Energy Employees Compensation: GAO's Prior Work Has Identified	 
Needed Improvements in Various Aspects of the Program (05-DEC-06,
GAO-07-233T).							 
                                                                 
The Energy Employees Occupational Illness Compensation Program	 
Act (EEOICPA) was enacted in 2000 to compensate Department of	 
Energy employees and contractors who developed work-related	 
illnesses such as cancer and lung disease. Energy administered	 
Subtitle D of the program. Subtitle B of the program is 	 
administered by the Department of Labor, which uses estimates of 
workers' likely radiation exposure to make compensation 	 
decisions. The estimates, known as dose reconstructions, are	 
performed by the National Institute for Occupational Safety and  
Health (NIOSH) under the Department of Health and Human Services 
(HHS). The act specified that the President establish an Advisory
Board on Radiation and Worker Health to review the scientific	 
validity of NIOSH's dose reconstructions and recommend whether	 
workers should be part of special exposure cohorts whose	 
claimants can be compensated without dose reconstructions. A	 
recent memorandum from the Office of Management and Budget (OMB) 
to Labor has raised concern about potential efforts to unduly	 
contain the cost of benefits paid to claimants. This testimony	 
presents GAO's past work on program performance and the work of  
the advisory board. It also highlights GAO's ongoing work	 
relevant to issues raised by the OMB memorandum. GAO interviewed 
key officials and reviewed contract and other agency documents.  
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-233T					        
    ACCNO:   A63887						        
  TITLE:     Energy Employees Compensation: GAO's Prior Work Has      
Identified Needed Improvements in Various Aspects of the Program 
     DATE:   12/05/2006 
  SUBJECT:   Claims processing					 
	     Compensation claims				 
	     Federal funds					 
	     Hazardous substances				 
	     Health hazards					 
	     Occupational safety				 
	     Program evaluation 				 
	     Program management 				 
	     Radiation exposure hazards 			 
	     Safety standards					 
	     Workers compensation				 
	     Program goals or objectives			 
	     Program implementation				 

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GAO-07-233T

   

     * [1]Background
     * [2]GAO's Prior Work Identified Problems with Case Processing an
     * [3]GAO's Prior Work Also Highlighted Issues of Advisory Board I
     * [4]GAO's Ongoing Work Includes Focus on Labor's Involvement in
     * [5]GAO Contact and Staff Acknowledgments
     * [6]GAO's Mission
     * [7]Obtaining Copies of GAO Reports and Testimony

          * [8]Order by Mail or Phone

     * [9]To Report Fraud, Waste, and Abuse in Federal Programs
     * [10]Congressional Relations
     * [11]Public Affairs

Testimony

Before the Subcommittee on Immigration, Border Security, and Claims,
Committee on the Judiciary, House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 4:00 p.m. EST

Tuesday, December 5, 2006

ENERGY EMPLOYEES COMPENSATION

GAO's Prior Work Has Identified Needed Improvements in Various Aspects of
the Program

Statement of Daniel Bertoni, Director, Education, Workforce and Income
Security Issues

GAO-07-233T

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss GAO's completed and ongoing work
on the implementation of the Energy Employees Occupational Illness
Compensation Program Act^1 (EEOICPA). For the last several decades, the
Department of Energy and its predecessor agencies and contractors have
employed thousands of individuals in secret and dangerous work in the
atomic weapons industry. This legislation was enacted in 2000 to provide
compensation to Energy employees and contractors who were exposed to
radioactive and hazardous materials and who subsequently developed
illnesses such as cancer and lung disease. Subtitle B of the program is
administered by the Department of Labor (Labor) and provides for a
one-time payment of $150,000 to eligible workers or their survivors and
coverage of future medical expenses associated with their illnesses. From
the program's effective date in July 2001, through October 2006, Labor
received 77,710 Subtitle B claims and has made payments for 21,376 of
these claims exceeding $1.7 billion.^2

The compensation act also called for the President to establish the
President's Advisory Board on Radiation and Worker Health--composed of
scientists, physicians, and employee representatives--to advise the
Secretary of Health and Human Services (HHS) on its activities under the
act.^3 The board is tasked with reviewing the scientific validity and
quality of the National Institute for Occupational Safety and Health's
(NIOSH) "dose reconstructions." These are estimates of the likely
radiation levels to which individual workers were exposed that Labor uses
to determine whether claimants will receive compensation. The board is
also tasked with making recommendations to the HHS Secretary on whether to
approve petitions for "special exposure cohort" status. Because certain
facilities are known to have exposed employees to radiation while keeping
few records of individuals' exposure, their employees have been designated
under the law as members of the special exposure cohort and their claims
may be paid without individual dose reconstructions.  The board is
assisted in its oversight work by a contractor.

^1Title XXXVI of Pub. L. No. 106-398.

^2Labor publishes program statistics at its Web site:
http://www.dol.gov/esa/regs/compliance/owcp/eeoicp/weeklystats.htm .

^3In December 2000 the President established the Advisory Board through
Executive Order 13179.

Subtitle D of EEOICPA established a separate program that was administered
by Energy. This program allowed Energy to help its contractors' employees
file state workers' compensation claims for illnesses determined by a
panel of physicians to be caused by exposure to toxic substances while
employed at an Energy facility. In October 2004, Congress amended the act
to restructure the program and to transfer responsibility from Energy to
Labor under the newly created Subtitle E.^4

Over the last several years, GAO has issued reports identifying needed
improvements in various aspects of the EEOICPA program that can affect
compensation provided to claimants. In 2004, we issued two reports that
focused on claims processing and program structure.^5 In February 2006, we
reported to you on the status of the advisory board's review of the
scientific validity and quality of NIOSH's dose reconstructions.^6

Since the issuance of our February 2006 report, a memorandum from the
Office of Management and Budget (OMB) to Labor has generated considerable
congressional concern about the potential for inappropriate efforts to
contain the cost of benefits paid to claimants. The memorandum notes that
Labor has identified the potential for a large expansion of EEOICPA Part B
benefits through the designation of special exposure cohorts. The
memorandum further states that the Administration planned to convene a
White House-led interagency workgroup to develop options to contain growth
in the costs of benefits provided by the program. The memorandum
specifically identifies five options, including more extensive review of
NIOSH's special exposure cohort recommendations and addressing any
"imbalance" in advisory board membership.^7 While it is reasonable for OMB
to have a role in overseeing the costs of federal programs, some have
raised concerns that certain options set forth in the memorandum, if
implemented, could result in decisions unduly based on budgetary
considerations rather than established scientific procedures for
compensating workers under this program. This Subcommittee held several
hearings in 2006 in response to such concerns.

^4Subtitle E of Title XXXI of Pub.L. No. 108-375.

^5Energy Employees Compensation: Even with Needed Improvements in Case
Processing, Program Structure May Result in Inconsistent Benefit Outcomes,
[12]GAO-04-516 (Washington, D.C.: May 28, 2004) and Energy Employees
Compensation: Many Claims Have Been Processed, but Action is Needed to
Expedite Processing of Claims Requiring Radiation Exposure Estimates,
[13]GAO-04-958 (Washington, D.C.: Sept. 10, 2004).

^6Energy Employees Compensation: Adjustments Made to Contracted Review
Process, but Additional Oversight and Planning Would Aid the Advisory
Board in Meeting Its Statutory Responsibilities, [14]GAO-06-177
(Washington, D.C.: Feb. 10, 2006).

GAO is currently conducting work requested by this Subcommittee to examine
a broad range of issues concerning implementation of Subtitle B. A central
focus of our ongoing work is on the reasons for increases in costs for the
contractors assisting NIOSH in performing dose reconstructions and how
effectively NIOSH has managed these contractors. Our ongoing work also
addresses other issues, including the implementation of conflict of
interest policies for NIOSH and its contractors, options for further
strengthening the independence of the advisory board and the contractor
assisting the board, and the extent, if any, to which Labor is involved in
Subtitle B activities that have been tasked to NIOSH, the advisory board,
or the contractor assisting the board, as specified by statute,
regulation, or contract. As agreed with your Committee, we plan to issue a
report on our ongoing work by the summer of 2007.

My testimony today will focus on three specific areas. First, I will
discuss our 2004 reports on claims processing and program structure.
Second, I will provide an overview of key findings from our February 2006
report on the work of the advisory board. Third, I will highlight an area
of our ongoing work that is especially relevant to issues raised by the
OMB memorandum to Labor. In performing this work, we interviewed key
officials, examined pertinent contract-related documents such as monthly
progress reports, and reviewed agency procedures and practices. Our work
is being conducted in accordance with generally accepted government
auditing standards.

^7The OMB memorandum to Labor specifies the following five cost
containment options: (1) require administration clearance of special
exposure cohort determination; (2) address any imbalance in membership of
the President's Advisory Board on Radiation and Worker Health; (3) require
an expedited review by outside experts of special exposure cohort
recommendations by NIOSH; (4) require NIOSH to apply conflict of interest
rules and constraints to the contractor assisting the Advisory Board; and
(5) require that NIOSH demonstrate that its site profiles and other dose
reconstruction guidance are balanced.

In summary, our May 2004 report indicated that Energy got off to a slow
start in processing Subtitle D claims and faced a backlog of cases
awaiting review by a physician panel. We concluded that in the absence of
changes to expedite Energy's review, many claimants would likely wait
years to receive the determination they needed from Energy to pursue a
state workers' compensation claim, and in the interim their medical
conditions might worsen or they might even die. We recommended that Energy
take actions to expedite claims processing, enhance communications with
claimants, and improve case management data. Our report also highlighted
problems with the structure of the program that could lead to inconsistent
benefit outcomes for claimants. We identified various options for
restructuring the program and a framework of factors to consider in
evaluating these options that informed congressional deliberations in
enacting new legislation to dramatically restructure the program and
transfer it from Energy to Labor. Labor told us it has taken actions to
address each of the recommendations we made to the Secretary of Energy in
our report. For example, Labor has compiled a data base of the toxic
substances that may have been present at Energy facilities and linked them
to medical conditions to help expedite the processing of claims. In
addition, Labor rebuilt its case management system which tracks all
Subtitle E claims transferred from Energy and enhanced the system's
performance and reliability.

Our September 2004 report focused on the Subtitle B program and found that
Labor and NIOSH faced a large backlog of claims awaiting dose
reconstruction. NIOSH had learned from its initial implementation
experience that completing site profiles--documents which describe the
layout, materials used, radiation sources, and other characteristics of
work sites--is a critical element for efficiently processing claims
requiring dose reconstruction. To enhance program management and promote
greater transparency with regard to the timeliness of completing dose
reconstructions, we recommended that the Secretary of HHS direct agency
officials to establish time frames for completing the remaining site
profiles, which HHS has done.

Our February 2006 report found that the roles of certain key federal
agency officials initially involved in the advisory board's review of dose
reconstructions may not have been sufficiently independent, but that
actions were taken to replace these officials. Since credibility is
essential to the work of the advisory board, we concluded that continued
diligence is required by HHS in avoiding actual or perceived conflicts of
roles when new candidates are considered for the roles. We also found that
the advisory board's review of site profiles and dose reconstructions
presented a steep learning curve and prompted the board to adjust the
contractor's work to better meet the needs of the review. For example, the
board revised task orders for the contractor to reduce the number of
reviews to be completed or extend completion dates. Nonetheless, we
concluded that further improvements could be made to the oversight and
planning of the contracted review. We recommended that HHS provide the
board with more comprehensive data on contractor spending levels compared
to work actually completed, assist the board in reexamining its long-term
plan for reviewing NIOSH's work, and improve tracking of agency actions
taken in response to board and contractor findings. HHS has implemented
these recommendations.

One aspect of our ongoing work on Subtitle B is especially relevant to
issues raised by the OMB memorandum to Labor. We are examining whether
Labor is involved in activities tasked to NIOSH, the advisory board, or
the contractor assisting the board, and if so, whether these activities
reflect an effort to constrain the cost of benefits. For example, in some
cases NIOSH has shared drafts of its special exposure cohort petition
evaluations as well as drafts of other NIOSH technical documents with
Labor before sending final versions to the advisory board, which is tasked
to review them. Labor has provided comments on some of these draft
documents. Labor officials told us that the basis of their involvement is
Labor's designation as primary administrator of the program. Labor
officials added that their reviews of these documents focus on changes
needed to promote clarity and consistency in the adjudication of claims.
We are currently examining the extent, nature, and outcome of Labor's
comments on various NIOSH documents. As our work proceeds, we plan to
obtain additional information on key issues such as the timing, nature,
and basis of Labor's activities in light of the program's design and
assignment of responsibilities.

Background

Several different federal agencies are involved with the implementation of
the Subtitle B program, including Labor, HHS, and Energy. However, Labor
has primary responsibility for administering the program. Labor receives
the claims, determines whether the claimant meets the eligibility
requirements, and adjudicates the claim. When considering the
compensability of certain claims, Labor relies on dose reconstructions
developed by NIOSH, under HHS. To avoid gathering similar information for
each claim associated with a particular facility, NIOSH compiles
facility-specific information in "site profiles," which assist NIOSH in
completing the dose reconstructions. NIOSH contracted with Oak Ridge
Associated Universities and the Battelle Corporation to develop site
profiles and draft dose reconstructions. Energy is responsible for
providing Labor and NIOSH with employment verification, estimated
radiation dose, and facility-wide monitoring data.

Labor does not refer all claims to NIOSH for dose reconstruction. For
example, reconstructions are not needed for workers in the special
exposure cohort. For special exposure cohort claimants, Labor verifies the
employment and illness, and develops a recommended compensability decision
that is issued to the claimant. The act specified that classes of workers
from four designated locations would constitute the special exposure
cohort^8 and authorized the Secretary of HHS to add additional classes of
employees. Classes of workers may petition HHS to be added to the cohort.
A class of employees is generally defined by the facility at which they
worked, the specific years they worked, and the type of work they did.^9
NIOSH collects and evaluates the petitions and gives the results of its
evaluations to the advisory board for review. The board, in turn, submits
a recommendation to the Secretary of HHS to accept or deny the petition.
To date, 13 classes of workers have been approved at 10 sites, and
petitions from 9 additional sites have been qualified for evaluation. A
petition from one site has been evaluated and denied.

GAO's Prior Work Identified Problems with Case Processing and Program Structure

Our May 2004 report identified various problems with Energy's processing
of Subtitle D cases. Energy got off to a slow start in processing cases
but had taken some steps to reduce the backlog of cases waiting for review
by a physician panel. For example, Energy took steps to expand the number
of physicians who would qualify to serve on the panels and recruit more
physicians. Nonetheless, a shortage of qualified physicians continued to
constrain the agency's capacity to decide cases more quickly. Further,
insufficient strategic planning and systems limitations made it difficult
to assess Energy's achievement of goals relative to case processing and
program objectives, such as the quality of the assistance provided to
claimants in filing for state workers' compensation. We concluded that in
the absence of changes that would expedite Energy's review, many claimants
would likely wait years to receive the determination they needed from
Energy to pursue a state workers' compensation claim, and in the interim
their medical conditions might worsen or they might even die. We made
several recommendations to Energy to help improve its effectiveness in
assisting Subtitle D claimants in obtaining compensation. Specifically, we
recommended that Energy take additional steps to expedite the processing
of claims through its physician panels, enhance the quality of its
communications with claimants, and develop cost-effective methods for
improving the quality of case management data and its capabilities to
aggregate these data to address program issues. Energy generally agreed
with these recommendations.

^8These four locations include three gaseous diffusion plants in Oak
Ridge, Tennessee; Paducah, Kentucky; Portsmouth, Ohio; and an underground
nuclear test site on Amchitka Island, Alaska.

^9For example, a member of the Amchitka Island Nuclear Explosion site
special exposure cohort is defined in the statute as an employee who was
"employed before January 1, 1974, by the Department of Energy or a
Department of Energy contractor or subcontractor on Amchitka Island,
Alaska and was exposed to ionizing radiation in the performance of duty
related to the Long Shot, Milrow, or Cannikin underground nuclear tests."

Our May 2004 report also identified structural problems that could lead to
inconsistent benefit outcomes for claimants whose illness was determined
by a physician panel to be caused by exposure to toxic substances while
employed at an Energy facility. Our analysis of cases associated with
Energy facilities in nine states^10 indicated that a few thousand cases
would lack a "willing payer" of workers' compensation benefits; that is,
they would lack an insurer that--by order from, or agreement with,
Energy--would not contest these claims. As a result, in some instances,
these cases may have been less likely to receive compensation than cases
for which there was a willing payer. We identified various options for
restructuring the program to improve payment outcomes and presented a
framework of issues to consider in evaluating these options. Congress
subsequently enacted legislation that dramatically restructured the
program, transferred it from Energy to Labor, and incorporated features of
some of the options we identified. Labor told us it has taken actions to
address each of the recommendations we made to the Secretary of Energy in
our report. For example, Labor has compiled a data base of the toxic
substances that may have been present at Energy facilities and linked them
to medical conditions to help expedite the processing of claims. In
addition, Labor has rebuilt its case management system which tracks all
Subtitle E claims transferred from Energy and enhanced the system's
performance and reliability.

Our September 2004 report on the Subtitle B program found that in the
first 2 1/2 years of the program, Labor and NIOSH had fully processed only
9 percent of the more than 21,000 claims that were referred to NIOSH for
dose reconstruction. NIOSH officials reported that the backlog of dose
reconstruction claims arose because of several factors, including the time
needed to get the necessary staff and procedures in place for performing
dose reconstructions and to develop site profiles. NIOSH learned from its
initial implementation experience that completing site profiles is a
critical element for efficiently processing claims requiring dose
reconstructions. To enhance program management and promote greater
transparency with regard to timeliness, we recommended that the Secretary
of HHS direct agency officials to establish time frames for completing the
remaining site profiles, which HHS has done.

^10The total number of cases in the nine states accounted for more than
three-quarters of all Subtitle D claims that had been filed.

GAO's Prior Work Also Highlighted Issues of Advisory Board Independence and
Oversight of the Contractor Supporting the Board

Our February 2006 report discussed the roles of certain federal agency
officials involved in the advisory board's review of NIOSH's dose
reconstructions and site profiles that raised concerns about the
independence of this review. The project officer who was initially
assigned responsibility for reviewing the monthly progress reports and
monitoring the technical performance of the contractor reviewing NIOSH's
dose reconstruction activities for the advisory board was also a manager
of the NIOSH dose reconstruction program. In addition, the person assigned
to be the designated federal officer for the advisory board, who is
responsible for scheduling and attending board meetings, was also the
director of the dose reconstruction program being reviewed. In response to
concerns about the appearance of conflicting roles, the director of NIOSH
replaced both of these officials in December 2004 with a senior NIOSH
official not involved in the program. The contractor and members of the
board told us that implementation of the contract improved after these
officials were replaced. Since credibility is essential to the work of the
advisory board and the contractor assisting the board, we concluded that
continued diligence by HHS is required to prevent such problems from
recurring when new candidates are considered for these roles. With regard
to structural independence, we found it appropriate that the contracting
officers managing the contract on behalf of the advisory board were
officials from the Centers for Disease Control and Prevention, NIOSH's
parent agency, who do not have responsibilities for the NIOSH program
under review and are not accountable to its managers. In addition,
advisory board members helped facilitate the independence of the
contractor's work by playing the leading role in developing and approving
the initial statement of work for the contractor and the independent
government cost estimate for the contract.

Our February 2006 report identified further improvements that could be
made to the oversight and planning of the advisory board's contracted
review of NIOSH's dose reconstructions and site profiles. We found that
this review presented a steep learning curve for the various parties
involved. In the first 2 years, the contractor assisting the board had
spent almost 90 percent of the $3 million that had been allocated to the
contract for a 5-year undertaking. In addition, the contractor's
expenditure levels were not adequately monitored by the agency in the
initial months and the contractor's monthly progress reports did not
provide sufficient details on the level of work completed compared to
funds expended. The advisory board had made mid-course adjustments to the
contractor's task orders and review procedures, such as by revising task
orders to reduce the number of reviews to be completed or extend
completion dates. However, the board had not comprehensively reexamined
its long-term plan for the overall project to determine whether the plan
needed to be modified in light of knowledge gained over the past few
years. Finally, without a system to track the actions taken by NIOSH in
response to the findings and recommendations of the advisory board and
contractor, there was no assurance that needed improvements were being
made.

We made three recommendations to HHS to address these shortcomings. First,
we recommended that HHS provide the board with more integrated and
comprehensive data on contractor spending levels compared with work
actually completed, which HHS has done. Second, we recommended that HHS
consider the need for providing HHS staff to collect and analyze pertinent
information to help the advisory board comprehensively reexamine its
long-term plan for assessing the NIOSH site profiles and dose
reconstructions. HHS is considering the need for such action. Third, we
recommended that the Director of NIOSH establish a system to track actions
taken by the agency in response to the board and contractor's findings and
recommendations. NIOSH now tracks agency actions to resolve the board and
contractor's comments.

GAO's Ongoing Work Includes Focus on Labor's Involvement in Certain Subtitle B
Program Activities

As part of our ongoing work, we are examining to what extent, if any,
Labor is involved in certain Subtitle B activities. While the director of
Labor's Office of Workers' Compensation Programs stated that Labor has not
taken any actions to implement the options outlined in the OMB memorandum,
Labor's internal correspondence reflects major concerns about the
potential for rapidly expanding costs in Subtitle B benefits resulting
from adding new classes of workers to the special exposure cohort. One
aspect of our ongoing work is determining whether Labor is involved in
activities that have been tasked to NIOSH, the advisory board, or the
contractor assisting the board, and if so, whether these activities
reflect an effort to constrain the costs of benefits. Our work in this
area is still ongoing and we have not drawn any conclusions. Nonetheless,
we would like to briefly highlight the types of issues we will be
analyzing as our work proceeds.

NIOSH has, in some cases, shared draft versions of key documents with
Labor before finalizing and sending them to the advisory board for review.
For example, NIOSH has shared draft special exposure cohort petition
evaluations with Labor. Similarly, NIOSH has agreed to allow Labor to
review and comment on drafts of various technical documents such as site
profiles, technical basis documents, or technical information
bulletins,^11 all of which are used to help perform dose reconstructions.
Labor has provided comments on some of these draft documents. Labor
officials told us that the basis of their involvement is Labor's
designation as lead agency with primary responsibility for administering
the program. Labor officials added that their reviews of these documents
focus on changes needed to promote clarity and consistency in the
adjudication of claims. In addition, Labor has reviewed individual dose
reconstructions completed by NIOSH. Labor officials told us that they
review all NIOSH dose reconstructions and return them for rework if, for
example, they find errors in factual information or in the way the dose
reconstruction methodology was applied. We are currently examining the
extent, nature, and outcome of Labor's comments on these various
documents. As our review proceeds, we plan to obtain more information on
key issues such as the timing, nature, and basis of Labor's activities in
light of the program's design and assignment of responsibilities.

Mr. Chairman, this concludes my prepared remarks. I will be pleased to
answer any questions you or other Members of the Subcommittee may have.

^11Site profiles are documents that describe a specific work site,
including physical appearance and layout of the site, the work processes
used there, the types of materials used, potential sources of radiation,
and other details important at that work site. Site profiles may be used
to assist NIOSH in the completion of the dose reconstruction. Technical
basis documents are the individual documents that form a site profile.
Technical information bulletins contain information on specific technical
issues or procedures for estimating radiation exposure for specific or
multiple work sites. They are used to add to or supplement site profiles
and technical basis documents.

GAO Contact and Staff Acknowledgments

For further information regarding this testimony, please contact me at
(202) 512-7215. Key contributors to this testimony were Claudia Becker,
Meeta Engle, Robert Sampson, Andrew Sherrill, and Charles Willson.

Related GAO Products

Department of Energy, Office of Worker Advocacy: Deficient Controls Led to
Millions of Dollars in Improper and Questionable Payments to Contractors.
[15]GAO-06-547 . Washington, D.C.: May 31, 2006.

Energy Employees Compensation: Adjustments Made to Contracted Review
Process, but Additional Oversight and Planning Would Aid the Advisory
Board in Meeting Its Statutory Responsibilities. [16]GAO-06-177 .
Washington, D.C.: Feb. 10, 2006.

Energy Employees Compensation: Many Claims Have Been Processed, but Action
Is Needed to Expedite Processing of Claims Requiring Radiation Exposure
Estimates. [17]GAO-04-958 . Washington, D.C.: Sept. 10, 2004.

Energy Employees Compensation: Even with Needed Improvements in Case
Processing, Program Structure May Result in Inconsistent Benefit Outcomes.
[18]GAO-04-516 . Washington, D.C.: May 28, 2004.

(130627)

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Highlights of [26]GAO-07-233T , a testimony before the Subcommittee on
Immigration, Border Security, and Claims, Committee on the Judiciary,
House of Representatives

December 5, 2006

ENERGY EMPLOYEES COMPENSATION

GAO's Prior Work Has Identified Needed Improvements in Various Aspects of
the Program

The Energy Employees Occupational Illness Compensation Program Act
(EEOICPA) was enacted in 2000 to compensate Department of Energy employees
and contractors who developed work-related illnesses such as cancer and
lung disease. Energy administered Subtitle D of the program. Subtitle B of
the program is administered by the Department of Labor, which uses
estimates of workers' likely radiation exposure to make compensation
decisions. The estimates, known as dose reconstructions, are performed by
the National Institute for Occupational Safety and Health (NIOSH) under
the Department of Health and Human Services (HHS).

The act specified that the President establish an Advisory Board on
Radiation and Worker Health to review the scientific validity of NIOSH's
dose reconstructions and recommend whether workers should be part of
special exposure cohorts whose claimants can be compensated without dose
reconstructions. A recent memorandum from the Office of Management and
Budget (OMB) to Labor has raised concern about potential efforts to unduly
contain the cost of benefits paid to claimants. This testimony presents
GAO's past work on program performance and the work of the advisory board.
It also highlights GAO's ongoing work relevant to issues raised by the OMB
memorandum. GAO interviewed key officials and reviewed contract and other
agency documents.

GAO issued two reports in 2004 that focused on claims processing and
program structure. The first report found that Energy got off to a slow
start in processing Subtitle D claims and faced a backlog of cases. In
addition, limitations in data systems made it difficult to assess Energy's
performance. GAO recommended that Energy take actions to expedite claims
processing, enhance communication with claimants, and improve case
management data. The report also highlighted problems with program
structure that could lead to inconsistent benefit outcomes and GAO
presented various options for restructuring the program. Congress
subsequently incorporated features of some of these options in enacting
new legislation that dramatically restructured the program and transferred
it from Energy to Labor. Labor has taken action to address the
recommendations GAO made to Energy. The second report found that Labor and
NIOSH faced a large backlog of claims awaiting dose reconstruction. To
enhance program management and transparency, HHS implemented GAO's
recommendation to establish time frames for completing profiles of Energy
work sites, which are a critical element in efficiently processing claims
that require dose reconstruction.

GAO's February 2006 report found that the roles of two key NIOSH officials
involved with the work of the advisory board may not have been
sufficiently independent because these officials also represented the dose
reconstruction program under review. In response, NIOSH replaced them with
a senior official not involved in the program. Since credibility is
essential to the advisory board's work, GAO concluded that ongoing
diligence by HHS is required to avoid actual or perceived conflicts of
roles when new candidates are considered for these roles. GAO also found
that the board's work presented a steep learning curve, prompting
adjustments to the work done by the contractor assisting the board. GAO
recommended actions to provide the board with more comprehensive data on
contractor spending levels compared to work actually completed, assist the
board in reexamining its long-term plan for reviewing NIOSH's work, and
better track agency actions taken in response to board and contractor
findings. HHS has implemented these recommendations.

One aspect of GAO's ongoing work especially relevant to the OMB memorandum
is the extent to which Labor's concerns over potentially escalating
benefit costs may have led the agency to be involved in activities tasked
to NIOSH, the advisory board, or the contractor assisting the board. NIOSH
agreed to provide Labor with draft versions of some of its evaluations of
special exposure cohort petitions and other NIOSH technical documents
before sending them for board review. Labor has commented on some of these
draft documents. Labor officials told us that their reviews focus on
changes needed to promote clarity and consistency in the adjudication of
claims. As the review proceeds, GAO plans to obtain more information on
key issues such as the timing, nature, and basis of Labor's activities in
light of the program's design and assignment of responsibilities.

References

Visible links
  12. http://www.gao.gov/cgi-bin/getrpt?GAO-04-516
  13. http://www.gao.gov/cgi-bin/getrpt?GAO-04-958
  14. http://www.gao.gov/cgi-bin/getrpt?GAO-06-177
  15. http://www.gao.gov/cgi-bin/getrpt?GAO-06-547
  16. http://www.gao.gov/cgi-bin/getrpt?GAO-06-177
  17. http://www.gao.gov/cgi-bin/getrpt?GAO-04-958
  18. http://www.gao.gov/cgi-bin/getrpt?GAO-04-516
  25. http://www.gao.gov/cgi-bin/getrpt?GAO-07-233T
  26. http://www.gao.gov/cgi-bin/getrpt?GAO-07-233T
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