Federal Employees' Compensation Act: No Evidence That Labor's Physician
Selection Processes Biased Claims Decisions (Letter Report, 02/11/94,
GAO/GGD-94-67).
Claimants and their representatives have alleged that the Labor
Department's Office of Workers' Compensation Programs lacks objectivity
and has "shopped" for doctors who, when examining claimants, would be
predisposed against supporting their claims for workers' compensation
benefits. GAO did not find this to be the case. When claimants'
benefits were terminated after a second-opinion examination, these
adjustments were usually unrelated to conflicts in medical evidence that
would have required an impartial medical examination. Also, the Office
has an automated system--the Physician Directory System--in place to
ensure that physicians were chosen in an unbiased manner. Finally,
given the number of impartial medical examinations done by individual
doctors and the amounts paid to those who did both second-opinion
examinations and impartial medical examinations, it seems unlikely that
the Office was repeatedly using the same doctors to achieve
predetermined results. Yet, there have been situations in which
districts have been unable to use the Physician Directory System when
choosing doctors to do impartial medical examinations. It would be in
the Office's best interest to establish controls to ensure the impartial
selection of doctors whenever methods other than the Physician Directory
System are used to select doctors.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-94-67
TITLE: Federal Employees' Compensation Act: No Evidence That
Labor's Physician Selection Processes Biased Claims
Decisions
DATE: 02/11/94
SUBJECT: Workers compensation
Physicians
Payments
Medical examinations
Compensation claims
Medical fees
Eligibility determinations
Disability benefits
Personnel recruiting
Computerized information systems
IDENTIFIER: DOL Physician Directory System
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Cover
================================================================ COVER
Report to Congressional Requesters
February 1994
FEDERAL EMPLOYEES' COMPENSATION
ACT - NO EVIDENCE THAT LABOR'S
PHYSICIAN SELECTION PROCESSES
BIASED CLAIMS DECISIONS
GAO/GGD-94-67
Physician Selection Processes
Abbreviations
=============================================================== ABBREV
OWCP - Office of Workers' Compensation Programs
IME - impartial medical examinations
PDS - Physician Directory System
Letter
=============================================================== LETTER
B-249142
February 11, 1994
The Honorable William D. Ford
Chairman, Committee on Education and Labor
House of Representatives
The Honorable Austin J. Murphy
Chairman, Subcommittee on Labor Standards,
Occupational Safety and Health
Committee on Education and Labor
House of Representatives
This report responds, in part, to your August 1991 request for a
comprehensive review of the administration of the Federal Employees'
Compensation Act by the Department of Labor's Office of Workers'
Compensation Programs (OWCP). You asked that we focus our review
primarily on issues related to the timeliness and objectivity of
processing claims, OWCP's compliance with program regulations, and
whether the Employees' Compensation Appeals Board conducts fair and
objective reviews of OWCP decisions.
Following discussions with your offices, we agreed to focus our
initial work on how OWCP obtains and uses medical evidence from
doctors it selects to assist its claims examiners in adjudicating and
managing claims under the act. Your offices had received allegations
from claimants or their representatives that OWCP was not objective
and "shopped" for physicians who would be willing to examine
claimants and be predisposed against supporting their claims for
workers' compensation benefits. We agreed with your offices that
following issuance of this report, we would discuss additional work
that may be needed to respond to your initial request.
Physicians selected by OWCP are called upon to conduct
"second-opinion medical examinations" and "impartial medical--i.e.,
referee--examinations" (IME) to help OWCP determine (1) whether
claimants have suffered work-related injuries and should receive
benefits or (2) whether these benefits should be adjusted due to the
claimants' vocational rehabilitation or their partial or complete
medical improvement. As further agreed with your offices, we did not
attempt to evaluate the medical conclusions reached in physicians'
reports to OWCP. Instead, we focused on determining if OWCP obtained
and used medical evidence supplied by these physicians in ways that
minimized the possibility of bias against claimants.
We also agreed to provide information on (1) the timeliness of
medical payments made to these physicians and to the physicians
retained by claimants, (2) the amounts paid to second-opinion and IME
physicians, and (3) OWCP's efforts to recruit additional physicians
who would be willing to conduct second-opinion exams and IMEs.
For this review, we visited 5 of OWCP's 12 district offices\1
that processed federal workers' compensation claims, interviewed
officials about their procedures and practices for selecting
physicians that conducted second-opinion exams and IMEs, reviewed
questionnaire responses from the 12 districts on their efforts to
increase the number of physicians willing to conduct IME and
second-opinion exams, and reviewed selected medical expense data from
OWCP's bill payment system. We also reviewed samples of cases to
determine whether OWCP followed its procedures for selecting IME
physicians and whether, and if so, why, OWCP terminated compensation
benefits following second-opinion exams. Our objectives, scope, and
methodology are discussed in more detail in appendix I.
--------------------
\1 We visited the Seattle, Jacksonville, San Francisco, Philadelphia,
and Washington, D.C. district offices. Other OWCP district offices
that handle claims under the act are Chicago, Boston, Cleveland,
Dallas, Denver, New York, and Kansas City, MO.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
We found no basis to conclude that OWCP was shopping for doctors who
would be predisposed against claimants. For the offices we visited,
most of the cases in which OWCP terminated benefits following
second-opinion exams were terminated because of factors generally
unrelated to conflicts in medical evidence. In addition, OWCP's
Physician Directory System (PDS)\2 provided a reasonable level of
certainty that IME physicians were selected in an unbiased manner.\3
PDS data for the districts we visited showed that about 1,000
physicians conducted 1,435 IMEs. Finally, nationwide bill payment
data suggested that OWCP was not relying on a small group of
hand-picked physicians to conduct second-opinion exams and IMEs but
rather used about 6,700 physicians or group practices to conduct
them.
In the 5 districts we visited, we reviewed 126 randomly selected
cases. These cases were selected from a universe of 378 cases with a
second-opinion exam but no IMEs in which claimants' compensation
benefits were terminated in the period following their second-opinion
exams:
In 85 of these cases (67 percent), schedule award\4 benefits ended
after OWCP made the last in a series of predetermined payments
to the individuals receiving them.
In 35 cases (28 percent), OWCP terminated benefits when, among
other things, claimants died, elected retirement benefits in
lieu of workers' compensation benefits, improved medically, or
returned to work.
In six cases (5 percent), the benefits were not increased or were
terminated because OWCP's claims examiners--at least in
part--gave more weight to second-opinion physicians' medical
reports than to claimants' physicians' reports.
In most cases in which claims examiners accorded equal weight\5
to second-opinion physicians and claimants' physicians conflicting
medical evidence, OWCP used PDS to sequentially select IME
physicians.\6 For the 15-month period ending September 1992, OWCP
used PDS to schedule 1,039 (89 percent) of the IMEs in the districts
we reviewed. Districts did not use PDS to schedule all of the cases
needing IMEs in part because of the unique characteristics of some
cases or the dearth of physician specialists in selected geographic
areas. However, none of the districts had established procedures to
ensure impartial physician selection when PDS was not used.
Our analysis of PDS data also showed that OWCP did not repeatedly use
the same physicians for IMEs in the districts we visited. Nearly 95
percent of the IME physicians did three or fewer exams from the time
the districts implemented PDS to September 1992. Moreover,
nationwide medical bill payment information showed that OWCP paid
over 98 percent of the physicians or groups that conducted these IMEs
and second-opinion exams less than $10,000 each during fiscal years
1991 and 1992 combined.
While OWCP took longer to reimburse claimants' physicians than to
reimburse physicians they selected to conduct IME and second-opinion
exams, OWCP paid over 95 percent of these bills within the
established standards of 60 days for claimants' physicians and 30
days for IME and second-opinion physicians.
In discussions with district officials and in responses to our
questionnaire, most districts indicated that they had difficulty
increasing the number of physicians in selected medical specialties
to conduct second-opinion exams and/or IMEs. To address this
problem, districts used such methods as (1) mailing form letters to
physicians, (2) telephoning individual doctors or specialty groups,
and (3) visiting physicians' offices to encourage additional
physicians to participate in these exams.
--------------------
\2 PDS is an automated system developed and implemented by OWCP in
1990 and 1991 to assist its staff in the scheduling of IMEs and to
ensure systematic rotation and impartial selection of physicians for
IME cases.
\3 OWCP's district offices are not required to use PDS for selecting
second-opinion physicians.
\4 A schedule award is an award of compensation payable for a set
number of weeks for a permanent impairment to certain parts of the
body. The length of the award is determined by a schedule provided
for in 5 U.S.C. 8107, which specifies the parts of the body for
which OWCP will pay these awards. For example, a claimant with the
complete loss of hearing in one ear would be entitled to compensation
for 52 weeks even though the claimant may return to work during that
period.
\5 According to the OWCP procedures manual, medical evidence is of
equal weight when the attending and second-opinion physicians have
equal medical credentials, their reports are based on accurate
medical and factual background information, and both opinions are
well rationalized.
\6 PDS is based on information from the Directory of Medical
Specialists, published by Marquis Who's Who. The Directory is a
comprehensive listing of physicians certified by the 23 individual
boards of the American Board of Medical Specialists. The Directory
is arranged first by specialty, second by geographic location, and
last in alphabetical order within each location. In November 1993,
OWCP was updating its existing database of physicians.
BACKGROUND
------------------------------------------------------------ Letter :2
Between July 1991 and June 1992, OWCP paid about $1.7 billion in
compensation, death benefits, and medical expenses on behalf of
nearly 260,000 federal workers with job-related injuries or
occupational diseases and approved over 88 percent of all workers'
compensation cases either initially or upon appeal. About $5.3
million of the $424 million in medical payments during this period
was for approximately 14,600 second-opinion exams and IMEs, according
to OWCP medical bill payment information.
Upon receiving a claim for workers' compensation benefits, OWCP
claims examiners are to determine if the claim meets the conditions
for approval.\7 In most cases, the medical evidence submitted by the
claimant's physician is sufficient for an OWCP claims examiner to
adjudicate or subsequently manage the claim. For more complicated
cases or for cases in which claimants apply for workers' compensation
benefits for occupational diseases such as asbestosis and hearing
loss, development of additional medical evidence is often needed to
adjudicate or manage the claim. In these cases, OWCP's claims
procedures allow claims examiners to have the case files reviewed
either by physicians who work for OWCP or by physicians whom OWCP
pays on a case-by-case basis. When the medical opinions of these
physicians are the same as those of claimants' physicians, claims
examiners can generally consider the medical evidence sufficiently
developed to continue with claims processing.
If, however, questions about the medical evidence remain following
case file reviews, examiners' options for clarifying this evidence
include requesting additional information from claimants' physicians
or scheduling claimants for exams by second-opinion physicians.
Second-opinion exams may also be conducted (1) when surgery is
recommended for certain medical conditions and (2) to determine the
extent to which an injured worker has lost the partial or complete
use of a body part (e.g., an arm) or function (e.g., hearing).
OWCP has discretion in choosing qualified private physicians to
conduct second-opinion exams. Claimants must submit to these exams
as frequently and at such times and places as OWCP considers
reasonably necessary. Two of the five districts, Seattle and
Washington, D.C., used PDS to select almost all second-opinion
physicians; however, these offices did not necessarily use the
rotational feature of PDS to select physicians. The other three
districts generally used either a manual card file, their own
automated database systems, or other sources to select second-opinion
physicians.
Following a review of the second-opinion physician's report, a claims
examiner may find that the second-opinion physician and the
claimant's physician agree and, in these cases, continue with the
adjudication process. If, however, the views of the second-opinion
physician and the claimant's physician are of equal weight and
quality and they disagree, regulations require OWCP to resolve this
conflict by appointing a board-certified physician with no previous
connection with the case to conduct an IME to resolve the medical
issues.
In selecting IME physicians, the act has been interpreted as
requiring OWCP to select physicians in an impartial manner. The
importance of impartiality in OWCP's selection of physicians has been
reinforced by the board, which has jurisdiction to consider and
decide appeals of final decisions made by OWCP on claims filed under
the act. In a 1986 appeals case,\8 the board refused to give the
special weight ordinarily accorded to IME opinions to evidence from
an IME physician because OWCP had not selected the physician in
accordance with its established procedures for ensuring impartiality.
OWCP's procedures manual for claims examiners states: "only if the
selection procedures which were designed to achieve [the impartial
selection of IME physicians] are scrupulously followed may the
selected physician carry the special weight accorded to an impartial
specialist."
By 1991, all districts had replaced their existing manual or
computer-based systems and were using PDS to select physicians for
IMEs. The initial basis for OWCP's PDS database was the
independently prepared Marquis' Directory. District offices may
update the PDS database by adding and deleting specialists.
According to OWCP, the system ensures impartial physician selection
because it automatically sequentially selects physicians listed
alphabetically by specialty and geographic location on the basis of
the first three digits of the postal zip code.
When OWCP schedulers successfully identify a physician who is willing
to examine a claimant, they are to enter the appointment date and
time in the system, and PDS automatically creates a record of the
scheduled appointment. When a physician either refuses or is too
busy to see a claimant in a timely manner or has previously treated
or examined the claimant, schedulers are to enter bypass codes into
PDS and contact the next physician that the system identifies.
In November 1993, OWCP improved PDS by adding features that allow for
(1) better record keeping when physicians are not selected, (2)
automatically searching the next highest postal zip code when a
physician cannot be located in the primary zip code area, and (3)
identifying the group practice, if any, in which the physician is a
member.
--------------------
\7 Conditions for approval include the timely filing of a claim,
employee coverage under the act, occurrence of an injury or disease
in the performance of duty, and disability or death caused by the
injury.
\8 Leonard W. Wagoner, 37 ECAB 676. In this case, the Board
remanded the case to the district because the physician who examined
the claimant was an associate of the physician selected to perform
the IME.
BENEFIT ADJUSTMENTS GENERALLY
UNRELATED TO MEDICAL EVIDENCE
PROVIDED BY SECOND-OPINION
PHYSICIANS
------------------------------------------------------------ Letter :3
Of the 4,126 cases with terminated benefits in the 5 districts
reviewed, we identified 378 cases with a second-opinion exam but no
IME in which benefits were adjusted in the period following the
second-opinion exam. In 120 of 126 cases we reviewed, these
adjustments were generally unrelated to conflicts in medical evidence
between the claimants' physicians and second-opinion physicians. In
the remaining six cases, OWCP either did not increase or terminated
benefits citing the weight of the evidence supplied by the
second-opinion physician. Table 1 contains information on our sample
results; details on how this sample was selected are contained in
appendix I.
Table 1
Reasons OWCP Terminated or Did Not
Increase Claimants' Benefits
Reasons benefits terminated or not adjusted Cases
-------------------------------------------------- --------
Payments for schedule award benefits ceased. 85
Medical reports indicated the claimants' medical 25
conditions improved, and they either returned to
or refused to return to work.
Claimants died, elected retirement benefits in 10
lieu of workers' compensation benefits, or did
not cooperate with OWCP in scheduling an exam.
============================================================
Subtotal\a 120
OWCP placed more weight on medical evidence 6
provided by second-opinion physicians than on the
evidence provided by claimants' physicians.
============================================================
Total 126
------------------------------------------------------------
\a Benefit adjustments unrelated to conflicting medical evidence.
Source: GAO review of OWCP case management system and case files.
In reviewing the six cases with conflicting findings between
second-opinion and claimants' physicians, claims examiners included
with their recommendations to not increase or to terminate benefits
such comments as (1) the claimant's physician's report lacked
supportive findings, whereas the second-opinion physician's report
was supported by a thorough physical exam and detailed pulmonary
function studies of the patient; (2) the second-opinion physician's
report was comprehensive and well rationalized, and the weight of the
medical evidence in the file therefore rests with this physician; and
(3) the claimant's physician's report was based on subjective
complaints with no objective findings to support them as compared to
a well-rationalized medical report by the second-opinion physician.
For each of these cases, district offices provided claimants with the
required written notice of the claim decision and their right to
appeal the decision within 30 days.\9
--------------------
\9 In one of these cases an OWCP hearing examiner subsequently
overturned the decision to terminate benefits when the second-opinion
report was not provided for use in reviewing the claimant's appeal.
DISTRICTS GENERALLY USED PDS TO
MINIMIZE BIAS IN SELECTING IME
PHYSICIANS
------------------------------------------------------------ Letter :4
OWCP's PDS provided a reasonable level of certainty that IME
physicians were generally selected without bias, considering the zip
code and medical specialty constraints imposed by the system. From
July 1991 to September 1992, PDS records showed that the 5 districts
we visited used PDS to select IME physicians 1,039 times, an
estimated 89 percent of the time an IME was requested. However, in
situations in which PDS was not used, we also found that OWCP did not
have internal controls to help ensure that its selection of IME
physicians in these cases was impartial.
Our tests of PDS software showed that the system operated as
specified to select IME physicians and schedule claimants' exams.
That is, for the medical specialty and zip code area for which a
physician was needed, PDS software identified the last physician who
was contacted for a referral and then selected the next physician
listed in alphabetical order. After the last physician on the list
was contacted, the system returned to the beginning of the
alphabetical list.
Although OWCP's guidelines required district offices to use PDS to
select and schedule all IME physicians, we found that it was not
always possible to do so. For the 5 districts we visited, our
comparison of information from OWCP's bill payment system and PDS
identified an additional 877 cases that were coded as IMEs but did
not appear to be scheduled with PDS.
We reviewed a sample of 231 of these cases and found that 196 cases
were either (1) miscoded in the bill payment system as IMEs instead
of as second-opinion exams or exams by claimants' physicians, (2)
scheduled using PDS but the claim numbers entered into PDS were
incorrect, (3) scheduled before the districts implemented PDS, (4)
scheduled with physicians in districts other than the district
managing the case,\10 or (5) rescheduled with the same IME physician
when claimants missed their original appointments or when additional
information was needed. On the basis of the remaining 35 IMEs, which
were not scheduled using PDS, we estimated that in the 5 districts we
visited OWCP scheduled 129 IMEs (+39) without using PDS.
According to district officials, following are some of the reasons
OWCP did not use PDS to schedule 26 of the 35 IMEs:
The PDS database did not include physicians in all medical
specialties.
Claimants lived in geographic areas in which there were no
physicians in the required specialty, or the physician
identified by PDS had previously examined or treated the
claimant.
Claimants' medical conditions required more than one physician
specialist (i.e., a panel) to conduct the IME.
Claimants asked OWCP if they could participate in the IME physician
selection process.
In 9 of the 35 cases, district officials could not recall reasons for
not using PDS.
According to district officials, in cases where OWCP needed a
specialist in one of the medical specialties not included in PDS,\11
district office schedulers used information from the Marquis'
Directory that had not been entered into PDS, other directories of
physicians, or other sources relevant to a particular location to
identify specialists with whom IME appointments could be scheduled.
Schedulers also used the above sources to schedule IMEs when
claimants lived in rural or remote geographic areas with specialists
who were either not willing to conduct IMEs or not in a position to
examine claimants because they had previously examined them.
For cases requiring physicians willing to participate in a panel exam
of a claimant, an official in one district office said that PDS could
not be used easily because it did not identify physicians willing to
participate on such panels. Panel exams involve the exam of a
claimant by several physicians who each have different medical
specialty training. Panels are used to examine claimants with
complex medical conditions to reach a collective opinion that fully
addresses the claimant's work-related medical conditions. While PDS
guidelines were silent on the use of panels, one district office
demonstrated that PDS could be used in the panel selection process by
selecting a lead physician to conduct the IME who would agree to
recruit other physicians for the panel exam.
For cases in which claimants asked to participate in the selection of
the IME physician, district offices prepared a list of three
specialists acceptable to OWCP. At the claimants' request, OWCP can
also include a physician who is a minority on this list. According
to OWCP's procedures, the claimant then selects one of the three
specialists to conduct the IME.
The reasons stated for not using PDS appeared reasonable. However,
without guidance specifying when it would be appropriate to select
IME physicians without using PDS and how to do so, OWCP's process for
selecting IME physicians might be more subject to challenge from
claimants or their representatives.
--------------------
\10 Except for nationwide PDS databases maintained by the Kansas City
and Washington, D.C., districts, other OWCP districts' PDS databases
are relevant only within their boundaries.
\11 In scheduling IMEs, the PDS used at the time we completed our
review contained information for the following 11 specialties and
subspecialties: allergy and immunology, cardiovascular diseases,
dermatology, gastroenterology, neurology, neurological surgery,
occupational medicine, orthopedic surgery, otorhinolaryngology,
pulmonary diseases, and psychiatry. Specialties and subspecialties
to be added as part of the PDS improvements include physical medicine
and rehabilitation, hand surgery, vascular surgery, and thoracic
surgery.
INDIVIDUAL IME PHYSICIANS WERE
NOT USED REPEATEDLY
------------------------------------------------------------ Letter :5
Our analysis of PDS data in the five districts also indicated that
OWCP did not repeatedly use the same physicians to do IMEs. From the
dates district offices implemented PDS to September 1992, OWCP used
1,002 physicians to conduct 1,435 IMEs. As shown in table 2, nearly
95 percent of the physicians who conducted IMEs did so on three or
fewer occasions. Further, less than 2 percent of the physicians
conducted six or more IMEs during this period.
Table 2
Frequency Physicians Were Used For IMEs
(From Dates Implemented to September
1992)
Percent
Number of of
Number of IMEs conducted physicians physicians
------------------------------------ ---------- ----------
1 782 78
2 113 11
3 52 5
4 25 3
5 16 2
6 10 1
7 or more 4 \a
============================================================
Total 1,002 100
------------------------------------------------------------
\a Less than 1 percent.
Source: GAO analysis of PDS data.
OWCP DID NOT PAY SUBSTANTIAL
MEDICAL FEES TO MOST PHYSICIANS
OR GROUPS FOR IME AND
SECOND-OPINION EXAMS
------------------------------------------------------------ Letter :6
As shown in table 3, during fiscal years 1991 and 1992, 78 percent of
the physicians who conducted IMEs and second-opinion exams were paid
less than $1,500 each for these exams, according to OWCP bill payment
data. Further, 98 percent of them were paid less than $10,000 each
from OWCP for these 2 fiscal years combined.
Table 3
Amounts Received by OWCP-Selected
Physicians During Fiscal Years 1991 and
1992
Number of Percent
of
physicians
Amounts of reimbursements for IME or physicians
and second-opinion exams groups\a or groups
------------------------------------ ---------- ----------
0 to $1,499 5,255 78.4
$1,500 to $2,499 618 9.2
$2,500 to $4,999 494 7.4
$5,000 to $9,999 207 3.1
More than $10,000 133 2.0
============================================================
Total 6,707 100.0\b
------------------------------------------------------------
\a OWCP's medical bill payment system is unable to distinguish
whether the reimbursement was made to a sole practitioner or to a
group practice or to firms that provided only vocational
rehabilitation services.
\b Total does not add due to rounding.
Source: GAO analysis of OWCP medical bill payment information.
Of the 19 physician and group practices that received more than
$25,000 in a year, 17 were group practices. And, although one group
practice earned about $121,775 during the 2-year period, the overall
data do not, in our opinion, suggest that OWCP-selected physicians
and practices received substantial fees for second-opinion exams and
IMEs.
TIMELINESS OF MEDICAL BILL
PAYMENTS
------------------------------------------------------------ Letter :7
OWCP took longer to reimburse claimants' physicians than to reimburse
physicians that it selected to conduct IME and second-opinion exams
and case file reviews. Differences in times for paying claimant's
physicians can be attributed to OWCP procedures that include controls
for ensuring that medical bills submitted by these physicians are not
paid before OWCP's acceptance of the claim. In contrast, for
physicians selected by OWCP, the Prompt Payment Act (39 U.S.C. 3901
et seq.) requires OWCP to pay interest when bills from these
physicians are not paid within 30 days.
For claimants' physicians, OWCP's procedures for reviewing bills are
designed to ensure that (1) medical services are provided only to
authorized claimants, (2) medical services provided are related to
claimants' injuries, (3) OWCP has not already paid the medical bill,
and (4) amounts billed are allowed under OWCP's medical fee schedule.
OWCP's standard is to pay 95 percent of claimants' physicians' bills
within 60 days. Our analysis of OWCP medical bill payment data for
nearly 1.15 million bills submitted by claimants' physicians showed
that during fiscal years 1991 and 1992 OWCP paid almost 82 percent
within 30 days and about 95 percent within 60 days. In contrast,
OWCP paid about 98 percent of the 54,471 bills subject to the Prompt
Payment Act within the required 30 days.
DISTRICTS' EFFORTS TO INCREASE
THE NUMBER OF PHYSICIANS TO
CONDUCT IME AND SECOND-OPINION
EXAMS
------------------------------------------------------------ Letter :8
Most districts that responded to our questionnaire indicated that
they have had problems recruiting physicians in selected medical
specialties to conduct second-opinion exams and/or IMEs. To ensure
that district offices can rotate IMEs among a sufficient number of
physician specialists, each OWCP district office has made efforts to
increase the number of physicians used to conduct these exams.
According to OWCP's Medical Director, each district office is
responsible for deciding the number of physicians needed for an
adequate rotation.
Some district offices attempted to increase their number of
physicians by sending form letters to all physicians in needed
specialties and geographic areas. These letters explained the
second-opinion and IME programs and OWCP's policy to promptly pay
physicians' bills. The national office prepared form letters that
the districts could use in their recruiting efforts. In 1991 for
example, the San Francisco district office sent more than 7,000
letters to all physician specialists in its district encouraging them
to accept second-opinion and IME referrals. The Philadelphia office,
in contrast, sent recruitment letters just to physicians in selected
specialties and geographic areas.
Other efforts by district offices to increase the number of
physicians included telephoning or visiting physicians' offices. For
example, in 1992 and 1993, the Seattle and Washington, D.C., district
medical directors made recruiting trips to clinics and practitioners'
offices to increase the pool of physicians available to conduct
second-opinion exams and IMEs.
According to district officials, recruiting was also conducted on an
"as needed" basis when PDS failed to identify physicians who
practiced in locations near claimants or who had not previously
examined claimants. District office staff telephoned physicians
whose names did not appear in PDS, explained the need for impartial
physician specialists, and encouraged physicians to allow their names
to be added to the PDS database.
District officials cited several difficulties in obtaining physicians
to participate in second-opinion exams and IMEs. They said some
physicians are reluctant to participate because they have concerns
about issues such as (1) OWCP's promptness in paying medical bills,
(2) fear of litigation or tort action, (3) the adversarial and
unpleasant nature of these types of exams, and (4) the amount of time
case file reviews and exams take away from their own patients.
OWCP national and district office officials said they believed that
in some cases these physicians' concerns were not warranted. For
example, an official said that while some physicians were concerned
about defending their decisions in court, litigation or tort action
was rare under the act. In addition, because medical bills for
second-opinion exams and IMEs are subject to the Prompt Payment Act,
OWCP has been relatively successful in paying these bills within the
30 days required by this act.
CONCLUSIONS
------------------------------------------------------------ Letter :9
OWCP did not appear to be selecting physicians who would examine
claimants and be predisposed against supporting their claims for
compensation benefits. When claimants' benefits were terminated
following a second-opinion exam, these adjustments were usually
unrelated to conflicts in medical evidence that would have required
an IME. Also, OWCP had an automated system in place to provide a
reasonable level of certainty that IME physicians were selected in an
unbiased manner. Finally, given the number of IMEs conducted by
individual physicians and the amounts paid to those who conducted
both second-opinion exams and IMEs, it does not seem likely that OWCP
was attempting to repeatedly use the same physicians to achieve
predetermined results.
Yet, there have been, and likely will continue to be, situations in
which districts are unable to use PDS for selecting IME physicians.
It seems to be in OWCP's best interest to establish controls to help
ensure the impartial selection of IME physicians whenever methods
other than PDS are used to schedule IMEs because (1) the board has
placed a great deal of importance on the manner in which OWCP selects
IME physicians and (2) exceptions to the use of PDS could lead to
continued perceptions of bias by claimants whose benefits are
terminated.
RECOMMENDATIONS TO THE
SECRETARY OF LABOR
----------------------------------------------------------- Letter :10
To further ensure unbiased selection of IME physicians and to reduce
the potential for perception of bias, we recommend that the Secretary
of Labor direct OWCP to provide guidance on
how IME physicians are to be selected when they are unable to use
PDS and
when to obtain supervisory approval before using selection methods
not specified by the guidance.
We also recommend that the Secretary direct OWCP to prepare
documentation in all cases in which PDS is not used to schedule IMEs.
AGENCY COMMENTS
----------------------------------------------------------- Letter :11
In commenting on a draft of this report, Labor agreed to expand its
procedures to explicitly address situations in which physicians must
be selected outside of PDS (see app. II for a copy of Labor's
January 3, 1994, letter).
--------------------------------------------------------- Letter :11.1
As agreed with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 7 days from the date of this letter. At that time, we will
send copies of this report to the Secretary of Labor, the Director of
the Office of Management and Budget, and interested congressional
committees. Copies will also be made available to others upon
request.
The major contributors to this report are listed in appendix III. If
you have any questions about this report, please contact me on (202)
512-5074.
Nancy Kingsbury
Director
Federal Human Resource Management
Issues
OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix I
As agreed with the Committee and Subcommittee, our objectives were to
(1) determine if OWCP districts obtained and used medical evidence
prepared by physicians conducting second-opinion exams and IMEs in
ways that minimized the possibility of bias against claimants, (2)
examine OWCP procedures and practices for selecting physicians to
conduct IMEs and second-opinion exams, (3) analyze information on the
timeliness and amounts of OWCP payments to OWCP-selected physicians
and claimants' physicians, and (4) describe OWCP's efforts to
increase the number of physicians willing to conduct second-opinion
exams and IMEs. We also agreed that we would not evaluate the
medical conclusions reached by claimants' physicians or OWCP-selected
physicians.
For this review, we visited 5 of OWCP's 12 district offices that
handled federal workers' compensation cases. We selected these
offices (Seattle, San Francisco, Jacksonville, Philadelphia, and
Washington, D.C.) to obtain a mix of large and small offices in
different geographic areas of the country. These offices were
responsible for adjudicating and managing 56 percent of the cases
that OWCP opened in the 12-month period ending in June 1992. In each
office, we reviewed samples of cases and interviewed district office
officials about their procedures and practices for selecting and
recruiting second-opinion and IME physicians.
We also interviewed OWCP headquarters officials and reviewed records
on such matters as the development of PDS and its system requirements
and statistical information on the number of claimants and amounts of
workers' compensation payments. We did not verify the statistical
data obtained from OWCP's bill payment and case management systems.
Further, we developed and administered a questionnaire to each of
OWCP's 12 districts to obtain information on PDS activities and
district offices' efforts to increase the number of physicians who
could conduct second-opinion exams and IMEs.
To determine whether OWCP districts inappropriately terminated
benefits following a second-opinion exam, we used OWCP's case
management system to identify claimants whose cases were closed and
benefits terminated during fiscal years 1991 and 1992. From this
list of claimants, we used PDS and the bill payment system to select,
in the offices we visited, samples of cases that had second-opinion
exams but no IMEs.\1 For the 126 cases we reviewed, we determined why
OWCP terminated compensation benefits or otherwise closed the case.
Table I.1 contains details about this sample.
Table I.1
Cases Selected For Review
Cases with
Cases terminated
with benefits with a
terminate second-opinion Schedule
d exam award Cases
District office benefits but no IME cases reviewed
--------------------- --------- ------------------- -------------- ---------
Seattle 725 23 19 21
Washington 953 28 22 26
Philadelphia 553 117 80\a 23
San Francisco 1,153 112 96 47
Jacksonville 742 98 79\a 9
================================================================================
Total 4,126 378 296 126
--------------------------------------------------------------------------------
\a After determining that benefit terminations following the
expiration of the schedule award period were generally automatic, we
did not continue our review of such cases in Philadelphia and
Jacksonville.
Source: GAO analysis of OWCP's case management and bill payment
systems.
We used interval sampling techniques to identify cases for review,
and for the 126 cases selected, we reviewed documentation prepared by
the claims examiners that discussed the rationale for recommending
benefit adjustments. The number of cases reviewed in each district
depended on such factors as the length of our visit and the
availability of case files for review. Some cases had been
transferred to other district offices or to the federal records
center.
To determine if OWCP shopped for a particular opinion from IME
physicians, we assessed whether PDS and other methods for selecting
physicians in the five districts that we reviewed provided a
reasonable level of certainty that physicians were selected in an
unbiased manner. We compared OWCP's bill payment and PDS databases
to identify cases that did not appear to be scheduled using PDS. We
sampled 231 of 877 cases identified in this manner and asked district
officials for explanations after we determined that PDS was not used.
In addition, we examined PDS software to assure ourselves that it
selected physicians on a rotational basis and that each physician
listed in the PDS system was contacted with the same relative
frequency. In sampling from the universe of cases, we are 95 percent
confident that PDS was used between 86 and 92 percent of the time.
We also attempted to identify claimants who received two or more IMEs
and whose benefits were terminated following the second IME exam. We
found no such cases in the five districts that we reviewed.
To determine the timeliness and amounts OWCP paid physicians, we
analyzed data from the bill payment system for fiscal years 1991 and
1992. We determined the length of time OWCP took to pay claimants'
physicians and physicians selected by OWCP to examine claimants or
conduct case file reviews. We also determined amounts OWCP paid
physicians who conducted these exams or reviews. We analyzed PDS in
the five districts to determine the number of times physicians
conducted IMEs from the time the districts implemented PDS to
September 1992.
To obtain information on OWCP's efforts to increase the number of
physicians available to conduct IMEs and second-opinion exams, we
analyzed the 12 districts' responses to our questionnaire and
interviewed officials from the 5 district offices visited and OWCP
headquarters officials.
We conducted our review between March 1992 and December 1993 in
accordance with generally accepted government auditing standards.
(See figure in printed edition.)Appendix II
--------------------
\1 Because the Philadelphia, Jacksonville, and San Francisco district
offices did not generally use the PDS to schedule second-opinion
exams, we used information from OWCP's bill payment system to
identify claimants with terminated benefits who received only
second-opinion exams.
COMMENTS FROM LABOR
=========================================================== Appendix I
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III
GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C.
Larry H. Endy, Assistant Director, Federal Human Resource Management
Issues
Edward R. Tasca, Assignment Manager
SEATTLE REGIONAL OFFICE
Neil T. Asaba, Regional Management Representative
Donald A. Praast, Evaluator-in-Charge
Matthew W. Byer, Site Senior
OFFICE OF THE GENERAL COUNSEL,
WASHINGTON, D.C.
V. Bruce Goddard, Senior Attorney