Testimony 

Before the Committee on Energy and 

Natural Resources, U.S. Senate

United States General Accounting Office 

GAO

For Release on Delivery 

Expected at 9:30 a.m. EST 

Friday, November 21, 2003 ENERGY EMPLOYEES 

COMPENSATION 

Case-Processing 

Bottlenecks Delay Payment 

of Claims 

Statement of Robert E. Robertson, Director, 

Education, Workforce, and Income Security Issues 

GAO-04-249T 
www.gao.gov/cgi-bin/getrpt?GAO-04-249T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Robert E. 

Robertson at (202) 512-7215 or 

robertsonr@gao.gov. 

Highlights of GAO-04-249T, testimony 

before the Committee on Energy and 

Natural Resources, U.S. Senate 

November 2003 

ENERGY EMPLOYEES COMPENSATION

Case-Processing Bottlenecks Delay 

Payment of Claims 

As of June 30, 2003, Energy had completely processed only about 6 percent 

of the nearly 19,000 cases it had received. More than three-quarters of all 

cases were associated with facilities in nine states. Processing had not 

begun on over half of the cases and, of the remaining 40 percent of cases 

that were in processing, almost all were in the initial case development 

stage, as illustrated below. 

 Case Status as of June 30, 2003 

While the majority of cases (86 percent) associated with major Energy 

facilities in nine states potentially have a willing payer of workers’ 

compensation benefits, actual compensation is not certain. This figure is 

based primarily on the method of workers’ compensation coverage used by 

Energy contractor employers and is not an estimate of the number of cases 

that will ultimately be paid. Since no claimants to date have received 

compensation as a result of their cases filed with Energy, there is no actual 

experience about how contractors and state programs treat such claims. 

Claimants have been delayed in filing for state worker’s compensation 

benefits because of two bottlenecks in Energy’s claims process. First, the 

case development process has not always produced sufficient cases to allow 

the panels of physicians who determine whether the worker’s illness was 

caused by exposure to toxic substances to operate at full capacity. While 

additional resources may allow Energy to move sufficient cases through its 

case development process, the physician panel process will continue to be a 

second, more important, bottleneck. The number of panels, constrained by 

the scarcity of physicians qualified to serve on panels, will limit Energy’s 

capacity to decide cases more quickly, using its current procedures. Energy 

officials are exploring ways that the panel process could be made more 

efficient. 

The Department of Energy 

(Energy) and its predecessor 

agencies and contractors have 

employed thousands of workers 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. Energy began 

accepting applications under this 

program in July 2001, but did not 

begin processing them until its final 

regulations became effective on 

September 13, 2002. 

The 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 three key 

areas: (1) the number, status, and 

characteristics of claims filed with 

Energy; (2) 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 

(3) the extent to which Energy 

policies and procedures help 

employees file timely claims for 

these state benefits. 
Page 1 GAO-04-249T 

Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss our work regarding the 

effectiveness of the benefit program under Subtitle D of the Energy 

Employees Occupational Illness Compensation Program Act of 2000 

(EEOICPA) in assisting contractor employees in obtaining compensation 

for occupational illnesses. Congress mandated that we study this issue and 

report to the Senate Committees on Energy and Natural Resources and 

Appropriations and the House Committees on Energy and Commerce and 

Appropriations. 

For the last several decades, the Department of Energy (Energy) and its 

predecessor agencies and contractors have employed thousands of 

individuals in secret and dangerous work in the nuclear weapons 

production complex. Over the years, employees were unknowingly 

exposed to toxic substances, including radioactive and hazardous 

materials, and studies have shown that many of these employees 

subsequently developed illnesses. The Energy Employees Occupational 

Illness Compensation Program provides for compensation to these 

employees who developed occupational illnesses and, where applicable, to 

their survivors. Congressional Committees, as well as individual Members 

of Congress, claimants, and advocates have raised concerns regarding 

Energy’s processing of claims and the availability of benefits once claims 

have been decided. 

As title XXXVI of the Floyd D. Spence National Defense Authorization Act 

for Fiscal Year 2001, which was signed into law on October 30, 2000, this 

legislation has two major components. Subtitle B provides eligible 

workers who were exposed to radiation or other toxic substances and 

who subsequently developed illnesses such as cancer and lung disease a 

onetime payment of up to $150,000 and covers future medical expenses 

related to the illness. The Department of Labor administers these benefits, 

payable from a compensation fund established by the same legislation. 

Subtitle D 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. The legislation did not set aside funding 

for payment of benefits under Subtitle D. 

My testimony today reflects our ongoing review of the effectiveness of 

Energy’s implementation of Subtitle D. We focused our work on three key 

areas: (1) the number, status, and characteristics of claims filed with 

Energy; (2) the extent to which there will be a “willing payer” of workers’ 
Page 2 GAO-04-249T 

compensation benefits; that is, an insurer who—by order from, or 

agreement with, Energy—will not contest these claims; and (3) the extent 

to which Energy policies and procedures help employees file timely claims 

for state workers’ compensation benefits. 

In summary, as of June 30, 2003, Energy had fully processed about 6 

percent of the nearly 19,000 cases received, and more than three-quarters 

of all cases were associated with facilities in nine states. Energy had not 

begun processing over half of the cases received. While some other case 

characteristics can be determined, such as illness claimed, systems 

limitations prevent reporting on other case characteristics, such as the 

reasons for ineligibility or basic demographics. While the majority of cases 

(86 percent) associated with major Energy facilities in nine states potentially 

have a willing payer of workers’ compensation benefits, actual compensation 

is not certain. In certain states such as Ohio and Iowa, there are likely to be 

many cases that lack willing payers, and in some instances may be less 

likely to receive compensation than a comparable case with a willing 

payer in a different state. The 86 percent figure reflects the number of 

cases for which contractors and their insurers are likely to not contest a 

workers’ compensation claim, rather than the number of cases that will 

ultimately be paid. For all claimants, actual compensation is not certain 

because of additional factors such as variations in state workers’ 

compensation programs or contractors’ uncertainty on how to compute 

the benefit. Claims for workers’ compensation have been delayed by two 

bottlenecks in Energy’s claims process. First, Energy’s case development 

process has not always produced sufficient cases to keep physician panels 

operating at full capacity. While additional resources may allow Energy to 

move a sufficient number of cases through its case development process, 

the physician panel process will continue to be a second and more 

important bottleneck. The number of panels, constrained by the scarcity 

of physicians qualified to serve on panels, will limit Energy’s capacity to 

decide cases more quickly, using its current procedures. Energy officials 

are exploring ways that the panel process could be made more efficient. 

To perform our review, we analyzed data extracted from Energy’s Subtitle 

D case management system for applications filed through June 30, 2003.1

 1

We collected data as of this date to enable us to assess the reliability of Energy’s data by 

(1) performing electronic testing for obvious errors in accuracy and completeness, 

(2) reviewing available documentation, and (3) interviewing agency officials and 

contractors knowledgeable about the data. We determined that the data elements used 

were sufficiently reliable for our purposes. 
Page 3 GAO-04-249T 

We also reviewed the provisions of, and interviewed officials with, the 

workers’ compensation programs in nine states accounting for more than 

three-quarters of Subtitle D cases filed, and we interviewed the 

contractors operating the major facilities in these states. In addition, we 

conducted site visits to three Energy facilities in Oak Ridge, Tennessee, 

the state with facilities accounting for the largest number of Subtitle D 

claims. We also interviewed key program officials and other experts. We 

conducted our review from April 2003 through October 2003 in 

accordance with generally accepted government auditing standards. 

Energy oversees a nationwide network of 40 contractor-operated 

industrial sites and research laboratories that have historically employed 

more than 600,000 workers in the production and testing of nuclear 

weapons. In implementing EEOICPA, the President acknowledged that it 

had been Energy’s past policy to encourage and assist its contractors in 

opposing workers’ claims for state workers’ compensation benefits based 

on illnesses said to be caused by exposure to toxic substances at Energy 

facilities.2

 Under the new law, workers or their survivors could apply for 

assistance from Energy in pursuing state workers’ compensation benefits, 

and if they received a positive determination from Energy, the agency 

would direct its contractors to not contest the workers’ compensation 

claims or awards. Energy’s rules to implement the new program became 

effective in September 2002, and the agency began to process the 

applications it had been accepting since July 2001, when the law took 

effect. 

Energy’s claims process has several steps, as shown in figure 1. First, 

claimants file applications and provide all available medical evidence. 

Energy then develops the claims by requesting records of employment, 

medical treatment, and exposure to toxic substances from the Energy 

facilities at which the workers were employed. 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. For all others, once development is complete, 

a panel of three physicians reviews the case and decides whether 

exposure to a toxic substance during employment at an Energy facility 

was at least as likely as not to have caused, contributed to, or aggravated 

the claimed medical condition. The panel physicians are appointed by the 

 2

Executive Order 13179 of December 7, 2000. 

Background 
Page 4 GAO-04-249T 

National Institute for Occupational Safety and Health (NIOSH) but paid by 

Energy for this work. Claimants receiving positive determinations are 

advised that they may wish to file claims for state workers’ compensation 

benefits. Claimants found ineligible or receiving negative determinations 

may appeal to Energy’s Office of Hearings and Appeals. 

Figure 1: Energy’s Claims Process 

Each of the 50 states and the District of Columbia has its own workers’ 

compensation program to provide benefits to workers who are injured on 

the job or contract a work-related illness. Benefits include medical 

treatment and cash payments that partially replace lost wages. 

Collectively, these state programs paid more than $46 billion in cash and 

medical benefits in 2001. In general, employers finance workers’ 

compensation programs. Depending on state law, employers finance these 

programs through one of three methods: (1) they pay insurance premiums 

to a private insurance carrier, (2) they contribute to a state workers’ 

compensation fund, or (3) they set funds aside for this purpose as selfinsurance. Although state workers’ compensation laws were enacted in 

part as an attempt to avoid litigation over workplace accidents, the 

workers’ compensation process is still generally adversarial, with 

employers and their insurers tending to challenge aspects of claims that 

they consider not valid. 

Claims sent 

by mail

Claims received from 10 

Resource Centers

Energy 

develops claims

Physician panel reviews 

case and recommends

positive or negative

determination

Negative

determination

Positive 

determination

Energy decides claim is 

ineligible based on

non-covered employment or

illness

Energy makes final

determination and

notifies applicant

Energy notifies claimant

 to submit

claim to state workers'

compensation program

Claimant may appeal

 determination to Energy's 

 Office of Hearings and Appeals

Records retrieval at

Energy facilities

Source: GAO analysis of Energy Claims Process.
Page 5 GAO-04-249T 

State workers’ compensation programs vary as to the level of benefits, 

length of payments, and time limits for filing. For example, in 1999, the 

maximum weekly benefit for a total disability in New Mexico was less than 

$400, while in Iowa it was approximately $950. In addition, in Idaho, the 

weekly benefit for total disability would be reduced after 52 weeks, while 

in Iowa benefits would continue at the original rate for the duration of the 

disability. Further, in Tennessee, a claim must be filed within 1 year of the 

beginning of incapacity or death. However, in Kentucky a claim must be 

filed within 3 years of exposure to most substances, but within 20 years of 

exposure to radiation or asbestos. 

As of June 30, 2003, Energy had completely processed about 6 percent of 

the nearly 19,000 cases that had been filed, and the majority of all cases 

filed were associated with facilities in nine states. Forty percent of cases 

were in processing, but more than 50 percent remained unprocessed. 

While some case characteristics can be determined, such as illness 

claimed, systems limitations prevent reporting on other case 

characteristics, such as the reasons for ineligibility or basic demographics. 

During the first 2 years of the program, ending June 30 2003, Energy had 

fully processed about 6 percent of the nearly 19,000 claims it received. The 

majority of these claims had been found ineligible because of either a lack 

of employment at an eligible facility or an illness related to toxic exposure. 

Of the cases that had been fully processed, 42 cases—less than one-third 

of 1 percent of the nearly 19,000 cases filed—had a final determination 

from a physician panel. More than two-thirds of these determinations (30 

cases) were positive. At the time of our study, Energy had not yet begun 

processing more than half of the cases, and an additional 40 percent of 

cases were in processing (see fig. 2). The majority of cases being 

processed were in the case development stage, where Energy requests 

information from the facility at which the claimant was employed. Less 

than 1 percent of cases in process were ready for physician panel review, 

and an additional 1 percent were undergoing panel review. 

Energy Has Fully 

Processed Few Cases, 

and Systems 

Limitations 

Complicate Program 

Management 

About 6 Percent of Cases 

Have Been Fully Processed 
Page 6 GAO-04-249T 

Figure 2: Case Status as of June 30, 2003 

A majority of cases were filed early during program implementation, but 

new cases continue to be filed. Nearly two-thirds of cases were filed 

within the first year of the program, between July 2001 and June 2002. 

However, in the second year of the program—between July 2002 and June 

30, 2003—Energy continued to receive more than 500 cases per month. 

Energy officials report that they currently receive approximately 100 new 

cases per week. 

While cases filed are associated with facilities in 38 states or territories, 

the majority of cases are associated with Energy facilities in nine states 

(see fig. 3).3

 Facilities in Colorado, Idaho, Iowa, Kentucky, New Mexico, 

Ohio, South Carolina, Tennessee, and Washington account for more than 

75 percent of cases received by June 30, 2003. The largest group of cases is 

associated with facilities in Tennessee. 

 3

 See Energy’s Web site at: http://tis.eh.doe.gov/advocacy/index.html for more information 

on the current distribution of cases across facilities and states. 

Energy Facilities in Nine 

States Account for More 

than 75 percent of Cases 

6%

54% 40%

Fully processed

In processing

Unprocessed

98% In case 

development

1% Ready for 

physican panel

1% Undergoing 

physican panel 

review

Source: GAO analysis of Energy data.
Page 7 GAO-04-249T 

Figure 3: Distribution of Cases by Employee’s Last Energy Facility Worked 

Note: Facility information is missing or unknown for 1,577 cases. 

Workers filed the majority of cases, and cancer is the most frequently 

reported illness. Workers filed about 60 percent of cases, and survivors of 

deceased workers filed about 36 percent of cases. In about 1 percent of 

cases, a worker filed a claim that was subsequently taken up by a survivor. 

Cancer is the illness reported in more than half of the cases. Diseases 

affecting the lungs accounted for an additional 14 percent of cases. 

Specifically, chronic beryllium disease is reported in 1 percent of cases, 

and beryllium sensitivity, which may develop into chronic beryllium 

disease, is reported in an additional 5 percent. About 7 percent of cases 

reported asbestosis, and less than 1 percent claimed silicosis. 

Source: GAO analysis of Energy data.

Nine states with most cases (N=14,862)

Other states and territories with cases (N=2,456)

States and territories with no cases

Ohio

723

Iowa

598

South Carolina

2,876

Kentucky

1,957

Tennessee

3,505

Washington

1,707

Idaho

764

Colorado

1,539

New Mexico

1,193
Page 8 GAO-04-249T 

Systems limitations prevent Energy officials from aggregating certain 

information important for program management. For example, the case 

management system does not collect information on the reasons that 

claimants had been declared ineligible or whether claimants have 

appealed decisions. Systematic tracking of the reasons for ineligibility 

would make it possible to identify other cases affected by appeal decisions 

that result in policy changes. While Energy officials report that during the 

major systems changes that occurred in July 2003, fields were added to the 

system to track appeals information, no information is yet available 

regarding ineligibility decisions. In addition, basic demographic data such 

as age and gender of claimants are not available. Gender information was 

not collected for the majority of cases. Further, insufficient edit controls—

for example, error checking that would prevent claimants’ dates of birth 

from being entered if the date was in the future—prevent accurate 

reporting on claimants’ ages. 

Insufficient strategic planning regarding data collection and tracking have 

made it difficult for Energy officials to completely track case progress and 

determine whether they are meeting the goals they have established for 

case processing. For example, Energy established a goal of completing 

case development within 120 days of case assignment to a case manager. 

However, the data system developed by contractors to aid in case 

management was developed without detailed specifications from Energy 

and did not originally collect sufficient information to track Energy’s 

progress in meeting this 120-day goal. Furthermore, status tracking has 

been complicated by changes to the system and failure to consistently 

update status as cases progress. While Energy reports that changes made 

as of July 2003 should allow for improved tracking of case status, it is 

unclear whether these changes will be applied retroactively to status data 

already in the system. If they are not, Energy will still lack complete data 

regarding case-processing milestones achieved prior to these changes. 

Systems Limitations 

Complicate Program 

Management 
Page 9 GAO-04-249T 

Our analysis shows that a majority of cases associated with major Energy 

facilities in nine states4

 will potentially have a willing payer of workers’ 

compensation benefits. This finding reflects the number of cases for 

which contractors and their insurers are likely to not contest a workers’ 

compensation claim, rather than the number of cases that will ultimately 

be paid. The contractors considered to be willing payers are those that 

have an order from, or agreement with, Energy to not contest claims. 

However, there are likely to be many claimants who will not have a willing 

payer in certain states, such as Ohio and Iowa. For all claimants, 

additional factors such as state workers’ compensation provisions or 

contractors’ uncertainty on how to compute the benefit may affect 

whether or how much compensation is paid. 

A majority of cases in nine states will potentially have a willing payer of 

workers’ compensation benefits, assuming that for all cases there has been 

a positive physician panel determination and the claimant can 

demonstrate a loss from the worker’s illness that has not previously been 

compensated. Specifically, based on our analysis of workers’ 

compensation programs and the different types of workers’ compensation 

coverage used by the major contractors, it appears that approximately 86 

percent of these cases will potentially have a willing payer—that is, 

contractors and their insurers who will not contest the claims for benefits. 

It was necessary to assume that all cases filed would receive a positive 

determination by a physician panel because sufficient data are not 

available to project the outcomes of the physician panel process. More 

specifically, there are indications that the few cases that have received 

determinations from physician panels may not be representative of all 

cases filed, and sufficient details on workers’ medical conditions were not 

available to enable us to independently judge the potential outcomes. In 

addition, we assumed that all workers experienced a loss that was not 

previously compensated because sufficient data were not available to 

enable us to make more detailed projections on this issue. 

As shown in table 1, most of the contractors for the major facilities in 

these states are self-insured, which enables Energy to direct them to not 

 4

 The cases in these nine states represent more than three-quarters of the cases filed 

nationwide. The results of our analysis cannot necessarily be applied to the remaining 25 

percent of the cases filed nationwide. 

While a Majority of 

Cases Potentially 

Have a Willing Payer, 

Actual Compensation 

Is Not Certain 

A Majority of Cases in Nine 

States Potentially Have a 

Willing Payer 
Page 10 GAO-04-249T 

contest claims that receive a positive medical determination.5 In addition, 

the contractor in Colorado, which is not self-insured but has a commercial 

policy, took the initiative to enter into an agreement with Energy to not 

contest claims. The contractor viewed this action as being in its best 

interest to help the program run smoothly. However, it is unclear whether 

the arrangement will be effective because no cases in Colorado have yet 

received compensation. In such situations where there is a willing payer, 

the contractor’s action to pay the compensation consistent with Energy’s 

order to not contest a claim will override state workers’ compensation 

provisions that might otherwise result in denial of a claim, such as failure 

to file a claim within a specified period of time. However, since no 

claimants to date have received compensation as a result of their cases 

filed with Energy, there is no actual experience about how contractors and 

state workers’ compensation programs treat such cases. 

About 14 percent of cases in the nine states we analyzed may not have a 

willing payer. Therefore, in some instances these cases may be less likely 

to receive compensation than a comparable case for which there is a 

willing payer, unless the claimant is able to overcome challenges to the 

claim. Specifically, these cases that lack willing payers involve contractors 

that (1) have a commercial insurance policy, (2) use a state fund to pay 

workers’ compensation claims, or (3) do not have a current contract with 

Energy. In each of these situations, Energy maintains that it lacks the 

authority to make or enforce an order to not contest claims. For instance, 

an Ohio Bureau of Workers’ Compensation official said that the state 

would not automatically approve a case, but would evaluate each workers’ 

compensation case carefully to ensure that it was valid and thereby 

protect its state fund. 

 5

EEOICPA allows Energy, to the extent permitted by law, to direct its contractors not to 

contest such workers’ compensation claims. In addition, Energy’s regulations prohibit the 

inclusion of the costs of contesting such claims as allowable costs under its contracts with 

the contractors; however, the costs incurred as the result of a workers’ compensation 

award are allowed as reimbursable costs to the full extent permitted under the contracts. 
Page 11 GAO-04-249T 

Table 1: Extent to Which Cases in Nine States Will Potentially Have Willing Payers 

Types of workers’ compensation coverage Energy facility, State 

Number of cases 

as reported in 

Energy data 

Cases that will potentially have a willing payer 

Self-insurance Idaho National Engineering Lab, Idaho 

Paducah Gaseous Diffusion Plant, Kentuckya

Los Alamos National Lab, New Mexico 

Savannah River Site, South Carolina 

Oak Ridge K-25, X-10, and Y-12 Plants, 

Tennessee 

Hanford Site, Washington 

724 

978 

1,043 

2,873 

3,325 

1,664 

Commercial policy, agreement with Energy not to contest claims Rocky Flats Plant, Colorado 1,488 

Subtotal of cases with a willing payer 86%, or 12,095 

Cases That May Not Have a Willing Payer 

Commercial policy, no agreement with Energy to not contest 

claims; leases Energy facility 

Paducah Gaseous Diffusion Plant, Kentuckya 977 

State fund Portsmouth Gaseous Diffusion Plant, Ohio 506 

No current contractor Iowa Ordnance Plant, Iowa 563 

Subtotal of cases without a willing payer 14%, or 2,046 

Source: GAO analysis of Energy data and interviews with current contractors. 

Note: The table includes the cases from the facilities in these states with the largest number of cases 

filed but does not include the remaining 721 cases (5 percent) from other facilities in these states. 

a

While an Energy contractor previously operated the Paducah Gaseous Diffusion Plant, the plant is 

currently operated by a private entity that leases the facility. In addition, an Energy contractor is 

currently performing environmental cleanup at the facility. We split the cases filed for the Paducah 

facility evenly between the current operator and the cleanup contractor, based on discussions with 

the cleanup contractor. 

Concerns about the extent to which there will be willing payers of benefits 

have led to various proposals for addressing this issue. For example, the 

state of Ohio proposed that Energy designate the state as a contractor to 

provide a mechanism for reimbursing the state for paying the workers’ 

compensation claims. However, Energy rejected this proposal on the 

ground that EEOICPA does not authorize the agency to establish such an 

arrangement. In a more wide-ranging proposal, legislation introduced in 

this Congress6

 proposes to establish Subtitle D as a federal program with 

uniform benefits administered by the Department of Labor. 

 6

 H.R. 1758, sponsored by Representative Ted Strickland, was introduced on April 10, 2003. 
Page 12 GAO-04-249T 

In contrast to Subtitle B provisions that provide for a uniform federal 

benefit that is not affected by the degree of disability, various factors may 

affect whether a Subtitle D claimant is paid under the state workers’ 

compensation program or how much compensation will be paid. Beyond 

the differences in the state programs that may result in varying amounts 

and length of payments, these factors include the demonstration of a loss 

resulting from the illness and contractors’ uncertainty on how to compute 

compensation. 

Even with a positive determination from a physician panel and a willing 

payer, claimants who cannot demonstrate a loss, such as loss of wages or 

medical expenses, may not qualify for compensation. On the other hand, 

claimants with positive determinations but not a willing payer may still 

qualify for compensation under the state program if they show a loss and 

can overcome all challenges to the claim raised by the employer or the 

insurer. 

Contractors’ uncertainty on how to compute compensation may also cause 

variation in whether or how much a claimant will receive in compensation. 

While contractors with self-insurance told us that they plan to comply with 

Energy’s directives to not contest cases with positive determinations, 

some contractors were unclear about how to actually determine the 

amount of compensation that a claimant will receive. For example, one 

contractor raised a concern that no guidance exists to inform contractors 

about whether they can negotiate the degree of disability, a factor that 

could affect the amount of the workers’ compensation benefit. Other 

contractors will likely experience similar situations, as Energy has not 

issued guidance on how to consistently compute compensation amounts. 

While not directly affecting compensation amounts, a related issue 

involves how contractors will be reimbursed for claims they pay. Energy 

uses several different types of contracts to carry out its mission, such as 

operations or cleanup, and these different types of contracts affect how 

workers’ compensation claims will be paid. For example, a contractor 

responsible for managing and operating an Energy facility was told to pay 

the workers’ compensation claims from its operating budget. The 

contractor said that this procedure may compromise its ability to conduct 

its primary responsibilities. On the other hand, a contractor cleaning up an 

Energy facility was told by Energy officials that its workers’ compensation 

claims would be reimbursed under its contract, and therefore paying 

claims would not affect its ability to perform cleanup of the site. 

Multiple Factors Make 

Compensation Not Certain 
Page 13 GAO-04-249T 

As a result of Energy’s policies and procedures for processing claims, 

claimants have experienced lengthy delays in receiving the determinations 

they need to file workers’ compensation claims. In particular, the number 

of cases developed during initial case processing has not always been 

sufficient to allow the physician panels to operate at full capacity. 

Moreover, even if these panels were operating at full capacity, the small 

pool of physicians qualified to serve on the panels would limit the agency’s 

ability to produce more timely determinations. Energy has recently 

allocated more funds for staffing for case processing, but it is still 

exploring methods for improving the efficiency of its physician panel 

process. 

Energy’s case development process has not consistently produced enough 

cases to ensure that the physician panels are functioning at full capacity. 

To make efficient use of physician panel resources, it is important to 

ensure that a sufficient supply of cases is ready for physician panel review. 

Energy officials established a goal of completing the development on 100 

cases per week by August 2003 to keep the panels fully engaged. However, 

as of September 2003, Energy officials stated that the agency was 

completing development of only about 40 cases a week. Further, while 

agency officials indicated that they typically assigned 3 cases at a time to 

be reviewed within 30 days, several panel physicians indicated that they 

received fewer cases, some receiving a total of only 7 or 8 during their first 

year as a panelist. 

Energy was slow to implement its case development operation. Initially, 

agency officials did not have a plan to hire a specific number of employees 

for case development, but they expected to hire additional staff as they 

were needed. When Energy first began developing cases, in the fall of 

2002, the case development process had a staff of about 14 case managers 

and assistants. With modest staffing increases, the program quickly 

outgrew the office space used for this function. Though Energy officials 

acknowledged the need for more personnel by spring 2003, they delayed 

hiring until additional space could be secured, in August. As of August 

2003, Energy had more than tripled the number of employees dedicated to 

case development to about 50, and Energy officials believe that they will 

now be able to achieve their goal of completing development of 100 cases 

a week that will be ready for physician panel review. Energy officials cited 

a substantial increase in the number of cases ready for physician panel 

review during October 2003, and reported preparing more than a hundred 

cases for panel review in the first week of November 2003. 

Bottlenecks in 

Energy’s Claims 

Process Delay Filing 

of Workers’ 

Compensation Claims 

Sufficient Cases Have Not 

Always Been Available for 

Physician Panel Review 
Page 14 GAO-04-249T 

Energy shifted nearly $10 million from other Energy accounts into this 

program in fiscal year 2003, and plans to shift an additional $33 million 

into the program in fiscal year 2004, to quadruple its case-processing 

operation. With additional resources, Energy plans to complete the 

development of all pending cases as quickly as possible and have them 

ready for the physician panels. However, this would create a large backlog 

of cases awaiting review by physician panels. Because most claims filed so 

far are from workers whose medical conditions are likely to change over 

time, creation of such a backlog could further slow the decision process 

by making it necessary to update medical records before panel review. 

Even if additional resources allow Energy to speed initial case 

development, the limited pool of qualified physicians7

 for panels will likely 

prevent significant improvements in processing time. Currently, 

approximately 100 physicians are assigned to panels of 3 physicians. In an 

effort to improve overall processing time, Energy has requested that 

NIOSH appoint an additional 500 physicians to staff the panels. NIOSH has 

indicated that the pool of physicians with the appropriate credentials and 

experience (including those already appointed) may be limited to about 

200. Even if Energy were able to increase the number of panel physicians 

to 200, with each panel reviewing 3 cases a month, the panels would not 

be able to review more than 200 cases in any 30-day period, given current 

procedures. Thus, even with double the number of physicians currently 

serving on panels, it could take more than 7 years to process all cases 

pending as of June 30, 2003, without consideration of the hundreds of new 

cases the agency is receiving each month.8

Energy officials are exploring ways that the panel process could be made 

more efficient. For example, the agency is currently planning to establish 

permanent physician panels in Washington, DC. Physicians who are 

willing to serve full-time for a 2- or 3-week period would staff these panels. 

In addition, the agency is considering reducing the number of physicians 

 7

The criteria NIOSH uses to evaluate qualifications for appointing physicians to these 

panels include: (1) board certification in a primary discipline; (2) knowledge of 

occupational medicine; (3) minimum of 5 years of relevant clinical practice following 

residency; and (4) reputation for good medical judgment, impartiality, and efficiency. 

8

This 7-year estimate assumes that none of the pending cases would be determined 

ineligible on the basis of non-covered employment or illnesses because we did not possess 

a sufficient basis for projecting the number of additional cases that would be determined 

ineligible in the future. 

The Ability to Produce 

More Timely Decisions 

May Be Limited by the 

Small Pool of Qualified 

Physicians and Gaps in 

Information They Need to 

Quickly Decide Cases 
Page 15 GAO-04-249T 

serving on each panel—for example, initially using one physician to review 

a case, assigning a second physician only if the first reaches a negative 

determination, and assigning a third physician if needed to break a tie. 

Energy staff are currently evaluating whether such a change would require 

a change in their regulations. 

Agency officials have also recommended additional sources from which 

NIOSH might recruit qualified physicians and are exploring other potential 

sources. For example, the physicians in the military services might be used 

on a part-time basis. In addition, physicians from the Public Health Service 

serve on temporary full-time details as panel physicians. 

Panel physicians have also suggested methods to Energy for improving the 

efficiency of the panels. For example, some physicians have stated that 

more complete profiles of the types and locations of specific toxic 

substances at each facility would speed their ability to decide cases. In 

addition, one panel physician told us that one of the cases he reviewed 

received a negative determination because specific documentation of 

toxic substances at the worker’s location was lacking. While Energy 

officials reported that they have completed facility overviews for about 

half the major sites, specific data are available for only a few sites. Agency 

officials said that the scarcity of records related to toxic substances and a 

lack of sufficient resources constrain their ability to pursue building-bybuilding profiles for each facility. 

Mr. Chairman, this completes my prepared statement. I would be happy to 

respond to any questions you or other Members of the Committee may 

have at this time. 

For information regarding this testimony, please contact Robert E. 

Robertson, Director, or Andrew Sherrill, Assistant Director, Education, 

Workforce, and Income Security, at (202) 512-7215. Individuals making 

contributions to this testimony include Amy E. Buck, Melinda L. Cordero, 

Beverly Crawford, Patrick DiBattista, Corinna A. Nicolaou, Mary Nugent, 

and Rosemary Torres Lerma. 

Contacts and 

Acknowledgments 

(130339) 
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
The General Accounting Office, the audit, evaluation and investigative arm of 

Congress, exists to support Congress in meeting its constitutional responsibilities 

and to help improve the performance and accountability of the federal 

government for the American people. GAO examines the use of public funds; 

evaluates federal programs and policies; and provides analyses, 

recommendations, and other assistance to help Congress make informed 

oversight, policy, and funding decisions. GAO’s commitment to good government 

is reflected in its core values of accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older 

products. The Web site features a search engine to help you locate documents 

using key words and phrases. You can print these documents in their entirety, 

including charts and other graphics. 

Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site 

daily. The list contains links to the full-text document files. To have GAO e-mail 

this list to you every afternoon, go to www.gao.gov and select “Subscribe to e-mail 

alerts” under the “Order GAO Products” heading. 

The first copy of each printed report is free. Additional copies are $2 each. A 

check or money order should be made out to the Superintendent of Documents. 

GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a 

single address are discounted 25 percent. Orders should be sent to: 

U.S. General Accounting Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800 

U.S. General Accounting Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

GAO’s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Mail or Phone 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Public Affairs