WORKERS COMPENSATION BOARD Board of Directors by ZCjoRh

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									                    WORKERS' COMPENSATION BOARD
                             Board of Directors’ Meeting
                             February 1, 2005

A meeting of the Workers’ Compensation Board of Directors was held on Tuesday,
February 1, 2005 at the Board's Central Office in Augusta (located in the AMHI Complex,
Deering Building – Rm. 170, Augusta, Maine). Chair Dionne called the meeting to order
at 10:00 a.m.

                                   ROLL CALL
PRESENT: Paul Dionne, James Mingo (via telephone), Gary Koocher, John Cooney,
Anthony Monfiletto, Rodney Hiltz and Joan Kirkpatrick.

                                    MINUTES
1)    Draft Minutes: Directors received and approved the draft minutes of their last
      meeting, which was held on 1-18-05.

      Anthony Monfiletto MOVED TO APPROVE THE MINUTES OF JANURY 18,
      2005, AS WRITTEN; Joan Kirkpatrick seconded. MOTION PASSES 6-0.

                       EXECUTIVE DIRECTOR REPORT
1)    Personnel (Consolidation of State Government): Executive Director P.Dionne
      circulated a document he received from the Governor’s office and advised
      directors that the handout has been sent to all Commissioners and Department
      heads. Mr. Dionne advised directors that Governor Baldacci is looking at
      consolidating five key areas of State Government.

      Discussion:
      Directors and Staff discussed the five key areas being consolidated
      (P.Dionne advised directors that the Governor is looking at consolidating areas
      relating to Information Technology, Payroll, Human Resources, Finance and
      Accounting, and Hearing Officers); the positions affected by the Governor’s
      plan, as outlined in the column entitled
      “Net Position Savings” (Staff noted the proposed consolidation plan will result
      in the elimination of 46 positions statewide); Richard Thompson,
      the State of Maine’s Information Technology Officer overseeing the IT
      functions of the consolidation plan (Staff informed directors that Mr.
      Thompson has been meeting with staff members in the various computer
      divisions throughout State Government, including the Board’s Technology
      Officer, P.Fortier, and explained that he has been given
                                                                                        2



                  EXECUTIVE DIRECTOR RPORT
                         CONTINUED

Discussion Continued (Consolidation of Areas within State Government):
authority over the State’s IT functions and that he has the ability to assign or
reassign personnel, as needed. Mr. Dionne also noted that Maine’s smaller
departments may benefit from the reassignment of some IT personnel and the
reallocation of some larger Department’s resources);
the impact the consolidation plan will have on the employees who work
in the Board’s Business office and Personnel Department
(Executive Director P.Dionne has asked Ms.McLaughlin, the Supervisor in
Business Services, to provide him with a summary of her staff members’ duties
and responsibilities which will be provided to
Patrick Damon and Ed Karass – the two individuals the Governor has assigned
to oversee the consolidation process. Mr. Dionne noted the Governor’s
consolidation plan will also include a review of human resource functions
within State government); the Governor’s consolidation plan as it relates to
the State’s hearing officers
(Staff explained that the Governor’s proposal will also include a study of
whether hearing officers should be consolidated. Directors were also advised
that the feedback staff has received to date is that the WCB’s hearing officers
are in a different category than the other hearing officers in State Government
because of the complexity of their duties and the judicial role they perform and
that both the Maine AFL-CIO and Maine Chamber of Commerce support the
Workers’ Compensation Board maintaining its hearing officers); Mr. Damon
and Mr. Karass most likely overseeing the internal review of the State’s
Human
Resource departments, as well; Commissioner Wyke, the individual
overseeing the consolidation process for Governor Baldacci, assigning the
review process with respect to the consolidation plan to Richard
Thompson, Edward Karass and Patrick Damon
(Staff noted the three of them will be working on the internal review process as
it relates to the Governor’s consolidation plans) and the Board’s Technology
Officer and whether the Board hired Mr. Fortier after seeking a
legislative change which increased the Board’s personnel headcount
(Director Monfiletto noted the Board received a report from Coopers & Lybrand
recommending it hire an Information Technology Officer and stated the Board
may have hired
Mr. Fortier after receiving legislative approval to increase its personnel
headcount. In response, Chairman Dionne stated his understanding
is that the Board will still have an Information Technology Officer on




                                                 Minutes of February 1, 2005 Board Meeting
                                                                                                    3



                           EXECUTIVE DIRECTOR RPORT
                                  CONTINUED

       Discussion Continued (Consolidation of Areas within State Government):
       its payroll and noted the Board currently has a contract with the Bureau of
       Information Services for additional help. Mr. Dionne also explained to directors
       that the consolidation review process may result in the Board being able to hire
       additional IT staff and receiving additional resources).

Director Mingo joined the meeting at approximately 10:09 a.m., via telephone.

       Discussion Continued:
       Directors and Staff continued their deliberations on the five areas the
       Governor is looking at consolidating throughout State Government (Mr.
       Dionne noted the internal review process is in its preliminary stages and
       remarked that all Department heads met with Administration approximately a
       week ago to discuss the consolidation plan); the initial meeting that took
       place between Administration and the State’s Commissioners and
       Department heads (Mr. Dionne advised directors that the group recently met
       for approximately one and one-half hours and noted that at the end of the
       meeting DHHS Commissioner, J.Nicholas, asked if there was going to be any
       time set aside to discuss the State’s hearing officers and that in response,
       Commissioner Wyke indicated the group was out of time for that day and that
       the group would be discussing the matter at a later date) and asking staff to
       look into whether the Board sought a legislative amendment prior to
       hiring its Technology Officer, after receiving Coopers & Lybrand’s
       business assessment report.

2)     Requests for Extension of Benefits Due to Extreme Financial Hardship,
       Filed Pursuant to 39-A M.R.S.A. §213(1): Executive Director P.Dionne
       reported that the Board will be continuing its hardship deliberations on the
       Holland case after the next board meeting, which is scheduled for 2-15-05.




                                                             Minutes of February 1, 2005 Board Meeting
                                                                                                    4



                        EXECUTIVE DIRECTOR REPORT
                               CONTINUED
3)   Formal Hearing Cases Assigned to the Augusta Regional Office: Following up
     on the concerns expressed to him recently regarding the travel time the parties are
     experiencing with attending formal hearings on Sappi cases,
     P.Dionne reported that he discussed the matter with the hearing officers on 1-
     21-05 and noted Hearing Officer Greene has offered to hold his hearings
     involving Sappi cases in Augusta, as opposed to Bangor, to reduce the travel
     time for the parties involved in those cases. Mr. Dionne noted he also plans to
     discuss the matter with B.Inman and F.Richards to ascertain whether it creates
     a problem elsewhere within the dispute resolution process, such as mediation.
     Staff noted that most of the parties involved in Sappi cases reside in Augusta,
     or work at a site that is closer to the Board’s Augusta office.

4)   Actuarial Study Pursuant to 39-A M.R.S.A. §213: Staff informed directors
     that the Section 213 RFP has been approved by the Bureau of Purchases and
     that the contract has been awarded to Practical
     Actuarial Solutions, Inc.

     Discussion:
     Directors, Staff and Public Participants discussed the Workers’ Compensation
     Coordinating Council’s 1-31-05 letter to Practical Actuarial Solutions’
     President, Jeffrey Kadison, regarding the actuarial study he is
     performing for the Workers’ Compensation Board (Directors briefly
     conversed as to when they became aware of the correspondence the Executive
     Director received via regular mail this morning; the Council circumventing the
     Administrative Procedures Act which allows for public input on regulatory
     matters; instructing
     Mr. Kadison not to open the letter because it could bias the outcome of his
     study and findings; reinforcing to Mr. Kadison that the only contact he is to
     have is with the Board’s Deputy Director of Benefits Administration; the
     actuarial firm following the language in the Request for Proposal and advising
     Mr. Kadison that the letter was not sent on behalf of the Management members
     of the Board); WCC Representative M.Mayo’s remarks regarding the letter
     she sent to Practical Actuarial Solutions’ President and the Board
     Members
     (Ms. Mayo stated the actuarial study was discussed at a recent
     WCC meeting and explained that the Council felt strongly that the issues
     addressed in her letter should be considered by the actuarial firm because the
     Council believes it will have an impact on the level of permanent impairment in
     the future. Ms. Mayo advised directors that the Council felt Mr. Kadison should
     be aware of how the hearing officers




                                                             Minutes of February 1, 2005 Board Meeting
                                                                                              5



                      EXECUTIVE DIRECTOR REPORT
                             CONTINUED
     Discussion Continued:
     are interpreting the statute) and instructing Mr. Kadison to return the letter
     to the Board in an unopened envelope so that Staff can verify that it has
     not been opened by the firm hired to conduct the actuarial review
     mandated in the statute..

5)   Worker Advocate Program (Contract Positions): Directors were advised that the
     Board has received funding for the contract positions in the Worker Advocate
     Program through the end of March. Staff also announced their plans to file
     another waiver after that time asking
     that it be granted through the end of the fiscal year (6-30-05).

6)   MAE Program (Consent Decrees): Acknowledging receipt of a copy of
     the Consent Decrees the MAE Program recently entered into with Royal Alliance
     Insurance Company and Hartford Insurance Company,
     P.Dionne reported that the Monitoring, Audit & Enforcement Program has
     referred the two carriers to the Bureau of Insurance for questionable claims
     handling practices.

     Discussion:
     Directors and Staff discussed the areas in which the Monitoring, Audit and
     Enforcement Program has concerns with the way Royal Sun Alliance
     Insurance Company is handling its workers’ compensation claims (Mr.
     Minkowsky stated the carrier has been filing late reports, that it was not
     producing complete forms during the on-site audit, that it had not reported all
     lost-time cases, that it had overpaid employees, that the carrier failed to make
     mandatory payments or file a Notice of Controversy, and that the insurance
     company was found to be making numerous errors in calculating employee’s
     benefits) the areas the MAE Program address in its Consent Decree with
     Hartford Insurance Company (Mr. Minkowsky stated the carrier did not file
     the required forms, or filed them late and remarked that some of the insurance
     company’s claim were incomplete or not available at the time of examination;
     that the company had some unreported claims,
     that the carrier had numerous errors in calculating an employee’s average
     weekly wage, and that the carrier had not made timely payments); employers
     oftentimes being harmed by overpayments because of premium increases
     (it was also noted that there is no


                                                       Minutes of February 1, 2005 Board Meeting
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                      EXECUTIVE DIRECTOR REPORT
                             CONTINUED
     Discussion Continued:
     mechanism in place that entitles an entity to overpayments); the
     Monitoring, Audit and Enforcement Program also preparing a referral for
     the Bureau of Insurance regarding the claims handling practices of St.
     Paul Insurance Co.; developing a process that allows insurance carriers
     to correct their claims handling practices while working under a Consent
     Decree (Mr. Minkowsky noted J.Levesque has been conducting training
     sessions on claims handling to assist the carriers in improving their claims
     processing); looking at what presence an insurance company has in the
     State
     to determine if its claims handling practices are related to whether they
     are an in-state or out-of-state carrier (Attorney J.Case advised directors that
     he knows of some insurance carriers that erroneously refer to other statutes for
     answers to their claims handling questions and noted there may be a link to the
     presence, or absence of insurance carriers who handle workers’ compensation
     claims in Maine. In response, Mr. Minkowsky stated the MAE Program may be
     able to include the information in its quarterly compliance reports. Staff also
     advised directors that the Audit Division has a pre-audit question regarding a
     carrier’s presence in the State of Maine and noted some carriers state they are
     represented by Counsel); Staff updating the Board on its current audit
     schedule, in an executive session, due to the confidentiality of the
     Division’s ongoing audits; the progress the Audit Division has made with
     respect to its audit schedule
     (Mr. Minkowsky announced that the Audit Division is now fully staffed and
     commented that the Board’s new Chief Auditor, Kimberlee Barriere, is doing an
     excellent job and noted the Division will be receiving a new computer program
     that will allow the Audtors to perform their own claims analysis and to schedule
     audits) and setting aside time at a later meeting for the Board to discuss
     the MAE Program’s audit schedule in an executive session.

7)   Waiver Requests Filed Pursuant to Chapter 3 (Lost-Time First Reports Filed
     Electronically After January 1, 2005):   P.Dionne, referring to the EDI Waiver
     Request the Board received from Crum & Foster, on behalf of United States Fire
     Insurance Company, North River Insurance Company and Crum & Foster
     Indemnity Co., inquired of directors how they would like to proceed with respect
     to formally granting, or denying the request.




                                                      Minutes of February 1, 2005 Board Meeting
                                                                                        7



                 EXECUTIVE DIRECTOR REPORT
                        CONTINUED

Anthony Monfiletto MOVED TO DENY THE WAIVER REQUEST
FILED BY CRUM & FOSTER; Rodney Hiltz seconded.

Discussion:
Directors and Staff discussed the company being in violation of Chapter 3
since the waiver request was not filed prior to the effective date of
Chapter 3, Sec. 2; insurance companies becoming aware of the Board’s
new form filing procedures at the time they file a lost-time First Report
and possibly seeking an extension at that time as opposed to filing the
form electronically; Board Staff contacting those carriers who have not
submitted a waiver to date, including Crum & Foster, to inquire as to
what their plans are with respect to complying with the Board’s new
form filing procedures (P.Fortier noted that Crum & Foster was not aware of
the new filing procedures and stated they filed a waiver upon learning of the
new procedures); Crum & Foster filing forms via IAIABC’s EDI Program
(Staff noted they cannot file the form electronically until the Board gives them
the okay to do so and commented that most National carriers use IAIABC’s EDI
Program, as opposed to the Board’s proprietary program, which is currently
being updated); Staff working with IAIABC two to three times a week, via
telephone, on the changes that need to be made to their new electronic
data interchange program; the EDI Waivers granted to date being for six
months and the Board requiring the entities come into compliance on or
before
7-1-05, which is when staff expect IAIABC’s new EDI Program to be up
and running; the 60-day moratorium the Board instituted on
1-4-05 with respect to not imposing a penalty for late-filed First Reports
filed electronically after 1-1-05, the Board not having the ability to
accept all electronic transmissions at this time; the
EDI Waiver being filed late since Chapter 3, Sec. 2 went into effect on 1-1-
05; the entities currently using IAIABC’s Release 1 electronic data
interchange program migrating to the Association’s new EDI Program
(Release 3) in the near future; the testing the Board will be doing in
February with IAIABC and imposing a penalty against those entities that
are not filing forms electronically, via the Board’s propriety program, if
they have not been granted an extension under Chapter 3.

John Cooney MOVED TO MOVE THE QUESTION; Gary Koocher seconded
(withdrawn).




                                                 Minutes of February 1, 2005 Board Meeting
                                                                                             8



                       EXECUTIVE DIRECTOR REPORT
                              CONTINUED

      Discussion:
      Directors and Staff discussed Director Cooney’s withdrawal of his proposed
      motion and Director Koocher’s withdrawal of his second to the motion.

      CONCLUSION
      Chairman Dionne called for a vote on the motion proposing that the              Board
deny the EDI Waiver filed by Crum & Foster:

      MOTION PASSES 4-3
      (Directors Mingo, Cooney & Koocher opposed)

                        GENERAL COUNSEL REPORT
1)    Pending District Court Matter: Assistant General Counsel J.McNitt, following
      up on J.Rohde’s recent report regarding a pending legal matter involving a
      worker advocate who received an subpoena to appear before the Rockland
      District Court to testify about an employee’s receipt of a lump-sum settlement
      in his workers’ compensation case. Ms. McNitt advised directors that General
      Counsel J.Rohde is in Rockland this morning to present the Court with a copy
      of the certified records from the Board’s file and to answer any questions the
      Court may have.

2)    Pending Request for Extension of Benefits Due to Extreme Financial
      Hardship: J.McNitt stated the Board will be holding a hardship hearing on the
      Holland case on 2-15-05, following the next Board meeting, and stated the
      parties may file written position papers prior to that date which will be
      distributed to the Board members prior to the hearing.

      Discussion:
      Directors and Staff discussed the hearing taking place directly after the
      Board meeting on 2-15-05 and notifying the parties of when the hearing
      will take place.

3)    Chapter 5 Consensus-Based Rulemaking Committee: Deputy Director of
      Medical/Rehabilitation Services E.Inman informed directors that the Chapter 5
      Consensus-Based Rulemaking Committee will be holding a conference call next
      week to discuss what amendments, if any, should be made to the Board’s
      Medical Fee Schedule.




                                                      Minutes of February 1, 2005 Board Meeting
                                                                                                          9



                                      OLD BUSINESS
1)   Legislation: Assistant General Counsel J.McNitt, referring to J.Rohde’s 1-27-
     05 legislative memorandum, stated the bills have not been scheduled for a
     hearing and advised directors that the Board may want to continue its
     deliberations on L.D. 54 today because the bill may be scheduled for a hearing
     prior to the next Board meeting.

     LD 54
     AN ACT TO REDUCE WORKERS’ COMPENSATION COSTS FOR SMALL BUSINESS EMPLOYERS


     Summary:
     The bill exempts employers of six or fewer employees from securing workers’ compensation
     coverage if they have an employers’ liability policy with limits of $100,000 times the number of
     full-time equivalent employees and medical payment coverage of not less than $5,000 and would
     require employers to provide healthcare coverage for its employees.

     Discussion:
     Directors and Staff discussed the possibility of LD 54 being scheduled for a
     public hearing prior to the next board meeting (Staff noted the bill is not
     scheduled before the Labor Committee within the next seven days, but that it
     may be scheduled for a hearing the following week which is the week prior to
     the next board meeting); the bill resulting in many questions about
     enforcement, how six or fewer employees would be defined and who
     would verify it, how information could be tracked as to whether
     employers who fell under the bill would be reported to the Workers’
     Compensation Board, and how to address the uncertainty with respect to
     the private health insurance component of the bill (Ms. McNitt advised
     directors that the Dirigo plan and other health insurance policies exclude
     coverage for workers’ compensation benefits and noted that if an employee were
     injured and were out of work that they could loose their health insurance
     coverage), the other questions that have been raised as a result of the
     proposed bill, such as the employer liability portion and whether it is
     available in the market at that level of $600,000 and what it might do to
     premiums to the employers left in the pool if employers were allowed to
     opt out, and the indemnity provisions in the bill (Ms. McNitt pointed out
     that the employees that are out of work collecting partial or total incapacity
     benefits would have no wage compensation); an issue that arose at the last
     meeting regarding how many employers may possibly be affected by the
     bill (Ms. McNitt informed directors that F.Richards has indicated that there are
     approximately 22,300 with six or fewer employees in the State of Maine and
     that an estimated 57,000 employees would be affected by the

                                                                   Minutes of February 1, 2005 Board Meeting
                                                                                         10



                   OLD BUSINESS CONTINUED
Discussion Continued on L.D.:
proposal); those entities that opposed the initiative in the past (it was
noted that the Maine AFL-CIO, Maine Chamber of Commerce and Maine
Employers Mutual Insurance Company opposed the initiative back then); the
bill creating an issue with respect to the payment of medical bills and
indemnity payments because of the uncertainty of whether an employer’s
liability policy is available in the market (Attorney Alan Muir stated he has
discussed the matter with Mr. Shaw, the President of Maine Mutual, who
indicated they do not offer an employer’s liability policy and that the only
product that is available is for farms and agricultural workers and commented
that an estimated 22,000 employers will be affected by the bill. Mr. Muir noted
someone could seek approval to market such the liability policy but that
employees will not have their medical bills covered or be able to receive
indemnity payments because the liability policy will not pay unless an employer
is negligent. Mr. Muir explained that Dirigo will be in a difficult position
because their policy excludes occupational injuries so they will be receiving
medical bills and denying the claims. Mr. Muir further stated that once an
employee is out of work for 90 days that he or she will be receiving a Cobra
letter and will be removed from their policy,
and noted that if an injured worker is out of work for more than 90 days that
they will be asked to pay their own premiums. Mr. Muir informed directors that
the bill will result in additional costs to the State of Maine because they will be
absorbing the costs of uninsured injured workers who go the Emergency Room
and undergo surgery and remarked that the State is already facing a healthcare
crisis); the other issues that have been raised as a result of the bill such
as employees having no protection under the bill; some industries
dropping out because of the cost of premiums; some employers not being
able to hire additional employees and/or notifying the appropriate
individuals if they hired additional employees (it was noted that the Board
would have the burden of determining if employers are complying with the law);
the business community being united in its opposition to the bill; some
employers being at a disadvantage because of premium costs; Rhode
Island’s recent repeal of similar legislation that was in place for a
couple of years (Mr. Muir noted they repealed the legislation because they
were receiving a lot of complaints because employers with six or eight
employees were at a competitive disadvantage and because some employers
have not been able to bid against employers with fewer employees); the Maine
Council of Self-Insureds’


                                                   Minutes of February 1, 2005 Board Meeting
                                                                                            11



                        OLD BUSINESS CONTINUED
     Discussion Continued on L.D.:
     opposition to the bill when it was proposed during an earlier Legislative
     Session; the bill being counterproductive because it will actually result in
     an increase in other areas and the Board taking formal action today to
     formally oppose the bill.

     James Mingo MOVED TO OFFICIALLY OPPOSE L.D. 54; John Cooney
     seconded. MOTION PASSES 7-0.

                               NEW BUSINESS
1)   Independent Medical Examiners Appointed Under §312: Deputy Director of
     Medical/Rehabilitation Services, referring to the application received from
     Bruce Sigsbee, M.D., stated she is recommending the Board appoint Dr.
     Sigsbee as an Independent Medical Examiner under §312. Ms. Inman informed
     directors that Dr. Sigsbee is Board certified in neurology and in nerve
     conduction studies and that he has workers’ compensation experience and has
     no potential conflicts. Ms. Inman announced that Dr. Sigsbee meets the
     Board’s qualifications because he has an active treating practice and has not
     performed any Section 207 examinations. Ms. Inman informed the Board that
     Dr. Dillihunt and G.Smith, the President of the Maine Medical Association, also
     recommend approving Dr. Sigsbee as an IME under Section 312
     of Title 39-A.

     Anthony Monfiletto MOVED THAT THE BOARD APPOINT
     BRUCE SIGSBEE, M.D. AS AN INDEPENDENT MEDICAL EXAMINER;
     J.Kirkpatrick seconded. MOTION PASSES 7-0.

                             ADJOURNMENT
     Gary Koocher MOVED TO ADJOURN; Anthony Monfiletto seconded.
     MOTION PASSES 7-0.

     The meeting formally adjourned at 10:58 a.m.




                                                      Minutes of February 1, 2005 Board Meeting

								
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