Louis Dubrel testified that before his work-accident “I used to do it all . . .I used to be Superman . . [but now I’m so disabled] I’m Mighty Mouse.” Unfortunately for Dubrel, following this testimony his employer presented video showing “Mighty Mouse” was actually still “doing it all” - including winning prize money as a jockey racing horses! On Monday, January 30, 2012, New Jersey’s Appellate Division agreed that Dubrel’s fraud was "flagrantly galling" and upheld the denial of all benefits. On January 31, 2012, a state Grand Jury indicted Dubrel for insurance fraud and perjury.  

This case, involving twin brother evidence, horse racing prize money, and surveillance video is a great starting point for talking about the nuts and bolts of trying a case where fraud becomes an issue.

But first, the law.

Under the New Jersey Worker's Compensation Act fraud section (§57.4(c)(1)),

"if a person purposely or knowingly makes, when making a claim for benefits…a false or misleading statement, representation or submission concerning any fact which is material to that claim for the purpose of obtaining the benefits, the Division may order the immediate termination or denial of benefits with respect to that claim and a forfeiture of all rights of compensation or payments sought with respect to the claim."

On my blog I’ve often discussed (see here, and here) the use of videotape surveillance in New Jersey courts. I've also written about the Gross v. City of Neptune decision – a 2005 case in which the employer was barred from using surveillance which was obtained after the trial began because the surveillance was not referred to on the "Pre Trial Memorandum." The Pre Trial Memorandum is executed by the parties and the Judge and lists all of the witnesses both parties will call as well as the issues in dispute. In the Gross case, because the employer did not reveal that they had videotape evidence on the pretrial memorandum the judge of compensation ruled the videotape evidence was “surprise testimony” and could not come into the case. The Appellate Division upheld that exclusion.

New case: showing how “new” video – not revealed on the Pre Trial Memorandum or provided in discovery before trial – can get into a New Jersey case.

Louis Dubrel claimed he sustained permanent injuries to his neck and low back from an injury at work in February 2004. Dubrel testified “Now I’m Mighty Mouse.” According to the claimant, before his debilitating injuries he was able to travel, go fishing with his kids, and ride off-road motorcycles. The petitioner also testified that he used to ride, train, and race horses. At trial in 2009, the petitioner testified that "I can't ride [horses], not a shot." He further testified that he could no longer perform household chores and that it was even a challenge to dress himself.

After testifying that he had to give up his horse racing hobby – the claims adjuster – who happened to be a horse enthusiast herself – found references on a popular horse racing website showing that the claimant had actually jockeyed less than two weeks before he testified – and had recently won prize money! Based on what she learned, the adjuster assigned surveillance.

Surveillance was successful in obtaining videotape of the claimant, as he worked on his farm, doing carpentry, taking care of animals, etc. In the video and according to the surveillance investigator, the claimant was unimpaired in his activities of daily living. The claimant was then presented with the videotape and informed that the employer was going to call the surveillance agent and the adjuster at trial.

The video was shown, over the objections of the petitioner’s counsel. The adjuster testified, too, about what she had discovered on the horse racing websites. In his own defense, the claimant was able to show he actually had a twin brother. However, the petitioner never attempted to demonstrate or argue that it was actually the twin brother who was caught on videotape or engaging in the horse racing activities.

The judge of compensation stated that the claimant had "made an unambiguous claim that he no longer drives horses" but that testimony was made "just one week after he was the driver of [his horse] Finest Firewater in a qualifying race in Delaware" and concluded that there was "no charitable explanation they could characterize these statements made by the petitioner under oath as anything other than false." The judge found that it was clear from the context of the petitioner's remarks that the statements were made to obtain workers compensation benefits fraudulently.

Practice Tips

In this new decision the Appellate Division approved the inclusion of surveillance video obtained after the claimant testified because it was “relevant to prove or disprove a fact in issue.” The Appellate Court found that the video surveillance and the information about the petitioner’s horse racing and prize winnings were not “surprise witnesses” and the Compensation judge had not abused his discretion by letting that testimony into the case.

The Appellate Court ruled that although surveillance tapes made after the start of trial should generally be excluded, an exception arises where the employer could not be aware of the circumstances necessitating the surveillance before the start of the trial.

In cases like this one, where the claimant testifies that he can do “nothing,” denies participation in specific activities, or testifies he is as weak as a fictional cartoon mouse, additional investigation and even surveillance should be considered to disprove those claims.

Decision: Louis Dubrel v. Maple Crest Auto Group, A-3321-10T3 (App. Div. Decided January 30, 2012) 

New York has a "Special Fund for Reopened Cases" to assume liability for reopener workers’ compensation claims. When a claimant moves to reopen a "stale" case, the employer/carrier requests relief from the "Special Fund for Reopened Cases." By shifting cases over to the Special Fund, the carrier/employer shifts the burden for paying compensation to the Special Fund.

Filing requirements.

There are forms available to the employee seeking “reopener” of the closed claim. A new medical record can be sufficient to reopen the case if it provides notice to the Worker's Compensation Board of the change in condition – in that case, Form C-27 (Medical Proof of Change in Condition in Support of Application for Reopening) should be used. The medical report must demonstrate a new condition and not merely the continuing effects of the original disability or injury.

Time factors.

There are time limitations for the shift of exposure to the Special Fund. These rules are as follows:

• More than seven years from the date of a compensable injury or death and the claim has been disposed of without a compensation award being issued;
• More than seven years has elapsed from the compensable injury or death which was compensated and also more than three years has elapsed from the last date of payment of compensation;
• After death, occurring more than seven years from a compensable injury and either more than three years unless payment of compensation or from acclaimed disposed of without an award.
• Payment for continuing medical care does not bar the transfer of liability under section 25–a (see Beder v Big Apple Circus, decided May 26, 2011, Appellate Division, Third Department).
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This is important factor to consider – as the Worker's Compensation Board does not consider payments for medical services "compensation." Oftentimes in a reopener case, the claimant has been receiving ongoing medical care and indemnity benefits have ceased.

“Closed” status – not as simple as it could be.

In 2011 there were at least nine reported decisions on whether or not the workers compensation claim had been "truly closed” by the Worker's Compensation Board and the requisite amount of time had elapsed, thereby creating a viable claim for relief from the Special Fund for Reopened Cases.

Since 2001 the Board has been marking cases as "No Further Action" rather than stating a case is "closed." This "No Further Action" marking  confuses the issue as to whether or not a case is truly closed at the time of adjudication.

• In the most recent case decided on this topic, Hosey v Central New York DDSO, decided January 5, 2012, the Appellate Division found that the underlying case had not been "truly closed" and therefore the employer could not get the benefit of reimbursement from Special Funds for what they were calling a "reopener claim." In the Hosey decision, the claimant had a 2000 back injury and returned to work in 2002. The claimant continued to work with no additional lost time but had some work restrictions and received ongoing payments for medical treatment. Although his treating physician in 2002 indicated the claimant had a permanent disability referable to the work injury, the issue of permanency was never formally addressed. Although seven years elapsed and the claimant returned to work, the Special Fund argued that the issue of permanent residual disability had remained unresolved and therefore the case was still "open." Despite the fact that no lost time benefits have been issued for the prior seven years, and after three years of litigation on this issue, the Appellate Division upheld the denial of reimbursement for reopener benefits to the employer.
  
• In another case, Sauers v Kmart, decided December 1, 2011, the Appellate Division returned the case to the Worker's Compensation Board for review of a denial of reopener reimbursement. In this decision, the requisite seven year period had elapsed during which time the claimant had not received any medical treatment. Nor had any lost time benefits been issued. However, it was learned that approximately 2 weeks prior to the seven year anniversary of the injury the claimant had seen her treating doctor who recommended she undergo a surgery. The claimant did not want to pursue the surgery that time. Then, a few weeks later, but after the seven year period elapsed, the claimant decided to request the surgery. The employer argued that the case was closed and the appropriate seven-year period had elapsed. They argued that by the claimant decided not to pursue surgery, within the seven year period, the time period had elapsed and the employer should be reimbursed for further medical and lost time. However, the Appellate Division refused to follow that argument and instead referred the matter back to the Worker's Compensation Board for additional proceedings.
  
• The Appellate Division considered whether the case of a claimant who had already pled guilty for fraudulently collecting workers comp benefits while working was “truly closed.” In that case, the claimant made an argument that her condition had worsened and that she was due further benefits. The claimant had a ready been disqualified from obtaining further indemnity (wage replacement benefits) as she had been deemed a fraud after trial pursuant to §114a of the Worker's Compensation Act. In this interesting case, the Appellate Division found because the claimant was a fraud and therefore not do any lost wage benefits the claim was truly closed at that time and that the only payments ongoing were for consequential medical treatment. Therefore, the employer in this case was able to shift responsibility for the alleged reopener or worsening of the claimant's underlying medical condition to the Special Fund for reopener cases. (Palermo v Primo Paint Corporation, decided October 6, 2011).
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Practice tips for adjusters.

First, identify claims where significant time has elapsed from last payment of lost time or permanency benefits. The passage of time is critical to establishing Special Fund exposure.

Next, confirm the case was “truly closed” at a prior proceeding by settlement or by Order of the Workers’ Compensation Law Judge. This will usually involve reviewing old EC-23’s (decisions) in the electronic case file. Knowledge of these reopening rules in the instances where cases been "truly closed" can significantly reduce exposure for New York employers and carriers.

As this issue continues to be raised before the Board and continues to be a steady source of Appellate Division review, it is clear that the rules concerning whether or not cases "truly closed” are nuanced and require a close analysis of the facts and the applicable law in your case.

Is there a notice defense in New York?

New York employers must provide statutory benefits to employees who have an accident and sustain an injury, which arises out of and in the course of employment. The employee must provide notice to the employer within 30 days after the accident. WCL § 18. Timely notice gives the employer the ability to fully investigate the circumstances of the accident when information is available and witnesses can recall the event. Failure to give proper notice may prejudice the rights of the employer to the extent that it may be found to be relieved of its obligation to provide benefits under the law.

What constitutes Employer Prejudice?

Notice must come within 30 days – but the claimant can report it later – and get benefits – if the employer is not prejudiced by this late reporting. Whether or not late reporting prejudices the employer is a fact question for the Board.

New Case on employer prejudice.

In a new case decided December 15, 2011, the Appellate Division reviewed the denial of a claim based on the failure of the claimant to provide timely notice to the employer. In Dudas v. Town of Lancaster, the claimant allegedly injured his ankle in a slip on ice while working at Town Hall on February 28, 2007. The employee continued to work and did not seek medical treatment until 10 days later. The claimant reported the injury as work-related on June 27, 2007. The employer filed denial pleadings raising "notice" as a defense (see my "best practices" recommendations for filing denial pleadings). The employer also obtained the original emergency room intake records, in which the claimant was recorded as stating he was injured when he "fell off a porch" - a story at odds with his "slip on ice at Town Hall" claim.

Here, the Board disallowed the claim and the Appellate Division upheld that denial, as the claimant's failure to report the injury within the time period required by law (30 days) prejudiced the employer's ability to investigate the underlying accident.
Case: Dudas v. Town of Lacaster, 2011 Slip Op. 09050 (N.Y. App. Div., Decided December 15, 2011).

The workers’ compensation law provides two separate ways for a compensation carrier to obtain reimbursement from the proceeds of a claimant’s third-party settlement:

1. Assert a lien against the recovery for the amount of benefits already disbursed by the carrier. N.Y. Work. Comp. Law § 29(1); or
2. Offset the claimant’s future compensation benefits by the amount of the claimant’s net recovery in the third-party action. N.Y. Work. Comp. Law § 29(4).

Asserting a Lien for Past Benefits Conferred

The workers compensation carrier “shall have a lien on the proceeds of any recovery from” a third party settlement less reasonable and necessary expenditures, such as attorney’s fees. N.Y. Work. Comp. Law § 29(1). The employee may apply on notice to the lienor to the court for an order apportioning reasonable and necessary expenditures including attorneys fees. The court shall apportion such expenditures equitably between the employee and the lienor. Id.

Offsetting Future Compensation Benefits

The carrier must affirmatively preserve its right to offsets, or it may involuntarily waive such right. See Hilton v. Truss Systems, Inc., 82 A.D.2d 711, 444 N.Y.S.2d 229 (3d Dep’t 1981), order aff’d, 56 N.Y.2d 877, 453 N.Y.S.2d 428, 438 N.E.2d 1143 (1982). The claimant’s third-party settlement recovery less the carrier’s lien is credited by the carrier against future compensation payments. The net amount the claimant receives offsets future compensation payments, and no future payments will be made until the credit is exhausted. The carrier may waive the lien or the offset. N.Y. Work. Comp. Law § 29.

SIMPLY THE MOST PRACTICAL, up-to-date and easy-to-understand guide to New Jersey workers' compensation claims. Tackling issues like employee fraud, this book is designed for employers, attorneys, claims adjusters, physicians, self-insured employers and vocational rehabilitation workers.

This guide is written in plain English by New Jersey attorneys and provides a detailed analysis of relevant statutes and regulations; a complete recap of recent court decisions; and a full description of current practice and procedure. This book provides a behind-the-scenes look at the complicated issues and makes the law understandable for business owners.

Updated chapters on OSHA regulations, new "emergent" motions for medical benefits, the Medicare Secondary Payer Act, and HIPAA considerations are included. Available in print here.

The Appellate Division issued a decision last week in a case where a post-2007 claimant had average weekly wages of $3.56 per week in the primary employment (the employment where she sustained the injury). The claimant had another job - a part time position at a retail clothing store, where she earned an average weekly wage of $77.13.

Added together, the Board found a wage of $80.69 per week. The Law Judge issued awards at a temporary total rate of $80.69 per week. The employer appealed - arguing that the award should have been based on the primary wage only - $3.56 per week - because reimbursement for compensation paid for additional amount attributable to the concurrent employment are no longer reimbursable from the Special Disability Fund (as per Section 14(6) of the WCL).

In this case the Appellate Panel ruled in favor of the claimant, finding that there was concurrent employment pursuant to Workers' Compensation Law § 14 (6) and that claimant's benefits were properly calculated based upon both employments.  Despite the weekly wage in the primary employment being nly $3.56 per week, the claimant got the benefit of a much higher rate based on both employments.

Case: Hazel Hope v. Warren County Board of Elections, 512524 (App. Div. Decided Nov. 23, 2011). 

Have a question about calculating wages or rates in a case where there is concurrent employment? Contact Greg Lois.

There may be recession on, but New Jersey's petitioner's attorneys will not be feeling the pinch!  Petitioner's attorneys are moving forward on two fronts to skim more money from the compensation system.

Increasing Fees on Awards.

Attorneys fees in New Jersey are controlled by N.J.S.A. 34:15-64, which states that an attorneys fee must be "reasonable" and can not exceed 20% of the total award.

In practice, the Division issues a memorandum each year that sets a threshold fee. In the past, if a petitioner's attorney wanted to get a bigger fee than the "threshold" he or she was required to present an affidavit of services, detailing exactly what they did to earn that money. In practice, Judges of Compensation nearly always award the maximum fee.

Last year, the "no questions asked" fee threshold was $40,000. For 2012, the "no questions asked" fee jumps to $42,000. Also, under the new practice (effective January 3, 2012), petitioner's attorneys will no longer have to submit an affidavit of services - just make some sort of argument for why they are due an enhanced fee on the record.

New Jersey to reconsider fees on "Voluntary" Compensation.

When an employer knows (with certainty) that an employee has been injured and will suffer some degree of permanent injury (for example, when there has been loss of a limb), a voluntary tender, made at the appropriate time, may be offered to reduce exposure for attorney’s fees when the underlying claim is disposed of.

N.J.S.A.34:15-64 provides (in part):

When, however, at a reasonable time, prior to any hearing compensation has been offered and the amount then due has been tendered in good faith or paid within 26 weeks from the date of the notification to the employer of an accident or an occupational disease or the employee’s final active medical treatment or within 26 weeks after the employee’s return to work whichever is later or within 26 weeks after employer’s notification of the employee’s death, the reasonable allowance for attorney fee shall be based upon only that part of the judgment or award in excess of the amount of compensation, theretofore offered, tendered in good faith or paid.

There is now a pending proposed amendment to Section 64 which would grant an attorney a fee on this voluntarily tendered payment.

In other words - even where the petitioner did not have an attorney at the time a voluntary tender was issued - if he later retained counsel his attorney would be due a fee on any money already paid to him or her.

As recently as 2005 the Appellate Division affirmed the decision of the workers’ compensation judge to deny the employer the benefit of a reduced contribution to the petitioner attorney’s fee award because the employer’s voluntary tender of disability benefits was untimely when it occurred slightly beyond the twenty-six week period allowed by statute.  In reviewing the statutory history of N.J.S.A. 34:15-64 and viewing that statute together with N.J.S.A. 34:15-16, the Appellate Division concluded that when the NJ Legislature amended this statute in 1979 it intended to create a “bright line” timeframe and set a clear and certain deadline an employer must meet to reduce its contribution to an attorney fee award by invoking the “26-week rule.”  In other words - most voluntary payments to injured workers have been shielded the increased costs associated with attorneys fees - and that may change.

The law has not changed yet - but the proposed legislation change will be discussed in committee on December 8th.

Of course, we will continue to monitor this proposed change and keep you updated on any significant developments.

New York's 2007 reforms promised employers relief from the runaway costs of an out-of-control workers' compensation system by capping indemnity benefit weeks, instituting a system of "preauthorized" treatment to reduce medical costs, and by reviewing the failed disability duration guidelines which established the standards for awards of permanent disability in the state since 1996.

Since 2007, the Board has adopted Medical Treatment Guidelines and the new caps on awards (can not exceed 600 weeks for less-than-total disability) are in effect.

As of January 1, 2012 the “New York State Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity” (2012 Guidelines”) will apply to all cases where there has been no medical opinion finding permanent impairment with a rating based on the 1996 Guidelines (now deprecated). On January 1, 2012 these new Guidelines will apply to all cases where there has not been an estimate of permanent impairment under the old (1996) Guidelines.

Under the New York Workers’ Compensation Law, there are four types of benefits available to an injured worker:

1. Medical treatment. Emergency and follow-up treatment for their injuries.
2. Wage compensation for earnings lost while they recover from the immediate effects of their injury.
3. • This wage compensation is called "temporary total" with the claimant is 100% totally temporarily disabled (cannot work at all) OR
   • "Partial temporary" when the claimant can do some work – but isn't earning their prior level of wages (usually because they can only work part time or have to work at a job that pays less than the work they were doing at the time of the accident). This is calculated as 2/3rds of the difference between old wages and post-accident wages.
4. Death benefits payable to the dependents (usually wife and kids) of a worker killed during the course of employment. This is 2/3rds of their average weekly wage at the time of injury, subject to maximums and minimums, to the wife for life.
5. "Permanency" benefits – these are payments of money to injured worker to compensate them for the "permanent effects" of an accident. As of January 1, 2012 the “New York State Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity” (2012 Guidelines”) will apply to all cases where there has been no medical opinion finding permanent impairment with a rating based on the 1996 Guidelines (now deprecated).

Most settlements resolve the amount of "permanent disability" that a claimant is due - and the new Guidelines directly address how these disabilities are to be compensated.

Valuing Workers' Compensation for Injuries in New York.

The happening of an injury is not enough (by itself) to warrant the payment of an award. Awards are issued for residual permanent impairment. If the claimant is due an award, the amount of money the claimant receives will depend on the nature and degree of the loss. The Workers' Compensation Law breaks down the amount payable into two broad categories: "scheduled losses” and "unscheduled losses."

Maximum Medical Improvement.

Before scheduled or non-schedule (classification) permanent disabilities can be determined, there must be a finding by a medical professional that the injured worker has reached maximum medical improvement (“MMI”). According to the 2012 Guidelines:

A finding of maximum medical improvement is based on a medical judgment that (a) the claimant has recovered from the work related injury to the greatest extent that is expected or (b) no further improvements in his or her condition is reasonably expected. The need for palliative care or symptomatic treatment does not preclude a finding of MMI. In cases that do not involve surgery or fractures, MMI cannot be determined prior to six months from the date of injury or disablement, unless otherwise agreed to by the parties.

Awards for permanent disability.

Some specific injuries, such as loss of an extremity, vision loss, hearing loss, or facial disfigurement have scheduled or set payment amounts. Other losses, called unscheduled or classifications compensate the injured worker for injuries which are not on the schedule (such as a spinal injury, disc herniation, a cardiac injury, abdominal injury, etc.) but which cause continuing partial or total disability in the claimant. These unscheduled losses are classified into permanent partial disability and permanent total disability.

The statute envisions two types of permanent disability compensation:

Scheduled Loss of Use.

“Scheduled loss of use" relates to injuries to specific, enumerated body parts which are listed on a "scheduled loss of use chart" (found in this book). This is a fixed amount of compensation for injuries to fingers, toes, hands, feet, arms, ankles, knees, etc.  In other words, the Workers Compensation Law states that if you lose your thumb in accident, you get a fixed benefit – a number of weeks of compensation times your weekly rate – which is determined by the injury.

Classification.

The second type of permanent disability award is called a "classified award” or sometimes it is called a "classification." This term "classification" doesn't really mean anything – it just means the claimant sustained injury to a body part which is not specifically described on the "scheduled loss of use chart." For example, injuries to the head, neck, and low back are considered "classifiable" injuries – and they are compensated in terms of a fixed number of weeks – up to 600 weeks.

Example - Scheduled Loss of Use.

If an injured worker made $200 per week and lost her thumb, according to the Scheduled Loss of Use chart, she would be entitled to 100% loss of the thumb – 75 weeks of compensation. This would be paid at a rate equivalent to 2/3rds (66.6%) of her average weekly wage – or approximately $133.34 per week (two thirds of $200 per week). So in this example, the loss of the thumb would give rise to an award of $10,000 for permanent disability. The other benefit the injured worker would receive is medical treatment for life in regards to the lost thumb.

Example - Injury Giving rise to Classification.

If an injured worker earned $200 per week and sustained an injury to her low back, such an injury (if permanent) could give rise to a classification award. Any amounts already paid to me – the claimant – during the claim for my lost wages – for example, if I lost a few weeks from work – would be subtracted from the overall award.

What a treating doctor must do.

Often, there is not a simple agreement between the parties as to the extent and nature of the claimant's residual permanent disability. In such a case, we will often have a trial. During the pendency of the trial both parties have the opportunity to present their own witnesses.

A treating physician must provide the Board with medical evidence that the Workers' Compensation Law Judge will consider when making his or her legal determination about disability. The health provider can make a recommendation about whether or not the claimant can return to his or her regular employment. If the medical provider states that the claimant can not return to his previous employment, the medical provider should states what medical limitations exist.

The 2012 Guidelines envision that the treating physician’s evaluation of medical impairment should include the relevant basis for the impairment classification, including the relevant history, physical findings, and diagnostic test results and be provided on Form C-4.3.

The C-4.3 evaluation of impairment report must include the following:

1. That the injury occurred on-the-job.
2. Functional abilities and restrictions (if any). The physician should measure the claimant’s ability to perform a range of functional abilities. These should include general abilities (lifting, carrying, pushing, etc.) but also general and specific tolerances (climbing, bending, kneeling, stooping, walking, standing).
3. Exertional ability (using standard classification system - ranging from “Sedentary” to “Very Heavy.”)
4. Psychiatric Limitations.
5. Other Limitations, which would include the impact of medications on ability to operate machinery, for example.

Examining Doctors.

The Workers' Compensation Law presumes that the medical records and reports from both treating physicians and IME doctors will be "adequate, complete, and objective." In reality, medical reports often contain subjective impressions, such as a treating doctor's feeling that a claimant can not return to work based on non-medical factors such as age, education, occupation, etc.

Evaluating doctors are expected to produce reports which measure, to a reasonable degree of accuracy and uniformity, the nature and extent of the impairment experienced by the individual claimant. This assessment should be based upon the loss of structural integrity, pathology, and pain substantiated through physical (clinical) findings.

In order to prepare a report on permanent impairment, the examining physician should do the following:

1. Review the Guidelines.
2. Review the medical records.
3. Perform a thorough history and physical examination and recount the relevant medical history, examination findings and appropriate test results.
4. State the work related medical diagnosis(es) based upon the relevant medical history, examination and test results.
5. Identify the affected body part or system (include Chapter and Table No. for non-schedule disabilities).
6. Follow the recommendations to establish a level of impairment.
7. For a non-schedule disability, evaluate the impact of the impairment(s) on claimant’s functional and exertional abilities.

What the Workers' Compensation Law Judge does.

In disputed cases, the Law Judge considers the employer's defenses and makes a determination regarding accident, notice, and causal relationship. In practice, most cases do not involve disputes about whether or not the accident took place, except for occupational claims, in which there may be serious issues of notice and causal connection. The Law Judge must be made aware of any pre-existing conditions the claimant had, prior claims and awards, and any subsequent injuries or claims.

Non-schedule/Classification Awards Post-Reform.

For dates of injury post March 13, 2007, there are two formula to be applied to distinct classes of injured worker: those workers who have returned to work (in some capacity) and those who have not.

The Working Post-reform Claimant.

Current wage information will be available for the working claimant.

The degree of disability and monetary award will be based entirely on the Loss of Wage Earning Capacity (LWEC). This is simple to calculate:

AWW less Current Earnings / AWW * 100% = LWEC %

Calculating the weekly benefits due a working claimant would follow the following:

Weekly Benefit Rate - 2/3 * LWEC * Current Wages

Example.

Presume a pre-injury wage of $500 per week. After return-to-work, the claimant now earns $350 per week. The calculation would be:

LWEC = (($500 - $350)/$500))*100% = 30%

Weekly Benefit Rate = ((2/3) * .30 * 350 = $70

Under this example, the claimant would receive a weekly benefit of $70 per week, which added to her earned wages ($350) give a total income of $420 per week.

Using the chart (“LWEC and Maximum PPD Benefit”), this benefit would be payable for 250 weeks.

LWEC and Maximum PPD Benefit (Chart).

The Non-working Post-reform Claimant.

If the claimant is not working, the Judge must establish a loss of wage earning capacity based on the facts in the case, considering medical evidence and vocational factors. The Judge is not expected to presume that the wage earning capacity of the non-working claimant is zero.

The calculation for the non-working claimant is as follows:

Weekly Benefit Rate - 2/3 * LWEC * AWW (at time of loss)

Unlike the working claimant, there is no current earnings to base LWEC on. Therefore, loss of wage earning capacity (“LWEC”) is based on three types of input:

1. Medical impairment. The medical impairment evaluation must be performed by a medical professional. The medical professional should apply the evaluation criteria laid out by the Board in the 2012 Guidelines. (For more on this topic, see Chapter 2: IMEs). The physician must document the injured worker’s diagnoses and impairment ranking by body part or system and state the medical basis for the impairment classification, including reference to the relevant history, physical findings, and diagnostic test results.
2. 
   
   
3. Functional ability/loss. The medical assessment of the residual functional abilities and losses is also considered by the Judge in assessing loss of wage earning capacity in the non-working claimant. The functional evaluation (recorded on Form C-4.3) should include the following:
   
   
   1. Functional ability/restrictions: On examination, the physician should measure the injured worker’s performance and restrictions across a range of functional abilities, including dynamic abilities (lifting, carrying, pushing, pulling and grasping), general tolerances (walking, sitting and standing) and specific tolerances (climbing, bending/stooping, kneeling, and reaching). These abilities and restrictions, including specific weight and time limitations, should be recorded on the Form C-4.3. Alternatively, the physician may refer the injured worker to a physical or occupational therapist for completion of the functional measurements and, after the physician’s review, incorporate them into the Form C-4.3.
   2. 
      
   3. Exertional ability: Finally, the physician should rate the injured worker’s residual exertional capacity according to the standard classification system of Sedentary to Very Heavy. The exertional capacities relate to those activities that require lifting and/or pushing or pulling objects. The definitions of each category, which are derived from the Dictionary of Occupational Titles and used in the Social Security system, are as follows:
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   • Sedentary: Exerting up to 10 pounds of force occasionally and/or a negligible amount of force frequently to lift, carry, push, pull or otherwise move objects, including the human body. Sedentary work involves sitting most of the time, but may involve walking or standing for brief periods of time. Jobs are sedentary if walking and standing are required only occasionally and all other sedentary criteria are met.
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   • Light: Exerting up to 20 pounds of force occasionally, and/or up to 10 pounds of force frequently and/or negligible amount of force constantly to move objects. Physical requirements are in excess of those for sedentary work. Even though the weight lifted may only be a negligible amount, a job should be rated light work: (1) when it requires walking or standing to a significant degree; or (2) when it requires sitting most of the time but entails pushing and/or pulling of arm or leg controls; and/or (3) when the job requires working at a production rate pace entailing the constant pushing and/or pulling of materials even though the weight of those materials is negligible. NOTE: The constant stress of maintaining a production rate pace, especially in an industrial setting, can be and is physically demanding of a worker even though the amount of force exerted is negligible.
   • 
     
   • Medium: Exerting 20 to 50 pounds of force occasionally, and/or 10 to 25 pounds of force frequently, and/or greater than negligible up to 10 pounds of force constantly to move objects. Physical demand requirements are in excess of those for light work.
   • 
     
   • Heavy: Exerting 50 to 100 pounds of force occasionally, and/or 25 to 50 pounds of force frequently, and/or 10 to 20 pounds of force constantly to move objects. Physical demand requirements are in excess of those for medium work.
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   • Very Heavy: Exerting in excess of 100 pounds of force occasionally, and/or in excess of 50 pounds of force frequently, and/or in excess of 20 pounds of force constantly to move objects. Physical demand requirements are in excess of those for heavy work.
4. 
   
5. Non -medical vocational factors:
6. • 
     
   • Vocational issues: Education and Training. The Board considers the role of education in a worker’s ability to qualify for different occupations and level of income. The relationship between education and loss of wage earning capacity is complicated by the fact that the impact of education is also generally reflected in workers’ pre-injury wages. Those with more education generally earn more than those with less education, both pre-injury and post-injury. Thus, in determining loss of wage earning capacity, it the court will evaluate the degree that educational achievement affects the impact of a medical impairment on a worker’s earning capacity.
   • 
     
     
   • Vocational issues: Skills. Prior work skills are often as important as formal education in an individual’s qualification for employment. An injured worker with a history of unskilled or semi-skilled work in the past is unlikely to qualify for skilled work post-injury. A worker who has performed skilled work may be able to find other skilled work within his functional limitations, though this depends on the nature of the worker’s job skills. A key consideration is whether the worker’s skills are readily transferable to alternative employment. The transferability of skills from a prior occupation generally depends on the similarity of occupationally significant work activities among different jobs. The similarity can be measured by the level of similarity in the degree of skill involved, the tools and machines used, and the materials, products, processes or services involved.
   • 
     
     
   • Vocational issues: Age. The 2012 Guidelines instruct that age “should be considered in the context of residual function, education, and work experience.” The court will presume that advancing age adversely impacts a person’s ability to obtain employment that involves work that is different from one’s prior work experience or requires developing new skills.
   • 
     
     
   • Vocational issues: Literacy and English Proficiency. The ability to read, write, and speak English fluently is a requirement for many occupations in New York. Those who have limited or no ability to read, write or speak English fluently may still qualify to perform manual labor and other work that does not require interaction with the public or involvement with written documents. Workers who are illiterate or have limited or no English proficiency and, by virtue of their impairment, are rendered unable to perform manual work may have a significant loss of earning capacity.

In the case of Calle v. DeJana Industries, decided October 7, 2011, the New Jersey Appellate Division found that "reconstructing" wages for a part-time seasonal worker to an earning level equivalent to a full-time employee was appropriate based on the claimant's testimony that he was an "off the books" worker elsewhere. The petitioner testified that when not working part-time working for the employer he "would stand on a corner waiting for work" as a day laborer. The Judge of Compensation considered this testimony as proof that the claimant was disabled from all full-time employment even though the claimant was only a part-time worker for the defending employer and did not produce any proofs of the alleged full-time work elsewhere. By making this determination, the claimant's wages were "reconstructed" to a higher rate, entitling him to a much larger award.

When wages are "reconstructed."

The first step in determining the appropriate rate of compensation is to determine "wages" as defined in N.J.S.A. 34:15-37. The rate of compensation may not exceed 70% of petitioner's wages at the time of the accident subject to the maximum and minimum rate in effect for the year the accident occurred.

In practice, claims adjusters should obtain “26-week wage statements” from insured/employers so that an average wage can be computed. Why 26 weeks? The Workers' Compensation Act (N.J.S.A. 34:15-37) uses "six months" as the appropriate look-back period for wages.

The New Jersey Supreme Court in Katsoris v. South Jersey Publishing Co., 131 N.J. 535 (1993) instructed that reconstruction of wages is appropriate when necessary to compensate the worker for loss of earning capacity, i.e., diminution of future earning power. The 'loss of earning capacity' includes a loss of "potential for full employment." Where an employee, who is permanently disabled due to an injury on a part-time job, also has a full-time job, use of a "reconstructed" work week is appropriate if there has been an impact on the employee's ability to return to a full-time job. (Citing Mahoney v. Nitroform, 20 N.J. 499 (1956). By contrast, where a worker with a part-time and full-time employment is permanently partially disabled from the part-time employment but able to return to the full-time employment, reconstruction of the work week as if the part-time employment were full time employment is improper. (Katsoris, 131 N.J. at 548).

In cases involving part-time employees with no full-time work, a judge of compensation must employ the principles of "fairness and equity" in determining if the circumstances warrant reconstruction of a part-time worker's wages. However, the Appeal court drew a distinction, as did prior cases, for part-time workers - concluding that reconstruction is appropriate when the "permanently disabling accident 'prevents or interferes with later full-time employment.'" (Citing Engelbretson v. AM. Stores, 49 N.J. Super. 19 (App. Div. 1957) aff'd, 26 N.J. 106 (1958).

Determining out the 'rate' at which compensation should be paid is often the central issue in claims involving part-time workers. If a worker makes $100 a week as a part-timer, the permanent disability rate (the rate at which permanent disability benefits is paid) would be $70 per week. For an award of 25% of the hand (at the 2010 rates) a part-time worker earning $100 per week is due an award of $4,285. A full-time worker, earning wages exceeding $290 per week, would be due a "full" statutory award of $12,585.

There are many instances where a judge of compensation is persuaded to "reconstruct" a part-time wage into a full-time wage. This results in a much-higher award (in our example, $4,285 versus $12,585). The Judge of Compensation can be persuaded to "reconstruct" wages to a full-time rate because the law allows for wages of a part-time employee may be reconstructed for purposes of fixing the rate for permanent partial disability in accordance with N.J.S.A. 34:15-37 based upon "diminished future earning capacity."

Case where wage reconstruction was rejected.

Another recent case which I've written about reached different conclusion regarding wage reconstruction. In Rose Gruzlovic v. Giovani's Trattoria, A-1519-08T1 (App. Div. Decided April 15, 2010), the appeals court reviewed the decision of a Judge of Compensation who had "reconstructed" part-time wages of a cafeteria worker, resulting in an increased award. In Gruzlovic, the claimant was a 76-year-old woman who worked nine hours per week, earning $10.50 per hour (average weekly wage of $94.50). During the thirteen years the claimant worked for the employer, she did not have or seek additional part-time employment. After the accident at work, the claimant no longer worked, stating simply, "I thought I had my share [of work]."

The Judge of Compensation awarded Gruzlovic 25% permanent partial total benefits, and "reconstructed" the rate so that the claimant received the "full" statutory award ($30,420).

The Appeals Court overturned this ruling, and ruled that the claimant was only due an award only on her part-time work - which would equate to 150 weeks of compensation payable at $66.15 per week, totaling $9,922.50.

In Gruzlovic, the Judge of compensation was reversed and the wage reconstruction was remanded for further proceedings. The Judge was asked to find out whether the accident and resulting residual disability "had any impact on Gruzlovic's capacity or inclination to work full-time as opposed to part-time. Based on the fact that the claimant had only worked one day per week for the thirteen years leading up to the accident, the Appellate Court stated 'there is no basis for an inference" that Guzlovic would have pursued other full- or part-time jobs "but for" her partial disability. The Appeals Panel further stated "When an inference of a loss of potential full-time employment attributable to the accident is not available from the evidence presented, principles of fairness and equity developed to compensate for that lost potential are not implicated and reconstruction of wages is not appropriate."

Applying Gruzlovic to Calle.

The Calle decision reveals a low threshold for the petitioner to prove a loss of future earning power - the claimant in Calle merely alleged that he was a day laborer working full time in other employments. The record does not reveal any wage information, pay stubs, or tax returns which were used to verify this claim. Nonetheless, the Appellate Division accepted the bald assertion of the injured worker that he sought full-time work in essentially unverifiable (and likely illegal) employments, and then relied on that low proof threshold to establish the petitioner's right to reconstructed wages.

Case: Calle v. DeJana Industries, A-0797-10T2 (App. Div. decided October 7, 2011).

An employer can deny a case for lack of notice, lack of employment, wrong carrier, or other jurisdictional or substantive reasons by filing a "notice of Controversy" (Form C-7). Once the C-7 is filed, the case will be set down for an expedited hearing within 30 days. The Act also requires that a "Pre-Hearing Conference Statement" (Form PH-16.2) must be filed 10 days before the Expedited hearing. See 12 NYCRR 300.38(f)(4). If the Pre-Hearing Conference statement is not filed on time, all defenses are waived.

We counsel our clients that if you are denying a case, file a Pre Hearing Conference statement at the same time - to avoid the potential for failing to file the Statement (Form PH-16.2) within the 10 days. There is just too much that can go wrong - late notice of the hearing date, no notice at all, etc! If you have enough information to justify a denial, you have enough information to fill out the Pre-hearing Conference Statement - so go ahead and file the PH-16.2 at the same time.

We think he best practice is to have outside counsel handle the entire process! More commonly, we see the carrier file a C-7, then refer the claim to outside counsel. This introduces delay and a possible dropped deadline into a time-sensitive process.

In March I reported on two cases where the Appellate Division upheld the suppression of defenses where the carrier failed to timely file the Pre-hearing Conference Statement. LINK

In a case decided September 29, 2011, the Appellate Division reviewed a situation where the employer denied the case (filed a C-7) but didn't file the PH-16.2 within the time limits. To fix the mistake, counsel immediately filed an "amended notice of controversy" and argued that the originally-scheduled Pre-hearing Conference was therefore "premature" and should have been rescheduled, thereby making the PH-16.2 timely.

The Workers' Compensation Law Judge refused to excuse the late fling, and stripped the employer of its defenses, ultimately establishing the claim.

In a decision dated September 29, 2011, the Appellate Division affirmed this outcome.

Best practice: be wary of the requirement that the Pre-Hearing Conference Statement be filed ten days prior to the expedited hearing - implement a plan to make sure this is done timely or risk a suppression of defenses!

Case: Butler v. General Motors, NY Slip Op 06634 (App. Div. 3d Dep't, Decided September 29, 2011).

It has been nearly a year since the Medical Treatment Guidelines become the mandatory standard of care for injured workers, regardless of the date of injury or accident for injuries to the back, neck, shoulder, or knee. N.Y.C.R.R. 324.2. Now the Board has proposed Carpal Tunnel Syndrome Medical Treatment Guidelines. This will impact handling of these claims as currently treatments (such as release surgeries) which cost more than $1,000 are subject to carrier approval for body parts not covered by the MTG. Under the proposed Guideleines, nearly all carpal tunnel release surgeries will be considered pre-approved.

What do the current Guidelines cover?

Under the current Medical Treatment Guideliness, medical care provided to injured workers must satisfy a two-prong test:

The Medical Treatment Guidelines include statements of "General Principles" in each MTG's first section. These are the key principles necessary to apply and interpret the MTGs. There are 23 general principles divided into 6 categories. Of these, the two most important are:

When are Authorizations Required?

All medical consistent with the MTG is pre-authorized and the health care provider is not required to obtain prior authorization. See N.Y.R.R.C. 324.2(d)(1). For carpal tunnel syndrome, all release surgeries will be considered pre-approved under the proposed Guidelines except where there is no electrodiagnostic evidence of carpal tunnel injury (must be EMG and NCV). Further, some therapies, including: low level laser, iontophresis, magnets, or "laser acupuncture" are specifically deprecated.

The Board is accepting comments on the proposed CTS Guidelines and will likely adopt regulations to incorporate the Carpal Tunnel Syndrome Medical Treatment Guidelines into the law after December 1, 2011. Of course, I will keep you up to date with the progress of this reposed change.

Now, where's that pain management guideline we need so badly?!?

Download the latest schedules of loss here.

Background

Under the New York Workers’ Compensation Law, there are four types of benefits available to an injured worker:

1. Medical treatment. Emergency and follow-up treatment for their injuries.
2. Wage compensation for earnings lost while they recover from the immediate effects of their injury.
   • This wage compensation is called "temporary total" with the claimant is 100% totally temporarily disabled (cannot work at all) OR
   • "Partial temporary" when the claimant can do some work – but isn't earning their prior level of wages (usually because they can only work part time or have to work at a job that pays less than the work they were doing at the time of the accident). This is calculated as 2/3rds of the difference between old wages and post-accident wages.
3. Death benefits payable to the dependents (usually wife and kids) of a worker killed during the course of employment. This is 2/3rds of their average weekly wage at the time of injury, subject to maximums and minimums, to the wife for life.
4. "Permanency" benefits – these are payments of money to injured worker to compensate them for the "permanent effects" of an accident.

With rare exception, our settlements will focus on resolutions regarding the amount of "permanent disability" that a claimant is due.
 
The amount of permanent disability – the money award at a claimant gets when he has reached maximum medical improvement – is set by statute.
 
The statute envisions two types of permanent disability compensation:

1. "Scheduled loss of use" which relates to injuries to body parts which are listed on this "scheduled loss of use chart" which is attached to this document. This is a fixed amount of compensation for injuries to fingers, toes, hands, feet, arms, ankles, knees, etc.  In other words, the Workers Compensation Law states that if you lose your thumb in accident, you get a fixed benefit – a number of weeks of compensation times your weekly rate – which is determined by the injury.
2. The second type of permanent disability award is called a "classified award” or sometimes it is called a "classification." This term "classification" doesn't really mean anything – it just means you sustained injury to a body part which is not specifically described on the "scheduled loss of use chart." For example, injuries to the head, neck, and low back are considered "classifiable" injuries – and they are compensated in terms of a fixed number of weeks – up to 600 weeks.

Example.

If I made $200 per week and I lose my thumb, according to the scheduled loss of use chart, I would be entitled to 100% loss of the thumb – 75 weeks of compensation. This would be paid at a rate equivalent to 2/3rds (66.6%) of my average weekly wage – or approximately $133.34 per week (two thirds of $200 per week). So in this example, the loss of my thumb would give rise to an award of $10,000 for permanent disability. The other benefit I would get would be medical treatment for life in regards to the lost thumb.
 
Imagine if I sustained an injury to my low back.
 
Assume that the treating and examining physicians all agreed that I was left with a 25% permanent residual impairment. My award would be 2/3rds of my average weekly wage times 25% of 600 weeks (the maximum number of weeks for classifiable injury). So, the award would be $133.34 times 150 weeks of compensation or $20,000.
 
Any amounts already paid to me – the claimant – during the claim for my lost waged – for example, if I lost a few weeks from work – would be subtracted from the overall award.

 Often, there is not a simple agreement between the parties as to the extent and nature of the claimant's residual permanent disability. In such a case, we will often have a trial. During the pendency of the trial both parties have the opportunity to present their own witnesses – usually medical witnesses who claim that the injured worker is either completely and totally disabled (the claimant’s doctors) or is absolutely fine and ready for the Olympics (our IME doctors).
 
If the parties can reach a settlement before the judge reaches his conclusion regarding permanent disability – we can stipulate to an overall resolution. That settlement can be handled a number of different ways. What follows is a description of the three ways in which settlements are typically resolved.
 

Settlements

The main difference between these ways of settlement is whether or not the settlement is "full and final" – that means the claimant can never come back into court and alleged that his condition has worsened and now needs more compensation – and whether or not the employer/carrier remains liable to provide future medical benefits to the claimant should the condition worsen or should the claimant require additional medical treatment.
 
As medical treatment costs are now driving workers compensation claims (the employers and carriers are seeking to minimize medical treatment costs) a settlement in which the medical treatment aspects are closed (a "full and final settlement with closed medical") is the preferred way for a carrier/player to resolve workers compensation case.
 

1. Lump-sum dismissals – everything gets closed.

    This is often referred to as a "section 32" settlement after the section of the statute which allows for this type of settlement. This is the preferred way for employer/carrier to close a case. In this type of settlement, the claimant is paid one lump sum – usually agreed upon between the parties and usually a whole number – for example, $50,000 – to resolve all issues. The claimant loses the right to reopen this claim should his condition worsened. The claimant loses the right to seek additional medical treatment which must be paid for by the employer/carrier. The claimant is responsible for paying his own attorney's fee – usually 15% of any settlement – directly to his attorney.
   
   A section 32 settlement must be approved by a judge of compensation. There are number of forms which must be completed and submitted to the court for settlement of this type to take place. Addiitonally, consideration of Medicare's potential future interest must be made - in many cases, a set-aside allocation should be considered.
    
   These forms are:
    
   1. C–32 settlement form.
   2. C–32.1 settlement form
   3. A–9 form.
   4. An addendum document, explaining that the claimant's right further compensation is waived, that medicals are closed, and laying out any other particular aspects of the proposed settlement.
   5. A further correspondence must be sent to the office of Child support enforcement seeking a statement that the claimant does not know any child support payments in the state of New York. This should be simply sent to the Office of Child Support Enforcement – and does not have to be submitted to the workers compensation board except as a copy.

2. Lump-sum dismissals – medical stays open.

   This is still a "section 32" settlement with the only aspect of the case that is closed is the amount and nature of the claimant's permanent residual disability. In other words, we our paying the claimant a lump sum for the amount of permanent impairment to the body part injuries the accident.  The claimant is also giving up the right to reopen the case – he can never come into court and say's condition has worsened and he needs more compensation for increased impairment. However, the carrier remains "responsible" for additional medical treatment should the claimant's condition worsen and require additional care. In this type of settlement, Medicare's potential future insterest does not have to be considered - medical stays open and so the claimant can come back to the medical carrier for any necessary treatment.
    
   The specific forms which must be filed in this case are the same as the lump-sum dismissal of all claims (above at one).
    
   1. C–32 settlement form.
   2. C–32.1 settlement form
   3. An addendum document, explaining that the claimant's right further compensation is waived, that medicals are closed, and laying out any other particular aspects of the proposed settlement.
   4. A further correspondence must be sent to the office of Child support enforcement seeking a statement that the claimant does not know any child support payments in the state of New York. This should be simply sent to the office of Child support enforcement – and does not have to be submitted to the workers compensation board except as a copy.
    

3. Stipulated settlement

   – classification or scheduled loss of use with medical staying open. In this case, we are stipulating to the fact that the claimant has a residual permanent impairment to a "scheduled" body part or to a body part which is "classified." In this case, we complete form 300.5 S completely as possible – describing the injuries, the percentage of permanent pyramid, and all necessary particular facts to establish the award – which will include the average weekly wage of the claimant. In this type of stipulated settlement, we will be granted credit for payments of temporary total or temporary partial wage continuation benefits which were issued during the pendency of the case – while the claimant recovered.
    
   • Forms:  C-300.5

Have any questions about settling claims in New York? Contact Greg Lois.

New Jersey does not have a "fee schedule" for medical services provided to petitioners in workers' compensation cases, but because the employer controls care, the respondent is able to direct the claimant to medical care providers with whom contractual arrangements have established - usually to refer the provider's bills for third-party review and repricing. This helps the carrier/employer reduce costs.

In the past few years a huge number of "Medical Provider claims" have been filed in the Division of Workers' Compensation seeking additional payments for medical services provided to workers' compensation patients. Typically, the claim is for the difference between the billed amount of services and the amount paid (usually less than 50% of the original billing).

Initially there was confusion within the Division regarding how these cases were to be docketed and litigated. The Division now accomodates the filing of these claims through the use of a new claim form ("Medical Provider Application for Payment or Reimbursement of Medical Payment"). The Division also formed a Task Force on Medical Provider Claims" to address the new actions. The Task Force issued a memorandum in November 2010 which provided a 13-point "checklist" of factors that a workers' compensation judge should consider when deciding a Medical Provider Claim ("MPC") - but this list had the force of a "suggestion" rather than a rule or regulation (go to page 8-9 of the memo for the proposed list).

Practitioners representing carriers and self-insureds have suffered from limited guidance on how these claims were to be litigated - simply stated, there have been no reported decisions addressing the proofs and standards for these new claims. In litgating these matters, a form of brinksmanship has developed - in which the defense sought trial and asked to cross-examine the doctor seeking the fee - in order to force the doctor to come to court and presumably lose time that could be spent more profitably treating patients. In practice, these claims are usually compromised - with the parties agreeing to negotiate values and then entering a Section 20 agreement to close the case (pursuant to N.J.S.A. 34:15-20).

In a 77-page decision issued August 31, 2011, Administrative Supervisory Judge Virginia Dietrich (Middlesex County) ruled on a MPC case in which the claimant underwent extensive skin grafting surgery performed by two surgeons. The carrier (NJM) disputed the billing - specifically, that the surgeons submitted two bills for the same surgery - not as "co-surgoens" but rather seperately - as if one surgeon was not assisting the other.

Judge Dietrich ultimately ruled against the surgeons - findings that the carrier had applied the appropriate reductions after their review and audit of the billing.

While this decision is an agency decision, and therefore un-reported, this is the frst decision on this subject - and Judge Dietrich chaired the Division's Task Force on Medical Provider Claims - so we can expect the reasoning in this decision to influence the way these MPC claims are handled throughout New Jersey.

What's good in the decision for employers:

• Judge Dietrich had to decide what the "usual, customary, and reasonable" fees for the surgeries performed was. Judge Dietrich decided to rely on paid fees as appropriate as opposed to billed fees for services rendered.
• In finding what was the "usual, customary, and reasonable allowance" Judge Dietrich also found it was appropriate to look at all payments made to the medical providers rather those exclusively made by commercial carriers.
• Judge Dietrich also found that contractual carriers or government programs should be considered in determining what is customarily accepted by the provider.
• The Judge also suggested that the more payments that are considered, the better - stating "It is only by reviewing every payment that a determination can be made as to what an acceptable payment is.
• Judge Dietrich was reviewing bills relating to very specialized care - she found that

  "[t]he instant case is somewhat unusual because it deals with burn surgeryIn New Jersey there are very few practitioners. There are none in northern New Jersey to compare with. The fact is, however, that the Burn Surgeons do accept all manners of insurance coverage including self-pay, government programs, contractual payers and commercial carriers. It is possible then to compare what the petitioner deems acceptable from other payers.

  This is important for defense practititioners to keep in mind in cases where the petitioenr has been rendered specialized or emergent treatment.

What's bad:

• Judge Dietrich found that

  "In trying these cases it is helpful to have witnesses familiar with coding and billing processes. Dr. Marano was a necessary witness in this case as there was a question as to the work done in the surgery. In those cases in which the dispute is over payment only and not whether the procedures were completed or the manner in which the procedures were completed I find that it is unnecessary to have the doctor testify. The petitioner must produce a party responsible for the data and an expert who can interpret it if necessary."

  This is bad for employers because it means that the doctor who is seeking additional payments does not have to tactually come to court (and thereby lose time she could be spending treating and billing) but can send "a party responsible for the data and an expert to interpret it if necessary" to prosecute her claims.
  
  Case: Burn Surgeons of St. Barnabas v. Shop Rite, decided August 31, 2011. (Note: this is an agency decision and has no precedential value. Burn Surgeons of St. Barnabas has an abolute right of appeal in this case. I will continue to follow this case closely and report on any appellate developments.)

In New Jersey the employer has the right to direct and control medical care. However, there are limited circumstances where an employer can lose that right to control - specifically, when the employer has failed to provide "reasonable and necessary" curative treatment to a claimant. What usually happens is that an authorized treating provicder requests authorization to perform a specific treatment (such as surgery) and authorization is withheld or delayed, often for good reason.

Under such circumstances, the Rules of the Division of Workers’ Compensation allow an injured employee to file a "Motion for Temporary and Medical Benefits” (AKA, "Motion for Med & Temp") to compel the employer/respondent to provide specific medical treatment or temporary disability wage compensation which was denied.

The respondent has 21 days to file a responsive pleading (or 30 days, if the Motion for Med & Temp is filed at the same time as the Claim Petition). If the respondent wishes to present an IME report in opposition to the Motion for Med & Temp (which is usually the case), the doctor’s examination must be conducted within 30 days of the receipt of the filed motion and the report issued within 35 days.

Disputes about whether specific treatments are "necessary" often require testimony - essentially a "mini-trial" within the litigation. First the claimant testifies, and then the treating doctor (who is seeking to provide some specific treatment to the claimant) testifies, and then the employer's IME doctor testifies. Litigating a motion for Med & Temp can be more costly then just the litigation expense: if a petitioner prevails in their motion, claimant's counsel is due a fee (up to 20% of all the treatment provided pursuant to the motion). It goes without saying that the potential for an attorneys' fee often drives the filing of such motions.

Most of the time such disputes can be resolved informally between the parties. If not, a filed motion will be conferenced in chambers with the presiding judge. If the parties can reach an agreement as to the treatment course, a consent order can be issued resolving the matter.

Sometimes when an agreement can not be reached, the Judge or either party will recommend that a third doctors opinion be obtained - to act as an effective "tie-breaker."

Recent case: Dispute about the "tie-breaker's role."

In a recent case (decided July 27, 2011) the Appellate Panel looked at a very interesting issue: absent the clear consent of the parties to be bound to the opinion of the "tie-breaker", can a judge of compensation "appoint" a court-selected doctor to decide the medical issue?

In the new case, the judge of compensation selected and appointed a physician to perform a physical examination, review the relevant medical records, and provide an opinion as to whether a specific medical treatment (in this case, surgery) was necessary. In their subsequent appellate briefs one side stated that it was agreed by all counsel in chambers that, in light of the conflicting information regarding causation, the court-appointed physician would serve as the "tie-breaker," and that his opinion would be dispositive of the issue. The other side took a contrary position, contending that the court-appointed evaluation and report would be "non-binding."

In other words, on appeal, the parties disputed that they had consented to the appointment of the "tie breaker" doctor and disagreed over whether they were to be bound by the findings of the selected doctor.

The hearing transcript was silent: there was no mention by any counsel or the court of an off-the-record agreement as to the effect of the "tie-breakers's" evaluation and report.

The appellate panel ruled that the workers' compensation judge correctly exercised her discretion by basing her ruling on the report of her appointed "tie-breaker" in conjunction with other competent evidence in the record.

Practical Tips for counsel:

Resolving medical disputes in a cost-effective manner is always a goal - but in this case the appointment of the "tie-breaker" without a clear statement on the record as to the effect of that appointment - whether or not the parties would be bound by the opinion of the new physician - should not be allowed. If a consent order is entered, the employer's counsel should clearly mark the appointment of the new reviewing physician as "without prejudice" on the consent order itself to avoid ambiguity and preserve all defenses.

Case: Thompson v. Quality Et al., 2011 WL 3107767, Docket No. A-1177-10T1 (NJ App. Div.) decided July 27, 2011.

Forensic Investigator Gary Veeder specialized in trace fiber evidence for the New York State Police Forensic Investigation Center. His findings were relied upon by prosecutors and juries in sending people to jail. Unfortunately, a state investigation found that in nearly 1/3rd of all the cases Veeder worked on there were "serious problems" with the evidence provided by Veeder.

A very public scandal erupted following an investigation ("Troopergate" and "Dirty Tricks Scandal") when it was learned that Veeder

"routinely failed to conduct a required test when examining fiber evidence, then falsely indicated in case records that he had performed the test,"

according to the audit of his practices. It appears that Veeder had no knowledge of the tests he was supposed to be conducting, and could not even properly operate a microscope.

A lot of people may have gone to jail because of Veeder's fake evidence.

Veeder first retired and then 15 days later committed suicide by hanging himself in his garage.

His widow claimed that his death was caused by work-related stress and filed for workers' compensation benefits.

Dependency Benefits in New York

Under the New York Workers' Compensation Law, if a worker dies from a compensable injury, the surviving spouse would be entitled to weekly cash benefits. The amount is equal to two-thirds of the deceased worker's average weekly wage for the year before the accident. The weekly compensation may not exceed the weekly maximum, despite the number of dependents.

Suicide

Intentional self-injury is not compensable under the New York Workers' Compensation law. Self-injury or stress related to a negative personnel action (discipline, termination, etc.) is not compensable. However, a line of cases has developed since 1991 finding some suicides compensable. For example, a suicide may be found compensable where:

• There was a work-related injury which caused insanity, derangement, or mental deterioration;
• A depressive condition causally related to the employment (presume causal connection between work and mental illness);
• Work-related stress contributed to a depressive illness (which may have been pre-existent in nature and in which suicidal tendencies were a feature).

See Miller v. Int’l Bro. Of Elec. Workers Local 631, 654 N.Y.S.2d 460 (3d Dep’t 1997).

The widow's claim was denied, on the basis that the stress was the result of personnel actions, which are excluded from workers' compensation eligibility.

The case was appealed and the decision to deny benefits was reversed and the case sent back to the Workers' Compensation Board for reconsideration.

Decision on appeal

The reversal was based upon the fact that at the time of Veeder's suicide, no personnel actions had been implemented. The Appellate court stated that "the unrefuted psychiatric evidence contained in the record, as well as the suicide letters, make clear that decedent's suicide was predominantly the product of the depression and stress he experienced from the employer's inquiry into the inconsistencies in his fiber analysis tests." The state was investigating the situation; they had uncovered problems in Veeder's work, but they were on a narrowly defined "fact finding" mission. No action had been taken against Veeder: he was not suspended or demoted or disciplined in any manner. Thus the stress was purely the result of the investigation, not of any personnel action.

In other words, had the employer simply announced to Veeder that the investigation was the initial phase of a disciplinary process, he would probably not have been eligible for workers comp. The only facts that count: he was under enormous work-related stress (of his own making) and he killed himself as a direct result of the work-related situation.

Based on the decision in the appeal, it appears that Veeder's widow will be eligible for burial and indemnity benefits.

Case: Veeder v. New York State Police, 511128 (N.Y. App. Div decided July 14, 2011).

in a recent case (decided June 20, 2011) the claimant worked for a long time in foreign combat environments. He then took a "safer" job working on the United States Army Kwajalein Atoll in the South Pacific. In 2008 he sustained a neck injury and was admittedly entitled to medical and lost time (indemnity) benefits. The administrative law judge (“ALJ”) had to determine the average weekly wage. The ALJ determined that Claimant’s rate of pay at the time of his injury on the Atoll, a non-hostile environment, would form the basis of his wage calculation under 33 U.S.C. § 910. The claimant appealed, arguing he had earned more when working in more dangerous environments previously.

The Benefits Review Board (“BRB”) upheld the ALJ’s average weekly wage calculation, finding that because the Claimant’s pre-Atoll jobs were performed under different conditions, they would not form the basis for calculating his current wages.

Interestingly, this case is the exact opposite of the typical war zone cases, where a claimant is working in a high-danger job, often at a premium for any hazardous duty, and often for a short time before the disabling accident occurs - in which case the claimant gets the benefit of the higher wages (even if only briefly earned) in establishing his wage rate for the purposes of compensation.

Defining Wages.

The LHWCA defines the term "wages" as the money rate at which the service rendered by an employee is compensated by an employer under the contract of hiring in force at the time of the injury, including the reasonable value of any advantage which is received from the employer and included for purposes of any withholding of tax under subtitle c of the Internal Revenue Code of 1954 (relating to employment taxes). The term "wages" does not include fringe benefits, including (but not limited to) employer payments for or contributions to a retirement, pension, health and welfare, life insurance, training, social security or other employee or dependent benefit plan for the employee's or dependent's benefit, or any other employee's dependent entitlement. 33 U.S.C. § 902(13). This definition does include housing and meals in the calculation of a claimant's wages provided that they were not fringe benefits except in the Ninth Circuit, which holds that the the IRS criteria for deciding whether non-monetary compensation counts as wages. (For more on the definition of "wages" see Chapter 8 of my book, Longshore and Harbor Workers' Compensation Law, 2011 edition.)

Calculating Wages.

In the case where the claimant worked substantially the same employment as the employment he was engaged in at the time of the injury, whether for the insured or another employer, for most of the year the Act provides:

. . . his average annual earnings shall consist of three hundred times the average daily wage or salary for a six-day worker and two hundred and sixty times the average daily wage or salary for a five-day worker, which he shall have earned in such employment during the days when so employed. 33 U.S.C. § 910(a).

Making this determination requires knowledge of whether the claimant was six- or five-day worker. Next, a wage statement should be obtained, with daily and weekly wages if available.
If the claimant did not work in the employment or a similar employment for “substantially the whole part of the year” then his wages will be based on a co-employee of “the same class working the whole of such immediately preceding year in such employment in the same or neighboring place” using the same 260- or 300-day multiples. 33 U.S.C. § 910 (b).

If neither of these metrics fit the fact situation (for example, a new hire working on a new project without a similar project in a neighboring locale) then the wages will be based on the previous earning of the claimant, the reasonable value of the services provided if the claimant was engaged in self-employment, and the wage experience of similar workers.

Wages in Traumatics versus Occupationals

The LHWCA calculates the claimant's average weekly wage differently based on the type of injury sustained.

Traumatic Cases

In a trauma case the employee's average weekly wage "at the time of the injury" is used to compute the claimant's compensation. LeBlanc v. Cooper/T. Smith Stevedoring, Inc., 130 F.3d 157 (5th Cir. 1997). This is relatively easy to do. In a traumatic case where the injury is to the low back, neck, head, shoulder, or psyche, the AWW is very important as the unscheduled disability award will be based on the claimant’s pre- and post-injury earnings. In all cases, claimants will receive more benefits for higher wages, subject to the statutory maximums in place at the time of loss.

Occupationals

In an occupational case the time of injury, is when the claimant became aware of, "or in the exercise of reasonable diligence or by reason of medical advice should have been aware, of the relationship between the employment, the disease, and the death or disability.” Therefore, the wage earned by the claimant at that time (time of discovery) is used. This can be higher than during the period of actual exposure or employment.

Rates: a key the difference between Longshore and the Defense Base Act.

All Longshore compensation rates are based on a calculation of the claimant’s weekly wage. In every case, the actual benefit amount requires reference to the National Average Weekly Wage as a "maximum" on the possible benefits. For accident occurring now (Aug 2011) the maximum is $1,256.84 and the minimum is $314.21. Although the benefits available under the DBA are identical to the LHWCA, there is one key distinction: minimum compensation rates. While the minimum compensation rate under the LHWCA is 50% of NAWW, there is no minimum weekly compensation rate under the DBA.

New Case: Calculating wages under the Defense Base Act.

In a recent case (decided June 20, 2011) the claimant worked for a long time in foreign combat environments. He then took a "safer" job working on the United States Army Kwajalein Atoll in the South Pacific. In 2008 he sustained a neck injury and was admittedly entitled to medical and lost time (indemnity) benefits. The administrative law judge (“ALJ”) had to determine the average weekly wage. The ALJ determined that Claimant’s rate of pay at the time of his injury on the Atoll, a non-hostile environment, would form the basis of his wage calculation under 33 U.S.C. § 910. The claimant appealed, arguing he had earned more when working in more dangerous environments previously.

The Benefits Review Board (“BRB”) upheld the ALJ’s average weekly wage calculation, finding that because the Claimant’s pre-Atoll jobs were performed under different conditions, they would not form the basis for calculating his current wages.

Interestingly, this case is the exact opposite of the typical war zone cases, where a claimant is working in a high-danger job, often at a premium for any hazardous duty, and often for a short time before the disabling accident occurs - in which case the claimant gets the benefit of the higher wages (even if only briefly earned) in establishing his wage rate for the purposes of compensation.

Case: Luttrell v. Alutiiq Global Solutions, BRB No. 10-0555 (2011).

Twice this year the Appellate Division has affirmed the rule that a claimant who is receiving an award for permanent partial disability has an ongoing obligation to show “attachment to the workforce” - that he is actively seeking a job within his restrictions - in order to continue to be eligible for weekly benefits. In both of these cases the Appellate court has instructed that where a claimant fails to seek employment, fails to participate in vocational rehabilitation, and fails to attend to a referral to educational services, the Board’s determination that the separation from the workforce was “voluntary” and therefore on further benefits must be paid by the carrier/employer.
 
 On June 9th, the Appellate Panel ruled that a subsequent medical condition - which left the previously “partially” disabled claimant unable to work in his former industry but still able to do something - extinguished the claimant’s right to benefits.  In that admittedly compensable case, the claimant was collecting a partial permanent disability award for orthopedic injuries to his neck, shoulder, and back (the award was entered pursuant to stipulation). However, the claimant failed to demonstrate search for work within his restrictions.  The claimant also failed to attend to vocational rehabilitation or offered educational services.
 
The employer argued that benefits should be discontinued as the claimant failed to demonstrate “attachment tot he workforce" in the form of a reasonable work search within his restrictions.  For his part, the claimant argued that he had developed a subsequent health condition which made work as a construction laborer impossible.  The Law Judge found that this factor mitigated the claimant’s obligation to show he was seeking work within his restrictions.
 
On June 9, 2011 the Appellate court overruled the workers’ compensation judge  - ruling that even a subsequent unrelated condition does not abrogate the claimant’s duty to seek work within his restrictions.
 
Keep this decision by your side!  

Even in a case where the employer has stipulated to the claimant;s ongoing permanent partial disability, benefits can be withdrawn if the claimant fails to seek accommodated work.  

Remember: the burden is on the claimant to show a evidence of a  job search within his restrictions.

Case:  Bobbitt v. Peter Charbonneau Constr., 2011 N.Y. Slip Op. 04790 (App. Div. Decided June 9, 2011) andMatter of Hester v Homemakers Upstate Group, 2011 NY Slip Op 02091 [82 AD3d 1461] (App. Div. Decided March 24, 2011).

A bill to change the Longshore and Harbor Workers’ Compensation Act (LHWCA) was recently referred to the Senate Committee on Health, Education, Labor and Pensions. (Track it!:  S. 669)  This bill is in the first step in the legislative process. Introduced bills and resolutions first go to committees that deliberate, investigate, and revise them before they go to general debate.
 
What is on the table?
There is a lot to like in the proposed bill for those of us defending Longshore Act claims:
 
LIKE IT:  A proposed amendment to the act (adding a new section, “901A”) stating “in a claim brought under this Act, the facts are not to be given a broad liberal construction in favor of the employee or of the employer, and the laws pertaining to a claim brought under this Act are to be construed in accordance with the basic principles of statutory construction and not liberally in favor of either the employee or employer.”  In other words: the “liberality and generosity” usually afforded to the claimant by the “remedial” legislation is not to be taken by the Courts as an excuse to make every inference in favor of the claimant.
 
LOVE IT:  Extensive revisions to Section 7 (33 U.S.C. 907 et seq.) allowing a carrier to “designate 1 or more participating networks or 1 or more health care panels, or both, for purposes of providing medical services to employees under this Act. An injured employee served by a carrier that has designated an approved participating network under subparagraph (C) or a health care panel under subparagraph (D) shall not be entitled to recover any amount expended by the employee for medical services and supplies unless the employee has secured such medical services and supplies through a physician or other health care provider that is a participant in such network or panel, respectively.”  In other words, medical cost control with the employer/carrier picking the doctors and medical facilities.  Hooray!
 
GOOD:  The revised law would provide a real defense to intoxication by removing the word  “solely” from the sentence, “No compensation shall be payable if the injury was occasioned solely by the intoxication of the employee or by the willful intention of the employee to injure or kill himself or another”. Section 903(c).  Proving a legally drunk claimant’s injury is “solely” due to his intoxication, in light of other possible factors (fatigue, etc.) makes the current defense illusory.  The proposed changes also add a later section ( 920(a)(3)) Section 920(a)(3) which allows that the the nonintoxication presumption of Section 920(a)(1)(c) can be rebutted, by a refusal of a drug or alcohol test by the employee, by the employee testing positive for illegal drugs, or by  the employee having a blood alcohol concentration level above the permitted driving limit.
 
OK:  The employer no longer has to show “irreparable harm” in order to obtain a stay of an order under appeal.  Section 921 would read “Disputed amounts required by an award shall be stayed.”
 
FINALLY:  A proposed change to the way penalties are assessed: The 20% penalty provision of Section 914(f) is changed by striking “within ten days after it becomes due” and inserting instead “within 10 business days after receipt by the employer or carrier of a priority mailing containing the order.”  
 
So far, so good.  But the proposed bill is not all roses. 
 
HATE IT: Ending the Second Injury relief of 908(f) except for modifications of existing 8(f) cases.
 
WHAT THE . . .?: The proposed law would raise the compensation rate to 75% of “spendable earnings” rather than 66.% of average weekly wage.  This introduces a new concept:  “spendable earnings.”  Currently, only six states base workers’ compensation benefits on “spendable earnings” (Rhode Island, Alaska, Connecticut, Iowa, Maine, and Michigan).    The proposed changes calculate “spendable earnings” as follows: first, divide the actual earnings of the employee for the provisos 52 weeks by 52, then subtract “the Federal, State, and local taxes that would have been withheld based on standard deductions and on the domicile of the employee at the time of the injury, and reduced by subtracting the tax that would have been withheld under section 3101 of the Internal Revenue Code of 1986.”  The proposed changes require that a new table be drafted to assist in this calculation.  (Proposed change to Section 10).  Clearly unnecessary and burdensome.
 
What’s next?  We will continue to monitor the progress of this proposed bill and let you know if it makes it out of committee! 

Full text of proposed changes: Link.

New York's maximum compensation rate - for temporary total disability and permanent total disability - just went up effective July 1st to $772.96. The new, higher rate will be in effect until June 30, 2012.

Cathleen Renner died of a pulmonary embolism on September 25, 2007.  Renner’s dependents filed a workers' compensation claim alleging that she literally “worked herself to death” by sitting in a chair at home and working on an assigned project from “the evening” of September 24, 2007 until sometime in the morning of September 25, 2007.  According to the claimant’s paid expert, Renner died of blood clots which formed by “sitting for an extended period of time.”  The case was actually reviewed by the Appellate Division twice: the first decision of the workers’ compensation judge - finding that the decedent had sustained a comepnsable injury and awarding benefits to the survivors based on a  “occupational injuries” theory of causation - was reversed by the appeals panel because the judge applied the wrong standard.  The Appellate court ruled that the claimants had to meet a higher burden of proof imposed by New Jersey’s Section 7.2, which applies in heart attack and cardiovascular cases (N.J.S.A. 34:15-7.2).
 
On remand, the law judge decided the case again -  this time finding that the claimant’s inactivity was a material cause of her pulmonary embolism and ascribing that injury and ultimately the death to the employment.
 
As the decedent was 47 years old and likely subject to the maximum rate in effect for statutory year 2007.  Her husband will be paid $1,317,049 should he live to his life expectancy. 
 
Under the New Jersey Workers’ Compensation Act there is a higher burden for a claimant to meet in cases involving cardiovascular injury (such as pulmonary embolism).  A claimant must show that that “the injury or death was produced by the work effort or strain involving a substantial condition, event or happening in excess of the wear and tear of the claimant's daily living and in reasonable medical probability caused in a material degree the cardiovascular or cerebral vascular injury or death resulting therefrom.”  See N.J.S.A. 34:15-7.2.  In plain English, the claimant has the burden to show, by a preponderance of the evidence, that the work effort which caused the condition was somehow more strenuous than the activities of daily living.  This is because the drafters of the statute envisioned that the “cardiovascular” events brought before the Division of Worker’s Compensation would be heart attacks and strokes - which can be brought on by stress and strain.
 
For some unponderable reason, the defense counsel in the Renner case conceded that the issue in that case was “whether Cathleen's lack of movement at work was more severe than her lack of movement in her daily living” -essentially, applying the “reverse” of the excess wear and tear factor required by the Act.  Why on earth did defense counsel agree to this? Under the Act, the burden was on the claimant to show that the work activity produced the condition.  Why did defense agree to a weaker position - having to prove that the claimant’s activities of daily living were more strenuous than her work activities?  Considering the fact that the subject of that inquiry - Cathleen Renner - was dead - how exactly was defense counsel intending on proving her activities of daily living?  Through the testimony of her dependents?  
 
Well, Renner’s  dependents certainly testified in the case, but given their own financial interest in the outcome, could not reasonably be expected to help the defense by volunteering information about Renner’s personal life.  In fact, Renner’s husband testified that in her personal life, his wife was “never sitting on the  couch with me.  She was always up and out, you know, running with the kids and taking them wherever they needed to be. . .  always running.  Always running.” 
 
The case is also amazing because there is a lack of verifiable (objective) proofs that the decedent was actually working for any of the time period she was allegedly immobile.
 
According to the facts as accepted by the workers’ compensation court, she “began working at home on the evening of September 24, 2007.”  No specific time is noted anywhere.  There is no statement as to what she was actually doing - Facebook?  Twitter? Farmville?  Work?   Instead, there is a reference to an email sent to a coworker at 12:26AM.  No discussion is provided as to what that email was about.
 
The next piece of information comes from the decedent’s son, who stated he woke at 7AM on September 25th, 2007 and saw his mother at her desk in her home office.  Her husband was not home to observe any of the alleged “work.”  The son did not testify that she worked through the night - only that she was at her desk in the morning.  There appears to have been no evidence of what actual work she was doing - no computer log files, documents, or network login information.  Even the decedent’s supervisor testified that she had plenty of work to do but did not confirm she was working overnight.  
 
The decedent next verifiable activity was to email a coworker at 9AM to state she was not feeling well.   Her final act was to email a document to someone at AT&T at 10:30AM.  Shortly after, she called for an ambulance and was taken to the hospital.  She succumbed to pulmonary embolism.
 
According to the National Heart Lung and Blood Institute(NHLBI) risk factors for pulmonary embolism include: prolonged immobility, obesity, and medications that affect blood clotting times, especially birth control pills.
 
Cathleen Renner was classified as “morbidly obese” at 300 pounds and on birth control medications at the time of death.  Both of these conditions are considered leading risk factors for developing a pulmonary embolism.
 
The Appellate Division affirmed  the opinion of the Judge of Compensation that Renner’s death was related to “prolonged inactivity” due to work and therefore compensable.  
 
The lack of evidence regarding work described in the opinion is disheartening.  The defense should have challenged the lack of a verifiable timeline and lack of documented proofs to show Renner was even working the alleged “overnight” marathon work session claimed.    
 
The fact that no one seems to have asked the simple question: what was it about the work that prevented the decedent from getting up every hour or so, and walking around for thirty seconds?  She certainly didn’t have a supervisor hovering over her shoulder, forcing her to sit perfectly still for hours on end.
 
This case is emblematic of the lengths courts will go to find questionable claims compensable. 
 
The defense in this case agreed to a “made up” legal standard to the case that shifted the burden of proof from the claimant to the employer.  This hurt the employer.  The Workers’ Compensation Act requires that in vascular cases the claimant must show a heightened exertion - something beyond the activity of daily living.  For some reason the employer agreed that if the claimant could show less exertion than daily living, the claimant should prevail.  That is ridiculous.
 
Next, the defense should have presented facts showing exactly what the decedent was doing for the unknown time period.  Server logs, network logins, and the decedent’s own computer should have been submitted into evidence.  The record as discussed in the Appellate decision is scant.  
 
Finally, the fact that the claimant was morbidly obese and on medication that affected the clotting characteristics of her blood - known risk factors for embolisms -  should have been used more effectively.  Instead, causation in this case turned on whether Cathleen's “lack of movement at work was more severe than her lack of movement in her daily living” which is an absurd standard not found in the Workers' Compensation Act.
 
The case is not appealable as of right to the New Jersey Supreme Court as there was no dissenting opinion.  The employer may seek to appeal, and if they do we will update you as to the outcome.

Case: James P. Renner v AT&T,  A-2393-10T (App. Div. Decided June 27, 2011).  Link to full decision.

Since May the WCB has assembled a new Medical Advisory Committee to provide guidance and commentary on new pain management treatment guidelines. The Medical Advisory Committee is expected to review and consider standards for evidence-based medicine applied to pain management and rehabilitation. More on this as it develops!

Using surveillance video at trial in New York, New Jersey, and Longshore/DBA workers' compensation claims.

New York: Special surveillance video rules.

Under the New York Workers' Compensation Law, making false statements to obtain workers' compensation benefits is illegal and will result in the claim being thrown out (WCL § 114(a)) and the claimant referred for prosecution. The fraud defense will be based on two types of statements made by the claimant: (1) statements made inside a court room and (2) statements made to doctors in examining rooms.

In a recent case, a New York Appellate Court affirmed a disqualification from benefits where video surveillance of the claimant showed him going to and leaving a medical examiner's office with a leg brace and a cane AND A WALKER.  (Wait a second - - -a cane AND a walker?  How could he manage that with only two hands?!?)  While that portion of video showed a severely disabled victim, in later scenes the claimant was able to move his legs freely.  The video revealed that he was not not using a brace,  cane or walker, and showed that he actually had no impairment in his daily activities. 

The Board ruled that the claimant had violated WCL § 114(a) and was disqualified from workers' compensation benefits.  The appellate panel, on review, affirmed that disqualification.  (Case: Retz v. Surpass Chem. Co.,).

Practical note: New York has specific submission requirements for video - it must be in either ".avi" or ".wmv" and submitted to the WCB on a DVD-ROM.  In my experience, the submission will be noted as a "NS-OBJECT" in e-case ("Non-scannable object").  The video must be viewable in "Windows Media Player" or the WCB will reject the video.

Video in New Jersey: Getting the video into evidence.

Video surveillance is often relied upon by the defense in New Jersey  to either challenge credibility or to demonstrate that a claimant is not as disabled as he appears from his own testimony or his doctor’s examination.  Video does not have to be disclosed during the normal discovery process, even though adversary counsel may demand copies of videotape.  Under the current rules, video does not have to be revealed unless the respondent intends on using the video and only after the petitioner testifies.

One exception to this is where the respondent has shown the video to an examining or treating physician.  If the video has been shown to an attending or examining doctor prior to the petitioner's testimony, then it is discoverable by the petitioner prior to his testimony.

Practical Tip:  Ever since the decision of Gross v. Neptune the introduction of videotape evidence in contested workers’ compensation trials in New Jersey is limited by the disclosures on the Pre-Trial Memorandum. In Gross, the respondent did not disclose surveillance video on the Pre-Trial memorandum.  During the trial (after the claimant testified), the respondent obtained videotape surveillance of the petitioner.  The video evidence was not admissible due to the failure of the respondent to provide proper notice that the video was to be used.

Best practices:  Whether or not we have surveillance, we always put (on every "green sheet" Pre-Trial memorandum) that the "respondent reserves the right to obtain video surveillance of the claimant after the trial has started as per Gross v. Neptune.

Video in Longshore/DBA claims.

The Federal Rules of Civil Procedure require that surveillance evidence must be disclosed if it is to be used at trial. FRCP 26(b)(1).   However, video used as "impeachment evidence" - to challenge the credibility of the claimant - is not subject to discovery.  So, if you have great video on the claimant, but you only intend to use the video during cross-examination (and not send it to your evaluating doctor, for example), is it discoverable?

The Federal Rules (FRCP 26(a)(3)) clearly excludes from pretrial discovery material which will be used "solely for impeachment purposes;" the obvious rationale for excluding impeachment material from discovery is that their disclosure would substantially impair their impeachment value.  In Fee v. Calcasieu Paper Co., videos of a claimant were obtained by elaborate detective work which included inducing the disabled man to dig, to conceal cameras in fox holes and to surveil on his activities.  That video was deemed admissible by the judge. However, in a recent  case arising under the Jones Act, the Fifth Circuit has held that a surveillance videotape of an injured worker's daily activities constituted substantive evidence subject to disclosure pursuant to a discovery request.  The trial court's admission of the tape solely for impeachment purposes, when the evidence was in part substantive, constituted reversible error. Chiasson v. Zapata Gulf Marine Corp.

The decision whether to admit surveillance films and the weight to be accorded such evidence are matters within the discretion of the judge. 

Clients have reported to me that when handling claims under the New York Workers' Compensation Act if the claimant resides out of state they are not applying Medical Treatment Guidelines ("MTG") to the ongoing treatment.  This means that employers and their insurers are not getting the benefit of the MTG in these cases. (Note: If you are unfamiliar with the Medical Treatment Guidelines that went into effect on December 1, 2010, I recommend you read my earlier posts on these topics:

• The Medical Treatment Guidelines - this is a general overview article;
• Optional Prior Approval; and
• The Variance process.
• Observations on the Variance process.)

There is no case law examining this issue in light of the controlling statutory authority and the information published by the WCB is simply nonsensical. Why would an out-of-state claimant be entitled to more or less medical treatment than the in-state claimant?

What the law states.

The strongest authority is the Workers' Compensation Law ("WCL") statute itself. Section 13 of the WCL states:
(b) In the case of persons, injured outside of this state, but entitled to compensation or benefits under this chapter, the provisions as to selection of authorized physicians shall be inapplicable. . . All fees and other charges for such treatment and services, whether furnished by the employer or otherwise, shall be subject to regulation by the board as provided in section twenty-four of this chapter, and shall be limited to such charges as prevail in the same community for similar treatment of injured persons of a like standard of living." None of the cases that cite to this provision indicate that an out-of-state claimant is entitled to less or more medical care than is required under WCL § 13-a.

That first part about the "selection of authorized physcians" just means that when the claimant is treating out-of-state, the treating physicians do not have to be "coded" or otherwise authorized by the WCB to treat the claimant. Nothing in the statute allows for an out-of-state claimant to get more or less treatment then a worker injured in New York.

What the WCB says.

This is where it gets confusing: I found this on the WCB website in a 'Frequently Asked Questions' response under the heading "Out of State" (link):
"Question: How do the Medical Treatment Guidelines apply if an injured worker lives or receives treatment outside of New York State?
Answer: If the injured worker either lives or is treated in New York State, the Medical Treatment Guidelines apply. If the injured worker both lives and is treated outside New York State, the Medical Treatment Guidelines do not apply."

There is also this:
"Question: How can a party compel appearance at a deposition of an out of state provider, when a variance is denied by a health care provider?
Answer: First, the variance can only be denied by a carrier. It is submitted by the health care provider. Second, If the out of state provider is treating a claimant that both lives and is treated outside New York State, the Medical Treatment Guidelines do not apply. If the Medical Treatment Guidelines do not apply, then there is no need to request a variance and there will be no need to depose such provider. However, if the out of state provider is treating a claimant who lives in New York State, the Medical Treatment Guidelines apply. In that case the methods used to depose out of state providers for all other issues should be used. A subpoena is not necessary if the provider agrees to a date and time to be deposed.
 
Hmm.  This seems to directly state that an out-of-state claimant is not bound by the MTG.  Remember, answers to "Frequently asked Questions" on the Board's website is not law or even persuasive authority.
 

The Regulations imply that the MTG applies to out-of-state claimants.

After reviewing the regulations and the MTG, I found only one Regulation that references a claimant who resides out of state in regards to treatment (in this case, IMEs). Here are some references in the Regulations that seem to imply that the Guidelines DO apply to claimants who reside out of state. For example, 12 N.Y.C.R.R. 325-1.4(a)5 states as follows:

In response to requests for authorization for treatment related to an established body part or illness, the self-insured employer or insurance carrier may have the [patient] claimant examined within four business days if the [patient] claimant is hospitalized or [30] thirty days if patient is not hospitalized, by an appropriate [medical board-certified] specialist who is [also] authorized [in such specialty,] by the [chair,] Chair to [treat] conduct independent medical examinations of workers' compensation claimants. If such specialist is not available or where the claimant resides outside of state, consultation may be rendered by [an authorized physician who is acceptable to both the self-insured employer or insurance carrier and the physician requesting authorization, or in the event the parties cannot agree, a physician may be selected by the chair] a qualified provider who may conduct the independent medical examination as provided in Workers' Compensation Law Section 137 (3) (a) and section 300.2 (b) (9) and (d) (7) of this Chapter.

This regulation clearly assumes that the Chair has the power to regulate out of state care, and that a patient who resides out of state (and presumably is getting treatment out of state) can still request authorization for treatment to established body parts.
 
The Regulations and the individual Guidelines for each body part certainly do not state that claimants who live out of State are treated any differently than in-state residents.

Of course, if out-of-state claimants with established cases were not subject to the MTG they could continue to direct and control their own medical care as they did in the pre-MTG era. Certainly, this creates a situation where the out-of-state claimant would be able to obtain more medical treatment than a similary-situated in-state claimant, which defies common sense.

Have any questions about this article? Contact Greg Lois.

What makes an MG-2 form complete?

The MG-2 variance request form is a multi-page document with plenty of small type. Certain information is essential to the Board's internal procedures and if that information is missing or incomplete, the Board cannot process the form. In order for the Board to take action on an MG-2 form, the Board requires that the following fields be completed (required items are denoted by the "checklist" symbol "☑".

Check the MG-2 - if any the following sections are incomplete or missing - issue a denial and alert the Board as to your reasons!

Required in Section A:

☑ Patient's name, and
☑ Insurance Carrier's Name & Address.
Please note that the Insurance Carrier's or TPA's name and address must match the information the Board has on file.

Required in Section B:

☑ Individual Provider's WCB Authorization Number for all providers authorized by the New York State Workers' Compensation Board

Required in Section C:

☑ Date Variance Request Submitted and Method of Transmission,
☑ Guideline Reference for the body part followed by the 2 to 4 character corresponding reference in the Medical Treatment Guidelines or followed by the four letters N-O-N-E if there is no listed procedure,
☑ Approval Requested For requires a written description of the treatment requested,
☑ Statement of Medical Necessity requires a description directly on the form. If there is a supporting medical report in the Board's case file, the requesting physician should enter the date of service or if there is no supporting medical report in the case file, attach a medical report and enter "See attached medical report" on the form;
☑ A check box selected for how the carrier was contacted; and
☑ the Provider's signature or stamp. Please note that initials next to the signature or stamp are not acceptable.

Also remember that physical therapists are not "medical providers" under the the MTG and cannot issue an MG-2 to request authorization for addiitonal physical therapy visits beyond the Guidelines - only a doctor can issue the MG-2 to request addiitonal PT. Issue a summary denial to any variance request issued by a physical therapist.

Did I tell you the one about the petitioner in one of my New Jersey cases who was too disabled to work by day but was still fighting in the "squared circle" by night as a professional wrestler?

True story, it really happened.

We busted him with videos he posted himself to MySpace showing him engaged in title fights while out of work and collecting temporary total disability. His attorney argued that "wrestling is fake." Needless to say, that case got dismissed at trial.

Is using Facebook or MySpace to check claimant activity OK?

Claimants have no "reasonable expectation" of privacy for information posted to a social networking site like Facebook or MySpace and anything they publicly post there is fair game. A recent 75-page law review article concludes that "just as a workers‘ compensation attorney may use informal discovery to observe an employee in a public place, such as a park or a restaurant, so too is an attorney able to observe and search information publicly available online." Using Facebook or MySpace or any other social network to "check in' on claimants by viewing their publicly-posted photos, videos, or "wall posts" is A-OK, and any useful information you get can be presented in a workers' compensation court (or a fraud proceeding).

But what about "private" profiles?

Facebook accounts can have different settings regarding sharing. If a Facebook account has "low" security settings, the general public can access the individual‘s profile by searching the internet or by searching for the person‘s name on the Facebook website. Attorneys and others can discover the individual‘s list of friends, shared postings, photographs, and videos. If the claimant has set "high" security settings, attorneys may still be able to discover that the individual has a Facebook account, but will not be able to view the individual‘s profile or information. If the claimant has a "private" account, posted information (like videos, photos of the claimant, etc) that are not publicly available can be obtained through the formal discovery process.

How about subpoenas to site operators?

Subpoenas to social networking site operators have been allowed by the courts when the discovery sought is relevant to the lawsuit. Obtaining social networking information from the site operator, however, would likely be a very lengthy and costly process - probably not worth the cost and time. The fact that subpoenas can be served serves as a "check" on the employee‘s ability to destroy or hide social networking information in a workers‘ compensation case.

What if the claimant just deletes their profile when we make the request for information?

Deleting doesn't work - because the social networking site operators keep the information. The Facebook "terms of use" document states:
"If you want to stop using your account you may deactivate it or delete it. When you deactivate an account, no user will be able to see it, but it will not be deleted. We save your profile information (connections, photos, etc.) in case you later decide to reactivate your account."
In other words - the information isn't going anywhere even after they delete their "profile"!

How about "friending" the claimant to get access to their private posts?

This is where it gets interesting.
A lawyer printing out images that a claimant has posted themselves and made "public" on a social network is entirely permissible and the resulting images are admissible, just as a video of the claimant made in public would be.
A defense lawyer CANNOT friend a claimant - that would violate the ethical rule against communication with a represented party, unless the claimant (through her attorney) permits the activity (unlikely).
However, if the employer/insurer's INVESTIGATOR "friends" the claimant and obtains useful posts, and then provides these posts to the employer's attorney, no foul (but only if the investigator was not employed, retained, or associated with the defense attorney).

Do New Jersey workers' compensation courts permit "social networking" discovery?

New Jersey is on the leading edge of this issue. Recently a federal magistrate judge in New Jersey found writings shared on social networking sites to be discoverable. In Beye v. Horizon Blue Cross Blue Shield an insurer sought production of all e-mails, journals, diaries, and communications and the judge ordered the plaintiffs to produce all entries on web pages, such as Facebook and MySpace, which the plaintiffs had shared with others. There is precedent for workers‘ compensation courts to permit discovery of all entries on social networking sites that relate to an employee‘s physical abilities.

Best Practices for WC in NJ?

Workers‘ compensation defense attorneys should ask in their interrogatories, or other form of discovery demand pursuant to their state‘s rules governing discovery, for the names of any social networking sites used by the employee and request copies of all relevant photographs, videos, postings, communications, and discussions from social networking sites relating to the employee‘s physical or employment abilities.

However, in NJ, there are no depositions and interrogatories are allowed in certain cases only (occupationals). Therefore, if you suspect your New Jersey claimant may be leading a "double life," and in certain other high-exposure claims, a motion for specific discovery can be filed seeking the names of any social networking sites used by the employee.

But, are the information, videos, and photos we obtain admissible in workers' compensation court?

Workers‘ compensation judges generally have broad discretion and are not bound by state or federal rules of evidence, and therefore social networking evidence may be admitted even more liberally in workers‘ compensation courts than in state or federal court.

Recent New York Workers' Compensation case involving Facebook fraud.

On September 13, 2010, Alexis Muniz was sentenced to three years probation for stealing $8,975 in workers' compensation benefits. It turns out she was working full-time while collecting benefits - and was stupid enough to post about her "dual life" on Facebook - boasting about her income! Click here to see the whole story.

Have any questions about this article? Contact Greg Lois.

The new Medical Treatment Guidelines aren’t that new anymore. In the four months since the Guidelines came into effect clear patterns have emerged for those of us regularly handling variances and medical treatment issues before the Board. This article provides our observations and practical tips for handling disputes post-MTG.

(If you are unfamiliar with the Medical Treatment Guidelines that went into effect on December 1, 2010, I recommend you read my earlier posts on these topics:

• The Medical Treatment Guidelines - this is a general overview article;
• Optional Prior Approval; and
• The Variance process.)

Observation #1: Magic Words

There is a literalist quality to the review of medical disputes before the Board. The Workers' Compensation Board has always been doctrinaire - and never more so than in the interpretation and application of the new Guidelines. How can we use this to our advantage in controlling runaway medical?

Magic words: Challenging treatment during the Optional Prior Approval process

If you have not "opted out" of the prior approval process, a medical provider can seek "prior approval" to provide treatment where there is a potential that the care is not pre-authorized under the MTG (using form MG-1). If the approval is denied by the carrier, the matter then goes to the Medical Arbitrator who will issue a decision within 8 days. The decision of the Medical Arbitrator is not appealable under WCL Section 23.

The arbitrator who reviews the denial will be in the Medical Director's Office - the review process includes MDO nurses. In our experience, they are looking for documentation of clinical symptoms, correlation of those symptoms to the medical treatment sought, and a statement as to how the proposed medical treatment follows under the MTG.

In our experience, this process can be aided by careful documentation by the carrier and carrier's medical reviewer.

First, a denial of treatment must include a specific reference to which Medical Treatment Guidelines applies. In the case of the carrier seeking to deny care, a statement must be made that the treatment sought is not authorized by the MTG. The denial should include the name of a licensed medical professional (and that could be a LPN, PA-C, MD or RN) who reviewed the medical request. The report supporting the denial should be as detailed and complete as possible - make is easy for the reviewer at the Medical Director's office. This means that specific reference to the MTG "chapter and verse" that applies should be provided, along with references to the treating records as to how the claimant's prior symptomatology and improvement departs from the symptoms and functional improvement documentation required under the MTG.

Second, carefully review the Board's file (e-case) to see what medical records have been submitted to the Board. Often, a supporting MRI report or EMG result is not filed. A treating physician may refer to the report or record and rely on same in formulating an opinion that the medical treatment is necessary. However, if the report is not submitted to the Board - part of the e-case file - the attending doctor's opinion is weakened. The Board should be made aware that supporting diagnostic testing has not been submitted.

Because the reviewers are taking a "literalist" approach to reviewing medical disputes, missing records will be construed against the claimant. Use this to your advantage! If the record is missing be sure to have your reviewing medical professional note that for the Board.

Finally, be mindful of the deadlines in a prior approval request - failure to respond will result in an unappealable determination.

More magic words: Defending variance requests

The carrier must explain any denial of requested variance in Section "E" of Form MG-2. Any reason for denial that is not raised is deemed waived. The possible grounds for denial are:

• The medical care requested has already been rendered (if the request was submitted after treatment already rendered, an IME or records review is not necessary, See N.Y.C.R.R. 324.3(i)(b));
• The Treating Medical Provider did not meet the burden of proof (appropriateness and medical necessity);
• The treatment requests is not medically necessary or appropriate for the claimant - this would be coming from your IME or records review; or
• The claimant failed to appear for the scheduled IME examination. In this situation, the WCB may extend the time for IME by thirty days. See N.Y.C.R.R. 324.3.

If the denial is based on the grounds that the treatment sought is not medically necessary or appropriate, the carrier must:

• Have the case reviewed by its own medical professional, independent medical examiner, or records reviewer;
• Attach the written report of the chosen medical professional;
• (Optional) Submit citations to peer-reviewed medical journals in support of the denial (if such articles formed the basis of the denial).

First, be mindful of the time constraints. If the carrier submits a notice of an IME or Medical Records Review within 5 business days of the variance request, the carrier has 30 calendar days to get the IME exam or Medical Records Review and submit Form IME-4. If no notice of an IME or Record Review is submitted, the carrier has 15 calendar days from the date of the request to reply to the variance request. These are extremely short time periods to respond - therefore, prepare, prepare, and prepare. A successful defense requires an action plan - a "go to" medical professional to issue a response. This could be a a physician, registered physician assistant, registered professional nurse, or nurse practitioner licensed in ANY state.

The denial: the carrier must explain why the treatment request was denied and attach the written report of the medical professional that reviewed the variance request. Such report shall include a list describing the medical records reviewed by the medical professional when considering the variance request. The carrier has the option to submit citations or copies of relevant literature published in recognized, peer-reviewed medical journals in support of a denial of a variance request.

Here is where the "magic words" are important. Most variance denials will be for "burden of proof" reasons. Specifically, that the treatment is not medically necessary and appropriate in the individual claimant's situation. This requires the report of a medical reviewer, who must review the medical records (and list in her report the records reviewed). If the claimant failed to respond to prior treatment (for example, physical therapy) and the claimant simply seeks more of the same, the reviewer should note that the request for treatment violates the MTG. Specifically, the reviewer should state that "medical necessity is not established where there is no evidence of functional improvement related to the previously delivered therapy modalities." (This is a reference to the "general principle" common to all MTGs). We have seen the Board adopt this exact language in decisions denying variance requests.

Controverted Claims: If the compensation case is controverted, the carrier must still respond to the variance request timely and in the same manner as requests in non-controverted claims. If the carrier approves a variance request when a claim is controverted or the compensability of the body part is controverted, the approval only relates to medical necessity and shall not be construed as an admission that the condition for which variance is requested is compensable. The carrier shall not be responsible for the payment of medical care which is the subject of the variance request until the question of compensability is resolved.

Failure to Timely Respond to Form MG-2: The variance shall be deemed approved by an Order of the Chair issued by the Workers' Compensation Board if the carrier fails to respond within the time frames specified above. The Order of the Chair is the final decision of the Board.

Magic "Missing" words.

One final caution: "missing" magic words can sink a defense. In a recent case I handled, the claimant's chose physician recommended cervical fusion surgery in a case where the claimant had minimal objective findings and no improvement in his subjective complaints from protracted prior treatment. The IME physcian - an orthopedic surgeon - opined that the claimant's clinical presentation did not warrant surgery and found the claimant able to return to the pre-injury job. The reviewer at the office of the Medical Director was not so concerned about whether the treatment was necessary so much as she was concerned that the IME doctor was not a neurologist. Furthermore, the IME doctor did not record any positive findings regarding a neurological exam.

In other words, the reviewer presumed that because the the IME physician did not enumerate neurological findings, that meant there could be findings. Obviously, this is flawed.

We recommend that IME physicians clearly state where no symptoms are noted. For example, a "checklist" type exam would likely have appeased the institutional bias.

Observation #2: No one is an expert. Even the people who are supposed to be experts.

In a typical scenario, a claimant is seeking additional medical care and the carrier is defending an IME opinion that states the medical treatment sought is unnecessary. A common argument raised by claimant's counsel is that "the treatment sought is covered by the MTG."

Once this argument is raised, carrier's counsel must be ready to respond. Why? Because many judges will simply order "Medical Treatment as per the Medical Treatment Guidelines is authorized." This argument effectively short-circuits the carrier posiiton - that there is not further causally related disability. This often arises in a context where the carrier is seeking to take medical testimony and put the claimant to his proofs.

The defense must be able to explain why the medical treatment is not pre-authorized under the MTG. Alternatively, defense counsel must be able to explain why even if the treatment is pre-authorized under the MTG, the claimant's clinical presentation does not warrant the treatment.

Your best defense will be reliance on your IME opinion and a careful argument as to why the claimant's prior diagnosis and treatment does not meet the requirements for additional care under the MTG.

All too often, both parties are not prepared to explain to the presiding judge as to why the treatment is either covered by the MTG or disallowed. Too often, specific reference to the medical record is not prepared. Many times the parties merely shrug at each other, and the Judge issues an Order stating "All treatment as per the MTG is authorized," effectively sidestepping the issue.

Disputing medical care in a post-MTG world requires more than a shrug of the shoulders and deferral to a judge's inclination. When the treating physician wants to perform an invasive procedure like a surgery, and the IME opinion has stated that the claimant does not have the necessary objective findings to warrant same, a challenge to the proposed treatment, even though it is pre-authorized under the Medical Treatment Guidelines, is essentially a denial based on ripeness (where the he treating doctor believes that the claimant would benefit from medical care that is within the Guidelines but not specified at that point in the claimant's treatment - see N.Y.C.R.R. Sect. 324.

Defense could argue that given the conflict, the treating physician should file an MG-2, which must include information about the body part, the section of the MTG that applies, the specific treatment requested, a statement as to why the treatment is medically necessary, reference to records in the WCB's file, and a certification that the claimant understands and agrees to undergo the proposed medical care. Fight for this!

Where there is a good faith dispute about whether or not the treatment is authorized under the MTG, the carrier must be prepared fully to raise all defenses. Too often available arguments are not raised. If you have an IME that has conflicting clinical findings (neurological test, dermatonal distribution, lack of objective observations, etc) and treatment is an issue knowledge of the specific medical treatment guidelines that apply in your case is a must!

Observation #3: Everyone gets one "Do over"

No matter how old the claim the variance judges have been instructed to treat December 1, 2010 as "day zero" for all claims. Even where the claimant has had three years of physical therapy and pain medications with absolutely no functional improvement - December 1, 2010 begins a "do over." Essentially, all claimants get a "mulligan" and treatment starts over as of that day.

The exception to this will be surgery - "repeat" surgery always requires pre-approval. So, expect that at a variance hearing where the claimant is seeking additional physical therapy, the treatment will be authorized as per the MTG (usually 4-6 weeks for "active" therapy modalities) After this required period, claimant's physician must file reports showing improvement. Where there has been no objective improvement, alternate treatment paths within the MTG should be followed. The game of merely continuing to pursue physical therapy or chiropractic for years after a soft-tissue injury will be tolerated by the variance judges for the initial period allowed by the MTG. After that, the claimant should be moving on to either more invasive (often surgical) treatment paths or be deemed at MMI.

C-8.1s should still be used for treatment falling outside the MTG. This means that when the claimant continues to pursue these modalities of care after the "maximum" period allowed by the MTG (and post December 1, 2010), file your C-8.1s. The attending physician's next step should be to file an MG-2, which should tee up the case for a variance proceeding. Get your review report ready and defend as discussed above!

Final thoughts.

The Guidelines specify an outcome oriented approach with the goal of returning injured workers to employment in a reasonable time frame. While it may seem like common sense, this approach is all new to the judges and medical office staff that are reviewing the disputes that arise under the MTG. The challenge for employers, carriers, and defense counsel is as much changing prevailing attitudes as it is adapting to new procedures.

Have any questions about this article? Contact Greg Lois. Check out the book New York Workers' Compensation Law 2011 available in print here, on Amazon, or for for Kindle or e-reader.

New York and New Jersey workers' compensation claims can turn on deadlines and handling. This month, we look at how two new cases showing how strict deadline compliance is necessary in New York to avoid draconian penalties; we also explore a very recent New Jersey decision on bad faith actions.

New Jersey: penalties for carrier's actions.

For failing to follow the order of a Judge or failure to provide benefits under the Act, the Judge of Compensation can:

• Impose costs and simple interest on any monies due.
• An additional money penalty up to 25 percent;
• Fine the parties or their attorneys up to $5,000 for unreasonable delay or continued noncompliance;
• Close proofs;
• Suppress defenses;
• Exclude evidence or witnesses;
• Allow a reasonable counsel fee to a prevailing party, where supported by an affidavit of services.

These penalties are bad enough, but the law also allows for a petitioner to seek civil damages for 'bad faith' actions of the employer, the compensation carrier, or its representative.

The general rule in New Jersey allows no direct action available to an injured employee against the employer, or against the employer's insurer when the insurer does what is required under the Workers' Compensation Act and the carrier's insurance policy. Under normal circumstances, injured employees must pursue their exclusive remedies in the Division of Workers' Compensation, even when an employer, acting through its insurer, does not furnish necessary medical treatment when requested to do so by an employee.

This 'general rule' is known as the exclusivity provision and it is enshrined in the New Jersey Workers' Compensation Act at N.J.S.A. 34:15-8.

We recently wrote about the Davis v. OneBeacon case, where a 'bad faith' action was permitted when an employer selected an authorized doctor and then refused to offer the treatment recommended by that doctor. In the wake of this decision it was clear that ‘bad faith’ civil claims are not limited to a situation where a party ignores a court order - a claimant was allowed to make a ‘bad faith’ civil claim when an insurer refused to authorize treatment recommended by their own selected doctor.

In a new decision (published February 1, 2011) the New Jersey Appellate Court reviewed an admitted case where the insurer paid $567,000 in medical and indemnity benefits to the claimant. Scattered medical bills remained outstanding, and the petitioner's attorney filed a motion to enforce the prior orders in the case and requiring the insurer to pay the outstanding bills. The Judge of Compensation ordered the carrier to pay the bills (enforcing his own prior order) and awarded the petititoner's attorney a $2,000 counsel fee. Petitioner's attorney demanded that the judge of compensation sanction and fine the workers' compensation insurer. The Judge of Compensation declined to do so.

Petitioner then brought a civil claim in Superior Court, alleging that he had suffered "pain and suffering" due to the workers' compensation carrier's wanton refusal to abide by the orders of the compensation judge and sought compensatory and punitive damages, plus costs, interest, and attorney's fees.

The Superior Court dismissed the complaint. The Superior Court Judge found that plaintiff was not precluded from returning to the compensation court to seek sanctions and penalties against the insurer, and, if a new Superior Court action is thereafter necessary for enforcement, such action would not be precluded. The Appellate Court agreed with this result, and affirmed the dismissal of the bad faith claim.

The petitioner now can return to the workers' compensation court and seek the maximum penalties against the insurer available under the New Jersey Administrative Code (N.J.A.C. 12:235-3.16). In addition to the penalties described above and upon a finding by the judge of contempt, the petitioner or the judge may file a motion with the Superior Court for contempt action.

New York: Defenses suppressed for late filing; Appellate Panels affirm.

There are many reasons to deny a workers' compensation case in New York (see my chapter on Defenses). Two recent cases demonstrate the danger of failing to file ALL the appropriate forms when you are denying a New York Workers' Compensation claim by filing a Notice of Controversy ("C-7").

When a C-7 is filed, controverting a case for lack of notice, lack of employment, wrong carrier, or other jurisdictional or substantive reasons, the case will be set down for an expedited hearing within 30 days. The Act also requires that a "Pre-Hearing Conference Statement" (PH-16.2) must be filed 10 days before the Expeditied hearing. See 12 NYCRR 300.38(f)(4).

In many cases, the carrier files a C-7 after initial investigation reveals that the claimant did not work for the company, or where either notice or the accident itself is in dispute. Our recommendation: file a Pre Hearing Conference statement at the same time - to avoid the potential for failing to file the Statement (Form PH-16.2) within the 10 days. There is just too much that can go wrong - late notice of the hearing date, no notice at all, etc! If you have enough information to justify a denial, go ahead and file the PH-16.2 at the same time.

Better, have your outside counsel handle the process! It seems that common practice is to have the carrier file a C-7, then refer the claim to outside counsel. This introduces delay and a possible dropped deadline into a time-sensitive process.

Two recent cases (both decided in March 3, 2011) show what can happen when the Pre-hearing Statement is not timely filed the carrier/employer loses the right to assert defenses!

In Smith v Albany County Sheriff’s Dep't, the Appellate Division ruled that because the the carrier submitted an untimely prehearing conference statement the employer waived all defenses to the claim and, upon review of claimant’s medical records, established an occupational injury. In a similar case (Quagliata v Starbucks Coffee) also decided the same day, the Appellate Panel ruled that stripping the carrier of its defenses for failing to file the Pre Hearing Conference Statement on time was "not unreasonable, arbitrary, capricious or contrary to the statute under which it [is] promulgated."

Best practices: be wary of the requirement that the Pre-Hearing Conference Statement be filed ten days prior to the expedited hearing - implement a plan to make sure this is done timely or risk a suppression of defenses!

Have any questions about this article? Contact Greg Lois.

Excellent "kinetic typography" video on the placebo effect. Check out the statistics on "pain."

Regular readers of this blog know that I can not resist linking to hilarious workers' compensation frauds.

Do the claimants really think we're this stupid?

This video captures one of the most bizarre fraud claims ever.
(From: Inside Edition, running time: 8 minutes, suitable for work.)

Valentine's day - when love and bullets are in the air.  In honor of this upcoming celebration of love, let's explore the risk implications when love goes horribly, horribly wrong . . . using actual New York and New Jersey workers' compensation cases!

In New Jersey, Mary Ann Marky made the mistake of breaking up with boyfriend Lou Rosa just before Valentine's Day.  Though they had only been dating a year, Lou was madly possessive of Mary Ann.  Lou just wouldn't take a hint, and continued to attempt to woo Mary Ann - by calling her and showing up unannounced at her home. 

Lou also accused Mary Ann of taking up with another man - John Brinker, one of Mary Ann's furniture store co-workers.  This "aggressive wooing" quickly turned into serious stalking, and after one 'surprise visit' Mary Ann resorted to calling the police, who arrested Lou for criminal trespass and carrying a concealed weapon.

Five days after his stalking arrest, Lou stopped a police officer to ask directions.  When the officer responded, Lou produced a knife which he held to the throat of the policeman.  Lou grabbed the officer's pistol and forced him into the trunk of his car.
Read More...

It is hard to imagine it today, walking down Broadway towards Times Square, but from the late 1800's until the 1930's the garment trade was the largest and most vibrant trade in New York City. More people worked making clothes in New York City than doing anything else, and more clothes were manufactured in New York City than in any other city in the world.

The factories that produced those clothes were vast rooms of men, women, and children hunched over sewing machines. On March 11, 1911 a fire ripped through the 'Triange Shirt Waist Company' killing at least 145 workers, trapped inside a factory with doors chained shut. It was the deadliest workplace accident in New York Cityís history. Public opinion (aided by yellow journalism) set the stage for politicians to enact a system iof compulsory insurance providing benefits to injured workers and their dependents - thus creating the New York Workers' Compensation Law - one of the first in the nation.

The story behind the tragedy that led to the law, dramatized into a movie "Triangle Fire," airs on American Experience on PBS Feb. 28, 2011 at 9:00pm on most PBS stations.

Strippers are not independent contractors, and therefore are eligible for workers' compensation benefits, said a New York court in a recent case. Although this ruling doesn't make every stripper in New York an employee, it does present an interesting set of facts to explore the often hazy line between "employee" and "independent contractor" for workers' compensation purposes.

The Judge in Hart v. Ricks Cabaret (decided December 30, 2010) found that although the cub owner classified the exotic dancers as independent contractors the club was the employer. The club argued that the dancers were not employees as they paid the club to perform there (the performers paid the club "shift fees" to dance there). By classifying the strippers as independents the club avoided numerous regulations and avoided having to pay workers' comepnsation premiums for these dancers.

The exotic dancers argued that the club controlled and directed their performances. For example, the club required them to cover all tattoos while performing, banned gum chewing, specified the height of the heels worn by the performers, and selected the music.

The ruling is expected to impact nearly 1,700 exotic performers and the clubs that employ them in New York, who may be subjected to the New York Labor Laws and Workers' Compensation Act.

The case illuminates the often hazy definition of employee and independent contractor.

Who is an Employee?
A common question before the WCB is whether or not an injured claimant is an ‘employee’ or an ‘independent contractor.’ Most individuals providing services to a for-profit business will be deemed an employee of that business and therefore must be covered by the employer for workers’ compensation insurance. This applies unless those services are specifically excluded. N.Y. Work. Comp. Law §3. ‘Employee’ includes day laborers, leased employees, borrowed employees, part-time employees, unpaid volunteers (including family members) and most subcontractors. In this case, the club owner was calling all the exotic dancers independent contractors to avoid paying workers' compensation premiums and other costs associated with employees.

The Board considers the following factors in determining whether an injured claimant is an employee or was an independent contractor (and therefore not eligible for benefits):

Who has the ‘Right to Control’ the claimant?
What was the degree of direction and control the ‘alleged employer’ exercised over the claimant? A person or organization controlling the manner in which the work is to be performed indicates that the task is being performed by an employee. If the person doing the labor controls the time and manner in which the work is to be done this may indicate that the task is being done by an independent contractor.
Rule of thumb: If an individual is truly independent, the individual generally works under his/her own operating permit, contract or authority.

Was the ‘Character’ of the work performed by the claimant the Same as the Employer?
Work done consistent with the primary work performed by the hiring business indicates that the labor was done by an employee. Work done by a person that is different than the primary work of the hiring business may indicate the task is being performed by an independent contractor. (For example, someone paving a driveway for a driveway contractor is generally considered the employee of that paver. Conversely, a plumber hired on a one time basis to fix a broken pipe for a retail store owner is generally considered an independent contractor – the character of the plumber’s work is different than the work done by the retailer.) In this case, the "character of the work" performed by the dancers is essentially the same as the services offered by the employer.

What was the Method of Payment?
Employees tend to be paid wages on an hourly, daily. weekly, or monthly basis. Similarly, employment is indicated if the hiring business withholds taxes and/or provides other employee benefits (Unemployment Insurance, health insurance, pensions, FICA, etc.) Whether the labor is paid using a W2 or 1099 Form for tax purposes does not matter in determining an employer/employee relationship for workers’ compensation purposes. A business paying cash to an individual for services usually indicates that the individual is an employee. Payment made for performance of the task as a whole may indicate the task is being done by an independent contractor.

Who Furnished the Equipment/Materials for the job?
A business providing the equipment and/or materials used by people in performing the work tends to indicate an employer-employee relationship.

Who has the right to Right to Hire/Fire at the worksite?
A business retaining the authority to hire and fire the individuals performing the work indicates an employee is performing the work. An independent contractor retains a degree of control over the time when the work is to be accomplished and is not subject to be discharged by the hiring entity because of the method he chooses to use in performing the work. Naturally, an independent contractor’s services may be terminated if the services rendered do not meet contractual requirements,)

All factors may be considered and no one factor alone determines whether a person will be considered an employee under the WCL.

Independent Contractors
To be considered an independent contractor, and thus not an employee, an individual must meet and maintain all ten of the following conditions:

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; and
10. The individual works under his/her own operating permit, contract or authority.

The 2011 schedule of disabilities is available here. (Caution: links to PDF).

Claimant Gerard McGlinsey worked from 1974 to 2001 as a press operator in Pennsylvania. In 1999 he complained to his employer about physical problems he was having, related to the job. The employer told him to file a workers' compensation claim (in Pennsylvania) and pursue treatment. The claimant didn't file anything and kept working as a pressman.
The claimant then worked from 2001-2002 as a pressman in New Jersey, essentially performing the same job. Following this employment, the claimant brought an occupational claim for workers' compensation benefits in New Jersey. The employer filed a motion to dismiss based on a lack of subject matter jurisdiction - stating that the claim should have been brought in Pennsylvania (the claimant called this motion a 'stealth' motion for summary judgment).
During the trial it was established that most of the claimant's work experience was in Pennsylvania, and that only 5% of his work life occurred in New Jersey.
Which state has jurisdiction, Pennsylvania or New Jersey?
The New Jersey Appellate Division just affirmed the decision of New Jersey Workers' Compensation Judge Jose LaBoy. Read More...

The 54 year-old worker in this case was employed in a brick factory. He described his factory job as "not stressful" and enjoyable. Sometimes, when a machine would break, the workers would have to work overtime doing manual jobs to keep production going.
On March 11, 2006 the employee had to work overtime. He did strenuous work in a hot environment. While working, he complained to a co-worker of feeling unwell. At the suggestion of the co-worker, the claimant went home early.
The next day the claimant went to the emergency room and was diagnosed as having had a heart attack. A cardiac cauterization was ordered, and the employee died 11 days later.
The claimant's widow filed a dependency claim petition, alleging that his death resulted from the strenuous condition and the heart attack. Both sides selected experts. Claimant's expert (Dr. Malcolm Hermele) opined that the heart attack occurred on the day the claimant worked overtime, ad the work effort materially contributed to the attack.
Respondent's expert opined that the claimant had a long standing unstable angina. According to the employer's expert, unstable angina is characterized by chest pain that develops with activity and subsides with rest.
After hearing the testimony of both doctors, the Judge of Compensation found that the work effort caused the cardiac event. Although the employer's expert testify that the claimant had unstable angina and that the heart attack would have occurred even if the employee had not worked overtime, the Judge found that the heavy labor occasioned by the overtime work materially contributed to the heart attack.
This case demonstrates that where your defense expert opines the 'cardiac event would have curried anyway' that is not enough to prevail when the claimant can show (1) increased work effort and (2) that the cardiac event occurred while working.
Case: Carol Reading v. Glen Gery Shale and Brick Company, A-1525-09T3 (N.J. App. Div. Decided Oct. 22, 2010). Note: I couldn't find a link to the final decision online - just the Appellate Division's notice the decision was issued. Contact me to request a copy of the decision.

36 year-old Thomas McKeever was employed by J.C. Penney as a security guard. On his day off, McKeever happened to be walking through a different J.C. Penney (not the one he worked in) when he observed a customer acting suspiciously. The claimant started following the customer.
Eventually the customer saw the claimant following him and fled the store. The claimant chased after him, breaking into a run. After running about 50 yards, the claimant was out of breath and seeing stars so he broke off the pursuit.
After doing some personal banking, the claimant returned to the store and complained about being out of breath. An ambulance was called, the claimant was taken to the emergency room. He was released without a diagnosis.
Two days later the claimant returned to the hospital and was diagnosed as having had an acute stroke or strokes. The claimant now alleges he has no sensation on the right side of his body,has problems remebering things, and needs a cane to walk. He filed a New Jersey claim petition alleging that the 50-yard pursuit of the possible shoplifter through a J.C. Penney store (but not the store he actually worked in) on his day off caused him to have a compensable cardiovascular event.
The issue before the workers' compensation court was whether the petitioner met his bred of proof under the New Jersey Workers' Compensation Act. The law requires that any claim for cardiovascular event (heart attack, angina attack, stroke, etc) must be proven by a showing that the precipitating event that allegedly caused the cardiac incident was the result of a strain in excess of the wear and tear of the activities of daily living. This effectively shifts the burden of proof to the claimant to make a prima facie showing - and in this case, the expert doctors each had an opinion as to whether the running event caused the stroke two days later.
The expert doctors hired by each side gave predictably conflicting opinions at the trial. The Judge of Compensation found that the claimant's expert was not as credible as the employer's expert, and the case was dismissed.
On appeal, the reviewing court found that the Judge of Compensation's reliance on the defense expert was well-placed as the employer's expert was better qualified. The employer's doctors was a board-certified neurologist while the claimant's expert was a psychiatrist.
Of note: an interesting aside in this case was that the respondent;s expert came up with a new alternate theory of causation on the eve of trial - but the Judge of Compensation refused to allow the expert to testify about the new theory because the defense expert had not provided a supplemental report to claimant's counsel prior to trial. On the stand the defense expert did not testify about his new theory of causation. However, claimant's counsel "opened the door" into this alternate theory of causation by asking the employer's expert to explain "how the stroke occurred." In response, the employer's expert testified based on his new alternate theory. The Judge of Compensation was able to rely upon this previously-barred testimony!
The Take-away: Never ask an opposing expert to explain their opinion - it opens the door for the opposing expert to expand upon their earlier opinions and maybe introduce a new theory of causation for you to combat at trial!
Case: Thomas McKeever v. J.C. Penney, A-0992-09T1 (N.J. App. Div. Decided Oct. 18, 2010). Unpublished.

When a medical care provider wants to provide specific medical treatment that does not fit the MTG they can request prior authorization for the treatment by requesting a variance. This procedure is similar to a 'Request for Authorization' under WCL Section 13-a(5). The regulation that permits variances is found at 12 N.Y.C.R.R. 324.3.
Variance Basics
A variance is a license to do something that varies from the MTG (Please read my post on the MTG). A treating medical provider must request this approval from the carrier. A variance request must be made even if the claim is controverted or the time to controvert the case has not yet expired.
A variance request must be made before treatment is provided that differs from the Guidelines. Requests made after treatment that differs from the MTG has already been provided will not be considered.
A variance will be sought in four circumstances:

• EXTRA-MTG: The treating doctor believes that the claimant would benefit from medical care that is not within the MTG;
• 
  
• NOT RECOMMENDED BY THE MTG: The treating doctor believes that the claimant would benefit from medical care that is within the Guidelines but not recommended;
• 
  
• NOT YET RIPE: The treating doctor believes that the claimant would benefit from medical care that is within the Guidelines but not specified at that point in the claimant's treatment; or
• 
  
• FREQUENCY: The treating doctor believes that the claimant would benefit from medical care that is within the Guidelines but exceeds the maximum number or frequency limit for that particular treatment.

Variance requests must be made on Form MG-1, 'Attending Doctor's Request for Approval of Variance and Carrier's Response.' The treating physician must complete all of the sections of the Form MG-2, which includes information about the claimant, employer, carrier, the Medical Treatment provider, the body part, the section of the MTG that applies, the specific treatment requested, a statement as to why the treatment is medically necessary, reference to records in the WCB's file, and a certification that the claimant understands and agrees to undergo the proposed medical care.
It is possible for attending doctors to request treatment which is not addressed specifically in the MTG. In those cases, the attending doctor is not seeking a variance from the Guidelines as much as they are asking for permission to do something not contemplated by the MTG. In those cases, the attending doctor must show the same proofs as a doctor seeking simple variance. See N.Y.C.R.R. Section 324.5.
If more than one Treating Medical Provider needs a variance for more than one procedure or test at the same time, Form MG-2.1 should be used. The MG-2 form must be transmitted the same day to the WCB, the carrier, the claimant, and claimant's attorney. Form MG-2 must be sent by either email or fax - mail is acceptable only if the provider does not have fax or email capabilities. N.Y.C.R.R. Section 324.3(a)(3). This is likely to cause problems as the attending doctor is unlikely to have an email address for the claimant or the claimant's attorney. All carriers are required to designate a 'qualified employee' to receive these requests and the WCB is publishing all of the 'qualified employees' contact info on the WCB website.
The medical provider requesting the variance has the burden of proof to show that the treatment requested is appropriate and medically necessary for the claimant. N.Y.C.R.R. Section 324.3(a)(2). The attending doctor requesting the variance must provide:

• the basis for the opinion that the specified treatment or test is appropriate and is medically necessary;
• a statement that the claimant agrees to the proposed medical care;
• an explanation why alternatives contained within the Guidelines are not appropriate or sufficient; and
• any signs or symptoms which failed to improve with treatment provided in accordance with the Guidelines; or
• the objective improvements made by particular treatment and the expected improvements with more of the same treatment. See N.Y.C.R.R. 324.3(a)(3).

The attending doctor may also submit copies of relevant articles from peer-reviewed medical journals which lend support for the variance request but ONLY for treatments not otherwise addressed by the MTG. If the claimant is seeking a treatment (like discography) which has been specifically eliminated by the MTG, then NO AMOUNT of contrary articles in support of the procedure will be persuasive. The attending doctor must make reference to medical reports that get attached to the MG-2 form or already within the WCB's file (E-case).
Insurance Carrier Actions
Each carrier is required to designate a 'qualified employee' who the WCB may contact about any variance requests. The WCB then publishes these contacts on its website. This should aid the treating physicians with identifying who to send the request for variance to.
Upon receipt of a variance request the carrier must decide if it will obtain an IME or review of the records report. If the carrier is going to obtain an IME or records review, the WCB must be notified within 5 business days of receipt. (Receipt of variance is calculated as 'same day' if email or fax transmission is used; if sent by mail then receipt is 5 business days after treating doctor certified it was mailed). The carrier notifies the WCB that they are obtaining an IME or records review by completing Section "D' of the MG-2 form.
If the carrier decides not to get an IME or records review, then the carrier must transmit its response within 15 calendars after receipt of the variance request. If the carrier has selected to get an IME or records review, the response is due within 30 days from receipt of variance request. Obviously, this creates an enormous burden for carriers: it will be a challenge to get an IME scheduled and completed and a report generated and reviewed within 30 days from receipt of a variance request. One response to this time challenge may be to get examining physicians to set one day aside per month for these 'emergent' variance review IMEs.
The possible responses to a variance request are:

• Approval;
• Denial. Remember to issue a denial even if you have already filed a C-7 to controvert the case - controverting the case is not enough - the WCB can rule on variance requests where no denial was issued.;
• "Grant without prejudice." This is only available if the claim has been controverted or the time to controvert the claim has not yet expired.
• Do nothing. if this happens (you do not respond within the time limitations) the Chair will issue an Order of the Chair. This decision will likely result in an approval of the variance. An Order of the Chair issued under these circumstances (untimely or no response) is not subject to an appeal under WCL Section 23.

Denials
The carrier must explain any denial of requested variance in Section "E" of Form MG-2. Any reason for denial that is not raised is deemed waived. The possible grounds for denial are:

• The medical care requested has already been rendered (if the request was submitted after treatment already rendered, an IME or records review is not necessary, See N.Y.C.R.R. 324.3(i)(b));
• The Treating Medical Provider did not meet the burden of proof (appropriateness and medical necessity);
• The treatment requests is not medically necessary or appropriate for the claimant - this would be coming from your IME or records review; or
• The claimant failed to appear for the scheduled IME examination. In this situation, the WCB may extend the time for IME by thirty days. See N.Y.C.R.R. 324.3.

If the denial is based on the grounds that the treatment sought is not medically necessary or appropriate, the carrier must:

• Have the case reviewed by its own medical professional, independent medical examiner, or records reviewer;
• Attach the written report of its own medical professional, independent medical evaluator, or records reviewer;
• Submit citations to peer-reviewed medical journals in support of the denial (if such articles formed the basis of the denial).

What Happens After a Denial?
There are three pathways for resolution to a denied variance request. The first path to resolution is 'informal' discussions between the medical care provider seeking the variance and the carrier. The parties have 8 business days to attempt an informal resolution - and if the dispute can be resolved, the insurance carrier confirms the agreement by completing Section "G" ('Carrier's Granting of Attending Doctor's Variance Request after Initial Denial').
If 'informal' resolution fails, the treating doctor notifies the claimant and claimant's counsel. The claimant can then seek review of the denial by the Board. If the claimant decides to request review, a request for review must be filed within 21 business days of the receipt of denial (once again, 'receipt' is deemed the date of transmission of the denial was sent via fax or email and 5 business days of the denial was sent via mail). If the claimant is represented, the request for review must be on the Form MG-2 (Section F). if the claimant is not represented, the request for review must be in writing (but does not have to be on Form MG-2).
When informal resolution fails and the claimant requests a review, there are two pathways the review can take:

• Submission to a medical arbitrator if both parties agree in writing to the submission; or
  
• By a Workers' Compensation Law Judge through the expedited hearing process ("Rocket Docket").

The choice of either medical arbitration or 'rocket docket' is up to the claimant - the claimant elects the method for resolving the dispute on Section "F" of Form MG-2. If the claimant is not represented then they have 14 days after the WCB responds to select either an expedited hearing or medical arbitration. If the claimant makes no choice the case is set for an expedited hearing.
The carrier may also elect either expedited hearing or medical arbitration - but in the case of arbitration the claimant must agree to it. The 'default' position is that if the carrier makes no election, the case will be set down for expedited hearing.
Medical Arbitrator Process
By agreeing to have the denial of waiver decided by a medical arbitrator, the parties give up the right to an expedited hearing and accept a final decision that CANNOT be appealed under WCL Section 23 (so don't file an RB-89 if you are unhappy with the outcome!). The review is conducted without participation of the parties - the arbitrator reviews the request for review, variance request, and denial (and all papers including medical reports, IMEs or record reviews, and articles from peer-reviewed journals). The Medical Arbitrator then issues a notice of resolution setting forth the ruling and the basis for the ruling.
Expedited Hearing Process
The expedited hearing will be held within 30 days after the period of informal resolution has ended and the matter could not be resolved informally. One or both parties must request the expedited hearing (or not waive the right to expedited hearing). Medical testimony will be taken. If the claimant is unrepresented then medical testimony is always taken at the hearing. if the claimant is represented, then medical testimony may be by submission of deposition transcripts at the hearing (the transcripts must be submitted to the WCB at or before the expedited hearing). Adjounrments are possible, but only for up to 30 days and only for cases in involving complex medical issues of causation or diagnosis.
Which Should I choose: Medical Arbitrator or Expedited Hearing?
At the time of this writing (November 2010) there is no way of knowing which of the the formal paths to resolution will work most to the favor of the carrier. However, I Director recommend that medical arbitration be considered. Why? Because the medical arbitration is conducted by the offices of the Medical Director. The Medical Director was behind the new Medical Treatment Guidelines, so if a 'strict' interpretation of the MTG is desired, one would hope the party that had a large hand in drafting the new MTG would be inclined to affirm the medical treatment paths under the MTG.
Ultimately, the choice will reside with the claimants: unless the claimants agree to medical arbitration, the matter goes to expedited hearing.

Important timelines for variance requests:

• 5 (five) business days to respond if obtaining an IME;
• 15 (fifteen) days for a final response if not obtaining an IME;
• 30 (thirty) days for a final response along with a copy of the IME;
• 8 (eight) business days to discuss denial informally;
• 21 (twenty one) business days for claimant to request review.

Questions? Contact me.

The new Medical Treatment Guidelines (MTG) are the mandatory standard of care for injured workers regardless of the date of injury. All medical care to the neck, mid- and low back, shoulder and knee must be consistent with the MTG. All medical care required by the MTG is deemed 'authorized' by the respondent, with the exception of 13 treatments/procedures which require carrier authorization.

The Optional Prior Approval process allows a medical treatment provider the opportunity to confirm that medical treatment is consistent with the MTG. See N.Y.C.R.R. 324.4. While participation in this process is voluntary, as of the date of this writing all carriers have been "opted in" to this system. In order to 'opt out' a carrier or third-party administrator must issue a written notice of the desire to get out, and must give the Chair 60 days notice.

The carrier must provide a qualified employee as a point of contact for the medical providers. The required point of contact information is to be placed on the WCB's website. Medical providers must submit a written form (Form MG-1 for the first request and Form MG-1.1 for all subsequent requests) and are encouraged to call the qualified employees directly to discuss authorizations.

Medical providers must use Form MG-1. Form MG-1 must be sent using "same day transmission" (either fax or email) to the carrier. The carrier has eight (8) days to respond. The carrier can respond one of three (3) ways:

1. Grant the request;
2. 
   
3. Grant the request Without Prejudice; or
4. 
   
5. Deny the Request.

If the request is denied because the requested medical treatment departs from the MTG, further explanation is not required - the carrier should note which specific MTG section supports the denial. The denial must include the name of the medical professional (and that could be a LPN, PA-C, MD, or RN) who reviewed the request along with the MTG section that supports the denial. However, this medical professional (who reviewed the request on behalf of the carrier) does not have to sign the Form MG-1.
If the request is denied, the medical care provider has 14 days to request a review of the denial. The matter then goes to the Medical Arbitrator who will issue a decision within 8 days. The decision of the medical Arbitrator is not appealable under WCL Section 23.
Please note: if the carrier fails to respond to the 'Optional Prior Approval Request' a 'Notice of Resolution' will be issued approving the procedure and the carrier loses the ability to challenge the necessity or appropriateness of the treatment later.

This process is only to be used for knee, neck, shoulder, and mid- and low back cases. The claim does not have to be established for this process to be used.

Question about the Optional Prior Approval procedure? Contact me.

This article provides and overview of medical benefits under the 2010 Medical Treatment Guidelines promulgated by the New York Workers' Compensation Board.

In General
On December 1, 2010, the Medical Treatment Guidelines become the mandatory standard of care for injured workers, regardless of the date of injury or accident. N.Y.C.R.R. 324.2. Medical care providers are required to treat all existing and new workers' compensation injuries in accordance with the Medical Treatment Guidelines (MTG) which are incorporated by reference into the regulations. The MTG body-part specific guidelines are:

• 
  
• New York Mid and Low Back Injury Medical Treatment Guidelines, First Edition, June 30, 2010. Link here (Warning: Links to a large PDF file!)
• 
  
• New York Neck Injury Medical Treatment Guidelines, First Edition, June 30, 2010. Link here (Warning: PDF)
• 
  
• New York Knee Injury Medical Treatment Guidelines, First Edition, June 30, 2010. Link here (Warning: PDF)
• 
  
• New York Shoulder Injury Medical Treatment Guidelines, First Edition, June 30, 2010. Link here (Warning: PDF)

Note: all of these Guidelines self-referentially describe themselves as a "First Edition." In training delivered to attorneys by the WCB on November 3, 2010, Elain Sobol-Berger, JD/MD, the WCB's Associate Medical Director, stated that the WCB expects to update these Guidelines as necessary.

Medical care provided to injured workers must satisfy a two-prong test:

The Medical Treatment Guidelines include statements of "General Principles" in each MTG's first section. These are the key principles necessary to apply and interpret the MTGs. There are 23 general principles divided into 6 categories. Of these, the two most important are:

When are Authorizations Required?
All medical consistent with the MTG is pre-authorized and the health care provider is not required to obtain prior authorization. See N.Y.R.R.C. 324.2(d)(1). There are twelve (12) exceptions to this rule which are defined in the regulations and one (1) additional exception defined in the regulations. So, in total there are thirteen official exceptions - 13 specific procedures that a doctor must get pre-authorization to do.

Now, if you pay close attention, you will realize that these "thirteen exceptions" are really 20 exceptions. Check out the WCB's published list of procedures that require the health care provider to obtain pre-authorization.

• 
  
• Mid- and Low Back: lumbar fusion, vertebroplasty, kyphoplasty, and spinal cord stimulator;
• 
  
• Neck and Low Back: artificial disc replacement and spinal cord stimulator;
• 
  
• Shoulder: anterior acromioplasty;
• 
  
• Knee: Chrondroplasty, osteochondral autograft, autologous chrondrocyte implantation, meniscal allograft transplantation and knee arthroscopy (total or partial knee replacement); and
• 
  
• Duplicative surgery/treatment.

If you list all these procedures separately, you see that there are actually 20 different procedures or treatment scenarios listed here - 6 for the low back, 4 for the mid back, 2 for the neck, 6 for the knee, 1 for the shoulder, and all 'duplicative treatment.'
Add them up: 6 + 4 + 2 + 6 + 1 + 1 = 20!

Providers who want to perform one of these procedures must request pre-authorization from the carrier before performing the procedure. In addition, the MT specifically forbids any "medical treatment that is experimental and not approved by the FDA." If the MTG do not address a condition, treatment or diagnostic test for one of the covered body parts, then a variance request can be made to determine whether a carrier will be obligated to pay for the treatment or medical care.

Duplicate surgery or treatment is not 'automatically' authorized. Referred to by practitioners as the "13th Exception" this exception requires a medical provider to seek prior approval for repeat or revision care - for example, removal of hardware in a failed fusion attempt.

Questions about the new Medical Treatment Guidelines? Contact me.

Under the new medical treatment guidelines recently adopted by the NY WCB and coming into effect on December 1, 2010, carriers must identify a "qualified employee" in its office whom the treating medical provider and WCB can contact in relation to a variance request.

Put simply, a variance request is where a medical provider is asking for authorization to depart from the medical treatment guidelines in case of emergency or medical plateau without improvement.

Register here.

In 2007 New York's Workers' Compensation law was changed to eliminate the possibility of 'lifetime' partial disability benefits. Instead, awards of partial permanent disability are now subject to a 'capped' number of weeks. Benefits for injuries resulting in permanent disability that occurring after March 13, 2007 are subject to 'week capping.'
The 2007 changes in the law also created an 'Aggregate Trust Fund.' Under the new law, the carrier must pay the 'present value' of any permanent partial disability directly into the Aggregate Trust Fund, which then doles out the payments to the claimant.

There have been a number of cases where the claimant was injured before March 13, 2007, but not classified as having a permanent partial disability until after July 1, 2007. Employers in this circumstance DO NOT get the benefit of a 'capped' number of weeks - because the injury occurred before the reform legislation became law on March 13, 2007. Employers in this circumstance MUST deposit the 'present value' of the claimant's (potentially) lifetime benefit into the Aggregate Trust Fund.

Employers and insurance carriers argued that the value of the potentially-lifetime benefits was 'speculative' and they would be required to make enormous deposits with the Aggregate Trust Fund.

This matter came before the Appellate Division which ruled that
(1) cases where the injury occurred before the new law was enacted do not get the benefit of capped weeks; and
(2) deposit of permanent partial awards not subject to capping must be done. The carriers were directed to deposit funds as computed by the Workers' Compensation Board.

Case: Matter of Garcia v. Wings Digital, (N.Y. App. Div. decided October 14, 2010).

A new case (U.S. vs. Stricker, decided September 30, 2010) has established the statute of limitations period for a claim under the Medicare Secondary Payer Act.

The Medicare Secondary Payer Act is a Federal statute that enables Medicare to recover money spent during the pendency of a workers' compensation or civil claim ('conditional payments') or will have to expend in the future (depending on the size and type of settlement). Applying the Medicare Secondary Payer Act to the workers' compensation context has been challenging - we have devoted chapters to this subject in our New York and New Jersey Workers' Compensation handbooks).

We previously reported on the Stricker case back in January. In Stricker, Medicare brought actions against the attorneys and insurance carriers involved in a toxic-tort lawsuit. Medicare argued that the attorneys and the corporate defendants had failed to take Medicare'r recovery interests into account and had disbursed the settlement proceeds inappropriately.

In a stunning decision, The United States District Court for the Northern District of Alabama just ruled that Medicare's claims were to be dismissed for failing to file their lawsuit within the applicable Statute of Limitations time periods.

The Federal Court ruled that under the 'Federal Claims Collection Act' ("FCCA") (28 U.S.C. 2415) a three-year statute of limitations applied to the corporate defendants. The Federal judge also ruled that a six-year statute of limitations applied to the attorney defendants (the attorneys who represented the claimants in those cases).

The federal court also ruled that the statute of limitations started running for the corporate defendants "on the date that the settlement was approved by the state Court." In regards to the attorney defendants, the date of accrual for the statute of limitations was the date they received the first settlement payment. The different defendants each had different applicate statutes of limitations because the FCCA treats 'primary payers' (corporate tort defendants) differently than attorneys, who have a 'express contractual agreement' with the Medicare beneficiaries - namely, the attorney-fee agreement between them.

This outcome means that all of Medicare's claims for reimbursement in this case were dismissed. It is also interesting in that the settlement money pool ($300 Million in all) was funded over a period of years (the corporate defendants are scheduled to contribute additional funds to the settlement fund over a period of nine years - in fact they are still paying into the settlement fund (and will continue to pay until 2013).

For carriers and corporate defendants - this means that MSP has a three-year statute of limitations from the date the settlement is approved by the workers' compensation court or state court.

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In a long and complicated decision involving issues of claim removal, diversity citizenship of insurance companies, and limitations of actions, a Federal District Court found that a workers' compensation carrier (OneBeacon) could be liable in a civil action to a claimant whose benefits (surgery) was denied. In this article we will ignore most of the legal wrangling and focus on the dangerous precedent set in Davis v. OneBeacon - that a valid cause of action existed directly against an insurance company for the delay in treatment provided to an injured worker.

The case arose on a complicated set of facts. For the purposes of this article, we focus on the facts in the workers' compensation case that led to the ruling finding that an injured worker could proceed in civil court to recover damages against a workers' compensation carrier for delays in treatment.

The general rule in New Jersey allows no direct action available to an injured employee against the employer, or against the employer's insurer when the insurer does what is required under the Workers' Compensation Act and the carrier's insurance policy. Under normal circumstances, injured employees must pursue their exclusive remedies in the Division of Workers' Compensation, even when an employer, acting through its insurer, does not furnish necessary medical treatment when requested to do so by an employee.

This 'general rule' is known as the exclusivity provision and it is enshrined in the New Jersey Workers' Compensation Act at N.J.S.A. 34:15-8.

Here are the facts: On August 11, 2000, Frank Davis, Sr., suffered a serious injury to, among other things, his left shoulder while working for his employer, South Jersey Overhead Door Company (“Overhead Door”), in Vineland, New Jersey. As a result of the accident, Davis filed a claim petition in the New Jersey Division of Workers' Compensation. OneBeacon, identified in Davis's complaint as the workers' compensation insurance carrier for Overhead Door, selected and appointed Dr. Robert Dalsey, an orthopedic surgeon, to serve as the authorized treating physician to care for and treat Davis.

On March 16, 2005, Dr. Dalsey evaluated Davis and recommended an MRI exam of his left shoulder. About a week later, avers Davis, “The Honorable Robert F. Butler, Judge of Compensation, entered an Order Approving Settlement of Plaintiff['s] ... claim for permanent disability benefits arising out of the August 11, 2000 accident, awarding 40% permanent partial total disability including, inter alia, 2.5 % permanent partial total disability stemming from tendinopathy and impingement syndrome of the left shoulder.”

On March 15, 2006, Dr. Dalsey recommended that Davis undergo surgery for his left shoulder as a result of the August 2000 accident. Despite being advised of Dr. Dalsey's recommendation and several requests made by Davis, OneBeacon refused to authorize the surgery. Consequently, on September 20, 2006, Davis filed a Motion for Temporary Disability and Medical Benefits with the Division of Workers' Compensation (or, “the Division”), seeking to compel the treatment recommended by Dr. Dalsey along with temporary benefits.

The Workers’ Compensation Ruling: On April 18, 2007, Judge Butler rendered his decision, finding that OneBeacon was obligated to authorize the shoulder surgery as recommended by Dr. Dalsey, its authorized treating physician, and that OneBeacon's refusal to authorize the surgery violated Section 15 of the Workers' Compensation Act (or, “the Act”), N.J.S.A. 34:15-1 et seq. , and was unconscionable. In reaching its conclusion that OneBeacon's violation of the Act was unconscionable, the Judge explained that OneBeacon's denial of surgery was not predicated on any sound medical basis, was made with disregard to the seriousness of Davis's injury and the possible consequences he could suffer due to a delay in treatment, and defied the recommendations of OneBeacon's own authorized physician.
Further, Workers' Compensation Judge Butler suggested that, apart from the Act, Davis could pursue a civil remedy for his pain and suffering in another court.

Judge Butler wrote in his opinion:

"The additional and prolonged pain and obvious mental anguish of the Petitioner that has been caused by the appalling and unconscionable conduct of OneBeacon are neither cognizable nor compensable based upon the provisions of the Workers' Compensation Act. Only the nature and extent of the Petitioner's permanent disability following his recuperation from surgery is compensable in this court.
. . .
As regrettable as that may be, the Petitioner is not left without a possible source of redress against OneBeacon for his pain and suffering. The Court suggests that Petitioner's counsel direct his attention to the case of Rothfuss versus Bakers Mutual Insurance Company of New York, 107 N.J.Super. 189, 257 A.2d 733 (1969)."

In apparent response to the Judge's opinion, Davis filed a two-count complaint in the Superior Court of New Jersey on April 13, 2009. In the first count, Davis alleges that OneBeacon's egregious refusal to authorize necessary medical treatment has caused him “injuries that are not compensable under the Workers' Compensation Act, including but not limited to, pain and suffering, deterioration, worsening, wasting, inability to return to work sooner, prolonged pain and mental anguish and severe emotional distress.” Further, in the second count, Davis's wife, Carolyn, asserts a claim for loss of consortium. Together, Davis and his wife sought compensatory and punitive damages, among other expenses.

On August 17, 2009, defendant removed Davis's suit to Federal Court.

The Federal Court ruled that an employee has a limited right to maintain a common-law cause of action against an employer's insurance carrier for willful failure to provide medical benefits in a circumstance where it ‘voluntarily undertook to examine and treat an injured employee by its own doctor ....‘ In particular, the court in Rothfuss, the panel clarified, “found that when the carrier failed to provide medical benefits that its own physician had deemed necessary, it opened the door to a common-law cause of action.”
Under New Jersey law, an employee can state a common law cause of action against an employer's workers' compensation carrier, which was not categorically precluded by the Workers' Compensation Act, by alleging that carrier frivolously, negligently, willfully, wantonly and maliciously failed or refused to authorize the surgery recommended by its own authorized treating physician.

Keep this new decision (decided June 28, 2010) in mind when making treatment decisions!

In the wake of this decision it is clear that ‘bad faith’ civil claims are not limited to a situation where a party ignores a court order - a claimant can make a ‘bad faith’ civil claim anytime an employer selects an authorized doctor and then refuses to offer treatment recommended by that doctor.

Case: Davis v. OneBeacon Insurance, --- F.Supp.2d ----, 2010 WL 2629053 (D.N.J.), decided June 28, 2010).

In 2006 David Poulton worked for Martec Industries in Rochester, New York, as a laborer. Poulton had a history of low back claims, and had filed workers comp claims in 1998 and 2000. When he visited his treating physician in June 2006, he had the same old complaint: his back hurt, as it had virtually every day since his first injury in 1998. He told his doctor that he re-injured his back at work the prior day while lifting materials.

At the 1998 appointment Poulton told his doctor he wanted to quit working.

The doctor disabled him from work citing "old injuries and his continued decline." The doctor characterized the situation as involving "episodic increases in pain" that had troubled Poulton for several years. The doctor, in fact, had been encouraging Poulton to stop working prior to this particular visit. Poulton testified that he "had this type of pain even before [he] started working at Martec" and, in fact, had felt the same type of intense pain in the "same area of the body, same area of the back" as recently as one month before the June 7, 2006 incident. Furthermore, claimant's supervisor testified that claimant regularly complained of back pain and that, before June 2006, claimant stated that he might stop working and seek permanent disability benefits as a result of a back injury sustained at his former job.

An independent medical exam determined that Poulton suffered from degenerative disc disease and that his disability was caused primarily by preexisting problems.

So is this a new injury, as reported by Poulton, or simply the recurrence of an old one?

Ruling
The Workers' Compensation Board ruled in Poulton's favor, determining that the lifting incident at Martec aggravated the pre-existing condition. However, this ruling was reversed by the appellate division of the NY supreme court, which found no evidence of a new injury and remanded the case for further consideration.
The Appellate Court said "Considering the foregoing and viewing the record as a whole, we conclude that the Board's finding that claimant sustained a new injury on June 7, 2006 is not supported by substantial evidence." In other words - Poulton had a pre-existing degenerative condition.

Poulton is likely to go back into workers' compensation court, and this time will bring in the insurance company from 1998.

The future for Poulton.
The interesting thing about this decision - finding that there was no "new" injury - is that Poulton may end up with an award against the prior insurer but his lost time wages and scheduled loss of use award will be based on what he earned in 1998, as opposed to 2010. This will likely result in a much lower potential recovery.

Case: Pulton v. Martec, 2010 NY Slip Op 06035, N.Y. App. Div. 3rd Dep't, decided July 7, 2010.

The MSP has been in effect since 1980, and there has been little effort to enforce its provisions in third-party liability cases. Moreover, there has been no indication from CMS that they would seek to exercise their MSP rights retroactively. Indeed, the workers’ compensation example has shown that CMS is not interested in ‘looking back’ to impose MSP responsibility.
We think that the MSP Act applies to third-party liability cases.
Although Medicare has not traditionally enforced its rights under the MSP with respect to third-party liability cases, it is clear that the Act applies to those cases. Lack of enforcement will likely soon change. All insurers, third-party health plans, self-insured plans, and self-administered plans must identify situations where the Plan is or has been primary to the Medicare program. The requirements of the MMSEA including the carrier/self-insured’s duties to identify claimants and provide “such other information as the Secretary may specify” certainly signal the beginning of an enforcement effort by CMS in third-party liability cases.
It is true that there is not yet a “formal” CMS process in place for reviewing settlements in the liability arena as there is in the workers’ compensation world. However, CMS offices in Dallas and Atlanta have begun reviewing third-party liability settlements and granting approvals of set-aside agreements. At a CMS “town hall” meeting - a dial-in telephone conference call - which took place on March 16, 2010, CMS stated that “the obligation of liability settlements to protect CMS for past-due and future medical bills is exactly the same as the workers’ compensation side.” CMS said “[w]here future medicals are a consideration in arriving at a settlement, then appropriate arrangements should be made for appropriate exhaustion of the settlement before Medicare is billed for related services.”

On December 29, 2007 President Bush signed into law the “Medicare, Medicaid and SCHIP Extension Action of 2007” (‘MMSEA’). The MMSEA made changes to the nation’s three major health programs: Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP). Section 111 of the MMSEA imposes complicated reporting obligations on self-insured and insurance carriers who settle claims with plaintiffs who have received, or who are qualified to receive, Medicare benefits for the injuries that are the subject of their claims. Specifically, RREs must identify claimants who are Medicare beneficiaries and report data regarding their identities and claim to Medicare.
Liability insurers, self-insured defendants, and defense attorneys must take all steps necessary to ensure their compliance with the reporting requirements imposed by MMSEA Section 111. The MMSEA imposes substantial fines on ‘Responsible Reporting Entities’ (“RRE”) who fail to report qualifying claims. CMS may seek reimbursement from plaintiffs, defendants, carriers, and both the claimants’ attorneys and defense attorneys.
Mandatory reporting was initially scheduled to begin July 1, 2009. This was pushed back to April 1, 2010 and now is set for January 1, 2011. RREs must register with CMS, and should have already done so.
Triggers for reporting requirements include settling a claim with a payee who received Medicare payments. In addition, CMS has set a ‘declining’ table of reviewable claims values: $5,000 in 2010, $2,000 in 2011, and $600 in 2013. In other words, if a RRE is going to settle a claim for $601 in 2013, and the claimant is Medicare-entitled, the settlement must be reported to CMS. Even if the settlement falls below these “threshold” levels, Medicare’s reimbursement rights exist.


Noncompliance can result in fines of up to $1,000 per day per claimant.

During settlement negotiations, RREs and their representatives must take care to determine whether a claimant is a Medicare beneficiary and find out if there is a Medicare lien. The lien must be paid from settlement proceeds before money is distributed to the claimant and must be paid within 60 days of payment to the claimant.

My guide for Complying with MMSEA

Each carrier and self-insured must establish protocols to comply with the Medicare reporting requirements imposed by the “Medicare, Medicaid and SCHIP Extension Action of 2007” (‘MMSEA’). Each carrier and self-insured is left to its own devices to come up with these protocols. We have seen many of our clients turn to vendors to review claims and communicate with Medicare.
My Checklist:
Carriers must determine which claimants are Medicare beneficiaries and those non-Medicare beneficiaries who have a reasonable expectation of entitlement within 30 months of the settlement date.
A claims representative should determine entitlement to Social Security and Medicare as early as possible in the file’s life. Warning flags include: (a) Has the claimant been out of work more than six months (SSD); (b) Has the claimant been off work for 30 months or longer (Medicare); (c) Was it a catastrophic injury?; (d) Is the settlement value over $250,000 (including the cost of medicals paid)?; (e) Does the claimant admit to applying for SSD and getting denied or is the SSD denial on appeal?; (f) Is the claimant aged 62 and six months old or older?; and (g) Does the claimant have end-stage renal disease?
Our rule of thumb is that where the parties negotiate a settlement that terminates the obligation of the self-insured or carrier to pay for future medicals, even if the claimant denies being on Social Security Disability, independent verification should be obtained. A vendor can be used to identify Social Security recipients.
If the claimant is on Medicare but the settlement is less than $25,000 (and forecloses the possibility of the carrier/self-insured being responsible for future medicals) CMS will not review the settlement and either ‘approve’ a proposed set-aside or ‘waive’ Medicare’s set-aside requirement. In such an instance, the carrier/self-insured can prepare their own set aside agreement with the claimant. At settlement, appropriate consent and/or testimony should be obtained from the payee, making sure they understand that the payee must ‘spend down’ the allocable amount with medical bills prior to submitting bills to the compensated injury to Medicare.
One way of verifying that a payee is not on Medicare is to ask for copies of recent pay stubs. If the pay stubs are less than six months old, they cannot be a Medicare beneficiary.

1. When must Medicare’s interest be considered?
Medicare’s interest must always be considered whenever:
(A) Medicare has paid for treatment for a disability/injury alleged in the claim petition; and/or
(B) In the closure of a workers’ compensation case the petitioner is Medicare entitled and future medicals for a disability/injury maintained in the claim petition are being foreclosed.

2. When is a petitioner considered “Medicare entitled”?
A petitioner is Medicare entitled if he or she is:
65 years or older (assuming sufficient work quarters); or
On Social Security Disability (SSD) for 24 months or longer; or
Suffering from End Stage Renal Disease (ESRD).

3. Is repaying Medicare for conditional payments (or obtaining a waiver) always required when the petitioner has received Medicare benefits?
Yes. CMS recommends that the process outlined under Question 4 of this memo be initiated as soon as possible for petitioners who have received Medicare benefits. To ensure that a record of any Medicare benefits be established, this process must be initiated in all cases when the petitioner is a Medicare beneficiary. One should also keep in mind that repaying CMS for past /conditional payments Medicare made on behalf of the petitioner is required even when no set-aside allocation review is required. Therefore, pleadings become very important in determining the extent to which past/conditional Medicare payment issues may play a role in resolving a claim. Plaintiffs/Petitioners who allege work injuries or disabilities that clearly cannot be sustained may be subjecting their cases to more extensive CMS/Medicare review and delay for alleged injuries or disabilities that will be found “non-compensable” later in the proceedings. In summary, adequate consideration must be given to the issue of conditional payments in all cases involving a Medicare beneficiary at the time of settlement. This includes cases resolved by Orders Approving Settlement, Section 20 Settlements, Judgments, and Second Injury Fund Awards. As long as the petitioner is a Medicare beneficiary, this issue must be addressed.

While attending a training conference and after an employer-sponsored dinner, Emily Maher and a group of co-workers took a shuttle into downtown Saratoga and visited three bars on Caroline Street. According to one witness Maher consumed five beers but did not appear drunk. Around midnight, Maher and two of her coworkers took a taxi back to the Gideon Putnam Hotel, where they had overnight accommodations, and eventually worked their way to a second-floor suite occupied by one of the coworkers.
After arriving in the suite, claimant and her two coworkers stepped out onto the roof of the hotel, which was accessible only via the bathroom window in the suite. Approximately 20 minutes later, claimant placed her hands on the railing surrounding the roof, heard a loud crack and fell to the ground below. She brought a claim for workers' compensation benefits against her employer.
Was is compensable? Read More...

A recent case re-examined the rules regarding reconstructing wages. In Rose Gruzlovic v. Giovani's Trattoria, A-1519-08T1 (App. Div. Decided April 15, 2010), the appeals court reviewed the decision of a Judge of Compensation who had 'reconstructed' part-time wages of a cafeteria worker, resulting in an increased award. In Gruzlovic, the claimant was a 76-year-old woman who worked nine hours per week, earning $10.50 per hour (average weekly wage of $94.50). During the thirteen years the claimant worked for the employer, she did not have or seek additional part-time employment. After the accident at work, the claimant no longer worked, stating simply, "I thought I had my share [of work]."
The Judge of Compensation awarded Gruzlovic 25% permanent partial total benefits, and 'reconstructed' the rate so that the claimant received the 'full' statutory award ($30,420).

Was this correct? Read More...

The employer appealed an award of $100,000 for temporary disability benefits paid to a claimant with an injured "pinkie toe." 

Hector Mercado sustained a fractured left fifth metatarsal on March 12, 1999 when a pipe fell on his foot.  The employer referred to the injury as a 'pinkie toe' fracture - in truth the metatarsal bones are five long bones comprising the foot - located between the tarsus and the phalanges (toes). 

On April 19, 2010 the New Jersey Appellate Court upheld the $100,000 award. Why? Read More...

In Wadsworth v. K-Mart Corp., -- N.Y.S.2d ---, 2010 WL 1375231 (App. Div. 3rd Dep't, Decided April 8, 2010), the Workers' Compensation Board found that 'emotional injuries' sustained by a claimant whose car was stolen while she was at work were compensable. Bizarrely, a week after the car was stolen, the claimant saw the car idling in the parking lot at work. When the claimant approached the vehicle, she became involved in a scuffle with the driver. At the same time, a co-worker emerged from the place of work, jumped in the car, and the stolen car took off. The Board ruled against the employer, citing the fact that a co-worker was apparently involved in the theft of the car, and found the matter compensable.

How did the Appellate Court rule? With the employee - finding her injuries compensable? or with the employer - ruling that the stolen car had nothing to do with work? Read More...

Proving depression is related to the employment is difficult for New York claimants. The claimant bears the burden of establishing, by competent medical evidence, a causal relationship between his or her employment and the psychiatric disability. In a recent case claimant Janina Guz alleged her employment at Jewelers' Machinist, Inc., caused her to develop a psychiatric disability: major depression.

Guz last worked in 2002. Her claim for major depression was initiated in 2007. In the meantime, she had received psychiatric treatment with her own psychiatrist, Dr. Alina Marek, in five occasions beginning after she filed her claim for benefits (she first sought treatment in January 2008). Dr. Marek diagnosed Guz as suffering from major depressive disorder and causally related same to her 2002 employment (Guz allegedly suffered bilateral carpal tunnel syndrome in 2002).

The employer had Guz examined by Dr. Areyek Klahr, who performed two independent medical examinations. Dr. Klahr concurred that the claimant had the condition, but found it would not interfere with her ability to work. Dr. Klahr also testified that the claimant's responses were inconsistent and that her complaints did not correlate to his objective findings. On the stand, Dr. Klahr testified that the claimant did not suffer a work-related disability.

While testifying on behalf of the claimant, Dr. Malek admitted that she had no information about the claimant;s work or her 2002 carpal tunnel injury. Dr. Malek testified that she was unaware of the claimant's prior claims history (which included multiple MVAs, etc) although she agreed that knowing the claimant's prior medical and claims history would be useful in assessing Guz's condition. Further, Dr. Malek stated that she had no information about the claimant's activities of daily living or her personal life history, and admitted that her opinion was based on the claimant’s subjective account of the cause of her depression.

The Workers' Compensation Board found against the claimant. The decision was upheld by the Appellate Division Case: Janina Guz v. Jewelers Machinist, Inc., 2010 NY Slip Op. 01870, App. Div. 3rd Dep't, Decided March 11, 2010.

Claimant Gerald Catalano was injured at work delivering packages for UPS in Staten Island, New York. But he filed a claim for workers' compensation benefits in New Jersey, telling the Judge that "it would be to his benefit to seek compensation under New Jersey's jurisdiction rather than New York as he would be entitled to a permanent disability award and a higher weekly benefit." UPS asserted a defense of 'lack of jurisdiction' and moved to dismiss the claim petition.

How is jurisdiction established in New Jersey Workers’ Compensation Courts? The Courts look at the following factors:
1. Residence of the petitioner. This is simple: does the claimant reside in New Jersey? Even if the injured worker was injured in another state, and the contract of hire stated that another state’s workers’ compensation law would be applied, a resident of New Jersey can claim New Jersey jurisdiction based upon residence. In Parks v. Johnson Motor Lines, 156 N.J. Super. 177 (App. Div. 1978), the appellate panel found that the New Jersey residence of an injured worker and the fact that a substantial part of his employment was carried out in New Jersey was sufficient for New Jersey jurisdiction even though the accident occurred in Pennsylvania and the contract of employment provided that North Carolina’s law would govern.
Residence alone, without the presence of the other factors, is not likely sufficient to create jurisdiction in New Jersey.

2. Respondent’s location. Is the respondent located in New Jersey? If not, the Court will consider ‘significant contacts’ with New Jersey, such as selling products here, soliciting business in New Jersey, or advertising in New Jersey.

3. Place of Hire. A contract of hire made in New Jersey, by itself, is not enough to create jurisdiction in New Jersey workers’ compensation courts.

4. Location of Accident. If the accident which injured the employee took place in New Jersey, while the petitioner was in the course and scope of her employment, then jurisdiction in New Jersey Workers’ Compensation Court is created.

5. Place where the contract of hire was made; and

6. Place where workers' compensation jurisdiction was established by agreement between the parties. Williams v. Port Authority, 175 N.J. 82, 87-88 (2003).

In Catalano the petitioner admitted that he lived in Staten Island, worked out of the Staten Island UPS terminal, and that he was delivering in Staten Island when the injuries occurred. However, the claimant argued that he was a member of a Teamster's local based in New Jersey and the name of the business unit he reported to was the 'Central Jersey Division.' The claimant also stated that he took his initial employment physical at UPS's Edison, New Jersey plant (ten years earlier) and drove as a 'probationary employee' for two weeks in New Jersey at the start of his employment (also ten years before the accident).

The Workers' Compensation Judge ruled that Catalano could not establish jurisdiction for his claim in New Jersey court. The ruling was found that the employment took place in New York, as did the residence of the claimant and the place of injury. The claimant’s minor contact within New Jersey were not enough to establish jurisdiction in NJ WC Court.

Case: Catalano v. UPS, N.J. App Div. 39-2-7061 (Decided March 9, 2010).

A new case shows just how far the New Jersey Courts will go to construe ‘questionable’ injuries as compensable under the Workers’ Compensation Act.

A truck driver was injured at home while doing some routine maintenance on his work truck. He claimed that his injuries were compensable because his hauling services agreement with his employer required him to "maintain" his tractor trailer at his own expense. The employer denied the claim, stating that the injuries did not arise out of the 'scope' of employment.
The driver, Guillermo Chaverri, entered into an exclusive written agreement with Cace Trucking to provide hauling services. Under the contract, the claimant was required to "maintain, register, and insure" his tractor trailer at his own expense. The Agreement also contained a provision requiring the claimant to maintain the tractor in "good and safe condition and in compliance with the relations of all applicable public authorities."

The incident occurred on a weekend day. The petitioner claimed that he injured is right eye while working on his tractor trailer at his home. The claimant alleged that his vision was impaired and that he developed a psychiatric disability. There were no witnesses to the incident.

The Judge of Compensation ruled that Chaverri was an employee of cace, finding that Cace "had total control of the workday, told petitioner exactly what to do all day, and petitioner was precluded from working for anyone else during the time period he worked for Cace." However, the Judge of Compensation found that the eye injury feel outside the scope of employment - finding it significant that the claimant was not on duty at all times, could use the tractor trailer for his own purposes, and was not "in the business of maintaining vehicles." Further, the Judge found that nothing in the agreement between Cace and the claimant required the petitioner to do his own repairs.

The Appellate Division reversed, stating that "Courts have held that certain injuries sustained by an employee while performing a necessary aspect of the job, even if not performed during normal working hours and not on the employer's premise, may be compensable." The Appellate Curt ruled that at the time of the injury, the claimant was "engaged in the direct performance of his duties assigned" under the employment agreement. The case was remanded to the workers' compensation court for further proceedings (most likely a settlement or award for permanent disability).
Case: Chaverri v. Cace Trucking Inc., App. Div. 39-2-7290 (Decided March 26, 2010).

Following a growing national trend, on January 10, 2010 the Appeals Court upheld the New York Workers’ Compensation Board Order requiring an employer to provide treatment for a ‘lifestyle disease’ allegedly related to the claimant’s employment.

Salvatore Laezzo slipped-and-fell, sustaining compensable knee and low back injury, while working for the New York State Thruway Authority in 2002. Medical treatment was provided by his employer. Laezzo's doctor testified that "his morbid obesity has contributed to his knee and back problems and was a broader threat to his survival." The doctor recommended gastric bypass surgery.

The employer challenged that recommendation, arguing that there was no causal link between the surgery and the claimant's injuries.

New York's Workers' Compensation Law requires an employer to pay for claimant's medical care "for such period as the nature of the injury or the process of recovery may require." (WCL Sect. 13a). This means that treatment must be provided so long as it is directed at returning the claimant to gainful employment. Not all medical treatment relates to disabilities that ‘arises out of and in the course of employment’ – and those disabilities that do not arise from the employment (such as those from the natural aging process) are not compensable.

The Workers' Compensation Board and the Appellate Division both agreed that the gastric bypass surgery should be paid for by the employer. The Appellate Court stated that "there is evidence in the record that the claimant has gained a substantial amount of weight since 2002 due to his sedentary lifestyle imposed by the compensable injuries." The Court ruled that "substantial evidence exists for the Board's determination that claimant's weight gain was caused by his compensable injuries and that gastric bypass surgery would assist in his recovery."

In reaching this decision, the Court considered the claimant’s pre-accident state. In this case, the claimant had massive weight gain after the incident at work. The Appellate Court signaled that if the claimant had been obese before the work-injury, they may not have ordered the bypass surgery to correct the condition. However, whether or not a carrier would be liable to treat obesity in a claimant who is obese before the workplace accident is no settled.

In reaching the conclusion that the claimant should be provided gastric bypass surgery, the Appellate Panel cited another case, Stephen Spyhalsky v. Cross Construction (decided april 29, 2002) in which the WCB ruled that the compensation carrier was "liable for certain medical procedures if deemed necessary to impregnate claimant's wife." In Spyhalsky, the claimant sustained nerve damage during surgery to repair a compensable back injury which prevented him from naturally impregnating his wife. In that case, the compensation carrier was ordered to provide artificial insemination services to the claimant's wife. In Spyhalsky, the Court specifically rejected the argument of the employer that the claimant may not have had the ability to naturally father before the workplace accident. In other words, in Spyhalsky, there was no "look back" to before the incident to identify the claimant's health status at that time.

Case: Salvatore Laezzo v. New York State Thruway Authority, Decided March 11, 2010 (App. Div). Link.

In our December 2009 article ("Facebook Postings: Proof of Condition") we reported the Canadian case where a woman's Facebook postings were relied upon to disqualify her for benefits. In this issue, we provide the story of of Jacob Bancroft, whose MySpace pictures were used to convict him of fraud. In Georgia, the state Workers' Compensation Board has ruled to allow defense counsel to introduce Facebook and MySpace 'status updates' and pictures to challenge the disability claims of employees.

Taking it one step further, one Georgia employer demanded that an employee respond to a 'production of documents' request that required the claimant to turn over his personal computer to the employer. The insurance company argued that the claimant's hard drive would reveal "photos, evidence of work or physical activity."

The Georgia Workers' Compensation Board ruled that the computer must be turned over to the insurance company. We are not aware of any other jurisdiction allowing such discovery.

A recent case, decided March 1, 2010, explores what 'good cause' means in the context of 'reinstating' a dismissed New jersey Workers' compensation case. Claims can be dismissed under N.J.S.A. 34:15-54 ('Section 54') for a variety of reasons, ranging from a claimant's failure to provide discovery, for failing to abide by a prior order of Court, or for lack of prosecution. Section 54 also provides that a dismissed case can be restored "within one year" and if the claimant shows "good cause" for reinstatement.

The Compensation Judge in Metrick v. United Parcel Service, A-4132-08T1 (App. Div. Decided March 1, 2010), denied the motion for the claimant to restore the dismissed claimant to the active trial list. According to the compensation judge, the claimant failed to show 'good cause' as to why the claim should be reinstated. The Appellate Division upheld the reinstatement. Read More...

On February 24, 2010 a woman who 'staged' a robbery at the store she worked at plead guilty to a charge of insurance fraud. Miranda Lorraine Pruitt helped 'stage' a robbery of the convenience store she worked at in order to collect workers' compensation benefits. She reportedly collected $3,360 in disability and workers' compensation benefits after she quit her job citing 'anxiety and stress-related symptoms' made her unable to work. She claimed that she suffered post-traumatic stress disorder thinking about the robbery she helped to stage!

Her sentencing is expected to take place on April 20.

When a claimant gets workers' compensation benefits and makes a recovery in a civil suit, the workers' compensation carrier is due a credit (or reimbursement) for up to 2/3rds of the moneys it paid in WC benefits. This right to reimbursement is set forth in the New Jersey Workers' Compensation Act at N.J.S.A. 34:15-40 ('Section 40'). Read More...

A new case (decided February 18, 2010) addresses one of the most common disputes in New Jersey Workers' compensation cases:s calculating wages for part-time or seasonal employees. Settling the 'average weekly wage' for a claimant is an important first step in calculating overall exposure, because for low-wage earner (usually part-time employees) the final award for permanency, and the amount that is paid for temporary total disability, will be based on the actual average weekly wage earned. The rate of compensation may not exceed 70% of petitioner's wages at the time of the occurrence of the accident subject to the maximum and minimum rate ($35.00 for partial permanent disability) in the year in which the accident occurred. Read More...

A New York Workers’ Compensation claimant is availed five (5) presumptions. The first presumption is that an accidents which occurs in the course of employment is presumed to arise out of the employment. This is a temporal/substantive link: if the injury occurs at work and during the work day, it is presumed the injury ‘arose out of and in the course of employment.’

If the activity the claimant was undertaking at the time of the accident was ‘purely personal’ it would not be within the scope of the employment and the presumption would be rebutted. Read More...

On February 11, 2010, claimant Jacob Bancroft limped up to the defendant's table to face criminal prosecution for workers' compensation fraud. Bancroft was charged with counts of grand larceny, insurance fraud and falsifying business records. Bancroft plead guilty to a felony charge of 'falsifying business records.' He was sentenced to 5 years of probation and is required to pay back $54,000 in workers' compensation benefits.

What did Bancroft do to deserve such punishment? While out of work collecting benefits for a "back injury" the 29-year-old was actually working a job as a construction laborer and volunteering as a firefighter. He wasn't just working - he was also playing. Bancroft was videotaped skydiving. Bancroft posted pictures of himself on his MySpace page showing him hiking while carrying a backpack.

In addition to the criminal penalties (restitution and probation) Bancroft is likely going to be sued in civil court for the difference in benefits paid ($83,000) and the restitution ordered by the court ($54,000). Bancroft faces up to four years in state prison if he does not comply with the terms of his probation and restitution.

Increasingly, social networking sites like MySpace and Facebook are becoming a resource for investigating possible insurance fraud.

Security Guard Randolph Olsen forgot to look up before faking injuries from an alleged car accident. Olsen was employed as a school security guard. He collected $8,726 in workers' compensation benefits for injuries caused by a "hit-and-run" car accident while patrolling the school's parking lot.

The accident never happened. Olsen, the security guard, was apparently unaware that the parking lows were monitored by closed-circuit television cameras, which contradicted his claims (there was no accident).

On February 10, 2010 Olsen was sentenced to 30 days in County jail, five years probation, and ordered to make restitution.

Independent contractors are not covered by New York Workers' Compensation Law (Section 3). A recent case (Lai Pock Lew v. Younger, 893 N.Y.S2d 367 (App. Div. 2010) decided January 21, 2010) explores the boundary between employee and 'independent contractor.' Read More...

According to statistics provided by the NJ Division of Workers' Compensation, nearly 30% of all case closures in the average year are dismissals. This does not mean that those cases are closed forever - the claimant has a right to 'restore' a dismissed case when the case is closed for lack of prosecution. A new case explores the discretion a workers' comp judge has in restoring a case when the claiamnt did not move to restore it within the 'one year' time period to get the case back on the active hearing list. Read More...

Each year Lexis-Nexis, one of the biggest legal publishers, creates a list of "Top 10" most bizarre cases. This year, They named Sexton v. County of Cumberland to the list. In Sexton, the New Jersey Appellate Division reversed the ruling of a workers' compensation judge and held that the alleged aggravation of claimant's pre-existing COPD caused by inhaling perfume sprayed into the air by a co-worker "arose out of and int he course of" employment and was compensable. Read More...

Only an employee is entitled to New York workers’ compensation benefits.
Whether or not a claimant is an ‘employee’ or not is a fact issue for the WCB. The WCB will typically consider the following factors:
1. How was the claimant paid? (weekly, monthly, lump sum, etc)?
2. Who furnished the tools used by the claimant?
3. Who furnished the materials used by the claimant?
4. Who had the right to fire or discharge the claimant?
5. Was the relative nature of the work the same as the alleged employer’s business?
Typically, an employer wants a claimant to be considered an employee, to get the benefits of the ‘workers’ comp bar’ against a potential civil suit for injury.
In a recent case (decided October 22, 2009), the WCB found the claimant to be an employee, but the appellate court found that the claimant might have been an independent contractor, and therefore could sue the ‘employer’ in civil court for damages. Read More...

Medicare filed a new lawsuit on December 1, 2009 signaling a possible change in the recovery focus - from claimants (Medicare beneficiaries) to insurance carriers who contribute to settlements.
In the past, workers, their attorneys, employers, and even insurance companies have ignored or attempted to evade the fact that workers’ compensation is primary to Medicare. There were undoubtedly some instances in which a worker would go into a hospital for treatment of a work-related problem and show a Medicare card, and the hospital would bill Medicare. At times, no one on behalf of the employer or its insurer went out of the way to tell the hospital that the bill should have been sent to workers’ compensation or to reimburse Medicare after it had paid the bill.
In July 2001 CMS issued a memo to its regional offices. It suggests that under certain circumstances parties to workers' compensation claims should not settle those cases until after CMS has had an opportunity to review the settlement and approve the allocation to future medical expenses. In addition, Medicare asserted a right to repayment for medical expenses for treatments ‘related’ to the workers’ compensation claim but which had been paid by Medicare (“conditional payments”).
Since then, the settlement of workers’ compensation claims in which an employee’s future right to medical treatment is foreclosed and the claimant is Medicare-entitled or eligible have required a Medicare Set-Aside approval (or waiver). As any claims person can tell you, this has dramatically slowed down the closure rate of higher-value ‘lump-sum’ type claims (Section 20s in NJ, Section 32s in NY). At the same time, Medicare has been issuing ‘Conditional Payment Statements’ showing payments made for medical care which Medicare asserts may be related to the workers’ compensation claim - and therefore not payable by Medicare under the Secondary Payer Act. Read More...

Despite the recession, WC claims filed in New Jersey have been surprisingly steady. So why is New Jersey getting eight new comp judges, most of whom have never stepped foot in WC court?
New Jersey’s manufacturing, construction, farm, and trade employment has shrunk every year for the past two decades. The drop in claim petitions filed has followed this trend over the past two decades: from 53,637 new claim petitions filed in 1990 to only 35,566 new formal claim petitions filed in 2007.
Despite the worsening recession, 2009 saw about 35,000 new claims filed - which is in line with 2008’s filings. The gross number of filed claim petitions is likely to fall in 2009-2010, but this is more likely indicative of the general trend of job loss in high-risk industries like manufacturing and construction.
The big question is - with the population of new claims slowly but steadily declining year over year - and with that decline projected to continue, why did outgoing Governor Corzine appoint eight new WC judges?

The answer is: Politics as usual. Read More...

Are you taking advantage of the ability to email in documents related to claims?
The WCB allows certain forms to be attached to emails and sent to wcbclaimsfiling@web.state.ny.us.
Please note that a separate email is required for each claimant. You must put the case number (the WCB case number) in the ‘subject line’ of the email. Forms that cannot be emailed include those forms that require a verification of original signature.

In a recent published decision, the New Jersey Appellate Division just published a decision finding that injuries arising from an employee's five-mile off-premises trip to run a personal errand - buy a cup of coffee - was compensable. The Court ruled that accidents "occurring during coffee breaks for off-site employees, which are equivalent to those of on-site workers, are minor deviations from employment which permit full recovery of workers' compensation benefits."
This is an extremely liberal interpretation of the ‘coming and going’ rule in New Jersey.
The Statute which controls when and where and injury is compensable states: “employment [starts] when an employee arrives at the employer's place of employment to report for work and [ends] when the employee leaves the employer's place of employment, excluding areas not under the control of the employer; [unless] the employee is required by the employer to be away from the employer's place of employment, [in which case] the employee [is] deemed to be in the course of employment when engaged in the direct performance of duties assigned or directed by the employer.” (See N.J.S.A. 34:15-36.) The Act provides exceptions for
paid travel time;
employees using an employer-authorized vehicle; and
travel by emergency personnel (fire, police) traveling to an emergency.
Generally, off-premises travel to and from work is not compensable, UNLESS the employer provides the transportation.
Further, injuries that occur during on-site lunch breaks and coffee breaks are generally found compensable by the New Jersey courts.
In this new case (Cooper v. Barnickel Enterprises Inc., App. Div. Decided Jan 14, 2010) the Court took note of the fact that the claimant was working on a ‘remote’ job site in a “rural area.” Therefore, the claimant’s was entitled to travel a “reasonable distance” from the place at which the off-site employee was waiting to attend his work-related meeting and the coffee break was equivalent to that of an on-site employee.

51-year old William Wehnke was out-of-work this December, collecting workers’ compensation benefits. 26-year-old insurance investigator Matthew Brady of New Jersey was surveilling Wehnke, who was under investigation for insurance fraud.
While filming Wehnke on his property, Brady was shot by Wehnke. Brady’s injuries included wounds to back, side, and leg. Brady required surgery to recover from his wounds, inflicted by Wehnke’s shotgun.
Wehnke claims the shooting was accidental and that he was shooting at some turkeys in his field.
Wehnke claimed that he “didn’t see” Brady crouching in a his field to obtain video surveillance footage. Wehnke claims he was shooting at the wild turkeys which were allegedly present. Challenging Wehnke’s story of an ‘accidental’ shooting is the fact that the turkey season had been over (closed) for months and that he was allegedly using the wrong ammo for hunting turkeys.
Wehnke has been charged with felony-degree assault and weapons charges. A grand jury handed down three indictments. This is the first case we are aware of in which an insurance investigator was shot.
Without a doubt, Investigator Brady is due worker’s compensation benefits!

The WCB has issued the following statement:

“The Board has been asked about the use of indemnification or hold harmless provisions in Section 32 agreements to protect a carrier or employer from liability of medicare payments related to an established workers’ compensation claim. The Board will not approve agreements containing such indemnification for payments made by Medicare for services provided prior to the Section 32 agreement.”

Workers’ Compensation Law Section 32 (part b1) directs the WCB to disapprove unfair agreements. We expect the WCB to decline to approve Section 32s where there have been conditional payments made by Medicare and the carrier seeks indemnification. (We also think such a disapproval would be appealable under Section 23). Of course, a Section 3 can be ‘silent’ on the conditional payment issues, but we continue to recommend that the payments be addressed at time of settlement.

The 2007 Workers’ Compensation Reform Legislation (passed March 17, 2007) raised the maximum compensation benefit indemnity rate paid to claimants for the first time since 1992. The rate had been $400 per week since July 1, 1992. The rate was raised to $500 per week for accidents occurring after July 1, 2007. On July 2008 the rate was raised again to $550 and increased to $600 per week in 2009.
As of July 1, 2010 the maximum rate will be adjusted again and will be pegged to the State Average Weekly Wage. as of July 1, 2010 the rate will be two-thirds of the NY State Average Weekly Wage (“SAWW”). The rate will then follow the SAWW.
New Jersey has long pegged the state ‘maximum’ temporary and total disability rates to the SAWW. This method has resulted in an ever-increasing maximum total disability compensation rate. The 2010 “maximum” rate in New Jersey is $794 per week. Despite the recession, and falling ‘real’ wages, the NJ SAWW keeps rising. How is that?
The answer is that the New Jersey Department of Labor simply “makes up” a SAWW based on a secret formula. The SAWW number derived has absolutely nothing to do with reality - and differs (significantly) from the SAWW computed by the Federal Bureau of Labor Statistics. Other NJ SAWW figures, using Federal unemployment claims as a basis for determining actual weekly wages, would yield an even lower figure for NJ SAWW.
So far, no word from NY as to how the NY SAWW is going to computed. If NJ is any example, we can expect that the resulting SAWW figures will not reflect the actual SAWW. The figure has not been announced yet. We will keep you up-to-date with this important information.

An employee can not sue his employer in civil court for bodily injuries - he can only collect workers' comp benefits. While this exposes employers to the costs associated with medical treatment, temporary disability wage compensation benefits, and permanency benefits, this is far less expense then if employees were able to collect money judgments in civil court for their injuries (well, that is the theory justifying our compulsory system of workers' compensation, anyway).

What this means is that in many situations, particularly those where there may be dual employment, potential litigation targets bend over backwards to prove that they are, indeed, an employer and therefore responsible only for their portion of workers' compensation costs - and not liable in superior court for a civil judgment. In fact, much of the case law in New Jersey on the topic of "co-employment" or "dual employment" has been generated by targets of litigation fighting to show that they were, in fact, the employer of the injured party and therefore entitled to the "workers' comp bar" (the immunity from civil suit afforded an employer is commonly referred to as the "comp bar.")

In a recent case, the decedent was the superintendent at an apartment building. One business entity, "Lincoln Avenue Corp" provided free rent to the claimant, who was required to live 'on the premises.' Another business entity, "TR Mudnick" actually paid the employee his salary.

While these two entities had different names, the two entities shared the same corporate officers, both paid the claimant wages, and being the same entity, each had control over the way he carried out his duties. In so ruling, the Court found that 'free rent' was akin to paying wages.

The result of this ruling - finding that both 'Lincoln Avenue Corp' and 'TR Mudnick' were employers - meant that the claimant's only recourse against those employers was his workers' compensation claim.

This ruling is an important one for employers in similar situations, and employers who (for example) have one company that "operates" a facility and another that "owns the property" that the facility occupies. In cases where the owner of the property - even if that is the same as the 'actual' owners of the operating entity - may be exposed for civil claims from their employees.

Case: Montalvo v. Lincoln Avenue Corporation and City of Newark, A-0904-08T3 (App. Div., decided October 30, 2009).

New York Workers' Compensation Law Section 114-a prohibits the making of false statements to obtain workers' comepnsation benefits. In practice, this means statements made inside a court room and statements made to doctors in examining rooms. In the real world, two recent cases show exactly how an employer can demonstrate employee fraud.

1. Video.

In a recent case, a New York Appellate Court affirmed a disqualification from benefits where video surveillance of the claimant showed him going to and leaving a medical examiner's office with a leg brace and a cane AND A WALKER. While that portion video (a cane and a walker!?! How could he even do that with only hands!?!) showed a severely disabled accident victim, later scenes, in which the claimant is able to move his leg freely, and without a brace, a cane or a walker, showed that he actually had no impairment in his daily activities.

The WCB ruled that the claimant had violated WCL Sect. 114-a and was disqualified from comp benefits. The appellate panel, on review, affirmed that disqualification.

Case: Retz v. Surpass Chem. Co., 834 N.Y.S.2d 389 (2007).

2. Statements - outside of court.

Video can be persuasive, but even better than video is the claimant's own words. In another recent case, an employe neglected to reveal a prior, very significant injury that resulted in neck and back injuries when filling out forms to obtain workers' comp benefits. The claimant repeated answered "No" on multiple daily activities questionnaires that asked "Did you have any injuries, illnesses, or limitations before this workers' comp injury?"

The claimant, who had suffered severe cervical and lumbar injuries just prior to his workers' comp claim, failed to disclose those injuries. The claimant argued that the questions were ambiguous and that he wasn't sure exactly what he was being asked. The WCB determined that the claimant knew he was providing false information in connection with his workers' comp claim and disqualified the claimant from further benefits.

Case: Husak v. New York City Transit Authority, 836 N.Y.S. 2d 319 (2007).

Injuries that 'arise out of and in the course of' employment are compensable - unless they are the result of some intervening cause. How about injuries that arise when an employee is undertaking something 'outside their regular duties but which still benefits the employer - like taking a class (self-education) or writing a newsletter (cough, cough)? Are injuries that occur during such activities compensable?

In Murphy v. Mt. Sinai Hospital, 829 N.Y.S. 2d 728 (App. Div. 2007) a nurse practitioner sustained multiple injuries in a traffic accident while attending a 'continuing eduction' conference. Attendance at the conference was a 'mandatory' requirement of his position. The claimant had been encouraged to go to the conference by his supervisor. The claimant testified that his supervisor had handed him the brochure advertising the conference.

The employer denied that the injuries were a direct result of the employment - and that attendance at the conference did not 'directly' benefit the employer.

The WCB found that "an act outside of an employee's regular duties which is undertaken in good faith to advance the employer's interests is generally within the course of employment." Therefore, any injuries arising from the act (in this case, a motor vehicle accident) were compensable.

In so ruling, the WCB looked at the factual circumstances surrounding the educational conference. The WCB was impressed by the following: (1) The employer paid remuneration for two "conference days"; (2) the employer 'encouraged' the employee to attend the conference; and (3) attendance was a 'mandatory' requirement for the position.

Death benefits are payable to the 'spouse and minor children' and other beneficiaries 'allowed by law' on behalf of a worked killed at his employment. What about members of a civil union? In a recent decision, the WCB denied death benefits to the surviving "member" of a civil union ceremony which had taken place in Vermont. A divided appellate Panel agreed, and ruled that the 'surviving meber' of the civil union ceremony was not entitled to benefits.

The decision of the WCB strictly construed that workers' comp law - the 'surviing spouse' langauge. According to the facts of the case, John Langdon and his partner, Neal Spicehandler participated ina 'civl union ceremony' in Vermont in 2000. According to the Vermont 'specil statute' authorizing the ceremony, the participants in the 'union ceremony' are not legal "spouses." Fo that reason, the New York court refused to grant death benefits to Spicehandler.

This is a significant departure from New Jersey law, which specifically includes members of a 'domestic partnership' recognized under New Jersey law (since 2007) - and provides the same benefits to parties in a civil union as to married spouses.

Case: Langan v. State Farm Fire & Cas., 2007 N.Y. App. Div. LEXIS 13242 (N.Y. App. Div. Dec. 27, 2007).

Pornographic cartoons, rumors of sexual escapades while on a business trips, and a co-worker hell bent on your destruction. No, this is not an episode of Melrose Place: this is working for the City of Asbury Park. On November 23, 2009, the Appellate court found that the Judge of compensation (Hon. Leslie Berich, from the Freehold court) had correctly ruled that the psychiatric conditions that Lori Ross suffered from were related to the hostile working conditions she was exposed to.

The facts of the case established that the petitioner, Lori ross, was the victim of an organized "rumor" campaign at the hands of Cassandra Dickerson. according to the decision, Dickerson was 'jealous' of compliments that a shared supervisor directed to Ross. As a result, she began a smear campaign about the petitioner, allegin sexual indiscretions and crafting stories of escapades which occurred during business travel.

The claimant was also the subject of a pornographic cartoon depicting her relationship with another co-worker. There was also testimony that rather than address these problems head-on, the City attempted to lay off the offended worker.

The petitioner presented evidence that she suffered from 'Adjustment Disorder with Mixed Anxiety and Depressed Mood.' The testifying psychiatrist attributed this condition tot he claimant's employment experiences, which were described as an "unhealthy work environment." The Judge agreed, and found in favor of the claimant.

The facts in this case are extraordinay and show a very dysfunctional workplace in which the claimant can show a pattern of peculiar stresses which amount to more than just a psychiatric reaction to the work itself.

In New Jersey, a psychiatric injury can be compensable by itself - that is, without any physical injury. This was recognized by the Court in Williams v. Western Electric Co., 178 N.J. Super. 571, 577 (App. Div.), cert. denied, 87 N.J. 380 (1981). That doesn't mean that any psychiatric reaction tot he workplace is compensable - just those in which the claimant can meet their burden of proof that the work exposure was a 'material' contributing cause of the alleged psychiatric injury.

The Courts later ruled that the workplace exposures must be 'peculiar' - that is, the workplace conditions must be uniquely linked to the employment, and the medical opinion must be supported by objective evidence. In the Ross case, the work exposures were indeed peculiar: dirty cartoons and an organized smear campaign could not be considered a 'regular' part of a 'normal' employment anywhere.

"regular' incidents of employment, common to all jobs, such as a layoff notice, a bad review, or even a normal dressing-down by a superior, are not the basis for a compensable psychiatric claim in New Jersey.

Workplace psychiatric claims always boil down to a fact analysis. This must be applied on a case-by-case basis. If a claimant can show that the working conditions are 'objectively stressful' and 'peculiar' to that specific employment, the claim may be compensable.

Case: Lori Ross v. City of Asbury Park, A-0379-08T3, (App. Div. Decided Nov. 23, 2009).

It's a sad commentary on New Jersey: even our own state employees don't want to live here. When you travel to Trenton the parking lots of the various state agencies are filled with cars bearing Pennsylvania license plates - and the rush hour traffic is directed out of New Jersey as New Jersey state workers travel home to their residences in Pennsylvania, where they enjoy lower property and income taxes.

This sad state of affairs gives rise to a recent decision that examines what happens when an employee collects workers' comp benefits in one state but live sin another, where he recovers under an Uninsured Motorist policy.

In a recent case, a New Jersey state employee was injured while driving a New Jersey-issued car. He recovered New Jersey workers' compensation benefits. Apparently, the vehicle which struck his official vehicle was not identified or did not carry insurance. So, the employee brought a claim for "Uninsured Motorist" benefits against his own (personal) auto policy (a personal policy under Pennsylvania law).

The New Jersey workers' comp insurer asserted a lien against any recovery the petitioner recived from his personal auto insurer.

If the claimant was a New jersey resident, this would be a 'no-brainer': the workers' comp carrier would pay medical, temporary, and permanency benefits and then recover a lien against the UM (uninsured motorist) carrier. However, this claimant accepted new jersey benefits, then recovered under his Pennsylvania auto policy, and then resisted reimbursing the New Jersey carrier, stating that he was entitled to keep both recoveries because Pennsylvania law allowed him to.

The New Jersey workers' comp Judge relied on New Jersey state law - which forbids double recovery - and Ordered the claimant to reimburse the New Jersey Workers' Comp carrier. The claimant appealed.

On appeal, a three-Judge panel (including Judge Maryann Espinosa, formerly a partner at Tompkins, McGuire, Wachenfeld & Barry) ruled that the Judge of Compensation should have performed a 'conflict of laws' legal analysis before summarily ruling that New Jersey law controlled. The case was remanded to the New Jersey workers' comp Judge to make a final decision.

Conflict of laws issues crop up all the time - most often in cases where a claimant live sin one state and works in another. Some states (like New York) have 'carve outs' where specific amounts ($50,000, in New York's case) are immune from subrogation by a comp carrier. The attorneys at Tompkins have been successfully arguing these cases for years - arguing that New Jersey law controls in issues of subrogation. We sty up-to-date on all changes in this area of the law and keep you informed as well!

Case: Terrence Johnson v. State of New Jersey, A-3202-07T3 (App. Div. Decided Nov. 20, 2009).

In a case with a truly bizarre set of facts, the Judge of compensation had to decide on an issue of what exactly should count as wages, in a claim where the 'employee' was obviously trying to 'game the system.'

Some facts: the claimant, Richard Holle was a funeral director who was injured at work in 1985, getting an award of 60% partial total (remember: 75% of partial total is deemed 'totally disabled' in New Jersey). Over the next 13 years he succeeded in having this finding of disability increased from 60% to 65% and then 'totally disabled.'

The issue before the court: was the claimant working for the respondent at the time he was deemed 'totally disabled', and if so, how would his wages be computed? This was a huge question because the claimant "sold the business' to family members under an "installment contract" that paid the claimant fixed sums for twenty years - and that in return, the claimant continued to act as a funeral director at the funeral home, meeting clients, residing on the premises, holding a state funeral license, and assisting in making funeral arrangements.

If the claimant was indeed working (as the comp Judge found he was) then the claimant would only be due $5 per week for 'permanent, total disability.' This is due to a 'quirk' in the New jersey law which states that if a claimant can earn wages that exceed the wages he earned at the time he was injured, then the employer must pay only $5 per week to the claimant until such time as the claimant's wages fall below his pre-injury earnings.

In this case, the claimant's pre-injury earnings (in 1985) were MUCH LESS than his income under his 'installment contract.' This means that the Comp Judge's ruling - that the 'installment contract' is really the equivalent of wages given what the claimant is actually doing for the funeral home - would entitle the petitioner to only $5 a week in compensation.

The Appellate Division screwed this one up - finding that the Comp Judge needed to make "further findings . . . as to whether petitioner's receipt of payments under the installment contract can qualify as wages or earnings."

Case: Richard J. Holle v. Jacob A. Holle Funeral Home, A-3632-08T2 (App. Div., decided November 5, 2009).

New York Claimant Sharon Hammes received workers’ compensation benefits for a permanent partial disability. The employer alleged that she had ‘fraudulently misrepresented’ her injuries and ability to work, and a hearing was held where the employer presented the testimony of its investigator. In addition, the employer presented videotape.
The employer was able to establish, through the investigator's testimony and the videotape evidence, that the claimant worked at a coffee shop serving customers and regularly made candy which was sold at a candy store.
While engaging in these activities, the claimant completed questionnaires stating that she was ‘totally’ unable to work, and stated that “she had not engaged in work activity for any employer.” In fact, the claimant completed 11 separate questionnaires during this period of work, in each claiming that she had no employment.
The WCB ruled that the claimant was a fraud and disqualified her for further benefits. The Board also ordered the claimant to repay the benefits she had already received (pursuant to Workers’ Compensation Law Section 114-a).
On appeal, the Appellate Court found that the claimant had misrepresented her working ability to obtain benefits. The Appellate panel relied on the findings of the WCB that the claimant was not credible, and her statements that when caught working she was “just helping out a friend” were not believable. Further, they discounted her excuse that “she didn’t think part-time work” counted as work, and that she “didn’t think she had to report part-time work” in answering the questions.
Practice Tip: Good follow-up here by the carrier - in reviewing the responses of the claimant and assigning an investigator.
Case: Hammes v. Sunrise Psychiatric Clinic, ___N.Y.S.2d ___ (N.Y. App. Div. 3rd Dep’t, Decided October 29, 2009).

New York workers who die on the job are entitled to a presumption that the death was ‘work-related’ where the death is unwitnessed or unexplained (Workers’ Compensation Law, Section 21). This section of the statute is meant to encourage employer vigilance regarding employees in dangerous circumstances and encourage proper supervision.
In Frederick v. Lindenhurst, decided october 8, 2009, the Appellate Court reviewed a case where an employee custodian was found dead in the school’s boiler room. An autopsy was performed. According to the autopsy report, the death was attributed to arteriosclerotic heart disease. This disease is frequently referred to as ‘hardening of the arteries’ and comes from a buildup of fatty plaque on the walls of the main arteries. This disease is not ‘peculiar’ to any employment.
Both the autopsy report and the death certificate found that the decedent’s cause of death was arteriosclerotic heart disease. The employer disputed that the death was related, and the WCB agreed. The decedent’s dependent’s appealed.
The Appellate Panel found that “substantial evidence” will rebut the presumption that unwitnessed deaths are related tot he employment. In this case, the cause of death was known: arteriosclerotic heart disease. The Appellate Division stated that absent any medical evidence that would call that conclusion into question or otherwise suggest that the decedent’s work and his death were causally linked, the opinion of the WCB must stand. The Appellate Panel repeated the case law that instructs that the employer doe snot have to rebut or meet every allegation presented by the dependents in order to overcome the assumption: in other words, if the claimant alleges that the ‘heat’ of the boiler-room, plus the claimant;s work effort, ‘combined’ to cause his cardiac condition to erupt, the employer doe snot have to meet each theory separately in order to overcome the presumption of compensability, just offer a medically-sound evidence of contrary causation.

In Curtis v. Xerox, N.Y.A.D. 3rd Dep’t, ___ N.Y.S.2d ___ (decided October 8, 2009), the claimant alleged that her 33 year employment caused her to develop occupational conditions related to her use of a computer keyboard. The claimant stopped working in July 2005, and thereafter visited the employer’s ‘plant medical department’ receiving treatment. The Workers’ Compensation Law Judge (WCLJ) directed the employer to produce the records of this treatment. The employer failed to do so.
After trial, the WCLJ issued an opinion denying the claimant’s occupational claims. On appeal, the Workers’ Compensation Board ordered the employer to produce the records within two weeks, or be subject to an ‘inference’ at trial that the occupational disease was causally related to the employment.
At trial, the employer produced a lay witness to state that no medical records existed for the claimant. Once again, after trial, the WCLJ dismissed the case, stating that there was insufficient proofs to establish the occupational claims.
Once again, the trial decision was reversed by the WCB, who found that “testimony regarding the non-existence of records” was improper. The WCB found the occupational claims “causally related” to the employment.
The employer appealed.
On appeal, the Appellate Division agreed with the employer, that testimony that “there were no records” should not have been precluded. However, the Appellate Division stated that the decision of the WCB was ‘supported by substantial credible evidence’ and they affirmed the award of compensation. The Appellate judges went on to state that WCLJ ‘abused his discretion’ by allowing the employer multiple adjournments to locate the medical records/testimony requested by the Judge.

New York Claimant Rufus Browne, a railroad track employee, was bending down to pick up a rail flag when he experienced weakness on the left side of his body. He went to the hospital the next day and was diagnosed as having had a stroke. Browne filed a workers compensation claim, alleging that his stroke ‘arose out of and in the course of’ his work.
The employer denied the causal relationship of the stroke tot he work. A hearing was held (but no testimony was produced) and the Workers’ Compensation Law Judge determined there was ‘no prima facie medical evidence of causal relationship between the stroke and the employment’ and the claim was NFA’d (designated for ‘No Further Action.’)
The claimant appealed to the Workers’ Compensation Board (WCB), who affirmed the denial. The claimant appealed the WCB’s denial to the Appellate Division.
The Appellate panel found that the employer “never refuted the allegation that the onset of the claimant’s symptoms occurred while he was at work” and that therefore the claimant was entitled to the statutory presumption that the stroke arose out of the employment (WCL Sect. 27). The Appellate panel found that the WCB erred by requiring the claimant to establish his case before the employer refuted it: in essence, the panel found that the employer “must . . . .be afforded the opportunity to rebut the presumption [of compensability].”
Practice tip- in this case, the fact pattern must have been very clear to the employer and the WCLJ: the stroke didn’t happen at work, and the medical records probably bore that out. However, even where the employee fails to establish the ‘seemingly’ bare minimum proofs to establish his claim, the employer must be prepared to present the employer’s proofs - to make a record that will withstand appeal.
Case: Browne v. New York City Transit Auth., ___ N.Y.S. 2d ___ (N.Y. App. Div. 3rd Dep’t, Decided October 29, 2009).

New Jersey Claimant Kimberly Paladino was injured at work on March 30, 2001. On February 3, 2005, she agreed to an 'Order approving Settlement.' Nine days later (February 14th, 2005) the respondent issued her draft for the settlement. The claimant then waited seventeen months (until July, 2006) to take the settlement draft tot he bank for deposit. The bank refused to honor the old check.
After the bank refused to honor the original check, the claimant requested that another draft be issued. the respondent complied, and issued a replacement check on July 26, 2006. The claimant deposited the check and enjoyed the proceeds.
The claimant then filed a 're-opener' application on August 28, 2007, alleging that her disability had increased since the entry of her February 5, 2005 settlement and that she was entitled to more compensation.
The respondent raised the statute of limitations as a defense to the re-opener. Under the New jersey Workers' Compensation Act, a claimant has "two years from the date when the injured person last received a payment upon the application of either party on the ground that the incapacity of the injured party has subsequently increased" to file a 're-opener' claim. The respondent argued that the claimant has two years from the date of the original check being issued - not two years from the date the replacement checked was actually cashed - to re-open her claim. Under this reasoning, the claimant was 'out-of-time' on her re-opener.
The Appellate Court agreed: regardless of when the draft was actually cashed, the claimant's opportunity for re-opener was governed by the date the respondent delivered the original check to the petitioner.
Case: Paladino v. Pier One Imports, App. Div. 39-2-5671 (Decided October 26, 2009).

A recent federal case, decided October 9, 2009, explored the definition of ‘employee’ in a New Jersey workers’ compensation context. My discussion of this new case serves as a good summary of the law in this area . . . Read More...

A common practice - communications with IME doctors by the contracting entities that send them cases - is falling under increased scrutiny after the WCB banned virtually all verbal communications between the doctors and the IME entities.
Employer IMEs have been facilitated by a group of regulated ‘Independent Medical Examination ‘brokers’ known as IME entities for years. These entities act as go-betweens - findings doctors to perform IMEs, collecting the relevant medical records for the doctor’s review, sending scheduling notices, and collecting the final reports of the physicians to provide those reports to the WCB and the employer (or carrier).
This process necessarily injects the IME entity into the mix: they coordinate communications with the doctors and are intimately involved in selecting physicians. The entities have also been called in question for practices where they are generating reports for the doctors to sign - commonly ‘transcribing’ the doctors own notes or taped exams. In some instances the IME entities have been accused of generating reports that differ from the doctor’s findings and “changing” IME reports after the doctor has signed off on the report.
This summer the WCB banned all oral communications between IME entities and the examining physicians - and allowing for all written communications between the parties to be part of the WCB record. This move, coupled with the new IME report form (discussed in out last newsletter) is expected to reduce claims that IME reports are ‘tampered with’ by the IME entities entrusted with facilitating those examinations.

In a new case decided June 16, 2009, the Appellate Court ruled that an 'occupational aggravation' of an injury did not constitute a 'second injury' thereby implicating the Second Injury Fund. The case is interesting because the employer/respondent tried to argue that even though the claimant was injured at work ( a specific accident) it was the subsequent occupational exposure at work that worsened the claimant to the point of total disability - and that the occupational worsening should be considered a 'second accident' for the purposes of drawing contribution from the Second Injury Fund. A novel case - with interesting implications for employers in similar situations. Read More...

Your employee gets injured - you pay benefits. Your employee then sues the premises owner, who happens to be your landlord. You also happen to have executed a lease with an indemnification provision. What happens - do you have to reimburse your landlord any money he pays out to settle your employee's claim for injuries? Read More...

A new case (Continental Casualty Co. v. Ameritemp, Inc., 39-2-2843 App. Div) provides a good restatement of the basic formulation (the ‘six factors’ laid out above) used by the New Jersey courts in determining whether a claimant is considered a ‘New Jersey’ employee for the purposes of collecting benefits available under the New Jersey Workers’ Compensation Act.
Read More...

We previously reported on the changes to the Workers' Comp Act made in October 2008 (following a string of articles in the news railing against the NJ WC system) that created an 'emergent motion' for Med & Temp when a claimant is alleged to suffer 'irreparable harm' of medical care is denied by the employer.

According to figures provided by Chief Judge Calderone and revealed at the 2009 Workers' Compensation Conference (held May 15th at the Borgata in Atlantic City) only 31 'Emergent' motions were filed since the passage of the law. Of those 31 motions, only 11 were found to have met the criteria of 'irreparable harm' required to be considered 'emergent' by the Courts.

Figures like these (against a backdrop of more than 200,000 work-related accidents reported and more than 30,000 claim petitions for compensation filed) show just how unnecessary the October 2008 "reforms" were in assuring that cases where irreparable harm is possible get addressed by the Court.

The New Jersey State Bar Association Workers' Compensation section hosted the annual 'Workers' Compensation Conference' at the Borgata in Atlantic City on May 15th.

Chief Judge Calderone reported the following statistics to the crowd of Judges and attorneys:

• In 2008, 47% of cases were closed by an 'Order Approving Settlement' pursuant to N.J.S.A. 34:15-22 ('Section22').
• In 2008, 32% of cases were closed by way of 'Section 20 Lump-Sum Dismissal' (N.J.S.A. 34:15-20).
• In 2008, 20% of all filed cases were dismissed (for Lack of Prosecution, lack of jurisdiction, etc.)
• In 2008, 2% of all cases were tried (reached Judgment).

This entry discusses a recent Appellate decision where the court found that subsequent employment DID aggravate a prior comp injury. Contrast this decision with Zrno, another recently decided case on 'subsequent' injury.
The petitioner in Singeltary v. WaWa, A-5723-07T3, App. Div. decided April 23, 2009 (published version not available as I blog this) worked in a convenience store for 20 years. In 1992 and 2001 she was injured in work-related slip-and-falls involving her cervical spine. At the time of the incidents, AIG was the carrier. In 2002, WaWa became self-insured for workers' compensation purposes in New Jersey. In 2006 the claimant was told she needed a cervical fusion surgery.

The question was: Who was to pay? AIG or WaWa?
Read More...

This entry discusses a recent Appellate decision where the court found that subsequent employment did NOT aggravate a prior comp injury. Contrast this decision with Singletary, another recently decided case on 'subsequent' injury.

In Zrno v. Wegmans (A-4025-07T1)(App. Div. decided April 27, 2009, published version not available as I blog this) the employer (Wegmans) appealed the Order of the presiding workers' comp judge finding that the claimant's current occupational disability was the result of his employment at Wegmans, rather than an aggravation of a prior wc injury. The prior injury was compensated by the prior employer (Wakefern Food Corp.).

The claim petition did not allege that the claimant had actually sustained an injury while employed at Wegmans. Read More...

Here are the ingredients:

a. One totally disabled claimant;
b. Nine different employers; and
c. A Workers Comp Judge who didn't apply the law correctly.

Result: Appeal and reversal.

Read More...

The “Odd Lot” doctrine permits an employee to recover benefits when a work-related injury, in combination with “personal factors” creates a total disability. What is a “personal factor”? The doctrine, traceable to line of cases, defines a ‘personal factor’ as “a personal handicap.”
The ‘personal handicap’ is not a physical limitation. For employees that have a pre-existing disability, and then become totally disabled as a result of their pre-existing disability and a workplace accident, Second Injury Fund benefits are available.
The ‘Odd Lot’ doctrine refers to ‘personal handicaps’ for other-than-physical conditions. The cases law states that a worker is eligible for Odd Lot benefits when “viewed in the context of the market place, his inability to sell his labor is traceable to his personal background superimposed on his physical disability.”
Qualifying “Odd Lot” conditions are: Read More...

The 2009 edition of 'New Jersey Workers' Compensation Law for Adjusters and Risk Managers' has been published. The introductory guide, now reaching 270 pages, includes a copy of the scheduled loss charts for 2009 and a new chapter on 'Motions for Med & Temp' and the new-for-2008 'Emergent Motion for Med & Temp.' Authored by: Joseph K. Cobuzio and Greg Lois. Click here to request a complementary copy.

Deputy Attorney General Dolores McNamee, longtime Second Injury Fund Attorney, was elevated to the bench in January 2009.  Judge McNamee now presides over lists in New Brunswick (two week out of the cycle) and Camden (one week of the cycle).

This leaves the already overwhelmed ranks of the Deputy Attorney general with just four Deputies assigned to the whole state!  Accordingly, Administrative Supervisory Judge Dietrich has cancelled eight (8) Second Injury Funds lists and re-assigned those pending cases to already extant Deputies/Judges.

Because of the state hiring freeze (due to New Jersey's expected $4B budget shortfall), the Second Injury Fund is not able to hire any new Deputies to assist the Fund. Read More...

The State is phasing out half of the centralized computer system that the Workers' Comp clerks have access to. Now, when the docket shows a child support arrearage, and the amount is in dispute, the petitioner's attorney will have to resolve the dispute with the applicable county probation department. Read More...

We normally don’t report on 'unreported' Appellate Division decisions. That is because 'unreported' decisions of a Judge of Compensation have no ‘precedential’ value: they cannot be relied upon as a statement of the law for future cases.

However, the recently decided Natale v. Celanese is notable because it shows what can happen in an occupational disability case when an employer was covered by different policies (and carriers) for successive periods of coverage. Read More...

The NJ Legislature passed six bills which we reported on last year. One such bill requires each carrier or self-insured employer to identify a "contact person" to respond to issues concerning medical and temporary disability benefits in cases where a formal claim petition has not yet been filed. This is the so-called "pre-petition" contact. A form with instructions for competing it is available here. Read More...

In Sexton v. County of Cumberland, decided January 9, 2009, the Appellate Division upheld a denial of benefits from a Petitioner who alleged that her pre-existing respiratory illness (COPD) was aggravated by a co-worker spraying perfume into the air of the workplace. The workers’ compensation judge found that such aggravation was not compensable because it did not arise out of the employment but instead arose out of a "personal proclivity" of the petitioner. The Appellate Division reversed his conclusion, finding that such an aggravation was compensable under N.J.S.A. 34:15-7 because it did arise out of this employment.

Video surveillance is often relied upon by the defense in New Jersey Workers’ Compensation cases to either challenge credibility or to demonstrate that a claimant is not as disabled as he appears from his own testimony or his doctor’s examination. A recent case (Gross v. Neptune) has been relied upon by plaintiff’s attorneys to limit the introduction of videotape evidence in contested workers’ compensation trials in New Jersey. Read More...

New Jersey workers’ compensation law makes no distinction between seasonal employees and 50-year veterans in regards to entitlement to compensation for work-related injuries. Seasonal employee have the same rights and protections under our laws as do ‘permanent’ employees.

Seasonal workers hired by nation’s retailers in November 2006: 427,000

Seasonal workers hired by nation’s retailers in November 2007: 458,000

Seasonal workers hired by nation’s retailers in November 2008: 217,200

Source: ‘The Record,’ B-1, December 9, 2008.

FAQ: Is there a minimum number of weeks worked to receive WC benefits pay or is a seasonal employee entitled to compensation if he gets hurt on day one?

Answer: If an employee is hurt in the first minute he “punches in” he is entitled to exactly the same medical, wage replacement, and permanent disability benefits as if he had worked for the employer for 50 years.

In Sroczynski v. John Milek, decided December 17, 2008 the NJ Supreme Court found that there can be no legally effective policy cancellation where a carrier fails to prove that it strictly complied with all of the requirements for canceling a workers’ compensation insurance policy. The NJ Legislature established clear and unambiguous requirements in the cancellation statute, which include the requirement that a carrier file with the Compensation Rating and Inspection Bureau the certified statement required in N.J.S.A. 34:15-81(b). However, the Court also held that only parties that have raised this particular filing issue can be granted relief from improper cancellations - past cancellations that were never challenged on this ground will stand because the policyholders waived their right to challenge them.

One of the most basic questions we always ask when looking at a new claim is: Did the injuries arise out of the employment? There are probably more reported decisions on disputes about this question than any other issue in New Jersey Workers’ Compensation. I dedicate an entire chapter of my book to this subject and blogged extensively on this subject.

In an interesting new decision, an Appellate Panel found that that an employee’s injuries did not arise out of the course of employment while he was on a personal errand.

The claimant, William Garcia, was riding in his employer’s vehicle which was being driven by his foreman. The claimant was on his way to a bank to cash his paycheck. The claimant also alleged that he was riding between job sites or was going to return to the original job site at the time of the accident.

The claimant relied on the following facts to establish that he was actually working at the time of his accident:
• He was actually being driven in an employer-owned vehicle at the time of the accident;
•He was driven by his foreman; and
•He was on his way to or from a job site.

The workers’ compensation judge found that the claimant was not engaged in or assigned to work directed by the employer at the time of the accident. The Appellate Division agreed with this reasoning, and affirmed the denial of workers’ compensation benefits.

The Appellate Panel explored the possible legal arguments that would support the petitioner’s claims for benefits. First, they determined that the claimant failed to show “that the employee was performing his or her prescribed duties at the time of the injury.” (Quoting Jumpp v. City of Ventnor, 177 N.J. 470 (2003).

Next, the Appellate Panel discussed the Supreme Court’s decision in Sager v. O.A. Peterson Construction Company, 182 N.J. 156 (2004) and compared the facts in Sager to the facts of the Garcia case. In Sager, the claimant was “directed” by his site supervisor to extend his workday and have dinner with his co-employees and was injured while returning to the worksite after dinner. The Panel found that unlike the facts in Sager, no one ‘directed’ the claimant to go to the bank and cash his check (they found it to be a personal errand).

Finally, the Panel considered whether it was possible the claimant had a “reasonable belief” that his employer wanted him to go to the bank and cash his paycheck. This consideration was necessary in light of the Supreme Court’s decision in Lozano v. Frank DeLuca Construction, 178 N.J. 513 (2004), which held that even if an employee is not directly told to do something, the act may be found to be “in the course of employment” if the employee had a reasonable belief that his employer wanted the act done.

After considering every possible way that the accident could be considered “arising out of the employment” the Appellate Panel concluded that it did not. The decision of the workers’ compensation Judge dismissing this case was rightly affirmed.

Case: William Garcia v. Wagner Land Expansion, App. Div. A-3595-07T1, decided November 6, 2008 by Judges Stern, Waugh, and Newman. (Note: this blog entry discusses an ‘unpublished’ decision).

Statute discussed: N.J.S.A. 34:15-36

Contributed by: Greg Lois

According to the U.S. Bureau of Labor Statistics, the average man working full-time logs 8.2 hours per day.

According to the same study, the average woman works 7.8 hours.

The average American spends 2.6 hours a day watching TV.

What is a “commutation”? Simply stated, a ‘commutation’ is the legal term for a petitioner asking the Court to accelerate the payment of an award to answer some pressing need of the claimant.

A recent case, Piskorz v. Beno Stucco Systems Corp., discussed the availability of commutation in a specific case. The Petitioner filed a motion for commutation of his workers’ compensation award, stating he wanted to leave America and open a business in Poland. According to the petitioner, he needed his money NOW because he had obtained the promise of a financial subsidy from the European Regional Development Fund for $60,000.00 to open the business, however, as a condition of the approval, he had to provide his own matching personal funds of $60,000, otherwise he will not receive the subsidy. Read More...

Governor Corzine just signed six new laws yesterday which attempt to "reform" certain aspects of the New Jersey Workers' Compensation system. The "reforms" were passed by the Legislature in response to the series of newspaper articles in the Star Ledger which focused on the long wait some New jersey claimant have had to obtain their benefits.

Three of the new laws (S-1914/A-2962, S-1915/A-3059 and S-1918/A-2970) create new reporting requirements, create a new prosecutorial power, and increase penalties on employers who fail to provide workers comp coverage for all their own employees (or see that it's provided for their subcontractors' workers). These laws can be said to address the situations where an employer has no coverage or issues of coverage are in doubt. These laws are in direct response to the Star Ledger series of articles which focused on cases where benefits were delayed because the claimant’s employment status and coverage issues were questioned. Read More...

According to the U.S. Bureau of Labor Statistics, the median weekly earnings of all full-time workers in the United States is $695.00 per week. In New Jersey, the maximum rate of temporary disability for 2008 is $742.00 per week.

We have blogged before on this topic (here and here)- the way the Feds and the State calculate ‘average weekly wage’ is different with the net effect that the NJ State Temporary Total disability rates are artificially high.

How high? Well the state of New Jersey just released figures showing a state average weekly wage of of $1,031.28. (Figures released August 22, 2008).

Who is a “volunteer” and who is an “employee”? The defense of “non-employment” is one of the few affirmative defenses left under the New Jersey Workers’ Compensation Act. This case explores the distinction between and ‘employee’ (whose injuries are compensable) and a ‘volunteer’ (for whom there is no workers’ compensation liability.)

The salient facts of the Flores v. Paragon case are as follows:

•Flores was an undocumented (illegal) worker who was employed by general contractor Bredbenner from April to November of each year. Bredbenner’s business was installing gutters.
•Returning to America after his usual winter stay in Mexico, Flores sought work with Bredbenner.
•Here the story conflicts: Bredbenner testified he had no gutter work for Flores, and instead offered to hire Flores to work at his hose, doing yard cleanup for two days. Pay was $100 per day. Flores testified that he was hiredin his usual capacity as ‘laborer’ without limitation or qualification on the amount or type of work to be done.
•Flores did do yard work for Bredbenner.
•After two days of yard work, Flores accompanied Bredbenner to a gutter worksite. According to Bredbenner, the gutter installation was for a ‘friend’ and the work was unpaid (although Bredbenner was reimbursed for materials).
•According to Bredbenner, Flores offered to help at the gutter installation job, and Bredbenner accepted the offer.
•Flores fell off the roof at the job site, breaking both arms, his nose, and one leg.

Bredbenner argued that Flores was a ‘volunteer’ at the time he fell of the roof - not an employee. Bredbenner argued that Flores ‘offered’ to help and there was no promise of payment for his help. The Judge of Compensation found that Flores was an employee of Bredbenner at the time of the accident. The Appellate Panel agreed.

The legal decision was based on the following factors:
1. Credibility. Basically, the trial judge found Flores more credible than Bredbenner.
2. The statutory definition of employee. N.J.S.A. 34:15-36 defines an employee as “a servant . . . who performs a service for financial consideration.”
3.The prior employment relationship. Flores was able to show a two-year history of working for Bredbenner.
4.The circumstances of the incident. Flores was transported to the work site by Bredbenner, used materials and tools provided by Bredbenner, and worked under the ‘direction and control’ of Bredbenner.

All of the judges acknowledged that the lack of a contract and the fact that Flores was a seasonal employee who had only been back in Bredbenner’s employ for two days complicated the decision.

Case: Flores v. Paragon Construction and Restoration, App. Div. A-1035-07T3, decided September 15, 2008 by Judges Payne and Alvarez. (Note: this blog entry discusses an ‘unpublished’ decision). Also note: I can’t find a copy of this decision online, either at the Rutgers Law Library or the Appellate Division’s page. If you would like a copy of this decision, please contact me directly - my office # is 973-622-3000.

Statute discussed: N.J.S.A. 34:15-36
NEW CASE: FLORES V. PARAGON CONSTRUCTION - DEFINING “EMPLOYMENT”
9/15/08
New Case - Employment - Who Is an ‘Employee’?



Picture: View from via Del Corso, Rome, Italy
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In a case of first impression, the Appellate Division held that where a public entity settles with an injured plaintiff for an at-work injury, the plaintiff's independent contractor-employer is not entitled to a credit for workers compensation payments in a subsequent indemnity suit by the public entity. In Serpa v. New Jersey Transit, a construction worker was severely injured while working on a train station owned by New Jersey Transit -- a publicly owned concern. He received some $900,000 in workers' compensation payments from his employer, the general contractor for the job. New Jersey Transit paid the plaintiff $1.5 million to settle a personal injury suit, wherein the employer was named as a third-party defendant on an indemnity claim. The employer's attorney agreed on the record that the $1.5 million was a reasonable settlement. However, after being apportioned 85% of the fault at trial on the indemnity issue, the employer sought a credit for its workers compensation payments. The trial court declined the requested relief and the Appellate Division affirmed. The court held that N.J.S.A. 59:9-2(e) precludes reimbursement to an employer from a public entity tortfeasor. Rather, the public entity or public employee receives a credit for the workers compensation payments, if a judgment is entered. Thus, in a settlement, a public entity cannot reasonably be expected to pay full value for a claim, knowing that if the case goes to trial, it will receive a credit against the damage verdict for the workers' compensation payments. This was not accounted for by the employer in consenting to the reasonableness of the settlement.

Ultimately, the lesson taught by Serpa for carriers with insureds who work with public entities is that the public entity's right to a credit for workers compensation payments made to injured employees must be taken into account before conceding as to whether a settlement proposal is reasonable. In this case, counsel for the employer should have argued that a settlement of $600,000 was appropriate.

A settlement or judgment is not the end of a case in New Jersey (unless you close a case by way of Section 20 - a ‘lump sum dismissal.’ A claimant retains the right to ‘re-open’ their case if their condition worsens and the doctrine of res judicata does not apply.

The law (N.J.S.A. 34:15-27) states that the worker can ‘re-open’ their claim for “two years from the date compensation was last paid” which includes payments for medical benefits. Read More...

The Temporary Total Disability ‘maximum rate’ climbs to $773 for year 2009. The minimum rate rises to $206.

This represents a 4.2% increase in compensation rates (on the ‘maximum side; interestingly, the ‘minimum’ rate only rises 4%).

The Appellate Division affirmed the trial court in ‘Ferrigno v. Tyco.’ Greg Lois co-wrote the Appellate Briefs (with Michael S. Miller, Esq., also of Tompkins McGuire). Decision is here (PDF).

Citation: Ferrigno v. Tyco International, Ltd., App. Div. A-3328-06T3 (Decided Aug. 15, 2008). Download decision (PDF).

According to the Division of Workers’ Compensation, 197,006 workplace accidents were reported in 2007. This led to 34,556 new workers’ compensation claims being filed. In addition, 4,773 “re-opener” claims were filed.
These figures show almost no changes in the numbers of filed cases over the past year, but do reflect an increase in reported accidents year-over-year (approximately 20,000 more accidents reported in 2007).

On July 16, 2004 Alfonso Estrada Moron (A.K.A. Eduardo Zambrano) was shot and killed in a hold-up while working for Quik Chek as an assistant manager.

The dispute arose as to whether or not the claimant’s mother, who lived in Peru was “solely dependent” on the decedent as she claimed. If she could prove dependency, she would received $227.98 per week until she died. The claimant testified that the decedent sent her $600 per month for her support, plus $600 for her birthday and $1,000 at Christmas. Read More...

Claimant Orsola Doria, sixty-eight years old at the time of her alleged “accident” filed occupational and specific accident claims against her employer alleging that as a result of her employment as a housekeeper for five years she was totally and completely disabled.

Respondent’s doctors found no disability except for 2.5% of permanent partial total for “post-concussion syndrome” related to an incident where a ceiling tile fell on the claimant’s head.

After eight (8) trial days, the Judge of Compensation found a permanent partial disability of 30% of partial total and dismissed the petitioner's claims against the Second Injury Fund. The claimant appealed.
Read More...

Many Second Injury Fund Cases end with a Judge of Compensation ruling that the Fund is dismissed from the case. This usually happens when the Judge determines that (a) the claimant is not totally disabled, or (b) the claimant was totally disabled as a result of the last accident alone, or (c) the claimant’s pre-existing conditions were not disabling.
Read More...

The Appellate Court reversed the decision of the workers' compensation judge, finding the "travel-time" exception to the going-and-coming rule does not apply where a salaried employee is reimbursed for gas, tolls, and wear and tear on his vehicle, but was not paid wages for the time of his commute to and from work.

In Scott v. Foodarama, 398 N.J. Super. 441 (App. Div. 2008), the Appellate Division found that the claimant was merely driving to work when the accident happened, and was barred from receiving compensation for injuries sustained on his commute. In other words, the claimant was engaged in his normal commute. The fact that his commuting expenses were paid by the employer did not make the claim fall "within the course of" his employment.

What makes this case notable is that the claimant was actually reimbursed for his commuting expenses by the employer. (Decided February 27, 2008, link to full decision: http://lawlibrary.rutgers.edu/courts/appellate/a3936-06.opn.html)

The New Jersey Workers' Compensation system was the focus of an investigation conducted by the Star-Ledger Newspaper , one of the most widely-read newspapers in New Jersey. The articles (which ran consecutively in April) concluded that "bureaucratic delays, politics and poor state oversight have left thousands of injured workers waiting years for the relief promised by the compensation system." The three-part article has led to a New Jersey Senate Labor Committee hearings scheduled to begin May 5th in Trenton to examine ways to "reform" the workers' comp system in New Jersey. Read More...

Garrett A. Dalton of Naugatuck Conn., was out of work collecting workers' compensation benefits "too injured to work." Unfortunately for Dalton, authorities were alerted when they saw Dalton dressed in women's clothes, wearing high-heels, and participating in a foot-race to win 'Hanna Montana' tickets (in a contest sponsored by a local radio station). Dalton was running in heels while also balancing an egg on a spoon. Prosecutors have charged Dalton with workers' compensation fraud.

And no, he didn't win the contest. Read More...

In a case currently being considered for publication, Janela v. Roman Asphalt Co., the issue of dual employment arose in the context of a government construction contract. The employer/paving company, Raebeck Construction won a contract for paving at Newark Liberty International Airport, which called for it to exercise direct control over the project and to certify that it did not share staff with any other company. On the date of the accident, an employee was struck in the head by a compressor and killed. His estate was paid dependency benefits by Raebeck. However, the estate also brought suit against another company, Roman, who actually did the paving work. It was revealed that contrary to the contract, Raebeck had no role in the job and essentially leased all workers from Roman. Raebeck did actually pay all of the workers, however. Roman moved for summary judgment on the exclusivity provisions of the Workers Compensation Act. The Appellate Division upheld the dismissal of Roman using a five part fact sensitive test focusing on the control exercised over the employees, to determine whether Roman was also an employer. It found that even though Raebeck violated specific government contract provisions to avoid this precise employment situation, bidding qualifications and contract requirements did not negate the legal rules governing workers' compensation.

Application:

When analyzing a new claim involving dual employment, an immediate and comprehensive investigation of the employment relationship is essential. Obtaining documentation such as contracts, job descriptions, employment handbooks, payroll records, and even incorporation documents is an essential strategy in evaluating the claim. Also, early identification and interviews of the owners, managers and contractors can further assist in determining the degree of control each entity had over the injured worker.

Upon the occurrence of a workplace injury involving industrial machinery or equipment, it is often the case that an employee will sue the manufacturer of the machine as a companion to his/her Workers’ Compensation petition. At the same time, the employer might seek to effectuate changes in order to make the culpable machine safer for employee operation. However, before any such changes are made, careful consideration must be given to the potential for a claim for “spoliation evidence” against the employer. Read More...

In Cruz v. Central Jersey Landscaping, Inc., decided by the New Jersey Appellate Division on May 14, 2007, the majority found that amendments to N.J.S.A. 34:15-13 (which went into law effective January 14, 2004 setting a uniform 70% of the decedent’s wages as the death benefit amount in dependency cases regardless of the number of dependents) applied to pending workers’ compensation cases including claims where the worker’s death was prior to January 14, 2004.

On March 30, 2007 the Appellate Division decided Ventura v. Reliable Wood Products, A-4554-05T1 (Mar. 30, 2007)(Not Approved for Publication). The cases presented a novel issue: an undocumented worker alleged that his daily weekly wages were $500 per week. The employer alleged that his wage was $6.15 per hour.

On November 22, 2005, the very first day he worked for the respondent, the claimant was injured (his right foot was amputated). Read More...

On March 14, 2007, the New Jersey Appellate Division decided Valcarel v. FSA Management, A-40001-05T2 (Mar. 14, 2007)(Not Approved for Publication). The issue at bar was whether or not the claimant was “acting within the scope of his employment” when the accident occurred. The Appellate Division agreed with the Judge of Compensation (Judge Joel Gottlieb, New Brunswick) that the petitioner was engaged “on personal business when he was involved in the accident in question” and that no compensation would be payable. Read More...

It is a familiar story in New Jersey: immediately after Melard Manufacturing Corporation closed its Passaic plant, laying off 111 workers, 84 of the former employees promptly filed workers’ compensation claims alleging a variety of “occupational” maladies. (Melard, which manufactured plastic bathroom parts and packaged other items, laid off the workers in 2002.) The problem: the employees were represented by a single law firm, which filed identical complaints for each former employee, changing only the personally-identifying information on each court pleading. Melard filed a complaint in federal Court alleging Racketeer Influenced and Corrupt Organizations Act (RICO) violations by the employees and their lawyers - alleging that “fraudulent claims were being filed” and that “workers were being