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Office of Workers' Compensation Programs

Division of Longshore and Harbor Workers' Compensation (DLHWC)

CHAPTER 6-300 — SPECIAL FUND MONITORING

1. Purpose and Scope. This chapter describes the procedures for monitoring cases which are being paid from the Special Fund.

2. Policy. All cases being paid benefits from the Special Fund must be monitored each year. In those cases in which TTD, PTD, TPD, and/or PPD benefits are being paid, all claimants are required to certify their employment status, and provide the amount of any earnings, for each calendar year by completing Form LS-200, Report of Earnings (Exhibit 14, PM 10-200). Claimants who are being paid death benefits are required to complete Form LS-267, Claimant's Statement (Exhibit 35, PM 10-200), which certifies their marital status and whether they remain entitled to student benefits, if applicable, for each calendar year. These Forms are not the only source of information for monitoring Special Fund beneficiaries. The DO may also use information, regarding the claimant's earnings or a widow's marital status for example, which is received from other sources.

3. Mailing of Forms LS-200/267. After the close of each calendar year, the NO will mail to each claimant receiving benefits from the Special Fund a Form LS-200, if receiving disability benefits, or a Form LS-267, if receiving death benefits, for completion and return to the DO that has jurisdiction over the case. At the time of the mailing, the NO will also forward the following material to each DO:

a. A listing of Special Fund cases coming under the jurisdiction of each DO in which benefits are being paid from the Special Fund under sections 8(f), 10(h) and 18(b) of the Act.

b. A specimen form letter for use in returning incomplete or unsigned Forms LS-200 and LS-267 (Exhibit 17, PM 10-300).

c. A specimen form letter for use in forwarding copies of those Forms LS-200/267 which contain earnings information, or which show a change in beneficiary status, to insurance carriers or self-insured employers who originally paid benefits in these cases (Exhibit 18, PM 10-300).

d. A specimen form letter for use in requesting a Form LS-200/267 from those claimants who fail to respond to the original mailing (Exhibit 19, PM 10-300).

e. A supply of Forms LS-200/267 for mailing to those claimants who fail to respond to the original mailing.

4. Time Frames. Each Form LS-200/267 is to be returned to the DO within thirty days after receipt by the claimant. To allow for mailing delays, the DO is allowed up to forty-five days from the initial mailing before follow-up letters are to be sent for any missing forms.

5. Action by DO. Each DO is to use the above referenced case listing as a check-off list to record the receipt of the Forms LS-200/267 as they are received in the DO. Upon receipt of a form, or other relevant information, the following actions are to be taken by the DO:

a. Review the Form to determine if it has been properly completed, signed and dated. If not, the Form should be returned to the claimant using the form letter provided for this purpose.

b. If the form has been properly completed, signed and dated, compare the claimant's signature with those appearing on forms submitted for prior years and on other documents in the case file. If the signature appears to be different, the DD should schedule an informal conference and require the claimant to personally attend and bring with him/her proper photo identification and request completion of another Form LS-200/267. If it is not possible to schedule an informal conference due to travel restrictions or the age or disability of the claimant, the DD should obtain some other form of proof that the claimant is still alive. This may be in the form of statements from the claimant's attorney or medical facility attesting to the fact that the claimant is still alive. A current medical report will also be acceptable. If the DD is unable to verify that the claimant is still alive, he/she should fax copies of the current form LS-200/267 with prior years' forms to the National Office showing the difference in the signatures along with a request to suspend benefits in the case.

c. If the form has been signed by someone for the claimant e.g., by a son or daughter or other relative because the claimant is no longer able to personally sign the form due to poor health or advanced age, a current power of attorney must be submitted with the form. The power of attorney must specifically authorize the person to sign for the claimant. Under these circumstances, the DD must also request some form of proof that the claimant is still alive. This may be in the form of statements from the claimant's attorney or medical facility attesting to the fact that the claimant is still alive. A current medical report will also be acceptable. If the DD is unable to obtain proof that the claimant is still alive, he/she should request the National Office to suspend benefits until such proof is provided.

d. File the form in the appropriate case file if it has been properly completed and shows no earnings information or no change in beneficiary status if a death case. No further action is required.

e. Forward a copy of the properly completed form to the insurance carrier or self-insured employer if the form shows earnings information or a change in beneficiary status using the form letter provided for this purpose. Review the form, and other information contained in the case file, to determine whether a modification of the compensation order should be considered based on all of the available facts.

f. If, in the DD's opinion, a modification should not be attempted, the form should be filed in the case folder and no further action is required. Modifications may not be appropriate in certain sheltered work situations, where there are low or moderate earnings in permanent partial disability cases, or where the reported employment was of short duration and has been discontinued.

g. If, after reviewing the form and the case file, the DD determines that the compensation order in the case should be considered for modification he/she should contact the claimant or his/her attorney to determine whether a voluntary modification is possible. A voluntary modification is only possible if all parties in interest, i.e., the claimant, the carrier/self insured employer originally paying benefits and the Special Fund, agree to the modification. If the claimant will not agree to a voluntary modification of the order, an impartial medical examination should be obtained if current medical reports contained in the case file do not adequately address the extent of the claimant's current disability. If the claimant will not initially agree to modify the order an informal conference should also be scheduled and held to develop any additional facts which relate to the proposed modification, e.g., physical limitations, specific employment duties, and any work restrictions, and to provide an additional opportunity to discuss a voluntary modification. The insurance carrier or self-insured employer should be sent a notice of the conference; however, it is not required that they attend the conference if they do not wish to do so.

h. If, at the conclusion of the informal conference, the claimant will still not agree to a voluntary modification of the order the DD may issue his/her recommendation in the case. A copy of the recommendation should also be sent to the insurance carrier or self-insured employer even if they elected not to attend the conference. The case file, with an appropriate covering memorandum containing all facts developed at the informal conference, should then be sent to the National Office. If the National Office concurs with the DD's recommendation, the case file will be referred to the Office of Associate Solicitor for Employee Benefits with a request that a formal hearing be scheduled to resolve the matter.

6. Failure To Return Forms. With regard to those claimants who fail to respond to the original mailing of forms LS-200/267, the following action should be taken:

a. If a form is returned due to an incorrect or inadequate address, immediately attempt to obtain a correct address from the claimant's attorney or the National Office. If unsuccessful, request the National Office to immediately suspend benefits until the claimant can be located.

b. If the form is not received within the allowed 45 days, send by certified mail return receipt requested (restricted delivery) another Form LS-200/267 for completion. If the self-mailer format is used, the envelope should be marked "Second Request". If the self-mailer format is not used, the follow-up letter identified as Item 4 in this memorandum may be used.

c. Wait 30 days for a response. If the certified return receipt confirms that the claimant received the LS-200 but he/she has not returned it to the DD, schedule an informal conference as required by Section 702.286 of the regulations. Send the notice of conference by certified mail return receipt requested (restricted delivery). The reason for holding the conference, i.e., to consider forfeiture of compensation benefits, should be clearly stated on the conference notice. If the DD cannot document receipt of the LS-200/267 directly by the claimant, request the National Office to suspend benefits. If the DD can document receipt of the LS-267, but the widow has not returned the form, the DD should request the National Office to suspend benefits. The requirement to hold a conference applies only to cases in which you have documented receipt of the LS-200 by the claimant.

d. If the claimant fails to appear at the conference after receiving proper notice, and the DD has documented receipt of the follow-up letter and conference notice by the claimant, he/she may proceed to issue a compensation order establishing the amount of compensation to be forfeited and the weekly rate at which recovery is to be made, pursuant to Section 702.286(b)(c) of the regulations. The weekly rate for recovery of benefits should be the rate at which benefits are currently being paid. A copy of this order should be sent to the National Office by memorandum advising that benefits in the case should be suspended until the amount forfeited has been recovered. The period for which compensation is subject to forfeiture is the period shown in Item 6 on the LS-200, i.e., January 1, XXXX to December 31, XXXX, inclusive.

e. If the certified mailing of the LS-200/267 is returned to the office due to an incorrect address, and the case file does not contain the claimant's current address, and the claimant's attorney does not have a current address, the DD should request the National Office to immediately suspend benefits.

7. Omitted or Understated Earnings. In the event that an LS-200 is timely filed, but it is later discovered that earnings have been omitted or understated, the procedures contained in Section 702.286 of the regulations must also be followed to include an informal conference and a determination by the District Director as to the amount of compensation that is to be forfeited and the weekly amount to be deducted from future compensation payments. However, under these circumstances, the DD should advise the National Office by memorandum of the facts developed at the informal conference and provide his/her recommendation relative to the amount of compensation to be forfeited and the proposed repayment schedule prior to issuing a compensation order. The forfeiture period in such cases shall also be for the period shown under Item 6 on the LS-200. See Handley v. Newport News Shipbuilding and Dry Dock 32 BRBS 254, 258 (1998).

8. Retention of Case Listing. The case listing of claimants in the district office should be retained after all claimants have complied with the LS-200/267 reporting requirements as it will be reviewed by the National Office Accountability Review team at the next scheduled Accountability Review of the office.

9. Monitoring of Student Status for Beneficiaries Receiving Student Benefits.

a. Policy. All beneficiaries receiving student benefits from the Special Fund must be monitored. The DO must verify a student beneficiary's full-time school attendance every 6 months. Claimants who are being paid student benefits are required to complete Form LS-266 (Exhibit 34, PM 10-200), which certifies that the claimant still qualifies as a student for continuing benefits after age 18.

b. Action by DO.

(1) The DO must ensure that there is a current LS-266 (within the last six months) signed by the registrar of the school in all cases where the Special Fund is paying student benefits.

(2) A diary should be placed in each case to request an LS-266 every 6 months. A copy of the latest LS-266 should be sent to the National Office.

(3) The DO must also ensure that the latest LS-267 (Exhibit 35, PM 10-200) in the file shows the proper check mark in Box 5, indicating continuing student status.

(4) The DO must immediately notify the National Office if a student beneficiary is no longer entitled to benefits from the Special Fund.

c. Mailing of Form LS-266, Application for Continuation of Death Benefit for Student. Each February and September, the DO will mail to each student beneficiary Form LS-266 for completion and return.

d. Time Frames. See PM 6-300.4 above.

e. Evaluation. Forms are to be evaluated for patent compliance and in accordance with PM 3-302.2(e).

f. Failure to Return Forms. See PM 6-300.6 above.