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					                    MAINE WORKERS' COMPENSATION BOARD
                          Board of Directors’ Meeting
                               March 14, 2006

A business meeting of the Maine Workers’ Compensation Board of Directors was held
on Tuesday, March 14, 2006 at the Workers’ Compensation Board’s Central Office
(located on Blossom Way in Augusta). Acting Chairman G.Koocher called the meeting
to order at 9:58 a.m.

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

1)    Draft Minutes (February 28 Board Meeting): Directors received and approved the
      draft minutes of the business meeting the Board held at the Central Office on the
      28th of February.

      Monfiletto seconded. MOTION PASSES 6-0.

                          GENERAL COUNSEL REPORT
1)    Chapter 2 Amendments: General Counsel J.Rohde informed the Board that
      the amendments to Chapter 2 went into effect on 3-11-06.

2)    Pending Request for Extension of Benefits Due to Extreme Financial
      Hardship (Parks v. University of Southern Maine): Referring to the pending Petition for
      Request for Extension of Benefits Due to Extreme Financial Hardship currently before the Board
      in the case of David Parks v. University of Southern Maine, which the Board stayed pending
      resolution of the underlying petitions in the case, General Counsel J.Rohde reported the
      employee will be withdrawing
      his petition before the Board.

3)    March 28 Meeting: After advising directors that Chairman Dionne has changed the
      location of the next board meeting from the Bangor office to the Central office,
      General Counsel J.Rohde apprised Board members that the next board meeting
      will take place at the Central Office in Augusta so that the
      Board can meet with Jeffrey Kadison of Practical Actuarial Solutions, Inc. to
      discuss his actuarial study and report he is preparing for the Board
      in accordance with Section 213.



     Directors and Staff discussed J.Cooney’s scheduling conflict on the 28th of March and his
     inability to attend a board meeting on that day; having all Board members present, if
     possible, at the time Mr. Kadison presents his actuarial report to the Board and
     providing directors with ample opportunity to review the report in its entirety before
     meeting with Mr. Kadison; whether copies of
     Mr. Kadison’s draft actuarial report should be made available to the public
     prior to when the Board discusses the matter with Mr. Kadison at a meeting (Directors
     and General Counsel Rohde conversed briefly with respect to not distributing the report
     to the public until a final report becomes available;
     the actuarial report being a matter of public record; staff providing only Board members
     with a copy of the draft actuarial report at this time; working documents before the
     Board being public information; the likelihood of the public receiving a copy of the draft
     actuarial report as soon as it is circulated; Board members having the ability to share and
     discuss the draft report with their respective constituency groups; the draft report
     possibly being amended and not distributing the report until a final version of the report
     becomes available); Executive Director Dionne’s plans to discuss various issues
     regarding permanent impairment cases with the hearing officers and not adding the
     draft actuarial report to an agenda until Mr. Dionne has an opportunity to discuss
     those issues with the hearing officers and report back to the Board; Mr. Kadison
     currently working on his actuarial report for the Board; whether the Board should hold
     off adding the draft actuarial report to an agenda until it has been confirmed that a full
     board will be present to discuss the draft actuarial report and after the Board receives a
     report back from Executive Director Dionne (it was noted the Board can schedule
     another meeting, if needed, for the Board to deliberate on the draft actuarial report if it
     receives additional information from the hearing officers and before the report is sent
     out for public comment); the actuarial studies Practical Actuarial Solutions has done
     for the Board in the past; hearing officers only being able to provide the Board with
     anecdotal information and the information possibly triggering a need to look at the
     matter more closely;
     staff not having a date certain as to when the Board will be receiving the draft actuarial
     report from Jeffrey Kadison and staff providing Board members with ample time to
     review the report to decide what questions, if any, Board members would like to ask Mr.
     Kadison about the draft report; the next Board meeting taking place on the 28th of
     March, which has been changed from the Board’s Bangor regional office to their Central
     Office in Augusta and the general consensus among the Board members with respect to
     the draft actuarial report being provided to the Board in advance of its meeting with
     Mr. Kadison.

                                                         Minutes of WCB March 14, 2006 Board Meeting


4)   Request for Board Review of Hearing Officer Decision (Shaver v. Poland
     Springs Bottling Company): Referring Board members to the employer’s Request for
     Clarification in the Shaver case, General Counsel J.Rohde explained that the
     employer is seeking clarification as to when its reply brief is due since three briefs
     were filed on different dates and stated that if the Board does not object he will
     respond in writing to the request stating the reply brief will be due 15 days after
     the last reply brief has been filed in the case. No objections voiced.

                                    OLD BUSINESS
1)   Legislation: General Counsel J.Rohde provided Board members with a brief
     status report on L.D. 1715 (An Act to Amend the Laws Governing Employees of the Workers’
     Compensation Board), L.D. 1817 (An Act to Protect Access to Social Security Numbers), L.D.
     1990 (An Act to Create the Insurance Fraud division within the Bureau of Insurance) and L.D.
     2068 (An Act Regarding the Maine Insurance Guaranty Association).

     Directors and Staff discussed L.D. 1715 creating the position of Deputy Director of
     Information Management; L.D. 1817, An Act to Protect Access to Social Security
     Numbers (Mr. Rohde reported the bill was going to be amended so that social security
     numbers would not be a public record under the Freedom of Access Act and so that it
     would focus on the University of Maine system. Mr. Rohde informed Board members
     that the Committee initially voted “ought-to-pass, as amended” and that it ultimately
     voted “ought-not-to-pass” on the proposal. Staff advised directors that the University of
     Maine system is moving away from the practice of using social security numbers for
     identification purposes and that a number of State agencies had expressed serious
     concerns with making social security numbers non-public records and that in particular,
     the Secretary of State’s office indicated it would cost the State in the seven figures to
     redact social security numbers from all of their UCC filings); L.D. 1990, An Act to Create
     the Insurance Fraud Division within the Bureau of Insurance (Assistant General
     Counsel J.McNitt advised Board members that the Insurance and Financial Services
     Committee has scheduled a work session on the proposed bill and that a number of
     changes were made by the Bureau of Insurance, the lead agency on the bill, and that a
     decision was made, after discussing the bill with others,
     that most of the provisions put forth in the bill exist within different provisions

                                                           Minutes of WCB March 14, 2006 Board Meeting

                          OLD BUSINESS CONTINUED

     Discussion Continued:
     of law and reported the Committee amended the bill so that the only items going into
     the Act are certain provisions that require them to insert the name of the new agency.
     Ms. McNitt noted there were substantial changes made to the bill and stated they should
     not have an effect on the Board’s operations. Ms. McNitt also advised Board members
     that the bill changes the confidentiality provisions to incorporate Title 16, which refers to
     criminal investigations and noted a number of commentators raised issues about
     criminal prosecutions such as the Maine Trial Lawyers Association and informed the
     Board that the current laws have different provisions allowing access to the records. Ms.
     McNitt noted the largest issue appeared to be insurance companies interested in having
     immunity for insurer-to-insurer communications because they are concerned about the
     broad bill looking at all lines of insurance. Ms. McNitt stated that because the
     confidentiality provisions are being changed there is a rule that requires that it go before
     the Judiciary Committee and noted the bill has been tabled and that the Committee has
     asked the Judiciary Committee to act on the bill. Ms. McNitt informed directors that the
     Committee essentially had reached a consensus that the bill should pass and that there is
     basic agreement on the amendments with the exception of the insurer-to-insurer
     immunity and some of the other confidentiality provisions. Mr. McNitt explained to
     Board members that the Committee is waiting for the parties to work those out and
     noted the bill has been scheduled for a work session this Thursday, which may be
     rescheduled to a later date because the Committee is dealing with a number of other
     legislative proposals and that the Committee is waiting for the Judiciary Committee to
     act on the bill. Ms. McNitt noted the changes do not appear to affect the Board and
     stated she is discussing the bill informally with the Bureau of Insurance to keep apprised
     as to what is happening with the bill. Ms. McNitt noted that if the bill passes there will
     be a dedicated Attorney General assigned to the Bureau to prosecute fraud cases, which
     is the person the Board will most likely be working with on its fraud cases under the
     Maine Workers’ Compensation Act); L.D. 2068, An Act Regarding the Maine Insurance
     Guaranty Association (Mr. Rohde, referring to the bill provided to Board members this
     morning, stated the bill deals with the Maine Insurance Guaranty Association. Mr.
     Rohde noted the Board and the Bureau of Insurance have worked on some consensus
     language for the bill and commented that the bill makes it clear that MIGA is subject to
     audit and the payment of interest and penalties, pursuant to the Workers’ Compensation

                                                          Minutes of WCB March 14, 2006 Board Meeting

                         OLD BUSINESS CONTINUED

     Discussion Continued:
     Mr. Rohde, referring to the various sections of the bill, noted Section 1 defines a covered
     claim to include interest and penalties for purposes of workers’ compensation, that
     Section 2 makes it clear that the Maine Insurance Guaranty Association is subject to
     audit, enforcement and monitoring by the Workers’ Compensation Board and that it
     must pay penalties & interest and any compensation due as a result of a Board
     examination or audit, that Section 3 adds MIGA to Section 153(9) of Title 39-A -- the
     section establishing the Board’s Monitoring, Audit & Enforcement Program, and noted
     the same is true for both Section 4 and Section 5, which add the Maine Insurance
     Guaranty Association to Sections 359(1) and (2). Board Member J.Mingo inquired as to
     what impact the proposed bill will have on MIGA as it relates to penalties and interest
     that are imposed on the Association as a result of its predecessor’s questionable claims
     handling practices, or any other obligation that the Association inherits.
     Mr. Mingo pointed out that it is not the Association’s fault if an injured worker has not
     been paid properly or if a timely notice of controversy form has not been filed on a
     workers’ compensation claim, even though MIGA is now handling the claim, and
     remarked that the responsibility should lie with its predecessor.
     In response, Mr. Rohde stated the bill may result in the Maine Insurance Guaranty
     Association being responsible for those costs and Attorney Case noted that is the reason
     the Association was created – to take over the responsibility of a workers’ compensation
     claim for an insurer who fails to meet its responsibility and pointed out that injured
     workers should not be penalized, or forced to go without workers’ compensation
     benefits because of an insurer’s mismanagement of their claim. Mr. Rohde also advised
     Board members of the language in
     Section 3 of the bill requiring the Monitoring, Audit and Enforcement Program to take
     into account, during an audit, when MIGA obtained the records of an insolvent insurer.
     Staff noted that when conducting an audit the Association would not be held
     responsible for questionable claims handling techniques of its predecessor and remarked
     that the Board will also consider when the Association obtained the file(s). Mr. Rohde
     informed the Board that L.D. 2068 has not been scheduled for a public hearing and
     stated the Board has the ability to schedule an emergency meeting, if needed, to act on
     the bill, if it so desires,
     if and when the bill is scheduled for a hearing) and allowing the Board ample time to
     review the language in L.D. 2068 and discuss it with their constituents.

                                                         Minutes of WCB March 14, 2006 Board Meeting

                                  NEW BUSINESS
1)   Draft 2005 Third Quarter Compliance Report: Deputy Director of Benefits
     Administration S.Minkowsky provided Board members with the Draft 2005 Third
     Quarter Compliance Report, dated February 22, 2006, and briefly summarized
     the MAE Program’s compliance data on Lost-time First Report filings, the
     payment of initial indemnity benefits and memorandum of payment form filings,
     and some initial notice of controversy form filings.

                          COMPLIANCE REPORT SUMMARY

     Lost-Time First Report Filings
     Deputy Director of Benefits Administration S.Minkowsky referred directors to
     page 1, Section A, of the report and announced the Board received 3,868 Lost-
     Time first reports in the third quarter of 2005, during the period of July 1, 2005
     through September 30, 2005 and advised directors that 84.18% of the filings
     were received within seven days and that 88.52% were filed within 10 days. Mr.
     Minkowsky noted seven-day filings were down slightly from the two previous
     quarters, which is most likely due to employers and insurers transitioning to an
     electronic filing program. Mr. Minkowsky stated the MAE Program still provides
     the data on seven and ten-day filings and commented that as of January 1,
     2006 the data will only be provided for seven-day filings.

     Directors and Staff discussed the improvement in Wal-Mart’s compliance
     (Mr. Minkowsky, referring to Section A-1 in Appendix I, under A.I.G/Claims
     Management/Wal-Mart, that the employer/insurer had eleven payments and
     six denials, which shows a dramatic change in their claims handling practices. Mr.
     Minkowsky applauded Wal-Mart for the improvement in their compliance); Wal-Mart’s
     MOP and NOC filings during the third quarter of 2005 and Maine’s injuries at Wal-
     Mart being handled by insurance adjusters in Arkansas (Staff noted the preliminary
     statistics in the compliance report have been shared with Wal-Mart and stated he will be
     meeting with the company and their attorney at the end of this month).

     Initial Indemnity payments
     Board staff advised directors that 85.66% of the initial Indemnity benefits paid
     in the third quarter were paid within 14 days and that the benchmark in this
     area is 80%. Staff advised Board members that the insurance community
     exceeded the Board’s expectations.

                                                        Minutes of WCB March 14, 2006 Board Meeting

                         NEW BUSINESS CONTINUED

     Memorandum of Payment Filings
     Staff informed Board members that the total number of Memorandum of
     Payment filings (MOPs) received within 17 days was 82.98%, that the Board’s
     benchmark in this area is 75% and that insurers exceeded the benchmark by
     approximately 8%.

     Initial Denials / Notice of Controversy Filings
     Staff, referring to page 2 of the third quarterly compliance report, indicated
     91.91% of initial indemnity NOCs filed was received within
     0-17 days.

     Directors and Staff discussed the draft compliance report being a routine report provided
     to the Board on a quarterly basis and the protocol in place for Notice of Controversy
     form filings which is 14 days plus an additional three days for mailing purposes (Mr.
     Minkowsky noted the Board will need to take formal action to change the protocol after
     it phases in the electronic filing of denial paperwork).

     COMPLIANCE REPORT; Anthony Monfiletto seconded. MOTION PASSES 6-0.

James Mingo MOVED TO AJOURN; John Cooney seconded. MOTION PASSES 6-

The meeting formally adjourned at 10:32 a.m.

                                                         Minutes of WCB March 14, 2006 Board Meeting