Energy Employees Compensation: Case-Processing Bottlenecks Delay
Payment of Claims (06-DEC-03, GAO-04-298T).
The Department of Energy (Energy) and its predecessor agencies
and contractors have employed thousands of workers in the nuclear
weapons production complex. Some employees were exposed to toxic
substances, including radioactive and hazardous materials, during
this work and many subsequently developed illnesses. Subtitle D
of the Energy Employees Occupational Illness Compensation Program
Act of 2000 allows Energy to help its contractor employees file
state workers' compensation claims for illnesses determined by a
panel of physicians to be caused by exposure to toxic substances
in the course of employment at an Energy facility. Energy began
accepting applications under this program in July 2001, but did
not begin processing them until its final regulations became
effective on September 13, 2002. The Congress mandated that GAO
study the effectiveness of the benefit program under Subtitle D
of this Act. This testimony is based on GAO's ongoing work on
this issue and focuses on three key areas: (1) the number,
status, and characteristics of claims filed with Energy; (2) the
extent to which there will be a "willing payer" of workers'
compensation benefits, that is, an insurer who--by order from, or
agreement with Energy--will not contest these claims; and (3) the
extent to which Energy policies and procedures help employees
file timely claims for these state benefits.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-298T
ACCNO: A08959
TITLE: Energy Employees Compensation: Case-Processing
Bottlenecks Delay Payment of Claims
DATE: 12/06/2003
SUBJECT: Claims processing
Data collection
Hazardous substances
Health hazards
Insurance claims
Radiation exposure hazards
Workers compensation
******************************************************************
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GAO-04-298T
United States General Accounting Office
GAO Testimony
Before the Subcommittee on Energy, Committee on Energy and Natural
Resources, U.S. Senate
For Release on Delivery
Expected at 9:00 a.m. CST
Saturday, December 6, 2003 ENERGY EMPLOYEES COMPENSATION
Case-Processing Bottlenecks Delay Payment of Claims
Statement of Robert E. Robertson, Director, Education, Workforce, and Income
Security Issues
GAO-04-298T
Highlights of GAO-04-298T, testimony before the Subcommittee on Energy,
Committee on Energy and Natural Resources, U.S. Senate
The Department of Energy (Energy) and its predecessor agencies and
contractors have employed thousands of workers in the nuclear weapons
production complex. Some employees were exposed to toxic substances,
including radioactive and hazardous materials, during this work and many
subsequently developed illnesses. Subtitle D of the Energy Employees
Occupational Illness Compensation Program Act of 2000 allows Energy to
help its contractor employees file state workers' compensation claims for
illnesses determined by a panel of physicians to be caused by exposure to
toxic substances in the course of employment at an Energy facility. Energy
began accepting applications under this program in July 2001, but did not
begin processing them until its final regulations became effective on
September 13, 2002.
The Congress mandated that GAO study the effectiveness of the benefit
program under Subtitle D of this Act. This testimony is based on GAO's
ongoing work on this issue and focuses on three key areas: (1) the number,
status, and characteristics of claims filed with Energy; (2) the extent to
which there will be a "willing payer" of workers' compensation benefits,
that is, an insurer who-by order from, or agreement with Energy- will not
contest these claims; and (3) the extent to which Energy policies and
procedures help employees file timely claims for these state benefits.
www.gao.gov/cgi-bin/getrpt?GAO-04-298T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Robert E. Robertson at (202)
512-7215 or [email protected]..
December 2003
ENERGY EMPLOYEES COMPENSATION
Case-Processing Bottlenecks Delay Payment of Claims
As of June 30, 2003, Energy had completely processed only about 6 percent
of the nearly 19,000 cases it had received. More than three-quarters of
all cases were associated with facilities in nine states. Processing had
not begun on over half of the cases and, of the remaining 40 percent of
cases that were in processing, almost all were in the initial case
development stage, as illustrated below.
Case Status as of June 30, 2003
While the majority of cases (86 percent) associated with major Energy
facilities in nine states potentially have a willing payer of workers'
compensation benefits, actual compensation is not certain. This figure is
based primarily on the method of workers' compensation coverage used by
Energy contractor employers and is not an estimate of the number of cases
that will ultimately be paid. Since no claimants to date have received
compensation as a result of their cases filed with Energy, there is no
actual experience about how contractors and state programs treat such
claims.
Claimants have been delayed in filing for state worker's compensation
benefits because of two bottlenecks in Energy's claims process. First, the
case development process has not always produced sufficient cases to allow
the panels of physicians who determine whether the worker's illness was
caused by exposure to toxic substances to operate at full capacity. While
additional resources may allow Energy to move sufficient cases through its
case development process, the physician panel process will continue to be
a second, more important, bottleneck. The number of panels, constrained by
the scarcity of physicians qualified to serve on panels, will limit
Energy's capacity to decide cases more quickly, using its current
procedures. Energy officials are exploring ways that the panel process
could be more efficient.
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss our work regarding the
effectiveness of the benefit program under Subtitle D of the Energy
Employees Occupational Illness Compensation Program Act of 2000 (EEOICPA)
in assisting contractor employees in obtaining compensation for
occupational illnesses. Congress mandated that we study this issue and
report to the Senate Committees on Energy and Natural Resources and
Appropriations and the House Committees on Energy and Commerce and
Appropriations.
For the last several decades, the Department of Energy (Energy), and its
predecessor agencies and contractors have employed thousands of
individuals in secret and dangerous work in the nuclear weapons production
complex. Over the years, employees were unknowingly exposed to toxic
substances, including radioactive and hazardous materials, and studies
have shown that many of these employees subsequently developed illnesses.
The Energy Employees Occupational Illness Compensation Program provides
for compensation to these employees who developed occupational illnesses
and, where applicable, to their survivors. Congressional Committees, as
well as individual Members of Congress, claimants, and advocates have
raised concerns regarding Energy's processing of claims and the
availability of benefits once claims have been decided.
As title XXXVI of the Floyd D. Spence National Defense Authorization Act
for Fiscal Year 2001, which was signed into law on October 30, 2000, this
legislation has two major components. Subtitle B provides eligible workers
who were exposed to radiation or other toxic substances and who
subsequently developed illnesses such as cancer and lung disease a
one-time payment of up to $150,000 and covers future medical expenses
related to the illness. The Department of Labor administers these
benefits, payable from a compensation fund established by the same
legislation. Subtitle D allows Energy to help its contractor employees
file state workers' compensation (WC) claims for illnesses determined by a
panel of physicians to be caused by exposure to toxic substances in the
course of employment at an Energy facility. The legislation did not set
aside funding for payment of benefits under Subtitle D.
My testimony today reflects our ongoing review of the effectiveness of
Energy's implementation of Subtitle D. We focused our work on three key
areas: (1) the number, status, and characteristics of claims filed with
Energy; (2) the extent to which there will be a "willing payer" of
workers'
compensation benefits; that is, an insurer who-by order from, or agreement
with Energy-will not contest these claims; and (3) the extent to which
Energy policies and procedures help employees file timely claims for state
workers' compensation benefits.
In summary, as of June 30, 2003, Energy had fully processed about 6
percent of the nearly 19,000 cases received, and more than three-quarters
of all cases were associated with facilities in nine states. Energy had
not begun processing over half of the cases received. While some other
case characteristics can be determined, such as illness claimed, systems
limitations prevent reporting on other case characteristics, such as the
reasons for ineligibility or basic demographics. While the majority of
cases (86 percent) associated with major Energy facilities in nine states
potentially have a willing payer of workers' compensation benefits, actual
compensation is not certain. In certain states such as Ohio and Iowa,
there are likely to be many cases that lack willing payers, and in some
instances may be less likely to receive compensation than a comparable
case with a willing payer in a different state. The 86 percent figure
reflects the number of cases for which contractors and their insurers are
likely to not contest a workers' compensation claim, rather than the
number of cases that will ultimately be paid. For all claimants, actual
compensation is not certain because of additional factors such as
variations in state workers' compensation programs or contractors'
uncertainty on how to compute the benefit. Claims for workers'
compensation have been delayed by two bottlenecks in Energy's claims
process. First, Energy's case development process has not always produced
sufficient cases to keep physician panels operating at full capacity.
While additional resources may allow Energy to move a sufficient number of
cases through its case development process, the physician panel process
will continue to be a second and more important bottleneck. The number of
panels, constrained by the scarcity of physicians qualified to serve on
panels, will limit Energy's capacity to decide cases more quickly, using
its current procedures. Energy officials are exploring ways that the panel
process could be made more efficient.
To perform our review, we analyzed data extracted from Energy's Subtitle D
case management system for applications filed through June 30, 2003.1
1We collected data as of this date to enable us to assess the reliability
of Energy's data by (1) performing electronic testing for obvious errors
in accuracy and completeness, (2) reviewing available documentation, and
(3) interviewing agency officials and contractors knowledgeable about the
data. We determined that the data elements used were sufficiently reliable
for our purposes.
We also reviewed the provisions of, and interviewed officials with, the
workers' compensation programs in nine states accounting for more than
three-quarters of Subtitle D cases filed, and we interviewed the
contractors operating the major facilities in these states. In addition,
we conducted site visits to three Energy facilities in Oak Ridge,
Tennessee, the state with facilities accounting for the greatest number of
Subtitle D claims. We also interviewed key program officials and other
experts. We conducted our review from April 2003 through October 2003 in
accordance with generally accepted government auditing standards.
Background Energy oversees a nationwide network of 40 contractor-operated
industrial sites and research laboratories that have historically employed
more than 600,000 workers in the production and testing of nuclear
weapons. In implementing EEOICPA, the President acknowledged that it had
been Energy's past policy to encourage and assist its contractors in
opposing workers' claims for state workers' compensation benefits based on
illnesses said to be caused by exposure to toxic substances at Energy
facilities.2 Under the new law, workers or their survivors could apply for
assistance from Energy in pursuing state workers' compensation benefits,
and if they received a positive determination from Energy, the agency
would direct its contractors to not contest the workers' compensation
claims or awards. Energy's rules to implement the new program became
effective in September 2002, and the agency began to process the
applications it had been accepting since July 2001, when the law took
effect.
Energy's claims process has several steps, as shown in Figure 1. First,
claimants file applications and provide all available medical evidence.
Energy then develops the claims by requesting records of employment,
medical treatment, and exposure to toxic substances from the Energy
facilities at which the workers were employed. If Energy determines that
the worker was not employed by one of its facilities or did not have an
illness that could be caused by exposure to toxic substances, the agency
finds the claimant ineligible. For all others, once development is
complete, a panel of three physicians reviews the case and decides whether
exposure to a toxic substance during employment at an Energy facility was
at least as likely as not to have caused, contributed to, or aggravated
the claimed medical condition. The panel physicians are appointed by the
2Executive Order 13179 of December 7, 2000.
National Institute for Occupational Safety and Health (NIOSH) but paid by
Energy for this work. Claimants receiving positive determinations are
advised that they may wish to file claims for state workers' compensation
benefits. Claimants found ineligible or receiving negative determinations
may appeal to Energy's Office of Hearings and Appeals.
Figure 1. Energy's Claims Process
Energy notifies claimant Claimant may appealto submit claim to state
workers' determination to Energy's
compensation program Office of Hearings and Appeals
Source: GAO analysis of Energy Claims Process.
Each of the 50 states and the District of Columbia has its own workers'
compensation program to provide benefits to workers who are injured on the
job or contract a work-related illness. Benefits include medical treatment
and cash payments that partially replace lost wages. Collectively, these
state programs paid more than $46 billion in cash and medical benefits in
2001. In general, employers finance workers' compensation programs.
Depending on state law, employers finance these programs through one of
three methods: (1) they pay insurance premiums to a private insurance
carrier, (2) they contribute to a state workers' compensation fund, or (3)
they set funds aside for this purpose as selfinsurance. Although state
workers' compensation laws were enacted in part as an attempt to avoid
litigation over workplace accidents, the workers' compensation process is
still generally adversarial, with employers and their insurers tending to
challenge aspects of claims that they consider not valid.
State workers' compensation programs vary as to the level of benefits,
length of payments, and time limits for filing. For example, in 1999, the
maximum weekly benefit for a total disability in New Mexico was less than
$400, while in Iowa it was approximately $950. In addition, in Idaho, the
weekly benefit for total disability would be reduced after 52 weeks, while
in Iowa benefits would continue at the original rate for the duration of
the disability. Further, in Tennessee, a claim must be filed within 1 year
of the beginning of incapacity or death. However, in Kentucky a claim must
be filed within 3 years of exposure to more substances, but within 20
years of exposure to radiation or asbestos.
As of June 30, 2003, Energy had completely processed about 6 percent of
the nearly 19,000 cases that had been filed, and the majority of all cases
filed were associated with facilities in nine states. Forty percent of
cases were in processing, but more than 50 percent remained unprocessed.
While some case characteristics can be determined, such as illness
claimed, systems limitations prevent reporting on other case
characteristics, such as the reasons for ineligibility or basic
demographics.
Energy Has Fully Processed Few Cases, and Systems Limitations Complicate
Program Management
About 6 Percent of Cases Have Been Fully Processed
During the first 2 years of the program ending June 30 2003, Energy had
fully processed about 6 percent of the nearly 19,000 claims it received.
The majority of these claims had been found ineligible due to either a
lack of employment at an eligible facility or an illness related to toxic
exposure. Of the cases that had been fully processed, 42 cases-less than
one third of one percent of the nearly 19,000 cases filed-had a final
determination from a physician panel. More than two thirds of these
determinations (30 cases) were positive. At the time of our study, Energy
had not yet begun processing more than half of the cases, and an
additional 40 percent of cases were in processing (see fig. 2). The
majority of cases being processed were in the case development stage,
where Energy requests information from the facility at which the claimant
was employed. Fewer than 1 percent of cases in process were ready for
physician panel review and an additional 1 percent were under panel
review.
Figure 2. Case Status as of June 30, 2003
A majority of cases were filed early during program implementation, but
new cases continue to be filed. Nearly two-thirds of cases were filed
within the first year of the program, between July 2001 and June 2002.
However, in the second year of the program-between July 2002 and June 30,
2003-Energy continued to receive more than 500 cases per month. Energy
officials report that they currently receive approximately 100 new cases
per week.
Energy Facilities in Nine States Account for More than 75 percent of Cases
While cases filed are associated with facilities in 38 states or
territories, the majority of cases are associated with Energy facilities
in nine states (see fig. 3).3 Facilities in Colorado, Idaho, Iowa,
Kentucky, New Mexico, Ohio, South Carolina, Tennessee, and Washington
account for more than 75 percent of cases received by June 30, 2003. The
largest group of cases is associated with facilities in Tennessee.
3See Energy's website at: http://tis.eh.doe.gov/advocacy/index.html for
more information on the current distribution of cases across facilities
and states.
Figure 3. Distribution of Cases by Employee's Last Energy Facility Worked
Source: GAO analysis of Energy data.
Workers filed the majority of cases, and cancer is the most frequently
reported illness. Workers filed about 60 percent of cases, and survivors
of deceased workers filed about 36 percent of cases. In about 1 percent of
cases, a worker filed a claim that was subsequently taken up by a
survivor. Cancer is the illness reported in more than half of the cases.
Diseases affecting the lungs accounted for an additional 14 percent of
cases. Specifically, chronic beryllium disease is reported in 1 percent of
cases, and beryllium sensitivity, which may develop into chronic beryllium
disease, is reported in an additional 5 percent. About 7 percent of cases
report asbestosis, and less than 1 percent claimed silicosis.
Systems Limitations Systems limitations prevent Energy officials from
aggregating certain Complicate Program information important for program
management. For example, the case Management management system does not
collect information on the reasons that
claimants had been declared ineligible or whether claimants have
appealed decisions. Systematic tracking of the reasons for ineligibility
would make it possible to identify other cases affected by appeal
decisions that result in policy changes. While Energy officials report
that during the major systems changes that occurred in July 2003, fields
were added to the system to track appeals information, no information is
yet available regarding ineligibility decisions. In addition, basic
demographic data such as age and gender of claimants are not available.
Gender information was not collected for the majority of cases. Further,
insufficient edit controls- for example, error checking that would prevent
claimants' dates of birth from being entered if the date was in the
future-prevent accurate reporting on claimants' ages.
Insufficient strategic planning regarding data collection and tracking
have made it difficult for Energy officials to completely track case
progress and determine whether they are meeting the goals they have
established for case processing. For example, Energy established a goal of
completing case development within 120 days of case assignment to a case
manager. However, the data system developed by contractors to aid in case
management was developed without detailed specifications from Energy and
did not originally collect sufficient information to track Energy's
progress in meeting this 120-day goal. Furthermore, status tracking has
been complicated by changes to the system and failure to consistently
update status as cases progress. While Energy reports that changes made as
of July 2003 should allow for improved tracking of case status, it is
unclear whether these changes will be applied retroactively to status data
already in the system. If they are not, Energy will still lack complete
data regarding case processing milestones achieved prior to these changes.
Our analysis shows that a majority of cases associated with major Energy
facilities in nine states4 will potentially have a willing payer of
worker's compensation benefits. This finding reflects the number of cases
for which contractors and their insurers are likely to not contest a
workers' compensation claim, rather than the number of cases that will
ultimately be paid. The contractors considered to be willing payers are
those that have an order from, or agreement with, Energy to not contest
claims. However, there are likely to be many claimants who will not have a
willing
4The nine states are Colorado, Idaho, Iowa, Kentucky, New Mexico, Ohio,
South Carolina, Tennessee, and Washington. The cases in these states
represent more than three-quarters of the cases filed nationwide. The
results of our analysis cannot necessarily be applied to the remaining 25
percent of the cases filed nationwide.
While A Majority of Cases Potentially Have A Willing Payer, Actual
Compensation Is Not Certain
payer in certain states, such as Ohio and Iowa. For all claimants,
additional factors such as state workers' compensation provisions or
contractors' uncertainty on how to compute the benefit may affect whether
or how much compensation is paid.
A Majority of Cases in Nine States Potentially Have a Willing Payer
A majority of cases in nine states will potentially have a willing payer
of workers' compensation benefits, assuming that for all cases there has
been a positive physician panel determination and the claimant can
demonstrate a loss from the worker's illness that has not previously been
compensated. Specifically, based on our analysis of worker's compensation
programs and the different types of workers compensation coverage used by
the major contractors, it appears that approximately 86 percent of these
cases will potentially have a willing payer-that is, contractors and their
insurers who will not contest the claims for benefits. It was necessary to
assume that all cases filed would receive a positive determination by a
physician panel because sufficient data are not available to project the
outcomes of the physician panel process. More specifically, there are
indications that the few cases that have received determinations from
physician panels may not be representative of all cases filed, and
sufficient details on workers' medical conditions were not available to
enable us to independently judge the potential outcomes. In addition, we
assumed that all workers experienced a loss that was not previously
compensated because sufficient data were not available to enable us to
make more detailed projects on this issue.
As shown in table 1, most of the contractors for the major facilities in
these states are self-insured, which enables Energy to direct them to not
contest claims that receive a positive medical determination.5 In
addition, the contractor in Colorado, which is not self-insured but has a
commercial policy, took the initiative to enter into an agreement with
Energy to not contest claims. The contractor viewed this action as being
in its best interest to help the program run smoothly. However, it is
unclear whether the arrangement will be effective because no cases in
Colorado have yet received compensation. In such situations where there is
a willing payer, the contractor's action to pay the compensation
consistent with Energy's
5EEOICPA allows Energy, to the extent permitted by law, to direct its
contractors not to contest such WC claims. Energy's regulations prohibit
the inclusion of the costs of contesting such claims as allowable costs
under the contract, but allow the costs incurred as the result of a WC
award as reimbursable costs to the full extent permitted under the
contract.
order to not contest a claim will override state workers' compensation
provisions that might otherwise result in denial of a claim, such as
failure to file a claim within a specified period of time. However, since
no claimants to date have received compensation as a result of their cases
filed with Energy, there is no actual experience about how contractors and
state workers' compensation programs treat such cases.
About 14 percent of cases in the nine states we analyzed may not have a
willing payer. Therefore, in some instances these cases may be less likely
to receive compensation than a comparable case for which there is a
willing payer, unless the claimant is able to overcome challenges to the
claim. Specifically, these cases that lack willing payers involve
contractors that (1) have a commercial insurance policy, (2) use a state
fund to pay workers' compensation claims, or (3) do not have a current
contract with Energy. In each of these situations, Energy maintains that
it lacks the authority to make or enforce an order to not contest claims.
For instance, an Ohio Bureau of Workers' Compensation official said that
the state would not automatically approve a case, but would evaluate each
workers' compensation case carefully to ensure that it was valid, and
thereby protect its state fund.
Table 1. Extent to Which Cases in 9 States Will Potentially Have Willing Payers
Number of Cases as reported in Energy Facility, State
Types of Workers Compensation Coverage Energy data
Cases That Will Potentially Have a Willing Payer Commercial policy, agreement
with Energy not to contest claims Rocky Flats Plant, Colorado 1,488
Self-insurance Idaho National Engineering Lab, Idaho
Paducah Gaseous Diffusion Plant, Kentuckya 724
Los Alamos National Lab, New Mexico 978
Savannah River Site, South Carolina 1,043
Oak Ridge K-25, X-10, and Y-12 Plants, 2,873
Tennessee 3,325
Hanford Site, Washington 1,664
Subtotal of cases with a Willing Payer 86% or 12,095
Cases That May Not Have a Willing Payer
Commercial Policy, no agreement with Energy to not contest Paducah Gaseous
Diffusion Plant, Kentuckya claims; leases Energy facility
State Fund Portsmouth Gaseous Diffusion Plant, Ohio
No Current Contractor Iowa Ordnance Plant, Iowa
Subtotal of cases without a Willing Payer 14% or 2,046
Source: GAO analysis of Energy data and interviews with current
contractors.
Note: Table includes the cases from the facilities in these states with
the largest number of cases filed but does not include the remaining 721
cases (5 percent) from other facilities in these states.
aWhile an Energy contractor previously operated the Paducah Gaseous
Diffusion Plant, the plant is currently operated by a private entity that
leases the facility. In addition, an Energy contractor is currently
performing environmental clean-up at the facility. We split the cases
filed for the Paducah facility evenly between the current operator and the
clean-up contractor, based on discussions with the clean-up contractor.
Concerns about the extent to which there will be willing payers of
benefits have led to various proposals for addressing this issue. For
example, the state of Ohio proposed that Energy designate the state as a
contractor to provide a mechanism for reimbursing the state for paying the
workers' compensation claims. However, Energy rejected this proposal on
the grounds that EEOICPA does not authorize the agency to establish such
an arrangement. In a more wide-ranging proposal, legislation introduced in
this Congress6 proposes to establish Subtitle D as a federal program with
uniform benefits administered by the Department of Labor.
6H.R. 1758, sponsored by Representative Ted Strickland, was introduced on
April 10, 2003.
Multiple Factors Make Compensation Not Certain
In contrast to Subtitle B provisions that provide for a uniform federal
benefit that is not affected by the degree of disability, various factors
may affect whether a Subtitle D claimant is paid under the state workers'
compensation program, or how much compensation will be paid. Beyond the
differences in the state programs that may result in varying amounts and
length of payments, these factors include the demonstration of a loss
resulting from the illness and contractors' uncertainty on how to compute
compensation.
Even with a positive determination from a physician panel and a willing
payer, claimants who cannot demonstrate a loss, such as loss of wages or
medical expenses, may not qualify for compensation. On the other hand,
claimants with positive determinations but not a willing payer may still
qualify for compensation under the state program if they show a loss and
can overcome all challenges to the claim raised by the employer or the
insurer.
Contractors' uncertainty on how to compute compensation may also cause
variation in whether or how much a claimant will receive in compensation.
While contractors with self-insurance told us that they plan to comply
with Energy's directives to not contest cases with positive
determinations, some contractors were unclear about how to actually
determine the amount of compensation that a claimant will receive. For
example, one contractor raised a concern that no guidance exists to inform
them about whether they can negotiate the degree of disability, a factor
that could affect the amount of the workers' compensation benefit. Other
contractors will likely experience similar situations, as Energy has not
issued guidance on how to consistently compute compensation amounts.
While not directly affecting compensation amounts, a related issue
involves how contractors will be reimbursed for claims they pay. Energy
uses several different types of contracts to carry out its mission, such
as operations or cleanup, and these different types of contracts impact
how workers' compensation claims will be paid. For example, a contractor
responsible for managing and operating an Energy facility was told to pay
the workers' compensation claims from its operating budget. The contractor
said that this procedure may compromise its ability to conduct its primary
responsibilities. On the other hand, a contractor cleaning up an Energy
facility was told by Energy officials that its workers' compensation
claims would be reimbursed under its contract, and therefore paying claims
would not affect its ability to perform cleanup of the site.
Bottlenecks In Energy's Claims Process Delay Filing Of Workers Compensation
Claims
As a result of Energy's policies and procedures for processing claims,
claimants have experienced lengthy delays in receiving the determinations
they need to file workers' compensation claims. In particular, the number
of cases developed during initial case processing has not always been
sufficient to allow the physician panels to operate at full capacity.
Moreover, even if these panels were operating at full capacity, the small
pool of physicians qualified to serve on the panels would limit the
agency's ability to produce more timely determinations. Energy has
recently allocated more funds for staffing for case processing, but is
still exploring methods for improving the efficiency of its physician
panel process.
Sufficient Cases Have Not Always Been Available for Physician Panel Review
Energy's case development process has not consistently produced enough
cases to ensure that the physician panels are functioning at full
capacity. To make efficient use of physician panel resources, it is
important to ensure that a sufficient supply of cases is ready for
physician panel review. Energy officials established a goal of completing
the development of 100 cases per week by August 2003 to keep the panels
fully engaged. However, as of September 2003, Energy officials stated that
the agency was completing development on only about 40 cases a week.
Further, while agency officials indicated that they typically assigned 3
cases at a time to be reviewed within 30 days, several panel physicians
indicated that they received fewer cases, some receiving a total of only 7
or 8 during their first year as a panelist.
Energy was slow to implement its case development operation. Initially,
agency officials did not have a plan to hire a specific number of
employees for case development, but they expected to hire additional staff
as they were needed. When Energy first began developing cases, in the fall
of 2002, the case development process had a staff of about 14 case
managers and assistants. With modest staffing increases, the program
quickly outgrew the office space used for this function. Though Energy
officials acknowledged the need for more personnel by spring 2003, they
delayed hiring until additional space could be secured in August. As of
August 2003, Energy had more than tripled the number of employees
dedicated to case development to a about 50, and Energy officials believe
that they will now be able to achieve their goal of completing development
of 100 cases a week that will be ready for physician panel review. Energy
officials cited a substantial increase in the number of cases ready for
physician panel review during October 2003, and reported preparing more
than a hundred cases for panel review in the first week of November 2003.
Energy shifted nearly $10 million from other Energy accounts into this
program in fiscal year 2003, and plans to shift an additional $33 million
into the program in fiscal year 2004, to quadruple its case-processing
operation. With additional resources, Energy plans to complete the
development of all pending cases as quickly as possible and have them
ready for the physician panels. However, this would create a large backlog
of cases awaiting review by physician panels. Because most claims filed so
far are from workers whose medical conditions are likely to change over
time, creation of such a backlog could further slow the decision process
by making it necessary to update medical records before panel review.
The Ability to Produce More Timely Decisions May Be Limited By Small Pool
Of Qualified Physicians and Gaps in Information They Need to Quickly
Decide Cases
Even if additional resources allow Energy to speed initial case
development, the limited pool of qualified physicians7 for panels will
likely prevent significant improvements in processing time. Currently,
approximately 100 physicians are assigned to panels of 3 physicians. In an
effort to improve overall processing time, Energy has requested that NIOSH
appoint an additional 500 physicians to staff the panels. NIOSH has
indicated that the pool of physicians with the appropriate credentials and
experience (including those already appointed) may be limited to about
200. Even if Energy were able to increase the number of panel physicians
to 200, with each panel reviewing 3 cases a month, the panels would not be
able to review more than 200 cases in any 30-day period given current
procedures. Thus, even with double the number of physicians currently
serving on panels, it would take more than 7 years to process all cases
pending as of June 30, 2003, without consideration of the hundreds of new
cases the agency is receiving each month.8
Energy officials are exploring ways that the panel process could be made
more efficient. For example, the agency is currently planning to establish
permanent physician panels in Washington, DC. Physicians who are willing
to serve full-time for a 2 or 3-week period would staff these panels. In
addition, the agency is considering reducing the number of physicians
7The criteria NIOSH uses to evaluate qualifications for appointing
physicians to these panels include: (1) board certification in a primary
discipline; (2) knowledge of occupational medicine; (3) minimum of 5 years
of relevant clinical practice following residency; and (4) reputation for
good medical judgment, impartiality, and efficiency.
8This 7-year estimate assumes that none of the pending cases would be
determined ineligible on the basis of non-covered employment or illnesses
because we did not possess a sufficient basis for projecting the number of
additional cases that would be determined ineligible in the future.
serving on each panel-for example, initially using one physician to review
a case, assigning a second physician only if the first reaches a negative
determination, and assigning a third physician if needed to break a tie.
Energy staff are currently evaluating whether such a change would require
a change in their regulations.
Agency officials have also recommended additional sources from which NIOSH
might recruit qualified physicians and are exploring other potential
sources. For example, the physicians in the military services might be
used on a part-time basis. In addition, physicians from the Public Health
Service serve on temporary full-time details as panel physicians.
Panel physicians have also suggested methods to Energy for improving the
efficiency of the panels. For example, some physicians have stated that
more complete profiles of the types and locations of specific toxic
substances at each facility would speed their ability to decide cases. In
addition, one panel physician told us that one of the cases he reviewed
received a negative determination because specific documentation of toxic
substances at the worker's location was lacking. While Energy officials
reported that they have completed facility overviews for about half the
major sites, specific data are available for only a few sites. Agency
officials said that the scarcity of records related to toxic substances
and a lack of sufficient resources constrain their ability to pursue
building-bybuilding profiles for each facility.
Contacts and Acknowledgments
Mr. Chairman, this completes my prepared statement. I would be happy to
respond to any questions you or other Members of the Committee may have at
this time.
For information regarding this testimony, please contact Robert E.
Robertson, Director, or Andrew Sherrill, Assistant Director, Education,
Workforce, and Income Security at (202) 512-7215. Individuals making
contributions to this testimony include Amy E. Buck, Melinda L. Cordero,
Beverly Crawford, Patrick DiBattista, Corinna A. Nicolaou, Mary Nugent,
and Rosemary Torres Lerma.
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