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.

Section 207 vs. Section 312: Understanding the Difference

There are key differences between a § 207 exam and a § 312 exam that must be understood to have a proper grasp on medical evaluations under the Maine Workers’ Compensation Act.

A § 207 examination is performed by a doctor chosen by the employer and insurer. The key provision is as follows:

An employee being treated by a health care provider of the employee’s own choice shall, after an injury and at all reasonable times during the continuance of disability if so requested by the employer, submit to an examination by a physician, surgeon, or chiropractor authorized to practice as such under the laws of this State, to be selected and paid by the employer. The physician, surgeon, or chiropractor must have an active practice of treating patients. For purposes of this section, “active practice” may be demonstrated by having active clinical privileges at a hospital. A physician or surgeon must be certified in the field of practice that treats the type of injury complained of by the employee. Certification must be by a board recognized by the American Board of Medical Specialties or the American Osteopathic Association or their successor organizations. A chiropractor licensed by the Board of Chiropractic Licensure who has an active practice of treating patients may provide a second opinion when the initial opinion was given by a chiropractor.

Once an employer selects a health care provider to examine an employee, the employer may not request that the employee be examined by more than one other health care provider, other than a § 312 examiner (more on this below), without prior approval from the employee or an administrative law judge (ALJ). However, this does not limit an employer’s right to request that the employee be examined by a specialist upon referral by the health care provider. Once the employee is examined by the specialist, the employer may not request that the employee be examined by a different specialist in the same specialty, other than a § 312 examiner, without prior approval. The employee has the right to have a physician, surgeon, or chiropractor of the employee’s own selection present at the exam, whose costs are paid by the employer. The doctor’s opinion is not entitled to any special weight.

On the other hand, a § 312 examination is an independent medical examination performed by a doctor appointed by the Maine Workers’ Compensation Board.

The Board maintains a list of health care providers in specific fields of expertise to serve as independent medical examiners from each of the specialties the board finds most commonly used by injured employees. An independent medical examiner must be certified in the field of practice that treats the type of injury at issue. One other important characteristic of the § 312 process is that the parties are to have no direct contact with the § 312 examiner. Rather, the parties are to submit any questions to the examiner and materials through the Board’s Office of Medical and Rehab Services.

Ultimately, an independent medical examiner “shall render medical findings on the medical condition of an employee and related issues. . . . ” The independent medical examiner shall issue a written report stating the examiner’s medical findings on the issues raised by that case and providing a description of findings sufficient to explain the basis of those findings. The Board must adopt the medical findings of the independent medical examiner unless there is clear and convincing evidence to the contrary in the record that does not support the medical findings. The Board shall state, in writing, the reasons for not accepting the medical findings of the independent medical examiner. The Maine Supreme Court has interpreted the clear and convincing evidence to the contrary standard to require a showing “that it was highly probable that the record did not support the [independent medical examiner’s] medical findings” (Dubois v. Madison Paper, Co., 2002 ME 1). Further, where the ALJ adopts the § 312 examiner’s findings, the decision may only be reversed on appeal if the findings are not supported by any competent evidence of the records that shows no reasonable basis to support the decision. This is obviously a very high standard.

Recent Study Finds Women’s Risk of Work Injuries Increased with Depression, Fatigue, Anxiety

Women who suffer from anxiety, depression, and fatigue are at a heightened risk for work injuries, according to a new study led by researchers from the Colorado School of Public Health's Center for Health, Work & Environment and published in the Journal of Occupational and Environmental Medicine. Nearly 17,000 employees, ranging from executives to laborers, were part of the study. Over 300 claims from a range of industries were examined. The study found that these health factors significantly affected women’s risk of injury but not men’s risk. 

According to the study, as a general rule, men were more likely to sustain a work-related injury. However, with men, factors such as poor sleep and anxiety did not directly affect their risk of injury. On the other hand, women were more likely to report experiencing mental and behavioral health issues and these conditions increased their risk of getting hurt on the job. Almost 60% of women with a work injury reported experiencing a behavioral health condition before they were injured, compared to 33% of men.

The study notes that further research is needed to understand these differences. Overall, workers with a history of a work injury were more likely to be injured again, regardless of gender. “There are a number of social and cultural factors that may explain why women reported having more behavioral health concerns than men did. Men generally admit to fewer health concerns,” said Dr. Natalie Schwatka, the study’s lead author. “And women may face different stresses at work and at home. It’s something that is worth exploring in future research.”

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.

Maine’s Insurance Superintendent Approves Decrease in Workers' Compensation Loss Costs; Paves the Way for Lower Premiums

Maine’s Superintendent of Insurance Eric Cioppa recently announced approval of the National Council on Compensation Insurance, Inc.’s (NCCI) 2018 loss costs for Maine, which proposed an average loss cost decrease of 12%. With this approval, the new NCCI loss costs go into effect for new and renewing policies as of April 1, 2018.

NCCI is the advisory rating organization for Maine workers’ compensation insurance companies.

Loss costs are based on previous and projected losses and benefit payments employers are expected to incur. NCCI provides advisory rates for insurance carriers that offer workers’ compensation coverage in Maine. When such insurers file their rate requests with the Bureau of Insurance, NCCI-approved loss costs are available as a reference.

The loss costs change ranges from -10.4% to -15.1% depending on the industry; the 12% decrease represents an average. According to the Bureau of Insurance, because this is an average decrease, rates for some businesses will go up but most will go down. Also keep in mind that the loss cost decrease is only a recommendation; individual insurers may or may not accept the proposed change in loss costs.

“Maine employers’ efforts to improve workplace safety, return injured workers to their jobs in a timely manner, and control medical costs continues to pay off,” Cioppa stated. “This most recent decrease should result in lower workers’ compensation premiums on average across all industry groups.” Cioppa stated that recently filed NCCI loss costs represent a cumulative decrease of 59.5% since the 1992 workers’ compensation reform, and that if all insurers fully adopt the decrease, Maine businesses could save an estimated $27 million in the year following implementation.

MEMIC, Maine’s largest workers’ compensation insurer, will adopt the rate recommendation. MEMIC reports that this amounts to the largest rate reduction in more than 20 years.

Medicare Set Asides in Workers’ Compensation—The Basics

In workers’ compensation settlements, depending upon the status of the injured worker, interests of Medicare must be protected. If an injured employee has a reasonable expectation of becoming or is a Medicare beneficiary at the time of settlement of the medical portion of a claim, Medicare is considered to be a “secondary payer.” In the event of the settlement of the medical portion of a claim, some settlement funds must be allocated to bills Medicare has paid on behalf of an injured worker. As well, because Medicare is a “secondary payer,” the parties must allocate enough funds to cover future medical expenses related to a work injury before Medicare pays for any bills related to a work injury.

A Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) is an agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury. Funds placed in a WCMSA must be depleted before Medicare will pay for treatment related to the workers’ compensation injury, illness, or disease.

Funds are either placed in the WCMSA account in one lump-sum or the account is funded with a “structured settlement annuity.” Either way, the administrator of the WCMSA may only use the funds to pay for medical care related to a work injury, leaving Medicare free to cover medical expenses unrelated to the work injury.

There is no provision requiring that a WCMSA proposal be submitted to the Center for Medicare & Medicaid Services (CMS) for review. However, submission of a WCMSA is recommended. Doing so ensures that Medicare will pay for future covered expenses down the road in excess of the approved MSA amount. That being said, CMS will not review every proposal. CMS will only review new WCMSA proposals that meet the following criteria:

• The claimant is a Medicare beneficiary and the total settlement amount is greater than $25,000.00; or
• The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability/lost wages is expected to be greater than $250,000.00 

Once the MSA is implemented, Medicare will not pay for medical expenses related to the injury until after all set-aside money has been used properly. Thereafter, Medicare can start paying for items and services related to the work injury. 

Please note that CMS recently created an MSA re-review process. Effective July 31, 2017, submitters can submit a re-review request where CMS has provided an approved amount, but settlement has not occurred and the medical care that supported the approved amount has changed substantially. This process is not available in all situations. For starters, (1) the MSA must have been originally submitted between 1 – 4 years from the date of the re-review request; (2) the re-review must result in at least a 10% or $10,000 change (whichever is greater) from the previously approved amount.

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.”