Laskey v. S.D. Warren Co.
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2001 ME 103
Docket:	WCB-00-166
Argued:	May 15, 2001
Decided:	July 11, 2001

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.


									

GEORGE M. LASKEY

v.

S.D. WARREN COMPANY

ALEXANDER, J.

	[¶1]  S.D. Warren Company appeals from a decision of a Hearing
Officer of the Workers' Compensation Board denying its petition for review
of incapacity.  The key issues on appeal arise from the action of the Hearing
Officer disqualifying an independent medical examiner (IME) who had
examined the employee and reported on his condition.
	[¶2]  S.D. Warren contends that:  (1) the employee's objection to the
IME was untimely; (2) the Hearing Officer lacked authority to disqualify an
IME because qualification and disqualification of IMEs is a Board function;
(3) the Hearing Officer misinterpreted the conflict of interest sections of
the statute which are limited to case­p;specific conflicts; and (4) the Hearing
Officer erred in denying S.D. Warren's petition for review of incapacity. 
There is no error in the Hearing Officer's interpretations of law or rulings
on the issues.  We affirm the decision.

I.  APPOINTMENT AND CONFLICT OF INTEREST RULES

	[¶3]  The appointment and conflict of interest sections of the
independent medical examiner (IME) statute, 39-A M.R.S.A. § 312 (2001),
and a Workers' Compensation Board regulation governing conflicts of
interest, Me. W.C.B. Rule, ch. 4, § 2(6), are important to understand both
the facts and legal issues in this case.
	[¶4]  Appointment and establishment of a roster of IMEs is governed
by 39-A M.R.S.A. § 312(1):

	1. Examiner system.  The board shall develop and
implement an independent medical examiner system consistent
with the requirements of this section.  As part of this system,
the board shall, in the exercise of its discretion, create,
maintain and periodically validate a list of not more than 50
health care providers that it finds to be the most qualified and
to be highly experienced and competent in their specific fields
of expertise and in the treatment of work-related injuries to
serve as independent medical examiners from each of the
health care specialties that the board finds most commonly used
by injured employees.  The board shall establish a fee schedule
for services rendered by independent medical examiners and
adopt any rules considered necessary to effectuate the purposes
of this section.

39-A M.R.S.A. § 312(1) (2001).

	[¶5]  Qualifications related to conflict of interest are addressed in
39­p;A M.R.S.A. § 312(2) which provides, in pertinent part, that:

A physician who has examined an employee at the request of an
insurance company, employer or employee in accordance with
section 207[{1}] during the previous 52 weeks is not eligible to
serve as an independent medical examiner.

39-A M.R.S.A. § 312(2) (2001).
	[¶6]  A separate sentence in section 312(2) provides that an IME will
be disqualified from a particular case if the IME has treated the individual
employee.{2}
	[¶7]  Under the rulemaking authority stated in section 312(1), the
Workers' Compensation Board adopted Me. W.C.B. Rule, ch. 4, § 2(6)
governing disclosure and conflicts of interest by IMEs.  Section 2(6) states:

6.  Disqualification and Disclosure in Individual Cases.

A.  The independent medical examiner in a case may not be the
employee's treating health care provider and may not have
treated the employee with respect to the injury for which the
claim is being made or benefits are being paid.

B.  A physician who has examined the employee at the request of
an insurance company, employer, or employee in accordance
with 39-A M.R.S.A. § 207 during the previous 52 weeks is not
eligible to serve as the independent medical examiner.[{3}]

C.  The independent medical examiner must disclose potential
conflicts of interest that may result from a relationship(s) with
industry, insurance companies, and labor groups.  A potential
conflict of interest exists when the examiner, or someone in
their immediate family, receives something of value from one of
these groups in the form of an equity position, royalties,
consultantship, funding by a research grant, or payment for
some other service.  If the independent medical examiner
performs equivalent examinations as an employee of another
organization, potential conflicts of interest may arise from that
organization's contracts with industry, insurance companies,
and labor groups.  The Deputy Director of Dispute Resolution
shall determine whether any conflict of interest is sufficiently
material as to require disqualification in the event of initial
disclosure.  In the event an undisclosed conflict of interest is
revealed during the hearing process, the hearing officer may
disqualify the independent medical examiner and order a new
examiner which shall be assigned in accordance to this rule.

Me. W.C.B. Rule, ch. 4, § 2(6).

II.  CASE HISTORY

	[¶8]  George M. Laskey suffered a work-related injury while employed
by S.D. Warren in 1984.  Since then, he has received partial incapacity
benefits.  S.D. Warren filed a petition for review in 1998, contending that
Laskey's work-related incapacity had diminished or ended.
	[¶9]  At S.D. Warren's request, the Board appointed Stewart Russell as
the IME.  The IME examination took place on March 11, 1999.  Dr. Russell
opined that Laskey's 1984 injury had resolved and that his ongoing
incapacity is unrelated to that incident.
	[¶10]  In May 1999, Laskey sent a letter to the Deputy Director of
Medical/Rehabilitation Services of the Board contending that Dr. Russell had
a conflict of interest pursuant to Me. W.C.B. Rule, ch. 4, § 2(6)(C).  The
Deputy Director referred the issue to the Hearing Officer.
	[¶11]  At Laskey's request, the Hearing Officer ordered a deposition of
Dr. Russell pursuant to Board Rule, ch. 4, § 3(6), which provides:  "Any party
may set a deposition of the independent medical examiner prior to the
hearing or subsequent to the hearing with permission of the hearing
officer."  Me. W.C.B. Rule, ch. 4, § 3(6).  
	[¶12]  Prior to the deposition, Laskey posed several questions through
interrogatories seeking information regarding Dr. Russell's industry ties and
examinations in workers' compensation proceedings in the preceding fifty-
two weeks.  Dr. Russell refused to answer the interrogatories, stating at his
deposition that the interrogatories were:  "a waste of my time, and I have
more important things to do with my time than that, and so does my staff."
	[¶13]  Dr. Russell was deposed in August 1999.  General answers given
by Dr. Russell at his deposition indicated that: (i) in the fifty-two weeks prior
to the examination of Laskey, Dr. Russell performed, on average, between
ten and twelve medical examinations per week; (ii) between 90% and 95%
were section 207{4} examinations; and (iii) 95% of those examinations were
for "insurance companies, employers or defense counsel."  Dr. Russell
testified that he charges $850 per examination, on average, and earns
roughly $240,000 per year from medical exams.{5}   In addition, Dr. Russell
testified that he earns roughly $90,000 per year treating employees and
patients as medical director of the occupational health clinic at Goodall
Hospital in Sanford.  Dr. Russell also testified that he has acted as a
consultant to five significant southern Maine employers.
	[¶14]  Based on this record, the Hearing Officer disqualified
Dr. Russell for a conflict of interest, stating the following findings and
conclusions:

	9. A potential conflict of interest is present when the
examiner receives something of value from his/her relationship
with industry, insurance companies or labor groups in the form
of equity positions, royalties, consultantships or payment for
other services.  W.C.B., Board Chapter 4, Section 2, §6 (C).

	10. Based upon the deposition of Dr. Russell, I conclude
that he had several consultantships with different Employers
during the 52 week period prior to the examination for which
he received payment (Cyro, Merck, Fiber Materials, Woban
Projects, Hussey Seeding{6}.)  He also was the medical director of
the occupational health clinic at Goodall Hospital, treating both
Employees and patients.

	In addition Dr. Russell indicated that approximately, 75%
of his income came from § 207 exams, approximately 90%-95%
of which were requested by insurance companies, employers or
defense counsel. 
 
	11. Based upon the facts noted above, particularly the
percentage of work done, and moneys received, from insurance
carriers, defense counsel and Employers, I conclude that Dr.
Russell has a 'conflict of interest' and should not have been
assigned as a §312 examiner in this matter.

	12.  Board rules give the hearing officer authority to assign
a new examiner.  I decline to do that in this case without some
employer input.  If the Employer decides it would like another
§312 exam, as opposed to a §207 exam, it should refile its
Petition and request an appointment of an examiner. . . .

	[¶15]  S.D. Warren then requested further findings directed to the
timeliness of Laskey's objection and the appropriateness of focusing on
general industry relationships instead of case­p;specific conflicts.  The
Hearing Officer denied the employer's motion for further findings of fact,
stating:

I note that the employee's objection to Dr. Russell was made in
early May, after hearing in this matter but well before the
deposition of Dr. Russell. . . .  I find that the facts which support
the employee's objection were made available during
Dr. Russell's deposition.  I find that the employer had ample
notice that this issue would be raised in the deposition and
would be an issue in the resolution of the case.  Because the
factual basis for the employee's conflict objection was made
available only at deposition, I find that the objection was not
untimely.

. . . . 

The Board's rules clearly give the hearing officer a standard to
apply, in any individual case, to determine if there is an
unacceptable conflict.  That standard is not limited to an
examination of the relationship between the parties and the
§312 doctor.  The Board could have written the rule that way,
but it did not.  Instead, the standard chosen is broad and
requires an examination of the totality of the doctor's
relationships with 'industry, insurance companies and labor
groups.'

The Hearing Officer referred the issue to the full Board for appellate review
pursuant to 39-A M.R.S.A. § 320 (2001).  Section 320 authorizes full Board
review of a Hearing Officer's decision which "involves an issue that is of
significance to the operation of the workers' compensation system."  The
Board denied the request to address the issue and interpret its rule.  S.D.
Warren then brought this appeal pursuant to 39-A M.R.S.A. § 322 (2001).

III.  DISCUSSION

	[¶16]  There are two provisions in the Workers' Compensation Law
governing medical examinations:  (1) 39-A M.R.S.A. § 207 (2001) is the
vehicle for ordinary, nonindependent, medical examinations for the
purposes of litigation;{7} and (2) 39-A M.R.S.A. § 312 (2001) provides for
independent medical examinations.{8} 
	[¶17]  The IME's opinion is binding in cases when the parties agree to
the selection of the IME.  In cases when the parties do not agree, the Board
may appoint an IME, and is required to adopt the IME's findings in the
absence of clear and convincing evidence to the contrary.  39-A M.R.S.A.
§§ 312(3) & (7) (2001).
	[¶18]  Because of the significance of the IME's role, independence,
integrity, and absence of conflict of interest are important.  Board Rule 4,
§ 2(6)(C) attempts to support such independence, integrity, and absence of
conflict of interest.  The Hearing Officer's findings regarding Dr. Russell's
conflict of interest are amply supported in the record.  The issue is not the
findings of conflict of interest, but the process that resulted in Dr. Russell's
disqualification.
	[¶19]  S.D. Warren contends that the employee's conflict of interest
objection was untimely; that the objection could have, and should have, been
made during the roughly two-month period subsequent to Dr. Russell's
appointment and prior to the examination.  S.D. Warren relies, in part, on
Board Rule, ch. 4, § 2(3), which provides:  "If a particular provider on the
independent medical examiner list is precluded by rule or statute from
acting as an independent medical examiner in the parties' case, the parties
should notify the Board prior to the selection process."  Me. W.C.B. Rule,
ch. 4 § 2(3).  In this case, the Hearing Officer found that the grounds for
disqualification were not known until the time of the deposition.  Implicit in
the Hearing Officer's decision was a determination that Dr. Russell violated
Me. W.C.B. Rule, ch. 4, § 2(6)(c) by failing to disclose his conflict of interest
in a timely manner.
	[¶20]  Subsection 2(6) provides:

The Deputy Director of Dispute Resolution shall determine
whether any conflict of interest is sufficiently material as to
require disqualification in the event of initial disclosure.  In the
event an undisclosed conflict of interest is revealed during the
hearing process, the hearing officer may disqualify the
independent medical examiner and order a new examiner
which shall be assigned in accordance to this rule.

Me. W.C.B. Rule, ch. 4 § 2(6)(C).  This part of the rule plainly envisions the
possibility of an "undisclosed conflict of interest" being "revealed during the
hearing process."  Id.  The Hearing Officer did not err in determining that
Laskey's objection to the IME was presented in a timely manner.
	[¶21]  On the merits of the disqualification, S.D. Warren makes two
arguments.  First, S.D. Warren contends that the Hearing Officer
misinterpreted the Board's conflict of interest rule.  Second, S.D. Warren
contends that, if the Hearing Officer's interpretation of the conflict of
interest rule is correct, the rule is inconsistent with the mandate of section
312 and is, therefore, invalid.  S.D. Warren contends that the plain language
of the conflict of interest rule permits a disqualification if the IME has a
relationship with the specific employer or employee in a case, but does not
permit the disqualification of IMEs based on the IME's connections with the
insurance industry as a whole.
	[¶22]  Subsection 6 can be divided into its component parts.  The first
sentence provides:

The independent medical examiner must disclose potential
conflicts of interest that may result from a relationship(s) with
industry, insurance companies, and labor groups.  

This sentence requires the IME to disclose relationships with "industry,
insurance companies, and labor groups."  Unlike other parts of the rule, this
language refers to the industry at large rather than specific employers,
insurers, or labor groups.
	[¶23]  The second sentence makes this reference more clear:

A potential conflict of interest exists when the examiner, or
someone in their immediate family, receives something of value
from one of these groups in the form of an equity position,
royalties, consultantship, funding by a research grant, or
payment for some other service. 

Thus, a conflict of interest is defined very broadly to include the receipt of
something of value from "one of these groups."  
	[¶24]  The third sentence provides:

If the independent medical examiner performs equivalent
examinations as an employee of another organization, potential
conflicts of interest may arise from that organization's contracts
with industry, insurance companies, and labor groups.  

This language provides that a conflict may arise not only if the IME has a
relationship with insurers, employers, or labor groups, but if the IME is an
employee of another organization which has sufficient contacts with these
groups.
	[¶25]  The last two sentences of section 2(6)(C) specify that a Hearing
Officer has the authority to disqualify an IME for these general contacts with
industry if such contacts are not disclosed to the Deputy Director of Dispute
Resolution and come to light during the hearing. 
	[¶26]  Paragraph 2(6)(C) states that a disqualifying conflict of interest
may arise from an IME's work for the insurance industry, employers, or
labor unions, as a whole.  It extends to Dr. Russell's consultantships with
employers.  We cannot say that the Hearing Officer's finding of a conflict of
interest on these previously undisclosed facts was clearly erroneous.
	[¶27]  S.D. Warren also contends that even if the Hearing Officer
correctly interpreted the conflict of interest rule, the rule should be
invalidated because it is inconsistent with the statute.  S.D. Warren relies
primarily on section 312(1), which empowers the Board to create a list of
fifty IMEs and to "periodically validate" that list.  39-A M.R.S.A. § 312(1). 
S.D. Warren contends that by disqualifying Dr. Russell based on a general
relationship with the industry, the Hearing Officer has usurped the authority
of the Workers' Compensation Board to determine which physicians are
qualified to serve as independent examiners.  
	[¶28]  The Legislature intended that the Board select and periodically
evaluate whether IMEs are sufficiently independent to meet the purposes of
the statute.  The Board is free, however, to delegate disqualification
decisions to employees of the Board.  Subsection 152(7) provides:  "The
board has all powers as are necessary to carry out its functions under the
law.  The board may delegate any powers and duties as necessary."  39-A
M.R.S.A. § 152(7) (2001).  Separately, the final sentence of subsection
312(1) provides that:  "The board shall establish a fee schedule for services
rendered by independent medical examiners and adopt any rules
considered necessary to effectuate the purposes of this section."  39-A
M.R.S.A. § 312(1) (emphasis added).  The Board rule promoting the
important objectives of independence and integrity of IMEs is within the
range of authority granted by this legislation.  With this statutory authority,
the Board may also delegate to a Hearing Officer authority to disqualify an
IME when, during the proceeding, it is established that the IME has
previously undisclosed disqualifying contacts with either industry or labor,
as a whole, that create a conflict of interest.  Such a delegation would be
appropriate "to ensure the speedy, efficient, just and inexpensive
disposition of all proceedings under this Act."  39 M.R.S.A. § 152(2) (2001).
	[¶29]  The applicable Board rule provides:  "In the event an
undisclosed conflict of interest is revealed during the hearing process, the
hearing officer may disqualify the independent medical examiner and order
a new examiner [who] shall be assigned in accordance to this rule."  Me.
W.C.B. Rule, ch. 4, § 2(6)(C).  The Hearing Officer interpreted this language
as not requiring the immediate appointment of a new examiner.  The
Hearing Officer ruled:  "Board rules give the hearing officer authority to
assign a new examiner.  I decline to do that in this case without some
employer input.  If the Employer decides it would like another §312 exam,
as opposed to a §207 exam, it should refile its Petition and request an
appointment of an examiner." 
	[¶30]  S.D. Warren contends that even if the Court affirms the Hearing
Officer's decision to disqualify Dr. Russell, the Hearing Officer erred in
denying the petition without (1) appointing another IME, or (2) deciding
the issues based on Dr. Russell's opinion as an ordinary section 207 expert. 
However, the Hearing Officer acted within the bounds of her authority in
deferring the decision to appoint another IME and giving S.D. Warren the
stated options on how it could proceed.  
	[¶31]  S.D. Warren also suggests that because the employee's partial
benefits are based on an average weekly wage that has been adjusted for
inflation in a manner differing from our recent decision in Bernard v. Mead
Publ'g Paper Div., 2001 ME 15, ¶ 16, 765 A.2d 576, 581, S.D. Warren
should be entitled to a new calculation of benefits without an adjustment of
the employee's pre-injury wage.{9}  This issue was not raised in S.D. Warren's
petition for appellate review and cannot be raised now.  See Longtin v. City
of Lewiston, 1998 ME 90, ¶ 5 n.3, 710 A.2d 901, 903 n.3. 
	The entry is:
The decision of the Hearing Officer of the
Workers' Compensation Board is affirmed. 
Remanded to the Workers' Compensation
Board for further proceedings.
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