BIW claims local man has conflict of interest in case


AUGUSTA — Bath Iron Works has filed a court motion in a long-running battle over hospital charges to businesses that pay medical bills for injured workers, claiming Maine Workers’ Compensation Board Chairman Paul Dionne has a conflict of interest.

The company claims Dionne has been paid as both head of the state board and as board chairman of Central Maine Healthcare Corp., which includes Central Maine Medical Center in Lewiston.

At issue is the fee hospitals charge for the use of operating rooms, hospital beds and other facilities, services and equipment.

BIW claims that in the early 1990s, as part of the state’s reform of Workers’ Comp, the board was required to create a list of allowable fees — capping charges in a way similar to Medicaid and Medicare.

BIW said such a cap is important to businesses that self-insure for workers’ compensation because those businesses pay their own hospital bills and cannot negotiate charges, as insurance companies do. Without a list of allowable fees, BIW said, hospitals charge whatever they deem “usual and customary,” resulting in bills that are sometimes tens of thousands of dollars higher than what businesses think they should be.       

In 2006, BIW filed suit against the Maine Workers’ Compensation Board, saying it had failed for 14 years to do its job. In 2008, a judge sided with BIW and ordered the board to create a fee list.

A year and a half later, there is still no list. BIW’s motion, filed this week in Kennebec County Superior Court, asks the judge to remove both Dionne and the Workers’ Compensation Board from the decision-making process and to appoint an independent person to create the list.

“The inescapable fact is that the Board has not fulfilled its statutory obligation for no reason other than that it truly does not want to do so,” the motion says.

Dionne, however, said the board is working diligently and just needs a few more months.

“I think the board has dealt with all of the major issues and has really made a good-faith effort to deal with this issue,” he said.

Both Dionne and a lawyer for the compensation board said the board was nearly ready to vote on a fee list late last year, but BIW and other interested parties asked it to consider fee information gathered by a third party.

They said it’s taken three months to get that information, forcing the board to miss its deadline at the end of the year. They said the board now has that information and will soon be ready to accept public comment on a fee list proposal.

 “We’ve been trying to accommodate as many parties as possible, so I don’t think it’s a fair statement to say we’ve been dragging our heels or ignoring prior court orders,” said John Rohde, a lawyer for the board. “Hopefully, we’ll have this thing done sooner rather than later.”

BIW says the board isn’t working as fast as it could.

“They’ve had since 1993; they’ve had since 2006 when we filed the lawsuit and they’ve had since 2008 when they were ordered by the court, so there are a long string of promises,” said Jon Fitzgerald, a lawyer for BIW. He added, “How long do we have to wait?”

BIW believes Dionne is part of the problem and that, as chairman of the Central Maine Healthcare Board of Directors, he has an interest in keeping hospital rates high — a conflict when his Workers’ Compensation Board must cap rates.

In the motion, BIW points out that Dionne asked the Attorney General’s Office a couple of years ago to conclude whether he had a conflict of interest as chairman of both the Workers’ Compensation Board and the Central Maine Healthcare board. The AG’s Office said Dionne did not have to step aside. However, BIW’s motion points out that Dionne failed to tell the AG’s office that he had been compensated by Central Maine Healthcare.

For years, Central Maine Healthcare hospital group contributed tens of thousands of dollars to a life insurance plan for board members who wanted it. Members could take out loans against that money or, when they left the board, they could draw money from the plan or leave the lump sum to a beneficiary upon their death.

In August, the board voted to abolish the long-term compensation program and give members a lump-sum payout. Dionne received $40,000. The board also voted to pay members’ taxes on those payouts. For Dionne that amounted to another $20,000. 

BIW learned of that compensation from a Sun Journal story about hospital spending published in February.

The AG’s Office is evaluating whether knowledge of Dionne’s compensation would have affected its opinion. 

Dionne said he has abstained from votes on other issues in the past when he has appeared to have a conflict. He said he has not stepped aside in this instance because there has not yet been a vote.

“About a month or so ago, after the article came out in the newspaper, I consulted a private attorney to see if in fact he thought I had a conflict relative to this case,” Dionne said Friday. “He advised me that there was the potential for a conflict of interest. I’ve also, this morning, asked our general counsel to give me a ruling to see if, in fact, there is a conflict of interest.

“It could very well be that once the issue is before the board, that I make a full disclosure, as I have in the past,” he said. “And if there is in fact a conflict of interest, then certainly I will abstain from any action or votes on the issue.”

BIW’s lawyer, however, believes Dionne has already negatively affected the Workers’ Compensation Board’s work on the issue, even though there has not been a vote.

“(Dionne’s) official duty is not just simply the vote,” Fitzgerald said. “It’s the creation of the rule and the rule-making process itself, which is something over which he has a significant amount of influence.”

The two sides are expected to confer with the judge assigned to the case in a couple of weeks.     

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