It Causes One to Wonder...

Tuesday, December 18, 2012 | 0

A recent Appellate Division 3rd Department case, Miller vs. Joyful Farms, calls into question whether it is possible to establish the degree of trust needed to enact meaningful process reform in New York.

The case in point involves a paraplegic claimant whose wife sought payment for care she was rendering at home. The accident occurred in 2006. After litigation, the Workers’ Compensation Law Judge awarded $315 per week as compensation for the time and effort the wife put in to such tasks as maneuvering her husband in and out of bed, attending to his personal hygiene, obtaining and administering his medication, and exercising his legs and feet.

An appeal was filed to the Workers’ Compensation Board (the final arbiter of fact in New York) and upon review the award was increased to $500 per week. Another appeal was filed to the Appellate Division which affirmed the Board’s decision citing four existing cases dating back as far as 1964 as precedent. Theoretically, it is possible to take another appeal to New York’s highest court and I have no way of knowing whether this case is finally resolved.

Both this blog and the Workers’ Compensation Policy Institute have repeatedly pointed out that New York is a phenomenally expensive state for workers’ compensation. It is my belief that one reason our system is so expensive is the level of mistrust that exists among all parties in the system (payers, plaintiffs and regulators). Sadly this case, which took six years to resolve and which may yet continue, indicates that some of that mistrust may be earned.

One has to wonder what thought, if any, goes in to decisions to litigate a claim and to file an appeal. Anyone who has ever handled a catastrophic loss knows that a number of people in the organization (the adjuster, supervisor, manager, reinsurance adjuster, underwriter, and possibly executive management) will take an interest in a catastrophic loss such as the one in this case. Claims such as this one are enormously expensive and can cost as much as a million dollars over the life of the injured worker. 

At some point, a decision was made to look at legal arguments barring the wife’s request for compensation for the care rendered to her husband rather than negotiating reasonable compensation. After an award of $16,380 per year, another decision was made to appeal, resulting in an increase in benefits to $26,000 per year. Having lost twice, another decision was made to appeal to the courts.

Those of us who pay workers’ compensation claims would like to believe we are reasonable people who can be trusted to voluntarily pay reasonable claims. Given the existing case law in New York, the wife’s request was not unreasonable, nor was there any argument that excessive compensation was sought for the wife’s services. Whatever the legal merits raised by the defense on this case might be, the decision to draw a line in the sand on this issue is puzzling at best. 

If, as an industry, we wish to be perceived as trustworthy and reasonable, we need to give serious thought to how and when we choose to pick a fight.

Paul Jahn is executive director of the New York Public Policy Institute. This column was reprinted from The Compensation Chronicles blog.