[Federal Register Volume 60, Number 190 (Monday, October 2, 1995)]
[Rules and Regulations]
[Pages 51346-51348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24078]
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DEPARTMENT OF LABOR
Employment Standards Administration
20 CFR Parts 702 and 703
RIN 1215-AA92
Longshore and Harbor Workers' Compensation Act and Related
Statutes
AGENCY: Employment Standards Administration, Labor.
ACTION: Final rule.
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SUMMARY: On May 8, 1995, the Department of Labor published a proposal
to amend the regulations implementing the Longshore and Harbor Workers'
Compensation Act. The amendments are designed to improve administration
and clarify existing policy by: Providing that the district
jurisdictional boundaries would be changed by direct notice to affected
parties; eliminating the requirement for using certified mail in most
circumstances; clarifying that the Office of Workers' Compensation
Programs fee schedule would be used to determine the reasonable and
customary medical charge where there is a dispute; and modifying the
requirement that an employer with geographically different work sites
within one compensation district have only one insurance carrier. The
final rules are being published essentially unchanged from the
proposal.
Effective Date. The rule is effective on November 1, 1995.
FOR FURTHER INFORMATION CONTACT:
Joseph Olimpio, Director for Longshore and Harbor Workers'
Compensation, Employment Standards Administration, U.S. Department of
Labor, Room C-4315, Frances Perkins Building, 200 Constitution Avenue
NW., Washington, DC 20210; Telephone (202) 219-8721.
SUPPLEMENTARY INFORMATION:
Introduction
The Longshore and Harbor Workers' Compensation Act (LHWCA; 33
U.S.C. 901, et seq.) establishes a federal workers' compensation system
for certain workers in covered employment and sets forth the general
parameters of the compensation scheme, including the system for filing
claims, the benefit levels to be paid, and how the liability of the
employer is to be secured. The preamble to the proposed rule published
May 8, 1995 (60 FR 22537) sets forth in detail the bases for the
changes to the existing rules, which streamline and improve certain
administrative functions under the LHWCA.
The authority for the administration of the LHWCA granted to the
Secretary of Labor has been delegated to the Office of Workers'
Compensation Programs (OWCP). This authority includes initial
adjudication of disputed claims, resolution of certain ancillary issues
such as disputes involving the amount charged for medical treatment,
and responsibility for authorizing private insurance carriers to
underwrite coverage. In brief, the changes to the rules affect:
Compensation Districts
The rules will now provide that changes in the administrative
compensation districts can be made by notice to all affected parties
and not through a change in the regulations. This will ensure that, in
this period of rapid change in the way government performs its
functions, the program can rapidly reposition its resources as needed.
Certified Mail
The rules remove the requirement that the appropriate office
(either the Longshore district office or the Administrative Law Judges
(ALJs)) serve via certified mail the notice of deficiency of settlement
applications (702.243(b)); Memoranda of the informal conference
(702.316); and the notice of
[[Page 51347]]
claim given to the employer (702.224). This is an expensive and time
consuming process which has been proven to be unnecessary.
Use of OWCP Fee Schedule
The rules make clear what has been the practice since the 1984
amendments to the Act: that the OWCP fee schedule may be used in
determining the prevailing community rate for the purposes of enforcing
the provision that authorizes OWCP to-direct a change of physician or
the debarment of the physician who submits bills for medical treatment
where the charge exceeds the prevailing community rate for such
service.
Insurance Policies
The rule requiring an employer operating within any one OWCP
compensation district to insure all operations within that district
through a single insurance carrier has been eliminated. Each LHWCA
district is comprised of a number of different states (see current 20
CFR 702.101), while insurance carriers, which are regulated by the
individual states, may not do business or write LHWCA coverage in every
state conforming to the LHWCA compensation districts in which an
operator may have facilities. The result is that an employer's choice
in carriers is limited and the employer could potentially be left
uninsured for a portion of its operations.
Analysis of Comments
Two comments were received. One employer objected to the
elimination of the certified mail requirement, and an individual raised
general concerns with the rules and requested that they be made
effective only prospectively.
The employer commented that the use of certified mail helps ensure
that the employer is not subject to the fines and penalties provided in
the LHWCA for failure to conform with various time requirements. The
commentor suggests that if the Department is removing this requirement,
then it should be the Director's burden to demonstrate when notice was
accomplished.
Contrary to the implication in this comment, the LHWCA does not
condition the employer's obligation to pay benefits (section 14(e)) or
to controvert entitlement to compensation (section 14(d)), on its
receiving written notice of the filing of a claim. Quite to the
contrary, those obligations arise as soon as the employer has knowledge
of the injury or death. Our experience indicates that receipt or non-
receipt of written notice from the district directors, has little to do
with an employer's timely compliance with the statutory obligations.
Further, our experience does not support the assertion that
certified mail is necessary to protect an employer from an unjustified
or unwarranted decision requiring it to pay claimant's attorney fees.
An employer can protect itself from this liability by paying
compensation no later than 30 days after receiving the written notice
from the district director. Prior to receipt of such notice, an
employer cannot be held liable. See: Watkins v. Ingalls Shipbuilding,
Inc., 26 BRBS 179 (1993), appeal dismissed No. 93-4367 (5th Cir.
December 9, 1993).
In general, the postmark showing the date of mailing (and/or date-
stamp showing receipt) may be used to establish a general time frame
within which correspondence was received, if this is necessary to
resolve disputes where time is relevant. For example, we are not aware
of such penalties incurred as a result of not having the conference
recommendation sent by certified mail. The commentor argues that
receipt of notice of a deficiency in a settlement application must be
timely, or the employer could pay the settlement, then not be able to
recoup it. The scenario painted by the commentor (that the deficiency
notice is not received in a timely manner because it is not sent by
certified mail) simply is not relevant. Any delay could exist, whether
or not certified mail is used, and the same problem with recoupment
would exist, whatever the reason for the delay in receipt of notice of
deficiency.
The remotely possible scenarios used to support the employer's
objections are not sufficient to overcome the distinct advantages,
particularly the savings in staff resources and mailing costs,
associated with dropping this requirement. As noted in the preamble to
the proposed rule, while certified mail does not add significantly to
the security of the mail process, the requirement does increase costs
and the amount of staff time it takes to mail a document. Approximately
9,000 pieces of mail per year must now be sent certified mail under
these rules, at a cost of over $9,000 in extra mailing charges and more
in staff time to complete the necessary Postal Service forms. The
recipients should see an improvement in the level of service as
resources now dedicated to certified mailings can be used elsewhere.
The individual, in his comments, requested that the regulatory
changes be applicable only prospectively and that they not apply to
injuries sustained or claims filed before the proposed rules were
published in the Federal Register. It is not the intent of the
Director, that the changes deleting the certified mail requirement be
applied to relieve a party of liability already incurred or to impose
liability where none existed. However, the Director does believe that
it will be appropriate to apply the OWCP fee schedule to pending claims
where such application will assist in resolving outstanding issues. For
these reasons, no change needs to be made to the rules as written.
Conclusion
For the reasons set out in the preamble to the proposed rule, as
amplified by these comments, the Department has determined to finalize
the rule.
Statutory Authority
Subsections 39(a) and 39(b) of the Act, 33 U.S.C. 939 (a) & (b),
provide the general statutory authority for the Secretary to prescribe
rules and regulations necessary for administration and enforcement of
the Longshore and Harbor Workers' Compensation Act. 33 U.S.C. 907(a)
provides that the Secretary of Labor may supervise the medical
treatment and care, including determining the appropriateness of
charges.
Classification
The Department of Labor has concluded that the regulatory proposal
is not a significant regulatory action under the criteria of section
3(f) of Executive Order 12866.
Paperwork Reduction Act
The information collection requirements entailed by the regulations
have previously been approved by OMB.
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 section 3(a) of the Regulatory Flexibility Act. Pub. L.
No. 96-354, 91 Stat. 1164 (5 U.S.C. 605(b)). Although this rule will be
applicable to small entities it should not result in or cause any
significant economic impact. The elimination of the requirement for
insurance underwriting will provide increased flexibility and
opportunity for covered employers to effect savings. The provision for
determining medical charges is not expected to result in a significant
difference in the outcome from that in the present method. The
Secretary has so certified to the Chief Counsel for Advocacy of the
Small Business Administration. Accordingly,
[[Page 51348]]
no regulatory impact analysis is required.
List of Subjects
20 CFR Part 702
Administrative practice and procedure, Claims, Insurance,
Longshoremen, Vocational rehabilitation, and Workers' compensation.
20 CFR Part 703
Insurance, Longshoremen, Workers' compensation.
For the reasons set out in the preamble, part 702 and 703 of
chapter VI of title 20 of the Code of Federal Regulations are amended
as follows:
Subchapter A--Longshore and Harbor Workers' Compensation Act and
Related Statutes
1. The authority citation for Part 702 and 703 are revised to read
as follows:
Authority: 5 U.S.C. 301, 8171 et seq., Reorganization Plan No. 6
of 1950, 15 FR 3174, 3 CFR. 1949-1953, Comp. p. 1004, 64 Stat. 1263;
33 U.S.C. 939; 36 D.C. Code 501 et seq., 42 U.S.C. 1651 et seq., 43
U.S.C. 1331. Secretary's Order 1-93, 58 FR 21190.
PART 702--ADMINISTRATION AND PROCEDURE
Sec. 702.101 [Removed]
2. Section 702.101 removed and reserved.
3. Section 702.102 is amended by revising the section heading, and
paragraphs (a) and (b) are redesignated as paragraphs (b) and (c) and a
new paragraph (a) is added to read as follows:
Sec. 702.102 Establishment and modification of compensation districts,
establishment of suboffices and jurisdictional areas.
(a) The Director has, pursuant to section 39(b) of the Longshore
and Harbor Workers' Compensation Act, 33 U.S.C. 939(b), established
compensation districts as required for improved administration or as
otherwise determined by the Director (see 51 FR 4282, Feb. 3, 1986).
The boundaries of the compensation districts may be modified at any
time, and the Director shall notify all interested parties directly by
mail of the modifications.
(b) * * *
(c) * * *
Sec. 702.224 [Amended]
4. Section 702.224 is amended by removing the word ``certified.''
Sec. 702.243 [Amended]
Sec. 702.316 [Amended]
5. Sections 702.243(b) and 702.316 are amended by removing the
words ``by certified mail.''
6. Section 702.413 is revised to read as follows:
Sec. 702.413 Fees for medical services; prevailing community charges.
All fees charged by medical care providers for persons covered by
this Act shall be limited to such charges for the same or similar care
(including supplies) as prevails in the community in which the medical
care provider is located and shall not exceed the customary charges of
the medical care provider for the same or similar services. Where a
dispute arises concerning the amount of a medical bill, the Director
shall determine the prevailing community rate using the OWCP Medical
Fee Schedule (as described in 20 CFR 10.411) to the extent appropriate,
and where not appropriate, may use other state or federal fee
schedules. The opinion of the Director that a charge by a medical care
provider disputed under the provisions of section 702.414 exceeds the
charge which prevails in the community in which said medical care
provider is located shall constitute sufficient evidence to warrant
further proceedings pursuant to section 702.414 and to permit the
Director to direct the claimant to select another medical provider for
care to the claimant.
7. In section 702.414, paragraphs (a) and (c) are revised to read
as follows:
Sec. 702.414 Fees for medical services; unresolved disputes on
prevailing charges.
(a) The Director may, upon written complaint of an interested
party, or upon the Director's own initiative, investigate any medical
care provider or any fee for medical treatment, services, or supplies
that appears to exceed prevailing community charges for similar
treatment, services or supplies or the provider's customary charges.
The OWCP medical fee schedule (see section 702.413) shall be used by
the Director, where appropriate, to determine the prevailing community
charges for a medical procedure by a physician or hospital (to the
extent such procedure is covered by the OWCP fee schedule). The
Director's investigation may initially be conducted informally through
contact of the medical care provider by the district director. If this
informal investigation is unsuccessful further proceedings may be
undertaken. These proceedings may include, but not be limited to: an
informal conference involving all interested parties; agency
interrogatories to the pertinent medical care provider; and issuance of
subpoenas duces tecum for documents having a bearing on the dispute.
(1) A claim by the provider that the OWCP fee schedule does not
represent the prevailing community rate will be considered only where
the following circumstances are presented:
(i) where the actual procedure performed was incorrectly identified
by medical procedure code;
(ii) that the presence of a severe or concomitant medical condition
made treatment especially difficult;
(iii) the provider possessed unusual qualifications (board
certification in a specialty is not sufficient evidence in itself of
unusual qualifications); or
(iv) the provider or service is not one covered by the OWCP fee
schedule as described by 20 CFR 10.411(d)(1).
(2) The circumstances listed in paragraph (a)(1) of this section
are the only ones which will justify reevaluation of the amount
calculated under the OWCP fee schedule.
(b) * * *
(c) After any proceeding under this section the Director shall make
specific findings on whether the fee exceeded the prevailing community
charges (as established by the OWCP fee schedule, where appropriate) or
the provider's customary charges and provide notice of these findings
to the affected parties.
* * * * *
PART 703--INSURANCE REGULATIONS
Sec. 703.12 [Removed]
8. Section 703.121 is removed.
Signed at Washington, DC, this 22d day of September 1995.
Ida L. Castro,
Deputy Assistant Secretary for Workers' Compensation Programs.
[FR Doc. 95-24078 Filed 9-29-95; 8:45 am]
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