DOE's "Path Forward " for Implementing EEOICPA Strengths and Weaknesses: A Preliminary Analysis

Prepared by
The Government Accountability Project (GAP) and
Alliance of Nuclear Workers Advocacy Groups (ANWAG)

February 25, 2004

DOE issued "EEOICPA Part D Path Forward" on February 12, 2004, which outlines DOE's "plan" to eliminate its current caseload of 22,000+ claims filed with the department under Subtitle D of EEOICPA. This plan is intended to justify DOE's $33 million reprogramming request to increase its FY 04 funding from $26 million to $59 million, and to secure $42 million in appropriations in FY 05.  Total proposed funding for FY 04 + FY 05 is $111 million on claims processing only. Although $20+ million has been paid for claims processing so far, we are not aware of any claims being paid to any of the 95 claimants with positive physician panel determinations.

DOE has processed 217 (<1%) of the 22,000+ claims through its physicians panels since the DOE's Physicians Panel rule (10 CFR Part 851) was published in August 2002. This works out to approximately 3 claims per week. DOE projects its will process 15,000 claims through its physicians panels in FY 05, or 300 claims per week. To date, DOE's performance pales against the claims processing systems operated by the 50 states and the Department of Labor-all of which have larger annual caseloads than DOE's 22,000 claims. The General Accounting Office (GAO) is now evaluating the potential effectiveness of DOE's plan.

Background

The "Fernald" Ohio model is the basis for using a Physicians Panel as a means for determining whether a claim for occupational illness should be deemed to arise from occupational exposure to toxic substances.  In the Fernald model, intensive case preparation precedes physician panel reviews. Case preparation includes use of a site profile (a job-exposure matrix which combines an extensive review of industrial hygiene data, radiation exposure data and occupational histories). This voluminous material is distilled and extracted into a set of "agreed facts," which, once assembled into an indexed binder, serves as the backbone for the three-physician panel to render an efficient decision. While this process is work intensive on the front end, it reduces demand for physician hours and provides a scientific basis for credible decisions, which are consistent from claim to claim.  It allows common types of cases to be processed in a wholesale, rather than retail, manner.

Key elements in DOE's Plan

• Modifying DOE's Physicians Panel regulations to use 1 doctor to screen
  claims instead of a three-doctors panel, and then add two more doctors to
  review negative findings of claims
• Lifting statutory cap on payments for Physicians Panels.
• Expending $111 million, including $59 million in FY 04 and $42 million in FY 05 for claims processing and panels using a support service contractor (SEA).
• Hiring the National Academy of Social Insurance to study the scope and extent of the willing payor problem, and examine benefit levels.
• Creating a 12-person advisory board to replace the one dissolved by DOE in 2002.

Key elements missing from DOE's plan

• No "site profiles" are required for toxic chemical exposures, nor is there an adequate case preparation system. These would increase physician efficiency two to three fold.
• No willing payor provided, despite 2 years of urging by the DOE's Advisory Board, Congress, and stakeholders. Claimants will hit a dead end with no way to get paid.
• DOE's claims processing contractor lacks qualified personnel or adequate systems.
• A credible basis for DOE's projections.

Plan Strengths

Physician payment levels must be increased. Lifting the current statutory cap on physicians pay ($68 per hour) merits approval, inasmuch as it is too low to attract occupational physicians who operate clinical practices. NIOSH has appointed approximately 140 physicians with occupational medicine expertise to serve on physicians panels so far. The pool of physicians must be expanded to increase throughput. DOE was slow to propose this simple reform despite the fact that DOE staff and the DOE's (now abolished) Worker Advocacy Advisory Board (WAAC) identified this as a problem needing a remedy in 2002. Members of Congress proposed that this payment "cap" be eliminated a year ago in the Reform of Energy Worker Compensation Act (HR 1758). The Grassley-Murkowski amendment to the FY 04 Energy & Water Appropriations Act proposed this change in September 2003. DOE only proposed it in 2004.

Plan Weaknesses

Having no site profiles compromises the quality of Physicians Panel findings. DOE's plan is bed rocked on a $111 million two-year investment in a system that will not meet the basic Congressional intent of producing high quality and credible physician panel decisions.  A Physicians Panel finding is worthless without the science to back it up. This science must consist of a site profile, probable pathways of exposure, and occupational medical expertise. Site profiles form the foundation for determining workers exposures. This is imperative because there is little individual toxic exposure monitoring in DOE.  Even though Secretary Abraham committed to Congress in 2003 that DOE would develop "site profiles" as a means to process 100 claims per week through the physicians panels, DOE has no scope, schedule or budget in its plan to develop and complete site profiles of toxic substance exposures. While NIOSH is compiling radiological site profiles to assist in dose reconstruction, DOE is not conducting comparable assessments. Absent adequate exposure analysis, decisions will, by necessity, be biased against the very claimants that Congress wanted DOE to assist. No site profiles have been completed as of February 2004.

Site Profiles Will Boost Efficiency.  Physicians report that they sometimes receive 200-1500 pages of documents, which are not indexed, and they must dig through this chaotic pile of documents in search of answers-which may or may not be there.   With a site profile in hand, DOE can do far more to increase efficiency in processing claims through the Physicians Panel than it will ever accomplish through proposed changes to its rules. Site profiles allow certain types of claims to be processed wholesale, rather than on a retail basis (i.e. building or workgroup or job title).  During 2003 budget briefings, Assistant Secretary Cook committed to site profiles, which she said would allow claims to speed like a "snowball rolling down hill."  This was seen as a credible step, because it would allow physicians to have a concise information resource from which they can quickly extract necessary information without having to pour through thousands of pages of documents.  As late as July 2003, Under Secretary Card advised Congress that site profiles would be forthcoming.

DOE has changed it stories several times since then. First, DOE said they were working on these site profiles. Then they said it is impossible to do them. Now DOE says they have "done what they are going to do," and they refer to "site analyses" which describe the history of a DOE site, but this "site analysis" does not identify hazards by building, process and time frames in the kind of "job-exposure matrix" that is used in industrial hygiene and epidemiology.  DOE received offers from industrial hygienists in its Former Worker Medical Screening Programs to develop site profiles. These offers were rejected.  DOE has provided no justification for reversing course on site profiles. Meanwhile, DOE has squandered time in which these could have been completed, leading to more delays. NIOSH has decided they cannot process their large volume of claims without site
profiles. For many sites, there is no willing payor.  DOE's plan contains no means for assuring payment of claims, despite the fact that as many as 40% of the valid claims may not have a " willing payor." Claimants in Iowa, Kentucky, Alaska, Missouri, Colorado, Ohio, as well as some in New Mexico, Idaho and Nevada lack a willing payor. A willing payor is an entity that DOE can meaningfully direct not to contest a claim after a positive physicians panel determination has been issued.  DOE has proposed to have the National Academy of Social Insurance (NASI) or the NAS study the size of the willing payor problem and compare benefits.

The DOE Plan for more studies is a delay tactic.  This proposed study by NASI is a delay tactic to avoid paying valid claims. Today, there are claimants who have received a positive physicians panel determination, but they are left to defend themselves from attacks by insurance.  DOE already knows that certain workers who have a valid claim will not be compensated under their state workers' compensation system, at least not without a major legal battle.

Even though DOE's Advisory Committee warned DOE loudly in August 2001, DOE's 2004 plan labels this an "emergent" issue.  In 2002, the House Energy & Commerce Committee asked DOE to identify where it lacked willing payors. In June 2002, DOE said it was working on an analysis and would provide it in the near future. The Committee received no follow-on analysis. In 2003, Congress again asked DOE to define the scope and offer solutions to the willing payor problem.  In December 2002, Ohio Bureau of Workers' Comp proposed that DOE contract with Ohio's exclusive state fund, if DOE would reimburse its costs. DOE rejected this approach, and offered no alternative. One DOE contractor tried to set up a third party administrator for the past two years, but this is not workable. GAO is also due to report to Congress on the willing payor problem.  The National Economic Council published a study in March 2000, which evaluated the suitability of state worker compensation systems for compensating occupational illnesses at DOE sites, and concluded it would be better to establish a federal system. Despite extensive evaluations, DOE is delaying action with yet another study. 

Offering claimants hope with a positive panel finding, but offering no way to assure payment is cruel. This must be remedied through legislation, not more studies.

Solution

Congress should have DOL be the administrator of the program. DOE should agree to make the DOL the administrator of benefits, including evaluating disability levels and serving as the willing payor. HR 1758 proposes to make DOL the willing payor.   S. 3058, introduced in the 107^th Congress, also makes DOL the willing payor.  DOL has the expertise to serve as the willing payor, as it operates 4 compensation programs.

DOE's plan does nothing to close the expertise gap.  DOE hired a support service contractor-- Science and Engineering Associates (SEA) in 2001 through an interagency agreement with the Navy to process claims, even though this contractor has not run a claims program before. The contractor put together a system, which, according to the Hays Group (DOE's consultant to evaluate their program), suffers from "design flaws."  Performance to date reveals questionable expertise in running a claims processing system. DOE claims it is going to overcome this expertise gap forming a "Tiger Team" with the Labor Department, but this team will only be reviewing and advising on new procedures.  Based on the Hays Group's report and this constellation of knowledge, DOE is requesting $111 million over the next two years to work off the caseload. DOE should consider an interagency agreement with the DOL, which has a system to process hundreds of thousands of claims per year.

The plan fails to consider the excessive costs charged by SEA.  SEA has been charging the Energy Department 2.5 times the hourly rate (fully loaded) compared with comparable federal employees (GS-11 or GS-12) who perform identical claims processing work in the Labor Department. In sum, DOL can process claims for less than half the cost of DOE, based on a review of SEA's costs for this contract.

DOE's plan entails significant risk of failure.  DOE is planning to scale up a system that has not been demonstrated to be effective at its current level of operations. Many of the positive physician panel determinations have involved claims previously adjudicated by the Department of Labor, thus DOE's projections are not based on a sufficiently representative sample of claims. DOE's plan to separate cases into those who are living versus survivors may have merit, but no analysis has been presented.

A Worker Compensation Assistance Advisory Committee (WAAC) will be formed. With DOE facing pointed criticism from Congress, the GAO, and claimants, DOE is seeking to rebuild "stakeholder support" for a program that has lost legitimacy. DOE intends to establish a new Advisory Committee to replace the expert Advisory Committee it abolished 14 months ago.  The previous Board of nationally recognized experts offered suggestions on the willing payor problem and avoiding a case backlog.  Meetings with insurance companies and contractors on the willing payor problem were actively underway when the Charter was allowed to expire. The Committee's recommendations were viewed as criticisms by DOE, and were largely ignored.  A new Advisory Committee coming at this late date appears to be little more than window dressing on a failing program.

DOE misunderstands the EEOICPA.  DOE asserts in its plan that it was DOE Secretary Abraham who decided that the DOE contractors will not be allowed to contest claims approved by Physicians Panels, and that the Secretary alone decided that DOE would reimburse contractors for the costs of paying claims with positive determinations.  DOE is a misreading the law.  EEOICPA specifically states that DOE may not contest workers compensation claims that are approved by Physicians Panels. This is a minimum statutory requirement.  Further, DOE has not ordered reimbursement of contractor costs for claims.  Rather such payments are, by the terms of DOE's physicians panel rule, strictly dependent on the terms of DOE's contracts with its contractors. DOE's apparent misunderstanding of this legislation puzzles us.

Conclusions
We recommend that Congress ask GAO and the Department of Labor whether DOE has offered a believable plan which: (1) assures that workers made sick in DOE's weapons factories will get a scientifically credible Physicians Panel determination, (2) whether compensation that is due will be paid and that no one is left without a willing payor, and (3) whether there is a reasonable basis for DOE's claims processing projections.

Congress needs to examine whether there are more cost-effective and efficient alternatives to DOE's plan. Congress should consider one well-tested alternative: using the DOL for claims processing, managing physicians panels and serving as the willing payor, while assigning DOE to secure the records (as it does today under Subtitle B for NIOSH and DOL). Unlike DOE, DOL is well qualified. Moreover, DOL offers substantial cost efficiencies, inasmuch as 95% of DOE claims backlog overlaps with claims already processed by the DOL. DOL has already started claims development work that DOE is planning to replicate. Further, claims processing costs are 50% lower at the DOL than at the DOE, due to the high rates charged by SEA under its Blanket Purchase Order.

For more information, please contact: Richard Miller, 202-408-0034 extension 127