Federal Compensation Programs
Perspectives on Four Programs
Gao ID: GAO-06-230 November 18, 2005
Since 1969, when Congress established the Black Lung Program as a temporary federal program to provide benefits for coal miners disabled by pneumoconiosis (black lung disease), the federal government has played an ever-increasing role in providing benefits to individuals injured as result of exposure to harmful substances. Although the Black Lung Program was initially designed to end in 1976, when state workers' compensation programs were to provide these benefits, it was amended to make it an ongoing federal program. Since that time, Congress has enacted several additional programs to provide benefits to individuals injured by exposure to such things as radiation and beryllium, a substance used in nuclear weapons production. In addition, the role of the federal government in many of these compensation programs has expanded over time. Most recently, legislative proposals have been introduced in the Senate and the House that would add asbestos to the list of substances for which federally administered compensation programs have been established. As Congress considers legislation to establish a compensation program for those injured by asbestos exposure, Congress asked us to provide information on four existing federal compensation programs: the Black Lung Program, the Vaccine Injury Compensation Program (VICP), the Radiation Exposure Compensation Program (RECP), and the Energy Employees Occupational Illness Compensation Program (EEOICP). As requested, our objectives were to (1) provide information on the design of the programs, including their purpose, financing, administration, benefits, and eligibility criteria; (2) describe the length of time it took to establish the programs, the costs of establishing and administering them, and the initial estimates and actual costs of benefits paid to date; and (3) provide information on the claims histories of the programs, including the number of claims, approval rates, and the length of time it has taken to finalize claims and compensate eligible claimants.
All four programs were designed to compensate individuals injured by exposure to harmful substances. However, their design, the agencies that administer them, their financing mechanisms, benefits paid, and eligibility criteria, including their standards of proof, differ significantly. Several federal agencies are responsible for the administration of the programs: DOL administers the Black Lung Program and EEOICP; DOJ administers the RECP program and shares administration of the VICP program with HHS and the Court of Federal Claims. Among the four programs, EEOICP and RECP are completely federally funded. The Black Lung Program is funded by a trust fund financed by an excise tax on coal, and VICP is funded by a trust fund financed by a per dose tax on each covered vaccine purchased. Benefits vary among the programs: They provide lump sum compensation and payments for lost wages, pain and suffering, medical and rehabilitation costs, and attorney's fees. Eligibility criteria among the programs vary widely. The Black Lung Program covers coal miners who show that they developed black lung disease and are totally disabled as a result of their employment in coal mines and their survivors; VICP covers individuals who show that they were injured by certain vaccines; RECP covers some workers in the uranium mining industry and others exposed to radiation during the government's atmospheric nuclear testing who developed certain diseases; and EEOICP covers workers in nuclear weapons facilities during specific time periods who developed specific diseases. All four programs were established within 2 years of their enacting legislation, and for some programs, benefits paid have exceeded the initial estimates. As specified in its enacting legislation, the Black Lung Program was effective upon enactment. Two of the programs--VICP and RECP--were established within 23 months and 18 months, respectively, of their enacting legislation. The portion of EEOICP administered by DOL was established within 9 months of its enacting legislation, and the portion initially administered by DOE was established within 23 months. Actual costs have significantly exceeded the estimate for several reasons, including (1) the program was initially set up to end in 1976 when state workers' compensation programs were to have provided these benefits to coal miners and their dependents and (2) the program has been expanded several times since it was established in 1969, including several amendments that have increased benefits and added categories of claimants. The number of claims filed and approval rates vary, but for all four programs, it has taken the agencies years to finalize some claims and compensate eligible claimants. The number of claims filed for three of the programs through the end of fiscal year 2004 exceeded the initial estimates. Among the four programs, the number of claims filed ranged from 10,900 for VICP to 960,800 for the Black Lung Program, and approval rates ranged from 31 percent for VICP to 68 percent for RECP. The agencies responsible for processing claims have, at various times, taken years to finalize some claims, resulting in some claimants waiting a long time to obtain compensation. Factors that affect the amount of time it takes the agencies to finalize claims include statutory and regulatory requirements for determining eligibility, changes in eligibility criteria that increase the volume of claims, the agency's level of experience in handling compensation claims, the availability of funding, factors outside the agencies' control such as incomplete applications being filed by claimants and claimants' difficulties in obtaining the evidence needed to meet the programs' standards of proof, and whether claims decisions can be appealed in the courts.
GAO-06-230, Federal Compensation Programs: Perspectives on Four Programs
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
November 2005:
Federal Compensation Programs:
Perspectives on Four Programs:
GAO-06-230:
Contents:
Letter:
Appendix I: Briefing Slides:
Appendix II: GAO Contact and Staff Acknowledgments:
Abbreviations:
DOE: Department of Energy:
DOJ: Department of Justice:
DOL: Department of Labor:
EEOICP: Energy Employees Occupational Illness Compensation Program:
HHS: Department of Health and Human Services:
NIOSH: National Institute for Occupational Safety and Health:
RECP: Radiation Exposure Compensation Program:
SSA: Social Security Administration:
VICP: Vaccine Injury Compensation Program:
United States Government Accountability Office:
Washington, DC 20548:
November 18, 2005:
Congressional Requesters:
Since 1969, when Congress established the Black Lung Program as a
temporary federal program to provide benefits for coal miners disabled
by pneumoconiosis (black lung disease), the federal government has
played an ever-increasing role in providing benefits to individuals
injured as result of exposure to harmful substances. Although the Black
Lung Program was initially designed to end in 1976, when state workers'
compensation programs were to provide these benefits, it was amended to
make it an ongoing federal program. Since that time, Congress has
enacted several additional programs to provide benefits to individuals
injured by exposure to such things as radiation and beryllium, a
substance used in nuclear weapons production. In addition, the role of
the federal government in many of these compensation programs has
expanded over time. Most recently, legislative proposals have been
introduced in the Senate and the House that would add asbestos to the
list of substances for which federally administered compensation
programs have been established.
As Congress considers legislation to establish a compensation program
for those injured by asbestos exposure, you asked us to provide you
with information on four existing federal compensation programs: the
Black Lung Program, the Vaccine Injury Compensation Program (VICP), the
Radiation Exposure Compensation Program (RECP), and the Energy
Employees Occupational Illness Compensation Program (EEOICP). As
requested, our objectives were to (1) provide information on the design
of the programs, including their purpose, financing, administration,
benefits, and eligibility criteria; (2) describe the length of time it
took to establish the programs, the costs of establishing and
administering them, and the initial estimates and actual costs of
benefits paid to date; and (3) provide information on the claims
histories of the programs, including the number of claims, approval
rates, and the length of time it has taken to finalize claims and
compensate eligible claimants. On October 28, 2005, we briefed you on
the results of our study. This report formally conveys the information
we presented at that briefing (see app. I).
To provide information on these programs, we reviewed previous GAO
reports on these and other compensation programs;[Footnote 1]
interviewed officials with the Departments of Labor (DOL), Justice
(DOJ), and Health and Human Services (HHS), the Congressional Budget
Office, and other experts about the start-up and ongoing administration
of the programs; obtained data from the agencies on funding, costs,
claims processing, number of claims, and approval rates; examined the
relevant laws and regulations governing the programs; and reviewed
studies and other publicly available information.
We reviewed information on the four programs from their inception
through the end of fiscal year 2004. We obtained initial estimates of
the anticipated costs of benefits, the number of claims for the life of
the programs, and the actual costs of benefits and claims from the date
the programs were established through the end of fiscal year 2004. We
also obtained information on the annual administrative costs for each
program for fiscal year 2004. In addition, we obtained information on
the total number of claims completed as of the end of fiscal year 2004
and reviewed information on the time it has taken the agencies to
finalize claims and compensate eligible claimants. We did not obtain
cost or claim information on the portion of EEOICP initially
administered by the Department of Energy (DOE) that was moved to DOL as
of fiscal year 2005.[Footnote 2] We also did not consider the
programmatic design of this portion of the program, except where noted.
Although we did not independently assess the accuracy of the data
obtained from the federal agencies, we determined the reliability of
the data by interviewing knowledgeable agency officials regarding the
completeness and accuracy of administrative data, reviewing related
documentation, and obtaining assurances that the agencies conducted
tests of the data for omissions and errors. We determined that the data
were sufficiently reliable to meet the objectives of this engagement.
Our work was conducted from June to October 2005 in accordance with
generally accepted government auditing standards.
In summary, we found that all four programs were designed to compensate
individuals injured by exposure to harmful substances. However, their
design, the agencies that administer them, their financing mechanisms,
benefits paid, and eligibility criteria, including their standards of
proof (the evidence claimants must provide to support their claims),
differ significantly. For example, some programs, such as the Black
Lung Program and EEOICP, were designed to compensate individuals for
work-related injuries, while others, such as RECP and VICP, provide
restitution to injured parties. Several federal agencies are
responsible for the administration of the programs: DOL administers the
Black Lung Program and EEOICP; DOJ administers the RECP program and
shares administration of the VICP program with HHS and the Court of
Federal Claims. Among the four programs, EEOICP and RECP are completely
federally funded. The Black Lung Program is funded by a trust fund
financed by an excise tax on coal, and VICP is funded by a trust fund
financed by a per dose tax on each covered vaccine purchased. Benefits
vary among the programs: They provide lump sum compensation and
payments for lost wages, pain and suffering, medical and rehabilitation
costs, and attorney's fees. Eligibility criteria among the programs
vary widely. The Black Lung Program covers coal miners who show that
they developed black lung disease and are totally disabled as a result
of their employment in coal mines and their survivors; VICP covers
individuals who show that they were injured by certain vaccines; RECP
covers some workers in the uranium mining industry and others exposed
to radiation during the government's atmospheric nuclear testing who
developed certain diseases; and EEOICP covers workers in nuclear
weapons facilities during specific time periods who developed specific
diseases.
All four programs were established within 2 years of their enacting
legislation, and for some programs, benefits paid have exceeded the
initial estimates. As specified in its enacting legislation, the Black
Lung Program was effective upon enactment. Two of the programs--VICP
and RECP--were established within 23 months and 18 months,
respectively, of their enacting legislation. The portion of EEOICP
administered by DOL was established within 9 months of its enacting
legislation, and the portion initially administered by DOE was
established within 23 months.[Footnote 3] Total benefits paid for the
Black Lung Program and RECP have far exceeded initial estimates. For
example, the initial estimate of benefits for the Black Lung Program
developed in 1969 was about $3 billion, while actual benefits paid
through 1976--when the program was initially to have ended--totaled
over $4.5 billion; actual benefits paid through fiscal year 2004 have
totaled over $41 billion. Actual costs have significantly exceeded the
estimate for several reasons, including (1) the program was initially
set up to end in 1976 when state workers' compensation programs were to
have provided these benefits to coal miners and their dependents and
(2) the program has been expanded several times since it was
established in 1969, including several amendments that have increased
benefits and added categories of claimants. In addition, although the
costs of EEOICP benefits paid to date have been fairly close to the
initial estimate, these costs are expected to rise substantially
because of recent changes that were not anticipated at the time the
estimate was developed--payments that were to have been made by state
workers' compensation programs will now be paid by DOL.
The number of claims filed and approval rates vary, but for all four
programs, it has taken the agencies years to finalize some claims and
compensate eligible claimants. The number of claims filed for three of
the programs through the end of fiscal year 2004 exceeded the initial
estimates (no estimates were available for VICP). Among the four
programs, the number of claims filed ranged from 10,900 for VICP to
960,800 for the Black Lung Program, and approval rates ranged from 31
percent for VICP to 68 percent for RECP. As we previously reported, the
agencies responsible for processing claims have, at various times,
taken years to finalize some claims, resulting in some claimants
waiting a long time to obtain compensation. Factors that affect the
amount of time it takes the agencies to finalize claims include
statutory and regulatory requirements for determining eligibility,
changes in eligibility criteria that increase the volume of claims, the
agency's level of experience in handling compensation claims, the
availability of funding, factors outside the agencies' control such as
incomplete applications being filed by claimants and claimants'
difficulties in obtaining the evidence needed to meet the programs'
standards of proof, and whether claims decisions can be appealed in the
courts.
In conclusion, the federal role in all four programs has expanded
significantly over time. All four have expanded to provide eligibility
to additional categories of claimants, cover more medical conditions,
or provide additional benefits. As might be expected, as the federal
role for these four programs has grown, so have their costs. Beyond the
costs associated with expanded eligibility, increasing medical costs
and new research on exposure levels and medical conditions associated
with that exposure that could lead to expanded eligibility may further
increase program costs. The difficulty in estimating the actual cost of
these programs may be due to the inherent difficulty of estimating the
number of claimants and anticipating expansions of the programs.
However, because these programs may expand significantly beyond the
initial cost estimates, policymakers must carefully consider the cost
and precedent-setting implications of establishing any new federal
compensation programs, particularly in light of the current federal
deficit. Finally, program design--including the extent to which
programs allow claimants and payers to appeal claims decisions in the
courts and the standards of proof for each program--can affect claims-
processing time. Ultimately, these program design decisions reflect
trade-offs between processing claims quickly and ensuring accuracy and
fairness.
We provided DOL, DOJ, and HHS with a draft of this report for review
and incorporated their technical comments as appropriate.
As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after the date of the report. At that time, we will send copies of this
report to the Attorney General, the Secretary of HHS, the Secretary of
Labor, appropriate congressional committees, and other interested
parties. It also will be available at no charge on GAO's Web site at
http://www.gao.gov.
If you have any questions about this report, please contact me at (202)
512-9889 or at robertsonr@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this report. Key contributors to this report are listed in
appendix II.
Signed by:
Robert E. Robertson:
Director, Education, Workforce, and Income Security Issues:
List of Congressional Requesters:
The Honorable John Conyers, Jr.
Ranking Minority Member:
Committee on Judiciary:
House of Representatives:
The Honorable William D. Delahunt:
The Honorable Sheila Jackson Lee:
The Honorable Zoe Lofgren:
The Honorable Martin T. Meehan:
The Honorable Jerrold Nadler:
The Honorable Linda T. Sanchez:
The Honorable Robert C. Scott:
The Honorable Adam Smith:
The Honorable Chris Van Hollen, Jr.
The Honorable Maxine Waters:
The Honorable Melvin L. Watt:
The Honorable Anthony D. Weiner:
The Honorable Robert Wexler:
House of Representatives:
[End of section]
Appendix I: Briefing Slides:
[See PDF for images]
[End of slide presentation]
[End of section]
Appendix II: GAO Contact and Staff Acknowledgments:
GAO Contact:
Robert A. Robertson (202) 512-9889:
Staff Acknowledgments:
Revae E. Moran, Assistant Director; Karen A. Brown, Analyst in Charge;
Don D. Allison; David A. Eisentstadt; Jean L. McSween; Regina Santucci;
Jeremy D. Sebest; and Roger J. Thomas made significant contributions to
this report.
FOOTNOTES
[1] See the list of related GAO products at the end of appendix I.
[2] GAO is currently reviewing DOE's costs and administration of this
portion of EEOICP, but the results of this work will not be available
until 2006.
[3] One portion of EEOICP, Part B, has been administered by DOL since
the inception of the program. Another portion, Part D, was initially
administered by DOE. As of fiscal year 2005, that portion of the
program was replaced with Part E, which will be administered by DOL.
See appendix I for details.
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