Worker’s Compensation Cases Decided 11-20-14

Today the Third Department decided 2 cases and the Court of Appeals decided one case dealing with workers compensation issues.

In Matter of Best Hatfield, Appeal from an order of the Supreme Court , entered May 30, 2013 in Saratoga County, which, among other things, denied defendants motion to compel plaintiff to file a satisfaction piece against a certain judgment.

Defendant was an employer member of Elite Contractors Trust of New York, a group self-insured trust (hereinafter GSIT) that was formed in 1999 to provide mandated workerscompensation coverage to the employees of trust members. In April 2010, plaintiff determined that the trust was insolvent and assumed its administration (see Workers Compensation Law $ 50 [3-a] [8]; [5] [f]; 12 NYCRR 317.20 [c]). A deficit reconstruction subsequently revealed that Elite had an $82 million member deficit. Based upon that deficit, plaintiff levied an assessment against defendant for $2.1 million, which represented defendants pro rata share of Elites total member deficit (see Workers Compensation Law $ 50 [3-a] [7] [b]). After defendant failed to make any payment toward the assessment, plaintiff sent defendant a final demand for payment and informed defendant that any further failure to pay both its pro rata share and awards of compensation to its injured employees would result in plaintiff filing a judgment against defendant.

In December 2011, following defendants continued failure to pay, plaintiff obtained a Workers Compensation Law $ 26 judgment against defendant in the amount of $26,177.15, representing workerscompensation payments that plaintiff made to Owen Flavin, one of defendants injured employees, between July 2010 and November 2011. In February 2013, defendant moved to compel plaintiff to file a satisfaction piece against that judgment on the basis that the judgment had been satisfied by payments made to plaintiff by the Special Disability Fund (hereinafter SDF) pursuant to Workers Compensation Law $ 15 (8). Supreme Court, among other things, denied defendants motion and determined that the judgment could only be satisfied by payments made by defendant or Elite and, thus, the judgment had not been satisfied. Defendant now appeals and we affirm. Pursuant to Workers Compensation Law $ 50 (3-a) (7) (b), plaintiff can levy an assessment on the members of a defaulted GSIT for such an amount that is, among other things, necessary to discharge the GSITs liabilities. Notwithstanding such assessment, each member of the defunct GSIT remains jointly and severally responsible for all of the GSITs liabilities (Workers Compensation Law $ 50 [3-a] [7] [b]). In 2010, the Legislature added a clause to Workers Compensation Law $ 50 (3-a) (7) (b) to provide that, separate and apart from, and in addition to a members joint and several liability, where a member fails to pay a levied assessment, the member shall be deemed in default (see L 2010, ch 56, part R, $ 4). Once in default, the member is subject to the enforcement mechanism contained in Workers Compensation Law $ 26, which provides, in pertinent part, that, where the employer defaults in the payment of any compensation due under an award, plaintiff may file, among other things, a certified copy of the decision awarding compensation and thereupon judgment must be entered (see Workers Compensation Bd. of State of N.Y. v Rizzi, 14 AD3d 608, (2005).

Here, defendant does not dispute the fact that, pursuant to Workers Compensation Law $ 50 (3-a) (7) (b), it is in default because it has not paid any money towards its pro rata share of Elites deficit and, thus, plaintiff was entitled to obtain a Workers Compensation Law $ 26 judgment against it for any awards due and owing on claims filed by its employees. Defendants pro rata share of Elites deficit, in turn, includes a portion of Elites share of the assessment levied by plaintiff that is used to fund the SDF (see Workers Compensation Law $ 15[8] [h]; 151). Despite the fact that defendant has never paid its share of those assessments in the years for which Flavin received benefits, it is undisputed that plaintiff has received reimbursement from the SDF for some of the money it has expended paying for those benefits. Thus, the pertinent issue before this Court is whether such reimbursement warrants the filing of a satisfaction piece.

To this end, Workers Compensation Law $ 50 (3-a) (7) (b)explicitly provides that plaintiff can obtain a judgment against a defaulting member of a GSIT for workerscompensation awards obtained by the members employees that have neither been paid by the member or the [GSIT] (Workers Compensation Law $ 50 [3-a] [7] [b] [emphasis added]). To date, defendant has paid neither its pro rata share of Elites total member deficit, which includes its share of the assessments intended to fund the SDF and provide for the very reimbursement paid to plaintiff, nor the underlying award of compensation to its injured employee. As previously noted, plaintiff was therefore entitled to obtain a judgment against defendant representing the amount paid by plaintiff to Flavin on defendants behalf. We are unpersuaded by defendants contention that the payment by the SDF to plaintiff served to satisfy the judgment obtained against defendant. A brief overview of how plaintiff and the SDF are funded, along with plaintiffs obligations under the circumstances here, is necessary to our analysis. Pursuant to Workers Compensation Law $ 50 (5) (f), if an insolvent GSIT, such as Elite, fails to pay compensation and benefits owed to an employee, plaintiff is required to pay such benefits as expenses of administration. Plaintiff is also required to levy assessments against, as relevant here, self-insured employers and GSITs to assure, among other things, its ability to make prompt payments of such compensation and benefits (see Workers Compensation Law $ 50 [5] [g]; see also Workers Compensation Law $ 15 [8] [h]). In general, a portion of the assessments levied by plaintiff is used to establish separate funds out of which, under certain conditions, liability for employee benefits are shifted from an employer to a special fund, such as the SDF (see Workers Compensation Law $$ 15 [8] [h] [4]; 151 [2] [c]). Neither the levy of assessments nor the payment of benefits by plaintiff precludes plaintiff from recovering from the defaulting party (see Workers Compensation Law $ 50 [5] [g]), and any money reimbursed to plaintiff must be applied against the expenses on which the assessment levied against employers is calculated (Workers Compensation Law $ 50 [5] [f]).

Applying the foregoing to the situation here, given insolvency, plaintiff assumed Elites responsibility for paying workerscompensation benefits owed to Flavin out of plaintiffs administrative expenses, which were funded, in the first instance, through assessments levied on Elite which were unpaid by either Elite or defendant and other private self-insured employers and GSITs. When plaintiff was reimbursed by the SDF which is also funded through plaintiff by such assessments it was essentially deprived of the ability to levy an assessment therefor. Thus, the judgment at issue here is intended to assist in recovering the money that plaintiff paid to Flavin, as plaintiff is authorized to do under Workers Compensation Law $50 (5) (g). In sum, notwithstanding defendants claim that Supreme Courts order results in a double recovery for plaintiff, given the statutory scheme, we conclude that no impermissible Accordingly, we find that plaintiffs judgment was not satisfied by reimbursement payments made by the SDF and, therefore, defendants motion for the filing of a satisfaction piece was properly denied. Defendants remaining arguments have been considered and have been found to be without merit.

In Matter of Dobney, the carrier appealed from an amended decision of the Workers Compensation Board, filed September 16, 2013, which, upon reconsideration, ruled that the employer and its third-party administrator were not entitled to reimbursement for certain benefits paid to claimant.

Claimant injured her right knee in the course of her employment and was awarded workerscompensation benefits for lost time from work in 2006, 2009 and early 2010. The benefits totaling approximately $11,500 were payable as reimbursement to the self-insured employer, which had paid claimant $17,400 in wages while she was absent from work. The wages were paid pursuant to the employers workerscompensation supplement plan, which provided that employees who suffered a workerscompensation injury would receive the difference between their workerscompensation benefits and the amount of pay that they would have received under a separate short-term disability plan 100% of their salary initially, and 70% after a certain period of time. That is, injured employees were to receive either 100% or 70% of their salary through a combination of traditional workerscompensation benefits and benefits under the supplement plan.

In June 2010, the employer and its third-party administrator (hereinafter collectively referred to as the employer) again requested reimbursement in connection with additional benefits paid, and claimant asserted that the employer was entitled only to reimbursement of benefits paid as workerscompensation benefits, as opposed to that paid as opposed to those paid as supplement to those benefits. The employer sought reimbursement for all benefits paid pursuant to its supplemental benefit plan, up to the statutory maximum compensation rate. At a hearing, the employer admitted that it had not submitted a copy of its benefit plan prior to the first award of workers compensation benefits to claimant. Thereafter, a Workers Compensation Law Judge awarded claimant a 55% schedule loss of use of her right leg, equal to 158.4 weeks of compensation at $400 per week, and determined that the employer was not entitled to reimbursement out of that award for wages paid in excess of workerscompensation benefits. The Workers Compensation Board ultimately affirmed, prompting this appeal.

The Court affirmed. The employer argues that the Board erred in applying Workers Compensation Law $ 25 (4) (c), rather than subdivision (4) (a) of that section, in resolving its reimbursement request. Section 25 (4) (c) requires that employers seeking reimbursement for benefits paid to an injured employee pursuant to an employee benefit plan . . . [that] provide[s] that the injured employee . . . shall be limited in the amount of benefits or payments thereunder if he or she shall be entitled to [workers compensation] benefits under this chapter must file proof of the terms of [the employee benefit] plan . . . before award of compensation is made (Workers Compensation Law $ 25 [4] [c]; see Matter of Karl v New Venture Gear, 41 AD3d 1024, 1025 [2007], lv dismissed 9 NY3d 1000 [2007]). This Court has held that an employers right to seek credits against schedule awards for moneys paid pursuant to an employee benefit plan . . . stems from Workers Compensation Law $ 25 (4) (c) and is limited by the restrictions in that provision (Matter of Staruch v New York Tel. Co., 277 AD2d 830, 833 [2000], lv dismissed and denied 96 NY2d 852 [2001]). We concluded that sub division (4) (a), which imposes no requirement to file the terms of a plan and, indeed, makes no reference to proof of plan terms[,] . . . was not intended to address moneys paid from an employee benefit plan.

Here, as the Board explained, the employers workers compensation supplement plan limited the amount of benefits that an employee with a work-related injury would receive as compared to an employee entitled to benefits under the employers short term disability plan essentially deducting workerscompensation benefits from the amount paid in salary under the short-term disability plan. Even considering the workers compensation supplement plan alone, we conclude that the injured employee is limited in the amount of benefits paid thereunder meaning from the plan itself if he or she is awarded workers compensation benefits (Workers Compensation Law $ 25 [4] [c]). While the employee initially receives his or her full salary from the supplement plan, if the employer is reimbursed out of a workers compensation award, then the employee has received less in (or is limited in the amount of) benefits from the supplement plan itself due to his or her entitlement to those workers compensation benefits. Thus, Workers Compensation Law $ 25 (4) (c) is applicable and, inasmuch as the employer admittedly failed to file proof of the terms of the plan prior to the first award of benefits, the Board properly determined that the employers right to compensation was limited to the amount paid to claimant as workers compensation benefits (see Matter of Karl v New Venture Gear, 41 AD3d at 1025; Matter of Staruch v New York Tel. Co., 277 AD2d at 833; see also Matter of Groth v Daimler Chrysler Corp., 41 AD3d 1021, 1022-1023 [2007], lv dismissed and denied 9 NY3d 1000 [2007]).



The Court of Appeals also handed down a ruling in Matter of Kigin. The primary issue presented on the appeal was whether the Workers Compensation Board (the Board) exceeded its statutory authority when it promulgated portions of the Medical Treatment Guidelines (see 12 NYCRR 324.2 [a]-[f]). The Court held that it did not and therefore affirmed the Appellate Division.

In 2007, as part of its comprehensive reform of the Workers Compensation Law, the Legislature amended Workers Compensation Law $ 13-a (5) in two ways: (1) it raised from $500 to $1,000 the maximum cost of specialist treatments for which the employer is automatically liable without prior authorization, and (2) it directed that the Board issue and maintain a list of pre-authorized procedures that a claimant can obtain at the employers expense even if the cost exceeds $1,000, without the need for the employers prior approval. The purpose of both of these provisions was to remove impediments to prompt diagnostic and treatment measures and to better reflect current medical service costs. The provision permitting the creation of a pre-authorized list allows the Board appropriate regulatory flexibility to add or remove procedures depending on best practices, increases and decreases in cost, or opportunities presented by managed care approaches (Governors Program Bill Memorandum, Bill Jacket, L 2007, ch 6).

The Board adopted the Medical Treatment Guidelines, which were subsequently incorporated by reference in the regulations (see 12 NYCRR 324.2 [a]). The Guidelines include the list of pre-authorized medical procedures and set forth limitations on the scope and duration of each procedure. They also set forth a variance procedure, under which medical treatment providers can, on behalf of a claimant, request authorization for medical care not included in the Guidelines or in excess of the scope and/or duration that is pre-authorized (see 12 NYCRR $ 324.3 [a] [1]). The medical treatment provider requesting a variance must demonstrate that the requested treatment is appropriate for the claimant and medically necessary (see id. $$ 324.3 [a] [2]; 324.3 [a] [2] [i] [a]). II.

In December 1996, claimant Maureen Kigin, a Hearing Reporter for the Workers Compensation Board (the Board), injured her neck and back in a work-related automobile accident. In June 1997, the Board accepted her claim for wage replacement benefits and ongoing medical treatment. In 2006, Kigins case was reopened and transferred to the Special Fund for Reopened Cases (hereafter the carrier) pursuant to Workers Compensation Law $ 25-a. On December 14, 2006, she was classified as permanently partially disabled.

In March 2011, Dr. Coladner re-evaluated claimant and recommended that she receive additional acupuncture treatment, namely, three acupuncture treatments to her cervical and lumbar spine each month for six months. The doctor again requested authorization from the carrier, this time under the newly-created Medical Treatment Guidelines established by the Board that had become effective on December 1, 2010. Specifically, she requested two variances, one for claimants cervical spine and another for her lumbar spine. These variances were required because the Guidelines for the treatment of neck injuries provided that the optimum duration of acupuncture treatments is one month and the maximum duration is 10 treatments.

In response the carrier had the claimant examined by an Ime who indicated no further treatment was needed. After both doctors testified, a Workers Compensation Law Judge determined that claimants medical provider failed to show that the additional acupuncture treatments were medically necessary. In particular, the Judge noted that, although Dr. Coladner testified that claimant reported some pain reduction from the prior treatments, there was no evidence in the record that these earlier treatments resulted in the objective improvement of functional outcomes with respect to claimants neck, or that it was reasonable to expect that further acupuncture would result in such improvement.

The Board affirmed the judge on appeal.

Claimant appealed the Boards decision, arguing, as relevant here, that (1) the Board lacked the authority to promulgate the regulations and incorporated Guidelines, (2) the variance procedure improperly shifts the burden of proof to claimants physician to prove the medical necessity of a proposed treatment, and (3) the Guidelines violate claimants due process right to a meaningful hearing. The Appellate Division, with one Justice dissenting, affirmed (109 AD3d 299 [3d Dept. 2013]). The court rejected claimants argument that the Board exceeded its statutory authority in promulgating the regulations, holding that the Board acted within its legislatively conferred authority when it devised a list of preapproved medical care deemed in advance to be medically necessary for specified conditions, and did so in a manner consistent with Workers Compensation Law $ 13 (a) and the overall statutory scheme (id. at 307). In support of its conclusion, the court noted that medical necessity and appropriateness . . . have always been prerequisites to an employers obligation to pay and the Legislature purposefully conferred the authority on the Board to predetermine medical necessity for medical care, and its scope and duration, consistent with best medical practices (id. at 306).


The Court also rejected claimants argument that the variance procedure improperly shifts the burden to the claimants treating physician to prove medical necessity, in conflict with Workers Compensation Law $ 21 (5) (see id. at 307-308). Finally, the court found unavailing claimants argument that the Guidelines deprived her of due process, noting that the regulations provide an opportunity to be heard, an expedited process for determining the medical necessity of the requested care, and a review process (id. at 310) After the decision this Court granted leave to appeal.

The Claimant first contends that the Board exceeded its statutory authority to preauthorize medical treatment under Workers Compensation Law $ 13-a (5) by using the Guidelines to pre-deny medical treatment . The Court noted that the Board is authorized to adopt reasonable rules consistent with and supplemental to the [Workers Compensation Law] (Workers Compensation Law $ 117 [1]). Courts will uphold regulations that have a rational basis and [are] not unreasonable, arbitrary, capricious or contrary to the statute under which [they were] promulgated (see generally Kuppersmith v Dowling, 93 NY2d 90 [1999]). We hold that the Board acted properly and lawfully when it promulgated the Guidelines, as they reasonably supplement Workers Compensation Law $ 13 and promote the overall statutory framework of the Workers Compensation Law, which is to provide appropriate medical care to injured workers. There is no dispute that the Board was statutorily authorized under section 13-a (5) to issue a list of pre-authorized procedures. That determination necessarily meant that the Board consider what is not best practice and what may not be medically necessary. Contrary to claimants contention, the procedures that are not on the list are not pre-denied, given the possibility of obtaining a variance. In other words, treatments that are not in accord with the Guidelines may nevertheless be approved for particular claimants pursuant to the variance procedure. The establishment of the variance procedure was within the Boards broad regulatory powers (Workers Compensation Law $$13, 141, and 117 [1]).


Courts will uphold regulations that have a rational basis and [are] not unreasonable, arbitrary, capricious or contrary to the statute under which [they were] promulgated (see generally Kuppersmith v Dowling, 93 NY2d 90 [1999]). We hold that the Board acted properly and lawfully when it promulgated the Guidelines, as they reasonably supplement Workers Compensation Law $ 13 and promote the overall statutory framework of the Workers Compensation Law, which is to provide appropriate medical care to injured workers. There is no dispute that the Board was statutorily authorized under section 13-a (5) to issue a list of pre-authorized procedures. That determination necessarily meant that the Board consider what is not best practice and what may not be medically necessary. Contrary to claimants contention, the procedures that are not on the list are not pre-denied, given the possibility of obtaining a variance. In other words, treatments that are not in accord with the Guidelines may nevertheless be approved for particular claimants pursuant to the variance procedure.


The establishment of the variance procedure was within the Boards broad regulatory powers (Workers Compensation Law $$ 13, 141, and 117 [1]). The Board explained that the prior lack of standards in assessing the medical necessity of treatment had resulted in disputes over treatments, delayed care and increased frictional costs (Notice of Proposed Rulemaking, New York State Register, June 30, 2010, at 33-38). Disputes over the medical necessity or the frequency/duration of medical care were often made after the care was provided, on a case-by-case basis, when the employer disputed the bill. It was reasonable for the Board to promulgate uniform guidelines for defining the nature and scope of treatment considered medically necessary. By adopting the pre-authorized list and variance procedure for determining the necessity of care, the Board provides a measure of avoiding delay and uncertainty that previously resulted from disputes over the medical necessity of treatment.


Claimant next claims that the Guidelines remove the burden of proof from the employer and the carrier and shift it to the injured worker and the treating physician. This, claimant argues, is directly contrary to the Workers Compensation Law. Under the regulations, the burden of proof to establish that a variance is appropriate and medically necessary rests on the treating medical provider (12 NYCRR 324.3 [a] [2]). Whether a treating medical provider has met this burden is a threshold determination that must be made whenever a carrier properly and timely articulates an objection to a variance request. Contrary to claimants contention, nothing in the Workers Compensation Law has ever precluded the Board from requiring proof of medical necessity from claimants health care provider. Indeed, the claimant generally has the burden in the first instance of proving facts sufficient to support his or her claim for compensation (see Matter of Malacarne v City of Yonkers Parking Auth., 41 NY2d 189, 193 [1976] [claimant has the burden of showing that injuries were sustained in the course of employment]). Moreover, in his argument, claimant relies on the provision of Workers Compensation Law $ 13-a (5) that an employers or carriers refusal to authorize special services costing more than $1,000 must be based on a conflicting second opinion by a board-authorized physician. That requirement presupposes that the claimant has submitted the first opinion, from his or her treating physician.


The Court also disagreed with claimants contention that section 21 (5) of the Workers Compensation Law establishes that the burden rests on the employer or carrier. That provision creates a presumption, [i]n any proceeding for the enforcement of a claim for compensation, that the contents of medical and surgical reports introduced in evidence by claimants for compensation shall constitute prima facie evidence of fact as to the matter contained therein (Workers Compensation Law $ 21 [5]). It is the carrier that then bears the burden of proffering substantial evidence to contradict the content of those medical reports (id.).


We agree with the Appellate Division majority that claimants can continue to rely on the presumption, while also satisfying the variance procedures requirement that they establish the medical necessity of the requested treatment. While the presumption establishes the facts contained in the medical report, the claimant must first establish the medical necessity for the treatment.

Finally, claimant argued that the Guidelines deny injured workers due process by predetermining their need for medical treatment. She contends that the Guidelines do not provide an opportunity to be heard in a meaningful time and manner.

Generally, procedural due process principles require an opportunity for a meaningful hearing prior to the deprivation of a significant property interest (see Hodel v Virginia Surface Mining & Reclamation Assn., 452 US 264, 303 [1981]). The fundamental requirement of due process is the opportunity to be heard at a meaningful time and in a meaningful manner (Matthews v Eldridge, 424 US 319, 333 [1976] [internal quotation marks omitted]; see Curiale v Ardra Ins. Co., 88 NY2d 268, 274 [1996]). The Guidelines provide claimants with a meaningful opportunity to be heard on the denial of any variance request. The variance procedure expressly provides a process for requesting review of the denial of a variance request, under which the treating medical provider may elect review by a medical arbitrator or through an expedited hearing process (see 12 NYCRR 324.3 [d]). Indeed, in this case, a hearing was held at which a Workers Compensation Law Judge considered testimony by both claimants own care provider and the independent expert engaged by the carrier. Claimant was represented by counsel, who cross examined the carriers expert. The Workers Compensation Law Judges decision was reviewed by the Board, which considered legal arguments by claimants attorney, and the Boards decision was subject to judicial review.


Accordingly, the order of the Appellate Division was affirmed.


The dissent of this 4-3 decision would have sided with the claimant.



The dissent would have found the Board exceeded its authority when it promulgated regulations imposing a pre-approval requirement that forecloses reimbursement for medical services that vary from the list and the Boards Medical Treatment Guidelines (Guidelines) in all cases where the services are rendered in advance of approval. Also, to the extent the Boards regulations establish a variance scheme that predetermines that all treatment not included on the pre-authorized list of services is presumptively not medically necessary, it imposed a burden on Kigin and other claimants inconsistent with the statutes language and underlying purpose. Therefore, I would reverse the Appellate Division.

The Workers Compensation Law is framed on broad principles for the protection of [workers] (Waters v William J. Taylor Co., 218 NY 248, 251 [1916]; accord Illaqua vBarr-Llewellyn Buick Co., Inc. , 81 AD2d 708, 708 [3d Dept 1981], No. 181 citing In re Heitz, 218 NY 148, 154 [1916], and Lorer v Gotham Concrete & Cement Finish Corp., 8 AD2d 221, 224 [3d Dept 1959]), and thus should be construed liberally in favor of the employee (Wolfe v Sibley, Lindsay & Curr Co., 36 NY2d 505, 508 [1975]). It is beyond dispute that the Board has broad regulatory power to administer and carry out the mandates of the Workers Compensation Law (see e.g. Workers Compensation Law (WCL) $$ 117 [1]; 141). To that end, the Board is authorized to adopt reasonable rules consistent with and supplemental to the statutory scheme (id. $ 117 [1]). However, the Boards powers are not limitless, and we review its administrative regulations to determine whether they are rational and to ensure that they are not arbitrary and capricious or contrary to the statute under which they are promulgated (Belmonte v Snashall, 2 NY3d 560, 567 [2004]; see Kuppersmith v Dowling, 93 NY2d 90, 96 [1999]).


The Workers Compensation Law states that employers shall be liable for the payment of and shall promptly provide for an injured employee, medical treatment for such period as the nature of the injury or the process of recovery may require (Workers Compensation Law (WCL) $ 13 [a]). Prior to the Boards regulatory adoption of the Guidelines in 2010, where an employer or provider disputed a request for treatment reimbursement, the parties resolved the dispute pursuant to an individualized determination of whether the request is compensable after treatment was rendered to the claimant (see Kigin v State Workers Compensation Bd., 109 AD3d 299, 306 [3dDept 2013], citing WCL $ 13-g, 13-k, 13-l, 13-m, and Matter of Spinex Labs. Inc. (Patton), 213 AD2d 884, 885 [3d Dept 1995], and Employer: Livingston County, 2011 WL 5618432, at *5; see also 110 N.Y. Jur. 2d Workers Compensation $ 565 [after treatment is rendered, employer must pay or give written notice of the reasons for nonpayment]). Only in certain cases where the claimant sought treatment in the form of specialist consultations,

surgical operations, physiotherapeutic or occupational therapy procedures, x-ray examinations or special diagnostic laboratory tests costing more than [$500] was the provider required to obtain preauthorization for the treatment from the employer or Board in order to obtain reimbursement (WCL $ 13-a [5]). A denial of preauthorization under this section must be based on a conflicting second opinion rendered by a physician authorized by the board (id.)

The Board promulgated regulations that implemented a regulatory scheme whereby reimbursement for medical services would be subject to the Guidelines. All of this was well within the Boards power and in furtherance of the statute. The Board went awry when it promulgated regulations that imposed a variance scheme that requires pre-approval for reimbursement requests related to treatment that varies from the Guidelines. Section 324.3 of the Boards regulations states that a variance for medical care that varies from the Guidelines must be requested and granted . . . before [that care is]. . . provided to the claimant (12 NYCRR 324.3 [a] [1]). Nothing in the language of the statute limits compensation to care approved in advance of treatment unless the pre-authorization requirement of section 13-a (5) applies, and there is no claim that it does here. Thus, the regulations preapproval requirement lacks a necessary textual grounding to the extent that it extends the limited pre-authorization requirement of section 13-a (5) to care beyond that specifically enumerated in that section of the statute. Indeed, it is undisputed that prior to implementation of the regulations, disputes over reimbursement for medical services other than those in section 13-a (5) were usually resolved after the services had been provided.

In this regard, the Boards regulations also undermine the purpose of the 2007 amendment to remove impediments to prompt diagnostic and treatment measures (see Governors Program Bill Memorandum, Bill Jacket, L 2007, ch 6, at 5). The regulation instead serves to hinder timely medical service delivery by denying payment to providers who fail to secure preapproval. Under the regulation, a request for a variance will not be considered if the medical care has already been provided (12 NYCRR 324.3 [a] [1]). As a result, the preapproval requirement incentivizes providers to delay treatment based on financial concerns. Realistically, providers will defer medical care until they are certain of reimbursement, which under the regulations means until a variance is granted. How long this may take is uncertain, and dependent upon the deliberateness of the administrative process. Such delay carries with it the potential for significant adverse health consequences due to a break in medical services. In contrast, the statute expressly provides ensured compensation for medically necessary services, making no mention of whether treatment was rendered prior to approval. The Boards regulation would permit denial of reimbursement even for medically necessary treatment simply because the medical services were provided prior to preapproval. As a consequence, the regulation is inconsistent with the mandate of section 13 (a). The Board is also subject to challenge for interpreting its regulations so as to deny Kigins request for reimbursement on the ground that her treatment varied from the Guidelines. This interpretation contravenes the statutory and regulatory scheme for individual assessment of compensable injuries, and was not mandated by the 2007 amendments. Although I agree with the majority that the claimant had the burden to establish that the treatment was compensable under the statute (see majority op. at 10-11), under the Boards interpretation of the regulations the claimant is subject to an adverse presumption that the requested services are not medically necessary simply because they are not included on the preauthorized list and vary from the Guidelines.

The Board argues, and the majority concludes, that the Legislatures directive to create a list of pre-authorized procedures, also means that the Board has the authority to predetermine that all excluded services are not medically necessary. I disagree. The more logical and reasonable interpretation of the statutory language, and one which furthers the 2007 amendmentspurpose to increase benefits to workers, is that the Legislature authorized the Board to pre-determine procedures over which there was general medical consensus, leaving claims regarding other medical services to the preexisting dispute resolution process.

Whereas the rulemaking process is more appropriate to pronouncements of generalized treatment protocols, without consideration of specific individualized health concerns (see State Administrative Procedure Act $ 102 [2] [a] [defining a rule as the whole or part of each agency statement, regulation or code of general applicability that implements or applies law. . .] [emphasis added]; see also Alca Indus., Inc. v Delaney, 92 NY2d 775, 778 [1999] [discussing distinction between rulemaking and ad hoc decision making based on individual facts and circumstances]). The statutory language does not support the Boards position that the variance process established by the regulations is consistent with the pre-existing statutory scheme. The source of the Boards authority for the Guidelines, section 13-a (5), merely states that the Board shall issue and maintain a list of preauthorized procedures. It does not state that excluded procedures are to be treated as presumptively not medically necessary. Since the Guidelines were adopted pursuant to the exercise of the Boards rulemaking power, the Boards interpretation of the statute would permit the regulations to supplant the individualized assessment of medical necessity by establishing a presumption against certain services. We would expect that such a dramatic departure from the prior statutorily established case-by-case approach would be authorized by clear, unambiguous language.


Under the Boards approach, the claimant faces a previously unknown burden to rebut a presumption against payment for certain medical services, and must endure the physical and mental affects of delays in service pending the outcome of the variance request. This appears to be in service of cost reduction for its own sake. For it increases the challenges faced by claimants rather than remov[ing] impediments to prompt diagnostic and treatment measures (Governors Program Bill Memorandum, at 5). Whereas, both goals are achievable by the adoption of a pre-authorized list which expedites treatment delivery without automatically labeling certain medical care medically unnecessary, thus increasing benefits for workers, and at the same time reducing the number of claims and parties subjected to the dispute and variance process, thus containing costs. The statutory presumption in favor of claimants applicable to proceedings to enforce claims for compensation, found in section 21 (5), illustrates the Legislative commitment to reducing the burdens faced by claimants in securing benefits, and further supports the conclusion that the Boards interpretation is contrary to the statute and the legislative intent. Section 21 (5) states that in any proceeding to enforce claim for compensation it shall be presumed in the absence of substantial evidence to the contrary . . . [t]hat the contents of medical and surgical reports introduced in evidence by claimants or compensation shall constitute prima facie evidence of fact as to the matter contained therein. No such presumption applies to the carrier/employers medical evidence. The presumption clearly indicates the Legislatures intention to ease the claimants burden of establishing a right to reimbursement for treatment. The Boards interpretation undermines that intent because it requires the claimant to establish by facts and opinion that the treatment is medically necessary, without benefit of the fact presumption, and it eliminates the carrier/employers burden to rebut the presumption with substantial evidence to the contrary.

Here, the Board determined that Kigins medical provider failed to establish that the request for compensation for additional acupuncture treatments was medically necessary. That determination, however, was based on the independent medical examination and report of Dr. Chiu, who concluded that the treatments were not medically necessary because Kigin was not disabled and the treatments failed to comply with the Guidelines. This was error, as the Board had previously classified Kigin as permanently partially disabled, and Dr. Chiu should have evaluated the services not as against generalized Guidelines of pre-authorized treatment, but based on the medical cares impact on Kigins conditions and needs.

Based on same the dissent would have ruled in favor of the claimant.