67120 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

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 nonFederal 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 renumbered 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 (§§ 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 SelfEmployment from its existing location

in Section 10.125(c) and revises it to

clarify that earnings from selfemployment 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).
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 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 § 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 § 10.6, current § 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

§ 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 §§ 10.100

through 10.122, 10.130, and 10.140. The

material in current § 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,

§ 10.12. Current § 10.104, regarding

physicians’ reports, has been moved to

subpart D (Medical and Related

Benefits). Current § 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

§ 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 § 10.120 and

§ 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

§ 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 § 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
67122 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

it has been adjudicated has also been

added to these sections as well as to

§ 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 wageloss 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

§ 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 § 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 §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 §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 § 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

§10.108, has been removed as

unnecessary from §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

§ 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 §10.125 revises the language in

existing §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 (§§10.200 through

10.209). The general rules found in

current §10.201 have been rearranged

and placed in different sections. The

criteria for eligibility in current

§10.201(a) are now found in § 10.205.

Current §10.201(b) is now found at

§10.215; current § 10.201(d) is now

found at § 10.200; and current

§§10.201(e) and (f) are now found at

§ 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

§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

§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 § 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,
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 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 §10.217 reworks material

found in current § 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 §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

(§§10.401 through 10.413), except that

some of the material about medical

reports and payments (§§10.410 through

10.413) has been moved to new subpart

I. The definitions contained in current

§10.400 have been shortened and

moved to subpart A. This subpart also

addresses the subjects of current

§§10.104(a) and 10.305. Current

§10.401(d), which addresses the status

of federal health units, has been

removed as superfluous. Current

§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 §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 § 10.310, the references to costeffectiveness 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

§ 10.311 provides more specific

guidance. Two changes to current

practice are made for administrative

convenience: the definition of

‘‘subluxation’’ which appears in current

§ 10.400(e) has been moved to new

§ 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
67124 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

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 frequentlyapproved 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 longstanding practice and is consistent with

ECAB precedent on this issue.

In § 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 § 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 § 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

(§§ 10.300 through 10.324), and it

addresses the subjects of current

§§ 10.109, 10.126 through 10.128, and

§§ 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 § 10.424, as most of the current

material is procedural rather than

regulatory in nature.

No counterpart to current § 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
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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 § 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 § 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 § 10.406 and § 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 § 10.413, the provisions of current

§ 10.109 have been shortened so as not

to repeat those appearing in the FECA

itself.

In § 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 § 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 rewritten 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 § 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

§ 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 § 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 §§ 10.123

through 10.128. It also includes some
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material from current §§ 10.107 and

10.110.

Claims for Continuing Disability

The regulation concerning continuing

receipt of compensation benefits, new

§ 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 § 10.500(a) has been

added to inform claimants, employing

agencies and others of OWCP’s longstanding 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 § 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 § 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 § 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 § 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 § 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 lightduty work and are separated when their

employers eliminate their light-duty

positions in a subsequent reduction-inforce (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 lightduty 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 wageearning capacity after completion of a

vocational rehabilitation program. This

discussion is intended to inform

employees and others of OWCP’s longstanding practice in this area and is

consistent with ECAB precedent

concerning determination of wageearning capacity.

Reports of Earnings From Employment

and Self-Employment

The FECA authorizes OWCP to

require FECA claimants to report
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earnings from employment or selfemployment. 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

§ 10.5(g). The language in § 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 § 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 § 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 §§ 10.130

through 10.145, except for the material

found in current § 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

§ 10.138(b), and review of a decision on

the Director’s own motion is addressed

in current § 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, § 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 longstanding position of the Director that the

plain language of section 8128(a)

authorizes the Director, without precondition, to review a decision ‘‘at any

time.’’ The existing regulations contain

a provision, carried over in § 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 § 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,’’ § 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
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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,

§ 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 § 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,

§ 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, § 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, § 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 § 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 § 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 § 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 (§§ 10.500 through 10.624), as

well as the material found in § 10.142.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67129

Representation

Current § 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,

§ 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 § 10.703(c). This section adopts

the criteria in the existing regulations at

§ 10.145(b), after removing items that

are essentially duplicative.

Third-Party Liability

Current § 10.501 through § 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

§ 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 § 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

§ 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, § 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
67130 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

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 § 10.620 on the definition of

jurors has been moved to the list of

definitions at § 10.5(h), while current

§ 10.621 on the applicability of the other

subparts of the regulations has been

removed as unnecessary.

Peace Corps Volunteers

Current § 10.600 on the definition of

Peace Corps volunteers, § 10.601 on the

applicability of the FECA, § 10.602 on

when disability compensation

commences, § 10.603(a) through (c) on

special pay rate considerations, and

§ 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 § 10.612(d) on the eligibility

of non-federal law enforcement officers,

§ 10.617(c) on the adjudication of these

claims, § 10.618 regarding consultation

with the Attorney General and other

agencies, and § 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 § 10.735

combine current §§ 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 § 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 § 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 §§ 10.410

through 10.413 with §§ 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 § 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
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 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 § 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 workrelated 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 wellsuited 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
67132 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

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 workrelatedness 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 × 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 × 1.24) + [(Billed Amount¥(TA ×

1.24)) × 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 × 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 § 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
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 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 §§ 25.23 and

25.24 have been deleted as unnecessary.

Furthermore, old § 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 §§ 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
67134 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

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 FECArelated 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×$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?
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 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 workrelated?

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 workrelated 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?
67136 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

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 selfemployment?

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 jurisdiction of cases on

appeal to the ECAB?

Subpart H—Special Provisions

Representation

10.700 May a claimant designate a

representative?

10.701 Who may serve as a representative?

10.702 How are fees for services paid?

10.703 How are fee applications approved?

Third Party Liability

10.705 When must an employee or other

FECA beneficiary take action against a

third party?

10.706 How will a beneficiary know if

OWCP or SOL has determined that

action against a third party is required?

10.707 What must a FECA beneficiary who

is required to take action against a third

party do to satisfy the requirement that

the claim be ‘‘prosecuted’’?

10.708 Can a FECA beneficiary who refuses

to comply with a request to assign a

claim to the United States or to prosecute

the claim in his or her own name be

penalized?

10.709 What happens if a beneficiary

directed by OWCP or SOL to take action

against a third party does not believe that

a claim can be successfully prosecuted at

a reasonable cost?

10.710 Under what circumstances must a

recovery of money or other property in

connection with an injury or death for

which benefits are payable under the

FECA be reported to OWCP or SOL?

10.711 How much of any settlement or

judgment must be paid to the United

States?

10.712 What amounts are included in the

gross recovery?
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67137

10.713 How is a structured settlement (that

is, a settlement providing for receipt of

funds over a specified period of time)

treated for purposes of reporting the

gross recovery?

10.714 What amounts are included in the

refundable disbursements?

10.715 Is a beneficiary required to pay

interest on the amount of the refund due

to the United States?

10.716 If the required refund is not paid

within 30 days of the request for

repayment, can it be collected from

payments due under the FECA?

10.717 Is a settlement or judgment received

as a result of allegations of medical

malpractice in treating an injury covered

by the FECA a gross recovery that must

be reported to OWCP or SOL?

10.718 Are payments to a beneficiary as a

result of an insurance policy which the

beneficiary has purchased a gross

recovery that must be reported to OWCP

or SOL?

10.719 If a settlement or judgment is

received for more than one wound or

medical condition, can the refundable

disbursements paid on a single FECA

claim be attributed to different

conditions for purposes of calculating

the refund or credit owed to the United

States?

Federal Grand and Petit Jurors

10.725 When is a federal grand or petit

juror covered under the FECA?

10.726 When does a juror’s entitlement to

disability compensation begin?

10.727 What is the pay rate of jurors for

compensation purposes?

Peace Corps Volunteers

10.730 What are the conditions of coverage

for Peace Corps volunteers and volunteer

leaders injured while serving outside the

United States?

10.731 What is the pay rate of Peace Corps

volunteers and volunteer leaders for

compensation purposes?

Non-Federal Law Enforcement Officers

10.735 When is a non-federal law

enforcement officer covered under the

FECA?

10.736 What are the time limits for filing a

claim?

10.737 How is a claim filed, and who can

file a claim?

10.738 Under what circumstances are

benefits payable?

10.739 What kind of objective evidence of

a potential federal crime must exist for

coverage to be extended?

10.740 In what situations will OWCP

automatically presume that a law

enforcement officer is covered by the

FECA?

10.741 How are benefits calculated?

Subpart I—Information for Medical

Providers

Medical Records and Bills

10.800 What kind of medical records must

providers keep?

10.801 How are medical bills to be

submitted?

10.802 How should an employee prepare

and submit requests for reimbursement

for medical expenses, transportation

costs, loss of wages, and incidental

expenses?

10.803 What are the time limitations on

OWCP’s payment of bills?

Medical Fee Schedule

10.805 What services are covered by the

OWCP fee schedule?

10.806 How are the maximum fees defined?

10.807 How are payments for particular

services calculated?

10.808 Does the fee schedule apply to every

kind of procedure?

10.809 How are payments for medicinal

drugs determined?

10.810 How are payments for inpatient

medical services determined?

10.811 When and how are fees reduced?

10.812 If OWCP reduces a fee, may a

provider request reconsideration of the

reduction?

10.813 If OWCP reduces a fee, may a

provider bill the claimant for the

balance?

Exclusion of Providers

10.815 What are the grounds for excluding

a provider from payment under the

FECA?

10.816 What will cause OWCP to

automatically exclude a physician or

other provider of medical services and

supplies?

10.817 When are OWCP’s exclusion

procedures initiated?

10.818 How is a provider notified of

OWCP’s intent to exclude him or her?

10.819 What requirements must the

provider’s reply and OWCP’s decision

meet?

10.820 How can an excluded provider

request a hearing?

10.821 How are hearings assigned and

scheduled?

10.822 How are subpoenas or advisory

opinions obtained?

10.823 How will the administrative law

judge conduct the hearing and issue the

recommended decision?

10.824 How can a party request review by

the Director of the administrative law

judge’s recommended decision?

10.825 What are the effects of exclusion?

10.826 How can an excluded provider be

reinstated?

Authority: 5 U.S.C. 301, 8103, 8145 and

8149; 31 U.S.C. 3716 and 3717;

Reorganization Plan No. 6 of 1950, 15 FR

3174, 64 Stat. 1263; Secretary’s Order 5–96,

62 FR 107.

Subpart A—General Provisions

Introduction

§ 10.0 What are the provisions of the

FECA, in general?

The Federal Employees’

Compensation Act (FECA) as amended

(5 U.S.C. 8101 et seq.) provides for the

payment of workers’ compensation

benefits to civilian officers and

employees of all branches of the

Government of the United States. The

regulations in this part describe the

rules for filing, processing, and paying

claims for benefits under the FECA.

(a) The FECA has been amended and

extended a number of times to provide

workers’ compensation benefits to

volunteers in the Civil Air Patrol (5

U.S.C. 8141), members of the Reserve

Officers’ Training Corps (5 U.S.C. 8140),

Peace Corps Volunteers (5 U.S.C. 8142),

Job Corps enrollees and Volunteers In

Service to America (5 U.S.C. 8143),

members of the National Teachers Corps

(5 U.S.C. 8143a), certain student

employees (5 U.S.C. 5351 and 8144),

certain law enforcement officers not

employed by the United States (5 U.S.C.

8191–8193), and various other classes of

persons who provide or have provided

services to the Government of the

United States.

(b) The FECA provides for payment of

several types of benefits, including

compensation for wage loss, schedule

awards, medical and related benefits,

and vocational rehabilitation services

for conditions resulting from injuries

sustained in performance of duty while

in service to the United States.

(c) The FECA also provides for

payment of monetary compensation to

specified survivors of an employee

whose death resulted from a workrelated injury and for payment of certain

burial expenses subject to the provisions

of 5 U.S.C. 8134.

(d) All types of benefits and

conditions of eligibility listed in this

section are subject to the provisions of

the FECA and of this part. This section

shall not be construed to modify or

enlarge upon the provisions of the

FECA.

§ 10.1 What rules govern the

administration of the FECA and this

chapter?

In accordance with 5 U.S.C. 8145 and

Secretary’s Order 5–96, the

responsibility for administering the

FECA, except for 5 U.S.C. 8149 as it

pertains to the Employees’

Compensation Appeals Board, has been

delegated to the Assistant Secretary for

Employment Standards. The Assistant

Secretary, in turn, delegated the

authority and responsibility for

administering the FECA to the Director

of the Office of Workers’ Compensation

Programs (OWCP). Except as otherwise

provided by law, the Director, OWCP

and his or her designees have the

exclusive authority to administer,

interpret and enforce the provisions of

the Act.
67138 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

§ 10.2 What do these regulations contain?

Part 10 of this chapter sets forth the

regulations governing administration of

all claims filed under the FECA, except

to the extent specified in certain

particular provisions. Its provisions are

intended to assist persons seeking

compensation benefits under the FECA,

as well as personnel in the various

federal agencies and the Department of

Labor who process claims filed under

the FECA or who perform

administrative functions with respect to

the FECA. Part 10 applies to part 25 of

this chapter except as modified by part

25. The various subparts of this part

contain the following:

(a) Subpart A: The general statutory

and administrative framework for

processing claims under the FECA. It

contains a statement of purpose and

scope, together with definitions of

terms, descriptions of basic forms,

information about the disclosure of

OWCP records, and a description of

rights and penalties under the FECA,

including convictions for fraud.

(b) Subpart B: The rules for filing

notices of injury and claims for benefits

under the FECA. It also addresses

evidence and burden of proof, as well as

the process of making decisions

concerning eligibility for benefits.

(c) Subpart C: The rules governing

claims for and payment of continuation

of pay.

(d) Subpart D: The rules governing

emergency and routine medical care,

second opinion and referee medical

examinations directed by OWCP, and

medical reports and records in general.

It also addresses the kinds of treatment

which may be authorized and how

medical bills are paid.

(e) Subpart E: The rules relating to the

payment of monetary compensation

benefits for disability, impairment and

death. It includes the provisions for

identifying and processing

overpayments of compensation.

(f) Subpart F: The rules governing the

payment of continuing compensation

benefits. It includes provisions

concerning the employee’s and the

employer’s responsibilities in returning

the employee to work. It also contains

provisions governing reports of earnings

and dependents, recurrences, and

reduction and termination of

compensation benefits.

(g) Subpart G: The rules governing the

appeals of decisions under the FECA. It

includes provisions relating to hearings,

reconsiderations, and appeals before the

Employees’ Compensation Appeals

Board.

(h) Subpart H: The rules concerning

legal representation and for adjustment

and recovery from a third party. It also

contains provisions relevant to three

groups of employees whose status

requires special application of the

provisions of the FECA: federal grand

and petit jurors, Peace Corps volunteers,

and non-federal law enforcement

officers.

(i) Subpart I: Information for medical

providers. It includes rules for medical

reports, medical bills, and the OWCP

medical fee schedule, as well as the

provisions for exclusion of medical

providers.

§ 10.3 Have the collection of information

requirements of this part been approved by

OMB?

The collection of information

requirements in this part have been

approved by the Office of Management

and Budget and assigned OMB control

numbers 1215–0055, 1215–0067, 1215–

0103, 1215–0115, 1215–0154, 1215–

0155, 1215–0167, 1215–0176 and 1215–

0182.

Definitions and Forms

§ 10.5 What definitions apply to these

regulations?

Certain words and phrases found in

this part are defined in this section or

in the FECA statute. Some other words

and phrases that are used only in

limited situations are defined in the

later subparts of these regulations.

(a) Benefits or Compensation means

the money OWCP pays to or on behalf

of a beneficiary from the Employees’

Compensation Fund for lost wages, a

loss of wage-earning capacity or a

permanent physical impairment, as well

as the money paid to beneficiaries for an

employee’s death. These two terms also

include any other amounts paid out of

the Employees’ Compensation Fund for

such things as medical treatment,

medical examinations conducted at the

request of OWCP as part of the claims

adjudication process, vocational

rehabilitation services, services of an

attendant and funeral expenses, but

does not include continuation of pay.

(b) Beneficiary means an individual

who is entitled to a benefit under the

FECA and this part.

(c) Claim means a written assertion of

an individual’s entitlement to benefits

under the FECA, submitted in a manner

authorized by this part.

(d) Claimant means an individual

whose claim has been filed.

(e) Director means the Director of

OWCP or a person designated to carry

out his or her functions.

(f) Disability means the incapacity,

because of an employment injury, to

earn the wages the employee was

receiving at the time of injury. It may be

partial or total.

(g) Earnings from employment or selfemployment means:

(1) Gross earnings or wages before any

deductions and includes the value of

subsistence, quarters, reimbursed

expenses and any other goods or

services received in kind as

remuneration; or

(2) A reasonable estimate of the cost

to have someone else perform the duties

of an individual who accepts no

remuneration. Neither lack of profits,

nor the characterization of the duties as

a hobby, removes an unremunerated

individual’s responsibility to report the

estimated cost to have someone else

perform his or her duties.

(h) Employee means, but is not

limited to, an individual who fits within

one of the following listed groups:

(1) A civil officer or employee in any

branch of the Government of the United

States, including an officer or employee

of an instrumentality wholly owned by

the United States;

(2) An individual rendering personal

service to the United States similar to

the service of a civil officer or employee

of the United States, without pay or for

nominal pay, when a statute authorizes

the acceptance or use of the service, or

authorizes payment of travel or other

expenses of the individual;

(3) An individual, other than an

independent contractor or an individual

employed by an independent contractor,

employed on the Menominee Indian

Reservation in Wisconsin in operations

conducted under a statute relating to

tribal timber and logging operations on

that reservation;

(4) An individual appointed to a

position on the office staff of a former

President; or

(5) An individual selected and serving

as a federal petit or grand juror.

(i) Employer or Agency means any

civil agency or instrumentality of the

United States Government, or any other

organization, group or institution

employing an individual defined as an

‘‘employee’’ by this section. These terms

also refer to officers and employees of

an employer having responsibility for

the supervision, direction or control of

employees of that employer as an

‘‘immediate superior,’’ and to other

employees designated by the employer

to carry out the functions vested in the

employer under the FECA and this part,

including officers or employees

delegated responsibility by an employer

for authorizing medical treatment for

injured employees.

(j) Entitlement means entitlement to

benefits as determined by OWCP under

the FECA and the procedures described

in this part.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67139

(k) FECA means the Federal

Employees’ Compensation Act, as

amended.

(l) Hospital services means services

and supplies provided by hospitals

within the scope of their practice as

defined by State law.

(m) Impairment means any anatomic

or functional abnormality or loss. A

permanent impairment is any such

abnormality or loss after maximum

medical improvement has been

achieved.

(n) Knowingly means with knowledge,

consciously, willfully or intentionally.

(o) Medical services means services

and supplies provided by or under the

supervision of a physician.

Reimbursable chiropractic services are

limited to physical examinations (and

related laboratory tests), x-rays

performed to diagnose a subluxation of

the spine and treatment consisting of

manual manipulation of the spine to

correct a subluxation.

(p) Medical support services means

services, drugs, supplies and appliances

provided by a person other than a

physician or hospital.

(q) Occupational disease or illness

means a condition produced by the

work environment over a period longer

than a single workday or shift.

(r) OWCP means the Office of

Workers’ Compensation Programs.

(s) Pay rate for compensation

purposes means the employee’s pay, as

determined under 5 U.S.C. 8114, at the

time of injury, the time disability begins

or the time compensable disability

recurs if the recurrence begins more

than six months after the injured

employee resumes regular full-time

employment with the United States,

whichever is greater, except as

otherwise determined under 5 U.S.C.

8113 with respect to any period.

(t) Physician means an individual

defined as such in 5 U.S.C. 8101(2),

except during the period for which his

or her license to practice medicine has

been suspended or revoked by a State

licensing or regulatory authority.

(u) Qualified hospital means any

hospital licensed as such under State

law which has not been excluded under

the provisions of subpart I of this part.

Except as otherwise provided by

regulation, a qualified hospital shall be

deemed to be designated or approved by

OWCP.

(v) Qualified physician means any

physician who has not been excluded

under the provisions of subpart I of this

part. Except as otherwise provided by

regulation, a qualified physician shall

be deemed to be designated or approved

by OWCP.

(w) Qualified provider of medical

support services or supplies means any

person, other than a physician or a

hospital, who provides services, drugs,

supplies and appliances for which

OWCP makes payment, who possesses

any applicable licenses required under

State law and who has not been

excluded under the provisions of

subpart I of this part.

(x) Recurrence of disability means an

inability to work after an employee has

returned to work, caused by a

spontaneous and material change in a

medical condition which had resulted

from a previous injury or illness without

an intervening injury or new exposure

to the work environment that caused the

illness. This term also means an

inability to work that takes place when

a light-duty assignment made

specifically to accommodate an

employee’s physical restrictions due to

his or her work-related injury or illness

is withdrawn (except when such

withdrawal occurs for reasons of

misconduct, non-performance of job

duties or a reduction-in-force), or when

the physical requirements of such an

assignment are altered so that they

exceed his or her established physical

restrictions.

(y) Representative means an

individual properly authorized by a

claimant in writing to act for the

claimant in connection with a claim or

proceeding under the FECA or this part.

(z) Student means an individual

defined at 5 U.S.C. 8101(17). Two terms

used in that particular definition are

further defined as follows:

(1) ‘‘Additional type of educational or

training institution’’ means a technical,

trade, vocational, business or

professional school accredited or

licensed by the United States

Government or a state government or

any political subdivision thereof

providing courses of not less than three

months’ duration, that prepares the

individual for a livelihood in a trade,

industry, vocation or profession.

(2) ‘‘Year beyond the high school

level’’ means:

(i) The 12-month period beginning the

month after the individual graduates

from high school, provided he or she

had indicated an intention to continue

schooling within four months of high

school graduation, and each successive

12-month period in which there is

school attendance or the payment of

compensation based on student

attendance; or

(ii) If the individual has indicated that

he or she will not continue schooling

within four months of high school

graduation, the 12-month period

beginning with the month that the

individual enters school to continue his

or her education, and each successive

12-month period in which there is

school attendance or the payment of

compensation based on student status.

(aa) Subluxation means an incomplete

dislocation, off-centering, misalignment,

fixation or abnormal spacing of the

vertebrae which must be demonstrable

on any x-ray film to an individual

trained in the reading of x-rays.

(bb) Surviving spouse means the

husband or wife living with or

dependent for support upon a deceased

employee at the time of his or her death,

or living apart for reasonable cause or

because of the deceased employee’s

desertion.

(cc) Temporary aggravation of a preexisting condition means that factors of

employment have directly caused that

condition to be more severe for a limited

period of time and have left no greater

impairment than existed prior to the

employment injury.

(dd) Traumatic injury means a

condition of the body caused by a

specific event or incident or series of

events or incidents within a single

workday or shift. Such condition must

be caused by external force, including

stress or strain, which is identifiable as

to time and place of occurrence and

member or function of the body

affected.

§ 10.6 What special statutory definitions

apply to dependents and survivors?

(a) 5 U.S.C. 8133 provides that certain

benefits are payable to certain

enumerated survivors of employees who

have died from an injury sustained in

the performance of duty.

(b) 5 U.S.C. 8148 also provides that

certain other benefits are payable to

certain family members of employees

who have been incarcerated due to a

felony conviction.

(c) 5 U.S.C. 8110(b) further provides

that any employee who is found to be

eligible for a basic benefit shall be

entitled to have such basic benefit

augmented at a specified rate for certain

persons who live in the beneficiary’s

household or who are dependent upon

the beneficiary for support.

(d) 5 U.S.C. 8101, 8110, 8133 and

8148, which define the nature of such

survivorship or dependency necessary

to qualify a beneficiary for a survivor’s

benefit or an augmented benefit, apply

to the provisions of this part.

§ 10.7 What forms are needed to process

claims under the FECA?

(a) Notice of injury, claims and certain

specified reports shall be made on forms

prescribed by OWCP. Employers are

expected to maintain an adequate
67140 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

supply of the basic forms needed for the proper recording and reporting of

injuries.

Form No. Title

(1) CA–1 ........... Federal Employee’s Notice of Traumatic Injury and Claim for Continuation of Pay/Compensation.

(2) CA–2 ........... Notice of Occupational Disease and Claim for Compensation.

(3) CA–2a ......... Notice of Employee’s Recurrence of Disability and Claim for Pay/Compensation.

(4) CA–3 ........... Report of Termination of Disability and/or Payment.

(5) CA–5 ........... Claim for Compensation by Widow, Widower and/or Children.

(6) CA–5b ......... Claim for Compensation by Parents, Brothers, Sisters, Grandparents, or Grandchildren.

(7) CA–6 ........... Official Superior’s Report of Employee’s Death.

(8) CA–7 ........... Claim for Compensation Due to Traumatic Injury or Occupational Disease.

(9) CA–8 ........... Claim for Continuing Compensation on Account of Disability.

(10) CA–12 ....... Claim for Continuance of Compensation.

(11) CA–16 ....... Authorization of Examination and/or Treatment.

(12) CA–17 ....... Duty Status Report.

(13) CA–20 ....... Attending Physician’s Report.

(14) CA–20a ..... Attending Physician’s Supplemental Report.

(b) Copies of the forms listed in this

paragraph are available for public

inspection at the Office of Workers’

Compensation Programs, Employment

Standards Administration, U.S.

Department of Labor, Washington, DC

20210. They may also be obtained from

district offices, employers (i.e., safety

and health offices, supervisors), and the

Internet.

Information in Program Records

§ 10.10 Are all documents relating to

claims filed under the FECA considered

confidential?

All records relating to claims for

benefits, including copies of such

records maintained by an employer, are

considered confidential and may not be

released, inspected, copied or otherwise

disclosed except as provided in the

Freedom of Information Act and the

Privacy Act of 1974. All FECA-related

records are covered by the governmentwide Privacy Act system of records

entitled DOL/GOVT–1 (Office of

Workers’ Compensation Programs,

Federal Employees’ Compensation Act

File). The routine uses to which such

records may be put are set forth in the

Notice published in the Federal

Register by the Department of Labor.

The regulations and routine uses

promulgated by the Department of Labor

control decisions regarding access to all

FECA-related records.

§ 10.11 Who maintains custody and

control of FECA records?

All documents covered by DOL/

GOVT–1 are official records of OWCP

and, as such, are maintained by and

under the control of OWCP. While an

employer may establish procedures an

injured employee or FECA beneficiary

should follow in requesting access to

documents it maintains, any decision

issued in response to such a request

must comply with the rules and

regulations of the Department of Labor.

§ 10.12 How may a FECA claimant or

beneficiary obtain copies of protected

records?

(a) A claimant seeking copies of his or

her official FECA file should address a

request to the District Director of the

OWCP office having custody of the file.

A claimant seeking copies of FECArelated documents in the custody of the

employer should follow the procedures

established by that agency. In

responding to a claimant’s request, the

employer must comply with the rules

and regulations of the Department of

Labor which govern all aspects of

safeguarding the records.

(b) Any appeal from a decision

denying access to the FECA-related

documents must be filed with the

Solicitor of Labor as provided in 29 CFR

part 71.

§ 10.13 What process is used by a person

who wants to correct FECA-related

documents?

Any request to amend a record

covered by DOL/GOVT–1 should be

directed to the district office having

custody of the official file. No employer

has the authority to issue

determinations with regard to requests

for the correction of records contained

in or covered by DOL/GOVT–1. Any

request for correction received by an

employer must be referred to OWCP for

review and decision.

Rights and Penalties

§ 10.15 May compensation rights be

waived?

No employer or other person may

require an employee or other claimant

to enter into any agreement, either

before or after an injury or death, to

waive his or her right to claim

compensation under the FECA. No

waiver of compensation rights shall be

valid.

§ 10.16 What are the criminal law penalties

for making a false report in connection with

a claim under the FECA?

(a) A number of statutory provisions

make it a crime to file a false or

fraudulent claim or statement with the

government in connection with a claim

under the FECA. Included among these

provisions are sections 287, 1001, 1920,

and 1922 of title 18, United States Code.

Enforcement of these and other criminal

provisions that may apply to claims

under the FECA are within the

jurisdiction of the Department of Justice.

(b) In addition, administrative

proceedings may be initiated under the

Program Fraud Civil Remedies Act of

1986 (PFCRA), 31 U.S.C. 3801–12, to

impose civil penalties and assessments

against persons who make, submit, or

present, or cause to be made, submitted

or presented, false, fictitious or

fraudulent claims or written statements

to OWCP in connection with a claim

under the FECA. The Department of

Labor’s regulations implementing the

PFRCA are found at 29 CFR part 22.

§ 10.17 Is a beneficiary who defrauds the

government in connection with a claim for

benefits still entitled to those benefits?

When a beneficiary either pleads

guilty to or is found guilty on charges

of defrauding the federal government in

connection with a claim for benefits, the

beneficiary’s entitlement to any further

compensation benefits will terminate

effective the date either the guilty plea

is accepted or a verdict of guilty is

returned after trial, for any injury

occurring on or before the date of such

guilty plea or verdict. Termination of

entitlement under this section is not

affected by any subsequent change in or

recurrence of the beneficiary’s medical

condition.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67141

§ 10.18 Can a beneficiary who is

incarcerated based on a felony conviction

still receive benefits?

(a) Whenever a beneficiary is

incarcerated in a state or federal jail,

prison, penal institution or other

correctional facility due to a state or

federal felony conviction, he or she

forfeits all rights to compensation

benefits during the period of

incarceration. A beneficiary’s right to

compensation benefits for the period of

his or her incarceration is not restored

after such incarceration ends, even

though payment of compensation

benefits may resume.

(b) If the beneficiary has eligible

dependents, OWCP will pay

compensation to such dependents at a

reduced rate during the period of his or

her incarceration, by applying the

percentages of 5 U.S.C. 8133(a)(1)

through (5) to the beneficiary’s gross

current entitlement.

(c) If OWCP’s decision on entitlement

is pending when the period of

incarceration begins, and compensation

is due for a period of time prior to such

incarceration, payment for that period

will only be made to the beneficiary

following his or her release.

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?

(a) To claim benefits under the FECA,

an employee who sustains a workrelated traumatic injury must give

notice of the injury in writing on Form

CA–1, which may be obtained from the

employer. The employee must forward

this notice to the employer. Another

person, including the employer, may

give notice of injury on the employee’s

behalf. The person submitting a notice

shall include the Social Security

Number (SSN) of the injured employee.

(b) For injuries sustained on or after

September 7, 1974, a notice of injury

must be filed within three years of the

injury. (The form contains the necessary

words of claim.) The requirements for

filing notice are further described in 5

U.S.C. 8119. Also see § 10.205

concerning time requirements for filing

claims for continuation of pay.

(1) If the claim is not filed within

three years, compensation may still be

allowed if notice of injury was given

within 30 days or the employer had

actual knowledge of the injury or death

within 30 days after occurrence. This

knowledge may consist of written

records or verbal notification. An entry

into an employee’s medical record may

also satisfy this requirement if it is

sufficient to place the employer on

notice of a possible work-related injury

or disease.

(2) OWCP may excuse failure to

comply with the three-year time

requirement because of truly

exceptional circumstances (for example,

being held prisoner of war).

(3) The claimant may withdraw his or

her claim (but not the notice of injury)

by so requesting in writing to OWCP at

any time before OWCP determines

eligibility for benefits.

§ 10.101 How and when is a claim for wage

loss compensation on account of traumatic

injury filed?

(a) Form CA–7 is used to claim

compensation for initial periods of

disability.

(1) An employee who is disabled with

loss of pay for more than three calendar

days due to an injury, or someone acting

on his or her behalf, must file Form CA–

7 before compensation can be paid.

(2) The employee shall complete the

front of Form CA–7 and submit the form

to the employer for completion and

transmission to OWCP. The form should

be completed as soon as possible, but no

more than 14 calendar days after the

date pay stops due to the injury or

disease.

(3) The requirements for filing claims

are further described in 5 U.S.C. 8121.

(b) Form CA–8 is used to claim

compensation for additional periods of

disability after Form CA–7 is submitted

to OWCP.

(1) It is the employee’s responsibility

to submit Form CA–8. Without receipt

of such claim, OWCP has no knowledge

of continuing wage loss. Therefore,

while disability continues, the

employee should submit a claim on

Form CA–8 each two weeks until

otherwise instructed by OWCP.

(2) The employee shall complete the

front of Form CA–8 and submit the form

to the employer for completion and

transmission to OWCP.

(3) The employee is responsible for

submitting, or arranging for the

submittal of, medical evidence which

establishes both that disability

continues and that the disability is due

to the work-related injury. Form CA–20a

is attached to Form CA–8 for this

purpose.

§ 10.102 How and when is a notice of

occupational disease filed?

(a) To claim benefits under the FECA,

an employee who has a disease which

he or she believes to be work-related

must give notice of the condition in

writing on Form CA–2, which may be

obtained from the employer. The

employee must forward this notice to

the employer. Another person,

including the employer, may do so on

the employee’s behalf. The person

submitting a notice shall include the

Social Security Number (SSN) of the

injured employee. The claimant may

withdraw his or her claim (but not the

Notice of Injury) by so requesting in

writing to OWCP at any time before

OWCP determines eligibility for

benefits.

(b) For occupational diseases

sustained as a result of exposure to

injurious work factors that occurs on or

after September 7, 1974, a notice of

occupational disease must be filed

within three years of the onset of the

condition. (The form contains the

necessary words of claim.) The

requirements for timely filing are

described in § 10.100(b)(1) through (3).

(c) However, in cases of latent

disability, the time for filing claim does

not begin to run until the employee has

a compensable disability and is aware,

or reasonably should have been aware,

of the causal relationship between the

disability and the employment (see 5

U.S.C. 8122(b)).

§ 10.103 How and when is a claim for wage

loss compensation on account of

occupational disease filed?

Compensation for the initial period of

disability, additional periods of

disability, and impairment of a body

part is claimed as described in §§ 10.101

and 10.104.

§ 10.104 How and when is a claim for

permanent impairment filed?

Form CA–7 is used to claim

compensation for impairment to a body

part covered under the schedule

established by 5 U.S.C. 8107. If Form

CA–7 has already been filed to claim

disability compensation, an employee

may file a claim for impairment

compensated according to the schedule

by sending a letter to OWCP which

specifies the nature of the benefit

claimed.

§ 10.105 How and when is a claim for

recurrence filed?

(a) A recurrence should be reported

on Form CA–2a if it causes the

employee to lose time from work and

incur a wage loss. However, a notice of

recurrence should not be filed for time

loss due to traumatic injury during the

period covered by continuation of pay.

Also, a notice of recurrence should not

be filed when a new injury or event

contributing to an occupational disease

has occurred. In these instances, the

employee should file Form CA–1 or

CA–2.
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(b) The employee has the burden of

establishing by the weight of reliable,

probative and substantial evidence that

the recurrence of disability is causally

related to the original injury.

(1) The employee must include a

statement with Form CA–2a describing

his or her duties upon return to work

after the original injury, stating whether

there were any other injuries or illness,

and giving a general description of his

or her physical condition during the

intervening period. The employer may

submit comments concerning the

employee’s statement.

(2) The employee should arrange for

the submittal of a detailed medical

report from the attending physician as

described on Form CA–2a. The

employee should also submit, or arrange

for the submittal of, similar medical

reports for any examination and/or

treatment received after returning to

work following the original injury.

§ 10.106 How and when is a notice of

death and claim for benefits filed?

(a) If an employee dies from a workrelated traumatic injury or an

occupational disease, any survivor may

file a claim for death benefits using

Form CA–5 or CA–5b, which may be

obtained from the employer. The

survivor must provide this notice in

writing and forward it to the employer.

Another person, including the

employer, may do so on the survivor’s

behalf. The claimant may also submit

the completed Form CA–5 or CA–5b

directly to OWCP. The claimant shall

disclose the SSNs of the survivors in

addition to the SSN of the deceased

employee. The claimant may withdraw

his or her claim (but not the notice of

death) by so requesting in writing to

OWCP at any time before OWCP

determines eligibility for benefits.

(b) For deaths that occur on or after

September 7, 1974, a notice of death

must be filed within three years of the

death. The form contains the necessary

words of claim. The requirements for

timely filing are described in § 10.100(b)

(1) through (3).

(c) However, in cases of death due to

latent disability, the time for filing the

claim does not begin to run until the

claimant is aware, or reasonably should

have been aware, of the causal

relationship between the death and the

employment (see 5 U.S.C. 8122(b)).

(d) The filing of a notice of injury will

satisfy the time requirements for a death

claim based on the same injury. If an

injured employee or someone acting on

the employee’s behalf does not file a

claim before the employee’s death, the

right to claim compensation for

disability other than medical expenses

ceases and does not survive.

(e) A survivor must be alive to receive

any payment; there is no vested right to

such payment. A report as described in

§ 10.414 of this part must be filed once

each year to support continuing

payments of compensation.

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?

(a) The employer shall complete the

agency portion of Form CA–1 (for

traumatic injury) or CA–2 (for

occupational disease) no more than five

calendar days after receipt of notice

from the employee. The employer shall

also complete the Receipt of Notice and

give it to the employee.

(b) The employer must transmit the

form to OWCP within five calendar days

if the injury or disease will likely result

in:

(1) A medical charge against OWCP;

(2) Disability for work beyond the day

or shift of injury;

(3) The need for more than two

appointments for medical examination

and/or treatment on separate days,

leading to time loss from work;

(4) Future disability;

(5) Permanent impairment; or

(6) Continuation of pay pursuant to 5

U.S.C. 8118.

(c) The employer should not wait for

submittal of supporting evidence before

sending the form to OWCP.

(d) If none of the conditions in

paragraph (b) of this section applies, the

Form CA–1 or CA–2 shall be retained as

a permanent record in the Employee

Medical Folder in accordance with the

guidelines established by the Office of

Personnel Management.

§ 10.111 What should the employer do

when an employee files an initial claim for

compensation due to disability or

permanent impairment?

(a) When an employee is disabled by

a work-related injury and loses pay for

more than three calendar days, or has a

permanent impairment or serious

disfigurement as described in 5 U.S.C.

8107, the employer shall furnish the

employee with Form CA–7 for the

purpose of claiming compensation.

(b) If the employee is receiving

continuation of pay (COP), the employer

should give Form CA–7 to the employee

by the 30th day of the COP period and

submit the form to OWCP by the 40th

day of the COP period. If the employee

has not returned the form to the

employer by the 40th day of the COP

period, the employer should ask him or

her to submit it as soon as possible.

(c) Upon receipt of Form CA–7 from

the employee, or someone acting on his

or her behalf, the employer shall

complete the appropriate portions of the

form. As soon as possible, but no more

than five working days after receipt

from the employee, the employer shall

forward the completed Form CA–7 and

any accompanying medical report to

OWCP.

§ 10.112 What should the employer do

when an employee files a claim for

continuing compensation due to disability?

(a) If the employee continues in a

leave-without-pay status due to a workrelated injury after the period of

compensation initially claimed on Form

CA–7, the employer shall furnish the

employee with Form CA–8 for the

purpose of claiming continuing

compensation.

(b) Upon receipt of Form CA–8 from

the employee, or someone acting on his

or her behalf, the employer shall

complete the appropriate portions of the

form. As soon as possible, but no more

than five working days after receipt

from the employee, the employer shall

forward the completed Form CA–8 and

any accompanying medical report to

OWCP.

§ 10.113 What should the employer do

when an employee dies from a work-related

injury or disease?

(a) The employer shall immediately

report a death due to a work-related

traumatic injury or occupational disease

to OWCP by telephone, telegram, or

telefax. No more than 10 working days

after notification of the death, the

employer shall complete and send Form

CA–6 to OWCP.

(b) When possible, the employer shall

furnish a Form CA–5 or CA–5b to all

persons likely to be entitled to

compensation for death of an employee.

The employer should also supply

information about completing and filing

the form.

(c) The employer shall promptly

transmit Form CA–5 or CA–5b to

OWCP. The employer shall also

promptly transmit to OWCP any other

claim or paper submitted which appears

to claim compensation on account of

death.

Evidence and Burden of Proof

§ 10.115 What evidence is needed to

establish a claim?

Forms CA–1, CA–2, CA–5 and CA–5b

describe the basic evidence required.

OWCP may send any request for

additional evidence to the claimant and

to his or her representative, if any.

Evidence should be submitted in

writing. The evidence submitted must
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67143

be reliable, probative and substantial.

Each claim for compensation must meet

five requirements before OWCP can

accept it. These requirements are as

follows:

(a) The claim was filed within the

time limits specified by the FECA;

(b) The injured person was, at the

time of injury, an employee of the U.S.

as defined in 5 U.S.C. 8101(1) and

§ 10.5(h) of this part;

(c) The fact that an injury, disease or

death occurred;

(d) The injury, disease or death

occurred while the employee was in the

performance of duty; and

(e) The medical condition for which

compensation or medical benefits is

claimed is causally related to the

claimed injury, disease or death. For

wage loss benefits, the claimant must

also submit medical evidence showing

that the condition claimed is disabling.

The rules for submitting medical reports

are found in §§ 10.330 through 10.333.

§ 10.116 What additional evidence is

needed in cases based on occupational

disease?

(a) The employee must submit the

specific detailed information described

on Form CA–2 and on any checklist

(Form CA–35, A–H) provided by the

employer. OWCP has developed these

checklists to address particular

occupational diseases. The medical

report should also include the

information specified on the checklist

for the particular disease claimed.

(b) The employer should submit the

specific detailed information described

on Form CA–2 and on any checklist

pertaining to the claimed disease.

§ 10.117 What happens if the employer

contests any of the facts as stated by the

claimant?

(a) An employer who has reason to

disagree with any aspect of the

claimant’s report shall submit a

statement to OWCP that specifically

describes the factual allegation or

argument with which it disagrees and

provide evidence or argument to

support its position. The employer may

include supporting documents such as

witness statements, medical reports or

records, or any other relevant

information.

(b) Any such statement shall be

submitted to OWCP with the notice of

traumatic injury or death, or within 30

calendar days from the date notice of

occupational disease or death is

received from the claimant. If the

employer does not submit a written

explanation to support the

disagreement, OWCP may accept the

claimant’s report of injury as

established. The employer may not use

a disagreement with an aspect of the

claimant’s report to delay forwarding

the claim to OWCP or to compel or

induce the claimant to change the claim.

§ 10.118 Does the employer participate in

the claims process in any other way?

(a) The employer is responsible for

submitting to OWCP all relevant and

probative factual and medical evidence

in its possession, or which it may

acquire through investigation or other

means. Such evidence may be submitted

at any time.

(b) The employer may ascertain the

events surrounding an injury and the

extent of disability where it appears that

an employee who alleges total disability

may be performing other work, or may

be engaging in activities which would

indicate less than total disability. This

authority is in addition to that given in

§ 10.118(a). However, the provisions of

the Privacy Act apply to any endeavor

by the employer to ascertain the facts of

the case (see §§ 10.10 and 10.11).

(c) The employer does not have the

right, except as provided in subpart C of

this part, to actively participate in the

claims adjudication process.

§ 10.119 What action will OWCP take with

respect to information submitted by the

employer?

OWCP will consider all evidence

submitted appropriately, and OWCP

will inform the employee, the

employee’s representative, if any, and

the employer of any action taken. Where

an employer contests a claim at time of

the initial submittal and the claim is

later approved, OWCP will notify the

employer of the rationale for approving

the claim.

§ 10.120 May a claimant submit additional

evidence?

A claimant or a person acting on his

or her behalf may submit to OWCP at

any time any other evidence relevant to

the claim.

§ 10.121 What happens if OWCP needs

more evidence from the claimant?

If the claimant submits factual

evidence, medical evidence, or both, but

OWCP determines that this evidence is

not sufficient to meet the burden of

proof, OWCP will inform the employee

of the additional evidence needed. The

claimant will be allowed up to 30

calendar days to submit the evidence

required. OWCP is not required to notify

the claimant a second time if the

evidence submitted in response to its

first request is not sufficient to meet the

burden of proof.

Decisions on Entitlement to Benefits

§ 10.125 How does OWCP determine

entitlement to benefits?

(a) In reaching any decision with

respect to FECA coverage or

entitlement, OWCP considers the claim

presented by the claimant, the report by

the employer, and the results of such

investigation as OWCP may deem

necessary.

(b) OWCP claims staff apply the law,

the regulations, and its procedures to

the facts as reported or obtained upon

investigation. They also apply decisions

of the Employees’ Compensation

Appeals Board and administrative

decisions of OWCP as set forth in FECA

Program Memoranda.

§ 10.126 What does the decision contain?

The decision shall contain findings of

fact and a statement of reasons. It is

accompanied by information about the

claimant’s appeal rights, which may

include the right to a hearing, a

reconsideration, and/or a review by the

Employees’ Compensation Appeals

Board. (See subpart G of this part.)

§ 10.127 To whom is the decision sent?

A copy of the decision shall be mailed

to the employee’s last known address. If

the employee has a designated

representative before OWCP, a copy of

the decision should also be mailed to

the representative. Notification to either

the employee or the representative will

be considered notification to both. A

copy of the decision will also be sent to

the employer.

Subpart C—Continuation of Pay

§ 10.200 What is continuation of pay?

(a) For most employees who sustain a

traumatic injury, the FECA provides

that the employer must continue the

employee’s regular pay during any

periods of resulting disability, up to a

maximum of 45 calendar days. This is

called continuation of pay, or COP. The

employer, not OWCP, pays COP. Unlike

workers’ compensation benefits, COP is

subject to taxes and all other payroll

deductions that are made from regular

income.

(b) While the employer must generally

continue the pay of an employee

entitled to COP, the employer may make

certain preliminary determinations

regarding an employee’s entitlement to

COP (including not paying salary under

§ 10.220 or terminating COP under

§ 10.221), and may in all circumstances

controvert the payment. OWCP has the

exclusive authority to finally determine

questions of entitlement and all other

issues relating to COP.
67144 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

(c) The FECA excludes certain

persons from eligibility for COP. COP

cannot be authorized for members of

these excluded groups, which include

but are not limited to: persons rendering

personal service to the United States

similar to the service of a civil officer or

employee of the United States, without

pay or for nominal pay; volunteers (for

instance, in the Civil Air Patrol and

Peace Corps); Job Corps and Youth

Conservation Corps enrollees;

individuals in work-study programs,

and grand or petit jurors (unless

otherwise federal employees).

Eligibility for COP

§ 10.205 What other conditions must be

met to receive COP?

(a) To be eligible for COP, a person

must:

(1) Have a ‘‘traumatic injury’’ as

defined at § 10.5(dd) which is jobrelated and the cause of the disability;

(2) File Form CA–1 within 30 days of

the date of the injury (but if that form

is not available, using another form

would not alone preclude receipt); and

(3) Begin losing time from work due

to the traumatic injury within 30 days

of the injury.

(b) OWCP may find that the employee

is not entitled to COP for other reasons

consistent with the statute (see

§ 10.220).

§ 10.206 May an employee who uses leave

after an injury later decide to use COP

instead?

On Form CA–1, an employee may

elect to use accumulated sick or annual

leave, or leave advanced by the agency,

instead of electing COP. The employee

can change the election between leave

and COP for prospective periods at any

point while eligibility for COP remains.

The employee may also change the

election for past periods and request

COP in lieu of leave already taken for

the same period. In either situation, the

following provisions apply:

(a) The request must be made to the

employer within one year of the date the

leave was used or the date of the written

approval of the claim by OWCP,

whichever is later.

(b) Where the employee is otherwise

eligible, the agency shall restore leave

taken in lieu of any of the 45 COP days.

Where any of the 45 COP days remain

unused, the agency shall continue pay

prospectively.

(c) The use of leave may not be used

to delay or extend the 45-day COP

period or to otherwise affect the time

limitation as provided by 5 U.S.C. 8117.

Therefore, any leave used during the

period of eligibility counts towards the

45 day maximum entitlement to COP.

§ 10.207 May an employee who returns to

work, then stops work again due to the

effects of the injury, receive COP?

If the employee recovers from

disability and returns to work, then

becomes disabled again and stops work,

the employer shall pay any of the 45

days of entitlement to COP not used

during the initial period of disability

where:

(a) The employee completes Form

CA–2a and elects to receive regular pay;

(b) OWCP did not deny the original

claim for disability;

(c) The disability recurs and the

employee stops work within 30 days of

the time the employee first returned to

work following the initial period of

disability; and

(d) Pay has not been continued for the

entire 45 days.

Responsibilities

§ 10.210 What are the employee’s

responsibilities in COP cases?

An employee who sustains a

traumatic injury which he or she

considers disabling, or someone

authorized to act on his or her behalf,

must take the following actions to

ensure continuing eligibility for COP.

The employee must:

(a) Complete and submit Form CA–1

to the employing agency as soon as

possible, but no later than 30 days from

the date the traumatic injury occurred.

(b) Ensure that medical evidence

supporting disability resulting from the

claimed traumatic injury, including a

statement as to when the employee can

return to his or her date of injury job,

is provided to the employer within 10

calendar days after filing the claim for

COP.

(c) Ensure that relevant medical

evidence is submitted to OWCP, and

cooperate with OWCP in developing the

claim.

(d) Ensure that the treating physician

specifies work restrictions and provides

them to the employer and/or

representatives of OWCP.

(e) Provide to the treating physician a

description of any specific alternative

positions offered the employee, and

ensure that the treating physician

responds promptly to the employer and/

or OWCP, with an opinion as to whether

and how soon the employer could

perform that or any other specific

position.

§ 10.211 What are the employer’s

responsibilities in COP cases?

Once the employer learns of a

traumatic injury sustained by an

employee, it shall:

(a) Provide a Form CA–1 and Form

CA–16 to authorize medical care in

accordance with § 10.300. Failure to do

so may mean that OWCP will not

uphold any termination of COP by the

employer.

(b) Advise the employee of the right

to receive COP, and the need to elect

among COP, annual or sick leave or

leave without pay, for any period of

disability.

(c) Inform the employee of any

decision to controvert COP and/or

terminate pay, and the basis for doing

so.

(d) Complete Form CA–1 (or other

form approved by the Secretary) and

return it, along with all other available

pertinent information, (including the

basis for any controversion), to OWCP

within five calendar days after receiving

the completed form from the employee.

Calculation of COP

§ 10.215 How does OWCP compute the

number of days of COP used?

COP is payable for a maximum of 45

calendar days, and every day used is

counted toward this maximum. The

following rules apply:

(a) Time lost on the day or shift of the

injury does not count toward COP.

(Instead, the agency must keep the

employee in a pay status for that

period);

(b) The first COP day is the first day

disability begins following the date of

injury (providing it is within the 30

days following the date of injury),

except where the injury occurs before

the beginning of the work day or shift,

in which case the date of injury is

charged to COP;

(c) Any part of a day or shift (except

for the day of the injury) counts as a full

day toward the 45 calendar day total;

(d) Regular days off are included if

COP has been used on the regular work

days immediately preceding and

following the regular day(s) off; and

(e) Leave used during a period when

COP is otherwise payable is counted

toward the 45 day COP maximum as if

the employee had been in a COP status.

§ 10.216 How is the pay rate for COP

calculated?

The employer shall calculate COP

using the period of time and the weekly

pay rate.

(a) The pay rate for COP purposes is

equal to the employee’s regular

‘‘weekly’’ pay (the average of the weekly

pay over the preceding 52 weeks).

(1) The pay rate excludes overtime,

but includes applicable premium,

Sunday and holiday pay, night and shift

differential or other extra pay.

(2) Changes in pay or salary (for

example, promotion, demotion, withingrade increases, termination of a
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67145

temporary detail, etc.) which would

have otherwise occurred during the 45-

day period are to be reflected in the

weekly pay determination.

(b) The weekly pay for COP purposes

is determined according to the following

formulas:

(1) For full or part-time workers

(permanent or temporary) who work the

same number of hours each week of the

year (or of the appointment), the weekly

pay rate is the hourly pay rate (A) in

effect on the date of injury multiplied by

(×) the number of hours worked each

week (B): A × B = Weekly Pay Rate.

(2) For part-time workers (permanent

or temporary) who do not work the

same number of hours each week, but

who do work each week of the year (or

period of appointment), the weekly pay

rate is an average of the weekly

earnings, established by dividing (÷) the

total earnings (excluding overtime) from

the year immediately preceding the

injury (A) by the number of weeks (or

part of a week) worked in that year (B):

A÷B = Weekly Pay Rate.

(3) For intermittent, seasonal and oncall workers, whether permanent or

temporary, who do not work either the

same number of hours or every week of

the year (or period of appointment), the

weekly pay rate is the average weekly

earnings established by dividing (÷) the

total earnings during the full 12-month

period immediately preceding the date

of injury (excluding overtime) (A), by

the number of weeks (or part of a week)

worked during that year (B) (that is,

A÷B); or 150 times the average daily

wage earned in the employment during

the days employed within the full year

immediately preceding the date of

injury divided by 52 weeks, whichever

is greater.

§ 10.217 Is COP charged if the employee

continues to work, but in a different job that

pays less?

If the employee cannot perform the

duties of his or her regular position, but

instead works in another job with

different duties with no loss in pay,

then COP is not chargeable. COP must

be paid and the days counted against

the 45 days authorized by law whenever

an actual reduction of pay results from

the injury. This includes work which

results in loss of salary or premium (that

is, Sunday or night differential) pay

authorized for the employee’s normal

administrative workweek.

Controversion and Termination of COP

§ 10.220 When is an employer not required

to pay COP?

An employer shall continue the

regular pay of an eligible employee

without a break in time for up to 45

calendar days, except when:

(a) The disability was not caused by

a traumatic injury;

(b) The employee is not a citizen of

the United States or Canada;

(c) No written claim was filed within

30 days from the date of injury;

(d) The injury was not reported until

after employment has been terminated;

(e) The injury occurred off the

premises and was otherwise not within

the performance of official duties;

(f) The injury was caused by the

employee’s willful misconduct, intent to

injure or kill himself or herself or

another person, or was proximately

caused by intoxication by alcohol or

illegal drugs; or

(g) Work did not stop until more than

30 days following the injury.

§ 10.221 How is a claim for COP

controverted?

When the employer stops an

employee’s pay for one of the reasons in

§ 10.220, the employer must controvert

the claim for COP on Form CA–1,

explaining in detail the basis for the

refusal. The final determination on

entitlement to COP always rests with

OWCP.

§ 10.222 When may an employer terminate

COP which has already begun?

(a) Where the employer has continued

the pay of the employee, it may be

stopped only when at least one of the

following circumstances is present:

(1) Medical evidence which on its

face supports disability due to a workrelated injury, is not received within 10

calendar days after the claim is

submitted (unless the employer’s own

investigation shows disability to exist);

(2) The medical evidence from the

treating physician shows the individual

is not disabled from his or her regular

position;

(3) Medical evidence from the treating

physician shows that the employee is

not totally disabled and the employee

refuses a written offer of a suitable

alternative position as determined by

OWCP;

(4) The employee returns to work

with no loss of pay;

(5) The employee’s period of

employment expires or employment is

otherwise terminated (as established

prior to the date of injury);

(6) OWCP directs the employer to stop

COP; and/or

(7) COP has been paid for 45 calendar

days.

(b) An employer may not interrupt or

stop COP to which the employee is

otherwise entitled because of a

disciplinary action, unless a preliminary

notice was issued to the employee

before the date of injury and the action

becomes final or otherwise takes effect

during the COP period.

(c) An employer must file a

controversion with OWCP, setting forth

the basis on which it terminated COP,

no later than the effective date of the

termination.

§ 10.223 Are there other circumstances

under which OWCP will not authorize

payment of COP?

When OWCP finds that an employee

refuses or obstructs a required medical

examination, the right to COP is

suspended until the refusal or

obstruction ceases. COP already paid or

payable for the period of suspension is

forfeited. If already paid, the COP may

be charged to annual or sick leave or

considered an overpayment of pay

consistent with 5 U.S.C. 5584.

§ 10.224 What happens if OWCP finds that

the employee is not entitled to COP after it

has been paid?

Where OWCP finds that the employee

is not entitled to COP after it has been

paid, the employee may chose to have

the time charged to annual or sick leave,

or considered an overpayment of pay

under 5 U.S.C. 5584. The employer

must correct any deficiencies in COP as

directed by OWCP.

Subpart D—Medical and Related

Benefits

Emergency Medical Care

§ 10.300 What are the basic rules for

authorizing emergency medical care?

(a) When an employee sustains a

work-related traumatic injury that

requires medical examination, medical

treatment, or both, the employer shall

authorize such examination and/or

treatment by issuing a Form CA–16.

This form may be used for occupational

disease or illness only if the employer

has obtained prior permission from

OWCP.

(b) The employer shall issue Form

CA–16 within four hours of the claimed

injury. If the employer gives verbal

authorization for such care, he or she

should issue a Form CA–16 within 48

hours. The employer is not required to

issue a Form CA–16 more than one

week after the occurrence of the claimed

injury. The employer may not authorize

examination or medical or other

treatment in any case that OWCP has

disallowed.

(c) Form CA–16 must contain the full

name and address of the qualified

physician or qualified medical facility

authorized to provide service. The

authorizing official must sign and date
67146 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

the form and must state his or her title.

Form CA–16 authorizes treatment for 60

days from the date of issuance, unless

OWCP terminates the authorization

sooner.

(d) The employee has an initial choice

of physician. The employer shall allow

the employee to select a qualified

physician, after advising him or her of

those physicians excluded under

subpart I of this part. The physician may

be in private practice, including a health

maintenance organization (HMO), or

employed by a federal agency such as

the Department of the Army, Navy, Air

Force, or Veterans Affairs. Any qualified

physician may provide initial treatment

of a work-related injury in an

emergency. See also § 10.825(b).

§ 10.301 May the physician designated on

Form CA–16 refer the employee to another

medical specialist or medical facility?

The physician designated on Form

CA–16 may refer the employee for

further examination, testing, or medical

care. OWCP will pay this physician or

facility’s bill on the authority of Form

CA–16. The employer should not issue

a second Form CA–16.

§ 10.302 Should the employer authorize

medical care if he or she doubts that the

injury occurred, or that it is work-related?

If the employer doubts that the injury

occurred, or that it is work-related, he

or she should authorize medical care by

completing Form CA–16 and checking

block 6B of the form. If the medical and

factual evidence sent to OWCP shows

that the condition treated is not workrelated, OWCP will notify the employee,

the employer, and the physician or

hospital that OWCP will not authorize

payment for any further treatment.

§ 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?

(a) Simple exposure to a workplace

hazard, such as an infectious agent, does

not constitute a work-related injury

entitling an employee to medical

treatment under the FECA. The

employer therefore should not use a

Form CA–16 to authorize medical

testing for an employee who has merely

been exposed to a workplace hazard,

unless the employee has sustained an

identifiable injury or medical condition

as a result of that exposure. OWCP will

authorize preventive treatment only

under certain well-defined

circumstances (see § 10.313).

(b) Employers may be required under

other statutes or regulations to provide

their employees with medical testing

and/or other services in situations

described in paragraph (a) of this

section. For example, regulations issued

by the Occupational Safety and Health

Administration at Chapter XVII of Title

29 of the Code of Federal Regulations

require employers to provide their

employees with medical consultations

and/or examinations when they either

exhibit symptoms consistent with

exposure to a workplace hazard, or

when an identifiable event such as a

spill, leak or explosion occurs and

results in the likelihood of exposure to

a workplace hazard. In addition, 5

U.S.C. 7901 authorizes employers to

establish health programs whose staff

can perform tests for workplace hazards,

counsel employees for exposure or

feared exposure to such hazards, and

provide health care screening and other

associated services.

§ 10.304 Are there any exceptions to these

procedures?

In cases involving emergencies or

unusual circumstances, OWCP may

authorize treatment in a manner other

than as stated in this subpart.

Medical Treatment and Related Issues

§ 10.310 What are the basic rules for

obtaining medical care?

(a) The employee is entitled to receive

all medical services, appliances or

supplies which a qualified physician

prescribes or recommends and which

OWCP considers necessary to treat the

work-related injury. The employee need

not be disabled to receive such

treatment. If there is any doubt as to

whether a specific service, appliance or

supply is necessary to treat the workrelated injury, the employee should

consult OWCP prior to obtaining it.

(b) Any qualified physician or

qualified hospital may provide such

services, appliances and supplies. A

qualified provider of medical support

services may also furnish appropriate

services, appliances, and supplies.

OWCP may apply a test of costeffectiveness to appliances and

supplies. With respect to prescribed

medications, OWCP may require the use

of generic equivalents where they are

available.

§ 10.311 What are the special rules for the

services of chiropractors?

(a) The services of chiropractors that

may be reimbursed are limited by the

FECA to treatment to correct a spinal

subluxation. The costs of physical and

related laboratory tests performed by or

required by a chiropractor to diagnose

such a subluxation are also payable.

(b) In accordance with 5 U.S.C.

8101(3), a diagnosis of spinal

‘‘subluxation as demonstrated by X-ray

to exist’’ must appear in the

chiropractor’s report before OWCP can

consider payment of a chiropractor’s

bill.

(c) A chiropractor may interpret his or

her x-rays to the same extent as any

other physician. To be given any weight,

the medical report must state that x-rays

support the finding of spinal

subluxation. OWCP will not necessarily

require submittal of the x-ray, or a

report of the x-ray, but the report must

be available for submittal on request.

(d) A chiropractor may also provide

services in the nature of physical

therapy under the direction of a

qualified physician.

§ 10.312 What are the special rules for the

services of clinical psychologists?

A clinical psychologist may serve as

a physician only within the scope of his

or her practice as defined by state law.

Therefore, a clinical psychologist may

not serve as a physician for conditions

that include an organic component

unless the applicable state law allows

clinical psychologists to treat organic

conditions. A clinical psychologist may

also perform testing, evaluation and

other services under the direction of a

qualified physician.

§ 10.313 Will OWCP pay for preventive

treatment?

The FECA does not authorize

payment for preventive measures such

as vaccines and inoculations, and in

general, preventive treatment may be a

responsibility of the employing agency

under the provisions of 5 U.S.C. 7901

(see § 10.303). However, OWCP can

authorize treatment for the following

conditions, even though such treatment

is designed, in part, to prevent further

injury:

(a) Complications of preventive

measures which are provided or

sponsored by the agency, such as an

adverse reaction to prophylactic

immunization.

(b) Actual or probable exposure to a

known contaminant due to an injury,

thereby requiring disease-specific

measures against infection. Examples

include the provision of tetanus

antitoxin or booster toxoid injections for

puncture wounds; administration of

rabies vaccine for a bite from a rabid or

potentially rabid animal; or appropriate

measures where exposure to human

immunodeficiency virus (HIV) has

occurred.

(c) Conversion of tuberculin reaction

from negative to positive following

exposure to tuberculosis in the

performance of duty. In this situation,

the appropriate therapy may be

authorized.

(d) Where injury to one eye has

resulted in loss of vision, periodic
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67147

examination of the uninjured eye to

detect possible sympathetic

involvement of the uninjured eye at an

early stage.

§ 10.314 Will OWCP pay for the services of

an attendant?

Yes, the OWCP will pay for the

services of an attendant up to a

maximum of $1,500 per month, where

the need for such services has been

medically documented. In the exercise

of the discretion afforded by 5 U.S.C.

8111(a), the Director has determined

that, except where payments were being

made prior to [insert the effective date

of the final rule], direct payments to the

claimant to cover such services will no

longer be made. Rather, the cost of

providing attendant services will be

paid under section 8103 of the Act. This

decision is based on the following

factors:

(a) The additional payments

authorized under section 8111(a) should

not be necessary since OWCP will

authorize payment for personal care

services under 5 U.S.C. 8103, whether

or not such care includes medical

services, so long as the personal care

services have been determined to be

medically necessary and are provided

by a home health aide, licensed

practical nurse, or similarly trained

individual.

(b) A home health aide, licensed

practical nurse, or similarly trained

individual is better able to provide

quality personal care including

assistance in feeding, bathing, and using

the toilet. In the past, provision of

supplemental compensation directly to

injured employees may have

encouraged family members to take on

these responsibilities even though they

may not have been trained to provide

such services. By paying for the services

under section 8103, OWCP can better

determine whether the services

provided are necessary and/or adequate

to meet the needs of the injured

employee. In addition, a system

requiring the personal care provider to

submit a bill to OWCP will result in

greater fiscal accountability as the

amount billed will be subject to OWCP’s

fee schedule.

§ 10.315 Will OWCP pay for transportation

to obtain medical treatment?

The employee is entitled to

reimbursement of reasonable and

necessary expenses, including

transportation needed to obtain

authorized medical services, appliances

or supplies. To determine what is a

reasonable distance to travel, OWCP

will consider the availability of services,

the employee’s condition, and the

means of transportation. Generally, 25

miles from the place of injury, the work

site, or the employee’s home, is

considered a reasonable distance to

travel. The standard form designated for

federal employees to claim travel

expenses should be used to seek

reimbursement under this section.

§ 10.316 After selecting a treating

physician, may an employee choose to be

treated by another physician instead?

(a) When the physician originally

selected to provide treatment for a workrelated injury refers the employee to a

specialist for further medical care, the

employee need not consult OWCP for

approval. In all other instances,

however, the employee must submit a

written request to OWCP with his or her

reasons for desiring a change of

physician.

(b) OWCP will approve the request if

it determines that the reasons submitted

are sufficient. Requests that are often

approved include those for transfer of

care from a general practitioner to a

physician who specializes in treating

conditions like the work-related one, or

the need for a new physician when an

employee has moved. The employer

may not authorize a change of

physicians.

Directed Medical Examinations

§ 10.320 Can OWCP require an employee

to be examined by another doctor?

OWCP sometimes needs a second

opinion from a medical specialist. The

employee must submit to examination

by a qualified physician as often and at

such times and places as OWCP

considers reasonably necessary. The

employee may have a qualified

physician, paid by him or her, present

at such examination. However, the

employee is not entitled to have anyone

else present at the examination unless

OWCP decides that exceptional

circumstances exist. For example, where

a hearing-impaired employee needs an

interpreter, the presence of an

interpreter would be allowed. Also,

OWCP may send a case file for second

opinion review where actual

examination is not needed, or where the

employee is deceased.

§ 10.321 What happens if the physician

selected by OWCP does not agree with the

physician selected by the employee?

If a conflict exists between the

medical opinion of the employee’s

physician and the medical opinion of

either a second opinion physician or an

OWCP medical adviser or consultant,

OWCP shall appoint a third physician to

make an examination (see 5 U.S.C.

8123(a)). This is called a referee

examination. OWCP will select a

physician who is qualified in the

appropriate specialty and who has had

no prior connection with the case. The

employee is not entitled to have anyone

present at the examination unless

OWCP decides that exceptional

circumstances exist. For example, where

a hearing-impaired employee needs an

interpreter, the presence of an

interpreter would be allowed. Also, a

case file may be sent for referee medical

review where there is no need for an

actual examination, or where the

employee is deceased.

§ 10.322 Who pays for second opinion and

referee examinations?

OWCP will pay second opinion and

referee medical specialists directly.

OWCP will reimburse the employee all

necessary and reasonable expenses

incident to such an examination,

including transportation costs and

actual wages lost for the time needed to

submit to an examination required by

OWCP.

§ 10.323 What are the consequences of

failing to report for or obstructing a second

opinion or referee examination?

If an employee refuses to submit to or

in any way obstructs an examination

required by OWCP, his or her right to

compensation under the FECA is

suspended until such refusal or

obstruction stops. The action of the

employee’s representative is considered

to be the action of the employee for

purposes of this section. The employee

will forfeit compensation otherwise

paid or payable under the FECA for the

period of the refusal or obstruction, and

any compensation already paid for that

period will be declared an overpayment

and will be subject to recovery pursuant

to 5 U.S.C. 8129.

§ 10.324 May an employer require an

employee to undergo a physical

examination in connection with a workrelated injury?

The employer may have authority

independent of the FECA to require the

employee to undergo a medical

examination to determine whether he or

she meets the medical requirements of

the position held or can perform the

duties of that position. Nothing in the

FECA or in this part affects such

authority. However, no agency-required

examination or related activity shall

interfere with the employee’s initial

choice of physician or the provision of

any authorized examination or

treatment, including the issuance of

Form CA–16.
67148 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

Medical Reports

§ 10.330 What are the requirements for

medical reports?

In all cases reported to OWCP, a

medical report from the attending

physician is required. This report

should include:

(a) Dates of examination and

treatment;

(b) History given by the employee;

(c) Physical findings;

(d) Results of diagnostic tests;

(e) Diagnosis;

(f) Course of treatment;

(g) A description of any other

conditions found but not due to the

claimed injury;

(h) The treatment given or

recommended for the claimed injury;

(i) The physician’s opinion, with

medical reasons, as to causal

relationship between the diagnosed

condition(s) and the factors or

conditions of the employment;

(j) The extent of disability affecting

the employee’s ability to work due to

the injury;

(k) The prognosis for recovery; and

(l) All other material findings.

§ 10.331 How and when should the

medical report be submitted?

(a) Form CA–16 may be used for the

initial medical report; Form CA–20 may

be used for the initial report and for

subsequent reports; and Form CA–20a

may be used where continued

compensation is claimed. Use of

medical report forms is not required,

however. The report may also be made

in narrative form on the physician’s

letterhead stationery. The report should

bear the physician’s signature or

signature stamp. OWCP may require an

original signature on the report.

(b) The report shall be submitted

directly to OWCP as soon as possible

after medical examination or treatment

is received, either by the employee or

the physician. (See also § 10.210.) The

employer may request a copy of the

report from OWCP. The employer

should use Form CA–17 to obtain

interim reports concerning the duty

status of an employee with a disabling

traumatic injury.

§ 10.332 What additional medical

information will OWCP require to support

continuing payment of benefits?

In all cases of serious injury or

disease, especially those requiring

hospital treatment or prolonged care,

OWCP will request detailed narrative

reports from the attending physician at

periodic intervals. The physician will be

asked to describe continuing medical

treatment for the condition accepted by

OWCP, a prognosis, a description of

work limitations, if any, and the

physician’s opinion as to the continuing

causal relationship between the

employee’s condition and factors of his

or her federal employment.

§ 10.333 What additional medical

information will OWCP require to support a

claim for a schedule award?

To support a claim for a schedule

award, a medical report must contain

accurate measurements of the function

of the organ or member. These

measurements may include: the actual

degree of loss of active or passive

motion or deformity; the amount of

atrophy; the decrease, if any, in

strength; the disturbance of sensation;

and pain due to nerve impairment.

Medical Bills

§ 10.335 How are medical bills submitted?

Usually, medical providers submit

bills directly to OWCP. The rules for

submitting and paying bills are stated in

subpart I of this part. An employee

claiming reimbursement of medical

expenses should submit an itemized bill

as described in § 10.802.

§ 10.336 What are the time frames for

submitting bills?

To be considered for payment, bills

must be submitted by the end of the

calendar year after the year when the

expense was incurred, or by the end of

the calendar year after the year when

OWCP first accepted the claim as

compensable, whichever is later.

§ 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?

(a) The OWCP fee schedule sets

maximum limits on the amounts

payable for many services (see § 10.805).

The employee may be only partially

reimbursed for medical expenses

because the amount he or she paid to

the medical provider for a service

exceeds the maximum allowable charge

set by the OWCP fee schedule.

(b) If this happens, OWCP shall advise

the provider of the maximum allowable

charge for the service in question and

ask the provider to refund to the

employee, or credit to the employee’s

account, the amount he or she paid

which exceeds the maximum allowable

charge. The provider may request

reconsideration of the fee determination

as provided by § 10.812.

(c) If the provider does not refund to

the employee or credit to his or her

account the amount of money paid in

excess of the charge which OWCP

allows, OWCP may make reasonable

reimbursement to the employee after

reviewing the facts and circumstances of

the case.

Subpart E—Compensation and Related

Benefits

Compensation for Disability and

Impairment

§ 10.400 What is total disability?

(a) Permanent total disability is

presumed to result from the loss of use

of both hands, both arms, both feet, or

both legs, or the loss of sight of both

eyes. However, the presumption of

permanent total disability as a result of

such loss may be rebutted by evidence

to the contrary, such as evidence of

continued ability to work and to earn

wages despite the loss.

(b) Temporary total disability is

defined as the inability to return to the

position held at the time of injury or

earn equivalent wages, or to perform

other gainful employment, due to the

work-related injury. Except as presumed

under paragraph (a) of this section, an

employee’s disability status is always

considered temporary pending return to

work.

§ 10.401 When and how is compensation

for total disability payable?

(a) Compensation is payable when the

employee starts to lose pay if the injury

causes permanent disability or if pay

loss continues for more than 14 days.

Otherwise, compensation is payable on

the fourth day after pay stops.

Compensation may not be paid while an

injured employee is in a continuation of

pay status or receives pay for leave.

(b) Compensation for total disability is

payable at the rate of 662⁄3 percent of the

pay rate if the employee has no

dependents, or 75 percent of the pay

rate if the employee has at least one

dependent.

§ 10.402 What is partial disability?

An injured employee who cannot

return to the position held at the time

of injury (or earn equivalent wages) due

to the work-related injury, but who is

not totally disabled for all gainful

employment, is considered to be

partially disabled.

§ 10.403 When and how is compensation

for partial disability paid?

(a) 5 U.S.C. 8115 outlines how

compensation for partial disability is

determined. If the employee has actual

earnings which fairly and reasonably

represent his or her wage-earning

capacity, those earnings may form the

basis for payment of compensation for

partial disability. If the employee’s

actual earnings do not fairly and

reasonably represent his or her wage-
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67149

earning capacity, or if the employee has

no actual earnings, OWCP uses the

factors stated in 5 U.S.C. 8115 to select

a position which represents his or her

wage-earning capacity. However, OWCP

will not secure employment for the

employee in the position selected for

establishing a wage-earning capacity.

(b) Compensation for partial disability

is payable as a percentage of the

difference between the employee’s pay

rate for compensation purposes and the

employee’s wage-earning capacity. The

percentage is 662⁄3 percent of this

difference if the employee has no

dependents, or 75 percent of this

difference if the employee has at least

one dependent.

(c) The formula which OWCP uses to

compute the compensation payable for

partial disability employs the following

terms: pay rate for compensation

purposes, which is defined in § 10.5(s)

of this part; current pay rate, which

means the salary or wages for the job

held at the time of injury at the time of

the determination; and earnings, which

means the employee’s actual earnings,

or the salary or pay rate of the position

selected by OWCP as representing the

employee’s wage-earning capacity.

(d) The employee’s wage-earning

capacity in terms of percentage is

computed by dividing the employee’s

earnings by the current pay rate. The

comparison of earnings and ‘‘current’’

pay rate for the job held at the time of

injury need not be made as of the

beginning of partial disability. OWCP

may use any convenient date for making

the comparison as long as both wage

rates are in effect on the date used for

comparison.

(e) The employee’s wage-earning

capacity in terms of dollars is computed

by first multiplying the pay rate for

compensation purposes by the

percentage of wage-earning capacity.

The resulting dollar amount is then

subtracted from the pay rate for

compensation purposes to obtain the

employee’s loss of wage-earning

capacity.

§ 10.404 When and how is compensation

for a schedule impairment paid?

Compensation is provided for

specified periods of time for the

permanent loss or loss of use of certain

members, organs and functions of the

body. Such loss or loss of use is known

as permanent impairment.

Compensation for proportionate periods

of time is payable for partial loss or loss

of use of each member, organ or

function. OWCP evaluates the degree of

impairment to schedule members,

organs and functions as defined in 5

U.S.C. 8107 according to the standards

set forth in the specified (by OWCP)

edition of the American Medical

Association’s Guides to the Evaluation

of Permanent Impairment available

from the Order Department, OP–025493,

American Medical Association, P.O.

Box 109050, Chicago, Illinois, 60610.

(a) 5 U.S.C. 8107(c) provides a list of

schedule members. Pursuant to the

authority provided by 5 U.S.C.

8107(c)(22), the Secretary has added the

following organs to the compensation

schedule for injuries that were sustained

on or after September 7, 1974:

Member Weeks

Breast (one) ...................................... 52

Kidney (one) ..................................... 156

Larynx ............................................... 160

Lung (one) ........................................ 156

Penis ................................................. 205

Testicle (one) .................................... 52

Tongue .............................................. 160

Ovary (one) ....................................... 52

Uterus/cervix and vulva/vagina ......... 205

(b) Compensation for schedule awards

is payable at 662⁄3 percent of the

employee’s pay, or 75 percent of the pay

when the employee has at least one

dependent.

(c) The period of compensation

payable under 5 U.S.C. 8107(c) shall be

reduced by the period of compensation

paid or payable under the schedule for

an earlier injury if:

(1) Compensation in both cases is for

impairment of the same member or

function or different parts of the same

member or function, or for

disfigurement; and

(2) OWCP finds that compensation

payable for the later impairment in

whole or in part would duplicate the

compensation payable for the preexisting impairment.

(d) Compensation not to exceed

$3,500 may be paid for serious

disfigurement of the face, head or neck

which is likely to handicap a person in

securing or maintaining employment.

§ 10.405 Who is considered a dependent in

a claim based on disability or impairment?

(a) Dependents include a wife or

husband; an unmarried child under 18

years of age; an unmarried child over 18

who is incapable of self-support; a

student, until he or she reaches 23 years

of age or completes four years of school

beyond the high school level; or a

wholly dependent parent.

(b) Augmented compensation payable

for an unmarried child, which would

otherwise terminate when the child

reached the age of 18, may be continued

while the child is a student as defined

in 5 U.S.C. 8101(17).

§ 10.406 What are the maximum and

minimum rates of compensation in

disability cases?

(a) Compensation for total or partial

disability may not exceed 75 percent of

the basic monthly pay of the highest

step of grade 15 of the General

Schedule. (Basic monthly pay does not

include locality adjustments.) However,

this limit does not apply to disability

sustained in the performance of duty

which was due to an assault which

occurred during an attempted

assassination of a federal official

described under 10 U.S.C. 351(a) or

1751(a).

(b) Compensation for total disability

may not be less than 75 percent of the

basic monthly pay of the first step of

grade 2 of the General Schedule or

actual pay, whichever is less. (Basic

monthly pay does not include locality

adjustments.)

Compensation for Death

§ 10.410 What are the rates of

compensation payable in death cases?

The rates of compensation payable in

death cases are stated in 5 U.S.C. 8133.

§ 10.411 What are the maximum and

minimum rates of compensation in death

cases?

(a) Compensation for death may not

exceed the employee’s pay or 75 percent

of the basic monthly pay of the highest

step of grade 15 of the General

Schedule, except that compensation

may exceed the employee’s basic

monthly pay if such excess is created by

authorized cost-of-living increases.

(Basic monthly pay does not include

locality adjustments.) However, the

maximum limit does not apply when

the death occurred during an

assassination of a federal official

described under 18 U.S.C. 351(a) or 18

U.S.C. 1751(a).

(b) Compensation for death is

computed on a minimum pay rate equal

to the basic monthly pay of an employee

at the first step of grade 2 of the General

Schedule. (Basic monthly pay does not

include locality adjustments.)

§ 10.412 Will OWCP pay the costs of burial

and transportation of the remains?

In a case accepted for death benefits,

OWCP will pay up to $800 for funeral

and burial expenses. When an

employee’s home is within the U.S. and

the employee dies outside the U.S., or

away from home or the official duty

station, an additional amount may be

paid for transporting the remains to the

employee’s home. An additional

amount of $200 is paid to the personal

representative of the decedent for

reimbursement of the costs of
67150 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

terminating the decedent’s status as an

employee of the United States.

§ 10.413 If a person dies while receiving a

schedule award, to whom is the balance of

the schedule award payable?

The circumstances under which the

balance of a schedule award may be

paid to an employee’s survivors are

described in 5 U.S.C. 8109. Therefore, if

there is no surviving spouse or child,

OWCP will pay benefits as follows:

(a) To the parent, or parents, wholly

dependent for support on the decedent

in equal shares with any wholly

dependent brother, sister, grandparent

or grandchild;

(b) To the parent, or parents, partially

dependent for support on the decedent

in equal shares when there are no

wholly dependent brothers, sisters,

grandparents or grandchildren (or other

wholly dependent parent); and

(c) To the parent, or parents, partially

dependent upon the decedent, 25

percent of the amount payable, shared

equally, and the remaining 75 percent to

any wholly dependent brother, sister,

grandparent or grandchild (or wholly

dependent parent), share and share

alike.

§ 10.414 What reports of dependents are

needed in death cases?

If a beneficiary is receiving

compensation benefits on account of an

employee’s death, OWCP will ask him

or her to complete a report once each

year on Form CA–12. The report

requires the beneficiary to note changes

in marital status and dependents. If the

beneficiary fails to submit the form (or

an equivalent written statement) within

30 days of the date of request, OWCP

shall suspend compensation until the

requested form or equivalent written

statement is received. The suspension

will include compensation payable for

or on behalf of another person (for

example, compensation payable to a

widow on behalf of a child). When the

form or statement is received,

compensation will be reinstated at the

appropriate rate retroactive to the date

of suspension, provided the beneficiary

is entitled to such compensation.

§ 10.415 What must a beneficiary do if the

number of beneficiaries decreases?

The circumstances under which

compensation on account of death shall

be terminated are described in 5 U.S.C.

8133(b). A beneficiary in a claim for

death benefits should promptly notify

OWCP of any event which would affect

his or her entitlement to continued

compensation. The terms ‘‘marriage’’

and ‘‘remarriage’’ include common-law

marriage as recognized and defined by

state law in the state where the

beneficiary resides. If a beneficiary, or

someone acting on his or her behalf,

receives a check which includes

payment of compensation for any period

after the date when entitlement ended,

he or she must promptly return the

check to OWCP.

§ 10.416 How does a change in the number

of beneficiaries affect the amount of

compensation paid to the other

beneficiaries?

If compensation to a beneficiary is

terminated, the amount of compensation

payable to one or more of the remaining

beneficiaries may be reapportioned.

Similarly, the birth of a posthumous

child may result in a reapportionment of

the amount of compensation payable to

other beneficiaries. The parent, or

someone acting on the child’s behalf,

shall promptly notify OWCP of the birth

and submit a copy of the birth

certificate.

§ 10.417 What reports are needed when

compensation payments continue for

children over age 18?

(a) Compensation payable on behalf of

a child, brother, sister, or grandchild,

which would otherwise end when the

person reaches 18 years of age, shall be

continued if and for so long as he or she

is not married and is either a student as

defined in 5 U.S.C. 8101(17), or

physically or mentally incapable of selfsupport.

(b) At least twice each year, OWCP

will ask a beneficiary receiving

compensation based on the student

status of a dependent to provide proof

of continuing entitlement to such

compensation, including certification of

school enrollment.

(c) Likewise, at least twice each year,

OWCP will ask a beneficiary or legal

guardian receiving compensation based

on a dependent’s physical or mental

inability to support himself or herself to

submit a medical report verifying that

the dependent’s medical condition

persists and that it continues to

preclude self-support.

Adjustments to Compensation

§ 10.420 How are cost-of-living

adjustments applied?

(a) In cases of disability, a beneficiary

is eligible for cost-of-living adjustments

under 5 U.S.C. 8146(a) where injuryrelated disability began more than one

year prior to the date the cost-of-living

adjustment took effect. The employee’s

use of continuation of pay as provided

by 5 U.S.C. 8118, or of sick or annual

leave, during any part of the period of

disability does not affect the

computation of the one-year period.

(b) Where an injury does not result in

disability but compensation is payable

for permanent impairment of a covered

member, organ or function of the body,

a beneficiary is eligible for cost-of-living

adjustments under 5 U.S.C. 8146(a)

where the award for such impairment

began more than one year prior to the

date the cost-of-living adjustment took

effect.

(c) In cases of recurrence of disability,

where the pay rate for compensation

purposes is the pay rate at the time

disability recurs, a beneficiary is eligible

for cost-of-living adjustments under 5

U.S.C. 8146(a) where the effective date

of that pay rate began more than one

year prior to the date the cost-of living

adjustment took effect.

(d) In cases of death, entitlement to

cost-of-living adjustments under 5

U.S.C. 8146(a) begins with the first such

adjustment occurring more than one

year after the date of death. However, if

the death was preceded by a period of

injury-related disability, compensation

payable to the survivors will be

increased by the same percentages as

the cost-of-living adjustments paid or

payable to the deceased employee for

the period of disability, as well as by

subsequent cost-of-living adjustments to

which the survivors would otherwise be

entitled.

§ 10.421 May a beneficiary receive other

kinds of payments from the federal

government concurrently with

compensation?

(a) 5 U.S.C. 8116(a) provides that a

beneficiary may not receive wage-loss

compensation concurrently with a

federal retirement or survivor annuity.

The beneficiary must elect the benefit

that he or she wishes to receive, and the

election, once made, is revocable.

(b) An employee may receive

compensation concurrently with

military retired pay, retirement pay,

retainer pay or equivalent pay for

service in the Armed Forces or other

uniformed services, subject to the

reduction of such pay in accordance

with 5 U.S.C. 5532(b).

(c) An employee may not receive

compensation for total disability

concurrently with severance pay or

separation pay. However, an employee

may concurrently receive compensation

for partial disability or permanent

impairment to a schedule member with

severance pay or separation pay.

(d) Pursuant to 5 U.S.C. 8116(d), a

beneficiary may receive compensation

under the FECA for either the death or

disability of an employee concurrently

with benefits under title II of the Social

Security Act on account of the age or

death of such employee. However, this

provision of the FECA also requires

OWCP to reduce the amount of any such
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compensation by the amount of any

Social Security Act benefits that are

attributable to the federal service of the

employee.

(e) To determine the employee’s

entitlement to compensation, OWCP

may require an employee to submit an

affidavit or statement as to the receipt of

any federally funded or federally

assisted benefits. If an employee fails to

submit such affidavit or statement

within 30 days of the date of the

request, his or her right to compensation

shall be suspended until such time as

the requested affidavit or report is

received. At that time compensation

will be reinstated retroactive to the date

of suspension provided the employee is

entitled to such compensation.

§ 10.422 May compensation payments be

issued in a lump sum?

(a) In exercise of the discretion

afforded under 5 U.S.C. 8135(a), OWCP

has determined that lump-sum

payments will not be made to persons

entitled to wage-loss benefits (that is,

those payable under 5 U.S.C. 8105 and

8106). Therefore, when OWCP receives

requests for lump-sum payments for

wage-loss benefits, OWCP will not

exercise further discretion in the matter.

This determination is based on several

factors, including:

(1) The purpose of the FECA, which

is to replace lost wages;

(2) The prudence of providing wageloss benefits on a regular, recurring

basis; and

(3) The high cost of the long-term

borrowing that is needed to pay out

large lump sums.

(b) However, a lump sum payment

may be made to an employee entitled to

a schedule award under 5 U.S.C. 8107

where OWCP determines that such a

payment is in the employee’s best

interest. Lump-sum payments of

schedule awards generally will be

considered in the employee’s best

interest only where the employee does

not rely upon compensation payments

as a substitute for lost wages (that is, the

employee is working or is receiving

annuity payments). An employee

possesses no absolute right to a lumpsum payment of benefits payable under

5 U.S.C. 8107.

(c) Lump-sum payments to surviving

spouses are addressed in 5 U.S.C.

8135(b).

§ 10.423 May compensation payments be

assigned to, or attached by, creditors?

(a) As a general rule, compensation

and claims for compensation are exempt

from the claims of private creditors.

This rule does not apply to claims

submitted by federal agencies. Further,

any attempt by a FECA beneficiary to

assign his or her claim is null and void.

However, pursuant to provisions of the

Social Security Act, 42 U.S.C. 659, and

regulations issued by the Office of

Personnel Management (OPM) at 5 CFR

part 581, FECA benefits, including

survivor’s benefits, may be garnished to

collect overdue alimony and child

support payments.

(b) Garnishment for child support and

alimony may be requested by providing

a copy of the state agency or court order

to the district office handling the FECA

claim.

§ 10.424 May someone other than the

beneficiary be designated to receive

compensation payments?

A beneficiary may be incapable of

managing or directing the management

of his or her benefits because of a

mental or physical disability, or because

of legal incompetence, or because he or

she is under 18 years of age. In this

situation, absent the appointment of a

guardian or other party to manage the

financial affairs of the claimant by a

court or administrative body authorized

to do so, OWCP in its sole discretion

may approve a person to serve as the

representative payee for funds due the

beneficiary.

Overpayments

§ 10.430 How does OWCP notify an

individual of a payment made?

(a) In addition to providing narrative

descriptions to recipients of benefits

paid or payable, OWCP includes on

each periodic check an indication of the

period for which payment is being

made. A form is sent to the recipient

with each supplemental check which

states the date and amount of the

payment and the period for which

payment is being made. For payments

sent by electronic funds transfer (EFT),

a notification of the date and amount of

payment appears on the statement from

the recipient’s financial institution.

(b) By these means, OWCP puts the

recipient on notice that a payment was

made and the amount of the payment.

If the amount received differs from the

amount indicated on the written notice

or bank statement, the recipient is

responsible for notifying OWCP of the

difference. Absent affirmative evidence

to the contrary, the beneficiary will be

presumed to have received the notice of

payment, whether mailed or transmitted

electronically.

§ 10.431 What does OWCP do when an

overpayment is identified?

Before seeking to recover an

overpayment or adjust benefits, OWCP

will advise the beneficiary in writing

that:

(a) The overpayment exists, and the

amount of overpayment;

(b) A preliminary finding shows

either that the individual was or was not

at fault in the creation of the

overpayment;

(c) He or she has the right to inspect

and copy Government records relating

to the overpayment; and

(d) He or she has the right to present

evidence which challenges the fact or

amount of the overpayment, and/or

challenges the preliminary finding that

he or she was at fault in the creation of

the overpayment. He or she may also

request that recovery of the

overpayment be waived.

§ 10.432 How can an individual present

evidence to OWCP in response to a

preliminary notice of an overpayment?

The individual may present this

evidence to OWCP in writing or at a prerecoupment hearing. The evidence must

be presented or the hearing requested

within 30 days of the date of the written

notice of overpayment. Failure to

request the hearing within this 30-day

time period shall constitute a waiver of

that right.

§ 10.433 Under what circumstances can

OWCP waive recovery of an overpayment?

(a) OWCP may consider waiving an

overpayment only if the individual to

whom it was made was not at fault in

accepting or creating the overpayment.

Each recipient of compensation benefits

is responsible for taking all reasonable

measures to ensure that payments he or

she receives from OWCP are proper. The

recipient must show good faith and

exercise a high degree of care in

reporting events which may affect

entitlement to or the amount of benefits.

A recipient who has done any of the

following will be found to be at fault

with respect to creating an

overpayment:

(1) Made an incorrect statement as to

a material fact which he or she knew or

should have known to be incorrect; or

(2) Failed to provide information

which he or she knew or should have

known to be material; or

(3) Accepted a payment which he or

she knew or should have known to be

incorrect. (This provision applies only

to the overpaid individual.)

(b) Whether or not OWCP determines

that an individual was at fault with

respect to the creation of an

overpayment depends on the

circumstances surrounding the

overpayment. The degree of care

expected may vary with the complexity

of those circumstances and the
67152 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

individual’s capacity to realize that he

or she is being overpaid.

§ 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?

If OWCP finds that the recipient of an

overpayment was not at fault,

repayment will still be required unless:

(a) Adjustment or recovery of the

overpayment would defeat the purpose

of the FECA (see § 10.436), or

(b) Adjustment or recovery of the

overpayment would be against equity

and good conscience (see § 10.437).

§ 10.435 Is an individual responsible for an

overpayment that resulted from an error by

OWCP or another government agency?

(a) The fact that OWCP may have

erred in making the overpayment, or

that the overpayment may have resulted

from an error by another Government

agency, does not by itself relieve the

individual who received the

overpayment from liability for

repayment if the individual also was at

fault in accepting the overpayment.

(b) However, OWCP may find that the

individual was not at fault if failure to

report an event affecting compensation

benefits, or acceptance of an incorrect

payment, occurred because:

(1) The individual relied on

misinformation given in writing by

OWCP (or by another governmental

agency which he or she had reason to

believe was connected with the

administration of benefits) as to the

interpretation of a pertinent provision of

the FECA or its regulations; or

(2) OWCP erred in calculating cost-ofliving increases, schedule award length

and/or percentage of impairment, or loss

of wage-earning capacity.

§ 10.436 Under what circumstances would

recovery of an overpayment defeat the

purpose of the FECA?

Recovery of an overpayment will

defeat the purpose of the FECA if such

recovery would cause hardship to a

currently or formerly entitled

beneficiary because:

(a) The beneficiary from whom OWCP

seeks recovery needs substantially all of

his or her current income (including

compensation benefits) to meet current

ordinary and necessary living expenses;

and

(b) The beneficiary’s assets do not

exceed a specified amount as

determined by OWCP from data

furnished by the Bureau of Labor

Statistics. A higher amount is specified

for a beneficiary with one or more

dependents.

§ 10.437 Under what circumstances would

recovery of an overpayment be against

equity and good conscience?

(a) Recovery of an overpayment is

considered to be against equity and

good conscience when any individual

who received an overpayment would

experience severe financial hardship in

attempting to repay the debt.

(b) Recovery of an overpayment is

also considered to be against equity and

good conscience when any individual,

in reliance on such payments or on

notice that such payments would be

made, gives up a valuable right or

changes his or her position for the

worse. In making such a decision,

OWCP does not consider the

individual’s current ability to repay the

overpayment.

(1) To establish that a valuable right

has been relinquished, it must be shown

that the right was in fact valuable, that

it cannot be regained, and that the

action was based chiefly or solely in

reliance on the payments or on the

notice of payment. Donations to

charitable causes or gratuitous transfers

of funds to other individuals are not

considered relinquishments of valuable

rights.

(2) To establish that an individual’s

position has changed for the worse, it

must be shown that the decision made

would not otherwise have been made

but for the receipt of benefits, and that

this decision resulted in a loss.

§ 10.438 Can OWCP require the individual

who received the overpayment to submit

additional financial information?

(a) The individual who received the

overpayment is responsible for

providing information about income,

expenses and assets as specified by

OWCP. This information is needed to

determine whether or not recovery of an

overpayment would defeat the purpose

of the FECA, or be against equity and

good conscience. This information will

also be used to determine the repayment

schedule, if necessary.

(b) Failure to submit the requested

information within 30 days of the

request shall result in denial of waiver,

and no further request for waiver shall

be considered until the requested

information is furnished.

§ 10.439 May other issues be addressed at

the pre-recoupment hearing?

At the pre-recoupment hearing, the

OWCP representative will consider all

issues in the claim on which a formal

decision has been issued. The hearing

will thus fulfill OWCP’s obligation to

provide pre-recoupment rights and a

hearing under 5 U.S.C. 8124(b). Prerecoupment hearings shall be conducted

in exactly the same manner as provided

in § 10.615 through § 10.622.

§ 10.440 How does OWCP communicate

its final decision concerning recovery of an

overpayment, and what appeal right

accompanies it?

(a) OWCP will send a copy of the final

decision to the individual from whom

recovery is sought; his or her

representative, if any; and the

employing agency.

(b) The only review of a final decision

concerning an overpayment is to the

Employees’ Compensation Appeals

Board. The provisions of 5 U.S.C.

8124(b) (concerning hearings) and 5

U.S.C. 8128(a) (concerning

reconsiderations) do not apply to such

a decision.

§ 10.441 How are overpayments collected?

(a) When an overpayment has been

made to an individual who is entitled to

further payments, the individual shall

refund to OWCP the amount of the

overpayment as soon as the error is

discovered or his or her attention is

called to same. If no refund is made,

OWCP shall decrease later payments of

compensation, taking into account the

probable extent of future payments, the

rate of compensation, the financial

circumstances of the individual, and

any other relevant factors, so as to

minimize any hardship. Should the

individual die before collection has

been completed, collection shall be

made by decreasing later payments, if

any, payable under the FECA with

respect to the individual’s death.

(b) When an overpayment has been

made to an individual who is not

entitled to further payments, the

individual shall refund to OWCP the

amount of the overpayment as soon as

the error is discovered or his or her

attention is called to same. The

overpayment is subject to the provisions

of the Debt Collection Act of 1982 and

may be reported to the Internal Revenue

Service as income. If the individual fails

to make such refund, OWCP may

recover the same through any available

means, including offset of salary,

annuity benefits, or other Federal

payments, including tax refunds as

authorized by the Tax Refund Offset

Program, or referral of the debt to a

collection agency or to the Department

of Justice.

Subpart F—Continuing Entitlement to

Benefits

§ 10.500 What are the basic rules

governing continuing receipt of

compensation benefits?

OWCP’s goal is to return each

disabled employee to suitable work as
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67153

soon as medically able. ‘‘Suitable work’’

is defined as employment which is:

appropriate to the nature of the injury;

the degree of physical impairment; the

employee’s usual work; the employee’s

age; the employee’s qualifications for

other work; and the availability of the

work.

(a) Benefits are available only while

the effects of a work-related condition

continue. Compensation for wage loss

due to disability is available only for

any periods during which an

employee’s work-related medical

condition prevents him or her from

earning the wages earned before the

work-related injury. Payment of medical

benefits is available for all treatment

necessary due to a work-related medical

condition. The employee is responsible

for providing sufficient medical

evidence to justify payment of any

compensation sought.

(1) To support payment of continuing

compensation, narrative medical

evidence must be submitted whenever

OWCP requests it but not less than once

a year. It must contain a physician’s

rationalized opinion as to whether the

specific period of alleged disability is

causally related to the employee’s

accepted injury or illness.

(2) The physician’s opinion must be

based on the facts of the case and the

complete medical background of the

employee, must be one of reasonable

medical certainty and must include

objective findings in support of its

conclusions. Subjective complaints of

pain are not sufficient, in and of

themselves, to support payment of

continuing compensation. Likewise,

medical restrictions based solely on the

fear of a possible future injury are also

not sufficient to support payment of

continuing compensation. See § 10.330

for a fuller discussion of medical

evidence.

(b) OWCP may require any kind of

non-invasive testing to determine the

employee’s functional capacity. In

addition, OWCP may direct the

employee to undergo a second opinion

or referee examination in any case it

deems appropriate (see §§ 10.320 and

10.321).

(c) In considering the medical and

factual evidence, OWCP will weigh the

probative value of the attending

physician’s report, any second opinion

physician’s report, any other medical

reports, or any other evidence in the

file. If OWCP determines that the

medical evidence supporting one

conclusion is more consistent, logical,

and well-reasoned than evidence

supporting a contrary conclusion,

OWCP will use the conclusion that is

supported by the weight of the medical

evidence as the basis for awarding or

denying further benefits. If medical

reports that are equally well-reasoned

support inconsistent determinations of

an issue under consideration, OWCP

will direct the employee to undergo a

referee examination to resolve the issue.

The results of the referee examination

will be given special weight in

determining the issue.

(d) Once OWCP has advised the

employee that it has accepted a claim

and has either approved continuation of

pay or paid medical benefits or

compensation, benefits will not be

terminated or reduced unless the weight

of the evidence establishes that:

(1) The disability for which

compensation was paid has ceased;

(2) The disabling condition is no

longer causally related to the

employment;

(3) The employee is only partially

disabled;

(4) The employee has returned to

work;

(5) The beneficiary was convicted of

fraud in connection with a claim under

the FECA, or the beneficiary was

incarcerated based on any felony

conviction; or

(6) OWCP’s initial decision was in

error.

Return to Work—Employer’s

Responsibilities

§ 10.505 What actions must the employer

take?

Upon authorizing medical care, the

employer should advise the employee in

writing as soon as possible of his or her

obligation to return to work under

§ 10.210 and as defined in this subpart.

The term ‘‘return to work’’ as used in

this subpart is not limited to returning

to work at the employee’s normal

worksite or usual position, but may

include returning to work at other

locations and in other positions. In

general, the employer should make all

reasonable efforts to place the employee

in his or her former or an equivalent

position, in accordance with 5 U.S.C.

8151(b)(2), if the employee has fully

recovered within one year. The Office of

Personnel Management (not OWCP)

administers this provision.

(a) Where the employer has specific

alternative positions available for

partially disabled employees, the

employer should advise the employee of

the specific duties and physical

requirements of those positions.

(b) Where the employer has no

specific alternative positions available

for an employee who can perform

restricted or limited duties, the

employer should advise the employee of

any accommodations the agency can

make to accommodate the employee’s

limitations due to the injury.

(c) The employer must make any job

offer in writing. The offer must include

a description of the duties of the

position, the physical requirements of

those duties, and the date by which the

employee is either to return to work or

notify the employer of his or her

decision to accept or refuse the job offer.

The employer must send a complete

copy of any job offer to OWCP when it

is sent to the employee.

§ 10.506 May the employer monitor the

employee’s medical care?

The employer may monitor the

employee’s medical progress and duty

status by obtaining periodic medical

reports. Form CA–17 is provided for this

purpose. To aid in returning an injured

employee to suitable employment, the

employer may also contact the

employee’s physician in writing

concerning the work limitations

imposed by the effects of the injury and

possible job assignments. When such

contact is made, the employer shall

send a copy of any such correspondence

to OWCP and the employee, as well as

a copy of the physician’s response when

received. The employer may also

contact the employee at reasonable

intervals to request periodic medical

reports addressing his or her ability to

return to work.

§ 10.507 How should the employer make

an offer of suitable work?

Where the attending physician or

OWCP notifies the employer in writing

that the employee is partially disabled

(that is, the employee can perform some

work but not return to the position held

at date of injury), the employer should

act as follows:

(a) If the employee can perform in a

specific alternative position available in

the agency, and the employer has

advised the employee of the specific

duties and physical requirements, the

employer should notify the employee

immediately of the date of availability.

(b) If the employee can perform

restricted or limited duties, the

employer should determine whether

such duties are available or whether an

existing job can be modified. If so, the

employer shall advise the employee of

the duties, their physical requirements

and availability.

§ 10.508 May relocation expenses be paid

for an employee who would need to move

to accept an offer of reemployment?

If possible, the employer should offer

suitable reemployment in the location

where the employee currently resides. If

this is not practical, the employer may
67154 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

offer suitable reemployment at the

employee’s former duty station or other

location. Where the distance between

the location of the offered job and the

location where the employee currently

resides is at least 50 miles, OWCP may

pay such relocation expenses as are

considered reasonable and necessary if

the employee has been terminated from

the agency’s employment rolls and

would incur relocation expenses by

accepting the offered reemployment.

OWCP may also pay such relocation

expenses when the new employer is

other than a federal employer. To

determine whether a relocation expense

is reasonable and necessary, OWCP

shall use as a guide the federal travel

regulations for permanent changes of

duty station.

§ 10.509 If an employee’s light-duty job is

eliminated due to downsizing, what is the

effect on compensation?

(a) In general, an employee will not be

considered to have experienced a

compensable recurrence of disability as

defined in § 10.5(x) merely because his

or her employer has eliminated the

employee’s light-duty position in a

reduction-in-force or some other form of

downsizing. When this occurs, OWCP

will determine the employee’s wageearning capacity based on his or her

actual earnings in such light-duty

position if this determination is

appropriate on the basis that such

earnings fairly and reasonably represent

the employee’s wage-earning capacity

and such a determination has not

already been made.

(b) For the purposes of this section

only, a ‘‘light-duty position’’ means a

classified position that conforms to the

established physical restrictions of the

injured employee and for which the

employer has already prepared a written

position description such that the

position constitutes ‘‘regular’’ federal

employment. In the absence of a ‘‘light

duty position’’ as described in this

paragraph, OWCP will assume that the

employee was instead engaged in noncompetitive employment which does

not represent the employee’s wageearning capacity, i.e., work of the type

provided to injured employees who

cannot otherwise be employed by the

federal government or in any wellknown branch of the general labor

market.

Return to Work—Employee’s

Responsibilities

§ 10.515 What actions must the employee

take?

(a) If an employee can resume regular

federal employment because total

disability has ceased, he or she must do

so. No further compensation for wage

loss is payable once the employee has

recovered from the work-related injury

to the extent that he or she can perform

the duties of the position held at the

time of injury, or earn equivalent wages.

(b) If an employee cannot return to the

job held at the time of injury due to

partial disability from the effects of the

work-related injury, but has recovered

enough to perform some type of work,

he or she must accept suitable work.

(See § 10.500 for a definition of

‘‘suitable work’’.) This work may be

with the original employer or through

job placement efforts made by or on

behalf of OWCP.

(c) If the employer has advised an

employee in writing that specific

alternative positions exist within the

agency, the employee shall provide the

description and physical requirements

of such alternate positions to the

attending physician and ask whether

and when he or she will be able to

perform such duties.

(d) If the employer has advised an

employee that it is willing to

accommodate his or her work

limitations, the employee shall so

advise the attending physician and ask

him or her to specify the limitations

imposed by the injury. The employee is

responsible for advising the employer

immediately of these limitations.

(e) From time to time, OWCP may

require the employee to report his or her

efforts to obtain suitable employment,

whether with the federal government,

state and local governments, or in the

private sector.

§ 10.516 How will an employee know if

OWCP considers a job to be suitable?

OWCP shall advise the employee that

it has found the offered work to be

suitable and afford the employee 30

days to accept the job or present any

reasons to counter OWCP’s finding of

suitability. If the employee presents

such reasons, and OWCP determines

that the reasons are unacceptable, it will

notify the employee of that

determination and that he or she has 15

days in which to accept the offered

work without penalty. At that point in

time, OWCP’s notification need not state

the reasons for finding that the

employee’s reasons are not acceptable.

§ 10.517 What are the penalties for

refusing to accept a suitable job offer?

(a) 5 U.S.C. 8106(c) provides that a

partially disabled employee who refuses

to seek suitable work, or refuses to or

neglects to work after suitable work is

offered to or arranged for him or her, is

not entitled to compensation. An

employee who refuses or neglects to

work after suitable work has been

offered or secured for him or her has the

burden to show that this refusal or

failure to work was reasonable or

justified.

(b) After providing the two notices

described in § 10.516, OWCP will

terminate the employee’s entitlement to

further compensation under 5 U.S.C.

8105, 8106, and 8107, as provided by 5

U.S.C. 8106(c)(2). However, the

employee remains entitled to medical

benefits as provided by 5 U.S.C. 8103.

§ 10.518 Does OWCP provide services to

help employees return to work?

(a) OWCP may, in its discretion,

provide vocational rehabilitation

services as authorized by 5 U.S.C. 8104.

These services include assistance from

registered nurses working under the

direction of OWCP. Among other things,

these nurses visit the worksite, ensure

that the duties of the position do not

exceed the medical limitations as

represented by the weight of medical

evidence established by OWCP, and

address any problems the employee may

have in adjusting to the work setting.

The nurses do not evaluate medical

evidence; OWCP claims staff perform

this function.

(b) Vocational rehabilitation services

may also include vocational evaluation,

testing, training, and placement services

with either the original employer or a

new employer, when the injured

employee cannot return to the job held

at the time of injury. These services also

include functional capacity evaluations,

which help to tailor individual

rehabilitation programs to employees’

physical reconditioning and behavioral

modification needs, and help employees

to meet the demands of current or

potential jobs.

§ 10.519 What action will OWCP take if an

employee refuses to undergo vocational

rehabilitation?

Under 5 U.S.C. 8104(a), OWCP may

direct a permanently disabled employee

to undergo vocational rehabilitation. If

an employee without good cause fails or

refuses to apply for, undergo, participate

in, or continue to participate in a

vocational rehabilitation effort when so

directed, OWCP will act as follows:

(a) Where a suitable job has been

identified, OWCP will reduce the

employee’s future monetary

compensation based on the amount

which would likely have been his or her

wage-earning capacity had he or she

undergone vocational rehabilitation.

OWCP will determine this amount in

accordance with the job identified

through the vocational rehabilitation

planning process, which includes
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meetings with the OWCP nurse and the

employer. The reduction will remain in

effect until such time as the employee

acts in good faith to comply with the

direction of OWCP.

(b) Where a suitable job has not been

identified, because the failure or refusal

occurred in the early but necessary

stages of a vocational rehabilitation

effort (that is, meetings with the OWCP

nurse, interviews, testing, counseling,

functional capacity evaluations, and

work evaluations), OWCP cannot

determine what would have been the

employee’s wage-earning capacity.

(c) Under the circumstances identified

in paragraph (b) of this section, in the

absence of evidence to the contrary,

OWCP will assume that the vocational

rehabilitation effort would have resulted

in a return to work with no loss of wageearning capacity, and OWCP will reduce

the employee’s monetary compensation

accordingly (that is, to zero). This

reduction will remain in effect until

such time as the employee acts in good

faith to comply with the direction of

OWCP.

§ 10.520 How does OWCP determine

compensation after an employee completes

a vocational rehabilitation program?

After completion of a vocational

rehabilitation program, OWCP may

adjust compensation to reflect the

injured worker’s wage-earning capacity.

Actual earnings will be used if they

fairly and reasonably reflect the earning

capacity. The position determined to be

the goal of a training plan is assumed to

represent the employee’s earning

capacity if it is suitable and performed

in sufficient numbers so as to be

reasonably available, whether or not the

employee is placed in such a position.

Reports of Earnings From Employment

and Self-Employment

§ 10.525 What information must the

employee report?

(a) An employee who is receiving

compensation for partial or total

disability must advise OWCP

immediately of any return to work,

either part-time or full-time. In addition,

an employee who is receiving

compensation for partial or total

disability will periodically be required

to submit a report of earnings from

employment or self-employment, either

part-time or full-time. (See § 10.5(g) for

a definition of ‘‘earnings’’.)

(b) The employee must report even

those earnings which do not seem likely

to affect his or her level of benefits.

Many kinds of income, though not all,

will result in reduction of compensation

benefits. While earning income will not

necessarily result in a reduction of

compensation, failure to report income

may result in forfeiture of all benefits

paid during the reporting period.

§ 10.526 Must the employee report selfemployment?

The employee is required to report

self-employment, including volunteer

work or any other kind of activity which

shows that the employee is no longer

totally disabled for work.

§ 10.527 Does OWCP verify reports of

earnings?

To make proper determinations of an

employee’s entitlement to benefits,

OWCP may attempt to verify the

earnings reported by the employee

through a variety of means, including

but not limited to computer matches

with the Office of Personnel

Management and inquiries to the Social

Security Administration. Also, OWCP

may perform computer matches with

records of state workers’ compensation

administrations to determine whether

private employers are paying workers’

compensation insurance premiums for

recipients of benefits under the FECA.

§ 10.528 What action will OWCP take if the

employee fails to file a report of activity

indicating an ability to work?

OWCP periodically requires each

employee who is receiving

compensation benefits to complete an

affidavit as to any work, or activity

indicating an ability to work, which the

employee has performed for the prior 15

months. If an employee who is required

to file such a report fails to do so within

30 days of the date of the request, his

or her right to compensation for wage

loss under 5 U.S.C. 8105 or 8106 is

suspended until OWCP receives the

requested report. At that time, OWCP

will reinstate compensation retroactive

to the date of suspension if the

employee remains entitled to

compensation.

§ 10.529 What action will OWCP take if the

employee files an incomplete report?

(a) If an employee knowingly omits or

understates any earnings or work

activity in making a report, he or she

shall forfeit the right to compensation

with respect to any period for which the

report was required. A false or evasive

statement, omission, concealment, or

misrepresentation with respect to

employment activity or earnings in a

report may also subject an employee to

criminal prosecution.

(b) Where the right to compensation is

forfeited, OWCP shall recover any

compensation already paid for the

period of forfeiture pursuant to 5 U.S.C.

8129 and other relevant statutes.

Reports of Dependents

§ 10.535 How are dependents defined, and

what information must the employee

report?

(a) Dependents are defined in

§ 10.405. While the employee has one or

more dependents, the employee’s basic

compensation for wage loss or for

permanent impairment shall be

augmented as provided in 5 U.S.C.

8110. (The rules for death claims are

found in § 10.414.)

(b) An employee who is receiving

augmented compensation on account of

dependents must advise OWCP

immediately of any change in the

number or status of dependents. The

employee should also promptly refund

to OWCP any amounts received on

account of augmented compensation

after the right to receive augmented

compensation has ceased. Any

difference between actual entitlement

and the amount already paid beyond the

date entitlement ended is an

overpayment of compensation and may

be recovered pursuant to 5 U.S.C. 8129

and other relevant statutes.

(c) An employee who is receiving

augmented compensation shall be

periodically required to submit a

statement as to any dependents, or to

submit supporting documents such as

birth or marriage certificates or court

orders, to determine if he or she is still

entitled to augmented compensation.

§ 10.536 What is the penalty for failing to

submit a report of dependents?

If an employee fails to submit a

requested statement or supporting

document within 30 days of the date of

the request, OWCP will suspend his or

her right to augmented compensation

until OWCP receives the requested

statement or supporting document. At

that time, OWCP will reinstate

augmented compensation retroactive to

the date of suspension, provided that

the employee is entitled to receive

augmented compensation.

§ 10.537 What reports are needed when

compensation payments continue for

children over age 18?

(a) Compensation payable on behalf of

a child that would otherwise end when

the child reaches 18 years of age will

continue if and for so long as he or she

is not married and is either a student as

defined in 5 U.S.C. 8101(17), or

physically or mentally incapable of selfsupport.

(b) At least twice each year, OWCP

will ask an employee who receives

compensation based on the student

status of a child to provide proof of

continuing entitlement to such
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compensation, including certification of

school enrollment.

(c) Likewise, at least twice each year,

OWCP will ask an employee who

receives compensation based on a

child’s physical or mental inability to

support himself or herself to submit a

medical report verifying that the child’s

medical condition persists and that it

continues to preclude self-support.

(d) If an employee fails to submit

proof within 30 days of the date of the

request, OWCP will suspend the

employee’s right to compensation until

the requested information is received.

At that time OWCP will reinstate

compensation retroactive to the date of

suspension, provided the employee is

entitled to such compensation.

Reduction and Termination of

Compensation

§ 10.540 When and how is compensation

reduced or terminated?

(a) Except as provided in paragraphs

(b) and (c) of this section, where the

evidence establishes that compensation

should be either reduced or terminated,

OWCP will provide the beneficiary with

written notice of the proposed action

and give him or her 30 days to submit

relevant evidence or argument to

support entitlement to continued

payment of compensation. This notice

will include a description of the reasons

for the proposed action and a copy of

the evidence upon which OWCP is

basing its determination. Payment of

compensation will continue until any

evidence or argument submitted has

been reviewed and an appropriate

decision has been issued, or until 30

days have elapsed if no additional

evidence or argument is submitted.

(b) OWCP will not provide such

written notice when the beneficiary has

no reasonable basis to expect that

payment of compensation will continue.

For example, when a claim has been

made for a specific period of time and

that specific period expires, no written

notice will be given. Written notice will

also not be given when a beneficiary

dies, when OWCP either reduces or

terminates compensation when an

employee returns to work, when OWCP

terminates medical benefits only after a

physician indicates that further medical

treatment is not necessary or has ended,

or when OWCP denies payment for a

particular medical expense.

(c) OWCP will also not provide such

written notice when compensation is

suspended or forfeited due to one of the

following: a beneficiary’s conviction for

fraud in connection with a claim under

the FECA, a beneficiary’s incarceration

based on any felony conviction, an

employee’s failure to report earnings

from employment or self-employment,

an employee’s failure or refusal to either

continue performing suitable work or to

accept an offer of suitable work, or an

employee’s refusal to undergo or

obstruction of a directed medical

examination or treatment for substance

abuse.

§ 10.541 What action will OWCP take after

issuing written notice of its intention to

reduce or terminate compensation?

(a) If the beneficiary submits evidence

or argument prior to the issuance of the

decision, OWCP will evaluate it in light

of the proposed action and undertake

such further development as it may

deem appropriate, if any. Evidence or

argument which is repetitious,

cumulative, or irrelevant will not

require any further development. If the

beneficiary does not respond within 30

days of the written notice, OWCP will

issue a decision consistent with its prior

notice. OWCP will not grant any request

for an extension of this 30-day period.

(b) Evidence or argument which

refutes the evidence upon which the

proposed action was based will result in

the continued payment of

compensation. If the beneficiary submits

evidence or argument which fails to

refute the evidence upon which the

proposed action was based but which

requires further development, OWCP

will not provide the beneficiary with

another notice of its proposed action

upon completion of such development.

Once any further development of the

evidence is completed, OWCP will

either continue payment or issue a

decision consistent with its prior notice.

Subpart G—Review Process

§ 10.600 How can final decisions of OWCP

be reviewed?

There are three methods for reviewing

an initial final decision of the OWCP

(§§ 10.125–10.127 discuss how

decisions are made). These methods are:

reconsideration by the district office; a

hearing before an OWCP hearing

representative; and appeal to the

Employees’ Compensation Appeals

Board (ECAB). For each method there

are time limitations and other

restrictions which may apply, and not

all options are available for all

decisions, so the employee should

consult the requirements set forth

below. Further rules governing appeals

to ECAB are found at part 501 of this

title.

Reconsiderations and Reviews by the

Director

§ 10.605 What is reconsideration?

The FECA provides that the Director

may review an award for or against

compensation upon application by an

employee (or his or her representative)

who receives an adverse decision. The

employee shall exercise this right

through a request to the district office.

The request, along with the supporting

statements and evidence, is called the

‘‘application for reconsideration.’’

§ 10.606 How does a claimant request

reconsideration?

(a) An employee (or representative)

seeking reconsideration should send the

application for reconsideration to the

address as instructed by OWCP in the

final decision.

(b) The application for

reconsideration, including all

supporting documents, must:

(1) Be submitted in writing;

(2) Set forth arguments and contain

evidence that either:

(i) Shows that OWCP erroneously

applied or interpreted a specific point of

law;

(ii) Advances a relevant legal

argument not previously considered by

OWCP; or

(iii) Constitutes relevant and pertinent

new evidence not previously considered

by OWCP.

§ 10.607 What is the deadline for

requesting reconsideration?

(a) An application for reconsideration

must be sent within one year of the date

of the OWCP decision for which review

is sought. If submitted by mail, the

application will be deemed timely if

postmarked by the U.S. Postal Service

within the time period allowed. If there

is no such postmark, or it is not legible,

other evidence such as (but not limited

to) certified mail receipts, certificate of

service, and affidavits, may be used to

establish the mailing date.

(b) OWCP will consider an untimely

application for reconsideration only if

the application demonstrates clear

evidence of error on the part of OWCP

in its most recent merit decision. The

application must establish, on its face,

that such decision was erroneous.

§ 10.608 How does OWCP decide whether

to grant or deny the request for

reconsideration?

(a) A timely request for

reconsideration may be granted if

OWCP determines that the employee

has presented evidence and/or argument

that meets at least one of the standards

described in § 10.606(b)(2). If

reconsideration is granted, the case is
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reopened and the case is reviewed on its

merits (see § 10.609).

(b) Where the request is timely but

fails to meet at least one of the standards

described in § 10.606(b)(2), or where the

request is untimely and fails to present

any clear evidence of error, OWCP will

deny the application for reconsideration

without reopening the case for a review

on the merits. A decision denying an

application for reconsideration cannot

be the subject of another application for

reconsideration. The only review for

this type of non-merit decision is an

appeal to the ECAB (see § 10.625), and

OWCP will not entertain a request for

reconsideration or a hearing on this

decision denying reconsideration.

§ 10.609 How does OWCP decide whether

new evidence requires modification of the

prior decision?

When application for reconsideration

is granted, OWCP will review the

decision for which reconsideration is

sought on the merits and determine

whether the new evidence or argument

requires modification of the prior

decision.

(a) After OWCP decides to grant

reconsideration, but before undertaking

the review, OWCP will send a copy of

the reconsideration application to the

employer, which will have 15 days from

the date sent to comment or submit

relevant documents. OWCP will provide

any such comments to the employee,

who will have 15 days from the date the

comments are sent to him or her within

which to comment. If no comments are

received from the employer, OWCP will

proceed with the merit review of the

case.

(b) A claims examiner who did not

participate in making the contested

decision will conduct the merit review

of the claim. When all evidence has

been reviewed, OWCP will issue a new

merit decision, based on all the

evidence in the record. A copy of the

decision will be provided to the agency.

(c) An employee dissatisfied with this

new merit decision may again request

reconsideration under this subpart or

appeal to the ECAB. An employee may

not request a hearing on this decision.

§ 10.610 What is a review by the Director?

The FECA specifies that an award for

or against payment of compensation

may be reviewed at any time on the

Director’s own motion. Such review

may be made without regard to whether

there is new evidence or information. If

the Director determines that a review of

the award is warranted (including, but

not limited to circumstances indicating

a mistake of fact or law or changed

conditions), the Director (at any time

and on the basis of existing evidence)

may modify, rescind, decrease or

increase compensation previously

awarded, or award compensation

previously denied. A review on the

Director’s own motion is not subject to

a request or petition and none shall be

entertained.

(a) The decision whether or not to

review an award under this section is

solely within the discretion of the

Director. The Director’s exercise of this

discretion is not subject to review by the

ECAB, nor can it be the subject of a

reconsideration or hearing request.

(b) Where the Director reviews an

award on his or her own motion, any

resulting decision is subject as

appropriate to reconsideration, a

hearing and/or appeal to the ECAB.

Jurisdiction on review or on appeal to

ECAB is limited to a review of the

merits of the resulting decision. The

Director’s determination to review the

award is not reviewable.

Hearings

§ 10.615 What is a hearing?

A hearing is a review of an adverse

decision by a hearing representative.

Initially, the claimant can choose

between two formats: an oral hearing or

a review of the written record. At the

discretion of the hearing representative,

an oral hearing may be conducted by

telephone or teleconference. In addition

to the evidence of record, the employee

may submit new evidence to the hearing

representative.

§ 10.616 How does a claimant obtain a

hearing?

(a) A claimant, injured on or after July

4, 1966, who has received a final

adverse decision by the district office

may obtain a hearing by writing to the

address specified in the decision. The

hearing request must be sent within 30

days (as determined by postmark or

other carrier’s date marking) of the date

of the decision for which a hearing is

sought. The claimant must not have

previously submitted a reconsideration

request (whether or not it was granted)

on the same decision.

(b) The claimant may specify the type

of hearing desired when making the

original hearing request. If the request

does not specify a format, OWCP will

schedule an oral hearing. The claimant

can request a change in the format of the

hearing by making a written request to

the Branch of Hearings and Review. A

request received by the Branch of

Hearings and Review before either the

date OWCP issues notice that the record

is closed for written review, or the date

OWCP issues a notice that OWCP has

set a date for an oral hearing, will be

granted. A request received after that

date will be subject to OWCP’s

discretion. The decision to grant or deny

a change of format is not reviewable.

§ 10.617 How is an oral hearing

conducted?

(a) The hearing representative retains

complete discretion to set the time and

place of the hearing, including the

amount of time allotted for the hearing,

considering the issues to be resolved.

(b) Unless otherwise directed in

writing by the claimant, the hearing

representative will mail a notice of the

time and place of the oral hearing to the

claimant and any representative at least

30 days before the scheduled date. The

employer will also be notified at least 30

days before the scheduled date.

(c) The hearing is an informal process,

and the hearing representative is not

bound by common law or statutory rules

of evidence, by technical or formal rules

of procedure or by section 5 of the

Administrative Procedure Act. During

the hearing process, the claimant may

state his or her arguments and present

new written evidence in support of the

claim.

(d) Testimony at oral hearings is

recorded, then transcribed and placed in

the record. Oral testimony shall be made

under oath.

(e) OWCP will furnish a transcript of

the oral hearing to the claimant and the

employer, who have 15 days from the

date it is sent to comment. Any

comments received from the employer

shall be sent to the claimant, who will

be given an additional 15 days to

comment from the date OWCP sends

any agency comments.

(f) The hearing remains open for the

submittal of additional evidence until

the date the decision is mailed to the

claimant’s last known address and to

any representative. A copy of the

decision will also be mailed to the

employer.

(g) The hearing representative

determines the conduct of the oral

hearing and may terminate the hearing

at any time he or she determines that all

relevant evidence has been obtained, or

because of misbehavior on the part of

the claimant and/or representative at or

near the place of the oral presentation.

§ 10.618 How is a review of the written

record conducted?

(a) The hearing representative will

review the official record and any

additional evidence submitted by the

claimant and by the agency. The hearing

representative may also conduct

whatever investigation is deemed

necessary. New evidence and arguments

may be submitted at any time up to the
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time the hearing is closed, but it should

be submitted as soon as possible to

avoid delaying the hearing process.

(b) The claimant should submit, with

his or her application for review, all

evidence or argument that he or she

wants to present to the hearing

representative. A copy of all pertinent

material will be sent to the employer,

which will have 15 days from the date

it is sent to comment. (Medical evidence

is not considered ‘‘pertinent’’ for review

and comment by the agency, and it will

therefore not be furnished to the agency.

OWCP has sole responsibility for

evaluating medical evidence.) Any

comments received from the employer

shall be sent to the claimant, who will

be given an additional 15 days to

comment from the date OWCP sends

any agency comments.

§ 10.619 May subpoenas be issued for

witnesses and documents?

A claimant may request a subpoena,

but the decision to grant or deny such

a request is within the discretion of the

hearing representative. The hearing

representative may issue subpoenas for

the attendance and testimony of

witnesses, and for the production of

books, records, correspondence, papers

or other relevant documents. Subpoenas

are issued for documents only if they

are relevant and cannot be obtained by

other means, and for witnesses only

where oral testimony is the best way to

ascertain the facts.

(a) A claimant may request a

subpoena only as part of the hearings

process, and no subpoena will be issued

under any other part of the claims

process. To request a subpoena, the

requestor must:

(1) Submit the request in writing and

send it to the hearing representative as

early as possible but no later than 60

days (as evidenced by postmark,

electronic marker or other objective date

mark) after the date of the original

hearing request.

(2) Explain why the testimony or

evidence is directly relevant to the

issues at hand, and a subpoena is the

best method or opportunity to obtain

such evidence because there are no

other means by which the documents or

testimony could have been obtained.

(b) No subpoena will be issued for

attendance of employees of OWCP

acting in their official capacities as

decision-makers or policy

administrators. For hearings taking the

form of a review of the written record,

no subpoena for the appearance of

witnesses will be considered.

(c) The hearing representative issues

the subpoena under his or her own

name. It may be served in person or by

certified mail, return receipt requested,

addressed to the person to be served at

his or her last known principal place of

business or residence. A decision to

deny a subpoena can only be appealed

as part of an appeal of any adverse

decision which results from the hearing.

§ 10.620 Who pays the costs associated

with subpoenas?

(a) Witnesses who are not employees

or former employees of the federal

government shall be paid the same fees

and mileage as paid for like services in

the District Court of the United States

where the subpoena is returnable,

except that expert witnesses shall be

paid a fee not to exceed the local

customary fee for such services.

(b) Where OWCP asked that the

witness submit evidence into the case

record or asked that the witness attend,

OWCP shall pay the fees and mileage.

Where the claimant requested the

subpoena, and where the witness

submitted evidence into the record at

the request of the claimant, the claimant

shall pay the fees and mileage.

§ 10.621 What is the employer’s role when

an oral hearing has been requested?

(a) The employer may send a

representative to observe the

proceeding, but the agency

representative cannot give testimony or

argument or otherwise participate in the

hearing, except where the claimant or

the hearing representative specifically

asks the agency representative to testify.

(b) The hearing representative may

deny a request by the claimant that the

agency representative testify where the

claimant cannot show that the

testimony would be relevant or where

the agency representative does not have

the appropriate level of knowledge to

provide such evidence at the hearing.

The employer may also comment on the

hearing transcript, as described in

§ 10.618(b).

§ 10.622 May a claimant withdraw a

request for or postpone a hearing?

(a) The claimant and/or representative

may withdraw the hearing request at

any time up to and including the day

the hearing is held, or the decision

issued. Withdrawing the hearing request

means the record is returned to the

jurisdiction of the district office and no

further requests for a hearing on the

underlying decision will be considered.

(b) OWCP will entertain any

reasonable request for scheduling the

oral hearing, but such requests should

be made at the time of the original

request; scheduling is at the sole

discretion of the hearing representative,

and is not reviewable. Once the oral

hearing is scheduled and OWCP has

mailed appropriate written notice to the

claimant, the oral hearing cannot be

postponed at the claimant’s request for

any reason, unless the hearing

representative can reschedule the

hearing on the same docket (that is,

during the same hearing trip). When the

request to postpone a scheduled hearing

cannot be accommodated on the docket,

no further opportunity for an oral

hearing will be provided. Instead, the

hearing will take the form of a review

of the written record and a decision

issued accordingly. In the alternative, a

teleconference may be substituted for

the oral hearing at the discretion of the

hearing representative.

Review by the Employees’

Compensation Appeals Board (ECAB)

§ 10.625 What kinds of decisions may be

appealed?

Only final decisions of OWCP may be

appealed to the ECAB. However, certain

types of final decisions, described in

this part as not subject to further review,

cannot be appealed to the ECAB.

Decisions that are not appealable to the

ECAB include: decisions concerning the

amounts payable for medical services,

decisions concerning exclusion and

reinstatement of medical providers,

decisions by the Director to review an

award on his or her own motion, and

denials of subpoenas independent of the

appeal of the underlying decision. In

appeals before the ECAB, attorneys from

the Office of the Solicitor of Labor shall

represent OWCP.

§ 10.626 Who has jurisdiction of cases on

appeal to the ECAB?

While a case is on appeal to the

ECAB, OWCP has no jurisdiction over

the claim with respect to issues which

directly relate to the issue or issues on

appeal. The OWCP continues to

administer the claim and retains

jurisdiction over issues unrelated to the

issue or issues on appeal and issues

which arise after the appeal as a result

of ongoing administration of the case.

Such issues would include, for example,

the ability to terminate benefits where

an individual returns to work while an

appeal is pending at the ECAB.

Subpart H—Special Provisions

Representation

§ 10.700 May a claimant designate a

representative?

(a) The claims process under the

FECA is informal. Unlike many workers’

compensation laws, the employer is not

a party to the claim, and OWCP acts as

an impartial evaluator of the evidence.

Nevertheless, a claimant may appoint

one individual to represent his or her
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67159

interests, but the appointment must be

in writing.

(b) There can be only one

representative at any one time, so after

one representative has been properly

appointed, OWCP will not recognize

another individual as representative

until the claimant withdraws the

authorization of the first individual. In

addition, OWCP will recognize only

certain types of individuals (see

§ 10.701).

(c) A properly appointed

representative who is recognized by

OWCP may make a request or give

direction to OWCP regarding the claims

process, including a hearing. This

authority includes presenting or

eliciting evidence, making arguments on

facts or the law, and obtaining

information from the case file, to the

same extent as the claimant. Any notice

requirement contained in this subpart or

the FECA is fully satisfied if served on

the representative, and has the same

force and effect as if sent to the

claimant.

§ 10.701 Who may serve as a

representative?

A claimant may authorize any

individual to represent him or her in

regard to a claim under the FECA,

unless that individual’s service as a

representative would violate any

applicable provision of law (such as 18

U.S.C. 205 and 208). A federal employee

may act as a representative only:

(a) On behalf of immediate family

members, defined as a spouse, children,

parents, and siblings of the

representative, provided no fee or

gratuity is charged; or

(b) While acting as a union

representative, defined as any officially

sanctioned union official, provided such

representation would not conflict with

any other provision of law, and no fee

or gratuity is charged.

§ 10.702 How are fees for services paid?

A representative may charge the

claimant a fee and other costs associated

with the representation before OWCP.

The claimant is solely responsible for

paying the fee and other charges. The

claimant will not be reimbursed by

OWCP, nor is OWCP in any way liable

for the amount of the fee.

Administrative costs (mailing, copying,

messenger services, travel and the like,

but not including secretarial services,

paralegal and other activities) need not

be approved before the representative

collects them. Before any fee for services

can be collected, however, the fee must

be approved by the Secretary.

(Collecting a fee without this approval

may constitute a misdemeanor under 18

U.S.C. 292.)

§ 10.703 How are fee applications

approved?

(a) Fee application. (1) The

representative must submit the fee

application to the district office and/or

the Branch of Hearings and Review,

according to where the work for which

the fee is charged was performed. The

application shall contain the following:

(i) An itemized statement showing the

representative’s hourly rate, the number

of hours worked and specifically

identifying the work performed and a

total amount charged for the

representation (excluding

administrative costs).

(ii) A statement of agreement or

disagreement with the amount charged,

signed by the claimant. The statement

must also acknowledge that the

claimant is aware that he or she must

pay the fees and that OWCP is not

responsible for paying the fee or other

costs.

(2) An incomplete application will be

returned with no further comment.

(b) Approval where there is no

dispute. Where a fee application is

accompanied by a signed statement

indicating the claimant’s agreement

with the fee as described in paragraph

(a)(2) of this section, the application is

deemed approved.

(c) Disputed requests. (1) Where the

claimant disagrees with the amount of

the fee, as indicated in the statement

accompanying the submission, OWCP

will evaluate the objection and decide

whether or not to approve the request.

OWCP will provide a copy of the

request to the claimant and ask him or

her to submit any further information in

support of the objection within 15 days

from the date the request is forwarded.

After that period has passed, OWCP will

evaluate the information received to

determine whether the amount of the

fee is substantially in excess of the value

of services received by looking at the

following factors:

(i) Usefulness of the attorney’s

services;

(ii) The nature and complexity of the

claim;

(iii) The actual time spent on

development and presentation of the

claim; and

(iv) Customary local charges for

similar services.

(2) Where the claimant disputes the

attorney’s request and files an objection

with OWCP, an appealable decision will

be issued.

Third Party Liability

§ 10.705 When must an employee or other

FECA beneficiary take action against a third

party?

(a) If an injury or death for which

benefits are payable under the FECA is

caused, wholly or partially, by someone

other than a federal employee acting

within the scope of his or her

employment, the claimant can be

required to take action against that third

party.

(b) The Office of the Solicitor of Labor

(SOL) is hereby delegated authority to

administer the subrogation aspects of

certain FECA claims for OWCP. Either

OWCP or SOL can require a FECA

beneficiary to assign his or her claim for

damages to the United States or to

prosecute the claim in his or her own

name.

§ 10.706 How will a beneficiary know if

OWCP or SOL has determined that action

against a third party is required?

When OWCP determines that an

employee or other FECA beneficiary

must take action against a third party, it

will notify the employee or beneficiary

in writing. If the case is transferred to

SOL, a second notification may be

issued.

§ 10.707 What must a FECA beneficiary

who is required to take action against a

third party do to satisfy the requirement

that the claim be ‘‘prosecuted’’?

At a minimum, a FECA beneficiary

must do the following:

(a) Seek damages for the injury or

death from the third party, either

through an attorney or on his or her own

behalf;

(b) Either initiate a lawsuit within the

appropriate statute of limitations period

or obtain a written release of this

obligation from OWCP or SOL unless

recovery is possible through a

negotiated settlement prior to filing suit;

(c) Refuse to settle or dismiss the case

for any amount less than the amount

necessary to repay OWCP’s refundable

disbursements, as defined in § 10.714,

without receiving permission from

OWCP or SOL;

(d) Provide periodic status updates

and other relevant information in

response to requests from OWCP or

SOL;

(e) Submit detailed information about

the amount recovered and the costs of

the suit on a ‘‘Statement of Recovery’’

form approved by OWCP; and

(f) Pay any required refund.
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§ 10.708 Can a FECA beneficiary who

refuses to comply with a request to assign

a claim to the United States or to prosecute

the claim in his or her own name be

penalized?

When a FECA beneficiary refuses a

request to either assign a claim or

prosecute a claim in his or her own

name, OWCP may determine that he or

she has forfeited his or her right to all

past or future compensation for the

injury with respect to which the request

is made. Alternatively, OWCP may also

suspend the FECA beneficiary’s

compensation payments until he or she

complies with the request.

§ 10.709 What happens if a beneficiary

directed by OWCP or SOL to take action

against a third party does not believe that

a claim can be successfully prosecuted at

a reasonable cost?

If a beneficiary consults an attorney

and is informed that a suit for damages

against a third party for the injury or

death for which benefits are payable is

unlikely to prevail or that the costs of

such a suit are not justified by the

potential recovery, he or she should

request that OWCP or SOL release him

or her from the obligation to proceed.

This request should be in writing and

provide evidence of the attorney’s

opinion. If OWCP or SOL agrees, the

beneficiary will not be required to take

further action against the third party.

§ 10.710 Under what circumstances must a

recovery of money or other property in

connection with an injury or death for which

benefits are payable under the FECA be

reported to OWCP or SOL?

Any person who has filed a FECA

claim that has been accepted by OWCP

(whether or not compensation has been

paid), or who has received FECA

benefits in connection with a claim filed

by another, is required to notify OWCP

or SOL of the receipt of money or other

property as a result of a settlement or

judgment in connection with the

circumstances of that claim. This

includes an injured employee, and in

the case of a claim involving the death

of an employee, a spouse, children or

other dependents entitled to receive

survivor’s benefits. OWCP or SOL

should be notified in writing within 30

days of the receipt of such money or

other property or the acceptance of the

FECA claim, whichever occurs later.

§ 10.711 How much of any settlement or

judgment must be paid to the United

States?

The statute permits a FECA

beneficiary to retain, as a minimum,

one-fifth of the net amount of money or

property remaining after a reasonable

attorney’s fee and the costs of litigation

have been deducted from the third-party

recovery. The U.S. shares in the

litigation expense by allowing the

beneficiary to retain, at the time of

distribution, an amount equivalent to a

reasonable attorney’s fee proportionate

to the refund due the United States.

After the refund owed to the United

States is calculated, the FECA

beneficiary retains any surplus

remaining, and this amount is credited,

dollar for dollar, against future

compensation for the same injury, as

defined in § 10.719. OWCP will resume

the payment of compensation only after

the FECA beneficiary has been awarded

compensation which exceeds the

amount of the surplus.

(a) The refund to the United States is

calculated as follows, using the

Statement of Recovery form approved

by OWCP:

(1) Determine the gross recovery as set

forth in § 10.712;

(2) Subtract the amount of attorney’s

fees actually paid, but not more than the

maximum amount of attorney’s fees

considered by OWCP or SOL to be

reasonable, from the gross recovery

(Subtotal A);

(3) Subtract the costs of litigation, as

allowed by OWCP or SOL (Subtotal B);

(4) Subtract one fifth of Subtotal B

from Subtotal B (Subtotal C);

(5) Compare Subtotal C and the

refundable disbursements as defined in

§ 10.714. Subtotal D is the lower of the

two amounts.

(6) Multiply Subtotal D by a

percentage that is determined by

dividing the gross recovery into the

amount of attorney’s fees actually paid,

but not more than the maximum amount

of attorney’s fees considered by OWCP

or SOL to be reasonable, to determine

the government’s allowance for

attorney’s fees, and subtract this amount

from Subtotal D.

(b) The credit against future benefits

(also referred to as the surplus) is

calculated as follows:

(1) If Subtotal C, as calculated

according to paragraph (a)(4) of this

section, is less than the refundable

disbursements, as defined in § 10.714,

there is no credit to be applied against

future benefits;

(2) If Subtotal C is greater than the

refundable disbursements, the credit

against future benefits (or surplus)

amount is determined by subtracting the

refundable disbursements from Subtotal

C.

(c) An example of how these

calculations are made follows. In this

example, a federal employee sues

another party for causing injuries for

which the employee has received

$22,000 in benefits under the FECA,

subject to refund. The suit is settled and

the injured employee receives $100,000,

all of which was for his injury. The

injured worker paid attorney’s fees of

$25,000 and costs for the litigation of

$3,000.

(1) Gross recovery ........................ $100,000

Attorney’s fees ............................. ¥25,000

(2) Subtotal A ............................... 75,000

(3) Costs of suit ............................ ¥3,000

Subtotal B ..................................... ¥72,000

One-fifth of Subtotal B ................ ¥14,400

(4) Subtotal C ............................... 57,600

Refundable Disbursement ........... 22,000

(5) Subtotal D (lower of Subtotal

C or refundable disbursements) ....................................... 22,000

(6) Government’s allowance for

attorney’s fees [25,000/

100,000×22,000] ....................... ¥5,500

(Attorney’s fees divided by gross

recovery then multiplied by

Subtotal D) Refund to the

United States ............................ 16,500

(7) Credit against future benefits

[57,600¥22,000] (Subtotal C

minus refundable disbursements) ....................................... 35,600

§ 10.712 What amounts are included in the

gross recovery?

(a) When a settlement or judgment is

paid to, or for, one individual, the entire

amount, except for the portion

representing damage to real or personal

property, is reported as the gross

recovery. If a settlement or judgment is

paid to or for more than one individual

or in more than one capacity, such as a

joint payment to a husband and wife for

personal injury and loss of consortium

or a payment to a spouse representing

both loss of consortium and wrongful

death, the gross recovery to be reported

is the amount allocated to the injured

employee. If a judge or jury specifies the

percentage of a contested verdict

attributable to each of several plaintiffs,

OWCP or SOL will accept that division.

(b) In any other case, where a

judgment or settlement is paid to or on

behalf of more than one individual,

OWCP or SOL will determine the

appropriate amount of the FECA

beneficiary’s gross recovery and advise

the beneficiary of its determination.

FECA beneficiaries may accept OWCP’s

or SOL’s determination or demonstrate

good cause for a different allocation.

Whether to accept a specific allocation

is at the discretion of SOL or OWCP.
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§ 10.713 How is a structured settlement

(that is, a settlement providing for receipt of

funds over a specified period of time)

treated for purposes of reporting the gross

recovery?

In this situation, the gross recovery to

be reported is the present value of the

right to receive all of the payments

included in the structured settlement,

allocated in the case of multiple

recipients in the same manner as single

payment recoveries.

§ 10.714 What amounts are included in the

refundable disbursements?

The refundable disbursements of a

specific claim consist of the total money

paid by OWCP from the Employees’

Compensation Fund with respect to that

claim to or on behalf of a FECA

beneficiary, less charges for any medical

file review (i.e., the physician does not

examine the employee) done at the

request of OWCP. Charges for medical

examinations also may be subtracted if

the FECA beneficiary establishes that

the examinations were required to be

made available to the employee under a

statute other than the FECA by the

employing agency or at the employing

agency’s cost.

§ 10.715 Is a beneficiary required to pay

interest on the amount of the refund due to

the United States?

If the refund due to the United States

is not submitted within 30 days of

receiving a request for payment from

SOL or OWCP, interest shall accrue on

the refund due to the United States from

the date of the request. The rate of

interest assessed shall be the rate of the

current value of funds to the United

States Treasury as published in the

Federal Register (as of the date the

request for payment is sent). Waiver of

the collection of interest shall be in

accordance with the provisions of the

Department of Labor regulations on

Federal Claims Collection governing

waiver of interest, 29 CFR 20.61.

§ 10.716 If the required refund is not paid

within 30 days of the request for repayment,

can it be collected from payments due

under the FECA?

If the required refund is not paid

within 30 days of the request for

payment, OWCP can, in its discretion,

collect the refund by withholding all or

part of any payments currently payable

to the beneficiary under the FECA with

respect to any injury. The waiver

provisions of §§ 10.432 through 10.440

do not apply to such determinations.

§ 10.717 Is a settlement or judgment

received as a result of allegations of

medical malpractice in treating an injury

covered by the FECA a gross recovery that

must be reported to OWCP or SOL?

Since an injury caused by medical

malpractice in treating an injury

covered by the FECA is also an injury

covered under the FECA, any recovery

in a suit alleging such an injury is

treated as a gross recovery that must be

reported to OWCP or SOL.

§ 10.718 Are payments to a beneficiary as

a result of an insurance policy which the

beneficiary has purchased a gross recovery

that must be reported to OWCP or SOL?

Since payments received by a FECA

beneficiary pursuant to an insurance

policy purchased by someone other than

a liable third party are not payments in

satisfaction of liability for causing an

injury covered by the FECA, they are

not considered a gross recovery covered

by section 8132 that requires filing a

Statement of Recovery and paying any

required refund.

§ 10.719 If a settlement or judgment is

received for more than one wound or

medical condition, can the refundable

disbursements paid on a single FECA claim

be attributed to different conditions for

purposes of calculating the refund or credit

owed to the United States?

(a) All wounds, diseases or other

medical conditions accepted by OWCP

in connection with a single claim are

treated as the same injury for the

purpose of computing any required

refund and any credit against future

benefits in connection with the receipt

of a recovery from a third party, except

that an injury caused by medical

malpractice in treating an injury

covered under the FECA will be treated

as a separate injury for purposes of

section 8132.

(b) If an injury covered under the

FECA is caused under circumstances

creating a legal liability in more than

one person, other than the United

States, to pay damages, OWCP or SOL

will determine whether recoveries

received from one or more third parties

should be attributed to separate

conditions for which compensation is

payable in connection with a single

FECA claim. If such an attribution is

both practicable and equitable, as

determined by OWCP or SOL, in its

discretion, the conditions will be treated

as separate injuries for purposes of

calculating the refund and credit owed

to the United States under section 8132.

Federal Grand and Petit Jurors

§ 10.725 When is a federal grand or petit

juror covered under the FECA?

(a) Federal grand and petit jurors are

covered under the FECA when they are

in performance of duty as a juror, which

includes that time when a juror is:

(1) In attendance at court pursuant to

a summons;

(2) In deliberation;

(3) Sequestered by order of a judge; or

(4) At a site, by order of the court, for

the taking of a view.

(b) A juror is not considered to be in

the performance of duty while traveling

to or from home in connection with the

activities enumerated in paragraphs

(a)(1) through (4) of this section.

§ 10.726 When does a juror’s entitlement

to disability compensation begin?

Pursuant to 28 U.S.C. 1877,

entitlement to disability compensation

does not commence until the day after

the date of termination of service as a

juror.

§ 10.727 What is the pay rate of jurors for

compensation purposes?

For the purpose of computing

compensation payable for disability or

death, a juror is deemed to receive pay

at the minimum rate for Grade GS–2 of

the General Schedule unless his or her

actual pay as an ‘‘employee’’ of the

United States while serving on court

leave is higher, in which case the pay

rate for compensation purposes is

determined in accordance with 5 U.S.C.

8114.

Peace Corps Volunteers

§ 10.730 What are the conditions of

coverage for Peace Corps volunteers and

volunteer leaders injured while serving

outside the United States?

(a) Any injury sustained by a

volunteer or volunteer leader while he

or she is located abroad shall be

presumed to have been sustained in the

performance of duty, and any illness

contracted during such time shall be

presumed to be proximately caused by

the employment. However, this

presumption will be rebutted by

evidence that:

(1) The injury or illness was caused

by the claimant’s willful misconduct,

intent to bring about the injury or death

of self or another, or was proximately

caused by the intoxication by alcohol or

illegal drugs of the injured claimant; or

(2) The illness is shown to have

preexisted the period of service abroad;

or

(3) The injury or illness claimed is a

manifestation of symptoms of, or

consequent to, a preexisting congenital

defect or abnormality.
67162 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

(b) If the presumption that an injury

or illness was sustained in the

performance of duty is rebutted as

provided by paragraph (a) of this

section, the claimant has the burden of

proving by the submittal of substantial

and probative evidence that such injury

or illness was sustained in the

performance of duty with the Peace

Corps.

(c) If an injury or illness, or episode

thereof, comes within one of the

exceptions described in paragraph (a)(2)

or (3) of this section, the claimant may

nonetheless be entitled to

compensation. This will be so provided

he or she meets the burden of proving

by the submittal of substantial,

probative and rationalized medical

evidence that the illness or injury was

proximately caused by factors or

conditions of Peace Corps service, or

that it was materially aggravated,

accelerated or precipitated by factors of

Peace Corps service.

§ 10.731 What is the pay rate of Peace

Corps volunteers and volunteer leaders for

compensation purposes?

The pay rate for these claimants is

defined as the pay rate in effect on the

date following separation, provided that

the rate equals or exceeds the pay rate

on the date of injury. It is defined in

accordance with 5 U.S.C. 8142(a), not

8101(4).

Non-Federal Law Enforcement Officers

§ 10.735 When is a non-federal law

enforcement officer covered under the

FECA?

(a) A law enforcement officer (officer)

includes an employee of a state or local

government, the governments of U.S.

possessions and territories, or an

employee of the United States

pensioned or pensionable under

sections 521–535 of Title 4, D.C. Code,

whose functions include the activities

listed in 5 U.S.C. 8191.

(b) Benefits are available to officers

who are not ‘‘employees’’ under 5

U.S.C. 8101, and who are determined in

the discretion of OWCP to have been

engaged in the activities listed in 5

U.S.C. 8191 with respect to the

enforcement of crimes against the

United States. Individuals who only

perform administrative functions in

support of officers are not considered

officers.

(c) Except as provided by 5 U.S.C.

8191 and 8192 and elsewhere in this

part, the provisions of the FECA and of

subparts A, B, and D through I of this

part apply to officers.

§ 10.736 What are the time limits for filing

a claim?

OWCP must receive a claim for

benefits under 5 U.S.C. 8191 within five

years after the injury or death. This fiveyear limitation is not subject to waiver.

The tolling provisions of 5 U.S.C.

8122(d) do not apply to these claims.

§ 10.737 How is a claim filed, and who can

file a claim?

A claim for injury or occupational

disease should be filed on Form CA–

721; a death claim should be filed on

Form CA–722. All claims should be

submitted to the officer’s employer for

completion and forwarding to OWCP. A

claim may be filed by the officer, the

officer’s survivor, or any person or

association authorized to act on behalf

of an officer or an officer’s survivors.

§ 10.738 Under what circumstances are

benefits payable?

(a) Benefits are payable when an

officer is injured while apprehending, or

attempting to apprehend, an individual

for the commission of a federal crime.

However, either an actual federal crime

must be in progress or have been

committed, or objective evidence (of

which the officer is aware at the time of

injury) must exist that a potential

federal crime was in progress or had

already been committed. The actual or

potential federal crime must be an

integral part of the criminal activity

toward which the officer’s actions are

directed. The fact that an injury to an

officer is related in some way to the

commission of a federal crime does not

necessarily bring the injury within the

coverage of the FECA. The FECA is not

intended to cover officers who are

merely enforcing local laws.

(b) For benefits to be payable when an

officer is injured preventing, or

attempting to prevent, a federal crime,

there must be objective evidence that a

federal crime is about to be committed.

An officer’s belief, unsupported by

objective evidence, that he or she is

acting to prevent the commission of a

federal crime will not result in coverage.

Moreover, the officer’s subjective intent,

as measured by all available evidence

(including the officer’s own statements

and testimony, if available), must have

been directed toward the prevention of

a federal crime. In this context, an

officer’s own statements and testimony

are relevant to, but do not control, the

determination of coverage.

§ 10.739 What kind of objective evidence

of a potential federal crime must exist for

coverage to be extended?

Based on the facts available at the

time of the event, the officer must have

an awareness of sufficient information

which would lead a reasonable officer,

under the circumstances, to conclude

that a federal crime was in progress, or

was about to occur. This awareness

need not extend to the precise

particulars of the crime (the section of

Title 18, United States Code, for

example), but there must be sufficient

evidence that the officer was in fact

engaged in actual or attempted

apprehension of a federal criminal or

prevention of a federal crime.

§ 10.740 In what situations will OWCP

automatically presume that a law

enforcement officer is covered by the

FECA?

(a) Where an officer is detailed by a

competent state or local authority to

assist a federal law enforcement

authority in the protection of the

President of the United States, or any

other person actually provided or

entitled to U.S. Secret Service

protection, coverage will be extended.

(b) Coverage for officers of the U.S.

Park Police and those officers of the

Uniformed Division of the U.S. Secret

Service who participate in the District of

Columbia Retirement System is

adjudicated under the principles set

forth in paragraph (a) of this section,

and does not extend to numerous

tangential activities of law enforcement

(for example, reporting to work,

changing clothes). However, officers of

the Non-Uniformed Division of the U.S.

Secret Service who participate in the

District of Columbia Retirement System

are covered under the FECA during the

performance of all official duties.

§ 10.741 How are benefits calculated?

(a) Except for continuation of pay,

eligible officers and survivors are

entitled to the same benefits as if the

officer had been an employee under 5

U.S.C. 8101. However, such benefits

may be reduced or adjusted as OWCP in

its discretion may deem appropriate to

reflect comparable benefits which the

officer or survivor received or would

have been entitled to receive by virtue

of the officer’s employment.

(b) For the purpose of this section, a

comparable benefit includes any benefit

that the officer or survivor is entitled to

receive because of the officer’s

employment, including pension and

disability funds, state workers’

compensation payments, Public Safety

Officers’ Benefits Act payments, and

state and local lump sum payments.

Health benefits coverage and proceeds

of life insurance policies purchased by

the employer are not considered to be

comparable benefits.

(c) The FECA provides that, where an

officer receives comparable benefits,
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67163

compensation benefits are to be reduced

proportionally in a manner that reflects

the relative percentage contribution of

the officer and the officer’s employer to

the fund which is the source of the

comparable benefit. Where the source of

the comparable benefit is a retirement or

other system which is not fully funded,

the calculation of the amount of the

reduction will be based on a per capita

comparison between the contribution by

the employer and the contribution by all

covered officers during the year prior to

the officer’s injury or death.

(d) The non-receipt of compensation

during a period where a dual benefit

(such as a lump sum payment on the

death of an officer) is being offset

against compensation entitlement does

not result in an adjustment of the

respective benefit percentages of

remaining beneficiaries because of a

cessation of compensation under 5

U.S.C. 8133(c).

Subpart I—Information for Medical

Providers

Medical Records and Bills

§ 10.800 What kind of medical records

must providers keep?

Agency medical officers, private

physicians and hospitals are required to

keep records of all cases treated by them

under the FECA so they can supply

OWCP with a history of the injury, a

description of the nature and extent of

injury, the results of any diagnostic

studies performed, the nature of the

treatment rendered and the degree of

any impairment arising from the injury.

§ 10.801 How are medical bills to be

submitted?

(a) All charges for medical and

surgical treatment, appliances or

supplies furnished to injured

employees, except for treatment and

supplies provided by nursing homes,

shall be supported by medical evidence

as provided in § 10.800. The physician

or provider shall itemize the charges on

the standard Health Insurance Claim

Form, HCFA 1500 or OWCP 1500, (for

professional charges), the UB–92 (for

hospitals), the Universal Claim Form

(for pharmacies), or other form as

warranted, and submit the form

promptly to OWCP.

(b) The provider shall identify each

service performed using the Physician’s

Current Procedural Terminology (CPT)

code, the Health Care Financing

Administration Common Procedure

Coding System (HCPCS) code, the

National Drug Code (NDC), or the

Revenue Center Code (RCC), with a brief

narrative description. Where no code is

applicable, a detailed description of

services performed should be provided.

(c) The provider shall also state each

diagnosed condition and furnish the

corresponding diagnostic code using the

‘‘International Classification of Disease,

9th Edition, Clinical Modification’’

(ICD–9–CM), or as revised. A separate

bill shall be submitted when the

employee is discharged from treatment

or monthly, if treatment for the workrelated condition is necessary for more

than 30 days.

(1)(i) Hospitals shall submit charges

for medical and surgical treatment or

supplies promptly to OWCP on the

Uniform Bill (UB–92). The provider

shall identify each outpatient radiology

service, outpatient pathology service

and physical therapy service performed,

using HCPCS/CPT codes with a brief

narrative description. The charge for

each individual service, or the total

charge for all identical services, should

also appear in the UB–92.

(ii) Other outpatient hospital services

for which HCPCS/CPT codes exist shall

also be coded individually using the

coding scheme noted in this paragraph.

Services for which there are no HCPCS/

CPT codes available can be presented

using the RCCs described in the

‘‘National Uniform Billing Data

Elements Specifications’’, current

edition. The provider shall also furnish

the diagnostic code using the ICD–9-

CM. If the outpatient hospital services

include surgical and/or invasive

procedures, the provider shall code each

procedure using the proper CPT/HCPCS

codes and furnishing the corresponding

diagnostic codes using the ICD–9–CM.

(2) Pharmacies shall itemize charges

for prescription medications,

appliances, or supplies on the Universal

Claim Form and submit them promptly

to OWCP. Bills for prescription

medications must include the NDC

assigned to the product, the generic or

trade name of the drug provided, the

prescription number, the quantity

provided, and the date the prescription

was filled.

(3) Nursing homes shall itemize

charges for appliances, supplies or

services on the provider’s billhead

stationery and submit them promptly to

OWCP.

(d) By submitting a bill and/or

accepting payment, the provider

signifies that the service for which

reimbursement is sought was performed

as described and was necessary. In

addition, the provider thereby agrees to

comply with all regulations set forth in

this subpart concerning the rendering of

treatment and/or the process for seeking

reimbursement for medical services,

including the limitation imposed on the

amount to be paid for such services.

(e) Bills submitted by providers must:

be itemized on the Health Insurance

Claim Form (for physicians), the UB–92

(for hospitals), or the Universal Claim

Form (for pharmacies); contain the

signature or signature stamp of the

provider; and identify the procedures

using HCPCS/CPT codes, RCCs, or

NDCs. Otherwise, OWCP may return the

bill to the provider for correction and

resubmission.

§ 10.802 How should an employee prepare

and submit requests for reimbursement for

medical expenses, transportation costs,

loss of wages, and incidental expenses?

(a) If an employee has paid bills for

medical, surgical or dental services,

supplies or appliances due to an injury

sustained in the performance of duty, he

or she may submit an itemized bill on

the Health Insurance Claim Form, HCFA

1500 or OWCP 1500, together with a

medical report as provided in § 10.800,

to OWCP for consideration.

(1) The provider of such service shall

state each diagnosed condition and

furnish the applicable ICD–9–CM code

and identify each service performed

using the applicable HCPCS/CPT code,

with a brief narrative description of the

service performed, or, where no code is

applicable, a detailed description of that

service.

(2) The bill must be accompanied by

evidence that the provider received

payment for the service from the

employee and a statement of the amount

paid. Acceptable evidence that payment

was received includes, but is not limited

to, a signed statement by the provider,

a mechanical stamp or other device

showing receipt of payment, a copy of

the employee’s canceled check (both

front and back) or a copy of the

employee’s credit card receipt.

(b) If services were provided by a

hospital, pharmacy or nursing home, the

employee should submit the bill in

accordance with the provisions of

§ 10.801(a). Any request for

reimbursement must be accompanied by

evidence, as described in paragraph (a)

of this section, that the provider

received payment for the service from

the employee and a statement of the

amount paid.

(c) OWCP may waive the

requirements of paragraphs (a) and (b) of

this section if extensive delays in the

filing or the adjudication of a claim

make it unusually difficult for the

employee to obtain the required

information.

(d) OWCP will not accept copies of

bills for reimbursement unless they bear

the original signature of the provider,
67164 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

with evidence of payment. Payment for

medical and surgical treatment,

appliances or supplies shall in general

be no greater than the maximum

allowable charge for such service

determined by the Director, as set forth

in § 10.805.

(e) An employee will be only partially

reimbursed for a medical expense if the

amount he or she paid to a provider for

the service exceeds the maximum

allowable charge set by the Director’s

schedule. In this instance, OWCP shall

advise the provider of the maximum

allowable charge for the service in

question and allow the provider the

opportunity to refund to the employee,

or credit to the employee’s account the

amount paid by the employee which

exceeds the maximum allowable charge,

or request reconsideration of the fee

determination as provided by § 10.812.

(f) If the provider fails to make

appropriate refund to the employee, or

to credit the employee’s account, within

60 days after the date of this notification

by OWCP, or the date of a subsequent

reconsideration decision which

continues to disallow all or a portion of

the appealed amount, OWCP shall

initiate exclusion procedures as

provided by § 10.815.

(g) After notification as provided in

paragraph (e) of this section, OWCP may

make reasonable reimbursement to the

employee, based on a review of the facts

and circumstances of the case, if the

provider does not refund or credit to the

employee’s account the amount of

money paid in excess of the charge

allowed by OWCP.

§ 10.803 What are the time limitations on

OWCP’s payment of bills?

OWCP will pay providers and

reimburse employees promptly for all

bills received on an approved form and

in a timely manner. However, no bill

will be paid for expenses incurred if the

bill is submitted more than one year

beyond the end of the calendar year in

which the expense was incurred or the

service or supply was provided, or more

than one year beyond the end of the

calendar year in which the claim was

first accepted as compensable by OWCP,

whichever is later.

Medical Fee Schedule

§ 10.805 What services are covered by the

OWCP fee schedule?

(a) Payment for medical and other

health services furnished by physicians,

hospitals and other providers for workrelated injuries shall not exceed a

maximum allowable charge for such

service as determined by the Director,

except as provided in this section.

(b) The schedule of maximum

allowable charges does not apply to

charges for services provided in nursing

homes, but it does apply to charges for

treatment furnished in a nursing home

by a physician or other medical

professional.

(c) The schedule of maximum

allowable charges also does not apply to

charges for appliances, supplies,

services or treatment furnished by

medical facilities of the U.S. Public

Health Service or the Departments of the

Army, Navy, Air Force and Veterans

Affairs.

§ 10.806 How are the maximum fees

defined?

For professional medical services, the

Director shall maintain a schedule of

maximum allowable fees for procedures

performed in a given locality. The

schedule shall consist of: an assignment

of a value to procedures identified by

Health Care Financing Administration

Common Procedure Coding System/

Current Procedural Terminology

(HCPCS/CPT) code which represents the

relative skill, effort, risk and time

required to perform the procedure, as

compared to other procedures of the

same general class; an index based on a

relative value scale that considers skill,

labor, overhead, malpractice insurance

and other related costs; and a monetary

value assignment (conversion factor) for

one unit of value in each of the

categories of service.

§ 10.807 How are payments for particular

services calculated?

Payment for a procedure identified by

a HCPCS/CPT code shall not exceed the

amount derived by multiplying the

relative values for that procedure by the

geographic indices for services in that

area and by the dollar amount assigned

to one unit in that category of service.

(a) The ‘‘locality’’ which serves as a

basis for the determination of average

cost is defined by the Bureau of Census

Metropolitan Statistical Areas. The

Director shall base the determination of

the relative per capita cost of medical

care in a locality using information

about enrollment and medical cost per

county, provided by the Health Care

Financing Administration (HCFA).

(b) The Director shall assign the

relative value units (RVUs) published by

HCFA to all services for which HCFA

has made assignments, using the most

recent revision. Where there are no

RVUs assigned to a procedure, the

Director may develop and assign any

RVUs that he or she considers

appropriate. The geographic adjustment

factor shall be that designated by

Geographic Practice Cost Indices for

Metropolitan Statistical Areas as

devised for HCFA and as updated or

revised by HCFA from time to time. The

Director will devise conversion factors

for each category of service, and in

doing so may adapt HCFA conversion

factors as appropriate using OWCP’s

processing experience and internal data.

(c) For example, if the unit values for

a particular surgical procedure are 2.48

for physician’s work (W), 3.63 for

practice expense (PE), and 0.48 for

malpractice insurance (M), and the

dollar value assigned to one unit in that

category of service (surgery) is $61.20,

then the maximum allowable charge for

one performance of that procedure is the

product of the three RVUs times the

corresponding geographical indices for

the locality times the conversion factor.

If the geographic indices for the locality

are 0.988 (W), 0.948 (PE), and 1.174 (M),

then the maximum payment calculation

is:

[(2.48)(0.988) + (3.63)(0.948) + (0.48)(1.174)]

× $61.20

[2.45 + 3.44 + .56] × $61.20

6.45 × $61.20 = $394.74

§ 10.808 Does the fee schedule apply to

every kind of procedure?

Where the time, effort and skill

required to perform a particular

procedure varies widely from one

occasion to the next, the Director may

choose not to assign a relative value to

that procedure. In this case the

allowable charge for the procedure will

be set individually based on

consideration of a detailed medical

report and other evidence. At its

discretion, OWCP may set fees without

regard to schedule limits for specially

authorized consultant examinations, for

examinations performed under 5 U.S.C.

8123, and for other specially authorized

services.

§ 10.809 How are payments for medicinal

drugs determined?

Payment for medicinal drugs

prescribed by physicians shall not

exceed the amount derived by

multiplying the average wholesale price

of the medication by the quantity or

amount provided, plus a dispensing fee.

(a) All prescription medications

identified by National Drug Code (NDC)

will be assigned an average wholesale

price representing the product’s

nationally recognized wholesale price as

determined by surveys of manufacturers

and wholesalers. The Director will

establish the dispensing fee.

(b) The NDCs, the average wholesale

prices, and the dispensing fee shall be

reviewed from time to time and updated

as necessary.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67165

§ 10.810 How are payments for inpatient

medical services determined?

(a) OWCP will pay for inpatient

medical services according to predetermined, condition-specific rates

based on the Prospective Payment

System (PPS) devised by HCFA (42 CFR

parts 412, 413, 424, 485, and 489). Using

this system, payment is derived by

multiplying the diagnosis-related group

(DRG) weight assigned to the hospital

discharge by the provider-specific

factors.

(1) All hospital discharges will be

classified according to the DRGs

prescribed by the HCFA in the form of

the DRG Grouper software program. On

this list, each DRG represents the

average resources necessary to provide

care in a case in that DRG relative to the

national average of resources consumed

per case.

(2) The provider-specific factors will

be provided by HCFA in the form of

their PPS Pricer software program. The

software takes into consideration the

type of facility, census division, actual

geographic location (MSA) of the

hospital, case mix cost per discharge,

number of hospital beds, intern/beds

ratio, operating cost to charge ratio, and

other factors used by HCFA to

determine the specific rate for a hospital

discharge under their PPS. The Director

may devise pricer adjustment factors as

appropriate using OWCP’s processing

experience and internal data.

(3) OWCP will base payments to

facilities excluded from HCFA’s PPS on

consideration of detailed medical

reports and other evidence.

(4) The Director shall review the predetermined hospital rates at least once

a year, and may adjust any or all

components when he or she deems it

necessary or appropriate.

(b) The Director shall review the

schedule of fees at least once a year, and

may adjust the schedule or any of its

components when he or she deems it

necessary or appropriate.

§ 10.811 When and how are fees reduced?

(a) OWCP shall accept a provider’s

designation of the code to identify a

billed procedure or service if the code

is consistent with medical reports and

other evidence. Where no code is

supplied, OWCP may determine the

code based on the narrative description

of the procedure on the billing form and

in associated medical reports. OWCP

will pay no more than the maximum

allowable fee for that procedure.

(b) If the charge submitted for a

service supplied to an injured employee

exceeds the maximum amount

determined to be reasonable according

to the schedule, OWCP shall pay the

amount allowed by the schedule for that

service and shall notify the provider in

writing that payment was reduced for

that service in accordance with the

schedule. OWCP shall also notify the

provider of the method for requesting

reconsideration of the balance of the

charge.

§ 10.812 If OWCP reduces a fee, may a

provider request reconsideration of the

reduction?

(a) A physician or other provider

whose charge for service is only

partially paid because it exceeds a

maximum allowable amount set by the

Director may, within 30 days, request

reconsideration of the fee

determination.

(1) The provider should make such a

request to the OWCP district office with

jurisdiction over the employee’s claim.

The request must be accompanied by

documentary evidence that the

procedure performed was incorrectly

identified by the original code, that the

presence of a severe or concomitant

medical condition made treatment

especially difficult, or that the provider

possessed unusual qualifications. In

itself, board-certification in a specialty

is not sufficient evidence of unusual

qualifications to justify an exception.

These are the only three circumstances

which will justify reevaluation of the

paid amount.

(2) A list of OWCP district offices and

their respective areas of jurisdiction is

available upon request from the U.S.

Department of Labor, Office of Workers’

Compensation Programs, Washington,

D. C. 20210. Within 30 days of receiving

the request for reconsideration, the

OWCP district office shall respond in

writing stating whether or not an

additional amount will be allowed as

reasonable, considering the evidence

submitted.

(b) If the OWCP district office issues

a decision which continues to disallow

a contested amount, the provider may

apply to the Regional Director of the

region with jurisdiction over the OWCP

district office. The application must be

filed within 30 days of the date of such

decision, and it may be accompanied by

additional evidence. Within 60 days of

receipt of such application, the Regional

Director shall issue a decision in writing

stating whether or not an additional

amount will be allowed as reasonable,

considering the evidence submitted.

This decision shall be final, and shall

not be subject to further review.

§ 10.813 If OWCP reduces a fee, may a

provider bill the claimant for the balance?

A provider whose fee for service is

partially paid by OWCP as a result of

the application of its fee schedule or

other tests for reasonableness in

accordance with this subpart shall not

request reimbursement from the

employee for additional amounts.

(a) Where a provider’s fee for a

particular service or procedure is lower

to the general public than as provided

by the schedule of maximum allowable

charges, the provider shall bill at the

lower rate. A fee for a particular service

or procedure which is higher than the

provider’s fee to the general public for

that same service or procedure will be

considered a charge ‘‘substantially in

excess of such provider’s customary

charges’’ for the purposes of § 10.815(d).

(b) A provider whose fee for service

is partially paid by OWCP as the result

of the application of the schedule of

maximum allowable charges and who

collects or attempts to collect from the

employee, either directly or through a

collection agent, any amount in excess

of the charge allowed by OWCP, and

who does not cease such action or make

appropriate refund to the employee

within 60 days of the date of the

decision of OWCP, shall be subject to

the exclusion procedures provided by

§ 10.815(h).

Exclusion of Providers

§ 10.815 What are the grounds for

excluding a provider from payment under

the FECA?

A physician, hospital, or provider of

medical services or supplies shall be

excluded from payment under the FECA

if such physician, hospital or provider

has:

(a) Been convicted under any criminal

statute of fraudulent activities in

connection with any federal or state

program for which payments are made

to providers for similar medical,

surgical or hospital services, appliances

or supplies;

(b) Been excluded or suspended, or

has resigned in lieu of exclusion or

suspension, from participation in any

federal or state program referred to in

paragraph (a) of this section;

(c) Knowingly made, or caused to be

made, any false statement or

misrepresentation of a material fact in

connection with a determination of the

right to reimbursement under the FECA,

or in connection with a request for

payment;

(d) Submitted, or caused to be

submitted, three or more bills or

requests for payment within a twelvemonth period under this subpart

containing charges which the Director

finds to be substantially in excess of

such provider’s customary charges,

unless the Director finds there is good
67166 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

cause for the bills or requests containing

such charges;

(e) Knowingly failed to timely

reimburse employees for treatment,

services or supplies furnished under

this subpart paid by OWCP;

(f) Failed, neglected or refused on

three or more occasions during a twelvemonth period, to submit full and

accurate medical reports, or to respond

to requests by OWCP for additional

reports or information, as required by

the FECA and § 10.800 of this subpart;

(g) Knowingly furnished treatment,

services or supplies which are

substantially in excess of the employee’s

needs, or of a quality which fails to meet

professionally recognized standards; or

(h) Collected or attempted to collect

from the employee, either directly or

through a collection agent, an amount in

excess of the charge allowed by OWCP

for the procedure performed, and has

failed or refused to make appropriate

refund to the employee, or to cease such

collection attempts, within 60 days of

the date of the decision of OWCP.

§ 10.816 What will cause OWCP to

automatically exclude a physician or other

provider of medical services and supplies?

(a) OWCP shall automatically exclude

a physician, hospital, or provider of

medical services or supplies who has

been convicted of a crime described in

§ 10.815(a), or has been excluded or

suspended, or has resigned in lieu of

exclusion or suspension, from

participation in any program as

described in § 10.815(b).

(b) The exclusion applies to

participating in the program and to

seeking payment under the FECA for

services performed after the date of the

entry of the judgment of conviction or

order of exclusion, suspension or

resignation, as the case may be, by the

court or agency concerned. Proof of the

conviction, exclusion, suspension or

resignation may be by a copy thereof

authenticated by the seal of the court or

agency concerned.

§ 10.817 When are OWCP’s exclusion

procedures initiated?

Upon receipt of information

indicating that a physician, hospital or

provider of medical services or supplies

(hereinafter the provider) has engaged in

activities enumerated in paragraphs (c)

through (h) of § 10.815, the Regional

Director, after completion of inquiries

he or she deems appropriate, may

initiate procedures to exclude the

provider from participation in the FECA

program. For the purposes of this

section, ‘‘Regional Director’’ may

include any officer designated to act on

his or her behalf.

§ 10.818 How is a provider notified of

OWCP’s intent to exclude him or her?

The Regional Director shall initiate

the exclusion process by sending the

provider a letter, by certified mail and

with return receipt requested, which

shall contain the following:

(a) A concise statement of the grounds

upon which exclusion shall be based;

(b) A summary of the information,

with supporting documentation, upon

which the Regional Director has relied

in reaching an initial decision that

exclusion proceedings should begin;

(c) An invitation to the provider to:

(1) Resign voluntarily from

participation in the FECA program

without admitting or denying the

allegations presented in the letter; or

(2) Request that the decision on

exclusion be based upon the existing

record and any additional documentary

information the provider may wish to

provide;

(d) A notice of the provider’s right, in

the event of an adverse ruling by the

Regional Director, to request a formal

hearing before an administrative law

judge;

(e) A notice that should the provider

fail to answer (as described in § 10.819)

the letter of intent within 30 calendar

days of receipt, the Regional Director

may deem the allegations made therein

to be true and may order exclusion of

the provider without conducting any

further proceedings; and

(f) The name and address of the

OWCP representative who shall be

responsible for receiving the answer

from the provider.

§ 10.819 What requirements must the

provider’s reply and OWCP’s decision

meet?

(a) The provider’s answer shall be in

writing and shall include an answer to

OWCP’s invitation to resign voluntarily.

If the provider does not offer to resign,

he or she shall request that a

determination be made upon the

existing record and any additional

information provided.

(b) Should the provider fail to answer

the letter of intent within 30 calendar

days of receipt, the Regional Director

may deem the allegations made therein

to be true and may order exclusion of

the provider.

(c) By arrangement with the official

representative, the provider may inspect

or request copies of information in the

record at any time prior to the Regional

Director’s decision.

(d) The Regional Director shall issue

his or her decision in writing, and shall

send a copy of the decision to the

provider by certified mail, return receipt

requested. The decision shall advise the

provider of his or her right to request,

within 30 days of the date of the adverse

decision, a formal hearing before an

administrative law judge under the

procedures set forth in § 10.820. The

filing of a request for a hearing within

the time specified shall stay the

effectiveness of the decision to exclude.

§ 10.820 How can an excluded provider

request a hearing?

A request for a hearing shall be sent

to the official representative named

under § 10.818(f) and shall contain:

(a) A concise notice of the issues on

which the provider desires to give

evidence at the hearing;

(b) Any request for a more definite

statement by OWCP;

(c) Any request for the presentation of

oral argument or evidence; and

(d) Any request for a certification of

questions concerning professional

medical standards, medical ethics or

medical regulation for an advisory

opinion from a competent recognized

professional organization or federal,

state or local regulatory body.

§ 10.821 How are hearings assigned and

scheduled?

(a) If the designated OWCP

representative receives a timely request

for hearing, the OWCP representative

shall refer the matter to the Chief

Administrative Law Judge of the

Department of Labor, who shall assign

it for an expedited hearing. The

administrative law judge assigned to the

matter shall consider the request for

hearing, act on all requests therein, and

issue a Notice of Hearing and Hearing

Schedule for the conduct of the hearing.

A copy of the hearing notice shall be

served on the provider by certified mail,

return receipt requested. The Notice of

Hearing and Hearing Schedule shall

include:

(1) A ruling on each item raised in the

request for hearing;

(2) A schedule for the prompt

disposition of all preliminary matters,

including requests for more definite

statements and for the certification of

questions to advisory bodies; and

(3) A scheduled hearing date not less

than 30 days after the date the schedule

is issued, and not less than 15 days after

the scheduled conclusion of preliminary

matters, provided that the specific time

and place of the hearing may be set on

10 days’ notice.

(b) The purpose of the designation of

issues is to provide for an effective

hearing process. The provider is entitled

to be heard on any matter placed in

issue by his or her response to the

Notice of Intent to Exclude, and may

designate ‘‘all issues’’ for purposes of
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hearing. However, a specific designation

of issues is required if the provider

wishes to interpose affirmative defenses,

or request the issuance of subpoenas or

the certification of questions for an

advisory opinion.

§ 10.822 How are subpoenas or advisory

opinions obtained?

(a) The provider may apply to the

administrative law judge for the

issuance of subpoenas upon a showing

of good cause therefor.

(b) A certification of a request for an

advisory opinion concerning

professional medical standards, medical

ethics or medical regulation to a

competent recognized or professional

organization or federal, state or local

regulatory agency may be made:

(1) As to an issue properly designated

by the provider, in the sound discretion

of the administrative law judge,

provided that the request will not

unduly delay the proceedings;

(2) By OWCP on its own motion either

before or after the institution of

proceedings, and the results thereof

shall be made available to the provider

at the time that proceedings are

instituted or, if after the proceedings are

instituted, within a reasonable time after

receipt. The opinion, if rendered by the

organization or agency, is advisory only

and not binding on the administrative

law judge.

§ 10.823 How will the administrative law

judge conduct the hearing and issue the

recommended decision?

(a) To the extent appropriate,

proceedings before the administrative

law judge shall be governed by 29 CFR

part 18.

(b) The administrative law judge shall

receive such relevant evidence as may

be adduced at the hearing. Evidence

shall be presented under oath, orally or

in the form of written statements. The

administrative law judge shall consider

the Notice and Response, including all

pertinent documents accompanying

them, and may also consider any

evidence which refers to the provider or

to any claim with respect to which the

provider has provided medical services,

hospital services, or medical services

and supplies, and such other evidence

as the administrative law judge may

determine to be necessary or useful in

evaluating the matter.

(c) All hearings shall be recorded and

the original of the complete transcript

shall become a permanent part of the

official record of the proceedings.

(d) Pursuant to 5 U.S.C. 8126, the

administrative law judge may:

(1) Issue subpoenas for and compel

the attendance of witnesses within a

radius of 100 miles;

(2) Administer oaths;

(3) Examine witnesses; and

(4) Require the production of books,

papers, documents, and other evidence

with respect to the proceedings.

(e) At the conclusion of the hearing,

the administrative law judge shall issue

a written decision and cause it to be

served on all parties to the proceeding,

their representatives and the Director.

§ 10.824 How can a party request review

by the Director of the administrative law

judge’s recommended decision?

(a) Any party adversely affected or

aggrieved by the decision of the

administrative law judge may file a

petition for discretionary review with

the Director within 30 days after

issuance of such decision. The

administrative law judge’s decision,

however, shall be effective on the date

issued and shall not be stayed except

upon order of the Director.

(b) Review by the Director shall not be

a matter of right but of the sound

discretion of the Director.

(c) Petitions for discretionary review

shall be filed only upon one or more of

the following grounds:

(1) A finding or conclusion of material

fact is not supported by substantial

evidence;

(2) A necessary legal conclusion is

erroneous;

(3) The decision is contrary to law or

to the duly promulgated rules or

decisions of the Director;

(4) A substantial question of law,

policy, or discretion is involved; or

(5) A prejudicial error of procedure

was committed.

(d) Each issue shall be separately

numbered and plainly and concisely

stated, and shall be supported by

detailed citations to the record when

assignments of error are based on the

record, and by statutes, regulations or

principal authorities relied upon.

Except for good cause shown, no

assignment of error by any party shall

rely on any question of fact or law upon

which the administrative law judge had

not been afforded an opportunity to

pass.

(e) A statement in opposition to the

petition for discretionary review may be

filed, but such filing shall in no way

delay action on the petition.

(f) If a petition is granted, review shall

be limited to the questions raised by the

petition.

(g) A petition not granted within 20

days after receipt of the petition is

deemed denied.

(h) The decision of the Director shall

be final with respect to the provider’s

participation in the program, and shall

not be subject to further review by any

court or agency.

§ 10.825 What are the effects of exclusion?

(a) OWCP shall give notice of the

exclusion of a physician, hospital or

provider of medical services or supplies

to:

(1) All OWCP district offices;

(2) All federal employers;

(3) The HCFA;

(4) The State or Local authority

responsible for licensing or certifying

the excluded party; and

(5) All employees who are known to

have had treatment, services or supplies

from the excluded provider within the

six-month period immediately

preceding the order of exclusion.

(b) Notwithstanding any exclusion of

a physician, hospital, or provider of

medical services or supplies under this

subpart, OWCP shall not refuse an

employee reimbursement for any

otherwise reimbursable medical

treatment, service or supply if:

(1) Such treatment, service or supply

was rendered in an emergency by an

excluded physician; or

(2) The employee could not

reasonably have been expected to have

known of such exclusion.

(c) An employee who is notified that

his or her attending physician has been

excluded shall have a new right to select

a qualified physician.

§ 10.826 How can an excluded provider be

reinstated?

(a) If a physician, hospital, or provider

of medical services or supplies has been

automatically excluded pursuant to

§ 10.816, the provider excluded will

automatically be reinstated upon notice

to OWCP that the conviction or

exclusion which formed the basis of the

automatic exclusion has been reversed

or withdrawn. However, an automatic

reinstatement shall not preclude OWCP

from instituting exclusion proceedings

based upon the underlying facts of the

matter.

(b) A physician, hospital, or provider

of medical services or supplies excluded

from participation as a result of an order

issued pursuant to this subpart may

apply for reinstatement one year after

the entry of the order of exclusion,

unless the order expressly provides for

a shorter period. An application for

reinstatement shall be addressed to the

Director for Federal Employees’

Compensation, and shall contain a

concise statement of the basis for the

application. The application should be

accompanied by supporting documents

and affidavits.

(c) A request for reinstatement may be

accompanied by a request for oral

argument. Oral argument will be

allowed only in unusual circumstances

where it will materially aid the decision

process.
67168 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

(d) The Director for Federal

Employees’ Compensation shall order

reinstatement only in instances where

such reinstatement is clearly consistent

with the goal of this subpart to protect

the FECA program against fraud and

abuse. To satisfy this requirement the

provider must provide reasonable

assurances that the basis for the

exclusion will not be repeated.

2. It is proposed that part 25 be

revised to read as follows:

PART 25—COMPENSATION FOR

DISABILITY AND DEATH OF

NONCITIZEN FEDERAL EMPLOYEES

OUTSIDE THE UNITED STATES

Subpart A—General Provisions

25.1 How are claims of federal employees

who are neither citizens nor residents

adjudicated?

25.2 In general, what is the Director’s policy

regarding such claims?

25.3 What is the authority to settle and pay

such claims?

25.4 What type of evidence is required to

establish a claim under this part?

25.5 What special rules does OWCP apply

to claims of third and fourth country

nationals?

25.6 How does OWCP adjudicate claims of

non-citizen residents of possessions?

Subpart B—The Special Schedule of

Compensation

25.100 How is compensation for disability

paid?

25.101 How is compensation for death

paid?

25.102 What general provisions does OWCP

apply to the Special Schedule?

Subpart C—Extensions of the Special

Schedule of Compensation

25.200 How is the Special Schedule applied

in the Republic of the Philippines?

25.201 How is the Special Schedule applied

in Australia?

25.202 How is the Special Schedule applied

for Japanese seamen?

25.203 How is the Special Schedule applied

to non-resident aliens in the Territory of

Guam?

Authority: 5 U.S.C. 301, 8137, 8145 and

8149; 1946 Reorganization Plan No. 2, sec. 3,

3 CFR 1943–1948 Comp., p. 1064; 60 Stat.

1095; Reorganization Plan No. 19 of 1950,

sec. 1, 3 CFR 1943–1953 Comp., p. 1010; 64

Stat. 1271; Secretary’s Order 5–96, 62 FR 107.

Subpart A—General Provisions

§ 25.1 How are claims of federal

employees who are neither citizens nor

residents adjudicated?

This part describes how OWCP pays

compensation under the FECA to

employees of the United States who are

neither citizens nor residents of the

United States, any territory or Canada,

as well as to any dependents of such

employees. It has been determined that

the compensation provided under the

FECA is substantially disproportionate

to the compensation for disability or

death which is payable in similar cases

under local law, regulation, custom or

otherwise, in areas outside the United

States, any territory or Canada.

Therefore, with respect to the claims of

such employees whose injury (or injury

resulting in death) has occurred

subsequent to December 7, 1941, or may

occur, the regulations in this part shall

apply.

§ 25.2 In general, what is the Director’s

policy regarding such claims?

(a) Pursuant to 5 U.S.C. 8137, the

benefit features of local workers’

compensation laws, or provisions in the

nature of workers’ compensation, in

effect in areas outside the United States,

any territory or Canada shall, effective

as of December 7, 1941 and as

recognized by the Director, be adopted

and apply in the cases of employees of

the United States who are neither

citizens nor residents of the United

States, any territory or Canada, unless a

special schedule of compensation for

injury or death has been established

under this part for the particular

locality, or for a class of employees in

the particular locality.

(b) The benefit provisions adopted

under paragraph (a) of this section are

those dealing with money payments for

injury and death (including medical

benefits), as well as those dealing with

services and purposes forming an

integral part of the local plan, provided

they are of a kind or character similar

to services and purposes authorized by

the FECA.

(1) Procedural provisions,

designations of classes of beneficiaries

in death cases, limitations (except those

affecting amounts of benefit payments),

and any other provisions not directly

affecting the amounts of the benefit

payments, in such local plans, shall not

apply, but in lieu thereof the pertinent

provisions of the FECA shall apply,

unless modified in this section.

(2) However, the Director may at any

time modify, limit or redesignate the

class or classes of beneficiaries entitled

to death benefits, including the

designation of persons, representatives

or groups entitled to payment under

local statute or custom whether or not

included in the classes of beneficiaries

otherwise specified by this subchapter.

(c) Compensation in all cases of such

employees paid and closed prior to

[insert the effective date of the final

rule] shall be deemed compromised and

paid under 5 U.S.C. 8137. In all other

cases, compensation may be adjusted to

conform with the regulations in this

part, or the beneficiary may by

compromise or agreement with the

Director have compensation continued

on the basis of a previous adjustment of

the claim.

(d) Persons employed in a country or

area having no well-defined workers’

compensation benefits structure shall be

accorded the benefits provided—either

by local law or special schedule—in a

nearby country as determined by the

Director. In selecting the benefit

structure to be applied, equity and

administrative ease will be given

consideration, as well as local custom.

(e) Compensation for disability and

death of non-citizens outside the United

States under this part, whether paid

under local law or special schedule,

shall in no event exceed that generally

payable under the FECA.

§ 25.3 What is the authority to settle and

pay such claims?

In addition to the authority to receive,

process and pay claims, when delegated

such representative or agency receiving

delegation of authority shall, in respect

to cases adjudicated under this part, and

when so authorized by the Director,

have authority to make lump sum

awards (in the manner prescribed by 5

U.S.C. 8135) whenever such authorized

representative shall deem such

settlement to be for the best interest of

the United States, and to compromise

and pay claims for any benefits

provided for under this part, including

claims in which there is a dispute as to

questions of fact or law. The Director

shall, in instructions to the particular

representative concerned, establish such

procedures in respect to action under

this section as he or she may deem

necessary, and may specify the scope of

any administrative review of such

action.

§ 25.4 What type of evidence is required to

establish a claim under this part?

Claims of employees of the United

States who are neither citizens nor

residents of the United States, any

territory or Canada, if otherwise

compensable, shall be approved only

upon evidence of the following nature

without regard to the date of injury or

death for which claim is made:

(a) Appropriate certification by the

Federal employing establishment; or

(b) An armed service’s casualty or

medical record; or

(c) Verification of the employment

and casualty by military personnel; or

(d) Recommendation of an armed

service’s ‘‘Claim Service’’ based on

investigations conducted by it.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67169

§ 25.5 What special rules does OWCP

apply to claims of third and fourth country

nationals?

(a) Definitions. A ‘‘third country

national’’ is a person who is neither a

citizen nor resident of the United States

who is hired by the United States in the

person’s country of citizenship or

residence for employment in another

foreign country, or in a possession or

territory of the United States. A ‘‘fourth

country national’’ is a person who is

neither a citizen nor resident of either

the country of hire or the place of

employment, but who otherwise meets

the definition of third country national.

‘‘Benefits applicable to local hires’’ are

the benefits provided in this part by

local law or special schedule, as

determined by the Director. With

respect to a United States territory or

possession, ‘‘local law’’ means only the

law of the particular territory or

possession.

(b) Benefits payable. Third and fourth

country nationals shall be paid the

benefits applicable to local hires in the

country of hire or the place of

employment, whichever benefits are

greater, provided that all benefits

payable on account of one injury must

be paid under the same benefit

structure.

(1) Where no well-defined workers’

compensation benefits structure is

provided in either the country of hire or

the place of employment, the provisions

of § 25.2(d) shall apply.

(2) Where equitable considerations as

determined by the Director so warrant,

a fourth country national may be

awarded benefits applicable to local

hires in his or her home country.

§ 25.6 How does OWCP adjudicate claims

of non-citizen residents of possessions?

An employee who is a bona fide

permanent resident of any United States

possession, territory, commonwealth or

trust territory will receive the full

benefits of the FECA, as amended,

except that the application of the

minimum benefit provisions provided

therein shall be governed by the

restrictions set forth in 5 U.S.C. 8138.

Subpart B—The Special Schedule of

Compensation

§ 25.100 How is compensation for

disability paid?

Compensation for disability shall be

paid to the employee as follows:

(a) Permanent total disability. In cases

of permanent total disability, 662⁄3

percent of the monthly pay during the

period of such disability.

(b) Temporary total disability. In cases

of temporary total disability, 662⁄3

percent of the monthly pay during the

period of such disability.

(c) Permanent partial disability. In

cases of permanent partial disability,

662⁄3 percent of the monthly pay, for the

following losses and periods:

(1) Arm lost: 280 weeks’

compensation.

(2) Leg lost: 248 weeks’ compensation.

(3) Hand lost: 212 weeks’

compensation.

(4) Foot lost: 173 weeks’

compensation.

(5) Eye lost: 140 weeks’

compensation.

(6) Thumb lost: 51 weeks’

compensation.

(7) First finger lost: 28 weeks’

compensation.

(8) Great toe lost: 26 weeks’

compensation.

(9) Second finger lost: 18 weeks’

compensation.

(10) Third finger lost: 17 weeks’

compensation.

(11) Toe, other than great toe, lost: 8

weeks’ compensation.

(12) Fourth finger lost: 7 weeks’

compensation.

(13) Loss of hearing: One ear, 52

weeks’ compensation; both ears, 200

weeks’ compensation.

(14) Phalanges: Compensation for loss

of more than one phalanx of a digit shall

be the same as for the loss of the entire

digit. Compensation for loss of the first

phalanx shall be one-half of the

compensation for the loss of the entire

digit.

(15) Amputated arm or leg:

Compensation for an arm or a leg, if

amputated at or above the elbow or the

knee, shall be the same as for the loss

of the arm or leg; but, if amputated

between the elbow and the wrist, or

between the knee and the ankle, the

compensation shall be the same as for

the loss of the hand or the foot.

(16) Binocular vision or percent of

vision: Compensation for loss of

binocular vision, or for 80 percent or

more of the vision of an eye shall be the

same as for the loss of the eye.

(17) Two or more digits:

Compensation for loss of two or more

digits, one or more phalanges of two or

more digits of a hand or foot may be

proportioned to the loss of use of the

hand or foot occasioned thereby, but

shall not exceed the compensation for

the loss of a hand or a foot.

(18) Total loss of use: Compensation

for a permanent total loss of use of a

member shall be the same as for loss of

the member.

(19) Partial loss or partial loss of use:

Compensation for permanent partial

loss or loss of use of a member may be

for proportionate loss of use of the

member.

(20) Consecutive awards: In any case

in which there shall be a loss or loss of

use of more than one member or parts

of more than one member set forth in

paragraphs (c)(1) through (19) of this

section, but not amounting to

permanent total disability, the award of

compensation shall be for the loss or

loss of use of each such member or part

thereof, which awards shall run

consecutively, except that where the

injury affects only two or more digits of

the same hand or foot, paragraph (c)(17)

of this section shall apply.

(21) Other cases: In all other cases

within this class of disability the

compensation during the continuance of

disability shall be that proportion of

compensation for permanent total

disability, as determined under

paragraph (a) of this section, which is

equal in percentage to the degree or

percentage of physical impairment

caused by the disability.

(22) Compensation under paragraphs

(c)(1) through (21) of this section for

permanent partial disability shall be in

addition to any compensation for

temporary total or temporary partial

disability under this section, and

awards for temporary total, temporary

partial, and permanent partial disability

shall run consecutively.

(d) Temporary partial disability. In

cases of temporary partial disability,

during the period of disability that

proportion of compensation for

temporary total disability, as

determined under paragraph (b) of this

section, which is equal in percentage to

the degree or percentage of physical

impairment caused by the disability.

§ 25.101 How is compensation for death

paid?

If the disability causes death, the

compensation shall be payable in the

amount and to or for the benefit of the

persons, determined as follows:

(a) To the undertaker or person

entitled to reimbursement, reasonable

funeral expenses not exceeding $200.

(b) To the surviving spouse, if there is

no child, 35 percent of the monthly pay

until his or her death or remarriage.

(c) To the surviving spouse, if there is

a child, the compensation payable

under paragraph (b) of this section, and

in addition thereto 10 percent of the

monthly wage for each child, not to

exceed a total of 662⁄3 percent for such

surviving spouse and children. If a child

has a guardian other than the surviving

spouse, the compensation payable on

account of such child shall be paid to

such guardian. The compensation of any

child shall cease when he or she dies,

marries or reaches the age of 18 years,

or if over such age and incapable of self-
67170 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

support, becomes capable of selfsupport.

(d) To the children, if there is no

surviving spouse, 25 percent of the

monthly pay for one child and 10

percent thereof for each additional

child, not to exceed a total of 662⁄3

percent thereof, divided among such

children share and share alike. The

compensation of each child shall be

paid until he or she dies, marries or

reaches the age of 18, or if over such age

and incapable of self-support, becomes

capable of self-support. The

compensation of a child under legal age

shall be paid to its guardian, if there is

one, otherwise to the person having the

custody or care of such child, for such

child, as the Director in his or her

discretion shall determine.

(e) To the parents, if one is wholly

dependent for support upon the

deceased employee at the time of his or

her death and the other is not

dependent to any extent, 25 percent of

the monthly pay; if both are wholly

dependent, 20 percent thereof to each;

if one is or both are partly dependent,

a proportionate amount in the discretion

of the Director. The compensation to a

parent or parents in the percentages

specified shall be paid if there is no

surviving spouse or child, but if there is

a surviving spouse or child, there shall

be paid so much of such percentages for

a parent or parents as, when added to

the total of the percentages of the

surviving spouse and children, will not

exceed a total of 662⁄3 percent of the

monthly pay.

(f) To the brothers, sisters,

grandparents and grandchildren, if one

is wholly dependent upon the deceased

employee for support at the time of his

or her death, 20 percent of the monthly

pay to such dependent; if more than one

are wholly dependent, 30 percent of

such pay, divided among such

dependents share and share alike; if

there is no one of them wholly

dependent, but one or more are partly

dependent, 10 percent of such pay

divided among such dependents share

and share alike. The compensation to

such beneficiaries shall be paid if there

is no surviving spouse, child or

dependent parent. If there is a surviving

spouse, child or dependent parent, there

shall be paid so much of the above

percentages as, when added to the total

of the percentages payable to the

surviving spouse, children and

dependent parents, will not exceed a

total of 662⁄3 percent of such pay.

(g) The compensation of each

beneficiary under paragraphs (e) and (f)

of this section shall be paid until he or

she, if a parent or grandparent, dies,

marries or ceases to be dependent, or, if

a brother, sister or grandchild, dies,

marries or reaches the age of 18 years,

or if over such age and incapable of selfsupport, becomes capable of selfsupport. The compensation of a brother,

sister or grandchild under legal age shall

be paid to his or her guardian, if there

is one, otherwise to the person having

the custody or care of such person, for

such person, as the Director in his or her

discretion shall determine.

(h) Upon the cessation of any person’s

compensation for death under this

subpart, the compensation of any

remaining person entitled to continuing

compensation in the same case shall be

adjusted, so that the continuing

compensation shall be at the same rate

such person would have received had

no award been made to the person

whose compensation ceased.

(i) In cases where there are two or

more classes of persons entitled to

compensation for death under this

subpart, and the apportionment of such

compensation as provided in this

section would result in injustice, the

Director may in his or her discretion

modify the apportionments to meet the

requirements of the case.

§ 25.102 What general provisions does

OWCP apply to the Special Schedule?

(a) The definitions of terms in the

FECA, as amended, shall apply to terms

used in this subpart.

(b) The provisions of the FECA,

unless modified by this subpart or

otherwise inapplicable, shall be applied

whenever possible in the application of

this subpart.

(c) The provisions of the regulations

for the administration of the FECA, as

amended or supplemented from time to

time by instructions applicable to this

subpart, shall apply in the

administration of compensation under

this subpart, whenever they can

reasonably be applied.

Subpart C—Extensions of the Special

Schedule of Compensation

§ 25.200 How is the Special Schedule

applied in the Republic of the Philippines?

(a) Modified special schedule of

compensation. Except for injury or

death of 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 of the Philippine Social

Security System, the special schedule of

compensation established in subpart B

of this part shall apply, with the

modifications or additions specified in

paragraphs (b) through (k) of this

section, in the Republic of the

Philippines, to injury or death occurring

on or after July 1, 1968, with the

following limitations:

(1) Temporary disability. Benefits for

payments accruing on and after July 1,

1969, for injuries causing temporary

disability and which occurred on and

after July 1, 1968, shall be payable at the

rates in the special schedule as modified

in this section.

(2) Permanent disability and death.

Benefits for injuries occurring on and

after July 1, 1968, which cause

permanent disability or death, shall be

payable at the rates specified in the

special schedule as modified in this

section for

(i) All awards not paid in full before

July 1, 1969, and

(ii) Any award paid in full prior to

July 1, 1969: Provided, that application

for adjustment is made, and the

adjustment will result in additional

benefits of at least $10. In the case of

injuries or death occurring on or after

December 8, 1941 and prior to July 1,

1968, the special schedule as modified

in this section may be applied to

prospective awards for permanent

disability or death, provided that the

monthly and aggregate maximum

provisions in effect at the time of injury

or death shall prevail. These maxima are

$50 and $4,000, respectively.

(b) Death benefits. 400 weeks’

compensation at two-thirds of the

weekly wage rate, shared equally by the

eligible survivors in the same class.

(c) Death beneficiaries. Benefits are

payable to the survivors in the following

order of priority (all beneficiaries in the

highest applicable classes are entitled to

share equally):

(1) Surviving spouse and unmarried

children under 18, or over 18 and totally

incapable of self-support.

(2) Dependent parents.

(3) Dependent grandparents.

(4) Dependent grandchildren, brothers

and sisters who are unmarried and

under 18, or over 18 and totally

incapable of self-support.

(d) Burial allowance. 14 weeks’ wages

or $400, whichever is less, payable to

the eligible survivor(s), regardless of the

actual expense. If there is no eligible

survivor, actual burial expenses may be

paid or reimbursed, in an amount not to

exceed what would be paid to an

eligible survivor.

(e) Permanent total disability. 400

weeks’ compensation at two-thirds of

the weekly wage rate.

(f) Permanent partial disability.

Where applicable, the compensation

provided in paragraphs (c)(1) through

(19) of § 25.100, subject to an aggregate
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules 67171

limitation of 400 weeks’ compensation.

In all other cases, provided for

permanent total disability that

proportion of the compensation

(paragraph (e) of this section) which is

equivalent to the degree or percentage of

physical impairment caused by the

disability.

(g) Temporary partial disability. Twothirds of the weekly loss of wageearning capacity.

(h) Compensation period for

temporary disability. Compensation for

temporary disability is payable for a

maximum period of 80 weeks.

(i) Maximum compensation. The total

aggregate compensation payable in any

case, for injury or death or both, shall

not exceed $8,000, exclusive of medical

costs and burial allowance. The weekly

rate of compensation for disability or

death shall not exceed $35.

(j) Method of payment. Only

compensation for temporary disability

shall be payable periodically.

Compensation for permanent disability

and death shall be payable in full at the

time the extent of entitlement is

established.

(k) Exceptions. The Director in his or

her discretion may make exceptions to

regulations in this section by:

(1) Reapportioning death benefits, for

the sake of equity.

(2) Excluding from consideration

potential death beneficiaries who are

not available to receive payment.

(3) Paying compensation for

permanent disability or death on a

periodic basis, where this method of

payment is considered to be in the best

interest of the beneficiary.

§ 25.201 How is the Special Schedule

applied in Australia?

(a) The special schedule of

compensation established by subpart B

of this part shall apply in Australia with

the modifications or additions specified

in paragraph (b) of this section, as of

December 8, 1941, in all cases of injury

(or death from injury) which occurred

between December 8, 1941 and

December 31, 1961, inclusive, and shall

be applied retrospectively in all such

cases of injury (or death from injury).

Compensation in all such cases pending

as of July 15, 1946, shall be readjusted

accordingly, with credit taken in the

amount of compensation paid prior to

such date. Refund of compensation shall

not be required if the amount of

compensation paid in any such case,

otherwise than through fraud,

misrepresentation or mistake, and prior

to July 15, 1946, exceeds the amount

provided for under this paragraph, and

such case shall be deemed compromised

and paid under 5 U.S.C. 8137.

(b) The total aggregate compensation

payable in any case under paragraph (a)

of this section, for injury or death or

both, shall not exceed the sum of

$4,000, exclusive of medical costs. The

maximum monthly rate of

compensation in any such case shall not

exceed the sum of $50.

(c) The benefit amounts payable

under the provisions of the

Commonwealth Employees’

Compensation Act of 1930–1964,

Australia, shall apply as of January 1,

1962, in Australia, as the exclusive

measure of compensation in cases of

injury (or death from injury) according

on and after January 1, 1962, and shall

be applied retrospectively in all such

cases, occurring on and after such date:

Provided, that the compensation

payable under the provisions of this

paragraph shall in no event exceed that

payable under the FECA.

§ 25.202 How is the Special Schedule

applied for Japanese seamen?

(a) The special schedule of

compensation established by subpart B

of this part shall apply as of November

1, 1971, with the modifications or

additions specified in paragraphs (b)

through (i) of this section, to injuries

sustained outside the continental

United States or Canada by direct-hire

Japanese seamen who are neither

citizens nor residents of the United

States or Canada and who are employed

by the Military Sealift Command in

Japan.

(b) Temporary total disability. Weekly

compensation shall be paid at 75

percent of the weekly wage rate.

(c) Temporary partial disability.

Weekly compensation shall be paid at

75 percent of the weekly loss of wageearning capacity.

(d) Permanent total disability.

Compensation shall be paid in a lump

sum equivalent to 360 weeks’ wages.

(e) Permanent partial disability. (1)

The provisions of § 25.100 shall apply to

the types of permanent partial disability

listed in paragraphs (c)(1) through (19)

of that section: Provided that weekly

compensation shall be paid at 75

percent of the weekly wage rate and that

the number of weeks allowed for

specified losses shall be changed as

follows:

(i) Arm lost: 312 weeks.

(ii) Leg lost: 288 weeks.

(iii) Hand lost: 244 weeks.

(iv) Foot lost: 205 weeks.

(v) Eye lost: 160 weeks.

(vi) Thumb lost: 75 weeks.

(vii) First finger lost: 46 weeks.

(viii) Second finger lost: 30 weeks.

(ix) Third finger lost: 25 weeks.

(x) Fourth finger lost: 15 weeks.

(xi) Great toe lost: 38 weeks.

(xii) Toe, other than great toe lost: 16

weeks.

(2) In all other cases, that proportion

of the compensation provided for

permanent total disability in paragraph

(d) of this section which is equivalent to

the degree or percentage of physical

impairment caused by the injury.

(f) Death. If there are two or more

eligible survivors, compensation

equivalent to 360 weeks’ wages shall be

paid to the survivors, share and share

alike. If there is only one eligible

survivor, compensation equivalent to

300 weeks’ wages shall be paid. The

following survivors are eligible for death

benefits:

(1) Spouse who lived with or was

dependent upon the employee.

(2) Unmarried children under 21 who

lived with or were dependent upon the

employee.

(3) Adult children who were

dependent upon the employee by reason

of physical or mental disability.

(4) Dependent parents, grandparents

and grandchildren.

(g) Burial allowance. $1,000 payable

to the eligible survivor(s), regardless of

actual expenses. If there are no eligible

survivors, actual expenses may be paid

or reimbursed, up to $1,000.

(h) Method of payment. Only

compensation for temporary disability

shall be payable periodically, as

entitlement accrues. Compensation for

permanent disability and death shall be

payable in a lump sum.

(i) Maxima. In all cases, the maximum

weekly benefit shall be $130. Also,

except in cases of permanent total

disability and death, the aggregate

maximum compensation payable for

any injury shall be $40,000.

(j) Prior injury. In cases where injury

or death occurred prior to November 1,

1971, benefits will be paid in

accordance with regulations previously

promulgated, contained in the 20 CFR,

parts 1 to 399, edition revised as of

January 1, 1971.

§ 25.203 How is the Special Schedule

applied to non-resident aliens in the

Territory of Guam?

(a) The special schedule of

compensation established by subpart B

of this part shall apply, with the

modifications or additions specified in

paragraphs (b) through (k) of this

section, to injury or death occurring on

or after July 1, 1971 in the Territory of

Guam to non-resident alien employees

recruited in foreign countries for

employment by the military

departments in the Territory of Guam.

However, the Director may, in his or her

discretion, adopt the benefit features
67172 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Proposed Rules

and provisions of local workers’

compensation law as provided in

subpart A of this part, or substitute the

special schedule in subpart B of this

part or other modifications of the

special schedule in this subpart C, if

such adoption or substitution would be

to the advantage of the employee or his

beneficiary. This schedule shall not

apply to any employee who becomes a

permanent resident in the Territory of

Guam prior to the date of his or her

injury or death.

(b) Death benefits. 400 weeks’

compensation at two-thirds of the

weekly wage rate, shared equally by the

eligible survivors in the same class.

(c) Death beneficiaries. Beneficiaries

of death benefits shall be determined in

accordance with the laws or customs of

the country of recruitment.

(d) Burial allowance. 14 weeks’ wages

or $400, whichever is less, payable to

the eligible survivor(s), regardless of the

actual expense. If there is no eligible

survivor, actual burial expenses may be

paid or reimbursed, in an amount not to

exceed what would be paid to an

eligible survivor.

(e) Permanent total disability. 400

weeks’ compensation at two-thirds of

the weekly wage rate.

(f) Permanent partial disability.

Where applicable, the compensation

provided in paragraphs (c)(1) through

(19) of § 25.100, subject to an aggregate

limitation of 400 weeks’ compensation.

In all other cases, that proportion of the

compensation provided for permanent

total disability (paragraph (e) of this

section) which is equivalent to the

degree or percentage of physical

impairment caused by the disability.

(g) Temporary partial disability. Twothirds of the weekly loss of wageearning capacity.

(h) Compensation period for

temporary disability. Compensation for

temporary disability is payable for a

maximum period of 80 weeks.

(i) Maximum compensation. The total

aggregate compensation payable in any

case, for injury or death or both, shall

not exceed $24,000, exclusive of

medical costs and burial allowance. The

weekly rate of compensation for

disability or death shall not exceed $70.

(j) Method of payment. Compensation

for temporary disability shall be payable

periodically. Compensation for

permanent disability and death shall be

payable in full at the time the extent of

entitlement is established.

(k) Exceptions. The Director may in

his or her discretion make exception to

the regulations in this section by:

(1) Reapportioning death benefits for

the sake of equity.

(2) Excluding from consideration

potential beneficiaries of a deceased

employee who are not available to

receive payment.

(3) Paying compensation for

permanent disability or death on a

periodic basis, where this method of

payment is considered to be in the best

interest of the employee or his or her

beneficiary(ies).

Signed at Washington, D.C., this 28th day

of November, 1997.

Alexis M. Herman,

Secretary of Labor.

Bernard E. Anderson,

Assistant Secretary for Employment

Standards Administration.

[FR Doc. 97–32511 Filed 12–22–97; 8:45 am]

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