo, Attorney General New York State, for the WCB.
Affirmed the decision of the WCB and the law judge that Zurich American (for Ramistain) failed to preserve its right to future offsets against claimant’s net recovery in a third-party action pursuant to WCL §29 (4). Zurich, also the liability carrier in that action, waived its rights at the settlement hearing. When payment was made to the claimant two years later, Zurich for the first time stated it was preserving these offset rights; it then refused to reimburse any of the claimant’s new medical expenses. Based on the earlier waiver at the settlement hearing and facts relating to constructive knowledge of the settlement by Zurich’s WC department, the Court affirmed the WCB and law judge decision. Issue: §29 (4) liens Click here to read the full decision…
December 11, 2008 Appellate Division 3rd Judicial Department
Peterson v Faculty Student Association
Prevailing parties represented by: George Panebianco of Lewis & Lewis (Jamestown) for the Faculty Student Association and Steven Segall of the Office of Andrew Cuomo, the Attorney General of the State of New York, for the Workers’ Compensation Board.
Affirmed the decision of the WCB and the law judge that apportionment of medical expenses between the work-related injury of April 2005 was not sufficiently related to a 1992 non-work related automobile accident and two 1995 work-related accident to warrant apportionment of medical expenses. The carrier argued that “since the claimant’s own physician concluded that the current accident was only 15% responsible for the need for a total knee replacement, it should only be required to pay that percentage of the total cost of the medical procedure.” The Court disagreed, concurring with the Board “that the claimant’s preexisting condition ‘was not disabling for workers’ compensation purposes,’ adding that ‘while her knee was at times symptomatic, she was not disabled. Moreover this case does not involve a schedule loss of use.” The Board’s “determination that the apportionment is not appropriate enjoys ample support in the record.” Click here to read the full decision…
Reece v City of New York
Prevailing parties represented by: Mordecai Newman for Michael Cardozo, Corporation Counsel for the City of New York, respondent.
Affirmed the decision of the WCB that the claimant’s wage loss was unrelated to her compensable injury.The key issue was whether or not the claimant failed to provide up-to-date medical evidence of her continuing inability to return to work. The period of time at issue started the effective date the claimant was fired by her employer for failing to supply any up-to-date medical evidence support her claim of a continuing disability. The Court affirmed the law judge’s determination, affirmed by the Board, that the claimant did in fact fail to timely submit any medical evidence to support her allegation. The Court also rejected claimant’s additional assertion that her due process rights were violated. Click here to read the full decision…
December 4, 2008 Appellate Division 3rd Judicial Department
Beers v Jump Start Advanced Academics
Prevailing parties represented by: Stanley A Tomkeil III of Tomkiel & Tomkeil (New York City) for Gary Beers and Estelle Kraushar of the Office of Andrew Cuomo, Attorney General of the State of New York, for the Workers’ Compensation Board.
Affirmed the decision of the WCB that the carrier, who failed to appear to a hearing in which the case was established, was not denied due process when they argued that they never got the notice, which was mailed to the address they had registered with the Board. Per 12 NYCRR 300.10 (b), the Court also denied the carrier’s claim that they were denied due process when the law judge did not adjourn the hearing or attempt to contact the carrier. And, finally, the Court noted that the carrier’s challenge of specific findings in the law judge’s decision are unpreserved inasmuch as they were not raised in the carrier’s application for appeal to the Board. Click here to read the full decision…
Bentvena v City & Suburban
Prevailing party represented by: Iris Steel of the Office of Andrew Cuomo, Attorney General of the State of New York, for the Workers’ Compensation Board.
Affirmed the decision of the Board, which reversed the law judge, determining that the claimant did not voluntarily withdraw from the labor market. The claimant’s doctor submitted medical evidence that the claimant could only work 5 hours a day and that the employer’s offer of three eight-hour days was not consistent with this report. Click here to read the full decision…
Barth v Hanson Aggregates
Prevailing party represented by: John Hvozda of Falge & McClean (North Syracuse) for Hanson Aggregates, Inc.
Affirmed the decision of the Board and law judge that the claimant’s death was not work-related. A major issue of contention was whether or not the medical report of the employer’s doctor was filed timely per 12 NYCRR 3.002 (d) (12) after both the Board and the law judge ruled it was timely. Although the claimant was not formally served with a copy of the medical report, they did have access to it for six months prior to the hearing and used it to cross-examine the employer’s doctor. The Court also affirmed that §21 [1] relating to unwitnessed deaths did not apply because the decedent’s collapse was witnessed by a coworker. Click here to read the full decision…
Ewing v YMCA and the Special Fund for Reopened Cases
Prevailing party represented by: Jeremy B. Davis for the State Insurance Fund (New York City) for the YMCA and itself.
Affirmed the Board’s decision, after reopening the case, to find that liability has shifted to the SFCC per §25-a. The SFCC argued that an earlier letter from the claimant raised the issue at hand prior to the time limits. The Court and the Board disagreed. Click here to read the full decision…
November 26, 2008 Appellate Division 3rd Judicial Department
Kim Boni-Phillips v Oliver
Prevailing parties represented by: James E. Duffy of counsel to Silverman, Silverman & Seligman (Schenectady) for Kim Boni-Phillips and Iris Steel of the Office of Andrew Cuomo, Attorney General of the State of New York, for the Workers’ Compensation Board.
Rescinded the decision of WCB and the law judge, both of whom ruled that the death of the claimant’s decedent was causally related to his employment. The Court stated that although WCL §21 (1) presumption lies with the claimant in an unwitnessed or unexplained death claim. The employer may rebut this presumption which the Court felt was done by the employer’s submission of extensive medical evidence. Since the Board and the law judge made their decision solely on the basis of §21 (1) and did not consider the rebuttal evidence, the Court sent it back for reconsideration of the facts. Click here to read the full decision…
Pereni Corporation v Thomas Victor II and Steel Style, Inc
Prevailing parties represented by: Lawrence D. Lissauer of counsel to Finkelstein & Partners (Newburgh) for Thomas Victor II and Iris Steel of the Office of Andrew Cuomo, Attorney General of the State of New York, for the Workers’ Compensation Board.
Affirmed the WCB that Steel Style was the sole employer, that Perini (the appellant) had no relationship to the claimant who was an employee of Steel Style but was injured helping Perini unload a delivery to Steel Style. Also affirmed the WCB’s discretion in refusing to consider Perini’s untimely reply and sur-rebuttal per 12 NYCRR 300.13 [e] [2]. Click here to read the full decision…
November 20, 2008 Appellate Division 3rd Judicial Department
Mary Scodary v Marie Serritella
Prevailing party presented by: John F. Clennan (Ronkonkoma) for Mary Scodary.
Reversed the WCB and the law judge. The Court found that the medical reports submitted by the claimant did qualify as Prima Facia Medical Evidence for consequential depression even though her treatment with a psychologist was not based upon a referral from an authorized physician pursuant to WCL §13-m (2) (a). This is the second time that Court has made this decision. On December 20, 2007 in the Matter of Van Dam v New Paltz Cent. School Dist., 46 AD3d at 1195, the Court similarly reversed the WCB and law judge on the same facts and issue. Click here to read the full decision…
Note: Based on a number of comments received on this case, a more detailed discussion of this case can be found in Opinions & Reports, December 12, 2008
November 13, 2008 Appellate Division 3rd Judicial Department
John Fortunato v Opus III VII Corporation
Prevailing party presented by: Leonard Feld of counsel to Vecchione, Vecchione & Connors (Williston Park) for Opus III IV and other respondents.
Affirmed the WCB Panel which reversed the law judge. The Court agreed that the claimant failed to prove notice due to his failure to timely file a claim with his employer after the allegedly work-related MVA, that the claim was not credible, and that the Board had the right to reject his request for a Full Board Review. Click here to read the full decision…
Michelle Laverghetta v Tug Edge Diary
Prevailing party represented by: Estelle Kraushar of the Office of Andrew Cuomo, Attorney General of the State of New York, for the respondents.
Affirmed the WCB Panel and the law judge that the carrier had no right to suspend payments, regardless of any medical report they had, until the issue was ruled upon by the WCB. Penalties were also affirmed. (12 NYCRR 300.23 [b] [2]) Click here to read the full decision…
Scott North v New Venture Gear
Prevailing party represented by: Robert Geyer of counsel to Wolff, Goodrich & Goldman (Syracuse) for New Venture and other respondents.
Affirmed the WCB Panel and the law judge that the claimant had refused a light duty job and failed to show any attempt to reattach to the labor market, warranting suspension of benefits. The Court also refused to hear the claimant’s appeal of involuntary withdrawal from the labor market because this was not raised before the Board. (12 NYCRR 300.13 [e] [1] [iii]) Click here to read the full decision…
November 6, 2008 Appellate Division 3rd Judicial Department
Diane White v Steve Herman
Affirmed the WCB Panel decision to allow carrier to reopen the case of a claimant with a permanent partial disability because of their failure to return certain forms submitted by the carrier periodically to the claimant. (12 NYCRR 300.14 [a] [3] and WCL §123) Click here to read the full decision…
Cheryl Robideau v Van Rensselaer Manor
Affirmed the WCB Panel and the law judge that the claimant qualified for continuing benefits because she had to take a job with her employer that, due to her injuries, paid less money. Click here to read the full decision…
Stephen A Danussi v Chateaugy A.S.A.C.T.C.
Affirmed the WCB Panel and the law judge that the claimant, who had worked up to the date of his retire, voluntarily withdraw from the labor market, even though he was, post-retirement, found to have a permanent partial disability. Click here to read the full decision…
Samantha Hyland, on behalf of Jerrel Corley, as surviving child of Walter Corley, Jr, deceased
Affirmed the WCB Panel to deny the employer’s request for review due to the application for review being late.(WCL §23) Click here to read the full decision…
Juan Long v. Liberty Mutual Insurance Company & Buffalo Destroyers
Affirmed the WCB Panel that claimant, allegedly an employee for both the Destroyers and Source One was an employee of the Destroyers, whose carrier was Liberty Mutual. The Panel modified the law judge decision which found dual employment. Click here to read the full decision…
The Appellate Division, First Department 10/21/2008
Silverman v Reisman, Abramson
The Appellate Division, First Department, affirmed the Order of the Supreme Court, New York County, in an action for legal malpractice arising out of defendants’ representation of plaintiff in a workers’ compensation proceeding, granted defendants’ motion for summary judgment dismissing the complaint, unanimously affirmed, without cost. Click here to read the full decision…
Supreme Court, Erie County 10/16/2008
Scheer v. New York State Ins. Fund
In what appears to be a case of first impression, the Erie County Supreme Court has declined to apply the equitable considerations outlined in the United States Supreme Court Medicaid-lien case Arkansas Dept. Of Health and Human Servs. v Ahlborn (547 US 268 [2006]) to set (a) the amount of the workers’ compensation lien to be enforced against the proceeds of settlement of the injured employee’s tort or personal injury action, and (b) of the workers’ compensation carrier’s obligation to make future compensation payments to the injured employee, instead following the methodology set forth by the New York Court of Appeals in Matter of Kelly v State Insurance Fund (60 NY2d 131 [1983]) and Burns v Varriale (9 NY3d 207 [2007]). Click here to read the full decision…
November 5, 2008 Civil Court Of The City Of New York, Kings County
Allstate Social Work a/a/o the Jocelyns v Utica Mut. Ins. Co.
Prevailing party represented by: Bruno, Berbino & Soriano (Melville) for Utica Mutual Insurance
The Court granted the motion for summary judgment requested by Utica Mutual to dismiss Allstate’s complaint which argued that the assignors claim should not be dismissed for their failure to appear at two allegedly improperly scheduled IME exams due to the defective nature of the notices sent them for the appointments. The Court ruled that the affidavits submitted by defendant are sufficient to establish that defendant’s initial IME requests, its follow-up IME requests and its denial of claim were mailed pursuant to a standard office practice and procedure, and that the assignors’ failed to appear for the IMEs. While this was not a Workers’ Compensation case, it is important to note, including in the many citations in the decision by this Court, how many other jurisdictions hold to the standard that a failure to appear for medical examination scheduled by the carrier can have severe consequences for the injured party. Issue: Medical exams. Click here to read the full decision…
December 17, 2008 Supreme Court of the State of New York, County of Kings
Nwankwo v City of New York & NYC Police Dept & Reilly
Prevailing Parties represented by: Stacey Mondschein of the Office of Corporation Counsel for the City of New York
The claimant, injured in a motor vehicle accident (MVA) driven by NYC Police Officer Reilly, pursued a claim against the City in the Supreme Court and on March 8, 2008 was granted a motion requiring the City to preserve certain evidence in its possession, pending further review of the case. At a Workers’ Comp hearing on May 15, 2008, Nwankwo’s won his claim that the injury was work-related and both compensation and medical payments were paid as of June 6, 2008. The City then cross-moved for an order granting leave to amend their answer pursuant to CPLR §3025 to assert an affirmative defense that Nwankwo’s action is barred by The Workers’ Compensation Law and for dismissal of the complaint pursuant to CPLR §3211 or, in the alternative, granting summary judgment pursuant to CPLR §3212. Upon review of the record the Court granted the cross-motion and the motion to dismiss. On December 17, 2008, the Court granted the cross-motion and the motions requested by the City, stating that “the City’s motion for leave to amend the answer to assert a defense that the action is barred by Workers Compensation Law is granted”. Click here to read the full decision and the specific citations used by the Court
October 23, 2008 Florida Supreme Court
Murray v. Mariner Health No. SC07-244 (Fla. 10/23/2008) (Fla., 2008)
The Florida Supreme Court has ruled that workers’ compensation clients are entitled to recover “reasonable fees” for attorney services rather than being limited by the statutory formula of a percentage of benefits. “Reasonable fees” in this context could include payment of hourly charges at a prevailing market rate. Issue: Legal Fees There are three links for this case which are the formal decision, an excellent analysis from Sedgewick CMS, and an article from the South Florida Business Journal.
Opinions & Reports
Medicare Offsets
The secret dagger at the heart of §32’s
Because of the Board’s failure, inability, or lack of interest in properly addressing the issue of Medicare offsets as they pertain to §32 settlements, Medicare can effectively stop most of the proposed settlements.
Because a claimant could come under coverage Medicare, either at the time of the agreement or shortly thereafter, no carrier or claimant will enter into a §32 without the express written consent of Medicare, by asking Medicare to determine how much of the settlement must be set aside for medical expenses pursuant to Title 42 Chapter IV Part 411 “Exclusions from Medicare and Limitations on Medicare Payment”. The failure to get such set-asides and approval from Medicare can result in not only financial losses to the claimant but also substantive penalties to the attorneys on both sides of the settlement.
The problem is the manner in which the offset is calculated. Too high an offset and the net cash moving to the claimant becomes negligible and the agreement not worth accepting. The true fiction of the offset is that, in the vast majority of the cases, the money is given to the claimant with the understanding that the claimant will open up a separate bank account, sort of an escrow account, from which the appropriate future medical expenses be deducted. To understand what this means, one only need look at the back page of the C-22 form used for Lump Sum Settlements under §15 (5)b. The question asks what will the claimant be doing with the money. They invariably write, “Put it into a saving/checking account.” Of course they will as that is a lot cheaper than cashing it at a check cashing service. But there is nothing that asks, “And for how long will you keep it in that account?” For every claimant who understands the concept of set-aside and undertakes the steps necessary to open up such an account, there is another who does not understand or care about the set-asides. And, of those who do set up separate accounts but did not use the money for two or three years, how many would continue to maintain the account?
Another problem is that the amount of the set-aside is often arbitrary and capricious.
If the money were required to be set-aside into an account managed by a third party, which some settlements require, then the claimant would know what is the net amount of cash being offered in lieu of future compensation. A specific case I had several years ago illustrates this.
The gross settlement was $65,000 with a $6,500 legal fee leaving a net of $59,500. Medicare requested and the parties agreed to a set-aside of $58,800, leaving the grand total of $700 as settlement for any future claims for compensation. As there was no requirement to segregate the funds, the claimant pictured only the entirety of the $59,500. Had he been required to put this $58,800 set-aside into a separate escrow account, managed by a third party and was told that he would be getting a check for only $700, he would not have accepted the settlement.
But assume he was willing to accept this offer and take just the $700. There is nothing in the law which requires that his medical providers, once he has opted out of the Workers Compensation system, charge the claimant the rate schedule set in WCL §13. In fact, it is likely that all the providers would charge the much higher ‘market rate’.
Which then raises the question of “From where was the $58,800 medical offset derived?”
If Medicare uses the rates in WCL §13 but the providers do not, it is likely that the account will run out much faster than anticipated by Medicare such that Medicare will be picking up the cost of future medical care much sooner than anticipated. If Medicare uses another set of rates which represent the fair market value of what the claimant would be expected to pay for his future medical treatment, the claimant would be shortchanged in the amount of the set-aside. If the claimant was getting treatment twice a week at $300 per visit per WCL §13, his $58,800 would pay for 98 weeks of treatment. But if the market rate in which Medicare based their set-aside was $900 per visit, he would treatment for only 32 weeks.
If he was getting even as little as the current minimum of $40 a week in benefits, the Compensation portion of his settlement, the $700, would run out in 18 weeks. Thus after 18 weeks he would have used up the compensation portion of his settlement and, in just under two years, the medical component of his settlement.
But in the case referenced above, a review of the calculations used by Medicare to determine the offset was quite interesting, if not remarkable. The claim had been established for bi-lateral carpal tunnel syndrome. And the first item listed as future medical expenses was the treatment for CTS or which, let us say, $10,000 as set aside. (Individual treatment numbers are made up here but not the total or the treatments.) But the schedule then anticipated consequential medical problem with both elbows: $10,000. And once the elbows were problematic, the two shoulders followed: $15,000, to be followed by a severe cervical condition, another $15,000. But shoulder and neck problem always effect the upper back so the consequential medical conditions and related expenses added another $8,800 to the set-aside, for a total of $58,800.
Since under Part 411, Medicare and the Federal government are responsible for picking up portion of this claimant’s future medical expenses, once the set-aside has been exhausted, it only makes sense for them to set aside as large as amount as possible. And, as in this case, an extraordinary extrapolation into the future could result in virtually 100% of the settlement being allocated to the set-aside.
The next step would be for Medicare to then insist that all these set-asides be put into third-party managed escrow accounts. A recognition of the profit making potential by bank, insurance companies, and other yet-to-be-formed companies would certainly have the leverage in Congress and definitely in the NYS legislature to make such a requirement fit into some future piece of legislation.
The result would be that Medicare, by the use of rather loose extrapolations of future medical exposure combined with the need for third-party escrow, would effectively cut the actual cash moving to the claimant for these proposed settlements to one or two years worth of compensation. As a result, any claimant who was classified would either have minimal incentive to take a settlement or the cost to the carriers would be substantially increased as Medicare marched in lockstep beside them to ‘set-aside’ whatever increasing settlement were being proffered.
[Note: This is basically the same presentation I made to Chairman Weiss by e-mail in November 2007.]
January 8, 2009
Powered by WordPress
|
|
