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In re Claim of Kigin

Supreme Court of New York, Third Department

July 18, 2013

In the Matter of the Claim of MAUREEN KIGIN, Appellant,

Calendar Date: April 16, 2013

Grey & Grey, LLP, Farmingdale (Robert E. Grey of counsel), for appellant.

Eric T. Schneiderman, Attorney General, New York City (Steven Segall of counsel), for State of New York Workers' Compensation Board, respondent.

Steven Licht, Special Funds Conservation Committee, Albany (Jill B. Singer of counsel), for Special Fund for Reopened Cases, respondent.

Before: Rose, J.P., Stein, Spain and McCarthy, JJ.

Spain, J.

Appeal from a decision of the Workers' Compensation Board, filed February 9, 2012, which denied claimant's request for a variance.

In 1996, claimant was in a work-related automobile accident in which she sustained injuries to her head, neck and lower back; she received workers' compensation benefits and returned to work full time in 1998. Medical coverage was provided for numerous diagnostic tests and studies, chiropractic and orthopedic treatments, and physical and other therapies for her ongoing neck and back pain as prescribed by several treating physicians. Her diagnoses included cervical and lumbar radiculopathies, muscle spasm, dyasthesias/parasthesias, cervical disc disease and herniated disc. In 2006, liability for the claim was transferred to the Special Fund for Reopened Cases (see Workers' Compensation Law § 25-a) and she was classified as having a permanent partial disability. Since 2006, Andrea Coladner, board certified in physical medicine and rehabilitation, has been claimant's treating physician, and she prescribed numerous modalities and therapies. At Coladner's request, the Special Fund authorized and paid for the foregoing treatments up until early 2011, including acupuncture (three times per week for six weeks) to treat and decrease an exacerbation of cervical pain and to increase her range of motion and circulation.

In 2007, the Legislature enacted comprehensive reforms to the Workers' Compensation Law (see L 2007, ch 6). Among the reform revisions, the Legislature amended Workers' Compensation Law § 13-a (5) by directing that the Workers' Compensation Board, with the approval of the Superintendent of Insurance, [1] "shall issue and maintain a list of pre-authorized procedures under this section." A task force comprised of medical professionals appointed by the impacted parties formulated the Medical Treatment Guidelines (see 12 NYCRR part 324) (hereinafter the Guidelines), which the Chair of the Board adopted as the standard of care for all medical treatment for workplace injuries rendered on or after December 1, 2010 related to four body parts: back, neck, shoulder and knee (see 12 NYCRR 324.2 former [a]) [2]. The Guidelines, which were incorporated by reference into the regulations (see 12 NYCRR 324.2 [a]), adopted a preauthorized specific procedure list for many commonly performed medical tests and services. Included services, treatments and tests are covered in the scope and duration provided and do not require prior authorization regardless of their cost, with limited exceptions (see 12 NYCRR 324.2[d] [1]) [3]. The regulations set forth a variance procedure pursuant to which medical treatment providers may request approval for medical care or testing for injured workers that is not preapproved as medically necessary in the Guidelines, or for authorized treatment in excess of the scope or duration authorized, upon a showing that the treatment is appropriate and medically necessary (see 12 NYCRR 324.2 [e]; 12 NYCRR 324.3 [a] [2]).

After the regulations and Guidelines went into effect, as relevant here, Coladner filed an MG-2 form in March 2011 requesting a variance for additional acupuncture treatments in excess of the allowance under the Guidelines for claimant's cervical spine, [4] to address ongoing back and neck pain. At the Special Fund's behest, Peter Chiu, a physician board certified in physical medicine and rehabilitation and certified in acupuncture, conducted an independent medical exam and a traditional Chinese medical exam of claimant and reviewed her medical records. Based upon Chiu's determination that there was a lack of objective findings to support claimant's subjective complaints and that further acupuncture treatments were not medically necessary, the Special Fund denied the requested variance pursuant to 12 NYCRR 324.3 (b) (3) (iii) [5]. Claimant sought review (see 12 NYCRR 324.3 [c]) and, after Coladner and Chiu testified at depositions, a Workers' Compensation Law Judge (hereinafter WCLJ) denied the requested variance, determining that Coladner, on behalf of claimant, had not demonstrated the medical necessity of the requested treatments. The Board affirmed, and claimant now appeals.

Initially, claimant argues that the Board lacked the authority to promulgate the regulations and the incorporated Guidelines, which she contends are not consistent with the enabling legislation and the workers' compensation statutory scheme. The Board is broadly charged with the responsibility and power to administer and enforce the Workers' Compensation Law and regulations, to regulate treatment and determine all claims for benefits or compensation for work-related injuries, and to "adopt reasonable rules consistent with and supplemental to the provisions of this chapter, " while the chair may adopt reasonable consistent regulations (Workers' Compensation Law § 117 [1]; see Workers' Compensation Law §§ 141, 142; Matter of Belmonte v Snashall, 2 N.Y.3d 560, 567 [2004]). Although administrative agencies have no inherent legislative power, they have "all the powers expressly delegated to [them] by the Legislature" (Matter of Consolidated Edison Co. of N.Y. v Department of Envtl. Conservation, 71 N.Y.2d 186, 191 [1988]) and are authorized to "fill in the interstices in the legislati[on]" by promulgating rules and regulations consistent with their enabling legislation (Matter of Nicholas v Kahn, 47 N.Y.2d 24, 31 [1978]). "[I]t is not always necessary that the Legislature provide precise guidelines to an agency charged with carrying out the policies embodied in a legislative delegation of power. In certain technical areas, where flexibility is required to enable an administrative agency to adapt to changing conditions, it is sufficient if the Legislature confers broad power upon the agency to fulfill the policy goals embodied in the statute, leaving it up to the agency itself to promulgate the necessary regulatory details" (Matter of Consolidated Edison Co. of N.Y. v Department of Envtl. Conservation, 71 N.Y.2d at 191 [citation omitted]). We will uphold regulations that are consistent with and supplemental to the Workers' Compensation Law, provided they have "a rational basis and [are] not unreasonable, arbitrary, capricious or contrary to the statute under which [they were] promulgated" (Matter of Smith v Albany County Sheriff's Dept., 82 A.D.3d 1334, 1335 [2011], lv denied 17 N.Y.3d 770 [2011] [internal quotation marks and citations omitted]).

Here, as part of its workers' compensation reform package, the Legislature expressly authorized the Board to "issue and maintain a list of pre-authorized procedures under this section" (Workers' Compensation Law § 13-a [5]), which the Board accomplished by promulgating the subject regulations and incorporated Guidelines (see 12 NYCRR part 324). The purposes of the reform legislation were sweeping: to remove impediments to prompt diagnosis and treatment of injured workers; to confer regulatory flexibility on the Board to maintain a list of preauthorized medical tests and treatment reflecting best practices, cost fluctuations and managed care opportunities; to reduce litigation costs and disputes between medical providers and payers; to lower costs for employers and increase benefits to injured workers; and to eliminate unnecessary and potentially harmful treatment (see Governor's Mem approving L 2007, ch 6; Letter from St Ins Dept, Mar. 13, 2007, Bill Jacket, L 2007, ch 6). We find that the Legislature expressly delegated to the Board the authority and obligation to promulgate the regulations (and incorporated Guidelines containing the list of preauthorized procedures) and that the Legislature's delegation of this authority to the Board was lawful (see Matter of Consolidated Edison Co. of N.Y. v Department of Envtl. Conservation, 71 N.Y.2d at 191). Further, we determine that the Board acted lawfully, as the regulations and incorporated Guidelines are "consistent with and supplemental to" the provision of the Workers' Compensation Law and statutory scheme (Workers' Compensation Law § 117 [1]; see Matter of Smith v Albany County Sheriff's Dept., 82 A.D.3d at 1335), and "fulfill the policy goals embodied in the statute [i.e., Workers' Compensation Law § 13-a (5)]" (Matter of Consolidated Edison Co. of N.Y. v Department of Envtl. Conservation, 71 N.Y.2d at 191).

We reach the foregoing conclusions mindful that, under the Workers' Compensation Law scheme, employers are required to pay for medical treatment, procedures, devices, tests and services (hereinafter medical care) for employees who sustain causally related injuries "for such period as the nature of the injury or the process of recovery may require" (Workers' Compensation Law § 13 [a]; see Matter of Laezzo v New York State Thruway Auth., 71 A.D.3d 1252, 1253 [2010]). However, medical necessity and appropriateness (hereinafter medical necessity) have always been prerequisites to an employer's obligation, and the denial of payment for medical care has been upheld where it is "duplicative, excessive or inappropriate for the claimed injury, and accordingly of no benefit to the [injured worker]" (Matter of Spinex Labs. [Patton], 213 A.D.2d 884, 885 [1995], lv denied 86 N.Y.2d 702 [1995]). Prior to the enactment of the Guidelines, for treatments that were not special medical services enumerated in Workers' Compensation Law § 13-a (5) or which cost less than $500, disputes over the medical necessity or the frequency/duration of medical care — and whether the medical provider would be paid and to what extent — were often made after the care was provided, on a case-by-case basis when the employer disputed the bill; they were ordinarily resolved through the relevant arbitration panel for the medical provider's profession with few appeals to this Court (see Workers' Compensation Law §§ 13-g, 13-k, 13-l, 13-m; see also Matter of Spinex Labs. [Patton], 213 A.D.2d at 885; Employer: Livingston County, 2011 WL 5618432, *5, 2011 NY Wrk Comp LEXIS 6751, *15-*16 [WCB No. 7990 5338, Nov. 9, 2011]).

The legislative history reflects that the intent of the amendments to Workers' Compensation Law § 13-a (5) was to empower the Board to devise a list of preauthorized diagnostic tests and treatments that would be automatically covered in the frequency and duration recommended, regardless of cost, thereby decreasing provider bill disputes, unnecessary or ineffective treatment, and delays and inconsistency in medical care, among other benefits, and eliminating the need for preauthorization for medical care consistent with best medical practices as reflected in the Guidelines [6]. Now, pursuant to Workers' Compensation Law § 13-a (5), while certain enumerated special medical services require preauthorization, the limitation on cost was raised to those in excess of $1, 000, and other such special medical services that previously required preauthorization are now included in the Guidelines (see 12 NYCRR 324.2 [d]; 325-1.4 [a]). The overall scheme thus now ensures medical care consistent with the Guidelines, requires preauthorization for certain statutory special medical services (costing over $1, 000) unless listed in the Guidelines and a ...

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