If Energy determines that the worker was not  employed by one of its facilities or did not have an illness that could be  caused by exposure to toxic substances, the agency finds the claimant  ineligible. Energy had  begun processing of nearly 35 percent of cases, but processing had not yet  begun on nearly 60 percent of the cases. Energy Has Fully Processed about 6 Percent of Its Cases

During the first 2 ½ years of the program, ending December 31, 2003,  Energy had fully processed about 6 percent of the more than 23,000 claims  it received. However, the rate of  increase in cases filed was not uniform across the 9 states with facilities  that account for more than three-quarters of all cases. A Shortage of Qualified Physicians To Issue Determinations Delays Filing of Workers’ Compensation Claims And Claimants May Receive Inadequate Information To Prepare Them To Pursue These Claims

Energy was slow in implementing its initial case processing operation, but  it is now processing enough cases so that there is a backlog of cases  awaiting physician panel review. Energy has taken some steps intended to reduce the backlog of  cases. Energy and NIOSH officials have taken steps to expand the number of  physicians who would qualify to serve on the panels and to recruit more  physicians, including some willing to work full-time. Workers’ Compensation Claims For a Majority of Cases Are Not Likely to be Contested

The workers’ compensation claims for the majority of cases associated  with major Energy facilities in 9 states are likely to have no challenges to  their claims for state workers’ compensation benefits. Specifically, based  on additional analysis of workers’ compensation programs and the  different types of workers’ compensation coverage used by the major  contractors, it appears that slightly more than half of the cases will  potentially have a willing payer—that is, contractors that will not contest  the claims for benefits as ordered by Energy. Another 25 percent of the  cases, while not technically having a willing payer, have workers’  compensation coverage provided by an insurer that has stated that it will  not contest these claims and is currently processing several workers’  compensation claims without contesting them. The remaining 20 percent  of cases in the 9 states we analyzed are likely to be contested. Because of  data limitations, these percentages provide an order of magnitude estimate  of the extent to which claimants will have willing payers. The estimates  are not a prediction of actual benefit outcomes for claimants. In particular, the cost implications of these options for the  federal government should be carefully considered in the context of the  current federal fiscal environment. Options for Changing the Current Program

We identified four possible options for improving the likelihood of willing  payers, some of which have been offered in proposed legislation. While  not exhaustive, the options range from adding a federal benefit to the  existing program for cases that lack a willing payer to addressing the  willing payer issue as part of designing a new program that would allow  policymakers to decide issues such as the eligibility criteria and the type  and amount of benefits without being encumbered by existing program  structures. Table 2 arrays the relevant issues to provide a framework for  evaluating the range of options in a logical sequence.
Why GAO Did This Study

The Department of Energy (Energy) and its predecessor agencies and contractors have employed thousands of people in the nuclear weapons production complex. Some employees were exposed to toxic substances, including radioactive and hazardous materials, during this work, and many subsequently developed illnesses. Subtitle D of the Energy Employees Occupational Illness Compensation Program Act of 2000 allows Energy to help its contractor employees file state workers' compensation claims for illnesses determined by a panel of physicians to be caused by exposure to toxic substances in the course of employment at an Energy facility. Congress mandated that GAO study the effectiveness of the benefit program under Subtitle D of this Act. This testimony is based on GAO's ongoing work on this issue and focuses on four key areas: (1) the number, status, and characteristics of claims filed with Energy; (2) the extent to which Energy policies and procedures help employees file timely claims for these state benefits; (3) the extent to which there will be a "willing payer" of workers' compensation benefits, that is, an insurer who--by order from or agreement with Energy--will not contest these claims; and (4) a framework that could be used for evaluating possible options for changing the program.

What GAO Found

During the first 2 1/2 years of the program, ending December 31, 2003, Energy had completely processed about 6 percent of the more than 23,000 cases that had been filed. Energy had begun processing of nearly 35 percent of cases, but processing had not yet begun on nearly 60 percent of the cases. While Energy got off to a slow start in processing cases, it is now processing enough cases that there is a backlog of cases waiting for review by a physician panel. Energy has taken some steps intended to reduce this backlog, such as reducing the number of physicians needed for some panels. Nonetheless, a shortage of qualified physicians continues to constrain the agency's capacity to decide cases more quickly. Consequently, claimants will likely continue to experience lengthy delays in receiving the determinations they need to file workers' compensation claims. GAO estimates that more than half of the cases associated with Energy facilities in 9 states that account for more than three-quarters of all Subtitle D cases filed are likely to have a willing payer of benefits. Another quarter of the cases in these 9 states, while not technically having a willing payer, have workers' compensation coverage provided by an insurer that has stated that it will not contest these claims. However, the remaining 20 percent of cases lack willing payers and are likely to be contested, which means that many of these cases may be less likely to receive compensation. Because of data limitations, these percentages provide an order of magnitude estimate of the extent to which claimants will have willing payers. The estimates are not a prediction of actual benefit outcomes for claimants. In this testimony, GAO also provides a framework for evaluating potential options for changing the program to address the willing payer issue. This framework includes a range of issues that would help the Congress assess options if it chooses to change the current program. One of these issues in particular--the federal cost implications--should be carefully considered in the context of the current federal fiscal environment.