New York Claims Handling in a post-EDI world.

Effective April 23, 2014, New York requires electronic claim data filing by workers’ compensation carriers and third-party administrators. This article discusses this change from the perspective of claims handling. To understand this change, we explore two related topics:

  1. understanding the nuts and bolts of the new electronic system; and
  2. considering the impact on handling claims, especially denials.

1. What is Electronic Data Interchange (EDI)?

Electronic Data Interchange is “an electronic communication system that provides standards for exchanging data via any electronic means.” This is a fancy way of saying that two parties have agreed to agree on a specific way of trading information digitally. New York’s Workers’ Compensation Board has followed 39 other states to adopt the “International Association of Industrial Accident Boards and Commissions’ (IAIABC) Claims Electronic Data Interchange (EDI) Release 3.0” specification. By adopting this electronic interchange format, and making it mandatory for the submission of nearly all records and reports to the Board, New York hopes to reduce costs and delays associated with paper filing. Of course, and as we will see below, the implementation fo this system has been costly and slow, and the need to “serve” papers on the claimant and her attorney will still result in the mailing of paper, at least in most litigated claims.

New York’s Required Forms

New York’s Workers Compensation Law (WCL) and Regulations (NYCRR) require that the employer/carrier provider specific information to the Board during the lifetime of a workers’ compensation claim. The Board promulgated specific paper forms to be filed, and the rules set forth a specific timeline for filing, beginning with the happening for an accident.

Example of paper forms

For example, New York Workers’ Compensation Law § 110 states that an accident must be reported when it:

will cause a loss of time from regular duties of one day beyond the working day or shift on which the accident occurred, or which has required or will require medical treatment beyond ordinary first aid or more than two treatments by a person rendering first aid.

In order to be reportable, the injury must:

  • Cause the worker to lose one day of work in addition to the date of loss; OR
  • Require more than ordinary first aid; OR
  • Require at least three “first aid” visits.

The Workers’ Compensation Board has an official form for reporting injuries (“Form C-2F: Employer’s Report of Work-Related Injury or Illness“). The form must be provided to the injured player upon request and has to be maintained (held) by the employer for at least 18 years.

The C-2F report must be filed with the Workers’ Compensation Board within 10 days after the occurrence of the accident.

Paper forms replaced with EDI equivalents.

The following forms are now deprecated, and replaced with Electronic Data Interchange:

  • C-2 (Employer’s Report of Work-Related Injury/Illness)
  • C-7 (Notice That Right to Compensation is Controverted)
  • C-8/8.6 (Notice That Payment of Compensation Has Been Stopped or Modified)
  • C-669 (Notice to Chair of Carrier’s Action on Claim for Benefits)
  • VAW-2 (Political Subdivision’s Report of Injury to Volunteer Ambulance Worker)
  • VF-2 (Political Subdivision’s Report of Injury to Volunteer Firefighter)

The following forms replace the prior forms which were used to transmit the same information (see above):

  • FROI 00 – Original (Mailing to parties is optional)
  • FROI 01 – Cancel
  • FROI 02 – Change
  • FROI 04 – Denial
  • FROI AQ – Acquired Claim (Mailing to parties is optional)
  • FROI AU – Acquired/Unallocated (Mailing to parties is optional)
  • FROI UR – Upon Request (Mailing to parties is optional)
  • SROI 02 – Change
  • SROI 04 – Denial
  • SROI AP – Acquired/Payment
  • SROI CA – Change in Benefit Amount
  • SROI CB – Change in Benefit Type
  • SROI CD – Compensable Death
  • SROI EP – Employer Paid
  • SROI ER – Employer Reinstatement
  • SROI IP – Initial Payment
  • SROI PD – Partial Denial
  • SROI PY – Payment Report
  • SROI RB – Reinstatement of Benefit
  • SROI RE – Reduced Earnings
  • SROI S1 – Suspension, RTW or Medically Determined/Qualified to RTW
  • SROI S2 – Suspension, Medical Non-Compliance
  • SROI S4 – Suspension, Claimant Death
  • SROI S5 – Suspension, Incarceration
  • SROI S7 – Suspension, Benefits Exhausted
  • SROI SD – Suspension, Directed By Jurisdiction
  • SROI SJ – Suspended Pending Appeal or Judicial Review
  • SROI SA – Sub-Annual (Mailing to parties is optional)
  • SROI UR – Upon Request (Mailing to parties is optional)

EDI Mandate

On March 5, 2012, the New York State Workers’ Compensation Board (Board) announced via bulletin the mandate to utilize “eClaims” for carriers and TPAs to electronically submit employer claims data. EDI is not optional. The standard adopted is the IAIABC Electronic Data Interchange (EDI) Release 3.0. The Board has now supplemented this with a new Bulletin issued April 17, 2014, indicating that the Regulations (court rules) for implementing the process are being changed as of April 23, 3014 to finalize the implementation. Now, the EDI transition is over and with the adoption of changes to the regulation (effective April 23, 2014) nearly all filing should be electronic.

Impact of EDI on claims handling: Reporting, Filing, and Appearing.

​At the time of the accident:

First, the worker gets medical treatment and notifies her supervisor about the accident and how it occurred.

The employee notifies the employer of the accident in writing, as soon as possible, but within 30 days. The Board may excuse the lack of notice if notice could not be given (for example: the claimant was taken to the hospital and could not inform her employer), the employer had knowledge, or if the employer is not harmed by lack of notice.

The employee may file a claim with the Board by filing a Form C-3. This must be done within two years of the accident or within two years after the employee knew, or should have known, that the injury was related to employment.

Within 48 hours of the first medical treatment:

The doctor completes a preliminary medical report on a Form C-4 and mails it to the appropriate District Office. Copies of the Form C-4 must also be sent to the employer or its insurance carrier, the injured worker, and her representative (if any).

​Within 10 days of the accident:

The employer or its third party designee reports the injury to the Board and the insurance company with a Form C-2F.

Within 14 days of receipt of Form C-2:

The insurer provides the injured worker with a written statement of his/her rights under the law (Form C-430S). This must be done within 14 days after receipt of the C-2F from the employer or with the first check, whichever is earlier. If the insurer requires the injured worker to use a provider within a network for diagnostic tests, it must provide the injured worker with the name and contact information for the network.

Within 15 days of initial treatment:

The doctor completes a 15-day report of the injury and treatment on a Form C-4 and mails it to the District Office of the WCB.

Within 18 days after the first day of disability, or 10 days after the employer first has knowledge of the alleged accident, or within 10 days after the carrier receives the Form C-2F:

The insurer begins the payment of benefits if lost time exceeds seven days. If the claim is being disputed, the insurer must inform the Workers’ Compensation Board (and the claimant and his/her representative, if any) by filing electronic data interchange form FROI-04. If the claim is not disputed, but payment is not being made for specific reasons stated on the notice (e.g., that there is no lost time or that the duration of the disability is less than the 7-day waiting period), the insurer must also notify all the parties.

The insurer files a FROI-00 or FROI-04 with the Board indicating either that payment has begun or the reasons why payments are not being made. A copy of the FROI must be transmitted to the claimant and his/her attorney/licensed representative, if any, within one business day of the electronic filing with the Board. If the employee does not timely notify the employer, this notice may be filed within 10 days after the employer learns of the accident.

Now is the time to controvert!

A case may be disputed because:

  • The employer alleges that proper notice was not timely given; or
  • The claim was not properly filed; or
  • A lack of causal connection is alleged between the alleged injury and the accident; or
  • The employer-employee relationship is denied; or
  • The accident is alleged not to have occurred at work; or
  • Any other reason for denying the claim (see my Book, Chapter 8).

A dispute will create an adversarial proceeding. The forum will be the Workers’ Compensation Board, and a Workers’ Compensation Law Judge will hear the dispute.

Timelines for denials.

As per Workers’ Compensation Law Section 25-2(a), a denial must be filed “on or before the eighteenth day after disability or within ten days after it has knowledge of the accident, whichever period is greater.” Failure to file a denial within this time period can result in a $300 penalty assessed against the carrier (but defenses are not stripped). Under Section 25-2(b), a denial may be filed “within 25 days from the date of mailing of a notice that the case has been indexed.” If the denial is not filed (by filing FROI-04 or SROI-04), then all defenses (substantive or legal) are barred.

In practice, the Board rarely assesses the $300 penalty for late filing under Section 25-2(a) and instead rigorously enforces the preclusionary Section 25-2(b). 

Completing the FROI-04 (denying the claim).

eClaims Denial Code (Translation)

  • 1A: No Compensable Accident (Coming and Going – No Accident Arising Out of and In the Course of Employment)
  • 1B: No Compensable Accident (Horseplay – No Accident Arising Out of and In the Course of Employment)
  • 1C: No Compensable Accident (Willful Intent to Injury Oneself – No Accident Arising Out of and In the Course of Employment)
  • 1D: No Compensable Accident (Not WCL Definition of Accident – No Accident Within Meaning of WCL)
  • 1E: No Compensable Accident (Deviation from Employment – No Accident Arising Out of and In the Course of Employment)
  • 1F: No Compensable Accident (Recreational/social activity – No Accident Within Meaning of WCL)
  • 1I: Presumption Does Not Apply (No Accident/Occupational Disease Arising Out of and In the Course of Employment)
  • 2C: No Causal Relationship (Stress non-work related – No Accident Arising Out of and In the Course of Employment)
  • 2D: No Causal Relationship (No Medical Evidence of Injury – No Prima Facie Medical Evidence
  • 2E: No Causal Relationship (No Injury Per Statutory Definition – No Causally Related Accident or Occupational Disease)
  • 3A: No Employer-Employee Relationship (No Employer-Employee Relationship)
  • 3B: Independent Contractor (No Employer-Employee Relationship)
  • 3C: Not WCL Definition of Employee (No Employer-Employee Relationship)
  • 3D: No Jurisdiction (No Subject Matter Jurisdiction)
  • 3E: No Coverage (No policy in Effect on Date of Accident – Cancellation of Coverage)
  • 3F: Statute of Limitations Expire (Timely Filing – Section 28)
  • 3G: Statute Exempts Claimant (Employer-Employee Relationship)
  • 5A: Failure to Report Timely (Notice – Section 18)

​Within 25 days of the notice of indexing:

After the Board notifies the employer (or its insurance carrier) that a workers’ compensation case has been indexed against the employer, the employer may file a notice of controversy (FROI-04) within 25 days from the date of mailing of the notice of indexing. Failure to file the notice of controversy within the prescribed 25 day time limit could bar the employer and its carrier from pleading certain defenses to the claim.

Where the employer is not controverting (challenging) the claim – If payment has not begun because no compensation is presently due, a FROI-00 must be filed with the Board within 25 days after the Board has transmitted a notice of indexing.

Should I wait for indexing before controverting?

A common question for adjusters is whether to wait for the Board to formally “index” a claim before filing the Notice of Controversy (thereby disputing the compensability of the claim). Strategically, if the claimant does not file the appropriate forms or if medical is not submitted to the Board, there is a possibility that the case will not be indexed – in which case, the employer/carrier may not have to file any formal notice disputing the case.

Generally speaking, if a claim is going to be controverted, the FROI-04 and Pre-hearing Conference Statement should be filed regardless of the state of Board indexing. Simply put, the potential for a missed Notice of Indexing, tight timelines for filing the Notice of Controversy, etc., make the “waiting” strategy risky.

Serving the denial on the claimant.

The Regulations require that the claimant and her attorney be served with a paper copy of the denial. However, as of May 23, 2014, the Board is no longer accepting paper denial forms. The Board has issued new regulations which provide that the claimant and her attorney can be served with a paper copy of the denial “within one business day” of the electronic filing being issued, The Board has also issued a statement that the Board will generate these paper denial forms and place them in the Electronic Case Folder “within one day.”

The Board has mandated service on the parties of a paper form in the following situations:
• FROI 00 – Original (Mailing to parties is optional)
• FROI 01 – Cancel
• FROI 02 – Change
• FROI 04 – Denial
• FROI AQ – Acquired Claim (Mailing to parties is optional)
• FROI AU – Acquired/Unallocated (Mailing to parties is optional)
• FROI UR – Upon Request (Mailing to parties is optional)
• SROI 02 – Change
• SROI 04 – Denial
• SROI AP – Acquired/Payment
• SROI CA – Change in Benefit Amount
• SROI CB – Change in Benefit Type
• SROI CD – Compensable Death
• SROI EP – Employer Paid
• SROI ER – Employer Reinstatement
• SROI IP – Initial Payment
• SROI PD – Partial Denial
• SROI PY – Payment Report
• SROI RB – Reinstatement of Benefit
• SROI RE – Reduced Earnings
• SROI S1 – Suspension, RTW or Medically Determined/Qualified to RTW
• SROI S2 – Suspension, Medical Non-Compliance
• SROI S4 – Suspension, Claimant Death
• SROI S5 – Suspension, Incarceration
• SROI S7 – Suspension, Benefits Exhausted
• SROI SD – Suspension, Directed By Jurisdiction
• SROI SJ – Suspended Pending Appeal or Judicial Review
• SROI SA – Sub-Annual (Mailing to parties is optional)
• SROI UR – Upon Request (Mailing to parties is optional)
So, when a denial is made, the FROI-04 must be printed out and mailed to the claimant and her attorney within one business day (12 NYCRR 300.22[2][b][1][ii]). If the defense attorney did not also prepare and serve a paper C-7 (paper only on the claimant and her attorney) then defense should prepare and file a Form OC-400.5 certifying the controversy.

​Penalties for Frivolous Denials.

If the Board finds that the denial was “interposed without just cause,” the law allows for a penalty of $300 to be paid to the claimant. This $300 is in addition to any amount found payable under the award.

Every 2 weeks:

The insurer makes payments of benefits to the injured employee (if the case is not being disputed).

​Reporting to the Board:

The carrier must notify the Board by filing the correct SROI form (see below) when compensation is stopped or modified, within 16 days after the date on which payments were stopped or modified. The carrier/employer then must transmit the electronic form generated by the Board to the claimant and her attorney (if any) within one business day of the filing.

The doctor periodically submits progress reports following every treatment to the Board on Form C-4.2.

Practical Advice for Claims Handlers on EDI

For adjusters handling claims, we provide the following practical tips:

  1. Download and print out the “event table” cheat sheet (PDF) that lists all the event triggers (for example, reduction in benefits) and identifies the correct electronic form to designate. This “cheat sheet” provides a list of all the prior forms filed (for example, Form C-8/8.6, showing a change or reduction in benefit) and then provides the corresponding EDI equivalents. The “cheat sheet” is available here.
  2. Download and print out the PDF “cheat sheet” provided by the Board providing all the codes necessary to complete the electronic submissions. The “cheat sheet” is available here.
  3. When denying claims (filing FROI-04 or SROI-04) contact counsel to confirm you are entering the appropriate denial codes. A denial reason not raised is waived!
  4. Don’t forget: a Pre Hearing Conference Statement must still be filed at least ten days prior tot he first scheduled Pre hearing Conference (which itself will be scheduled within 30 days of the filing of the denial pleadings and after receipt of supporting medical from the claimant).
  5. It is still my recommendation that a Pre Hearing Conference Statement is issued at the same time the denial pleadings are filed with the Board and the paper FROI-04 or SROI-04 (“transaction report”) is served on the claimant and her attorney. There is no guidance from the Board to stand for the proposition that a Pre Hearing Conference Statement can not be amended, and so my advice is to file an immediate Statement with the aid of counsel and then supplement the filing if new information or witnesses are identified during investigation.

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Greg Lois is the managing partner of LOIS LLC and dedicates his practice to defending employers and carriers in New York and New Jersey workers' compensation claims. Greg is the author of a popular series of "Handbooks" on workers' compensation, and is the co-author of the 2016 & 2017 Lexis-Nexis New Jersey Workers' Compensation Practice Guide. Greg can be reached at 201-880-7213 or glois@loisllc.com