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.

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.

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.