WORKERS’ COMPENSATION LAW § 136
§ 136. Workers' compensation fraud inspector general.
Effective: October 3, 2011
1. Definitions. For the purposes of this section, the following definitions shall apply:
(a) “Inspector general” means the workers' compensation fraud inspector general created by this section.
(b) “Assistant inspector general” means a workers' compensation fraud assistant inspector general created
by this section.
2. Appointment, compensation and removal. Notwithstanding any other provision of law, the governor shall appoint the inspector general. The board shall employ and the governor shall fix the compensation of the inspector general. The inspector general shall, and may do so without civil service examination, appoint and the board shall employ, such assistant inspectors general and other persons as he or she deems necessary, determine their duties and fix their compensation. Such assistant inspectors general shall assist the inspector general in carrying out the inspector general's duties and responsibilities as set forth in this section and shall have such powers as granted the inspector general under this section. Employees appointed pursuant to this section without civil service examination shall be placed in the noncompetitive class of the competitive service pursuant to subdivision two-a of section forty-two of the civil service law and shall serve at the pleasure of the governor. The payment of salaries and compensation of employees appointed pursuant to this section shall be made pursuant to section one hundred forty-eight of this chapter.
3. Powers, duties and responsibilities. The inspector general shall investigate violations of the laws and regulations pertaining to the operation of the workers' compensation system. The inspector general shall have the following powers, duties and functions:
(a) to conduct and supervise investigations, within or without this state, of possible fraud and other violations of laws, rules and regulations pertaining to the workers' compensation system;
(b) to subpoena witnesses, administer oaths or affirmations, take testimony and compel the production of such books, papers, records and documents as the inspector general may deem to be relevant to an investigation undertaken pursuant to this section;
(c) to report to the attorney general, the insurance frauds bureau, or other appropriate law enforcement agency, violations found through investigations undertaken pursuant to this section and to provide such materials and assistance as may be necessary or appropriate for the successful investigation and prosecution of violations of this chapter;
(d) to submit a written report, on an annual basis, to the governor and to the chair of the board, listing all activities undertaken to the extent such activities can be disclosed pursuant to subdivision five of this section; and
(e) to recommend legislative and regulatory changes to the governor and to the chair of the board.
4. Cooperation of agency officials and employees. (a) In addition to the authority otherwise provided by this section, the inspector general, in carrying out the provisions of this section, is authorized: (i) to have full and unrestricted access to all records, reports, audits, reviews, documents, papers, recommendations or other material maintained by the board or any other state agency relating to the workers' compensation system, with respect to which the inspector general has responsibilities under this section; and
(ii) to request such information, assistance and cooperation from any federal, state or local government, department, board, bureau, commission, or other agency or unit thereof as may be necessary for carrying out the duties and responsibilities enjoined upon the inspector general by this section. State and local agencies or units thereof are hereby authorized and directed to provide such information, assistance and cooperation.
(b) No person shall prevent, seek to prevent, interfere with, obstruct or otherwise hinder any investigation being conducted pursuant to this section.
5. Disclosure of information. The inspector general shall not publicly disclose information which is:
(a) a part of an ongoing investigation or prosecution; or
(b) specifically prohibited from disclosure by any other provision of law.
The disclosure of information in order to coordinate investigations with the insurance frauds bureau of the department of financial services, including the unit for workers' compensation insurance frauds investigations within such insurance frauds bureau, and any frauds investigations unit of the state insurance fund, to provide the report required by paragraph (c) of subdivision three of this section or to apprise the chair of ongoing investigations shall not be considered public disclosure for purposes of this section.
(Added L.1996, c. 635, § 13. Amended L.2007, c. 6, § 16, eff. March 13, 2007; L.2011, c. 62, pt. A, § 104,
eff. Oct. 3, 2011.)
HISTORICAL AND STATUTORY NOTES
L.2011, c. 62 legislation
L.2011, c. 62, pt. A, § 104, subd. (c), provides:
“(c) Wherever the terms ‘insurance department’, ‘department of insurance’, ‘banking department’ or
‘department of banking’ appears in the consolidated or unconsolidated laws of this state other than the
banking law or the insurance law, such terms are hereby changed to ‘department of financial services’.”
L.2007, c. 6 legislation
Subd. 5, closing par. L.2007, c. 6, § 16, added the closing paragraph.
L.1996, c. 635 legislation
Section effective Sept. 10, 1996, provided that nothing contained herein shall be deemed to affect the
application, qualification, expiration, reversion or repeal of any provision of law amended by any section of
this act, pursuant to L.1996, c. 635, § 90, set out as a note under Workers' Compensation Law § 20.
SUPPLEMENTARY PRACTICE COMMENTARIES
by Martin Minkowitz
This section was amended in 2007 in an effort to support coordination of efforts to prevent
fraud. This is in addition to provisions in § 141(c) WCL created for the same purpose. The
amendment provides for an exception to the non-disclosure of information by the inspector
general. It is now permissible to share such restricted information with the frauds bureaus of the
Insurance Department and the State Insurance Fund, as well as the Chair of the Board.
The immunity provision of the Insurance Law (§ 635 Insurance Law) was also amended at the
same time in 2007 to give qualified immunity to anyone who, in good faith, gives information
of suspected fraudulent insurance transactions to any state agency investigating fraud or
misconduct relating to workers' compensation insurance. It deleted the specific reference to the
fraud inspector general with the apparent belief that the new broader provision includes that
The Tax Law was also amended to provide for sharing of information between the Department
of Taxation and Finance and the Department of Labor. (See§ 697 Tax Law.)
by Martin Minkowitz
The office of a Workers' Compensation Fraud Inspector General (IG) was created by statute in
1996. Unlike other employees of the Board, the IG and those appointed as Assistant Inspector
Generals (AIG) are not appointed by either the Chair or the Board. Instead, the Governor appoints
the IG and the IG then appoints those who will be AIGs. All are appointed without the need to
take a civil service exam. Compensation for the IG is fixed by the Governor and the IG sets the
salaries for the AIGs. This was apparently done to maintain a degree of independence from the
Board although they are all Board employees.
The IG's powers and duties include investigation of all aspects of the workers' compensation
system including the activities of other employees of the Board. This makes the independence of
the IG and the AIGs very important. Neither the Chair nor the Board has the authority to interfere
with the IG's investigations and must provide full cooperation to the IG's office. This includes full
and unrestricted access to all Board files. The IG's office is one of the exceptions to the prohibition
of access to files contained in § 110-a WCL.
The IG renders a report to the Governor and the Chair each year of the IG's activities, except for
those investigations, which are still in progress.
The IG does not do its own prosecution of those it finds to have been involved in fraudulent
activities. Instead, it is required to notify the appropriate law enforcement agency such as the State
Attorney General, a District Attorney or U.S. Attorney. It is not restricted as to which it may turn
over the prosecution. It would then assist in the prosecution of the case after a prosecutor has
agreed to proceed. The statute (§ 136, subd. 3(c)) refers to the State Insurance Department Fraud
Bureau as one of those law enforcement organizations. It is presumed, since that Bureau does not
prosecute on its own, that such a reference of the investigation would be for the further
investigation of the facts. It would probably be most appropriate in matters relating to fraud
committed by insurance companies, where there is a specific expertise in that Bureau.
The IG may be referred situations where an employer, carrier or Independent Medical Examiner
(IME) has caused a medical report to be submitted to the Board as evidence in a case which is
different from that Independent Medical Examiner's opinion of the injury or illness after having
examined the claimant. The medical report is significant in establishing the benefits to be awarded.
Encouraging the change of the IME's opinion to be reported to the Board would be the basis of an
allegation of fraud (see§ 137(6) WCL).
LAW REVIEW AND JOURNAL COMMENTARIES
New York State's 2007 workers' compensation reform: Success or failure? Mary L. D'Agostino, 76
Alb. L. Rev. 367 (2012/2013).
Workers' Compensation 1084.
Westlaw Topic No. 413.
C.J.S. Workers' Compensation §§ 708 to 709.
Treatises and Practice Aids
New York Practice Workers' Compensation § 20:11, Fraud Inspector General.
McKinney's Workers' Compensation Law § 136, NY WORK COMP § 136
Current through L.2014, chapters 1 to 550.