Either the claimant or insurer can appeal this decision. As a result of the September 11 terrorist attacks, Congress appropriated  $175 million in federal funds to assist the New York State Workers’  Compensation Board with the resulting workers’ compensation claims. Specifically, the law provided the funds in three earmarked portions:  $125 million “for payment to the New York State Workers’ Compensation  Review (sic) Board, for the processing of claims related to the terrorist  attacks”; $25 million “for payment to the New York State Uninsured  Employers Fund, for reimbursement of claims related to the terrorist  attacks”; and $25 million “for payment to the New York State Uninsured  Employers Fund, for reimbursement of claims related to the first response  emergency services personnel who were injured, were disabled, or died  due to the terrorist attacks.” The legislation provided no further  explanation regarding the use of the federal funds. The grant agreement’s statement of work, prepared by the Board,    set out three broad categories of activities to be carried out:  (1) administration, (2) mitigation—efforts to help mitigate the effects  of future disasters, and (3) claims reimbursements to the Uninsured  Employers Fund;  requested flexibility to “transfer funds amongst the three pools of  money,” that is, the $125 million and the two $25 million portions; and  listed the Board’s intention “to use a portion of the disaster funds to  assist other entities by creating a contingency account within [the  Board’s] funding structure that will allow the State to respond  effectively to any unexpected needs as they arise, both in  administrative and in mitigation efforts.”
The following timeline summarizes the flow of federal funds to the Board:    Early January 2002: Congress appropriated $175 million to DOL for  the New York State Workers’ Compensation Board. The Board Used $49 Million for Benefits and Mitigation Efforts

As of June 30, 2004, of the $175 million in federal funds to help pay  expenses related to the September 11 attacks and recovery, the New York  State Workers’ Compensation Board had used about $49 million. The Board also had used about  $4.4 million on mitigation efforts to prepare for responding to any future  terrorist attacks. However, the Board had used  funds from the UEF to pay these benefits and was first trying to recoup  these funds from the uninsured employers before drawing upon federal  funds to reimburse for any unrecovered expense. We are continuing to gather information  about whether these reimbursements were authorized in the grant  agreement’s statement of work and whether the $125 million appropriation  earmarked for “the processing of claims” was available for  reimbursements of benefits paid. For example, the Board paid for new tape and disk backup systems, new  off-site storage contracts, and new image storage systems to ensure  viability of Board data and operations. The Board Had Not Used any of the $25 Million Available for Workers with Uninsured Employers

The Board had not used any of the $25 million federal funds available to  reimburse the UEF for benefits the UEF paid to workers with uninsured  employers (or their survivors). The Board Had Used Some of the $25 Million Available for Volunteers

The Board had used about $456,000 of the $25 million available to  reimburse the UEF for benefits the UEF paid to volunteers (or their  survivors) who were injured or killed as a result of the September 11  attacks. For the  subset of claims associated with workers whose employers were  uninsured, the Board had resolved 89 percent. In addition to the  September 11 claims for workers’ compensation, the Board had resolved  31 percent of the volunteer claims received and 69 percent of these claims  were pending. Ninety Percent of September 11 Claims for Workers’ Compensation Had Been Resolved

As of mid-2004, most September 11–related workers’ compensation claims  had been resolved, that is, the Board had resolved all the issues that it  could with the information available at that point. Specifically, 90 percent  of the 10,182 claims received by the Board had been resolved. For 42 percent of claims received, the Board had determined that a link  had been established between the September 11 disaster and the resulting  death, injury, or illness and benefits had been paid or were in the process  of being paid. According to  Board officials, a high portion of the volunteer claims were pending  because (1) sufficient medical evidence had not been provided to establish  the link between the September 11 volunteer activities and the death,  injury, or illness and (2) claimants had not pursued their case after filing.
Why GAO Did This Study

In the aftermath of the September 11, 2001, terrorist attacks, Congress appropriated $175 million for the New York State Workers' Compensation Board (the Board) to assist with the resulting workers' compensation claims. These claims were filed by workers or volunteers (or survivors) who were injured, became ill, or died as a result of the attacks and the recovery efforts. Specifically, Congress provided federal funds to the U.S. Department of Labor (DOL) for the Board in three earmarked portions: $125 million for processing of claims, and $25 million each to reimburse the state Uninsured Employers Fund (UEF) for benefits paid (1) for workers associated with uninsured employers and (2) for volunteers. DOL transferred the funds to the Board using a grant agreement. This testimony looks at the Board's use of the $175 million in federal funds and the status of September 11 workers' compensation claims. The testimony addresses: (1) how the federal funds have been used and (2) how many applications for compensation have been received and their status. In addition, we are continuing to gather information about whether the grant agreement and the appropriation act are consistent with the Board's use of the funds.

What GAO Found

As of June 30, 2004, of the $175 million in federal funds appropriated to help pay workers' compensation expenses related to the September 11 attacks and recovery, the New York State Workers' Compensation Board had used about $49 million. From the $125 million portion available for processing of claims, the Board had used about $44 million to reimburse two state entities--the New York State Crime Victims Board and the New York State Insurance Fund--for benefits those entities had paid to September 11 victims (or survivors). In addition, the Board had used about $4.4 million of the $125 million to prepare for responding to any future terrorist attacks. For example, the Board paid for new computer backup systems and new off-site storage contracts to ensure access to claims data in case of a disaster. At the time of our review, the Board had not yet used any of the $25 million that is available to reimburse the UEF for benefits the UEF paid to workers associated with uninsured employers (or survivors). However, the Board had used funds from the UEF to pay these benefits and was first trying to recoup these funds from the uninsured employers before drawing upon federal funds to reimburse for any unrecovered expense. Finally, the Board had used about $456,000 of the $25 million that is available to reimburse the UEF for benefits the UEF paid to volunteers (or survivors). The Board indicated that, as of mid-2004, it had received 10,182 claims for workers' compensation and 588 volunteer claims related to the September 11 attacks and recovery. Ninety percent of the workers' compensation claims had been resolved, that is, the Board had resolved all the issues that it could with the information available at that point. The remaining 10 percent of claims were pending, as the Board was waiting for additional information from claimants (such as medical evidence), hearings were yet to be held, or claimants had not pursued their case after initial filing. The Board officials noted that the status of claims was fluid: a resolved claim could change to pending if more information becomes available and the Board reopens the case. In addition, we were unable to report approval and denial rates of claims because, according to Board officials, the Board's core mission is to process individual claims and not track outcomes of claims decisions. For 52 percent of workers' compensation claims received, (1) a link had been established between the September 11 disaster and the resulting death, injury, or illness and benefits had been paid or were in the process of being paid, or (2) this link had been established but the Board had not authorized paying benefits. Of the 10,182 workers' compensation claims, 133 were associated with workers whose employers were uninsured. The Board had resolved 89 percent of these 133 claims. Of the 588 volunteer claims received, the Board had resolved 31 percent and 69 percent were pending. According to the Board, many of the volunteer claims were pending because the claimants were not actively pursuing their claims.