Modifying Incapacity Benefits—Certificates and Petitions for Review

The nature, extent, and/or level of incapacity often becomes a disputed issue in workers’ compensation claims. This could be due to a medical release assessing work capacity for an individual who was previously medically totally incapacitated, or a medical release assessing less stringent restrictions for an individual previously partially incapacitated with stricter restriction. It could also be a job offer, labor market findings that the employee has earning capacity within physical limitations, or surveillance evidence, among other things. 

The simplest approach to a discontinuance or reduction is in 39-A M.R.S.A. § 205(9)(A) of the Maine Workers’ Compensation Act. Incapacity benefits may be reduced or discontinued upon an employee’s return to work at the same employer. Oftentimes, however, this is not an option. 

If no payment scheme is in place (i.e., payment is being made non-prejudicially), § 205(9)(B) can be used to unilaterally reduce or discontinue incapacity benefits. Here, a WCB-8 Certificate of Discontinuance/Reduction of Compensation must be filed with the Workers’ Compensation Board by certified mail and sent by certified mail to the employee. The WCB-8 must be supported with the sort of evidence referenced above. In such a case, the employee may challenge this with an employee Petition for Review and request a Provisional Order reinstating benefits. The case then proceeds into formal litigation. 

What about when an employer/insurer wishes to take action but a payment scheme is in effect (approved agreement by the Board, Decree, accepted Memorandum of Payment)? The avenue for relief is a Petition for Review. In such cases, the Board must set the matter for hearing and go through the formal litigation process to determine whether benefits may be reduced or discontinued. Petitions for Review may be filed under circumstances similar to those above which would prompt a WCB-8. However, the standard is high for Petitions for Review. To prevail on a Petition for Review, an employer/insurer must show there has been a change in medical or economic circumstances to reduce or discontinue benefits. 

Note that in determining whether changed circumstances may exist, careful attention must be given to identifying the basis on which the prior award was made. 

To prove a change in medical circumstances, comparative medical evidence must be provided. For example, an employee was found medically totally incapacitated in a prior decree, but recent medical evidence demonstrates that the employee has the capacity to work with restrictions. The comparison is made between the most recent evidence and the circumstances at the time of the prior Board decision or approved agreement awarding benefits. 

Among other things, evidence regarding the current labor market or evidence that an employee has performed a work search may be relevant to the determination of whether there has been a change in economic circumstances. In all cases, the key is to ensure the evidence is of the kind which will provide sufficient proof of a change in circumstances. 

Another circumstance where a Petition for Review can be filed is when the 520-week “durational cap” is approaching in cases where an employee is receiving partial incapacity benefits. Such a Petition is usually filed in advance of the expiration of the 520-week mark given the length of the litigation process.

Workers’ Compensation Board Rules Taskforce Proposes Changes to Workers’ Compensation Board Rules

The Workers’ Compensation Board Rules Taskforce has proposed changes and amendments to various Board Rules. The following are highlights of what has been proposed. 

WCB Rules c. 1 may be amended to provide that if an employer is out of business, has been sold, or changed its name since the last time the employee worked there, an employee’s failure to give notice of the injury does not bar a claim unless the employer designated a person or entity to receive notice and the employee was provided with that designation in writing.

There is a proposed amendment to WCB Rules 4 §4(1), which currently provides that the cost for a 312 IME is borne “by the employer.” Under the proposed rule, the fee for the examination and report would be borne by the employer/insurer that requested the exam and any other employer/insurer that is a party to the proceeding. If an employee requests the exam, all employers/insurers that are parties shall, unless otherwise agreed, split the cost equally. 

A proposed amendment to Chapter 5 would provide for a procedure to expeditiously go before an administrative law judge (ALJ) if a medical release is revoked and there is a compensation payment scheme in place. 

There are numerous proposed amendments to WCB Rules c. 6, the vocational rehabilitation rule. Proposals would establish minimum qualifications for employment rehabilitation providers and provide for two-year appointments. The proposed rule would provide that providers must clearly articulate why or why not an employee is suitable for vocational rehabilitation and, if eligible, provide a detailed employment rehabilitation plan, including a clear plan for workforce reentry, outline of expected costs, and estimated length of the plan. There are also proposed rules dealing with plan implementation procedures and conflicts of interest. Objections to proposed plans would be forwarded to an ALJ for review. Proposed amendments also provide that an employment rehabilitation plan may end if the provider states that services have been completed; the duration allowed under §217(5) has expired; the applicant is unwilling or unable to continue, or is otherwise uncooperative; the parties agree to end the plan; a hearing officer or ALJ orders the plan to end; or the workers’ compensation claim lump sum settles. Finally, with respect to § 355(7) which provides that, “upon an order of recovery of plan implementation costs under section 217, subsection 3, the board shall assess the employer who refused to agree to implement the plan under section 217 an amount equal to 180% of the costs paid from the fund under this subsection,” a proposed amendment provides that an employer/insurer could file a petition objecting to an order of payment of costs where an employee returns to suitable employment after completing a rehabilitation plan to which the employer/insurer did not agree to pay.

A proposed amendement to WCB c. 8, § 18 would provide that the Consent Between Employer and Employee (WCB‑4A) may be used when the parties have agreed to discontinue or reduce benefits during the 21-day period following the filing of a Certificate of Discontinuance or Reduction of Compensation (WCB-8). By background, currently a WCB‑4A may be used when the parties have agreed to a voluntary payment of a retroactive closed-end period of incapacity, or a modification, reduction, or discontinuance in ongoing weekly incapacity benefits. 

There are various proposed amendments to WCB Rules c. 12, which primarily relate to hearing procedures. This includes revised questions on the exchange of information forms, minor changes in procedures regarding exhibits, and for continuances of hearings. There is also a proposed provision which would expressly provide that a party is not prohibited from seeking a prospective order for payment of medical treatment if payment for that treatment or treatments, or related expenses, has been denied by the opposing party.

WCB Limits Requirement for Notice of Rights Leading up to Cessation of Partial Incapacity Benefits after 520 Weeks

For injuries on or after January 1, 2013, partial compensation is calculated using 2/3 of the difference between the employee’s average weekly wage and post-injury earnings subject to the maximum rates. An employee’s benefits are capped after receiving 520 weeks of partial compensation benefits. This cap may be extended in cases involving extreme financial hardship or as outlined below. 

For injuries on or after January 1, 2013, employees whose permanent impairment exceeds 18% may qualify for an extension of the 520 week cap. Entitlement to benefits is determined based upon the facts as they exist at the expiration of 520 weeks of benefits, and requires that: (1) the employee must be working and the employee’s earnings (as measured by average weekly earnings over the most recent 26 week period) are 65% or less than the employee’s pre-injury average weekly wage; and (2) the employee’s actual earnings are commensurate with the employee’s earning capacity, including consideration of the employee’s physical and psychological work capacity as determined by a §312 Independent Medical Examiner, and (3) the employee has earnings from employment for a period of not less than 12 months within a 24 month period prior to the expiration of the 520 week durational cap. Additionally, once an employee’s post-injury earnings (as measured by the most recent 26 week period) exceed the pre-injury average weekly wage, the employee’s entitlement to partial incapacity benefits terminates permanently. 

Pursuant to the Board’s rules, an employer can discontinue partial incapacity benefits at the expiration of 520-weeks of payment of such benefits but, according to the a Workers’ Compensation Board rule, only if notice is first given to the employee 21-days in advance of the upcoming date of discontinuance and of the employee’s 30-day right to request a hardship extension. The rule states:

1. Prior to cessation of benefits pursuant to 39-A M.R.S.A. § 213(1), the employer must notify the employee that the employee’s lost time benefits are due to expire. The notice must be sent at least 21 days in advance of the expiration date, and must include the date the lost time benefits are due to expire and the following paragraph:

If you are experiencing extreme financial hardship due to inability to return to gainful employment, you may be eligible for an extension of your weekly benefits. To request such an extension, you must file a Petition for Extension of Benefits within 30 calendar days of the date that benefits expire, or, in cases where the expiration date is contested, within 30 calendar days of a final decree as to the expiration date.

Failure to send the required notice will automatically extend the employee’s entitlement to lost time benefits for the period that the notice was not sent. 

Notice shall be considered “sent” if it is mailed to the last address to which a compensation check was sent.

WCB Rule c. 2, §5

In Lorraine Somers v. S.D. Warren Co., Me. WCB No.: 00017178 (Feb. 28, 2017) Judge Elwin found that the above rule applies only if the employer files a 21-day Certificate of Discontinuance. It does not apply when a Petition for Review is filed when the decision is issued after the 520-week limit has expired because the future “date of discontinuance” is unknown at that point. Judge Elwin held that applying the rule when a Petition for Review is filed would be illogical because the date benefits are “due to expire” depends on when the Board issues a decision. The decision was appealed. The Appellate Division will decide the matter on the briefs or, if requested and the case fits the criteria, after oral argument.

As an aside, a Certificate of Discontinuance can only be filed when benefits are being paid voluntary, without prejudice (i.e. payment is not being made pursuant to an “accepted” Memorandum of Payment, Record of Mediation or Decree). In all other cases, a Petition for Review must be filed to discontinue benefits.