JERRY D. FLOCK, 
Employee, 
Applicant
v. 
GENERAL ROOFING SYSTEMS,
Employer,
and 
NOT INSURED EMPLOYER,
Insurer,
Defendant(s).

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ERRATA SHEET
DECISION AND ORDER
AWCB Case No(s). 199713636
AWCB Decision No. 99-0220
Filed with AWCB Anchorage, Alaska
on November 2, 1999

We issued a Decision and Order, AWCB Decision No. 99-0220, on this case on November 2, 1999. The decision contained an omission, the result of a clerical error, in the ORDER section on page 55. Although we concluded on pages 43 - 46 that interest would be awarded, this award was inadvertently omitted from the ORDER section. The ORDER section presently has five orders.

Page 55, paragraph #6 should be added to the ORDER section and should read:

Dated at Anchorage, Alaska this 16th day of November, 1999.

ALASKA WORKERS' COMPENSATION BOARD

/s/ Kathleen M. Snow
Kathleen M. Snow,
Designated Chairman

I hereby certify that the foregoing is a full, true and correct copy of the Errata in the matter of JERRY D. FLOCK employee/applicant; v. GENERAL ROOFING SYSTEMS, employer(s) ; uninsured employer/defendant; ;Case No(s). 199713636; dated and filed in the office of the Alaska Workers' Compensation Board in Anchorage, Alaska, this 16 day of Month, Year.

Brady D. Jackson, III, Clerk

JERRY D. FLOCK, 
Employee,
Applicant,
v. 
GENERAL ROOFING SYSTEMS,
(Uninsured)
Employer,
Defendant.

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FINAL
DECISION AND ORDER
AWCB Case No. 199713636
AWCB Decision No. 99-0220
Filed in Anchorage, Alaska
November 2, 1999

On July 27, 1999, we heard Employee’s petition to set aside the parties’ August 26, 1998 Compromise and Release Agreement (C&R), and his claim for continuing medical expenses, interest, penalties, and unfair and frivolous controversion, in Anchorage, Alaska. Employee attended the hearing and represented himself. Ms. Sandra Smart, owner of General Roofing Systems (Employer), appeared at the hearing and represented herself. As discussed more fully below, Employer left the hearing in protest of the Board’s decision allowing Employee to videotape the hearing. We proceeded with the hearing in Employer’s absence.

We kept the record open until on September 13, 1999, to allow sufficient time for Investigator Joireen Cohen to obtain additional documentation, provide proper service on the parties, and to receive the parties’ responses. We closed the record when we next met, September 23, 1999.

1. Did the Board violate Employer’s constitutional right to privacy when it allowed Employee to videotape the hearing?
2. Did the Board err when it proceeded with the hearing on the merits in Employer’s absence? AS 23.30.100.
3. Should we set aside the August 26, 1998 C&R under AS 23.30.012?
4. Is Employee entitled to an award of continuing medical expenses under AS 23.30.095?
5. Is Employee entitled to an award of interest on unpaid medical expenses under 8AAC 45.142?
6. Is Employee entitled to an award of penalties on unpaid medical expenses under AS 23.30.155?
7. Did Employer file unfair or frivolous controversions?
8. Shall we award a penalty against Employer for her failure to timely file updated Compensation Reports as required under AS 23.30.155(c)?

We incorporate by reference the facts set forth in Flock v. General Roofing Systems, AWCB Interlocutory Decision No. 98-0196 (July 29, 1998)(Flock I), and Flock v. General Roofing Systems, AWCB Final Decision No. 98-0245 (September 29, 1998)(Flock II). Nonetheless, we briefly summarize the salient facts.

The Employee was injured on May 27, 1997, when he fell 12-15 feet to the ground through a rotted section of roofing, while working for Employer. Employer was uninsured at the time of Employee’s accident. Alaska National Insurance Company (ANIC) filed a Controversion Notice on June 10, 1997, denied liability for any compensation benefits owed Employee, and stated Employer’s insurance policy lapsed and ANIC was therefore not the insurer at the time of Employee’s injury.

Employer accepted Employee’s claim, and admitted responsibility for compensation benefits and medical expenses related to his May 27, 1997 industrial injury. Employer paid Employee temporary total disability (TTD) benefits, from May 27, 1997 through July 28, 1997. Employer calculated Employee’s TTD rate as a seasonal worker under AS 23.30.220(a)(6), and paid $154.00 per week.¹

On July 29, 1997, Bret Mason, D.O., released Employee to return to work for Employer. Employee testified he returned to full-time work on July 30, 1997, however, he only worked a few weeks between July 30, 1997 and October 29, 1997 due to Employer's lack of projects. Employer suspended TTD benefits from July 30, 1997 through October 29, 1997.

On September 5, 1997, Employee’s physical therapist, Dennis Poirier, noted Employee’s 10-12 hour work days on pitched roofs were increasing his low back pain. Employee testified he ceased working for Employer on October 29, 1997. Employee testified he could not perform his day-to-day work tasks because he was suffering increased pain from his industrial injury.

On January 27, 1998, Employee’s treating physician, Byron Perkins, D.O., released Employee to light sedentary work, with no bending or twisting movements, and denied his release to medium or heavy-duty jobs.² On February 11, 1998, Dr. Perkins completed a medical report which confirmed Employee’s release to light sedentary work only. Employer filed both of Dr. Perkins’ reports with its March 2, 1998 and March 11, 1998 medical summary forms.

On February 13, 1998, Employee signed several of Employer’s release forms, including but not limited to:

1. Employer’s Employment Records Release, addressed to any "Employer, Union Representative or Custodian of Records," and requesting copies of Employee’s employment records;
2. Employer’s Consent to Release Information, addressed to any "Governmental Agency of any Local, State or National Government," and requesting copies of Employee’s unemployment records;
3. Employer’s Medical Release, addressed to any "doctor, hospital, hospital administrator, custodian of medical records or vocational rehabilitation service;"
4. Employer’s Consent to Release Information, addressed to the "Alaska Workers’ Compensation Board, or Workers’ Compensation Agency of any other state," and
5. Employer’s Consent to Release Information, addressed to any "individual, firm, corporation, doctor, hospital and governmental agency of any local, state or national government," for any records pertaining to medical, military, employment, unemployment, insurance, school and education, vocational training and rehabilitation, psychological and psychiatric, alcohol or drug abuse treatments.

Three days later, on February 16, 1998, Eric Carlsen, M.D., assigned a 10 percent PPI rating for Employee’s industrial injury.³ On March 27, 1998, Employer’s independent medical examiner (EIME), Ronald C. Brockman, D.O., assigned a 12 percent PPI rating.⁴ At the April 21, 1998 prehearing, Employer refused to pay the 12 percent PPI benefits assigned by its EIME, but agreed to pay the 10 percent PPI benefits assigned by Dr. Carlsen.⁵

On March 11, 1998, Employer accepted the Rehabilitation Benefits Administrator (RBA) Designee’s determination Employee was eligible for reemployment benefits.⁶ However, Rehabilitation Specialist Williams made the following inquiry of RBA Saltzman:

At the June 2, 1998 prehearing, the parties stipulated to a second independent medical examination (SIME) by Edward Voke, M.D. The parties were instructed to submit their questions for the SIME no later than June 29, 1998.⁸

On June 23, 1998, the parties’ legal counsel put the general terms and conditions of a proposed C&R on the record for the Board’s consideration and approval. However, it was clear to the presiding panel that there was not a "meeting of the minds" between Employee and Employer on several of the terms set forth in the C&R. Therefore, the Board scheduled a second hearing for July 14, 1998, to allow the parties to put the final terms of the C&R on the record, or to proceed with a hearing on the merits.

At the July 14, 1998 hearing, the parties’ legal counsel stated they intended to proceed with a hearing on the merits of the claim. Employee testified he was hired as a full-time employee, and he was therefore entitled to a compensation rate adjustment under AS 23.30.220(a)(4)(A) or (B). Employee testified he previously worked the winter months for Employer, and had no reason to believe he would not work for Employer during the winter of 1997. Employee testified Employer never told him he was hired only as a seasonal employee.

Ms. Smart testified she had a work diary at her office that proved Employee worked as a seasonal employee. The Board ordered Ms. Smart to retrieve the diary during the lunch break, and present it to the Board when the hearing reconvened. When the hearing reconvened, Ms. Smart testified she could not produce the diary because she had forgotten that it had been destroyed in a fire. Upon questioning by the Board, Ms. Smart testified she never discussed with Employee whether he was hired as a full-time or seasonal worker in 1997.⁹ After four hours of testimony, the Board continued the hearing to August 12, 1998, and instructed the parties to bring documentation specifically requested by the Board to the next hearing.¹⁰

The parties next appeared before the Board on August 12, 1998. At that hearing, Employer was represented by legal counsel. Employee, however, represented himself because his attorney withdrew from the case just days before the hearing.¹¹ The parties presented the Board with a signed C&R. Employee requested we approve the C&R. Employee testified Employer consistently admitted liability for, and never controverted his entitlement to, compensation benefits and medical expenses related to his industrial injury. Employee testified Employer nonetheless paid no compensation benefits or medical expenses for more than one year. Employee testified Employer’s continued refusal to pay the compensation left him without any source of income for more than one year. Employee testified his lack of any form of income, coupled with his inability to work during that time, was the sole reason he was unable to pay rent, child support, or credit card bills. Employee testified he needed the money offered in the C&R to try to pull his life back together.

Employer’s counsel stated Employer was prepared to pay Employee $18,000.00 to resolve the parties’ disputes. In exchange for Employer’s payment of $18,000.00, Employee agreed to waive all of his workers’ compensation benefits, except future medical expenses, related to his industrial injury. In keeping with the Board’s prior orders, Employer’s counsel presented the Board with three business checks drawn on Holmes, Weddle & Barcott, P.C. IOLTA Trust Account, as follows:

1. check #2672, in the amount of $15,065.95, payable to Employee;
2. check #2674, in the amount of $2,934.05, payable to Child Support Enforcement Division; and
3. check #2693, in the amount of $3,000.00, payable to Employee’s former attorney, Robert Rehbock of Rehbock, Rehbock & Wittenbrader.

Employer’s counsel explained the C&R would be in the best interest of both parties, particularly in light of the fact Employer was having a difficult time paying the bills and funding the settlement. Concerned with the implications of counsel’s statement, the Board asked Ms. Smart how she intended to secure the requisite funds to pay the settlement, in the event the Board approved the C&R. Ms. Smart testified she was having a very difficult time financially due to this case, and she would have to take a second mortgage on her personal residence because she had no other resources available to her.

On August 21, 1998, five days before the Board approved the C&R, Employee reported to Dr. Perkins for follow-up of his low back pain, acute epigastric pain, and blood in his vomit. Dr. Perkins contacted Thomas G. Shreves, M.D., for an urgent consult, and ordered Employee to cease taking all nonsteroidal antiinflammatory drugs (NSAIDs), and aspirin products, which had been prescribed for his industrial injury over the past year. Dr. Perkins’ assessment was "gastro esophageal reflux and possible gastritis related to his nonsteroidal anti-inflammatories, resulting in some erosive esophagitis and gastritis."¹²

On August 26, 1998, the Board held another hearing to determine whether it would approve the proposed C&R. The presiding panel was extremely reluctant to approve the C&R, and in Flock II stated, in pertinent part:

On August 27, 1998, the day after the C&R was approved, Dr. Shreves examined Employee. In his notes, Dr. Shreves stated Employee "has a remote history of lye ingestion as a child and had esophageal dilatation a number of times for a lye induced esophageal stricture. He has had no problems with this over the last eleven years."¹⁵

On September 29, 1998, we issued Flock II. In that decision we stated in part:

We also discussed recent Board decisions, and Alaska Supreme Court cases, which addressed the issue of setting aside a C&R. We advised the parties that their C&R agreement could not be set aside based on any claim of changed conditions or mistake of fact. We further explained that an employee may seek to set aside a C&R only if he establishes fraud or duress on the part of the employer.

On October 8, 1998, just seven working days after the C&R was approved, Employer again allowed her workers’ compensation insurance to lapse. On November 5, 1998, Alaska Workers’ Compensation Investigator Cohen filed and served an Accusation of Employer’s Failure to Insure Compensation Liability (Accusation) against Employer. The Accusation alleged Employer violated AS 23.30.075 because she failed to insure, or keep insured, her liability under the Alaska Workers’ Compensation Act (Act), or to provide satisfactory proof of ability to pay directly the compensation benefits required under the Act.

On November 3, 1998, Dr. Perkins examined Employee. Dr. Perkins noted Employee complained of recurrent low back pain, and continued heartburn despite taking Prilosec. Dr. Perkins also noted Employee obtained some relief with stretching exercises, and prescribed a 24" flex ball, Prilosec, and Doxepin. ¹⁷

On November 16, 1998, Employee filed two medical summaries, and attached medical bills. Employee completed the proof of service on the form, and stated he mailed the documents to Employer. The first medical summary included bills from: (1) Gastroenterology Associates, L.L.C., for services rendered on August 19 and 27, 1998, in the amount of $244.00; and (2) Alaska Radiology Associates, for services provided from May 27, 1997 through June 7, 1997, in the amount of $692.00. The second summary includes: (1) Cornerstone Clinic, for services rendered on August 21, 24, and 28, 1998, in the amount of $300.00; (2) November 4, 1998 prescription from Dr. Perkins for Prilosec and Doxepin; and (3) supporting medical chart notes.

A hearing on the Accusation was originally set for November 18, 1998, but was later rescheduled to December 15, 1998. In a December 1, 1998 letter to Employer, Investigator Cohen stated:

At the December 2, 1998 prehearing, Employer stated Cornerstone Clinic sent her all of Employee’s medical bills and statements through November 11, 1998, and would continue sending her statements for any new medical expenses Employee incurred.¹⁸ Workers’ Compensation Officer (WCO) Gerke instructed Employer to:

1. respond to medical bills and reports in accordance with 8 AAC 45.082(d);
2. serve a Controversion Notice, in accordance with AS 23.30.155(d) for any benefits she denies; and
3. serve an updated Compensation Report, listing payments made pursuant to the approved C&R, because the last report was filed May 5, 1998.

On December 9, 1998, Employer filed three Controversion Notices denying Employee’s November 3 and 17, 1998, and August 24 and 28, 1998 treatments with Dr. Perkins at the Cornerstone Clinic. Employer asserted the treatments exceeded the frequency standards set forth in 8 AAC 45.082(f), and were not reported correctly.¹⁹ Less than one week later, on December 14, 1998, Employer filed a fourth Controversion Notice.²⁰ In the notice, Employer controverted Employee’s August 21, 1998 treatment with Dr. Perkins, and asserted it also exceeded the treatment frequency standards.

Three days later, on December 17, 1998, Dr. Shreves completed a Physician’s Report for his August 27, 1998 examination of Employee. In his report, Dr. Shreves’ diagnosis was "gastritis vs ulcer secondary to NSAIDs," and he stated Employee’s condition was work-related. Dr. Shreves explained, "Patient fell at work resulting in back pain. He was given NSAIDs for this problem which then resulted in epigastric pain and vomiting. He was referred to me, Gastroenterology, for evaluation of this problem. . . ."²¹

Following Dr. Shreves’ August 27, 1998 examination, Dr. Perkins referred Employee to Ronald J. Boisen, M.D., for consultation. Dr. Boisen diagnosed Employee with "severe esophageal stricture with ulcerations," and stated the condition was work-related because it was exacerbated by the prescribed NSAID treatment.²²

On January 4, 1999, Dr. Perkins explained the reason he prescribed a 24" flex ball for Employee on November 3, 1998, as follows:

At the January 4, 1999 prehearing, Employee requested Employer provide a copy of all medical bills she alleged were paid, and a copy of the checks supporting payment. Employee also filed a medical summary at the prehearing, stated on the form he hand-delivered the document to Employer at the prehearing, and attached the following medical bills:

1. Cornerstone Clinic, for treatments from January 6, 1998 through December 8, 1998, in the amount of $680.00;
2. Providence Imaging Center, for services on November 24, 1998, in the amount of 237.00;
3. Alaska Radiology Associates, L.L.C. (a duplicate bill) for services provided from May 27, 1997 through June 7, 1997, in the amount of $692.00;
4. Pathology Associates, for services provided on November 23, 1998, in the amount of $351.00;
5. Geneva Woods Health Care, for services provided August 7, 1998, in the amount of $44.48; and
6. Dr. Boisen’s bill in the amount of $1,225.00.

At the January 4, 1999 prehearing, Employer stated she received Dr. Shreves’ December 17, 1998 Physician’s Report on January 2, 1999. Employer stated she would review the report, and either pay or deny the related bill. Employer stated if she received bills and supporting medical reports for treatment prior to the signing of the C&R, for conditions which were work-related, she would pay the bills. Employer stated she had not paid a bill since the date the C&R was signed and approved. Employer stated she did not recall filing an Annual Report with the Board, in accordance with AS 23.30.155(m), for 1997.

WCO Gerke noted Employer had a copy of the statutes regarding Annual Reports, provided Employer with copies of Bulletin numbers 97-03 and 96-10, a copy of Annual Report form 07-6115, and instructed Employer she must file an Annual Report by March 1 of each year. WCO Gerke noted Employee filed two medical summaries, dated January 4, 1999, at the hearing – one for Employee’s medical bills, and the other for the corresponding medical reports. WCO Gerke ordered Employer to review, and pay or deny the claims relating to the bills and reports she received on the medical summaries. WCO Gerke instructed Employer to inform Employee of her decision no later than January 26, 1999. WCO Gerke ordered Employee to file a statement, no later than January 26, 1999, which clarified the false and misleading statements he alleged were made by Employer.

In a January 6, 1999 letter to Dr. Perkins, Employer asked why he referred Employee to Dr. Boisen, and whether he agreed/disagreed with Dr. Shreves’ diagnosis. In his response letter dated January 12, 1999, Dr. Perkins stated , in part, as follows:

On January 11, 1999, Employer filed a fifth Controversion Notice.²⁵ In that notice, Employer controverted Employee’s December 8, 1998 office visit and treatment because it exceeded treatment frequency standards, and because it was not reported correctly. On February 2, 1999, Employer filed a sixth Controversion Notice.²⁶ In that notice, Employer relied on Dr. Perkins’ January 12, 1999 letter, controverted all of Employee’s medical expenses for his lye stricture-related gastroenterological problems, and asserted the medical expenses were not work-related.

On February 5, 1999, the parties attended a prehearing. Employee was unrepresented, and Employer was represented by paralegal Michael Boshears, a non-attorney representative. According to WCO Gerke’s notes, Employee became agitated in the course of the prehearing and requested the prehearing be continued. When his request was denied, Employee left the prehearing. WCO Gerke noted the prehearing continued in Employee’s absence. Prior to leaving the prehearing, Employee stated he did not file a statement of clarification regarding the false and misleading statements Employer has made because he believed the documents already filed with the Board clearly state the exact false or misleading statements. WCO Gerke again instructed Employee to file a statement of clarification, no later than March 5, 1999, regarding the false and misleading statements made by Employer. WCO Gerke also noted:

At the February 5, 1999 prehearing, Ms. Smart stated she would pay $692.00 of the $796.00 bill with Alaska Radiology Associates on the same day. Employer denied the remaining $104.00 and asserted it was for Employee’s non-work-related upper GI condition. Employer denied Dr. Boisen’s bill for $1,225.00, and other medical bills, because the expenses were for Employee’s non-work-related upper GI condition, or treatments she alleged exceeded the frequency standards. Finally, Employer filed a seventh Controversion Notice which, although not date-stamped, is initialed by WCO Gerke as received on February 5, 1999. In that notice, Employer controverted all of Employee’s treatments with Dr. Perkins, from August 26, 1998, through the present, and asserted they exceeded the frequency standards.

In the February 5, 1999 prehearing summary, under Action, WCO Gerke stated the three medical summaries filed by Employee, which contained unpaid medical bills and corresponding medical reports, were reviewed. Upon review, WCO Gerke recorded Employer’s responses as follows:

Medical Summary dated 11-16-98 (contains 2 items: number 5 and 6)

1. Medical Summary dated 11-16-98 (contains 6 items: number 5 thru 10)

5 thru 10. Cornerstone Clinic $300.00 and medical records: treatment in excess of the frequency standards; treatment for a non-work related upper GI condition; controversion notices dated 12-9-98, 1-5-99, and 2-2-99.

2. Medical Summary dated 1-4-99 (this summary initially appears to have been dated 1-4-98, it was changed to 1-4-99, filed with the Board on 1-4-99, it contains 7 items: number 5 thru 9, 11 and 13)

1. Providence Imaging Center $237.00: treatment for a non-work related upper GI condition, controversion notice dated 2-2-99
2. AK Radiology Associates $796.00: $692.00 is work related and payment will be made on 2-5-99; the balance relates to treatment for a non-work related upper GI condition.

1. Dr. Boisen $1,225.00: treatment for a non-work related upper GI condition, controversion notice dated 2-2-99.

On February 9, 1999, the Board heard Investigator Cohen’s application for a Stop Order against Employer. The Board’s final decision, In the Matter of the Accusation of the Failure to Insure Workers’ Compensation Liability Against Sandra Smart d/b/a General Roofing Company, (uninsured employer)(General Roofing I) AWCB Decision No. 99-0063 (March 22, 1999), set forth, in part, the following summary of evidence:

The Board found Smart failed to comply with AS 23.30.085, and AS 23.30.075, for the following periods: September 8-27, 1993; December 4-31, 1993; April 1 – May 7, 1994; July 7 - September 22, 1994; February 18 – March 22, 1995; March 22 – May 17, 1996; May 17-29, 1997; and October 8 - November 10, 1998. However, because Smart appeared at the February 9, 1999 hearing with an active workers’ compensation insurance policy, the Board was precluded from issuing a Stop Order. Nonetheless, based on the facts in the case, the Board determined the matter should be referred to the District Attorney’s Office for prosecution, and stated:

In an April 6, 1999 letter to Employee, WCO-II Michael Monagle stated in pertinent part:

On April 21, 1999, Employee again served Employer with a copy of all medical bills, medical reports, including Dr. Boisen’s April 21, 1999 bill and corresponding medical report, correspondence from his workers’ compensation file, and his Notice of Intent to Rely.²⁹ In the April 21, 1999 Physician’s Report, Dr. Boisen diagnosed Employee with "severe esophageal strictures with ulcerations," and stated his condition was aggravated by his NSAIDs treatment for his industrial injury.

On April 22, 1999, Dr. Boisen referred Employee to Steven Floerchinger, M.D., for surgical consultation. In his report, Dr. Floerchinger stated:

Dr. Floerchinger’s impressions were "multiple esophageal strictures, secondary to lye ingestion at the age of three[,]" and he stated, "This patient’s symptoms seem to be . . . exacerbated by his use of non-steroidal anti-inflammatory drugs since 1997."³¹ Dr. Floerchinger recommended:

At the May 3, 1999 prehearing, Employee served Employer with a copy of the approved C&R, with highlighted statements he alleged were false and misleading, and a letter dated April 1, 1999. Employee also again served Employer with Dr. Boisen’s April 21, 1999 bill, and Dr. Floerchinger’s April 22, 1999 bill. WCO Gerke noted Employee previously filed the same documents.

Employee requested a continuance of the May 13, 1999 hearing because he was scheduled to have the colon interposition surgery on that date, and Employer did not oppose his request. The parties stipulated the May 13, 1999 hearing would be re-scheduled to June 10, 1999. WCO Gerke noted the only Compensation Reports on file to date were May 2, 1998 and May 5, 1998, and he again ordered Employer to file an updated Compensation Report. On May 3, 1999, Employer also filed her annual report, and issued a Cashier’s Check to the State of Alaska, Second Injury Fund (SIF), in the amount of $775.00, for payment of its SIF liability pursuant to the terms of the C&R.

On May 4, 1999, Employer filed an updated Compensation Report. In that report, Ms. Smart stated she paid $775.00 to the SIF on March 3, 1999, and $692.00 in medical bills on February 5, 1999. On the same date, Employer also filed a document titled "Statement of Trueth [sic] and Facts," and stated, in part:

On May 14, 1999, Employer filed a Petition for Relief of Over Paid Medical Bills. Employer asserted Employee was declared medically stable on July 30, 1997, his treatments exceeded the frequency standards, and she was therefore entitled to an offset for her overpayments. Relying on Croft v. Pan Alaska Trucking, Inc., 820 P.2d 1064 (Alaska 1991), Employer requested a 50 percent offset under AS 23.30.155(j) and stated, in part:

At the May 21, 1999 prehearing, Employee again requested a continuance. Employee stated he was still in Washington waiting for the surgery to be performed. Hearing Officer Feltis continued the hearing to July 27, 1999. The prehearing summary set forth the following issues for the July 27, 1999 hearing:

1. continuing medical costs (as itemized in the prehearing summary);
2. interest and penalties on unpaid medical costs;
3. default order against Employer under AS 23.30.170;
4. set aside the C&R based on Employer’s fraud and misrepresentations;
5. frivolous and unfair controversions;
6. penalties against Employer under AS 23.30.155(c) for failure to timely file updated Compensation Reports;
7. Employee’s compliance with the C&R to remove all liens.

On May 26, 1999, Employer filed a Correction to the Pre-[Hearing] Summary Conference. Employer raised only one issue for correction, and stated, "Under issues (A) number 6. States: [T]he ER has made false or misleading statements under AS 23.[30].250 (to be clarified). Clarification: The EE has in fact filed some of his false and misleading statements which are in fact illegible."

Employee and Employer appeared in person, and represented themselves at the hearing. At the beginning of the hearing, Employee requested permission to videotape the proceedings. Employee argued he was entitled to videotape the hearing because the hearing was open to the public.

Employer objected to Employee’s request, and argued it would violate her constitutional right to privacy; the issue was raised at the May 21, 1999 prehearing, and Hearing Officer Feltis never made a ruling or otherwise informed the parties of the appropriateness of videotaping hearings; and she would leave the hearing if the Board allowed Employee to videotape the proceeding. The Board adjourned to consider the parties’ arguments, and to review the May 21, 1999 prehearing summary and related objections or corrections.

After deliberating, the Board ruled:

1. Employer did not include the videotape issue in her Correction to the May 21, 1999 prehearing summary, and the summary was therefore binding;
2. videotaping the hearing did not violate Employer’s right to privacy because the hearing was open to the public;
3. Employee was allowed to videotape the hearing;
4. Employer received proper notice of the hearing, and the hearing would be held in Employer’s absence if she elected to leave; and
5. Employer had the right to appeal the Board’s final decision and order if she believed her rights had been violated.

Employer stated she would not remain at a hearing where her constitutional rights were ignored, and collected her things to leave. The Board advised Employer she had received proper notice of the hearing, and the Board would proceed on the merits even if she chose to leave. Employer left the hearing. The Board proceeded with the hearing on the merits.

Employee testified he signed the C&R under duress – duress which was created through Employer’s intentional misrepresentations. Employee testified Employer repeatedly stated, to him and the Board, she accepted his claim and would pay his workers’ compensation benefits and related medical expenses for his industrial injury. Employee testified he believed Employer, he relied on Employer’s representations, and he therefore refrained from taking legal action based on her representations. Employee testified he fell into arrears on his payments for rent, child support, and credit card bills because he detrimentally relied on Employer’s representations, and because Employer failed to pay his compensation benefits or medical expenses for more than one year, at the time of signing the C&R, even though she did not controvert his entitlement to the benefits.

Relying on Employer’s own testimony at prior hearings, Employee testified he believed Employer’s only means to pay his compensation benefits, medical expenses, or the settlement funds in the C&R, was by taking a second mortgage on her personal residence. Employee testified subsequent to signing the C&R he learned, through his own inquiry with the Alaska Department of Motor Vehicles (DMV), that Employer owned several work vehicles free and clear of bank liens that could have been sold, or borrowed against, to pay the benefits, medical expenses, and settlement funds he was entitled to under the Act. Employee testified he would never have signed the C&R if he had known Employer had unincumbered assests, other than taking a second mortgage on her personal residence, available to pay his workers’ compensation benefits and medical expenses.

Employee testified he did not, pursuant to the terms of the C&R, remove the liens he previously placed against Employer’s property. Employee testified he did not remove the liens because Employer refused to pay continuing medical expenses in accordance with the terms of the C&R. Employee testified he believed the C&R was not valid because Employer violated the terms, and he therefore was not required to remove the liens.

Employee testified Employer told WCO Gerke, at the February 5, 1999 prehearing, she would pay the $692.00 Alaska Radiology Associate bill, and the $775.00 SIF bill, on the same day. Employee testified the payment for the Alaska Radiology Associate bill was received on March 2, 1999, as evidenced by the computerized statement he filed in the record from Andrea Meche, Professional Corporations, Inc. (P.C., Inc.). Employee testified the SIF payment was not made until May 3, 1999, as confirmed by cashier check #2665650. Employee testified Employer misrepresented the dates of the payments to WCO Gerke at the February 5, 1999 prehearing, and in her May 4, 1999 Compensation Report. Employee testified Employer, in the May 4, 1999 Compensation Report, said she paid the Alaska Radiology Associate bill on February 5, 1999, and paid the SIF bill on March 3, 1999.

Employee testified Employer did not timely file updated Compensation Reports as required under the Act. Employee testified Employer only filed Compensation Reports on May 2, 1998, May 5, 1998, and May 4, 1999. Employee testified beginning with the December 1998 prehearing, WCO Gerke repeatedly instructed Employer to file updated Compensation Reports, however, Employer failed to comply until May 4, 1999.

Employee testified he has continuing medical expenses that are attributable to his industrial injury. Employee testified he ingested lye as a three-year old child. Employee testified several medical procedures were performed during his childhood years for the problems resulting from his lye injury. Employee testified between 1987 and 1998 he experienced no medical problems from his childhood injury, and required no medical treatment, care, or procedures. Employee testified Dr. Perkins, Dr. Shreves, Dr. Boisen, and Dr. Floerchinger, opined the NSAIDs and aspirin products prescribed for his industrial injury aggravated his pre-existing gastroenterological condition. Employee testified the NSAIDs and aspirin products caused bleeding, ulceration, and vomiting.

Employee testified he incurred medical expenses for diagnosis, treatment, care, and surgical procedures related to the aggravation of his pre-existing gastroenterological condition. Employee testified he submitted medical bills and reports to Employer, for his past and continuing medical expenses, in November 1998, December 1998, January 1999, February 1999, April 1999, and May 1999. Employee testified Employer controverted the medical expenses and asserted they were not related to his industrial injury or exceeded the frequency standards. Employee testified Employer continues to deny all medical expenses related to his gastroenterological condition, including the surgery he had in Washington.

At the end of the time allotted for Employee’s case, the Board instructed Employee to submit all of the documentation he brought with him for presentation to the Board. Employee requested the hearing be continued because he had not finished presenting his evidence regarding the unpaid medical bills. The Board denied Employee’s request. The Board advised Employee that it would review the entire written record, including Employer’s documentation, in reaching its final decision.

At the July 27, 1999 hearing, the Board orally ordered Employee to submit several documents by August 10, 1999.³⁴ At the hearing, the Board failed to specify how long the record would be held open to allow Employer an opportunity to file a written response, stating with specificity her objections, if any, to the Board’s consideration of the documents. In its July 28, 1999 letter, the Board held the record open an additional 10 days, and ordered the record closed on August 24, 1999.

With the exception of the records from the Alaska DMV, Employee timely submitted the requested documents. Employee informed Investigator Cohen that the Alaska DMV would not provide him with a statement regarding the vehicles Employer owned free and clear, however, it would provide a statement to the Alaska Workers’ Compensation Division as another state agency. The Board instructed Investigator Cohen to obtain the records.

The Board informed the parties that on August 24, 1999, Investigator Cohen submitted the requested documentation from the Alaska DMV, and the record would be kept open until September 13, 1999. No legal briefs were filed by the parties.

Employee argued the C&R must be set aside because Employer committed fraud and made misrepresentations, upon him and the Board, regarding her ability to pay the compensation and medical expenses she admitted he was entitled to under the Act. Employee argued Employer’s fraud and misrepresentations were the sole reason he agreed to sign the C&R because he believed she had no other means to pay his benefits. Employee argued the Board, in Flock II, approved the C&R because it, too, relied on Employer’s misrepresentations and believed Employer had no resources, other than a second mortgage on her personal residence, available to pay the compensation Employee was entitled to under the Act. Employee argued, but for Employer’s fraud and misrepresentations, he would never have signed the C&R. Employee argued Employer’s failure to comply with the terms of the C&R excused his failure to remove the liens he filed against Employer’s property.

Employee argued he is entitled to continuing medical expenses. Employee argued the expenses have all been incurred as a direct result of his industrial injury. Employee argued Drs. Perkins, Shreves, Boisen, and Floerchinger all stated the prescribed NSAIDs and aspirin products aggravated his gastroenterological condition, and all medical expenses aasociated with treating his pre-existing condition are therefore compensable under the Act. Employee argued he is also entitled to interest and penalties for all medical expenses Employer paid late, or refused to pay.

Employee argued a penalty should also be assessed against Employer, under AS 23.30.155(c), for late-filed Compensation Reports. Employee argued Employer did not file a report after paying the settlement funds in the August 26, 1998 C&R until May 4, 1999. Employee argued Employer filed unfair and frivolous controversions because she did not have any evidence to support them, and the Board should refer this case to the Division of Insurance. Employee argued the Board should issue a default order, under AS 23.30.170, for Employer’s failure to pay ongoing medical expenses pursuant to the terms of the C&R.

Employer’s Argument³⁵

Employer argued she timely paid all compensation benefits, medical expenses, and penalties owed to Employee pursuant to the C&R. Employer argued Employee is not entitled to any additional medical expenses for his industrial injury. Relying on Dr. Perkins’ January 12, 1999 letter, Employer argued all medical expenses related to Employee’s upper GI condition are not compensable because they were not caused by his industrial injury. Employer argued Employee is precluded from raising any issues regarding fraud and misrepresentation committed by Employer because he failed to timely comply with WCO Gerke’s instruction to file a clarification of the allegations by March 5, 1999 as ordered at the February 5, 1999 prehearing.

Employer argued the videotaping of the July 27, 1999 hearing violated her constitutional right to privacy. Employer argued the videotaping was, by definition, disruptive because she left the hearing. Employer argued the Board is discriminating against her because she is a female owner of a small business. Employer argued this particular case "has turned into a personal vendictive vendeta against the employer personally."³⁶

On August 24, 1999, Investigator Cohen submitted a memorandum to the Board panel in this case. In her memorandum, Investigator Cohen stated she had obtained information from Ms. Connie Mayes, of the Alaska DMV, regarding 12 vehicles owned by Sandra Smart, Glenn Smart (her father), and General Roofing. Ten of the vehicles were owned free and clear of any lienholder. Two of the vehicles, a 1992 Ford pickup truck and a 1993 Ford pickup truck, listed Ms. Smart as the registered owner, and First National Bank as the lienholder.

Investigator Cohen contacted First National Bank regarding the liens on the 1992 and 1993 pickup trucks, and stated:

The Board’s file contains several documents which were filed by Employer in support of her legal arguments. However, Employer did not submit any documents between August 24, 1999 and September 13, 1999 to address information obtained by Investigator Cohen from the DMV. In the attachments to her July 29, 1999 letter to William Walters, Chief of Adjudication, Employer included an unidentified publication that listed warnings regarding the usage of NSAIDs. In that document, the following warning is provided:

The August 10, 1999 computer printout from P.C., Inc. contains log notes from telephone conversations, between P.C., Inc.’s staff and Employee or Employer, regarding the payment of accounts with Alaska Radiology Associates and Providence Imaging. The first bill from Alaska Radiology Associates is for Employee’s medical costs incurred between May 27, 1997 through June 7, 1997, in the amount of $692.00. The notes reflect that on October 30, 1998, following a conversation with Employee, P.C., Inc. changed the billing information in their records to list Employer as the responsible party for billing purposes. The November 24, 1998 notes reflect Employer requested a letter showing the first date she was billed for Employee’s charges. On February 17, 1999, the notes reflect Employee informed P.C., Inc., that Employer should have sent a check for payment in full. On the same date, a note reflects a conversation with Employer, and Employer stated she did send a cashier’s check on February 5, 1999. On February 24, 1999, P.C., Inc. called Employer again, inquiring about the cashier’s check. Employer stated it came back to her because it was not addressed correctly, she would bring it down personally, and directions were given to Employer. On March 2, 1999, another call was placed to Employer regarding payment of the $692.00, and Employer stated she would be at the office in one hour. The last entry for March 2, 1999, states, "Sandra finally brought in the c[hec]k f[o]r p[ayment] i[n] f[ull]."

On March 9, July 29, and August 10, 1999, the notes reflect Employee called P.C., Inc. to inform them he was still pursuing payment from Employer for the $237.00 bill from Providence Imaging, for gastroenterological services provided on November 24, 1998, and the $104.00 bill from Alaska Radiology Associates, for gastroenterological services provided on November 24, 1998. To date, those bills remain unpaid.

1. DID THE BOARD VIOLATE EMPLOYER’S CONSTITUTIONAL RIGHT TO PRIVACY WHEN IT ALLOWED EMPLOYEE TO VIDEOTAPE THE HEARING?

The Alaska Rules of Court, Rule 50, Media Coverage of Court Proceedings, paragraph (a) provides in pertinent part:

Media Coverage. Court proceedings may be covered by the news media under the provisions of this rule. For purposes of this rule, "media" includes the electronic media, still photographers and sketch artists. The rule applies at all times throughout state court facilities and is not limited to courtrooms or to times when court is in session. . . .

Moreover, activity by individuals not associated with the news media is governed by Rule 50(f), which provides:

Photographing, filming, videotaping and sketching by anyone other than news media requires a prior written determination by the presiding judge of the judicial district that the activity is not disruptive. In addition, such activity must comply with the other provisions of this rule.

In Bright v. State of Alaska, 875 P.2d 100, 105-06 (Alaska App. 1994), the Alaska Court of Appeals upheld the news media’s coverage of trials and stated:

The guarantee of public trials has been said to foster and preserve at least three important societal values. Two of these primarily protect a defendant’s right to a fair trial, while the third involves society’s broader interest in preserving social cohesion and the public peace by allowing citizens to assure themselves that justice is being done.

[C]onstant public scrutiny motivates judges, prosecutors, jurors, and witnesses to adhere more strictly to their oaths of public duty. "[P]ublicity serves as a safeguard against unjust persecution of an accused and goes far toward insuring him the fair trial to which he is entitled." People v. Jelke, 308 N.Y. 56, 123 N.E.2d 769, 771 (1954). . . . And witnesses are more likely to tell the unembroidered truth when they know that their testimony is exposed to public scrutiny. See Jelke, 123 N.E.2d at 772; Wigmore on Evidence (Chadbourn rev’n 1976), § 1834, Vol. 6, pp. 435-36.

[P]ublic observation and reporting of trial testimony will, from time to time, enhance the truth-finding process by creating the possibility that someone who attends the trial or who learns of the testimony through the media may be able to furnish additional evidence, either to further elucidate the events being litigated or to contradict the testimony of previous witnesses. . . .³⁷

We find Employer’s argument, i.e., videotaping of the hearing violated her constitutional right to privacy, to be without merit. We make this finding for the following reasons. We find the statutory and regulatory provisions under the Act do not prohibit, nor otherwise address, the videotaping of a hearing on the merits. We therefore exercise our discretion to look to the Alaska Civil Rules and Rules of Court for guidance. We find Rule 50, as a matter of practice, has allowed local television stations to record murder, robbery, and assualt trials live, subsequently air portions of the tape on the evening news, and report the events in the local newspapers. We find this practice has been determined to not violate a defendant’s constitutional rights in those cases. With regard to worker compensation cases, we find the public has an interest in learning whether a particular employer is conducting its business contrary to, or in compliance with, the requirements set forth in the Act.

Although the videotaping in the instant case was by an individual, not the news media, we find Rule 50(f) clearly states that videotaping by an individual merely requires a determination by the presiding judge that the "activity" of videotaping is not disruptive. At the hearing, we unanimously determined the activity of videotaping the hearing, in-and-of-itself, would not be disruptive. We find the video recorder was secured to a stationary tripod, placed in the front row of the public sitting area, would be turned on once at the beginning of the hearing, and would run continuously until it was turned off at the conclusion of the hearing. We find there were no other persons attempting to sit in the public area. We find the "activity" of videotaping was not disruptive to the hearing process.

We find Employer voluntary chose to leave the hearing in protest of the Board’s decision authorizing Employee to videotape the hearing. We find Employer’s departure is not the "activity" contemplated by Rule 50(f) for purposes of determining whether videotaping is disruptive in a particular case.

In keeping with the legislature’s statutory mandate that workers’ compensation cases be held open to the public, Alaska Rules of Court – Rule 50, and the Alaska Court of Appeals’ discussion in the Bright decision, we find the videotaping of the July 27, 1999 hearing was statutorily and constitutionally permissible. We further find the decision whether an individual will be permitted to videotape a particular workers’ compensation hearing rests within the sole discretion of the presiding Board panel. We find each time a request to videotape a hearing is made, the presiding panel must balance the interests of the parties and the public, and conduct the hearing in a manner that is consistent with the Act.

2. DID THE BOARD ERR WHEN IT PROCEEDED WITH THE JULY 27, 1999 HEARING IN EMPLOYER’S ABSENCE?

Our regulation, 8 AAC 45.070(f), provides:

If the board finds that a party was served with notice of hearing and is not present at the hearing, the board will, in its discretion, and in the following order of priority,

(1) proceed with the hearing in the party's absence and, after taking evidence, decide the issues in the application or petition;

(2) dismiss the case without prejudice; or

(3) adjourn, postpone, or continue the hearing.

We are required to give each party, either personally or by certified mail, at least 10 days’ notice of a scheduled hearing date.³⁸ We find notice of the July 27, 1999 hearing was timely sent by certified-return receipt requested mail, and by regular mail. We further find Employer personally appeared at the July 27, 1999 hearing. We find Employer subsequently left the hearing in protest of the Board’s decision allowing the hearing to be videotaped. We find there was no counsel, or other representative, present on behalf of Employer after her departure.

We find other Board panels have previously found it appropriate to proceed with a hearing on the merits when an employee has been served proper notice of the hearing but is absent from the hearing.³⁹ For example, in Sullivan v. Casa Valdez Restaurant, AWCB Decision No. 98-0194 (July 28, 1998), a hearing was scheduled for July 16, 1998, to determine whether the employee would be required to sign release of information forms. The employee and employer were served with proper notice of the hearing. On July 15, 1998, the employee faxed a letter to the Board and stated, "I am finished with you. I will "not play" your fraudulent-illegal-game. I have contacted another attorney who is great in "sueing [sic] for "unfair claims practices" and this government abuse/corruption is also being investigated for indictment and prosecution. . . ." On July 16, 1998, the employee did not attend the hearing. At the employer’s expense, the presiding panel called the employee two separate times. The employee refused to be sworn in, made several negative comments, and hung up the telephone both times. The presiding panel proceeded in the employee’s absence.

We find Employer and Employee attended a February 5, 1999 prehearing in this case. We find during the course of that prehearing, Employee became agitated, requested the prehearing be continued, and when his request was denied, left the prehearing. We find WCO Gerke noted Employee’s departure, and continued the prehearing in his absence. We find Employer participated in the prehearing after Employee departed.

We find we have discretion under 8 AAC 45.070(f) to proceed with a hearing in a party’s absence, and decide the issues, if that party has been served with proper notice of the hearing. We find continuances and cancellations of hearings are not favored by the Board under 8 AAC 45.074. We find Employer was served with proper notice of the July 27, 1999 hearing. We find this panel informed Employer the hearing would proceed in her absence if she elected to leave. We find because notice of the July 27, 1999 hearing was properly served on Employer, and based on general principles of equity as applied to the parties, we properly exercised our discretion to proceed with the hearing in Employer's absence.

3. SHOULD THE AUGUST 26, 1998 COMPROMISE & RELEASE BE SET ASIDE?

Changed Conditions or Mistake of Fact

In Olsen Logging Co. v. Lawson, 856 P.2d 1155, 1158 (Alaska 1993), the Alaska Supreme Court held, "Alaska Statute 23.30.012 governs the compromise and release of workers' compensation claims. That statute provides that settlement agreements are not valid until they are approved by the Board. Upon approval by the Board, settlement agreements have the same legal effect as awards, except that they are more difficult to set aside. . . ." Specifically, AS 23.30.012 provides in pertinent part:

If approved by the board, the agreement is enforceable the same as an order or award of the board and discharges the liability of the employer for the compensation notwithstanding the provisions of AS 23.30.130, 23.30.160, and 23.30.245.

The power to modify an award for changed conditions or mistakes of fact expressed under AS 23.30.130 does not extend to settlement agreements.⁴⁰ This means that under the provisions of the Act, a settlement agreement cannot be set aside based on any claim of changed conditions or mistakes of fact. Additionally, we previously found the parties in this case each explicitly waived their right to set aside the C&R based upon any changed condition or mistake of fact, and we therefore concluded no changed condition or mistake of fact exists for which Employee may successfully set aside this C&R. ⁴¹

Fraud & Duress

A settlement agreement may be set aside on grounds of fraud or duress.⁴² "The one-year limitation found in AS 23.30.130 applies to changes in conditions and mistakes; it has no application to claims of fraud or misrepresentation."⁴³ Moreover, a distinction between "regular" fraud and fraud upon the court has no bearing on the timeliness of a petition to set aside a C&R.⁴⁴

In his treatise on workers’ compensation law, Professor Larson defined fraud as follows:

Fraud may be in the form of intentional deception, as when the employer dishonestly induced the signing of an agreement by telling the employee that this was necessary if the employee was to have his medical expenses paid, or by falsely telling the employee that he would be able to hold his old job. . . . But the "fraud" may also be constructive, and may even consist, for example, in the honest but entirely erroneous opinion, expressed by the insurance representative and insurance doctor in the agreement negotiations, that claimant's condition would clear up in sixty days, when that opinion induced claimant to acquiesce in the agreement. . . .

. . . .

Ignorance or misunderstanding on the claimant's part will not in itself justify reopening a settlement or award, if the employer had nothing to do with inducing claimant's misapprehension. So, when claimant alleges that he belatedly discovered that he might have a claim under a different statute, or when he says that he was incapable of understanding the legal implications of the agreement he signed, reopening will not be granted in the absence of fraud or insanity. And even as to insanity, North Carolina has ruled that an assertion that claimant was mentally incompetent at the hearing due to his brain injury was not of itself sufficient ground to set aside the judgment denying compensation.⁴⁵

The Black’s Law Dictionary definition of fraud is consistent with Professor Larson's discussion, and provides:

An intentional perversion of the truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right. A false representation of a matter of fact, whether by words or by conduct . . . which deceives and is intended to deceive another so that he shall act upon it to his legal injury. . . .⁴⁶

Finally, duress is defined in Black’s Law Dictionary as follows:

Any illegal imprisonment, or threats of bodily or other harm, or means amounting to, or tending to coerce the will of another, and actually inducing him to do an act contrary to his free will. . . . A condition where one is induced by wrongful act or threat of another to make contract under circumstances which deprive him of exercise of his free will.⁴⁷

Although an employee may feel pressured to settle his claim because he is faced with unpaid bills and is out of work, we have found such a situation does not qualify as "duress" unless the financial hardship was created by an employer as a "means . . . to coerce" the employee to settle against his free will.⁴⁸ Therefore, even if an employee was in dire financial circumstances when he decided to settle his claim, the distress he felt would not serve as grounds to set aside the C&R unless the distress was attributable to improper actions by the employer.⁴⁹ However, an employee may have grounds to set aside a C&R if he learns, after signing the agreement, that the employer misrepresented a fact, actually created the employee's financial hardship, or committed other improper acts, to coerce or induce the employee to sign the C&R.⁵⁰

We find Employer’s conduct was a "perversion of the truth for the purpose of inducing [Employee] in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right." We find Employer’s conduct caused Employee’s financial hardship, and that the financial hardship was created as a "means to coerce" Employee to settle his claim against his free will. We make this finding as follows.

We find Employer accepted, and continues to accept, responsibility for the compensation benefits and medical expenses associated with Employee’s industrial injury. Prior to the approval of the C&R, we find Employer repeatedly told Employee, at prehearings and hearings on the merits, she would pay all of his compensation benefits and medical expenses related to his industrial injury. We find Employer did not file a Controversion Notice prior to approval of the C&R. Despite her promises, we find Employer failed to pay several of Employee’s medical expenses prior to approval of the C&R.

We find the Alaska DMV lists Employer as the owner of 12 vehicles, all free and clear of any liens, and all of which could have been sold or borrowed against to pay additional compensation benefits or medical expenses. We find Employer did not submit any documentation between August 24, 1999 and September 13, 1999, to refute the information contained in the Alaska DMV records. We find Employer never informed Employee, or this Board, of the 12 unencumbered vehicles.

We find Employee signed the C&R only because he believed Employer had no resources, other than a second mortgage on her personal residence, to pay the compensation benefits and medical expenses she agreed he was entitled to under the Act. We find this Board agreed to approve the C&R only because it believed Employer had no resources, other than a second mortgage on her personal residence, available to pay additional compensation benefits or medical expenses to Employee.

We find Employee and this Board believed Employer’s only resource to pay compensation benefits and medical expenses in this case was a second mortgage on her personal residence. We find our belief resulted from Employer’s false representation of fact, and withholding of information. We find Employer’s false representations were intended to deceive Employee so that he would act upon it to his legal detriment. We find Employer’s misrepresentations, regarding resources available to pay Employee’s compensation benefits, medical expenses, and settlement funds, induced Employee to sign, and the Board to approve, the C&R on the erroneous belief Employer had no resources other than a second mortgage on her personal residence. We conclude Employer’s misrepresentations constituted fraud, and that the C&R should be set aside.

4. IS EMPLOYEE ENTITLED TO AN AWARD OF CONTINUING MEDICAL EXPENSES?

To determine whether Employee is entitled to continuing medical benefits under the Act, we apply the statutory presumption of compensability.⁵¹ Alaska Statute 23.30.120(a) provides in pertinent part, "In a proceeding for the enforcement of a claim for compensation under this chapter it is presumed, in the absence of substantial evidence to the contrary, that (1) the claim comes within the provisions of this chapter." Applying the presumption of compensability is a three step process.⁵²

In the first step, we must determine whether Employee has produced sufficient evidence to raise the presumption that the injury entitles Employee to workers' compensation benefits. To raise the presumption Employee need only adduce "some" "minimal" relevant evidence⁵³establishing a "preliminary link" between the injury claimed and employment,⁵⁴or between a work-related injury and the existence of disability,⁵⁵or the continuing entitlement to a benefit.⁵⁶ If Employee's evidence establishes the preliminary link, we presume Employee's injury is compensable and the burden of producing contrary evidence shifts to Employer.

In the second step, we must determine whether Employer has met its burden of producing contrary evidence.⁵⁷ To rebut the presumption, Employer must produce substantial evidence that "either (1) provides an alternative explanation which, if accepted, would exclude work-related factors as a substantial cause of the disability; or (2) directly eliminates any reasonable possibility that the employment was a factor in the disability."⁵⁸ Evidence presented by Employer that simply points to other possible causes of Employee's injury or disability, without ruling out work-related causes, cannot overcome the presumption of compensability.⁵⁹ "Substantial evidence" is the amount of relevant evidence a reasonable mind might accept as adequate to support a conclusion.⁶⁰

Because the presumption shifts only the burden of production to Employer, and not the burden of proof, we examine Employer's evidence in isolation.⁶¹ We defer questions of credibility and the weight to give Employer's evidence until after we have decided whether Employer has produced a sufficient quantum of evidence to rebut the presumption that Employee's injury entitles him to compensation benefits.⁶² If Employer produces substantial evidence rebutting the presumption of compensability, the presumption drops out, and we move to the third step.⁶³

In the third step, Employee bears the burden of proving all elements of the claim by a preponderance of the evidence.⁶⁴The party with the burden of proving asserted facts by a preponderance of the evidence, must "induce a belief" in the mind of the triers of fact that the asserted facts are probably true.⁶⁵ A longstanding principle in Alaska workers' compensation law is that inconclusive or doubtful medical testimony must be resolved in the employee's favor⁶⁶

Alaska Statute 23.30.095 provides in pertinent part:

Our regulation governing frequency standards, 8 AAC 45.82 provides, in pertinent part:

Subsection .095(a) requires employers to pay for the treatment necessitated by the nature of injury, or the process of recovery, up to two years after the injury date. After the two years, we may authorize treatment necessary for the process of recovery or to prevent disability. "If the treatment is necessary to prevent the deterioration of the patient's condition and allow his continuing employment, it is compensable within the meaning of the statute."⁶⁷ Treatment must be reasonable and necessary to be compensable under subsection .095(a).⁶⁸

It is a well established rule in workmen's compensation law that a pre-existing disease or infirmity does not disqualify a claim under the work-connection requirement if the employment aggravated, accelerated, or combined with the disease or infirmity to produce the death or disability for which compensation is sought.⁶⁹ The question in a particular case of whether the employment did so contribute to the final result is one of fact which is usually determined from medical testimony.⁷⁰

Liability may be imposed on an employer, however, only if the employment aggravated, accelerated, or combined with the pre-existing condition and the aggravation, acceleration, or combination was a "substantial factor" contributing to the ultimate disability.⁷¹ A "substantial factor" is found where it is "shown both that the [disability] would not have happened 'but for' the [employment] and that the [employment] was so important in bringing about the [disability] that reasonable men would regard it as a cause and attach responsibility to it."⁷²

In analyzing a case involving a pre-existing condition, the Supreme Court has held that an aggravation or acceleration (and presumably a combination as well) must be presumed under AS 23.30.120.⁷³ We find Employee raised the presumption he is entitled to continuing medical benefits for his industrial injury. We make this finding as follows. Based on the medical records of Drs. Shreves, Boisen, and Floerchinger, we find:

1. Employee has a pre-existing gastroenterological condition that was caused when, as a 3-year old child, Employee swallowed lye;
2. Employee underwent several medical procedures through 1986-87 for his childhood injury;
3. Employee had no symptoms, and required no medical treatment for, his pre-existing gastroenterological condition between 1987 and 1998;
4. Employee required additional medical care and treatment for his pre-existing condition, beginning in 1998 and continuing into 1999, because the NSAIDs and aspirin products prescribed for his industrial injury aggravated his pre-existing condition, and caused new GI bleeding, ulcerations, epigastric pain, and vomiting of blood.

We find this is sufficient evidence to establish the preliminary link that Employee’s need for the particular medical benefit sought is related to his work, is provided for under the Act, and is a compensable medical cost. We therefore presume Employee's continued medical treatment is compensable, and the burden of producing contrary evidence shifts to Employer.

We find Employer rebutted the presumption. We make this finding as follows. We find Dr. Perkins, in his January 12, 1999 letter, stated in pertinent part:

We find this evidence, viewed in isolation, provides an alternative explanation which, if accepted, would exclude work-related factors as a substantial cause of the disability. Based on the foregoing findings, we conclude the presumption drops out, and Employee musts prove all elements of his claim by a preponderance of the evidence.

We find Employee proved his claim by a preponderance of the evidence. We make this finding as follows. We find the medical reports of Drs. Shreves, Boisen, and Floerchinger, very persuasive and therefore give them greater weight. We find all three physicians opined Employee was symptom-free and required no medical care or treatment for his pre-existing condition between 1987 and 1998. We find all three physicians opined Employee’s gastroenterological condition, although originally caused by Employee’s childhood ingestion of lye, was aggravated by the NSAIDs and aspirin products prescribed for Employee’s industrial injury. We find all three physicians opined Employee’s recent GI bleeding, epigastric pain, ulcerations, and vomiting of blood, were caused by the prescribed NSAIDs and aspirin products. Moreover, we find Employer’s own document, which listed GI warnings for NSAID consumption, stated in part, "Serious GI toxicity such as bleeding, ulceration and perforation can occur at any time, with or without warning symptoms, in patients treated chronically with NSAID therapy."

We give less weight to Dr. Perkins’ January 12, 1999 letter. We find Dr. Perkins’ statement, i.e., "After evaluation by both Dr. Shreves and Dr. Boisen, it is concluded that his GI bleeding and epigastric pain were the result of an old injury suffered in childhood," at best unclear. We find the phrase "it is concluded" does not inform this Board "who" is the physician(s) that reached such a conclusion. We find Dr. Perkins may have meant "he" concluded, "Dr. Shreves and Dr. Boisen" concluded, or "all three of them" concluded, Employee’s recent GI bleeding and epigastric pain were not caused by the prescribed NSAIDs and aspirin products prescribed for his industrial injury. We find if Dr. Perkins independently reached that conclusion, based on a review of the medical records, it would fly in the face of the overwhelming consensus of Drs. Shreves, Boisen, and Floerchinger. We find if Dr. Perkins meant Drs. Shreves and Boisen reached that conclusion, then his assessment is incorrect – Drs. Shreves’ and Boisen’s medical records clearly state Employee’s pre-existing condition was aggravated by the prescribed NSAIDs and aspirin products. We find if Dr. Perkins meant all three physician, i.e., himself, Dr. Shreves, and Dr. Boisen, reached that conclusion, then Dr. Perkins is incorrect for the reasons stated above.

We find the March 27, 1998 EIME performed in this case preceded Employee’s gastroenterological-related problems of August 1998. We find Employer did not request a second EIME as she has a right to do under AS 23.30.095(e).⁷⁴ We find there is no other medical evidence in the file for our consideration.

Based on our review of the medical evidence in the file, we find Employee proved his claim by a preponderance of the evidence. We find Employee incurred medical expenses for diagnosis, treatment, and surgical intervention for the aggravation of his pre-existing gastroenterological condition as follows:

1. Alaska Radiology Associates, on November 24, 1998, in the amount of $104.00;
2. Gastroenterology Associates, on August 19 and27, 1998, in the amount of $244.00;
3. Geneva Woods Health Care, on August 7, 1998, in the amount of $44.48;
4. Providence Imaging, on November 24, 1998, in the amount of $237.00;
5. Pathology Associates, on November 23, 1998, in the amount of $351.00; and
6. Dr. Boisen’s bill in the amount of $1,225.00.

We find these medical expenses were reasonable and necessary to treat the aggravation of Employee’s pre-existing condition, specifically his recent GI bleeding, epigastric pain, ulcerations, and vomiting of blood. We find Employee’s surgical procedure in Washington was also reasonable and necessary because conservative care and treatment failed to cure Employee’s symptoms. We find Employee’s continuing medical treatment, and associated medical expenses, are compensable under the Act.

We find the aggravation of Employee’s pre-existing condition would not have happened but for his employment and resultant industrial injury. We find the employment was so important in bringing about Employee’s disability that reasonable people would regard it was a cause and attach responsibility to it. We make this finding for the following reasons. We find Employee was symptom-free, and received no medical care or treatment for his pre-existing condition, for an 11 year period of time prior to his industrial injury, i.e., from 1987 through 1998. We find Employee was prescribed NSAIDs and aspirin product for his industrial injury. We find Employee took the NSAIDs and aspirin products for more than one year following his industrial injury. We find Drs. Shreves, Boisen, and Floerchinger all opined Employee’s pre-existing condition was aggravated by the prescribed NSAIDs and aspirin products. We therefore conclude Employer shall pay the outstanding medical bills listed above, including the medical bill for Employee’s surgery in Washington after Employee has submitted the medical bill, corresponding medical report, and the requisite proof of service on Employer and the Board.

We next consider whether Employer is responsible for paying the medical expenses Employee incurred for treatments with Dr. Perkins at the Cornerstone Clinic. We find Employer controverted and denied Employee’s treatments with Dr. Perkins, from August 26, 1998 through the present, because they exceeded the frequency standards.

We find Employee treated with Dr. Perkins from December 5, 1997 through January 4, 1999. We find between December 5, 1997 and April 17, 1998 (a 20-week period of time during which Employee could have received up to 36 treatments), Employee received only 7 treatments. Additionally, we find Employee received no treatments for a period of nine weeks between February 12, 1998 and April 16, 1998. We find Employee’s treatments between December 5, 1997 through April 17, 1998 were infrequent and sporadic, and do not establish a course of continuing and multiple treatments subject to the frequency standards of 8 AAC 45.082(f).

We find a course of continuing and multiple treatments with Dr. Perkins began on April 17, 1998 and continued through January 4, 1999. We find Employee could have received 12 treatments the first month (3 treatments per week), however, he only received 1 treatment the first month. We find Employee could have received 8 treatments for the second and third months (2 treatments per week), however, he only received 2 treatments for the second month and 3 treatments for the third month. We find Employee could have received 4 treatments for the fourth and fifth months (1 treatment per week), however, he only received 3 treatments for each of those months. We find Employee thereafter could have received 1 treatment per month for the sixth through the twelvth months. We find Employee received 0 treatments for the sixth month, 1 treatment for the seventh month, 3 treatments for the eighth month (i.e., between November 19, 1998 and December 18, 1998), and 1 treatment for the ninth month.

We find Employee’s treatments did not exceed the frequency standard, except during the eighth month, i.e., between November 19, 1998 and December 18, 1998. We find Employee was entitled to receive 1 treatment but, instead, received 3 treatments. We find Employee’s treatments exceeded the frequency standard by 2 treatments, specifically, for the November 24, 1998 and December 8, 1998 treatments.

However, we find Employee, between November 19, 1998 and December 18, 1998, began experiencing the first onset of spontaneous GI bleeding, epigastric pain, and vomiting of blood as a result of the prescribed NSAIDs and aspirin products aggravating his pre-existing condition. Accordingly, we find treatments during this month were for a new, recently developed condition. We find a new treatment plan would be called for if the treatment exceeded the initial treatment frequency standards. We find these treatments did not exceed the frequency standards during the eighth month. We find the two extra treatments were reasonable and necessary. We make this finding for the following reasons. We find Dr. Perkins’ treatments, with this one exception, were well below the frequency standard. We find the treatments which exceeded the frequency standard were administered by Dr. Perkins during the month Employee first began experiencing GI bleeding, epigastric pain, ulcerations, and vomiting blood related to the NSAID and aspirin aggravation of his pre-existing condition. We find the treatments were reasonable and necessary given the facts of this case. We therefore conclude Employer shall pay for all of Employee’s treatments with Dr. Perkins between December 5, 1997 and January 4, 1999.

1. IS EMPLOYEE ENTITLED TO AN AWARD OF INTEREST UNDER 8 AAC 45.142?

Our regulation, 8 AAC 45.142, provides in pertinent part:

(a) If compensation is not paid when due, interest must be paid at the rate established in AS 45.45.010. If more than one installment of compensation is past due, interest must be paid from the date each installment of compensation was due, until paid. If compensation for a past period is paid under an order issued by the board, interest on the compensation awarded must be paid from the due date of each unpaid installment of compensation. (emphasis added).

. . . .

(b) The employer shall pay the interest

(3) on late-paid medical benefits to

(A) the employee . . . , if the employee has paid the provider or the medical benefits;

. . . .

(C) to the provider if the medical benefits have not been paid.

The language in 8 AAC 45.142(a) is mandatory. If we find Employer failed to pay compensation when due, we must award interest on the unpaid installments.⁷⁵ In Moretz v. O’Neill Investigations, 783 P.2d 764 (Alaska 1989), the Alaska Supreme Court interpreted the requirement for interest payments broadly, and stated in part:

The applicable rule is that "a workers’ compensation award, or any part thereof, shall accrue lawful interest . . . from the date it should have been paid." . . . In Rawls, we reasoned that "[a] system of resolving work-related injuries ‘in the most efficient, most dignified, and most certain form’ must recoginze the time value of money." . . . We recognized that "it would serve the employer’s or the carrier’s best interest to hold the money as long as possible in order to continue collecting a favorable rate of return on it or in order to continue to have the use of the money without the cost of hiring it." Id. . . . Money loses its value over time, regardless of why it is awarded, be it for tort or for workers’ compensation. Indeed, if anyone has been unjustly enriched, it is IIC by delaying payment of Moretz’s medical benefits.⁷⁶

While interest is not paid until the good or service is determined compensable, interest is calculated from the time the compensable good is delivered, or the service rendered, until such time as it is paid.⁷⁷ For the reasons previously stated, we find the medical expenses Employee incurred in this case are compensable. We next determine the date each service was rendered, and accordingly, the date from which interest accrues for each unpaid medical bill.

We find the $244.00 medical bill from Gastroenterology Associates, L.L.C., includes two charges for services provided by Dr. Shreves, including: (1) 8-19-98 charge of $5.00; and (2) 8-27-98 charge of $239.00. We find Employer controverted these medical expenses, and has not paid this bill to date. For the reasons stated earlier in this decision, we find this bill is a compensable medical expense under the Act. Because this bill is compensable, we find Employer owes interest to Gastroenterology Associates, L.L.P., under 8 AAC 45.142(b)(3)(C), to account for the time value of money. We find Employer shall pay interest, at the statutory rate of 10.5 percent set forth in AS 45.45.010, from the time the services were rendered (8-19-98 and 8-27-98), until the date Employer makes full payment.

We find there are two bills from Alaska Radiology Associates. We find the first bill includes 12 charges for x-ray services on six different dates, including: (1) 5-27-97 combined charge of $114.00; (2) 5-28-97 charge of $30.00; (3) 5-30-97 charge of $284.00; (4) 6-7-97 charge of $24.00; (5) 6-8-97 charge of $24.00; and (6) 6-9-97 charge of $216.00. We find Employer did not pay this bill until March 2, 1999. For the reasons stated earlier in this decision, we find these medical expenses are compensable under the Act. We find Employer owes interest to Alaska Radiology Associates to account for the time value of money. We find Employer shall pay interest, at the statutory rate of 10.5 percent set forth in AS 45.45.010, from the date each service was provided as set forth above, through March 2, 1999, the date Employer paid the $692.00 bill.

We find the second bill from Alaska Radiology Associates includes two charges for services provided on November 24, 1998, in the amount of $104.00. We find Employer controverted this bill, asserted it was non-work related because it pertained to Employee’s pre-existing condition, and has not paid this bill to date. For the reasons stated earlier in this decision, we find these medical expenses are compensable under the Act. We find Employer owes interest to Alaska Radiology Associates to account for the time value of money. We find Employer shall pay interest, at the statutory rate of 10.5 percent set forth in AS 45.45.010, from November 24, 1998 through the date Employer makes full payment on this bill.

We find the $680.00 medical bill from Cornerstone Clinic includes 14 charges for physical therapy services provided by Dr. Perkins on seven different dates, including: (1) 8-21-98 charge of $110.00; (2) 8-24-98 charge of $95.00; (3) 8-28-98 charge of $95.00; (4) 11-3-98 charge of $95.00; (5) 11-17-98 charge of $95.00; (6) 11-24-98 charge of $95.00; and (7) 12-8-98 charge of $95.00. We find Employer controverted these medical expenses, asserted they exceeded the frequency standards, and has not paid this bill to date. For the reasons stated earlier in this decision, we find these medical expenses are compensable under the Act. We find Employer owes interest to Cornerstone Clinic to account for the time value of money. We find Employer owes, at the statutory rate of 10.5 percent set forth in AS 45.45.010, from the date each service was provided as set forth above, through the date Employer makes full payment on this bill.

We find the $237.00 medical bill from Providence Imaging Center includes two charges for services provided on November 24, 1998. We find Employer controverted this medical expense, asserted it was non-work related because it pertained to Employee’s pre-existing condition, and has not paid this bill to date. For the reasons stated earlier in this decision, we find this medical expense is compensable under the Act. We find Employer owes interest to Providence Imaging Center to account for the time value of money. We find Employer owes interest, at the statutory rate of 10.5 percent set forth in AS 45.45.010, from November 24, 1998 through the date Employer makes full payment on this bill.

We find the $351.00 medical bill from Pathology Associates includes two charges for services provided on November 23, 1998. We find Employer controverted this medical expense, asserted it was non-work related because it pertained to Employee’s pre-existing condition, and has not paid this bill to date. For the reasons stated earlier in this decision, we find this medical expense is compensable under the Act. We find Employer owes interest to Pathology Associates to account for the time value of money. We find Employer owes interest, at the statutory rate of 10.5 percent set forth in AS 45.45.010, from November 23, 1998 through the date Employer makes full payment on this bill.

We find the $44.48 medical bill from Geneva Woods Health Care includes one charge for services provided on August 7, 1998. We find Employer has not paid this bill to date. For the reasons stated earlier in this decision, we find this medical expense is compensable under the Act. We find Employer owes interest to Geneva Woods Health Care to account for the time value of money. We find Employer owes interest, at the statutory rate of 10.5 percent set forth in AS 45.45.010, from August 7, 1998 through the date Employer makes full payment on this bill.

We find the $1,225.00 medical bill from Dr. Boisen’s office is for his examinations of Employee beginning November 18, 1998. We find Employer controverted this medical expense, asserted it was non-work related because it pertained to Employee’s pre-existing condition, and has not paid this bill to date. For the reasons stated earlier in this decision, we find this medical expense is compensable under the Act. We find Employer owes interest to Dr. Boisen to account for the time value of money. We find Employer owes interest, at the statutory rate of 10.5 percent set forth in AS 45.45.010, from November 18, 1998, through the date Employer makes full payment on this bill.

We find Employer requested a 50 percent offset for overpayment of medical expenses. For the reasons stated above, we find Employer’s request to be without merit. We therefore deny Employer’s request for an offset.

2. IS EMPLOYEE ENTITLED TO AN AWARD OF PENALTIES UNDER AS 23.30.155?

Alaska Statute 23.30.155 provides in pertinent part:

Unless a benefit is compensable, and becomes due and payable, no penalty under AS 23.30.155 may be awarded. An employee is entitled to recover a penalty under section .155 if compensation was due without an award, and the employer did not pay the compensation within 7 days after it became due; or if compensation was payable under an award and the employer did not pay the compensation within 14 days after it became due.

Under subsection .155(a), an employer must promptly pay any compensation due, with or without an award, except where liability to pay compensation is controverted. A notice of controversion must be filed in good faith to protect an employer from imposition of a penalty under subsection .155(e). The Alaska Supreme Court explained the standard for properly controverting a claim in Harp v. ARCO Alaska, Inc., 831 P.2d 352 (Alaska 1992):

We find Employer filed 9 separate Controversion Notices in this case as set forth below in chronological order:

1. December 9, 1998, controversion asserted Employee’s 8-21-98 treatment with Dr. Perkins exceeded the frequency standards (date-stamped 12-14-98);
2. December 9, 1998, controversion asserted Employee’s 8-24-98 treatment with Dr. Perkins exceeded the frequency standard (not date-stamped);
3. December 9, 1998, controversion asserted Employee’s 8-28-98 treatment with Dr. Perkins exceeded the frequency standard (not date-stamped);
4. December 9, 1998, controversion asserted Employee’s 11-3-98 treatment with Dr. Perkins exceeded the frequency standard (not date-stamped);
5. December 9, 1998, controversion asserted Employee’s 11-17-98 treatment with Dr. Perkins exceeded the frequency standards (not date-stamped);
6. December 14, 1998, controversion asserted Gastroenterology Associates did not file the required medical report (date-stamped 12-14-98);
7. January 5, 1999, controversion asserted Employee’s 12-8-98 treatment with Dr. Perkins exceeded the frequency standard (date stamped 1-11-99);
8. February 5, 1999, controversion asserted "all treatments for lye stricture-related/gastroenterological problems" were from a pre-existing condition which was not caused by Employee’s work injury (date-stamped 2-2-99); and
9. February 5, 1999, controversion asserted all of Employee’s treatments with Dr. Perkins, from 8-26-98 and continuing, exceeded the frequency standards (not date-stamped, but initialed by WCO Gerke on 2-5-99).

We find Employer’s first December 9, 1998 controversion asserted Employee’s August 21, 1998 treatment with Dr. Perkins exceeded the frequency standard under 8 AAC 45.082(f). Based on the reasons and analysis set forth earlier in this decision, we find Employee’s August 21, 1998 treatment with Dr. Perkins did not exceed the frequency standard. Moreover, we find Employer previously agreed to pay for this treatment at prior prehearings, hearings, and pursuant to the terms of the parties’ C&R. We find Employer possessed not only insufficient evidence to support her first December 9, 1998 controversion, she possessed no evidence to support her first controversion. We find Employer’s December 9, 1998 controversion was filed more than 12 weeks late under AS 23.30.155. Based on the foregoing findings, we conclude Employer failed to meet the standard set forth in Harp, and Employee is therefore entitled to a 25 percent penalty for his August 21, 1998 treatment (i.e., $110.00 x 25% = $27.50).

We find Employer’s second, third, fourth, and fifth December 9, 1998 controversions, listed above, are not date-stamped as received by the Alaska Workers’ Compensation Board. We also find there is no proof of service of these controversions on Employee. We find we cannot consider these four controversions. We conclude Employer resisted paying these medical expenses, and Employee is therefore entitled to a 25 percent penalty for his August 24, 1998 treatment (i.e., $95.00 x 25% = $23.75); August 28, 1998 treatment (i.e., $95.00 x 25% = $23.75); November 3, 1998 treatment (i.e., $95.00 x 25% = $23.75); and November 17, 1998 treatment⁷⁹(i.e., $95.00 x 25% = $23.75).

We find Employer’s sixth controversion, signed and date-stamped received on December 14, 1998, denied payment for the $244.00 medical bill from Gastroenterology Associates, L.L.C., because a medical report form 07-6102 was not submitted by the provider. We find Dr. Shreves submitted the requisite report on December 17, 1998. We find, under AS 23.30.155(d) and (e), Employer had until January 7, 1999, to pay or controvert this bill. We find Employer has not paid this bill to date. We find Employer did not file another controversion until February 5, 1999. We find Employer’s controversion, although initially valid when filed on December 14, 1998, became ineffective when Dr. Shreves filed his medical report on December 17, 1998. We find Employer did not subsequently timely pay or controvert this medical bill. We therefore conclude Employee is entitled to a 25 percent penalty for this medical bill (i.e., $244.00 x 25% = $61.00).

We find Employer’s next controversion, filed on January 11, 1999, denied payment for Employee’s December 8, 1998 treatment with Dr. Perkins because it exceeded the frequency standards. We find, under AS 23.30.155, Employer was required to timely pay, or controvert, this medical expense by December 29, 1998. We find Employer has not paid this bill to date. We find Employer’s controversion was not timely filed. Based on the foregoing findings, we conclude Employer failed to meet the standard set forth in Harp, and Employee is therefore entitled to a 25 percent penalty for the medical bill⁸⁰(i.e., $95.00 x 25% = $23.75).

We find Employer filed two controversion notices on February 5, 1999. We find the first notice denied "all treatments for lye stricture-related/gastroenterological problems" because they were caused by Employee’s pre-existing condition, and were not related to his industrial injury. We find Employer’s controversion relates to the following medical bills:

2. Gastroenterology Associates, services provided on August 19 and 27, 1998, in the amount of $244.00;
3. Providence Imaging, services provided on November 24, 1998, in the amount of $237.00;
4. Pathology Associates, services provided on November 23, 1998, in the amount of $351.00; and
5. Dr. Boisen, services provided on November 18 and 23, 1998, in the amount of $1,225.00.

We find Employer was required to either pay or controvert these medical expenses by December 15, 1998; September 9 and 17, 1998; December 15, 1998; December 14, 1998; and December 9 and 14, 1998 respectively. We find Employer has not paid these medical bills to date. We find Employer filed its controversion on February 5, 1999, more than six weeks late. We find Employer’s controversion was not timely filed under AS 23.20.155. Because Employer’s controversion was not timely filed, we do not reach the issue of whether Dr. Perkins letter was sufficient evidence to support the controversion. Based on the foregoing findings, we conclude Employer failed to meet the standard set forth in Harp, and Employee is therefore entitled to a 25 percent penalty for the above-listed medical bills (i.e., Alaska Radiology Associates $104.00 x 25% = $26.00; a penalty for the Gastroenterology Associates, L.L.C. bill was calculated above; Providence Imaging $237.00 x 25% = $59.25; Pathology Associates $351.00 x 25% = $87.75; and Dr. Boisen $1,225.00 x 25% = $306.25).

We find Employer’s other February 5, 1999 controversion denied payments for Employee’s treatments with Dr. Perkins from August 26, 1998, and continuing, because they exceeded the frequency standard. We find Employee’s last such treatment was on January 4, 1999. We find Employer has not paid the medical bill for these treatments to date. We find Employer’s February 5, 1999 controversion was not filed within 14 days of each date of treatment, for all of Employee’s treatments between August 26, 1998 and January 4, 1999. For the reasons stated earlier in this decision, we find these medical expenses are compensable under the Act. Based on the foregoing findings, we conclude Employer failed to meet the standard set forth in Harp, and Employee is therefore entitled to a 25 percent penalty for his November 24, 1998 treatment (i.e., $95.00 x 25% = $23.75), and January 4, 1999 treatment (i.e., $95.00 x 25% = $23.75).⁸¹

1. DID EMPLOYER FILE UNFAIR OR FRIVOLOUS CONTROVERSIONS?

Alaska Statute 23.30.155(o) provides:

The board shall promptly notify the division of insurance if the board determines that the employer's insurer has frivolously or unfairly controverted compensation due under this chapter. After receiving notice from the board, the division of insurance shall determine if the insurer has committed an unfair claim settlement practice under AS 21.36.125.

We find Employer filed 9 controversions in this case. We find only Employer’s December 14, 1998 controversion, denying payment for the medical bill with Gastroenterology Associates, L.L.C. because there was not a corresponding medical report filed, met the good faith standard set forth in Harp. We find the remaining controversions – filed December 9, 1998, January 5, 1999, and two on February 5, 1999 – were not timely, failed to meet the Harp standard, and awarded penalties accordingly. For the reasons stated earlier in this decision, we find four of Employer’s December 9, 1998 controversions were not considered by this Board for purposes of determining whether the controversions met the Harp standard, and we therefore do not reach the issue of whether they were unfair or frivolous controversions.

We find the language in AS 23.30.155(o) is mandatory. If we find an employer’s insurer filed a controversion that is unfair or frivolous, we "shall promptly notify the division of insurance. . . ." We find the import of this statute is to ensure that the division of insurance is kept apprised of insurers who, in an isolated instance or in a course of dealing, are relying on unfair or frivolous controversions to deny injured employees’ claims.

In past decisions, we have applied the Alaska Supreme Court’s reasoning in Harp and held that controversions filed with no evidence to support them were not filed in good faith, and were therefore unfair and frivolous.⁸² For the reasons stated earlier in this decision, we found one of Employer’s five December 9, 1998 controversions was not supported by any evidence (and the other four were not considered by the Board), and Employer’s January 11, 1999 and February 5, 1999 controversions were not timely filed.

We find we have no authority under subsection .155(o) to refer this matter to the Division of Insurance because the unfair and frivolous controversions were filed by an uninsured employer. We take administrative notice that the Division of Insurance has jurisdiction over insurers, not employers. We find, however, that because Employer filed controversions which did not meet the good faith standard in Harp we awarded a 25 percent penalty, as authorized under subsection .155(e), on all compensation awarded and not timely paid or controverted.

2. SHALL WE AWARD A PENALTY AGAINST EMPLOYER FOR HER FAILURE TO TIMELY FILE UPDATED COMPENSATION REPORTS AS REQUIRED UNDER AS 23.30.155(c)?

The effect setting aside the August 26, 1998 C&R has on the parties’ rights are as follows: (1) Employee may request any additional compensation benefits he believes he is entitled to under the Act by filing a new claim and proceeding accordingly; (2) the compensation paid pursuant to the C&R applied to approximately four weeks of temporary total disability (TTD) benefits at a rate of $154.00; a $500.00 rehabilitation program at the Dimond Athletic Club; $14,850.00 for 11 percent PPI benefits; and $2,000.00 in penalties; and (3) if Employee succeeds in any subsequent claims for additional TTD benefits, compensation rate adjustment, vocational rehabilitation, PPI, medical benefits, or any other compensation benefits, we find the new awards for additional compensation would not be reduced by the previously paid benefits. There would be no deduction in this case because the compensation benefits paid under the C&R were for benefits Employer agreed Employee was entitled to prior to the signing of the agreement.

1. The Board did not violate Employer’s constitutional rights to privacy when it approved Employee’s request to videotape the July 27, 1999 hearing.
2. The Board did not violate Employer’s constitutional rights to due process when it proceeded with the hearing in Employer’s absence.
3. The August 26, 1998 C&R is set aside.
4. Employer shall pay the medical expenses awarded by this Board, as set forth in this decision.
5. Employer shall pay the civil penalties assessed by the Board, as set forth in this decision.

Dated at Anchorage, Alaska this 1^st day of November, 1999.

ALASKA WORKERS' COMPENSATION BOARD

/s/ Gwendolyn K. Feltis
Gwendolyn K. Feltis, Designated Chairman

/s/ S.T. Hagedorn
S. T. Hagedorn, Member

/s/ HM Lawlor
Harriett Lawlor, Member

If compensation is payable under the terms of this decision, it is due on the date of issue and penalty of 25 percent will accrue if not paid within 14 days of the due date unless an interlocutory order staying payment is obtained in Superior Court.

This compensation order is a final decision. It becomes effective when filed in the office of the Board unless proceedings to appeal it are instituted. Proceedings to appeal must be instituted in Superior Court within 30 days of the filing of this decision and be brought by a party in interest against the Board and all other parties to the proceedings before the Board, as provided in the Rules of Appellate Procedure of the State of Alaska.

A party may ask the Board to reconsider this decision by filing a petition for reconsideration under AS 44.62.540 and in accordance with 8 AAC 45.050. The petition requesting reconsideration must be filed with the Board within 15 days after delivery or mailing of this decision.

Within one year after the rejection of a claim or within one year after the last payment of benefits under AS 23.30.180, 23.30.185, 23.30.190, 23.30.200 or 23.30.215 a party may ask the Board to modify this decision under AS 23.30.130 by filing a petition in accordance with 8 AAC 45.150 and 8 AAC 45.050.

I hereby certify that the foregoing is a full, true and correct copy of the Final Decision and Order in the matter of JERRY D. FLOCK employee / applicant; v. GENERAL ROOFING SYSTEMS, uninsured employer; / defendant; Case No. 199713636; dated and filed in the office of the Alaska Workers' Compensation Board in Anchorage, Alaska, this 1^st day of November, 1999.

Brady D. Jackson, III, Clerk