Procedure Manual

Transmittals

LHWCA Part 0 - Introduction

LHWCA Part 1 - Mail and Records

LHWCA Part 2 - Initial Case Development

LHWCA Part 3 - Case Evaluation

LHWCA Part 4 - Case Adjudication

LHWCA Part 5 - Medical

LHWCA Part 6 - Special Fund

LHWCA Part 7 - Insurance

LHWCA Part 8 - Penalties and Interest

LHWCA Part 9 - Program Evaluations

LHWCA Part 10 - Forms and Exhibits

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1. Purpose and Scope. The Introduction to the Longshore and Harbor Workers' Compensation Act (LHWCA) Procedure Manual (PM) outlines some of the basic things you need to know about the Procedure Manual, e.g., its structure, composition, and relationship to other written instructions. The Introduction also contains a description of the organization and structure of the Division of Longshore and Harbor Workers' Compensation (DLHWC), and discusses the benefits and services available under the LHWCA and the requirements which must be met to obtain these benefits and services.

1. Chapter 0-100 provides information on the structure of the LHWCA PM and directions for its use and maintenance.
2. Chapter 0-200 presents a brief summary of the statutory authority for the compensation programs administered by the Division of Longshore and Harbor Workers' Compensation (DLHWC) and briefly describes the LHWCA and its extensions.
3. Chapter 0-300 describes the various benefits and services which injured workers are eligible to receive under the LHWCA as extended and the requirements which must be met to qualify for these benefits and services.
4. Chapter 0-400 describes the background and structure of the DLHWC, its organization, delegations of authority, and relationships to the Employment Standards Administration (ESA) and other offices of the Department of Labor.
5. Chapter 0-500 describes the communications and directives system authorized for DLHWC. It describes the various directives used and establishes responsibilities and procedures for the issuance of those directives.
6. Chapter 0-600 contains a list of reference resource materials for use in researching claims-related or program-related issues.
7. Chapter 0-601 contains a Glossary which defines frequently used terms.
8. Chapter 0-602 contains a list of commonly used Abbreviations.

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2. Structure of the LHWCA PM. The Procedure Manual (PM) consists of ten major divisions or Parts. The Parts, in turn, are further divided into chapters which are identified by triple-digit identifiers, e.g., 0-100, 0-200, etc. Chapters are further divided into paragraphs and other necessary subdivisions as follows:

1. Divisions and Subdivisions.
   1. Part: 0 (1, 2, etc.)
   2. Chapter: -100 (200, 300, etc.)
   3. Subchapter: -101 (102, 103, etc.)
   4. Paragraph: .1 (.2, .3, etc.)
   5. Subparagraph: a (b, c, etc.)
   6. Sub-Subparagraph: (1) ((2), (3), etc.)
   7. Sub-Sub-Subparagraph: (a) ((b), (c), etc.)
2. Citations. Citation to a portion of the LHWCA PM should be as specific as possible and should be made in the following manner:
   1. Citation to a Part: LHWCA PM 3
   2. Citation to a Chapter: LHWCA PM 3-200
   3. Citation to a Subchapter: LHWCA PM 3-205
   4. Citation to a Paragraph: LHWCA PM 3-205.3
   5. Citation to a Subparagraph: LHWCA PM 3-205.3b
   6. Citation to a Sub-Subparagraph: LHWCA PM 3-205.3b(7)
   7. Citation to a Sub-Sub-Subparagraph: LHWCA PM 3-205.3b(7)(g)
3. DLHWC Directives. Detailed instructions for the preparation, review, clearance, publication, and distribution of DLHWC directives are contained in the LHWCA PM 0-500.
4. Checklist. Located in front of the LHWCA PM is a "Checklist" of all pages issued and currently in effect within the LHWCA PM system. Checklists are issued periodically and supersede previous editions.

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3. Maintenance and Revision.

1. New Issuances. New and revised chapters and pages of all PM material are distributed by numbered PM Transmittals. The Transmittals contain an explanation of the material transmitted, provide filing instructions for the new material, and directions on the disposition of any superseded or obsolete material.
2. Filing Instructions. Detailed filing instructions are contained in PM 0-500. With routine changes or additions, observe the following procedure:
   1. File new material in accordance with the instructions contained in the PM Transmittal which transmits them.
   2. Remove and destroy any material identified as superseded or obsolete.
   3. File the Transmittal behind the latest "Checklist" which is located in front of the PM.
   4. When a new Checklist is received, destroy the Transmittals which have accumulated behind the previous Checklist. Keep only the latest Checklist in the manual.)

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1. Purpose and Scope. This Chapter presents a brief summary of the statutory authority for the compensation programs administered by DLHWC and briefly describes the LHWCA and its extensions.

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2. Authority. The basic authority for all DLHWC compensation programs and their administration by agencies and persons within the Department of Labor is derived from the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. sections 901-950, its extensions and from the implementing rules and regulations issued by the Department, 20 C.F.R. Parts 701-704. Administration of the LHWCA was initially vested in an independent establishment known as the U.S. Employees' Compensation Commission. The Commission was abolished in 1946 and its functions transferred to the Federal Security Agency to be performed by a newly created Bureau of Employees' Compensation. In 1950, the Bureau was transferred to the Department of Labor (Reorganization Plan No. 19 of 1950). By Secretary's Order No. 13-71, the Assistant Secretary, Employment Standards Administration (ESA), established the Office of Workers' Compensation Programs (OWCP) within ESA and designated the Director thereof to administer the programs assigned to OWCP by the Assistant Secretary. See PM 0-400 for a discussion of the relationships and lines of authority within OWCP and between OWCP and ESA.

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3. Basic Act. The Longshore and Harbor Workers' Compensation Act (LHWCA)(33 U.S.C. sections 901-950) was passed in 1927 to provide compensation payable by an employer to an employee, or the employee's dependents, for disability or death due to an injury occurring upon the navigable waters of the United States. The LHWCA provides payment for medical care required for the injury, disability compensation payments, and a maintenance allowance during rehabilitation training. In the event of death caused by injury, benefits include payment for reasonable funeral expenses and compensation payments to surviving dependents. The Act resolved a problem of worker coverage when the worker's activity was on the navigable waters of the United States. Before the enactment of the law, state workers' compensation programs applied to injuries occurring on land, and the Supreme Court had held that a state could not extend its workers' compensation remedy to cover longshoremen injured over the navigable waters of the United States (Southern Pacific Co. v. Jensen, 244 U.S. 205 (1917)).

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4. Amendments of 1972. The LHWCA Amendments of 1972 (Pub. L. No. 86-1251), enacted in October 1972, extended coverage to maritime workers employed in shoreside areas such as piers, wharves, drydocks, terminals, building ways, marine railways, or other adjoining areas customarily used by employees in loading, unloading, repairing, or building a vessel. Other changes included in the Amendments pertained to maximum and minimum benefit rates, student benefits, time for commencement of compensation, medical services, disfigurements, special fund, injury following previous impairment, death benefits, annual increases in compensation, time for notice and claims, fees for services, hearing procedure, a Benefits Review Board, representation of the Secretary of Labor by the Solicitor, claimant assistance, third party liability, prohibition against discrimination against certain employees, annual adjustment of benefit levels, and other miscellaneous provisions. Under the LHWCA, the employer must notify the DOL of all lost-time injuries as well as any action taken regarding the employee's claims, i.e., payment, medical treatment provided, or denial of the claim.

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5. Amendments of 1984. The most recent changes to the Act were the LHWCA Amendments of 1984 (Pub. L. No. 98-426, 98 Stat. 1639), enacted September 28, 1984. The changes made by some of the major provisions of the 1984 Amendments include:

1. The Act's jurisdiction was clarified and limited by exclusion of certain groups of employees and facilities from LHWCA coverage, to the extent workers are covered under a state workers' compensation law.
2. Compensation for unrelated death was eliminated; a five percent ceiling was placed on annual increases under section 10 in compensation payable for permanent total disability and death; death cases are now subject to the maximum weekly benefit; and, for the purpose of calculating benefit rates, wages are defined to exclude fringe benefits.
3. To provide additional safeguards against fraudulent activities by employees to obtain benefits, and by employers or insurance carriers to deny, reduce or terminate benefits, fines and penalties for such actions were increased. In addition, provisions were added authorizing the Secretary to debar health care providers and claimant representatives for fraud or abuse.
4. A method for computing compensation for victims of latent disabilities due to occupational disease which do not become manifest until after the employee retires was established. Also, time of injury was redefined as occurring after the disease becomes manifest and the claimant is aware of the relationship between the disease, the resulting disability, and the employment. The time requirements for filing a notice of disease (injury) and a claim for compensation were extended.
5. Uninsured employers and carriers not authorized to write insurance under the Act are prohibited from receiving second injury (section 8(f)) relief; applications for second injury relief must now be filed by ECs with an OWCP DD prior to consideration of claims for permanent disability alleged to be more serious because of contribution from a manifest preexisting disability; and the formula for determining industry assessments was revised to include a factor for section 8(f) cases which are attributable to each employer and insurance carrier.
6. To expedite case processing activities under both the LHWCA and Black Lung Benefits Act, the permanent membership of the Benefits Review Board was increased from three to five members and the Secretary was authorized to appoint up to four administrative law judges as temporary members.

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6. Extensions. Since 1927, provisions of the Act have been extended to include additional groups of employees:

1. The District of Columbia Workmen's Compensation Act (DCCA) (36 D.C. Code section 501)(1973)) enacted in 1928 extended the provisions of the Longshore Act to injuries and deaths which arose out of employment with District of Columbia employers. In 1979 the District of Columbia government repealed the 1928 Act and enacted its own workers' compensation law, which became effective on July 26, 1982. Injuries to employees in the District of Columbia occurring prior to July 26, 1982 are covered by the DCCA, an extension of the Longshore Act. However, as the repeal of the 1928 Act had the effect of severing the application of the Longshore Act to the District of Columbia, the 1984 Amendments to the Longshore Act have no effect on and are not to be applied to claims for injuries sustained prior to July 26, 1982. This position [i.e., that the 1984 LHWCA Amendments do not apply to DCCA cases generally] was adopted by the Secretary after the holding in Keener v. WMATA, 800 F.2d 1173 (D.C. Cir. 1986). The provisions of the Longshore Act, as they existed in 1982, are preserved for the benefit of employees whose claims are derived from injuries occurring prior to July 26, 1982. In July of 1988, the administration of claims filed under the DCCA was delegated to the District of Columbia Government, to be handled by the Department of Employment Services.
2. The Longshore Act, as extended by the Defense Base Act (DBA), 42 U.S.C. section 1651 et seq., enacted in 1941, provides workers' compensation coverage for workers engaged in employment on overseas defense bases, or under contracts with the United States, or an agency thereof, for public work to be performed outside of the continental United States. To be compensable under the Act, a claim must stem from employment either on a U.S. base overseas or under a "contract" for "public work" overseas, public work constituting government related construction projects, work connected with national defense, or employment under a service contract supporting either activity.

   (1) History. When enacted in 1941 its main purpose was to extend coverage for civilians engaged in employment overseas at American Military Bases. The statute was adopted at the request of the Secretary of War in order to enable the U.S. Government and its defense contractors to avoid enormous expenses when securing workers' compensation insurance for overseas employees who had suffered industrial accidents that had taken place outside the United States. Subsequently, after World War II, the Defense Base Act's coverage was expanded to include civilians working on overseas construction projects for the United States. Employees covered under the Federal Employees' Compensation Act are excluded from coverage.

   (2) Zone of Special Danger. The traditional concept of causal relationship does not normally apply to claims filed under the DBA. This is due to the advent of the "zone of special danger" doctrine. The zone of special danger doctrine (see Self v. Hanson, 305 F. 2d 699, 702 (9th Circuit 1962) is a judicially created legal concept. The U.S. Supreme Court, in a 1951 decision, first enunciated and defined the scope of compensability under the Defense Base Act in the following terms:

   The test of recovery is not a causal relation between the nature of employment of the injured person and the accident. Nor is it necessary that the employee be engaged at the time of the injury in activity of benefit to his/her employer. All that is required is that the "obligation or condition" of employment create the "zone of special danger" out of which the injury arose.

   (3) Reasonable Recreation. Normally, a DBA claim arising out of an injury or death of an employee that takes place while the injured worker is on duty in most cases is found to be compensable. The difficult task under this Act is to determine compensability when the injury occurs while the employee was off duty and engaged in some form of recreational activity. In O'Keefe v. Pan American World Airways, Inc., 338 F. 2d 319, 322 (5th Cir. 1964), cert. Denied, 380 U.S. 951 (1965), the court recognized that these types of claims may be compensable:

   Employees working under the DBA far away from their families and friends, in remote places where there are severely limited recreational and social activities, are in different circumstances from employees working at home. Personal activities of a social or recreational nature must be considered as incident to the overseas employment relationship.

   That being said, the CE should keep in mind that not every claim arising out of an off duty injury or death is compensable. The issue then arises as to what types of recreational activities fall within the zone of special danger such that claims for injuries or deaths arising out of those activities are compensable. What constitutes reasonable recreation in a given case is considered a fact question as opposed to a question of law. This question is normally answered by the trier of fact based on a review of the evidence. Due to the absence of any case law precedent, defining the concept of reasonable recreation has compelled the courts to employ a case by case analysis of compensability.

3. The Outer Continental Shelf Lands Act (OCSLA) 43 U.S.C. section 1331 et sec.. This Act emerged out of Congressional recognition that the need to develop and explore the natural resources of the continental shelf would require governmental intervention and a new body of federal laws. Due to technological advances offshore, by 1937 offshore oil and gas exploration became more practical. This generated more interest at home and abroad in mineral resources. The OCSLA was enacted by Congress in 1953. The purpose was to "safeguard the U.S. interest in any international race for the vast wealth of the continental shelf," by providing an administrative and legal framework within which this wealth could be developed and exploited by the Federal Government.

   Continental shelves have been defined as those slightly submerged portions of the continents that surround all the continental areas of the earth. They are a part of the same continental mass that forms the lands above water. They are part of the continent temporarily overlapped by oceans. The outer boundary of each shelf is marked by a sharp increase in the slope of the sea floor. It is the point where the continental mass drops off steeply toward the ocean depths. Typically, this abrupt drop occurs where the water reaches depths of 600 feet or greater. This depth is used as a gauge in defining the outer limits of the shelf. For example, the Atlantic coastal region from the shore to the outer edge of the shelf is approximately 250 miles, and the average distance is about 70 miles.

   (1) Conditions of Coverage. The OCSLA provides workers' compensation coverage for the death or disability of an employee resulting from any injury occurring as a result of operations connected with the exploration, development, removal, and transportation of natural resources from the seabed and subsoil of the Outer Continental Shelf. The Act applies to all submerged lands (and artificial islands and fixed structures thereon) which lie beneath navigable waters seaward of state jurisdictional boundaries, and which are subject to the jurisdiction and control of the United States.

   (a) Coverage under the OCSLA is not based on the same requirements as coverage requirements under the LHWCA. One of the main differences is that work activities covered under the OCSLA is not considered maritime employment. See Herb's Welding v. Gray, 470 U.S. 414 (1985).

   (b) Each State has a claim over the area off their shores. For most States, the claim occurs within the three-mile radius or limit. The area within three miles falls under State jurisdiction. The area beyond is called the Outer Continental Shelf and is subject to the Federal OCSLA.

   (c) The OCSLA is unique because most offshore employees stay on the platform for their full tour of duty, which is normally a 7 or 14 day shift, 12 hours of "work duties" per day at which point they return to shore for 7 days "off". Since the employees are on the platform 24 hours per day at the convenience of the employer and they are housed and fed by the employer, OCSLA workers are considered to be "in the course and scope of their employment" for their entire shift, 24 hours per day.

4. The Nonappropriated Funds Instrumentalities Act (NFIA), was enacted in 1952 by Congress to define the status of civilian employees working under the Nonappropriated Fund at various U.S. military bases. Nonappropriated Funds are funds that are not appropriated by the Congressional Budget or the Defense Budget. The NAFIA includes the various military branch exchanges and other activities that provide entertainment, recreation and housing to military employees on military bases in the U.S. and overseas. NAF civilian employees are not classified as Federal Government employees and, therefore, are not covered under the Federal Employees compensation Act. Although their jobs are tailored more towards the private sector, their industrial work related claims do not fall under the state workers' compensation system. NAF employees are compensated from revenue earned by business operations. All funds are maintained in a Federal Reserve Bank as required by federal statute.
5. The War Hazards Compensation Act, (WHA), 42 U.S.C., section 1701 et seq., enacted in 1942, applies the benefit structure of the LHWCA to certain employees of contractors engaged in work outside the continental United Sates and exposed to war risks. These cases are normally adjudicated under the Defense Base Act until a compensation order is issued at which point the employer/carrier applies to the Division of Federal Employees' Compensation, Branch of Special Claims, for reimbursement from the FECA Compensation Fund under the provisions of the War Hazards Compensation Act. The regulations at 20 C.F.R. 61.101(a) provide that applications for reimbursement are to be sent to the U.S. Department of Labor, Office of Workers' Compensation Programs, Branch of Special Claims, P.O. Box 37117, Washington, DC 20013-7117. Employers/carriers should not be instructed to send the applications to the Longshore district office servicing the Defense Base Act claim. If a Longshore district office should receive such an application, it should be forwarded directly to the Branch of Special Claims.

   If an employer/carrier inquires as to the documentation needed in support of an application for reimbursement, they should be made aware of the provisions of 20 C.F.R. 61.101(b) and (c).

   20 C.F.R. 61.101 provides as follows:

   Sec. 61.101 Filing a request for reimbursement.

   (a) A carrier or employer may file a request for reimbursement. The request shall be submitted to the U.S. Department of Labor, Office of Workers' Compensation Programs, Branch of Special Claims, P.O. Box 37117, Washington, DC 20013-7117;

   (b) Each request for reimbursement shall include documentation itemizing the payments for which reimbursement is claimed. The documentation shall be sufficient to establish the purpose of the payment, the name of the payee, the date(s) for which payment was made, and the amount of the payment. Copies of any medical reports and bills related to medical examination or treatment for which reimbursement is claimed shall also be submitted. If the carrier cannot provide copies of the payment drafts or receipts, the Office may accept a certified listing of payments which includes payee name, description of services rendered, date of services rendered, amount paid, date paid check or draft number, and signature of certifier.

   (c) When filing an initial request for reimbursement under the Act, the carrier shall submit copies of all available documents related to the workers' compensation case, including-- (1) Notice and claim forms; (2) Statements of the employee or employer; (3) Medical reports; (4) Compensation orders; and (5) Proof of liability (e.g., insurance policy or other documentation).

   (1) History. As a result of the Pearl Harbor Attack during World War II, military demands required contractors to extend their operations into areas not covered under the Defense Base Act; in which case a number of interim arrangements were entered into by contractors to provide a standard of compensation for their employees. These arrangements mainly provided voluntary workers' compensation coverages of no set pattern and various guarantees of payments for disability or death. Due to danger that these employees were faced with, each successive group of employees leaving the country sought out their employer's guarantees. These informal arrangements provided neither consistency nor equality. As a result, the Act of December 2, 1942, commonly known as the War Compensation Act was passed.

   (2) Definition. A "war risk hazard" is a hazard arising during a war in which the United States is engaged during an armed conflict whether or not war has been declared; or during a war or armed conflict between military forces of any origin, occurring within any country in which a covered individual is serving.

   (3) The DBA provides a reimbursement system through the Federal Employees' Compensation Program to self-insured employer and insurers for losses that they may have paid under the Defense Base Act, once the claim has been declared a war risk hazard.

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1. Purpose and Scope. This Chapter presents a brief, overall summary of the statutory authority for the compensation programs administered by the DLHWC; describes the various types of coverage provided; and, outlines the benefits and services available to eligible workers or their survivors.

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2. Basic Eligibility Requirements.

For more detailed information concerning potentially complex issues (e.g., coverage), the CE should also consult other reference materials such as the Longshore Desk Book and applicable Program Memoranda or contact the National Office. These requirements are also discussed further in paragraphs 4-8, below.

1. Medical Benefits. There are four basic requirements for a worker to be entitled to medical benefits under the Act. The condition requiring medical treatment, services, or appliances must be (1) causally related, at least in part, to (2) an accidental injury or exposure to injurious conditions (3) in the course of covered employment (4) at a covered location.
2. Periodic benefits for disability or death as well as medical expenses are payable if, in addition, the disability or death results at least in part from the condition.
3. Funeral Benefits. To be entitled to an award of contested periodic (or funeral) benefits, there must also have been a timely claim under the Act filed in the DD’s office. Elements (3) and (4) as defined in the Act itself are replaced by other “coverage” determinants under its extensions (e.g., the DBA and OCSLA).

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3. Presumptions. Section 20 of the Act provides that in any proceeding for the enforcement of a claim for compensation under the Act it is presumed, in the absence of substantial evidence to the contrary

Section 20 of the Act provides the claimant with a presumption in the areas covered which shifts the burden to the employer to rebut the presumption with substantial evidence. In order for the section 20(a) presumption to apply to causation, a claimant must establish a prima facie case by proving that he or she suffered some harm or pain, and that working conditions existed or an accident occurred which could have caused the harm or pain. Once the claimant establishes the two elements of the prima facie case, the section 20(a) presumption applies to link the harm or pain with the claimant's employment. The section 20(a) presumption also applies to the issue of whether an injury arose in the course of employment.

1. That the claim comes within the provisions of the Act. (Relevant principally to sections 2(2), 2(3), and 3(a) of the Act.)
2. That sufficient notice of such claim has been given (Relevant to sections 12, 13 and 30 of the Act.)
3. That the injury was not occasioned solely by the intoxication of the injured employee (Relevant to section 3(c) of the Act.)
4. That the injury was not occasioned by the willful intention of the injured employee to injure or kill himself or another. (Relevant to section 3(c) of the Act.)

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4. Timely Claim. Under the provisions of section 13(a) of the Act and 20 C.F.R. section 702.221, a claim for compensation for disability or death must be in writing and filed with the DD in the compensation district in which the injury or death occurred. The claim need not be filed on a particular form. Any written document will do as long as it discloses an intention to assert a right to compensation. It is not necessary that the written document explicitly state a claim as long as the fact that a claim is being made is inferable from the writing. It is also important to remember that the presumption contained in section 20(b) applies to the filing of a claim. The provisions concerning the timely filing of a claim are as follows:

1. The right to compensation for disability or death shall be barred unless the claim is filed within one year from the time the claimant becomes aware, or in the exercise of reasonable diligence should have been aware, of the relationship between the injury or death and the employment. Such awareness must include recognition of the full nature and character of the injury for the one year period to begin. If, however, the EC has made voluntary payments of compensation pursuant to section 14, a claim may be filed anytime before one year after the last payment.
2. In the case of a hearing loss claim, the time for filing a claim for compensation does not begin to run until the employee has received an audiogram with an accompanying report which indicates that he or she has suffered a loss of hearing related to employment.
3. A claim for death or disability due to an occupational illness which does not immediately result in death or disability will be timely if filed within two years after the employee or claimant becomes aware, or in the exercise of reasonable diligence or by reason of medical advice should have been aware, of the relationship between the employment, the disease, and the death or disability, or within one year from the date of the last payment of compensation, whichever is later. Thus, the filing period does not begin to run until the employee is disabled, or, in the case of a retired employee, until a permanent impairment exists.
4. In death cases, a separate claim must be filed for section 9 death benefits by the survivor even though a claim for disability benefits was filed by the decedent, and the death claim must be filed within the applicable time requirement.
5. Where a person entitled to compensation under the LHWCA is mentally incompetent or a minor, the time limitation does not begin to run until a guardian or other authorized representative has been appointed. The time limitation begins to run from the date of appointment of the guardian or representative. In the case of a minor who has no guardian appointed before he or she comes of age, time begins to run from the date he/she comes of age.
6. Where a person brings a suit at law or in admiralty to recover damages relative to an injury or death, and recovery is denied on the ground that such person is an employee, that the defendant was an employer within the meaning of the LHWCA, and that the employer has secured compensation to such employee under the LHWCA, the time limitation begins to run from the date of termination of such suit.
7. Where an EC has been given notice of or otherwise has knowledge of an injury or death and fails to file a report with the DD, the time limitations do not begin to run against a claim for benefits until the required report is filed with the DD. (See section 30(f) of the Act.)
8. The failure to file a claim within the appropriate time limitation shall not be a bar to the right to make claim unless objection to such failure is made at the first hearing of the claim in which all parties in interest are given reasonable notice and opportunity to be heard.

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5. Coverage. The requirements for coverage under the LHWCA are defined in section 3(a). Besides the requirement for an injury which arises out of and in the course of employment, section 3(a) requires that the injured worker must be an "employee" (as defined by section 2(3)) and that the injury must have occurred "upon the navigable waters of the United States" (as defined by section 3(a)). These two requirements have come to be known as the "status" and "situs" tests, respectively. Prior to the enactment of the 1972 Amendments, the Act contained only a situs test; recovery was limited to those injured on the navigable waters, including any dry dock (construed by case law to include marine railways, building ways, graving docks and similar structures actually located on land). The term "employee" was not affirmatively defined, did not require maritime employment of the employee, and therefore, did not constitute a status test. Recognizing that modern cargo-handling techniques had moved much of the longshoring duties off the vessel and onto land, the 1972 Amendments expanded the covered situs and added the status test, limiting coverage to "maritime employees."

1. Status. Section 2(3) contains a definition of the term "employee" which describes those workers who are covered by the Act and therefore have employment status. This definition includes: harbor workers, ship repairmen, shipbuilders, shipbreakers, longshoremen and others engaged in ship loading or unloading operations and traditional maritime employment (see LHWCA MEMO No. 58). Section 2(3) also contains a list of specified exclusions which are explained further in subparagraph 5.c, below.
2. Situs. Section 3 specifies which locations are covered by the Act. These covered locations are:
   1. The navigable waters of the United States.
   2. Adjoining areas which include any adjoining pier, wharf, drydock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, building or breaking a vessel. Section 3 also contains a list of exclusions which are explained further in subparagraph 5c, below.
3. Exclusions.
   1. As defined by the Act, section 2(3), the term employee does not include a master or member of a crew of any vessel, or a person engaged by the master to load or unload or repair any small vessel under 18 tons net. The 1984 Amendments expanded these exclusions to include:
      1. Individuals employed exclusively to perform office clerical, secretarial, security, or data processing work;
      2. Individuals employed by a club, camp, recreational operation, restaurant, museum or retail outlet;
      3. Individuals employed by a marina and who are not engaged in construction, replacement or expansion of such marina (except for routine maintenance);
      4. Individuals who (1) are employed by suppliers, transporters, or vendors, (2) are temporarily doing business on the premises of a covered employer, and (3) are not engaged in work normally performed by covered employees;
      5. Aquaculture workers; and
      6. Individuals employed to build, repair, or dismantle any recreational vessel under sixty-five feet in length. These exclusions only apply if the workers otherwise excluded are covered by a state workers' compensation law.
   2. Section 3 of the Act specifically excludes the following groups of employees:
      1. An officer or employee of the United States, or any agency thereof, or of any State or foreign government, or subdivision thereof.
      2. An employee whose injury was occasioned solely by intoxication or by the willful intent to injury himself or another.
      3. The 1984 Amendments expanded the section 3 exclusions to include any employee of a facility certified by the Secretary to be engaged in work on exclusively small vessels. (See PM 4-400.13.)
4. Extensions. The Act (with its extensions) provides compensation to:
   1. Workers employed by private employers carrying on employment within the District of Columbia. (District of Columbia Workmen's Compensation Act). This extension applies to injuries sustained prior to July 26, 1982. The administration of these claims was transferred to the Government of the District of Columbia in July 1988.
   2. Workers engaged in employment on overseas defense bases and employment under contracts with the United States, or an agency thereof, for public work to be performed outside the continental United States. (The Defense Base Act).
   3. Workers involved in the exploration, development, removal, and transportation of natural resources from the seabed and subsoil of the Outer Continental Shelf. (The Outer Continental Shelf Lands Act).
   4. Civilian employees of nonappropriated fund instrumentalities of the Armed Forces. (The Nonappropriated Fund Instrumentalities Act).
   5. Civilian employees of contractors engaged in work covered by the DBA and exposed to war risks. (The War Hazards Compensation Act). Please refer to PM 0-200.6 for more information on the extensions of the Act.

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6. Employment-Relatedness of the “Injury”.

1. Arising Out Of and In The Course Of. A medical condition qualifies for benefits under the Act if it results at least in part -- by way of direct causation, aggravation, precipitation of symptoms, or acceleration -- from an “injury.” Under the LHWCA, injury is defined as an accidental injury or death arising out of and in the course of employment, and an occupational disease or infection that arises naturally out of such employment or naturally or unavoidably results from such accidental injury. The phrase "arising in the course of employment" relates to elements of time, place and work activity. To occur in the course of employment, an injury must occur at a time when the employee may reasonably be said to be engaged in the employer's business, at a place where the employee may reasonably be expected to be in connection with the employment, and while the employee was reasonably fulfilling the duties of his or her employment or engaged in doing something incidental thereto. This alone is not sufficient to establish entitlement to compensation. The concurrent requirement of an injury "arising out of the employment" must be shown. The phrase "arising out of employment" relates to the element of causal connection, the requirement being that a factor of employment caused the injury.
2. Injury. The term “injury” has been further defined as a physical or psychological harm or pain (i.e, something wrong with the human frame). A prima facie claim for compensation is established where the claimant shows that he or she sustained such harm or pain and that an accident occurred in the course of employment, or conditions existed at work, which could have caused that harm or pain. The Act stipulates, however, that compensation shall not be payable for injuries caused solely by the intoxication of the employee or for injuries which are deliberately self-inflicted (section 3(b)).

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7. Causal Relationship of the Disability or Death. A disability or death is compensable if it results, even in part, from an employment-related injury (medical condition). An exception arises when the injured worker’s intentional post-injury conduct, rather than a natural consequence of the employment-related injury, is an “intervening cause” leading directly to the worsened disability. An example of an intervening cause would be a game of volleyball during which an injured worker breaks an arm which had only been strained by a employment-related injury.

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8. Benefits. Employees and their authorized dependents or survivors are entitled to benefits under the LHWCA in case of injury, disability or death as set forth in sections 6, 7, 8, and 9 of the Act. Definitions contained in section 2 of the Act, this PM Chapter, referenced opinions and decisions of the BRB and Courts, and Part 3 of the Procedure Manual contain guidelines and procedures for determining eligibility for benefits and services.

1. Medical Services.
   1. Under the provisions of the LHWCA, the employer is responsible for providing medical, surgical, and other attendance or treatment, nursing and hospital services, medicine, crutches, and apparatus for the duration of the injury or as long as the process of recovery may require. Sections 702.401-.422 of the regulations and Part 5 of the Procedure Manual further describe the medical services available to an injured employee and the procedures governing them.
   2. The 1972 Amendments to the LHWCA provided that the injured employee shall have the right to choose an attending physician authorized by the Secretary to provide medical care under the Act.
   3. Fees paid to such physicians or to others furnishing approved medical services are limited by the Act to the charges prevailing in the community for such treatment, and are subject to regulation by the Secretary under section 7(g) of the Act and 20 C.F.R. section 702.413.
   4. While all medical services and supplies must be furnished by the EC from the moment the injury or illness occurs, the injured worker must be at least partly unable to earn his or her full usual pay for at least three days before being entitled to compensation. If the injured worker returns to full work at any time up to seventy-two hours from the time the injury was incurred, the coverage provided is for medical services and supplies only, unless a permanent, partial disability covered by the section 8(c) schedule results.
2. Disability Benefits. The LHWCA provides compensation for several types of disability which are described below:
   1. Temporary Total Disability (TTD). When the employee loses pay in excess of three days, compensation for TTD is paid until the employee is able to return to work or is found eligible for permanent total or permanent partial benefits. This disability is compensated at 66 2/3 percent of the employee's average weekly wage (AWW) prior to the injury, subject to a weekly maximum. No compensation is paid for the first three days unless the disability lasts more than fourteen days. In such cases compensation is paid from the first day of disability (sections 6(a) and 8(b)).
   2. Temporary Partial Disability (TPD). If an employee returns to less than full-time, regular employment prior to reaching maximum medical improvement, that employee is entitled to weekly compensation payments at the rate of 66 2/3 percent of the wage loss during the period of reduced wages, not to exceed five years (section 8(e)).
   3. Permanent Total Disability (PTD). Employees who sustain injuries (including occupational diseases) which totally disable them for an indefinite period of time are said to be permanently totally disabled. Certain anatomical losses, described in section 8(a) of the Act, also qualify an employee to receive compensation for PTD, in the absence of conclusive proof to the contrary. Compensation for such PTD is paid at 66 2/3 percent of the employee's AWW (established at the time of the injury), subject to the statutory weekly maximums. These payments are adjusted annually, effective October 1 (section 10(f)), to reflect the increase in the National Average Weekly Wage (NAWW). (See PM 3-202.)
   4. Permanent Partial Disability (PPD).
      1. Schedule Disabilities. The Act contains a schedule (section 8(c)(1)-(20)) which provides benefits for various types of permanent partial impairments based on a number of weeks of compensation payable at 66 2/3 percent of the injured worker's AWW. These benefits are called a schedule award. The schedule covers total or partial loss or loss of use of the extremities and the functions of hearing and vision. Partial loss or loss of use of a part of the body listed on the schedule is compensated for a period of weeks proportional to the partial loss. For example, a worker with 10 percent loss of use of an arm receives 31.2 weeks of compensation (10 percent of 312 weeks). Payment of a schedule award is not contingent on actual wage loss.
      2. Partial Loss of Earning Capacity. Where the injury is not covered by a schedule award but permanently reduces the worker’s earning capacity on the open labor market, compensation is paid at the rate of 66 2/3 percent of the loss of wage earning capacity (section 8(c)(21)). The most common type of injury in this category is a back injury.
      3. Retiree Impairments from Occupational Diseases (section 8(c)(23)). The 1984 Amendments created a third category of permanent partial disability benefits. These benefits are for employees who have an occupational disease which did not immediately result in disability and which became manifest after the employee had voluntarily retired. Benefits are based upon the claimant's AWW (or the NAWW) and are based upon the percent of whole person impairment found in the American Medical Association’s Guides to the Evaluation of Permanent Impairment. (See 20 C.F.R. sections 702.601-603 and PM 3-400.)
3. Death Benefits.
   1. Death benefits are payable to certain dependents of those covered under the LHWCA if the injury causes death. Compensation includes reasonable funeral expenses up to $3,000. In addition, a widow or widower receives 50 percent of the decedent's average weekly wages subject to a maximum of 200% of the National Average Weekly Wage. Upon remarriage, the widow/widower receives a lump sum payment of two years' compensation, and children's benefits are increased as of the date of remarriage. (See PM 3-302.)
      If there is one or more children, an additional 16 2/3 percent is provided up to the maximum 66 2/3 percent of the employee's average weekly wage. If there is no widow or widower, the rate is 50 percent of the decedent's wages, for one child, increased by 16 2/3 percent for any additional children. The maximum benefit is limited to 66 2/3 percent of the decedent's average weekly wage. All children share the benefits equally (section 9(a) and (b)). The right to death benefit compensation is not affected by the subsequent adoption of the child or children of a deceased employee who had a statutory compensable death. There is no provision in Section 2(14) of the Act which could terminate a child's right to continued payments in this instance.
   2. Other eligible survivors include dependent brothers, sisters, grandchildren, parents, and grandparents. The first three types of beneficiaries are entitled to receive 20 percent, and the latter two, 25 percent. However, those beneficiaries are subordinate to the widow/widower and children, and can only receive an amount not more than the maximum percentage allowable. Thus, a widow and child would preclude any other beneficiaries. A widow/widower only would decrease a dependent brother's share from 20 percent to 16 2/3 percent (section 9(d)).
   3. Compensation to a surviving spouse terminates upon death or remarriage. Awards to children, brothers, sisters, and grandchildren terminate when they reach eighteen years of age or cease to be a full-time students under age 23, whichever is later (PM 3-202.5). Such compensation may be extended, however, if the child is incapable of self-support by reason of physical or mental handicap.
4. Attendant Allowance. Certain money may be paid for an attendant when the employee is seriously injured and unable to care for personal body needs or functions. Such allowance may be paid directly to the person providing the service.
5. Rehabilitation Services. The rehabilitation program provides permanently disabled employees with early referral to and the benefit of needed medical or vocational rehabilitation programs for their early return to work. (See Part 5 Chapter 12, and OWCP Rehabilitation Procedure Manual.)

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1. Purpose and Scope. This Chapter describes the organization, function, and objectives of the Division of Longshore and Harbor Workers' Compensation (DLHWC); lists established delegations of authority; and describes the relationships of the Longshore Division within the Employment Standards Division (ESA).

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2. Organization.

1. National Office. The OWCP is an office within ESA responsible for the administration of LHWCA as well as two other Federal workers' compensation laws (Federal Employees' Compensation Act (FECA) and Black Lung Benefits Act (BLBA)). The OWCP organization structure is depicted in Exhibit 1, PM 10-300 and its overall mission consists of planning and directing the LHWCA program, as well as the activities of the two other compensation programs. The main role of the Division of Longshore and Harbor Workers' Compensation (DLHWC) NO is to establish policies, regulations, and procedures for the administration and operation of the program. The Division's responsibilities also include: administration of the Special Fund; providing technical guidance and direction for the evaluation/adjudication of claims and benefits; conducting Accountability Reviews of DOs; and providing ADP technical support for the Longshore Case Management System (LCMS). Both OWCP and DLHWC interface with the Office of Management, Administration and Planning (OMAP) on matters of ESA objectives and program evaluations, and with the Solicitor's Office on such matters as legal advice, assistance, and opinions.
2. Field Organization. In the field, there are 12 District Offices (DOs) headed by District Directors and 1 Sub-District Office. The District Director (DD) reports to the Regional Director (RD), OWCP, for the Region in which the office is located. The RD is responsible for the administration of the LHWCA and DO operations in their Regions. The role of the DOs is to ensure that the provisions of LHWCA are carried out, to monitor and mediate claims made under the Act's provisions, and to provide outreach and educational services to program participants. A list of addresses and telephone numbers of DLHWC DOs along with their territorial jurisdiction appears in Exhibit 2, PM 10-300.

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3. Delegations of Authority .

1. The Assistant Secretary, ESA, has the delegation of authority for the LHWCA program as set forth in Secretary's Order (S.O.) 16-75. Employment Standards Administrative Order 78-1 redelegated authority for the execution of the program and activities of the LHWCA, as amended and extended, to the Director, OWCP.
2. The Regional Directors are assigned responsibility for all OWCP programs within their geographic jurisdictions.
3. The Assistant Secretary, ESA, retains authority for administrative management (ESA Order 1-75).
4. The Claims Examiner's (CE) activities involve the processing, monitoring, and adjudication of claims, and educational services. More specifically, they perform the following tasks:
   1. Review and respond to lost-time and no-lost-time injury reports, jacketed cases, and associated correspondence;
   2. Provide medical supervision and advise the DD concerning appropriate resolution of contested issues with respect to medical-benefits liability;
   3. Refer claimants for impartial medical examinations;
   4. Conduct informal conferences for controverted claims; make recommendations for solutions of unresolved issues;
   5. Prepare compensation orders for signature of the DD;
   6. Prepare unresolved controverted claims for referral to the OALJ;
   7. Inform carriers/employers of LHWCA requirements; and
   8. Provide education for participants through seminars and presentations.
      The DD has the ultimate and final responsibility for efficient operation of the LHWCA DO, including the day-to-day case flow and quality of the adjudicative process by the CE.

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4. Objectives.

1. The overall objectives of the DLHWC are to administer the LHWCA, to insure that the provisions of the Act regarding benefits for injured employees are properly applied, to promptly and impartially assist in the resolution of any disputes which may arise, and to refer cases for a formal hearing in a timely manner when a dispute subject to hearing cannot be informally resolved. In this regard, output goals and performance standards are established by the DLHWC to permit the evaluation of individual and DO performance toward the achievement of objectives (PM Part 9).
2. The Office of Management, Administration and Planning (OMAP) has primary staff responsibility for evaluation of ESA program operations and conducts regular reviews of such programs to assure quality control. On the other hand, the DLHWC conducts Accountability Reviews of DLHWC activities in DOs to ensure that uniform standards are being applied in the determination of entitlement and the provision of benefits and services.
3. Performance Standards. A full account of the DLHWC program of performance evaluation, periodic report requirements, and a detail listing of performance standards appears in Part 9 of the LHWCA PM.

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5. Functional Statements.

1. National Office. In connection with job-related injuries and deaths sustained by employees eligible for benefits of the LHWCA and its extensions, the NO establishes program policies, regulations and procedures; and provides professional and technical guidance for claims and benefit payments, administration of the Special Fund, and technical assistance programs.
2. District Offices administer the LHWCA and its extensions, within the geographic boundaries as shown in Exhibit 2, PM 10-300. Specific functions and procedures are set forth in the PM pages that follow this Introduction.

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6. Administrative Management. The Functions of budget, accounting, personnel, management systems, etc., are centralized within ESA and exercised in the DLHWC district offices through the DOL regional offices, the NO and OMAP. The functions encompass all operations of the DLHWC that are not directly concerned with the administration of the LHWCA, and include, among others, the following:

1. Correspondence Management. The DOL Correspondence Guide (DLMS Handbook 1-2) is to be used as a guide throughout the Department. For more detailed information concerning style and grammar, refer to the U.S. Government Printing Office (GPO) Style Manual. See the Word Division Supplement to the GPO Style Manual for quick reference regarding spelling and word division.
   1. Stationery for use by all DOL offices has been designed to provide a uniform style and format consistent with the Graphic Communications Standards Manual.
   2. A DLHWC correspondence guide covering written communications and frequently used forms is contained in Part 10 of the LHWCA Procedure Manual.
   3. A standard filing pattern has been developed and is to be used by all elements of the OWCP. Copies of the pattern are available from the Office of the Director, OWCP.
2. Forms Management. The DOL forms management program is described in Chapter 200 of the Departmental Directives System (DLMS 1). It requires the proper design and accurate use and the elimination of unnecessary or duplicate forms. It also prohibits the use of unauthorized forms or form letters. Forms, form letters and other formats approved for use within the DLHWC are described and illustrated in appropriate sections of the LHWCA PM.
3. Records Disposition. A records disposal schedule for the program records of the OWCP has been prepared by ESA. The DLHWC portion of this schedule is discussed in PM 1-502 and an extract from the schedule has been included as Exhibit 7, PM 10-300 to be used as a guide by Mail and Records personnel in the DOs in the disposition of records of DLHWC field installations.
   1. Program Records are to be disposed of only in accordance with the schedule described above.
   2. Administrative Records are to be disposed of only in accordance with the GSA General Schedules with other instructions provided by ESA.

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1. Purpose and Scope. This Chapter describes the communications and directives system authorized for the DLHWC. It establishes responsibilities and procedures for the issuance of policies, procedures, guidelines, and staff instructions applicable to the preparation, clearance, approval, and publication of those directives.

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2. Authority.

1. Federal Property Management Regulation (FPMR) 101-11.209-3 requires, among other things, the establishment of agency directives programs that will:
   1. Establish and maintain a system for the classification, codification, and supplementation of agency directives.
   2. Document policies, standards, procedures, and standing instructions.
   3. Preserve directives as an integral part of agency documentation deserving permanent preservation.
   4. Describe in writing the standards, guides, and instructions developed for the preparation, clearance, and issuance of directives.
2. Departmental Regulations (DLMS 1-100 and OWCP AM 1-100 and 1-101) require the DLHWC to maintain a directives management program in compliance with statutory, regulatory, USDOL, and other requirements.

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3. Authorized Directives.

1. External directives which may consist of either formal or informal releases or other documents.
   1. Formal releases include Federal Register rules or notices pertaining thereto, and other written instructions which initiate or govern the actions, conduct, or procedures of the DLHWC and the public when involved with programs administered under the Authority of the Longshore Act as extended (20 C.F.R. Parts 701-704).
   2. Informal releases include Notices to Insurance Carriers and Self-Insured Employers. "One time" report requirements, notices of annual assessments and similar communications are also included.
2. Internal directives fall into three categories: permanent (or indefinite-until-superseded), temporary/one-time, and informational.
   1. Permanent directives include all standing instructions, policies, forms, form letters, guidelines, and procedures. They require specific performance or continuing activity and remain in force until rescinded or superseded and replaced. Included in this body of material are the following:
      1. LHWCA Procedure Manual (LHWCA PM), its component volumes, Parts, and supplements which are distributed by PM Transmittals.
      2. LHWCA Program Memorandums (LHWCA MEMOS) which provide case histories, background, judicial rationale, and other details inappropriate for inclusion in a manual of procedural directives. LHWCA MEMOS clearly cite the PM chapter provisions to which they refer. As new LHWCA MEMOs are issued, they are simultaneously accompanied by the issue of revised or new PM pages briefly stating the new decisions, criteria, or implementing procedures.
      3. Other guides include the DOL Correspondence Guide, DLMS Handbook 1-2, the GPO Style Manual, and other such guides as may be described in and authorized for use by the LHWCA PM.
   2. Temporary/one-time directives are issued as LHWCA Bulletins. They require or invite action from two or more district offices, may concern Longshore and other ESA personnel, and are effective only until the required action is completed. Bulletins may involve one-time or special reports, pilot procedures, arrangements for training classes or rotating assignments over a specified period of time, or specific instructions affecting an EC whose business extends into more than one district. Bulletins must always bear an expiration date upon issue and a reference to any PM chapters affected. They may be discarded when expired or when required action is completed. Bulletins are published on blue letterhead.
   3. Informational directives are issued as LHWCA Circulars. Circulars require no specific action and are used to transmit copies of preliminary legal decisions, announcements of personnel changes, interesting events or activities, or other items of informational value; to call attention to standing instructions or performance standards which may require compliance or improvement; to announce proposed plans or anticipated program changes; or to keep field offices informed of the activities and interests of the NO. Circulars are reproduced on white letterhead.

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4. Records Required. The record copy of each directive issued by the DLHWC shall be retained in the Office of the Director, OWCP. The record copy shall be accompanied by essential supporting documents such as clearance forms and comments, and a copy of the document used to transmit the issuance, appropriately coded and cross-referenced in accordance with the standard subject matter correspondence classification codes established for the OWCP.

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5. Style and Format. The style and format of the LHWCA PM shall follow that illustrated in this Chapter. (Also see PM 10-300, Exhibit 3 for the format of the Bulletin, Exhibit 4 for the LHWCA Circular, Exhibit 5 for the format of an LHWCA Transmittal, and Exhibit 6 for the LHWCA Notice.)

1. Margins. Margins are as illustrated on this page.
2. Page Headings. The name of the Manual, the Part number and title, and the chapter number and title appear at the top of each page.
3. Paragraphs. The primary breakdown of the Chapter is the paragraph. Within each Chapter, each paragraph is designated by an Arabic numeral followed by a period. Each paragraph should be identified by a title typed two spaces after the number, in upper and lower case, and underlined. Paragraphs are subdivided as follows:
   1. Paragraph
   a. First Subdivision
   (1) Second Subdivision
   (a) Third Subdivision
   (ii) Forth Subdivision
4. Exhibits. Forms will be arranged numerically in PM Chapter 10-200 of LHWCA PM. They are numbered at the lower right corner and are paginated only when an Exhibit consists of more than one page, see PM 10-300. Illustrations, graphics, reprints, charts, and other exhibits will be contained in PM 10-300.
5. Notices. The style and format of LHWCA Notices to Insurance Carrier and Self-Insured Employers Under the Longshore and Harbor Workers' Compensation Act as Extended shall be as illustrated in Exhibit 6, PM 10-300.

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6. Method of Issue. New and revised Chapters and pages of all Procedure Manuals are distributed by numbered PM Transmittals (Exhibit 5, PM 10-300) containing an explanation of the material transmitted, and filing instructions for the removal of any superseded pages and the insertion of new or revised pages. When the indicated actions have been completed, file the Transmittal sheet behind the checklist which is located at the end of the List of Chapters in the front of the LHWCA PM.

1. Changes. Avoid the use of pen-and-ink changes. Use them only to change reference or form numbers or to correct typographical errors. For language changes, either minor or substantive, re-issue the entire page or chapter.
2. Page Identification. Each page will include the Part of the Manual and the Chapter title and number.

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7. Reproduction and Distribution. This is provided by the Office of the Director, OWCP. hat office prepares the necessary printing requisitions and arranges for distribution to all manual holders. Distribution codes are structured to the number, level, and category of manual holders on a need-to-know basis.

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8. Maintenance of Procedure Manuals. In each office or work place at which a Manual is maintained, one employee shall be given the responsibility of filing new material and maintaining it on an up-to-date basis.

1. Filing Instructions Procedure Manuals are subdivided into and maintained in separate volumes or binders by Part, chapter, and paragraph. Pages are numbered beginning with "1" within each chapter. Exhibits are filed numerically in Part 10. Specific filing instructions for each new group of pages is included in the PM Transmittal.
2. Checklists These are issued periodically identifying the chapters and pages currently in effect. Each checklist is cumulative and supersedes its previous editions. When a new checklist is received, the employee responsible for maintaining the PM shall:
   1. Remove and destroy PM pages not listed.
   2. Identify and obtain listed material which is not included in the Procedure Manual.
   3. Destroy the Transmittals which have accumulated behind the previous checklist. Keep only the latest checklist in the Manual.

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9. Responsibilities.

1. Development, Preparation, and Updating The Branch of Policies, Regulations, and Procedures is responsible for:
   1. Preparing and updating standing instructions, policies, and procedures within their respective areas of program or administrative jurisdiction.
   2. Preparing and submitting to the Director, DLHWC, periodically:
      1. Updated checklists identifying the directives currently in effect.
      2. A statement certifying that the directives for which they are responsible are accurate, complete, and current.
   3. Reviewing their various directives on a continuing and systematic basis to ensure that they are complete and up-to-date, identifying subject voids and recommending corrective action.
   4. Maintaining accurate and up-to-date statements of their assigned functions, polices, and procedures in the OWCP PM and the LHWCA PM.
   5. Preparing standing instructions that are easily understood, complete, up-to-date, and readily accessible on both a need-to-know and a need-to-act basis.
   6. Cooperating with the office of the Director, OWCP, in applying standards and achieving program objectives; soliciting comments and suggestions from field installations; consulting with SOL/EB when indicated; and coordinating with officials in other elements of the OWCP during the development or revision of material affecting their operations or instructions.
2. District Directors are responsible for ensuring that adequate copies of each appropriate Part of the LHWCA PM are available at work places where they are needed and that the designated employees keep the material up to date. They are also responsible for securing compliance with the provisions of the LHWCA PM within their respective areas of jurisdiction.
3. Individual employees of the DLHWC are responsible for following the procedures set forth in the LHWCA PM, and for recommending additions, corrections, or other changes that will improve content or coverage, or make these directives easier to understand and more useful. Suggested improvements should be forwarded through appropriate channels to the Director, DLHWC.

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10. Clearance and Review.

1. Within DLHWC. Certain personnel at both the NO and the DOs will be given the opportunity to review and comment on proposed changes or additions to the LHWCA directives.
2. Outside the DLHWC. Officials who originate DLHWC directives are responsible for clearing and coordinating them with other elements of the OWCP regarding procedures that might affect their operations; with the office of the Director, OWCP in applying standards for uniformity and consistency (OWCP PM 1-100.6b)); and with other offices (Office of the Solicitor, Office of the Secretary, ESA, OALJ) and other agencies (OMB, HHS, etc.)
3. Federal Register. DLMS 1-113c states that "The Solicitor is responsible for reviewing and clearing proposed directives concerning matters which require publication in the Federal Register and proposed issuances of legal significance or implications."

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1. Purpose and Scope. This Chapter provides a list of reference or resource materials which may prove useful in researching claims-related or program-related issues. These documents, which should be available to DLHWC claims examining staff, supplement the standard reference documents, i.e., the LHWCA, the regulations pertaining to the LHWCA, and this Procedure Manual.

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2. Reference/Resource Materials.

1. Longshore Desk Book. This book was created by the BRB as a book of first reference to assist the BRB and its staff in deciding cases under the LHWCA, as amended, and its extensions. It takes a section-by-section approach to the Act and contains numerous BRB and court citations. (Note, however, that the decisions therein do not necessarily comport with the Director’s administrative construction).
2. Benefits Review Board Service - Longshore Reporter. The multi-volume BRBS - Longshore Reporter, published by Matthew Bender & Company, provides comprehensive coverage of published BRB and court opinions and decisions, and some ALJ decisions, in LHWCA cases.
3. The Law of Workmen's Compensation. This treatise by Arthur Larson presents and discusses the primary principles and rules of workers' compensation. Generally, these principles and rules are common to the vast majority of workers' compensation laws. While this treatise focuses primarily on state workers' compensation laws (which generate the greatest amount of case law), significant federal court decisions concerning the LHWCA are included.
4. The Merck Manual of Diagnosis and Therapy. This manual discusses numerous medical conditions, disorders and diseases, generally in terms of their etiology, symptoms, diagnosis and treatment.
5. Guides to the Evaluation of Permanent Impairment. This reference guide is published, and revised from time to time, by the American Medical Association. It is used by physicians for rating the physical impairment of various organ systems. These ratings are used as the basis of PPD awards under the Act in hearing loss and retiree cases, and are also relevant (though not conclusive) in determining the extent of “loss of use” under the schedule provisions of section 8(c)(19).

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3. Subject-Word Index. The Preface contains a subject-word index with appropriate eference to the PM, the LHWCA, and the regulations.

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4. Definitions and Abbreviations. Chapter 0-601 contains the definition of terms frequently used in the processing of Longshore cases; however, it does not include terms which are specifically defined in the Act or the regulations, or which are defined or extensively discussed elsewhere in the PM. Chapter 0-602 contains a list of abbreviations frequently used in the LHWCA PM.

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1. Purpose and Scope. This Chapter provides definitions of certain terms used in the LHWCA PM. In some cases, these definitions may differ slightly from legal definitions in current use.

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2. Exclusions. Generally, this chapter does not contain terms that are defined in section 2 of the Act or in the regulations, or which are defined or extensively discussed in the LHWCA PM. The word index (located in the Preface) may be useful in locating definitions or discussions of such terms.

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3. Terms.

• Abnormality. Describes a function which is no longer within the normal range in either of two dimensions. Abnormality can result from a quantitative loss of function or from a qualitative change in functional capacity. Reduced range of motion is a quantitative abnormality. Tremor, spasm, rigidity, hallucinations, etc., represent qualitative changes.
• Act. The Longshore and Harbor Workers' Compensation Act, as amended and extended by the DCCA, DBA, OCSLA, and NFIA.
• Acupuncture. The Oriental practice in which needles are inserted into specific peripheral nerves to relieve the discomfort associated with painful disorders, to induce surgical anesthesia, and for therapeutic purposes. Acupuncturists are not considered physicians under the LHWCA, but the treatment may be approved if authorized by a duly qualified physician.
• Anatomical Abnormality. A visible abnormality in tissue formation or growth. Scars, disfigurement, and joint disease are all examples of an anatomical abnormality. Visibility can be attained through x-ray, CAT scan, and other tests.
• Appeal. The process of seeking review by the Benefits Review Board of a decision and order issued by an Administrative Law Judge or, under certain circumstances, of a compensation order issued by a District Director. The term is also used to refer to the process of seeking review of a final order of the Benefits Review Board in the U.S. Court of Appeals for the circuit in which the injury occurred. In DBA cases where the injury did not occur within any "circuit," the appellate jurisdiction is in the circuit that includes the OWCP district where the claim was filed.
• Claims Examiner. An employee of the OWCP having special training and experience in the field of claims adjudication under the specific act to which the Claims Examiner is assigned.
• Compensation Order. A legal document in connection with a compensation case. Issued over the signature of an Administrative Law Judge or, under certain situations, over the signature of the District Director, acting as a Deputy Commissioner, the order describes the findings of fact and either makes the award or denies the claim. A compensation order may be the subject of a direct appeal to the Benefits Review Board.
• Compliance. Conformity of an employer or insurance carrier with the provisions of the Act. On the part of the employer this may include obtaining required insurance coverage, posting a notice of insurance coverage, and reporting injuries specified by the law. On the part of the insurance carriers, the term includes payment of benefits, providing for medical care, issuing a coverage card to the DO, or reporting and making payment of the company's assessment under section 44.
• Controversion. A formal denial of responsibility under the Act by an employer or insurance carrier. The denial may be based on the belief that the injury did not occur in the course of employment or did not fall within the coverage of the LHWCA, or for other reasons. In essence the employer or carrier is refusing on the basis of legal merit to accept liability or the asserted extent of liability voluntarily. The denial also relieves the employer or insurance carrier of a 10 percent penalty, provided the controversion is made within the time specified by section 14(d) of the Act. In brief, controversion is a denial by the EC of a claimant's right to compensation (or compensation beyond an admitted amount).
• Determinative Audiogram. The “determinative audiogram” is that test which is determinative of the disability for which the Claimant is being compensated.
• Disability. The term is defined in section 2(10) of the LHWCA. It is important to note that, with certain exceptions, disability is an economic concept, and not solely a medical concept. (Also see "Impairment.")
• Dispute. A contested issue with respect to an essential element of a compensation claim; or, as used informally, any question or difference with regard to the entitlement or amount of compensation due a claimant, medical treatment, etc.
• Eligibility/Entitlement. As used throughout the LHWCA PM, "eligibility" refers to the benefits and services which may be made available to an injured worker or his/her dependents. Through the evaluation/adjudication process, a determination is made regarding specific benefits to which an injured worker is entitled. "Entitlement" is one of the end products of the evaluation/adjudication process.
• Evaluation/Adjudication. The process by which the CE, DD, or the ALJ may determine the rate, duration, or type of specific benefit or service to which a beneficiary is entitled and must receive.
• Filing. The submission of forms or records to the OWCP within a time period required by the various sections of the Act.
• Functional Abnormality. Describes a condition in which the physiological function is abnormal. Pain, tremors, and difficulties in speech secondary to brain lesions are examples of functional abnormality.
• Functional Loss. Describes a situation in which a physiological function can no longer be performed by the individual. It should be measured in quantifiable terms. A loss need not be absolute; it can be partial. Loss of joint movement is an example of functional loss.
• Impairment. The loss, loss of use, or derangement of any body part, system or function. Impairment does not necessarily equate to disability since an individual could have an impairment but not be disabled from work. Statutorily, however, disability means impairment in the case of retiree occupational disease cases and hearing loss cases.
• Impartial Specialist. A physician, usually a medical doctor of outstanding capability and often certified in a specialty by a national board, selected to perform a medical evaluation or provide treatment of an injured employee when a medical question has arisen.
• Informal Conference. A meeting or telephone conference scheduled by the OWCP at which the employer and/or insurance carrier or their representatives are in attendance with the injured party or the claimant and/or his/her representative for the purpose of resolving any outstanding claim-related issue. The meeting is conducted by the CE or DD.
• Loss of Wage-Earning Capacity. A computation of economic loss which takes into consideration a claimant's age, degree of disability, education, work history, training, and the availability of work in the area in which the claimant lives. Payment of compensation based on such computation may continue for the life of the claimant. However, if the employment-related condition causing such a loss remains temporary, benefits are restricted to five years.
• Lost-Time Injury Report. Form LS-202 entitled "Employer's First Report of Accident or Occupational Illness" concerning a job-related injury or illness which causes the loss of one or more shifts of work.
• Permanent. A descriptive term for a medical condition indicating that it has become static or well stabilized and that it is not expected to remit within a normal, predictable period despite medical treatment.
• Permanent Partial Disability. A job-related physical or mental disability which is permanent in nature but it is established that the employee is capable of earning wages (i.e., it is established that the employee is working or that there are realistically available job opportunities within the geographical area where the employee resides which he or she is capable of performing, considering the employee's age, education, work experience, and physical restrictions, and which the employee could secure if he or she diligently tried). In cases of “scheduled” permanent partial disability, the actual loss of earning capacity is irrelevant as long as it is less than total.
• Permanent Total Disability. A job-related physical or mental disability which is permanent in nature and renders the employee incapable of earning pre-injury wages at the same work as at the time of injury or in any other employment. A prima facie case of total disability is established where the employee shows that he or she cannot return to his or her regular or usual employment due to the work-related injury.
• Schedule Award. A payment of compensation for job-related injury resulting in permanent impairment of a scheduled member of the body defined by section 8(c)(1)-(20) of the LHWCA.
• Secretary. The Secretary of Labor, or his or her designee, or the person who has been delegated the authority to act for and on behalf of the Secretary.
• Subrogation. The right of one who has paid an obligation for which another has primary liability to be indemnified by the other (e.g., where a case results in an employee's receipt of compensation under an award which includes disability due to malpractice, an insurance carrier may have subrogation rights to the recovery of the employee against the physician, but limited to the amount actually paid by the carrier or for which it has become liable because of the malpractice).
• Temporary Disability. This term refers to a situation in which the individual is incapacitated to perform his or her regular work because of an anatomical or functional abnormality or loss, but where it is expected that recovery merely awaits a normal healing period.
• Temporary Partial Disability. A job-related physical or mental disability which is temporary in nature and renders the injured employee unable to perform the full duties of his or her regular job, but can perform some of the duties of his or her job or can perform the duties on a less than full-time basis, or can perform other suitable work during the recovery period and such limited, part-time, or alternative work is actually reasonably available to him or her. Compensation payments are limited to a maximum of five years.
• Temporary Total Disability. Differs from temporary partial disability in that the employee is totally disabled and cannot perform the duties of his or her job.
• Third Party. A party or individual who is neither the claimant nor the employer, who causes the injury or disability to the employee, entitling the employee or his or her survivors to pursue a suit, claim or action to recover damages.
• Third Party Suit. A legal action usually instituted by the injured party against a party, other than the employer, whose tort against the employee caused the compensable injury or death. The employee may pursue a third party suit concurrently while receiving compensation from the employer or insurance carrier.

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Back to Chapter 0-0602 Table of Contents

1. Purpose and Scope. This Chapter provides a list of abbreviations frequently used in the LHWCA PM.

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2. Abbreviations.

• ADP Automated Data Processing
• ALJ Administrative Law Judge
• APA Administrative Procedures Act
• AWW Average Weekly Wage
• BLBA Black Lung Benefits Act
• BRB Benefits Review Board
• CA Compensation Act (Generally used in form designation, e.g., CA-58)
• CE Claims Examiner
• CEC Claims Examiner Clerk
• CFR Code of Federal Regulations (Generally used when citing a specific regulation, e.g., 20 C.F.R. section 702.100)
• CR Claims Representative
• DBA Defense Base Act
• DCCA District of Columbia Workmen's Compensation Act (Also DCWCA)
• DD District Director
• DI Disability Insurance
• DLHWC Division of Longshore and Harbor Workers' Compensation
• DMMI Date of Maximum Medical Improvement
• DO District Office
• DOL U.S. Department of Labor
• EC Employer/Carrier
• ESA Employment Standards Administration
• FECA Federal Employees' Compensation Act
• FLSA Fair Labor Standards Act
• FOIA Freedom of Information Act
• FR Federal Register (Generally used in citing a specific page within a Federal Register volume, e.g., 46 FR 135)
• LCMS Longshore Case Management System
• LHWCA Longshore and Harbor Workers' Compensation Act
• LS Longshore (Generally used in form designation, e.g., LS-202)
• LT Lost Time
• MEMO LHWCA Program Memorandum
• MMI Maximum Medical Improvement
• MWD Minimum Wage Determination
• NAWW National Average Weekly Wage
• NFI Non-appropriated Fund Instrumentalities
• NFIA Non-appropriated Fund Instrumentalities Act
• NIOSH National Institute for Occupational Safety and Health
• NLT No Lost Time
• NO National Office
• OALJ Office of Administrative Law Judges
• OCSLA Outer Continental Shelf Lands Act
• OD Occupational Disease
• OMAP Office of Management, Administration and Planning
• OMB Office of Management and Budget
• OSHA Occupational Safety and Health Act/Administration
• OWCP Office of Workers' Compensation Programs
• PM Procedure Manual (e.g., LHWCA PM)
• PPD Permanent Partial Disability
• PPI Permanent Partial Impairment
• PTD Permanent Total Disability
• RD Regional Director, OWCP
• RS Rehabilitation Specialist
• SSA Social Security Administration
• SSN Social Security Number
• TPD Temporary Partial Disability
• TTD Temporary Total Disability
• USC United States Code (Generally used in citing a section with the Code, e.g., 33 U.S.C. section 921)
• WHA War Hazards Compensation Act

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Back to Chapter 1-0200 Table of Contents

1. Purpose and Scope. This Chapter of the PM describes the approved procedures for handling and processing mail in the DO, including receipt, sorting, and routing of mail. Offices with a small case load may be able to combine and simplify processing. However, any such changes require the approval of the DD or higher authority.

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2. Mail Classifications. This paragraph describes the sources and primary classifications of incoming mail. Mail may be delivered to a central mail room from several different sources (e.g., the U.S. Postal Service, the Department's mail room, the regional mail office). The mail must be processed as expeditiously as possible, consistent with control practices and procedures. If indicated, a DO may obtain and use a post office box for the receipt of Longshore Program mail. If a post office box is used, mail should be picked up twice a day but no less frequently than once per day. Except for mail that has been opened by mistake, or wrongly delivered to another recipient, the mail room receives unopened mail. The following are the primary classifications of mail received in the DO:

1. Priority Mail. The term "priority mail" denotes incoming documents and correspondence requiring prompt action. This type of mail is identified with an "Expedite" tag or other appropriate notation and delivered to the specified recipient ahead of the regular mail. Mail from the following sources is considered priority mail:
   • The President and the White House Staff
   • The Vice President and members of his staff
   • Members of the Cabinet
   • Members of Congress
   • Governors of States
   • Heads of employee organizations
   • Heads of national and international labor organizations
   • National Office correspondence
   • Regional Director correspondence
   • ALJ/BRB correspondence

   Based on their content, documents and mail of the following types are also designated as priority mail:

   • Hardship reports
   • Requests for medical treatment
   • Appeals
   • Freedom of Information Act requests and correspondence
   • Privacy Act requests
   • Other mail for which there is a time requirement on action, such as subpoena actions and controverted cases

   Priority mail, if it can be identified without opening the envelope, is delivered unopened to the DD. In other cases, the mail will not be recognized as priority until it is opened. Priority mail will, therefore, be found both in the sort of unopened mail and the opened mail. The Supervisor of the Mail and File Section will decide, in questionable cases, whether to classify the mail as priority.

2. Injury and Claim Forms (See also CH.1-300.5 and 1-400.3). A case file is created, or an action is taken, following receipt of one or more of the following:
   LS-201 - Employee's Notice of Injury and Claim.
   LS-202 - Employer's First Report of Injury.
   LS-203 - Employee's Claim for Compensation.
   LS-206 - Payment of Compensation Without Award.
   LS-207 - Notice of Controversion of Right to Compensation
   LS-208 - Final Payment or Suspension of Compensation.
   LS-262 - Claim for Death Benefits.
   Other - A combination power-of-attorney and claim executed by the attorney or representative and signed by the claimant or a medical report.
   A case may be created based on receipt of an LS-207 or a medical report where there is information indicating that the case will present serious disputes or that lost time is likely.
   The more frequently used LS forms received in the DO, including those referenced above and in the following subparagraph, are shown as exhibits in PM 10-200 and discussed elsewhere in this PM.
3. Other Case-Related Forms. The Mail and Files Section also receives other documents on which action must be taken. Some examples include:
   LS-207 - Notice of Controversion of Right to
   Compensation
   LS-570 - Card Report of Insurance.
   CA-58 - Request for Case File Transfer.
   Other - Medical and rehabilitation reports.
4. Correspondence. In addition to the above, correspondence of various types will be received in the DO. Generally, it will be addressed to a CE or the DD, or will carry a case number. In most instances, this mail is routed to the CE handling the block of cases in which the case number or alphabetical breakdown falls.

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3. Initial Sort. The Mail Clerk or designated office clerk should first screen the unopened mail for the following types of correspondence:

1. Priority Mail. The priority classification of mail is dependent on its source and on the action that it calls for within the office. It is defined in subparagraph 2.a., above. Such mail is usually directed to the DD and is, therefore, forwarded unopened. All mail that can be identified as priority is date-stamped on the envelope, marked as "Expedite" by the mail room, and forwarded unopened to the DD for action.
2. Personal Mail. Correspondence addressed to a particular Claims Examiner or Claims Clerk should be handled with other mail unless it is marked "personal," "confidential," "do not open in mail room," or similar notation. Personal mail is delivered unopened to the addressee. Some mail so addressed can be identified as priority mail and should be so handled; it should be marked "Expedite" and delivered to the addressee.
3. Misdirected Mail. Mail which has been misdirected should be forwarded internally to other DOL offices or returned to the Postal Service.
4. Other Mail. This constitutes the bulk of the mail on the initial sort, and is opened and processed by the Mail and Files Section as described in the following paragraphs.

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4. Opening/Date-Stamping Mail.

1. Opening Mail. All mail remaining after priority, personal, and misdirected mail has been appropriately routed is to be opened.
   (1) In opening the mail, care should be taken not to damage the contents or to leave part of the contents in the envelope.
   (2) While opening the mail, you may occasionally notice that some of the pieces do not bear a current date. This is very important in the case of report Forms LS-202 and LS-208. Therefore, before either destroying the envelopes or date-stamping the mail, look through these forms and check the reporting dates.
   (a) Form LS-202 or other report of injury must be filed by an employer within ten days of the date of the injury. The DOL considers the report timely if the envelope is postmarked within 10 days of the date of injury. The date of the report should be noted when the envelope is opened. If the reported injury occurred less than ten days prior to the date received, no further action is required. If there is any question, attach the envelope to the LS-202 or, if this cannot be done, annotate the LS-202 to show the date of the postmark.
   (b) Form LS-208, Final Payment, should also have the envelope attached (or bear an annotation as to the date of postmark) if sixteen days or more have elapsed since the date of final payment shown on the LS-208 form. In some cases, mail containing this form will be addressed to the DD and the envelope will be delivered without opening; in this case (if the sixteen day period allotted has passed), the office of the DD is responsible for ensuring that the envelope is attached to the form or that appropriate annotation is made.
2. Date Stamping Mail. After opening, all mail is to be date stamped to show the date of receipt in the office. Carefully check the setting of the date-stamping machine. If a manual machine is used, date stamp any mail remaining from the previous day before changing the setting to the current date and stamping the current mail. In stamping, do not make any writing illegible. Stamp all Longshore Program mail on the front. The date may be stamped on the back of a form if it cannot be placed on the front so as to be legible.

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5. Sorting Opened Mail. After date-stamping, sort the mail according to the following classifications:

1. Priority mail.
2. Unnumbered mail.
3. Numbered mail.
4. Insurance mail.
5. Rehabilitation mail.
6. Misdirected mail.
7. Mail containing checks, drafts or cash.

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6. Processing Mail.

1. Priority Mail. Check priority mail against the LCMS for the proper identifying case number on a priority basis. For a description of priority mail, see subparagraph 2.a., above. Check the case file number even if it is shown on the correspondence to make certain that the number is correct. It is suggested that the LCMS Case Search Find function be used where there is no case number and that the Claims Tab be used where a case number is provided. When the case number is determined or confirmed, obtain the case file and deliver the mail to the DD.
2. Unnumbered Mail. Unnumbered mail should be routed to appropriate personnel for identification of the case number through the Case Search function of LCMS. It is recommended that this mail be further separated into two subgroups -- injury report/claim forms and all other correspondence.
3. Numbered Mail. Arrange the numbered mail in numerical order. Numbered mail will include mail originally received as unnumbered to which the case number has been added after a search of the LCMS, and internal mail such as CE requests for specific cases because of, for example, expired case call-ups. Forward numbered mail to appropriate personnel for attachment to case files (see paragraph 7, below).
4. Insurance Mail. All mail relating to carriers, self-insured employers, new employers' records, and other mail identified as relating to identification and/or assignment of carriers is routed to the individual designated by the DD to handle insurance-related matters.
5. Rehabilitation Mail. Rehabilitation mail from claimants or from state or private rehabilitation workers or organizations is delivered to the Rehabilitation Specialist or other specified designee.
6. Misdirected Mail. Misdirected mail not identified in the sort of unopened or unnumbered mail should be forwarded to the correct DOL office or returned to the Postal Service, as appropriate.
7. Mail Containing Cash. Mail containing checks, cash, or any form of monetary remittance must be processed in accordance with the Department of Labor's accounting and control procedures. Before delivering mail containing cash, checks, money orders, etc., follow the procedures for cash receipts described in paragraph 9, below.

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7. Attaching Numbered Mail. Based on the batch of numbered mail, the necessary files should be pulled and the mail attached (see also PM 1-500.3). Mail may be attached to the case jacket or drop filed inside the jacket, but not secured on the spindle. The cases are now ready to be forwarded to the appropriate Claims Examiner. Except for cases with priority mail going to the DD, a case file should go to the Claims Examiner assigned to that case. The Claims Examiner will determine the next disposition of the case file. There should be no access of unauthorized personnel to the case files so that files removed from the file room are generally at the appropriate Claims Examiner station.

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8. Delivering Case Files. Following the sorting operation and the delivery of priority mail, routine mail is to be delivered as follows:

1. Cases With Mail Attached/New Cases. Deliver case files with mail attached and newly created cases to the CE handling that range of case numbers.
2. Interoffice Mail. Pick up interoffice mail from stations as delivery is made. Such mail should be processed (e.g., CE requests for case files with expired call-ups) or delivered to the appropriate station within the office.
3. Remaining Mail. Each day's mail should be processed the day it is received. Therefore, at the close of each day all mail received during the day should have been cleared from the mail room. If this is not possible, the remaining mail should be processed first on the following business day. However, it should bear the date stamp showing the date of actual receipt in the office.

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9. Cash Receipts. All cash received in a district office shall be processed in accordance with the Department of Labor's accounting and control procedures. This includes recording all cash upon receipt, maintaining prescribed records, physically safeguarding cash while in their possession and obtaining receipts when transferring the cash to appropriate individuals or organizations for further processing. Therefore, the DD, the Mail and Files Supervisor and any other employees responsible for processing cash receipts shall be familiar with the Department's cash control procedures (see Department of Labor Manual Series (DLMS) 6, sections 910-918, Cash Control).

1. Cash. The term "cash" as used in these procedures refers to currency, coins, money orders, and any type of negotiable instrument.
2. Priority Handling. All cash received by a DO shall be given priority handling and shall be processed immediately. Where cash cannot be transferred immediately and must be kept in the office, it should be kept in a secure location.
3. Sources of Cash. Cash is received by a district office primarily in relation to the following matters:
   (1) Charges for reproduction and services under the Freedom of Information Act and Privacy Act.
   (2) Payment of penalties for late reporting, sections 14(g) or 30(e), and for discrimination, section 48(a) of the Act.
   (3) Death benefit payments under section 44(c)(1) when there is no survivor entitled to benefits.
4. No Enclosure. Occasionally, letters are received which make reference to cash enclosures, but do not contain the cash. When such letters are received, the mail clerk should write the following notation on the letter:
   CASH NOT ENCLOSED AT TIME OF RECEIPT
   IN THE MAILROOM _____________________
   (Clerk's Initials)
   The letter will then be referred to the Claims Examiner for appropriate response.
5. Recording on the Cash Receipts Register (CRR). When the letters containing cash receipts have been separated from all others, each cash item is recorded on DL Form 1-301, Cash Receipts Register (Exhibit 56, PM 10-200). (Refer to DLMS 6, sections 915-916, Cash Processing, for detailed instruction on recording and maintenance of the CRR.) The pages of the CRR shall be maintained by the DO for a period of two years from the date of the last entry on each page, after which they may be destroyed. In addition, if the cash received is a penalty payment, appropriate entries shall also be made on the Penalty Log. (See PM 8-302.9.)
6. Transferring Cash. After cash receipts have been recorded on DL Form 1-301, they are grouped by routing destination and recorded on DL Form 1-303, Cash Transfer Receipt (Exhibit 57, PM 10-200). A separate Cash Transfer Receipt (CTR) is prepared for each receiving agency. (Refer to DLMS 6, sections 915-917, Cash Processing, for detailed instructions on the use of Form DL 1-303.)
   (1) Penalty payments under sections 14(g), 30(e) and 48(a) of the Act, as well as death payments under section 44(c)(1), shall be transferred, by means of the DL Form 1-303, to the Director, DLHWC, for deposit in the Special Fund. Cash receipts for reproduction and services under the Freedom of Information Act and the Privacy Act shall be transferred, also by means of DL Form 1-303, to the appropriate regional office for processing and deposit. Any questions concerning the proper office to which a particular cash receipt is to be transferred shall be referred to the DD, or an individual designated by the DD, to make this determination.
   (2) The DO shall maintain the original (white) copy of the DL Form 1-303 in a chronologically arranged file. When the signed receipt (pink) copy of the DL Form 1-303 is returned to the DO from the office to which the cash was transferred, it will be attached to the original (white) copy in the file. Each month the Mail and Files Supervisor, or other individual designated by the DD, shall review this file to determine if there are any receipt copies which are outstanding. If so, inquiry shall be made with the office to which the DL Form 1-303 was sent to determine if the cash was received.
   (3) The original and receipt copies of the DL Form 1-303 shall be maintained on file for a period of two years after the date the form was prepared, after which they may be destroyed. This file, in conjunction with the Cash Receipt Register, will enable auditors to trace cash receipts from the time of initial receipt in the district office to receipt by the depositing organization.

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10. Processing Outgoing Mail. Outgoing mail and packages should be delivered to the Mail Room preferably twice per day, but no less than once a day, for mailing. The mail is processed as follows:

1. Registered and Certified Mail. This mail is processed in accordance with the USPS regulations and procedures established in each OWCP office location.
2. Regular Mail. All envelopes must show the addressee's ZIP code. Some city post offices require a further separation of local mail from out-of-town mail.
3. Window Envelopes. Depending on staff and office practice, window envelopes may be used. As mentioned above, the addressee's zip code must be clearly readable.
4. Packages and Heavy Envelopes. All such mail must be securely wrapped and or taped.
5. Mail Metering. Mail meter machines have replaced franked postage which was previously used on outgoing mail. Some district offices share the use of a meter machine with a FECA district office. Longshore Mail and File personnel are to follow their local regional office's procedures for accounting for program mail costs.

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Back to Chapter 1-0300 Table of Contents

1. Purpose and Scope. This Chapter of the PM describes the methods by which communications are identified with related cases, how cases are located, and how various special situations are treated. The Longshore Case Management System (LCMS) provides various automated features, such as case search and case create, which are either essential to or particularly useful in accomplishing certain tasks in the mail and file section. Mail and file personnel must have a working knowledge of the LCMS.

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2. Searching For A Case File Number.

1. Case File Number. The primary control on mail and case files is by the case file number assigned at the time the case is jacketed. The number distinguishes between similar accidents to the same employee or ones that have happened to individuals with similar names. It is important that unnumbered mail receive the correct file number, and that a new case be created only where a case for that employee and for that accident does not already exist.
2. LCMS. To determine whether a case file already exists for a particular injury to a particular individual, and if so, the correct case number assigned, click on the "Find" button on the "Claim" screen of the LCMS. The "Select Case" screen will be displayed. You can search by case number, name, date of injury, etc. Since an unnumbered injury report form (LS-202, LS-201, LS-203, LS-208, and LS-262) may be a duplicate of or related to an already existing case file, it is recommended that these injury report forms be searched through the LCMS. This will avoid the effort expended in keying these reports into the LCMS Case Create function only to find that a case for that injury already exists. However, depending on staff, volume and workflow, all unnumbered injury report forms may be sent directly for processing through the LCMS Case Create function since this function will identify an already existing case. In using the LCMS Find function, in addition to the name on the document, check where possible for:
   • Possible variations in the spelling of the claimant's name.
   • The claimant's SSN and/or date of birth.
   • The date of injury.
   • The company involved (using the Employer Identification Number from the LCMS).
   
   A careful check before a number is assigned will avoid later problems for the claimant, the carrier and the DO.

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3. Unnumbered Correspondence. Unnumbered letter mail related to injuries or deaths should be searched against the LCMS. Unnumbered injury report forms are discussed in paragraph 5, below.

1. Case Number Found. Mail for which a LCMS case search shows there is a case file number will be so marked by placing the number in the upper right corner of the mail. The numbered mail is then forwarded to the File Clerk to be combined with other numbered mail for attachment to the appropriate case files.
2. Case Number Not Found. Mail for which no case number has been found will be so marked by placing the notation NR (for No Record) in the upper right corner of the mail. The mail will be forwarded to a Claims Examiner for a determination as to the disposition of the correspondence. A possible disposition is for the CE to return the correspondence to the Mail and Files Section for placement in a Pending Correspondence File (see paragraph 6, below).

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4. Unnumbered Injury Report Forms. Most cases start with the receipt of the LS-202 form; LS-201, LS-203, and LS-262 forms from employees or dependents and the LS-208 are generally matched with the LS-202 report when the case file is assembled. Separate the injury reports submitted on these forms into the categories discussed below. All new lost time or death reports, and Forms LS-201, LS-203, LS-208 and LS-262 (whether reported as no lost time injuries or not so reported at this time), will be processed as indicated in this paragraph, and docketed as described in PM 1-400.
Also note that a case may be created based on receipt of an LS-207 or a medical report where there is information indicating that the case will present serious disputes or that lost time is likely.

1. Lost Time (LT) Injury (Disabling Injury). A LT injury (reported on Forms LS-201, LS-202, LS-203, LS-208 and LS-262) is an injury which results in death or loss of time from work beyond the day or shift of injury. Unnumbered injury report forms should be checked through the LCMS Find function to see if the injury was previously reported.
   1. If a case file number is found, place the file number in the upper right corner of the form and send to the file unit to be attached to the case file.
   2. If the injury has not been previously reported, so indicate on the form by making the notation NR in the upper right corner and forward the form for docketing and jacketing.
2. No Lost Time (NLT) Injury. These reports are considered not to qualify as claims or cases. Note, however, that where an injury results in no loss of time from work but leaves an employee with a permanent impairment compensable under the schedule (i.e., section 908(c)(1)-(20)), a case should be created (The rationale for this policy is explained in Industry Notice No. 63, May 8, 1987. Please call the National Office if you need a copy of Industry Notice No. 63). Where there is no time lost and no evidence of either disfigurement, PPD, or occupational disease, such injury reports should be destroyed. However, if it is the experience of the district office that a significant number of initial NLT reports received from a particular employer or carrier are subsequently reported as lost time injuries, the district office may file such NLT reports in a Pending Correspondence File (see paragraph 6, below). NLT injury reports filed in the Pending Correspondence File differ from the questionable reports described below in that for the NLT injury report there is no evidence indicating possible lost time, permanent partial disability, disfigurement, or occupational disease. Placement of these reports in the Pending Correspondence File should be based primarily on the DO's experience with particular employers and/or carriers subsequently submitting lost time reports.
3. Questionable No Lost Time Injury. A questionable no lost time injury is one where the injury report shows no lost time, but other information or evidence gives reason to believe there may be justification for a lost time, permanent partial disability, and/or disfigurement case. Injury report forms for such injuries should be searched through the LCMS.
   1. If a case file number is found, place the file number in the upper right corner of the form and send to the file unit to be attached to the case file.
   2. If the injury has not been previously reported, so indicate on the form by making the notation NR in the upper right corner and forward the form for docketing and jacketing. In making the decision to forward the report for docketing and jacketing, it should be remembered that there should be evidence indicating a lost time, permanent partial disability and/or disfigurement case. If there is any question as to whether the report should be docketed and jacketed, the matter should be referred to the Mail and Files Supervisor or other designated individual for resolution.

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5. Pending Correspondence File. Depending on each DO's experience and need, correspondence for which there is no number, but where a case file is likely to be created, may be placed in a Pending Correspondence File. Correspondence should be filed alphabetically by the name of the potential claimant wherever possible, otherwise by the author of the correspondence. This file should be reviewed periodically to determine whether a case has been established for any of the correspondence; if so, the correspondence should be numbered and associated with the correct case file. The file should also be purged periodically (e.g., every six months) and correspondence older than six months, for which no case file exists, should be removed and destroyed. The types of correspondence which may be placed in this file include:

1. No Lost Time Cases. Those NLT cases which the office believes will subsequently be reported as lost time (as discussed in subparagraph 5b, above) may be placed in this file.
2. Unidentified Mail. There will be occasions when mail is received without the full name of the employee and the mail cannot be returned. This mail may be placed in the Pending Correspondence File. Usually, other correspondence will follow which will identify it and allow for the matter to be resolved. When searching for mail which may be needed and there is reason to believe that it has already been received by the office, refer to the Pending Correspondence File.

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6. LS-570 Insurance Cards. Insurance coverage by employers is recorded on LS-570 cards (Exhibit 52, PM 10-200). The file of LS-570 cards is kept by the individual designated by the DD to process or handle insurance-related matters. Authorization for issuance of the cards, their verification, and maintenance of the files is covered in Part 7 of the Procedure Manual. Where there is an individual designated to handle insurance-related matters, annotation of the carrier identification is the responsibility of that individual. All insurance correspondence is delivered to the individual designated by the DD to discharge this responsibility.

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1. Purpose and Scope. This Chapter of the PM is concerned with the procedures and requirements for creating, assembling, and maintaining the files for individual claims by the Mail and Files Section. The CE makes decisions concerning the claim and actions to be taken; these are discussed in Part 2 of this Manual.

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2. Establishing A Case File. Reports of injury are docketed and jacketed if they contain a Form LS-202 reporting a lost time injury or a death. They may also be docketed and jacketed if they contain a Form LS-201, LS-203, LS-206, LS-208, or LS-262, regardless of whether the injury was reported as a no lost time injury (see PM 1-300.4), or if the injury is reported as NLT but there is evidence indicating lost time, permanent partial disability, occupational disease, and/or disfigurement (see PM 1-300.4c). Also, A case may be created based on receipt of an LS-207 or a medical report where there is information indicating that the case will present serious disputes or that lost time is likely. The creation of a case file signals the beginning of claims processing activity. Opening a case file does not establish eligibility for compensation, but signals that there is a possibility of eligibility. The docketing and jacketing process requires judgment. The Mail and Files Supervisor, or other experienced person designated by the DD, shall have the responsibility of determining which injury reports need not be docketed and jacketed, and which need verification of insurance coverage. All questionable cases shall be referred to the designated individual.

1. Docketing. Docketing a case means assigning a case file number through the LCMS Case Create Function. Case file numbers include one or two digits indicating the district office number and up to six digits for the sequential number assigned to the case by the Case Create function (e.g., 01-234567).
2. LCMS Data Entry. Most of the data to be entered during the case creation process is taken directly from the injury report form. However, the Employer ID and Carrier ID sequence numbers are not provided on the injury report forms. To facilitate identification and data entry of these numbers, a current LCMS printout of the district office's employer and carrier listings should be readily available to case create personnel. So as to avoid potential future problems, it is important that care be taken to enter case creation information accurately and correctly into the LCMS.
3. Jacketing. Jacketing a case means placing the injury reports and related documents in a folder bearing the case number assigned during the docketing process.
4. Mailing Labels, LS-504 and Case Call-Up. Docketing injury reports through the LCMS Case Create function will result in the automated production of a LS-504 which advises the claimant of his or her rights, and a letter addressed to the employer/carrier advising them of the case number. The LCMS will also automatically establish a thirty day call-up for subsequent CE review of the case.
5. Timeliness of Case Creation. It is imperative that all cases be docketed and jacketed as soon as possible after reports are received. In all instances they must be docketed and jacketed within 7 days of the date of receipt.
6. Routing. After the new cases have been docketed and jacketed, they should be sent to the CE as designated by local office procedure. Usually the last two digits of the case number determine the CE who will receive the case, but there are other acceptable methods of assigning cases to CEs.

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3. Duplicate Cases. There are occasions when, through error, two cases are made for the same injury. After confirmation by the Mail and Files Supervisor or other designated individual that duplicate files have in fact been created, the following actions should be taken:

1. Merge the File Material. All correspondence, forms, etc., in the case with the higher file number should be renumbered and attached to the inside front cover of the case with the lower file number.
2. Delete the Case From LCMS. Delete the higher number case from the LCMS using the LCMS Case Delete function. It should be noted that use of the Case Delete function is limited to the DD.
3. Notification of Deletion. Since the claimant and EC were notified of the assignment of the case number, correspondence should be sent to both advising that the higher number case was found to be a duplicate of a previously created case, that all correspondence and forms already on record have been placed in the earlier case file, and that all future correspondence should refer only to the lower number.
4. Reissue the Folder. The higher number case folder should be reissued to a new case as soon as possible Creating a new case using the previously used case folder must be done through the LCMS Supplemental Screen, Case Create.

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4. Multiple Claims for One Injury. Occasionally, multiple claims by one employee for a single injury may be filed against several employers. Only one case should be created for the injury. Specifically, when an injury to a claimant (e.g., asbestosis or hearing loss) results in claims against several employers, a determination should be made as to which is the last responsible employer and only one case should be created, using that employer. If other employers are joined, enter their names on the Notes Tab on the Claims Screen in the LCMS. If later it is determined that another employer is the responsible employer, simply update the case record using the Basic Data Screen. Where it cannot initially be determined which employer is the responsible employer, leave this field blank when creating the case, since it is not a required field. This information may be added later as appropriate.

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5. Additional Hearing Loss Claim. Whenever there is a new claim for additional hearing loss, a case file should be created (cross reference should be noted in each case file). Keep in mind that this is different from the situation where an employee files a number of claims against multiple employers for the same injury (hearing loss or other type of injury). In that situation only one case should be created (See Chapter 1-400.4., above).

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1. Purpose and Scope. This Chapter describes the case files in the DO, the manner in which they are maintained, searched, and repaired; and the procedure for changing from open to closed status.

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2. Case Classification. Case records in the district office fall into one of the two following basic classifications:

1. Open Case. This case is one in which some action is expected or a time period for closing has not run. This is the basic active file. Cases remain in this status until they are closed by the CE.
2. Closed Case. Cases in this classification are those that have been closed by the CE, but have not been sent to the Federal Records Center for storage. At the time the case is closed, the CE should update the Case Status and Case Type in the LCMS. This should be done on the LCMS Claim Screen. The LCMS Case Type codes are as follows:
   1. No Lost Time
   2. 3 or Fewer Days Lost
   3. More Than 3 Days Lost
   4. Death
   5. Other

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3. Filing Cases. Prior to the introduction of the LCMS, open and closed cases were filed separately in the file room. This was necessary for the compiling of data for management reports and it facilitated the shipment of cases to the Federal Records Center according to the established retirement schedule. The LCMS now provides an automated capability of identifying open and closed cases, and district offices are no longer required to maintain separate open and closed files. Attaching mail is also facilitated since there is only one file room location for cases. With few exceptions case records shall be maintained in the file room. Exceptions include active cases which are being reviewed in another part of the office by district office personnel, and case records removed from the office (e.g., transferred to another DO or to the NO).

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4. Searching.

1. Numbered Mail. Numbered mail will be checked against the cases in the file room, placing the incoming mail connected with each case inside the appropriate folder. The folder will be removed from the file and routed for action.
2. Routing and Delivery. The case files with attached incoming mail will be delivered to the appropriate claims examiner assigned to each group of claim numbers as determined by the individual office.
3. Search List. A search list of remaining mail will be prepared at least weekly, listing the file numbers in numerical order. All cases in the office not in the file room will next be searched from this list.
4. Conducting the Search. All locations in the office should be searched for cases with outstanding unattached mail. When a case is located for which mail has been received, the mail should be placed in the case folder and given directly to the responsible individual or placed in a location where the responsible individual will be aware of incoming mail which requires his or her attention.

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5. Recall Mail. Mail for which no jacket has been located after a complete search of the files and desks of the office is designated as recall mail. It is interfiled with the next day's mail to be searched again.

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6. Old Mail. At the end of each week, all unattached mail should be screened prior to interfiling with the next new mail group. Any expedite mail which has been in OWCP five or more working days should be given to the Mail and File Supervisor for special searching for the related cases.

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7. Requirements For Filing Cases. A case is not to be filed if it contains loose mail. If there is loose mail in the case, the case should be returned to the responsible examiner for appropriate action.

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8. Filing Materials In The Case Folder.

1. Initialing and Dating Documents. Claims Examiners and all other personnel with the responsibility for filing forms, reports, correspondence, etc., in the case file are responsible for initialing and dating all pieces of mail which they add to the case file. The notation will be made in the upper right hand corner of the first page of the document.
2. Filing Order. Generally, no reports or correspondence should be placed on the fastener until appropriate action has been completed. Mail and other material should be filed in chronological order based on date of receipt, except that the LS-202 is always filed at the bottom. The file copy of a response should be placed on top of the reports or correspondence to which it pertains.
3. Duplicate Material. Copies or duplicates of forms, letters, medical reports, or other correspondence already on file should not be added to the case file. It is important to ensure that they are identical copies and not updated or revised versions of the earlier material. An exception to the rule of not adding duplicate records to the case file would be copies submitted by different parties. Such copies should be retained since they would be a part of the other party’s evidence.

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9. Repair of Files. With use, material in the case files and the case file folders can become damaged and could be made illegible. It is the responsibility of the Mail and Files Section to maintain the integrity of the case files.

1. Loosened Pages. In any instance where material has torn loose, partially or totally, from the fastener, repair or strengthen the page with a gummed or self-adhesive reinforcement or transparent tape, or by other appropriate and effective method.
2. Torn or Damaged Pages. Mend torn or damaged documents if possible. If mending is not sufficient, and there is a possibility of further damage, it may be necessary to photocopy the damaged document in order to have a serviceable copy in the file.
3. Spilled/Disassembled Cases. In the event that cases are dropped and spilled, or are disassembled (e.g., for photocopying purposes), make sure the contents are replaced in the proper folders and in the proper chronological order, with the LS-202 on the bottom.
4. Damaged Case File Folders. In all instances of damaged folders, the entire case file is to be referred to the Mail and Files Section for repair or replacement. Such repair or replacement is not to be performed other than by the Mail and Files Section.

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1. Purpose and Scope. Newly filed claims are created within the jurisdiction of the compensation district in which the injury or death occurred (with some exceptions for Defense Base Act claims). This chapter describes the guidelines and procedures used in transferring files from one District Office to another after the case has been created.

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2. Statutory and Regulatory Authority.

1. Statutory Authority.
   1. 33 U.S.C. §§ 12(a) and 13(a) state in pertinent part:
   2. Notice of an injury or death in respect of which compensation is payable under this Act shall be given … (1) to the deputy commissioner in the compensation district in which the injury or death occurred…
   3. … [T]he right to compensation for disability or death under this Act shall be barred unless a claim therefor is filed … with the deputy commissioner in the compensation district in which such injury or death occurred.
   4. 33 U.S.C. § 914(h) provides in part:
      The deputy commissioner (1) may upon his own initiative at any time in a case in which payments are being made without an award, and (2) shall in any case where right to compensation is controverted, or where payments of compensation have been stopped or suspended, upon receipt of notice from any person entitled to compensation, or from the employer, that the right to compensation is controverted, or that payments of compensation have been stopped or suspended, … take such further action as he considers will properly protect the rights of all parties.
   5. 33 U.S.C. § 939(b) provides in part:
      The Secretary shall establish compensation districts … and shall assign to each such district one or more deputy commissioners.
2. Regulatory Authority. 20 C.F.R. § 702.104 states,
   1. (a) At any time after a claim is filed, the district director having jurisdiction thereof may, with the prior or subsequent approval of the Director, transfer such case to the district director in another compensation district for the purpose of making an investigation, ordering medical examinations, or taking such other action as may be necessary or appropriate to further develop the claim. If, after filing a claim, the claimant moves to another compensation district, the district director may, upon request by the claimant or the employer and with the approval of the Director, transfer the case to such other compensation district.
   2. (b) The district director making the transfer may by letter or memorandum to the district director to whom the case is transferred give advice, comments, suggestions, or directions if appropriate to the particular case. All interested parties will be advised of the transfer.

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3. Request for Transfer. While the District Director has the authority to transfer a case at his/her discretion as outlined in 20 C.F.R. 702.104(a), a case will not routinely be transferred based solely on a claimant’s change of address. A written request for transfer from the claimant or the authorized representative should normally be received prior to the transfer.

1. Transfer requests should be based on a claimant’s change of physical address so that the case is moved within the jurisdiction where the claimant currently lives. This allows for ease of administration with regard to services provided such as vocational rehabilitation.
2. A written request should be received from the claimant or his/her representative requesting the transfer. If the claimant moves to another compensation district and requests that the file be transferred to the district in which he/she currently lives, the request for transfer will usually be honored.
3. If an employer requests that a case be transferred, but the claimant does not, the claimant should be consulted prior to the transfer. The District Director (or designee) will then evaluate the request and response from the claimant prior to deciding whether to transfer the case.
4. Requests to transfer a case to a district other than the district in which the claimant resides will typically not be honored except in exceptional circumstances. For instance, a request to transfer the case solely for the convenience of an authorized representative will generally not be honored.

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4. Transfer Actions. Upon receipt of a request to transfer the case to another district, the District Office administering the case will evaluate the request. If the District Director (or designee) finds the request to be appropriate, the case will be prepared for transfer. The transfer of files is to be initiated by the District Office having jurisdiction of the case.

1. Pending Actions. Prior to transfer, the District Office should insure that all required actions have been completed. A file is not to be transferred when outstanding adjudication actions have not been completed that can be completed by the District Office initiating the transfer.
   The District Director (or designee) making the transfer may give advice, comments, suggestions, or directions, as deemed appropriate, to the District Director to whom the case file is being transferred.
2. Case File Transfer Form. If there is a paper component to the file, a Case File Transfer Form, CA-58 (or equivalent) should be completed to show that the case file is being permanently transferred. After completion, the form should be placed into the imaged file and a copy should be attached to the outside of the paper case file. If the case is fully imaged this documentation is not needed.
3. Notification to Parties. The District Office should notify the claimant, attorneys and parties of interest that the case is being transferred and provide the contact information for the new District Office. The letter should be added to the case file before the transfer action is completed.
4. Longshore Case Management System (LCMS). When a case is transferred to another office, the originating office must change the LCMS case status to "Transferred" and the case location to reflect the receiving office. Once this occurs, the imaged portion of the file will be available to the new district office. The new district office must then update the case status in LCMS as appropriate.
5. Mailing. Paper cases must be sent via certified mail or some other method that allows for tracking receipt. The tracking documentation should be placed into the imaged portion of the file prior to transferring the file.

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1. Purpose and Scope. This Chapter describes the requirements for transfer of inactive files and records, the time periods for which they must be held, and the responsibility for their disposition. The authority for storage and disposal is given in the OWCP Records Disposal Schedule for program records and in the GSA General Schedules for administrative records.

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2. Procedures. A records disposal schedule for the program records of the OWCP has been prepared by ESA. A summary of that schedule is shown as Exhibit 7, PM 10-300.

1. Program Records. These records are to be disposed of in accordance with the schedule which is summarized as Exhibit 7, PM 10-300.
2. Administrative Records. These records are to be disposed of in accordance with the GSA General Schedules and with other instructions provided by ESA.

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3. NLT Cases and Index Cards. The following clarifications concern the OWCP Records Disposal Schedule as it pertains to no lost time cases and to index cards.

1. No Lost Time (NLT) Cases. It is current policy that reports of no lost time injuries are not to be jacketed or retained (see PM 1-300.5). The guidance on disposal of such reports is applicable only to those NLT cases which may have been jacketed or otherwise retained in the past.
2. Index Cards. With the implementation of the automated Longshore Case Management System (LCMS), index cards are no longer created for new cases. The guidance on the disposal of index cards is applicable to those cards retained for older cases not entered in the LCMS.

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1. Purpose and Scope. This Chapter implements the regulations of the Department of Labor regarding 5 U.S.C. section 552, the Freedom of Information Act (FOIA) and the Privacy Act, 5 U.S.C. section 552a, as amended. It establishes the responsibilities and provides guidance for compliance with these Acts in accordance with provisions of Employment Standards Administration (ESA) Manual 4-100. The Office of the Solicitor or Regional Solicitor should be consulted for further guidance required on these matters.

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2. Authority. DLMS 5-200/300, ESA Manual 4-100, and 29 C.F.R. Parts 70/71 establish the policies and procedures for the implementation of the FOIA and Privacy Act within the DOL and ESA. The responsible officials within the LHWCA to whom authority for release of information has been delegated are indicated in paragraph 5, below.

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3. Policy.

1. Organization of Records. All records shall be placed in such order as to facilitate the identification of records of concern to the public under the Freedom of Information Act (FOIA) and Privacy Act.
2. Aid to Those Seeking Information. ESA will not only comply with the terms of proper requests under the FOIA and Privacy Act but will seek to assist members of the public who have misdirected their requests out of a lack of knowledge of pertinent information systems. Pursuant to the FOIA Amendments of 1996, “Reading Room Records” (i.e., final adjudicatory opinions, specific policy statements, staff manuals) created on or after November 1, 1996, are being made available on DLHWC’s internet Home Page.
3. Press Releases. In instances when information disclosed under the FOIA is of general interest, ESA will cooperate with the Office of Information, Publications and Reports and the Regional Information Officers in the preparation and release of an announcement when appropriate.
4. Statistical Data. Permission may also be granted by OWCP National Office for release of documents or information in district office files in connection with a study being conducted for a legitimate purpose by another agency of the U.S. Government or a contractor of the U.S. Government provided the information is to be used as statistical data about a particular aspect of the agency's work and safeguards are maintained to prevent the identification of any individuals whose files are included in the study, or the disclosure of personal information in the individual records.
5. Personal Information. LHWCA case records are non-public since they contain personal information which may be released only to parties in interest in specific cases of injury or death. All documents contained in LHWCA claim files are covered by the Privacy Act system of records entitled “DOL/ESA-15 Office of Workers’ Compensation Programs, Longshore and Harbor Workers; Compensation Act Case Files.” As a general matter, therefore, disclosure of any documents contained in a LHWCA claim file may be made only in accordance with that Act. Disclosure may be made to the subject of the file (the claimant) and to those persons or entities specified in the routine uses applicable to DOL/ESA-15. See 58 Federal Register (FR) 49,599-600 (September 23, 1993), and the universal routine uses applicable to all DOL systems of records set forth at 63 FR 2,417-18 (January 15, 1998).
6. Internal Communications. Internal memoranda between DOs and the National Office are not to be released to parties outside the Department. This is particularly important in cases involving section 8(f) relief. Such memoranda between the DO and the National Office or the DO and the Regional Solicitor's Office contain information on the Department's handling of a particular section 8(f) application. Since this application may be the subject of a formal hearing, it is not appropriate to reveal the Department's views on the evidence submitted in support of the application or any possible litigation strategy. Therefore, these documents are to be considered privileged correspondence and are not to be released to any party
   It should be noted that internal memoranda should not be released in response to a request submitted under either the FOIA or the Privacy Act. The FOIA provides that requests that reasonably describe records in the custody of the agency are to be disclosed unless they fall within one of the nine exemptions to the FOIA. Exemption five (5) provides that staff opinion material found in internal memos, letters, recommendations and any nonfinal pre-decisional material up until the final action taken by the person with the legally delegated authority to take final action is exempt from disclosure. The findings of the responsible federal employee are factual material, not opinion and may be released.
7. Copying of Records. The Privacy Act provides the individual who is the subject of the records with the right to inspect or copy those records. If the individual requests a copy of a record under the Privacy Act, the first copy is made available to the requester or an individual designated by the requester at no charge. In addition, no charges will be assessed for the time spent searching for the record pursuant to a Privacy Act request. Copies of the record may be made by the requester in the DO on the DO copying machine or the record may be copied by DO personnel. However, the record should not be sent out to be copied by a private copying service, nor should employees of such a private copying service be permitted to copy records on district office copying equipment. Employees of private copying services are not permitted access to records collected and maintained in Privacy Act systems. Access to such records is limited to the individual who is the subject of the record, such person's parent or guardian if the person is a minor or has been declared incompetent, or to the representative designated by such individual. Requirements for identification are contained in 29 C.F.R. section 71.5.

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4. Definitions.

1. Request. To come under the FOIA or the Privacy Act, a request must be for an existing record. It is not necessary to create a record in response to a request. The request should be in writing.
2. Public Record. The FOIA covers records that are considered public. Nine specific exemptions are provided to cover records and parts of records that are considered non-public.
3. Disclosure Officer. The Disclosure Officer is a person designated as being responsible for answering requests under either Act.
4. Disclosure. Records may be disclosed by providing the requester with copies of the records which were requested or by providing that person with access to the records.
5. Personal Information. Personal information is information in governmental files about the aspects of a person's life.

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5. Responsibilities.

1. Disclosure Officer. The following officials are designated as Disclosure Officers for the LHWCA for purposes of both the FOIA and the Privacy Act:
   1. National Office (NO).
      1. Director, OWCP
      2. Director, DLHWC
   2. District Office (DO).
      1. Regional Directors (RD)
      2. District Director (DD)
2. Duties of Disclosure Officers. Disclosure Officers are responsible for the proper maintenance of all information systems under their jurisdiction as well as for final decisions concerning requests under the Acts. To avoid confusion of responsibilities under these Acts with other administrative responsibilities concerning records, they are made records custodians for the purposes of complying with the subpoenas and for the orderly retirement/destruction of records in keeping with National Archives and Records Service approved records schedules. Disclosure Officers are:
   1. Liable for their actions. If a suit contesting a refusal to disclose information under the FOIA is held against the Government and the Court finds the refusal to be "arbitrary and capricious," the Disclosure Officer or the alternate acting in that person's stead is subject to OPM investigation and any disciplinary action which may be recommended to DOL as a result.
   2. Subject to a $5,000 fine under the Privacy Act if a court finds them to have unlawfully disclosed material covered under the Act or to have failed to publish notice of a system of records covered under the Act.
   3. Authorized, where necessary, to delegate responsibility for carrying out the tasks of the Disclosure Officer with respect to the maintenance of records systems and the preparation of responses to requests. However, the authority and liability cannot be delegated short of designating additional Disclosure Officers.
   4. Responsible for ensuring that persons maintaining records or likely to receive requests under each Act are familiar with the relevant procedures and responsibilities. Training (formal or in-house) should be arranged for all such personnel.
   5. Responsible for ensuring that a contractor and the contractor's employees understand that the disclosure of any record (covered or not) is accomplished by the Disclosure Officer and not the contractor. (Section 3m of the Privacy Act makes contractors and their employees working on records covered by the Privacy Act liable under the Act.)
   6. Responsible for ensuring that information in case records is disclosed only in accordance with the Privacy Act. Only parties in interest are permitted access to the case record, and only these parties may receive copies of documents from the case file. Medical records and information may also be disclosed. However, if medical reports contain information of a nature that could be extremely injurious or shocking to the employee or claimant wishing to see his or her records (e.g., terminal conditions, social diseases, psychiatric illness, etc.), that person should be informed that the medical records or information will be released to his or her representative or treating physician.

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6. Coverage. Requests from the public for information in documents in the custody of ESA should be treated either under the FOIA or the Privacy Act. Requests for copies of publications or for information (rather than documents) are not covered by either Act. Requests for records not covered by the Privacy Act or by individuals other than the covered individual (or his or her attorney, parent, or legal guardian) are requests under the FOIA. The chart in Attachment 1, ESA Manual 4-104, should assist Disclosure Officers in responding to requests for records. Where a request is made by a law enforcement agency, material can be released provided the above requirements of the Privacy Act are fully met. (For further coverage regarding the implementation of the FOIA and Privacy Act, see ESA Manual 4-104a/b.)

1. Privacy Act of 1974 (5 U.S.C. section 552a). The provisions of the Privacy Act are meant to assure the private citizen's rights to confidentiality and secrecy of personal information, including financial and medical history. That statute, in addition to guaranteeing the claimant's access to the information contained in the file, prohibits disclosure to any person unless the subject of the file consents to such disclosure or the request meets one of the exceptions listed in section 552a(b). In as much as the gathering of any information by any source involves some distribution of that information, no matter how slight, the Privacy Act demands extra measure, through classification, secure custody, and restricted release of any information about an individual which is maintained by an agency, and which can be called up or retrieved by name or other personally identifying number or symbol. The effect of the Privacy Act as it relates to compensation matters is to require offices of the OWCP to advise claimants why any information requested of them is necessary, to permit such claimants to have access to any materials which they may have submitted over their own signatures, and to have access to medical reports (subject to certain limitations) and other documents which may have been submitted by other persons in connection with the claim.
2. Freedom of Information Act of 1967 (Pub. L. No. 90-23), as Amended.
   1. The Freedom of Information Act (FOIA) was designed to provide members of the public a defined procedure for obtaining records from the Federal government. The Act was amended by Pub. L. No. 93-502, effective February 19, 1975, to clarify and liberalize the requirements for, and to expedite the disclosure of information to the public. The FOIA requires the publication of indexes of specified agency documents and record materials, provides time limitations for responding to requests, and establishes a system of penalties for non-compliance with the time limitations; requires identification of persons responsible for granting or denying requests; provides for court review of denials, including classified materials; and provides for the levying of charges for searching and copying requested materials.
   2. In each office (National and DOs), the Disclosure Officer is responsible for acknowledging FOIA requests; making a determination as to whether or not the request shall be granted; and either providing the material, or else advising the requester why the request cannot be allowed, in which case the Officer must also advise the requester of the avenues of appeal. The Disclosure Officer must maintain an accurate log of all FOIA requests and their disposition. A record must be kept of the number of denials and the reason therefor.
   3. Time is a critical factor in processing FOIA requests for information. The Disclosure Officer has twenty working days from the date of receipt of an FOIA request to respond. If circumstances prevent the disclosure officer from providing the requested documents within the 20 working days, he/she should advise the requester in writing within the 20 working days of a specific latest date (generally within about 2 weeks) when the first response will be sent.

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7. Processing Requests. Procedures for processing requests are detailed in ESA Manual 4-105, including the evaluation of requests, charges for services, denials, identification requirements, and handling of personal records.

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8. Records and Reports. The records and reports required in the implementation of the FOIA and Privacy Act are described in ESA Manual 4-106. They include the instructions for:

1. FOIA Indexes. Periodic updating and publication of FOIA indexes.
2. Routine Uses. Informing the public of routine uses under the Privacy Act.
3. Workload. Maintaining records of FOIA workload, Form DL 1-520 (Request Under the Freedom of Information Act).
4. Disclosure. Recording the disclosure of material covered by the Privacy Act, Forms ESA 67a (Privacy Act Record System Log of Disclosures) and ESA 67b (OWCP Case File Privacy Act Disclosure Log).
5. Contractors. Monitoring contractors who generate, manipulate, or maintain records covered by the Privacy Act to prevent unauthorized disclosure.

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9. Routine Uses. The routine uses applicable to all Department of Labor systems of records is set forth in the Federal Register at 63 FR 2,417 (January 15, 1998), a copy of which is available from the National Office.

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10. Subpoenas. District Directors and National Office personnel should immediately contact their appropriate Solicitor’s office whenever they receive an ALJ or court subpoena, or other request made in connection with ongoing litigation, calling for the production of documents.

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1. Purpose and Scope. This Chapter provides an overview of the procedures for the initial review of a case file by the Claims Examiner (CE) or Claims Examiner Clerk (CEC).

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2. Definition. A primary case is a recently created case that has not been reviewed by a CE or CEC. It usually contains only the initial report of injury and an indication of the employee's absence from work. However, often it will also contain other reports or information germane to the case. At a minimum such cases will normally contain at least one of the following reports or forms:

1. LS-202, Employee's First Report of Injury (Exhibit 16, PM 10-200)
   1. . . . reporting lost-time beyond the date of injury,
   2. . . . reporting a case of occupational disease, or
   3. . . . reporting a case of permanent impairment which is covered by the schedule in section 8(c)(1)-(20) of the Act.
2. LS-206, Payment of Compensation Without Award or LS-208, Notice of Final Payment (Exhibits 19 and 20, PM 10-200).
3. LS-203, Employee's Claim for Compensation, or LS-262, Claim for Death Benefits (Exhibits 17, and 32, PM 10-200).
4. Settlement Application. Application for approval of section 8(i) settlement.

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3. Timely Review of Primary Cases. Proper claims management dictates that primary cases be reviewed promptly to insure that compensation payments are provided on a timely basis, appropriate medical care is being provided and that the injured worker is promptly informed when entitlement to compensation is controverted by the EC. For this reason one of the Longshore Program's performance standards requires that primary cases be reviewed within thirty days of the date the case was jacketed. Generally, this will allow sufficient time for receipt by the DO of the initial evidence in a claim, i.e., the employer's report of injury, the attending physician's report, the employer's report of first payment of compensation or the notice of controversion.

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4. Routine Cases. On receipt of primary cases the CE/CEC quickly analyzes the cases to segregate those which require full, systematic and thorough review from those which can be routinely closed or called up. In the routine type cases, frequently only one review of a case by a CE may be necessary. Such cases include those where lost-time did not exceed three days and no permanent partial disability is indicated, or those in which the appropriate payment for a short period of temporary disability has been paid and reported at the time of review. The initial review of routine cases by the CE/CEC should include monitoring for timeliness of required reports, completeness of the information thereon and review of the initial medical report for any treatment provided. More specific guidelines concerning this review are contained in PM 2-201 and 2-202.

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1. Purpose and Scope. This Chapter contains the procedures for the initial review of a disability case file by the Claims Examiner (CE) or Claims Examiner Clerk (CEC).

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2. Routine Cases. On receipt of a primary case with Form LS-202, Employer's First Report of Accident or Occupational Illness (Exhibit 16, PM 10-200), the CE or CEC checks the items listed in subparagraphs a to h, below, and recommends penalties or other action where necessary. Routine cases are closed or called-up. In some instances, only one review of a case, by an experienced CE, may be required. Such cases include those where lost time did not exceed three days and no permanent partial disability is indicated, or those in which the appropriate payment for a short period of temporary disability has been paid and reported at the time of review. (See also PM 2-300.) The initial review of routine cases includes all of the following:

1. Timeliness. The CE/CEC checks the LS-202 for completeness of information and timely submission of the report by the EC. The LS-202 should be received in the district office within ten days after the injury or the date the employer had knowledge of the injury/illness. If the injury/illness did not immediately result in disability the ten day period is measured from when disability commences. Action to be taken when a late report is received is described in subparagraph 3f, below.
2. Compensable Lost Time. The timely submission of Form LS-206, Payment of Compensation Without Award (Exhibit 19, PM 10-200) by the EC indicates that compensation is being paid for time lost from work. For the procedures pertaining to the imposition of penalties and interest please refer to Part 8 of the Procedure Manual.
3. Medical Report. There should be the timely submission of the first report of treatment by the attending physician, Form LS-1, Request for Examination and/or Treatment (Exhibit 1, PM 10-200). (See also PM 5-300.) The CE/CEC reviews the medical evidence and assesses the severity of the injury, to determine whether or not the injured employee needs the care of a specialist and how long the anticipated disability may continue.
4. Payment of Compensation Without Award. When the EC makes voluntary compensation payments in accordance with the entitlements set forth in PM 0-300, the EC notifies the DD by submitting Form LS-206, Payment of Compensation Without An Award (Exhibit 19, PM 10-200). If Form LS-206 is among the initial reports received, the CE checks the compensation rate for accuracy as prescribed below in paragraph 3b. The LS-206 should be submitted to the DO by the EC immediately after the first payment of compensation is made, and should reflect first payment within twenty-eight days of the injury or the date disability began (for late payment penalties, see PM Chapter 8-202).
5. Identification of Cases in Compensation Status. If Form LS-206 has been received, indicating that compensation payments are continuing, the CE should record this information in the LCMS (See Chapter 4, LCMS User's Manual.)
6. Review of Cases for Right to File Claim. Many routine cases require only one review. Such cases include those where time lost did not exceed three days and no permanent partial disability is reflected in the medical data, or those in which the appropriate payment for a short period of temporary disability has been paid and reported at the time of review. In the event no claim is received and the case is to be closed, but the CE considers the injury to be of a serious nature, a Form Ltr. LS-403, Letter to Employee on Right to File claim for Disability Compensation (Exhibit 38, PM 10-200) is sent to the employee apprising him or her of the right to file a claim. A call-up for thirty days is to be placed on the case after releasing Form LS-403. If no reply is received at the end of the thirty day period, the file is marked "closed", dated, initialed, and placed in the central files.
7. Separate the More Complicated Cases. The cases which require full, systematic, and thorough review should be separated from those which can be routinely closed or called up. For those cases (including claims) which require full review, consider each of the factors identified in paragraph 3, below.
8. Check for Return to Duty Date. Form LS-202 may not include the date that the claimant returned to duty. In such situations, the EC may file Form LS-210, Employer's Supplementary Report of Accident or Occupational Disease (Exhibit 23, PM 10-200). This Form may also be used where the injured employee has returned to duty and later becomes disabled again.

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3. In-Depth Case Review. Cases involving serious injuries, occupational diseases, or other complications or other disputed issues, will require in-depth review. The CE must examine and resolve each issue which is or could become controversial. If these issues can be recognized and addressed at the time of the first review, it will simplify the later processing of the case. The file cannot be handled in a cursory manner.

1. Determine Eligibility. There are five basic requirements which must be met for an injured worker (or survivor in case of death) to be eligible for LHWCA coverage: timely filing of a claim, jurisdiction, fact of injury, course of employment and causal relationship. These issues are discussed in detail in PM Chapter 0-300.
   1. Timeliness. Claims regarding compensation for disability or death must be in writing and filed by or for the individual claiming benefits with the District Director (DD) of the compensation district in which the injury or death occurred. Eligibility requirements, time limitations, and exceptions are set forth in PM 0-300.4.
   2. Employee (Jurisdiction Situs and Status). The situs/status factors influencing the coverage accorded maritime workers under the Act are explained in PM 0-300.5 and Program Memorandum No. 58, August 10, 1977. Please also refer to the Longshore Desk Book (Note, however, that the decisions therein do not necessarily comport with the Director’s administrative construction).
   3. Fact of Injury. There must be evidence of injury to an employee in a "covered" situation in order to establish eligibility for compensation. See PM 0-300.6.
   4. Course of Employment. To be eligible for benefits, the covered employee must have sustained an injury which occurred in the course and scope of his/her employment, section 2(2) of the Act. Also, please refer to the Longshore Desk Book for a discussion of this issue (Note, however, that the decisions therein do not necessarily comport with the Director’s administrative construction).
   5. Causal Relationship. In addition to occurring in the course and scope of employment, to be compensable, an injury must arise out of the employment, section 2(2) of the Act. The section 20 presumption aids the claimant in establishing that the injury arose out of and in the course of the employment. See PM 0-300.3 and the Longshore Desk Book for a further discussion of this issue (Note, however, that the decisions therein do not necessarily comport with the Director’s administrative construction).
   6. The phrase "arising in the course of employment" relates to elements of time, place and work activity. To occur in the course of employment, an injury must occur at a time when the employee may reasonably be said to be engaged in the employer's business, at a place where the employee may reasonably be expected to be in connection with the employment, and while the employee was reasonably fulfilling the duties of his or her employment or engaged in doing something incidental thereto. This alone is not sufficient to establish entitlement to compensation. The concurrent requirement of an injury "arising out of the employment" must be shown. The phrase "arising out of employment" relates to the element of causal connection, the requirement being that a factor of employment caused the injury.
2. Verify Compensation Rate (Wage Rates, AWW). If Form LS-206 is among the initial reports received, the CE checks the compensation rate for accuracy.
   1. Partial Earnings Rate. If the compensation rate appears low or otherwise indicates that all income may not have been considered, the CE should send Form Ltr. LS-557 (Notice of Compensation Rate, Exhibit 51, PM 10-200) for the period in which the injury occurred if this Form has not previously been sent.
   2. Tentative Rate. The CE should send Form LS-426 (Request to Employee for Earnings Information Data on Employee's Earnings, Exhibit 39, PM 10-200) to the employee, requesting wage data.
   3. Minimum/Maximum Rates. The CE should check for the applicability of minimum/maximum rates payable pursuant to section 6(b) (Exhibit 26, PM 10-300).
   4. Accurate Rate. If the compensation rate appears to be accurate, the CE may place a call-up on the case file, (see Chapter 3, LCMS User's Manual), and await supplemental medical reports and Form LS-208 (Notice of Final Payment, Exhibit 21, PM 10-200).
3. Consider Third Party Involvement. Under section 33, a claimant may receive compensation or a death benefit under the Act while pursuing a civil action against a third party (not the employer) who, the claimant feels, caused the injury or death through negligence. For further information please refer to PM 3-600.
4. Consider Controversion of Entitlement. If the EC controverts the employee's or survivor's right to compensation, there must be filed with the DD a Form LS-207, Notice of Controversion of Right to Compensation (Exhibit 20, PM 10-200) on or before the fourteenth day after the EC had knowledge of the alleged injury or death. This form is a notice that the right to compensation is controverted, listing the name of the claimant, the name of the employer, the date of the alleged injury or death, and the basis upon which the right to compensation is controverted. The form is submitted in duplicate to the DO and the CE sends a copy of the form to the claimant within ten days of receipt of the form in the DO. The Form LS-209, Request for Employee's Reply (Exhibit 22, PM 10-200) is used to transmit the LS-207. However, the LS-207 may be replaced with a cover letter prepared by a district office and tailored to accommodate local conditions and needs. For further guidance on the development of the case (e.g., arranging for informal conference, assessing penalties, etc.), see PM 3-301, 4-200 and Part 8.
5. Consider Medical Evidence. The LS-1, Request for Examination or Treatment and Attending Physician's Report of Injury and Treatment (Exhibit 1, PM 10-200) should be received in the DO within ten days of the examination or treatment. However, the initial medical report need not be on the LS-1, and frequently consists of a narrative report or a LS-204, Attending Physician's Supplementary Report, (Exhibit 18, PM 10-200). After reviewing the initial medical report the CE/CEC should be able to determine the severity of the injury, whether the injured employee needs the care of a specialist, and estimate how long the disability may last. The CE/CEC should also consider the availability and sufficiency of medical care based upon the medical reports in the primary case. For further information regarding medical issues please review Part 5 of the Procedure Manual.
6. Consider Late Reports (Employer).
   1. Form LS-202. If the envelope, in which the Form LS-202 is submitted has a postmark date in excess of ten days beyond the injury date, Form Ltr. LS-548, Request to Employer for Explanation of Late Filing of Form LS-202 (Exhibit 48, PM 10-200) should be released within ten working days to the employer after determining that the report is late. See PM 3-301.3f and 8-302.
   2. Forms/Documents Other Than LS-202. If the primary case is received with a form or document other than Form LS-202 (e.g., Form LS-201 or LS-203), the CE releases Form LS-512, Request to Employer for LS-202 and Explanation for Failure to File (Exhibit 41, PM 10-200). The original form LS-201 or LS-203 (or other document) is kept in the file because it constitutes a notice of the injury or a claim. A copy is sent to the employer/carrier with a request for Forms LS-202 and LS-1. Unless a Form LS-203 is received, which would require a response from the EC, requests for other forms may be deferred at the initial handling of the file. The CE may place a thirty day call-up on the file to allow time for the submission of subsequent reports. If the EC's report has not been received at the time the file is reviewed on the call-up, Form Ltr. LS-512 should be released, advising the EC of the penalty provisions for late filing or failure or refusal to file a report of injury. See PM 8-302.
      Patterns of such late reporting by an individual or self-insured and any refusal to file a report, should be reported to the DD and in turn, to the National Office.
7. Consider Rehabilitation Potential. Upon receipt of a claim where the probability of return to work exceeds two months, the LCMS institutes a call-up for ten weeks to ensure the receipt of Form LS-222, Carrier's or Self-Insurer's Report on Rehabilitation (Exhibit 26, PM 10-200). For further details regarding the handling of potential rehabilitation cases, see PM 3-301.3g and OWCP Rehabilitation PM 3-300.
8. Consider Adequacy of Report Forms.
   1. Requirements for Additional Reports. During the initial review of the case, the CE should send to the carrier/employer Form LS-216, Request for Additional Reports (Exhibit 25, PM 10-200), requesting an adequate medical report, if not included, and the submission of Form LS-206, if not included, showing that appropriate compensation has been voluntarily instituted. At this stage of the case development, Form LS-203 should be sent to the claimant only upon request or in cases where (in the opinion of the CE) they are necessary (e.g., to process a claim for occupational disease)
   2. Call-Up. A thirty day call-up should be placed in the file, awaiting a reply to Form LS-216 and receipt of Forms LS-206, LS-208, and LS-1. This completes action on the case as a primary one and such case will thereafter be regarded as a secondary case. (See paragraph 5, below).

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4. Formal Claims. Not all primary cases originate with the receipt of routine injury reports but on rare occasions the DD may process the claim without the pertinent data.

1. Preparation and Submission of Claim. Form LS-203, Employee's Claim for Compensation (Exhibit 17, PM 10-200), has been provided to serve as a formal written claim. However, no particular form is required to meet the time limitation provisions of the Act, and the completion and submission of Form LS-201 Notice of Employee's Injury (Exhibit 15, PM 10-200) will serve as a written claim to toll the statute. Any letter or other document containing words of claim will suffice as a claim. A written memorandum, prepared by a CE based on an oral communication with the claimant expressing an intention or desire to file a claim, has been held to be sufficient to toll the statute. (See PM 3-301.)
2. Notification to Employer of Filing by Employee. Within ten days after the filing of a claim for compensation for injury or death under the Act, the CE sends a copy of the claim to the EC. The claim is served personally or by mail. Form Ltr. LS-215a, Notice to Employer and Insurance Carrier That Claim Has Been Filed (Exhibit 24, PM 10-200) is used to transmit three copies of Form LS-207 for the response to the claim, if the claim is not to be approved. The LS-207 should be returned to the DO in triplicate. While awaiting the response, the CE shall proceed to develop and evaluate the claim.

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5. Call-Up. As soon as a case is created, it is assigned a case status of "Primary" and a call-up date thirty days in the future. However, after the CE/CEC has completed the primary case review, the length of future call-ups is left to the discretion of the claims examiner depending on the circumstances of the case, and awaiting a reply to receipt of any forms or information which have been specifically requested. This completes action on the case as a primary one and such case will thereafter be regarded as a secondary case.

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6. Case Closing. When the CE/CEC determines, after careful review that no further action is needed and the case is in posture to be closed, the following steps will be undertaken by the CE/CEC: Top document will be marked closed, dated and initialed by the CE.
Once the three steps listed above have been completed, the appropriate case closing date is also entered into the LCMS and the case is forwarded to the file room.

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1. Purpose and Scope. This Chapter contains the procedures for the initial review of a death case file by the Claims Examiner (CE) or Claims Examiner Clerk (CEC). This Chapter also augments the information contained in PM-201. Information on the processing of secondary death cases may be found in PM 3-302.

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2. Policy. The Claims Examiner (CE), assisted by the Claims Examiner Clerk (CEC), is responsible for processing death claims and insuring that the survivor(s) of the deceased employee receives all benefits to which they may be entitled to under the Act, while protecting the rights of all parties. Claims must be in writing and filed by or for the individual claiming benefits with the DD of the compensation district in which the injury or death occurred.

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3. Contents of Death Case. At a minimum, a death case should contain the following:

1. Report of Injury/Death. For example, Form LS-201 or LS-202 (Exhibits 15, and 16, PM 10-200).
2. Death Certificate. The case should also include a death certificate, and evidence concerning the factors of employment or injury suspected to be the cause of, to have contributed to, or to have hastened death.
3. Certificates for Dependents. These should include a marriage certificate, birth certificates for the eligible dependents, as well as evidence to establish student status and dependency where appropriate.
4. SSN of each beneficiary.
5. Claim for Benefits. One or all of the following claim forms should be included:
   1. Claim for Death Benefits, Form LS-262, Exhibit 32, PM 10-200;
   2. Application for Continuation of Death Benefit for Student, Form LS-266, Exhibit 34, PM 10-200;
   3. Certificate of Funeral Expenses, Form LS-265, Exhibit 33, PM 10-200.

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4. Processing of Death Cases. If the names and/or addresses of beneficiaries are unknown, the CE should write to the EC requesting the information along with wage information and evidence of voluntary payment of compensation (if the case has not been controverted). Upon receipt of this information the CE should write to the widow/widower and/or beneficiaries enclosing blank Forms LS-262, Claim for Death Benefits (See Exhibit 32, PM 10-200) and LS-265, Certification of Burial Expenses (See Exhibit 33, PM 10-200). The CE should also request copies of the death certificate, marriage certificate and any other pertinent information which may be missing SSN. A copy of this letter should be sent to the EC.

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Back to Chapter 2-0203 Table of Contents

1. Purpose and Scope. This Chapter provides an introduction to the handling of cases involving occupational diseases. Topics covered include: the changes brought about by the 1984 Amendments; and what evidence is necessary to make determinations on the level of disability, the average weekly wage and the timeliness of the claim for compensation.

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2. References.

1. The sections of the Act pertaining to occupational diseases are: sections 2(10), 8(c)(23), 9(e)(2), 10(d)(2), 10(i), 12(a), and 13(b)(2).
2. The sections of the regulations pertaining to these diseases are: sections 702.212(b), 702.222(c), 702.601 to 702.604.
3. The Law of Workmen's Compensation, by Arthur Larson, section 41.00.
4. Guides to the Evaluation of Permanent Impairment, published and revised from time to time by the American Medical Association.
5. Longshore (LHWCA) Procedure Manual, PM 3-400, 3-401, and 3-402.

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3. Definitions.

1. Average Weekly Wage.
   1. Use the average weekly wage at the time of injury if this date is prior to retirement.
   2. When the time of injury is after retirement and
      1. Within the first year after retirement, use 1/52 part of average annual earnings in the fifty-two week period prior to retirement,
      2. More than one year after retirement, use the National Average Weekly Wage at the time of injury.
2. Date of Last Injurious Exposure The last date the claimant was exposed to the pernicious substance while working in employment covered by the Act.
3. Disability.
   1. Where the disease becomes disabling prior to retirement, disability is based upon a loss of earnings or earning capacity.
   2. Where the disease becomes disabling after retirement, disability is based upon the amount of physical impairment.
4. Impairment. The amount of permanent loss, or loss of use of, an organ, body part, or bodily function, as determined in accordance with the Guides to the Evaluation of Permanent Impairment. If the Guides do not measure the impairment, any other professionally recognized standards or system of evaluation may be used.
5. Occupational Disease. An illness or condition which develops over a period of time in response to repeated exposure to harmful or injurious stimuli.
6. Retirement. The claimant has voluntarily withdrawn from the work force and there is no realistic expectation that he or she will return to the work force.
7. Time of Injury.
   1. For purposes of coverage and jurisdiction and for sections 10, 12, and 13: the date on which the employee or claimant becomes aware, or in the exercise of reasonable diligence or by reason of medical advice should have been aware, of the relationship between the employment, the disease, and the death or disability.
   2. For purposes of determining responsible EC: the date of last exposure to injurious stimuli prior to the disease becoming disabling.

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4. The 1984 Amendments. The LHWCA Amendments of 1984 specifically addressed certain issues with respect to occupational disease cases. Disability, relative to a disease which becomes manifest after retirement, is defined as permanent impairment. The time of injury for purposes of determining the rate of pay and filing a claim for compensation is now defined as the date on which the employee becomes aware of the relationship between the employment, the disease and the death or disability. The pay rate for a retired employee is deemed to be his or her wage at retirement if the disease becomes manifest within one year of retirement, and the National Average Weekly Wage if the disease becomes manifest more than one year after retirement. A retiree who becomes impaired due to an occupational disease may receive 66 2/3 percent of his or her pay multiplied by the percentage of the impairment. This amount is not subject to an annual adjustment but can be increased to cover a worsening of the condition.
The widow of a deceased employee whose employment related disease became manifest and caused death after retirement may receive 50 percent of the National Average Weekly Wage at the time of death. These benefits cannot exceed the decedent's wage at retirement.

The requirements for filing notice of injury and claim for compensation have been extended to one and two years respectively. These time periods are measured from the newly defined time of injury.

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5. Primary Case Review.

1. In addition to the normal procedures for Primary Case Review (see PM 2-200), the DO should insure that the file contains sufficient evidence to make a determination on the following:
   1. The time of injury.
   2. The date of manifestation of the disease.
   3. The date of last injurious exposure.
   4. The date of disability.
   5. The date of death.
   6. The date and cause of retirement.
   7. The claimant's, or decedent's, wages in the fifty-two week period prior to retirement.
   8. Claimant's SSN.
2. To assist in making these determinations the CE should request the following information:
   1. A detailed history of the disease from the date it started;
   2. The way in which the employee was exposed to the implicated injurious stimuli and the length of exposure;
   3. Statements from any witnesses concerning the degree and length of exposure;
   4. The date the employee was last exposed to the injurious stimuli;
   5. The date and circumstances when the claimant first became aware of a possible relationship between the disease and the employee's work; and
   6. The names and addresses of all physicians and hospitals which have provided the employee with medical care for a disease which is related to exposure to the implicated injurious stimuli.

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6. Secondary Case Review. For further information on occupational disease cases please refer to PM 3-400.

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1. Purpose and Scope. This Chapter describes the procedures for screening cases on a daily basis and establishing priorities of case files in order to achieve maximum efficiency in the processing of claims under the LHWCA. It defines the categories of cases, and the supporting documentation that must be identified at the earliest date and timely acquired by the Claims Examiner (CE) or Claims Examiner Clerk (CEC) for effective primary and secondary reviews as prescribed in PM 2-200 and 3-300.

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2. Policy. A CE or CEC should schedule duty time in such a manner as to be able to handle not only the routine type cases which require very little action or attention, but also cases of a more complicated nature.

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3. Categories of Cases. The principal categories of cases are as follows:

1. No-Lost-Time (NLT) Reports. The 1984 Amendments removed the requirement for ECs to report injuries which did not result in loss of one or more shifts of work. It is DLHWC policy that these injuries are not to be jacketed into case files. (See PM 1-400.) However, Industry Notice No. 63, May 8, 1987, notified ECs that injuries compensable under the schedule contained in sections 8(c)(1)-(20) of the Act would be jacketed even though the injury did not result in loss of one or more shifts of work. Therefore, most of the no-lost-time injury reports received will be reviewed by the mail and records personnel and discarded before jacketing, obviating initial review by the CE. The remaining no-lost-time cases fall into the next category of cases.
2. Compensable NLT Cases. In this category are cases involving schedule awards, disfigurements, third party action, or Notices of Controversion (Form LS-207, Exhibit 20, PM 10-200). Such cases may require requests for additional documents or reports. Usually, they can be processed in a very few minutes and can be placed in either the first or second stack explained in subparagraph 4a, below.
3. Lost-Time (LT) Uncontested Cases. These cases involve an injury which results in loss of time from work beyond the day or shift of injury and extending for more than three days. The EC must make payments periodically, promptly, and directly to the injured employee or survivors entitled to such benefits under the LHWCA (20 C.F.R. section 702.231). These cases may be satisfied by payments with or without a formal award. In certain instances, awards are paid as agreed settlements, (20 C.F.R. sections 702.241-243). These cases could be placed in either the third or fourth stack of cases mentioned in subparagraph 4a, below.
4. LT Contested Cases. These are cases where either the EC or the claimant/representative contests any action on a claim deriving from the injury or death of the employee under the LHWCA. It may consist of an ECs controversion of the right to compensation (20 C.F.R. section 702.251) or the claimant's contest of actions taken by the EC with respect to the claim (20 C.F.R. section 702.261). Such cases would be placed in the fourth stack of cases mentioned in subparagraph 4a, below.
5. Death Cases. These cases involve death benefits payable to the employee's survivors, covered by the LHWCA. For more detailed information on benefits and case determinations, see PM 2-202 and 3-302. Such cases would be placed in the third or fourth stack of cases (depending upon the degree of controversy) mentioned in subparagraph 4a, below.
6. Other Cases. These could be generally categorized as indicated in subparagraphs 3c, 3d, or 3e, but involve special issues and more complex evaluation/adjudication procedures as covered in PM 2-600, 3-302, 3-400, 3-500, 3-700, 4-200, 4-300, 4-500, 6-201, 6-202. Such cases would be placed in the fourth stack of cases mentioned in subparagraph 4a, below.

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4. Screening. Under normal conditions, the CE inspects the case files by arranging three or four stacks of cases as follows:

1. Organization for Screening. Under normal conditions, the CE inspects the case files by arranging three or four stacks of cases as follows:
   1. Stack 1 (Not Critical or Complicated) -- Contains those cases involving no complications, which can be handled very quickly. Certain cases can be closed without further action and others may need only a call-up, awaiting receipt of additional documents prior to closing.
   2. Stack 2 (Information Required) -- Contains those cases in which the CE/CEC will need to take a specific action, but of such a nature that it will not require significant amounts of time. Example would be the preparation and dispatch of letters requesting a medical report, wage data, clarification of jurisdictional questions, etc.
   3. Stack 3 (Evaluation Required) -- Contains cases that require some study to determine the issues, action to resolve them, and possibly the preparation of correspondence to obtain data that is critical to resolution of the controversy. These cases can consume more time and may require the CE to consult with the DD.
   4. Stack 4 (Further Study) -- Contains those cases of a more complicated nature. They require intensive study, perhaps research, and in most instances, consultation with the DD. These may include cases being processed for adjudication by informal conferences or final disposition (e.g., issuance of compensation order, payment of legal fee, approval of section 8(i) settlements, section 8(f) applications etc.).
2. Workload Scheduling. After arranging the incoming cases as in subparagraph 4a, the CE needs to estimate the amount of time required for processing each stack. The determination of the sequence for working each stack may be made by the individual CE; however, sufficient time should be set aside to allow for completion of work on each stack.
   1. Routine Cases. Since the majority of cases usually fall in Stack 1, many examiners consider it more advantageous to work that stack initially to complete and remove from the desk the greatest number of cases in the shortest period of time.
   2. Other Cases. Usually, the greatest portion of the work day is devoted to processing of the more complicated and time-consuming cases, placed in stacks 3 and 4. (See PM 2-201.3 and 3-301.3 for in-depth review procedures.)
3. Priorities of Cases and Documentation. Each case file arranged for screening as described in subparagraph 4a, is inspected for the essential documents and/or information which has not yet been seen by any CE. The presence of such documents may elicit a variety of possible responses. By organizing the files and documents involved in this screening system, the CE/CEC is able to review and process those cases with the greatest urgency and establish a priority category for all cases each time they are reviewed. This system consists of the following categories, in order of priority:
   1. Documents pertaining to cases where payment of compensation has been stopped prematurely or contrary to regulations.
   2. Documents pertaining to a death case (e.g., Claim for Death Benefits, Form LS-262, Exhibit 32, PM 10-200 and claimant's SSN).
   3. Requests for issuance of a Compensation Order and Proof of Service.
   4. Documents pertaining to a claim, the validity of which is being controverted.
   5. Medical Reports (Forms LS-1, and LS-204, Exhibits 1 and 18, PM 10-200 or other applicable documents) where full or maximum medical recovery from the reported injury is indicated, i.e., final medical reports.
   6. Form LS-208, Notice of Final Payment or Suspension of Compensation Payments (Exhibit 21, PM 10-200).
   7. Applications for section 8(f) relief.
   8. Form LS-206, Payment of Compensation Without Award (Exhibit 19, PM 10-200).
   9. Form LS-203, Employee's Claim for Compensation (Exhibit 17, PM 10-200) or other formal claim for compensation.
   10. Form LS-202, Employer's First Report of Accident or Occupational Illness and/or Form LS-201, Notice of Employee's Injury or Death (Exhibits 16 and 15, PM 10-200), and/or other injury reports.
   11. Form LS-222, Carrier's or Self-Insurer's Report on Rehabilitation (Exhibit 26, PM 10-200). (See PM 3-301.3g and OWCP Rehabilitation Procedure Manual.)
   12. Other documents or information received, not included in any of the above categories, will be reviewed and assigned appropriate priority by the CE.

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1. Purpose and Scope. This Chapter provides an introduction to the determination of pay and adjustments pursuant to section 10 of the Act. The following Chapters deal with this section of the Act in more depth. PM 3-201 deals with average weekly wage determinations, PM 3-202 deals with annual adjustments for PTD and death cases under section 10(f) of the Act, and PM 3-202 deals with adjustments to the compensation rate under section 10(h) of the Act.

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2. General.

1. The CE should determine the correct rate of compensation, to which an injured employee is entitled as soon as possible, after the EC reports that payments have begun. The initial report of payments is made on Form LS-206, Payment of Compensation Without An Award (Exhibit 19, PM 10-200) and triggers this activity. Form LS-208, Notice of Final Payment or Suspension of Benefits (Exhibit 21, PM 10-200) may be substituted if the injured worker has returned to work.
2. The starting point in calculating the rate of compensation for disability or death is the injured employee's or deceased employee's average weekly wage. It is the basis of all benefit calculations except those for disfigurement under section 8(c)(20) and medical payments under section 7. The overriding objective is to arrive at a valid earning capacity at the time of injury.

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3. Methods for Determining the Average Weekly Wage. Section 10 of the Act describes the basic methods for determining the injured worker's average weekly wage. Chapter 3-201 of the Procedure Manual describes in more detail the principal methods to be utilized.

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4. Form To Be Utilized in Determining the Average Weekly Wage.

1. LS-202, Employers First Report of Injury (Exhibit 16, PM 10-200)
2. LS-206, Payment of Compensation without Award (Exhibit 19, PM 10-200)
3. LS-208, Notice of Final Payment or Suspension of Benefits (Exhibit 21, PM 10-200)
4. LS-426, Request to Employee for Wage Earnings Information (Exhibit 39, PM 10-200)
5. LS-537, Change in Compensation Based on Higher AWW (Exhibit 46, PM 10-200)
6. LS-557, Notice to Employee of Compensation Rate under the LHWCA (Exhibit 51, PM 10-200)

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1. Purpose and Scope. This Chapter provides the procedures for making average weekly wage determinations. Further information regarding average weekly wage determinations in occupational disease cases can be found in PM 2-203.3 and PM 3-400.3.

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2. Definitions.

1. Average Weekly Wage. The average weekly wage (AWW) is set at one fifty-second part of the employee's average annual earnings.
2. Wages. Section 2(13) of the Act defines wages as the money rate at which the service rendered by an employee is compensated by an employer under the contract of hiring in force at the time of injury, including the reasonable value of any advantage which is received from the employer and included for purposes of any withholding of tax under subtitle (c) of the Internal Revenue Code of 1954 (relating to employment taxes). The term wages does not include fringe benefits, including (but not limited to) employer payments for or contribution to a retirement, pension, health and welfare, life insurance, training, social security or any other employee or dependent benefit plan for the employee's or dependent's benefit, or another employee's dependent entitlement.

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3. Provisions of Section 10 for Determining AWW. Section 10 of the Act provides three methods for calculating the employee's average annual earnings. One of these methods must be used to compute the average annual earnings of the employee. Section 10(d)(1) provides that the "average weekly wages of an employee shall be one fifty-second part of his average annual earnings."

1. Worker Engaged in Employment All or Most of Year. If the employee has worked in the kind of employment in which he/she was injured for substantially the whole of the preceding year, the average annual earnings for compensation will consist of 300 times the average daily wage of a 6-day worker or 260 times the average daily wage of a 5-day worker engaged in such employment. If a problem develops as to the precise meaning of the word "substantially," a certain amount of flexibility is granted by the nature of the word. The test is not to be applied mechanically but with a flexible view toward fairly reflecting the employee's probable future earning loss. It is intended to apply to work that is steady or permanent. Professor Arthur Larson gives the following example:
   In Tangorra v. National Steel, 6 BRBS 427 (1977), the Board concluded that the first step in determining the employee's correct average weekly wage was the calculation of the average daily wage. This is done by dividing the number of days actually worked into the total earnings for the 12 months immediately preceding the injury (for example $11,270 (total earnings) divided by 245 (total days worked) = $46.00 average daily wage). The resulting figure is then multiplied by 260 (if the employee was a "5 day worker") and divided by 52 weeks to obtain the correct average weekly wage ($46 x 260 / 52 = $230.00 P/W). If the employee was a "6 day worker" the $46 would be multiplied by 300 instead of 260 and then divided by 52 weeks.
2. Worker Engaged in Employment Less than All or Most of Year. If the employee did not work in the same employment during substantially the whole of the year before the injury, the same formula as applied in section 10(a) will be used and applied to the wage of an employee of the same class, working substantially the whole year, in the same or similar employment, in the same or a neighboring place on the days when so employed. The essential factor in applying this provision is to determine whether the earnings of the chosen "similar employee" are sufficiently similar to those of the injured employee. If the selected employment produces an unrealistic result, flexibility again must be stressed and the application is not to be rigid and mechanical. The CE shall strive for agreement of the parties when the method described in this subparagraph cannot be strictly applied.
3. Exceptional Conditions of Employment. If neither of the methods outlined in subparagraphs 4a and 4b above can reasonably be applied, the DD or CE will consider the average annual earnings to be "such sum as, having regard to the previous earnings of the injured employee in the employment in which he was working at the time of the injury, and of other employees of the same or most similar class working in the same or most similar employment in the same or neighboring locality, or other employment of such employee, including the reasonable value of the services of the employee if engaged in self-employment, shall reasonably represent the annual earning capacity of the injured employee." There are a number of variables that might affect this application. This test provides even more flexibility than is seen in section 10(a) or (b). Section 10(c) is the catch all provision. It applies to seasonal, intermittent, discontinuous and other employment, which amounts to less than a full work year.
   See Matulic v. Director, OWCP, 32 BRBS 148(CRT)(9th Cir. 1998) for an application of section 10 to an unusual set of facts.
4. Retired Employees.
   1. Section 10(d)(2)(A) provides that if the time of injury occurs within the first year of voluntary retirement, the average weekly wage shall be one fifty-second part of his/her average annual earnings during the 52 weeks prior to retirement.
   2. Section 10(d)(2)(B) provides that if the time of injury occurs beyond one year after voluntary retirement, the average weekly wage shall be the National Average Weekly Wage (as determined under section 6(b) of the Act) at the time of injury.
   3. If the employee retires due to the occupational injury, the post retirement provision does not apply. The claimant's AWW should reflect his/her wages prior to retirement. (See PM 2-203 for more information on the handling of occupational disease cases.)

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4. Time of Injury Determinations. The average weekly wage is fixed at the time of injury, even if the disability begins subsequent to this date. In occupational disease cases, injury is defined as the date on which the claimant became aware or in the exercise of reasonable diligence or by reason of medical advice should have been aware of the relationship between the employment, the disease and the death or disability. In hearing loss cases, the date of last exposure to injurious stimuli prior to administration of a determinative audiogram is the relevant time of injury for purposes of calculating the average weekly wage. See Ramey v. Stevedoring Services of America, 31 BRBS 206(CRT)(9th Cir. 1998); Mauk v. Northwest Marine Iron Works, 25 BRBS 118 (1991). The “determinative audiogram” is that test which is determinative of the amount of permanent partial impairment for which the Claimant is being compensated.

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5. Part-Time Employment. An employee's earning capacity is not limited solely to the earnings in the particular employment, which the employee was engaged in when injured but should be gauged by what the employee is capable of earning in all employment in which he/she was employed during the year prior to the injury.

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6. Determination of the Wages of a Minor. If under normal circumstances the wages of an injured minor can reasonably be expected to increase during the period of disability, the employee's wage rate shall not be limited to the pre-injury earnings. The age of majority shall be 21 years of age.

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7. Additional Income Considered As Wages. The following items have been held to be wages in certain conditions and should be included in the average annual wage calculation:

1. Overtime pay (if a regular and normal part of employment)
2. Vacation Pay
3. Container royalty payments
4. Tips and bonuses
5. Room and board
6. Car allowance

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8. Evaluating Wage Information.

1. General.
   1. Upon receipt of Form LS-206 or Form LS-208, the CE should examine the wage information reported and compare it to the wage information reported on Form LS-202.
   2. If there is a discrepancy or payment of compensation is at a tentative rate, the CE should actively resolve this matter as soon as possible. To resolve the controversy the CE should send the claimant a form LS-426 or LS-557 for clarification.
   3. If the claimant responds with information that substantiates a change in compensation benefits, the EC is to be promptly notified. LS-537, Change in Compensation Based on Higher AWW (Exhibit 46, PM 10-200), may be utilized for this purpose. If the claimant fails to respond and compensation continues to be paid at a tentative rate or at an obviously incorrect rate, the EC is to be contacted and advised that the rate must be corrected.
2. Resolution. The average weekly wage determination should be fair and reasonable. Section 10(c) of the Act is to be utilized whenever there is a doubt. All parties must be willing to compromise. Under extreme circumstances an informal conference may need to be scheduled, but keep in mind there is ample case law available. The Desk Book should be consulted along with the Matthew Bender Benefits Review Board Service for the current case law on the subject.
3. Exceptions. There are always exceptions to every rule and wage information will not always fit neatly into the categories listed in sections 10(a), (b), and (c) of the Act. For instance the Outer Continental Shelf Lands Act presents special problems due to the nature of the working assignments. District Offices will find it necessary to work up local rules to deal with such situations. Certain Defense Base Act contracts may also involve unique work assignments and unique contractual arrangements concerning payments. The NO should be contacted whenever a situation arises that cannot be resolved.

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1. Purpose and Scope. This Chapter provides the procedures for making the annual October 1 adjustments for those individuals receiving permanent total disability and death benefits. These individuals are entitled to have their weekly compensation benefits increased by a percentage determined by the Secretary of Labor based upon the increases in the National Average Weekly Wage (NAWW). These procedures apply to all cases entitled to October 1 adjustments whether payments are made by the Special Fund or by the EC.

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2. Statutory Provisions.

1. Section 6(b)(3) of the Act provides that as soon as practical after June 30 of each year and no later than October 1 of each year, the Secretary shall determine the NAWW for the three consecutive calendar quarters ending June 30. This determination becomes the applicable NAWW for the period beginning October 1 of that year and ending with September 30 of the following year.
2. Section 10(f) provides that effective October 1 of each year, the compensation or death benefits payable for permanent total disability or death arising out of injuries subject to the Act shall be increased by the lesser of:
   1. A percentage equal to the percentage (if any) by which the applicable NAWW for the period beginning on such October 1, as determined under section 6(b), exceeds the applicable NAWW, as so determined, for the period beginning with the preceding October 1; or
   2. 5 percent.
3. Section 10(g) provides that the weekly compensation under section 10(f) shall be fixed at the nearest dollar. No adjustment of less than $1.00 shall be made, but in no event shall compensation for death benefits be reduced.

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3. Cases to be Adjusted by National Office. On or about October 1 of each year, subsequent to the NAWW determination, the NO will compute and make adjustments on all cases on the Special Fund roll at that time. This will include sections 8(f), 18(b), and 10(h) cases (see PM Chapter 3-203 for further information). These individuals will receive direct adjustments from the Special Fund followed by a letter explaining the basis for the increase and the amount of the increase. A copy of the letter will be sent to the DO for review and filing. The DD should promptly notify the NO with respect to any discrepancies or changes. Such notification must be in writing.

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4. Cases to be Adjusted by District Offices. During the month of October each DO, upon receipt of the necessary notification and information from the NO via a LHWCA Bulletin, will compute and have adjustments made for all permanent total disability and related death cases not listed in paragraph 3.

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5. Procedures. The procedures described in the following paragraphs are to be followed in computing and implementing the annual section 10(f) adjustments. The steps included in these procedures are:

1. Annual Bulletin. Each year the LHWCA NO will issue a Bulletin providing the new NAWW, annual percentage increase and other information necessary to make the annual adjustments and distribution of Form Ltr. LS-521, Notice to Employer/Carrier and Payee/Beneficiary of Annual Adjustment in Weekly Compensation Rate (Exhibit 42, PM 10-200) revised for the current year's adjustment. The printed supply of the revised Form LS-521 will be sent to the DO in a separate mailing.
2. Notification of EC. Each DO notifies the appropriate Employer/Carrier of the section 10(f) increase and amount of adjusted weekly award and instructs them to pay the increased benefits (Form Ltr. LS-521 in duplicate). A thirty day call up will be placed on the case. The LS-521 will be sent to the local or regional office paying benefits. This form letter instructs the EC to return a copy of Form Ltr. LS-521 to the DO after filling in the certification portion on the reverse side of the letter. The information to be returned indicates that the adjustment has been made and the date of the adjustment payment. The DOs will verify that the certification has been made and the date of the adjustment made. The EC should promptly be notified if the certification portion is incomplete or not completed. (See paragraph 7, below.)
3. Notification of Chief Beneficiary/Payee. At the same time that the DO releases the LS-521 to the EC, a copy will also be released to the chief beneficiary/payee. While the contents of the letter are primarily directed to the EC, a paragraph has been included which indicates to the chief beneficiary or payee that a copy of this letter serves as notification of the annual adjustment.

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6. Annual Section 10(f) Bulletin. A LHWCA Bulletin will be issued each year as early as possible before October 1 notifying the DOs of the NAWW for the period applicable to that date and other information for adjusting PTD and related death cases under section 10(f). Since the amount to be adjusted and the percentage by which benefits are increased vary each year, examples of the current section 10(f) increase, including calculations will be provided as an enclosure to the Bulletin.

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7. Procedures for Form Ltr. LS-521. Each year DOs will notify eligible beneficiaries and the EC of the appropriate section 10(f) adjustment. (See subparagraphs 5b and 5c, above.) The steps included in these procedures are:

1. Prepare Form Ltr. LS-521 in quadruplicate.
2. Provide all data required at the top of the Form Ltr. LS-521, including the amount of weekly increase and the amount of the adjusted weekly award.
3. Type Name and address of EC on Form Ltr. LS-521. Since a copy of this letter is also to be sent to the claimant, it may be desirable to also type name and address of the payee under that of the EC. However, this is optional since such action may preclude the use of window envelopes.
4. Send the original and one copy. of Form Ltr. LS-521 to the EC. At the same time, send a copy to the chief beneficiary/payee.
5. Place the fourth copy of Form Ltr. LS-521 in the case file, indicating in some manner that Form Ltr. LS-521 was sent to both the employer/carrier and to the chief beneficiary/payee and the date sent.
6. Place thirty day call-up. on the case file.
7. When the copy of Form Ltr. LS-521 has been received from the EC by the DO and the certification portion verified as properly completed, and noted on the copy of the form letter, place the copy in the case file.

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8. Follow-Up on Form Ltr. LS-521. If the form letter is not returned by the EC within thirty days from the date of notification, the insurer shall be queried as to the action taken or reason for failure to take action. (See subparagraph 7f, above.)

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9. Unrelated Death. Under the provisions of Pub. L. No. 92-576, which became effective on November 26, 1972, section 9 provided that "if the employee who sustains permanent total disability due to the injury thereafter dies from causes other than the injury "the survivors are eligible to receive death benefits. However, the Director accepted the position of the Benefits Review Board in Witthuhn v. Todd Shipyards, 3 BRBS 146 (1976) and Egger v. Williamette Iron and Steel, 2 BRBS 247 (1975), that annual adjustments under section 10(f) do not apply to death benefits if the death was not causally related to the employment injury. This provision is applicable to unrelated deaths that occur between November 26, 1972 and September 27, 1984. Public Law No. 98-426 which became effective on September 28, 1984 amended section 9. There is no provision in the amended section 9 for the payment of death benefits to survivors when the claimant dies from unrelated cause while receiving permanent total disability benefits.

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10. Application of Holliday Decision. Application of Holliday Decision. In the case of Holliday v. Todd Shipyards Corp., 13 BRBS 741, 654 F.2d 415 (5th Cir. 1981), the United States Court of Appeals for the Fifth Circuit held that the initial permanent total disability rate should include all intervening section 10 (f) adjustments occurring during the period of previous temporary total disability.

Holliday was reversed in the Fifth Circuit, Phillips v. Marine Concrete, 23 BRBS 36(CRT)(5th Cir. 1990) and the Benefits Review Board found that it is no longer applicable in the D.C. Circuit, Bailey v. Pepperidge Farm, Inc., 32 BRBS 76. However, it still remains applicable to cases arising in the Eleventh Circuit. It is our policy to apply Holliday only to those cases governed by the Eleventh Circuit.

In order to calculate benefits in accordance with Holliday note the following example. A claimant is injured on August 1, 1981 with an average weekly wage of $300.00 per week. He/she reaches maximum medical improvement on August 1, 1984 and is declared permanently and totally disabled as of that date. The claimant is paid temporary total disability benefits from August 1, 1981 through July 31, 1984 at the rate of $200.00 (66 2/3% of $300.00). Effective August 1, 1984, the claimant receives the benefit of the annual adjustments for 1981, 1982 and 1983 and would receive $240.00 per week. Effective October 1, 1984 the rate would increase to $252.00 per week. If Holliday were not applied to the case, effective August 1, 1984, the claimant would still receive $200.00 per week and on October 1, 1984, the rate would increase to $210.00 per week. In both examples once the initial rate for permanent total disability is established, each October 1, thereafter, the claimant's weekly entitlement is increased by the percentage increase in the NAWW (limited to a maximum of five per cent).

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1. Purpose and Scope. This Chapter provides the procedures for determining the amount of initial and subsequent compensation payable in those cases subject to section 10(h) of the Act.

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2. History. When Congress enacted Pub. L. No. 92-576 on October 27, 1972, one of the primary purposes was to raise the benefit levels for those individuals receiving permanent total disability and death benefits. At that time, the maximum weekly compensation payable in these cases was $70.00 per week. In order to limit the impact of these increased benefits, it was established that fifty percent of the increased benefits would be funded annually by Congress and the remaining fifty percent would be obtained from an assessment of insurance carrier and self-insured employers. Initially these increased benefits were paid directly by the insurance carrier or self insured employer. Every six months, a claim for these additional payments was made to the NO. Reimbursement was directed to the ECs after verification of payment was made. Effective September 10, 1981, the direct payment of these benefits became the sole responsibility of the NO.

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3. Case Law. The language in section 10(h) has led to considerable controversy and litigation.

1. The BRB, in Silberstein v. Service Printing Company, 2 BRBS 143 (1975), considered whether section 10(h)(1) was applicable to a person who was injured before but permanently and totally disabled after the 1972 amendments. The Board noted that it was:
   
   The Board is of the opinion that the intent and purpose of all of section 10(h) is to upgrade benefits for permanent total disability or death from injuries occurring prior to the effective date of the amendments of the Act.
   
   In addition, in this decision the Board held that the claimant is entitled to all cost of living increases between November 26, 1972 and the date the permanent total disability commences. Thus, if the claimant was injured in 1971 with an average weekly wage of $105.00 per week and a permanent total disability date of October 15, 1975 the rate would be $107.00 per week computed as follows:
   1. The ECs liability would be limited to $70.00 per week.
   2. The balance of the payment would be made by the Special Fund. In order to determine the Special Fund's liability and the rate of compensation claimant would receive on the effective PTD date, October 15, 1975, the computations would be as follows: The Special Fund liability would be calculated from November 26, 1972. The claimant would be entitled to increases of $17.87 on 11/26/72 which is 66 2/3% of the National Average Weekly Wage (NAWW) established for that date less the ECs maximum liability (2/3 x $131.80 = $87.87 - $70.00= $17.87). On 10/1/73, a 6.49% increase in the NAWW results in a $24.00 increase to the claimant ($87.87 + 6.49% = $94.00 (rounded) - $70.00 = $24.00). On 10/1/74 the claimant would begin receiving $30.00 more ($94.00 + 6.26% = $100.00 (rounded) - $70.00 = $30.00). On 10/1/75 the claimant would begin receiving $37.00 per week from the Special Fund. The claimant's total payment would be $107.00 per week and his/her future annual increase would be based upon this amount (i.e. on 10/1/76: $107 + 7.59% = $115.00 (rounded), $70.00 paid by the EC and $45.00 paid by the Special Fund).
2. In Luke v. Petro-Weld, 12 BRBS 338 (5th Cir. 1980), the Court held that section 10(h) did not apply to injuries occurring after the date of enactment of the 1972 amendments, October 27, 1972. Section 10(h) would only apply to injuries occurring prior to the enactment date.
3. While most section 10(h) issues have previously been resolved by litigation, one issue still remains under consideration. In cases where the injury takes place prior to the enactment of the 1972 amendments but the death occurs after the 1972 amendments, the determination of the ECs liability is still in dispute. The Sixth Circuit, in Director, OWCP v. Detroit Harbor Terminals, Inc., 850 F.2d 283, 21 BRBS 85(CRT)(6th Cir. 1988), held that the EC’s liability was limited by the maximum in effect prior to the 1972 amendments. However, the First Circuit, in Director, OWCP v. Bath Iron Works (Lebel), 885 F.2d 983,22 BRBS 131 (CRT)(1st Cir. 1989), cert. denied, 494 U.S. 1091 (1990), reversed the Board's determination that Section 10(h) applies where a post-1972 amendment death follows a pre-1972 amendment injury. The court held that because death benefits for a post-1972 death are calculated at the more generous post-1972 rates, it is unnecessary for the "gap-closing" provision of Section 10(h)(l) to apply. In view of these decisions, the Director has taken the position that the death is a new cause of action and therefore the ECs liability for basic compensation is determined in accordance with that date, with all future adjustments payable by the Special Fund under section 10(h). Given the conflict in circuit court decisions, cases of this nature should be referred directly to the NO for a determination as to the amounts payable by the EC and the Special Fund.

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4. National Office Issuances. As time passes, the number of section 10(h) cases will diminish. However, all DDs and CEs should be aware of NO issuances on this subject made since the 1972 amendments. A copy of any of the following issuances can be obtained from the National Office.

1. OWCP Bulletin No. 10-73, 3/30/73, Adjustment of Compensation for Total Permanent Disability or Death Prior to LS/HW Amendments of 1972.
2. LHWCA Bulletin No. 2-75, 1/31/75, Procedures for Providing sections 10(h)(1) and 10(f) Adjustments for Eligible Cases Involving Multiple Payees and Certain Cases Where the Widow Has Remarried.
3. All Deputy Commissioners (LHWCA), 2/8/78, Adjustment of Permanent Total Disability and Death Benefits in Cases When the Date of Injury Occurred Prior to January 1, 1947.
4. Circular No. 80-14, 8/21/80, BRB Decision on Deficiency Compensation and section 10(h)(2), Waganer v. Alabama Dry Dock and Shipbuilding Co.

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1. Purpose and Scope. This Chapter serves as an introduction to the procedures for the secondary review of disability and death cases contained in the following two chapters.

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2. Related Chapters. In Part 2 of the Procedure Manual, Chapter 2-201 and Chapter 2-202 describe the actions to be taken in the primary review of disability and death cases. The procedures in Chapter 3-301 and Chapter 3-302 take up where those procedures left off. They include and augment the procedures for the primary review of disability and death cases found in Part 2.

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3. Definition. A secondary case is any open file which has previously undergone initial case review by the Claims Examiner (CE) or Claims Examiner Clerk (CEC). It comes up for secondary review when a call-up expires or a requested document or additional information is received. It remains a secondary case until all necessary action is completed and the case is closed.

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1. Purpose and Scope. This Chapter describes the procedures for the review of secondary disability case files by the Claims Examiner (CE) or Claims Examiner Clerk (CEC) after completing the initial primary case review. Secondary cases are jacketed cases which a CE/CEC has reviewed initially and in which at least one action has been taken. The second review of the file is made after additional information is received by the DO or when a call-up becomes due. These procedures augment those for primary case review in PM 2-201.

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2. Routine Cases Review.

1. Review for Additional Information at Call-Up Date. As soon as new information is received, the CE shall review each document for adequacy. All medical reports should be evaluated with respect to adequacy (check to see whether a diagnosis has been made, the severity of the injury, the type of treatment rendered, prognosis, etc.). Form LS-1, Request for Examination and/or Treatment (Exhibit 1, PM 10-200) should be reviewed to see whether the medical report was timely filed (within ten days) by the physician, and whether it indicates the claimant was afforded free choice of a physician.
2. Follow-Up Action for Additional Information. If the review of the case file is based on an expired call-up because the CE is awaiting additional information and the information has not been received, there should be a follow-up. If more than sixty days have elapsed without the receipt of a Form LS-204, Attending Physician's Supplementary Report (Exhibit 18, PM 10-200), or narrative report, the CE should request a medical report.
3. Closure of Case. Cases are closed when conditions exist as explained in PM 2-200.4 or when all payments have been made in accordance with a compensation order and Form LS-208, Notice of Final Payment or Suspension of Compensation Payments (Exhibit 21, PM 10-200) showing termination of payments is received and is verified by the CE. If Form LS-208 is correct, the CE sends copies of the form to the claimant or claimant's representative. The case is closed by changing the status in the LCMS. (For details on closing cases, see paragraph 12 below.)

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3. In-Depth Case Review. Cases involving serious injuries, occupational diseases (see PM 2-203), or other complications require in-depth review as secondary cases. All the issues listed below must be considered. The balance of the Chapter (paragraphs 4 through 10) addresses situations which may or may not occur and must be treated accordingly.

1. Determine Eligibility. The CE/CEC considers the criteria set forth in PM 0-300 and continues the evaluation begun in the primary review, PM 2-201.
2. Verify Compensation Rate (Wage Rates, AWW). The DD or CE shall review Form LS-206, Payment of Compensation Without Award (Exhibit 19, PM 10-200) to insure the correctness of payments to the injured employee. The employee's average weekly wage (AWW) shall be determined in accordance with section 10(a) through (d) of the Act (see PM 3-201). If Form LS-206 indicates that compensation payments are being paid at a tentative rate, and the EC reports that they have been unable to obtain data as to the employee's earnings through their usual channels to establish the exact amount of earnings, the CE/CEC shall send Form LS-426, Request to Employee for Wage Earnings Information (Exhibit 39, PM 10-200). When the information is received, the CE will determine the employee's correct AWW, and if it differs from the wage used by the employer/carrier, the CE shall advise the EC, using Form Ltr. LS-537, (Exhibit 46, PM 10-200), to adjust compensation payments accordingly. The CE should verify that the correct AWW is entered into the LCMS. The CE should also check for the applicability of minimum/maximum rates payable pursuant to section 6(b) (Exhibit 26, PM 10-300).
3. Consider Third Party Involvement. The CE/CEC reviews the case and takes action, as required, in accordance with PM 3-600.
4. Check for Controversion of Entitlement. When the EC controverts the employee's entitlement to compensation as indicated in PM 2-201.3d and Form LS-207, Notice of Controversion of Right to Compensation (Exhibit 20, PM 10-200) is received in the DO, the CE shall send a Form LS-209, Request for Employee's Reply to Employer's Objections (Exhibit 22, PM 10-200) to the claimant within ten days. The claimant should be allowed thirty to sixty days to respond before taking action (e.g., schedule of informal conference). Where any installment of compensation is not paid within fourteen days of date due (unless controversion is filed within fourteen days of the knowledge of injury), a 10% penalty must be applied under section 14(e) of the Act unless such nonpayment is excused by the DD after a showing by the EC that owing to conditions over which it had no control, such payment could not be made within the period prescribed for the payment. If the controversion notice is filed more than fourteen days after knowledge of the injury, the 10% penalty shall apply to all compensation due up to the date of the untimely filing or the date of an informal conference held to discuss the contested issue(s), whichever occurs first. (See PM 8-202.) Furthermore, interest should be applied to each delayed installment of compensation in accordance with 28 U.S.C. section 1961. (See PM 8-201.)
5. Consider Medical Evidence. Each case file should include sufficient medical data so that the DD/CE can monitor the medical care received and to make the necessary determinations regarding compensation.
   1. Initial Medical Reports. Within ten days following the initial examination or treatment, the physician shall furnish a medical report on Form LS-1, Request for Examination and/or Treatment (Exhibit 1, PM 10-200) to the DD, with copies to the EC.
   2. Medical Questions. In those cases where the DD/CE determines that there is a question regarding the necessity, character, or sufficiency of medical care being furnished the injured employee, the question shall be resolved as promptly as possible. Maximum use shall be made of available OWCP District Medical Advisors, or consultation with the attending physician. For further responsibilities of the DD/CE regarding the management of medical care for the injured employee, see PM 5-200.
   3. Obtaining Medical Reports. If no initial medical report is received within thirty days, a request on Form LS-216, Request for Additional Reports (Exhibit 25, PM 10-200) shall be sent to the EC. If the EC fails to respond within thirty days, the CE shall make a follow-up request. If the attending physician fails to comply within an additional thirty days or continually fails to submit reports, the CE shall refer the case to the DD, stating the facts of the case along with a recommendation for further handling of the case. (See PM 5-300.)
   4. Medical Reports in Long-Term Disabilities. Generally, medical reports should be required every thirty to sixty days. In cases of obvious long term disability (i.e., disabilities permanent in nature or permanent impairment), reports may be requested at ninety day intervals or longer, based on the circumstances.
   5. Final Medical Reports. Such reports are required for all extended disability cases at the time maximum medical improvement is achieved. Where the potential for PPD exists, a report shall be requested indicating the percentage of PPD (impairment) using the AMA Guides where possible. Sections 7(e) and 14(h) procedures may be utilized to obtain medical information on permanent impairments resulting from injuries when disputes arise in such cases. (See PM 5-300, PM 5-400 and LHWCA Program Memorandum No. 50, May 20, 1974, regarding applicability of section 7(e).) A copy of the Program Memorandum can be obtained from the National Office, if needed.
   6. Hearing Loss. In special evaluations for hearing loss cases, the claimant shall be referred to an impartial otologist for examination and determination as to the amount of hearing loss. This referral will be made after the CE insures that the case file contains as much information or evidence as is readily available or considered pertinent. Upon receipt of the otologist's report and contingent upon the findings, the DD/CE shall calculate the percentage of hearing impairment and render a recommendation for payment of a schedule award, notifying the interested parties of recommended payment of benefits. (See PM 3-401.)
6. Consider Late Report (Employer).
   1. Form LS-202, Employer's First Report of Accident or Occupational Illness. (Exhibit 16, PM 10-200). Section 30(a) requires an employer to furnish a report of the injury which causes loss of one or more shifts of work or death. For procedures regarding the assessment of penalty for late reporting, see PM 8-302.
   2. Form LS-208, Notice of Final Payment or Suspension of Compensation Payment. (Exhibit 21, PM 10-200). Under section 14(g), an EC is given sixteen days after final payment of compensation to make a report (Form LS-208) of the payment to the DD, or is subject to a penalty in accordance with the procedures in PM 8-301.
7. Consider Rehabilitation Potential.
   1. CE Referral Responsibility. The CE's responsibility for the development of rehabilitation referrals is the foundation for a successful rehabilitation program.
      1. "R" System Referrals (LS-222). The EC may, but is not required to, file Form LS-222, Carrier's or Self Insurer's Report of Rehabilitation (Exhibit 26, PM 10-200) whenever (i) the need for rehabilitation services is indicated or (ii) the injured individual receiving compensation has not returned to work within two months from the date of injury.
      2. Rehabilitation Follow-up System. To assist in the identification of cases with possible rehabilitation potential, LCMS automatically places a rehabilitation call-up on a case for "Initial Rehab Review" 120 days after the Pay Indicator is turned on for the first time. Running the "Rehabilitation Call-Up Schedules" under the Reports tab of LCMS will produce a list of those open cases with a rehab call-up falling within the period specified by the user.
         1. "R" Form (LS-222) Received. The mail clerk attaches the yellow copy of the Form LS-222 to the case file. The CE/CEC notes any significant details. The white copy of the Form LS-222 is routed to the Rehabilitation Specialist (RS).
         2. "R" Form (LS-222) Not Received. The claims examiner is responsible for the medical monitoring of cases in a TTD status for early indications of the need for rehabilitation. The claims examiner should refer the case to the Rehabilitation Specialist using Form OWCP-14 where the medical evidence indicates that the claimant cannot return to the job held when injured and is in need of rehabilitation services. If the claimant remains in TTD status for more than 120 days and the medical evidence is not sufficient to make a determination regarding referral, the claims examiner should then contact the employer/carrier to determine whether any rehabilitation effort has been initiated.
      3. Other Referrals (OWCP 14). Occasionally, the CE will encounter a case that warrants consideration for rehabilitation and is not being monitored by the RS. For example, the employee was previously referred to the RS but was terminated from monitoring by the RS and now has a change in medical or vocational condition. The CE should refer the case to the RS using Form OWCP 14, Referral to OWCP Rehabilitation (Exhibit 4, PM 10-200).
   2. Medical Rehabilitation. The CE's identification of subsequent cases for rehabilitation begins with the receipt of Form LS-204, Attending Physician's Supplementary Report (Exhibit 18, PM 10-200) or other medical report. For further procedures regarding medical rehabilitation, see OWCP Rehabilitation Procedure Manual. The RS, after referral by the CE, initiates an evaluation for medical rehabilitation services when the employee's early return to work would be facilitated. The RS will coordinate with the CE as needed.
   3. CE Involvement in Rehabilitation Planning.
      1. TTD During Rehabilitation. Injured workers have additional anxiety in planning for and undergoing rehabilitation programs when the length and amount of compensation payments are uncertain. The CE can eliminate this uncertainty by encouraging the EC to continue TTD payments during a vocational rehabilitation effort. See Abbott v. Louisiana Ins. Guaranty Ass'n. 27 BRBS 192(1993), aff'd, 40 F.3d 122,29 BRBS 22 (CRT)(5th Cir. 1994).
      2. Settlements During Rehabilitation. Injured workers settling their claim during rehabilitation rarely effectively rehabilitate themselves. The CE should support and encourage workers to complete rehabilitation programs, once started. The CE should also advise the RS whenever a case in rehabilitation is settled. (See Olsen v. General Engineering & Machine Works, 25 BRBS (1991).)
8. Consider Adequacy of Report Forms. By this time in the case review process, the voids in the essential reports for the development of a case should be identified and pursued by the CE/CEC.
   1. Required Additional Information. No more than thirty days elapse before a Form LS-216 (Exhibit 25, PM 10-200) or similar request is released for missing information. Such request shall receive a follow-up within thirty days.
   2. Required Information for Rehabilitation Cases. Submission of Form LS-222 (Exhibit 26, PM 10-200) or "R" Form is voluntary and may be submitted within two months of injury when compensation is continued and the injured worker has not returned to work. If the claimant remains in TTD status for more than 120 days and the medical evidence is not sufficient to make a determination regarding referral, the claims examiner should then contact the employer/carrier to determine whether any rehabilitation effort has been initiated.

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4. Failure To Pay Installment of Compensation.

1. Policy. If any installment of compensation payable without an award is not paid within fourteen days after it becomes due, there shall be added to such unpaid installment an amount equal to 10% of the amount due. This additional amount shall be paid at the same time as, but in addition to, such installment. Such nonpayment may be excused by the DD after considering evidence by the EC, owing to conditions over which the EC had no control, the installment could not be paid within the period prescribed for the payment. (See PM 8-202.)
2. Assessment. The DD shall take steps to insure payment of the compensation due, plus an additional 10% in any case in which:
   1. More than twenty-eight days have passed without an initial payment of compensation from the date the EC had knowledge of the injury or death, or
   2. Any subsequent installment of compensation payable without an award is not paid within fourteen days after it becomes due, and the DD does not excuse the nonpayment. A subsequent installment of compensation as defined by section 14(b) of the Act is due as of the end of the installment period.

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5. Compensation Payments Without Award.

1. Compensation benefits, under the Act, shall be paid by the EC periodically, promptly, and directly to the person entitled thereto without an award, except where the liability to pay compensation is controverted by the employer (see subparagraph 3d, above). For TTD, an employee is entitled to two-thirds of his/her AWW at the time of injury, subject to the maximum compensation rate (established under section 6 of the Act) which is in effect at the time of injury.
2. The first installment of compensation becomes due on the fourteenth day after the EC has knowledge of the employee's injury or death. In addition, the Act states that all compensation then due must be paid. The EC, making compensation payments must immediately notify the DD by submitting Form LS-206, Payment of Compensation Without Award (Exhibit 19, PM 10-200), which indicates that compensation is being paid. If the entire period of compensable disability for work is covered by a single payment, Form LS-208, Notice of Final Payment or Suspension of Payments (Exhibit 21, PM 10-200) may be submitted in lieu of Form LS-206. If the employee's disability for work did not exceed fourteen days, he/she is not entitled to compensation for the first three days of disability. After the first payment, compensation should be paid at intervals of two weeks, or otherwise as the DD directs. Upon receipt of Form LS-206, or other indication that payments are ongoing, the CE should insure that the payment status is properly entered into the LCMS.
3. Where the claimant is entitled to compensation, the CE should check the file in accordance with this paragraph, to insure that compensation payments without an award have been made.

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6. Compensation Status. Check to determine if the employee has returned to duty or if he/she is actually being compensated. If the EC's first report of injury indicates that the claimant lost time from work, but does not give the date of the employee's return to duty or notice of commencement of payment, the CE to whom the case is assigned shall request a report from the EC as to the claimant's status with respect to compensation. Form LS-216, (Exhibit 25, PM 10-200), should be used for this purpose. After the compensation status of the claimant has been established, the CE should update the LCMS to reflect the information.

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7. Annual Adjustments.

1. Applicability. Cases in which long term disability has been established, either by the issuance of compensation orders or when the EC voluntarily continues compensation payments, must be reviewed on a regular basis. If a compensation order is entered, the CE verifies that the EC is making or continuing payments. If the compensation is not for PTD or a death case, a call-up for twelve months may be placed on the case. At the end of the period, the CE requests a summary of payments made by the EC, and extends the call-up. A determination regarding the onset of permanency should be made at the earliest possible date in extended disability cases to insure that claimants receive all annual adjustments to which they are due.
2. PTD and Death Cases. All PTD and death case files are pulled annually (October) for the purpose of having an adjustment made under section 10(f) of the Act by either the EC or NO, DLHWC. (See PM 3-202.) The LCMS can provide a listing of these cases.

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8. Computation of Compensation for Loss of Wage-Earning Capacity.

Sections 8(c)(21) concerning permanent partial disability and 8(e) concerning temporary partial disability both basically provide that compensation for these classes of disability shall be two-thirds of the difference between the employee's average weekly wages (AWW) at the time of injury and the employee's wage-earning capacity (WEC) after the injury. Since the employee's post-injury earning capacity may be established several years after the injury and given the possible intervening times of rapid economic inflation or depression, it is necessary to adjust the post-injury WEC back to the time of injury before making a comparison to the employee's AWW (see Bethard v. Sun Shipbuilding and Dry Dock Company, 12 BRBS 691).

If the wages for the post-injury job at the time of injury are known, a direct comparison can be made. In some instances, they can be readily determined. For example, if the employee's post-injury job pays the minimum wage, then the claimant's WEC for comparison purposes would be the minimum wage at the time of injury.

If, however, the post-injury wages at the time of injury cannot be so easily determined, adjustment should be made based on the change in the national average weekly wage (NAWW). In Richardson v. General Dynamics Corporation, 23 BRBS 327, the BRB held that where there was no evidence of the actual wages paid by the claimant's post-injury job at the time of injury, the percent increase in the yearly national average weekly wage (NAWW), due to its more accurate reflection of the increase in wages over time than the Consumer Price Index (CPI), should be applied to adjust the claimant's post-injury wages downward.

For example, an employee was injured in July 1996 and had an AWW of $500.00 per week. In February 2000, the employee establishes a wage-earning capacity of $300.00 per week. Comparing the NAWW at the time of injury ($391.22) with the NAWW in February 2000 ($450.64) produces an adjustment factor of .86814 ($391.22/$450.64 = .86814). Applying this adjustment factor to the current WEC of $300.00 results in a WEC at the time of injury of $260.44 ($300.00 x .86814 = $260.44). This adjusted WEC can then be compared to the employee's AWW to determine the compensation entitlement.

$500.00 - AWW

less 260.44 - Adjusted WEC

$239.56 - Loss of WEC x 2/3 = $159.71 per week

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9. Suspension of Payments. In a non-controverted disability case in which the EC has been paying compensation without an award under sections 14(a) and (b), the EC should not stop or suspend the payment of compensation without notification to the DD. When a further medical examination shows some improvement in the injury-related condition, but there is continued disability for work, the EC should ask the DD for an informal conference in order to determine any future liability as contemplated by section 14(h). Suspension of payments unilaterally under the foregoing circumstance is not authorized or justified by the Act and a unilateral suspension of compensation is done at the risk of incurring liability for an additional assessment under Section 14(e) if it is eventually found that the suspension was not warranted.

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10. Suspension Of Compensation Contested By Claimant.

1. Actions to Resolve Contested Compensation. The claimant may contest the stoppage of compensation, and submit medical evidence of his/her continuing disability, or otherwise advise the CE either in writing, by phone, or by a personal visit to the DO, that he/she is not able to return to work. If the EC upon notification refuses to resume compensation, the CE may schedule an impartial medical examination or schedule an informal conference, whichever is appropriate, to attempt to resolve the differences in medical opinion or the extent of continuing disability. The CE should request the EC to pay for the examination. The Special Fund will pay only for those examinations involving Special Fund beneficiaries or examinations requested by the Director, DLHWC. (For EC liability and insolvency, see LHWCA MEMO 56, March 31, 1977, LHWCA Bulletin No. 82-2, and PM 6-202. Contact the National Office if a copy of these issuances is needed.)
2. Informal Written Recommendation. Upon receipt of the impartial examining physician's report, the CE reviews the case to determine whether an informal written recommendation is possible. Copies of the recommendation letter or memorandum and the impartial examiner's report are sent to all interested parties. At this time, a three week call-up requirement shall be placed on the file awaiting a response to the informal recommendation.
3. Acceptance of Additional Compensation to Claimant. If the informal recommendation is for payment of additional benefits to the claimant, and EC accepts it and submits Form LS-206 or LS-208 (Exhibits 19, and 21, PM 10-200) in compliance, the CE should check the form for accuracy of the payment(s). If Form LS-208 was required, after verification, the CE should send the appropriate copies of the form to the claimant and claimant's representative. If the recommended payment constitutes a final payment under section 14(g), the CE should also determine whether Form LS-208 was submitted within sixteen days after final payment was made. (See PM 8-301.) If the compensation status of the claimant changes, an entry must be made in the LCMS to reflect the new status.
4. Controversion by EC of Informal Recommendation. The EC is required to submit Form LS-207 (Exhibit 20, PM 10-200) or equivalent within fourteen days of the date of injury. If not, the EC may be subject to payment of additional compensation under section 14(e). The CE should immediately determine whether the Notice of Controversion was timely submitted. If Form LS-207 is received, copies, with Form Ltr. LS-209 (Exhibit 22, PM 10-200), or by a cover letter prepared by the district office, are sent to the claimant and his/her representative within ten days of receipt of Form LS-207 or equivalent.
5. Adjudication by Informal Conferences or Formal Hearing. A period of thirty to sixty days is allowed for a response to controversion by claimant or attorney/representative before taking further action. Procedures have been established for handling disputed cases by informal conferences (PM 4-200), and if the differences cannot be resolved by this method, a case is to be referred for formal hearing by the Office of Administrative Law Judges (OALJ). (See PM 4-600.)

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11. Suspension Or Termination.

1. Requirements for EC. Section 14(g) of the Act requires that within sixteen days after suspending or terminating payments of compensation, the EC shall send to the DD a Form LS-208 (Exhibit 21, PM 10-200) stating that such payments have been suspended or terminated, the total amount of compensation paid, the name of the employee and of any other person to whom compensation has been paid, the date of the injury or death, and the date (inclusive) to which compensation has been paid. For instructions regarding the assessment of a penalty for failure to submit report of final payment of the compensation, see PM 8-301.
2. Review of Form LS-208 by CEThe guidelines and procedures are set forth below:
   1. Review and Disposition of Compensation Status. On receipt of Form LS-208 (Exhibit 21, PM 10-200), the CE checks the period and amount of compensation for correctness, and releases copies to the claimant and his/her attorney or representative. The action is noted on the file copy of the form by initials and date of release of the form. Also, at this time the compensation status should be changed in the LCMS to show that the case is no longer in compensation status. If the information on the form is incorrect (i.e., wrong dates, incorrect number of days, or wrong compensation), the CE notes correction on copy four (employee's) and returns it to the EC with instructions to correct the error and return a corrected Form LS-208.
   2. Call-Up of Non-Controverted Case Files. In non-controverted claims, a call-up ranging from three to six months may be placed on the case file for later review; however, the length of the call-up is at the discretion of the claims examiner, provided that:
      1. Call-ups are being reviewed as cases become due.
      2. All initial data is available at the time the Form LS-208 is received.
      3. No immediate action is indicated, notwithstanding the need for further development or consideration of the case in the future (e.g., evaluation of PPD, disposition of a third party action, etc.).
3. Verification and Notification of Suspension to Claimant. Form LS-208 will be reviewed and verified by the CE/CEC having responsibility for the case. If the payments reported are incorrect, the EC should be advised. If the payments reported are correct as to the period, weekly compensation, and total amount, the CE should send a copy of the approved form to the claimant, and note on the original copy in the file the date that the form was sent to the claimant. If the claimant may be entitled to further compensation (schedule award), a call-up should be placed on the file pending receipt of further information.

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12. Call-Up After Second Review. After a second review of the case file, the CE determines when the file should be reviewed again, and places a call-up on the file. The periods between reviews are based on the CE's experience and judgement as to what further action is required.

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13. Closing Compensation Cases.

1. Conditions and Forms Required for Closurel. In order to close a case file, Form LS-204, Final Medical Report (Exhibit 18, PM 10-200) or an optional narrative report and Form LS-208 (Exhibit 21, PM 10-200) should be available for consideration. However, a case may be closed without obtaining a final medical report where all of the following conditions are satisfied:
   1. The case is not controverted,
   2. The disability is short-term (i.e., less than 15 days of disability),
   3. There is no indication of permanent disability (including a scheduled loss),
   4. No further adjudicatory action appears necessary, and,
   5. Form LS-208 has been received, where appropriate.
2. CE's Analysis and Actions in Closing Case. The CE shall examine the Forms LS-204 and LS-208 to verify that they are complete. If no errors or omissions are discovered, and the CE believes that the claimant's injury could result in PPD, the CE shall prepare and release a Form Ltr. LS-403, Employee's Right to File Claim for Disability Compensation (Exhibit 38, PM 10-200) to the claimant, with a copy of Form LS-203. The Form LS-403 instructs the claimant to contact the DO if the claimant has a claim for compensation or permanency. This serves as a final check for the propriety of closing a case. The case file is returned to central file with a thirty to sixty day call-up, pending a reply. If no reply is received, the CE closes the case at the end of the thirty day period by changing the case status code in the LCMS.
3. Exceptions to Closing Procedures. There are exceptions to these closing procedures under the following circumstances:
   1. Cases where the claim is rejected or where the claimant is determined ineligible to receive compensation payments. This would include cases where it was determined by the DO or some higher adjudicative body that the claim was not under LHWCA jurisdiction. Under these circumstances, the case would be closed when an order to that effect is received by the DO. The DO has no requirement to issue an order covering such a decision, unless requested by any of the parties involved.
   2. Cases where the injured party makes no claim. The injured party usually will not have to file a claim to receive benefits under the LHWCA. In other rare circumstances, payments will not be forthcoming without specific initiatives on the part of the injured party.
      Example:
      1. Occasionally, an injury report is jacketed with less than three days disability in instances where the injury is such that the CE/CEC expects some claim for partial disability. However, the injured party may fail to respond to the dispatched Form Ltr. LS-504, Letter to Employee Explaining Rights (Exhibit 40, PM 10-200) and make no such claim. After a specified period of time to allow for such a response, the case file will be called up and closed by the CE.
      2. A claimant may agree with an EC's reasons for denying the right to compensation, via Form Ltr. LS-209, Request for Employee's Reply to Employer's Objections, (Exhibit 22, PM 10-200). If so, and the CE cannot dispute the EC's contention, the case file will be closed.

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1. Purpose and Scope. This Chapter contains the procedures to be followed in handling secondary death cases. The initial development of primary death cases is covered in PM 2-202.

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2. Death Benefits.

1. General. Death benefits are payable to eligible survivors if the injury or disease causes death. Compensation includes reasonable funeral expenses up to $3,000. A widow or widower can receive compensation at the rate of 50 percent of the Average Weekly Wage (AWW) of the deceased. Each dependent child is entitled to receive compensation at the rate of 16 2/3 percent of the deceased employee's AWW. Total death benefits may not initially exceed 66 2/3 percent of the deceased employee's AWW and are subject to the statutory limitations contained in section 6(b) of the Act on the date of death. However, the section 6(b) limit may be exceeded by the addition of section 10(f) increases. See PM 3-302.7 for more information on computing death benefits.
   
   A "child" shall include a posthumous child, a child legally adopted prior to the injury of the employee, a child in relation to whom the deceased employee stood in loco parentis for at least one year prior to the time of the injury, and a step child or acknowledged illegitimate child dependent upon the deceased, but does not include married children unless wholly dependent on him.
   
   The Board has held that the definition of the term "in loco parentis" is to be found in the laws of the pertinent state.
   
   Generally speaking, any person who takes a child of another into his/her home and treats it as a member of his/her family, providing parental supervision, support and education as if is were his/her own child, is said to stand in loco parentis. A person stands in loco parentis to a child when the person intends to assume toward the child the status of a parent. Examples can include, but are not limited to: supplying money for food and clothes; providing discipline; providing parental status/supervision, support and education, and statements to the fact that the child was considered by the decedent as his/her child or acknowledged as his/her child.
2. Other Eligible Survivors include dependent brothers, sisters, grandchildren, parents, and grandparents. The first three types of beneficiaries are entitled to twenty percent and the latter two, twenty-five percent. However, those beneficiaries are subordinate to the widow/widower and children; and can only receive an aggregate amount not more than the maximum percentage allowable. Thus a widow/widower and child would preclude other beneficiaries. A widow/widower without children would decrease a brother/sister's share from the twenty percent to sixteen and two thirds percent (see section 9(d) of the Act).
3. Remarriage. Upon remarriage, a widow or widower will receive a lump sum equivalent to two years compensation. Other survivors' benefit will be recomputed, effective as of the date of remarriage, and the lump sum is not to be treated as if it were periodic, that is, it does not count against the aggregate maximum, which is 66 2/3 of the deceased worker's wages. (See LHWCA MEMO 59, March 6, 1979.) Awards to children, brothers sisters, and grandchildren terminate when they reach eighteen years of age, but such compensation may be extended if a child is a student or is incapable of self-support. (See section 2(14) of the Act and LHWCA MEMO 11, June 22, 1965.) An amended order awarding benefits as a result of the remarriage is to be issued. Copies of the above-referenced LHWCA memos can be obtained from the National Office if needed.
4. Dependent Beneficiaries. Section 2(14) of the Act provides that the terms “‘child,’ ‘grandchild,’ ‘brother,’ and ‘sister’ include only a person who is under eighteen years of age, or who, though eighteen years of age or over, is (1) wholly dependent upon the employee and incapable of self-support by reason of mental or physical disability, or (2) a student as defined in paragraph (18) of this section.”
5. Student Benefit.
   1. Section 2(18) defines the term "student" to include a person who is regularly pursuing a full-time course of study or training at certain specified classes of institutions, but not beyond the end of the semester or enrollment period after the person reaches the age of twenty-three, or has completed four years of education beyond the high school level.
   2. A child shall not be deemed to have ceased to be a student during
      1. any interim between school years if the interim does not exceed five months and he/she shows to the satisfaction of the Secretary that he/she has a bona fide intention of continuing to pursue a full-time course of study during the enrollment period immediately following the interim; or
      2. periods of reasonable duration during which, in the judgment of the Secretary, he/she is prevented by factors beyond his/her control from pursuing his/her education.
   3. A child shall not be deemed to be a student during a period of service in the Armed Forces of the United States.

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3. Compensation Orders. At such time as the pertinent information is received and the payment of compensation has not been contested, a formal compensation order should be issued. If the case is contested, the procedures in Part 4, Case Adjudication are to be followed.

1. Benefits for Children. Where benefits are to be awarded for a child as defined in section 2(14), the order may provide for payment of benefits for a child eligible as a student by including the following or similar language:
   
   That compensation may be continued for a child after he/she reaches the age of eighteen, if he/she is a "student" as defined by the Longshore and Harbor Workers' Compensation Act at the time he/she reaches the age of eighteen, for so long as he/she continues to be a student within the requirements of section 2(18), but not beyond the end of the semester or enrollment period after he/she reaches the age of twenty-three, or has completed four years of education beyond the high school level.
2. Benefits for Brother, Sister or Grandchildren. Compensation orders awarding death benefits for brothers, sisters, or grandchildren, may provide for payment of benefits for such dependents eligible as a student, by including the following or similar language:
   
   That compensation may be continued for a brother/sister/grandchild after he/she reaches the age of eighteen, if he/she is a "student" as defined in the Longshore and Harbor Workers' Compensation Act, at the time he/she reaches the age of eighteen, for as long as he/she continues to be a student within the requirements of section 2(18), but not beyond the end of the semester or enrollment period after he/she reaches the age of twenty-three or has completed four years of education beyond the high school level.

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4. Absence of Beneficiaries. If no eligible beneficiaries are found after a thorough investigation, a call-up shall be placed on the file to coincide with one year from the date of death. At that time, the DD will issue a compensation order in accordance with section 44(c)(1) of the Act, ordering the EC to pay $5,000 to the Special Fund. The EC is to be notified that a check is to be made out to the U.S. Department of Labor and forwarded to the DD. The DD will then forward the check with a memorandum and a copy of the compensation order to the Director, DLHWC.

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5. Death Benefits to Students. The actions and documentation involved in such cases follow:

1. Notice to Beneficiary of Benefit. In any death case where a benefit is being paid on account of a child or other dependent under eighteen years of age, Form Ltr. LS-535, Notice to Guardian of Provision for Benefit Continuation (see Exhibit 44, PM 10-200) is to be sent to the person to whom the death benefit is being paid within three months after the dependent reaches the age of seventeen. This letter advises the recipient of the potential eligibility of the dependent for a continuing death benefit. ("Dependent" as used in this chapter and the form letters refers to a child or other individual named in 2(14) of the Act.)
2. Notice to Parent/Guardian of Benefit. Within sixty days before a "dependent" becomes eighteen years of age, Form Ltr. LS-536, Notice to Guardian of Requirement to Complete Form LS-266 (see Exhibit 45, PM 10-200) shall be sent to the parent or guardian, enclosing two copies of Form LS-266, Application for Continuation of Death Benefit for Student (see Exhibit 34, PM 10-200).
3. DD/CE Evaluation of Case. Upon receiving a completed Form LS-266, bearing the certification of the official of the educational institution in which the dependent is enrolled, the DD/CE will determine whether the dependent is entitled to a continuing benefit as a "student." If the dependent is considered to be eligible, Form Ltr. LS-541, Recommendation to Employer/Carrier to Accept Continuation of Benefit (see Exhibit 47, PM 10-200) shall be sent to the EC paying benefits (or to the Director, DLHWC, if the case is being compensated under the War Hazards Compensation Act or from the Special Fund) enclosing one copy of Form LS-266.
4. Failure to Authorize Benefit. If the employer/carrier declines to continue the benefit or, if discontinued, declines to resume paying it, the DD/CE shall take appropriate action to resolve the question of the dependent's eligibility in accordance with the usual procedure for resolving disputed issues. (See Part 4, Case Adjudication.)

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6. Death Benefits for Survivors of Disability Beneficiaries. Section 9 of the Act, as amended by Pub. L. No. 98-426 (enacted September 28, 1984) provides benefits to the survivors of an employee whose injury causes death. The apportionment for these benefits is described in paragraph 2, above. Thus, the survivors are eligible if the claimant dies immediately or if the claimant is eligible for temporary total disability or permanent total disability and subsequently dies as a result of the accepted occupational injury.

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7. Computing Death Benefits.

1. In computing death benefits, the average weekly wage of the deceased shall not be lower than the National Average Weekly Wage prescribed in section 6(b) of the Act at the time of death. Thus, if the claimant's average weekly wage at the time of injury is less than the National Average Weekly Wage at the time of death, the latter wage is to be utilized. However, the total initial weekly benefits shall not exceed the lesser of the average weekly wages at the time of injury or the benefit the employee would have been eligible to receive utilizing the section6(b)(1) calculations.
2. If the death is due to an occupational disease, for which the time of injury, as determined by section 10(i) of the Act, occurred after the decedent had retired, the total initial weekly benefits shall not exceed one fifty-second part of the decedent's average annual earnings during the fifty two week period preceding retirement.

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8. Funeral Expenses. Section 9(a) of the Act provides for a reasonable funeral expense not to exceed $3,000. The survivors are not entitled to a simple lump sum of $3,000 upon the death of the employee. The payment is to be made to the person or business who supplied the funeral service or related items or to the person or persons that paid for the service. The amount shall be limited to the actual expenses incurred up to $3,000. Form LS-265, Certification of Burial Expenses (see Exhibit 33, PM 10-200) must be submitted prior to the issuance of the compensation order awarding funeral expenses.

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9. Change in Status of Beneficiary. Whenever the CE determines that there has been a change in the status of a beneficiary (e.g., death, remarriage, termination of eligibility because of age, etc.) the responsible provider of benefits, EC or Special Fund is to be notified immediately in writing. Otherwise incorrect payments will result. Reference PM Chapters 6-300.9 for verification of student status procedures.

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10. Annual Adjustments. The procedures for annual adjustments under sections 10(f) and 10(h) of the Act in death cases are covered in PM Chapters 3-202 and 3-203.

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11. Legislative History. Public Law No. 98-426, which was enacted on September 28, 1984, is applicable to any death that occurred on or after September 29, 1984 regardless of the date of the original injury. Public Law No. 92-576, enacted on October 27, 1972, is still applicable to deaths that took place between October 27, 1972, and September 28, 1984. This is significant since death benefits are payable in those cases where the claimant was entitled to permanent total disability benefits and died from unrelated causes. These unrelated death benefits are not subject to annual section 10(f) adjustments. In addition, there is no weekly maximum limitation on death benefits for deaths which occurred during this period in accordance with the Supreme Court's decision in Director, OWCP v. Rasmussen, 567 F.2d 1385 (9th Cir. 1978), aff'd, 440 U.S. 29, 9 BRBS 954 (1979). In addition, section 8(d)(3) of the Act prior to 1984, provided unrelated death benefits to survivors of employees who were receiving compensation for permanent partial disability pursuant to section 8(c)(21). Questions regarding which death cases may be subject to Pub. L. No. 92-576 and questions on how to handle deaths which occurred prior to the enactment of Pub. L. No. 92-576 should be referred to the NO.

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1. Purpose and Scope. This Chapter introduces the general policies and procedures for handling secondary occupational disease cases. More specific information can be found in PM 3-401 (Hearing Loss), and PM 3-402 (Asbestosis). Chapter 3-300 (Secondary Case Review) also provides guidance on handling secondary cases in general.

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2. References.

1. The sections of the Act pertaining to occupational diseases are: sections 2(10), 8(c)(23), 9(e)(2), 10(d)(2), 10(i), 12(a), and 13(b)(2).
2. The sections of the regulations pertaining to these diseases are: sections 702.212(b), 702.222(c), 702.601 to 702.604.
3. The Law of Workmen's Compensation, by Arthur Larson, Section 41.00.
4. Guides to the Evaluation of Permanent Impairment, published and revised from time to time by the American Medical Association.

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3. Definitions.

1. Average Weekly Wage.
   1. Use the average weekly wage at the time of injury if this date is prior to retirement.
   2. Where the time of injury is after retirement and
      1. Within the first year after retirement, use 1/52 part of average annual earnings in the fifty-two week period prior to retirement, or
      2. More than one year after retirement, use the National Average Weekly Wage at the time of injury.
2. Date of Last Injurious Exposure. The last date the claimant was exposed to the implicated harmful substance while working in employment covered by the LHWCA.
3. Date of Manifestation. The date the claimant becomes aware of the relationship between a disease and his or her employment or should have been aware of the relationship.
4. Disability.
   1. Where the time of injury is prior to retirement, disability is based upon a loss of earnings or earning capacity.
   2. Where the time of injury is after retirement, disability is based upon the amount of physical impairment.
5. Impairment. The amount of permanent loss, or loss of use of, an organ, body part, or bodily function, as determined in accordance with the Guides to the Evaluation of Permanent Impairment. If the Guides do not measure the impairment, any other professionally recognized standards or system of evaluation may be used.
6. Occupational Disease. An illness or condition which develops over a period of time in response to repeated exposure to harmful or injurious stimuli.
7. Retirement. The claimant has voluntarily withdrawn from the work force and there is no realistic expectation that he or she will return to the work force.
8. Time of Injury.
   1. For purposes of determining coverage and for sections 10, 12, and 13: the date on which the employee or claimant becomes aware, or in the exercise of reasonable diligence or by reason of medical advice should have been aware, of the relationship between the employment, the disease, and the death or disability.
   2. For purposes of determining identity of responsible EC: the date of last injurious exposure.

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4. Evaluation of Evidence.

1. General. The CE must first determine: 1)whether or not the disease caused disability or impairment, and if so, when; 2)whether the date of manifestation was before or after retirement; and 3)whether the retirement was voluntary. From these basic facts, the claimant's entitlement may be established. The claimant must assist in this process by providing any information necessary to make these determinations.
2. Time.
   1. If the occupational disease does not cause immediate disability or death, the time to give notice of injury and make a claim for compensation are one year and two years respectively. These time periods extend from the time of injury as defined in subparagraph 3h(1), above. In making this determination, particular attention must be given to the medical evidence and the statement of the claimant regarding his/her awareness of the disease. The section 20(b) presumption aids the claimant in establishing the timeliness of his/her claim.
   2. If the disease immediately causes disability or death, the time periods to give notice and make a claim are thirty days and one year respectively. These time periods extend from the time of injury as defined in subparagraph 3h(1), above.
3. Causal Relationship. The claimant has the burden of making a prima facie case, i.e., submitting evidence of an injury and an accident, or working conditions, which could have caused the injury. To satisfy this initial burden, the claimant must submit a medical report which contains a diagnosis and evidence that he or she was exposed to the implicated injurious stimuli.
4. Extent of Disability. In addition to s 10, 12, and 13, the time of injury also affects the extent of the claimant's disability within the meaning of section 8.
   1. If the time of injury was prior to retirement, the claimant's extent of disability is determined by the amount of lost wages caused by the injury. This may extend to total disability.
   2. If the time of injury was after retirement, the claimant may not receive compensation for more than partial disability. While this disability may be based on 100% impairment of the whole person, the claimant is not entitled to annual adjustments under section 10(f) of the Act.
   3. The time of injury does not similarly distinguish the type of death benefits to which a widow/widower is entitled.
5. Responsible Employer/Carrier.
   1. Employer during the last employment in which the claimant was exposed to the injurious stimuli prior to the date the claimant becomes aware of the disease and its relationship to employment.
   2. The carrier who insured the employer at the time of the last injurious exposure.
6. Entitlement to Compensation.
   1. Time of Injury Prior to Retirement and No Disability or Impairment:
      1. No injury for purposes of statute of limitations,
      2. No need to file notice of injury,
      3. No need to file protective claim,
      4. Claimant eligible for medical treatment if required for condition causally related to factors of employment.
   2. Time of Injury Prior to Retirement and Disability:
      1. Compensation based upon loss of wages or earning capacity,
      2. Compensation calculated in usual manner (i.e., TTD, PPD etc.),
      3. Claimant can receive benefits for PTD with annual adjustments.
   3. Time of Injury After Retirement and No Disability or Impairment:
      1. No injury for purposes of statute of limitations,
      2. No need for notice of injury,
      3. No need to file protective claim,
      4. Claimant eligible for medical treatment if required for condition causally related to factors of employment.
   4. Time of Injury After Retirement and Disability:
      1. For this class of claims disability means impairment, as measured by the AMA Guides (see subparagraph 3e, above),
      2. Convert all impairments to whole person amount,
      3. Multiply percent of whole person impairment times AWW times 66 2/3%, (see 20 C.F.R. section 702.604(a)).

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1. Purpose and Scope. This Chapter contains the procedures for developing and adjudicating claims for loss of hearing allegedly due to employment covered by the LHWCA or an extension thereof. These instructions apply mainly to hearing loss caused by repeated exposure to excessive or harmful noise in the day-to-day work environment. Some of the procedures may apply to loss of hearing caused by a traumatic incident.

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2. Authority. Section 8(c)(13) of the Act; 20 C.F.R. sections 702.212(a)(3), 702.221(b), 702.231, 702.441; 29 C.F.R. section 1910.95.

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3. Definitions and Terms.

1. Amount of Hearing Loss. Hearing loss determinations are to be made in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment using the frequencies of 500, 1,000, 2,000, and 3,000 Hz. A hearing loss may be monaural or binaural. See subparagraph 7b, below.
2. Audiograms.
   1. Determinative audiogram. The audiogram used to calculate the degree of hearing loss for compensation purposes.
   2. Audiograms performed before December 27, 1984 should include the following information:
      1. An indication of what equipment was used and the date calibrated and by whom;
      2. The measurement scale used (ANSI, ISO or ASA);
      3. A statement on the cooperation of the Claimant;
      4. The claimant's physical condition should be evaluated to assure that no temporary shift occurred due to: (1) ear wax, or (2) a cold or other physical ailment;
      5. The date of the test and the date the claimant was last exposed to noise;
      6. The name and qualifications of the person who performed the test;
      7. Test results for both bone conduction and pure-tone air conduction studies.
   3. In addition to the information listed above, audiograms performed after December 27, 1984 must conform to the following standards (see 20 C.F.R. section 702.441(d) and 29 C.F.R. 1910.95):
      1. The audiometer must be calibrated according to current American National Standard Specifications for Audiometers,
      2. Audiometric tests shall be pure tone, air conduction, hearing threshold examinations, with test frequencies including, at a minimum, 500, 1000, 2000, 3000, 4000 and 6000 Hz. These frequencies are required by 29 C.F.R. section 1910.95(h)(1) (see 20 C.F.R. section 702.441(d)). Tests at each frequency shall be taken separately for each ear, and
      3. Audiometric examinations shall be administered in a room meeting the requirements for background noise listed in Appendix D of 29 C.F.R. section 1910.95.
3. Average Weekly Wage Determinations. As noted in subparagraph 3k, below, the date of last exposure to injurious stimuli prior to administration of a determinative audiogram is the relevant time of injury for purposes of calculating the average weekly wage. See Ramey v. Stevedoring Services of America, 31 BRBS 206(CRT) (9th Cir. 1998); Mauk v. Northwest Marine Iron Works, 25 BRBS 118 (1991). See also Bath Iron Works Corp. v. Director, OWCP (Brown), 506 U.S. 153, 26 BRBS 151(CRT) (1993).
4. Classes of Hearing Loss.
   1. Conductive Loss. This loss is caused by a defect in the external or middle ear from disease or injury. It is never caused by excessive noise in the work environment.
   2. Perceptive Loss. This loss arises in the inner ear. It may be caused by prolonged exposure to excessive noise in the work environment or it may be caused by other factors, such as diseases of the brain, general or infectious diseases, drugs, or advancing age. For this reason, the CE's development of the evidence should consider whether some factor other than the claimant's employment may be one cause of the hearing loss.
   3. Mixed-Type Loss. In this class, the deafness is due to both kinds of loss - conductive loss and perceptive loss. An award of compensation is based upon the sum of both types of loss since the entire loss is compensable when any portion is work-related.
5. Credit.
   1. Where the claimant has been compensated for a previous hearing loss, either under a state act or the LHWCA, the amount paid for the prior hearing loss is to be credited against any award which includes the prior loss. Section 3(e), Brown v. Bethlehem Steel Corp., 19 BRBS 200, aff'd on recon., 20 BRBS 26 (1987), aff'd in pert. part, 868 F.2d 759, 22 BRBS 47(CRT) (5th Cir. 1989).
   2. Where the prior award was for a pre-employment hearing loss, the credit is to be applied against the Special Fund's liability. Blanchette v. General Dynamics Corp., 27 BRBS 58(CRT) (2d Cir. 1993).
6. Occupational Disease. Although hearing loss is an occupational disease it is not the type of long latency period occupational disease contemplated by Congress when it amended the Act in 1984. Unlike asbestosis, the symptoms of hearing loss occur simultaneously with the "disease." Therefore, hearing loss is not "an occupational disease which does not immediately result in...disability" within the meaning of section 10(i) of the Act. In view of this fact, "claims for loss of hearing, whether filed by current workers or retirees, are claims for a scheduled injury and must be compensated pursuant to section 8(c)(13) of the LHWCA, not section 8(c)(23)." Bath Iron Works Corp. v. Director, OWCP (Brown), 506 U.S. 153, 26 BRBS 151(CRT) (1993).
7. Presumptive Weight of Audiograms. An audiogram shall be presumptive evidence of the amount of hearing loss on the date administered if all of the following requirements are met:
   1. The audiogram was administered by a licensed or certified audiologist, by a physician certified by the American Board of Otolaryngology, or by a technician, under an audiologist's or physician's supervision, certified by the Council of Accreditation on Occupational Hearing Conservation, or by any other person considered qualified by a hearing conservation program authorized pursuant to 29 C.F.R. section 1910.95(g)(3).
   2. The employee was provided the audiogram and a report thereon at the time it was administrated or within thirty days thereof.
   3. No one produces a contrary audiogram of equal probative value (meaning one performed using the standards described in subparagraph 3b above) made at the same time.
8. Responsible Employer/Carrier.
   1. Employer during the last employment in which the claimant was exposed to injurious stimuli prior to the date the claimant receives an audiogram showing loss of hearing, and has knowledge of the causal connection between his or her work and the hearing loss.
   2. Carrier who insured the employer at the time of the last injurious exposure.
9. Same Time. This means within thirty days thereof where noise exposure continues or within six months where exposure to excessive noise does not continue.
10. Threshold Shift. The loss of sensitivity to sound. A threshold shift may be temporary or permanent.
11. Time of Injury. For purposes of pay rate determination, the time of injury is the date the claimant is last exposed to injurious noise prior to the determinative audiogram. Bath Iron Works Corp. v. Director, OWCP (Brown), 506 U.S. 153, 26 BRBS 151(CRT) (1993). For purposes of notice provisions and statute of limitations provisions, the time of injury is the date the claimant receives an audiogram, with a report thereon, which discloses a hearing loss. Section 8(c)(13)(D). See Mauk v. Northwest Iron Works, 25 BRBS 118 (1991) for a discussion of how the time of injury is applied for purposes of sections 12 and 13 and AWW determinations.
12. Whole Person Impairment. The AMA Guides provide charts for the conversion of impairments of specific limbs and organs to impairment of the whole person. It is our policy to use the whole person impairment only where the claimant is receiving two or more awards based upon section 8(c)(23) of the Act. (See PM 3-400.5e ) In cases being paid pursuant to section 8(c)(13), the award is to be based upon the amount of hearing loss.

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4. The 1984 Amendments. The 1984 Amendments to the Act made a number of changes concerning hearing loss. Audiograms are presumptive evidence of the amount of hearing loss sustained as of the date it is taken if a three part test is met. The time periods for giving notice and filing a claim do not begin to run until the employee is given a copy of the audiogram and a report there on. The amount of hearing loss is to be determined in accordance with the AMA Guides, using the frequencies of 500, 1000, 2000, and 3000 Hz. The 1984 Amendments do not apply to claims filed under the 1928 District of Columbia Workmen's Compensation Act, Keener v. WMATA, 800 F.2d 1173 (DC Cir. 1986). As noted above, the AMA Guides provide for and further recommend the conversion of actual binaural hearing impairment to impairment of the whole person. The amount of actual binaural hearing impairment, however, is to be used in calculating awards under section 8(c)(13). Those cases should be distinguished from other occupational disease claims which may fall under the retiree provisions of section 8(c)(23), wherein it is the Director's position that the whole person impairment rating be used. (See PM 3-400.5e, and subparagraph 3f, above.) The 1984 Amendments also changed the apportionment formula for hearing loss claims where there was a pre-existing loss. Previously, the EC was responsible for the percent of hearing loss due to the second injury or 104 weeks, whichever was greater. Since most hearing loss awards did not exceed 104 weeks, EC's infrequently received section 8(f) relief. The Act now provides that the EC is responsible for the percent of hearing loss due to the second injury or 104 weeks, whichever is less.

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5. Evaluation of Claims for Hearing Loss.

1. Factors Influencing Hearing Loss. The following are factors influencing damage to an ear by sound or noise.
   1. Intensity of Sound - Measured in Decibels. Exposure to noise of an intensity in excess of 85 decibels can prove damaging to the hearing. The intensity is determined by a noise-level meter. To the extent possible, the results of a reliable sound level survey of the work area should be obtained before a claim is adjudicated. This is especially important when multiple claims are filed against one employer.
   2. Frequency or Spectrum of Noise. Lower pitched sounds are less damaging to the ear. Those involving tones above 1,000 cycles per second are the most harmful and more likely to cause damage to hearing.
   3. Continuity of Sound. Continuous noise is more harmful than intermittent sounds.
   4. Duration of Exposure. Prolonged exposure has a cumulative effect on hearing loss.
   5. Individual Susceptibility. All persons are not equally susceptible to harmful noise.
   6. Fatigue or Temporary Loss. In many cases, a degree of the impairment is a form of "fatigue" or temporary loss (threshold shift). Since this temporary loss can only be distinguished from a permanent loss by the extent of its duration any hearing loss evaluation must be made 16 hours or more after the last exposure to noise.
2. Action by DD/CE to Resolve Questions. Since the time of injury does not occur until the claimant receives an audiogram and a report thereon, most hearing loss cases will contain some medical evidence. In the event that the claimant's audiogram conflicts with an audiogram performed by the EC or any other audiogram, the DO should attempt to resolve any questions by use of an impartial medical evaluation.
3. Case Documentation for Referral. Before a claimant is referred for an impartial medical evaluation it is desirable that the case contain as much of the following information or evidence as is readily available or considered pertinent:
   1. From the employee (as much of the following as the DD/CE considers pertinent):
      1. A statement or other information giving specific reasons the employee believes the hearing loss is due to the work.
      2. A detailed description, in chronological order, of the particular work factors which the employee believes to be the cause of the hearing loss. The employee should also state whether any protective devices were used (such as ear defenders) describe the devices, and state the approximate number of hours per day and days per week they were used.
      3. A statement indicating whether the employee had any ear or hearing problems prior to the employment alleged to be the cause of the loss, and, if so, full details of the problems, including dates, and the names and addresses of all physicians who examined or treated for the problems.
      4. Full details, if employee ever before filed a claim for workers' compensation or for similar benefits (e.g., Veterans Administration or State benefits), because of this, or any condition affecting the employee's ears or hearing. The information furnished should include the date of the claim, the name and address of the office where the claim was filed, and a description of any benefits received.
      5. Originals or copies of all audiograms made by any physician or medical facility.
   2. From the EC (as much of the following as the DD/CE considers pertinent):
      1. The employee's complete work assignment record, showing the positions held and, if possible, inclusive dates of assignments, a description of the duties performed, the type of noise to which the employee was exposed, and the length of time such exposure on each assignment.
      2. A description of the employee's work sites, including a diagram showing the dimensions and layouts of the areas, and a discussion of the noise hazard at the time the employee was on duty.
      3. The safety precautions (such as providing ear defenders, noise suppressors, acoustical engineering, etc.) taken to eliminate or reduce noise hazards.
      4. A statement as to whether any other employees performing the same work under the same working conditions had similar complaints.
      5. A copy of the employee's pre-employment medical examination.
      6. Medical records in the possession of the EC which show any ear trouble, and copies of all available audiometric tests (audiograms).
      7. The date and time the employee was last exposed to noise on the job. If the exposure is continuing, a statement should be made of that fact.

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6. Loss of Hearing Determinations.

1. Policies.
   1. The most recent edition of the Guides to the Evaluation of Permanent Impairment, published and revised from time to time by the American Medical Association is to be used for hearing loss determinations.
   2. All audiograms must continue to show test results for bone conduction and pure-tone air conduction studies. Schedule award determinations should be made based upon the loss as shown by the air conduction studies only.
   3. An audiogram that shows a greater loss for bone conduction than air conduction may not be used to establish the degree of hearing loss, nor may it be used to corroborate other audiograms. Such an audiogram is unreliable and should be disregarded.
   4. It remains DLHWC policy to include any pre-existing hearing loss in the schedule award calculation, where factors of employment have aggravated that loss. If the pre-existing hearing loss was previously compensated, credit should be given for the dollar amount compensated.
   5. If either of the parties disagrees with the recommendation of the district office the case should be referred for a formal hearing at the request of either party.
2. Determinations.
   1. The statute requires that hearing loss determinations be made in accordance with the AMA Guides. (See section 8(c)(13)(E).) Procedures for determining the amount of hearing impairment are found in the Guides.
   2. The Guides includes a method for calculating the percentage of binaural loss and this method must be used. The method uses the frequencies of 500, 1000, 2000, and 3000 Hz. Binaural hearing impairment is determined using the following formula:
      5 x % hearing impairment % hearing impairment
      
      Binaural Hearing Impairment, (%) = of better ear + of poorer ear
      
      6
   3. Using this formula, if the hearing loss does not exceed twenty-five decibels when the audiogram is based on an American National Standards Institute (ANSI) calibrated audiometer, there is no compensable loss. The Guides includes procedures for converting audiograms based upon the older ASA standard.
3. Referral of Claimant for Hearing Evaluation.
   1. Conditions/Methods for Referral. If the EC has controverted the claim and the claimant has not been examined by an otologist, the DD/CE, after having obtained all of the available pertinent medical reports and factual information, (see subparagraph 5c, above) will, with the agreement of the parties, prepare a memorandum of the undisputed facts pertaining to the nature of the employee's employment, etc., for referral of the case to an otologist selected by the DD/CE for examination and evaluation. (With respect to opinions, reports, or conclusions of any prior examining physician concerning the nature and extent of the impairment, its cause, etc., 20 C.F.R. section 702.411 should be observed.) After obtaining the otologist's agreement the DD/CE will refer the employee, the memorandum, and any other necessary information and reports. The examining otologist will be asked to examine and test the employee and furnish a report. The otologist should include in a report the date and hour of the employee's last exposure to employment related noise, which exposure must have been more than sixteen hours before the examination. The physician should also be instructed to make use of retesting and additional tests and techniques considered appropriate in those cases where it is determined that the results of the initial tests were inadequate or where the results appear to be inaccurate.
   2. Restrictions. In no case will examination by a physician or medical facility be authorized unless the physician or facility can certify that no more than one year will have passed from the date the audiometer to be used was last properly calibrated until the date of the scheduled examination. Each physician or facility should be asked to include in the report of examination the date of calibration of each instrument used and by whom the calibration was performed.
   3. Charges for Evaluation. The cost of the evaluation may be charged to the employer, or an insurance carrier. The cost of the examination may also be charged to the Special Fund in special circumstances and with the concurrence of the Director, DLHWC.

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7. Calculation of Hearing Impairment.

1. Applicability of Guidelines. The phrase "permanent partial disability" in section 8(c) of the Act is interpreted to mean "permanent partial physical impairment". The same standards for evaluating such impairment are applied in all like cases. The AMA Guides are used as guidelines for evaluating all permanent physical impairments, including hearing loss.
2. Methods of Calculation.
   1. The DD/CE will calculate the percentage of hearing impairment from the findings reported by the otologist, but in making a recommendation shall consider all relevant factors in the case. Loss of hearing may be monaural or binaural. If the claimant's hearing impairment is ratable in only one ear, it is to be compensated in accordance with section 8(c)(13)(A) of the Act, regardless of the type of causation. Rasmussen v. General Dynamics Corp., 993 F.2d 1014, 27 BRBS 17(CRT) (2d Cir. 1993); Garner v. Newport News Shipbuilding & Dry Dock Co., 955 F.2d 41, reported unofficially at 25 BRBS 122(CRT) (4th Cir. 1992).

      To obtain the degree of monaural hearing loss, the DD/CE will use the formula which deducts the hearing level threshold from the average measured frequencies, using the frequencies of 500, 1000, 2000, and 3000 Hz. This is the formula used in the AMA Guides. The "fence" or hearing threshold level of twenty-five db (using ANSI calibrated audiometers) should be deducted from the average of the measured frequencies. If the audiometer is calibrated using ASA-1951 standard, a fifteen db "fence" should be deducted from the average measured frequencies.

   2. Binaural loss of hearing will be calculated using the following formula:
      5 x % hearing impairment % hearing impairment
      
      Binaural Hearing Impairment, (%) = of better ear + of poorer ear
      
      6

      The following is an example of a typical audiograms showing a neurosensory loss (monaural) using the AMA formula. For every decibel (db) that the estimated hearing level exceeds twenty-five db (ANSI), 1.5% monaural impairment is assigned.

      CPS 500 1000 2000 3000
      
      db loss 15 20 35 60
      
      Average 130db / 4 = 32.5
      
      Less the fence of 25 db = 7.5 db x 1.5%/db
      
      % Loss = 11.25

   3. The following computation illustrate how the percent of binaural loss is derived assuming a 10% monaural loss in the left ear and a 15% monaural loss in the right ear.

      (5 x 10) + 15 = 10.8%

      6

   4. The DD/CE will then follow the procedure in subparagraph 7c, below. It should be noted that a recommendation on the amount of permanent partial disability is an administrative action as it relates to the claimant's entitlement. The DD/CE should consider all of the evidence of record in making this recommendation.
3. Action Following Receipt of the Report.
   1. DD's Assessment of Otologist's Report. Upon receiving the otologist's report, if a reported finding of hearing loss was, in the otologist's opinion, related to the employment conditions alleged to have been the cause, the DD will calculate the percentage of hearing impairment from the otologist's findings according to the procedures outlined in subparagraph 7b(4).
   2. Calculation of the Award.
      1. Monaural Hearing Loss. The amount of monaural hearing loss is multiplied times the number of weeks contained in section 8(c)(13)(A) to determine the length of entitlement. This number of weeks is multiplied times the compensation rate (i.e. AWW x 2/3) to determine the amount of compensation. The following is an example of the application of this formula:

         11.25% monaural loss x 52 weeks = 5.85 weeks

         5.85 weeks x $392 x 2/3 = $1,528.80

      2. Binaural Hearing Loss. If there is a binaural loss of hearing, the amount of binaural loss is multiplied times the number of weeks contained in section 8(c)(13)(B), and then times the compensation rate. The following is an example of the application of this formula:

         10.8% binaural loss x 200 weeks = 21.6 weeks

         weeks x $392 x 2/3 = $5,644.80

   3. Recommendation. Using the figures derived from the calculations contained in subparagraphs 7b(4), and 7c(2), above as a guide, and taking into account such other factors as warrant consideration, the DD/CE handling the case will make a recommendation for payment of a schedule award and notify the parties as to the of payment of benefits.

      It is important to also make a finding as to when the schedule award begins to run since this will obviously affect such determinations as whether the entire schedule is accrued and unpaid, whether continuing installment payments are warranted, and the amount of sliding/straight interest, if any, due on the unpaid compensation

      1. Section 14(e). Since the Supreme Court's decision in Brown provides a time of injury for former employees which is often in the distant past, i.e., the last day of injurious workplace noise exposure, the entire schedule award may have run by the time of employer's knowledge, thereby making the entire amount penalty "then due" within the meaning of section 14(b) and (e) of the Act. Since the section 14(e) is triggered by a failure to pay compensation when due, i.e., fourteen days after the employer has been notified pursuant to section 12, or the employer has knowledge of the injury, an employer who timely controverts or pays the full amount of compensation due within the period prescribed by section 14(b) will not be liable for a section 14(e) penalty even though the controversion or payment is made years after the compensable injury occurred.
      2. Like the section 14(e) penalty, interest for post-retirement hearing loss awards will not begin to accrue until the employer has been notified pursuant to section 12 or the employer has knowledge of the injury or death. See Renfroe v. Ingalls Shipbuilding Inc., 30 BRBS 101, 108 (1996) (en banc). In the Renfroe case, the last injurious exposure occurred in 1971 and the claimant's entitlement to a schedule award for hearing loss under section 8(c)(13) commenced at that time. However, the employer did not have knowledge of the injury until February 23, 1987. Since the entitlement to the schedule award began in 1971, the entire amount of the schedule was due and unpaid as of February 23, 1987, and the BRB held that interest was to be assessed on the entire amount beginning February 23, 1987. Since the entire amount of the schedule is past due, the period of entitlement has ended, and no additional payments are due, only the formula for "straight" interest (see PM 8-201) is applicable.

         For the sake of this example, assume an interest rate of 6.09%, a total amount due of $363.19, and that payment was made on June 24, 1996.

         Straight interest formula -- Interest = A * n * v

         Interest = $363.19 * (bi-weekly periods during 02/23/87 - 06/24/96) * (.0609 / 26)

         Interest = $363.19 * 243.57142 bi-weekly periods * .002342

         Interest = $207.21

         Depending on the date of maximum medical improvement (i.e., date of last injurious exposure) and the date of the employer's knowledge, interest may involve the application of both "straight" and "sliding" interest. See the following example:

         Beginning date of the schedule award - December 9, 1999

         Percent of binaural hearing loss - 42.7% (schedule should end on July 28, 2001)

         Compensation rate - $347.00 per week

         Date of the employer's knowledge of injury - March 1, 2000

         Date of payment - May 9, 2000

         Interest Rate - 6.0%

         As of March 1, 2000 (the point at which interest is payable), that portion of the schedule from 12/09/99 through 03/01/00 (12 weeks x $347.00 = $4,164.00) would be accrued and unpaid, and subject to "straight" interest.

         Interest = A * n * v

         Interest = $4164.00 * (bi-weekly periods during 03/01/2000 - 05/09/2000) * (.06 / 26)

         Interest = $4164.00 * 5.00000 bi-weekly periods * .002308

         Interest = $48.05

         That portion of the schedule award from 03/02/00 through 05/09/00 is subject to "sliding" interest.

         Interest = (B * r) * (p2-p)

         26 * 2

         Interest = ($694.00 * 6.0%) * (24.29080 - 4.92857)

         52

         Interest = $41.64 * 19.36223

         52

         Interest = $806.24325

         52

         Interest = $15.50

         Total interest in this example would be $63.55 ($15.50 + $48.05). It is assumed that any further payments after 05/09/00 would be made by the EC in a timely manner and would not be subject to the payment of interest.

         Another scenario would be that the EC did not make payment until after the period of schedule award had ended, e.g., payment was made in September 2001. In this instance, the period from 03/02/00 - 07/28/01 would be subject to both "sliding" and "straight" interest.

      3. Action of the Parties.
         1. Acceptance of the Recommendation. If the parties accept the recommendation, the usual procedure followed for awarding benefits to an injured employee having residual physical impairment shall be followed by the DD/CE (see PM 4-200.9).
         2. Rejection of the Recommendation. If either party rejects the recommendation, a conference may be scheduled to determine whether agreement can be reached. Should the parties continue to disagree, procedures described in 20 C.F.R. section 702.316 and PM 4-600 shall be followed to refer the case for formal hearing by an Administrative Law Judge.
      4. Failure to Agree as to Accepted Facts. If the parties are unable to agree upon a body of facts as to the duration and extent of the claimant's exposure to noise at work, or if either the EC or the claimant refuse to furnish information on which the DD/CE can base a recommendation, the case shall be referred to the Office of Administrative Law Judges for formal hearing.

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1. Purpose and Scope. This Chapter provides guidelines and procedures for developing and adjudicating claims of asbestosis allegedly resulting from a claimant's exposure to asbestos in the course of employment. PM 2-203 and PM 3-400 provide basic information on the development and handling of occupational disease cases in general as well as definitions of relevant terms.

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2. Introduction.

1. General Discussion. Asbestos is a naturally occurring mineral fiber which has multiple industrial uses due mostly to its binding and heat retardant properties. From the early years of the Second World War, industrial use (and production) of asbestos fiber products increased dramatically in the United States. As a result it has been estimated that as many as eleven million living Americans have received some occupational exposure to the various asbestos mineral fibers.
   
   About 2/3 of all asbestos was used in the construction industry, particularly in ship construction, since asbestos is effective in insulating boilers, steam pipes, hot water pipes and nuclear reactors. Thus, many persons employed in shipyards have been exposed to asbestos. In addition, exposure may occur during the transporting of asbestos, both on board ships and in terminals.
   
   Exposure to asbestos fibers has been epidemiologically linked to a number of human diseases. Asbestosis, diffuse interstitial fibrosis of the lungs' parenchymal tissues, is the most commonly recognized disease related to such exposure. Recent evidence has suggested, however, that asbestosis may be one of the least frequently occurring asbestos related diseases. Asbestos exposure has also been shown to be a causal factor in a variety of pulmonary (pleural and parenchymal) and gastrointestinal disorders. Probably least recognized is the recently established relationship of this mineral fiber to carcinogenesis including the development of mesothelioma and bronchogenic carcinoma.
   
   Mesothelioma, for instance, once an extremely rare human cancer, has been observed in significantly increased incidence in recent years. It is estimated that 85 to 90 percent of all diagnosed mesotheliomas are directly due to asbestos exposure. Some evidence also exists linking asbestos exposure to gastrointestinal carcinoma, but this relationship is less well documented.
2. Causal Relationship. Mere exposure to asbestos does not mean that an employee will contract a disease. Many workers remain unaffected. In order for a claim to be compensable, an employee must show that he or she has suffered some harm and that there were factors of employment capable of causing this harm. Once the employee meets this prima facie burden then the presumption contained in section 20 applies to link the harm with the claimant's employment.
3. Entitlement to Compensation. A distinction can be made between disability and impairment as follows:
   1. Disability. The partial or total loss of ability to earn wages.
   2. Impairment. The loss or loss of use of an organ, body part, or bodily function.
      
      An employee may show some evidence of asbestos exposure but not have suffered any harm or impairment. Ferruginous bodies ("asbestos bodies") in the sputum are indicative of exposure but do not demonstrate harm or the presence of active disease. Pleural plaques (on chest x-ray) constitute a typical example of abnormalities (harm) which may not cause any impairment or disability. An employee may also have impairment but no disability. This would occur where the employee has some reduction in pulmonary function but no reduction in earning capacity.
      
      The distinction between disability and impairment is relevant for cases where the time of injury is prior to voluntary retirement. If the time of injury is after retirement, disability means impairment.

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3. Applicability.

1. Eligibility. Present and former employees of employers subject to the LHWCA as extended, and/or their survivors, may be eligible for LHWCA benefits if exposure to asbestos occurred in the course of employment and some identifiable harm resulted from the exposure.
2. Benefits Provided. Disability benefits provided by the LHWCA and its extensions in the case of a disease causally related to asbestos exposure which is accepted under the Act include:
   1. Compensation for wage loss or loss of wage earning capacity;
   2. Compensation for physical impairment, where the injured employee is retired at the time of injury;
   3. All medical, surgical, and hospital treatment, and medical supplies and services required by the occupational disease;
   4. Vocational rehabilitation where indicated; and/or
   5. Death benefits.
3. Time Limits for Filing.
   1. Generally, the law requires that a claim be filed within one year from the date the employee or claimant is aware, or by the exercise of reasonable diligence should have been aware, of the relationship between the employee's disease or death and his or her employment. In addition, the employee or claimant is required to notify the employer or former employer with whom the employee's last exposure to asbestos occurred, and the DD in the compensation district in which the last exposure to asbestos occurred within thirty days after the employee or claimant is aware, or in the exercise of reasonable diligence should have been aware, of a relationship between the employee's disease or death and his or her employment.
   2. However, in the case of an occupational disease which does not immediately result in disability or death, a claim shall be timely if filed within two years after the employee or claimant becomes aware, or in the exercise of reasonable diligence or by reason of medical advice should have been aware, of the relationship between the employment, the disease, and the disability or death. In these cases the employee or claimant is required to notify the employer or former employer and the DD, as noted above, within one year after the employee or claimant becomes aware, or in the exercise of reasonable diligence or by reason of medical advice should have been aware, of the relationship between the employment the disease, and the disability or death.
   3. Time limits for filing a claim do not begin to run against the claim of an injured employee or eligible dependents entitled to compensation if:
      1. The employer has knowledge of the injury or death; or
      2. The employer has been given notice of injury or death; and
      3. The employer fails, neglects or refuses to file a report of the injury or death with the DD.
         
         In this situation, time limits for filing a claim do not begin to run until the employer submits the required report.

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4. Evidence to be Requested.

1. From the Claimant.
   1. A detailed history of the disease from the date it started;
   2. The way in which the employee was exposed to asbestos and the degree and length of exposure;
   3. Statement from any witnesses concerning the degree and length of exposure;
   4. The date the employee was last exposed to asbestos in his or her employment;
   5. The date and circumstances when the claimant first became aware of a possible relationship between the disease, any impairment/disability and the employee's work;
   6. The names and addresses of all physicians and hospitals which have provided the employee with medical care for a disease which is causally related to exposure to asbestos;
   7. A printout from the Social Security Administration, which shows the claimant's employment history; and
   8. Information about any third party actions which have been filed, i.e., when filed and against whom.
2. From Other Sources.
   1. It is recommended that the claimant arrange for submission of medical admission and discharge summaries and full hospital reports for all periods of hospitalization for an asbestos-related disease, and medical reports from any hospital which provided outpatient treatment for such a condition.
   2. It is also recommended that the claimant be prepared to submit a medical report from each physician who has examined or treated the employee for an asbestos-related disease. Each report should include as much of the following as possible:
      1. Dates of examination and treatment;
      2. History given to the physician;
      3. Detailed description of the physician's findings;
      4. Results of x-rays, pulmonary function tests, blood gas tests or other laboratory tests;
      5. Diagnosis;
      6. Clinical course and treatment; and
      7. The physician's opinion, with medical reasons, as to whether the disease is causally related to employment, either by direct cause, or by aggravation, acceleration or precipitation.
3. Measure of Impairment. Where the claimant has voluntarily retired, the level of compensation benefits is determined by the amount of impairment. Therefore, in appropriate cases, the claimant should be asked to submit a report which contains the amount of pulmonary impairment measured in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment.

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5. Procedures. Claims for compensation or death benefits resulting from exposure to asbestos should be filed with the DO having jurisdiction over the state in which the exposure occurred. The claim should be served on the responsible EC which the Social Security printout should help establish. The DO should ask the claimant to submit the evidence listed in paragraph 4, above. When this evidence has been submitted, the DO should make the following determinations:

1. Time of Injury. When the disease became manifest.
   1. For purposes of coverage and for sections 10, 12, and 13: the date on which the employee or claimant becomes aware, or in the exercise of reasonable diligence or by reason of medical advice should have been aware, of the relationship between the employment, the disease, and the death or disability.
   2. For purposes of determining the responsible EC: the date of last injurious exposure.
2. Retirement. Whether the claimant is still working or whether the claimant has voluntarily withdrawn from the work force with no realistic expectation that he or she will return to the work force.
3. Method of Compensation. Whether entitlement is based upon loss of wages or wage earning capacity (time of injury pre-retirement), or impairment (time of injury post-retirement).
   1. For loss of wages or earning capacity, entitlement is based upon the difference between the claimant's earnings and his or her average weekly wage on the date of injury.
   2. For entitlement based upon impairment, the whole person impairment as measured by the AMA Guides multiplied times the compensation rate.

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6. Recommendation. After the evidence has been evaluated and a determination regarding entitlement has been made, the DO should make a recommendation to the parties either for or against the payment of benefits. If either party disagrees with the recommendation, the case should be referred for formal hearing in accordance with the procedures contained in PM 4-600.

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1. Purpose and Scope. This Chapter provides an introduction to settlements and commutations under the LHWCA and its extensions. Chapter 3-501 pertains to settlements under section 8(i) of the LHWCA. Chapter 3-502 covers commutations under section 9(g) of the LHWCA and section 2(b) of the DBA.

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2. Policy. It is our policy to neither encourage nor discourage agreed settlements. It is the responsibility of the DD to insure that applications are complete, adequate, not procured by duress, and timely processed.

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3. Section 8(i) Settlements.

1. Settlement applications may be submitted solely for compensation, solely for medical benefits or for compensation and medical benefits combined.
2. Settlement may be considered for any claim under the Act, including survivor benefits.
3. Settlements may be "structured" so that payments will extend over the lifetime of the claimant with an annuity policy used to provide continuing payments.

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4. Commutations Pursuant to LHWCA Section 9(g).

1. Commutations are limited to death benefits for aliens or non-nationals of the United States, in the amount of 1/2 of the commuted future installments.
2. An informal conference or formal hearing is not required to authorize a lump sum payment.
3. A compensation order fixing the right of the beneficiary to compensation is required pursuant to section 702.142(d) of the regulations.
4. All commutation calculations are made by the National Office.
5. Commutation, pursuant to section 9(g), is mandatory upon request by the EC.

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5. Commutations Pursuant to DBA Section 2(b).

1. Commutations may be considered for permanent total disability, permanent partial disability under section 8(c)(21), or death of aliens or non-nationals of the United States. Payment is for 1/2 of the commuted amount of future installments.
2. Payment of a lump sum does not release the EC of the responsibility to furnish future medical care.
3. An informal conference or formal hearing is not required to authorize a lump sum payment.
4. All commutation calculations are made by the National Office.
5. Commutation, pursuant to DBA section 2(b), is mandatory upon request by the EC.

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1. Purpose and Scope. This Chapter describes the procedures for processing and evaluating settlements under section 8(i) of the Act.

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2. Policy. The Longshore and Harbor Workers' Compensation Act Amendments of 1984 changed the criterion for evaluating a settlement from "the best interests of an injured employee" to whether or not the settlement is "inadequate or procured by duress". The regulations concerning settlements may be found at 20 C.F.R. sections 702.241 to .243.

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3. Role of the District Office. As a general rule, the DD/CE should neither encourage nor discourage agreed settlements. The DD/CE should, however, insure that the application is complete and determine whether both parties are represented by counsel. After a complete application has been submitted, the DD/CE is to determine whether it is adequate and/or has been procured by duress.

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4. Types of Settlements.

1. The parties may submit a settlement application solely for compensation, or solely for medical benefits or for compensation and medical benefits combined. If either portion of a combined compensation and medical benefits settlement application is disapproved the entire application is disapproved unless the parties indicate on the face of the application that they agree to settle either portion independently.
2. A settlement may be considered for any claim under the Act, including section 48(a) and survivors benefits. However, an agreement among the parties to settle a claim is limited to the rights of the parties and to claims then in existence; settlement of disability compensation or medical benefits shall not be a settlement of survivor benefits nor shall the settlement affect, in any way, the right of survivors to file a claim for survivor's benefits. Only past claims for past discriminatory acts can be settled under section 48(a). Any settlement agreement that attempts to include a future section 48(a) claim would be invalid and should not be approved.
3. A settlement may also be "structured" in that payment of the agreed settlement may extend over the lifetime of the claimant and may even involve the use of annuity policies issued by life insurance companies to provide continuing payments. It is recommended that the following or similar language be contained in all structured settlement orders to assure that only upon the continued payment to the claimant of the agreed upon settlement shall the liability of the EC be discharged: "Upon payment of the aforesaid monies, the employer and carrier shall be forever discharged and released of any further liability for payment of compensation to the employee under the Longshore and Harbor Workers' Compensation Act". Should the carrier or any other party designated to make the continuing payments fail to make the payments, liability to make the payments shall revert to the original EC.

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5. Required Information.

1. The settlement application shall be a self-sufficient document which can be evaluated without further reference to the administrative file. The application shall be in the form of a stipulation signed by all parties and shall contain a brief summary of the facts of the case to include:
   1. a description of the incident,
   2. a description of the nature of the injury to include the degree of impairment and/or disability,
   3. a description of the medical care rendered to date of settlement, and
   4. a summary of compensation paid and the compensation rate or, where benefits have not been paid, the claimant's average weekly wage.
2. The settlement application shall also contain the following:
   1. A full description of the terms of the settlement which clearly indicates, where appropriate, the amounts to be paid for compensation, medical benefits, survivor benefits and representative's fees. Such fees shall be itemized as required by 20 C.F.R. section 702.132.
   2. The reason for the settlement, and the issues which are in dispute, if any.
   3. The claimant's date of birth and, in death claims, the names and birth dates of all dependents.
   4. Information on whether or not the claimant is working or is capable of working. This should include, but not be limited to, a description of the claimant's educational background and work history, as well as other factors which could impact, either favorably or unfavorably, on future employability.
   5. A current medical report which fully describes any injury related impairment as well as any unrelated conditions. This report shall indicate whether maximum medical improvement has been reached and whether further disability or medical treatment is anticipated. If the claimant has already reached maximum medical improvement, a medical report prepared at the time the employee's condition stabilized will satisfy the requirement for a current medical report. A medical report need not be submitted with agreements to settle survivor benefits unless the circumstances warrant it.
   6. A statement explaining how the settlement amount is considered adequate.
   7. If the settlement application covers medical benefits, an itemization of the amount paid for medical expenses by year for the three years prior to the date of the application shall be included. A statement in the application to the effect that the employer/carrier has not paid for any medical treatment in the past three years is not sufficient. The parties should be required to provide an itemization of all medical treatment expenses paid in the last three years, whether paid by employer/carrier, Medicare, other health plans or by the claimant, as well as itemization of all unpaid medical bills.
      
      An estimate of the claimant's need for future medical treatment as well as an estimate of the cost of such medical treatment shall also be submitted which indicates the inflation factor and/or the discount rate used, if any. The DD may waive these requirements for good cause. The case file must contain a memo explaining the "good cause" basis for waiving this requirement. However, for settlements that come within the Medicare pre-approval threshold (see paragraph 12.a., below) greater scrutiny should be given to determine if the proposed settlement is adequate, and waiver of such medical documentation is not appropriate.
   8. Information on any collateral source available for the payment of medical expenses. Medicare and Medicaid are not acceptable collateral sources of medical care.

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6. Submission of the Application. When the parties to a claim for compensation, including survivor benefits and medical benefits, agree to a settlement they shall submit a complete application to the DD. The application shall contain all the information outlined in paragraph 5 above, and as provided by 20 C.F.R. 702.243(a), shall be sent by certified mail, return receipt requested or submitted in person, or by any other delivery service with proof of delivery to the DD. Submission by facsimile (fax) is not specifically authorized by the regulation and is not considered to reasonably fall under the umbrella of a “delivery service with proof of delivery.” Further, since section 8(i)(1) provides that a settlement application will be deemed automatically approved unless it is specifically disapproved by the DD within 30 days of its submission, being able to establish when the application was received by the DD is important. While a sender can confirm that a fax was transmitted successfully, the sender cannot confirm that the DD actually received the settlement application. A settlement application submitted to the DD by fax should not be accepted and the parties should be advised to submit the application in a manner consistent with 20 C.F.R. 702.243(a).

Failure to submit a complete application shall toll the thirty day period mentioned in section 8(i) of the Act until a complete application is received, (see subparagraph 9c, below).

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7. Initial Review.

1. Timeliness. Section 8(i) of the Act now requires the approval of a settlement within thirty days unless it is found to be inadequate or procured by duress. Settlements must therefore be considered as soon as possible after receipt. Action to either approve, disapprove, or toll the thirty day period is to be taken within twenty-five days of receipt of the application.
2. District Director Initial Review. When a settlement application is received and date stamped in the mail room it should be taken to the DD immediately. The DD should review the settlement to determine if there is anything which would require the thirty day period to be tolled. The DD shall initial and date the first page of the settlement application when reviewed. At this time the DD should also review the application to determine if the threshold requirements for Medicare pre-approval of settlements are met, and to determine whether to issue appropriate notice to the parties (see paragraph 11 and 12, below).

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8. Evaluation.

1. General. When presented with a settlement, the DD shall review the application and determine whether, considering all of the circumstances, including where appropriate, the probability of success if the case were formally litigated, the amount is adequate. If the DD has any questions regarding the adequacy of the settlement, particularly in those cases where the claimant is not represented, the DD should personally meet with the claimant or, where this is not possible, discuss the terms of the settlement with the claimant by telephone.
2. Basic Adequacy Criteria. . The criteria for determining the adequacy of a settlement shall include, but not be limited to:
   1. The claimant's age, education and work history;
   2. The degree of the claimant's disability or impairment;
   3. The availability of the type of work the claimant can do; and
   4. The cost and necessity of future medical treatment (where the settlement includes medical benefits).
3. Additional Adequacy Criteria.
   1. If a case is being paid pursuant to a final compensation order, and there are no substantive issues in dispute, an additional criterion must be used to evaluate the adequacy of a settlement, see 20 C.F.R. section 702.243(g). A settlement amount which does not equal the present value of future compensation payments commuted, computed at the discount rate specified below, shall be considered inadequate unless the parties to the settlement show that the amount is adequate.
   2. The probability of the death of the beneficiary before the expiration of the period during which he or she is entitled to compensation shall be determined according to the most current United States Life Table, as developed by the United States Department of Health and Human Services, which shall be updated from time to time.
   3. The discount rate shall be equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last auction of 52 weeks U.S. Treasury Bills settled immediately prior to the date of the submission of the settlement application. Effective December 21, 2000, the U.S. Treasury discontinued the sale of 52 week U.S. Treasury Bills. The weekly average 1-year constant maturity Treasury yield for the calendar week preceding the date of submission of the settlement application may be used in its stead.
   4. For settlements submitted involving injuries covered by section 8(c)(1)-(20) of the Act, where there is only one medical opinion, e.g., the treating physician's, the settlement should not be based on a lower percent than that established by that physician. A proposed settlement for a lesser amount should be considered inadequate and should be rejected.
4. Voluntary Termination of Employment as a Condition of Settlement. Occasionally the parties to a settlement will include in the settlement application a stipulation that the claimant agrees to voluntarily resign from his/her employment as a condition of the settlement. Section 8(i) itself provides the district director with authority to disapprove settlement proposals containing termination of employment language whenever the circumstances of the case support a determination that the termination provision renders the settlement “inadequate” or results from “duress”. However, various factors are problematic toward defending such settlement denials on appeal. Among those are the difficulty on appeal of overcoming the voluntary resignation language when the claimant is represented by counsel, the historical trend toward a more liberal acceptance of settlements in amendments to the statute, and the lack of court cases specifically prohibiting the inclusion of voluntary resignation language in a section 8(i) settlement agreement. Therefore, defense of a denial based solely on termination of employment language is unlikely to prevail on appeal. Evaluation of settlement proposal should take into consideration all of the circumstances of the case as they relate to the statutory provisions of adequacy and lack of duress. Consequently, settlement applications are not to be denied based solely on the fact that they contain termination of employment language.

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9. Decision.

1. Approval. Approval of a settlement is to be done by compensation order. This order must be served within twenty-five days of receipt of the settlement application.
2. Disapproval. The disapproval of a settlement is to be done by a written statement, over the signature of the DD, which fully describes the grounds for the denial. This statement is to be served by certified mail within twenty five days of receipt of the application. The denial statement must advise the parties of their right to request a formal hearing before an ALJ, or to submit an amended application to the DD. If the parties request a formal hearing, the procedures outlined in PM 4-600 are to be followed. At the time of referral for formal hearing, a copy of the written statement denying the settlement is to be transmitted to the OALJ with the pre-hearing statements.
3. Toll the Thirty Day Period. Both the Act, under section 8(i), and the regulations, at 20 C.F.R. section 702.243(b), provide that if the parties are represented by counsel, as defined under 20 C.F.R. section 702.241(h), the settlement shall be deemed approved unless specifically disapproved within thirty days after receipt of a complete application. It is therefore important that all settlement applications be carefully reviewed within the thirty day period and the parties promptly notified by regular mail of any deficiency. The thirty day period provided for in the Act and the regulations does not begin until the deficiency is corrected, 20 C.F.R. section 702.243(b). The notice of deficiency is to specifically suspend the running of the thirty day period.

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10. Calculation of 30 Day Period. The thirty day period for consideration of a settlement application shall be calculated from the day after receipt. If the last day of this period is a holiday or occurs during a weekend, the next business day shall be considered the thirtieth day.

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11. Medicare and Workers' Compensation Medical Payments. Section 1862(b)(2) of the Social Security Act provides that Medicare payments may not be made for any item or service to the extent that payment has been made or can be reasonably expected to be made under a workers' compensation law. The Medicare Secondary Payer Statute (42 U.S.C. sec. 1395y(b)(2)) was enacted in 1980 to prevent the burden of such expenses, which should be paid by other insurance plans, including workers' compensation, from being shifted to Medicare. Pursuant to this statute, in recent years the Centers for Medicare and Medicaid Services (CMS), the federal agency that administers Medicare, has undertaken a comprehensive effort to ensure that Medicare does not pay for expenses covered under a primary payer plan, and to collect money owed to Medicare for the payment of such expenses.

The Medicare Secondary Payer Statute provides, in part, that Medicare may not pay for an individual's medical treatment if payment can "reasonably be expected to be made promptly" under workers' compensation. In such instances, Medicare is the "secondary payer" while the insurance company or some other responsible party remains the "primary payer." This statute further provides that, in the event Medicare does pay such expenses, those expenses shall be paid subject to reimbursement.

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12. Medicare and Section 8(i) Settlement. The private parties must take into consideration Medicare's interests in structuring the settlement. In general, this interest involves ensuring that the parties do not use the terms of the settlement to evade the employer's lawful responsibility for the medical treatment of the employee's work-related injury or illness. If the private parties do not account for Medicare's interests, Medicare may later refuse to cover some, or all, of the claimant's medical expenses for treating his or her work-related injury or illness. The parties may also be sued by the Department of Health and Human Services for improperly shifting medical expenses from the legally liable employer or insurance carrier to Medicare. For these reasons, special attention must be paid to section 8(i) settlement applications submitted for approval which include settlement of medical benefits. Claimants and their representatives should be made aware that settlements under the LHWCA are subject to Medicare requirements in certain cases.

1. Medicare requires pre-approval . of workers' compensation settlements if either one of the following is true.
   1. Any settlement, regardless of amount, if the claimant is currently entitled to Medicare; or
   2. Any settlement greater than $250,000, AND the claimant may reasonably expect to become eligible for Medicare within 30 months of the settlement date.
2. Notice to Claimants and Representatives. The DD has no authority to require the parties to a section 8(i) settlement to obtain Medicare pre-approval, nor to deny the settlement as inadequate absent such pre-approval. The DD's authority extends only to ensuring that a settlement is not "inadequate or procured by duress." However, for the protection of the claimant, who may be unwittingly relying on Medicare to pay all or part of his future work-related medical expenses, it is the duty of the DD to alert the settling parties to Medicare's pre-approval requirements and to the potential loss of Medicare benefits. The DD should encourage the parties to consult with CMS for answers about their legal obligations under Medicare. Therefore, when a settlement application is received in the district office, as a part of the "initial review" of the application by the district director (see paragraph 7, above), the following steps should be taken.
   1. The DD shall review the application to determine if either of the two requirements for Medicare pre-approval of settlements involving medical benefits are applicable (see paragraph 12.a., above).
   2. If it appears that the Medicare pre-approval requirements apply, a copy of the information leaflet "Notice to Claimants and Representatives: Settling Claims" (Exhibit 28, LHWCA PM Ch. 10-300) should be immediately sent to all parties to the settlement, including both the claimant and his representative, and the representative of the employer/carrier. In the case of an unrepresented claimant, the DD should ensure that the claimant understands the consequences of a section 8(i) settlement without Medicare pre-approval, and if he/she still wishes to proceed, extra care should be taken to ensure the adequacy of the medical settlement.
      
      The district office should develop an appropriate cover letter for transmitting the Notice. The cover letter should contain a request that the parties acknowledge having considered Medicare requirements as they may pertain to the settlement. The following language is recommended: "It is requested that the parties review the enclosed Notice and the provisions of the Medicare Secondary Payer Statute, and advise this office within ten days that consideration has been given to Medicare requirements for pre-approval of workers' compensation settlements." A sample cover letter can be found at PM Exhibit 29 (LHWCA PM Ch. 10-300). The district office cannot require the parties to respond to such a request, nor toll the thirty-day period for failure to do so. However, special care must be taken in review of the medical evidence in any application involving medical settlement cases. Failure of the parties to provide the required historical medical treatment information and estimate of need for future medical treatment as required (20 CFR 702.242(a)(7)), constitutes an incomplete application and could result in denial of the application on ground of inadequacy (see paragraph 5.b.(7), above).
3. Referral to OALJ. If the parties to a disapproved settlement request a hearing before an ALJ pursuant to 20 CFR §702.243(c), and the reason for disapproval is inadequacy of the medical settlement, the DD should so indicate on the transmittal letter. A copy of the written statement which was sent to the parties denying the settlement, is to be transmitted to the OALJ with the pre-hearing statements (see paragraph 9.b., above).

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1. Purpose and Scope. This chapter describes the procedures and requirements for processing requests for commutation of benefits under Section 9(g) of the Longshore and Harbor Workers’ Compensation Act (LHWCA) and Section 2(b) of the Defense Base Act (DBA). Under the LHWCA, the DBA, and the implementing regulations, commutation is permitted only for benefits paid to people who are not United States citizens, not United States residents, and not Canadian residents. Additionally, commutation is limited to LHWCA death benefits, DBA death benefits, and DBA benefits for permanent total or permanent partial disability.

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2. Statutory and Regulatory Authority.

1. Statutory Authority.
   
   1. LHWCA Commutations. The 1984 amendments to the LHWCA deleted the section of the Act (former section 14(j)) that provided for commutation of disability benefits. Section 9(g) of the LHWCA limits commutations to death benefits only.
      
      33 U.S.C. § 909(g) If the injury causes death, the compensation therefore shall be known as a death benefit and shall be payable in the amount and to or for the benefit of the persons following…Aliens: Compensation under this chapter [this Act] to aliens not residents (or about to become nonresidents) of the United States or Canada shall be the same in amount as provided for residents, except that dependents in any foreign country shall be limited to surviving wife and child or children, or if there be no surviving wife or child or children, to surviving father or mother whom the employee has supported, either wholly or in part, for the period of one year prior to the date of the injury, and except that the commission [Secretary of Labor] may, at its option or upon the application of the insurance carrier shall, commute all future installments of compensation to be paid to such aliens by paying or causing to be paid to them one-half of the commuted amount of such future installments of compensation as determined by the commission [Secretary of Labor].
      
   2. DBA Commutations. Section 2(b) of the DBA permits commutation of benefits in case of death and for permanent total and permanent partial disability. However, temporary disabilities, no matter how long in duration, are not subject to commutation.
      
      42 U.S.C. § 1652(b) Compensation for permanent total or permanent partial disability under section 8(c) of the Longshoremen's and Harbor Workers' Compensation Act, or for death under this Act to aliens and non-nationals of the United States not residents of the United States or Canada shall be in the same amount as provided for residents, except that dependents in any foreign country shall be limited to surviving wife and child or children, or if there be no surviving wife or child or children, to surviving father or mother whom the employee has supported either wholly or in part, for a period of one year immediately prior to the date of the injury, and except that the Secretary of Labor may, at his option or upon the application of the insurance carrier shall, commute all future installments of compensation to be paid to them one-half of the commuted amount of such future installments of compensation as determined by the Secretary.
      
2. Regultory Authority.
   
   1. 20 C.F.R. § 702.142 - Commutation of payments; aliens not residents or about to become nonresidents.
      1. Pursuant to section 9(g) of the Act, 33 U.S.C. 909(g), compensation paid to aliens not residents, or about to become nonresidents, of the United States or Canada shall be in the same amount as provided for residents except that dependents in any foreign country shall be limited to surviving spouse and child or children, or if there be no surviving spouse or child or children, to surviving father or mother whom the employee has supported, either wholly or in part, for the period of 1 year prior to the date of injury, and except that the Director, OWCP, may, at his option, or upon the application of the insurance carrier he shall, commute all future installments of compensation to be paid to such aliens by paying or causing to be paid to them one-half of the commuted amount of such future installments of compensation as determined by the Director.
      2. Applications for commutation under this section shall be made in writing to the district director having jurisdiction, and forwarded by the district director to the Director, for final action.
      3. Applications for commutations shall be made effective, if approved by the Director, on the date received by the district director, or on a later date if shown to be appropriate on the application.
      4. Commutations shall not be made with respect to a person journeying abroad for a visit who has previously declared an intention to return and has stated a time for returning, nor shall any commutation be made except upon the basis of a compensation order fixing the right of the beneficiary to compensation.
   2. 20 C.F.R. § 704.102 - Commutation of payments to aliens and nonresidents.
      
      Authority to commute payments to aliens and nonnationals who are not residents of the United States and Canada, section 2(b) of the Defense Base Act, 42 U.S.C. 1652(b), though separately stated in this Act, is identical in language to section 9(g) of the Longshoremen's Act. Thus, except for the different statutory citation, the LHWCA regulation at § 702.142 of this subchapter shall apply.

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3. General Provisions.

1. District Director Authority. The District Director (by delegation from the Secretary of Labor and the Director, OWCP under 20 C.F.R. § 1.2(e)) at his or her own option, or upon application by the Employer/Carrier (E/C), may commute benefits. Objection by the claimant is no bar to the execution of the commutation.
2. Formal Hearings. The Office of Administrative Law Judges (OALJ) lacks authority to hear any dispute regarding the Director’s commutation actions and thus, a formal ALJ hearing is neither required nor permitted prior to issuance of a commutation order. Rather, the Secretary has reserved commutation authority to the Director, and the Director’s commutation actions are final. 20 C.F.R. § 702.142(b); Omar v. Al Masar Transportation Co., 46 BRBS 21, 26 (2012).
3. Medical Care. Payment of a commuted lump sum does not relieve the E/C of the responsibility to furnish medical care needed by the injured employee as a result of his work-related injury. (However, the issue of future medical care may be resolved by a section 8(i) settlement agreement. See Procedure Manual 3-501.)
4. Bifurcated Commutation. It is the policy of the DLHWC that commutations will only be considered if all benefits due can be commuted. If there are multiple beneficiaries, all benefits must be commuted at the same time. No attempt will be made to bifurcate the calculation of the commutation to allow for commutation of benefits to one beneficiary if benefits for all beneficiaries cannot be commuted.
5. Temporary Status. Commutations shall not be made with respect to a person journeying abroad for a visit who has previously declared an intention to return and has stated a time for returning. See 20 C.F.R § 702.142(d).

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4. Processing a Request for Commutation.

1. Application from the Employer/Carrier. Consistent with 20 C.F.R § 702.142(b), an application for commutation of benefits must be made in writing.
   
   A claimant and/or the claimant’s authorized representative may not seek commutation of benefits directly from the DLHWC; he/she must contact the E/C to initiate such action. Only the E/C or the Director may initiate commutation.
2. Review by the District Director. Upon receipt, the District Director or his/her designee (Claims Examiner) will review the commutation application to determine if a commutation can be considered.
   
   As outlined in 20 C.F.R. § 702.142(d), a commutation must be based on a Compensation Order that has fixed the right of the beneficiary to compensation. However, in some instances a Compensation Order has not been issued when the request for commutation is received.
   1. If a Compensation Order has not been issued, but signed (and translated if necessary) stipulations are in the file, the District Director may proceed with referral to the National Office as outlined in paragraph 4c. Thus, only one Compensation Order is needed (after the commutation has been calculated). It is unnecessary to issue one Compensation Order prior to the referral and another after the approval and calculation have been completed.
   2. If signed stipulations are not received before or at the same time the commutation is requested, or if additional documentation is needed, the District Director will advise the E/C to submit the signed stipulations or the necessary documentation.
   3. If the request for commutation is denied, the District Director will inform the E/C and provide the rationale for the denial. These cases are not referred to the DLHWC Director.
3. Referral to the DLHWC Director. Once the District Director determines that a commutation can be considered, he/she will prepare a memorandum for the DLHWC Director recommending approval.
   
   This memorandum, which is to be made part of the case file, must include the full name(s) and birth date(s) of each beneficiary, the nature of the injury and the weekly compensation rate. The case file should contain the necessary supporting documentation, e.g., marriage and birth certificates for beneficiaries, evidence of the average weekly wage that supports the stated compensation rate, etc.
   
   In cases where the supporting documentation is in a language other than English, a translated version of the referenced document must be provided.
4. Director’s Review. Upon receipt of the memorandum from the District Director, the DLHWC Director (or his/her designee) will review the case file documentation.
   1. If the Director concurs that the evidence in the file supports commutation of benefits, the commuted amount will be calculated. The memorandum documenting the calculation will be placed in the case file, and the District Director will be notified.
      
      The District Director will then issue a Compensation Order for the commuted benefits. The compensation order should contain a complete finding of facts, including the following:
      1. The injury or death is covered under the Defense Base Act, 42 U.S.C. § 1651.
      2. An employer/employee relationship existed as supported by employment contract, statement of employer/supervisor, or other documentation establishing relationship.
      3. A description of how and where the injury or death occurred and how it arose out of and/or occurred in the course of employment.
      4. Average weekly wage.
      5. If permanent disability is claimed, the Maximum Medical Improvement date and the initial compensation rate.
      6. If death benefits are claimed, the name, relationship, date of birth, and residency of each beneficiary.
      7. The initial benefit rate for each beneficiary.
      8. The total amount of the commutation, and in case of death, the allocation of the award for each beneficiary.
      9. The effective date of the commutation and a statement that “All benefits accrued prior to this date must be paid in full.”
   2. If the Director does not concur with the recommendation for commutation, a memorandum declining the commutation request and outlining the deficiencies will be placed in the case file, and the District Director will be notified. The District Director will notify the E/C of the deficiencies and request additional information as necessary. Once the deficiencies are clarified, the District Director may resubmit the commutation to the Director for consideration.
   3. The Director may also provisionally approve a commutation in instances where the essential elements necessary for the commutation are available, but further documentation is needed. For instance, if a birth certificate is missing for a beneficiary, the commutation can be provisionally approved pending receipt of the birth certificate. Provisional approvals such as this should be considered only when the deficiency can be addressed by receipt of a specific document. Should the requested documentation result in a change in the commuted amount(s), resubmission of the commutation to the Director is required.

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5. Commutation Calculation. Commutations of all future installments of compensation shall be in the amount of one-half of the commuted future installments.

1. Effective Date. 20 C.F.R § 702.142(c) provides that applications for commutations shall be made effective on the date received by the District Director but that a later date may be used if shown to be appropriate on the application. When processing commutations, the date “received” is the date of the memorandum from the DLHWC Director (or his/her designee) to the District Director approving the commutation.
   
   All benefits accrued prior to this effective date must be paid by the E/C at the full rate, without commutation. Benefits paid after this effective date may be credited against the commuted amount.
2. Discount Rate. The discount rate to be used shall be equal to the coupon issue yield equivalent (as determined by the Secretary of Treasury) of the average accepted auction price for the last auction of 52 week U.S. Treasury Bills settled immediately prior to the date of submission of the commutation application, rounded to the nearest one-half percent. The discount rate used is the same as the discount rate used for settlement calculations. See 20 C.F.R. § 702.243(g).
3. Adjustments under §10(f) of the LHWCA. Annual adjustments, effective October 1st of each year for permanent total disability and death benefit calculations, are considered in the commutation calculation. Future §10(f) increases are also considered; however, since future rates have not yet been determined, the §10(f) rate in effect during the year of the commutation is the rate used for the remainder of the years (as determined by life expectancy). See Logara v. Jackson Engineering Co., 35 BRBS 83 (2001).
4. Life Expectancy. Effective March 23, 2015, all calculations for commutations are to be made using the life expectancy tables developed by the World Health Organization (WHO). The DLHWC uses the data provided in these tables to determine life expectancy based on a beneficiary’s country of residence, gender and age (as of the date of commutation).
   
   Note - Prior to the effective date above, the DLHWC used the United States Life Tables produced by the United States Department of Health and Human Services for commutation calculations, borrowing from the settlement provisions outlined in 20 C.F.R. 702.243(g). However, the DLHWC has determined that life expectancy tables specific to the United States are not the best indicator of life expectancy in foreign countries and that the tables provided by the WHO provide a more accurate determination of life expectancy. See LHWCA Transmittal 15-01 for more background regarding this updated policy.
5. Dependents. Under the DBA, dependents in any foreign country are limited to a surviving wife and child or children, or if there is no surviving wife or child or children, to a surviving father or mother whom the employee has supported either wholly or in part, for a period of one year immediately prior to the date of the injury or death. Benefits for children are calculated to end at the age of 18, unless there is proof at the time of the commutation that the child is a student as defined in the LHWCA. See 42 U.S.C. § 1652(b).
6. Credit. In some cases, the E/C paying the commutation will request a credit against its commutation liability for monies paid to the claimant or beneficiaries. The Act allows the E/C to take credit only in specifically defined circumstances:
   1. Under §33(f), if the person entitled to compensation institutes proceedings against a third party on account of the same injury for which compensation is payable under the Act and receives compensation, the E/C may offset any third party recovery against its liability under the Act.
   2. Under §14(j), if the person entitled to compensation receives advance payments of compensation from the E/C, the E/C is entitled to offset those advance payments against its liability under the Act.
   3. Under §3(e), if the person entitled to compensation receives compensation for the same injury or death under any other workers’ compensation statute, the E/C is entitled to offset those payments against its liability under the Act. See Lee v. Boeing Co., Inc., 7 F.Supp. 2d 617 (D. Md. 1998).
   The burden of establishing the credit is on the E/C claiming it. Reviewing courts have adhered strictly to the letter of the Act’s credit provisions in characterizing various payments made to foreign nationals. For instance, in some cultures, a criminal offender may make unsolicited payments to a victim or the victim’s family as a form of apology or retribution. Such payments may not be construed as credits under the Act.

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1. Purpose and Scope. This Chapter addresses situations in which an employee is injured during the course of his/her employment and the injury is caused by the action or the negligence of a third party. The DD/CE should identify these cases as early as possible in the adjudication process so as to simplify procedures and insure that all the parties in interest are aware of their responsibilities.

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2. Basic Procedures. When the CE first becomes aware of the existence of a third party claim or civil suit, the injured employee is to be notified via Form LS-526, Letter to Employee Explaining Need for Employer's Approval (Exhibit 43, PM 10-200). A diary action in the LCMS is required when this form is sent. In addition, four copies of Form LS-33, Approval of Compromise of Third Person Cause of Action (Exhibit 10, PM 10-200) are to be attached to Form LS-526. Receipt of the properly executed Form LS-33 requires a diary action in the LCMS.

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3. Employee Options. When an employee sustains an occupational injury that is caused by the negligence of a third party, the employee need not elect between a compensation remedy and a third party civil suit. Employees may do one of the following:

1. Employees may elect to file a claim for compensation; or
2. Employees may file a civil suit against the third party for negligence; or
3. Employees may elect to pursue both actions simultaneously.

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4. Purpose of Section 33. Section 33 is designed to prevent injured employees from receiving benefits under the Act and proceeds from a successful negligence suit, in effect double recovery for the same injury. It is also designed to insure that the subrogation interests of ECs and the Special Fund are fully protected. It is also designed to protect the injured worker when he/she settles a third party negligence action for an amount which is less than he/she would otherwise be entitled to receive in compensation benefits.

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5. Section 33 Time Limits. An employee must pursue any third party action against the negligent party within six months of accepting a compensation award or the right is assigned to the employer. Award, as used in this instance, means compensation order. The employer then has ninety days to commence a third party action. If the employer does not institute an action during this ninety day period the right reverts to the employee.

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6. Distribution of Third Party Action Proceeds. The EC has first dollar recovery rights against the "net amount" (i.e. the gross amount less reasonable attorneys' fees and expenses reasonably incurred) recovered in a third party action. If the recovery is less than the compensation benefits due, the employee is entitled to be paid the difference by the EC. However, if the third party recovery is greater than the benefits due, the EC is not only entitled to credit the recovery against past payments/obligations but also against any future liability for which it may be responsible. The employee is entitled to retain all the proceeds remaining from the third party recovery after the past and future credits, noted previously, have been applied.

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7. Medical Benefits. In addition to a credit for all compensation payments, the EC is entitled to a credit for all past and future medical payments made under section 7 of the Act. Thus, the injured employee is responsible for the payment of his/her medical expenses as long as proceeds remain from the third party action. The employee should be advised to submit these paid medical bills to the EC so that appropriate reductions to the remaining third party proceeds can be made.

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8. Rights of the Special Fund. To insure that claimants will continue to receive SF benefits, the parties of interest must submit form LS-33 for the N/O review and the Director's signature.

In addition to the LS-33, a statement outlining the specifics of the distribution must be furnished to include:

Gross Recovery

Attorney Fees

Costs and Expenses

Employer/Carrier lien (as agreed)

20 Percent of Gross Recovery (claimant's share as allowed by the Special Fund)

Special Fund Lien(taken after claimant's share is determined)

Any remaining balance will be applied as a credit to the claimant's future compensation.

Section 33(g)(3) of the Act specifically provides the Special Fund with a "lien upon the proceeds of any settlement obtained from or judgment rendered against a third person" whenever any funds have been disbursed under section 44. However, the EC retains first dollar recovery rights which must be satisfied before the Special Fund will assert its lien. Negotiations on behalf of the Special Fund will be conducted by the Director, DLHWC. Therefore, any questions raised by the parties in interest regarding the position of the Special Fund in any third party case should be referred directly to the NO. Due to the complexity of such negotiations, each case will be individually reviewed by the Director before a determination is made.

Please refer to Waganer v. Alabama Dry Dock and Shipbuilding Co., 12 BRBS 582 (1980), (LHWCA CIRCULAR 80-14, August 21, 1980, a copy of which may be obtained from the National Office if needed), for guidance on how to calculate deficiency compensation in cases being paid under section 10(h) of the Act. The Director, DLHWC, must execute Form LS-33 in all Special Fund cases involving third party settlements.

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9. Consent. Section 33(g)(1) of the Act requires the written approval of the employer and carrier for any settlement which is less than the amount to which the employee would be entitled to under the Act. If written approval is not received before the settlement, the employee's right to future compensation is terminated. Form LS-33 is used to obtain this written approval. Reference the Supreme Court's decision in Cowart v. Nicklos Drilling, 26 BRBS 49(CRT)(1992). This decision clearly outlines the obligations of the claimant.

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10. Third Party Action Against a Vessel. Under section 5(b) of the Act, a claimant may file a third party action against a vessel. If the claimant's employer is also the vessel owner, the claimant can sue the employer for negligence and also collect compensation benefits from the employer. Jones and Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523 (1983). However, if the claimant is employed by the vessel to provide stevedoring services, no third party action is permitted if the injury is caused by the negligence of persons providing stevedoring services to the vessel. In addition, no third party action is permitted for employees hired to provide ship building, repairing or breaking services if the employer is the "owner, owner pro hac vice, agent, operator, or charterer of the vessel."

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11. Regulatory Requirements. Section 702.281 of the regulations requires that the employer and the DD are to be promptly notified whenever any action is taken against a third party for the injuries sustained by the employee. Any settlement and its conditions are to be reported regardless of the amount. In addition, as described above, written approval must be obtained from the employer whenever the third party settlement amount is less than the compensation due. Failure to notify the employer and obtain written approval when required relieves the EC of the liability for future compensation. It is imperative that the claimant and his/her representative be aware of their obligations under sections 33(g)(1) and (2) of the Act.

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1. Purpose and Scope. This Chapter provides procedures for reporting instances of known or suspected fraud or abuse under the Longshore and Harbor Workers' Compensation Act (LHWCA) and its extensions. Instances of known or suspected fraud or abuse are to be investigated by the Office of Workers' Compensation Programs (OWCP) and reported to the Regional Solicitor if the allegations pertain to program matters in which private sector or Special Fund monies are involved. If the allegations pertain to Federal employees or contractors, if paid from Government funds, they are to be reported in accordance with the procedures contained in section 8900 of the ESA Manual of Administration.

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2. Policy. The detection and prevention of fraud or abuse in the Longshore Program is of the highest priority. Complaints of alleged fraud or abuse may be brought to the attention of the DO by Employers, Carriers, or other parties. All OWCP personnel are responsible for reporting actual or suspected fraud or abuse, through appropriate channels to the Department of Labor.

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3. Statutory Provisions. Section 31(a)(1) of the Act provides that any claimant or representative of a claimant who knowingly and willfully makes a false statement or representation for the purpose of obtaining a benefit or payment under the Act shall be guilty of a felony, and on conviction thereof shall be punished by a fine not to exceed $10,000, by imprisonment not to exceed five years, or by both.

Under section 31(c), the same penalties apply to an employer, his duly authorized agent, or an employee of an insurance carrier who knowingly and willfully makes a false statement or representation for the purpose of reducing, denying, or terminating benefits to an injured employee, or his dependents . . . .

Other provisions pertaining to fraud or abuse include sections 15(a), 28(e) and 38(a) and (b) of the Act.

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4. Types of Fraud or Abuse Not Covered by These Procedures. Types of Fraud or Abuse Not Covered by These Procedures. The procedures contained in this chapter do not apply to known or suspected instances of fraud, abuse, or criminal conduct by or involving OWCP personnel, contractors, or under the War Hazards Compensation Act which involve the payment of government funds. These are to be reported in accordance with the procedures contained in section 8900 of the ESA Manual of Administration.

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5. Procedures.

1. Receipt of Report or Information of Suspected Fraud or Abuse.
   1. A suspected instance of fraud or abuse in a LHWCA claim will, in general, be reported to the CE or DD by the Employer or Insurance Carrier. The report may be made verbally or by letter. If reported verbally, the informant should be requested to submit a written statement of the suspected violation and to provide supporting information or documents that led to the discovery or suspicion.
   2. Instances of alleged fraud or abuse in LHWCA claims may also come to light in the course of formal hearings before an Administrative Law Judge, who may, in the Decision and Order, refer the matter to the OWCP for appropriate action on the information. Such referrals should be carefully considered by the DD and RD, and should be investigated if warranted by the facts.
2. Action by Person Receiving Complaint. If the verbal or written report is made to a CE, he or she will immediately prepare a memorandum for the DD, describing in detail the known or suspected violation. If additional investigation or material is needed to support the allegation, it should be indicated if the person making the complaint will conduct the investigation or provide any additional material that may be needed.
3. Action by the DDUpon receipt of the complaint, the DD will review the information or evidence (including the case file) and will forward the complaint to the RD by narrative memorandum which shall include a summary of the complaint and other relevant information from the case file and the DD's recommendation regarding prosecution and the kinds of additional investigation, if any, that may be needed to resolve the matter. The RD will then refer the matter to the Regional Solicitor for review and concurrence of the proposed actions and guidance regarding any additional investigation which may be appropriate. The Regional Solicitor will refer the matter back to the RD for implementation of the proposed investigation by the DD if the matter is not in posture for referral to the U.S. Attorney. The DD will direct or conduct the investigation as follows:
   1. If the complaint was made by the employer/carrier, they should be requested to furnish whatever evidence is needed to support the complaint so that a decision can be reached regarding referral for prosecution.
   2. If the employer/carrier will not provide the needed evidence, or if the complaint was made by a person known to the claimant who is not willing or is unable to furnish the necessary evidence to support the complaint, all relevant information should be obtained from this person and the DD should attempt to obtain the needed evidence as outlined in subparagraphs d and e, below. If a surveillance investigation of a claimant is needed to support the complaint, or some other form of on site visit is needed, the use of Wage and Hour investigators or FBI agents should be considered. See subparagraphs e(5) and e(6), below.
4. Kinds of Evidence RequiredThe kinds of evidence needed to support the fraud allegation will differ from case to case depending on the nature of the allegation. It is important, however, that as much evidence as possible be obtained in each case so that a successful prosecution will be possible. The listing below identifies some of the kinds of evidence that should be obtained to support prosecution of a fraud allegation.
   1. A completed Form LS-200, Report of Earnings, or similar sworn wage statement, covering the period of any alleged employment while in receipt of compensation benefits. It is important that this evidence be obtained in every case of this nature, if possible. The DD, employer/carrier, or National Office for those cases being paid benefits from the Special Fund, may request the claimant to complete an LS-200.
   2. Payroll records covering the period of any alleged employment while in receipt of compensation benefits.
   3. Written statements, interrogatories, or depositions from individuals having knowledge of the alleged fraud or of a claimant's activities which relate to the fraud allegation.
   4. Income tax returns.
   5. Reports from private investigative agencies which may include surveillance films of the claimant.
   6. Reports from credit reporting agencies.
   7. Sworn testimony given at administrative hearings.
   8. Documentary evidence submitted at administrative hearings.
   9. Material contained in other Federal compensation, State compensation, or insurance case files.
   10. Medical records and/or medical receipts.
5. Methods of Obtaining Information. The following methods may be used to obtain the information or evidence needed to properly evaluate a complaint:
   1. Written correspondence.
   2. Telephone calls.
   3. Subpoenas. Subpoenas may be issued by the DD to obtain medical records, payroll records or other documentary evidence.
   4. Informal conferences. Conferences may be held to obtain information and material. If an overpayment of compensation exists, a conference may also be appropriate to determine whether and how the overpayment will be recovered.
   5. Wage and Hour Investigators. If an on site visit is needed to obtain evidence, or to conduct a surveillance of a claimant, the use of Wage and Hour Investigators should be considered. The RD for OWCP should request this kind of assistance directly from the RD for the Wage and Hour Division.
   6. Federal Bureau of Investigation Agents. Depending on the nature of the complaint, or the inability to obtain information or evidence by other means, the use of FBI agents may be considered. If it is not possible to obtain the needed evidence in any other way, the matter should be referred to the Regional Solicitor who will determine if a request should be made to the U.S. Attorney's Office for FBI assistance in the investigation pursuant to section 31(a)(2) of the Act. All such referrals to the U.S. Attorney's Office shall be made by the Regional Solicitor.
6. Action at Conclusion of Investigation. After the investigation has been concluded, and all relevant evidence has been obtained, the DD will refer the matter to the RD by narrative memorandum which shall include a summary of the facts obtained from the investigation, along with copies of all evidence obtained, and his/her recommendation regarding whether the facts warrant referral to the U.S. Attorney for prosecution or whether no basis exists for prosecution and the investigative file should be closed. The matter will then be referred by the RD to the Regional Solicitor for review and concurrence/rejection of the proposed recommendation. If the facts support prosecution, the Regional Solicitor will refer the matter to the U.S. Attorney for appropriate action. If he/she concurs with a recommendation that no basis exists for prosecution, the investigative file may be closed.
7. Maintenance of Fraud Complaint and Other Evidence.
   1. All original information, documentation, and evidence concerning the known or suspected instance of fraud or abuse is to be placed in a manila folder, separate from the case record, and in a secure file cabinet. These investigative files are to be maintained alphabetically by the name of each individual.
   2. Any reports or confidential information gathered by an agency such as the Federal Bureau of Investigation concerning claimants should be maintained in these files. Such information remains the property of that agency and is subject at all times to its control.
   3. Records containing information gathered in connection with investigations concerning possible violation of federal law are to be maintained in a separate system of records, established by DOL/ESA 26. Records maintained in connection with criminal investigations are exempt from disclosure under the Freedom of Information Act, pursuant to section 3(j)(2) of the Privacy Act. See 55 Federal Register 7126-7127 (February 28,1990). Access to these records should be limited to those OWCP and SOL personnel whose official duties require such access.
   4. Any request for the disclosure of information in these files should be referred to the Director, DLHWC. Either the Regional Solicitor or the Associate Solicitor for Employee Benefits must also be contacted before any disclosure is made.
8. Subpoenas Served on OWCP Personnel. Occasionally, subpoenas will be served on individuals by name and will require the appearance of the named individual as custodian of a case file about whom there is also an investigative file of the type specified in subparagraph 5g, above. Usually, the individual subpoenaed will be the DD, but it could be a CE or any other person who might have access to the case record. Anyone receiving or being served a subpoena should refer it to the DD for immediate referral to the Regional Solicitor for guidance in releasing the information requested. Any subpoena served on a National Office employee should be immediately referred to the Associate Solicitor for Employee Benefits to determine whether the procedures set forth at 29 C.F.R. section 2.20, et seq., have been complied with.

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