United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

M.F., Appellant 

and 

U.S. POSTAL SERVICE, MARYVILLE 

GARDENS STATION, St. Louis, MO, Employer 

__________________________________________ 

) 

) 

) 

) 

) 

) 

) 

) 

Docket No. 16-1089 

Issued: December 14, 2016 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

COLLEEN DUFFY KIKO, Judge 

ALEC J. KOROMILAS, Alternate Judge 

JURISDICTION 

On April 28, 2016 appellant filed a timely appeal from an April 19, 2016 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 merits of this case. 

ISSUES 

The issues are: (1) whether OWCP properly determined that appellant received an 

overpayment of compensation in the amount of $4,128.44 for the period August 30 to 

November 18, 2011; (2) whether OWCP properly denied waiver of the overpayment of 

compensation; and (3) whether OWCP properly found that appellant had abandoned her request 

for a prerecoupment hearing before an OWCP hearing representative. 

 1

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

On February 27, 2008 appellant, then a 30-year-old city carrier, filed a traumatic injury 

claim (Form CA-1) alleging that on February 16, 2008 she sustained an injury to both knees in 

the performance of duty. OWCP converted the claim to an occupational disease claim as she 

attributed her condition to events occurring over the course of more than one work shift.2

 It 

accepted the claim for bilateral chondromalacia patella and a right knee medial meniscus tear. 

On February 26, 2008 Dr. Charles Mannis, a Board-certified orthopedic surgeon, 

diagnosed chondromalacia patella and mild degenerative arthritis of both knees. A July 8, 2008 

magnetic resonance imaging (MRI) scan of the right knee showed intact menisci and ligaments 

with questionable early osteoarthritis of the medial femorotibial compartment and minimal 

chondromalacia, patella. In a report dated July 11, 2008, Dr. Richard C. Lehman, a Boardcertified orthopedic surgeon, related that the MRI scan showed “breakdown in the patellofemoral 

joint and the femoral tibial joint.” 

Dr. Lehman performed a debridement of the left knee on July 30, 2008 and a partial 

medial meniscectomy and a debridement of the patellofemoral joint and medial femur of the 

right knee on September 24, 2008. 

An OWCP medical adviser reviewed the evidence of record on September 12, 2011 and 

opined that, according to the sixth edition of the American Medical Association, Guides to the 

Evaluation of Permanent Impairment (A.M.A., Guides), appellant had two percent permanent 

impairment of the right lower extremity due to her partial meniscectomy and two percent 

permanent impairment of the left lower extremity due to patellofemoral arthritis. 

By decision dated October 21, 2011, OWCP granted appellant a schedule award for two 

percent permanent impairment of each lower extremity.3

 The period of the award ran for 11.52 

weeks from August 30 to November 18, 2011. 

A November 7, 2012 MRI scan of the left knee showed increased arthritis of the medial 

compartment and a developing subluxation of the medial meniscus with no medial or lateral tear. 

An OWCP medical adviser, on May 14, 2013, recommended that OWCP authorize a left 

knee arthroscopy due to increased arthritis as demonstrated by the November 7, 2012 MRI scan. 

On July 15, 2013 Dr. Lehman performed a left partial lateral meniscectomy and 

debridement of the patellofemoral articulation, trochlea, patella, femoral condyle, and lateral 

tibial plateau. In a report dated December 3, 2013, he found that appellant had good range of 

 2

 A traumatic injury is defined as a “condition of the body caused by a specific event or incident, or series of 

events or incidents, within a single workday or shift.” 20 C.F.R. § 10.5(ee). An occupational disease is defined as a 

condition produced by the work environment over a period longer than a single workday or shift.” 20 C.F.R. 

§ 10.5(q). 

3

 In a decision dated September 24, 2013, OWCP denied appellant’s claim for disability compensation on 

July 12, 2013. 
3

motion without swelling or laxity. Dr. Lehman advised that she had reached maximum medical 

improvement.4

 Appellant requested an additional schedule award (Form CA-7) 

By decision dated February 20, 2014, OWCP denied appellant’s claim for an increased 

schedule award as she had not submitted an impairment evaluation in support of her claim. 

Appellant, on December 30, 2014, filed another claim for an increased schedule award 

(Form CA-7).5

 

OWCP, on April 27, 2015, requested that its medical adviser review Dr. Lehman’s 

December 3, 2013 impairment rating. In an April 30, 2015 response, the medical adviser 

reported that Dr. Lehman’s report did not contain an impairment rating and opined that the report 

from Dr. Lehman was insufficient to support a schedule award and recommended a second 

opinion examination. 

On May 14, 2015 OWCP referred appellant to Dr. Richard T. Katz, a Board-certified 

physiatrist, for a second opinion examination. In a report dated June 5, 2015, Dr. Katz reviewed 

her history of knee surgeries and the diagnostic studies. He discussed appellant’s complaints of 

knee pain particularly with extensive walking, standing, or climbing stairs. Dr. Katz also 

reviewed the accepted conditions of bilateral chondromalacia patella and a right medial meniscus 

tear. On examination, he found pain at the medial patellar joint and crepitus bilaterally with 

negative drawer signs, but no vargus or vulgus, instability, or loss of motion. Dr. Katz noted that 

as chondromalacia patella was considered arthritis it required standing x-rays to rate the 

impairment under the A.M.A., Guides. In a June 29, 2015 report, he interpreted x-rays obtained 

on June 25, 2015 as showing bilaterally severe medial compartment narrowing, but noted that it 

was not an accepted condition. Dr. Katz found that appellant’s patellofemoral arthritis 

narrowing as demonstrated by x-ray was not of sufficient severity to warrant an impairment 

rating as her joint intervals were more than the cartilage intervals required for a rating accord to 

Table 16-3 on page 511. He again noted that he was not rating medial compartment arthritis as it 

was not listed as an accepted condition. Dr. Katz, citing Table 16-3 on page 509 of the A.M.A., 

Guides, identified the diagnosis as a partial medial meniscectomy and applied a grade modifier 

of one for physical examination. He opined that appellant had two percent permanent 

impairment due to her partial medial meniscectomy.6

 

An OWCP medical adviser reviewed Dr. Katz’ impairment evaluation on July 17, 2015. 

He found that appellant had two percent permanent impairment of the right lower extremity due 

to the accepted partial medial meniscectomy and no impairment of the left lower extremity due 

to the accepted left knee condition of chondromalacia patella. 

 4

 On November 18, 2014 Dr. Lehman related that appellant originally injured her knees in 2008 carrying mail and 

sustained an additional injury from a fall in 2009. He advised that she had preexisting bilateral degenerative 

patellofemoral joint arthritis, but that a portion of the arthritis was due to her employment injury. 

5

 On March 13, 2015 OWCP terminated appellant’s compensation and authorization for medical benefits, as she 

had no residuals or disability causally related to her accepted employment injury. 

6

 Dr. Katz did not specify the side that he was rating for the medial meniscal tear; however, OWCP has not 

accepted that appellant sustained a tear of the left medial meniscus. 
4

By decision dated July 23, 2015, OWCP denied appellant’s claim for an increased 

schedule award. 

In a memorandum dated July 28, 2015, OWCP calculated that appellant received a 

schedule award of $8,256.88 for two percent permanent impairment of each lower extremity 

when she was only entitled to two percent permanent impairment of the right lower extremity, 

which yielded an overpayment of $4,128.44. 

On July 29, 2015 OWCP advised appellant of its preliminary determination that she had 

received an overpayment of compensation in the amount of $4,128.44 for the period August 30 

to November 18, 2011 because it overpaid her for a schedule award. It further advised her of its 

preliminary determination that she was not at fault in creating the overpayment. OWCP 

requested that appellant complete the enclosed overpayment recovery questionnaire and submit 

supporting financial documents. Additionally, it notified her that, within 30 days of the date of 

the letter, she could request a telephone conference, a final decision based on the written 

evidence, or a prerecoupment hearing. 

Appellant, on August 4, 2015, challenged the existence of the overpayment and requested 

waiver. She noted that in July 2013 she had additional arthroscopic surgery on her left knee.7

 

Appellant returned an incomplete overpayment recovery questionnaire. 

In a September 3, 2015 telephone call, appellant requested a prerecoupment hearing. On 

February 18, 2016 OWCP again requested that she complete an overpayment recovery 

questionnaire and allotted her an additional 30 days for its submission. 

OWCP advised appellant on February 18, 2016 that it had scheduled a telephone hearing 

for April 4, 2016 at 2:15 p.m. Eastern Standard Time. The notice was addressed to appellant’s 

address of record. 

In a decision dated April 19, 2016, an OWCP hearing representative determined that 

appellant had abandoned her request for a prerecoupment hearing as she had not telephoned at 

the appointed time or contacted OWCP either before or after to explain her failure to appear. 

She found that appellant had received an overpayment of compensation in the amount of 

$4,128.44 because OWCP paid appellant two percent for each lower extremity when she was 

only entitled to two percent for the right lower extremity. The hearing representative further 

determined that appellant was not entitled to wavier as she failed to submit any financial 

information and that the overpayment was due in full. 

 7

 An MRI scan arthrogram of the left knee dated February 24, 2016 revealed moderate chondrosis of the patella 

and medial compartment, minimal chondrosis of the lateral compartment, and mild fraying of the medial meniscus 

at the posterior horn. An MRI scan arthrogram of the right knee obtained February 24, 2016 showed mild 

patellofemoral compartment and medial compartment chondrosis with no meniscal tear. In a February 11, 2016 

report, Dr. Lehman diagnosed chondromalacia of the patellofemoral joints bilaterally. He advised that x-rays 

revealed “[p]atellofemoral breakdown” and recommended further objective tests. 
5

LEGAL PRECEDENT -- ISSUE 1 

The schedule award provision of FECA,8 and its implementing federal regulations,9 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.10 As of May 1, 2009, the 

sixth edition of the A.M.A., Guides is used to calculate schedule awards.11

If a claimant received a schedule award and the medical evidence does not support the 

degree of permanent impairment awarded, an overpayment of compensation may be created. 

Claims for an increased schedule award based on the same edition of the A.M.A., Guides are 

subject to overpayment.12 

When OWCP makes a determination that an overpayment of compensation has occurred 

because the claimant received an erroneous schedule award, it must properly resolve the 

schedule award issue. Before the amount of the overpayment can be determined, the evidence 

must establish the degree of permanent impairment.13

ANALYSIS -- ISSUE 1 

OWCP accepted that appellant sustained bilateral chondromalacia patella and a medial 

meniscus tear of the right knee causally related to factors of her federal employment. Appellant 

underwent a left knee debridement in July 2008 and a partial medial meniscectomy and 

debridement of the patellofemoral joint and medial femur of the right knee on 

September 24, 2008. 

On September 12, 2011 an OWCP medical adviser found that appellant had two percent 

right lower extremity impairment due to her partial meniscectomy and two percent left lower 

extremity impairment due to her patellofemoral arthritis. OWCP granted her a schedule award 

for two percent permanent impairment of each lower extremity. 

Dr. Lehman performed a partial left lateral meniscectomy and debridement of the left 

knee on July 15, 2013. On December 3, 2013 he found that appellant had no swelling or laxity 

 8

 5 U.S.C. § 8107. 

9

 20 C.F.R. § 10.404. 

10 Id. at § 10.404(a). 

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

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

(January 2010). 

12 See W.M., Docket No. 13-291 (issued June 12, 2013); id., Chapter 2.808.9(e) (February 2013). 

13 See L.S., Docket No. 08-1247 (issued December 12, 2008); Richard Saldibar, 51 ECAB 585 (2000). 
6

and good motion. Dr. Lehman determined that she had reached maximum medical 

improvement. 

OWCP referred appellant to Dr. Katz for a second opinion examination to determine the 

extent of any permanent impairment. Dr. Katz noted that the accepted conditions were bilateral 

chondromalacia and right medial meniscal tear. He found that appellant had two percent 

impairment due to the meniscal tear. Dr. Katz obtained x-rays of the knees bilaterally and found 

that the patellofemoral arthritis, which he identified as the impairment due to chondromalacia, 

was not severe enough to be ratable. He advised that appellant had bilateral medial compartment 

arthritis that had not been accepted and thus did not rate this condition. 

On July 17, 2015 an OWCP medical adviser reviewed Dr. Katz’ opinion and determined 

that appellant had only two percent permanent impairment of the right lower extremity and no 

impairment of the left knee as a result of the accepted conditions. 

When OWCP makes a determination that an overpayment of compensation has occurred 

because the claimant received an erroneous schedule award, it must first properly calculate the 

schedule award.14 The Board finds that the overpayment issue is not in posture for decision as 

OWCP has not properly resolved the underline issue of appellant’s entitlement to a schedule 

award. Dr. Katz found that she had medial compartment arthritis which he did not rate because 

it was not an accepted condition. If medial compartment arthritis is a preexisting condition, it 

should have been considered in determining the extent of any permanent impairment.15 OWCP’s 

procedures provide that, in evaluating the loss of use of a scheduled member due to an 

employment injury, the percentage includes both employment-related impairments and “any 

preexisting permanent impairment of the same member or function.”16 Dr. Mannis diagnosed 

chondromalacia patella and mild degenerative arthritis of both knees in a report dated 

February 26, 2008. An MRI scan of the right knee obtained July 8, 2008 revealed possible early 

osteoarthritis of the medial femorotibial compartment and minimal chondromalacia patella. 

Dr. Lehman interpreted the MRI scan as showing a breakdown in the femoral tibial and 

patellofemoral joint. 

On remand, prior to determining whether appellant received an overpayment of 

compensation, OWCP should refer the case to Dr. Katz for a supplemental opinion as to whether 

she had preexisting medial compartment arthritis and, if so, whether she has more than a two 

percent permanent impairment of the right lower extremity.17 After such further development as 

it deemed necessary, it should issue an appropriate decision. 

 14 See L.S., supra note 12. 

15 See Clary J. Cleary, 57 ECAB 563 (2006); Mike E. Reid, 51 ECAB 543 (2000). 

16 Supra note 11 Chapter 2.808.5(d) (February 2013). 

17 Appellant must establish impairment to a scheduled member caused by the accepted condition before 

impairment due to a preexisting condition can be assessed. See K.H. Docket No. 13-0501 (issued January 28, 2014). 

As the medical evidence does not show a permanent impairment of the left lower extremity, the claim is not ripe for 

consideration of any preexisting impairment. See Thomas P. Lavin, 57 ECAB 353 (2006). 
7

CONCLUSION 

The Board finds that the case is not in posture for decision regarding whether appellant 

received an overpayment of compensation.18 

ORDER 

IT IS HEREBY ORDERED THAT the April 19, 2016 decision of the Office of 

Workers’ Compensation Programs is set aside and the case is remanded for further proceedings 

consistent with this opinion of the Board. 

Issued: December 14, 2016 

Washington, DC 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 18 In view of the Board’s determination on the fact and amount overpayment, the issues of whether OWCP 

properly denied waiver and properly found that appellant abandoned her request for a prerecoupment hearing are 

moot.