Workers’ Compensation Law § 15(3)(w) places a limitation – commonly referred to as “cap” – on the number of benefit weeks that compensation is payable to a claimant classified with a nonschedule permanent partial disability (PPD) and a date of accident or disablement on or after March 13, 2007. In general, the cap begins to run upon the date of classification – i.e., once a determination is made regarding the claimant’s loss of wage-earning capacity (LWEC).
The board has the broad authority to, “on its own motion, or on application of any party in interest, reclassify a disability upon proof that there has been a change in condition, or that the previous classification was erroneous and not in the interest of justice” (Workers’ Compensation Law § 15(6-a)), and to “make such modification or change with respect to former findings, awards, decisions or orders relating thereto, as in its opinion may be just” (Workers’ Compensation Law § 123). Pursuant to Workers’ Compensation Law § 15(6-a), any permanently partially disabled claimant may request a reclassification “upon proof that there has been a change in condition.”
Prior to February 11, 2019, it was well-settled that post-classification payments of temporary total disability benefits – attributable to, for example, the claimant undergoing causally related surgery post-classification – did not count against the cap of benefit weeks set forth in § 15(3)(w). Put differently, the cap was tolled by the claimant’s period of temporary total disability. In contrast, any post-classification payments of temporary partial disability benefits did count against the cap and were payable at the PPD rate.
Then, in Matter of Jacobi Medical Center, 2019 NY Wrk. Comp. 00825967, a decision filed on February 11, 2019, a board panel, at the direction of the full board, suddenly disavowed the board’s prior decisions that found that post-classification periods of temporary total disability did not count against the cap under § 15(3)(w), deeming this position inconsistent with the legislative history and intent of the statute. The board panel stated that there was nothing in the statute to suggest that any temporary increase in the claimant’s degree of disability post-classification should be considered to be additional weeks of benefits that would ultimately result in an increase in the cap. Instead, the board panel held, if a permanently partially disabled claimant experienced a short-term period of total disability after a causally related surgery, the claimant continued to be permanently partially disabled for purposes of both calculation of the capped number of weeks under § 15(3)(w) and the rate of awards. Lastly, the Jacobi board panel held that a permanently partially disabled claimant must make a request for reclassification based on an alleged change in condition pursuant to Workers’ Compensation Law § 15(6-a) before the expiration of the PPD caps for the request to be timely and considered.
Thus, after Jacobi, permanently partially disabled claimants who underwent causally related surgeries continued to receive awards at the PPD rate post-surgery, with those post-surgery PPD benefits counting against the cap. Further, the board denied as untimely requests for reclassification based on alleged changes in condition where the requests were not made before the § 15(3)(w) cap weeks had run out.
However, in an opinion and order decided and entered on February 20, 2020, the NYS Supreme Court, Appellate Division, Third Judicial Department, reversed the Jacobi Board Panel’s findings. In Matter of Sanchez v Jacobi Medical Center, — AD3d —, 2020 NY Slip Op 01235 (3d Dept 2020), the Third Department deemed the board panel’s findings to be contrary to the plain language of Workers’ Compensation Law § 15, which provides compensation for four distinct categories of disability:
The court found that when read as a whole, § 15 indicates that a claimant can only be classified under one of these four categories at any particular time. Thus, if a claimant classified with a PPD experiences a setback or exacerbation that results in a reclassification with a temporary total disability, the earlier PPD classification is displaced until further reclassification. After additional analysis of the statutory text, the court held that temporary total disability benefits do not count against the cap of PPD benefit weeks set forth in § 15(3)(w); the cap weeks should be tolled while the claimant is classified with a temporary total disability. For weeks that the claimant is found to have returned to his PPD status, benefits should be at the PPD rate and those weeks should count toward the cap. The Third Department also reversed the board’s finding that a PPD claimant must seek reclassification prior to the exhaustion of the PPD caps, deeming such finding to be in direct contravention to the plain language of § 15(6-a).
The Third Department’s reversal essentially reverts the law to what it was prior to the Jacobi Board Panel Decision: Post-classification periods of temporary total disability do not count against the caps. Unfortunately, the Jacobi Board Panel Decision was a favorable one for employers and carriers, as it capped PPD benefits at a fixed number of weeks based upon the LWEC determination, limiting the exposure for increases in indemnity benefits and the tolling of the cap due to temporary increases in disability owing to post-classification surgeries and other aggravating factors. Active monitoring of treatment and prompt scheduling of post-surgery IMEs are important to limit post-classification periods of temporary total disability by securing a reduction of benefits to a partial rate that will count against the caps, and will also be helpful in resisting any subsequent efforts by the claimant to seek reclassification with a higher LWEC based on an alleged change in condition.
The Jacobi Board Panel Decision had also set a deadline for claimants to request reclassification, rather than leaving open the possibility that a claimant who has exhausted PPD benefits will return years after the expiration of the caps to pursue reclassification and resumption of PPD benefits. That being said, the legal basis for setting a deadline at the exhaustion of the caps was unclear. Reclassification is sought based on the worsening of a claimant’s medical condition, which is unpredictable. Further, as the Third Department found, it does appear contrary to the language of § 15(6-a) itself, which states that the board may reclassify a claimant “at any time,” subject only to the limitations set forth in Workers’ Compensation Law §§ 25-a and 123. In contrast, under Workers’ Compensation Law § 35(3), a permanently partially disabled claimant found to have an LWEC greater than 75% “may request, within the year prior to the scheduled exhaustion of indemnity benefits under [§ 15(3)(w)], that the [B]oard reclassify the claimant to permanent total disability or total industrial disability due to factors reflecting extreme hardship.” Thus, § 35(3) contains an explicit temporal deadline for pursuing reclassification, which is lacking in § 15(6-a).
It remains to be seen whether the employer will seek motion for leave to appeal the Third Department’s decision to the NYS Court of Appeals. It would be up to the discretion of the Court of Appeals whether to grant or deny review.