The Full Board, at its meeting held on October 22, 2013, considered the above captioned case for Mandatory Full Board Review of the Board Panel Memorandum of Decision filed on February 22, 2013.
The issue presented for Mandatory Full Board Review is whether the carrier should remain liable for authorized medical treatment subsequent to liability having transferred to the Special Funds Conservation Committee (Special Funds) pursuant to Workers' Compensation Law (WCL) § 25-a, where the carrier failed to timely respond to the form C-4AUTH requesting authorization for the treatment.
In a decision filed on August 2, 2012, the Workers' Compensation Law Judge (WCLJ) found that Special Funds was liable for the cost of the claimant's surgery, as liability had shifted pursuant to WCL § 25-a.
In a Memorandum of Decision, filed on February 22, 2013, the Board Panel majority, citing Matter of Office of Children and Family (2010 NY Wrk Comp 60114178), found that since liability appropriately transferred to the Special Funds as of April 23, 2010, liability for the authorized medical treatment lies with the Special Funds.
The dissenting Board Panel member would have found that since the carrier failed to properly manage and maintain the file up to the date liability shifted to the Special Funds (by failing to properly respond to Dr. Fein's April 10, 2012, form C-4AUTH), the expense for the medical procedures should be borne by the carrier, and not the Special Funds.
In its application for Mandatory Full Board Review, filed with the Board on March 22, 2013, the Special Funds contends that under Matter of Central New York DDSO (2008 NY Wrk Comp 69703172) and its progeny, the majority was incorrect to uphold the finding that the cost of surgery is the liability of the Special Funds, as the carrier failed to properly administer the claim by failing to timely respond to Dr. Fein's April 10, 2012, form C-4AUTH. Special Funds further contends that the majority improperly relied on Matter of Office of Children and Family (2012 NY Wrk Comp 60114178), as the Board has carved out an exception to that case in situations where instead of properly administering a file, the carrier raises WCL § 25-a liability, and the failure results in prejudice to the claimant.
In its rebuttal, filed with the Board on April 18, 2013, the carrier contends that since Matter of Central New York DDSO, the Board has repeatedly found that once WCL § 25-a is found to apply, the Special Funds is liable for the claim without exception, despite any alleged mishandling of the file on the part of the carrier prior to the transfer of liability to Special Funds. The carrier further contended that even if the carrier responded to the April 10, 2012, C-4AUTH and authorized it at that time, Special Funds would have remained liable for the surgery as the effective date of WCL § 25-a was April 23, 2010, and there is no basis on which the carrier should be found liable for the cost of the claimant's surgery.
Upon review, the Full Board votes to adopt the following findings and conclusions.
On November 6, 2002, the claimant was injured when she slipped and fell on snow in the employer's parking lot. The case was initially accepted and established for work-related injuries to the claimant's right hand and left knee. The case was subsequently amended to include a consequential left ankle injury. The claimant's average weekly wage was set as $191.35. By a proposed decision filed on October 11, 2005, and finalized on November 15, 2005, the claimant was awarded a 21.25% schedule loss of use of the right hand and a 15% schedule loss of use of the left leg, entitling her to a total of 95.05 weeks of benefits, and the case was closed.
The claimant's treating physician, Dr. Fein, submitted a form C-4AUTH (Attending Doctor's Request for Authorization and Carrier's Response), requesting authorization for pre-operation diagnostic studies of the claimant's left knee and to perform a total left knee replacement surgery on the claimant, that was dated and filed with the Board on April 10, 2012.
The carrier did not immediately respond to Dr. Fein's request for authorization. Instead, on April 23, 2012, the carrier filed a form RFA-2 (Request for Further Action by Carrier), requesting liability for the claim be transferred to the Special Funds pursuant to WCL § 25-a.
Based on the carrier's failure to timely respond to Dr. Fein's April 10, 2012, request for authorization, the Board issued a form EC-325, Order of the Chair, on May 22, 2012, authorizing pre-operation radiology services and surgery to the claimant's left knee.
On June 4, 2012, the carrier submitted a form RFA-2 once again requesting WCL § 25-a relief.
During a hearing held on July 30, 2012, the WCLJ found no compensable lost time after October 11, 2005, and transferred liability for the case to the Special Funds pursuant WCL § 25-a, effective April 23, 2010. After the WCLJ made his finding concerning WCL § 25-a, the attorney for the Special Funds requested that pursuant to the Board's decision in Matter of Central NYDDSO (2008 NY Wrk Comp 69703172), since the carrier failed to respond to the request for authorization from the claimant's physician, the carrier should remain liable for the pre-operation radiology services and total knee arthoplasty, as requested in Dr. Fein's April 10, 2010, form C-4AUTH. The carrier's attorney responded that WCL § 25-a should apply as of the effective date without exception. The WCLJ found that the claimant was not prejudiced, as the surgery requested on April 10, 2012, was authorized by the Board on May 22, 2012, that Matter of Central New York DDSO did not apply to this case, and therefore Special Funds was liable for the surgery and pre-surgical testing. The WCLJ's findings were memorialized in a notice of decision filed on August 2, 2012.
"Once section 25-a (1) has been triggered, the insurance carrier has no further interest in payment of the claim. This statutory scheme contemplates that the Special Funds will step into the shoes of the insurance carrier and succeed to its rights and responsibilities" (Matter of De Mayo v Rensselaer Polytech Institute, 74 NY2d 459 ). Subsequent to the effective date of the transfer of liability to the Special Funds, "the Board should not [direct] any payments by the employer (see generally Matter of Castro v New York City Tr. Auth., 50 AD3d 1272 )" (see Matter of Lynch v Buffalo Bills, 62 AD3d 1061 ).
In the instant case, the effective date of the Special Funds' liability is April 23, 2010. After that date, the carrier is discharged and the Special Funds is liable for the claim. "There is no exception in statute or case law relieving the Special Funds of liability based on the carrier's misfeasance" (Matter of Office of Children and Family Services, 2010 NY Wrk Comp 60114178; see also, Matter of MRC-SKF Bearings, 2010 NY Wrk Comp 89615836; and Matter of American Felt & Filter Company, 2010 NY Wrk Comp 59808082).
Here, the Special Fund relies on Matter of Central New York DDSO, 2008 NY Wrk Comp 69703172, which found that,
In order to assure this administration of claims, the Board Panel finds that the retroactive effect of the applicability of Worker's Compensation Law Section 25-a relief should be limited to benefits, including medical expenses, actually paid by the carrier during the two years prior to the finding of Worker's Compensation Law Section 25-a. The statute anticipates that the carriers will pay for the administration of the claim up to a date on which they are relieved by the Special Funds or by the Board. The carrier is entitled to seek reimbursement for expenses actually paid on the claimant's behalf, but may not argue that the payments may properly be delayed while awaiting an anticipated favorable finding by the Board. To permit this behavior by the carrier's (sic) would be contrary to the intent of the statute that the claimant's benefits would remain unaffected by the possible transfer of liability between the original carrier to the Special Funds.
However, Matter of Central New York DDSO was decided prior to Matter of Lynch v Buffalo Bills, in which the Appellate Division set forth the relevant case law on the issue and reversed the Board Panel's decision to direct payment of awards by the self-insured employer for dates after the effective date of the Special Funds' liability. Also, in Matter of MRC-SKF Bearings, the Board Panel specifically distinguished the Board's prior decision in Matter of Central New York DDSO, since
directing the carrier [to] pay for the authorized right knee replacement surgery which may have been deemed authorized prior to reopening, but that were not yet actually performed would, in effect, direct that the carrier pay for the claimant's medical expenses long after WCL 25-a has been established. There is no support for such a direction in WCL 25-a, which in substance provides that expenses for 'stale claims' are to be paid by [the Special Funds] in a truly closed case which is reopened more than 7 years from the date of accident and 3 years from the last payment of compensation.
Therefore, the Full Board finds that, upon review of the record and based upon a preponderance of the evidence, the WCLJ correctly determined that liability appropriately transferred to the Special Funds as of April 23, 2010, and liability for the authorized medical treatment lies with the Special Funds.
The Full Board further finds that to the extent that any prior Board decision departs from reasoning in this decision, including Matter of Central New York DDSO, 2008 NY Wrk Comp 69703172, those decisions are incorrect and should not be followed.
ACCORDINGLY, the WCLJ decision filed on August 2, 2012, is AFFIRMED. No further action is planned by the Board at this time.