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Regulatory Impact Statement of Proposed Amendment of Part 324 of 12 NYCRR
(Amendment of the Medical Treatment Guidelines)


  1. Statutory Authority:

    The Chair of the Workers' Compensation Board (Board) is authorized to amend Part 324 of Title 12 NYCRR. Workers' Compensation Law (WCL) § 117 (1) authorizes the Chair to make reasonable regulations consistent with the provisions of the WCL and the Labor Law. WCL § 141 authorizes the Chair to enforce all provisions of the chapter and make administrative regulations and orders providing in part for the receipt, indexing, and examining of all notices, claims and reports.

    WCL § 13 of the WCL establishes employer liability for the provision of medical treatment and care for an injured employee and authorizes the Chair to prepare and establish a schedule for the state, or schedules limited to defined localities, of charges and fees for medical treatment and care, and including all medical, dental, surgical, optometric, or other attendance or treatment, nurse and hospital service, medicine, optometric services, crutches, eye-glasses, false teeth, artificial eyes, orthotics, prosthetic devices, functional assistive and adaptive devices and apparatus in accordance with and to be subject to change pursuant to rules promulgated by the Chair. Concomitant with an employer's liability to provide medical treatment and care for an injured employee and the Chair's authority to establish a medical fee schedule is the need for guidelines setting forth standards of appropriate treatment and care for injured or ill employees.

    WCL §13-b requires individuals rendering medical care to, or conducting independent medical examinations (IMEs) of, claimants to be authorized by the Chair, except for six enumerated exceptions. WCL §§ 13-k, 13-l, and 13-m, respectively, give the Chair the power to authorize podiatrists, chiropractors, and psychologists to treat and/or conduct IMEs of claimants, and to temporarily suspend or revoke their authorizations for the same reasons as a physician.

    WCL § 13-a (5) requires prior authorization from the insurance carrier or self-insured employer for operations, physical or occupational therapy, x-rays, or diagnostic tests costing more than $1,000. WCL § 13-a (5) also contains a provision directing the Chair to issue and maintain a list of pre-authorized procedures costing more than $1,000.
  2. Legislative Objectives:

    The purpose of the 12 NYCRR Part 324 (the Medical Treatment Guidelines, Guidelines or MTG) was to create medical guidelines for the treatment of injured workers using the most effective modern diagnostic and treatment techniques. The MTG are evidence-based standards of medical treatment that serve several important functions within the workers' compensation system. The Guidelines seek to: 1) set a single standard of medical care for injured workers; 2) expedite quality care for injured workers; 3) improve the medical outcomes for injured workers; 4) speed return to work by injured workers; 5) reduce disputes between payers and medical providers over treatment issues; 6) increase timely payments to medical providers; and 7) reduce overall system costs.
  3. Needs and Benefits:

    The Guidelines determine the standard of treatment and care for workers' compensation claimants. Carriers are only required to pay for medical care that is consistent with the Guidelines or that has been approved through a variance process. The Guidelines establish criteria for appropriate timing and use of diagnostic testing and medical treatments, control utilization of treatment, and thereby seek to reduce costs. Through these measures, the Guidelines seek to improve the quality of care and outcomes for injured workers while controlling utilization of some significant cost drivers in New York.

    In 2007, the Governor appointed an Advisory Committee to assist the Superintendent of Insurance in developing MTGs. The Advisory Committee was comprised of representatives from organized labor, the business community, the Legislature, the New York Departments of Insurance and Labor, and the Board. Following the Advisory Committee's development of four MTGs, the Board sought public comment on the proposed guidelines and developed a set of processes and regulations for the implementation of MTGs. On December 1, 2010, MTGs for the neck, back, shoulder, and knee became effective for the treatment of all workers' compensation claimants.

    Several years after the development of the initial MTGs, the Advisory Committee began to develop Guidelines for carpal tunnel syndrome (CTS). The Advisory Committee considered three state developed guidelines, a guideline developed in the private sector and used by other states, and a guideline from the American College of Occupational and Environmental Medicine (ACOEM). The state guidelines of Colorado and Washington, which are nationally recognized, were selected for development of the NYS guidelines. These states have prominent medical directors who hold faculty positions at their respective state medical universities. Both guidelines are evidence-based, supplemented by consensus of medical professionals and have an ease and friendliness of use for the participants in the workers' compensation system. Various parts of the two guidelines were selected and combined into a single NYS guideline. The Superintendent transmitted the recommended CTS MTG to the Chair in fall 2011. The Chair promptly posted the MTG and sought public comments. The comments were reviewed and changes made where appropriate.

    In fall 2011, the Chair created a Medical Advisory Committee (MAC) consisting of nine physicians, representing business, labor, and the Board, plus the Board's Medical Director and Deputy Medical Director. Their first task was to develop chronic pain guidelines. The MAC has been meeting monthly but has not yet completed proposed chronic pain guidelines. Nevertheless, the physician members of the MAC have agreed that some maintenance care (chiropractic and physical therapy) should be available for patients with chronic pain who have benefitted from the treatment in the past. That recommendation is being incorporated into revised back, neck, knee and shoulder MTGs in order to address the large volume of variance requests for maintenance care for those with chronic pain.

    In addition, throughout 2011 and 2012, the Board has closely monitored implementation of the MTGs. Board executives met regularly with various stakeholders, including provider and payer working groups, advocates for injured workers, and internal stakeholders, to understand their experience with the MTGs. Through these efforts, the Board has identified a set of changes that stakeholders could agree on to improve the process of applying MTGs.

    The proposed amendments to the Guidelines make three major changes to the existing MTG program: (1) adoption of new CTS MTG as the standard of care for carpal tunnel syndrome; (2) adoption of revised back, neck, shoulder, and knee MTGs that include new chronic maintenance care recommendations; and (3) several process changes recommended by stakeholders.

    The adoption of CTS MTG expands the benefits of MTGs to those injured workers who suffer from carpal tunnel syndrome. CTS is one of the most common occupational illnesses. Introduction of an agreed upon standard of care will help ensure prompt treatment according to evidence based standards while reducing disputes between payers and providers.

    The addition of maintenance care recommendations to the existing neck, back, shoulder and knee Guidelines will allow up to 10 chiropractic, physical therapy or occupational therapy visits each year following a determination that the claimant has reached maximum medical improvement (MMI). Under the 2010 Guidelines, there were no provisions for any "maintenance" care after the claimant reached MMI. Requests for this type of chiropractic, physical therapy or occupational therapy in cases that are more than two years old have comprised more than three-quarters of variance requests since the adoption of the Guidelines in 2010. The medical community recognizes the effectiveness of limited maintenance care to retain function and relieve chronic pain. It is important to note that no variance from the maximum of 10 "maintenance" visits will be permitted. This change will eliminate the delays in treatment that occur when claimants must await a decision on a variance request and reduce the costs associated with the request itself and the evaluation of the variance request.

    There are several process changes that seek to further streamline the process and thereby reduce delays in treatment and frictional costs associated with disputes over treatment as follows:

    The proposed amendments remove two procedures (anterior acromioplasty and chondroplasty) from the list of treatments that require pre-authorization by the carrier or Special Fund. The change is due to changes in the definition of the current procedure treatment (CPT) codes, which now incorporate the procedure in need of pre-authorization (i.e. anterior acromioplasty and chondroplasty) into the definition of the pre-authorized procedures. The change in CPT codes obviates the prior concern that the treatment would be overused for financial gain. Elimination of the pre-authorization requirement will further reduce delays to claimants in receiving medically necessary care and reduce the frictional costs associated with requesting and authorizing surgery.

    The proposed amendments also make changes to the variance process to address issues that have developed since the adoption of Part 324 of 12 NYCRR in 2010.

    Section 324.3 has been amended to prohibit the repeated submission of variance requests by a treating medical provider while earlier variance requests for substantially similar treatment are still pending or without additional information when the previous request has been denied. The measure will ensure that the variance process is not abused by treating medical providers repeatedly submitting similar requests in hopes of obtaining an order of the chair and will allow the Board, carriers and Special Funds to concentrate their efforts on review of legitimate new variance requests. The proposed amendments will permit carriers and Special Funds to deny substantially similar variance requests without obtaining a medical opinion on the need for such treatment.

    Paragraph (3) of subdivision (a) of Section 324.3 has been amended to specifically state that a variance must be submitted within two business days of the preparation of the request. This change addresses frequent technical violations of the regulations that resulted in rejected variance requests. The new rule accommodates typical medical office practices, such as when a treating medical provider determines that a variance is recommended but the request is not processed immediately. It should significantly reduce litigation over the timeliness of a variance request. A variance request submitted within two business days of its preparation will be timely, and the carrier or Special Funds' duty to respond or schedule an independent medical examination will run from the date of receipt of the variance request.

    Section 324.3 has been amended to direct that requests for review of a denial of a variance request will be directed to medical arbitration unless either the claimant or the carrier requests review by a Workers' Compensation Law Judge. Following adoption of the Guidelines and Part 324 of 12 NYCRR, the Board was surprised by the volume of variance requests. As resolution of variance denial disputes currently default to a Workers' Compensation Law Judge unless medical arbitration is specifically requested by both parties, the vast majority of requests for review of a denial of a variance request are resolved by a hearing before a Workers' Compensation Law Judge (WCLJ). Use of the hearing process entails greater expense by the parties and longer delays in the resolution of variance disputes. The Medical Director's Office, using its medical expertise, has been able to arbitrate variance disputes in a timely and effective manner. In fact, the request for medical arbitration has been increasing as the parties come to recognize that determinations regarding medical treatment are, in most instances, best determined by a medical expert. Requests for resolution of a variance dispute by medical arbitration currently occur in 20% of all disputes. Under the proposed amendments to Section 324.3, either party may still request that a variance dispute be decided at a hearing and it will be; however, if neither party makes such request, the dispute will be resolved by medical arbitration. As the parties in a measurable percentage of cases accept the default method for resolution of variance denials, it is expected that the proposed amendment will produce a significant increase in variance disputes resolved by medical arbitration, that such disputes will be resolved in a timely and effective manner, and that this change in the default process will improve the functioning of the variance review process.

    The Board also proposes amending Section 324.3 to remove the requirement that the informal resolution period last eight days. While the Board continues to encourage informal resolutions, it proposes removing the prescription that this process last eight days before review of the denial when it is clear that there will be no informal resolution.

    The Board proposes further changes to Part 324 of 12 NYCRR by modification of the definition of MMI to conform to the definition developed by the Advisory Committee and incorporated in the Board's 2012 Guidelines for the Determination of Permanent Impairment and Loss of Wage Earning Capacity. Though a relatively minor change in wording, this supports the Board's continuing efforts to ensure application of consistent standards.

    At subdivision (c) of section 324.1, the proposed amendment adds a definition of "Denial, deny or denies" to include instances when the carrier or Special Fund partially grants or approves only a portion of a variance or request for optional prior approval. This addition, at the recommendation of external stakeholders, will provide the parties greater flexibility, reduce disputes and speed delivery of services.

    Throughout the regulation the language has been modified from use of words like "form" and "file" to terms such as "prescribed by the Chair" and "submit." These changes are intended to provide the Chair the flexibility to adopt electronic delivery methods other than use of paper forms in the future, either through electronic submission, development of an interactive web portal for use by all parties to manage medical treatment, or some other readily accessible and effective method. This change is consistent with the Board's current projects involving Board process reengineering and eClaims initiatives.
  4. Costs:

    The proposed amendments are intended to improve medical care, speed delivery of care, reduce administrative costs to all parties and the Board, and reduce delays in resolution of disputes. As with the original Guidelines adopted in 2010, the Board will offer support for this implementation through training. The Guidelines will be available on the Board's website and anyone will be able to download and print them free of charge. If an individual or entity requests a hardcopy of one or more of the guidelines, the cost will be $10.00 per guideline or $50.00 for all five. This charge is to cover the Board's cost in making the copies. The charge for one or more of the Guidelines on a compact disc is $5.00.

    It should be noted that carriers will be able to use the new CTS Guidelines, which rely on guidelines from Colorado and Washington, without having to pay a licensing fee. In contrast, the back guidelines incorporated some copyrighted material from ACOEM with ACOEM's permission for fair use. However, ACOEM sought a licensing fee from certain guideline users whom it believed were using the copyrighted material in a commercial manner.
  5. Local Government Mandates:

    The rule only imposes a mandate on local governments that are self-insured or that own and/or operate a hospital. The mandates on local governments are the same as those imposed on private self-insured employers, insurance carriers, the State Insurance Fund, third party administrators, medical professionals, private hospitals. Self-insured local governments and those that own and/or operate a hospital will need to comply with the requirements in the rule the same as a private self-insured employer or insurance carrier or private hospital. It is expected that the rule will generate reduced medical costs and therefore lower workers' compensation costs for all employers, including local governments.

    The rule requires that all claimants with injuries, illnesses or occupational diseases to the neck, back, shoulder, and/or knee, and those diagnosed with carpal tunnel syndrome be treated in accordance with the Guidelines adopted and amended by the regulation.
  6. Paperwork Requirements:

    The proposed amendments should significantly reduce the number of variances requested and thus reduce the paperwork associated with those requests. The only additional paperwork requirements are the need to adhere to the Guidelines and to request a variance for treatment that deviates from the Guidelines' recommendations. The forms used to request a variance are already in use, but will be modified slightly.
  7. Duplication:

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

    Carpal Tunnel Syndrome Guideline. The Advisory Committee to the Superintendent developed and proposed these CTS Guidelines based on the Colorado and Washington state guidelines. The Board could have rejected the proposed guidelines and chosen another state or commercially available guidelines for the treatment of CTS. It did not do so because the Board values the inclusive and collaborative process by which the proposed guidelines were developed and because the Board did not receive any comments that called into question the validity of the proposed guidelines.

    Maintenance Care. The Board could have waited to incorporate new maintenance care guidelines as part of the chronic pain guidelines that are currently in development by the MAC. The Board chose to move forward at this time because there was widespread agreement on the need to allow limited maintenance care and more than three quarters of existing variance requests involve such treatment. The Board saw no reason to wait when a solution could be adopted at this time.

    Amendments to Part 324. One alternative to amending Part 324 of 12 NYCRR that the Board considered was to take no action. However, that alternative was not compelling because of the various issues that have been present since adoption of the original regulation. While the Board has attempted to correct the issues through communication with stakeholders and internal process, it was ultimately determined that the existing regulations required amendment.

    Under the current regulation, there are disputes regarding the timeliness of the filing of variance requests that occur when a variance is prepared and signed by the treating medical provider during the examination and treatment of a claimant, but the variance request is not submitted until later due to routine medical office practice. After consultation with stakeholders it was determined that the most important objective with respect to timeliness was to ensure that the Board and the carrier or Special Fund are provided with the variance request at the same time. It was determined that a slight delay between the preparation and submission of the variance request did not compromise the quality of the variance or the ability to evaluate the variance. Treating medical providers have communicated that the two business days proposed by the Board in this amendment is ample time to accommodate the minor routine delays between the preparation of the variance and the submission.

    Under the current regulation, the system has been burdened by treating medical providers that repeatedly submit variance requests for medical care, when a prior substantially similar, or identical, request has been denied or is still under review. These duplicate variance requests strain the Board's resources, the resources of carriers and Special Funds, produce delays in the resolution of all requests, and diminish the ability to carefully consider each variance request. The Board carefully considered this issue and has developed an approach in the proposed regulation that will create an expedited process for the denial of resubmitted variances while ensuring that claimants retain the ability to request a variance from the Guidelines when medically necessary.

    Finally, the Board has proposed changes to the regulation that will offer flexibility should the Board create an easy, accessible means for processing the requests for variances and optional prior approvals electronically via a web portal or some other electronic means. The Board considered not changing the regulation at the present time. However if the Board is able to offer an easily accessible, transparent web portal that will further reduce delays and eliminate disputes concerning timely filings, then no further amendment of this regulation would be necessary before the Board could implement such a change. Furthermore, the recommended changes will not impact the current process.
  9. Federal Standards:

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

    Participants will be able to comply with the proposed regulation when they take effect on February 1, 2013. The Board will conduct extensive outreach and education to providers, insurance companies, attorneys, Board staff, and others, between now and the effective date to facilitate incorporation of changes and to familiarize all stakeholders with the substantive content of the new and revised Guidelines. The participants will also have time to incorporate the carpal tunnel syndrome Guideline and the changes in the regulations into their policies, procedures and practices. Stakeholders will be given additional time beyond February, 2013, to incorporate revised forms into their systems.

Please Note: The Board recommends using the latest version of Adobe Reader Link to External Website which is available as a free download from Adobe's web site.

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