A collective bargaining agreement's silence with respect to a claim for certain benefits defeats a claim for such benefits pursuant to such collective bargaining agreement

The plaintiffs in three appeals from Supreme Court rulings decided on the same day by the Appellate Division, Caldara v County of Westchester, 2021 NY Slip Op 04693, [Caldara], Westchester County Corr. Officers Benevolent Assn., Inc. v County of Westchester, 2021 NY Slip Op 04733, [04733] and Westchester County Corr. Officers Benevolent Assn., Inc. v County of Westchester, 2021 NY Slip Op 04734 [04734], commenced their respective actions seeking to recover damages for the Westchester County's alleged breach of a collective bargaining agreement [CBA] based on Westchester's failure to pay certain benefits to the plaintiffs.

In Caldara the plaintiffs allege that any police officer who has been receiving disability benefits pursuant to General Municipal Law §207-c and who then receives a disability retirement pension upon the County of Westchester's application is entitled, upon retirement, to benefits equivalent to those provided by the Workers' Compensation Law for loss of earning capacity due to permanent partial or total disability.

Similarly, in 04733, theplaintiffs alleged that any correction officer who has been receiving disability benefits pursuant to General Municipal Law §207-c and who then receives a disability retirement pension upon the County of Westchester's application is entitled, upon retirement, to benefits equivalent to those provided by the Workers' Compensation Law for loss of earning capacity due to permanent partial disability while in 04074 plaintiffs argued that any correction officer who has been receiving disability benefits pursuant to General Municipal Law §207-c and who then receives a disability retirement pension upon the County of Westchester's application is entitled, upon retirement, to benefits equivalent to those provided by the Workers' Compensation Law for loss of earning capacity due to permanent total or partial disability.

In each action Westchester Countyrelied on its argument that the relevant collective bargaining agreement was silent as to such awards, and, as such, the relevant plaintiffs were not entitled, upon retirement, to benefits equivalent to those provided by the Workers' Compensation Law for loss of earning capacity due to permanent partial or total disability. In each action Westchester Countymoved to dismiss the complaints, and those plaintiffs' cross-moved pursuant to CPLR 3025(b) for leave to amend their complaint. The Supreme Court granted the County's motions and denied the plaintiffs' cross motions, and the respective plaintiffs appealed.

The Appellate Division, affirming the lower court ruling in each action, said that "When a party moves to dismiss a complaint pursuant to CPLR 3211(a)(7), the standard is whether the pleading states a cause of action, not whether the proponent of the pleading has a cause of action," citing Sokol v Leader, 74 AD3d 1180. Further, said the court, "In considering such a motion, the court must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory", noting the Court of Appeals ruling in Leon v Martinez, 84 NY2d 83.

Here, opined the Appellate Division, the relevant plaintiffs failed to identify a specific provision in the relevant CBA that requires the Westchesterto pay benefits equivalent to those provided by the Workers' Compensation Law for loss of earning capacity due to permanent partial or total disability. Accordingly, the court held that Supreme Court properly granted Westchester's motion to dismiss the complaint.

Click the text in blue to access the text of that Appellate Division decision in  Caldara.

Click in blueto access the text of that Appellate Division decision in 07433.

Click on blueto access the text of the Appellate Divisions decision in 07434.

 

Involuntary placement on disability leave pursuant to Civil Service Law §72

In a proceeding brought pursuant to §72.5 of the Civil Service Law, OATH of Administrative Law Judge Ingrid M. Addison recommended that the New York City Police Department [NYPD] place a Traffic Enforcement Agent [TEA] on an involuntary leave of absence, finding the TEA was unfit to perform her job duties due to a medical disability not incurred in the performance of the duties of her position.

The TEA did not dispute the fact that she could not stand or walk for long periods, conceding that effects of an earlier surgery prevented her from performing the duties required of a TEA.

Although the TEA had been temporarily assigned to a clerical job as a reasonable accommodation, the NYPD determined that she was unfit to perform the duties of a TEA. Judge Addison agreed, finding that the NYPD proved the employee was currently unfit to perform the essential duties a TEA due to her disability and recommended the TEA be placed on involuntary leave consistent with the provisions of Civil Service Law §72.5.

The appointing authority of the NYPD adopted the ALJ’s recommendation subject to the approval of NYPD’s pending application for a change in title of the TEA's position to Clerical Associate, presumably as the result of the reclassification of the TEA position then encumbered by the employee to "Clerical Associate."

On a similar note, General Municipal Law §207-c, providing for the payment of salary, wages, medical and hospital expenses of police officers disabled as the result of injuries or illness incurred in the performance of duty, authorizes appropriate municipal officials to transfer a police officer on disability leave pursuant §207-c to another position, including a position with another agency or department where he is able to perform the duties of such position consistent with [1] the applicable civil service law requirements, [2] provided the police officer consents to the change and [3] the agency to which the employee will transfer approves the transfer.

General Municipal Law §207-a, applicable to firefighters on disability leave as the result of suffering an injury or illness incurred in performance of official duties, similarly authorizes the appointment of the disabled firefighter to another position or title in the same or another agency with the consent of the injured firefighter and the approval of the department or agency involved.

Click HERE to access Judge Addison's decision and recommendation.

New York State's Comptroller finds Medicaid billing errors cost State more than $1.5 billion

The state Department of Health (DOH) allowed more than $1.5 billion in improper Medicaid payments over the course of several years due to errors in its billing system and may have exposed patients to unqualified and uncredentialed health care providers, according to three reports released today by State Comptroller Thomas P. DiNapoli. This, said the Comptroller,

“Troubling errors like the ones routinely identified by my auditors are extremely costly. They can also put patients at risk,” DiNapoli said. “By not fixing problems with the Department of Health’s eMedNY system and other issues, hundreds of millions of dollars more in taxpayer dollars could be misspent and unqualified providers could continue to treat Medicaid patients. The department must act on our recommendations and address these shortfalls, so Medicaid recipients receive the level of care they deserve, and taxpayers’ dollars are spent effectively.”  

Click on the text below highlighted in color to access the complete audit report.

For the state fiscal year that ended March 31, 2020, New York’s Medicaid program had approximately 7.3 million recipients and Medicaid claim costs totaled $69.8 billion.

The Affordable Care Act and federal regulations mandate that state Medicaid agencies require all ordering and referring physicians and other professionals providing services through the Medicaid fee-for-service program to be enrolled as participating providers and their National Provider Identifiers (NPIs) to be included on Medicaid claims. This screening and provider enrollment process improves the efficiency of the health care system and helps to reduce fraud and abuse. It also helps to ensure the quality of services and protects public health by validating that providers have the appropriate credentials to provide services and are not prohibited from participating in the Medicaid program by the federal government.

In the first report, DiNapoli’s auditors found that a significant number of claims were paid even though they did not have a proper NPI to ensure the ordering, prescribing, referring, or attending provider was properly qualified or credentialed, creating a risk for patients. Processing weaknesses in eMedNY, the Medicaid claims processing and payment system, allowed $1.5 billion in payments for Medicaid clinic and professional claims without an appropriate NPI.

For example, some claims contained NPIs of providers who were not enrolled in Medicaid, while other claims did not contain an NPI at all.

Auditors also found $57.3 million in payments for pharmacy claims that did not contain an appropriate prescriber NPI and $19.4 million in payments for claims that contained an NPI but, according to regulations, should not be included on Medicaid claims or that should be further reviewed by DOH due to past misconduct.

Auditors recommended DOH:

• Review the Medicaid payments for claims not containing an appropriate NPI identified by the audit and determine an appropriate course of action.
• Enhance system controls to prevent improper Medicaid payments for claims not containing an appropriate NPI.

The department’s full response to the findings and recommendations is included in the audit.

A second report found that from Jan. 1, 2015 through Dec. 31, 2019, claims totaling $28.5 million were paid for Medicaid recipients who were reported as discharged from a hospital, but then admitted to a different hospital less than 24 hours later. These claims raise the possibility that the first hospital wrongly recorded a patient’s transfer as a discharge, which is a red flag that the claims are at a high risk of overpayment.  

In fact, auditors found nearly half of the claims that they sampled (15 of 31) were incorrectly coded as discharges in the eMedNY system. The result of those errors was overpayment of $252,107, or 55% of the total value of the 31 sampled claims. This high error rate raised concerns about the extent of overpayment in the $28 million of high-risk claims. Auditors also found that DOH has no process to identify and recover such improper Medicaid payments.

Auditors recommended DOH:

• Develop a process to identify and recover Medicaid overpayments for fee-for-service inpatient claims that have a high risk of incorrect patient status codes such as those identified by the audit.
• Review the $252,107 in overpayments and recover as appropriate.
• Review the remaining 2,017 high-risk claims totaling $28 million and recover overpayments as appropriate. Ensure prompt attention is paid to those providers that received the highest amounts of payments.

In their response, department officials agreed with the audit recommendations and said actions will and have been taken. Their response is included in the report.

An audit released in July 2019 identified more than $102.1 million in improper managed care premium payments on behalf of 65,961 recipients who had multiple identification numbers in the eMedNY system. In a follow-up report released today, auditors found DOH made progress addressing the problems identified in the initial audit report and the Office of the Medicaid Inspector General recovered $50.8 million of the $102.1 million identified. Another $51.3 million still needs to be recovered.

Since the 2019 audit, auditors identified another $14.3 million in managed care premium payments for 14,293 potentially inappropriate identification numbers for the period July 1, 2018, to Aug. 31, 2020. According to department officials, many of these cases have been resolved or are currently being reviewed.

Audits

Improper Medicaid Payments for Claims Not in Compliance With Ordering, Prescribing, Referring, and Attending Requirements (2019-S-2)

Improper Medicaid Payments for Misclassified Patient Discharges (2020-S-8)

Improper Managed Care Premium Payments for Recipients With Duplicate Client Identification Numbers (2020-F-22)

 

Employees sue their employer alleging it breached its fiduciary duty in its administration of their retirement plans

The complaints [Plaintiffs] in this class action represent New York University and New York University School of Medicine employees who are suing the for their respective employers' alleged breach of its fiduciary duty in its administration of their retirement plans within the meaning of the federal Employment Retirement Income Savings Act of 1974, [ERISA], 88 Stat. 829.*

As described by the Second Circuit of Appeals, "[t]he Plaintiffs participate in either the NYU Retirement Plan for Members of the Faculty, Professional Research Staff, and Administration [the Faculty Plan] or the NYU School of Medicine Retirement Plan for Members of the Faculty, Professional Research Staff, and Administration [the Medical Plan]."

The Faculty Plan covers most of NYU’s faculty, research staff, and administrative staff, while the Medical Plan serves employees of the School of Medicine.

In the words of the Circuit Court, "The NYU Retirement Plan Committee [the Committee] is the nine-member fiduciary entity responsible for administering both plans, having been designated as the Plan Administrator by NYU’s Board of Trustees. The Committee is made up of senior University and Medical Center administrators, including NYU’s Chief Investment Officer, the Senior Vice Presidents of Finance of NYU and the Medical Center, the Medical Center’s Controller, the Vice Presidents of Human Resources of NYU and the Medical Center, the Directors of Benefits of NYU and the Medical Center, and NYU’s Provost (or its designee)."

Both the Faculty Plan and Medical Plan [the Plans] are defined contribution plans, as set forth in 29 U.S.C. §1002(34), and are tax-qualified under 26 U.S.C. §403(b). Defined contribution plans are retirement plans in which "the employee contributes directly to her individual account, and the benefits that will ultimately accrue to the employee are a function of the amount she contributes to investments in the plan and the market performance of those investments, minus the expenses of plan administration."** 

The Circuit Court, Circuit Judge Menashi dissenting in part, held:

1. Plaintiffs adequately pled a breach of the fiduciary duty of prudence in Count V’s share-class claim, opining that it could not find "the district court’s dismissal of this claim harmless on the present record" and reinstated that claim for further proceeding;

2. The district court erred in denying Plaintiffs’ motion to amend to name individual Committee members as defendants, and vacated the district court's denial of Plaintiffs' leave to amend; but

3. Rejected the remainder of Plaintiffs’ arguments on appeal, affirming [a] the trial of their claims without a jury, [b] the use of written direct testimony at that trial, [c]  the entry of judgment for NYU on the tried claims, and [d] the denial of their motion for a new trial based upon the alleged disqualification of the Federal District Court judge.

In contrast, in a case decided by the Appellate Division, Meirowitz v Bayport-Bluepoint Union Free School Dist., 57 AD3d 858, a save harmless clause was held to bar employees and retirees from recouping Tax Deferred Plan investment losses from the employer. A teacher had sued the Bayport-Bluepoint Union Free School District after losing her contributions that the District transmitted to Horizon Benefits Administration, Inc., its third-party administrator of its retirement savings plan - a Tax Deferred Annuity Plan. The “retirement savings plan” was made available to Bayport-Bluepoint's employees pursuant to Internal Revenue Code §403(b).***  

Horizon, however, also acted as a vendor of investment products and provided two investment options, Choices Unlimited and Choices Select.

Employees electing to participate in the retirement savings plan were required to enter into a written salary reduction agreement [SRA] with Bayport-Bluepoint. The SRA provided that Bayport-Bluepoint would deduct money from the participant's paycheck and transfer it to Horizon's custodial bank, where the funds would then be distributed by Horizon to the vendor selected by the employee-participant. Significantly, the SRA contains a "Hold Harmless Provision" which provided that "[t]he Employee agrees that the Employer shall have no liability whatsoever for any loss suffered by the Employee with regard to his selection of an insurance company or mutual fund, or the solvency of, operation of, or benefits provided by said insurance company or mutual fund company."

The events leading to this lawsuit involved an investigation by the Attorney General of the State of Ohio that resulted in Horizon's assets being frozen and Horizon was eventually liquidated. Retired and active Bayport-Bluepoint employees who participated in the retirement savings plan and opted to have their salary reductions deposited in Horizon's Choices Unlimited product lost their money when Horizon was liquidated. They sued the District, alleging “breach of contract.” The Appellate Division said that Bayport-Bluepoint established a prima facieentitlement to summary judgment dismissing the lawsuit based upon the clear and unambiguous language of the SRA's Hold Harmless Provision. The Hold Harmless Provision said the court, "was clearly intended to encompass a situation like the one at hand."

The Appellate Division also observed that only retirement savings plan employee-participants selecting the Choices Unlimited investment option offered by Horizon lost money. Employee-participants selecting Horizon's Choices Selectinvestment option or having their money deposited in funds offered by other vendors did not suffer losses as a result of Horizon's liquidation.

* The Trustees of Columbia University in the City of New York is an Intervenor in this action.

** The court noted that "Plans that operate under §403(b)’s beneficial tax scheme are retirement plans administered by certain qualifying non-profits, including universities, that offer mutual fund and annuity investment options to participants."

*** See also Education Law Section 114 that provides for reduction of salaries for investment in custodial accounts for employees of the State Department of Education and Education Law Article 8-C, authorizing a Tax Deferred Annuity Plan for employees of the State University, the City University and the community colleges.  

Click here to access the full text of the New York University decision. 

Webinar update for the week of August 16, 2021

GOVERNMENT TECHNOLOGY's live webinar update for the week of August 16, 2021.

 

Building a Future-Proof Cybersecurity Practice Part 4: Adapting the Strategy - Tuesday, August 17 | 1:00pm Eastern
During this four-part Master Class series, you will learn how to develop and deploy a future-proof cybersecurity strategy in state and local government. In this fourth session, Center for Digital Government Senior Fellow Deb Snyder and Tanium CISO Chris Hallenbeck will discuss how to adapt and sustain a cybersecurity strategy.

Click here to Register to attend 

 

Closing the Gaps in Your Security Posture - Wednesday, August 18 | 2:00pm Eastern
Like other states, Georgia has worked tirelessly to implement an advanced cybersecurity strategy, to ensure its networks and data are protected and secure. And like other states, Georgia nonetheless still faced a major gap in its security posture: User authentication. Georgia IT leaders in recent years have worked to close that gap by adopting hardware security keys for multifactor authentication. To hear Georgia’s story – and to learn more about how hardware security keys are and how they work.

Click here to Register to attend

 

Next-Gen Engagement: Why Your Contact Center Should be Cloud-Native and AI Enabled - Thursday, August 19 | 2:00pmEastern
The pandemic exposed the limitations of legacy contact center technology. On-premises systems struggled to respond to rapidly changing requirements like spiking call volumes and the transition of contact-center agents to remote work. As a result, constituents often faced long delays in getting the help they desperately needed. Find out how a cloud-native contact center platform can help your organization address these shortcomings, while delivering a better customer experience and improving internal operations.

Click here to Register to attend

 

For assistance with registration, contact:
Jeremy Smith, jsmith@erepublic.com(916) 932-1402 direct