Tag Archives: New York

Removing The Safety Net: A National Trend Of Benefit Reductions For Injured Workers

Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

Benefits for injured workers continue to be under attack throughout the country. In New York, there have been a number of changes in the last decade, all in the name of reform. These reforms were encouraging at first as they increased the weekly benefits for some higher wage-earning injured workers for the first time in decades. They also created medical treatment guidelines under the guise of allowing injured workers to obtain pre-approval on certain medical treatments and procedures. 

Unfortunately, the changes also resulted in reduction of benefits for many injured workers. Monetary benefits were capped, so injured workers deemed partially disabled could only receive a certain number of weeks of benefits regardless of their ability to return to their pre-injury jobs. The determination of the degree of disability has become a battle involving multiple, lengthy depositions of medical witnesses where the outcome is how long injured workers get wage replacement or whether they receive lifetime benefits. The criteria is not whether injured workers can return to their prior employment, but whether they are capable of performing any work at all, regardless of their past job experience or education. The battle is not limited to the amount of weeks of benefits injured workers can receive, however. The medical treatment guidelines, touted as getting injured workers prompt medical treatment, discounts the fact that if the requested treatment is not listed within the guidelines, it is denied and the burden is placed upon injured workers and their treating doctors to prove the requested treatment is necessary.

Other changes designed to cut administrative costs and court personnel include reducing the number of hearings held, thereby denying injured workers due process. There also has been a reduction in the number of presiding judges, and in many hearing locations the judges are not even at the site but are conducting hearings through video conferencing. At the end of October, the Board announced a new procedure authorizing the insurance carrier to request a hearing on whether injured workers should be weaned off of opioids that are used by many medical providers to treat chronic pain. While everyone would agree that the misuse of prescription pain medication is an epidemic in this country, many question whether the insurance industry really has the injured workers’ best interest at heart.    

As an attorney who has represented injured workers for more than 26 years, I have seen many workers successfully transition from injured worker back into the labor market. It is very encouraging to note that for many people the system has worked. They receive their treatment, which may involve physical therapy, surgery, pain management, prescription therapy, or whatever else their treating physician recommends. They are paid a portion of their prior income and after a period of convalescence, they are able to return to work. Some injured workers, however, are not so lucky. The decisions about what happens to those unable to work have been left to those who seem to care more about business and insurance industry profits. 

Just about one year ago, 14 people were killed and 22 more injured when ISIS-inspired terrorists went on a shooting rampage in San Bernardino, California. The nation and the world were horrified to hear about this tragedy and the story was in the news for many weeks. Now a year has gone by and many of the survivors have complained about treatment being denied and prescription medication being cut off.  While many injuries happen quietly without the headlines seen in the California attack, there are many similarities. It seems that when an initial injury occurs, there are many good protections and benefits in place. However, as time goes on and costs increase, injured workers are looked upon as enemies to defeat or to forget about. Unfortunately for injured workers and their families, they don’t have this luxury and they don’t have the means to fight.

Most people don’t think it will ever happen to them. That is what most of my clients have thought as well.

 

Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717. 

 

2015 Top Ten Workers’ Compensation Fraud Cases

Number Value
Non-Employee Fraud Cases 9 $ 848,000,000
Employee Fraud Cases 1 $ 1,500,000
Total $ 849,500,000

The top six of our top ten fraud cases of 2015 are from California, a perennial offender. The other four cases are from New York, Washington, Utah, and Massachusetts. As we continue to discover each year, non-employee fraud cases dominated the list. This year’s dollar amounts were particularly large, with nearly $850 million in total frauds. The largest fraud was a $580 million kickback scheme out of southern California. Authorities have begun to enforce the law against companies who have misclassified their workers and we expect to see a continued increase in these enforcement actions, both against our traditional offenders and against some of the sharing economy companies who are now the subject of multiple lawsuits.

1. (California) Surgeons and Owner of Hospital Charged In $580M Kickback Scheme (11/26/15)

(Credit: MoneyTimes) The kickbacks involving millions of dollars are increasing the insurance costs for patients.Such practice corrupts the relationship between doctor and patient, thus polluting medical profession.

(Credit: MoneyTimes) Kickbacks involving millions of dollars are increasing insurance costs for patients.

Five people have been criminally charged for their involvement in a medical kickback scheme that defrauded the California workers’ compensation system and insurance companies of $580 million over eight years. Two of the five charged were surgeons and one was a former owner of Pacific Hospital. The scheme benefited doctors and chiropractors who referred their patients to two Southern California hospitals for thousands of operations.

 

2. (California) FedEx Settles Misclassification Case For $228 Million (6/16/15)2. fedex
FedEx has agreed to pay $228 million to resolve claims by 2,300 FedEx Ground pickup and delivery drivers in California. FedEx was labeling drivers as independent contractors in order to avoid the costs of trucks, branded uniforms, scanners, fuel, maintenance of the trucks, insurance and much more. Drivers were also not paid for missed meals, rest periods, or overtime compensation.

 

3. (California) Spanish Translators Caught in $24 Million Workers’ Compensation Fraud Case (12/17/15)Screen Shot 2016-01-16 at 12.21.25 AM
The owners of G&G Translation services and over 200 of their employees fraudulently billed $24.6 million in workers’ compensation cases for services never rendered.  For example, one bill was for $422,000 for translation services by a translator who was actually in prison at the time. G&G obtained a list of patients who needed translation services at medical facilities and used those names to submit bills to large self-insured employers.

4. (California) Sewing Subcontractors Charged With Running $11 Million Dollar Workers’ Comp Insurance Fraud Scheme (4/16/15)
Caroline ChoiJae KimTwo CEOs of a sewing company were arrested on April 15, 2015 for conspiring with their CPA, Jae Kim, to underreport $78.5 million in payroll to multiple insurers. They were arrested on 18 felony counts of workers’ compensation insurance fraud totaling more than $11 million in losses.

 

5. (California) Truck Drivers Awarded More Than $2 Million Due To Misclassification By Employer (2/3/15)

Pacer Cartage drivers protesting in November (Photo from the Teamsters Union)

Pacer Cartage drivers protesting in November (Photo from the Teamsters Union)

Pacer Cartage, Inc. (one of the largest port trucking companies in the U.S.) owes $2,026,483 to seven truckers due to “unlawful payroll deductions and expenses as part of a wage theft scheme” by the company. The employees were incorrectly classified as “contract laborers” who were forced to lease their trucks by their employer, and the employer avoided paying workers’ compensation premiums. Their leases were deducted from their paychecks, and the employees were not allowed to use the trucks for any other business purpose or drive them home.

 

 

6. (California) NFL Player and Gallagher Bassett Adjuster Plead Guilty to Wire Fraud & Filing False Workers’ Comp Claims for $1.5 Million (10/1/15)

Marcus Buckley (55) played for the New York Giants from 1993 to 2000.

Marcus Buckley (55) played for the New York Giants from 1993 to 2000.

Claims Adjuster Kimberly Jones filed fraudulent workers’ compensation claims on behalf of former NFL player Marcus Buckley between 2001 and 2011. In 2006 Buckley filed a workers’ compensation claim that was settled for $300,000 in 2010. After the case was settled, Buckley and Jones filed numerous requests for reimbursement under Buckley’s closed cases providing fictitious invoices, statements and credit bills. Buckley received more than $1.5 million.

 

7. (New York) Plumbing and Heating Contractors Settle for $1.4 Million(4/21/15)
USDOL_Seal_circa_2015.svgFour Long Island City plumbing and heating contractors misclassified and underpaid a total of 300 employees. At least 25 employees were misclassified as independent contractors, several hundred were not paid overtime, and the companies’ recordkeeping did not meet the Fair Labor Standards Act requirements. The companies settled out of court when the Wage and Hour Division’s New York City District Office investigated and litigation began for a total of $710,000 in back wages to cover September 2010-April 2014 and damages for 300 employees equaling $1.42 million dollars.

 

8. (Washington) Drywall Contractor in Walla Walla Must Pay More Than $1 Million in Workers’ Compensation Premiums and Penalties (4/17/15)
drywallShawn A. Campbell and his wife were held personally liable for over $1 million in unpaid premiums, interest and late penalties for their company. Campbell listed his employees as co-owners in order to avoid paying workers’ compensation premiums.

 

9. (Utah) Construction Company to Pay $700,000 for Misclassification Scheme (5/1/15)
CSG Workforce Partners (a.k.a. Universal Contracting, LLC and later as Arizona Tract/Arizona CLA) required their workers to classify themselves as “members/owners” which limited their legal rights and gave them no minimum wage guarantee, no time-and-a-half overtime pay, no workers’ compensation insurance and no unemployment insurance. When the employers found out that the state of Utah was investigating, they packed-up and left for Arizona. However, they were tracked down and charged $600,000 in back wages to employees as well as $100,000 for their willful violations of employment laws.

10. (Massachusetts) Roofing Business Owners Indicted for Workers’ Comp Fraud Totaling $615,000 (3/25/15)
Two business owners allegedly failed to accurately report their payroll and underreported earnings in order to be granted lower insurance premiums in three roofing companies between 2008 and 2014. They avoided paying a total of more than $615,000 in insurance premiums alone.

 

For more information, contact:
Leonard T. Jernigan, Jr.
Adjunct Professor of Workers’ Compensation Law
N.C. Central University School of Law

The Jernigan Law Firm
2626 Glenwood Avenue, Suite 330
Raleigh, North Carolina 27608
(919) 833-0299
ltj@jernlaw.com
www.jernlaw.com
Twitter: @jernlaw
Blog: www.ncworkcompjournal.com

Call “Reform” What It Is: Death By A Thousand Cuts For Workers’ Rights

Today’s post comes from guest author Catherine Stanton, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

This week I attended the 20th anniversary of the Workers’ Injury Law and Advocacy Group (WILG) in Chicago. I am a proud past president of this group – the only national Workers’ Compensation bar association dedicated to representing injured workers.  

As an attorney who has represented injured workers for more than 25 years, I have seen their rights and benefits shrink under the guise of “reform”. After the tragic Triangle Shirtwaist Factory fire in 1911, which killed almost 150 women and girls, workplace safety and Workers’ Compensation laws were enacted. For the next half century or so, many protections and safeguards were implemented. However, many of these reforms were not sufficient, and in 1972, the National Commission on State Workmen’s Compensation Laws, appointed by then-President Nixon, issued a report noting that state Workers’ Compensation laws were neither adequate nor equitable. This led to a decade when most states significantly improved their laws. 

Unfortunately, there has once more been a steady decline in benefits to injured workers, again under the guise of reform. One major argument is that many workers are faking their injuries or they just want to take time off from work. There was even a recent ad campaign in which a young girl was crying because her father was going to jail for faking an injury. Workers’ Compensation fraud does exist, but the high cost of insurance fraud is not as a result of workers committing fraud.

A colleague of mine compiled a list of the top 10 Workers’ Compensation fraud cases in 2014 in which he noted that the top 10 claims of fraud cost taxpayers well more than $75 million dollars with $450,000 of the total amount resulting from a worker committing insurance fraud. That leaves $74.8 million as a result of non-employee fraud, including overbilling and misclassification of workers. We are told that insurance costs are too high; yet, according to the National Council on Compensation Insurance (NCCI) in 2014, estimates show that private Workers’ Compensation carriers will have pulled in $39.3 billion in written premiums, the highest since they began keeping data in 1990. More premiums result in higher net profits. Despite this, many states have implemented changes in their Workers’ Compensation systems aimed at reducing costs to the employer. The end results, however, is that fewer benefits are given to the injured worker and more profits go to the insurance companies.

In New York, one of the reform measures increased the amount of money per week to injured workers but limited the amount of weeks they can receive these benefits with the idea that they will return to work once their benefits run out. Additionally, limitations have been placed on the amount and types of treatment that injured workers may receive. Again, this is with the notion that once treatment ends, injured workers miraculously are healed and will not need additional treatment. In reality, those injured who can’t return to work receive benefits from other sources from state and federal governments at the taxpayer’s expense.  This is what is known as cost shifting, as those really responsible to pay for benefits – the insurance companies who collect the premiums from the employers – have no further liability. The reformers of 100 years ago would be appalled at what is happening to injured workers and their families today. It is time that those who are generating profits at the expense of injured workers do what is fair and just – provide prompt medical care and wage replacement to injured workers for as long as they are unable to work.

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Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.