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Board of Directors’ Meeting
July 20, 2004

A meeting of the Workers’ Compensation Board of Directors was held on Tuesday, July 20, 2004 at the Board's Central Office in Augusta, Maine (AMHI Complex, Deering Building, Rm. 170). Chairman Dionne called the meeting to order at 9:57 a.m.


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


Gary Koocher seconded.

Director Koocher, referring to the motion on pg. 2 regarding a salary increase for confidential employees, stated the minutes are incorrect and that he voted “present” when the Chair took a roll call vote on the proposal. Mr. Koocher explained that he chose to do that instead of voting in favor or against the motion because the Budget Subcommittee had requested specific information from the Bureau of Human Resources, which it has not received. Mr. Koocher noted the issue did not come up again until the meeting in Caribou on 6-15-04, which he attended via telephone.
Mr. Koocher concluded his comments by noting that the Board has a fiduciary responsibility with respect to the implications of its actions.

MOTION FAILS 3-0-1 (Director Hiltz abstained).

The draft minutes of the 6-15-04 board meeting will appear on the next agenda for final Board action.


  1. Personnel Subcommittee: Chairman Dionne informed directors that he and Personnel Subcommittee Members G.Koocher and R.Hiltz conducted interviews at the Portland Regional Office on 6-22-04, 6-23-04 and 6-24-04 for the two hearing officer vacancies and reported the Subcommittee would like to meet with the Board in an executive session to discuss the interviews.


Directors gathered in executive session at 10:04 a.m.; returned to the business meeting at 10:10 a.m.

Director Hiltz, on behalf of the Personnel Subcommittee, stated Chairman Dionne will be convening a special meeting to decide how best to proceed with respect to filling the two hearing officer positions.


  1. Independent Medical Examiners (See 39-A M.R.S.A. §312): On behalf of the Deputy Director of Medical/Rehabilitation Services and IME Subcommittee Members J.Kirkpatrick & J.Mingo, Chairman Dionne stated the IME Subcommittee recommends appointing Orthopedic Surgeon Frank Graf as an Independent Medical Examiner and noted Dr. Graf has an office in Portsmouth, N.H. and is licensed to practice orthopedic surgery in both Maine and New Hampshire.


    Directors and Staff discussed Public Participant A.Muir’s comments with respect to the appointment of Dr. Graf as an independent medical examiner most likely resulting in some concerns being expressed by Members of the Portland Bar Association who have worked with Dr. Graf in the past (Mr. Muir explained that the problem lies with the medical opinions Dr. Graf renders on workers’ compensation claimants); postponing final action on the proposed appointment until the IME Subcommittee has an opportunity to speak with some Members of the Portland Bar Association and the few physicians the Board currently has serving as Sec. 312 examiners and the individuals being overwhelmed.

Directors caucused at 10:16 a.m.; returned to the business meeting at 10:19 a.m.

  1. IAIABC’s 90th Annual Convention: After advising directors of his interest in attending the Association’s Annual Convention, which will be held in New York City in August (August 5-11), P.Dionne stated he has extended an invitation to the Board members to attend the Convention and inquired of directors if they have any objections to him attending the event, both as a Board member and Member of the Association’s Executive Committee.



Chairman Dionne, welcoming Former Director P.Lemaire, stated Ms. Lemaire served on the Workers’ Compensation Board from 1999 to 2003 and stated he will be presenting her with a plaque for her years of service, on behalf of the Board.


Chairman Dionne, on behalf of the State of Maine and Workers’ Compensation Board, presented Ms. Lemaire with a plaque for her years of dedicated service as a Member of the Maine Workers’ Compensation Board from 1999 to 2003.

  1. Deputy Director of Business Services Vacancy: Executive Director P.Dionne reported that he and Budget Subcommittee Members J.Kirkpatrick and J.Cooney interviewed six candidates at the Central Office on 7-19-04 for the Deputy Director of Business Services vacancy and stated the Subcommittee will be discussing the candidates via a telephone conference after Director Cooney returns from vacation. Mr. Dionne stated the group will most likely present its recommendation on who to hire for the DDBS position at the next board meeting.
  2. Board Member’s Temporary Medical Leave of Absence: Following up on his recent report regarding the bypass surgery Director Monfiletto underwent on 7-1-04, P.Dionne stated Mr. Monfiletto will out of work for eight to ten weeks and informed the Board that he will be seeing his Cardiologist on 8-19-04.
  3. Former Deputy Director of Business Services: P.Dionne, reporting on the status of Former Deputy Director of Business Services J.Jolicoeur, who retired on 4-30-04, stated Mr. Jolicoeur has gone for a second opinion and will be seeing a Nutritionist in the very near future.


  1. Chapter 5 Consensus-Based Rulemaking Committee: General Counsel J.Rohde informed directors that the Chapter 5 Consensus-Based Rulemaking Committee met on 7-6-04 to continue its discussions on including ambulatory surgical care centers, pharmaceuticals and in-patient care services in the Board’s Medical Fee Schedule and announced that the group plans to meet again at 1:00 p.m. on 9-7-04 to continue their work on Chapter 5. Mr. Rohde also informed the Board that the group may ask for an extension of time to submit their report to the Board if they find that they need additional time to address the issues.
  2. Cases Pending before the Abuse Investigation Unit: Following up on his report of 6-1-04 wherein he advised directors that the Board has identified several entities with outstanding fines, Assistant General Counsel T.Collier reported that the majority of the outstanding penalties the Board has identified relate to late-filed First Reports and indicated Planning & Research Assistant K.Schultz is working diligently with the entities to make arrangements to pay their outstanding fines. Mr. Collier noted three out of the four largest insurers with outstanding penalties have taken steps to pay the penalties.
  3. Pending Request for Extension of Benefits Due to Extreme Financial Hardship: Following up on the Board’s 5-18-04 deliberations on the pending Request for Extension of Benefits Due to Extreme Financial Hardship in the Frederick Starbird case, J.Rohde announced the Board’s plans to hold another hearing this afternoon, at 1:00 p.m., on the Starbird case and informed directors that staff will be contacting them shortly to inquire as to their availability in September to attend hearings on two other cases pending before the Board.
  4. Law Court Decisions (Curt Brown v. Sappi Fine Paper, et al and Francis Arsenault v. J.A. Thurston Co., et al): Referring to the decision the Law Court rendered in the Brown v. Sappi Fine Paper case on 6-30-04 and the Court’s 7-2-04 decision in the Arsenault case, Mr. Rohde advised directors that the Brown case deals with a case in which attorneys fees were already awarded at the hearing level, which the Court determined to be a contractual matter and not subject to another Order to fix the fees on a subsequent Motion for Fees. Mr. Rohde stated the Arsenault case involves a situation in which there are three injuries – the first of which occurred when the employee was insured by an insurance company and two later injuries that happened when the employer was self-insured. Mr. Rohde stated the self-insured employer filed a Petition to Apportionment against the prior insurer and noted that in the meantime a Request for a Lump-sum Settlement hearing was filed, which the self-insured employer objected to arguing that the Petition for Apportionment petition had not yet been heard. Mr. Rohde noted the Hearing Officer found that the self-insured employer did not have standing to object to the settlement and approved it which essentially dismissed the pending Petition for Apportionment. Mr. Rohde explained that the Law Court said that the Hearing Officer was correct in that the self-insured employer did not have standing to object to the lump-sum settlement proceeding between the insurance company and the employee, but that in a situation where you have pending both a lump-sum settlement request and a Petition for Apportionment that the apportionment petition must be heard and decided before a lump-sum settlement is agreement is approved.


  1. Legislation (L.D. 1688 and L.D. 1957): J.Rohde, referring to his memorandum dated 7-7-04, advised directors that the summary is a supplement report to his legislative summary of 4-21-04 and that it highlights two bills that were awaiting final action and were eventually signed into law by the Governor. Mr. Rohde noted the two new laws (outlined below) became effective on 7-29-04. Directors were also advised that the Board has until 12-1-04 to submit proposed legislation.


    P.L. 2003, Ch. 685 (L.D. 1688)
    An Act to Clarify the Law Regarding Interpreting Services for People Who are Deaf or Hard-of-hearing

    The law requires presiding officers to appoint qualified legal interpreters or CART (computer-assisted real-time transcription) providers after consultation with a deaf or hard-of-hearing person. The Board, who is already providing interpreting services, will need to have interpreters take an oath before performing their duties.

    P.L. 2003, Ch. 709 (L.D. 1957)
    An Act to Implement the Recommendations of the Committee To Study Compliance with Maine’s Freedom of Access Laws

    The law mandates that, before entering executive session, an agency include a citation of one or more statutory or other authority that permits an executive session. Directors were advised that an inaccurate citation does not violate the law as long as there is a valid authority and that the failure to cite the authority was inadvertent and contains other changes dealing with public records.

    Directors and Staff discussed the Board having until 12-1-04 to submit legislative proposals for the next Session (Mr. Rohde asked directors to contact him to discuss any legislative proposals they would like drafted and stated he will prepare legislative proposals for the Board’s review in late August, or early September).

  2. Draft 2003 Annual Compliance Report: On behalf of the Monitoring, Audit and Enforcement Program, Deputy Director of Benefits Administration S.Minkowsky and Management Analyst II J.Levesque presented directors with an Annual Compliance Report for 2003 and summarized the contents of the report via a Power Point presentation.


Deputy Director of Benefits Administration S.Minkowsky, prior to presenting the draft report in its entirety, introduced Planning & Research Associates B. Howard and K.Schultz, Administrative Secretary A.Poulin and Management Analyst J.Levesque (the employees in the Board’s Monitoring, Audit and Enforcement Program) and thanked them for their efforts in compiling the report.

Power Point Presentation

Summary of Compliance Report Authority; What a Compliance Report Is; The Basic Elements of a Compliance Report; What compliance is and what is measured in Compliance reports

The authority to generate and publish compliance reports is described in 39-A M.R.S.A. §153(9) of the Workers’ Compensation Act of 1992. The report is a tool the WCB uses to measure the filing and payment performance of every workers’ compensation insurance carrier processing workers’ compensation claims. The reports began in 1997 after a pilot project in which Board staff sampled insurance company data in order to conduct an initial analysis of compliance with the Act. The report process was fully implemented in 1999 to measure all insurance carriers and uses population (all filings by all insurers) data to compile four Quarterly Compliance Reports and an Annual Compliance Report each year. Compliance reports measure the community as a whole, which is broken down by entity type, in-state v. out-of-state insurance groups, individual insurance groups and entities and rate companies within an insurance group.

Improvements in Compliance

Compliance has improved for the third straight year in all categories -- fewer lost-time claims were filed, more insurance groups are meeting the Board’s benchmarks and Corrective Action Plans (CAPs) are working,

Data on First Reports of Injury

Staff reported that the Board received 16,362 Lost-Time reports in 2003, which were approximately 529 less than in 2002 and remarked that 82.43% of those reports were filed within seven days and that the figure is up from 81.73% in 2002. Mr. Minkowsky also explained that 88.83% of those reports were filed within ten days. Staff referred directors to pie charts in the Annual Report which show the filing distribution by the number of days and reported on the trends with First Reports as it relates to total lost-time reports dropping from 18,419 in 2002 to 16,352 reports in 2003. Staff further noted compliance continually improves and that fewer First Reports are being filed and that more are being filed timelier.



Data on Initial Indemnity Payments

The Board saw the highest indemnity payment compliance for the third year in a row. The data shows that 85.56% of initial indemnity payments were made timely, that the compliance rate has increased 6.21% since 1999 and that hundreds more household have received timely initial payments since compliance measuring began. Staff, referring to the pie chart in the Draft Compliance Report, stated the data shows the percentage of indemnity payments made within a specific timeframe. Staff announced that initial indemnity payment compliance continues to improve and referred directors to the charts in the report which show a steady increase in the compliance for indemnity payments made from 1999 to 2003.

Data on Memorandum of Payment Filings

Compliance for Memorandum of Payment (MOP) filings rose to almost 82% in 2003 -- a 6.73% increase in compliance since 1999 and as a result, the Board is receiving more timely filings, the average weekly wage can be determined more quickly and efficiently, and administrative issues are identified faster. Staff referred directors to a chart in the 2003 report showing MOP filings provide a valuable indicator of an insurance group’s administrative performance and focuses on form filings and eliminates unwanted delays in claims processing, which benefit all parties. Staff also referred directors to the graph showing the improved compliance of approximately 6 1/2% in the four years since the Board began measuring MOP filings in 1999.

General Compliance Trends

Staff presented directors with charts on the overall trends for First Report filings, initial indemnity payments and initial Memorandum of Payment filings from 1999 to 2003 and explained that in 1999 that only 36.74% of First Reports were filed within seven days, which is up to 82.43% in 2003, that initial indemnity payments has risen from 59.39% in 1999 to 85.56% in 2003, and that initial MOP filings rose from 56.78% in 1999 to 81.87% in 2003, which results in a reduction in litigation, less cost shifting, fewer constituent complaints, and more employees receiving timely and accurate payments.

Industry Performance v. Workers’ Compensation Board Benchmarks

Staff referred directors to the chart regarding the Board’s benchmarks for industry performance for both initial indemnity payments and MOPS filings and noted the industry performance for indemnity payments is 5.56% above the Board’s benchmarks and that Mop filings were also above the Board’s benchmark by approximately 6.87%.

Insurer Type Analysis (Initial Indemnity Payment filings)

The MAE Program’s data on initial indemnity payments made in 2001, 2002 and 2003 show a notable increase in MEMIC’s compliance and that third-party administrators are still showing poor compliance. Staff reported that standard insurers are having some problems and that they are focusing a lot of their time on initial Corrective Action Plans in that area. Staff advised directors that the difficulty with TPA’s is in locating them. Staff noted that in 2002 the Board saw an improvement in all areas, but a regression in TPA compliance in 2003 and stated they will continue working with TPA’s to improve their compliance.

Percentage of Memorandum of Payment Filings

The charts in the Annual Report give the program an analysis of who is filing the most payments. In 2002 standard insurers were making approximately 30% of the payments and MEMIC was handling approximately 32% of the MOPs being filed and self-insureds were at 17% and TPA’s at 11%. Some of the changes in 2003 with the filings correlate to the market share – standard insurers dropped 5%, MEMIC increased 3% and self-insured/self-administered increased by approximately 2%. Staff noted some of the changes are due to the changes in the market and that some of it is related to the Board’s maintenance of better records.

Insurance Group Analysis

Insurance group are the primary processor of Maine workers’ compensation claims, which is normally the parent company of any number of entities. Staff noted some of the larger insurers can have up to seven different companies working under an umbrella and remarked that it is important to focus on that data. Staff explained that many insureds can have self-insured or TPA portions where they hire their administrative work out to other insureds or third-party administrators. The assignment is determined by the primary processor location of Maine claims since some insurers have a small Maine office and consider themselves to be an in-state carrier even though they are actually an out-of-state carrier.

Insurance Group Analysis
Overall compliance is high and there has been a marked improvement since 2001 and 2002, but that at the same time there are still insurance groups who do not meet or exceed the Board’s benchmarks.

Charts on Insurance Groups and Benchmarks

Staff referred directors to the graphs that provide an indicator of insurance group performance that de-emphasizes MEMIC’s performance since MEMIC handles approximately half of the claims in the State. Staff provided directors with the figures for insurance groups with initial indemnity payments at or above the benchmarks for 2001, 2002 and 2003 and the percentage of insurance groups with initial MOP filings at or above the benchmarks for 2001, 2002 and 2003. Staff reported that indemnity payments went up from 44% in 2001 to 61% in 2003 and that timely MOP filings rose from 34% in 2001 to 49% in 2003. Staff further noted the data indicates that there are only approximately 50% of employers and insurers submitting their paperwork on time, which creates delays in dispute resolution, verifying wages and ensuring timely payments to injured workers. Staff advised directors that they will continue working with the various insurance groups to make sure the forms are being filed in a timely manner.

In-State v. Out-of-State Comparisons

The data helps the MAE Program determine how best to focus its limited resources and it provides an indicator for the MAE Program on the impact of the Board’s Corrective Action Plans. Staff noted the data is also helpful in monitoring the out-of-state companies who are filing approximately 25% of the MOP forms the Board receives. Directors were referred to the comparison charts in the report for both in-state and out-of-state insurance groups as it relates to both initial indemnity payments and MOP filings. Staff noted the MAE Program will continue to work with out-of-state insurance groups to improve their overall compliance.

Importance of Measuring the Performance of Insurance Groups

It is important to measure the performance of insurance groups so that the data can provide performance data to system users such as claims managers, employers, adjusters, consumers, regulators, policymakers and legislators.

Insurance Group Data Format

The feedback staff has received is that entities would like to see more analysis and more of a comparison of compliance data. Staff stated they have created a new insurance group data format and referred directors to the charts in the report. Staff noted that last year the Board simply had trend lines, but had no comparison data as it relates to the Board’s benchmarks to show how a specific insurance group is performing in comparison to the Board’s pre-set benchmarks, both for initial indemnity payments and MOP filings. Staff stated they took the annual averages for an annual comparison from last year’s report and noted this year is the largest change. The data tells consumers who an insurance company is, what they do, and basically how many memorandum of payment forms they filed for a specific period of time, which provides them with analytical data and a snapshot of an entity’s utilization of the workers’ compensations system.

Insurance Group Data and Corrective Action Plans

Insurers identified as having chronic poor compliance are put on Corrective Action Plans, which are voluntary plans that identify and remedy processing and administration issues -- training is often required; the Division increases its monitoring to make sure that the benchmarks are being met and there are documented deadlines and expectations. Staff also apprised directors of what takes place when a Corrective Action Plan fails such as the filing of a Complaint for Audit & Penalties against the insurance group, which details the violations of Sec. 359 as it relates to the entity’s questionable claims practices and violations of Sec. 360(2) with respect to their violations of the Act. Staff referred directors to the Executive Summary of the report for the list of entities currently working under a Corrective Action Plan and noted the data allows for public scrutiny and remarked that the entity is liable for fines and penalties.

High Compliance Performance

The charts in the 2003 report, which are broken down by volume such as MEMIC who processed 1,686 claims in 2003. The charts also indicate the compliance percentage for the entity’s initial payments and MOP filings. Staff noted the criteria for high compliance is an entity’s filing of at least ten Memorandum of Payment forms in a year and summarized the entity exceeding the Board’s benchmarks in both categories and the top three entities in each group where more than three qualify. Staff informed directors that less than two years ago one of the largest insurers was working under a Corrective Action Plan and has since risen to the top of their category and noted it is important to recognize both good compliance and poor compliance.

Directors and Staff discussed a recent article about Florida’s compliance and penalty imposition; whether Florida recognizes fewer entities with high compliance; whether the target should be 100% before the Board recognizes entities with higher compliance ratings; electronic filings improving compliance rates in the future; the difference in filing requirements by each State; industry performance; increasing the Board’s benchmarks at some point; the MAE Program’s plans with respect to delivering the same Power Point presentation at this year’s Comp-Summit Conference; other states having an interest in Maine’s monitoring, audit and enforcement program; engaging entities in a Corrective Action Plan that show poor claims handling practices, especially third-party administrators handling out-of-state insurance claims which will also be a focus for on-site audits and next year’s compliance reports including data on notice of controversy filings (Staff noted initial NOC data will appear in the first Quarterly Compliance Report for 2004).

Directors thanked Staff for their excellent presentation and unanimously approved the 2003 Annual Compliance Report.

Gary Koocher MOVED TO ACCEPT THE 2003 ANNUAL COMPLIANCE REPORT; Joan Kirkpatrick seconded. MOTION CARRIES 4-0.

  1. Future Public Forums: After advising directors that he received a request to add Public Forums to today’s agenda to discuss the low turnout the Board is seeing at its public forums, Chairman Dionne stated the Board’s next public comment session is scheduled for 7:00 p.m. on the evening of August 17, following a regular board meeting, and suggested readdressing how best to proceed with the remaining forums scheduled for 2004 after that session.

Directors and Staff discussed the low turnout at the Board’s 6-15-04 forum in Caribou; Public Participant J.Greenier’s remarks (Mr. Greenier stated he addressed the issue of evening public comment sessions at an earlier meeting noting the time may not be good for families, and suggested conducting a survey to determine the interests of the public); readdressing the issue of public forums after the 8-17-04 session at the LRO to see if that session also results in a low turnout to decide what time the 10-19-04 public forum at the PRO and 11-16-04 public forum at the ARO should be held; the low turnout at the CRO public comment session possibly being related to its geographical location; setting the business meeting scheduled for 8-17-04 before the public forum at 4:00 p.m. in anticipation of the items that will appear on that agenda; P.Lemaire’s comments with respect to asking Reporter K.Skelton at the Sun Journal to include a small article in the newspaper prior to the 8-17-04 session to assist the work in making the public aware of its upcoming public forum at the Lewiston office, and more people possibly attending the Board’s sessions if a business meeting is combined with a public forum; the low turnout at the Board’s public forums possibly being related to a lack of interest in Maine’s workers’ compensation system at this time; the Board’s business meetings being open to the public and possibly not needing to hold public forums any longer and Public Participant M.Greenier’s remarks (Ms. Greenier stated that some individuals may not be attending the Board’s public forums because they believe they are not being heard and commented that injured workers are the best advocates in the system) and Public Participant J.Greenier’s remarks regarding the Board’s conference room flags (Mr. Greenier stated the Board’s United States flag is not an official US flag and remarked that it is actually a military flag).


Gary Koocher MOVED TO ADJOURN TODAY’S MEETING; Rodney Hiltz seconded. MOTION CARRIES 4-0. The meeting formally adjourned at 11:14 a.m.

Return to 2004 Board Minutes