N.Y. Comp. Codes R. & Regs. tit. 12, § 363.12 – Payment of disability benefits pending determination of controverted workers' compensation or volunteer firemen's benefit claims; claim for reimbursement out of workers' compensation or volunteer firemen's benefit awards.

(a) If an employee claims workers' compensation under the Workers' Compensation Law or benefits under the Volunteer Firemen's Benefit Law, and if such claim is controverted on the ground that the employee's disability was not caused by an accident that arose out of and in the course of his employment or by an occupational disease under the Workers' Compensation Law or on the ground that the employee's disability was not caused by an injury in line of duty as a volunteer fireman, the chairman, employer or employer's disability benefits carrier shall, regardless of any additional issues raised in controverting the claim under the Workers' Compensation Law or Volunteer Firemen's Benefit Law, forthwith pay benefits under the Disability Benefits Law to the employee for his disability, if the employee is otherwise eligible and entitled to benefits under the Disability Benefits Law.
(b) An employer or carrier controverting a claim for workers' compensation or volunteer firemen's benefits is required promptly to furnish a copy of the prescribed notice of controversy and medical report(s) to the chairman, employer or employer's disability benefits carrier. In such event, furnishing of the copy of the notice of controversy and medical reports shall, for purposes of the Disability Benefits Law, constitute furnishing of written notice and proof of disability in behalf of the employee to the chairman, employer or employer's disability benefits carrier subject to the provisions of section 217(1) of the Workers' Compensation Law. In the event such claim for benefits under the Disability Benefits Law is rejected, the employer or employer's disability benefits carrier shall mail written notice of rejection to the employee as required under section 217(6) of the Workers' Compensation Law. A copy of such notice of rejection shall, on request, be promptly filed with the chairman.
(c) The chairman, employer or employer's disability benefits carrier making disability benefits payments pursuant to the provisions of section 206(2) of the Workers' Compensation Law shall have a lien against the award, if any, made in the controverted workers' compensation or volunteer firemen's benefits case, provided claim for reimbursement is filed with the board before the award is made, and either:
1. (1) the board's decision and award direct reimbursement thereform; or
2. (2) the insurance carrier liable for payment of the award receives, before the award is made, a copy of the claim for reimbursement from the chairman, employer or carrier who paid the disability benefits.
(d) Preliminary notice of claim for reimbursement shall be made on a prescribed form when payment of disability benefits is commenced and final claim for reimbursement shall be made on a prescribed form when payments terminate.