20 cfr 61.104

Office of Workers’ Compensation Programs, Labor
forces) due to the liability of a third
party, unless the financial condition of
the third party or the facts and circumstances surrounding the liability
justify the failure;
(2) Failed to take reasonable measures to contest, reduce, or terminate
its liability by appropriate available
procedure under workers’ compensation law or otherwise; or
(3) Failed to make reasonable and
adequate investigation or injury as to
the right of any person to any benefit
or payment; or
(4) Failed to avoid augmentation of
liability by reason of delay in recognizing or discharging a compensation
claimant’s right to benefits.

§ 61.105

specifically itemized or documented. A
carrier may receive reimbursement of
unallocated claims expense in an
amount of to 15% of the sum of the reimbursable payments made under the
Defense Base Act or other workers’
compensation law. If this method of
computing unallocated claims expense
would not result in reimbursement of
reasonable and necessary claims expense, the Office may, in its discretion,
determine an amount that fairly represents the expenses incurred.
(d) The Office shall not consider as a
claims expense any general administrative costs, general office maintenance
costs, rent, insurance, taxes, or other
similar general expenses. Nor shall expenses incurred in establishing or documenting entitlement to reimbursement
under the Act be considered.

§ 61.103 Examination of records of carrier.
Whenever it is deemed necessary, the
Office may request submission of case
records or may inspect the records and
accounts of a carrier for the purpose of
verifying any allegation, fact or payment stated in the claim. The carrier
shall furnish the records and permit or
authorize their inspection as requested.
The right of inspection shall also relate
to records and data necessary for the
determination of whether any premium
or other charge was made with respect
to the reimbursement claimed.

§ 61.105

Direct payment of benefits.

(a) The Office may pay benefits, as
they accrue, directly to any entitled
beneficiary in lieu of reimbursement of
a carrier.
(b) The Office will not accept a case
for direct payment until the right of
the person or persons entitled to benefits has been established and the Office
finds that the carrier would be entitled
to reimbursement for continuing benefits.
(c) The Office will not accept a case
for direct payment until the rate of
compensation or benefit and the period
of payment have become relatively
fixed and known. The Office may accept a case for direct payment before
this condition has been satisfied, if the
Office determines that direct payment
is advisable due to the circumstances
in that particular case.
(d) In cases transferred to the Office
for direct payment, medical care for
the effects of a war-risk injury may be
furnished in a manner consistent with
the regulations governing the furnishing of medical care under the Federal Employees’ Compensation Act, as
amended (5 U.S.C. 8101, et seq.).
(e) The transfer of a case to the Office for direct payment does not affect
the hearing or adjudicatory rights of a
beneficiary or carrier as established
under the Defense Base Act or other
applicable workers’ compensation law.

§ 61.104 Reimbursement of claims expense.
(a) A carrier may claim reimbursement for reasonable and necessary
claims expense incurred in connection
with a case for which reimbursement is
claimed under the Act. Reimbursement
may be claimed for allocated and
unallocated claims expense.
(b) The term ‘‘allocated claims expense’’ includes payments made for
reasonable attorneys’ fees, court and
litigation costs, expenses of witnesses
and expert testimony, examinations,
autopsies and other items of expense
that were reasonably incurred in determining liability under the Defense
Base Act or other workers’ compensation law. Allocated claims expense
must be itemized and documented as
described in § 61.101.
(c) The term ‘‘unallocated claims expense’’ means costs that are incurred
in processing a claim, but cannot be

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