Maine WCB to Take up Rule Proposals in April 2018

The Maine Workers’ Compensation Board (WCB) Rules Task Force has worked on developing a set of rule proposals since October 2016. These proposed rules will go before the WCB for a vote on April 3, 2018, at which time the formal rule-making process may begin. The following are some highlights: 

Notice to an Out-of-Business Employer (WCB Rules c. 1, § 1-A)

A proposed amendment would provide a claim notice mechanism when an employer is out of business and there is no one connected to the business to receive notice of a claim. The proposed rule provides that an employee can give notice of an occupational disease or injury to the Board when an employer is out of business and its insurer is unknown. Rule 1.1 is not triggered until a claim for benefits is received by the insurer, third-party administrator, or the employer’s self-insurance administrator. As a practical matter, such cases often arise in the occupational disease context where exposure is alleged many years prior to a claim being made.

Fringe Benefit Inclusion in Average Weekly Wage (WCB Rules c. 1, § 5(1)(A)(3))

The proposed amendment would provide that fringe benefits include the employer’s cost to provide pension benefits, including 401(k) matching funds, but excluding 401(k) matching funds which are reduced, but not completely discontinued.

Average Weekly Wage Calculation (WCB Rules c. 1, § 5(2)(C))

The employer/insurer may adjust the average weekly wage once using a WCB-4 within 90 days after making the first lost-time payment on a claim to correct an error. The employee may invoke dispute resolution if the adjustment results in decreased compensation. If greater than 90 days, the employer/insurer must use a WCB-8. This modification gives an employer/insurer one chance to fix an incorrect average weekly wage. However, the change must be made within 90 days of the first indemnity payment. Thereafter, any change must be made through the filing of a WCB-8.

Medical Only Claims: First Report of Injury (WCB Rules c. 3, § 1-A)

The amendment would require First Reports of Injury on medical-only claims. Under the amendment, an employer must complete a First Report (WCB-1) within 7 days after the employer receives notice or knowledge of an injury that requires the services or a health provider but has not caused the employee to lose a day’s work. A copy of the First Report must be sent to the employee and the employer’s insurer within 24 hours after completion.

Section 312 IMEs (WCB Rules c. 4, § 4(1))

A proposed amendment would address who pays for a § 312 independent medical examiner (IME) in an apportionment claim and who pays if there is no apportionment. The proposed amendment provides that, in the event the § 312 exam is scheduled to determine apportionment responsibility between employers, the employer/insurer that requested the exam pays for the exam and report unless otherwise agreed between the parties. If any employee requests the exam, all employers/insurers that are parties to the proceeding must, unless agreed otherwise, split the cost equally.

Reimbursement/Payment Agreements (WCB Rules c. 5, 1.07(6)(E))

A proposed Rule would address a problem the Board is facing with payors who claim a contractual right to pay less than the amount set forth in the fee schedule. Under the proposed rule, if a dispute arises as to whether there is a payment agreement that supersedes the maximum allowable payment otherwise payable, the burden is on the party invoking a payment agreement to provide a written contract within 30 days of a provider’s request. The contract must establish the party’s right to pay an amount different than provided in the Board’s Rules. If the contract is not produced within 30 days of a request, the bill will be subject to the maximum allowable amount.

Payment Procedures (WCB Rules c. 8, § 11(2))

The Board notes that indemnity payments are paid for incapacity. If there is no incapacity, there should be no obligation to pay lost time benefits. With respect to reductions or discontinuances pursuant to 39-A M.R.S.A. § 205(9)(A), under the proposed Rule, an employer may discontinue benefits regardless of the employee’s actual earnings if:

1. The employee is released to return to work without restrictions or limitations due to the injury for which benefits are being paid by the employee’s treating health providers; 
2. There are no conflicting medical records with respect to the lack of restrictions or limitations due to the injury for which benefits are being paid; and 
3. The employee, instead of returning to work, receives vacation pay, “paid time off” its equivalent, or holiday pay instead of regular wages. 

Payment Procedures (WCB Rules c. 8, § 18(1))

A proposed amendment to this Rule would provide that parties will now be able to discontinue benefits during a period covered by a 21-day letter. Under the proposed Rule, “The Consent Between Employer and Employee (WCB-4A) may be used when the parties agree to discontinue or reduce benefits during the 21-day period following the filing of a Certificate of Discontinuance of Reduction of Compensation (WCB-8).”

Coordination of Benefits Paid Pursuant to “Paid Time Off” or Equivalent Plans (WCB Rules c. 9, § 3(2)(2)(A-C))

The Rule would clarify how paid time off is to be treated and coordinated. In particular, proposed section C addresses the way some employers characterize time off and provides a formula for calculating a set-off in those cases. The proposed Rule provides: 

1. Paid time off or equivalent plan means an employer-paid benefit that covers both sick leave and vacation leave. 
2. If a paid time off or equivalent plan designates a specific portion of the benefit as sick leave, an employer/insurer may reduce benefits, as set forth in 39-A M.R.S.A. § 221(3)(A)(2) by the amount designated as sick leave. 
3. If a paid time off or equivalent plan does not designate a specific portion of the benefit a sick leave, an employer/insurer may reduce benefits, as set forth in 221(3)(A)(2), by 25% of the paid time off or equivalent plan payment received by the employee.

Social Security Notice to Employee (WCB Rules c. 9, § 3(D))

A proposed Rule would allow employers to notify an employee if the employee is receiving old age Social Security Benefits.

312 IME Request (WCB Rules c. 12, § 10(1))

A proposed Rule sets forth deadlines for § 207 and § 312 IME requests when a claim is in litigation. The proposed Rule provides:

1. If a § 312 exam has been requested prior to filing of the Joint Scheduling Memo, the parties must state on the memo the date of the request, whether it has been approved by the Board, and, if so, the name of examiner and date of exam. 
2. If a § 207 exam has been requested prior to the filing of the Joint Scheduling Memo, the parties must state on the memo the date of the request, name of examiner, and date of the exam. 
3. If a § 312 exam has not been requested prior to the filing of the Joint Scheduling Memo, a request must be made no later than 30 days from the date of filing. 
4. If a § 207 exam has not been requested prior to the filing of the JSM, a request must be made no later than 30 days from the date of filing. 

Work Search Evidence (WCB Rules c. 12, § 11(1))

A proposed Rule addresses an employee’s obligation when work search evidence is going to be introduced. The Rule provides that no later than 30 days after mediation or the filing of a petition, whichever is later, the employee shall provide the employer with the work search or labor market evidence the employee intends to introduce into evidence. The employee must use a standard Board work search log and include, at minimum, names of prospective employers, dates of application, responses to the application, if any, and whether the application was submitted in person, by mail, electronically, or by some other means.

Surveillance Evidence (WCB Rules c. 12, § 11(4)(A))

A proposed Rule would address the employer’s obligation with respect to surveillance evidence. Under the Rule, the employer must provide all surveillance information to the employee developed since the date of injury, or since the last decree, whichever is shorter, in connection with the claim, and provide an affirmation that all surveillance evidence has been provided. The employer must provide the surveillance to the employee within 14 days after the employer receives the information from the employee, and in no event later than 7 days before hearing.

The Rules will be voted on April 3, 2018. If approved, this will allow the formal rule-making process to begin, which includes review by the Governor’s office, publication of a rule-making hearing, a hearing, comment period, additional Board vote and review by the Attorney General’s Office, and filing with the Secretary of State. Stay tuned for more updates.

Maine Workers’ Compensation Board Issues 2018 Annual Report

The Maine Workers’ Compensation Board (WCB), in conjunction with the Superintendent of Insurance and the Director of the Bureau of Labor Standards, has issued its 2018 Annual Report on the Status of the Maine Workers’ Compensation System. The report can be found online at: http://www.maine.gov/wcb/Departments/administration/troika.html.

The Report notes that dispute resolution continues to perform well. Compliance with the Workers’ Compensation Act is generally high. Claim frequency and compensation rates are stable. The Report states that the WCB, over time, has transitioned from an agency with a primary focus on dispute resolution to one which provides effective regulation and improved compliance and functions as an advocate for both injured workers and the employers for whom they work. 

There are signs of improvement from a financial perspective. Not long ago, Maine was one of the costliest states in the nation for workers’ compensation. According to the Report, Maine’s status has improved when compared to other jurisdictions requiring workers’ compensation. It has moved from one of the most expensive states in the nation to one that is in the average range for premiums and benefits. As an aside, the report notes that some national reports comparing Maine to other jurisdictions continue to fail to account for the very high percentage of Maine employers who are self-insured—about 40%. This is much higher than most states. When comparisons are made on a national basis, they do not account for the self-insured community and, as such, these comparisons do not give an accurate picture of the Maine workers’ compensation market. 

The Board continues to focus on controlling medical costs through the Medical Fee Schedule. In 1992, the Legislature mandated the adoption of a Medical Fee Schedule to help contain healthcare costs within the system. However, it was not until 2011 that one was implemented. The Report highlights the progress Maine has made in controlling medical costs when it adopted a medical facility fee schedule in 2011 and in updating all medical fees each year thereafter. 

The Board continues to strive to address the problem of employee misclassification and is also monitoring the national and state opioid crisis. 

Despite the generally positive trends, the Report does note that more can be done to improve Maine’s workers’ compensation system. Some difficult issues the Board has addressed—and continues to address—include:

• Administrative law judge appointments
• Electronic filing mandates
• Budgetary and assessment matters
• Rule revisions
• Form revisions
• Compliance issues
• Independent medical examiner recruitment and retention
• Workers' advocate resources
• Dispute resolution
• Increases in compliance benchmarks
• Independent contractor predetermination and assessment
• Medical fee schedule updates
• Data gathering and employee misclassification 

Overall, the Report is generally positive. According to the Board’s Executive Director, Paul Sighinolfi, the factors discussed in the Report are “evidence of the Maine workers’ compensation system’s gradual and continued improvement for both injured employees and the business community.”

Permanent Impairment and the 18% Threshold – What It Means and What to Expect in the Coming Years

Permanent impairment has been in the news in recent months. With the Law Court’s decision in Bailey v. City of Lewiston (2017 ME 160), it has held that an established permanent impairment rating is not subject to revision, even in the face of changed medical circumstances. In Somers v. S.D. Warren Co. (Maine Workers’ Comp Board [WCB] App. Div. No. 17-38 [November 13, 2017]), the Appellate Division held that the WCB may not revise a previously established permanency rating in an upward manner.

With the recent focus on permanent impairment, it is worth addressing the current permanency threshold and what it means for ongoing benefits.

Permanent impairment is “any anatomic or functional abnormality or loss existing after the date of maximum medical improvement that results from the injury” (39-A M.R.S.A. § 102). Maximum medical improvement is defined as, “the date after which further recovery and further restoration of function can no longer be reasonably anticipated, based upon reasonable medical probability.”

For injuries on or after January 1, 1993, permanent impairment no longer means additional benefits for an injured worker, but it plays a significant role in determining how long partial incapacity benefits can be received (the level of permanent impairment does not come into play for total incapacity benefits, which must be paid for the duration of disability).

If permanent impairment is below the applicable threshold, injured workers may not receive partial benefits beyond 520 weeks. However, if permanent impairment exceeds the threshold, benefits may continue for the duration of disability.

The permanent impairment threshold for injuries is as follows:

• Injuries from January 1, 1993, to December 31, 1997, the threshold is 15%
• Injuries from January 1, 1991, to December 31, 2001, the threshold is 11.8%
• Injuries from January 1, 2002, to December 31, 2003, the threshold is 13.2%
• Injuries from January 1, 2004, to December 31, 2005, the threshold is 13.4%
• Injuries from January 1, 2006, to December 31, 2012, the threshold is 12%

For injuries on or after January 1, 2013, if, at 520 weeks, the partially incapacitated employee is working, earning 65% or less of his average weekly wage, and permanent impairment attributable to the injury is “in excess of 18%,” partial incapacity benefits may be required beyond 520 weeks so long as the employee continues to work and earn less than his average weekly wage. Regardless of the extent of permanent impairment or level of earnings, partial incapacity benefits may be extended beyond 520 weeks if the employee proves “extreme financial hardship due to inability to return to gainful employment.”

We are just over five years into a new permanent impairment threshold. In less than five years, those employees with injuries in early 2013 will be involved in litigation over cessation of benefits. The changes for injuries on or after January 1, 1993, will not begin to have a major impact until approximately 2022 or 2023, when the first group of employees with 2013 injuries will be involved in litigation over permanent impairment and cessation of benefits. Still, the threshold has an immediate impact when valuing cases for settlement purposes and planning for the future. Expect to see increased instances where individuals claim financial hardship, or continuing cases where employees try to allege they have 18% or more whole person permanent impairment. With this increased permanency threshold, generally only more serious injuries and/or injuries involving permanency from a psychological sequela will exceed the threshold.

Recent Appellate Division Cases: Benefits Reduction Due to Erroneous Calculations, Improper Communications with § 312 Examiner

Penalties for Reducing Benefits After Years of Improper Calculations

In Puiia v. Rumford Paper Co. (Me. WCB App. Div. No. 17-34), the Maine Workers’ Compensation Board (WCB) Appellate Division will hear oral argument in a case in which the employee sought the imposition of penalties based on the employer/insurer’s reduction of incapacity benefits. The employee had been paid 100% partial benefits pursuant to a March 2008 Decree that stated, “The employee is entitled to 100% partial benefits (limited by the statutory maximum) for the period November 28, 2006, through the present, and continuing.”

Per the above order, the Employee began paying weekly compensation of $574.08. On June 30, 2018, the Employer filed a Modification of Compensation, increasing benefits to $596.42 per week effective July 1, 2008, the date the maximum weekly benefit amount (§ 211) was adjusted. Similar increases were made on July 1 of each year through 2013. However, effective July 1, 2014, the Employer reduced weekly compensation at a rate from $655.78/week to $492.96/week. The reduction was made because the Employer had incorrectly calculated benefits by including fringe benefits (under § 102(4)(H) fringe benefits are not to be included in the benefit calculation if the resulting benefit amount exceeds 2/3 of the State Average Weekly Wage (SAWW) at the time of injury). In this case, the employee’s full compensation rate was an amount in excess of 2/3 of the SAWW. Therefore, by operation of § 102(4)(H), fringe benefits cannot be included in the weekly benefit amount. The administrative law judge (ALJ) found, “[t]he fact that Employer erroneously did so for years does not require it to continue to make the same computational error.”

The WCB found that the Employer/Insurer correctly calculated benefits in accordance with the payment order in the 2008 Decree, resulting in a reduction of her benefits effective July 1, 2014. There was therefore no legal basis for the imposition of penalties under §§ 359 or 360.

Alleged Improper Communication with § 312 Examiner

In Leclair v. Twin Rivers Paper Co., LLC (Me. WCB App. Div. No. 17-19), the issue before the Appellate Division is “[w]hether a violation of Board Rule Chapter 4 regarding communication with a § 312 examiner is sufficient to disqualify that examiner automatically or whether such disqualification is dependent on a finding of actual bias.” 

WCB Rules c. 4 § 3 provide in relevant part:

Contacts with the employee by the Board-appointed independent medical examiner will be limited to the scheduling of examinations and actual examinations. All communication between the examiner and the parties must be in writing and, except for questions which a party requests that the examiner address in the report, may only occur by agreement or with the permission of the hearing officer. Any such communication must be received by the Board and copied to all opposing parties not later than fourteen (14) days prior to any examination and must clearly and conspicuously state that the communication has been agreed to by the parties or approved by a hearing officer. Communications that comply with this subsection will be forwarded to the examiner through the Office of Medical/Rehabilitation Services. Communications received by the Board on or after the date of the examination will only be forwarded to the examiner with prior approval of a hearing officer. 

In this case, involving an alleged gradual injury to the lungs and respiratory system, the employee was evaluated by a § 312 examiner. The § 312 examiner found the upper airway sensitivity to be an occupational injury. The WCB adopted these findings. The employer/insurer objected to the admissibility of the § 312 examiner’s report because, according to the ALJ, “employee brought with him to the examination written materials which were not submitted to the [insurance medical exam] IME consistent with Board rules.” However, the ALJ also noted that at this deposition, the § 312 examiner testified that the written materials the employee brought to the § 312 exam “made no difference to his diagnosis and causation opinion.”

The decision is expected to shed light on whether the WCB Rule at issue is a zero-tolerance provision or whether actual bias must be demonstrated to disqualify a § 312 examiner. 

Remaining Issues

The Appellate Division will also take up other issues during the February session, including sufficiency of findings to support ongoing causation, refusal of suitable work, and a change in circumstances in the context of work capacity, among others. The Appellate Division is set to hold additional sessions this year in April, June, September, and December.

Maine Workers’ Compensation Board Approves New § 312 Candidates

In a unanimous vote, the Maine Workers’ Compensation Board recently approved Dr. Benjamin Branch, a physiatrist, and Dr. Howard Glass, a cardiologist, as independent medical examiners (IMEs) pursuant to 39-A M.R.S.A. §312 of the Maine Workers’ Compensation Act. 

Section 312 IMEs render medical findings on the medical condition of an employee and related issues. The IME in a case may not be the employee’s treating healthcare provider and may not have treated the employee with respect to the injury for which the claim is being made or for which the benefits are being paid. Unless agreed upon by the parties, or no other physician is reasonably available, a physician is not eligible to be assigned as an IME if the physician has examined the employee at the request of an insurance company, employer, or employee in accordance with section 207 (an employer/insurer-requested medical examination) or has been closely affiliated with the insurance company at any time during the previous 52 weeks. 

The opinions of IMEs are afforded great weight. Under the Maine Workers Compensation Act, “[t]he board shall adopt the medical findings of the [IME] unless there is clear and convincing evidence to the contrary in the record that does not support the medical findings.” The Maine Supreme Court has interpreted the “clear and convincing evidence to the contrary” standard to require a showing “that it is highly probable that the record did not support the [IME’s] findings.” Dubois v. Madison Paper, Co., 2002 ME 1. The Court in Dubois described the standard as follows:

The party with the burden of persuasion may prevail only if he can place in the ultimate factfinder an abiding conviction that the truth of his factual contentions are highly probable.

Id. at ¶ 10 (citations and internal quotations omitted).

The Board maintains a list of approved examiners, which, at the present time, includes the following specialties: chiropractic, internal medicine, family medicine, orthopedics, osteopathy, physiatry, podiatry, psychology, psychiatry, neurology, and pulmonology.

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.

Sporadic Lost Time, the Seven Day Waiting Period, and Rule 1.1

The Maine Workers’ Compensation Board recently addressed a case involving the time for payment of benefits, the statutory waiting period and the application of Rule 1.1, emphasizing the need to pay close attention to broken periods of lost time.

39-A MRSA § 205(2) provides:

2. Time for payment. The first payment of compensation for incapacity under section 212 or 213 is due and payable within 14 days after the employer has notice or knowledge of the injury or death, on which date all compensation then accrued must be paid. Subsequent incapacity payments must be made weekly and in a timely fashion. . . .

39-A MRSA § 204 imposes a seven-day waiting period before incapacity benefits are payable: 

§204. Waiting period; when compensation payable
Compensation for incapacity to work is not payable for the first seven days of incapacity, except that firefighters must receive compensation from the date of incapacity. In case incapacity continues for more than fourteen days, compensation is allowed from the date of incapacity.

The so-called “fourteen-day rule," per WCB Rule, c. 1 § 1, provides: 

§ 1. Claims for Incapacity and Death Benefits  

1. Within fourteen days of notice or knowledge of a claim for incapacity or death benefits for a work-related injury, the employer or insurer will:

A. Accept the claim and file a Memorandum of Payment checking "Accepted"; or
B. Pay without prejudice and file a Memorandum of Payment checking "Voluntary Payment Pending Investigation"; or
C. Deny the claim and file a Notice of Controversy.

For cases where the employee does not lose consecutive days from work, the methodology recommended by the Workers’ Compensation Board’s Monitoring Audit and Enforcement Unit is to file a Memorandum of Payment (MOP) or Notice of Controversy (NOC) “on the sixth day after ‘day 8.’” In other words, once an employee has missed eight nonconsecutive days of work, a MOP or NOC should be filed with the Board on the sixth day thereafter.

In Bendtson v. Penobscot Bay Medical Center, WCB No.: 16-004591 (October 18, 2017), the Employee in Bendtson worked as a certified nursing assistant (CNA). She was hurt lifting a resident on March 1, 2016. She was provided with a transitional work assignment from March 1, 2016, to April 1, 2016. She called out before her scheduled shift on March 1 as she claimed she was in too much pain to work. She called out again before her next scheduled shift on March 4, 2016. On March 8, 2016, she was assessed with modified work capacity. Over the next two weeks, she worked several light-duty shifts but also called out twice due to her back. On March 22, 2016, the employee checked herself into a facility for unrelated treatment, but was discharged March 28, 2016. On that date, she told her Employer that she was unable to work on account of neck/upper back pain.

In sum, the employee called out or was taken out of work by a medical provider on seven nonconsecutive days (March 1, 4, 5, 6, 7, 13, and 18). The NOC was required to be filed six days after “day 8.” In this case, “day 8” did not occur until after March 28. The administrative law judge (ALJ) noted, “whether there was a fourteen-day violation depends on how much time [the Employee] was out of work due to her work injury, whether this exceeded the statutory seven-day waiting period, and when the Employer had ‘notice or knowledge of a claim for incapacity.’”

The Board found that the filing of a NOC on April 1 (well within fourteen days of March 28) was timely.

The Board also reminded us that the event which triggers an employer’s obligation to act (under Rule 1.1) is its notice or knowledge of a “claim for incapacity or death benefits for a work-related injury.” An employer’s knowledge of lost time is insufficient to trigger the rule—the employer must have knowledge of a claim for incapacity benefits. The ALJ found it significant that the Employer had notice of the claimed injury and that the Employee had lost several days of work but that this did not constitute knowledge of a “claim for incapacity benefits” which triggered an employer’s obligation to file a NOC. Because the seven-day waiting period had not yet expired, the Employer had no obligation to pay benefits. The Employer would not have been able to file a MOP, either accepting the claim or as a voluntary payment without prejudice, because it was not yet obligated to make any payment. Therefore, two of the three actions that an employer must choose under Rule 1.1 were unavailable to the Employer until March 28, 2016, when the employee told the Employer she was unable to work due to neck and upper back pain.

Ultimately, because the employee’s sporadic days out of work did not exceed the seven-day waiting period until March 28, 2016, and because the Employer had no notice or knowledge of a claim for incapacity until then, the filing of a NOC on April 1, 2016, was timely and there was no fourteen-day violation.

Appellate Division Revisits Res Judicata and Permanent Impairment in the Wake of Bailey v. City Of Lewiston

In Somers v. S.D. Warren Co., WCB App. Div. No. 17-38 (November 13, 2017), the Employee appealed a decision granting S.D. Warren’s Petition for Review and request to discontinue payments due to the expiration of the 520-week durational limit on incapacity benefits.

In a 2008 decree, the administrative law judge (ALJ) found the Employee’s knee condition resulted in 7% whole-body permanent impairment. The ALJ specifically declined to award any permanent impairment for the Employee’s adjustment disorder, a psychological sequela of the knee injury because, according to the § 312 Independent Medical Examiner, she did not sustain any permanent impairment due to that condition.

Litigation was commenced when S.D. Warren filed a Petition for Review seeking to terminate benefits based on the 520-week durational limit (under § 213 of the Maine Workers' Compensation Act, compensation for partial incapacity is payable for a maximum of 520 weeks, except in cases where an employee’s whole-person permanent impairment exceeds a given percentage [set by the Board]). On the other hand, the Employee argued that a “change in circumstances” since the prior decree—a worsening in her right knee and psychological conditions—justified reevaluation of her permanent impairment rating.

The ALJ found the Employee failed to establish a medical change in circumstances sufficient to overcome the res judicata effect of the 2008 decree. Thus, the ALJ found the impairment rating remained at 7%. The Employee filed a Motion for Further Findings of Fact and Conclusions of Law. In response, the ALJ did not alter the outcome, but issued an amended decree finding that any change in the Employee’s psychological condition was a change in degree, rather than kind.

On appeal, the Employee argued that the ALJ erred in finding that she failed to prove a change in circumstances necessary to overcome the res judicata effect of a 2008 decision establishing permanent impairment (valid decisions of the Workers’ Compensation Board are subject to the rules of res judicata and are no longer subject to collateral attack after they become final. This point becomes particularly important, as explained below).

Before a decision was issued, the Law Court issued its decision in Bailey v. City of Lewiston, 2017 ME 160. In Bailey, the Law Court has held that permanent impairment and maximum medical improvement are not subject to reconsideration, even in the face of changed medical circumstances. The Appellate Division offered its interpretation of a seemingly unclear point in the wake of Bailey. Namely, exactly what happens when an employee seeks to increase permanent impairment after a decree establishing permanency. To be clear, Bailey addressed whether a downward revision of permanent impairment was possible. The Employee argued that the Bailey decision should be limited in its application to that set of facts. The Appellate Division disagreed:

"We disagree with this contention. The issue in Bailey, as framed by the Court, was whether the Workers’ Compensation Act allows the Board to revise a previously established impairment rating. It answered that question in the negative without distinguishing between upward and downward revisions. Therefore, pursuant to Bailey, the ALJ did not err when declining to revise the 7% impairment rating assigned to [the Employee’s] knee in the 2008 decree."

The Employee also argued that the Board should have increased her whole body impairment rating to account for added impairment related to her psychological sequela. However, in 2008 the ALJ had essentially found 0% psychological impairment and that figure cannot now be adjusted upward based on changed circumstances. 

The ALJ granted S.D. Warren’s Petition for Review and allowed it to cease paying partial incapacity benefits. 

Time will tell whether the case is appealed to the Law Court.

Appellate Division to Revisit (for a Second Time) the Issue of Refusal of Suitable Work in St. Louis V. Acadia Hospital

In St. Louis v. Acadia Hospital Corp., WCB No. 10002460 (April 14, 2017), the Maine Workers’ Compensation Board issued a decision dated March 4, 2015, finding the Employee had not refused an offer of suitable work and awarded partial incapacity benefits reduced by an imputed earning capacity of $300.00/week. The Employer appealed to the Appellate Division. A decision issued January 12, 2017, St. Louis v. Acadia Hospital Corp., App. Div. 17-3 (January 12, 2017), ordered that the case be remanded for a more complete analysis of whether the Employee unreasonably refused a bona fide offer of reasonable employment within the meaning of 39-A M.R.S.A. § 214(1)(A). 

The Employee worked as a certified nursing assistant (CNA) at Acadia Hospital. She was injured January 29, 2010. On account of this injury, the Employee experiences post-concussive headaches and an anxiety disorder with features of post-traumatic stress disorder. Because of her symptoms, she stopped working for the Employer August 6, 2013. She began a work search in February 2014 and found a part-time cashier position beginning February 10, 2014. The Employer sent the Employee a job offer on February 6, 2014, offering full-time work as a telephone operator and receptionist with a provision that the Employee would not be working in a patient care area or asked to be involved in restraining patients. This position paid approximately $12.00 per hour, while her position as a cashier paid $8.00 per hour. The Employee declined the offer because she had already accepted a new job as a cashier. The Employee testified that she was also concerned that, despite assurances, she still may have contact with patients through incidental activities like eating lunch. The Employer presented testimony from a human resources representative that the position offered was in a secured area inaccessible to patients and that the Employee was not required to take breaks or eat meals in areas with patients.

The Employee saw Drs. Carlyle Voss and Karyn Woelflein for independent medical examinations (39-A M.R.S.A. § 312). Dr. Voss found she, “could manage the basic duties of [a telephone] operator” and “could do similar work in another setting where there is low risk for being assaulted[,]” but “would be at significant risk to have symptoms escalate which could cause impairment that would preclude any type of work if she returned to work at Acadia or in another setting where there is increased risk for assaults.” Dr. Woelflein stated, “it would be imprudent for [her] to return to work at Acadia.”

The Employee argued that her refusal of the job offer was reasonable because she had already found work within her restrictions at a new employer and that the offered position was beyond her medical limitations. The Employer argued that the offer was reasonable as it was made only a few days after she began working for a new employer, paid higher, and was within her medical limitations. The Employer argued that § 214(1)(A) barred an award of partial incapacity benefits.

On the issue of refusal of suitable work, the Employer bears the burden of persuasion. In general, if an injured worker “receives a bona fide offer of reasonable employment” and the employee “refuses that employment without good and reasonable cause,” that employee is barred from receiving incapacity benefits under the Workers' Compensation Act “during the period of the refusal.” 39-A M.R.S.A. § 214(1)(A). The term, “reasonable employment” means “any work that is within the employee's capacity to perform that poses no clear and proximate threat to the employee's health and safety and that is within a reasonable distance from that employee's residence.” 39-A M.R.S.A. § 214(5).

When applying § 214, an administrative law judge (ALJ) “is required to undertake a two-part analysis, reviewing both the employer's actions in making the job offer and the employee's actions in declining that offer.” Thompson v. Claw Island Foods, Inc., 1998 ME 101, ¶ 7. When evaluating an employee's decision to decline a job offer, an ALJ must determine first whether the offer was a “bona fide offer of reasonable employment.” Id. The factors to consider include “whether the work falls within the employee's work capacity, whether it poses a threat to the employee's health and safety, and whether it is within a reasonable distance of the employee's residence.” Id. ¶ 8. Second, an ALJ must determine whether the employee refused that offer without “good and reasonable cause.” Id. ¶ 16. The reasonableness of the refusal is a broad inquiry; an ALJ “must consider all facts relevant to the employee's decision to decline the job offer.” Id. The Law Court has provided some guidance to this inquiry with a five factor test that is “not intended to be exhaustive or conclusive” but “represent[s] a sound general framework for decision making when the employee has refused an offer of reasonable employment:” (1) the timing of the offer, (2) if the employee has moved, the reasons for moving, (3) the diligence of the employee in trying to return to work, (4) whether the employee has actually returned to work with some other employer and, (5) whether the effort, risk, sacrifice or expense is such that a reasonable person would not accept the offer. Id. at ¶¶ 18, 19. 

Among other things, the ALJ found the position offered pays significantly higher than the work the Employee found on her own, but would have required her to abandon the cashier's position shortly after committing to it. Further, the ALJ found significant the medical opinions of Dr. Voss and Dr. Woelflein, which bear on her ability to return to work for the Employer. The ALJ found the Employer had not met its burden to prove that the Employee refused the offered job without good and reasonable cause. The Board granted the Employee’s Petitions for Award, in part, with an ongoing award of partial incapacity benefits reduced by an imputed earning capacity of $300.00/week. The matter is on appeal once again before the Appellate Division. 

Refusal of suitable work has generated a lot of decisions from the Appellate Division to date. This is due to the very fact-specific nature of these cases, particularly when it comes to the multifactor tests used in assessing a refusal defense. In this case, the binding medical evidence and the fact that the employee had already secured work before the offer was made were significant factors for the ALJ.

Workers’ Compensation Board Appellate Division to Review Decision Dealing with Application and Scope of § 327 Death Presumption

In Flaherty v. City of Portland, WCB Nos. 05032057 & 11036148 (June 22, 2017), Timothy Flaherty worked for years as a Portland firefighter. He was diagnosed with myelofibrosis, a rare cancer/disease of the bone marrow in August 2004. Mr. Flaherty retired from the fire department on February 28, 2005. He died from myelofibrosis on August 30, 2011.

Pending before the Board were two Petitions for Award – Occupational Disease Law, filed by Theresa Flaherty. The first petition was filed in Ms. Flaherty’s role as personal representative of the estate of Timothy Flaherty. The second petition was filed in her role as a dependent of Timothy Flaherty. Mrs. Flaherty alternatively claimed entitlement to incapacity and death benefits under the “traditional” (non-occupational) provisions of the Maine Workers’ Compensation Act. 

The petitions alleged that Mr. Flaherty's cancer was caused by occupational exposure related to his work as a firefighter. Mrs. Flaherty claimed entitlement to the benefit of the death presumption set forth in § 327 of the Act. The “death presumption” provides:

In any claim for compensation, when the employee has been killed or is physically or mentally unable to testify, there is a rebuttable presumption that the employee received a personal injury arising out of and in the course of employment, that sufficient notice of the injury has been given and that the injury or death was not occasioned by the willful intention of the employee to injure or kill the employee or another. 39-A MRSA § 327. 

Among other things, the employer argued the presumption did not apply because Mr. Flaherty was not unable to testify during the period between his cancer diagnosis and date of death. However, the Board found Mr. Flaherty had no reason to file a claim or otherwise testify concerning his potential exposure until it was discovered that there was a potential causal connection between his cancer and the conditions of his employment. Thus, Mr. Flaherty was “unable to testify” as of the date that potential connection was discovered (June 2012). The Employer also argued that the presumption was inapplicable because Mr. Flaherty was not killed, nor did he die, during the course of his employment. However, the Board found nothing in the language of § 327 that limits the presumption to the period of employment. In addition, § 327 has often been applied to cases where the employee has left employment. 

The Board noted, “[w]hether the presumption arises is determined based on the evidence actually presented and ‘testimony which, within reasonable limits, may be conceived as potentially forthcoming from the employee were the employee available as a witness.’ Therefore, the presumption is properly invoked if the evidence presented to the hearing officer, combined with any facts to which Sullwold may reasonably have testified if he were alive, could rationally result in an award of compensation.” Sullwold v. Salvation Army, 2015 ME 4, ¶ 9, (citing Toomey v. City of Portland, 391 A.2d 325 (Me. 1978)). In this case, the Board found that, if alive, Mr. Flaherty could have provided testimony concerning the nature and scope of his exposure to benzene. The Board found that such testimony, in combination with expert testimony in the record, could rationally result in an award of compensation. Thus, it is presumed that Mr. Flaherty received a “personal injury arising out of and in the course of his employment, and that sufficient notice has been given....” 39-A MRSA § 327.

The Board found Mr. Flaherty suffered a work-related injury in the nature of myelofibrosis as of February 28, 2005. The Petitions for Award – Occupational Disease Law filed by Ms. Flaherty in her role as personal representative and as widow were denied insofar as those petitions alleged claims under the Occupational Disease provision of the Act. Those petitions were granted, however, with respect to the claims made under the traditional Worker's Compensation Act. The employer was ordered to pay 500 weeks of benefits under § 215. 

The case is on appeal before the Workers’ Compensation Board Appellate Division. Among other things, at issue on appeal is the applicability of the death presumption, the burdens of production and proof under the presumption and the interplay between the Occupational Disease provisions in the Act and the traditional Act provisions.

New Legislation Provides for Right to Benefits to Employees Participating in Vocational Rehabilitation, Limited Exceptions for Insurers to Reduce Benefits

The Maine Workers’ Compensation Act provides, “[w]hen as a result of injury the employee is unable to perform work for which the employee has previous training or experience, the employee is entitled to such employment rehabilitation services, including retraining and job placement, as reasonably necessary to restore the employee to suitable employment.” Further, “[i]f employment rehabilitation services are not voluntarily offered and accepted, the board on its own motion or upon application of the employee, carrier or employer, after affording the parties an opportunity to be heard, may refer the employee to a board-approved facility for evaluation of the need for and kind of service, treatment or training necessary and appropriate to return the employee to suitable employment. . . .” 

Through October 31, 2017, § 217 provides:

8. Presumption. If an employee is participating in a rehabilitation plan ordered pursuant to subsection 2, there is a presumption that work is unavailable to the employee for as long as the employee continues to participate in employment rehabilitation.

In Axelsen v. Interstate Brands Corp., App. Div. No. 15-27 (October 22, 2015) the Workers’ Compensation Board Appellate Division found the presumption in § 217(8) is rebuttable. The employer can seek to rebut the presumption and establish the employee’s extent of incapacity is less than 100% while a Board-ordered vocational rehabilitation plan is in effect by proving that work is available through labor market evidence.

LD 612 (“An Act To Improve Vocational Rehabilitation under the Maine Workers’ Compensation Act of 1992”) will become effective November 1, 2017. The new legislation repeals § 217(8) and enacts § 217(9) which states:

9. Reduction of benefits. If an employee is actively participating in a rehabilitaion plan ordered pursuant to subsection 2, benefits may not be reduced except:

A. Under section 205, subsection 9, paragraph A, upon the employee’s return to work with or an increase in pay from an employer who is paying the employee compensation under this Act; 

B. Under section 205, subsection 9, paragraph B, based on the amount of actual documented earnings paid to the employee; or 

C. When the employee reaches the durational limit of benefits paid under section 213. 

The new legislation repeals the presumption in the current law with respect to an injured employee participating in employment rehabilitation that work is unavailable to the employee. In place of the presumption, the new legislation enacts a new provision which provides that an injured employee participating in vocational rehabilitation has a right to benefits except under only three circumstances where benefits may be reduced:

1. when the employee has returned to work with or received an increase in pay from the employer; 
2. when the employer has reduced benefits based on actual documented earnings of the employee; and 
3. when the employee has reached the durational limit on partial incapacity benefits 

Under the new legislation, there is no requirement that benefits be returned to the total rate if an employee has already been reduced to a partial rate, but benefits may not be reduced further except under the limited circumstances above.

Appellate Division Addresses Adequacy of Findings of Fact for Appellate Review

Under§ 318 of the Maine Workers’ Compensation Act:

. . . From the evidence or statements furnished, the administrative law judge shall in a summary manner decide the merits of the controversy . . . . The administrative law judge, upon the motion of a party made within 20 days after notice of the decision or upon its own motion, may find the facts specially and state separately the conclusions of law and file the appropriate decision if it differs from the decision filed before the request was made. Those findings and conclusions and the revised decision must be filed in the office of the board and a copy, attested by the clerk of the board, must be mailed promptly to all parties interested. . . .

When requested, an ALJ is under an affirmative duty to make additional findings to create an adequate basis for appellate review. Coty v. Town of Millinocket, 444 A.2d 355, 357 (Me. 1982).

If an employee requests additional findings of fact and conclusions of law under § 318 and submits proposed additional findings, the Appellate Division must not assume the ALJ made all necessary findings to support its conclusion(s). In such case, the Appellate Division reviews the original findings and any additional findings made in response to a motion for findings to determine if they are sufficient, as a matter of law, to support the result and if they are supported by record evidence. 

In Bisco v. SD Warren, WCB App. Div. No. 17-30 (September 22, 2017) an employee appealed a decision partially denying his Petition for Restoration, arguing that he proved a change in both medical and economic circumstances beyond a brief period awarded by the ALJ. In order to prevail upon a petition for restoration, the employee must demonstrate a change in circumstances sufficient to justify the restoration of compensation. This is typically done through proving a change in medical or economic circumstances.

Because the employee requested additional findings of fact and conclusions of law and submitted proposed additional findings, the Appellate Division must not assume the ALJ made all necessary findings to support the conclusion that the employee did not experience either changes of economic or medical circumstances beyond the limited period surrounding his surgery. 

The Appellate Division found the ALJ simply concluded that the employee had now shown a change in economic circumstances but did not specifically address this evidence or explain why this was insufficient to demonstrate a change in economic circumstances. The Appellate Division noted that the employee requested and submitted a proposed finding on the issue of whether increased pain due to the inability to take ibuprofen constitutes a change in medical circumstances that would justify revisiting the 2011 payment scheme beyond a recovery from surgery. The ALJs original findings do not address this issue and the Appellate Division found “some tension between his finding on the former effectiveness of ibuprofen and his conclusion that there had been no change of medical circumstances since the 2011 decree, except during the acknowledged closed-end period.” 

The case was remanded to the ALJ to make additional findings as to whether the employee’s failed effort to regain pre-injury earnings after the 2011 Decree constitutes a change of economic circumstances and whether the employee’s inability to control his symptoms with ibuprofen constitutes a change of medical circumstances.

The bottom line: When requested, an ALJ is under an affirmative duty under § 318 to make additional findings to create an adequate basis for appellate review. This case demonstrates the importance of adequate findings and the potential consequences on appeal without such findings. This is particularly important in the context of Petitions for Restoration or Review in which changed circumstances must be demonstrated, which is often a very fact-specific exercise.

Maine Supreme Court Case Involving Dispute Over Volunteer vs. Employee Status Could Have Far-Reaching Implications

Under the Maine Workers’ Compensation Act (§ 102(11)(A)), an “employee” is “every person in the service of another under any contract of hire, express or implied, oral or written.”

Generally, volunteers are not covered under the Workers’ Compensation Act. In Harlow v. Agway, Inc., 327 A.2d 856 (Me. 1974), the Law Court held that “[a]n essential element in creating an employer-employee relationship, and consistent with the purposes for which the [Act] was enacted, is payment, or expected payment, of some consideration by an employee to an employee, thus excluding from coverage purely gratuitous workers who neither receive, nor expect to receive, pay or other remuneration for their services.” In Closson v. Town of Southwest Harbor, 512 A.2d 1028 (Me. 1986), an individual who had applied for general assistance was injured while participating in the program’s work requirement. The Law Court found that because a participant in the program neither received nor could have expected to receive remuneration or wages for the services he performs, no employment relationship existed.

On October 12, the Maine Supreme Court heard oral arguments in the case of Huff v. Regional Transportation Program. At issue is whether an individual can be an “employee” for workers' compensation purposes even when treated as a volunteer by a nonprofit organization. 

In Huff v. Regional Transportation Program, Me. WCB App. Div. No. 16-40 (November 15, 2016), in 2011, an employee became a volunteer driver from the Regional Transportation Program (RTP), a nonprofit that provides elderly transportation. In conjunction with serving in this position, the employee signed a memorandum of understanding stating he was a volunteer. He also used his own vehicle to drive people around. The individual was reimbursed for expenses by RTP at the IRS employee reimbursement rate of 41 cents per mile. He generally received $700-$800/week in reimbursements. In 2012, the employee was involved in an accident while driving for RTP. He brought a claim for workers’ compensation benefits as an RTP employee, which the Workers’ Compensation Board (WCB) denied, finding he was a volunteer. 

The WCB Appellate Division affirmed the Board’s decision. The Appellate Division rejected the individual’s contention that the $0.41 per mile that the driver received as reimbursement constituted remuneration. The Appellate Division also rejected the argument that the $0.41 reimbursement rate is an IRS rate specifically set for employees, noting that provisions of the tax code do not dictate interpretations of the Workers’ Compensation Act. Because the individual’s services were without remuneration, he was not an employee under the Act. The Appellate Division found this case distinguishable from Harriman v. EMK, 1998 Me. Super. LEXIS 58 (Mar. 13, 1998), in which a volunteer, in exchange for services, was allowed to ski at any time without charge, received free beverages and was able to earn free ski passes for friends based on number of hours she worked. The key difference was that, in Harriman, that individual did not provide services on a purely gratuitous basis, but exchanged her services for valuable remuneration that was not fixed.

The decision may have significant implications for nonprofit employers.

ALJ Elwin Reappointed for Seven-Year Term

The Workers’ Compensation Board appoints Administrative Law Judges to conduct formal hearings. Formal hearings are scheduled after a petition is filed. At the hearing stage, the parties exchange information, including medical reports, and answer discovery questions relating to a claim. The parties also file a “Joint Scheduling Memorandum” which lists the witnesses who will testify and estimates the hearing time needed. At the formal hearing, witnesses for both sides testify and, usually, documentary evidence is submitted. In most cases, the parties are represented either by an attorney or a worker advocate. Following the hearing, position papers are submitted and the Administrative Law Judge issues a final written decision.

Judge Elizabeth Elwin was reappointed for a seven-year term. Judge Elwin is one of 8 Administrative Law Judges with the Maine Workers’ Compensation Board. She hears cases in formal hearings from the Augusta Regional Office. Judge Evelyn Knopf also hears cases in that Regional Office. The remaining Administrative Law Judges include David Hirtle, Tom Pelletier, Glen Goodnough and Tim Collier, Sue Jerome and Mike Stovall. These other Judges hear cases in Bangor, Caribou, Lewiston and Portland, respectively.