Postal Service Employee Workers' Compensation Claims Not Always Processed Timely, but Problems Hamper Complete Measurement
Gao ID: GAO-03-158R December 20, 2002In fiscal year 2000, U. S. Postal Service employees accounted for about one-third of both the federal civilian workforce and the $2.1 billion cost of the Federal Workers' Compensation Program (WCP). During that same year, Postal Service employees submitted 85,000 claims, or one-half of all claims for new work-related injuries, to the Department of Labor's (DOL) Office of Workers' Compensation Program (OWCP), which is charged with administering the program. Because of complaints the subcommittee received from injured federal employees about the untimely receipt of WCP benefits and because Postal Service employees account for such a large portion of the WCP, the Chairman, House Subcommittee on Government Efficiency, Financial Management, and Intergovernmental Relations, Committee on Government Reform, asked us to determine specifically whether Postal Service employees were receiving WCP benefits in a timely manner. For our current review, we agreed to (1) determine the extent to which Postal Service employees provided all of the evidence required by OWCP regulations for determining the claimants' eligibility for WCP benefits and (2) determine whether claims for WCP eligibility and WCP compensation payments for lost wages or schedule awards were submitted and processed within the time frames set forth in OWCP regulations or performance standards. On the basis of our analysis, we estimate that in about 99 percent of the cases involving Postal Service employees who (1) had work-related injuries during the 12-month period beginning July 1, 1997, and (2) filed claims for WCP benefits for lost wages or schedule awards due to these injuries, the employees eventually provided OWCP the evidence it required to make a determination on their eligibility for benefits. However, in about 69 percent of the cases, OWCP claims examiners had to request additional information because all of the required evidence needed to make a determination of WCP eligibility was not provided initially. As a result, claims for WCP eligibility were not always processed within the time frames set forth by OWCP. For those Postal Service employees in our sample cases who were determined to be eligible for WCP benefits and later filed claims for compensation for lost wages or schedule awards, we could not reliably estimate the percentage of claims for compensation that were processed within the time frames set forth by OWCP. This was because the dates we needed to "mark" the beginning and ending actions taken by the injured Postal Service employee and Postal Service supervisor to complete, submit, and forward claims to DWCP were missing from the claim forms.
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Director: Katherine A. Siggerud Team: Government Accountability Office: Physical Infrastructure Phone: (202) 512-6670GAO-03-158R, Postal Service Employee Workers' Compensation Claims Not Always Processed Timely, but Problems Hamper Complete Measurement
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December 20, 2002:
The Honorable Stephen Horn:
Chairman, Subcommittee on Government Efficiency,
Financial Management, and Intergovernmental Relations:
Committee on Government Reform:
House of Representatives:
Subject: Postal Service Employee Workers‘ Compensation Claims Not
Always Processed Timely, but Problems Hamper Complete Measurement:
Dear Mr. Chairman:
In fiscal year 2000, U. S. Postal Service employees accounted for about
one-third of both the federal civilian workforce and the $2.1 billion
cost of the Federal Workers‘ Compensation Program (WCP). During that
same year, Postal Service employees submitted about 85,000 claims, or
about one-half of all claims for new work-related injuries, to the
Department of Labor‘s (DOL) Office of Workers‘ Compensation Program
(OWCP), which is charged with administering the program. Because of
complaints the subcommittee received from injured federal employees
about the untimely receipt of WCP benefits and because Postal Service
employees account for such a large portion of the WCP, you asked us to
determine specifically whether Postal Service employees were receiving
WCP benefits in a timely manner.
We provided an initial response to your request on December 21,
2001,[Footnote 1] and testified on the matter during a hearing before
the subcommittee on May 9, 2002.[Footnote 2] Among other things, we
reported that during the period July 1, 1996, through June 30, 2000,
about 7 percent of the Postal Service‘s approximately 901,000 total
employee workforce filed an average of about 82,600 WCP claims each
year. Of these claims, about 88 percent were approved and about 12
percent were denied each year. We also reported that OWCP‘s automated
file records indicated a wide variance in the time between the date of
an employee‘s injury and (1) the date of OWCP‘s decision regarding the
claimant‘s entitlement to benefits[Footnote 3] and (2) the date OWCP
authorized the first compensation or schedule award payment.[Footnote
4]
However, as we reported, the automated records we reviewed did not
contain
the specific information we needed to identify how long it took the
injured employees, Postal Service supervisors, and OWCP claims
examiners to
submit and process WCP claims.
For our current review, we agreed to:
* determine the extent to which Postal Service employees provided all
of
the evidence required by OWCP regulations for determining the
claimants‘ eligibility for WCP benefits and:
* determine whether claims for WCP eligibility and WCP compensation
payments for lost wages or schedule awards were submitted and processed
within the time frames set forth in OWCP regulations or performance
standards.[Footnote 5]
Before Postal Service employees can receive medical benefits or
compensation for wage loss or schedule awards, OWCP must often first
establish--based on the evidence provided by the applicant--that the
applicant is eligible for workers compensation benefits due to the
injury for which the benefits are claimed. Once the claimant is
determined to be eligible, the claimant‘s injury-related medical costs
are paid directly by DOL to the medical provider. However, for wage
loss or physical impairment due to the work-related injury, the
employees must submit another WCP claim form specifically for
compensation payments and provide evidence that the time away from work
(wage loss) or impairment (schedule award) was directly related to the
injury.
To meet our objectives, we randomly sampled 484 Postal Service employee
WCP case files located at the 12 OWCP district offices throughout the
country. Our sample cases included only those cases where Postal
Service employees also filed claims for wage loss or schedule award
compensation payments due to injuries that occurred or were recognized
as job-related during the 12-month period beginning July 1, 1997. We
selected the sample file records on the basis of the type of injury
involved--traumatic or occupational[Footnote 6]--and on the basis of
their approval or nonapproval for WCP benefits and compensation or
schedule award payments. (See enc. III for more detail about our scope,
methodology, and sampling plan.) Our results can be generalized to the
entire group of Postal Service employees who applied for wage loss or
schedule award compensation due to injuries occurring during the period
covered by our review. (See enc. III for the confidence intervals for
each part of the claims processing activities we measured.) We chose
the period covered by the cases we reviewed because we believed it was
current enough to reflect ongoing operations, yet historical enough for
most, if not all, of the claims to have been decided upon. However, our
work did not include an analysis of any time involved in the appeals
process of any claim we reviewed, nor did we generally evaluate the
appropriateness of OWCP‘s decisions approving or denying the claims.
Our scope did not include an overall assessment of the performance of
the WCP. For example, we did not assess processing of claims solely for
medical payments or for subsequent claims for compensation made after
the initial payment was authorized. We performed our work from January
through December 2002 in accordance with generally accepted government
auditing standards and obtained comments on the results of our work
from OWCP and the Postal Service.
Results in Brief:
On the basis of our analysis, we estimate that in about 99 percent of
the cases involving Postal Service employees who (1) had work-related
injuries during the 12-month period beginning July 1, 1997, and (2)
filed claims for WCP benefits for lost wages or schedule awards due to
these injuries, the employees eventually provided OWCP the evidence it
required to make a determination on their eligibility for benefits.
However, in about 69 percent of the cases, OWCP claims examiners had to
request additional information because all of the required evidence
needed to make a determination of WCP eligibility was not provided
initially. As a result, claims for WCP eligibility were not always
processed within the time frames set forth by OWCP.
On the basis of our analysis of available information, we estimate that
Postal Service employees submitted about 95 percent of traumatic injury
claims and about 49 percent of occupational disease claims to their
respective Postal Service supervisors[Footnote 7] within the time
frames set forth in OWCP regulations or performance standards. Postal
Service supervisors then completed and submitted about 73 percent of
the traumatic injury claims and about 64 percent of the occupational
disease claims within OWCP‘s time frames, and OWCP claims examiners
processed about 71 percent of the traumatic injury claims and about 84
percent of the occupational disease claims within OWCP‘s time frames.
However, the reliability of our estimates is compromised to some extent
by data not required and not available from the claim forms in our
sample cases, as well as mistakes made by OWCP in selecting and
processing traumatic injury short form closure (SFC) cases.[Footnote 8]
Furthermore, because of the SFC case selection and processing problems
we found, the SFC case process may not be achieving the results OWCP
intended.
For those Postal Service employees in our sample cases who were
determined to be eligible for WCP benefits and later filed claims for
compensation for lost wages or schedule awards, we could not reliably
estimate the percentage of claims for compensation that were processed
within the time frames set forth by OWCP. This was because the dates we
needed to ’mark“ the beginning and ending actions taken by the injured
Postal Service employee and Postal Service supervisor to complete,
submit, and forward the claims to OWCP were missing from the claim
forms. Additionally, OWCP‘s performance standards for OWCP claims
examiners‘ part in processing these claims do not cover compensation
claims for schedule awards, or when applicable, consider the impact of
the additional time associated with (1) processing corresponding WCP
claims for eligibility or (2) OWCP requests for additional information
from the employees, Postal Service supervisors, or medical providers.
Accordingly, we are recommending that the Secretary of Labor and the
Postmaster General take certain actions to improve and monitor the
preparation and processing of Postal Service employees‘ WCP claims. In
commenting on a draft of this report, the Postal Service said that it
supported our recommendations and, in July 2002, had established a new
goal for submitting claims to OWCP. Although OWCP disagreed with many
aspects of our methodology, findings, and recommendations, it said it
was undertaking a review of its business and data system, including its
SFC case process, and that it would make changes where it felt
appropriate. Overall, we continue to believe that our methodology,
findings, and recommendations are appropriate, but we have made changes
to our report to reflect OWCP‘s concerns where appropriate. A complete
discussion of the Postal Service‘s and OWCP‘s comments can be found
near the end of this report.
Background:
Although OWCP is charged with administering the WCP, federal employing
agencies, including the Postal Service, are responsible for paying
normal salary and benefits, referred to as ’continuation of pay (COP),“
to those employees who miss work for up to 45 calendar days, during a
1-year period, due to a work-related traumatic injury for which they
have applied for WCP benefits. Additionally, at the end of each 12-
month period beginning on
July 1, referred to as a ’charge back year,“ employing agencies are to
reimburse DOL for (1) each agency‘s share of DOL administrative costs
and (2) costs associated with the WCP benefits and services provided to
their respective employees during the year. As shown below, Postal
Service employees‘ WCP claims for medical benefits and compensation for
lost wages and schedule awards have greatly increased since fiscal year
1998. (See table 1.):
Table 1: Postal Service‘s Share of Selected WCP Costs Due to Injured
Postal Service Employees for Fiscal Years 1998 through 2001 [A]:
[See PDF for image]
[A] Most current years for which costs were available at the time of
our
review.
[B] Outlay is the amount Postal Service reimburses DOL, which makes the
payment on WCP claims.
Source: GAO analysis of Postal Service data.
[End of table]
Employing agencies also provide the avenue through which injured
federal employees prepare and submit their claim forms for WCP
eligibility and claim forms for wage loss or schedule award
compensation payments to OWCP. Specifically, OWCP regulations and
performance standards in effect during the period covered by our review
set forth the following:
For OWCP to determine WCP eligibility, applicants had to provide
evidence to meet five requirements: (1) the claim was filed within the
time limits specified by law; (2) the injured or deceased person was,
at the time of injury or death, an employee of the U. S. government;
(3) the injury, disease, or death did, in fact, occur; (4) the injury,
disease, or death occurred while the employee was in the performance of
duty; and (5) the medical condition for which compensation or medical
benefits was claimed was causally related to the claimed job-related
injury, disease, or death.[Footnote 9]
For OWCP to process claims for WCP eligibility determination, OWCP
regulations state that applicants are to give notice of the injury in
writing[Footnote 10] to a Postal Service supervisor within 30 days of
the injury or the date the employee realized the disease was job-
related for traumatic or occupational disease, respectively. OWCP
regulations further state that Postal Service supervisors are to
complete the agency portion of the form and submit it to OWCP within
10 working days of receiving a claim.[Footnote 11] OWCP
regulations do not identify the time frames for OWCP to perform its
part of the claims processing activity. Instead, OWCP has developed
operational performance standards that identify the percentage of
claims it plans to process within certain time frames. Specifically,
OWCP claims examiners are to decide on WCP eligibility for at least
90 percent of the traumatic injury claims within 45 days of the claims‘
receipt from the Postal Service and for at least 70 percent of the
occupational disease claims within 6 months of the claims‘ receipt.
For OWCP to process claims for compensation for wage loss or schedule
award, OWCP regulations state that applicants--who were disabled by a
work-related injury and lost wages for more than 3 days, or had a
permanent impairment--are to submit a claim in writing[Footnote 12] to
the employing agency within 10 days of the date pay stopped. Upon
receipt of the claim, OWCP regulations state that Postal Service
supervisors are to complete the agency portion of the form and as soon
as possible, but not more than 5 working days, submit the form and any
accompanying medical reports to OWCP. OWCP regulations do not identify
the time frames for OWCP to perform its part of the claims processing
activity. Instead, OWCP has developed operational performance standards
that identify the percentage of claims it plans to process within
certain time frames. Specifically, OWCP‘s goal is for claims examiners
to process all payable claims for traumatic injuries and occupational
disease within 14 days of OWCP‘s receipt of the claim from the Postal
Service. OWCP considers the time that payment is authorized as the end
of the processing activity.
Evidence Required to Determine WCP Eligibility Was Almost Always
Provided by Postal Service Employees:
Overall, we estimate that for about 99 percent of the cases involving
Postal Service employees who (1) had work-related injuries during the
12-month period beginning July 1, 1997, and (2) filed claims for WCP
benefits for lost wages or schedule awards due to these injuries, the
employees provided to OWCP the evidence required to make a
determination on their eligibility for benefits. Specifically, about 99
percent of the traumatic injury claims filed by Postal Service
employees contained evidence related to the five requirements set forth
in OWCP regulations and only about 1 percent of the claims did not
include all of the required evidence. For occupational disease claims,
about 98 percent of the claims filed by Postal Service employees
contained evidence related to the five requirements, while only about 2
percent did not include all of the required evidence. Generally, the
evidence not provided for both types of claims pertained to either (1)
the employee‘s status as a Postal Service employee or (2) whether the
claims were filed within the time limits specified by law.
However, in about 69 percent of our sample cases--about 64 percent of
the traumatic injury cases and about 77 percent of the occupational
disease cases--OWCP claims examiners had to request and obtain
additional information from the injured employee, Postal Service, or
medical provider in order to make a determination of WCP eligibility.
Postal Service Employee Claims for Program Eligibility Are Not Always
Processed Within Time Frames Set Forth by OWCP:
On the basis of our analysis, we found that Postal Service employees
did not always submit, and Postal Service supervisors and OWCP claims
examiners did not always process, WCP claims within the time frames set
forth in OWCP regulations or performance standards for determining WCP
eligibility. Specifically, we estimate that Postal Service employees
met the time frames for submitting about 95 percent of traumatic injury
claims and about 49 percent of the occupational disease claims to the
Postal Service supervisors. (See table 2.) Once the Postal Service
supervisors received the claims, we estimate that these supervisors
completed the agency portion of the claim forms and forwarded about 73
percent of the traumatic injury claim forms and about 64 percent
occupational disease claim forms to OWCP within the time frames set
forth by OWCP. We also estimate that OWCP claims examiners processed
about 71 percent of the traumatic injury claims and about 84 percent of
the occupational disease claims within the times frames set forth by
OWCP. However, the time frames for OWCP to process both traumatic
injury claims and occupational disease claims were affected by factors
outside of OWCP‘s control. In addition, our estimate of the processing
times for traumatic injury claims were affected by OWCP‘s mishandling
of some SFC cases. As a result, claims for WCP eligibility were not
always processed within the time frames set forth by OWCP.
According to OWCP officials, delays by OWCP in processing WCP claims
are sometimes due to the employees‘ failure to initially provide all of
the information needed in order to determine WCP eligibility. As a
result, and as discussed earlier in this report, additional processing
time was sometimes needed for OWCP to request and receive the needed
information before WCP eligibility could be determined. According to
Postal Service officials, part of the delay in getting WCP forms
submitted within the time frame set forth in OWCP regulations,
especially for occupational disease claims, is because employees
sometimes do not realize the severity of their injuries and do not file
their WCP claims until the injuries get worse or start to affect their
job performance. These officials also told us that Postal Service
supervisors sometimes complete the agency part of the forms but may not
promptly forward WCP claim forms. In commenting on a draft of this
letter, the Postal Service told us that in July 2002, it had
established a reporting goal that 90 percent of employee claims for
traumatic injury and occupational disease are to be reported to OWCP
within 14 days of receiving the claims from the employees.
Table 2: Length of Time to Process Claims to Determine Eligibility for
WCP Benefits for Injuries during the Period July 1, 1997, through June
30, 1998 [A]:
[See PDF for image]
[A] Our sample included only those cases where Postal Service employees
also filed claims for wage loss or schedule award compensation payments
due to injuries that occurred or were recognized as job-related during
the 12-month period beginning July 1, 1997.
Source: GAO analysis of OWCP data.
[End of table]
Time Frame for Processing Traumatic Injury Claims for WCP Eligibility
Are Affected by SFC Cases:
Initially, we had estimated that OWCP claims examiners processed only
about 41 percent of the traumatic injury claims within the times frames
set forth by OWCP. This percentage, however, did not take into
consideration the ’down time“ associated with SFC cases.[Footnote 13]
According to OWCP, SFC cases are WCP claims that are accepted
(approved) as eligible for WCP benefits upon receipt and allowed to
incur up to $1,500 in medical bills--without formal adjudication--and
are closed. Also, SFC cases are to remain closed--without any action
taken on the part of claims examiners--unless one or more of the
following actions occur on the claims: (1) medical expenses exceed
$1,500, (2) the Postal Service later contests the claim, or (3) a wage
loss claim is submitted to OWCP. If one of these events occurs, the
case is to be reopened, processed, and adjudicated by an OWCP claims
examiner. Thus, according to OWCP officials, we should not have
considered as processing time the time frame between the date the SFC
case was closed and the date that it was reopened.[Footnote 14]
Once we deducted the ’down time“ associated with the 188 cases
identified by OWCP officials as SFC cases contained in our sample of
280 traumatic injury cases, we determined that the percentage of
traumatic injury claims that were processed within the time frame set
forth in OWCP performance standards increased from our original
estimate of about 41 percent to about 71 percent. However, we also
found from our case file review that OWCP personnel did not always
comply with OWCP‘s SFC selection and processing guidelines. This
problem precluded a complete and accurate assessment of OWCP‘s
processing time frames for eligibility determination and indicates that
closer monitoring of OWCP‘s claims examiners‘ adherence to SFC
processing guidelines may be needed.
Specifically, we found that 14 of the 188 SFC cases in our sample
(about 7 percent) were designated as SFC cases but did not meet OWCP‘s
SFC case criteria: 6 cases involved third parties, 5 cases were
initially contested by Postal Service officials, and 3 cases involved
occupational disease claims. According to OWCP, traumatic injury claims
that involve third parties or are initially contested or claims that
involve occupational diseases normally require additional case
development before a decision as to whether WCP eligibility can be
made. Thus, these 14 cases should not have been selected as SFC cases.
Initially, we had presented:
OWCP with 17 SFC cases in our sample that we believed did not meet the
SFC case criteria. At that time, OWCP provided us with additional
information that indicated that 3 of the 17:
cases were properly designated as SFC cases. However, in OWCP‘s
comments on a draft of this report, it stated that it had previously
demonstrated to us that only 9 of the 17 cases were handled improperly.
We disagree and still believe that 14 of our sample SFC cases were
handled improperly by OWCP claims examiners. Nevertheless, whether
there were 9 or 14 SFC cases that were handled improperly, the point is
that OWCP claims examiners do not always select and process SFC cases
properly.
We found further that once selected, some SFC cases may not have been
processed according to OWCP‘s guidelines. Of the 188 SFC cases, we
found that 70 cases (about 37 percent) were adjudicated the same day
that OWCP claims examiners reopened the claim, which could indicate
that contrary to OWCP‘s SFC guidelines, claims examiners may have
worked on or processed cases even though the cases were ’technically“
closed. Then, once the claims examiner decided to accept or reject the
claims, the cases were reopened, adjudicated, and closed on the same
day. Furthermore, in our case file review, we noted several instances
in which OWCP claims examiners had requested additional claim
information for closed SFC cases, indicating that processing was taking
place but that was not being considered in OWCP‘s processing time
measurement.
In its comments on our draft report, OWCP said that we implied that SFC
cases that are reopened and adjudicated on the same day are not
processed in accordance with OWCP guidelines and that this is not the
case. OWCP said that its examiners are in fact encouraged to adjudicate
claims as quickly as possible; frequently, triggers such as a telephone
call or a facsimile transmission will be sufficient basis to reopen and
adjudicate a claim instantly. However, our case file review showed, and
we were told by OWCP officials in both the Dallas and Washington, D.C.,
district offices, that contrary to SFC case processing guidelines,
claims examiners frequently work on cases while they are officially
closed in an effort to obtain relevant information from the claimant or
the employer so that an immediate eligibility determination can be made
when the case is reopened. Nevertheless, we revised our report to
indicate that we are not implying that all such cases are improperly
processed.
OWCP officials generally agreed that mistakes were made in the SFC
screening process and operating procedures. They explained that the SFC
selection process and operating procedures, as a whole, have never been
evaluated since the initial pilot project was done in 1993. Because the
SFC case process has never been evaluated, no one knows whether the
process has achieved its intended objectives or maintained the pilot
project‘s estimated error rate of about 1 percent for improperly
approved injury claims. Although we found that 2 of the 188 SFC cases
in our sample (about a 1 percent error rate) involved erroneously paid
medical benefits from OWCP and COP from the Postal Service, our review
of SFC cases was not designed to be representative of all such
cases.[Footnote 15] Furthermore, OWCP‘s pilot study that led to its SFC
case processing policy was limited to one district office, and OWCP has
not evaluated the SFC case processing error rate since that time. Thus,
neither OWCP nor we have sufficient data to determine the current SFC
case processing error rate.
OWCP officials told us that they did not seek reimbursement from
medical providers for costs paid prior to the time OWCP determined that
the claimants were ineligible for WCP benefits. They said that there is
no rule that precludes OWCP from seeking reimbursement for improperly
paid medical costs from the employees. Once OWCP formally authorizes
medical services to be provided to employees, the Employees‘
Compensation Appeals Board, which considers WCP appeals, takes the
position that OWCP is contractually obligated to pay medical providers
for services rendered in connection with the authorization, even if
OWCP later decides to deny the claim. Postal Service officials, too,
recognized that reimbursement of improperly awarded medical costs
should not be sought from the medical providers. However, the Postal
Service also said that, because it is difficult to recover improperly
awarded medical costs from employees, changing OWCP‘s regulations and
the language in the authorization form to require employees or their
insurance carriers to refund improper medical payments would make it
easier for them to recover such amounts. Also, the Postal Service is
required by statute to seek reimbursement from its employees for
improperly awarded COP.
Percentage of Compensation Claims Processed Within Time Frames Set
Forth by OWCP Could Not Be Reliably Estimated:
We could not reliably estimate the percentage of WCP claims for
compensation payments for lost wages or schedule awards that were
processed within the time frames set forth in OWCP regulations because
OWCP did not require the dates needed to identify certain milestones in
the claims processing activities to be recorded and the dates were not
available from our sample case files. Also, OWCP‘s performance
standards do not cover a significant type of claim for compensation--
schedule awards--or, when applicable, consider the impact of the
additional processing time associated with (1) processing the
corresponding WCP claim for eligibility or (2) OWCP requests for
additional information from injured employees, medical providers, or
Postal Service supervisors.
Specifically, the dates needed to mark the beginning and ending actions
taken by the injured Postal Service employee and Postal Service
supervisor to complete, process, and submit, the claims for
compensation to OWCP were not available. For example, for traumatic
injuries, OWCP regulations state that an injured employee should submit
a claim for compensation to the Postal Service supervisor within 10
days from the date the employee‘s pay stopped due to an absence from
work caused by the work-related injury. However, we found that the date
that the employee actually submits the form to the Postal Service
supervisor is not required by OWCP to be recorded nor was it recorded
on the claim form or available in the case files we reviewed. As a
result, we could not reliably estimate whether the injured employees
filed the claim forms within the time frame set forth by OWCP; nor
could we reliably estimate the time frame for the Postal Service
supervisors to complete and forward the claim form to OWCP after its
receipt from the employees.
Although we estimated that OWCP claims examiners processed about 59
percent of the traumatic injury and 63 percent of the occupational
disease claims within OWCP‘s 14-day performance standard (the standard
covers the period between the date OWCP first received the claim form
to the date OWCP authorized the first compensation payment), problems
with OWCP‘s performance standard itself reduced the reliability of the
processing time estimates we derived for this claims processing
activity. First, OWCP‘s performance standard on which:
our estimate is based excludes both claims for leave buy-backs[Footnote
16] and claims for schedule awards. According to OWCP, both types of
claims normally take longer than the 14-day time frame standard to
process.
OWCP officials stated that it is appropriate not to have performance
standards for processing employee claims for leave buy-back because
the decision to grant leave buy-back ultimately rests with the
employing agency, and the decision to actually repurchase leave
rests with the claimant.
OWCP stated that it has not established processing standards for
schedule awards because entitlement to a schedule award for permanent
impairment requires an often prolonged process of determining whether
the claimant has reached maximum medical improvement and a precise and
often difficult determination of the degree of impairment. Accordingly,
OWCP believes that applying meaningful timeliness standards to claims
staff in these circumstances would be exceedingly difficult. However,
we found that 43, or about 10 percent of our sample claims, were claims
for schedule awards. We estimated that the median processing time for
37 of these claims for which data were available was 115 days from the
date that OWCP received the claim until the first check was issued to
the injured employee. Further, we estimated that 90 percent of these
claims were paid within 787 days. Therefore, because the number of
schedule award claims is not insignificant and processing times appear
quite lengthy, we believe that if a reasonable standard for processing
these claims could be developed, it could provide claims examiners with
incentive to process schedule award claims expeditiously and provide
OWCP a management tool for overseeing and evaluating the process.
Second, OWCP‘s existing standard for compensation claims does not
consider the impact of delays caused by processing corresponding claims
for eligibility or delays caused by OWCP‘s need for additional
information from the injured employee, employing agency, or medical
provider. For example, OWCP‘s performance standard for processing
claims for compensation begins with OWCP‘s receipt of the compensation
claims forms, even though the claim for compensation cannot be decided
upon or awarded until after WCP eligibility is determined. As a result,
such compensation claims forms cannot be processed until WCP
eligibility is determined, which could inadvertently result in claims
being processed in greater than the 14-day processing time frame set
forth in OWCP performance standards. In our sample cases, we found that
compensation claims for about 23 percent of the traumatic injuries and
about 12 percent of the occupational disease were received by OWCP
before WCP eligibility was determined. According to OWCP officials,
this indeed happens but there is little they can do about it using the
current performance standard for processing claims for compensation,
other than being aware that it is a possible reason for such claims
exceeding the processing standard.
Moreover, we found that delays in processing claims frequently occur
because injured employees do not always provide complete information at
the time they submit WCP claims, nor is sufficient or competent
information always provided to allow OWCP to determine WCP eligibility
or decide on compensation awards. As a result, OWCP is to inform the
claimant that additional evidence is needed and allow the claimant up
to 30 days to submit the requested information before OWCP can deny the
claim. In our analysis, we found that this happened quite often. In
fact, for about 64 percent of the compensation claims stemming from
traumatic injuries and about 77 percent of the claims stemming from
occupational disease, OWCP requested additional information before
making a decision on the claims. According to OWCP officials, delays
created by having to request additional information is indeed a
problem. They have tried to minimize these delays by taking such action
as calling the employee or agency, when appropriate, to obtain the
information instead of sending formal written requests. Regardless,
according to these officials, under OWCP‘s current performance
standards,
all claims examiners and district directors can do is monitor these
delays
and note their impact on the overall claims processing activity.
Conclusions:
Although nearly all Postal Service employees who filed claims for WCP
benefits for work-related injuries sustained during the period July 1,
1997, through June 30, 1998, eventually provided the evidence required
by OWCP regulations to determine the employees‘ eligibility for WCP
benefits, many of these employees‘ claims were not processed within the
time frames set forth by OWCP. This is because (1) injured employees
sometimes failed to submit claim forms in a timely manner after the
date of injury or failed to initially provide all the needed
information and (2) Postal Service supervisors did not always follow
OWCP guidelines for forwarding the claims to OWCP. As a result, OWCP
claims examiners frequently had to request and obtain additional
information in order to determine the employees‘ WCP eligibility. These
factors may have contributed to delays that occurred in the overall
claims processing activity. In addition, data not required to be
captured on the claim forms and not available from the claim files as
well as the handling of some SFC cases by OWCP claims examiners
affected the reliability of performance measurements for determining
WCP eligibility. Furthermore, this could indicate a need for OWCP to
reevaluate the SFC case process. Moreover, problems with OWCP‘s
performance standards themselves made it impossible to reliably
estimate the time required for processing compensation claims for lost
wages. In addition, OWCP does not have performance standards for
schedule awards even though about 10 percent of WCP claims in our
sample were for schedule awards, and the processing times for these
claims were generally quite lengthy.
Recommendations for Executive Action:
To help (1) improve measurement of WCP claims processing activity and
(2) ensure the accuracy in awarding WCP benefits, we recommend that the
Secretary of Labor direct the OWCP administrator to:
* reevaluate and modify as needed OWCP‘s regulations and performance
standards to better ensure that measurements reflect the time
associated with the various specific components and parties involved in
processing WCP claim forms up to the time WCP eligibility is determined
and WCP compensation payments are authorized or denied, and reconsider
whether reasonable performance standards for claims for schedule awards
could and should be established, and whether SFC cases should be
combined with other traumatic injury claims when measuring the
timeliness of the eligibility determination process;
* establish a requirement that the dates needed to determine the
various
processing times covered by OWCP‘s regulations or performance standards
for all parties involved in processing WCP claims are recorded on the
applicable claim forms;
* periodically (1) monitor employee compliance with SFC case selection
and processing guidelines and (2) determine whether the SFC case
process is achieving OWCP‘s intended goals and maintaining a cost-
effective error rate regarding improperly awarded WCP benefits.
To help overcome the delays in processing WCP claim forms for
eligibility determination and compensation for lost wages and schedule
awards, we are also recommending that the Postmaster General
monitor and take appropriate actions to achieve its goal for the
preparation and processing of Postal Service employee claims for WCP
benefits and ensure that claims submitted to OWCP are as complete as
practical.
Agency Comments and Our Evaluation:
We provided copies of a draft of this report to the Postmaster General
and the Secretary of Labor for their review and comment. On December 6,
2002, the Postal Service‘s Vice President, Employee Resource
Management, provided us with written comments stating that the Service
supports our recommendations regarding OWCP‘s administration of the
program. (See enc. I.) He said that the Postal Service believes our
recommendations will improve OWCP‘s ability to effectively manage the
program. With regard to our recommendation that OWCP and the Postal
Service take action to improve and monitor the preparation and
processing of WCP claims, he stated that the Postal Service has
implemented such measures. He said that in July 2002, the Postal
Service established a timeline reporting goal that 90 percent of
employee claims for traumatic injury and occupational disease are to be
reported within 14 days. He said that in order to achieve such a goal,
field managers must establish a close working relationship with
employees‘ supervisors to ensure that claim forms are submitted
promptly and accurately. He also pointed out that in regard to the
discussion in our report relating to the collection of medical payments
improperly made, the payments are difficult to recover if the claim is
later denied. He said that if OWCP‘s regulations and the language on
the applicable form were revised to require the employees or their
insurance carriers to refund medical payments improperly made, this
would greatly increase the ability to collect these payments. Finally,
he stated that the efforts of OWCP in continuing to improve program
management and to identify ways to deliver good service to injured
Postal Service employees are appreciated.
We believe that the recent goal established by the Postal Service to
improve preparation and processing of Postal Service employees workers‘
compensation claims should, if effectively implemented, help expedite
the WCP claims eligibility determination and adjudication processes as
long as the claims contain sufficient information for OWCP to process
the claims. Accordingly, we have revised the recommendations in our
report to reflect the Postal Service‘s recently established claim
submission goal.
By letter dated December 11, 2002, OWCP‘s Director provided us general
and technical comments on our draft report. His general comments,
included as enclosure II, are discussed below and in those sections of
the report where applicable. We considered his technical comments and
made changes to the report where appropriate. Overall, OWCP disagreed
with several aspects of our methodology, findings, and recommendations
but said the data systems OWCP uses to measure its own and employing
agencies‘ performance are currently under review as part of a general
system redesign and replacement effort.
Comments about Our Methodology and Findings:
OWCP stated in its comments that the operation of the workers‘
compensation system remains a complex and intertwined set of
activities, and that in its view, the report does not fully and
accurately describe the overall performance of that system. OWCP
specifically:
pointed to our approach to the SFC case process as misrepresenting
OWCP‘s handling of this large category of traumatic injury cases. Also,
OWCP pointed out that with respect to the timeliness of wage-loss
claims processing, our analysis focused only on the outcomes of claims
for the first compensation payment. OWCP stated that its system reports
on a larger universe--all payments generated from the receipt of a
claim form, and multiple claims are frequently filed on the same case.
Our work was never intended to address the overall performance of the
federal workers‘ compensation program. We explain early in the report
that our work focused on only Postal Service employees who filed claims
for wage loss or schedule award compensation during a specified period
of time. Because of our limited scope, we recognize that there would
likely be differences between the results of our analysis and the
results of OWCP‘s systems for tracking its performance in processing a
differing universe of WCP claims. We nevertheless believe that the
results of our analysis of our sample postal employee claims are
relevant for OWCP to consider as it redesigns its system.
OWCP pointed out that on the basis of our stratified sample of 484
cases, we found that OWCP adjudicated traumatic injury claims within
program standards 71 percent of the time and occupational disease
claims 84 percent of the time. However, OWCP data systems capturing
information on all cases processed within the measured categories show
traumatic injury adjudication timeliness at better than 94 percent and
occupational disease case adjudication timeliness at more than 90
percent. OWCP said that the discrepancy between what we found and what
its systems show regarding traumatic injury claim adjudication
timeliness seriously distorts OWCP‘s performance.
Specifically, OWCP said that our approach to the SFC case process
misrepresents OWCP‘s handling of this large category of traumatic
injury cases. It said that its 94 percent measurement of timeliness
much more fairly represents service to injured workers because it
includes SFC cases as completed within the 45 day standard. It said
that this approach is appropriate because the only benefit being
claimed in such cases is payment of medical claims. Further, OWCP
disagreed with our approach of excluding the down time associated with
SFC cases because the vast majority of SFC cases are never reopened.
Therefore, if our methodology were used, these cases would never be
counted as processed even though up to $1,500 in medical bills may have
been promptly paid on each of these claims. OWCP further stated that it
has established a separate 45 day standard for SFC cases that are
reopened, and its system is reporting that approximately 85 to 90
percent of these reopened cases are adjudicated within the standard.
We believe that OWCP‘s approach of combining SFC cases, which do not
involve processing time by claims examiners, with cases that do require
processing time by claims examiners does not provide an appropriate
measurement of timeliness for processing traumatic injury claims. As
OWCP points out, SFC cases are closed automatically and immediately if
the case meets certain criteria and medical claims are paid
automatically up to a preset limit. Combining these cases with cases
that require examiners to make decisions does not provide the most
appropriate or meaningful measure of the eligibility processing times
for traumatic injury claims because it would be difficult for OWCP to
identify and address any problems that may affect the actual processing
times of claims that do require eligibility determination reviews. We
believe our approach for determining eligibility processing time frames
for SFC cases, which begins at such time the cases are reopened and
ends when they are either approved or denied, is more meaningful
because that is the period of time during which OWCP claims examiners
are actively processing the cases.
Further, regarding OWCP‘s concern that our approach to the SFC case
process would mean that SFC cases that are not reopened would never be
counted as processed, our analysis was intended to determine the
processing time for those SFC cases that were reopened from the time of
reopening through adjudication. OWCP could perform other analyses for
its purposes, such as determining and reporting the number of SFC cases
where medical payments were made but the cases were not reopened. We
did not do a separate analysis of the processing times for the SFC
cases in our sample after they were reopened; therefore, we do not know
how the processing times for these cases would compare to OWCP‘s
statement that about 85 to 90 percent of all reopened SFC cases are
adjudicated within the 45 day standard. We have added a recommendation
in our final report that OWCP reconsider whether SFC cases should be
combined with other traumatic injury claims when measuring the
timeliness of the eligibility determination process.
OWCP stated that with respect to the timeliness of wage-loss claim
processing, it believes our sample is skewed. It pointed out we
reported that OWCP claims examiners processed about 59 percent of the
traumatic injury claims and about 63 percent of the occupational
disease claims for the first compensation payment within OWCP‘s 14 day
time standard. However, the 85 percent figure reported by OWCP‘s
systems‘ relates to a larger universe of all payments generated from
the receipt of a claim form, including multiple claims filed on the
same case. OWCP further pointed out that it agreed that the actions we
cite in the report as contributing to delays would naturally occur most
frequently in connection with the first payment on a particular case.
However, according to OWCP, once these actions are complete,
supplemental payments can generally be more prompt as reflected in the
higher overall percentages of timely payments captured by OWCP‘s
system. We agree that by including all payments related to a claim
instead of only the first payment the timeliness of processing all
payments could be different from what we determined. However, because
our objective was to determine how soon after injury workers received a
compensation payment, we focused our review only on the first
compensation payment. We further clarified our report to state that we
did not review subsequent claims for compensation.
OWCP stated that the discrepancy for occupational disease case
adjudication rates between what we found (84 percent timeliness) and
what its system is reporting (90 percent) is very near the confidence
interval we describe in our report and hence may be a statistical
artifact. According to OWCP it is reasonable to assume that their
measures are comparable with ours for this category. We agree with
OWCP.
Comments about Our Recommendations:
OWCP also took issue with our recommendations. Specifically, OWCP
questioned the focus on our inability to measure all segments of
workers‘ compensation claims filing and processing, stating that two of
our three recommendations to OWCP related to this issue. OWCP points
out that the data systems it uses to measure its own and employing
agency performance were developed over many years and are currently
under review as part of a general system redesign and replacement
effort. It said that OWCP will take advantage of this review
opportunity to sharpen its measures where it believes doing so would
yield improved performance and transparency. However, it took exception
with our concern that the current performance measurement system does
not capture the date the claimant submits the claim form to his or her
supervisor, thereby preventing a determination of whether the claimants
were delaying the processing of the claims or whether the postal
supervisors were holding the claims and thus delaying the process. OWCP
defended its:
current system by stating that it places the burden of timeliness where
OWCP believes it primarily belongs--on the employing agency, not on the
injured worker.
We believe that capturing the date that the employee actually submits
the injury claim form to the employing agency instead of the date the
employee signs the claim form would allow the employing agencies and
OWCP to better determine where delays may be occurring in the process
so that remedial actions can be initiated. We do not believe that a
requirement to capture the date that employees submit the claim form to
the employing agency places any additional burden on injured workers;
nor would it necessarily detract from OWCP‘s efforts to encourage
employing agencies to act on their own to initiate the filing of
workers‘ compensation claims. We believe that any general system
redesign and replacement effort by OWCP should include an evaluation of
the need to capture the date on which injured workers file their claims
with the employing agencies. OWCP‘s regulations address the date
employing agencies actually receive the claim, which could be different
from the date that employees sign the claim form. Having this
information should allow OWCP to better determine the employees‘ needs
when submitting claims while allowing OWCP to identify actions the
employing agencies could take to improve the process.
OWCP also disagreed with the implication of our first recommendation
that OWCP‘s system of measuring its timeliness in processing wage-loss
claims should separate out claims for which the initial eligibility
determination has not been made. OWCP maintains that by separating such
claims, its claims examiners would have no incentive to try to quickly
obtain any missing information needed to determine a claimant‘s
eligibility for the program, and thus more claims would encounter a
much longer delay while in this ’deferred“ status. According to OWCP,
the net effect of measuring such claims separately would be to
increase, rather than reduce, the delays that claimants experience in
receiving their benefits.
We agree that OWCP should be in a position to determine whether its
claims examiners are trying to obtain missing eligibility information
as quickly as possible. However, we believe that an effective
performance measurement system should not hold claims examiners
accountable for actions for which they have no control. Under the
current process and standard, OWCP managers do not know when claims
examiners are responsible for not meeting its standard for timeliness
in processing wage-loss claims or whether the claim submitted did not
provide the required information to determine eligibility. As mentioned
earlier in this report, about 64 percent of the compensation claims for
traumatic injury and 77 percent of the claims for occupational disease
in our sample required OWCP to request additional information before
making a decision. Again, we believe that any general system redesign
and replacement effort by OWCP should include an assessment of whether
its performance standard is appropriate with respect to missing
information from the claimant, how to help claimants provide all
appropriate information, and a measure for holding OWCP examiners
accountable only for actions they control.
OWCP also disagreed with our recommendation that postal supervisors
send only complete injured employee claim forms to OWCP. It said that
if agencies hold on to initial claims to ensure that all possible
information is compiled, OWCP‘s initial receipt of the claim record may
be delayed, which in turn leads to the denial of medical bills because
there is no record of the worker or the injury in OWCP‘s system. The
intent of our recommendation, however, is that postal supervisors
should work with injured employees to see that the claim forms are as
complete as possible--we are not recommending that postal supervisors
unreasonably delay submission of the claim forms to OWCP. Our
recommendation is consistent with the initiative that the Postal
Service implemented in July 2002 to have managers, supervisors, and
employees work together to ensure that claim forms are submitted
promptly and accurately. Nonetheless we revised the wording of our
recommendation to focus on the Service‘s effective implementation of
its new initiative.
OWCP disagreed with our initial conclusion that the SFC case process
may result in greater than anticipated erroneous WCP payments and with
our recommendation that OWCP reevaluate the SFC case process. OWCP said
that it believes that our sample cases were not representative of the
entire universe of SFC cases. Nevertheless, OWCP said that it is
currently reviewing the precise rules and criteria used in implementing
the SFC case process as part of its business and data system redesign
and will continue to enhance the effectiveness of the process and
ensure that it is properly executed.
We agree that our sample of SFC cases was not designed to be
representative of the entire universe of SFC cases. We reviewed only
SFC cases that were part of our overall sample. The purpose of our
study was not to evaluate the overall SFC case process. We revised the
report to make this point clearer and to emphasize that neither we nor
OWCP has overall or generalizable current data on SFC case process
error rates. OWCP‘s pilot test for the SFC case process was conducted
in 1993 at only one district office and has not since been revisited.
We revised our conclusion but kept our recommendation because we
believe that our findings with respect to these cases show that OWCP‘s
ongoing review of the SFC case process provides an excellent
opportunity to make certain that the process is meeting OWCP‘s intended
goals and is maintaining a cost-effective error rate relative to any
improperly awarded WCP benefits.
Finally, OWCP disagreed with our proposed recommendation that the
Secretary determine whether processing standards should cover all types
of claims. OWCP provided a good reason for not having such a standard
for leave buy-back claims. It said that the decision to grant leave
buy-back ultimately rests with the employing agency and that the
decision to actually repurchase leave rests with the claimant. However,
we do not believe that OWCP provided sufficient information for not
having a performance standard for schedule awards. OWCP said that it
does not believe that schedule award determinations can be made subject
to strict processing standards because entitlement of a schedule award
for permanent impairment requires a determination that the claimant has
reached maximum medical improvement. OWCP said that applying meaningful
timeliness standards to claims staff in these circumstances would be
exceedingly difficult. We agree that there are numerous difficulties
involved in adjudicating schedule awards claims. However, without such
a standard, there appears to be no incentive for OWCP examiners to
process schedule award claims as quickly as possible. Considering the
proportion of lengthy processing times for schedule award claims in our
sample, we believe that OWCP should explore the feasibility of
developing a processing standard for schedule awards that considers all
the difficulties that can arise in processing these claims. Having such
a standard could act as an incentive for timely processing, help hold
OWCP staff accountable for actions they can control, and serve as an
impetus for identifying and addressing causes of delays or lengthy
processing times. Accordingly, we modified our recommendation to focus
specifically on exploring a standard for schedule awards.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 14 days
from the report date. At that time, we will send copies of this report
to the Ranking Minority Member of your subcommittee; the Chairman and
Ranking Minority Member, Senate Committee on Governmental Affairs; the
Chairman and Ranking Minority Member, House Committee on Government
Reform;
the Chairman and Ranking Minority Member, Senate Committee on Health,
Education, Labor, and Pensions; and the Chairman and Ranking Minority
Member, House Committee on Education and the Workforce. Copies of this
report will also be sent to the Director of the Office of Management
and Budget, the Postmaster General/Chief Executive Officer of the
United States Postal Service; the Chairman, Postal Rate Commission; the
Secretary of Labor; and others on request. In addition, the report will
be available at no charge on the GAO Web site at http://www.gao.gov.
If you have any questions, please contact me at (202) 512-2834 or
ungarb@gao.gov. Key contributors to this report are listed in appendix
IV.
Sincerely yours,
Bernard L. Ungar, Director:
Physical Infrastructure Issues:
Signed by Bernard L. Ungar:
Enclosure I:
Comments from the United States Postal Service:
DEWITT O. HARRIS VICE PRESIDENT EMPLOYEE RESOURCE MANAGEMENT:
UNITED STATES POSTAL SERVICE:
December 6, 2002:
Bernard L. Ungar:
Director, Physical Infrastructure Issues United States General
Accounting Office Washington, DC 20548-0001:
Dear Mr. Ungar:
Thank you for the opportunity to comment on the draft report entitled,
Federal Workers‘ Compensation Program: Postal Service Claims Not Always
Processed Timely But Missing Data and Other Problems Hamper Complete
Measurement (GAO-03-158).
We have reviewed the report and offer the following comments. We
support GAO‘s recommendations regarding the Office of Workers‘
Compensation Program‘s (OWCP) administration of the program. We believe
these recommendations will improve OWCP‘s ability to effectively manage
the program.
With regard to GAO‘s recommendation that the Secretary of Labor and
Postmaster General take action to improve and monitor the preparation
and processing of Postal Service Workers‘ Compensation Program (WCP)
claims, we have implemented such measures. During July of 2002 we
established a timeline reporting goal that 90 percent of all CA-1s and
CA-2s are to be reported within 14 days. In order to achieve such a
goal, field managers must establish a close working relationship with
employees‘ supervisors to ensure claim forms are submitted promptly and
accurately.
As a point of clarification to the discussion on page 13 regarding the
collection of medical payments improperly made, we offer the following
comment. In the case of a traumatic injury claim, the employing agency
issues a Form CA-16 that authorizes medical care. If OWCP later denies
the claim, the payment made for the medical care authorized under the
CA-16 is difficult to recover from the employee. If OWCP‘s regulations
and the CA-16 language were revised to require employees or their
insurance carriers to refund medical payments made improperly, this
would greatly increase our ability to collect these payments.
The efforts of OWCP in continuing to improve program management and to
identify ways to deliver good service to our injured employees are
appreciated.
Again, we thank you for the opportunity to comment on this draft.
Sincerely,
DeWitt O. Harris:
Signed by DeWitt O. Harris::
475 L‘ENFANT PLAZA SW Room 9840 WASHINGTON DC 20260-4200 (202) 268-
3783:
FAx: (202) 268-3803 W W W.USPS.COM:
[End of section]
Enclosure II:
Comments from the U.S. Department of Labor:
U.S. Department of Labor:
DEC 11 2002:
Employment Standards Administration Washington, D.C. 20210:
Reply to the Attention of:
Bernard L. Ungar:
Director, Physical Infrastructure Issues United States General
Accounting Office Washington, D.C. 20548:
Dear Mr. Ungar:
I am in receipt of your proposed report entitled, Federal Workers‘
Compensation Program: Postal Service Claims Not Always Processed Timely
But Missing Data and Other Problems Hamper Complete Measurement (GAO-
03-158). On behalf of the Office of Workers‘ Compensation Programs
(OWCP), I offer the following comments.
OWCP appreciates the GAO‘s interest in determining the various factors
that impact on the timeliness of Federal Employees‘ Compensation Act
(FECA) claims filing and processing. OWCP continually stresses the
importance of timely submission of initial claim forms and claims for
wage loss benefits by all Federal agencies, and we track agency
performance on our public website. We have been able to report
considerable progress in obtaining government-wide improvements in
submission timeliness during the past several years. The inauguration
of electronic submission of claims by several departments has assisted
greatly in this effort. The United States Postal Service has been among
the most successful agencies in filing timely notices of injury/
disease, and it has set very challenging goals for itself in FY 2003 to
improve upon that performance.
Most importantly from our own perspective, OWCP has long held itself
strictly accountable for processing cases in a timely manner once
received. We use a wide range of measures, calculated at the program,
district office, and individual claims examiner levels, to ensure
prompt handling at each of the various stages through which a claim can
pass. OWCP has made numerous efforts through the years, including the
implementation of electronic claims processing and maintenance, to
improve the accuracy, reliability, and speed of case processing.
However, the operation of a workers compensation system like FECA
remains a complex and intertwined set of activities, and,
unfortunately, the report does not fully and accurately describe the
overall performance of that system.
Notably, based on its stratified sample of 484 cases, the GAO report
finds that OWCP staff adjudicated traumatic injury claims within our
program standards 71 % of the time, and occupational disease claims 84%
of the time. For roughly the same time period as that covered by the
GAO sample, OWCP data systems capturing information on all cases
processed within the measured categories reported traumatic injury
adjudication timeliness at better than 94%, and occupational disease
case adjudication at more than 90%. Similarly, the report asserts OWCP
staff processed claims for wage-loss replacement within our standard
59% of the time for traumatic injuries and 63% of the time for
occupational disease cases.During that time period, OWCP‘s timely
payment tracking system reported performance (for traumatic and disease
cases together) at better than 85%.
The reasons for these statistical discrepancies are complex and
multiple. Of greatest concern to OWCP is the finding regarding initial
traumatic adjudication timeliness. We believe that statistic seriously
distorts OWCP‘s performance.
The team‘s approach to the so-called ’short form closure“ (SFC) process
misrepresents OWCP‘s handling of this large category of traumatic
injury cases, and holds the program to a standard that is irrelevant to
this category of cases. OWCP‘s 94+% measurement of traumatic
adjudication timeliness much more fairly represents the degree of
promptness of service to the injured workers in question, since it
includes SFC cases as completed within the 45 day standard. That is
appropriate, since the only benefit being claimed in such cases is
payment of medical claims. Once a case is ’short form closed“ - which
happens automatically and immediately if the case meets a set of pre-
determined criteria - payment of such medical claims is automatic up to
a pre-set limit. GAO‘s 71 rating is largely driven by its apparent
application of a standard of its own making to the short form closure
cases - apparently computed by subtracting out the ’down time“ (GAO‘s
term for the period of time such a case is in SFC status) and then
adding the time before and after the closure period to measure against
the 45 day standard. This approach is inappropriate for several
reasons, but primarily because the vast majority of SFC cases never
reopen, and hence using the GAO methodology would never be counted as
processed, despite the fact that up to $1500 in medical bills may be
promptly paid on each such claim. In 1999 OWCP established a separate
measure for adjudicating SFC cases once one of the triggers requiring
formal adjudication occurs. Since then, approximately 85-90% of such
’reopened“ cases are adjudicated within this separate 45 day standard.
We believe our statistics are valid, and fairly represent the actual
level of service being provided.
The discrepancy on occupational disease case adjudication (GAO - 84%;
OWCP - 90%) is very near the confidence interval described in the GAO
report, and hence may be a statistical artifact. Since the SFC process
does not apply to disease cases, it is reasonable to assume the GAO and
OWCP measures are comparable for this category.
With respect to the timeliness of wage-loss claim processing, we
believe the GAO sample is skewed. The report indicates that the 59%/63%
outcomes were for claims for ’the first compensation payment.“ The OWCP
system reported 85% relates to a larger universe - all payments
generated from the receipt of a claim form, and multiple claims are
frequently filed on the same case. This difference in the universe of
cases measured likely explains at least the majority of the discrepancy
between the OWCP and GAO figures. The issues cited in the report as
contributing to delay - need to make an initial eligibility
determination and the need to request additional information - would
naturally occur most frequently in connection with the first payment on
a particular case. However, once these actions are complete,
supplementary payments can generally be done more promptly, as
reflected in the higher overall percentages of timely payments captured
by our system.
The findings of the report focus heavily on the inability of GAO‘s team
to measure all segments of FECA claims filing and processing based on
the data collected by OWCP. Two of the three recommendations for OWCP
relate to this issue. (The third deals with the so-called ’short form
closure process, which I will address later.) The data systems OWCP
uses to measure its own and employing agency performance were developed
over many years and are currently under review as part of a general
system redesign and replacement effort. OWCP will take advantage of
this review opportunity to sharpen our measures where we believe that
would yield improved performance and transparency. However, several
important observations should be kept in mind in assessing these
measurement systems.
First, the report suggests that many, perhaps most, delays in FECA case
processing stem from the failure of the injured worker to file the
claim timely or to submit all the needed information at the time of
filing (see Conclusions, page 16). While claimant delays may sometimes
be the root cause of the overall delay, it is the responsibility of
OWCP and the employing agency, acting as partners, to ensure that
injury claims are processed as timely as possible. Cases delayed by the
claimant‘s own inaction are, in effect, their own reward; but delays
engendered by the employing agency or OWCP are precisely what those two
parties should be focused on avoiding. Accordingly, OWCP‘s performance
tracking systems are directed at its own activities and those of the
employing agency, since those are the areas where management has
responsibility and where management improvements can be expected to be
effective. We believe this is the appropriate approach; attempting to
focus on speeding the actions of injured workers, who are typically
filing a claim for the first and only time, is likely to be fruitless
and may actually be counterproductive.
For example, the report notes that OWCP‘s CA-7 form, claim for wage
loss benefits, does not capture the date the claimant submits the form
to his or her supervisor, and the team therefore reported it was
unable to determine if claimants were unduly delaying the processing of
their own claims. OWCP has explained that we strongly encourage
employing
agencies to act on their own responsibility to initiate the CA-7 filing
process when they become aware that a claimant will likely continue to
be
disabled beyond the 45 day continuation of pay (COP) period. We believe
that collecting data to emphasize the claimant‘s own responsibility for
timely filing in this circumstance would actually encourage agencies to
wait for the claimant to submit the CA-7, instead of initiating the
process before the end of the COP period as they should and as provided
in OWCP‘s guidelines. By measuring the agencies‘ performance starting
from the date the claimant signs the CA-7 form, OWCP is placing the
burden of timeliness where it primarily belongs - on the employing
agency personnel, not on the injured worker.
Similarly, the report concludes - and apparently recommends - that
OWCP‘s system of measuring its own timeliness in processing wage-loss
claims should separate out claims for which an initial eligibility
determination has not been made. OWCP‘s performance tracking system
holds its staff responsible for meeting the 14-day timeliness standard
in traumatic cases which have not been adjudicated, even though the
examiner often must request additional information and therefore may
not be able to meet the standard. The GAO recommendation is apparently
that OWCP should not ’start the clock“ on such wage-loss claims until
the initial eligibility or other determination is completed, so that
the Office can be assured that the 14-day standard for CA-7 processing
will be met, once all the necessary antecedent information and
decisions are in place. However, in practice this would mean that
claims examiners would have no incentive to try to quickly obtain the
missing eligibility information, and a greater percentage of these
claims would encounter a much longer delay while in this ’deferred“
stage. The net effect of applying the recommended change would be to
increase, rather than reduce, delays claimants experience in receiving
their benefits.
As noted, the operation of a workers compensation system like FECA
entails complex and intertwined processes, and changes made in one
stage can have significant impact on later activities. The report
emphasizes that in about 69% of the cases reviewed, OWCP claims
examiners were obliged to go back to the employing agency and/or
claimant for more information - resulting in delays for the overall
process. Accordingly, the report recommends that USPS encourage injured
workers to submit complete information with their claims, and USPS
supervisors to submit ’only complete WCP claim forms....“ OWCP
certainly would endorse the idea of eliminating extra steps through
improving the completeness and accuracy of initial submissions. But
while completeness is a virtue, in many cases it simply can‘t be
achieved within a reasonable time. If agencies hold on to initial
claims to ensure that all possible information is compiled, OWCP‘s
initial receipt of the claim record may be delayed, which in turn
leads to the denial of payable medical bills because there is no
record of the injured worker or the injury in OWCP‘s system, which
in turn leads to disgusted medical providers and frustrated injured
workers.
Short Form Closure Process:
As a separate matter, your report concludes that the ’short form
closure“ process may result in ’greater than anticipated erroneous WCP
payments“ and recommends that OWCP monitor and review the
appropriateness of the process. In brief, this process entails
authorization of the prompt payment of medical treatment for minor,
uncontested injuries without the investment of valuable claims staff
time. OWCP determined that a majority of simple, non-controversial
injury cases never involve anything more than medical benefits, and
hence need only be placed in a status allowing for such benefits to be
paid without a complete review and formal determination of eligibility.
The SFC procedure was adopted in 1993 as a means of re-directing scarce
staff resources to more critical and productive adjudication,
compensation payment and case management activities.
Here again, OWCP believes that the sample of cases the GAO team
reviewed was not representative of the entire universe of SFC cases.
The 188 cases reviewed were limited to postal claims which contain a
CA-7 claim for wage loss benefits and/or a schedule award for
compensation based on permanent partial impairment. Because these
claims therefore involve wage loss and impairment, they by definition
entail more serious injuries, exactly the category of claims the SFC
process was not designed for. A study of SFC cases created in FY 2001
demonstrated that 74.4% of these claims remain in a closed status more
than one year after the injury. The GAO sample was exclusively drawn
from cases that would fall within the 26% that do ’reopen“ when the
claim for wage-loss or schedule award is received, and totally ignores
the 74% for which the procedure was designed. Accordingly, we do not
believe this sample is appropriate for making inferences about the
effectiveness or accuracy of the overall administrative closure
process.
The report asserts that 3% of SFC cases reviewed were ineligible for
benefits based on the fact that they were ultimately denied, and based
on this finding suggests that the whole procedure needs to be
reassessed. We do not concur with the team‘s findings on four of the
six cases labeled as erroneous. Our reasoning on each of the cases is
specified in the enclosed appendix. Notwithstanding the skewed sample,
the corrected error rate of 1 % parallels the findings of our 1993
pilot test. Thus we disagree that the GAO study has identified ’greater
than anticipated erroneous WCP payments.“:
Nevertheless, OWCP is currently reviewing the precise rules and
criteria used in implementing the administrative closure process as
part of our business and data system redesign. While we remain
convinced that the administrative closure process enables us to
promptly and effectively serve the majority of federal injured
employees with minimal administrative costs and delay, we will continue
to work to enhance its effectiveness and ensure that it is properly
executed.
The enclosed appendix identifies specific comments/corrections
regarding the text of the draft report, including specific comments
regarding the six SFC cases cited as ultimately denied.
Thank you for the opportunity to provide comments on this study.
Sincerely,
SHELBY HALLMARK Director, Office of Workers‘ Compensation Programs:
Signed by SHELBY HALLMARK:
Enclosure:
[End of section]
Enclosure III:
Objectives, Scope, Methodology, and Sampling Plan:
To provide information requested by Chairman Horn, our objectives were
to determine:
* the extent to which Postal Service employees provided all of the
evidence required by Office of Workers‘ Compensation Program (OWCP)
regulations for determining eligibility for WCP benefits and:
* whether claims for WCP eligibility and WCP compensation payments for
lost wages or schedule awards were submitted and processed within the
time frames set forth in OWCP regulations or performance
standards.[Footnote 17]
We reviewed a statistically valid sample of Workers‘ Compensation
Program (WCP) case files to determine whether U.S. Postal Service
claimants submitted the evidence required for eligibility
determinations, as well as to determine the time required by the
claimants, the Postal Service, and OWCP to process claims and make
entitlement and compensation award decisions. Specifically, our review
was designed to obtain information on (1) when employees reported their
injuries and the related evidence to prove the sufficiency of their
claims, (2) the amount of time that Postal Service supervisors and
officials took to process employees‘ claims and forward them to OWCP,
and (3) the amount of time that OWCP took to process the claims and
determine eligibility for benefits. Additionally, we analyzed the
impact that OWCP‘s Short Form Closure (SFC) case program had on the
eligibility determination processing times associated with our sample
traumatic injury cases. Our work did not include an analysis of any
time involved in the appeals process of any claim we reviewed; nor did
we evaluate the appropriateness of OWCP‘s decisions on the claims or
make an assessment of all types of claims involved in the WCP. We
performed our work from January through December 2002 in accordance
with generally accepted government auditing standards and obtained
comments on the results of our work from OWCP and the Postal Service.
Workers‘ Compensation Case File Review Development and Design:
We randomly sampled 484 Postal Service employee WCP case files at the
12 OWCP district offices located throughout the country. For the 12-
month period beginning July 1, 1997, we obtained case file records for
injuries that occurred or were recognized as job-related during this
period. We chose this period of time because we believed that it was
current enough to reflect ongoing operations, yet historical enough for
most, if not all, of the claims to have been decided upon. The cases we
reviewed were randomly selected on the basis of the type of injury
involved--traumatic or occupational--as well as on the basis of their
approval or nonapproval for WCP benefits and compensation or schedule
award payments.
We developed a data collection instrument to capture all the
appropriate information from OWCP‘s case files and OWCP forms used to
file a claim for WCP benefits and compensation payments for lost wages
and schedule awards, along with any relevant information from OWCP or
Postal Service officials. We visited each of the OWCP district offices
to review each selected case file individually, compiling the claims
information directly into our automated data collection instrument.
In addition, we interviewed OWCP and Postal Service officials in
Washington, D.C., as well as the district office directors in
Washington,
D.C., and Dallas, Texas, to discuss and collect pertinent program
information regarding the processing of employees‘ claims for WCP
eligibility and for compensation for lost wages and schedule awards.
Sampling Methodology:
The population from which we selected our sample reflects Postal
Service employees who, as of June 30, 2001, submitted claims for
compensation for lost wages or schedule awards for injuries that
occurred, or were recognized as job-related, during the 12-month period
beginning July 1, 1997. In order to report results for traumatic injury
and occupational disease claims, and to report results on claims of
both types whether compensation was paid or not, we stratified our
population into the following four strata on the basis of information
from the sample frame:
1. The employee filed a ’Federal Employee‘s Notice of Traumatic Injury
and Claim for Continuation of Pay/Compensation“ form (Form CA-1) and
received payment for compensation for lost wages or a schedule award.
2. The employee filed a ’Federal Employee‘s Notice of Traumatic Injury
and Claim for Continuation of Pay/Compensation“ form (Form CA-1) and
did not receive payment for compensation for lost wages or a schedule
award.
3. The employee filed a ’Notice of Occupational Disease and Claim for
Compensation“ form (Form CA-2) and received payment for compensation.
4. The employee filed a ’Notice of Occupational Disease and Claim for
Compensation“ form (Form CA-2) and did not receive payment for
compensation.
The size of the population in each of these four strata was 3,872;
1,232; 2,967; and 873, respectively. The number of sample cases
obtained from each of the four strata was 198, 106, 143, and 96,
respectively. We initially selected somewhat higher numbers of sample
cases. If we were not able to obtain the file for a particular sample
case, we substituted cases from the additional randomly sampled cases.
Sampling Results and Confidence Interval of Estimates:
We followed a sampling procedure designed to draw 543 cases from the
agency‘s files. Of these 543 cases, we located and reviewed 484 (180,
96, 128, and 80 in each strata, respectively). A sampling error
indicates how closely we can reproduce from a sample the results we
would have obtained if we had reviewed every OWCP case file. By adding
the sampling error to and subtracting it from the estimate, we can
develop upper and lower bounds for each estimate. This range is called
the confidence interval. Sampling errors and confidence intervals are
stated at a certain confidence level--in this case, 95 percent. The 95
percent confidence interval for proportion estimates of the total
population was no greater than plus or minus 5 percentage points. The
95 percent confidence interval for proportion estimates applied to
individual strata was no greater than plus or minus 10 percentage
points. Confidence levels for other types of estimates, such as
averages, medians, and totals, depended on the variability of the
sample values. We used SUDAAN software to make population projections.
Table 3 lists the confidence intervals for selected information from
our case file review.
Table 3: Sampling Results:
[See PDF for image]
Source: GAO analysis of OWCP data.
[End of table]
[End of section]
Enclosure IV:
GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Bernard L. Ungar (202) 512-2834:
Sherrill Johnson (214) 777-5699:
Acknowledgments:
In addition to those named above, Michael Rives, Frederick Lyles, Jr.,
Melvin Horne, John Vocino, Jerry Sandau, Brandon Haller, Jill Sayre,
and Donna Leiss made key contributions to this report.
FOOTNOTES
[1] U.S. General Accounting Office, Administration of the Workers‘
Compensation Program by the Postal Service and Department of Labor
(DOL), (Washington, D.C.: Dec. 21, 2001).
[2] U.S. General Accounting Office, U.S. Postal Service: Workers‘
Compensation Benefits for Postal Employees, GAO-02-729T (Washington,
D.C.: May 9, 2002).
[3] WCP provides for payment of several types of benefits, including
compensation for wage loss, schedule awards, medical and related
benefits, and vocational rehabilitation services for conditions
resulting from injuries sustained or occupational disease or illness
contracted in performance of duty while in the service of the United
States. WCP also provides for payment of monetary compensation to
specified survivors of an employee whose death results from work-
related injury or disease and for payment of certain burial expenses.
[4] An injured employee can claim compensation as a (1) wage
replacement benefit for lost wages,
(2) schedule award if the employee has a permanent impairment to a
member or function of the body, or (3) both.
[5] OWCP regulations provide time frames for injured federal employees
and employing agencies to submit and process WCP-related forms; OWCP
performance standards provide the annual operational performance goals
or time frames for which OWCP claims examiners are to process WCP-
related forms.
[6] WCP allows for two types of work-related injuries for which
benefits and services can be claimed: ’traumatic injury“ and
’occupational disease or illness.“ Traumatic injury means a condition
of the body caused by a specific event or incidents, or series of
events or incidents, within a single day or work shift. Such condition
must be caused by an external force, including stress or strain, which
is identifiable as to time and place of occurrence and member or
function of the body affected. Occupational disease or illness is a
condition produced by the work environment over a period longer than a
single day or work shift.
[7] Federal employees with work-related injuries have up to 3 years to
file their claims for compensation. If the claim is not filed within 3
years, compensation may still be allowed if notice of the injury was
given within 30 days, or the employer had knowledge of the injury
within 30 days following the actual occurrence. In cases of latent
disability, the time for filing a claim does not begin until the
employee is reasonably aware of the causal relationship between the
disability and his/her employment.
[8] According to OWCP, SFC cases are WCP claims that are accepted
(approved) as eligible for WCP benefits upon receipt and allowed to
incur up to $1,500 in medical bills--without formal adjudication--and
are closed. Originally, we estimated that only about 41 percent of the
traumatic injury claims were processed within the time frames set forth
in OWCP performance standards. However, according to OWCP officials,
this estimate overstated the actual processing time because many of
these claims were treated as SFC cases, which were accepted as eligible
for WCP benefits upon their receipt by OWCP. Once we considered the
effect of these SFC cases on our sample claims, we found that about 71
percent of the traumatic injury claims were processed within the time
frames set forth by OWCP. However, we also found that on the basis of
OWCP‘s SFC case processing guidelines, OWCP (1) incorrectly selected 14
of these cases as SFC cases (about 7 percent of the SFC cases in our
sample), (2) may have inappropriately processed some claims that had
been administratively closed, and (3) mistakenly approved 2 claims
(about 1 percent of the SFC cases in our sample) for WCP benefits.
[9] For wage loss benefits, the claimant must also submit medical
evidence showing that the condition claimed is disabling.
[10] For traumatic injuries, OWCP regulations required the use of Form
CA-1, ’Federal Employee‘s Notice of Traumatic Injury and Claim for
Continuation of Pay/Compensation,“ in order to claim WCP benefits. To
claim benefits for a disease or illness that the employee believed to
be work-related, OWCP regulations required the use of Form CA-2,
’Notice of Occupational Disease and Claim for Compensation.“
[11] Claims are to be submitted to OWCP if the injury or disease was
likely to result in (1) a medical charge against OWCP, (2) disability
for work beyond the day or shift of injury, (3) the need for more than
two appointments for medical examination or treatment on separate days
leading to time lost from work, (4) future disability, (5) permanent
impairment, or (6) COP. If none of these conditions exist, the employer
is required to retain the forms as a permanent record in the Employee
Medical Folder in accordance with Office of Personnel Management
guidelines.
[12] For both traumatic injury and occupational disease claims, OWCP
regulations required the use of Form CA-7, ’Claim for Compensation Due
to Traumatic Injury or Occupational Disease,“ in order to claim
compensation for wage loss or schedule award.
[13] In April 1993, OWCP initiated a pilot project in the Cleveland
district office implementing a predefined screening process for
handling ’lost time“ traumatic injury cases. A lost time injury is an
injury for which time is charged to leave, COP, or a wage loss claim is
filed. Under this pilot program‘s screening process, a claim that was
not contested by the agency, had no wage loss claim, and did not have
medical bills to exceed $1,500 would not be reviewed by a claims
examiner. The purpose of this was to relieve claims examiners of
administrative work in adjudicating cases that involved work-related
disabilities that would likely be overcome during the 45-day COP
period. According to OWCP officials, on the basis of this pilot project
(OWCP officials could not provide us a copy of this study.) and its own
past experience in handling these types of cases, OWCP concluded that
only about 1 percent of all lost time cases closed through the SFC case
process would be denied if actually adjudicated by a claims examiner;
and only $147,085 in medical payments would have been avoided if all
such cases were adjudicated. Additionally, OWCP estimated that the
amount of time savings realized as a result of the SFC process--in
conjunction with other quality assurance efforts--could amount to as
much as $4,450,000 for fiscal year 1992. As a result, OWCP implemented
the SFC case process nationwide on October 3, 1993.
[14] Because our sample cases included only WCP cases containing claims
for compensation for lost wages or schedule awards, all of the SFC
cases in our sample would have been reopened after the initial closure.
[15] We initially believed that 6 of the 188 SFC cases we reviewed
indicated erroneously paid benefits. However, in commenting on a draft
of this report, OWCP provided additional explanations that appeared to
us to be reasonable for 4 of the 6 cases.
[16] Leave buy-backs are claims for compensation for lost wages or
schedule awards wherein the claimant requests reinstatement of annual
leave or sick leave for the time absent from work in lieu of a cash
payment. OWCP officials stated that the decision to grant leave buy-
back ultimately rests with the federal agency and the decision to
repurchase the leave rests with the claimant.
[17] OWCP regulations specify the time frames during which injured
federal employees and federal agencies are to submit and process WCP-
related forms; OWCP performance standards provide the annual
operational performance goals or time frames during which OWCP claims
examiners are to process WCP-related forms.
