Application of the Fair Labor Standards Act to Domestic Service
[Proposed Rules] [04/08/2002]
Claims for Compensation Under the Federal Employees' Compensation Act;
Compensation for Disability and Death of Noncitizen Federal Employees
Outside the United States; Proposed Rule [12/23/1997]
Volume 62, Number 246, Page 67119-67172[[Page 67119]]
_______________________________________________________________________
Part II
Department of Labor
_______________________________________________________________________
Office of Workers Compensation Programs
_______________________________________________________________________
20 CFR Parts 10 and 25
Claims for Compensation Under the Federal Employees' Compensation Act;
Compensation for Disability and Death of Noncitizen Federal Employees
Outside the United States; Proposed Rule
[[Page 67120]]
DEPARTMENT OF LABOR
Office of Workers' Compensation Programs
20 CFR Parts 10 and 25
RIN Number 1215-AB07
Claims for Compensation under the Federal Employees' Compensation
Act; Compensation for Disability and Death of Noncitizen Federal
Employees Outside the United States
AGENCY: Office of Workers' Compensation Programs, Employment Standards
Administration, Labor.
ACTION: Proposed rule; request for comments.
-----------------------------------------------------------------------
SUMMARY: The Department of Labor proposes to revise the regulations
governing the administration of the Federal Employees' Compensation Act
(FECA), which provides benefits to all civilian Federal employees and
certain other groups of employees and individuals who are injured or
killed while performing their jobs. The Office of Workers' Compensation
Programs (OWCP) administers the FECA.
The existing rules have been entirely rewritten using plain English
and have also been reorganized into a more accessible format. A number
of significant changes are made in the proposed regulations, including
new sections implementing amendments to the law which provide for
suspension of benefits during incarceration and termination of benefits
for conviction of fraud against the program; changes to the
continuation of pay (COP) provisions, including reducing to 30 days the
time within which COP may be used where there is a recurrence of
disability; paying for an attendant as a medical expense instead of as
a supplemental payment to the claimant; inclusion of OWCP nurse
services in the definition of vocational rehabilitation services;
clarifying the review process by distinguishing between modification on
the Director's own motion (in which case no new evidence or argument is
needed to reopen claim) and reconsideration at the request of the
claimant (which will require the claimant to provide new evidence or
argument to reopen the claim); restricting opportunities to postpone
oral hearings; clarification of subpoena authority; streamlining the
standards for review of attorney fees; provision of more detailed
guidance in regard to claims involving the liability of a third party;
and clarification of procedures with respect to claims filed by non-
Federal law enforcement officers. Also included in the proposed
regulations is a major revision of the medical fee schedule to include,
for the first time, pharmacy and inpatient hospital bills.
DATES: Written comments must be submitted on or before February 23,
1998.
ADDRESSES: Send written comments to Thomas M. Markey, Director for
Federal Employees' Compensation, Employment Standards Administration,
U.S. Department of Labor, Room S-3229, 200 Constitution Avenue NW.,
Washington, DC 20210; Telephone (202) 219-7552.
FOR FURTHER INFORMATION CONTACT: Thomas M. Markey, Director for Federal
Employees' Compensation, Telephone (202) 219-7552.
SUPPLEMENTARY INFORMATION: The FECA provides compensation for wage
loss, medical care, and vocational rehabilitation to Federal employees
and certain other individuals who are injured in the performance of
their duties, or who develop illness as a result of factors of their
Federal employment. It also provides monetary benefits to the survivors
of employees who are killed in the performance of duty or die as the
result of factors of their Federal employment.
The program's regulations were last substantially revised in 1987.
Since then, new provisions have been added to the statute, and
experience has shown that certain parts of the regulations need
clarification or revision to improve and streamline the claims process.
In addition, there has been a significant increase in the number and
complexity of OWCP issues requiring adjudication, which has strained
the administrative resources available to fulfill OWCP's statutory
mandate to adjudicate and administer claims. In addition, several
developments have enabled OWCP to devise a fee schedule applicable to
hospital inpatient and pharmacy bills. For all of these reasons, the
rules have been comprehensively rewritten.
The proposed rules look significantly different than the existing
rules. This is both because they have been completely reorganized into
a format reflecting the organization of the claims process itself and
because they are presented in a question-and-answer format instead of
the narrative form used in the existing rules. We believe that the new
organization and style of the regulations presents the information in a
way consistent with the needs of the user, and will help the reader
more easily find information. In addition, unnecessary information has
been eliminated and material which simply repeats the language of the
statute itself has been removed from various portions of the
regulations.
The regulations have been re-numbered and substantially re-worded.
The sections have been grouped by type of claims, where appropriate, so
that the reader who wants to know about filing death claims, for
example, need only turn to one section to get essentially all the basic
information about how such claims are filed.
A description of other significant changes made by these
regulations follows. Cross references from new sections to the existing
ones are made to allow the reader to better follow the changes.
Subpart A, General Provisions
This subpart is substantially the same as current subpart A
(Secs. 10.1 through 10.23), with the addition of material describing
the penalties imposed as a result of the amendments to the FECA that
added 5 U.S.C. 8148.
Introduction
Section 10.2 has been revised to reflect two changes: employees of
the Alaska Railroad are no longer covered under the FECA; and
administration of the FECA for Panama Canal Commission employees was
returned to OWCP in 1989.
Definitions and Forms
Section 10.5 now includes definitions that used to appear in
several later subparts. Definitions of terms defined in the FECA
itself, such as injury, organ and United States Medical Officers and
Hospitals, no longer appear in the regulations, because it is felt to
be unnecessary to repeat these statutory provisions.
Section 10.5(a) revises the definition of Benefits or Compensation
to clarify that those terms include the amounts paid out of the
Employees' Compensation Fund for medical examinations conducted at the
request of OWCP as part of the claims adjudication process, consistent
with OWCP's longstanding practice.
Section 10.5(g) moves the definition for Earnings From Employment
Or Self-Employment from its existing location in Section 10.125(c) and
revises it to clarify that earnings from self-employment include a
reasonable estimate of the cost to have someone else perform the duties
of an individual who accepts no remuneration. This revision is
consistent with several decisions by the Employees' Compensation
Appeals Board (ECAB) in this area. See, e.g., Edward O. Hamilton, 39
ECAB 1131 (1988); William C. Austin, 39 ECAB 357 (1988).
[[Page 67121]]
Section 10.5(h) replaces the lengthy and cumbersome list which
constituted the old definition for Employee with a shorter list that
omits references to coverage afforded pursuant to other specific
statutes, since the material omitted merely referenced other statutory
provisions.
Section 10.5(i) simplifies and updates the definition of Employer
or Agency by broadening it to make clear that it encompasses the
various titles now used by different agencies for persons designated to
perform the employer's tasks in the FECA claims process. This
streamlining is not intended to in any way change existing practice.
The definition of Knowingly in section 10.5(n) is new. It adopts
the definition for this term, consistently used by the ECAB in numerous
forfeiture cases construing section 8106(b)(2). See, e.g., Garry Don
Young, 45 ECAB 621 (1994); Lewis George, 45 ECAB 144 (1993).
Section 10.5(x) replaces the existing discussion of Recurrence Of
Disability found in Sec. 10.121, which merely provides that a
recurrence occurs when the original injury causes the employee to stop
work again. The definition of recurrence being added to the regulations
reflects OWCP's understanding of the term recurrence as explained by
the ECAB in numerous cases which have thoroughly examined both the
medical and non-medical aspects of this issue. The new definition will
also enable OWCP to recognize the changes that have occurred in the
nature of federal employment in this era of continued government
downsizing by specifically addressing some situations that arise as
agencies close work sites. See, e.g., Terry R. Hedman, 38 ECAB 222
(1986); John W. Normand, 39 ECAB 1378 (1988); Don J. Mazurek (Docket
No. 93-2063, January 23, 1995).
The definitions of Occupational Disease or Illness, Physician and
Student have been shortened, with no intent to make a substantive
change, by deleting (or simply referring to) definitional material
which already appears in the FECA.
In Sec. 10.6, current Sec. 10.5(b) is updated to include a new
category of ``dependents'' for purposes of implementing new section
8148 of the FECA. That amendment requires a suspension of benefits when
a claimant is incarcerated for a felony, but allows instead payments of
a portion of those benefits to eligible dependents.
Rights and Penalties
Sections which merely repeat provisions of the statute (such as the
reference to the FECA as the exclusive remedy for employees and their
families) have been removed. Proposed Sec. 10.16 provides information
about various provisions of criminal law relating to the FECA claims
process. In addition to the description of the penalties, a statement
has been added explaining that enforcement of the criminal laws
applicable to FECA activities is solely within the jurisdiction of the
Department of Justice. This is intended to eliminate confusion on the
part of some individuals who ask that OWCP enforce these criminal law
provisions.
Section 10.17 implements a recent addition to the FECA, section
8148(a). Pursuant to section 8148(a), any beneficiary convicted of
defrauding the federal government in connection with a FECA claim
forfeits his or her right to further compensation ``as of the date of
such conviction.'' To implement this provision in a uniform manner
consistent with the intent of the statute, the term ``conviction'' is
interpreted in this section as occurring either on the date that a
guilty plea is made in open court or the date that a verdict of guilty
is returned after trial.
This interpretation, which is consistent with opinions issued by
the Comptroller General and instructions issued by that office, ensures
consistency among various government agencies and permits uniform
application of these procedures despite variations among jurisdictions
with respect to how the term ``conviction'' has been defined for other
purposes. In addition, choice of the date a guilty plea is made in open
court or a verdict of guilty is returned after trial facilitates
implementation of the statutory provisions because the date is easy to
ascertain following the submission of pertinent factual evidence, such
as a copy of a plea agreement or a judgment order that has been filed
in a criminal case.
Section 10.18 implements another recent addition to the FECA,
section 8148(b). Pursuant to section 8148(b), which is similar to
provisions of several state workers' compensation statutes and a
provision in the Social Security Act, any beneficiary incarcerated for
either a state or federal felony conviction forfeits his or her right
to compensation during the period of such incarceration. However, this
section also provides the OWCP with the discretionary authority to
allocate ``a percentage of the benefits that would have been payable''
to an incarcerated beneficiary among his or her dependents using the
percentages stated in section 8133(a)(1) through (5).
In exercise of this discretion, OWCP has selected the gross current
entitlement of an incarcerated beneficiary as a ``percentage'' of such
beneficiary's ``monthly pay'' under section 8101(4), and the proposed
regulation provides that the resulting amount will be divided, using
the percentages of section 8133(a)(1) through (5), among his or her
dependents during the period of any such incarceration.
Subpart B, Filing Notices and Claims; Submitting Evidence
This subpart contains most of the information in current
Secs. 10.100 through 10.122, 10.130, and 10.140. The material in
current Sec. 10.102(e), which addresses the employer's authority to
provide copies of forms and other records pertaining to a claim, is now
addressed generally in subpart A, Sec. 10.12. Current Sec. 10.104,
regarding physicians' reports, has been moved to subpart D (Medical and
Related Benefits). Current Sec. 10.109(a) (concerning the payment of
the balance of schedule awards) has been moved to subpart E
(Compensation and Related Benefits).
The discussion of development of claims by OWCP found in current
Sec. 10.110(b) has been omitted from the proposed regulations. This
discussion has proven to be misleading, and was mistakenly assumed to
be a commitment by OWCP to undertake development, despite the fact that
it only describes what OWCP may, on an ad hoc basis, do even though the
burden of proof to establish the elements of the claim is on the
claimant at all times. The statements in current Sec. 10.120 and
Sec. 10.121(d) requiring the employer to report termination of
disability on Form CA-3 have been removed, as this procedure is no
longer required. Current Sec. 10.150, which describes OWCP's function
within the sphere of workers' compensation law generally, has been
entirely removed as unnecessary.
Notices and Claims for Injury, Disease, and Death--Employee or
Survivor's Actions
In Sec. 10.100 and 10.102, which discuss notices of injury and
occupational disease, the statements that the employer (or another
person) may file a notice of injury on the employee's behalf are new,
although the practice it describes is a longstanding one. This
provision is being added to the regulations to encourage prompt filing
of claims. OWCP cannot provide case management services, which assist
in a rapid return to work in the crucial early days of disability,
without prompt notice. An informational statement that a claimant may
withdraw a claim before
[[Page 67122]]
it has been adjudicated has also been added to these sections as well
as to Sec. 10.106.
Section 10.101 highlights the need for the employee to file a wage
loss claim (form CA-7 or CA-8) in order to receive wage-loss benefits
(compensation); this is in addition to the initial notice of injury
(form CA-1 or CA-2) which must be filed for every injury, whether or
not the injury results in lost wages. The need to file a separate claim
for wage loss has in the past sometimes been a point of confusion among
claimants, who do not realize that even though they filed the form
notifying OWCP of an injury, OWCP has no way of knowing that the person
has stopped work and lost wages unless the CA-7 or CA-8 claims for wage
loss are also filed. In addition, the 10-day time frame within which
the employee must file the wage-loss claim has been changed to 14 days
to conform to the two-week pay cycle observed by most federal agencies
and by OWCP. The longstanding practice that an employee may file a
claim for permanent impairment (that is, for a schedule award) by
letter if Form CA-7 has already been filed is specified in Sec. 10.104.
Section 10.105 clarifies the circumstances under which a notice of
recurrence (Form CA-2a) is required, rather than a new notice of injury
(Form CA-1 or CA-2). The statement in (a) concerning the need to file a
new notice of injury or episode of occupational disease is being added
as a clarification that reflects current OWCP practice.
The statement in Sec. 10.106 that the employer may file the claim
on the survivor's behalf is new. It is added to encourage prompt filing
of claims. The regulations also explain that the claim may be withdrawn
before adjudication in order to conserve resources.
Notices and Claims for Injury, Disease, and Death--Employer's Actions
Proposed Sec. 10.110, which discusses the employer's
responsibilities when a notice of traumatic injury or occupational
disease has been received, shortens the time frame for submission of
notices of injury and occupational disease from 10 to five work days,
and the regulations now make clear that the employer should not wait
for any supporting evidence before sending the form to OWCP. These
changes reflect OWCP's increasing emphasis on early receipt of notices
of injury and claims for compensation, which enables rapid initiation
of adjudication and case management procedures, as well as payment of
benefits, and an earlier return to work.
Proposed Sec. 10.111 discusses the employer's responsibilities when
a claim for compensation due to disability or permanent impairment has
been received. It also changes the time frames for submittal of a claim
for initial disability when the employee is receiving continuation of
pay. Similarly, a statement emphasizing that the employer should
provide the employee with a Form CA-8 to claim continuing disability
has been added to Sec. 10.112. Both changes represent long-standing
practice on the part of OWCP and most federal employers.
The statement that the employer may not charge for assisting
survivors in filing claims, which is found in current Sec. 10.108, has
been removed as unnecessary from Sec. 10.113, which discusses the
employer's responsibilities when an employee dies from a work-related
injury or disease.
Evidence and Burden of Proof
Section 10.115 describes, in a more comprehensive and specific
manner than the existing regulations, the five basic requirements which
have long been required of a claimant. It supplants the description in
the existing Sec. 10.110(a), which is more procedural and technical,
and which contains information (such as what medical evidence is
required) that is already in development letters and occupational
disease checklists provided directly to the claimant. The need to
submit supporting medical evidence when wage loss benefits are claimed
is emphasized, as this requirement is not always clear to employees.
Section 10.116 includes a reference to OWCP's use of checklists to
assist the claimant and employer in determining what information needs
to be submitted for certain occupational disease cases. While these
checklists have been in use for many years, and provide specific
guidance on what information is required for different types of claims,
they have not previously been mentioned in the regulations.
Decisions on Entitlement to Benefits
New Sec. 10.125 revises the language in existing Sec. 10.130 to
include, in the list of authorities used to adjudicate claims,
decisions of the Employees' Compensation Appeals Board interpreting the
FECA itself. This statement is added to provide claimants and employers
with a general idea of the precedents used in making determinations.
Sections 10.160-10.166 of the existing regulations authorize OWCP
to appoint a representative and to supervise the management of the
claimant's funds by the representative payee. Section 10.424 of the new
regulations regarding representative payees provides that a
representative payee will be appointed only in situations in which no
court or administrative body authorized to do so has appointed a
guardian or other party to manage the financial affairs of the
claimant, since such an appointment constitutes sufficient
authorization for payment of FECA benefits by OWCP to the party so
appointed. Furthermore, OWCP no longer will attempt to supervise a
representative payee's activities, but will instead rely upon
appointment of a guardian under applicable state law and supervision in
accordance with those procedures as necessary.
Subpart C, Continuation of Pay
This subpart covers the same material as current subpart C
(Secs. 10.200 through 10.209). The general rules found in current
Sec. 10.201 have been rearranged and placed in different sections. The
criteria for eligibility in current Sec. 10.201(a) are now found in
Sec. 10.205. Current Sec. 10.201(b) is now found at Sec. 10.215;
current Sec. 10.201(d) is now found at Sec. 10.200; and current
Secs. 10.201(e) and (f) are now found at Sec. 10.223.
Eligibility for COP
Sections 10.205 (d) and 10.207 address the time frames applicable
for paying continuation of pay (COP) when there is a recurrence of
injury. Under the current rule, COP is payable only when the disability
begins within 90 days of the date of injury (see current Sec. 10.201).
Similarly, when an injured employee returns to work but stops again,
any remaining COP is payable for the additional time lost (see current
Sec. 10.208(b)(3)). The proposed rules shorten the 90-day period to a
30-day period in both situations.
The 90-day period presently set forth in Sec. 10.202(a) and (b) was
initially adopted to ensure that injured workers (who filed claims for
COP within 30 days) would receive the full 45 days of COP, while at the
same time affording employers and OWCP sufficient time to develop and
adjudicate claims. Such a grace period is no longer necessary since the
employing agencies are referring Form CA-7s and CA-8s (claims for
compensation) to OWCP in a timely manner and OWCP is adjudicating about
93 percent of these claims and, where appropriate, authorizing the
payment of claims for disability compensation (CA-7s and CA-8s) within
14 days of receipt.
OWCP has focused on minimizing or eliminating lost work time
entirely,
[[Page 67123]]
which requires early intervention in the case. When the employer pays
COP, OWCP may not necessarily even know about lost work time. The
artificial extension of the COP period under the 90-day rules makes it
difficult to intervene in cases where lost time is continuing at the
point when early intervention is crucial. It is no longer necessary to
forego the opportunity for this early intervention to ensure that
income is not disrupted. Indeed, since COP was first introduced,
payment performance has improved measurably, and the time frames were
reduced in 1987 from six months to the current 90 days. OWCP's early
intervention efforts now support an additional reduction of the period
to 30 days, which is the period chosen by Congress as the time frame
within which the initial claim has to be filed.
Calculation of COP
Proposed Sec. 10.217 reworks material found in current
Sec. 10.201(b), which contains a lengthy discussion of when COP is
payable. Among other things, the discussion addresses situations where
an employee continues to work in a different position because he or she
is unable to work in the job held on the date of injury. The existing
rule has been re-written to remove excess verbiage and to make clear
that COP is chargeable where the employee who continues to work, but in
a different job, would otherwise incur a reduction in pay because of
the injury, but for COP. There is no intention to change the substance
of the current rule. Since the methods of computing pay differ among
agencies, it is difficult to capture all the variables, so we invite
comments particularly from agencies on whose practices these new rules
could inadvertently have an unintended adverse effect.
Controversion and Termination of COP
Section 10.222(b) allows an employer to terminate COP when a
preliminary notice of a disciplinary action issued before the injury
becomes final or otherwise effective during the COP period. Current
Sec. 10.201 states that the final written notice of termination of
employment for cause must have been issued before the date of injury.
The proposed change corrects an overly rigid rule and better reflects
the disciplinary process itself. It simply ensures that the employee
and the employer are put in the same position as that which would have
existed but for the injury; the salary would not have continued because
of the disciplinary action and therefore COP should not be paid.
Subpart D, Medical and Related Benefits
This subpart contains most of the information found in current
subpart E (Secs. 10.401 through 10.413), except that some of the
material about medical reports and payments (Secs. 10.410 through
10.413) has been moved to new subpart I. The definitions contained in
current Sec. 10.400 have been shortened and moved to subpart A. This
subpart also addresses the subjects of current Secs. 10.104(a) and
10.305. Current Sec. 10.401(d), which addresses the status of federal
health units, has been removed as superfluous. Current Sec. 10.406,
which concerns dental benefits, has been removed entirely as dental
care is just one of many specialized forms of treatment authorized
under the FECA, and it presents no special issues which need to be
addressed.
Emergency Medical Care
In Sec. 10.300, the statement that the employer need not issue a
Form CA-16 more than one week after the occurrence of the claimed
injury has been added. This statement reflects long-standing practice,
consistent with a purpose behind the issuance of this form, which is
designed to ensure that necessary immediate medical care is not
hindered through uncertainty by the provider of who is responsible for
payment. Section 10.301 addresses often-asked questions and reflects
long-standing policy, by making clear that the physician designated on
the CA-16 may refer a claimant for additional treatment and OWCP will
pay the appropriate associated costs.
Section 10.303 is new and is intended to provide uniform guidance
to employers who have questions about whether it is proper to use a
Form CA-16 to authorize medical testing at OWCP expense when their
employees experience an exposure to a workplace hazard. It has been a
matter of longstanding practice for OWCP to discourage the use of Form
CA-16 in this kind of situation and to remind employers that they may
be under an obligation independent of the FECA to provide their
employees with medical testing and/or other services. This regulation
reflects this practice, as well as OWCP's policy regarding payment for
preventive treatment.
Medical Treatment and Related Issues
In Sec. 10.310, the references to cost-effectiveness with respect
to appliances and supplies and to generic equivalents of prescribed
medications are new. They reflect the need for OWCP to control costs
wherever possible in the current medical environment. OWCP will not
approve an elaborate appliance or service where a more basic one is
suitable, and full reimbursement for the appliance or service may not
be made without prior approval by OWCP.
OWCP receives many questions from employees and chiropractors
concerning the parameters of chiropractic care, and Sec. 10.311
provides more specific guidance. Two changes to current practice are
made for administrative convenience: the definition of ``subluxation''
which appears in current Sec. 10.400(e) has been moved to new
Sec. 10.5(aa), and a statement that OWCP will not necessarily require
the x-ray or a report of the x-ray before adjudication has been added.
Section 10.312, which concerns the services of clinical
psychologists, is also new. Treatment of FECA claimants by clinical
psychologists has become much more common. Cases where a claimant
exhibits or alleges both physiological and psychological conditions
have presented problems concerning the proper scope of practice and the
needs of OWCP for comprehensive medical reports addressing both
conditions. Section 10.312 specifies that a clinical psychologist may
treat a FECA claimant as a physician within the scope of practice
allowed by applicable state law.
Section 10.313 has been added to address frequently asked questions
concerning preventive measures. It reflects OWCP policy as stated in
its internal procedures. What distinguishes situations where preventive
treatment may be authorized from those where it may not be authorized
is the presence of a verifiable work-related injury. Without such an
injury, preventive treatment cannot be authorized.
Attendants
Section 10.314, which concerns the services of attendants,
represents a significant departure from current practice. At present,
an allowance may be paid directly to a claimant for the services of an
attendant (limited by statute to a maximum of $1,500 per month).
Because the payment is made directly to the claimant, OWCP has no
opportunity to properly account for the expenditures, nor to monitor
the quality of the services provided.
The payment is a tax-free augmentation of compensation, and as the
proposed rule makes clear, the Director has determined that requests
for this augmentation will no longer be considered. Individuals who
have been awarded an attendant allowance before the effective date of
the final rule, however, would continue to receive it as
[[Page 67124]]
long as the service is otherwise necessary. Although the augmentation
payment will no longer be considered, and no new awards made, any
necessary services will still be payable (up to $1500 per month) but by
direct payments to the provider, as is generally the case for all other
services.
There are several reasons for this change. Foremost among these is
that it offers OWCP greater fiscal control and quality review, while
continuing to ensure that any necessary personal care services will
continue to be available to the claimant. First, augmentation itself is
paid very rarely. The attendant services for which the supplemental
income provided for under 5 U.S.C. 8111(a) is intended, is not often
necessary without the concurrent need for medical services. Under these
circumstances, the trained medical personnel necessary to perform the
medical functions also take care of the personal care needs, and both
are, and can continue to be paid for as a medical service.
Second, even when only personal care services are necessary, OWCP
may pay for them directly under 5 U.S.C. 8103. The administrative
resources expended in considering applications for this augmentation of
compensation under section 8111(a) are excessive, and most are denied
because there is no showing that the services are necessary. It is
expected that fewer requests for these services will be received when
the payments are made directly to the provider like almost all other
services. Where the claimant can show that the services are necessary
(by providing sufficient medical documentation), however, they will
still be provided for.
Another reason for this change is that by paying the providers of
such service, OWCP will gain both increased financial accountability
and better quality control than now exists. Currently, the allowance is
paid directly to the claimant resulting in OWCP having no effective
administrative control; we are unable to determine whether the provider
is charging too much for the services, for example, or even in some
cases whether the allowance is actually being spent for the services.
By paying for any necessary services directly, under section 8103,
instead of providing an allowance to the claimant, under section
8111(a), these costs will be subject to the same administrative
controls to which most other bills for services and supplies are
subject. Bills will be submitted to OWCP directly by the provider; they
will be subject through the OWCP fee schedule to a maximum monthly
charge of $1,500; bills for services will be scrutinized to ensure the
charges are correct; it will be OWCP, not the claimant, who will be
responsible for resolving any problems with the payments; and a record
of payments to the provider will be reported to the Internal Revenue
Service on form 1099 at the end of each year.
In addition to financial accountability, the quality of services
can better be monitored. Providing supplemental compensation to the
injured employee under section 8111 has in many instances encouraged
family members to take on the personal care services, even though they
may not be trained or well-suited to this task. Paying the provider
directly will give OWCP an added degree of review to ensure that the
necessary services are being provided by a home health aide, licensed
practical nurse or similarly trained individual better able to provide
the care needed. Where a family member can show he or she has the
appropriate qualifications and training, there will be nothing to
prevent them from providing the service and receiving payment.
Section 10.316, which concerns an employee's request to change his
or her primary treating physician, clarifies that an employee need not
consult OWCP for approval when the physician initially selected refers
the employee to a specialist appropriate to the nature of the injury.
Examples of frequently-approved requests for a change of physician are
also provided to illustrate the decision-making process.
Directed Medical Examinations
Sections 10.320 and 10.321 concern second opinion and referee
examinations. A statement has been added to make clear that the
claimant is not entitled to have anyone attend such examinations
(except for a physician of his or her choice, at a second opinion
examination) unless OWCP finds that exceptional circumstances, such as
the need for having an interpreter for a hearing-impaired claimant,
exist. This statement was added to address situations where
representatives and other parties wished to sit in on examinations,
even though this action can be disruptive. The statement that a case
file may be sent for second opinion or referee review where an actual
examination is not needed, or where the employee is deceased, reflects
long-standing practice and is consistent with ECAB precedent on this
issue.
In Sec. 10.323, which addresses failure to report for or
obstruction of a second opinion or referee examination, a sentence has
been added providing that actions of an employee's representative will
be considered the actions of the employee for the purposes of this
section. This statement was added to address situations where
representatives prevent or disrupt examinations, thereby hindering OWCP
from obtaining information needed to adjudicate and manage claims and
is consistent with ECAB precedent on this issue.
Medical Reports
In Sec. 10.330, the list of contents for medical reports has been
expanded to include the extent of disability and prognosis for
recovery, as these items are especially useful in managing disability
cases. Inclusion of these items reflects OWCP practice, and should help
medical providers and employees provide OWCP the information it
requires to reach a decision in the case.
To reduce confusion about submission of medical reports, the
statement that use of form reports is not required has been added to
Sec. 10.331. Also, this section makes clear that reports must have
signatures, although recognizing that many medical providers use
signature stamps in lieu of actual signatures. OWCP reserves the right
to request an original signature on any medical report. The use of Form
CA-17 to obtain interim medical reports is expressly confined to
employees with disabling traumatic injuries, as this form is not
properly used with occupational disease cases.
Subpart E, Compensation and Related Benefits
This subpart contains most of the information found in current
subpart D (Secs. 10.300 through 10.324), and it addresses the subjects
of current Secs. 10.109, 10.126 through 10.128, and Secs. 10.160
through 10.166. The very detailed guidance currently given with respect
to the appointment and responsibilities of representative payees has
been condensed into one paragraph, new Sec. 10.424, as most of the
current material is procedural rather than regulatory in nature.
No counterpart to current Sec. 10.310, which provided for buy-back
of annual or sick leave, is included in the new regulations. This
process is not authorized or required by the FECA, nor is it controlled
by OWCP. It is controlled by each employing agency, in accordance with
its general rules regarding leave repurchase. The only relationship
between those rules and FECA is the general prohibition against paying
wage-loss compensation benefits for any specific period where leave has
been used. OWCP needs to know, therefore, whether leave has been taken
in order to determine whether
[[Page 67125]]
compensation is payable for the same period. By including a reference
in the regulations to the repurchase of leave, however, OWCP has
inadvertently given the impression that OWCP controls or supervises
leave buy-back for injured workers, and disputes concerning leave buy-
back have often been incorrectly submitted to OWCP for resolution. To
avoid this confusion, the reference to leave buy-back has been removed.
Individuals who wish to repurchase leave should consult with their
employing agency. Compensation will not be paid where leave has been
used. Once restoration of leave has been authorized, however, OWCP will
entertain a claim for benefits for that period of time.
Compensation for Disability and Impairment; Compensation for Death
In Sec. 10.400, which defines total disability, a statement
explicitly recognizing OWCP's view that most employees will eventually
return to work has been added. This statement represents long-standing
policy as reflected in OWCP's case management procedures.
In Sec. 10.404, which concerns payment of compensation for schedule
impairment, a statement that OWCP uses the American Medical
Association's Guides to the Evaluation of Permanent Impairment as its
frame of reference for calculating such awards has been added. OWCP has
used this publication in calculating schedule awards for many years,
and the ECAB has approved its use. Since the publication is
periodically updated, OWCP generally uses the newest edition in effect
at the time of the decision in calculating loss of use.
OWCP has received a number of petitions over the years to add
various internal organs to the list of schedule members. We have
considered each organ suggested and, after much deliberation, decided
against any additions. This decision is consistent with most state
workers' compensation systems, which generally do not provide schedule
awards for internal organs.
In Sec. 10.406 and Sec. 10.411, which concern maximum and minimum
rates of compensation, the word ``basic'' has been prefixed to
``monthly pay'' to indicate that locality adjustments are not included
in determinations of maximum and minimum rates of compensation. Also,
statements have been added to recognize that compensation paid due to
an assault which occurred during an attempted or actual assassination
of a federal official in the performance of duty is exempted from the
maximum rates.
In Sec. 10.413, the provisions of current Sec. 10.109 have been
shortened so as not to repeat those appearing in the FECA itself.
In Sec. 10.417, the second and third paragraphs provide that OWCP
may, at least twice each year, request reports to verify student status
or the inability of a child over 18 years of age to support himself or
herself. This reporting schedule is consistent with most school
enrollment schedules, and helps avoid situations where overpayments
occur, by reminding recipients that individuals over the age of 18 who
are not enrolled in school for any particular semester are not eligible
for survivor benefits.
Adjustments to Compensation
Section 10.421(c) is new and reflects long-standing practice
regarding the concurrent receipt of compensation from OWCP and
severance or separation pay from the employer. With the increasing use
of such benefits as the government downsizes, the frequency with which
this is an issue has increased, and so a provision addressing this
issue was included in the regulation. This provision is consistent with
ECAB precedent on this issue.
Section 10.421(d) is also new and implements the changes made to
the FECA when the Federal Employees' Retirement System (FERS) was
instituted. Federal employees whose retirement benefits are provided by
the FERS receive benefits under the Social Security (SSA) retirement
system as part of their package of retirement benefits. Federal
employees eligible to receive retirement benefits under the Civil
Service Retirement Act (CSRA) must elect between FECA benefits and CSRS
retirement benefits and cannot receive both at the same time. With the
enactment of the FERS, Congress amended the dual benefit provisions of
the FECA (section 8116(d)). A FECA beneficiary may receive FECA
benefits and SSA benefits, except that OWCP is required to reduce FECA
benefits by the amount of any SSA retirement benefits attributable to
the individual's Federal employment.
In Sec. 10.423, which concerns assignment of compensation payments
to creditors, a statement concerning garnishment of benefits for
alimony and child support has been added. The language reflects changes
to various federal laws, making clear that FECA as well as other
Federal benefits may be attached to fulfill alimony and child support
obligations.
Overpayments
The regulations concerning overpayments have been extensively re-
written to highlight and clarify a FECA beneficiary's obligation to be
aware of the period for which benefits are paid, and the manner in
which overpayments are declared, contested, and collected.
The language in Sec. 10.430 has been added to describe how OWCP
notifies a recipient of compensation that a payment has been made,
whether by paper check or electronically. This language was added to
clarify that a recipient is required to be aware of the time period for
which each payment of compensation for wage loss or schedule award is
received and to advise OWCP of any discrepancies noted. Absent
affirmative evidence to the contrary, the beneficiary will be presumed
to have received the notice of payment, whether mailed or transmitted
electronically.
Sections 10.436 and 10.437 discuss the two circumstances under
which an overpayment can be waived pursuant to section 8129(b). Section
10.436 discusses the criteria to be used in determining whether
recovery would ``defeat the purpose'' of the FECA. Section 10.437
discusses the criteria to be used in determining whether recovery would
``be against equity and good conscience.'' Waiver under Sec. 10.436
because recovery would defeat the purposes of FECA is available only to
currently or formerly entitled beneficiaries, which continues the
application of that provision in the existing regulations. In
Sec. 10.437, the manner in which OWCP applies the ``against equity and
good conscience'' test for waiver of an overpayment is revised to
provide that this particular test applies to all individuals who are
``without fault'' and have received compensation because of an error of
fact or law, regardless of whether or not they are present or former
beneficiaries under the Act. This change restores the statutory
distinction between the application of the two tests for waiver
contained in section 8129(b), which was unintentionally removed as a
result of the 1987 revision of the regulations.
In new section 10.441, language has been added to clarify that an
overpayment is a debt that is subject to the Debt Collection Act of
1982 and that if such a debt is not repaid OWCP will attempt to recover
the debt by any available means including offset of salary, annuity
benefits or referral for collection to a collection agency or to the
Department of Justice.
Subpart F, Continuing Entitlement to Benefits
This subpart contains most of the information found in current
Secs. 10.123 through 10.128. It also includes some
[[Page 67126]]
material from current Secs. 10.107 and 10.110.
Claims for Continuing Disability
The regulation concerning continuing receipt of compensation
benefits, new Sec. 10.500, has been written to include a specific
statement that OWCP's goal is to return each disabled employee to work
as soon as medically able. The definition of ``suitable work'' has also
been revised to clarify the criteria by which it is determined that
work is ``suitable''. These changes were made because these concepts
are important to the program and important for both employees and
employers to understand.
The language in Sec. 10.500(a) has been added to inform claimants,
employing agencies and others of OWCP's long-standing practice of
requiring claimants to periodically submit medical evidence in support
of continuing disability. It also includes a description, based on a
consistent line of ECAB precedent, of the type of medical evidence
necessary to support a claim for continuing compensation.
The language in new Sec. 10.500(b) has been added to clarify that
OWCP can require non-invasive testing and functional capacity
evaluations and that failure to undergo such testing may result in
suspension of benefits.
The discussion of weighing medical evidence in Sec. 10.500(c) has
been added to describe OWCP's long-standing method of evaluating
medical evidence. It explains that the conclusions reached in medical
reports are not necessarily accepted at face value. Instead, OWCP
considers the entire report and determines the weight to be accorded it
based on a number of factors, including the extent to which the report
shows a familiarity with the history of the case, whether it contains
objective findings (as opposed, for example, to unsubstantiated
complaints), and the strength of the reasoning supporting any opinion
rendered.
Return to Work--Employer's Responsibilities
The discussion of an employer's responsibilities to return an
employee to work in Sec. 10.505 has been revised to specifically
reference the provisions of section 8151, which grants reinstatement
rights to injured employees and requires employers to take steps to
reemploy them. Language has also been added to inform employees,
employers and others that the Office of Personnel Management (not OWCP)
administers this provision. In the past, employees and former employees
have sought OWCP intervention in disputes concerning reemployment
rights based upon the mistaken belief that OWCP had jurisdiction over
such matters and authority over agency decisions concerning employment
decisions. This provision of the regulations is being added to correct
that misunderstanding of OWCP's role in regard to reemployment.
Section 10.506 includes a new provision allowing employers to
contact employees at reasonable intervals to request periodic medical
reports addressing their ability to return to work. This statement is
consistent with OWCP's case management procedures, which are designed
to include the employing agency in the effort to return the injured
employee to work. The provision is not intended to allow employers to
obtain medical reports for any reason other than evaluation of an
employee's ability to return to work.
The discussion of payment of relocation expenses, in Sec. 10.508,
has been revised to include a provision that OWCP may pay relocation
expenses when the new employer is other than a federal employer, a
situation which the current Sec. 10.123(f) does not address. Requests
for reimbursement in this context do not arise frequently, and the
expenses claimed are usually modest.
Section 10.509 adds a discussion, not contained in the current
regulations, of OWCP's practice with respect to injured employees who
have returned to light-duty work and are separated when their employers
eliminate their light-duty positions in a subsequent reduction-in-force
(RIF) as part of a general agency downsizing at a particular work site.
Consistent with established ECAB precedent, OWCP does not consider such
a termination of employment to be a recurrence of employment-related
disability, since it is not caused by a change in the nature or extent
of the employee's accepted medical condition or a change in the duties
of the light-duty position, which clearly would have continued to be
available in the absence of the RIF.
In such cases, OWCP will determine the employee's wage-earning
capacity based on his or her actual earnings in the former light-duty
position, if such a determination is appropriate and has not already
been made. Unless the employee has been working in a position for which
the employer has prepared a written position description, OWCP will
assume that the employee was engaged in non-competitive employment that
does not represent the employee's wage-earning capacity. This
requirement is consistent with ECAB precedent concerning wage-earning
capacity determinations, which provides that OWCP may not use an
unclassified or ``odd-lot'' position that has been specifically
tailored to fit the work limitations of a particular injured employee
to determine the wage-earning capacity of that employee.
Return to Work--Employee's Responsibilities
Section 10.516 incorporates into the regulations the procedures
followed when OWCP rejects an employee's reasons for refusing a
position that OWCP has found suitable. OWCP adopted these procedures
several years ago in accordance with the decision of the ECAB in Maggie
Moore, 42 ECAB 484 (1991). The proposed regulation provides for a 15-
day period during which an employee may accept the offered job without
penalty after OWCP has determined that his or her proffered reasons for
declining to accept an offer of suitable work are not reasonable.
Section 10.518 adds a discussion of ``vocational rehabilitation
services'' to the regulations. This definition is intended to clarify
that such services include the services of registered nurses working at
the direction of OWCP to assist employees in returning to work. These
nursing services, which generally take place in the weeks immediately
following the injury, are an integral part of OWCP's efforts to return
injured employees to work. Vocational rehabilitation includes a variety
of services, all of which are designed to assist an injured employee's
return to work. Including this definition of vocational rehabilitation
services clarifies that OWCP considers nursing services to be such
services and that the benefits and sanctions set forth in section 8104
and section 8113(b), which apply to other vocational services, will
also apply to nurse services. This discussion also states that OWCP
considers vocational evaluation, testing, training and placement
services, and functional capacity evaluations to be vocational
rehabilitation services.
Section 10.520 incorporates into the regulations an explanation of
how OWCP determines an employee's wage-earning capacity after
completion of a vocational rehabilitation program. This discussion is
intended to inform employees and others of OWCP's long-standing
practice in this area and is consistent with ECAB precedent concerning
determination of wage-earning capacity.
Reports of Earnings From Employment and Self-Employment
The FECA authorizes OWCP to require FECA claimants to report
[[Page 67127]]
earnings from employment or self-employment. The ``earnings'' from
employment or self-employment that must be reported by any employee who
is receiving compensation for either partial or total disability are
defined in Sec. 10.5(g). The language in Sec. 10.525(b) has been added
to clarify the distinction between the effects of having earnings,
which may or may not result in a reduction of FECA compensation, and
the effects of failing to report earnings, which can result in the
forfeiture of all compensation paid or found to be payable during the
reporting period.
The discussion of volunteer activity in Sec. 10.526 has been added
to clarify that employees receiving compensation for partial or total
disability are required to report volunteer activity as part of their
report of earnings from employment and self-employment. Volunteer
service can be a valuable indicator of the kind of gainful employment
that the employee may be able to undertake, and thus OWCP may be able
to use this information to help determine the employee's wage-earning
capacity.
The language in Sec. 10.527 has been added to the regulations to
inform employees and others of the fact that OWCP attempts to verify
reports of earnings in a number of ways, including computer matches
with the Office of Personnel Management and state workers' compensation
agencies.
Reduction and Termination of Compensation
Sections 10.540 and 10.541 are new and reflect OWCP's long-standing
practices with respect to how and under what circumstances it will
provide beneficiaries with written notice that it intends to either
reduce or terminate their compensation in the next 30 days, as well as
the administrative steps it will take after it provides such notice.
These provisions are to inform employees and others when and how OWCP
notifies beneficiaries of its intention to terminate compensation and
to clarify that, in situations when the beneficiary has no reasonable
expectation that compensation will continue, OWCP will not provide this
pre-termination notice.
Subpart G, Disallowances and Appeals
This subpart contains most of the information found in current
Secs. 10.130 through 10.145, except for the material found in current
Sec. 10.142, which is moved to subpart H.
Reconsiderations and Reviews by the Director
Review of a decision on application of the claimant is addressed in
current Sec. 10.138(b), and review of a decision on the Director's own
motion is addressed in current Sec. 10.138(a). Sections 10.605 through
10.610 revise and expand the description of reviewing a decision on
application of the claimant and on the Director's own motion in order
to clarify the difference between these two separate procedures. These
provisions state that the Director's authority is not subject to a
request or application. Further, these provisions adopt OWCP's long-
standing position that the Director does not need new evidence or
argument to review a decision and that the decision by the Director to
review a decision is not a proper subject for review or appeal.
In many cases, claimants appear not to have understood the
distinction between the two distinct review procedures authorized by
section 8128(a). Some individuals, who remain dissatisfied with an OWCP
decision after exhausting all their review and appeal rights, have
asked the Director to review the decision with which they disagree
pursuant to the Secretary's authority under section 8128(a), delegated
to the Director, to review a decision on his or her own motion. The
distinction between the Director's authority to review a decision on
his or her own motion and a claimant's application for review is not
new in practice. Claimants have never been entitled to ``apply'' for
review outside the process described as a ``reconsideration'' in the
review and appeal options accompanying all adverse decisions. When a
request to the Director to review a decision on his or her own motion
is received, it has been OWCP's long-standing practice to treat it as a
reconsideration request rather than an additional avenue for claimants
to seek review.
To alleviate the confusion that has been demonstrated in regard to
this issue, Sec. 10.610 specifically states that OWCP will not consider
a request for review on the Director's own motion. The statutory
provision authorizing a claimant to request review of a decision ``upon
application'' is fulfilled by the application for reconsideration.
Since no other mechanism for a claimant dissatisfied with a decision to
obtain a review ``upon application'' is available, OWCP will continue
to treat requests that the Director review a decision on his or her own
motion as requests for reconsideration.
A number of ECAB cases have addressed the question of whether the
Director is required to have new evidence or argument to review a
decision under section 8128(a). In Eli Jacobs, 32 ECAB 1147 (1981), the
ECAB held that the Director may reopen a claim at any time without
specifying what standard, if any, applied to that decision. In a later
decision, Daniel E. Phillips, 40 ECAB 1111, petition for
reconsideration denied, 41 ECAB 201 (1989), however, over the dissent
of one member of the panel, the ECAB held that to reopen and rescind
acceptance of a claim, the Director must establish that the original
decision was erroneous through the use of ``new or different
evidence.'' The ECAB reached this conclusion without specifying any
statutory or regulatory basis for this limitation. Its only rationale
was its opinion that reopening a decision should not become a
surreptitious route for OWCP to readjudicate a claim. In later cases
that formulation was expanded to include allowing reopening and
rescission of a prior decision through new or different evidence, legal
argument or rationale. See, e.g., Beth A. Quimby, 41 ECAB 683 (1990);
Billie C. Rae, 43 ECAB 192 (1991); Shelby J. Rycroft, 44 ECAB 795
(1993); Laura H. Hoexter (Nicholas P. Hoexter), 44 ECAB 987 (1993).
Section 10.610 adopts the long-standing position of the Director
that the plain language of section 8128(a) authorizes the Director,
without pre-condition, to review a decision ``at any time.'' The
existing regulations contain a provision, carried over in Sec. 10.608,
limiting the right of a claimant to obtain a merit review and a new
decision from OWCP to those situations in which the claimant meets one
of the requirements set out in Sec. 10.138(b). Without this limitation,
the effective administration of the program could be undermined by
taxing the limited resources available to administer the program
through frivolous requests for review. Allowing the claimant to reopen
the claim just to have the same evidence reviewed again would both
waste the claims staff time and slow down the appellate process.
In view of the fact that the statute imposes no limitation upon the
right of the Director to review a decision ``at any time,'' Sec. 10.610
grants the Director an unconditional right to review any decision
without requiring new evidence or argument. Effective administration of
the program requires that the Director be able to review decisions at
any time without having to supply new evidence or argument.
This does not mean, however, that the claimant has no recourse when
the
[[Page 67128]]
Director reviews a decision and issues a new decision with which he or
she disagrees. Any adverse decision is subject to the full range of
review and appeal options which protects the claimant from arbitrary
action. Congress clearly did not contemplate restricting the Director's
ability to reopen a claim when it gave the Director authority to review
a decision ``at any time''.
Consistent with this broad authority, Sec. 10.610 provides that the
determination whether or not to review a decision on his or her own
motion is not subject to reconsideration, review or appeal. Since the
Director has unfettered discretion in deciding whether or not to review
a decision, and any claimant unhappy with a new decision issued after
such a review by the Director is provided the same rights to seek
reconsideration, review or appeal associated with any OWCP decision, no
purpose would be served by allowing further review of the Director's
decision to review a previous decision.
Hearings
In Sec. 10.615 a provision has been added granting hearing
representatives discretion to conduct an oral hearing by telephone or
teleconference. Section 10.616(b) revises the time period in which a
claimant can request a change in the format of a hearing. A request
received by the Branch of Hearings and Review before the date OWCP
issues a notice that the record is closed for written review, or has
set a date for an oral hearing, will be granted. Later requests will be
subject to OWCP's discretion.
Section 10.617(g) makes clear that the hearing representative may
terminate a hearing at any time that he or she deems the actions of the
claimant and his or her representative to be disruptive. This provision
reflects current practice.
The discussion of issuing subpoenas, Sec. 10.619, has been revised
to set forth the criteria for issuing a subpoena. To alleviate
confusion that has been demonstrated concerning the circumstances under
which subpoenas can be issued, Sec. 10.619(a) specifically provides,
consistent with practice based upon ECAB precedent, that subpoenas will
be issued at the request of a claimant only in connection with
hearings. Moreover, it makes clear that this method of gathering
evidence is to be used as a last resort. Because the hearing is an
informal procedure, not bound by rules of evidence or formal rules of
procedure, the need for subpoenas is limited and is sufficiently
accommodated by providing that a subpoena can be issued for documents
when the information is not available by other means and for witnesses
when oral testimony is the best way to ascertain the facts. To avoid
disruptions of the hearing process and encourage early and active
development of the evidence, Sec. 10.619(a)(1) provides that a subpoena
must be requested within 60 days after the date of the original hearing
request.
To clarify the role of a representative of the employer at a
hearing, the discussion of this subject, in Sec. 10.621(b), has been
revised to specifically note that a hearing representative may deny a
request by the claimant that the agency representative testify where
the claimant cannot establish that such testimony would be relevant or
because the representative does not have the appropriate level of
knowledge.
Section 10.622 revises the rules concerning postponement of oral
hearings to address problems that have arisen since the institution of
the current rules concerning postponements in 1987. Oral hearings are
scheduled at locations within a reasonable proximity to claimants'
places of residence. As a result, hearings are scheduled throughout the
country, several times a year in some locations and only once a year in
other locations. For each trip, one hearing representative is assigned
a number of cases as the ``docket''. Before the trip, the hearing
representative must review each file, research the issues, and prepare
the record, all of which requires many hours of work.
Scheduling and workload constraints prevent OWCP from sending the
same hearing representative to the same city each time. Thus, when a
hearing is postponed, it often requires that another hearing
representative repeat the preparation for the hearing undertaken by the
previous representative. Furthermore, in many cases it is too late to
schedule another case for that slot on the docket, thus needlessly
delaying hearings for other claimants.
The current rule, found at Sec. 10.137, which allows a postponement
for ``good cause'' if the request is received at least three days prior
to the date of the hearing, has proven completely ineffective at
controlling the waste of resources caused by postponements. Disputes
over what constitutes ``good cause'' sometimes take longer and require
more resources than rescheduling the hearing itself. The result is
delay, not only for the claimant whose hearing was scheduled and
postponed, but for other claimants adversely affected by the
inefficiency of the current process.
Thus, new procedures are being adopted which provide that, once the
oral hearing is scheduled, it cannot be postponed unless the hearing
can be rescheduled on that same trip. In the event that an oral hearing
cannot be rescheduled on that same trip, the claimant will be provided
a review of the written record instead. The proposed limitation is a
reasonable compromise which will improve the administration of the
program. The program's resources must be preserved to ensure the best
service to all those seeking a hearing. Constant and repeated
postponement of oral hearings constitute a serious drain on those
resources. The review of the written record by a hearing representative
as a substitute for an oral hearing has served as an effective way to
provide the review contemplated by the FECA on a more timely basis than
resources otherwise would permit.
In most cases, the issues relate to written evidence (particularly
medical evidence). A face-to-face hearing does little to clarify
medical issues, since the determination, in most cases, must be made on
the basis of written medical evidence in the file. A review of the
written record has been selected, therefore, as an effective way to
provide the review of the decision by a hearing representative where
the claimant must postpone the hearing.
Another change to the oral hearing procedure is to allow a claimant
to express a preference for scheduling an oral hearing. OWCP will
attempt to comply with any scheduling preferences of which it is
advised at the time of the original request. Once the notice of hearing
is sent, the claimant can request a change in the day and the time of
the hearing within the same docket.
Review by the Employees' Compensation Appeals Board (ECAB)
Claims on appeal often have continuing issues, such as payments of
bills or actions on collateral issues such as recurrences, requiring
actions by OWCP. Sometimes, because the case is under the jurisdiction
of the ECAB, there are questions as to what can and cannot be done by
OWCP when cases are before the ECAB. To clarify this issue, language
has been added to the regulations, in Sec. 10.626, which explains the
circumstances under which OWCP still has jurisdiction over issues in
cases pending before the ECAB.
Subpart H, Specialized Topics
This subpart contains most of the information found in current
subparts G and H (Secs. 10.500 through 10.624), as well as the material
found in Sec. 10.142.
[[Page 67129]]
Representation
Current Sec. 10.143 states, with no elaboration, that a claimant
may authorize any individual as a representative in a claim before
OWCP. Section 10.700 more fully describes who may act as a
representative, what authority a representative has, and specifies that
there can be only one representative in a claim at a time. These
provisions essentially incorporate current practice.
The FECA gives to the Director, as the Secretary's delegate, the
authority to approve fees associated with representation of a claim
under the FECA. In the past, OWCP claims personnel have reviewed all
bills for representatives' services, even if the claimant did not
disagree with the amount billed. To reduce the workload imposed by
extensive review of bills with which claimants do not disagree,
Sec. 10.702 implements a new procedure by which OWCP would
automatically approve all fees unless the represented party objects to
the amount billed. In that case, OWCP will give that party an
opportunity to submit further information. OWCP will then adjudicate
the request according to the criteria set forth in Sec. 10.703(c). This
section adopts the criteria in the existing regulations at
Sec. 10.145(b), after removing items that are essentially duplicative.
Third-Party Liability
Current Sec. 10.501 through Sec. 10.507 essentially restate
provisions of sections 8131 and 8132 of the FECA. Much of that material
has, therefore, been removed as redundant. Sections 10.704 to 10.719
explain, interpret and clarify duties of FECA claimants and their
counsel pursuant to sections 8131 and 8132 of the FECA. Section
10.705(b) incorporates into the regulations a specific reference to the
fact that the Office of the Solicitor (SOL) administers the subrogation
aspects of certain FECA claims for OWCP. (This does not, however,
preclude an employing agency from participating in administering the
subrogation aspect of its employees' cases under a specific agreement
with OWCP.) Section 10.706 explains how a FECA beneficiary is informed
of the obligation to pursue a claim against a third party. Section
10.707 provides a list of all actions that must be taken by a FECA
beneficiary in order to comply with the requirement in section 8131 of
the FECA that a claimant prosecute an action against a third party when
required to do so by OWCP. The purpose of this section is to inform
claimants that failure to comply with any of the requirements in this
section could result in forfeiture of all FECA benefits arising out of
the injury at issue. Section 10.708 further details the penalties that
can be applied to a FECA beneficiary who fails to prosecute a claim or
to assign it to the United States when requested to do so by indicating
that OWCP may order forfeiture of such benefits or alternatively could
suspend such benefits until the request to assign or prosecute is
complied with. In many instances, review of the information available
to OWCP indicates that there is a possibility of third party liability,
which, upon further investigation by private counsel consulted by the
FECA beneficiaries, is either not economical to pursue or simply not
meritorious. Section 10.709 sets forth the procedure to be followed by
a FECA beneficiary to be released from the obligation to prosecute an
action against a third party.
Section 10.710 is being added to the regulations to clarify that
any person who has filed a FECA claim that has been accepted or who has
received FECA benefits in connection with a claim filed by another
person must report any receipt of money or other property as a result
of the liability arising out of that injury to OWCP or SOL within 30
days of receipt. Section 10.711 is being added to the regulations in
order to provide a step by step explanation of the calculation of the
refund to be paid to the United States and any credit against future
benefits calculated in accordance with the formula contained in section
8132 of the FECA. The only change contemplated from existing practice
by this formula is elimination of the opportunity to offset payment of
medical expenses to federal facilities or other parties from any
recovery. This practice has been allowed as an administrative
accommodation, but rarely occurs and is no longer considered necessary.
Any medical expenses paid directly by the FECA beneficiary should be
submitted directly to OWCP for reimbursement as appropriate.
Section 10.712 incorporates into the regulations OWCP's
longstanding practices in regard to what amounts are included in the
gross recovery reported in connection with third party liability for an
injury covered by the FECA. Section 10.713 is being incorporated into
the regulations to require that a FECA beneficiary who receives a
structured settlement (one which provides for payment of funds over a
specified period of time rather than immediately) report as the gross
recovery the present value of the right to receive all of the payments
called for in the settlement. This requirement is in keeping with the
plain language of section 8132 of the FECA, which covers the receipt of
``money or other property'' and the recognition that the right to
receive a stream of payments in the future is clearly a valuable
property right. This definition is intended to overrule the holding of
the ECAB in Benjamin S. Purser, Jr., 42 ECAB 204 (1990).
Section 10.714 sets forth the manner in which OWCP calculates
disbursements which it makes in connection with a FECA claim to be
refunded in accordance with the formula set out in section 8132 and
Sec. 10.711 of these regulations. The only change from existing
practice is to allow for subtraction from the total of refundable
disbursements of the cost of any medical examination that the FECA
beneficiary establishes that the employing agency should have made
available at no charge to the employee under a statute other than the
FECA. This change is being made to ensure that employees who sustain
injuries covered by the FECA are not treated less favorably than those
who receive such treatment but have not sustained injuries covered by
the FECA.
OWCP has decided to impose interest charges on refunds due to the
United States pursuant to section 8132 of the FECA as set forth in
Sec. 10.715. This is a change in current policy and is consistent with
the Debt Collection Act of 1982. In view of the fact that certain FECA
beneficiaries currently receiving compensation payments owe refunds and
have refused to pay, a provision is being added to the regulations at
Sec. 10.716 allowing collection of such refund by withholding from
payments currently payable under FECA. Section 10.717 is being added to
the regulations to clarify OWCP's longstanding interpretation that,
since an injury caused by medical malpractice in treating a FECA-
covered injury is itself an injury covered by FECA, any recovery
received in a negligence suit arising out of such malpractice is a
recovery subject to section 8132 of the FECA. Similarly, Sec. 10.718 is
being added to the regulations to make clear another longstanding OWCP
interpretation: that insurance payments to a beneficiary pursuant to a
policy the beneficiary has purchased do not constitute a recovery
pursuant to section 8132.
Section 10.719 is being added to the regulations to interpret the
phrase ``same injury'' for the purposes of implementing section 8132 of
the FECA. While an argument can be made that the statute intended that
each recovery for a medical condition or wound should be
[[Page 67130]]
treated separately for the purpose of calculating any required refund
or credit against future benefits (an argument which has been accepted
by one district court, in Benjamin S. Purser, Jr. v. United States
Department of Labor, 943 F.Supp. 898 (M.D. Tenn. 1996), the approach
being adopted by these regulations is more consistent with the intent
of section 8132 and the administration of the FECA. Attempting to
separate out each different ``injury'' incurred in, for example, an
automobile accident as a result of which an injured employee may have
multiple medical conditions affecting numerous body parts in order to
allocate a single settlement from the other driver into pieces appears
to be an artificial exercise that serves no purpose set forth by the
statute. Such an interpretation invites artful drafting of settlement
agreements designed to negate the intended effect of the statute to, in
part, shift the costs of FECA onto parties who have caused injuries
covered under the FECA. Since each claim for FECA benefits arising out
of a single incident is administered as one file, regardless of the
number of wounds or medical conditions involved, attempting to
separately account for the recovery attributable to each wound and to
offset any credit against future benefits only to medical payments
attributable to that wound would be nearly impossible, except in the
most arbitrary manner and even then would be time-consuming, cumbersome
and a source of immense delay and confusion.
Federal Grand and Petit Jurors
Current Sec. 10.620 on the definition of jurors has been moved to
the list of definitions at Sec. 10.5(h), while current Sec. 10.621 on
the applicability of the other subparts of the regulations has been
removed as unnecessary.
Peace Corps Volunteers
Current Sec. 10.600 on the definition of Peace Corps volunteers,
Sec. 10.601 on the applicability of the FECA, Sec. 10.602 on when
disability compensation commences, Sec. 10.603(a) through (c) on
special pay rate considerations, and Sec. 10.604 on the period of
service of volunteers essentially restated provisions of the FECA and
other relevant statutes and have therefore been removed as redundant.
Non-Federal Law Enforcement Officers
Current Sec. 10.612(d) on the eligibility of non-federal law
enforcement officers, Sec. 10.617(c) on the adjudication of these
claims, Sec. 10.618 regarding consultation with the Attorney General
and other agencies, and Sec. 10.619 on cooperation with state and local
agencies essentially restated provisions of the FECA and have therefore
been removed as redundant.
Subsections (a) and (c) of Sec. 10.735 combine current Secs. 10.611
and 10.612, which have been rewritten to accommodate the question and
answer format and to delete material that simply restated provisions of
the FECA, without any attempt to make a substantive change. Subsection
(b) is new and restates other parts of the FECA for use as a general
rule. The last sentence of subsection (b) reflects OWCP's longstanding
practice with respect to the issue of coverage under this subpart for
individuals who only perform administrative functions in support of
eligible officers.
The last sentence of Sec. 10.736 is new and reflects a recent ECAB
decision which construed the time limitation provision of 5 U.S.C.
8193(c)(3).
Section 10.738 has been rewritten with minor changes throughout to
address a growing body of ECAB precedent regarding the nature and
extent of coverage for officers who are injured in situations that
involve potential federal crimes (as distinguished from actual crimes
that have resulted in a criminal prosecution).
Section 10.739 is new and describes the type of objective evidence
necessary to establish the existence of a potential federal crime for
purposes of coverage consistent with several ECAB decisions on this
point. An enumeration of the various methods for making this type of
showing is necessary to assist OWCP in its adjudication of a growing
number of these sorts of claims.
Section 10.741 is new and substantially rewrites the existing
regulation at Sec. 10.616 to reflect longstanding administrative
practices regarding the interpretation of what constitutes
``comparable'' benefits consistent with ECAB precedent. Section
10.741(c) is added to the regulations to explain how these benefits are
calculated in certain circumstances where the officer contributes to
the fund which is the source of the benefit. These provisions are
needed to provide OWCP with guidance in adjudicating these matters,
which have generated a number of inquiries from officers and their
representatives. This interpretation is consistent with OWCP's current
practice in calculating how much of the eligible officer's FECA benefit
must be offset as a result of the receipt of comparable benefits.
Subpart I, Information for Medical Providers
This subpart is designed to gather in one section all of the
information needed by medical providers. It combines some of current
Secs. 10.410 through 10.413 with Secs. 10.450 through 10.457.
It also contains proposed revisions in the rules establishing
procedures for submission and reimbursement of inpatient hospital
services and pharmaceutical bills under the FECA. These revisions would
supplement rules in effect since 1986, which provide for a fee schedule
for reimbursement of medical procedures and services. This fee schedule
currently applies to all physician services as defined under the FECA,
and to outpatient professional services.
Medical Bills
In Sec. 10.801, references to National Drug Codes and Revenue
Center Codes have been added to the list of codes which the medical
provider must specify. References to UB-82 have been changed to UB-92,
as the latter has become the standard billing form for hospitals. A
statement that pharmacy bills are to be submitted on the Universal
Claim Form has also been added.
Medical Fee Schedule
Sections 10.809 and 10.810 are new. OWCP believes that expanding
its ability to control and monitor medical costs is a critical element
in ongoing efforts to enhance the management of injuries under FECA.
Under these rules, both pharmacy bills and inpatient hospital bills
will be subject to cost containment methods.
Under the FECA, OWCP authorizes payment for medical services and
establishes limits for fees for such services (March 10, 1986, 51 FR
8276-82, as amended). Since 1994, the schedule for payment of
professional services has been based on the relative value units
(RVU's) devised by the Department of Health and Human Services, Health
Care Financing Administration (HCFA). When appropriate for the
schedule, OWCP devises its own RVU's for procedures not covered under
the HCFA schedule, for procedures without an assigned RVU under the
HCFA schedule, for services HCFA covers under other schedules, and for
services unique to OWCP, such as second opinion and impartial medical
evaluations. In addition, OWCP devises its own conversion factors to
meet program needs.
The Department recognizes the worth of using a schedule to
reimburse
[[Page 67131]]
covered medical services in that it provides an equitable method to
implement cost control measures, and it enhances the ability to manage
injury claims, especially the appropriateness of the medical services
provided and their relatedness to the compensable injury. These same
principles underlie the extension of cost controls to pharmacy and
hospital bills.
Pharmacy bills: At present, pharmacy payments, which constitute
nearly 6% of the total medical outlays of the program, are not
controlled by the fee schedule. These rules would reimburse pharmacies
under a set schedule. To standardize payments for medicinal drugs, the
program has devised a fee schedule based on the Average Wholesale Price
(AWP) of each individual drug plus a dispensing fee established by the
Director. AWP prices will be obtained from a file provided by a
nationally recognized vendor containing medicinal drugs listed by their
unique National Drug Codes (NDCs). AWP prices will be updated on a
regular basis.
The AWP is set by the industry, and represents what pharmacies are
expected to pay for the drug. The dispensing fee will be twenty percent
of the cost of the drug up to a maximum of $12.50. Thus, if the AWP of
a drug is $20.00, there would be a dispensing fee of $4.00, and the
maximum allowable charge for the drug would be $24.00. If the AWP of
the drug was $500.00, however, the dispensing fee would be limited to
$12.50, and the maximum allowable charge would be $512.50.
The basic methodology is widely practiced. In all, 23 state
workers' compensation programs have some form of control over drug
costs through the use of a maximum allowable schedule; 17 of these
states have a set schedule for prescription drugs and six more have
reimbursement formulas based on average wholesale price similar to that
proposed for the FECA program or comparable data. OWCP's Division of
Coal Mine Workers' Compensation uses this formula for reimbursement of
drugs under the Black Lung Benefits Act.
Hospital bills: Proposed Sec. 10.810 concerns hospital bills.
Currently, only hospital outpatient services are subject to a fee
schedule. The OWCP now proposes to reimburse hospital inpatient
services under a prospective payment system (PPS) that is based on the
systems used by the Health Care Financing Administration's Medicare
program (42 CFR parts 412 et al).
The OWCP now proposes to use the HCFA prospective payment system
(PPS) using Diagnostic Related Groups (DRGs) (42 CFR part 412, et al.)
as the foundation of a PPS for determining the allowable reimbursement
for inpatient services covered under FECA. OWCP has already
successfully converted the foundation of its professional medical fee
schedule to the HCFA RVUs, and the use of the HCFA PPS will establish a
common base for payment of medical services under both agencies. OWCP's
proposal to use the HCFA PPS is compatible with hospital inpatient cost
control measures used by other federal agencies such as the Department
of Veterans Affairs (VA) and the Department of Defense, Civilian Health
and Medical Program of the Uniformed Services (CHAMPUS), who are also
using DRG-based reimbursement systems. In addition, several state
workers' compensation programs are using DRG-based systems to control
the cost of inpatient services for work-related injuries.
The HCFA PPS is based on the premise that similar medical
conditions and surgeries require similar inpatient services and
resources, and that those conditions and surgeries can be categorized
into DRGs according to the primary diagnoses and major surgical
procedures performed, as coded under the International Classification
of Diseases, 9th Revision (ICD-9-CM). Under the HCFA PPS, hospitals
receive a fixed, predetermined reimbursement for each beneficiary's
inpatient stay according to the assigned DRG and whether or not the
length of stay is considered to be an outlier (the number of inpatient
days is not within the nationally calculated range for the assigned
DRG).
Under the HCFA PPS, the reimbursement rate is hospital-specific and
is determined through a complex formula that considers national average
costs for all inpatient services, geographic wage and overhead indices,
medical education costs, patient mix, indigent care costs, and capital
investments. The HHS PPS DRG rates are updated each year and are
described in detail in the Federal Register (42 CFR part 412, et al.)
OWCP's decision to use the HCFA PPS as the foundation of its
reimbursement system is based on research that explored available
options, and on a study of FECA inpatient bills. OWCP reviewed a
representative sample of inpatient services reimbursed under FECA,
assigned DRGs in accordance with the HCFA DRG grouper rules, and used
the HCFA pricer program to determine allowable amounts under Medicare.
In the study, fourteen DRGs accounted for 61% of the dollars billed
and 64% of the inpatient stays. A wide range of diagnostic conditions
and medical procedures were represented in the study, nevertheless, and
they comprised a diverse list of DRGs. It is evident from the study
analyses that there is considerable variation in the amounts different
hospitals bill FECA for similar services. These billed amounts are
greater by a mean of 45% than the amounts that would be allowed if the
inpatient stay were paid under the HCFA PPS.
In instances of musculoskeletal soft tissue injuries, however, the
OWCP study indicated that the injured worker under FECA may at times
require a very short stay compared to that common for a patient under
HCFA's Medicare program. For that reason, the billed amounts under FECA
were in some cases actually less than that allowed under the HCFA PPS
for the same DRG. Short inpatient stays, however, are not uncommon for
work-related injuries and often are considered appropriate for post-
trauma observation and for diagnostic procedures. Services at
psychiatric and rehabilitation hospitals were excluded from this
portion of the analysis because they are not currently subject to the
HHS PPS for acute care.
Although there are differences in the medical conditions treated
under the HCFA and the FECA beneficiary populations, the study
indicated that the HCFA PPS using DRGs is well-suited to OWCP's efforts
to expand its ability to monitor and control inpatient costs covered
under FECA. Other federal agencies have reached similar conclusions,
such as CHAMPUS (32 CFR part 199) and the VA (38 CFR 17.55).
HCFA currently collects comprehensive hospital-specific fiscal
data, and has considerable experience in this regard. They have been
paying for inpatient services under a PPS since October 1983. OWCP does
not have the resources to collect such data now or in the foreseeable
future. In addition, the Department believes that duplicate collection
of data is not an efficient use of staff and resources.
It is proposed, therefore, that OWCP base reimbursement of
inpatient services covered under FECA on the HCFA PPS as described
below:
a. Hospitals must submit bills for inpatient services covered under
FECA on the Standard Form UB-92, or its equivalent, with all common
information completed. This information includes the hospital's
Medicare number, the patient's Social Security number, the FECA claim
number when available, the billed amount, and the primary conditions
[[Page 67132]]
treated and procedures performed coded under the current edition of the
International Classification of Diseases, 9th Revision, Clinical
Modification (ICD-9-CM), Volumes I, II, and III, and/or in accordance
with that specified in the yearly update of the HCFA regulations (42
CFR part 412, et. al.)
b. OWCP's adaptation of the HCFA PPS includes use of the HCFA
grouper and pricer programs, and an adjustment factor (AF) to the HCFA
DRG maximum allowable, which considers the uniqueness of work-related
injuries. For example, the median age of the FECA patient is about 42
years, rather than over 65, as is the case under the Medicare program.
Secondly, a low volume of FECA patients is expected at any one hospital
compared to the number of patients covered under the Medicare program.
Thirdly, at times there will be a need for more comprehensive
diagnostic and test procedures to determine the work-relatedness of
conditions, and/or conditions that may delay return to work. Finally,
FECA patients may have nationally common length of stays (LOSs)
different than those for Medicare patients, and FECA's goal to return
injured employees to work as soon as possible is not a Medicare goal
for a retired population.
OWCP believes, however, that the HCFA PPS is well-suited to be the
foundation of an OWCP PPS for inpatient services, and that it provides
a comprehensive data resource not otherwise available to the
Department. OWCP's proposal to use an adjustment factor (AF) to adapt
the HCFA PPS to individual program needs is consistent with similar
methods used by other federal and state agencies. The AFs used under
the OWCP PPS are based on the results of comprehensive studies of
inpatient services conducted by OWCP in 1996 and 1990, and on ongoing
analyses of medical costs and services provided under FECA.
c. Under OWCP's proposed PPS, the HCFA allowable for a specific DRG
at a particular facility constitutes OWCP's Threshold Amount (TA) for
the DRG. The OWCP AF to each TA considers: (1) Lengths of stay (LOS)
that are outside the HCFA LOS parameters; (2) LOS that are within the
HCFA LOS parameters but under OWCP are consistently on the short or
long end of the parameter for particular DRGs; and (3) cost outliers
that are the result of unique care requirements, particularly expensive
hardware such as that frequently used in joint replacements, or are
attributable to inflated charges.
In addition: (1) The proposed OWCP PPS per diem rate will not be
less than that allowable under the HCFA DRG program when based on the
50th percentile LOS as reported in the Federal Register by HCFA for the
Medicare program; and (2) the total dollar amounts reduced from billed
amounts will be consistent with reduction rates under other portions of
the OWCP medical fee schedule and with cost to charge ratios for
inpatient services reported by HCFA.
The following abbreviations are used in OWCP's formulae for setting
the AF:
TA--Threshold Amount--the HCFA Medicare program maximum allowable for a
specific DRG at a particular facility.
TA/H50--Threshold Amount Per Diem rate--the daily rate when the TA is
divided by the HCFA national 50th percentile LOS days.
HCFA LOS--The length of stay days as defined under the HCFA national
data sets reported in the Federal Register yearly; three sets are used
for these formulae:
H25 = 25th percentile
H50 = 50th percentile
H75 = 75th percentile
OWCP LOS--The actual number of inpatient days billed for covered
services provided a claimant under FECA.
OWCP's formulae for setting the AF are:
(1) The OWCP DRG standard maximum allowable (MA)
The OWCP LOS is within the HCFA LOS parameters, the 25th (H25) to
the 75th (H75) percentiles, and the billed amount is not greater than
twice the OWCP TA.
(TA x 1.24)--[(TA/H50*0.12) * (H75-LOS)] = MA
(2) The OWCP Short Stay Maximum Allowable (MASS)
The OWCP LOS is less than the HCFA 25th percentile (H25). Short
stays regardless of billed amounts are covered under this formula.
[(TA/H50) * (1.72*LOS)] + [(TA/H50*0.33) * (H50-LOS)] = MASS
This formula allows for higher costs typically associated with the
first days of an inpatient stay, and an incentive allowance for IP days
less than the H25.
(3) The OWCP Long Stay and/or Cost Outlier Maximum Allowable (MACO)
The OWCP LOS is (a) greater than the HCFA 75th (H75) percentile
LOS, considered a long stay, or (b) the billed amount is considered a
cost outlier (greater than twice the TA) but the LOS is within the HCFA
LOS parameters (H25 to H75).
(TA x 1.24) + [(Billed Amount-(TA x 1.24)) x 0.50] = MACO
This formula adjusts for the outlier length of stay, or
confinements with documented outlier costs when the length of stay is
within the H25-H75. The costs beyond the OWCP MA, however, are only
paid at 50% of the billed amount. There is no additional adjustment for
number of inpatient days. If the long stay billed amount is less than
the TA x 1.24, then no charges are paid at the 50% rate.
These formulae always result in a payment greater than the HCFA
Medicare program allowable per diem rate (TA/H50). They are consistent
with reimbursement principles used by CHAMPUS, the VA, and state
workers' compensation programs for short and long stays, and for cost
outliers.
d. OWCP proposes to use a separate schedule to reimburse facilities
not covered (FNCs) under the HCFA PPS, such as those that only provide
rehabilitation or psychiatric services. The information required on
each bill will be the same as that required of acute care facilities,
including ICD-9-CM coding of diagnostic conditions being treated and
any major procedures performed. During a two-year phase-in period, this
FNC schedule is to be based on HCFA-calculated cost to charge ratio
(CCR) data for acute care inpatient services, currently set at about
55%, on data shared by CHAMPUS and state workers' compensation
programs, and on the 1996 OWCP inpatient hospital services study.
The FNC schedule will be applied to inpatient services provided at
FNCs when CCR data is available to OWCP. When CCR data is not
available, reimbursements will be negotiated prior to services based on
locality FNC estimated CCR and available cost data.
FNC Per diem rate * CCR * 1.24 = FNC MA
Outlier costs will be negotiated based on the FNC formula.
20 CFR Part 25
Subpart A--General Provisions
Former Sec. 25.3 regarding the use of local workers' compensation
law and the Special Schedule has been deleted as unnecessary.
Subpart C--Extensions of the Special Schedule of Compensation
Section 25.200(a) now includes a specific statement that direct-
hire employees of the U.S. Military Forces covered by the Philippine
Medical Care Program and the Employees' Compensation Program pursuant
to the agreement signed by the United States and the Republic of the
Philippines on March 10, 1982 who are also members
[[Page 67133]]
of the Philippine Social Security System are not covered by the
modified Special Schedule that is otherwise applicable in the Republic
of the Philippines.
In addition, old reserved Secs. 25.23 and 25.24 have been deleted
as unnecessary. Furthermore, old Sec. 25.25 has also been deleted to
reflect OWCP's prior policy determination (and concomitant
administrative practice) to apply the lesser of the provisions of local
law in the Republic of Korea or FECA (not the special schedule).
Statutory Authority
Section 8149 of the Federal Employees' Compensation Act, (5 U.S.C.
8101, et seq.), provides the general statutory authority for the
Secretary to prescribe rules and regulations necessary for
administration and enforcement of the Act. Section 5 U.S.C. 8103
provides specific authority regarding medical treatment and care,
including determining the appropriateness of charges. The Debt
Collection Act of 1982, as amended authorizes imposition of interest
charges and collection of debts by withholding funds due the debtor.
Executive Order 12866
This proposed regulatory action constitutes a ``significant'' rule
within the meaning of Executive Order 12866. The Department believes,
however, that this regulatory action will not have a significant
economic impact on the economy, or any person or organization subject
to the proposed changes. The proposed changes will have little or no
effect on the level of benefits paid (which in any case involve
payments almost exclusively to Federal employees from funds
appropriated by Congress); nor will there be a significant economic
impact upon the hospitals and pharmacies which, for the first time,
will be subject to the fee schedules established by these rules. The
total dollar amount paid for inpatient hospital services in fiscal year
1996 was $81,955,562.00, and subjecting these charges to the DRG
schedule is expected to result in a 20 percent decrease in the amount
paid, or about $16.4 million. The total dollar amount paid for pharmacy
costs in fiscal year 1996 was $31.9 million, and subjecting these
charges to the fee schedule is expected to result in a 10 to 15 percent
decrease in the amount paid, or about $3-4.5 million. Insofar as the
proposed amendments make it easier to seek benefits under the FECA and
streamline the administration of the program, they would decrease
administrative costs. The proposed changes have been reviewed by the
Office of Management and Budget for consistency with the President's
priorities and the principles set forth in Executive Order 12866.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995, as well
as E.O. 12875, this rule does not include any federal mandate that may
result in increased expenditures by state, local and tribal
governments, or increased expenditures by the private sector of more
than $100 million.
Paperwork Reduction Act
The new collection of information contained in this rulemaking has
been submitted for review to the Office of Management and Budget (OMB)
in accordance with the Paperwork Reduction Act of 1995. No person is
required to respond to a collection of information request unless the
collection of information displays a valid OMB control number.
The new information collection requirements contained in this
proposed rule are set forth in Secs. 10.801 and 10.802, and they relate
to information required to be submitted by pharmacies and hospitals
covering certain in-patient bills. The Department is proposing to
create a new form (Universal Pharmacy Billing Form) which will be used
by pharmacies in submitting claims for payment. Another form (the
claimant reimbursement form) will be used by claimants seeking
reimbursement for medical expenses for which they have paid the
providers directly. The public reporting burden for these collections
of information is estimated to average as follows: Universal Pharmacy
Billing Form--It will take five (5) minutes to complete the form,
including time for reviewing instructions, searching existing data
sources, gathering and maintaining the data needed and completing and
reviewing the collection of information; Claimant Reimbursement Form--
we estimate it will take an average of ten (10) minutes to complete
this form, including reviewing instructions, searching for existing
data sources, gathering and maintaining the data needed, and completing
and reviewing the collection of information.
The Department would like to solicit comments to:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
Type of Review: New Collection.
Agency: Employment Standards Administration.
Title: Claimant Medical Reimbursement Form (CA-915).
OMB Number: None.
Affected Public: Individuals or households, Federal Government.
Total Respondents: 40,500.
Frequency: On occasion.
Total Responses: 40,500.
Average Time per Response: 10 minutes.
Total Hours: 6,723.
Total Burden Cost (capital/startup): 0.
Total Burden Cost (operating/maintenance): 0.
Type of Review: New Collection.
Agency: Employment Standards Administration.
Title: NCPDP Universal Pharmacy Billing Form (79-1A).
OMB Number: None.
Affected Public: Businesses or other for-profit; Not-for-profit
Institutions; Individuals or households; Federal Government; State,
Local or Tribal Government.
Total Respondents: 406,198.
Frequency: On occasion.
Total Responses: 406,198.
Average Time per Response: 5 minutes.
Total Hours: 33,714.
Total Burden Cost (capital/startup): 0.
Total Burden Cost (operating/maintenance): 0.
Send comments regarding this burden estimate or any other aspect of
this collection of information, including suggestions for reducing this
burden to the Office of information Management, U.S. Department of
Labor, Room N-1301, 200 Constitution Avenue, Washington, DC, 20210; and
to the Office of Information and Regulatory Affairs, Attn: ESA Desk
Officer, OMB New Executive Office Bldg., 725 17th Street NW., Room
10235, Washington, DC 20003.
Regulatory Flexibility Act
The Department believes that the rule will have ``no significant
economic impact upon a substantial number of small entities'' within
the meaning of
[[Page 67134]]
section 3(a) of the Regulatory Flexibility Act. Pub. L. No. 96-354, 91
Stat. 1164 (5 U.S.C. 605(b)). The provisions of the proposed rules
extending cost control measures to hospital inpatient services and
pharmacies is the only provision of the regulations which may have a
monetary effect on small businesses. That effect will not be
significant on a substantial number of those businesses, however, for
no one business bills a significant amount to OWCP for FECA-related
services, and the effect on those bills which are submitted, while a
worthwhile savings for the government in the aggregate, will not be
significant for individual businesses affected.
The two new cost containment provisions are: (1) a set schedule for
payment of pharmacy bills; and (2) a prospective payment system for
hospital inpatient services. The two methodologies are fully explained
in the text of the preamble, including the fact that the use of
Diagnostic Related Groups (DRGs) for setting payment for in-patient
hospital charges essentially is an adaptation of a system used by the
Health Care Finance Agency (HCFA) in payment of Medicare bills. The use
of Average Wholesale Prices (AWP) in setting the maximum reimbursable
amount for pharmacy bills is also commonplace in the industry.
The method selected by OWCP is therefore one which contains
efficiencies both for the government and providers. The government
benefits because OWCP did not reinvent the wheel, but minimized
resources by adopting existing and well-recognized systems already in
place. The providers benefit because submitting a bill to OWCP and
receiving payment will be almost the same process as submitting it to
Medicare, a program with which hospitals are already familiar and have
in place for billing, so they will not have to learn a new process and
the FECA bills will not represent an unnecessary administrative cost
because the FECA bill process will not be essentially distinguished
from that for Medicare. Similarly, the pharmacies are used to billing
through clearing houses and having charges subject to limits by private
insurers. By adopting the uniform billing statement and a familiar cost
control methodology, OWCP has kept close to the environment with which
the pharmacies are already familiar. The methods chosen, therefore,
represent a familiar environment to the providers.
The costs savings resulting from the implementation of these cost
containment methods are significant only in the aggregate and will have
no significant effect on any individual businesses. First, the need for
cost containment in the FECA program is self evident and these methods
are already utilized by Medicare, CHAMPUS and Veterans Administration
among government entities, and for the private insurance carriers which
cover Federal employees as part of the Federal employees' health
benefit insurance programs. The costs to providers whose charges may be
reduced are relatively small, both in incremental and in actual terms.
Incrementally, FECA bills simply do not represent a large share of
any one provider's total business. Since Federal employees are spread
throughout the United States and this system covers only those Federal
employees who are injured on the job and require either prescription
drugs or inpatient hospital care (a tiny subset of all employees), the
number of bills submitted by any one provider which may be subject to
these provisions is likely to be very small.
Second, in actual terms, the amount by which these bills might be
reduced will not have a significant impact on any business. As noted
earlier in this preamble, in fiscal year (FY) 1996, the program paid
$81.9 million dollars on about 15,700 bills received for in-patient
hospital services (an average charge of $5,225.00 per stay). The total
number of hospitals on our provider files is about 5,000, for an
average patient load of slightly over three FECA-claimant patients per
hospital. If we assume that no hospital had more than three patients,
then the average annual billings subject to these rules for any
hospital would be about $15,775 (3 x $5,225). As also noted earlier in
the preamble, the DRG method will reduce the $81.9 million by about 20
percent, or $16.4 million. Thus, the average dollar amount of the
reduction in bills submitted by any one hospital resulting from these
rules would be about $3,150.00.
A similarly small actual dollar reduction applies to pharmacy
charges. OWCP paid about $32,000,000 for pharmacy charges, although we
cannot identify exactly what portion of this amount was paid to
institutions, since much of this dollar figure represents
reimbursements directly to claimants. We cannot identify with certainty
the number of pharmacies who provided supplies, for the same reason,
but there are about 4,000 pharmacies in our provider files. Similarly,
we cannot determine the exact number of bills paid, since we capture
only those submitted by a provider for direct payment and not those
submitted by a claimant for reimbursement. Assuming for purposes of
this analysis that the reimbursements were evenly divided among
pharmacies already part of our provider files, we divide 4,000
providers in to the total number of dollars paid to get an average
annual aggregate of charges paid to a provider of about $8,000.00. It
is estimated that the schedule would result in an average reduction of
five percent in pharmacy charges; based on these figures, the average
pharmacy would see a reduction in the total amount of charges submitted
of about $400.
These figures illustrate that the ``cost'' of these rules to any
one provider is negligible. On the other hand, OWCP will see
substantial aggregate cost savings as a result (estimated at
$18,000,000). These savings benefit OWCP (by strengthening the
integrity of the program), the employing agencies (which ultimately
foot the bill for FECA through the chargeback system), and taxpayer and
rate payers to whom the ultimate costs of the program are eventually
charged through appropriations.
The Assistant Secretary for Employment Standards has certified to
the Chief Counsel for Advocacy of the Small Business Administration
that these rules will not have a significant impact on a substantial
number of small entities. Accordingly, no regulatory impact analysis is
required.
List of Subjects for 20 CFR Parts 10 and 25
Administrative practice and procedures, Claims, Government
employees, Labor, Workers' compensation.
For the reasons set forth in the preamble, it is proposed that 20
CFR Chapter I be amended as follows:
1. It is proposed that part 10 be revised to read as follows:
PART 10--CLAIMS FOR COMPENSATION UNDER THE FEDERAL EMPLOYEES'
COMPENSATION ACT, AS AMENDED
Subpart A--General Provisions
Sec.
Introduction
10.0 What are the provisions of the FECA, in general?
10.1 What rules govern the administration of the FECA and this
chapter?
10.2 What do these regulations contain?
10.3 Have the collection of information requirements of this part
been approved by OMB?
Definitions and Forms
10.5 What definitions apply to these regulations?
10.6 What special statutory definitions apply to dependents and
survivors?
[[Page 67135]]
10.7 What forms are needed to process claims under the FECA?
Information in Program Records
10.10 Are all documents relating to claims filed under the FECA
considered confidential?
10.11 Who maintains custody and control of FECA records?
10.12 How may a FECA claimant or beneficiary obtain copies of
protected records?
10.13 What process is used by a person who wants to correct FECA-
related documents?
Rights and Penalties
10.15 May compensation rights be waived?
10.16 What are the criminal law penalties for making a false report
in connection with a claim under the FECA?
10.17 Is a beneficiary who defrauds the government in connection
with a claim for benefits still entitled to those benefits?
10.18 Can a beneficiary who is incarcerated based on a felony
conviction still receive benefits?
Subpart B--Filing Notices and Claims; Submitting Evidence
Notices and Claims for Injury, Disease and Death--Employee or
Survivor's Actions
10.100 How and when is a notice of traumatic injury filed?
10.101 How and when is a claim for wage loss compensation on
account of traumatic injury filed?
10.102 How and when is a notice of occupational disease filed?
10.103 How and when is a claim for wage loss compensation on
account of occupational disease filed?
10.104 How and when is a claim for permanent impairment filed?
10.105 How and when is a claim for recurrence filed?
10.106 How and when is a notice of death and claim for benefits
filed?
Notices and Claims for Injury, Disease and Death--Employer's
Actions
10.110 What should the employer do when an employee files a notice
of traumatic injury or occupational disease?
10.111 What should the employer do when an employee files an
initial claim for compensation due to disability or permanent
impairment?
10.112 What should the employer do when an employee files a claim
for continuing compensation due to disability?
10.113 What should the employer do when an employee dies from a
work-related injury or disease?
Evidence and Burden of Proof
10.115 What evidence is needed to establish a claim?
10.116 What additional evidence is needed in cases based on
occupational disease?
10.117 What happens if the employer contests any of the facts as
stated by the claimant?
10.118 Does the employer participate in the claims process in any
other way?
10.119 What action will OWCP take with respect to information
submitted by the employer?
10.120 May a claimant submit additional evidence?
10.121 What happens if OWCP needs more evidence from the claimant?
Decisions on Entitlement to Benefits
10.125 How does OWCP determine entitlement to benefits?
10.126 What does the decision contain?
10.127 To whom is the decision sent?
Subpart C--Continuation of Pay
10.200 What is continuation of pay?
Eligibility for COP
10.205 What other conditions must be met to receive COP?
10.206 May an employee who uses leave after an injury later decide
to use COP instead?
10.207 May an employee who returns to work, then stops work again
due to the effects of the injury, receive COP?
Responsibilities
10.210 What are the employee's responsibilities in COP cases?
10.211 What are the employer's responsibilities in COP cases?
Calculation of COP
10.215 How does OWCP compute the number of days of COP used?
10.216 How is the pay rate for COP calculated?
10.217 Is COP charged if the employee continues to work, but in a
different job that pays less?
Controversion and Termination of COP
10.220 When is an employer not required to pay COP?
10.221 How is a claim for COP controverted?
10.222 When may an employer terminate COP which has already begun?
10.223 Are there other circumstances under which OWCP will not
authorize payment of COP?
10.224 What happens if OWCP finds that the employee is not entitled
to COP after it has been paid?
Subpart D--Medical and Related Benefits
Emergency Medical Care
10.300 What are the basic rules for authorizing emergency medical
care?
10.301 May the physician designated on Form CA-16 refer the
employee to another medical specialist or medical facility?
10.302 Should the employer authorize medical care if he or she
doubts that the injury occurred, or that it is work-related?
10.303 Should the employer use a Form CA-16 to authorize medical
testing when an employee is exposed to a workplace hazard just once?
10.304 Are there any exceptions to these procedures?
Medical Treatment and Related Issues
10.310 What are the basic rules for obtaining medical care?
10.311 What are the special rules for the services of
chiropractors?
10.312 What are the special rules for the services of clinical
psychologists?
10.313 Will OWCP pay for preventive treatment?
10.314 Will OWCP pay for the services of an attendant?
10.315 Will OWCP pay for transportation to obtain medical
treatment?
10.316 After selecting a treating physician, may an employee choose
to be treated by another physician instead?
Directed Medical Examinations
10.320 Can OWCP require an employee to be examined by another
doctor?
10.321 What happens if the physician selected by OWCP does not
agree with the physician selected by the employee?
10.322 Who pays for second opinion and referee examinations?
10.323 What are the consequences of failing to report for or
obstructing a second opinion or referee examination?
10.324 May an employer require an employee to undergo a physical
examination in connection with a work-related injury?
Medical Reports
10.330 What are the requirements for medical reports?
10.331 How and when should the medical report be submitted?
10.332 What additional medical information will OWCP require to
support continuing payment of benefits?
10.333 What additional medical information will OWCP require to
support a claim for a schedule award?
Medical Bills
10.335 How are medical bills submitted?
10.336 What are the time frames for submitting bills?
10.337 If OWCP reimburses an employee only partially for a medical
expense, must the provider refund the balance of the amount paid to
the employee?
Subpart E--Compensation and Related Benefits
Compensation for Disability and Impairment
10.400 What is total disability?
10.401 When and how is compensation for total disability paid?
10.402 What is partial disability?
10.403 When and how is compensation for partial disability paid?
10.404 When and how is compensation for a schedule impairment paid?
10.405 Who is considered a dependent in a claim based on disability
or impairment?
10.406 What are the maximum and minimum rates of compensation in
disability cases?
[[Page 67136]]
Compensation for Death
10.410 What are the rates of compensation payable in death cases?
10.411 What are the maximum and minimum rates of compensation in
death cases?
10.412 Will OWCP pay the costs of burial and transportation of the
remains?
10.413 If a person dies while receiving a schedule award, to whom
is the balance of the schedule award payable?
10.414 What reports of dependents are needed in death cases?
10.415 What must a beneficiary do if the number of beneficiaries
decreases?
10.416 How does a change in the number of beneficiaries affect the
amount of compensation paid to the other beneficiaries?
10.417 What reports are needed when compensation payments continue
for children over age 18?
Adjustments to Compensation
10.420 How are cost-of-living adjustments applied?
10.421 May a beneficiary receive other kinds of payments from the
federal government concurrently with compensation?
10.422 May compensation payments be issued in a lump sum?
10.423 May compensation payments be assigned to, or attached by,
creditors?
10.424 May someone other than the beneficiary be designated to
receive compensation payments?
Overpayments
10.430 How does OWCP notify an individual of a payment made?
10.431 What does OWCP do when an overpayment is identified?
10.432 How can an individual present evidence to OWCP in response
to a preliminary notice of an overpayment?
10.433 Under what circumstances can OWCP waive recovery of an
overpayment?
10.434 If OWCP finds that the recipient of an overpayment was not
at fault, what criteria are used to decide whether to waive recovery
of it?
10.435 Is an individual responsible for an overpayment that
resulted from an error by OWCP or another government agency?
10.436 Under what circumstances would recovery of an overpayment
defeat the purpose of the FECA?
10.437 Under what circumstances would recovery of an overpayment be
against equity and good conscience?
10.438 Can OWCP require the individual who received the overpayment
to submit additional financial information?
10.439 May other issues be addressed at the pre-recoupment hearing?
10.440 How does OWCP communicate its final decision concerning
recovery of an overpayment, and what appeal right accompanies it?
10.441 How are overpayments collected?
Subpart F--Continuing Entitlement to Benefits
10.500 What are the basic rules governing continuing receipt of
compensation benefits?
Return to Work--Employer's Responsibilities
10.505 What actions must the employer take?
10.506 May the employer monitor the employee's medical care?
10.507 How should the employer make an offer of suitable work?
10.508 May relocation expenses be paid for an employee who would
need to move to accept an offer of reemployment?
10.509 If an employee's light-duty job is eliminated due to
downsizing, what is the effect on compensation?
Return to Work--Employee's Responsibilities
10.515 What actions must the employee take?
10.516 How will an employee know if OWCP considers a job to be
suitable?
10.517 What are the penalties for refusing to accept a suitable job
offer?
10.518 Does OWCP provide services to help employees return to work?
10.519 What action will OWCP take if an employee refuses to undergo
vocational rehabilitation?
10.520 How does OWCP determine compensation after an employee
completes a vocational rehabilitation program?
Reports of Earnings From Employment and Self-Employment
10.525 What information must the employee report?
10.526 Must the employee report self-employment?
10.527 Does OWCP verify reports of earnings?
10.528 What action will OWCP take if the employee fails to file a
report of activity indicating an ability to work?
10.529 What action will OWCP take if the employee files an
incomplete report?
Reports of Dependents
10.535 How are dependents defined, and what information must the
employee report?
10.536 What is the penalty for failing to submit a report of
dependents?
10.537 What reports are needed when compensation payments continue
for children over age 18?
Reduction and Termination of Compensation
10.540 When and how is compensation reduced or terminated?
10.541 What action will OWCP take after issuing written notice of
its intention to reduce or terminate compensation?
Subpart G--Appeals Process
10.600 How can final decisions of OWCP be reviewed?
Reconsiderations and Reviews by the Director
10.605 What is reconsideration?
10.606 How does a claimant request reconsideration?
10.607 What is the deadline for requesting reconsideration?
10.608 How does OWCP decide whether to grant or deny the request
for reconsideration?
10.609 How does OWCP decide whether new evidence requires
modification of the prior decision?
10.610 What is a review by the Director?
Hearings
10.615 What is a hearing?
10.616 How does a claimant obtain a hearing?
10.617 How is an oral hearing conducted?
10.618 How is a review of the written record conducted?
10.619 May subpoenas be issued for witnesses and documents?
10.620 Who pays the costs associated with subpoenas?
10.621 What is the employer's role when an oral hearing has been
requested?
10.622 May a claimant withdraw a request for or postpone a hearing?
Reviews by the Employees' Compensation Appeals Board (ECAB)
10.625 What kinds of decisions may be appealed?
10.626 Who has jurisd |
