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Regulatory Impact Statement of Proposed Amendment of
12 NYCRR 300.2 (IME Regulation)


  1. Statutory Authority:

    The Workers' Compensation Board (hereinafter referred to as Board) is authorized to amend 12 NYCRR 300.2. Section 117(1) of the Workers' Compensation Law authorizes the Chair to make reasonable regulations consistent with the provisions of the Workers' Compensation Law and the Labor Law. Section 141 of the Workers' Compensation Law authorizes the Chair to make administrative regulations and orders providing, in part, for the receipt, indexing and examining of all notices, claims and reports. Section 137 of the Workers' Compensation Law mandates requirements for the notice, conduct and reporting of independent medical examinations. Sections 13-a, 13-k, 13-l and 13-m of the Workers' Compensation Law authorize the Chair to prescribe by regulation such information as may be required of physicians, podiatrists, chiropractors and psychologists submitting reports of independent medical examinations. Section 13-n of the Workers' Compensation Law authorizes the Chair to revoke the registration of entities that derive income from IMEs and to penalize such entities when the entity has materially altered a report of an IME or caused the material alteration of such a report.
  2. Legislative objectives:

    Chapter 473 of the Laws of 2000 amended Sections 13-a, 13-b, 13-k, 13-l and 13-m of the Workers' Compensation Law and added Sections 13-n and 137 to the Workers' Compensation Law to require authorization by the Chair of physicians, podiatrists, chiropractors and psychologists who conduct IMEs, guidelines for IMEs and reports, and mandatory registration with the Chair of entities that derive income from IMEs. In addition, Chapter 6 of the Laws of 2007 amended section 13-n of the Workers' Compensation Law to permit revocation of the registration of and imposition of a penalty on entities that derive income from IMEs in certain instances. These proposed rules would amend the regulations adopted in 2001 to implement Chapter 473 of the Laws of 2000 in order: to permit independent medical examiners more time to file reports of their examinations; to ensure that all relevant medical records are made part of the Board file while eliminating the waste and expense caused by duplicate filing of records already contained in the Board file; to create a process for removal from the list of authorized providers when the provider does not meet the threshold statutory requirements for authorization; and to create a process whereby the Chair may rescind the registration of an entity that derives income from IMEs pursuant to section 13-n of the Workers' Compensation Law.
  3. Needs and benefits:

    Prior to the adoption of Chapter 473 of the Laws of 2000, there were limited statutory and regulatory provisions applicable to independent medical examiners or examinations. With the passage of the law in 2000, the Legislature directed the Board to regulate authorization of independent medical examiners, conduct of independent medical examinations, provision of reports of such examinations, and registration of entities that derive income from such examinations. In 2001, the Board adopted regulations to clarify definitions, procedures and standards that were not expressly addressed by the Legislature.

    Over the last ten years, the Board and its stakeholders have observed several problems with the use of independent medical examinations in the system. First, carriers have expressed concerns that IME reports are regularly precluded on procedural grounds because of the difficulty of complying with very tight notice and filing timeframes. The proposed regulations would change the timeframe to file a report of independent medical examination from ten calendar days to ten business days, which would allow ten full days to complete the process when offices are open and mail service available.

    Second, observers have documented instances of poor quality exams and examiners as well as improper interference with the results of the exam by IME entities. While the Board diligently monitors the Department of Education records to ensure that all authorized providers of independent medical examinations have a valid license in New York State and required Board certifications, the existing regulation does not provide for the removal of a provider's name from the list of those authorized to conduct independent medical examinations when he or she no longer satisfies the statutory requirements of license and Board certification. The proposed regulations authorize removal of authorization when an examiner ceases to satisfy the requirements for authorization and authorizes the Board to consider disciplinary actions taken by medical licensing authorities in other states. Subdivision (3) of Workers' Compensation Law section 13-n, now authorizes the Board to revoke the registration of entities that derive income from the conduct of independent medical examinations when the entity has materially altered a report of independent medical examination or contributed to such alteration. As a result, the Board has developed a standard process if the Board is seeking revocation of an entity's registration.

    Third, it has become apparent that independent medical examiners and entities that derive income from independent medical examinations are duplicating the entire Board medical file and re-filing it as a supplement to the report of independent medical examination; this is wasteful and expensive for the Board as well as for the independent medical examiners. The regulations clarify that duplicate copies of existing medical records do not need to be filed with the Board, though communications between the IME entity and the examiner and other records that are not in the Board file must be submitted to the Board.

    Finally, the adoption of Medical Treatment Guidelines by the Board in December 2010, has increased the prevalence of medical reports based solely on a review of records rather than a physical examination of the claimant. Reports based on a review of records are used as evidence in support of the denial of medical treatment to a claimant (they are used in response to a variance request and a request for authorization for treatment). Accordingly, it has become apparent that a review of records must adhere to minimal standards to ensure that the medical opinion is rendered by a qualified medical provider and has not been altered. These reviews of records must be arranged by entities that have registered with the Board and are fully aware of the legal and medical standards for reports generated following a review of records. In addition, to avoid further delays in the adjudication of claims, the Board will now require that such reviews of records be supplied 10 business days before the hearing where they will be presented as evidence. This affords the opposing party the ability to appear at that hearing prepared to proceed.
  4. Costs:

    The proposal does not alter the registration fee of $250 that is paid by IME entities. However the proposal requires that IME entities register with the Board every three years. The registration fee will be payable every three years. Currently there are one-hundred-eighty registered IME entities. Section 13-n of the Workers' Compensation Law authorizes the Chair to impose a registration fee to be used for the purpose of administering IME entities. By requiring the registration fee of $250 to be payable every three years the Board will be able to recover a small portion of the costs associated to regulation of IME entities. This proposal will not impose any new costs on any of the other regulated parties, the Board, the State or local governments for its implementation and continuation.

    It is the Board's best estimate that the overall savings that could be achieved through the elimination of duplicate filing could range between $1.2 million and $1.6 million per year or $300,000 -$400,000 per quarter. This was determined by adding the number of IME-3 forms to the number of attachments submitted with the IME-3 in the current fiscal year, and then multiplying the result by 32.999 cents per page, which is the cost of scanning each page into an electronic case folder under the Board's current contract with its scanning vendor.

    The extension in the time to file the report from 10 days to 10 business days significantly reduces the number of reports of medical examination that are precluded for reasons that have nothing to do with the diligence and competence of the independent medical examiner. While the costs of this change are difficult to estimate, they are believed to be substantial because the change would eliminate unwarranted duplication of exams.

    The removal of the name of a provider from the list of those authorized to conduct independent medical examinations will reduce the costs of administrative hearings to revoke the authorization and will reduce the cost of unnecessary litigation when a provider possesses authorization to conduct independent medical examinations but no longer has a valid license or Board certification.

    The process to revoke the registration of entities that derive income from independent medical examinations that are found to have materially altered a report of independent medical examination or caused such alteration will reduce the costs associated with fraud. While it is difficult to estimate these exact costs, the cost of fraud is always significant not only to the specific claim affected but also to the integrity of the workers' compensation system as a whole.
  5. Local government mandates:

    Approximately 2,300 political subdivisions currently participate as municipal employers in self-insured programs for workers' compensation coverage in New York State. These self-insured municipal employers will be affected by the proposed rule in the same manner as all other employers who are self-insured for workers' compensation coverage.
  6. Paperwork:

    This proposed rule does not add any new reporting requirements. The requirements for these proposed amendments are set forth in sections 137 and section 13-n of the Workers' Compensation Law. It is anticipated that the proposed amendment will significantly reduce the amount of paperwork currently being generated under the regulation.
  7. Duplication:

    The proposed rule does not duplicate or conflict with any state or federal requirements.
  8. Alternatives:

    One alternative discussed was to take no action. However, due to the concerns and problems raised by many participants, the Board felt it was more prudent to take action. In reviewing the law and regulations, the Board felt the proposed changes were best.

    While some participants to the system recommended a longer period in which to file an IME report or that a report be deemed filed when mailed, the Board felt any time period longer than that provided would unduly delay a claim. Since IME reports are used to decide issues such as need for medical treatment, the Board felt the 10 business day rule was prudent. With respect to the suggestion that a report be deemed filed when mailed, the Board declined to follow this alternative as it is not consistent with other provisions of the regulations and WCL.

    Based on comments received from participants in the system, the Board amended the regulation to permit notice of the independent medical examination to be delivered to the claimant by overnight delivery service, so long as the claimant receives such notice within the seven days required by section 137 of the Workers' Compensation law. This change comports to similar provisions in the Civil Practice Laws and Rules.

    The Board considered requiring that carriers file a list of all documents supplied to the examiner. However, as the proposed amendment provides for the examiner to list every document reviewed and for the carrier to file all medical records supplied to the examiner that are not already in the Board file with the Board prior to the independent medical examination, the Board determined that the purpose and intent regarding the Request for Information process defined in section 137 of the Workers' Compensation Law had been met.
  9. Federal Standards:

    There are no federal standards applicable to this proposed rule.
  10. Compliance Schedule:

    It is expected that the affected parties will be able to comply with this change immediately.

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