The Third Department recently held in the Matter of Quigley v. Village of E. Aurora, 2021 N.Y. App. Div. LEXIS 1223 (3d Dept. Feb 25, 2021) that carriers are responsible for paying for, and reimbursing, a claimant’s medical marijuana use, regardless of federal law. The Third Department Decision however noted that the Workers’ Compensation Law still requires that treatment be rendered in accordance with the Medical Treatment Guidelines and that the claimant would still need a valid prescription. Furthermore, as medical marijuana is not specifically covered under the Guidelines, a variance request would be needed and the burden of proof to establish that a variance is appropriate and medically necessary is a burden that must be met by the claimant’s doctor. Carriers and self-insured employers can therefore object to medical marijuana requests on the basis that the doctor has not met his burden of proof or by obtaining a conflicting medical report (i.e. IME or record review). If you have any questions or would like to discuss implications of this case law further, please do not hesitate in contacting us at clientservices@jonesjonesllc.com. |
NYS Workers’ Compensation Medical Marijuana – The Third Department Weighs In
Appellate Division, 2nd Department Addresses Coverage Exhaustion in No-Fault Claims, Or Does It?
On February 24, 2021, the Appellate Division, Second Department issued a much anticipated decision that is likely to leave many interested parties, especially insurers, unsatisfied. The decision, Alleviation Medical Svcs. v. Allstate Ins. Co., 2021 N.Y. Slip Op. 08159 (App. Div., 2nd Dept. 2/24/21), was expected to clarify questions as to when No-Fault coverage is exhausted and, insurers hoped, resolve a split between the First and Second Departments on the issue. The specific issue that garnered so much attention in this case is whether an insurer can be compelled to pay in excess of its policy limits if, after coverage is exhausted, a court finds that claims that were previously denied should have been paid. The decision failed to directly address that issue and was instead decided based on the inadmissibility of the moving defendant’s evidence. As a result, the coverage exhaustion issue remains up in the air and will likely be the subject of further litigation for a long time to come.
New York’s Insurance Law requires every automobile liability insurance policy to include $50,000 in coverage for Mandatory Personal Injury Protection, commonly referred to as “No-Fault” coverage. No-Fault coverage provides for reimbursement of an eligible injured party’s basic economic loss, which consists of actual medical expenses, lost wages, and certain other necessary expenses. As a result, No-Fault benefits are rarely paid in one lump sum. Rather, claims for individual medical bills, lost wages, and expenses are submitted over time by the injured party and/or medical providers to whom the injured party has assigned their benefits and insurers are required to pay or deny each claim promptly upon receipt. Payments are to be made in the order in which the expenses were incurred, provided the claim is submitted to the insurer prior to coverage being exhausted. But what happens when a claim is denied, coverage is subsequently exhausted, and then a court determines that the denial was late, defective, or otherwise improper? For example, an insurer denies a bill for surgery based on lack of medical necessity but continues to pay subsequent bills for conservative treatment such as physical therapy until reaching the $50,000 coverage limit. After coverage is exhausted, the surgeon files a lawsuit seeking reimbursement and the court ultimately finds that the surgery was medically necessary. Is the insurer required to pay the surgery bill.
Since 2017, the First and Second Departments have been split on this issue. In 2015, the Appellate Term, First Department decided Harmonic Phys. Therapy, P.C. v. Praetorian Ins. Co., 47 Misc.3d 137(A) (App. Term, 1st Dept. 2015), which held that “defendant was not precluded by 11 NYCRR 65-3.15 from paying other providers’ legitimate claims subsequent to the denial of plaintiff’s claims. Adopting plaintiff’s position, which would require defendant to delay payment on uncontested claims, or, as here, on binding arbitration awards – pending resolution of plaintiff’s disputed claim – ‘runs counter to the no-fault regulatory scheme, which is designed to promote prompt payment of legitimate claims’.” In other words, once a claim is timely denied, the insurer can continue paying undisputed claims without the fear that subsequent adjudication of the disputed claim will force it to issue payment in excess of its policy limits. However, in 2017, the Appellate Term, Second Department decided Alleviation Medical Svcs. v. Allstate Ins. Co., 55 Misc.3d 44 (App. Term, 2nd Dept. 2017), rejecting the First Department’s reasoning in Harmonic and effectively finding that insurers deny claims at their own risk. If the denial is found to be improper and coverage was not yet exhausted when the denial was issued payment must be made even if it results in payment in excess of the policy limit. When this decision was appealed to the Appellate Division, No-Fault practitioners eagerly awaited the court’s decision with the hope that it would clarify the issue and, in the case of insurers, with the hope that the Appellate Division, Second Department would adopt the interpretation set out by the First Department in Harmonic. Unfortunately, the Second Department’s decision fails to squarely address the question of coverage exhaustion and does not resolve the split between the First Department and Second Department. Although the relevant regulations and case law are discussed, the court’s decision ultimately turns on the insufficiency of the defendant’s evidence in support of its summary judgment motion. Specifically, the court held that the testimony of the defendant’s witness was hearsay and therefore failed to establish whether the disputed claims were denied and, if so, whether they were denied timely, thereby creating a question of fact requiring the denial of the summary judgment motion.
To complicate matters further, arbitrators are not bound to follow the precedent set by either the First or Second Department. In general, arbitrators are free to apply the law as they see fit, provided their decision has a rational basis. There is case law stating that arbitrators lack the authority to issue an award in excess of the insurer’s policy limits, but while some arbitrators interpret this as an absolute bar to issuing an award that exceeds the policy limits, regardless of when coverage was exhausted, the propriety of the claims handling, or the order in which payments were issued, others adopt the Second Department’s approach and find that coverage exhaustion does not apply unless coverage was exhausted at the time payment of the claim or denial of the claim was required. Whichever interpretation the arbitrator espouses, the courts are unlikely to overturn an arbitrator’s award since both approaches have a rational basis and can be supported by either Harmonic or Alleviation. As a result, virtually identical cases could produce vastly different results depending on whether the case falls under the First Department, Second Department, arbitration, and even depending on the individual arbitrator assigned to the case.
While all involved in the No-Fault industry must find the Appellate Division’s decision in Alleviation anti-climactic, there is no question that it’s a victory for claimants and medical providers. Although this issue will likely find its way back to the Appellate Division, in the meantime the lower courts in the Second Department (Kings, Queens, Richmond, Nassau, and Suffolk counties) will continue to follow the Appellate Term’s decision in Alleviation and the threat of being compelled to issue payment in excess of the policy limits will make it very difficult for insurance companies to set premiums on their auto policies. While the First Department suggested in Harmonic that insurers in this situation might begin to delay payment of uncontested claims pending the adjudication of disputed claims, it’s questionable whether the No-Fault regulations allow insurers to delay claims on that basis. Rather, insurers would be well advised to carefully consider the basis for their denials, ensure that their denials are timely and proper, and avoid relying solely on coverage exhaustion as a basis for denial whenever possible.
Jones Jones Major Win Alert!
We are excited to announce a major win secured by Jones Jones LLC Associate Lauren Camo. This win showcases:
- Our aggressive approach to denied claims;
- The importance of our developing a timeline for COVID-19 claims; and
- Targeted testimony of the claimant and employer lay witness in order to develop the timeline of COVID-19 exposure, or lack thereof
Attorney Lauren Camo recently litigated an allegation of a COVID-19 work exposure. The case involved a claimant who was employed as a cleaner for a community college. The claimant alleged he became symptomatic on April 15, 2020; and thereafter obtained a positive COVID-19 test four days later.
Upon cross-examination of the claimant, Attorney Camo discovered that the claimant began to feel symptomatic three days prior to his wife, whom he lived with at home. Both the claimant and his wife tested on the same date and both ultimately obtained a positive result. The claimant continued to testify that his supervisor was also positive for COVID-19. However, Attorney Camo was able to secure a lay witness who testified that the claimant’s supervisor tested positive prior to the 14 day period that the claimant developed symptoms. In fact, the employer witness testified that the claimant last worked with this supervisor on March 20, 2020, well outside the widely accepted incubation period for COVID-19.
Further, the Jones Jones LLC team was able to elicit concessions from the claimant’s treating doctor that there was no history of work exposure so therefore any exposure would have to occur during the fourteen days prior to claimant’s development of symptoms. Due to the concessions elicited during lay and medical testimony, as well as the focus on details and dates of COVID-19 exposure and testing, Attorney Camo was able to lay out a timeline to the Law Judge that led to a finding that the claim must be disallowed in its entirety. This successful litigation was secured by aggressive and thoughtful preparation of targeted cross-examination and review of facts and timeline.
Please reach out to Jones Jones LLC today at clientservices@jonesjonesllc.
Proposed Legislation to Extend Compensation Coverage to Parking Areas
There has been recent confusion surrounding compensation cases which involve employees injuring themselves in parking lots, the main issue being whether an employee’s work period includes the travel time between the parking lot and the place of employment. According to the New Jersey “premises rule” employment on this travel ends “when the employee leaves the employer’s place of employment excluding areas not under the control of the employer.” N.J.S.A 34:15-36. Case law has, therefore, turned on whether an employer “owns or controls” the parking area so as to make the injury compensable.
It is no surprise that the uncertainty around the law came within the purview of the New Jersey legislation. In December 2020, New Jersey legislation has proposed a new bill (S.B. 771) amending the premises rule to extend compensation coverage to parking areas provided or designated by the employer. Under the proposed legislation, if an employer “provides or designates” a parking space for an employee, then employment terminates “when the employee leaves the parking area at the end of the work period.” This could result in a massive expansion in potential liability now that the entire trip to the parking space is covered and perhaps even the employees immediate exiting the parking space as well. Further, the bill provides that if the employer “provides or designates” a parking area that is separate from the place of employment, employees will now be covered while they travel to and from the parking area and the employer’s place of employment.
Prior to proposed Bill S711, the Court held that in cases in which an employer “directs” or “compels” an employee to park in a particular location, such conduct will fall under the ambit of the premises rule. Livingstone V. Abraham & Straus, Inc., 111 N.J. 89 (1988). In cases where the employer has been held to not own the parking lot or the street where the employee was injured, the court looked instead to factors such whether the employer created an additional hazard for employees or whether the employers accrued a business benefit. Hersh v. County of Morris, 217 N.J. 236 (2014). In the most recent case on the topic, Manuel v. RWJ Barnabas Health, the Court held that an employee’s walk to a hospital parking lot was not compensable. No. A-0270-18T1 (App. Div. Oct. 16, 2019). In Manuel, the Court reasoned that the claim was not compensable because the respondent did not own the public street or the parking lot, the respondent did not direct the employee where to park, and the claimant could have opted to use the provided shuttle bus. Supra.
If this new bill is passed, it is possible that the outcome in Manuel, would be changed. Since the respondent rented the parking spots for use of their employees, the claimant’s walk would have been compensable, as they would be deemed to have “provided” parking spaces.
In addition, with the rise in communal workspaces it is likely that parking lots will be shared between many different employers possibly making these claims even more complicated. However, employers can reduce the effects of the new bill by installing parking lot surveillance or providing transportation to and from work and the parking lot.
As a result of this new bill passing, each injury sustained in a parking lot will be assessed differently. We will be monitoring the proposed legislation on Legiscan to track the passing of the bill. As always, Jones Jones stands at the ready to ensure your claims are adequately represented in light of this possible law change. “Legal Defense Refreshed” is not just an empty slogan; we work hard every day to stay on the cutting edge of workers’ compensation defense.
To schedule a review of your claims that could be impacted by this new bill, contact us at clientservices@jonesjonesllc.com.
New NYS Workers’ Compensation Board Medical Treatment Guidelines
Jones Jones LLC is closely monitoring the implementation of newly developed NYS Workers’ Compensation Board Medical Treatment Guidelines.
The new Guidelines cover the following body parts and conditions:
- Ankle and Foot
- Asthma
- Depression
- Elbow
- Hand, Wrist, and Forearm
- Hip and Groin
- Interstitial Lung Disease
- PTSD
Originally, the Board had a targeted date of implementation of January 1, 2021. Due to the Covid-19 crisis, the Board recently announced that they will set the new date of effectiveness to be a date to be determined in the future.
http://www.wcb.ny.gov/content/main/hcpp/MedicalTreatmentGuidelines/MTGOverview.jsp
Jones Jones LLC stands at the ready to assist you and your team in the training and onboarding necessary in order to become familiar with the new Medical Treatment Guidelines.
Contact us today to schedule a webinar on the newly developed Guidelines!