7

NEWS FOR
THIS WEEK

December 31, 2015
Thursday

COMMENTARY: A few thoughts as the year ends and some suggesions for next year.

DECISIONS: There are no decisions from the Third Department this week but seven new cases have been added to the Third Department's January hearing calendar.

Week
#367

Issue
#1

Contact The Insider at:    TheInsider@InsideWorkersCompNY.com                                                                         212-734-9450

NEWSWIRE ARCHIVE - 2012

News reports, press releases, legislative updates, and background stories of concern to those who participate in the New York State Workers Compensation system: injured workers, carriers and employers, their attorneys, NYSWCB staff, and third party vendors. This page also posts 'insider' information about proposed changes in practice and procedures at the NYSWCB, information not available elsewhere. To be added to our weekly e-mail alert list or have any submissions or suggestions or would like to write an opinion piece, contact: TheInsider@InsideWorkersCompNY.com

The following headlines are links to the 2012 NEWSWIRE articles. Click here for 2014 and 2013



 

NY Daily News: Fire Fenster

October 23, 2012 [5357]: 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 [5356]: 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.

WCB Special Fund’s Bonds get AA+ Rating

October 8, 2012 [5355]: 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.


New NYSIF Billing Program

October 09, 2012 [5354: 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.

NYSIF a Winner

October 15, 2012 [5353]: 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.

 

-- Bulletin --

New Chairman for NYSIF

October 5, 2012 [5352]: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.


NYIA Calls NY WC Rate Market 'Defective

September 26, 2012 [5351]: 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

 

NYS WC Tax/Assessement US’s highest

September 10, 2012 [5350]: 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).


New “Best” Medical Provider List

October 2, 2012 [5349]: 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.

Board Hires Help to Speed Decisions

September 26, 2012 [5348]: 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.


Cuomo’s Republican Appointees

September 23, 2012 [5347]: 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 [5346]: 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.”

The Insider 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.

 

NYS WC Assessment US’ Highest
And three reasons why!

September 14, 2012 [5345]: 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.

The Insider: 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.

New Maximum AWW

August 3, 2012 [5344]: 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

 

Beloten, Not Legislature, rewrites WCL

 

August 1, 2012 [5343]: 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, it is no wonder that hundreds of appeals in the Administrative Review Division take more than one year to be reviewed.

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.