Appellate Division Issues Decision Clarifying How To Calculate Schedule Loss of Use For Shoulder Injuries

Case: Matter of Maloney v Wende Correctional Facility

Issue
In determining the Schedule Loss of Use (SLU) percentage applicable to a shoulder injury, whether it is appropriate to assign separate loss of use values for deficits in anterior flexion and abduction or if this is duplicative and results in an inflated SLU percentage.

Facts of Case
Claimant was a Correctional Officer who injured himself while working in July 2013. The claim was established for a right shoulder injury. At permanency, the claimant’s treating physician opined claimant had 90% SLU of the right arm while an IME opined the claimant had 50% SLU of the right arm. Following litigation of the issue, the law judge credited the IME opinion over that of the treating physician and found claimant to have 50% SLU of the right arm. The Workers’ Compensation Board affirmed the Law Judge’s finding and the claimant appealed to the Third Department.

Decision
Board decision is affirmed, finding claimant to have 50% SLU of the right arm. The Court noted “the Board is vested with the authority to resolve conflicting medical opinions concerning the SLU percentage to be assigned to aspecific injury.” Additionally, the Court noted “judicial review is limited, and the Board’s determination will not be disturbed as long as it is supported by substantial evidence.”

The Court reviewed how each of the medical experts came to their conclusion under the 2012 “New York State Guidelines for Determining Permanent Impairment and Loss of Wage Earning Capacity.” Both the treating physician and IME had assigned a 10% value due to claimant’s rotator cuff tear as required by a special consideration in the guidelines. The IME assigned a 40% loss of use for the decrease in range of motion in anterior flexion and abduction to 90 degrees under table 2.11, resulting in a total SLU finding of 50%. The treating physician also assigned a 40% loss of use for the decrease in range of motion in anterior flexion to 90 degrees under table 2.11.  However, in addition to this and the 10% loss of use attributable to the rotator cuff, the treating physician assigned another 40% loss of use for the decrease in range of motion in abduction to 90 degrees under section 2.5 (3) of the guidelines, resulting in a total SLU of 90%.

The Court noted the 2012 permanency guidelines do not address whether it is appropriate to assign separate loss of use values for deficits in anterior flexion and abduction. The Court ruled the Board has rendered multiple recent decisions that “concluded that separate values should not be assigned for anterior flexion and abduction deficits indetermining an SLU award for a shoulder injury.  Significantly, the Board noted that adding together separate values for anterior flexion and abduction deficits could produce an entirely illogical result.  Specifically, the combined value could exceed 80%, the SLU percentage that under the guidelines is applicable to a claimant with ankylosis – an impairment of the shoulder restricting the range of motion to zero degrees – and a claimant with a lesser injury and greater range of motion might actually obtain a more favorable SLU award.”

Commentary
This decision clarifies how Schedule Loss of Use issues should be resolved when there are deficits in anterior flexion and abduction under the 2012 permanency guidelines. As of January 1, 2018 the Board implemented new SLU guidelines. The new guidelines do not leave this issue up to the interpretation of the Court, instead the guidelines specifically state “if a defect of both flexion (forward elevation) and abduction are documented, the greater of the two defects must be utilized, not both. However, if the defect in both ranges of motion are moderate or higher, and the measures are within 10 degrees of each other, up to 10% may be added to the overall schedule loss of use, not to exceed ankylosis.”

Additionally, under the new SLU guidelines the claimant would not be entitled to the automatic 10% value for the rotator cuff tear, this special consideration has been removed from the 2018 SLU guidelines.

This decision makes perfect sense. If under the 2012 guidelines a claimant with zero range of motion in their shoulder (ankylosis) is not entitled to greater than an 80% SLU of the arm then it would not make sense for an individual with significantly better range of motion findings to be found to have a greater SLU.

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New 2018 Permanent Impairment Guidelines for Schedule Loss of Use

In April, part of the New York budget mandated numerous reforms to the New York Workers’ Compensation system. Workers’ Compensation law §15(3)(x), required the Board to implement new Permanency Impairment Guidelines for Scheduled Loss of Use (SLU) evaluations, with an effective date of January 1, 2018. The new SLU guidelines can be found here.

The Board made public “proposed” draft Schedule Loss of Use guidelines in September 2017 which were widely thought to be favorable to employers/insurance carriers and included some significant changes to the Schedule Loss of Use section of the existing 2012 Guidelines for “Determining Permanent Impairment and Loss of Wage Earning Capacity.” After some serious push back from claimant attorneys and trade unions, the Board issued new  “proposed” draft Schedule Loss of Use guidelines in November 2017. I appeared on the Third Fridays podcast [listen here] in December to discuss the significant differences between the first draft of the proposed changes released in September 2017 and the second draft of proposed changes posted on the Board website in November 2017.

The second guidelines proposed in November 2017 are the new SLU Guidelines that went into effect as of January 1, 2018. According to a Board Bulletin:

The 2018 SLU Guidelines will replace chapters in the existing 2012 Medical Impairment Guidelines with respect to SLU, and will take effect January 1, 2018. The 2012 Guidelines remain unchanged for determining non-schedule permanent impairments. For SLU claims that have at least one examination conducted before January 1, 2018, the Board will consider the issue of SLU to have been joined under the auspices of the Guidelines in effect at the time, and as such the Board will determine the claimant’s degree of permanent disability using the 2012 Guidelines. Where the first medical evaluation of SLU occurs on or after January 1, 2018, the question of SLU will be evaluated under the 2018 SLU Guidelines.

While the new SLU guidelines are not seen as being as employer/carrier “friendly” as the initial proposed Guidelines released in September, there are still some changes that are in the carrier/employer’s favor. Lois LLC provided a training webinar on the new SLU Guidelines, which I highly recommend.

The primary consideration in determining SLU under these new guidelines is loss of range of motion. The most significant changes from a review of the 2018 SLU guidelines pertain to total knee replacement surgeries, meniscal tears and rotator cuff injuries:

  • Under the 2012 SLU guidelines, with or without surgery the claimant was entitled to between 10-15% SLU for a rotator cuff tear. The 2018 guidelines do not include this automatic consideration and there is no longer an automatic 10-15% SLU finding for a rotator cuff tear.
  • Under the 2012 SLU guidelines, a claimant who has a work-related meniscal tear that was surgically repaired automatically was found to have 7.5-10% SLU as a special consideration in addition to any other SLU finding. Under the 2018 guidelines, this special consideration no longer exists and there is no longer an automatic 7.5% – 10% SLU added simply because a claimant with a meniscal tear underwent surgery.
  • Under the old guidelines, the guidelines specify the average SLU for a total knee replacement is 50-55%. The new guidelines indicate that a “good outcome” for a total knee replacement is 35% SLU of the leg.

It is important to note, the changes only pertain to Schedule Loss of Use and claims that resolve with a Loss of Wage Earning Capacity finding will continue to use the 2012 permanency guidelines.

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2018 New York & New Jersey Workers’ Compensation Handbooks Now Available!

Each year our firm publishes an updated workers’ compensation handbook for each New York and New Jersey. The book is authored by Gregory Lois and this year I am a co-author.

This is the most practical, up-to-date and easy-to-understand guide to New York workers’ compensation claims available. This book is designed for employers, attorneys, claims adjusters, physicians, self-insured employers and vocational rehabilitation workers. This guide is written in plain English by a New York attorney and provides a detailed analysis of relevant statutes and regulations; a complete recap of recent court decisions; and a full description of current practice and procedure. This book provides a behind-the-scenes look at the complicated issues and makes the law understandable for business owners2018 New York Handbook

A comprehensive description, including a list of what was updated since the last (2017) edition and complete chapter list is on Amazon.

If you would like a complimentary copy for yourself or your team, please fill out the form below. The books are available in the following formats: paperback, Kindle, PDF. and ePub (iBooks).

Virtual Hearings Coming To New York!

The New York Workers’ Compensation Virtual Hearings pilot program will be rolled out starting next week for hearings at the Menands (Albany) hearing point.

Virtual Hearings will allow injured workers, attorneys/representatives, witnesses and other participants to attend hearings online. Participants will no longer have to travel to a hearing site to attend their hearing. For the time being, parties will have the option to attend any hearing eligible for a virtual hearing either in person, as they normally would, or via the Board’s video conference software program.

According to the Board website:

Virtual Hearings will be rolled out gradually to districts throughout New York State after the successful completion of the Board’s Virtual Hearing pilot. The pilot moves into the next stage with Virtual Hearings available in the Albany District Office, located in Menands, beginning November 13, 2017.

If you are eligible to attend your hearing virtually, you will see a notification of ““Virtual Hearing Available” adobe pdf at the bottom of your hearing notice, along with detailed instructions.

There is no set time frame for when all Workers’ Compensation hearings in the state will be eligible for a virtual hearing but it is clear this is coming state-wide in the near future.

Anyone that has set foot in a hearing point recently has seen updated technology in many of the hearing points and presumably this is the Board preparing for the roll out across the state.

The Board has been hosting a series of webinar training sessions for attorneys and representatives to provide instructions on how to attend hearings virtually, as well as how to use the new check-in procedure when appearing in person. During a “Question & Answers” segment of one of the webinars it was disclosed that claimants will be allowed to attend virtual hearings using audio only but attorneys and representatives will be required to appear via video. Additionally, it appears the plan is eventually for all hearings aside from discrimination matters to be eligible for the virtual hearing process.

It is anticipated there will be many “growing pains” as the Board implements this new process. Presumably, regulations and new Board rules will follow.

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New York Court of Appeals Rules Amendment to §25-a Is Constitutional

 

What is the Fund?
As a background, §25-a provides for a Special Fund to be set up especially to administer and pay claims arising from the reopening of closed cases. The primary purpose of §25-a is to transfer liability for awards from self-insured employers and insurance carriers to the Special Fund where the claim has become “stale.” Under §25-a, claim is “stale” if it meets certain criteria:

  1. more than seven years has elapsed from the date of the injury or death, and;
  2. where more than three years has elapsed after the last payment of compensation.

Essentially, insurance carriers and self-insured employers could potentially shift liability to the Special Fund in claims that met the criteria of §25-a. Whether a case has been officially closed so as to shift liability to the Special Fund is a decision for the Board to make. Upon transfer to the Special Fund, the carrier or self-insured employer is no longer responsible for payment or management of the claim.

The Law was changed in 2013 to close the Fund to new claims.
In an effort to phase out the Special Fund/Fund for Reopened Cases, the Business Relief Act of 2013 created an amendment to §25-a that no application by an employer or insurance carrier to transfer liability to the Fund for Reopened Cases would be accepted by the Board on or after January 1, 2014. In short, the amendment to be addressed in American Economy Ins. Co. v State of New York closed the reopened case fund to newly reopened claims as of January 1, 2014. Following the amendment to §25-a, any claims that were reopened that previously would have transferred to the Fund became the obligation of the carrier, liability would not shift to the Special Fund.

On October 24, 2017, the Court of Appeals ruled that retroactive closure of the Fund for Reopened Cases was not unconstitutional.

Insurance carriers and self-insured employers have been waiting anxiously for the Court of Appeals to render a decision of the appeal filed by The State of New York and will not be happy with the ruling.

The New York Appellate Division previously ruled that a 2013 amendment to New York Workers’ Compensation Law §25-a which closed the Special Fund for Reopened Cases (the Fund) to new applications after January 1, 2014 was unconstitutional as applied to policies issued before October 1, 2013.

In yesterday’s decision, the Court of Appeals (highest state court) ruled Workers’ Compensation Law § 25-a (1-a) as applied to policies issued before October 1, 2013 is not unconstitutional. The Court of Appeals held the amendment’s retroactive impact is constitutionally permissible and any retroactive impact of the legislation is justified by a rational legislative purpose

Impact of this new decision
For now, the Fund remains closed. I anticipate further litigation, the next step will be the United States Supreme Court, presuming they agree to hear the case.