United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

T.W., Appellant 

and 

DEPARTMENT OF LABOR, BENEFITS 

REVIEW BOARD, Washington DC, Employer 

__________________________________________ 

) 

) 

) 

) 

) 

) 

) 

) 

Docket No. 15-0636 

Issued: September 26, 2016 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On January 27, 2015 appellant filed a timely appeal of an August 19, 2014 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 to consider the merits of the case.2

ISSUES 

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

amount of $19,867.47 because OWCP paid her for a schedule award to which she was not 

entitled; and (2) whether OWCP properly denied waiver of recovery of the overpayment. 

 1

 5 U.S.C. § 8101 et seq.

2

 Appellant filed a timely request for oral argument, pursuant to 20 C.F.R. § 501.5(b). After exercising its 

discretion pursuant to 20 C.F.R. § 501.5(a), the Board by a November 9, 2015 order, denied appellant’s request 

because it could adequately address appellant’s contentions based on a review of the case record. Order Denying 

Request for Oral Argument, Docket No. 15-0636 (issued November 9, 2015). 
2

On appeal, appellant contends that the August 19, 2014 overpayment decision was 

incorrect as OWCP did not properly develop and grant her schedule award claims upon which 

the overpayment was determined and calculated. 

FACTUAL HISTORY 

On October 21, 2008 appellant, then a 55-year-old paralegal specialist, filed an 

occupational disease claim (Form CA-2) alleging that she developed bilateral tricompartmental 

degenerative knee arthritis due to factors of her federal employment. 

In a report dated October 8, 2008, Dr. Nigel M. Azer, a Board-certified orthopedic 

surgeon, reviewed x-rays and diagnosed tricompartmental degenerative arthritis of both knees. 

He found that appellant’s arthritis mostly involved the medial compartment, as well as the 

patellofemoral articulation. Dr. Azer found crepitus in both knees with 10 to 95 degrees of 

flexion and medial joint line tenderness. He noted that appellant’s arthritis was varus on the 

right and valgus on the left. 

By decision dated January 5, 2009, OWCP accepted appellant’s claim for aggravation of 

bilateral tricompartmental degenerative arthritis of the knees. 

Dr. Azer examined appellant and reviewed knee x-rays on January 12, 2009. He found 

medial joint space narrowing in the right knee with subchondral sclerosis and slight medial 

subluxation of the right knee. X-rays of the left knee demonstrated joint space narrowing and 

peripheral osteophytes on the lateral compartment. Appellant underwent a magnetic resonance 

imaging (MRI) scan of her left knee on April 21, 2009. This scan demonstrated osteoarthritis of 

the lateral compartment with displacement of the meniscus from the joint space. Appellant also 

exhibited joint space effusion with a small Baker’s cyst. 

On July 21, 2009 Dr. Azer performed an arthroscopy of appellant’s left knee with 

chondroplasty and partial mediolateral meniscectomy and lavage.3

Dr. Azer noted on October 5, 2009 that appellant continued to have crepitus in both knees 

with diffuse lateral joint-line tenderness in the left knee and diffuse medial joint-line tenderness 

in the right knee. He reviewed additional x-rays which showed arthritis changes in the left knee 

including lateral joint space narrowing, subchondral sclerosis and peripheral osteophytes. 

Appellant’s right knee x-rays demonstrated moderate medial joint space narrowing, subchondral 

sclerosis, and peripheral osteophytes. Dr. Azer noted that appellant would eventually require 

total knee arthroplasty, but that she was currently at maximum medical improvement (MMI). 

Appellant filed a claim for a schedule award (Form CA-7) on November 10, 2009. In a 

letter dated November 20, 2009, OWCP requested additional medical evidence comporting with 

the American Medical Association, Guides to the Evaluation of Permanent Impairment.4

 On 

 3

 In a decision dated September 11, 2009, OWCP denied appellant’s claimed period of disability from July 19 to 

20, 2009 finding that July 19, 2009 was not a scheduled workday. It further noted that she had not submitted 

medical evidence to support her total disability from work on July 20, 2009. 

4

 A.M.A., Guides, 6th ed. (2009). 
3

December 2, 2009 Dr. Azer reported that appellant underwent partial medial and lateral 

meniscectomies with 12 percent impairment of the left leg due to these surgeries. He also noted 

that appellant’s primary joint cartilage interval measured two millimeters, for 20 percent 

impairment of the left lower extremity. Dr. Azer found that appellant had only a two millimeter 

cartilage interval of the patellofemoral joint or 10 percent impairment of the left leg. He 

combined these impairment ratings to reach 33 percent permanent impairment of the left lower 

extremity. 

OWCP’s medical adviser reviewed this rating and disagreed with Dr. Azer’s methods, 

finding that only the meniscectomies should be included in her schedule award determination. 

He found that appellant had 12 percent permanent impairment of her left lower extremity. 

By decision dated January 22, 2010, OWCP granted appellant a schedule award for 12 

percent permanent impairment of her left lower extremity due only to partial medial and lateral 

meniscectomies. The period of the award was from December 2, 2009 through July 31, 2010. 

Dr. Azer examined appellant on May 5, 2010 due to her bilateral knee conditions. He 

noted that appellant wished to proceed with a total knee arthroplasty. Dr. Azer examined x-rays 

which demonstrated complete obliteration of the medial joint space on the right knee with 

narrowing of the tibiofemoral articulation. X-rays of the left knee exhibited tricompartmental 

arthritis. Dr. Azer diagnosed post-traumatic valgus arthritis of the left knee and post-traumatic 

varus arthritis of the right knee. He opined that appellant had failed conservative treatment of 

her left knee and met the clinical and radiographic criteria for total knee arthroplasty. 

On November 16, 2010 Dr. Azer performed a left total knee arthroplasty on appellant. 

Appellant returned to work on March 7, 2011. 

On May 2, 2011 Dr. Azer noted that appellant wished to proceed with a right knee total 

replacement arthroscopy. Appellant filed an additional Form CA-7 requesting a schedule award 

on May 12, 2011. In a report dated June 1, 2011, Dr. Azer described appellant’s left knee 

condition and total knee replacement. He found that x-rays demonstrated excellent position of 

the total knee arthroplasty on the left side with no component migration of radiolucency. 

Appellant’s left leg demonstrated full extension to 130 degrees of flexion. He found that 

appellant had reached MMI with regard to her left knee. Dr. Azer opined that under the A.M.A., 

Guides a good result of a knee replacement was 25 percent permanent impairment of the left 

lower extremity.5

In regard to appellant’s right leg, Dr. Azer found varus alignment in the right knee with 

marked crepitus. Appellant’s range of motion on the right was from 5 to 95 degrees of flexion 

with mild instability to valgus and varus stressing as well as crepitus at the patellofemoral 

articulation. Dr. Azer found that appellant had no cartilage interval and primary knee joint 

arthritis. He reported that she had an angular deformity in varus which was a grade 3 modifier. 

Dr. Azer noted that appellant had a moderate grade 2 limitation in right knee range of motion. 

 5 Id. at 511, Table 16-3. 
4

Using the A.M.A., Guides, he opined that appellant had 58 percent permanent impairment of her 

right lower extremity.6

OWCP’s medical adviser reviewed this report on July 31, 2011 and found that appellant 

was entitled to 25 percent permanent impairment of her left lower extremity, less the previous 

award of 12 percent or 13 percent permanent impairment of the left leg. In regard to appellant’s 

right lower extremity, he found that appellant was entitled to 10 percent permanent impairment 

due to loss of flexion and 10 percent due to loss of extension or 20 percent permanent 

impairment of the right leg.7

By decision dated August 9, 2011, OWCP granted appellant schedule awards for an 

additional 13 percent permanent impairment of her left leg and 20 percent permanent impairment 

of her right leg. The period of the schedule awards was from June 1, 2011 to March 27, 2013 or 

95.04 weeks of compensation for total permanent impairments of 33 percent of her lower 

extremities. 

Appellant received compensation for her schedule awards from June 1 to July 30, 2011 in 

the amount of $12,107.44. She received a payment from July 31 through August 27, 2011 in the 

amount of $5,650.14 and a payment from August 28 through September 24, 2011 in the amount 

of $5,650.14. 

Appellant requested a lump-sum payment of her schedule award on August 19, 2011. 

OWCP calculated that her remaining schedule award ran for 549.28 days and that her annual 

compensation was $73,451.82 and that her remaining lump-sum total was $108,261.94. On 

September 27, 2011 it granted appellant a direct lump-sum payment of $108,261.94. 

Dr. Azer performed a right total knee arthroplasty on October 18, 2011. In a report dated 

November 12, 2012, he found that appellant had reached MMI. Dr. Azer reported that appellant 

was ambulating without a limp and had active range of motion from full extension to 130 

degrees of flexion. X-rays of the right knee showed excellent position of the total knee 

arthroplasty with no evidence of radiolucency or component migration. 

Appellant requested an additional schedule award (Form CA-7) on November 20, 2012. 

In a report dated December 10, 2012, Dr. Azer found that appellant had range of motion of her 

right knee of 0 to 120 degrees compared to 0 to 130 degrees on the left. He again noted that 

appellant’s right knee x-rays demonstrated excellent position of the cruciate retaining rotating 

platform total knee arthroplasty. Dr. Azer found that appellant had mild motion deficit of the 

right knee and accorded appellant class 3-B impairment of the right lower extremity at 34 

percent permanent impairment.8

OWCP’s medical adviser reviewed Dr. Azer’s December 10, 2012 report and found that 

he had not provided sufficient findings to reach a determination of appellant’s permanent 

 6 Id. 

7 Id. at 549, Table 16-23. 

8 Id. at 511, Table 16-3. 
5

impairment for schedule award purposes. He recommended that OWCP refer appellant for a 

second opinion evaluation. 

OWCP referred appellant for a second opinion evaluation with Dr. Robert Allen Smith, a 

Board-certified orthopedic surgeon, on March 7, 2013. In a report dated March 28, 2013, 

Dr. Smith reviewed appellant’s history of injury and medical history. He diagnosed bilateral 

total knee replacements with good results. Dr. Smith found that appellant’s knees demonstrated 

satisfactory alignment, with range of motion between 0 and 125 degrees, and no evidence of 

instability or atrophy. He noted that appellant’s motor strength was normal. Dr. Smith applied 

the A.M.A., Guides and noted that appellant’s diagnoses of total knee replacement with good 

result was a class 2 condition with a default rating of 25 percent of the lower extremity.9 He 

listed appellant’s grade modifiers as functional history grade 1, physical examination grade 1, 

and clinical studies grade 1. Dr. Smith applied the formula and determined that appellant’s net 

adjustment was -3 resulting in 21 percent permanent impairment of each of her lower 

extremities. 

OWCP’s medical adviser reviewed this report on April 23, 2013 and concurred with 

Dr. Smith’s findings and conclusions. He noted that appellant had previously received schedule 

award for 20 percent permanent impairment of her right lower extremity, such that she was 

entitled to an additional 1 percent impairment for the right lower extremity. OWCP’s medical 

adviser further noted that appellant had previously received schedule award totaling 25 percent 

of her left lower extremity, but that Dr. Smith’s report supported only 21 percent impairment of 

the left lower extremity. He found that appellant was not entitled to an additional schedule 

award for impairment of her left lower extremity. 

By decision dated July 8, 2013, OWCP granted appellant a schedule award for an 

additional one percent permanent impairment of her right lower extremity. The period of the 

award was from March 28 through April 17, 2013 in the amount of $4,262.40. 

On July 31, 2013 OWCP identified an overpayment of compensation as appellant was 

previously awarded 25 percent permanent impairment of the left lower extremity and the medical 

evidence currently supported only 21 percent permanent impairment of the left lower extremity. 

It found that she received compensation from June 1, 2001 to March 27, 2013 in the amount of 

$131,669.66. OWCP further determined that appellant was entitled to receive compensation in 

the amount of $111,802.19 for the period June 1, 2011 through December 16, 2012 including a 

lump sum of $88,394.47. It found that she received an overpayment of compensation in the 

amount of $19,867.47. 

On September 20, 2013 OWCP made a preliminary determination that appellant had 

received an overpayment of compensation in the amount of $19,867.47 for the period 

December 16, 2012 through March 27, 2013 as she received compensation for schedule awards 

totaling 25 percent permanent impairment for the left lower extremity while the medical 

evidence support impairment of 21 percent. It found that she was without fault in the creation of 

the overpayment. OWCP provided appellant with her appeal rights, an overpayment recovery 

questionnaire, and allowed her 30 days to respond. 

 9 Id. 
6

Appellant requested a prerecoupment hearing from OWCP’s Branch of Hearings and 

Review on October 15, 2013. She disagreed with the finding of overpayment and alleged that 

the September 20, 2013 preliminary determination was in error. 

Appellant testified at the oral hearing on April 25, 2014. She argued that the preliminary 

overpayment determination was inconsistent with the previous calculations. Appellant further 

argued that a new OWCP medical adviser was required to review her claim after her referral to 

Dr. Smith. She also asserted that there was an unresolved conflict of medical opinion evidence 

regarding the range of motion of her right knee. Appellant contended that the additional degrees 

of loss of range of motion, and the functional history limitations found by her physician, would 

increase her schedule award to 31 percent as a class 3 impairment. She indicated that she was 

not going to complete the overpayment recovery questionnaire. 

By decision dated August 19, 2014, OWCP’s hearing representative found that an 

overpayment of $19,867.47 occurred. He determined that appellant had not followed her appeal 

rights regarding the July 8, 2013 schedule award determination of 21 percent of each lower 

extremity, that OWCP properly followed the calculations of lump sum overpayments, and that as 

appellant failed to provide financial information, the entire amount of the overpayment was due 

and not subject to waiver. 

LEGAL PRECEDENT -- ISSUE 1 

The schedule award provision of FECA10 and its implementing regulations11 set forth the 

number of weeks of compensation payable to employees sustaining permanent impairment for 

loss of use of scheduled members or functions of the body. FECA, however, does not specify 

the manner in which the percentage loss of a member shall be determined. The method used in 

making such determination is a matter which rests in the discretion of OWCP. For consistent 

results and to ensure equal justice, the Board has authorized the use of a single set of tables so 

that there may be uniform standards applicable to all claimants. OWCP evaluates the degree of 

permanent impairment according to the standards set forth in the specified edition of the A.M.A., 

Guides.

12 

The protocol and formula of the sixth edition of the A.M.A., Guides requires that the 

physician determine the Class of Diagnosis (CDX) for the lower extremity and apply the 

appropriate grade modifiers for Functional History (GMFH), Physical Examination (GMPE), and 

Clinical Studies (GMCS) and apply the following formula (GMFH-CDX) + (GMPE-CDX) + 

(GMCS–CDX) to reach the appropriate grade within the CDX.13

 10 5 U.S.C. § 8107. 

11 20 C.F.R. § 10.404. 

12 For new decisions issued after May 1, 2009 OWCP began using the sixth edition of the A.M.A., Guides. 

A.M.A., Guides, 6th ed. (2009); Federal (FECA) Procedure Manual, Part 2 -- Claims, Schedule Award and 

Permanent Disability Claims, Chapter 2.808.5a (February 2013); and Part 3 -- Medical, Schedule Awards, Chapter 

3.700, Exhibit 1 (January 2010). 

13 A.M.A., Guides 521. 
7

It is well established that, when the attending physician fails to provide an estimate of 

impairment conforming to the A.M.A., Guides, his or her opinion is of diminished probative 

value in establishing the degree of permanent impairment and OWCP may rely on the opinion of 

its medical adviser to apply the A.M.A., Guides to the findings of the attending physician.14

FECA’s implementing regulations prohibit the payment of duplicative schedule awards 

for the same member by the following provision: 

(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.15

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

degree of permanent impairment awarded, an overpayment of compensation may be created.16

ANALYSIS -- ISSUE 1 

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation because OWCP paid her for a schedule award to which she was not fully 

entitled. 

OWCP accepted that appellant sustained an aggravation of bilateral tricompartmental 

degenerative knee arthritis due to her job duties. Appellant’s attending physician, Dr. Azer, 

submitted a series of reports supporting her permanent impairment due to her accepted condition. 

Dr. Azer’s reports did not comport with the A.M.A., Guides. He did not provide the grade 

modifiers he used to reach his impairment ratings and did not apply the formula for calculating 

the appropriate grade within the classes of diagnosis-based estimates as required by the A.M.A., 

Guides. OWCP’s medical adviser reviewed these reports and applied the A.M.A., Guides to 

Dr. Azer’s findings. Appellant received a schedule award on January 22, 2010 for 12 percent 

permanent impairment of her left leg. On August 9, 2011 OWCP granted appellant schedule 

 14 Linda Beale, 57 ECAB 429 (2006). 

15 20 C.F.R. § 10.404(c). 

16 See R.R., Docket No. 14-2031 (issued March 9, 2015); L.C., Docket No. 09-2274 (issued July 7, 2010); J.G., 

Docket No. 09-2081 (issued May 6, 2010); M.S., Docket No. 08-2070 (issued September 11, 2009); see also 

Richard Saldibar, 51 ECAB 585 (2000) (the Board found that the overpayment issue was not in posture because 

OWCP had not properly resolved the schedule award issue). 
8

awards for an additional 13 percent permanent impairment of her left leg and 20 percent 

permanent impairment of her right leg based on OWCP’s medical adviser’s review of Dr. Azer’s 

reports. 

In a report dated June 1, 2011, Dr. Azer determined that appellant had 25 percent 

permanent impairment of the left lower extremity. He further found that appellant had class 3-B 

impairment of the right lower extremity at 34 percent permanent impairment. Dr. Azer again 

failed to provide the grade modifiers used, apply the appropriate formula, or fully explain how he 

reached his impairment ratings. 

Due to the deficiencies in Dr. Azer’s report, OWCP referred appellant for a second 

opinion evaluation with Dr. Smith. Dr. Smith provided a detailed report, including his findings 

on physical examination, and he provided his evaluation of these findings through the grade 

modifiers required by the A.M.A., Guides. He applied the above-described formula and 

determined that appellant had 21 percent permanent impairment of each of her legs based on her 

good results following total knee replacement, with good position, stability, and functional 

usage. OWCP’s medical adviser reviewed this report and found that it complied with the 

A.M.A., Guides. The Board finds that Dr. Smith’s report is the only medical evidence in the 

record which includes all the elements required by the A.M.A., Guides and applies the 

appropriate formula to reach an impairment rating. For these reasons, the Board finds that this 

report constitutes the weight of the medical opinion evidence and establishes that appellant has 

21 percent permanent impairment of each of her lower extremities for schedule award purposes. 

As appellant has no submitted rationalized medical opinion evidence supporting more 

than 21 percent permanent impairment of her left leg, OWCP properly found that receipt of a 

schedule award for 25 percent permanent impairment of her left leg resulted in an overpayment 

of compensation. 

The Board is, however, unable to determine how OWCP reached its calculations of the 

amount of the overpayment. Appellant received payment for four percent more impairment than 

that to which she was entitled. OWCP determined in its August 9, 2011 decision that appellant 

was entitled to compensation from June 1, 2011 to March 27, 2013 or 665.28 days of 

compensation for her total impairments of 33 percent of her lower extremities (13 percent 

additional left leg and 20 percent right leg impairment). Based on the additional medical 

evidence from Dr. Smith, OWCP properly determined that appellant was entitled to 

compensation for only 29 percent of her lower extremities or 4 percent less than she previously 

received.17 Permanent impairment for 29 percent of her lower extremities would entitle her to 

601.92 days of compensation for the period June 1, 2011 to January 22, 2013. Instead, OWCP 

utilized the period June 1, 2011 to December 16, 2012 or approximately 560 days in determining 

the lump sum due appellant. OWCP’s procedures require when recalculating a lump-sum 

payment, the claims examiner enter the original start date, in this case June 1, 2011, but then key 

in the appropriate new ending date.18 The Board is unable to determine how OWCP reached the 

 17 OWCP previously granted appellant a schedule award for the additional one percent impairment of her right 

lower extremity. 

18 Federal (FECA) Procedure Manual, Part 2 -- Claims, Lump-Sum Payments Chapter 2.1300.4b (July 2003). 
9

ending date utilized and consequentially cannot determine that the lump-sum payment based on 

this ending date properly calculated appellant’s entitlement for schedule award purposes. A later 

ending date of the lump-sum payment of the schedule award would result in a smaller 

overpayment amount for appellant. Consequently, while the evidence establishes that appellant 

received an overpayment of compensation, the case is not in posture for decision regarding the 

amount of the overpayment.19 The Board will remand the case for OWCP to recalculate the 

overpayment of compensation. 

CONCLUSION 

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation. However, the case is not in posture regarding the amount of the overpayment. 

ORDER 

IT IS HEREBY ORDERED THAT August 19, 2014 decision of the Office of Workers’ 

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

with this decision of the Board. 

Issued: September 26, 2016 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Valerie D. Evans-Harrell, Alternate Judge 

 Employees’ Compensation Appeals Board 

 19 As the case is not in posture regarding the amount of the overpayment, it is premature to address the issue of 

waiver of recovery of the overpayment.