Hamberger & Weiss Elects Stephen P. Wyder, Jr. to Partnership
We are pleased to announce that Stephen P. Wyder, Jr. has been elected as a partner in the firm, effective January 1, 2018. Mr. Wyder has been practicing workers’ compensation defense since joining the firm in 2010. Prior to that, he was an Assistant District Attorney with the Sullivan County District Attorney’s Office where he handled both jury and bench trials in felony and misdemeanor criminal cases.
Mr. Wyder has developed a sub-specialty in appellate practice and has argued cases before the Appellate Division and worked on cases presented to the Court of Appeals. He is expert in trial practice and litigation before the Workers’ Compensation Board, having handled a wide range of claims ranging from slip-and-falls, repetitive stress claims, fraud, discrimination and other claims under the Workers’ Compensation, Volunteer Firefighters, and Volunteer Ambulance Workers’ Benefits Law.
He is a member of the Monroe County Bar Association and resident in our Rochester office.
Board Announces Draft Pharmacy Formulary and Finalizes SLU Guidelines
On 12/28/17, the Board announced draft regulations for a proposed New York State Pharmacy Formulary and finalized the new Permanent Impairment Guidelines for Schedule Loss of Use (SLU) evaluations.
WCL §13-p, which became law in April 2017, required the Board to "establish a comprehensive prescription drug formulary on or before" 12/31/17. The Board has apparently interpreted the "shall establish" language in WCL §13-p to only mean "publish proposed regulations for comment." The proposed formulary provides a list of preferred and non-preferred medications for treatment of common workers' compensation injuries. Medications on the preferred list do not require pre-authorization from the carrier but those on the non-preferred list do. Of note, not a single opioid medication is on the preferred list. We will review the formulary as well as the proposed regulations in detail and publish a detailed analysis of same in the coming weeks. The public comment period for the proposed regulations is open until 2/26/18.
The Board also finalized and adopted the new Permanent Impairment Guidelines for SLU evaluations. They appear to be substantially unchanged with only minor clarifications to the Proposed Guidelines the Board issued on 11/22/17 for public comment that we discussed in last month's issue. The primary consideration in determining SLU under these new guidelines is loss of range of motion. The new guidelines take effect for all claims, regardless of date of injury, on 1/1/18. The only exception to this is if the claimant had at least one SLU exam conducted under prior Guidelines before 1/1/18. In such cases, the Board will determine the claimant's SLU using the 2012 Guidelines.
Terranova Court of Appeals Decision Reminds Board to Not Miss the (Equitable Apportionment) Forest for the (Kelly Decision) Tree
In a decision released on 12/19/17, the Court of Appeals (New York State’s highest court) ruled that the Board erred in allowing a carrier to take full credit for a schedule loss of use awarded after the settlement of a claimant’s third-party action without any further contribution to litigation costs for use of that credit.
WCL Section 29 provides that for a carrier to obtain a lien recovery and future offset rights against a third-party settlement, the carrier must pay its fair share of litigation costs as outlined in Kelly, Burns, and other decisions. Nevertheless, in Terranova v. Lehr Construction Co., 139 A.D.3d 1309 (3d Dep’t 2016), the Appellate Division affirmed a Board decision allowing a carrier to take full credit on an SLU awarded after the settlement of the claimant’s third-party action but without any further contribution to litigation costs for use of that credit. The claimant appealed this decision to the Court of Appeals, which reversed the Appellate Division in the 12/19/17 decision.
In Terranova, the carrier paid $21,495.99 in past benefits at the time of settlement. The claimant also had a 10% SLU opinion from his doctor, but it hadn’t been awarded. The consent letter provided that the carrier would reduce its lien from $21,495.99 to $14,018.75. This reduction represented the carrier’s proportional contribution to the cost of litigation associated with obtaining the third-party settlement under Kelly v. State Insurance Fund. There was no further reduction of the lien to account for the carrier’s future credit rights. Rather, the consent to settle letter said that “any future workers’ compensation benefits [would] be subject to” Burns v. Varriale payments. After the settlement, the Board awarded the claimant a 10% SLU, which totaled $17,280.00. The Board also found that the third-party settlement exceeded the SLU award and that despite the language in the consent letter, the carrier could take full credit of the SLU award against the third-party settlement without any further contribution for litigation costs.
On appeal, the Appellate Division affirmed and focused its attention on the consent letter. Even though the consent letter noted that the carrier was subject to Burns payments on future awards, the Appellate Division ruled that the carrier did not need to make a Burns payment for the SLU award. Instead, the Appellate Division relied on the language in the consent letter that specified that the carrier’s initial reduction in the lien was in satisfaction of its Kelly obligation.
Last summer, we questioned the rationale of the Appellate Division’s decision as contrary to statute and precedent because the Kelly decision required not only a reduction in the carrier’s lien at the time of settlement to account for litigation costs, but also a further reduction to account for the present value of the carrier’s future obligation that was extinguished because of the third-party settlement. That further reduction was missing from the analysis of Terranova by both the Board and Appellate Division.
The Court of Appeals has corrected this, noting that the overriding principle in third-party action cases is the “certainty” of the award at the time a third-party matter is resolved. In Terranova, the Court found that because the present value of the loss of use was not finalized at the time of the claimant’s third-party recovery, the carrier was obligated to pay its fair share of litigation expenses at the time the present value was determined. The Board’s original decision allowed the carrier to take credit for the SLU without paying its fair share for use of that credit.
A Reminder Regarding Medical Treatment Denials and Expedited Hearings
As we reported in our March 2017 issue, we have noticed WCLJs strictly enforcing the requirement on Board Notices of Hearing regarding the scheduling of depositions in cases involving medical treatment issues. Specifically, WCLJs are precluding employers and carriers from scheduling depositions on these treatment issues when no attempts have been made to complete the deposition prior to the initial expedited hearing on the issue. Any denial of a C-4AUTH will result in an expedited hearing. A review request of an MG-2 will generally result in an expedited hearing, unless the claimant and carrier both request that the Board’s medical arbitrator review the denial.
If you receive a Notice of Expedited Hearing on a medical treatment issue, that Notice will usually contain language directing the parties to complete depositions prior to the hearing. If that is the case, we strongly recommend that you contact defense counsel to review the file to determine if a deposition should be scheduled. Often we do not recommend deposition testimony, particularly if the treatment at issue involves physical therapy or chiropractic care or where the attending physician didn’t meet his or her burden of proof in making the treatment request. But in those cases involving surgery requests or other expensive forms of treatment, it may be advisable to depose the treating physician.
A PH-16.2 should be filed in advance of any expedited hearing, even if the claim is not controverted. Under 12 NYCRR 300.34, a PH-16.2 must be filed within twenty days of the file being transferred to the expedited hearing process. However, 300.34 also requires the PH-16.2 be filed in accordance with 300.33, which requires the PH-16.2 be filed ten days before any pre-hearing conference. 12 NYCRR 300.33. Prior Board Decisions have held that failure to file a PH-16.2 prior to an expedited hearing scheduled to address a treatment denial issue will result in a waiver of the right to cross-examine any medical witnesses. In addition, if the deposition cannot occur prior to the expedited hearing, a written affirmation must be submitted. However, in no circumstances may an adjournment be granted more than thirty days after the pre-hearing conference.
Happy Holidays and Happy New Year from Hamberger & Weiss
We would like to thank our clients, colleagues, and friends for your continued trust in us. We sincerely hope that you have had a wonderful holiday season and we wish all of you peace, happiness, and prosperity throughout the new year!
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