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The Securities and Exchange Commission today announced that Chief Economist and Division of Economic and Risk Analysis (DERA) Director Mark J. Flannery will leave the agency by the end of the month. He will return to his position as a finance professor at the University of Florida’s Graduate School of Business Administration.
Dr. Flannery has held the positions of Chief Economist and DERA Director since September 2014 and has led a broad range of activities, including providing economic analysis to support SEC rulemaking and developing sophisticated analytical tools to assist in risk assessment and enforcement activities. He has also worked to secure a defining role for the SEC in the international regulatory arena by representing the agency on the Financial Stability Board’s Standing Committee on Assessment of Vulnerabilities (SCAV). On the SCAV, he has led discussions on the considerations and implications of stress testing asset managers, investment company redemption risk, and fixed income liquidity, among others.
“Mark has provided invaluable insight and analysis on important rulemakings and he has been instrumental in leading the Commission’s efforts in working with international regulators on the economics of financial stability,” said SEC Chair Mary Jo White.
In addition to his international regulatory efforts, Dr. Flannery has provided guidance and direction to economic analyses in recommendations to the Commission to enact rules related to asset management, corporate disclosure and governance, OTC derivatives, and market structure.
“I have thoroughly enjoyed my time heading DERA, whose talented and creative staff have worked so hard to enhance the economic analyses associated with many dimensions of the Commission’s activities,” said Dr. Flannery. “I am grateful to Chair White for providing me the opportunity to work with many other members of the Commission’s staff in developing new tools for overseeing our financial markets.”
Dr. Flannery recently served as Visiting Scholar at the New York Federal Reserve’s Research Department and Chairman of the Federal Reserve System’s Model Validation Council (2013-2014). He has held his position as Bank of America Eminent Scholar in Finance at the University of Florida since 1989. Dr. Flannery received an A.B. from Princeton University, and his master’s and doctorate in Economics from Yale University.
Upon Dr. Flannery’s departure, Scott W. Bauguess, the SEC’s Deputy Chief Economist and DERA Deputy Director, will become the acting Chief Economist and acting Director of DERA.
Dr. Bauguess joined the SEC in 2007 from Texas Tech University where he was on faculty in the College of Business. He became an Assistant Director in the division in 2011, and Deputy Director in 2013. Dr. Bauguess received his Ph.D. in Finance from Arizona State University in 2004. He also holds a B.S. and M.S. in Electrical Engineering and prior to his doctoral studies spent six years working as an engineer in the high tech industry.
What GAO Found The General Services Administration (GSA) developed eight selection criteria for utilizing its $ 4.5 billion in high-performing green (green) building funds—or more than 80 percent of its total $ 5.5-billion budget—under the American Recovery and Reinvestment Act of 2009 (Recovery Act). GSA used almost $ 800 million of its $ 4.5-billion green building funds on 15 full or partial modernization projects and the remaining funds were used on federal buildings or limited scope projects. For example, at the Hipolito F. Garcia Federal Building and U.S. Courthouse in San Antonio, Texas, GSA installed solar panels and a solar water heater on the roof, installed a green roof on the interior courtyard, and replaced the building’s lighting. In addition, as of May 2014, GSA used $ 257 million of the $ 750 million in Recovery Act funds dedicated to federal buildings and U.S. courthouses to construct or acquire seven courthouses. GSA management of selected Recovery Act courthouse projects did not always align with seven successful practices that GAO developed for managing large-scale investments. GAO’s more in-depth review of 10 courthouses showed that while GSA generally provided top leadership support and sufficient funding, its management of these Recovery Act projects did not always align with the remaining five practices. For example, judiciary tenants at 3 of the 10 courthouses said that GSA management did not actively engage with judiciary stakeholders during construction. In one case, judiciary officials at the Federico Degetau Federal Building and Clemente Ruiz Nazario Courthouse in Puerto Rico said they were not consulted on the project’s phased schedule approach that required the closure of all public restrooms in the operating courthouse for a year, except for one restroom on the seventh floor of the adjoining federal building. For the projects GAO reviewed, when GSA did not incorporate the successful practices, GAO found that projects were more likely to experience schedule delays, cost increases, or lack of tenant support. GAO found that most judiciary tenants were satisfied with the completed projects, although tenants at 4 courthouses said the projects disrupted court operations. GSA set environmental goals by establishing minimum performance criteria (MPC) to guide how it designed green courthouse Recovery Act projects; however, environmental outcomes are not yet known. The MPC included dozens of environmental requirements for projects in areas such as energy, water, and material use. While some Recovery Act projects have been completed for several years and GSA has the necessary data to evaluate projects, GSA officials have not developed a schedule for analyzing building performance against the MPC. GAO evaluated the extent to which the selected courthouses with a year or more of operational data contributed toward the energy and water- reduction goals that GSA used to develop the MPC. GAO found that as of fiscal year 2014, 2 of the 5 courthouses with available data are contributing toward energy reduction goals, and all 4 courthouses with available data are contributing toward water reduction goals. Without evaluating the performance of courthouse projects against the MPC, GSA lacks important information that could guide the agency’s future investments in green infrastructure. Why GAO Did This Study The Recovery Act provided GSA with $ 5.55 billion—over three times the agency’s 2009 funding for new construction and renovations—to invest in federal buildings and U.S. courthouses. This amount included $ 4.5 billion to convert federal buildings and U.S. courthouses into green buildings that would reduce energy and water use, among other goals. GAO was asked to review GSA’s use of Recovery Act funds as they related to courthouses. This report examines (1) how GSA determined which courthouse projects to fund under the Recovery Act, (2) how GSA’s management of selected Recovery Act projects aligned with successful practices and whether these projects disrupted judiciary operations, and (3) how GSA set environmental goals for courthouses and whether selected projects met those goals. GAO reviewed relevant laws and agency documents, collected cost and schedule data on courthouse projects, and analyzed environmental outcomes for 10 projects. GAO selected these 10 Recovery Act courthouse projects, based on project size, type, and location, and interviewed GSA officials and judiciary tenants about GSA’s management and coordination. What GAO Recommends GAO recommends that GSA (1) examine incorporating successful management practices into its capital investment process and (2) analyze and apply environmental outcomes for green Recovery Act projects. GSA agreed with GAO’s recommendations. For more information, contact Mark Goldstein at (202) 512-2834 or Goldsteinm@gao.gov.
American Recovery and Reinvestment Act
December 1, 2016 OSHA fines USPS $ 342K after inspectors find workers exposed tobloodborne pathogen hazards at Brooklyn, Maryland, annex Employer name: U.S. Postal Service LLC, doing business as Brook
OSHA News Release
A federal jury sitting in the District of Minnesota convicted a Minnesota chiropractor today of five counts of tax evasion and one count of presenting a fake financial instrument to the U.S. Department of Treasury, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Andrew Luger for the District of Minnesota.
WASHINGTON – U.S. Secretary of Labor Thomas E. Perez issued the following statement about the November 2016 Employment Situation report released today:
“Under President Obama’s leadership, the U.S. economy continued to demonstrate steady growth in November, with the addition of 178,000 jobs and the decline of the unemployment rate to 4.6 percent. This latest report is one more positive indicator of economic resilience, as American businesses have added 15.6 million jobs since February 2010, in the longest recorded streak of job growth in U.S. history.
“We have made incredible progress since the depths of the recession. It’s particularly encouraging to see employment increases in industries like professional and business services, which has added 571,000 new jobs over the past year, as well as health care and construction, which have added 407,000 and 59,000 jobs respectively over the same period. Other economic indicators provide additional reason for confidence. As we head into the holiday shopping season, retail sales and consumer confidence are strong. Average hourly earnings have risen by 2.5 percent over the past year.
“Despite this steady and sustained growth, there is more work to do to ensure that job growth and economic strength translate into sustaining wages for American workers and the families they support. Too many hardworking families struggle to make ends meet.
“We must remain committed to building and sustaining a sturdy economic foundation for America’s future: expanding opportunity for all Americans; providing widespread access to meaningful, prosperous employment; and creating an economy that works for everyone – because we all succeed only when we all succeed.”
What GAO Found GAO performed the procedures contained in the enclosures to this report, which it agreed to perform solely to assist the Department of Transportation’s Inspector General in ascertaining whether the net excise tax revenue distributed to the Airport and Airway Trust Fund (AATF) and the Highway Trust Fund (HTF) for the fiscal year ended September 30, 2016, is supported by underlying records. The enclosures to this report provide the results of performing each of these procedures. GAO was not engaged to perform, and did not perform, an examination, the objective of which would have been to express an opinion on the amount of net excise taxes distributed to the AATF and the HTF during fiscal year 2016. Accordingly, GAO does not express such an opinion. This report is solely for the use of the Office of Inspector General of the Department of Transportation and should not be used by those who have not agreed to the procedures or have not taken responsibility for the sufficiency of the procedures for their purposes. Why GAO Did This Study GAO performed agreed-upon procedures to assist the Department of Transportation’s Inspector General in ascertaining whether the net excise tax revenue distributed to the AATF and the HTF for the fiscal year ended September 30, 2016, is supported by underlying records. The Department of Transportation’s Inspector General is responsible for the sufficiency of these agreed-upon procedures to meet the Inspector General’s objectives, and GAO makes no representation in that respect. The procedures GAO agreed to perform were related to (1) transactions that represent the underlying basis of amounts distributed from the General Fund to the AATF and the HTF during fiscal year 2016, (2) the Internal Revenue Service’s (IRS) quarterly AATF and HTF excise tax receipt certifications prepared during fiscal year 2016, (3) the Department of the Treasury’s Office of Tax Analysis’s (OTA) estimates of excise tax amounts to be distributed to the AATF and the HTF for the fourth quarter of fiscal year 2016, and (4) the amount of net excise taxes to be distributed to the AATF and the HTF during fiscal year 2016. In commenting on a draft of this report, IRS agreed with the results and findings related to the procedures performed concerning excise tax distributions to the AATF and the HTF during fiscal year 2016. OTA responded that it had no comments on the report. What GAO Recommends GAO is not making any recommendations. For more information, contact Cheryl E. Clark at (202) 512-9377 or email@example.com.
Tax Policy and Administration
The U.S. Department of Labor’s Employee Benefit Security Administration filed a complaint on Aug. 7, 2015 against Steven J. Watkins, Oxford Holdings Inc., and Aetna 401(k) Plan. The complaint alleges the Aetna 401(k) retirement plan was established by Oxford Holdings Inc. for the benefit of its employees. The plan permitted participants to contribute a portion of their pay through payroll deductions. a former construction company based in Fort Lauderdale, Florida and Watkins was the company owner and plan trustee. The investigation revealed that from April 12, 2010 through April 5, 2013, Oxford and Watkins withheld a total of $ 117,167 in employee contributions and failed to segregate the contributions from company assets as soon as they reasonably could. The defendants never forwarded these contributions to the plan in accordance with the Employee Retirement Income Security Act. In April 2013, the company ceased operations and the defendants failed to terminate the plan and ensure the plan’s assets, totaling $ 130,525, were appropriately distributed to the plan participants. Since the secretary’s complaint was filed, defendants have made restitution to the plan in the amount of $ 95,000.
2015 EBSA News Releases
What GAO Found The U.S. Census Bureau’s (Bureau) 2020 Decennial Census program is heavily dependent upon the Census Enterprise Data Collection and Processing (CEDCAP) program to deliver the key systems needed to support the 2020 redesign. CEDCAP is a complex modernization program intended to deliver a system-of-systems for the Bureau’s survey data collection and processing functions. In August 2016, GAO reported that while the two programs had taken steps to coordinate their schedules, risks, and requirements, they lacked effective processes for managing interdependencies. Officials acknowledged weaknesses in managing interdependencies and reported that they were taking steps to address them. Until these interdependencies are managed more effectively, the Bureau will be limited in its ability to meet milestones, mitigate major risks, and ensure that requirements are appropriately identified. While the large-scale technological changes for the 2020 Decennial Census introduce great potential for efficiency and effectiveness gains, they also introduce many information security challenges. For example, the introduction of an option for households to respond using the Internet puts respondents more at risk for phishing attacks (requests for information from authentic-looking, but fake, e-mails and websites). The Bureau had begun efforts to address a number of these challenges; as it begins implementing this decennial census’ design, continued focus on these considerable security challenges will be critical. Looking forward, there is uncertainty as to whether the Census Bureau will be ready for the 2018 end-to-end test, set to begin in August 2017. GAO has ongoing work for this committee that is evaluating the significant challenges the Bureau faces in developing, testing, integrating, and securing systems prior to the 2018 test. For example, of the 50 systems to be included in the end-to-end test, half of them are to be delivered after the start of the test or lack a firm delivery date (see figure). In addition, key dates for the integration of the systems have not yet been defined. Given the short window of time before the test is to begin, it is important that the Bureau continue to focus its attention on implementing and securing the data collection systems that are to collect and store the personal information of millions of American people. Figure: Status of Systems to be used for the 2018 End-to-End Test Why GAO Did This Study The U.S. Census Bureau (a component of the Department of Commerce) plans to significantly change the methods and technology it uses to count the population with the 2020 Decennial Census, such as by offering an option for households to respond to the survey via the Internet. The Bureau’s redesign of the Census program relies on the acquisition and development of many new and modified systems. Several of the key systems are to be provided by an enterprise-wide initiative called CEDCAP. This statement summarizes the report GAO issued in August 2016 on the challenges the Bureau faces in managing the interdependencies between the 2020 Census and CEDCAP programs, as well as challenges it faces in ensuring the security and integrity of Bureau systems and data. GAO also updated key information based on its ongoing work for this committee by, among other things, reviewing the updated 2020 Operational Plan and systems lists provided by the Bureau, and by interviewing agency officials. What GAO Recommends In its August report, GAO made eight recommendations to the Department of Commerce. The recommendations addressed, among other things, deficiencies in the Bureau’s management of interdependencies related to schedule, risk, and requirements. The department agreed with all eight recommendations and indicated that it would be taking actions to address them. For more information, contact David A. Powner at (202) 512-9286 or firstname.lastname@example.org.
Testimony of Deputy Secretary of Labor Christopher P. Lu Before the Subcommittee on Employment and Workplace Safety, Committee on Health, Education, Labor, and Pensions, United States Senate, July 22, 2014
Chairman Casey, Ranking Member Isakson, and distinguished Members of the Subcommittee, thank you for inviting me to testify about the Department’s administration of the Black Lung Benefits Act. The Department is committed to the Nation’s coal miners and their families, and to ensuring fairness in the claims process.
You have asked us to address the steps the Department has taken in response to the October, 2013 Center for Public Integrity (CPI) and ABC News reports about difficulties miners and their survivors have encountered in pursuing black lung benefits. You have also asked us to address the backlog of black lung cases pending before the Office of Administrative Law Judges. We appreciate your ongoing interest in the Black Lung program and welcome the opportunity to discuss the program with you, Mr. Chairman, and the Subcommittee today. We look forward to your continuing leadership on these issues.
Recognizing that coal miners were sacrificing both their health and economic futures to produce the coal necessary to meet the Nation’s energy needs, and that State workers’ compensation programs were inadequate for them, Congress enacted the Black Lung Benefits Act in 1969. Since then, the Act has provided compensation and medical-treatment benefits to thousands of disabled coal miners and compensation to their surviving family members. Currently, the Act provides benefits to coal miners who are totally disabled by black lung disease and to the survivors of miners who died due to the disease. The Byrd Amendments, enacted in 2010, also restored automatic entitlement to survivors of miners who were found entitled to benefits based on their own lifetime claims.1
Generally, a miner must establish that he or she has a lung disease arising from coal mine employment, a totally disabling respiratory impairment, and that the lung disease contributed to the impairment. A survivor who cannot benefit from the Byrd automatic entitlement provisions must establish that the miner had a lung disease arising from coal mine employment, and that the lung disease hastened the miner’s death. Any claimant, miner, or survivor, must prove his or her case by a preponderance of the evidence.
In making his case, a claimant may be able to take advantage of two important statutory presumptions. First, if the claimant proves the miner has or had complicated black lung disease an advanced form of the disease also known as progressive massive fibrosis the claimant can invoke a presumption of entitlement that the liable party is not permitted to rebut. Second, if the miner engaged in underground coal mine employment, or substantially similar above-ground coal mine employment, for at least 15 years and the claimant proves that the miner has or had a totally disabling respiratory impairment, the claimant can invoke a presumption that the miner has or had black lung disease and that the miner’s disability or death was due to the disease. The liable party may rebut2 this presumption only by showing the absence of black lung disease and that no part of the miner’s disability or death was related to coal mine employment.3
The Department’s Office of Workers’ Compensation Programs (OWCP) administers the program. OWCP’s District Directors, whose offices are located around the country, develop claims and conduct initial adjudications. OWCP offers all miners who file claims a complete pulmonary evaluation at the Department’s expense. OWCP then considers this evidence, along with that submitted by the private parties, in adjudicating the claim. Any claimant or coal company dissatisfied with the District Director’s decision may request a de novo hearing before the Department’s Office of Administrative Law Judges (OALJ). Before the administrative law judge, parties may offer additional evidence within the limitations established by the Department’s regulations on contested issues. The judge will also conduct an oral hearing unless waived by the parties. After hearing the case and receiving evidence, the judge issues a decision either awarding or denying benefits. An aggrieved party may seek appellate review by the Department’s Benefits Review Board, and thereafter by the United States Court of Appeals for the circuit in which the miner’s coal mine employment occurred.
The Act originally divided responsibility for the program between the Social Security Administration, which administered early claims that were payable directly by the Federal government, and the Department of Labor, which administered all claims filed after 1973. Claims administered by the Department are payable by coal mine companies (or their insurance carriers) that employed the miner; if there is no liable coal mine company available, the Black Lung Disability Trust Fund pays benefits.
Last fall, CPI and ABC News published a series of reports highlighting hurdles claimants face in seeking black lung benefits. They focused primarily on two areas. First, the reports described litigation tactics used by attorneys representing coal companies. These tactics included selective disclosure of company-developed medical evidence to the adjudicator as well as to the company’s other medical experts and the miner. The reports used miner Gary Fox’s case, among others, to illustrate the problem. In that particular case, the coal company’s attorney did not share medical evidence that was indicative of complicated pneumoconiosis an advanced form of black lung disease that when proved, establishes entitlement to benefits with either the coal miner or the company’s other medical experts who ultimately testified that Mr. Fox did not have black lung disease. The company’s evidence resulted in denial of Mr. Fox’s initial claim for benefits.
Second, CPI and ABC News looked at coal companies’ routine use of certain physicians in developing medical evidence to defend against claims. The reports mainly focused on the Johns Hopkins Medical Center B-reader program, led by Dr. Paul Wheeler. (A “B-reader” denotes a physician who has passed the National Institute for Occupational Safety and Health’s examination on proficiency in using the International Labor Office (ILO) classification system to describe or “classify” the presence or absence of, and the severity of, radiographic opacities visible on chest X-rays, that are consistent with black lung or other dust-induced diseases.) Many employers, including coal companies, use B Readers to classify miners’ chest X-rays and serve as expert witnesses in contested proceedings. The CPI and ABC News reports stated that Dr. Wheeler had failed to diagnose complicated pneumoconiosis in over 1500 cases, while other experts who evaluated the same cases had found complicated pneumoconiosis in 390 of them. The stories also documented that Dr. Wheeler was failing to properly classify chest X-rays showing obvious large opacities because he argued that the opacities were due to diseases other than Black Lung. Johns Hopkins suspended the program shortly after the CPI and ABC News stories were published and launched an internal review. To our knowledge, the program remains suspended today.
The Department took these reports seriously. We conducted an extensive review of the program to look for innovative ways to address the disparity in resources between coal companies and benefits claimants within the existing statutory and regulatory framework. The Department also looked for other changes that could be made to improve the fairness of the claims process and increase the accuracy of decisions made on claims.
I would like to share with you some of the actions the Department has taken as a result of this review.
1. Pilot program to develop supplemental medical evidence
On February 24, 2014, the Department launched a pilot project to strengthen the complete pulmonary evaluation given to miners. When a miner files a claim, the miner picks a doctor to conduct an examination from an approved list the Department maintains. The physician examines the miner, conducts medical tests to determine whether the miner is disabled from black lung disease, and prepares a written report of his or her findings. OWCP then bases its initial entitlement determination on the report. All claims filed by miners follow this procedure.
But these initial medical reports do not always hold their value as a claim moves through the adjudication process. They are often rejected because they are outdated or do not consider all of the medical data added later to the record by miners and coal companies. The Department launched the pilot program to help alleviate these problems. In a small subset of claims generally those where the miner worked 15 or more years in the mines (and thus might be able to invoke the 15-year statutory presumption of entitlement) and whose initial medical report supports an award of benefits the Department is developing additional medical evidence. We ask the doctor who conducted the initial examination to review any evidence submitted by the miner or the coal company and update his or her initial opinion by drafting a supplemental report. Depending on the particular circumstances of any given case, we may ask for supplemental reports during both the OWCP and administrative law judge adjudication phases.
The Department chose this approach in response to the CPI and ABC News stories because it had multiple advantages. Developing additional medical evidence at no expense to the miner would: (1) address concerns about disparate resources; (2) improve decision making; and (3) fit within the existing legal framework, making speedy implementation possible.
The pilot project is still in its early stages. OWCP has sent out 79 requests for supplemental reports in cases being adjudicated by District Directors and has received 42 in response. OWCP has issued 37 decisions: 25 awards, 11 denials, and 1 claimant withdrew his application for benefits. We have also requested supplemental opinions in several cases set for hearing before an administrative law judge, but these cases have not yet been decided.
The Department hopes the pilot project gives deserving miners stronger medical reports that strengthen OWCP’s initial entitlement decisions and that withstand scrutiny when weighed against the coal companies’ contrary evidence. Stronger OWCP decisions may lead to fewer hearing requests in the future. While it is too soon to assess the pilot’s effectiveness, the Department will consider expanding this procedure to all claims filed by miners if the pilot is judged successful.
2. New regulatory initiative
In addition to the pilot project, the Department announced a new black lung rulemaking initiative on May 23, 2014, motivated in part by Gary Fox’s case and the CPI and ABC News reports. The Department plans to address three important issues in a proposed rule: whether all parties involved in a claim must disclose medical evidence they obtain in connection with a claim; the fee schedule used for payment of a miner’s medical expenses related to black lung disease; and a liable coal company’s responsibility to pay benefits under an effective award while seeking modification of the award.
The first of these issues the medical-evidence disclosure rule is the most relevant here. We want to ensure that coal miners have full access to information about their health. We also want to render accurate decisions in adjudicating claims. Having access to medical evidence developed by all parties can help us accomplish both of these goals.
The Department invited stakeholders to comment on all three rulemaking topics during outreach sessions held earlier this month on July 8 and 9. Both sessions were well attended and productive. The information the Department gathered will be of great assistance in drafting a proposed rule.
3. X-ray interpretations made by Dr. Wheeler
The Department also responded quickly to the allegations made in the CPI and ABC News reports about Dr. Paul Wheeler’s potentially incorrect X-ray readings. We immediately verified that OWCP was not employing Dr. Wheeler for any purpose. Shortly thereafter, OWCP’s National Office shared the news reports with their District Directors, instructed them to closely scrutinize any evidence offered by Dr. Wheeler and to consult with National Office staff on cases involving Dr. Wheeler’s X-ray readings.
The CPI and ABC News reports continued to be discussed in routine bi-weekly management meetings involving OWCP National Office and District Director staffs. Not surprisingly, coal companies, for the most part, stopped submitting X-ray readings made by Dr. Wheeler. One attorney who represents coal companies asked a District Director to disregard any earlier requests he had made for OWCP to forward radiographs to Dr. Wheeler for re-reading. When OWCP’s National Office learned that one of its district offices was not following these oral instructions, the Department issued more detailed, written guidance.
The Department made the judgment that the CPI and ABC News reports and Hopkins’ suspension of its B-reader program were sufficiently trustworthy and reliable to warrant consideration when weighing X-ray interpretations made by Dr. Wheeler. Accordingly, on June 2, 2014, OWCP issued a bulletin instructing its District Directors to consider this information when weighing Dr. Wheeler’s negative X-ray interpretations, and not to credit Dr. Wheeler’s interpretation in the absence of persuasive evidence either challenging the CPI and ABC News conclusions or otherwise rehabilitating Dr. Wheeler’s readings. The Solicitor’s Office is also asking administrative law judges and the Benefits Review Board to take official notice of the CPI and ABC News reports in appropriate cases.
In addition to issuing this guidance, OWCP searched its records to identify denied claims that contained X-ray interpretations made by Dr. Wheeler. The search included claims filed from 2001 to the present. OWCP broke these claims into two groups: those denied within the past year that could be reopened under the Act’s one-year modification provision, and those denied more than one year ago.
OWCP identified 83 claims that had been denied within the past year and sent a letter to those claimants alerting them to OWCP’s new guidance on Dr. Wheeler’s X-ray readings. The letter informed the claimants that they could request reopening of their claims, included the date by which they had to make the request, and told them that the request could be made either by telephoning or writing OWCP. In four instances, the one-year modification deadline was quickly approaching, so OWCP telephoned the claimants in addition to sending the letter. To date, 13 claimants have sought modification in response to OWCP’s letter.
OWCP also identified approximately 1,000 claims filed by miners between 2001 and 2013 that contained Dr. Wheeler X-ray interpretations and had been denied for more than one year. Although modification is no longer available to these miners, a miner may always file a new claim because his or her condition may significantly deteriorate over time. Black lung disease can be latent and progressive, appearing after a miner’s coal mine employment ends or progressing to total disability with or without continued mining exposure. OWCP sent letters to these miners advising them of the new guidance regarding Dr. Wheeler’s X-ray interpretations and that they could file new claims. The letter told them that the Department would once again provide each miner with a complete pulmonary evaluation at no expense. Because the letters were sent earlier this month, we do not yet know whether any miners will file new claims in response.
Unfortunately, most survivors (unlike miners) whose claims were denied more than one year ago have no avenue of relief. These survivors cannot ask for modification because the one-year period has expired. And under the current statutory and regulatory scheme, such survivors cannot be found entitled to benefits based on a new claim.
I can assure you that if a claimant files a timely modification request or a miner files a new claim, OWCP intends to follow its stated policy and not credit Dr. Wheeler’s X-ray interpretations without persuasive evidence either challenging the CPI/ABC News conclusions or otherwise rehabilitating Dr. Wheeler’s readings. The Solicitor’s Office will also continue to ask administrative law judges and the Benefits Review Board to take official notice of the CPI/ABC News stories where appropriate.
In addition, to address any similar issues that may arise going forward, the Department has begun exploring with the National Institute for Occupational Safety and Health (NIOSH) the feasibility of establishing an inter-agency quality assurance program for B-readers whose X-ray classifications are submitted and considered in black lung claims adjudications.
4. Training initiatives
The Department has also launched a new training initiative to further improve the quality of its decisions in black lung claims. We have worked closely with NIOSH to develop advanced training for Department personnel who adjudicate claims and physicians who examine miners on behalf of the Department. The program will keep staff up-to-date on medical developments relevant to black lung claims. A potential curriculum for the program was reviewed and evaluated by a broad range of participants including physicians and other medical providers, coal miners, claimant representatives and attorneys, OWCP staff, and Solicitor’s Office staff at the West Virginia Black Lung Clinics Program Conference in Pipestem, West Virginia, last month. The curriculum will be refined based on the feedback received at that session. We have engaged a contractor, Dr. Robert Cohen from the University of Illinois, to develop the training program with input from NIOSH. We believe the training will increase the quality of the medical evaluations the Department provides to miners and enhance the Department’s evaluation of the medical evidence when adjudicating claims.
OWCP is committed to ongoing training, and, in addition to entering into the contract noted above, recently added a training coordinator to its National Office black lung staff.
5. Communications and Outreach
OWCP has used a variety of forums to communicate the steps that it is taking to improve the program. OWCP leaders have discussed the pilot project, the agency’s expanded consultations with NIOSH, and the new training program at several conferences attended by miners and their representatives, doctors, and other medical providers who are involved with the program. OWCP has also placed on its website information about the pilot project, OWCP’s guidance on Dr. Wheeler’s X-ray readings, and a set of Questions and Answers about the rights of claimants whose claims were potentially impacted by Dr. Wheeler’s readings. OWCP also shared the Questions and Answers with interested congressional offices and OWCP’s District Offices.
6. Looking forward
In addition to the actions already taken, the Department is planning for the future. We have committed to consult regularly with NIOSH on recurring medical issues raised in claims litigation. If science resolves a particular issue, the Department will consider promulgating a rule to address it. Promulgating rules where the science is clear can lead to less litigation and help resolve miners’ and survivors’ claims more quickly. Both OWCP staff and the Solicitor’s Office attorneys who litigate black lung cases are on the lookout for recurring medical and scientific issues so that we can consult with NIOSH in a timely manner.
We will also be enhancing our accountability review process within OWCP. OWCP’s National Office staff performs onsite reviews of its District Offices and assesses their performance on critical program activities such as initial claim adjudications, administering benefit payments, and performing related activities associated with financial management and program administration. Each District Office is reviewed based on a sample of approximately 450 case files and other documents reflecting the work of the particular office.
We are considering adding spot audits that would require District Directors to review a sample of awards and denials after lower management reviews have been completed but before the award or denial is issued. The spot audits will be used as a quality enhancement tool and address whether the decision is appropriate, well-reasoned and in compliance with applicable statutes, regulations and policies.
As the Committee has recognized, there is a backlog in black lung claims awaiting hearing and decision by the Office of Administrative Law Judges. The number of judges available to hear cases has gone down over the past ten years from 45 to 36 due to retirement and other departures. We are working on replacing those that we have lost, but that process has been hindered by sequestration reductions. In addition, the President’s FY 2015 budget provides funding for OALJ to hire additional staff to address the backlog. The budget proposes a programmatic increase in OALJ for 10 full-time employees, $ 2,027,000 in general funds and $ 693,000 in Black Lung resources. In total, the budget reflects an 11.5 percent increase for OALJ over the FY 2014 enacted budget and is the largest increase the Department has sought in ten years. The FY 2015 budget also includes a plan for fully replacing the automatic sequester cuts with smarter, better targeted reductions. If allowed to continue, sequestration will further reduce available Black Lung funding for OALJ’s administrative needs. These additional resources proposed in the President’s budget will increase OALJs’ ability to hear and decide claims more quickly.
OALJ is also tackling the black lung case backlog in other ways. Some actions are directly related to adjudicating black lung cases while others are designed to free administrative law judges in other areas so that they have more time to devote to black lung cases. These actions include:
You have also asked whether the Department’s actions taken in response to the CPI and ABC News reports might have an impact on the backlog. The Department’s outreach efforts to miners whose claims contained Dr. Wheeler X-ray interpretations are likely to result in a significant number of new claim filings. We project approximately 330 new claims will be filed in FY 2014 with an additional 300 to 400 in FY 2015 in response to the 1,000 letters sent to miners whose claims were denied. In addition, new claim filings thus far in FY 2014 have exceeded earlier estimates. OWCP now projects 7,100 new claim filings (not including any new claims filed in response to the letters sent about Dr. Wheeler) by the end of this fiscal year, a 10.6 percent increase over claim filings in FY 2013. Although the reason for this increase is difficult to determine, drivers likely include OWCP’s publication of regulations in September, 2013, implementing the Byrd Amendments; the increased publicity the program has received; and OWCP’s outreach efforts to the coal-mining community. The increase in new claim filings will, of course, be reflected in the Department’s workload at all adjudication levels, including OALJ.
Coal miners who have sacrificed their health because of their occupation deserve a fair process when they file claims for black lung benefits. The actions the Department has taken will further that goal. We look forward to continuing to work with you to improve the program and the lives of coal miners and their families.
1 Pub. L. No. 111-148, § 1556(c), 124 Stat. 260 (2010).
2 30 U.S.C. § 921(c)(3).
3 30 U.S.C. § 921(c)(4) (2006 & Supp. V 2011).
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