Postal Service Employee Workers' Compensation Claims Not Always
Processed Timely, but Problems Hamper Complete Measurement
(20-DEC-02, GAO-03-158R).
In fiscal year 2000, U. S. Postal Service employees accounted for
about one-third of both the federal civilian workforce and the
$2.1 billion cost of the Federal Workers' Compensation Program
(WCP). During that same year, Postal Service employees submitted
85,000 claims, or one-half of all claims for new work-related
injuries, to the Department of Labor's (DOL) Office of Workers'
Compensation Program (OWCP), which is charged with administering
the program. Because of complaints the subcommittee received from
injured federal employees about the untimely receipt of WCP
benefits and because Postal Service employees account for such a
large portion of the WCP, the Chairman, House Subcommittee on
Government Efficiency, Financial Management, and
Intergovernmental Relations, Committee on Government Reform,
asked us to determine specifically whether Postal Service
employees were receiving WCP benefits in a timely manner. For our
current review, we agreed to (1) determine the extent to which
Postal Service employees provided all of the evidence required by
OWCP regulations for determining the claimants' eligibility for
WCP benefits and (2) determine whether claims for WCP eligibility
and WCP compensation payments for lost wages or schedule awards
were submitted and processed within the time frames set forth in
OWCP regulations or performance standards. On the basis of our
analysis, we estimate that in about 99 percent of the cases
involving Postal Service employees who (1) had work-related
injuries during the 12-month period beginning July 1, 1997, and
(2) filed claims for WCP benefits for lost wages or schedule
awards due to these injuries, the employees eventually provided
OWCP the evidence it required to make a determination on their
eligibility for benefits. However, in about 69 percent of the
cases, OWCP claims examiners had to request additional
information because all of the required evidence needed to make a
determination of WCP eligibility was not provided initially. As a
result, claims for WCP eligibility were not always processed
within the time frames set forth by OWCP. For those Postal
Service employees in our sample cases who were determined to be
eligible for WCP benefits and later filed claims for compensation
for lost wages or schedule awards, we could not reliably estimate
the percentage of claims for compensation that were processed
within the time frames set forth by OWCP. This was because the
dates we needed to "mark" the beginning and ending actions taken
by the injured Postal Service employee and Postal Service
supervisor to complete, submit, and forward claims to DWCP were
missing from the claim forms.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-158R
ACCNO: A05771
TITLE: Postal Service Employee Workers' Compensation Claims Not
Always Processed Timely, but Problems Hamper Complete Measurement
DATE: 12/20/2002
SUBJECT: Claims processing
Compensation claims
Performance measures
Postal service employees
Reporting requirements
Workers compensation
Federal Employees Compensation Program
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GAO-03-158R
GAO- 03- 158R Postal Service Workers* Compensation Claims United States
General Accounting Office
Washington, DC 20548
December 20, 2002 The Honorable Stephen Horn Chairman, Subcommittee on
Government Efficiency,
Financial Management, and Intergovernmental Relations Committee on
Government Reform House of Representatives
Subject: Postal Service Employee Workers* Compensation Claims Not Always
Processed Timely, but Problems Hamper Complete Measurement
Dear Mr. Chairman: In fiscal year 2000, U. S. Postal Service employees
accounted for about one- third of both the federal civilian workforce and
the $2.1 billion cost of the Federal Workers* Compensation Program (WCP).
During that same year, Postal Service employees submitted about 85,000
claims, or about one- half of all claims for new work- related injuries,
to the Department of Labor*s (DOL) Office of Workers* Compensation Program
(OWCP), which is charged with administering the program. Because of
complaints the subcommittee received from injured federal employees about
the untimely receipt of WCP benefits and because Postal Service employees
account for such a large portion of the WCP, you asked us to determine
specifically whether Postal Service employees were receiving WCP benefits
in a timely manner.
We provided an initial response to your request on December 21, 2001, 1
and testified on the matter during a hearing before the subcommittee on
May 9, 2002. 2 Among other things, we reported that during the period July
1, 1996, through June 30, 2000, about 7 percent of the Postal Service*s
approximately 901,000 total employee workforce filed an average of about
82,600 WCP claims each year. Of these claims, about 88 percent were
approved and about 12 percent were denied each year. We also reported that
OWCP*s automated file records indicated a wide variance in the time
between the date of an employee*s injury and (1) the date of OWCP*s
decision regarding the claimant*s entitlement to benefits 3 and (2) the
date
1 U. S. General Accounting Office, Administration of the Workers*
Compensation Program by the Postal Service and Department of Labor (DOL),
(Washington, D. C.: Dec. 21, 2001). 2 U. S. General Accounting Office, U.
S. Postal Service: Workers* Compensation Benefits for Postal Employees,
GAO- 02- 729T (Washington, D. C.: May 9, 2002). 3 WCP provides for payment
of several types of benefits, including compensation for wage loss,
schedule awards, medical and related benefits, and vocational
rehabilitation services for conditions resulting from injuries sustained
or occupational disease or illness contracted in performance of duty while
in the service of the United States. WCP also provides for payment of
monetary compensation to specified survivors of an employee whose death
results from work- related injury or disease and for payment of certain
burial expenses.
GAO- 03- 158R Postal Service Workers* Compensation Claims 2 OWCP
authorized the first compensation or schedule award payment. 4 However, as
we
reported, the automated records we reviewed did not contain the specific
information we needed to identify how long it took the injured employees,
Postal Service supervisors, and OWCP claims examiners to submit and
process WCP claims.
For our current review, we agreed to
determine the extent to which Postal Service employees provided all of
the evidence required by OWCP regulations for determining the claimants*
eligibility for WCP benefits and
determine whether claims for WCP eligibility and WCP compensation
payments for lost wages or schedule awards were submitted and processed
within the time frames set forth in OWCP regulations or performance
standards. 5
Before Postal Service employees can receive medical benefits or
compensation for wage loss or schedule awards, OWCP must often first
establish* based on the evidence provided by the applicant* that the
applicant is eligible for workers compensation benefits due to the injury
for which the benefits are claimed. Once the claimant is determined to be
eligible, the claimant*s injury- related medical costs are paid directly
by DOL to the medical provider. However, for wage loss or physical
impairment due to the work- related injury, the employees must submit
another WCP claim form specifically for compensation payments and provide
evidence that the time away from work (wage loss) or impairment (schedule
award) was directly related to the injury.
To meet our objectives, we randomly sampled 484 Postal Service employee
WCP case files located at the 12 OWCP district offices throughout the
country. Our sample cases included only those cases where Postal Service
employees also filed claims for wage loss or schedule award compensation
payments due to injuries that occurred or were recognized as jobrelated
during the 12- month period beginning July 1, 1997. We selected the sample
file records on the basis of the type of injury involved* traumatic or
occupational 6 *and on the basis of their approval or nonapproval for WCP
benefits and compensation or schedule award payments. (See enc. III for
more detail about our scope, methodology, and sampling plan.) Our results
can be generalized to the entire group of Postal Service employees who
4 An injured employee can claim compensation as a (1) wage replacement
benefit for lost wages, (2) schedule award if the employee has a permanent
impairment to a member or function of the body, or (3) both.
5 OWCP regulations provide time frames for injured federal employees and
employing agencies to submit and process WCP- related forms; OWCP
performance standards provide the annual operational performance goals or
time frames for which OWCP claims examiners are to process WCP- related
forms.
6 WCP allows for two types of work- related injuries for which benefits
and services can be claimed:
*traumatic injury* and *occupational disease or illness.* Traumatic injury
means a condition of the body caused by a specific event or incidents, or
series of events or incidents, within a single day or work shift. Such
condition must be caused by an external force, including stress or strain,
which is identifiable as to time and place of occurrence and member or
function of the body affected. Occupational disease or illness is a
condition produced by the work environment over a period longer than a
single day or work shift.
GAO- 03- 158R Postal Service Workers* Compensation Claims 3 applied for
wage loss or schedule award compensation due to injuries occurring during
the
period covered by our review. (See enc. III for the confidence intervals
for each part of the claims processing activities we measured.) We chose
the period covered by the cases we reviewed because we believed it was
current enough to reflect ongoing operations, yet historical enough for
most, if not all, of the claims to have been decided upon. However, our
work did not include an analysis of any time involved in the appeals
process of any claim we reviewed, nor did we generally evaluate the
appropriateness of OWCP*s decisions approving or denying the claims. Our
scope did not include an overall assessment of the performance of the WCP.
For example, we did not assess processing of claims solely for medical
payments or for subsequent claims for compensation made after the initial
payment was authorized. We performed our work from January through
December 2002 in accordance with generally accepted government auditing
standards and obtained comments on the results of our work from OWCP and
the Postal Service.
Results in Brief
On the basis of our analysis, we estimate that in about 99 percent of the
cases involving Postal Service employees who (1) had work- related
injuries during the 12- month period beginning July 1, 1997, and (2) filed
claims for WCP benefits for lost wages or schedule awards due to these
injuries, the employees eventually provided OWCP the evidence it required
to make a determination on their eligibility for benefits. However, in
about 69 percent of the cases, OWCP claims examiners had to request
additional information because all of the required evidence needed to make
a determination of WCP eligibility was not provided initially. As a
result, claims for WCP eligibility were not always processed within the
time frames set forth by OWCP.
On the basis of our analysis of available information, we estimate that
Postal Service employees submitted about 95 percent of traumatic injury
claims and about 49 percent of occupational disease claims to their
respective Postal Service supervisors 7 within the time frames set forth
in OWCP regulations or performance standards. Postal Service supervisors
then completed and submitted about 73 percent of the traumatic injury
claims and about 64 percent of the occupational disease claims within
OWCP*s time frames, and OWCP claims examiners processed about 71 percent
of the traumatic injury claims and about 84 percent of the occupational
disease claims within OWCP*s time frames. However, the reliability of our
estimates is compromised to some extent by data not required and not
available from the claim forms in our sample cases, as well as mistakes
made by OWCP in selecting and
7 Federal employees with work- related injuries have up to 3 years to file
their claims for compensation. If the claim is not filed within 3 years,
compensation may still be allowed if notice of the injury was given within
30 days, or the employer had knowledge of the injury within 30 days
following the actual occurrence. In cases of latent disability, the time
for filing a claim does not begin until the employee is reasonably aware
of the causal relationship between the disability and his/ her employment.
GAO- 03- 158R Postal Service Workers* Compensation Claims 4 processing
traumatic injury short form closure (SFC) cases. 8 Furthermore, because of
the
SFC case selection and processing problems we found, the SFC case process
may not be achieving the results OWCP intended.
For those Postal Service employees in our sample cases who were determined
to be eligible for WCP benefits and later filed claims for compensation
for lost wages or schedule awards, we could not reliably estimate the
percentage of claims for compensation that were processed within the time
frames set forth by OWCP. This was because the dates we needed to *mark*
the beginning and ending actions taken by the injured Postal Service
employee and Postal Service supervisor to complete, submit, and forward
the claims to OWCP were missing from the claim forms. Additionally, OWCP*s
performance standards for OWCP claims examiners* part in processing these
claims do not cover compensation claims for schedule awards, or when
applicable, consider the impact of the additional time associated with (1)
processing corresponding WCP claims for eligibility or (2) OWCP requests
for additional information from the employees, Postal Service supervisors,
or medical providers.
Accordingly, we are recommending that the Secretary of Labor and the
Postmaster General take certain actions to improve and monitor the
preparation and processing of Postal Service employees* WCP claims. In
commenting on a draft of this report, the Postal Service said that it
supported our recommendations and, in July 2002, had established a new
goal for submitting claims to OWCP. Although OWCP disagreed with many
aspects of our methodology, findings, and recommendations, it said it was
undertaking a review of its business and data system, including its SFC
case process, and that it would make changes where it felt appropriate.
Overall, we continue to believe that our methodology, findings, and
recommendations are appropriate, but we have made changes to our report to
reflect OWCP*s concerns where appropriate. A complete discussion of the
Postal Service*s and OWCP*s comments can be found near the end of this
report.
Background
Although OWCP is charged with administering the WCP, federal employing
agencies, including the Postal Service, are responsible for paying normal
salary and benefits, referred to as *continuation of pay (COP),* to those
employees who miss work for up to 45 calendar days, during a 1- year
period, due to a work- related traumatic injury for which they have
applied for WCP benefits. Additionally, at the end of each 12- month
period beginning on July 1, referred to as a *charge back year,* employing
agencies are to reimburse DOL for (1) each agency*s share of DOL
administrative costs and (2) costs associated with the WCP benefits and
services provided to their respective employees during the year. As shown
8 According to OWCP, SFC cases are WCP claims that are accepted (approved)
as eligible for WCP benefits upon receipt and allowed to incur up to
$1,500 in medical bills* without formal adjudication* and are closed.
Originally, we estimated that only about 41 percent of the traumatic
injury claims were processed within the time frames set forth in OWCP
performance standards. However, according to OWCP officials, this estimate
overstated the actual processing time because many of these claims were
treated as SFC cases, which were accepted as eligible for WCP benefits
upon their receipt by OWCP. Once we considered the effect of these SFC
cases on our sample claims, we found that about 71 percent of the
traumatic injury claims were processed within the time frames set forth by
OWCP. However, we also found that on the basis of OWCP*s SFC case
processing guidelines, OWCP (1) incorrectly selected 14 of these cases as
SFC cases (about 7 percent of the SFC cases in our sample), (2) may have
inappropriately processed some claims that had been administratively
closed, and (3) mistakenly approved 2 claims (about 1 percent of the SFC
cases in our sample) for WCP benefits.
GAO- 03- 158R Postal Service Workers* Compensation Claims 5 below, Postal
Service employees* WCP claims for medical benefits and compensation for
lost
wages and schedule awards have greatly increased since fiscal year 1998.
(See table 1.)
Table 1: Postal Service*s Share of Selected WCP Costs Due to Injured
Postal Service Employees for Fiscal Years 1998 through 2001 a
Fiscal year Administrative Charge by DOL
Medical benefits paid Compensation for lost wages and schedule awards
(thousands of $) No. of claims Outlay b (thousands
of $) No. of claims Outlays (thousands
of $)
1998 $21,000 108,677 $185,000 24,778 $361,000 1999 $20,000 111,383
$196,100 25,092 $368,700 2000 $20,000 119,942 $240,100 27,157 $397,800
2001 $33,000 125,375 $269,600 28,013 $424,600
a Most current years for which costs were available at the time of our
review. b Outlay is the amount Postal Service reimburses DOL, which makes
the payment on WCP claims.
Source: GAO analysis of Postal Service data. Employing agencies also
provide the avenue through which injured federal employees prepare and
submit their claim forms for WCP eligibility and claim forms for wage loss
or schedule award compensation payments to OWCP. Specifically, OWCP
regulations and performance standards in effect during the period covered
by our review set forth the following:
For OWCP to determine WCP eligibility, applicants had to provide
evidence to meet five requirements: (1) the claim was filed within the
time limits specified by law; (2) the injured or deceased person was, at
the time of injury or death, an employee of the U. S. government; (3) the
injury, disease, or death did, in fact, occur; (4) the injury, disease, or
death occurred while the employee was in the performance of duty; and (5)
the medical condition for which compensation or medical benefits was
claimed was causally related to the claimed job- related injury, disease,
or death. 9
For OWCP to process claims for WCP eligibility determination, OWCP
regulations state that applicants are to give notice of the injury in
writing 10 to a Postal Service supervisor within 30 days of the injury or
the date the employee realized the disease was job- related for traumatic
or occupational disease, respectively. OWCP regulations further state that
Postal Service supervisors are to complete the agency portion of the form
and submit it to
9 For wage loss benefits, the claimant must also submit medical evidence
showing that the condition claimed is disabling. 10 For traumatic
injuries, OWCP regulations required the use of Form CA- 1, *Federal
Employee*s Notice of Traumatic Injury and Claim for Continuation of Pay/
Compensation,* in order to claim WCP benefits. To claim benefits for a
disease or illness that the employee believed to be work- related, OWCP
regulations required the use of Form CA- 2, *Notice of Occupational
Disease and Claim for Compensation.*
GAO- 03- 158R Postal Service Workers* Compensation Claims 6 OWCP within 10
working days of receiving a claim. 11 OWCP regulations do not identify
the time frames for OWCP to perform its part of the claims processing
activity. Instead, OWCP has developed operational performance standards
that identify the percentage of claims it plans to process within certain
time frames. Specifically, OWCP claims examiners are to decide on WCP
eligibility for at least 90 percent of the traumatic injury claims within
45 days of the claims* receipt from the Postal Service and for at least 70
percent of the occupational disease claims within 6 months of the claims*
receipt.
For OWCP to process claims for compensation for wage loss or schedule
award, OWCP regulations state that applicants* who were disabled by a
work- related injury and lost wages for more than 3 days, or had a
permanent impairment* are to submit a claim in writing 12 to the employing
agency within 10 days of the date pay stopped. Upon receipt of the claim,
OWCP regulations state that Postal Service supervisors are to complete the
agency portion of the form and as soon as possible, but not more than 5
working days, submit the form and any accompanying medical reports to
OWCP. OWCP regulations do not identify the time frames for OWCP to perform
its part of the claims processing activity. Instead, OWCP has developed
operational performance standards that identify the percentage of claims
it plans to process within certain time frames. Specifically, OWCP*s goal
is for claims examiners to process all payable claims for traumatic
injuries and occupational disease within 14 days of OWCP*s receipt of the
claim from the Postal Service. OWCP considers the time that payment is
authorized as the end of the processing activity.
Evidence Required to Determine WCP Eligibility Was Almost Always Provided
by Postal Service Employees
Overall, we estimate that for about 99 percent of the cases involving
Postal Service employees who (1) had work- related injuries during the 12-
month period beginning July 1, 1997, and (2) filed claims for WCP benefits
for lost wages or schedule awards due to these injuries, the employees
provided to OWCP the evidence required to make a determination on their
eligibility for benefits. Specifically, about 99 percent of the traumatic
injury claims filed by Postal Service employees contained evidence related
to the five requirements set forth in OWCP regulations and only about 1
percent of the claims did not include all of the required evidence. For
occupational disease claims, about 98 percent of the claims filed by
Postal Service employees contained evidence related to the five
requirements, while only about 2 percent did not include all of the
required evidence. Generally, the evidence not provided for both types of
claims pertained to either (1) the employee*s status as a Postal Service
employee or (2) whether the claims were filed within the time limits
specified by law.
However, in about 69 percent of our sample cases* about 64 percent of the
traumatic injury cases and about 77 percent of the occupational disease
cases* OWCP claims examiners had
11 Claims are to be submitted to OWCP if the injury or disease was likely
to result in (1) a medical charge against OWCP, (2) disability for work
beyond the day or shift of injury, (3) the need for more than two
appointments for medical examination or treatment on separate days leading
to time lost from work, (4) future disability, (5) permanent impairment,
or (6) COP. If none of these conditions exist, the employer is required to
retain the forms as a permanent record in the Employee Medical Folder in
accordance with Office of Personnel Management guidelines.
12 For both traumatic injury and occupational disease claims, OWCP
regulations required the use of Form CA- 7, *Claim for Compensation Due to
Traumatic Injury or Occupational Disease,* in order to claim compensation
for wage loss or schedule award.
GAO- 03- 158R Postal Service Workers* Compensation Claims 7 to request and
obtain additional information from the injured employee, Postal Service,
or
medical provider in order to make a determination of WCP eligibility.
Postal Service Employee Claims for Program Eligibility Are Not Always
Processed Within Time Frames Set Forth by OWCP
On the basis of our analysis, we found that Postal Service employees did
not always submit, and Postal Service supervisors and OWCP claims
examiners did not always process, WCP claims within the time frames set
forth in OWCP regulations or performance standards for determining WCP
eligibility. Specifically, we estimate that Postal Service employees met
the time frames for submitting about 95 percent of traumatic injury claims
and about 49 percent of the occupational disease claims to the Postal
Service supervisors. (See table 2.) Once the Postal Service supervisors
received the claims, we estimate that these supervisors completed the
agency portion of the claim forms and forwarded about 73 percent of the
traumatic injury claim forms and about 64 percent occupational disease
claim forms to OWCP within the time frames set forth by OWCP. We also
estimate that OWCP claims examiners processed about 71 percent of the
traumatic injury claims and about 84 percent of the occupational disease
claims within the times frames set forth by OWCP. However, the time frames
for OWCP to process both traumatic injury claims and occupational disease
claims were affected by factors outside of OWCP*s control. In addition,
our estimate of the processing times for traumatic injury claims were
affected by OWCP*s mishandling of some SFC cases. As a result, claims for
WCP eligibility were not always processed within the time frames set forth
by OWCP.
According to OWCP officials, delays by OWCP in processing WCP claims are
sometimes due to the employees* failure to initially provide all of the
information needed in order to determine WCP eligibility. As a result, and
as discussed earlier in this report, additional processing time was
sometimes needed for OWCP to request and receive the needed information
before WCP eligibility could be determined. According to Postal Service
officials, part of the delay in getting WCP forms submitted within the
time frame set forth in OWCP regulations, especially for occupational
disease claims, is because employees sometimes do not realize the severity
of their injuries and do not file their WCP claims until the injuries get
worse or start to affect their job performance. These officials also told
us that Postal Service supervisors sometimes complete the agency part of
the forms but may not promptly forward WCP claim forms. In commenting on a
draft of this letter, the Postal Service told us that in July 2002, it had
established a reporting goal that 90 percent of employee claims for
traumatic injury and occupational disease are to be reported to OWCP
within 14 days of receiving the claims from the employees.
GAO- 03- 158R Postal Service Workers* Compensation Claims 8
Table 2: Length of Time to Process Claims to Determine Eligibility for WCP
Benefits for Injuries during the Period July 1, 1997, through June 30,
1998 a
Points in time to apply for and determine entitlement to WCP benefits Time
frames set forth in
OWCP regulations or performance standards
Estimated percentage of sample cases processed within time frames set
forth by OWCP
Traumatic injury Date of traumatic injury to date Postal Service
supervisor received notice of injury form 95 30 days
Date Postal Service supervisor received notice of injury form to date OWCP
received form
10 working days 73 Date OWCP received notice of injury form to date of
notice that eligibility for WCP benefits has been established 90 percent
of the cases
processed within 45 days 71 Occupational disease Date occupational disease
was recognized as jobrelated to date Postal Service supervisor receives
notice of occupational disease form
Date Postal Service supervisor received notice of occupational disease
form to date OWCP received form
Date OWCP received notice of occupational disease form to date of notice
that eligibility for WCP benefits has been established
30 days 10 working days 70 percent of the cases processed within 6 months
49 64 84
a Our sample included only those cases where Postal Service employees also
filed claims for wage loss or schedule award compensation payments due to
injuries that occurred or were recognized as job- related during the 12-
month period beginning July 1, 1997.
Source: GAO analysis of OWCP data.
GAO- 03- 158R Postal Service Workers* Compensation Claims 9 Time Frame for
Processing Traumatic Injury Claims for WCP Eligibility Are Affected
by SFC Cases Initially, we had estimated that OWCP claims examiners
processed only about 41 percent of the traumatic injury claims within the
times frames set forth by OWCP. This percentage, however, did not take
into consideration the *down time* associated with SFC cases. 13 According
to OWCP, SFC cases are WCP claims that are accepted (approved) as eligible
for WCP benefits upon receipt and allowed to incur up to $1,500 in medical
bills* without formal adjudication* and are closed. Also, SFC cases are to
remain closed* without any action taken on the part of claims examiners*
unless one or more of the following actions occur on the claims: (1)
medical expenses exceed $1,500, (2) the Postal Service later contests the
claim, or (3) a wage loss claim is submitted to OWCP. If one of these
events occurs, the case is to be reopened, processed, and adjudicated by
an OWCP claims examiner. Thus, according to OWCP officials, we should not
have considered as processing time the time frame between the date the SFC
case was closed and the date that it was reopened. 14
Once we deducted the *down time* associated with the 188 cases identified
by OWCP officials as SFC cases contained in our sample of 280 traumatic
injury cases, we determined that the percentage of traumatic injury claims
that were processed within the time frame set forth in OWCP performance
standards increased from our original estimate of about 41 percent to
about 71 percent. However, we also found from our case file review that
OWCP personnel did not always comply with OWCP*s SFC selection and
processing guidelines. This problem precluded a complete and accurate
assessment of OWCP*s processing time frames for eligibility determination
and indicates that closer monitoring of OWCP*s claims examiners* adherence
to SFC processing guidelines may be needed.
Specifically, we found that 14 of the 188 SFC cases in our sample (about 7
percent) were designated as SFC cases but did not meet OWCP*s SFC case
criteria: 6 cases involved third parties, 5 cases were initially contested
by Postal Service officials, and 3 cases involved occupational disease
claims. According to OWCP, traumatic injury claims that involve third
parties or are initially contested or claims that involve occupational
diseases normally require additional case development before a decision as
to whether WCP eligibility can be made. Thus, these 14 cases should not
have been selected as SFC cases. Initially, we had presented
13 In April 1993, OWCP initiated a pilot project in the Cleveland district
office implementing a predefined screening process for handling *lost
time* traumatic injury cases. A lost time injury is an injury for which
time is charged to leave, COP, or a wage loss claim is filed. Under this
pilot program*s screening process, a claim that was not contested by the
agency, had no wage loss claim, and did not have medical bills to exceed
$1, 500 would not be reviewed by a claims examiner. The purpose of this
was to relieve claims examiners of administrative work in adjudicating
cases that involved workrelated disabilities that would likely be overcome
during the 45- day COP period. According to OWCP officials, on the basis
of this pilot project (OWCP officials could not provide us a copy of this
study.) and its own past experience in handling these types of cases, OWCP
concluded that only about 1 percent of all lost time cases closed through
the SFC case process would be denied if actually adjudicated by a claims
examiner; and only $147,085 in medical payments would have been avoided if
all such cases were adjudicated. Additionally, OWCP estimated that the
amount of time savings realized as a result of the SFC process* in
conjunction with other quality assurance efforts* could amount to as much
as $4,450, 000 for fiscal year 1992. As a result, OWCP implemented the SFC
case process nationwide on October 3, 1993.
14 Because our sample cases included only WCP cases containing claims for
compensation for lost wages or schedule awards, all of the SFC cases in
our sample would have been reopened after the initial closure.
GAO- 03- 158R Postal Service Workers* Compensation Claims 10 OWCP with 17
SFC cases in our sample that we believed did not meet the SFC case
criteria.
At that time, OWCP provided us with additional information that indicated
that 3 of the 17 cases were properly designated as SFC cases. However, in
OWCP*s comments on a draft of this report, it stated that it had
previously demonstrated to us that only 9 of the 17 cases were handled
improperly. We disagree and still believe that 14 of our sample SFC cases
were handled improperly by OWCP claims examiners. Nevertheless, whether
there were 9 or 14 SFC cases that were handled improperly, the point is
that OWCP claims examiners do not always select and process SFC cases
properly.
We found further that once selected, some SFC cases may not have been
processed according to OWCP*s guidelines. Of the 188 SFC cases, we found
that 70 cases (about 37 percent) were adjudicated the same day that OWCP
claims examiners reopened the claim, which could indicate that contrary to
OWCP*s SFC guidelines, claims examiners may have worked on or processed
cases even though the cases were *technically* closed. Then, once the
claims examiner decided to accept or reject the claims, the cases were
reopened, adjudicated, and closed on the same day. Furthermore, in our
case file review, we noted several instances in which OWCP claims
examiners had requested additional claim information for closed SFC cases,
indicating that processing was taking place but that was not being
considered in OWCP*s processing time measurement.
In its comments on our draft report, OWCP said that we implied that SFC
cases that are reopened and adjudicated on the same day are not processed
in accordance with OWCP guidelines and that this is not the case. OWCP
said that its examiners are in fact encouraged to adjudicate claims as
quickly as possible; frequently, triggers such as a telephone call or a
facsimile transmission will be sufficient basis to reopen and adjudicate a
claim instantly. However, our case file review showed, and we were told by
OWCP officials in both the Dallas and Washington, D. C., district offices,
that contrary to SFC case processing guidelines, claims examiners
frequently work on cases while they are officially closed in an effort to
obtain relevant information from the claimant or the employer so that an
immediate eligibility determination can be made when the case is reopened.
Nevertheless, we revised our report to indicate that we are not implying
that all such cases are improperly processed.
OWCP officials generally agreed that mistakes were made in the SFC
screening process and operating procedures. They explained that the SFC
selection process and operating procedures, as a whole, have never been
evaluated since the initial pilot project was done in 1993. Because the
SFC case process has never been evaluated, no one knows whether the
process has achieved its intended objectives or maintained the pilot
project*s estimated error rate of about 1 percent for improperly approved
injury claims. Although we found that 2 of the 188 SFC cases in our sample
(about a 1 percent error rate) involved erroneously paid medical benefits
from OWCP and COP from the Postal Service, our review of SFC cases was not
designed to be representative of all such cases. 15 Furthermore, OWCP*s
pilot study that led to its SFC case processing policy was limited to one
district office, and OWCP has not evaluated the SFC case processing error
rate since that time. Thus, neither OWCP nor we have sufficient data to
determine the current SFC case processing error rate.
OWCP officials told us that they did not seek reimbursement from medical
providers for costs paid prior to the time OWCP determined that the
claimants were ineligible for WCP
15 We initially believed that 6 of the 188 SFC cases we reviewed indicated
erroneously paid benefits. However, in commenting on a draft of this
report, OWCP provided additional explanations that appeared to us to be
reasonable for 4 of the 6 cases.
GAO- 03- 158R Postal Service Workers* Compensation Claims 11 benefits.
They said that there is no rule that precludes OWCP from seeking
reimbursement
for improperly paid medical costs from the employees. Once OWCP formally
authorizes medical services to be provided to employees, the Employees'
Compensation Appeals Board, which considers WCP appeals, takes the
position that OWCP is contractually obligated to pay medical providers for
services rendered in connection with the authorization, even if OWCP later
decides to deny the claim. Postal Service officials, too, recognized that
reimbursement of improperly awarded medical costs should not be sought
from the medical providers. However, the Postal Service also said that,
because it is difficult to recover improperly awarded medical costs from
employees, changing OWCP's regulations and the language in the
authorization form to require employees or their insurance carriers to
refund improper medical payments would make it easier for them to recover
such amounts. Also, the Postal Service is required by statute to seek
reimbursement from its employees for improperly awarded COP.
Percentage of Compensation Claims Processed Within Time Frames Set Forth
by OWCP Could Not Be Reliably Estimated
We could not reliably estimate the percentage of WCP claims for
compensation payments for lost wages or schedule awards that were
processed within the time frames set forth in OWCP regulations because
OWCP did not require the dates needed to identify certain milestones in
the claims processing activities to be recorded and the dates were not
available from our sample case files. Also, OWCP*s performance standards
do not cover a significant type of claim for compensation* schedule
awards* or, when applicable, consider the impact of the additional
processing time associated with (1) processing the corresponding WCP claim
for eligibility or (2) OWCP requests for additional information from
injured employees, medical providers, or Postal Service supervisors.
Specifically, the dates needed to mark the beginning and ending actions
taken by the injured Postal Service employee and Postal Service supervisor
to complete, process, and submit, the claims for compensation to OWCP were
not available. For example, for traumatic injuries, OWCP regulations state
that an injured employee should submit a claim for compensation to the
Postal Service supervisor within 10 days from the date the employee*s pay
stopped due to an absence from work caused by the work- related injury.
However, we found that the date that the employee actually submits the
form to the Postal Service supervisor is not required by OWCP to be
recorded nor was it recorded on the claim form or available in the case
files we reviewed. As a result, we could not reliably estimate whether the
injured employees filed the claim forms within the time frame set forth by
OWCP; nor could we reliably estimate the time frame for the Postal Service
supervisors to complete and forward the claim form to OWCP after its
receipt from the employees.
Although we estimated that OWCP claims examiners processed about 59
percent of the traumatic injury and 63 percent of the occupational disease
claims within OWCP*s 14- day performance standard (the standard covers the
period between the date OWCP first received the claim form to the date
OWCP authorized the first compensation payment), problems with OWCP*s
performance standard itself reduced the reliability of the processing time
estimates we derived for this claims processing activity. First, OWCP*s
performance standard on which
GAO- 03- 158R Postal Service Workers* Compensation Claims 12 our estimate
is based excludes both claims for leave buy- backs 16 and claims for
schedule
awards. According to OWCP, both types of claims normally take longer than
the 14- day time frame standard to process. OWCP officials stated that it
is appropriate not to have performance standards for processing employee
claims for leave buy- back because the decision to grant leave buy- back
ultimately rests with the employing agency, and the decision to actually
repurchase leave rests with the claimant.
OWCP stated that it has not established processing standards for schedule
awards because entitlement to a schedule award for permanent impairment
requires an often prolonged process of determining whether the claimant
has reached maximum medical improvement and a precise and often difficult
determination of the degree of impairment. Accordingly, OWCP believes that
applying meaningful timeliness standards to claims staff in these
circumstances would be exceedingly difficult. However, we found that 43,
or about 10 percent of our sample claims, were claims for schedule awards.
We estimated that the median processing time for 37 of these claims for
which data were available was 115 days from the date that OWCP received
the claim until the first check was issued to the injured employee.
Further, we estimated that 90 percent of these claims were paid within 787
days. Therefore, because the number of schedule award claims is not
insignificant and processing times appear quite lengthy, we believe that
if a reasonable standard for processing these claims could be developed,
it could provide claims examiners with incentive to process schedule award
claims expeditiously and provide OWCP a management tool for overseeing and
evaluating the process.
Second, OWCP*s existing standard for compensation claims does not consider
the impact of delays caused by processing corresponding claims for
eligibility or delays caused by OWCP*s need for additional information
from the injured employee, employing agency, or medical provider. For
example, OWCP*s performance standard for processing claims for
compensation begins with OWCP*s receipt of the compensation claims forms,
even though the claim for compensation cannot be decided upon or awarded
until after WCP eligibility is determined. As a result, such compensation
claims forms cannot be processed until WCP eligibility is determined,
which could inadvertently result in claims being processed in greater than
the 14- day processing time frame set forth in OWCP performance standards.
In our sample cases, we found that compensation claims for about 23
percent of the traumatic injuries and about 12 percent of the occupational
disease were received by OWCP before WCP eligibility was determined.
According to OWCP officials, this indeed happens but there is little they
can do about it using the current performance standard for processing
claims for compensation, other than being aware that it is a possible
reason for such claims exceeding the processing standard.
Moreover, we found that delays in processing claims frequently occur
because injured employees do not always provide complete information at
the time they submit WCP claims, nor is sufficient or competent
information always provided to allow OWCP to determine WCP eligibility or
decide on compensation awards. As a result, OWCP is to inform the claimant
that additional evidence is needed and allow the claimant up to 30 days to
submit the requested information before OWCP can deny the claim. In our
analysis, we found that this happened quite often. In fact, for about 64
percent of the compensation claims stemming from traumatic injuries and
about 77 percent of the claims stemming from occupational
16 Leave buy- backs are claims for compensation for lost wages or schedule
awards wherein the claimant requests reinstatement of annual leave or sick
leave for the time absent from work in lieu of a cash payment. OWCP
officials stated that the decision to grant leave buy- back ultimately
rests with the federal agency and the decision to repurchase the leave
rests with the claimant.
GAO- 03- 158R Postal Service Workers* Compensation Claims 13 disease, OWCP
requested additional information before making a decision on the claims.
According to OWCP officials, delays created by having to request
additional information is indeed a problem. They have tried to minimize
these delays by taking such action as calling the employee or agency, when
appropriate, to obtain the information instead of sending formal written
requests. Regardless, according to these officials, under OWCP*s current
performance standards, all claims examiners and district directors can do
is monitor these delays and note their impact on the overall claims
processing activity.
Conclusions
Although nearly all Postal Service employees who filed claims for WCP
benefits for workrelated injuries sustained during the period July 1,
1997, through June 30, 1998, eventually provided the evidence required by
OWCP regulations to determine the employees* eligibility for WCP benefits,
many of these employees* claims were not processed within the time frames
set forth by OWCP. This is because (1) injured employees sometimes failed
to submit claim forms in a timely manner after the date of injury or
failed to initially provide all the needed information and (2) Postal
Service supervisors did not always follow OWCP guidelines for forwarding
the claims to OWCP. As a result, OWCP claims examiners frequently had to
request and obtain additional information in order to determine the
employees* WCP eligibility. These factors may have contributed to delays
that occurred in the overall claims processing activity. In addition, data
not required to be captured on the claim forms and not available from the
claim files as well as the handling of some SFC cases by OWCP claims
examiners affected the reliability of performance measurements for
determining WCP eligibility. Furthermore, this could indicate a need for
OWCP to reevaluate the SFC case process. Moreover, problems with OWCP*s
performance standards themselves made it impossible to reliably estimate
the time required for processing compensation claims for lost wages. In
addition, OWCP does not have performance standards for schedule awards
even though about 10 percent of WCP claims in our sample were for schedule
awards, and the processing times for these claims were generally quite
lengthy.
Recommendations for Executive Action
To help (1) improve measurement of WCP claims processing activity and (2)
ensure the accuracy in awarding WCP benefits, we recommend that the
Secretary of Labor direct the OWCP administrator to:
reevaluate and modify as needed OWCP*s regulations and performance
standards to better ensure that measurements reflect the time associated
with the various specific components and parties involved in processing
WCP claim forms up to the time WCP eligibility is determined and WCP
compensation payments are authorized or denied, and reconsider whether
reasonable performance standards for claims for schedule awards could and
should be established, and whether SFC cases should be combined with other
traumatic injury claims when measuring the timeliness of the eligibility
determination process;
establish a requirement that the dates needed to determine the various
processing times covered by OWCP*s regulations or performance standards
for all parties involved in processing WCP claims are recorded on the
applicable claim forms;
periodically (1) monitor employee compliance with SFC case selection and
processing guidelines and (2) determine whether the SFC case process is
achieving OWCP*s intended
GAO- 03- 158R Postal Service Workers* Compensation Claims 14 goals and
maintaining a cost- effective error rate regarding improperly awarded WCP
benefits. To help overcome the delays in processing WCP claim forms for
eligibility determination and compensation for lost wages and schedule
awards, we are also recommending that the Postmaster General
monitor and take appropriate actions to achieve its goal for the
preparation and processing of Postal Service employee claims for WCP
benefits and ensure that claims submitted to OWCP are as complete as
practical.
Agency Comments and Our Evaluation
We provided copies of a draft of this report to the Postmaster General and
the Secretary of Labor for their review and comment. On December 6, 2002,
the Postal Service*s Vice President, Employee Resource Management,
provided us with written comments stating that the Service supports our
recommendations regarding OWCP*s administration of the program. (See enc.
I.) He said that the Postal Service believes our recommendations will
improve OWCP*s ability to effectively manage the program. With regard to
our recommendation that OWCP and the Postal Service take action to improve
and monitor the preparation and processing of WCP claims, he stated that
the Postal Service has implemented such measures. He said that in July
2002, the Postal Service established a timeline reporting goal that 90
percent of employee claims for traumatic injury and occupational disease
are to be reported within 14 days. He said that in order to achieve such a
goal, field managers must establish a close working relationship with
employees* supervisors to ensure that claim forms are submitted promptly
and accurately. He also pointed out that in regard to the discussion in
our report relating to the collection of medical payments improperly made,
the payments are difficult to recover if the claim is later denied. He
said that if OWCP*s regulations and the language on the applicable form
were revised to require the employees or their insurance carriers to
refund medical payments improperly made, this would greatly increase the
ability to collect these payments. Finally, he stated that the efforts of
OWCP in continuing to improve program management and to identify ways to
deliver good service to injured Postal Service employees are appreciated.
We believe that the recent goal established by the Postal Service to
improve preparation and processing of Postal Service employees workers*
compensation claims should, if effectively implemented, help expedite the
WCP claims eligibility determination and adjudication processes as long as
the claims contain sufficient information for OWCP to process the claims.
Accordingly, we have revised the recommendations in our report to reflect
the Postal Service*s recently established claim submission goal.
By letter dated December 11, 2002, OWCP*s Director provided us general and
technical comments on our draft report. His general comments, included as
enclosure II, are discussed below and in those sections of the report
where applicable. We considered his technical comments and made changes to
the report where appropriate. Overall, OWCP disagreed with several aspects
of our methodology, findings, and recommendations but said the data
systems OWCP uses to measure its own and employing agencies* performance
are currently under review as part of a general system redesign and
replacement effort.
GAO- 03- 158R Postal Service Workers* Compensation Claims 15 Comments
about Our Methodology and Findings
OWCP stated in its comments that the operation of the workers*
compensation system remains a complex and intertwined set of activities,
and that in its view, the report does not fully and accurately describe
the overall performance of that system. OWCP specifically
pointed to our approach to the SFC case process as misrepresenting OWCP*s
handling of this large category of traumatic injury cases. Also, OWCP
pointed out that with respect to the timeliness of wage- loss claims
processing, our analysis focused only on the outcomes of claims for the
first compensation payment. OWCP stated that its system reports on a
larger universe* all payments generated from the receipt of a claim form,
and multiple claims are frequently filed on the same case.
Our work was never intended to address the overall performance of the
federal workers* compensation program. We explain early in the report that
our work focused on only Postal Service employees who filed claims for
wage loss or schedule award compensation during a specified period of
time. Because of our limited scope, we recognize that there would likely
be differences between the results of our analysis and the results of
OWCP*s systems for tracking its performance in processing a differing
universe of WCP claims. We nevertheless believe that the results of our
analysis of our sample postal employee claims are relevant for OWCP to
consider as it redesigns its system.
OWCP pointed out that on the basis of our stratified sample of 484 cases,
we found that OWCP adjudicated traumatic injury claims within program
standards 71 percent of the time and occupational disease claims 84
percent of the time. However, OWCP data systems capturing information on
all cases processed within the measured categories show traumatic injury
adjudication timeliness at better than 94 percent and occupational disease
case adjudication timeliness at more than 90 percent. OWCP said that the
discrepancy between what we found and what its systems show regarding
traumatic injury claim adjudication timeliness seriously distorts OWCP*s
performance.
Specifically, OWCP said that our approach to the SFC case process
misrepresents OWCP*s handling of this large category of traumatic injury
cases. It said that its 94 percent measurement of timeliness much more
fairly represents service to injured workers because it includes SFC cases
as completed within the 45 day standard. It said that this approach is
appropriate because the only benefit being claimed in such cases is
payment of medical claims. Further, OWCP disagreed with our approach of
excluding the down time associated with SFC cases because the vast
majority of SFC cases are never reopened. Therefore, if our methodology
were used, these cases would never be counted as processed even though up
to $1,500 in medical bills may have been promptly paid on each of these
claims. OWCP further stated that it has established a separate 45 day
standard for SFC cases that are reopened, and its system is reporting that
approximately 85 to 90 percent of these reopened cases are adjudicated
within the standard.
We believe that OWCP*s approach of combining SFC cases, which do not
involve processing time by claims examiners, with cases that do require
processing time by claims examiners does not provide an appropriate
measurement of timeliness for processing traumatic injury claims. As OWCP
points out, SFC cases are closed automatically and immediately if the case
meets certain criteria and medical claims are paid automatically up to a
preset limit. Combining these cases with cases that require examiners to
make decisions does not provide the most appropriate or meaningful measure
of the eligibility processing times for traumatic
GAO- 03- 158R Postal Service Workers* Compensation Claims 16 injury claims
because it would be difficult for OWCP to identify and address any
problems
that may affect the actual processing times of claims that do require
eligibility determination reviews. We believe our approach for determining
eligibility processing time frames for SFC cases, which begins at such
time the cases are reopened and ends when they are either approved or
denied, is more meaningful because that is the period of time during which
OWCP claims examiners are actively processing the cases.
Further, regarding OWCP*s concern that our approach to the SFC case
process would mean that SFC cases that are not reopened would never be
counted as processed, our analysis was intended to determine the
processing time for those SFC cases that were reopened from the time of
reopening through adjudication. OWCP could perform other analyses for its
purposes, such as determining and reporting the number of SFC cases where
medical payments were made but the cases were not reopened. We did not do
a separate analysis of the processing times for the SFC cases in our
sample after they were reopened; therefore, we do not know how the
processing times for these cases would compare to OWCP*s statement that
about 85 to 90 percent of all reopened SFC cases are adjudicated within
the 45 day standard. We have added a recommendation in our final report
that OWCP reconsider whether SFC cases should be combined with other
traumatic injury claims when measuring the timeliness of the eligibility
determination process.
OWCP stated that with respect to the timeliness of wage- loss claim
processing, it believes our sample is skewed. It pointed out we reported
that OWCP claims examiners processed about 59 percent of the traumatic
injury claims and about 63 percent of the occupational disease claims for
the first compensation payment within OWCP*s 14 day time standard.
However, the 85 percent figure reported by OWCP*s systems* relates to a
larger universe of all payments generated from the receipt of a claim
form, including multiple claims filed on the same case. OWCP further
pointed out that it agreed that the actions we cite in the report as
contributing to delays would naturally occur most frequently in connection
with the first payment on a particular case. However, according to OWCP,
once these actions are complete, supplemental payments can generally be
more prompt as reflected in the higher overall percentages of timely
payments captured by OWCP*s system. We agree that by including all
payments related to a claim instead of only the first payment the
timeliness of processing all payments could be different from what we
determined. However, because our objective was to determine how soon after
injury workers received a compensation payment, we focused our review only
on the first compensation payment. We further clarified our report to
state that we did not review subsequent claims for compensation.
OWCP stated that the discrepancy for occupational disease case
adjudication rates between what we found (84 percent timeliness) and what
its system is reporting (90 percent) is very near the confidence interval
we describe in our report and hence may be a statistical artifact.
According to OWCP it is reasonable to assume that their measures are
comparable with ours for this category. We agree with OWCP.
Comments about Our Recommendations OWCP also took issue with our
recommendations. Specifically, OWCP questioned the focus on our inability
to measure all segments of workers* compensation claims filing and
processing, stating that two of our three recommendations to OWCP related
to this issue. OWCP points out that the data systems it uses to measure
its own and employing agency performance were developed over many years
and are currently under review as part of a general system redesign and
replacement effort. It said that OWCP will take advantage of this review
opportunity to sharpen its measures where it believes doing so would yield
GAO- 03- 158R Postal Service Workers* Compensation Claims 17 improved
performance and transparency. However, it took exception with our concern
that
the current performance measurement system does not capture the date the
claimant submits the claim form to his or her supervisor, thereby
preventing a determination of whether the claimants were delaying the
processing of the claims or whether the postal supervisors were holding
the claims and thus delaying the process. OWCP defended its current system
by stating that it places the burden of timeliness where OWCP believes it
primarily belongs* on the employing agency, not on the injured worker.
We believe that capturing the date that the employee actually submits the
injury claim form to the employing agency instead of the date the employee
signs the claim form would allow the employing agencies and OWCP to better
determine where delays may be occurring in the process so that remedial
actions can be initiated. We do not believe that a requirement to capture
the date that employees submit the claim form to the employing agency
places any additional burden on injured workers; nor would it necessarily
detract from OWCP*s efforts to encourage employing agencies to act on
their own to initiate the filing of workers* compensation claims. We
believe that any general system redesign and replacement effort by OWCP
should include an evaluation of the need to capture the date on which
injured workers file their claims with the employing agencies. OWCP*s
regulations address the date employing agencies actually receive the
claim, which could be different from the date that employees sign the
claim form. Having this information should allow OWCP to better determine
the employees* needs when submitting claims while allowing OWCP to
identify actions the employing agencies could take to improve the process.
OWCP also disagreed with the implication of our first recommendation that
OWCP*s system of measuring its timeliness in processing wage- loss claims
should separate out claims for which the initial eligibility determination
has not been made. OWCP maintains that by separating such claims, its
claims examiners would have no incentive to try to quickly obtain any
missing information needed to determine a claimant*s eligibility for the
program, and thus more claims would encounter a much longer delay while in
this *deferred* status. According to OWCP, the net effect of measuring
such claims separately would be to increase, rather than reduce, the
delays that claimants experience in receiving their benefits.
We agree that OWCP should be in a position to determine whether its claims
examiners are trying to obtain missing eligibility information as quickly
as possible. However, we believe that an effective performance measurement
system should not hold claims examiners accountable for actions for which
they have no control. Under the current process and standard, OWCP
managers do not know when claims examiners are responsible for not meeting
its standard for timeliness in processing wage- loss claims or whether the
claim submitted did not provide the required information to determine
eligibility. As mentioned earlier in this report, about 64 percent of the
compensation claims for traumatic injury and 77 percent of the claims for
occupational disease in our sample required OWCP to request additional
information before making a decision. Again, we believe that any general
system redesign and replacement effort by OWCP should include an
assessment of whether its performance standard is appropriate with respect
to missing information from the claimant, how to help claimants provide
all appropriate information, and a measure for holding OWCP examiners
accountable only for actions they control.
OWCP also disagreed with our recommendation that postal supervisors send
only complete injured employee claim forms to OWCP. It said that if
agencies hold on to initial claims to ensure that all possible information
is compiled, OWCP*s initial receipt of the claim record may be delayed,
which in turn leads to the denial of medical bills because there is no
record of the worker or the injury in OWCP*s system. The intent of our
recommendation, however,
GAO- 03- 158R Postal Service Workers* Compensation Claims 18 is that
postal supervisors should work with injured employees to see that the
claim forms are
as complete as possible* we are not recommending that postal supervisors
unreasonably delay submission of the claim forms to OWCP. Our
recommendation is consistent with the initiative that the Postal Service
implemented in July 2002 to have managers, supervisors, and employees work
together to ensure that claim forms are submitted promptly and accurately.
Nonetheless we revised the wording of our recommendation to focus on the
Service*s effective implementation of its new initiative.
OWCP disagreed with our initial conclusion that the SFC case process may
result in greater than anticipated erroneous WCP payments and with our
recommendation that OWCP reevaluate the SFC case process. OWCP said that
it believes that our sample cases were not representative of the entire
universe of SFC cases. Nevertheless, OWCP said that it is currently
reviewing the precise rules and criteria used in implementing the SFC case
process as part of its business and data system redesign and will continue
to enhance the effectiveness of the process and ensure that it is properly
executed.
We agree that our sample of SFC cases was not designed to be
representative of the entire universe of SFC cases. We reviewed only SFC
cases that were part of our overall sample. The purpose of our study was
not to evaluate the overall SFC case process. We revised the report to
make this point clearer and to emphasize that neither we nor OWCP has
overall or generalizable current data on SFC case process error rates.
OWCP*s pilot test for the SFC case process was conducted in 1993 at only
one district office and has not since been revisited. We revised our
conclusion but kept our recommendation because we believe that our
findings with respect to these cases show that OWCP*s ongoing review of
the SFC case process provides an excellent opportunity to make certain
that the process is meeting OWCP*s intended goals and is maintaining a
cost- effective error rate relative to any improperly awarded WCP
benefits.
Finally, OWCP disagreed with our proposed recommendation that the
Secretary determine whether processing standards should cover all types of
claims. OWCP provided a good reason for not having such a standard for
leave buy- back claims. It said that the decision to grant leave buy- back
ultimately rests with the employing agency and that the decision to
actually repurchase leave rests with the claimant. However, we do not
believe that OWCP provided sufficient information for not having a
performance standard for schedule awards. OWCP said that it does not
believe that schedule award determinations can be made subject to strict
processing standards because entitlement of a schedule award for permanent
impairment requires a determination that the claimant has reached maximum
medical improvement. OWCP said that applying meaningful timeliness
standards to claims staff in these circumstances would be exceedingly
difficult. We agree that there are numerous difficulties involved in
adjudicating schedule awards claims. However, without such a standard,
there appears to be no incentive for OWCP examiners to process schedule
award claims as quickly as possible. Considering the proportion of lengthy
processing times for schedule award claims in our sample, we believe that
OWCP should explore the feasibility of developing a processing standard
for schedule awards that considers all the difficulties that can arise in
processing these claims. Having such a standard could act as an incentive
for timely processing, help hold OWCP staff accountable for actions they
can control, and serve as an impetus for identifying and addressing causes
of delays or lengthy processing times. Accordingly, we modified our
recommendation to focus specifically on exploring a standard for schedule
awards.
GAO- 03- 158R Postal Service Workers* Compensation Claims 19 - - - As
agreed with your office, unless you publicly announce the contents of this
report earlier, we plan no further distribution until 14 days from the
report date. At that time, we will send copies of this report to the
Ranking Minority Member of your subcommittee; the Chairman and Ranking
Minority Member, Senate Committee on Governmental Affairs; the Chairman
and Ranking Minority Member, House Committee on Government Reform; the
Chairman and Ranking Minority Member, Senate Committee on Health,
Education, Labor, and Pensions; and the Chairman and Ranking Minority
Member, House Committee on Education and the Workforce. Copies of this
report will also be sent to the Director of the Office of Management and
Budget, the Postmaster General/ Chief Executive Officer of the United
States Postal Service; the Chairman, Postal Rate Commission; the Secretary
of Labor; and others on request. In addition, the report will be available
at no charge on the GAO Web site at http:// www. gao. gov.
If you have any questions, please contact me at (202) 512- 2834 or ungarb@
gao. gov. Key contributors to this report are listed in appendix IV.
Sincerely yours, Bernard L. Ungar, Director Physical Infrastructure Issues
Enclosure I 20 GAO- 03- 158R Postal Service Workers* Compensation Claims
Comments from the United States Postal Service
Enclosure II
Comments from the U. S. Department of Labor
21 GAO- 03- 158R Postal Service Workers* Compensation Claims
Enclosure II
GAO- 03- 158R Postal Service Workers* Compensation Claims 22
Enclosure II
GAO- 03- 158R Postal Service Workers* Compensation Claims 23
Enclosure II
GAO- 03- 158R Postal Service Workers* Compensation Claims 24
Enclosure II
GAO- 03- 158R Postal Service Workers* Compensation Claims 25
Enclosure II
GAO- 03- 158R Postal Service Workers* Compensation Claims 26
Enclosure III 27 GAO- 03- 158R Postal Service Workers* Compensation Claims
Objectives, Scope, Methodology, and Sampling Plan
To provide information requested by Chairman Horn, our objectives were to
determine
the extent to which Postal Service employees provided all of the
evidence required by Office of Workers* Compensation Program (OWCP)
regulations for determining eligibility for WCP benefits and
whether claims for WCP eligibility and WCP compensation payments for
lost wages or schedule awards were submitted and processed within the time
frames set forth in OWCP regulations or performance standards. 17
We reviewed a statistically valid sample of Workers* Compensation Program
(WCP) case files to determine whether U. S. Postal Service claimants
submitted the evidence required for eligibility determinations, as well as
to determine the time required by the claimants, the Postal Service, and
OWCP to process claims and make entitlement and compensation award
decisions. Specifically, our review was designed to obtain information on
(1) when employees reported their injuries and the related evidence to
prove the sufficiency of their claims, (2) the amount of time that Postal
Service supervisors and officials took to process employees* claims and
forward them to OWCP, and (3) the amount of time that OWCP took to process
the claims and determine eligibility for benefits. Additionally, we
analyzed the impact that OWCP*s Short Form Closure (SFC) case program had
on the eligibility determination processing times associated with our
sample traumatic injury cases. Our work did not include an analysis of any
time involved in the appeals process of any claim we reviewed; nor did we
evaluate the appropriateness of OWCP*s decisions on the claims or make an
assessment of all types of claims involved in the WCP. We performed our
work from January through December 2002 in accordance with generally
accepted government auditing standards and obtained comments on the
results of our work from OWCP and the Postal Service.
Workers* Compensation Case File Review Development and Design
We randomly sampled 484 Postal Service employee WCP case files at the 12
OWCP district offices located throughout the country. For the 12- month
period beginning July 1, 1997, we obtained case file records for injuries
that occurred or were recognized as job- related during this period. We
chose this period of time because we believed that it was current enough
to reflect ongoing operations, yet historical enough for most, if not all,
of the claims to have been decided upon. The cases we reviewed were
randomly selected on the basis of the type of injury involved* traumatic
or occupational* as well as on the basis of their approval or nonapproval
for WCP benefits and compensation or schedule award payments.
We developed a data collection instrument to capture all the appropriate
information from OWCP*s case files and OWCP forms used to file a claim for
WCP benefits and compensation payments for lost wages and schedule awards,
along with any relevant information from OWCP or Postal Service officials.
We visited each of the OWCP district offices to review each selected case
file individually, compiling the claims information directly into our
17 OWCP regulations specify the time frames during which injured federal
employees and federal agencies are to submit and process WCP- related
forms; OWCP performance standards provide the annual operational
performance goals or time frames during which OWCP claims examiners are to
process WCP- related forms.
Enclosure III
GAO- 03- 158R Postal Service Workers* Compensation Claims 28 automated
data collection instrument. In addition, we interviewed OWCP and Postal
Service
officials in Washington, D. C., as well as the district office directors
in Washington, D. C., and Dallas, Texas, to discuss and collect pertinent
program information regarding the processing of employees* claims for WCP
eligibility and for compensation for lost wages and schedule awards.
Sampling Methodology The population from which we selected our sample
reflects Postal Service employees who, as of June 30, 2001, submitted
claims for compensation for lost wages or schedule awards for injuries
that occurred, or were recognized as job- related, during the 12- month
period beginning July 1, 1997. In order to report results for traumatic
injury and occupational disease claims, and to report results on claims of
both types whether compensation was paid or not, we stratified our
population into the following four strata on the basis of information from
the sample frame:
1. The employee filed a *Federal Employee*s Notice of Traumatic Injury and
Claim for Continuation of Pay/ Compensation* form (Form CA- 1) and
received payment for compensation for lost wages or a schedule award. 2.
The employee filed a *Federal Employee*s Notice of Traumatic Injury and
Claim for
Continuation of Pay/ Compensation* form (Form CA- 1) and did not receive
payment for compensation for lost wages or a schedule award. 3. The
employee filed a *Notice of Occupational Disease and Claim for
Compensation*
form (Form CA- 2) and received payment for compensation. 4. The employee
filed a *Notice of Occupational Disease and Claim for Compensation*
form (Form CA- 2) and did not receive payment for compensation. The size
of the population in each of these four strata was 3,872; 1,232; 2,967;
and 873, respectively. The number of sample cases obtained from each of
the four strata was 198, 106, 143, and 96, respectively. We initially
selected somewhat higher numbers of sample cases. If we were not able to
obtain the file for a particular sample case, we substituted cases from
the additional randomly sampled cases.
Sampling Results and Confidence Interval of Estimates
We followed a sampling procedure designed to draw 543 cases from the
agency*s files. Of these 543 cases, we located and reviewed 484 (180, 96,
128, and 80 in each strata, respectively). A sampling error indicates how
closely we can reproduce from a sample the results we would have obtained
if we had reviewed every OWCP case file. By adding the sampling error to
and subtracting it from the estimate, we can develop upper and lower
bounds for each estimate. This range is called the confidence interval.
Sampling errors and confidence intervals are stated at a certain
confidence level* in this case, 95 percent. The 95 percent confidence
interval for proportion estimates of the total population was no greater
than plus or minus 5 percentage points. The 95 percent confidence interval
for proportion estimates applied to individual strata was no greater than
plus or minus 10 percentage points. Confidence levels for other types of
estimates, such as averages, medians, and totals, depended on the
variability of the sample values. We used SUDAAN software to make
population projections. Table 3 lists the confidence intervals for
selected information from our case file review.
Enclosure III
GAO- 03- 158R Postal Service Workers* Compensation Claims 29
Table 3: Sampling Results
Description
(Agency performance measures listed in italics)
Percentage of sample cases,
except where noted
95 percent confidence interval
From To
Length of time to process claims to determine WCP eligibility-- traumatic
injury
Date of traumatic injury to date Postal Service supervisor received notice
of injury form (OWCP Form CA- 1) (within 30 calendar days)
94.69 91.30 97.10 Date Postal Service supervisor received notice of injury
form (OWCP Form CA- 1) to date OWCP received form (within 10 working days)
73.11 67.70 78.50 Date OWCP received notice of injury form (OWCP Form CA-
1) to date of notice that eligibility for WCP benefits has been
established (90 percent of the cases processed within 45 days)
41.26 34.90 47.60 Date OWCP received notice of injury form (OWCP Form CA-
1) to date of notice that eligibility for WCP benefits has been
established. [Estimate considers effect of SFCs] (90 percent of the cases
processed within 45 days)
70.56 64.70 76.40 Total processing time for 25 percent of cases: date of
injury to date eligibility for WCP benefits established. (Estimate deducts
down time associated with SFCs)
46.73 days 41.20 58.18 Total processing time for 90 percent of cases: date
of injury to date eligibility for WCP benefits is established. (Estimate
deducts down time associated with SFCs)
380.88 days 260.55 464.55
Length of time to process claims to determine eligibility -- occupational
disease
Date occupational disease was recognized as job- related (OWCP Form CA- 2)
to date Postal Service supervisor receives notice of occupational disease
form (within 30 calendar days)
48.51 41.00 56.10 Date Postal Service supervisor received notice of
occupational disease form (OWCP Form CA- 2) to date OWCP received form
(within 10 working days)
64.12 56.70 71.50 Date OWCP received notice of occupational disease form
(OWCP Form CA- 2) to date of notice that eligibility for WCP benefits has
been established (70 percent of the cases processed within 6 months)
84.16 77.80 89.30 Total processing time for 25 percent of cases: date
disease recognized as job- related to date of notice that eligibility for
WCP benefits is established
77.88 days 68.19 92.24 Total processing time for 90 percent of cases: date
disease recognized as job- related to date of notice that eligibility for
WCP benefits is established 577.44 days 447.34 666.68
Length of time to process claims for compensation for injuries * traumatic
injury
Date OWCP received claim for compensation to date of claim processed for
first payment. (OWCP Form CA- 7) (80 percent of claims processed within 14
days of receipt)
58.63 50.2 67.1
Length of time to process claims for compensation for injuries *
occupational disease
Date OWCP received claim for compensation to date of claim processed for
first payment. (OWCP Form CA- 7) (80 percent of claims processed within 14
days of receipt)
63.14 52.8 73.5
Additional estimates
Percentage of claims with COP requested 55.64 52.0 59.2 Percentage of
claims with annual or sick leave requested 11.09 8.3 14.5 Overall:
Percentage of claims for which OWCP requested additional information 68.72
64.20 73.30 Percentage of claims for which OWCP requested additional
information* traumatic injury
63.60 57.50 69.70 Percentage of claims for which OWCP requested additional
information occupational disease 76.51 68.90 83.00 Overall: Percentage of
claims with evidence that met all five OWCP required elements
98.74 97.30 99.50
Enclosure III
GAO- 03- 158R Postal Service Workers* Compensation Claims 30
Percentage of claims with evidence that met all five required elements *
traumatic injury 99.08 97.10 99.80
Percentage of claims with evidence that met all five required elements*
occupational disease 98.25 95.40 99.60
Source: GAO analysis of OWCP data.
Enclosure IV 31 GAO- 03- 158R Postal Service Workers* Compensation Claims
GAO Contacts and Staff Acknowledgments GAO Contacts
Bernard L. Ungar (202) 512- 2834 Sherrill Johnson (214) 777- 5699
Acknowledgments
In addition to those named above, Michael Rives, Frederick Lyles, Jr.,
Melvin Horne, John Vocino, Jerry Sandau, Brandon Haller, Jill Sayre, and
Donna Leiss made key contributions to this report.
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