United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

J.G., Appellant 

and 

DEPARTMENT OF THE NAVY, 

PHILADELPHIA NAVAL SHIPYARD, 

Philadelphia, PA, Employer 

__________________________________________ 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Docket No. 13-1407 

Issued: September 11, 2014 

Appearances: Case Submitted on the Record

Daniel R. Kehler, Esq., for the appellant 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

COLLEEN DUFFY KIKO, Judge 

ALEC J. KOROMILAS, Alternate Judge 

JURISDICTION 

On May 28, 2013 appellant, through his attorney, filed a timely appeal from a 

May 7, 2013 merit decision of the Office of Workers’ Compensation Programs (OWCP). 

Pursuant to the Federal Employees’ Compensation Act1

 (FECA) and 20 C.F.R. §§ 501.2(c) and 

501.3, the Board has jurisdiction over the case. 

ISSUES 

The issues are: (1) whether appellant received an overpayment of compensation in the 

amount of $22,531.71 for the period April 9, 2008 to July 20, 2009 because he incorrectly 

received compensation for a schedule award; and (2) whether OWCP properly denied waiver of 

recovery of the overpayment. 

 1

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

This case has previously been before the Board. In a decision dated April 7, 2010, the 

Board set aside a July 23, 2008 decision denying appellant’s claim for a schedule award for the 

lungs.2 The Board remanded the case for OWCP to refer the case record to an OWCP medical 

adviser to determine whether appellant had reached maximum medical improvement and, if so, 

to evaluate the extent of any pulmonary impairment due to his accepted employment injury. The 

facts and the circumstances as set forth in the prior decision are hereby incorporated by 

reference. 

On May 7, 2010 OWCP’s medical adviser reviewed the report of Dr. Gary A. Agia, an 

attending osteopath, and his finding that appellant had a 15 to 20 percent permanent impairment 

of the lungs due to asbestos-related pleural disease. He applied the tables and pages of the 

American Medical Association, Guides to the Evaluation of Permanent Impairment (6th ed. 

2009) (A.M.A., Guides), and concluded that appellant had a 20 percent permanent impairment of 

the lungs. 

By decision dated June 18, 2010, OWCP granted appellant a schedule award for a 20 

percent permanent impairment of the lung. The period of the award ran for 31.2 weeks from 

April 9 to November 13, 2008. On June 28, 2010 appellant, through his attorney, requested an 

oral hearing before an OWCP hearing representative. 

In a report dated October 12, 2010, Dr. Leon H. Waller, an osteopath and Board-certified 

internist, discussed appellant’s history of asbestos exposure and current complaints of dyspnea 

with exertion, a chronic cough and intermittent wheezing. He reviewed the results of a March 5, 

2010 computerized tomography (CT) scan showing pleural thickening and plaques indicative of 

pulmonary asbestosis and a May 19, 2010 pulmonary function study showing both obstructive 

and restrictive lung disease. Dr. Waller diagnosed chronic rhinopharyngosinusitis with 

bronchitis and pulmonary asbestosis with fibrosis due to asbestos exposure at work. He noted 

that appellant smoked one pack a day for 10 years and stopped in 1955. Citing the sixth edition 

of the A.M.A., Guides, Dr. Waller found that appellant had a 23 percent whole person 

impairment due to his lung impairment. 

In a decision dated January 6, 2011, an OWCP hearing representative vacated the 

June 18, 2010 decision. She found that OWCP should have paid appellant schedule award 

compensation for 62.4 weeks instead of 31.2 weeks. The hearing representative further 

determined that an OWCP medical adviser should review the May 19, 2010 pulmonary function 

study and the October 12, 2010 report from Dr. Waller. 

By decision dated February 3, 2011, OWCP granted appellant a schedule award for a 20 

percent impairment of the second lung. It noted that it had previously issued a schedule award 

for a 20 percent impairment of the first lung. The period of the award ran for 31.20 weeks from 

November 14, 2008 to June 20, 2009. 

 2

 Docket No. 09-1714 (issued April 7, 2010). On September 21, 1988 appellant, then a 61-year-old inspector, 

filed an occupational disease claim alleging that he sustained a pulmonary condition due to his federal employment. 

OWCP accepted the claim for asbestos exposure resulting in pleural thickening. 
3

On February 8, 2011 appellant, through his attorney, requested an oral hearing regarding 

OWCP’s February 3, 2011 decision. 

In a report dated February 22, 2011, an OWCP medical adviser questioned whether 

appellant was at maximum medical improvement and recommended further evaluation and 

testing. 

On May 19, 2011 OWCP referred appellant to Dr. Jonathan Gelfand, a Board-certified 

internist and pulmonologist, for a second opinion examination. In a report dated May 25, 2011, 

Dr. Gelfand discussed appellant’s complaints of fatigue and shortness of breath. He stated: 

“Pulmonary function testing done on the day of this evaluation revealed mildly 

reduced diffusing capacity which corrected for volume adjustment. There was 

evidence of air trapping in the lung volume determination. There was mild 

obstruction on spirometry with nonsignificant improvement following inhaled 

bronchodilator. These results were consistent with mild chronic obstructive lung 

disease. This is in comparison to a pulmonary function test done on 

December 19, 2006 with age appropriate deterioration in lung function with 

otherwise very similar results.” 

Dr. Gelfand diagnosed mild chronic obstructive lung disease and pleural plaques due to 

asbestos exposure. He found that appellant had reached maximum medical exposure. 

Dr. Gelfand related, “In my opinion, complaints of mild dyspnea on exertion are related to mild 

chronic obstructive lung disease supported by the presence of an obstructive defect with air 

trapping on pulmonary function testing and the presence of wheezing. These problems are not 

related to exposure to asbestos.” He further found that appellant’s reduced lung function was 

unrelated to asbestos exposure. Dr. Gelfand opined that the spirometry showed “moderately 

severe increase in residual volume characteristic of air trapping typical of chronic obstructive 

lung disease. The spirometry reveals mild reduction of the forced vital capacity and FEV1 and 

FEV1 [percent] characteristic of mild obstructive lung disease. In the absence of significant 

improvement following inhaled bronchodilator this should be characterized as fixed 

obstruction.” Applying the sixth edition of the A.M.A., Guides, he opined that appellant had a 

six percent impairment of the lungs. Dr. Gelfand concluded that the pleural plaques from 

asbestos were “not contributing to his disability” as no evidence of “pulmonary parenchymal 

asbestosis separate from the pleural plaques.” 

A hearing was held on June 21, 2011 regarding the February 3, 2011 schedule award 

decision. 

An OWCP medical adviser reviewed the evidence on July 25, 2011 and opined that 

appellant had a four percent permanent impairment of the lungs. He concurred with 

Dr. Gelfand’s opinion that any impairment was not related to the accepted condition of asbestosrelated pleural thickening. 

By decision dated July 27, 2011, OWCP denied appellant’s claim for an increased 

schedule award. It found that Dr. Gelfand and OWCP’s medical adviser determined that his 
4

pulmonary impairment was not due to asbestos exposure and thus he had no work-related 

impairment. 

On August 1, 2011 appellant, through his attorney, requested an oral hearing on the 

July 27, 2011 decision. 

By decision dated September 2, 2011, an OWCP hearing representative affirmed the 

February 3, 2011 decision. She found that the medical adviser properly applied the A.M.A., 

Guides to Dr. Agia’s finding that appellant had a 20 percent permanent impairment of each lung. 

The hearing representative noted that OWCP initially awarded him a 20 percent impairment for 

only one lung and thus properly issued him a second 20 percent impairment rating for the other 

lung. 

A video hearing was held on November 16, 2011 regarding the July 27, 2011 decision. 

By decision dated January 18, 2012, an OWCP hearing representative affirmed the July 27, 2011 

decision. She found that Dr. Gelfand’s report represented the weight of the evidence due to his 

expertise in pulmonary medicine and established that OWCP erred in paying appellant schedule 

awards for a 20 percent impairment to each lung as the impairment was not due to the accepted 

condition. 

In a decision dated May 2, 2012, OWCP vacated its June 18, 2010 and February 3, 2011 

schedule award decisions and denied his claim for a permanent impairment of the lungs. It 

determined that the weight of the evidence established that his decreased lung function did not 

result from the accepted condition of asbestos exposure resulting in pleural thickening. 

On May 18, 2012 OWCP notified appellant of its preliminary determination that he 

received an overpayment of $22,539.71 because it erroneously paid him a schedule award. It 

found that he was without fault in creating the overpayment. OWCP requested that appellant 

complete the enclosed overpayment recovery questionnaire and submit supporting financial 

documents. Additionally, it notified him that, within 30 days of the date of the letter, he could 

request a telephone conference, a final decision based on the written evidence or a 

prerecoupment hearing. 

On June 14, 2012 appellant requested a telephonic prerecoupment hearing. He submitted 

an overpayment recovery questionnaire and supporting financial documents. In an 

accompanying statement, appellant asserted that the medical evidence from Dr. Agia and 

Dr. Waller supported that he had an impairment due to his asbestos exposure. He requested 

waiver of any overpayment. 

At the telephone prerecoupment hearing, held on February 19, 2013, appellant argued 

that he was entitled to a schedule award for his lungs. He provided information about his income 

and expenses to the hearing representative. The hearing representative advised appellant that she 

would send him a letter within 10 days requesting current financial information. 

On April 17, 2013 appellant completed another overpayment recovery questionnaire. He 

listed income of $1,924.02 and expenses of $1,401.00. 
5

In a decision dated May 7, 2013, an OWCP hearing representative found that appellant 

received an overpayment of $22,531.71 for the period April 9, 2008 to June 20, 2009 because 

OWCP incorrectly paid him a schedule award. She declined to address the merits of the 

schedule award decision as he had not requested a hearing on that decision. The hearing 

representative determined that appellant was without fault in creating the overpayment but 

denied waiver as he had not submitted sufficient updated financial information. Based on her 

review of the record this found that he could repay the overpayment by submitting $310.00 per 

month. 

On appeal appellant’s attorney argues that he erred in listing his expenses as $1,401.00 

per month and requested a reduced repayment schedule. 

LEGAL PRECEDENT -- ISSUE 1 

Section 8128 of FECA provides that the Secretary of Labor may review an award for or 

against payment of compensation at any time on her own motion or application.3

 The Board has 

upheld OWCP’s authority to set aside or modify a prior decision and issue a new decision under 

section 8128 of FECA.4 The power to annul an award, however, is not an arbitrary one and an 

award for compensation can only be set aside in the manner provided by the compensation 

statute.5

Workers’ compensation authorities generally recognize that compensation awards may be 

corrected, in the discretion of the compensation agency and in conformity with statutory 

provision, where there is good cause for so doing, such as mistake or fraud.6 It is well 

established that, once OWCP accepts the claim, it has the burden of justifying the termination or 

modification of compensation benefits.7 Its burden of justifying termination or modification of 

compensation holds true where it later decides that it has erroneously accepted a claim of 

compensation. In establishing that its prior acceptance was erroneous, OWCP is required to 

provide a clear explanation of its rationale for rescission.8

 3

 5 U.S.C. § 8128; see also M.E., 58 ECAB 694 (2007). 

4 John W. Graves, 52 ECAB 160 (2000). 

5 See 20 C.F.R. § 10.610; Cary S. Brenner, 55 ECAB 739 (2004); Stephen N. Elliott, 53 ECAB 659 (2002). 

6 L.C., 58 ECAB 493 (2007). 

7 Andrew Wolfgang-Masters, 56 ECAB 411 (2005). 

8 See Amelia S. Jefferson, 57 ECAB 183 (2005); Delphia Y. Jackson, 55 ECAB 373 (2004). 
6

The schedule award provision of FECA,9

 and its implementing federal regulations,10 set 

forth the number of weeks of compensation payable to employees sustaining permanent 

impairment from loss, or loss of use, of scheduled members or functions of the body. However, 

FECA does not specify the manner in which the percentage of loss shall be determined. For 

consistent results and to ensure equal justice under the law for all claimants, OWCP has adopted 

the A.M.A., Guides as the uniform standard applicable to all claimants.11 As of May 1, 2009, the 

sixth edition of the A.M.A., Guides is used to calculate schedule awards.12

The sixth edition requires identifying the impairment class for the diagnosed condition 

(CDX), which is then adjusted by grade modifiers based on Functional History (GMFH), 

Physical Examination (GMPE) and Clinical Studies (GMCS).13 The net adjustment formula is 

(GMFH-CDX) + (GMPE-CDX) + (GMCS-CDX). 

ANALYSIS -- ISSUE 1 

OWCP paid appellant schedule awards for a 20 percent impairment of each lung. It 

subsequently determined that he had received an overpayment of compensation as the medical 

evidence did not establish that the permanent impairment of the lungs was due to his accepted 

employment injury. The Board must review the underlying decision to determine if the 

overpayment was properly established.14 While OWCP did not specifically indicate that it was 

rescinding its prior schedule award, as it had previously awarded appellant a schedule award for 

a 20 percent permanent impairment of each lung, it has the burden of proof to establish that he 

was not entitled to a schedule award.15

OWCP based its rescission of the schedule award on the May 25, 2011 second opinion 

report of Dr. Gelfand. 

The Board finds Dr. Gelfand’s opinion is sufficiently rationalized to establish that any 

permanent impairment of the lungs is not due to the accepted condition. He based his opinion on 

a complete and factual history of the appellant’s employment dates, duties and exposures. 

On May 25, 2011 he diagnosed mild chronic obstructive lung disease and pleural plaques 

caused by asbestos exposure. Dr. Gelfand found that appellant’s reduced lung capacity as seen 

on spirometry and mild dyspnea on exertion were not related to asbestos-related pleural plaques 

 9

 5 U.S.C. § 8107. 

10 20 C.F.R. § 10.404. 

11 Id. at § 10.404(a). 

12 Federal (FECA) Procedure Manual, Part 2 -- Claims, Schedule Awards and Permanent Disability Claims, 

Chapter 2.808.5 (February 2013); see also Part 3 -- Medical, Schedule Awards, Chapter 3.700.2 and Exhibit 1 

(January 2010). 

13 A.M.A., Guides 494-531. 

14 See Russell E. Wageneck, 46 ECAB 653 (1995); see also J.F., Docket No. 08-2396 (issued March 19, 2006). 

15 See M.G., Docket No. 11-806 (issued January 25, 2012); Vernon E. Gaskins, 39 ECAB 746 (1988). 
7

but instead due to chronic obstructive lung disease. Further, he indicated that appellant’s mild 

dyspnea on exertion was related to chronic obstructive lung disease supported by the presence of 

obstructive defect with air trapping on pulmonary function testing and the presence of wheezing. 

Dr. Gelfand related that pulmonary function tests showed findings of chronic obstructive 

lung disease. He explained that the moderately severe increase in residual volume characteristic 

of air trapping, is typical of chronic obstructive disease. As well, he indicated that the 

spirometry revealed a mild reduction of the forced vital capacity and FEV1 and FEV1 percent 

also characteristic of mild obstructive lung disease. He concluded that there was no evidence of 

parenchymal asbestosis separate from the pleural plaques. 

The Board finds that the medical evidence of record is sufficient to meet OWCP’s burden 

of proof. Dr. Gelfand’s report was based on an accurate history of the case, on recent diagnostic 

testing and physical examination provided sufficient reasoning to establish its rationale for 

rescission. 

The Board further finds that $22,539.71 was the total amount of the schedule award 

payments and is the correct amount of overpayment. 

LEGAL PRECEDENT -- ISSUE 2 

The waiver or refusal to waive an overpayment of compensation by OWCP is a matter 

that rests within OWCP’s discretion pursuant to statutory guidelines.16 These statutory 

guidelines are found in section 8129(b) of FECA and states: Adjustment or recovery of an 

overpayment by the United States may not be made when incorrect payment has been made to an 

individual who is without fault and when adjustment or recovery would defeat the purpose of 

this subchapter or would be against equity and good conscience.17 When a claimant is found to 

be without fault in the matter of the overpayment, then, in accordance with section 8129(b), 

OWCP may only recover the overpayment if it determined that recovery of the overpayment 

would neither defeat the purpose of FECA nor be against equity and good conscience. 

Section 10.438 of OWCP’s regulations provide: 

“(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 FECA or be against equity and good conscience. 

This information will also be used to determine the repayment schedule, if 

necessary. 

 16 See Robert Atchison, 41 ECAB 83, 87 (1989). 

17 5 U.S.C. § 8129(b). 
8

“(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.”18

ANALYSIS -- ISSUE 2 

OWCP properly determined that appellant had not established entitlement to waiver of 

recovery of the $22,531.71 overpayment of compensation under the relevant standards. It found 

that appellant was not at fault in the creation of the $22,531.71 overpayment.19 However, citing 

20 C.F.R. § 10.438 in her May 7, 2013 decision,20 OWCP’s hearing representative denied his 

request for waiver of recovery of the overpayment by finding that he was not entitled to such 

waiver because he had not provided adequate documentation of his financial information. 

The Board finds that appellant did not provide sufficient financial information within the 

appropriate time period to show that he was entitled to determine whether waiver of the 

$22,531.71 overpayment was appropriate. As such, OWCP’s hearing representative properly 

exercised her discretion to deny waiver of recovery of the overpayment. Appellant submitted an 

April 17, 2013 OWCP-20 listing income of $1,924.02 and expenses of $1,401.00, however, 

failed to provide any financial documents supporting his stated monthly income and expenses 

As such and pursuant to section 10.438 of its regulations, OWCP properly denied his 

request for waiver of recovery of the $22,531.71 overpayment of compensation. 

The Board further finds that it does not have jurisdiction to review OWCP’s 

determination that the overpayment of compensation would be recovered through payments of 

$310.00 a month. It does not appear from the record that appellant is receiving continuing 

compensation benefits. The Board’s jurisdiction to review recovery of an overpayment is limited 

to the situation where recovery is made from continuing FECA benefits.21

CONCLUSION 

The Board finds that appellant received an overpayment of compensation in the amount 

of $22,531.71 for the period April 9, 2008 to July 20, 2009 because he incorrectly received 

compensation for a schedule award. The Board also finds that OWCP did not abuse its 

discretion in denying waiver of the overpayment. 

 18 20 C.F.R. § 10.438. 

19 If OWCP finds a claimant to be without fault in the matter of an overpayment, then, in accordance with section 

8129(b) of FECA, OWCP may only recover the overpayment if it determined that recovery of the overpayment 

would neither defeat the purpose of FECA nor be against equity and good conscience. See supra note 16. 

20 See supra note 18. 

21 See Rose Carye, 50 ECAB 482, (1999); Lewis George, 45 ECAB 144 (1993); Levon H. Knight, 40 ECAB 658 

(1989); Edward O. Hamilton, 39 ECAB 1131 (1988). 
9

ORDER 

IT IS HEREBY ORDERED THAT the May 7, 2013 decision of the Office of Workers’ 

Compensation Programs is affirmed. 

Issued: September 11, 2014 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board