Testimony of James Linehan, Lawyer
James R. Linehan, P.C.
RE: OVERSIGHT OF CUSTOMER SERVICE AT THE OWCP

     Pursuant to your invitation of May 5th, 1999, the following statement is respectfully submitted as a synopsis of expected testimony to be presented via appearance of the undersigned witness. Said voluntary appearance has been requested before this Subcommittee on Tuesday, May 18th, 1999 at 10:00 a.m.

GENERAL

A. Expected Purpose

     The expected purpose of this Subcommittee hearing is to gather information on the processes, methods, and workings of the United States Department of Labor Office of Workers’ Compensation Programs ("OWCP"). The response of the OWCP to claims by federal civilian employees or their survivors who are or have been injured, diseased or killed on the job in and out of the course of their federal employment will be the specific subject of inquiry. In addition to federal employee testimony, additional testimony is expected from "professionals"; e.g. medical and legal personnel who are involved in the claims processes of OWCP on behalf of federal civilian employees.

B. The OWCP

     Federal employees who are injured, diseased or killed on the job as a federal employee are required to apply to the OWCP in the Department of Labor for workers’ compensation benefits. Statutory authority is contained in Title 5 U.S.C. §8103 et. seq. The OWCP is a self-governed, self-regulating, exclusive rights agency. The unilateral responses and actions of the OWCP in claims decisions are final and conclusive for all purposes with respect to all questions of law and fact and are not subject to review by another official of the United States or by a court by mandamus or otherwise. 5 U.S.C. §8128(b).

     Thus for all practical effect and purpose, for those federal civilian employees injured, diseased or killed on the job, their exclusive remedy for relief is to resort to the OWCP system with no rights of appeal to any court of law in the United States. 

C. The Claimant

     There are, to the undersigned’s estimation, between 2.5 and 3 million federal civilian employees in the United States. Federal employees covered under the OWCP include a range of employees such as postal workers, Peace Corps and Volunteers of America workers, student-employees. Generally, any officer or employee of any branch of the government or any individual rendering personal service to the United States falls within the parameters of OWCP. 5 U.S.C §8101 et seq.

D. Legal Representation

     There are, to the undersigned’s current estimation, more than 1 million practicing attorneys in the United States. Presently, the undersigned, knows of only three (3) to four (4) other attorneys in the entire United States willing to represent federal civilian employees in OWCP claims. The undersigned knows of no (0) other attorneys in his State of Oklahoma who will represent federal civilian employees in these claims.

E. Medical Treatment

     Presently, the undersigned knows of only one (1) to three (3) qualified medical physicians in the State of Oklahoma who are willing to medical treat federal civilian employees who are proceeding with a federal workers’ compensation claim under the OWCP. The undersigned is not aware of the status of medical treatment availability for the remainder of the United States. However, based on weekly telephone calls received from federal civilian employees across the United States, the rarity or non-existence of medical providers for injured federal employees is common.

SPECIFIC PROBLEM AREAS

Nonaccountability

     If there can be described one overall riding concern common to the OWCP claims handling process, the concern would be the express total nonaccountability of the OWCP to any overseer. As noted above, the OWCP is essentially, and for all practical purposes a self-governing, self-regulating federal agency that answers to no court of law. This nonaccountability of a federal agency leads to an obvious and common sense concept: a federal agency that is not required to answer or account for its actions need not concern itself with its action (or lack of action).  Specifically and most practically, why should the OWCP concern itself with its responses and decisions on federal workers’ compensation claims? There is nothing "legally" that the injured federal employee can do in response to the OWCP. There is no incentive, legally or economically, for the OWCP to act in the "best interest" of the federal employee.

     In reality, quite the opposite occurs. The OWCP can freely act to delay, stall or deny claims as desired. A federal employee meeting such delays in the face of mounting bills will grow increasingly frustrated with the OWCP claims process. The federal employee will either forego further action on her claim or will drop or refuse to file her claim. Thus, it is in the "best interest" of the OWCP to delay, stall or deny claims as such non-action saves the OWCP from claims payments. The OWCP will not have to pay out compensation benefits to a now thoroughly disgusted federal employee. Additionally, the never filed injury claim allows the federal employer to claim that the federal employer’s workplace injury rate is artificially lower since fewer claims are filed. Both the OWCP and federal employer gain whereas the employee and her family continually lose.

Effects of Nonaccountability of OWCP on the Medical Treatment of Federal Workers

     The effect of nonaccountability of the OWCP in its claims handling and decisions directly leads to the rapidly growing refusal of qualified medical practitioners across the United States to medically treat injured or diseased federal civilian employees. The nonaccountability of the OWCP, also leads to the diversion of due payment of millions of dollars per year in compensation benefits to the private sector. Annually, millions of dollars of benefits actually due as federal compensation are, in the undersigned’s opinion, being wrongfully diverted to private insurers for payment as result of OWCP’s nonaccountability.

     For example: an on the job back injury resulting in a herniated disc followed by surgery and physical therapy will average more than $150,000.00 in immediate medical costs. These medical costs are due and payable by the OWCP. However, with nonaccountability, the OWCP can simply, and knowingly, stall and delay authorization of medical treatment on the workers compensation claim for months on end. (The OWCP is under no statutory guideline or regulation requiring its timely response - - or any response for that matter - - to any federal employee’s workers’ compensation claim. The OWCP mandates that it must pre-approve and authorize medical treatment, however, the OWCP is under no timeline requiring it to issue such approval and authorization for medical treatment.) The injured federal worker who needs immediate medical treatment must first find a physician who will treat her. The physician is highly reluctant to even accept the case as the physician is well aware that she may not be paid for months, or years, if at all, by the OWCP. But, needing medical treatment, and needing to be paid for medical services, both the employee and the physician avoid OWCP and its indeterminable delays. The federal employee and her physician simply file her claim and medical bills with the employee’s private insurer. The private insurer, in turn, unknowingly pays for medical services that are in reality the total responsibility of OWCP.

     Thus, with nonaccountability, the OWCP has every incentive not to act in the best interest of the injured employee. By not taking action through nonaccountability the OWCP can, and does, divert millions of dollars per year onto the backs (literally) of the private sector. In turn, the OWCP and federal employer can claim artificially reduced ijury rates, reduced compensation claims paid, etc. In reality, the private insurers and American citizens are bearing the increased burden of nonaccountability: private insurance premium rates continue to rise to cover the nonaction of the OWCP.

     Nonaccountability of the OWCP also leads directly to increasing refusals of federal employees to either initially file their claim or to later prematurely drop their workers’ compensation claims. It is in the best interest of the OWCP not to take action on the employee’s claim. By not acting on a claim, OWCP avoids payment of compensation benefits to the employee if the employee never files or when the employee subsequently drops his claim. No claim means no payment. A very simple means of denial of benefits payments by OWCP.

     Nonaccountability of the OWCP also leads directly to increasing refusals of medical practitioners to treat injured or diseased federal employees. It is in the best interest of the OWCP not to authorize medical treatment. By not acting on a request for medical treatment authorization, OWCP avoids payment of medical treatment costs to the physician and the physician subsequently bills the private insurer. No authorization means no payment. Again, a very simple means of denial of benefits payments by OWCP.

Effects of Nonaccountability on Legal Representation of Federal Workers

     As stated above, there are less than a handful of practicing attorneys across the United States who will represent federal civilian employees in their workers’ compensation claims. The reason for this rarity of legal representation is quite simple: the express nonaccountability of the OWCP, its actions or nonactions, to any court review provides no legal peg on which an attorney can hang his hat in support of the federal employee. No review means no payment. Again, a very simple means of denial of benefits payments by OWCP.

     With no accountability to any court of law, the OWCP knowingly is free to act in any manner it so desires toward an injured federal civilian employee. The OWCP knowingly is free to refuse to respond to claimant’s telephone calls; to knowingly refuse to acknowledge receipt of correspondence, medical records, etc. from the claimant or her physician; to knowingly delay or knowingly and wrongfully deny due compensation benefits to the claimant; to knowingly refuse to provide OWCP file records upon request to the claimant; etc.

     The OWCP’s express nonaccountability to any court of law for its actions and nonactions on a federal workers’ compensation claim leads to a most common sense observation. The OWCP is free to do what it wants, when it wants, how it wants and why it wants on any federal workers’ compensation claim. Frankly, the undersigned knows of no other better example of the "fox left guarding the henhouse."

Unilateral Control

     As can be seen, allowed nonaccountability, the OWCP can, and does, assert full and final unilateral control over the claimant and all issues involving a claim for workers’ compensation benefits. 5 U.S.C. §8128(b). This issue of unilateral control can be readily illustrated by the following two examples.

The Attending Physician Rule

     Under most circumstances in courts of law or otherwise, the attending physician rule prevails. This rule is quite simple. In a contest between the injured claimant’s qualified attending medical physician and an agency’s non-attending consultative examiner regarding medical treatment, the qualified medical recommendations and reports of the attending physician prevail and take precedence over the paid consultant. The United States Federal Court of Appeals and the United States Social Security Administration recognize that "The "Attending Physicians Rule" was developed because such an opinion " 'reflects an expert judgment based on a continuing observation of the patient's condition over a prolonged period of time.' " Foster v. Heckler, 780 F.2d 1125, 1130 (4th Cir.1986) (quoting > Mitchell v. Schweiker, 699 F.2d 185, 187 (4th Cir.1983)). The exact opposite holds true in OWCP claims. 5 U.S.C. §8123 states that when there is a conflict in medical evidence of equal weight, the opinion of the hired medical consultant of the OWCP prevails over that of the claimant’s attending physician.

     The detailed medical treatment reports of a federal employee’s attending physician are considered less qualified than the medical report of a non-examining physician retained and paid by OWCP. This occurs despite the fact that the employee’s attending physician’s expert judgment reflects the continuing observation of the patient’s condition over a prolonged period of time.

     With total unilateral control by the OWCP over the medical treatment of the federal employee, it is in the best interest of OWCP not to recognize the attending physician rule. The OWCP, with unilateral control over its choice of the prevailing medical report needs only to "shop around" for a paid consultant to state any medical diagnosis the OWCP so desires. With such unilateral control over the claimant’s own attending physician, the OWCP has no incentive to act in the best interest of the federal employee.

Section 8128(a)(1)

     This section of OWCP regulations is quite simple and quite deadly for federal employees. This small and often unnoticed clause permits the Secretary of Labor (or any designate) to review for any reason -- at any time -- any claim -- for federal workers’ compensation.  Section 8128 allows the OWCP to unilaterally end, decrease or increase any award of compensation benefits paid to the claimant. 

     No pre-notice of such loss of compensation is required to be given to the claimant.    No due process hearing on such loss of compensation is required to be given to the claimant.   Subsequently, as explained above, Section 8128(b) then states that such a unilateral review of an award and its results is not reviewable in any court of law and is final.

     In quite simple terms, this clause is the trump card of all cards for OWCP. In the event a claimant should ever prevail on her federal workers’ compensation claim, the award given can always be taken back by the OWCP. Regardless of when the claimant was awarded benefits (there is no time limiting review by the OWCP); regardless of appropriateness of the claimant’s award; regardless of the claimant’s; the OWCP can and will at any time, now or in the distant future, on its own motion, without any right of review, end or decrease the claimant’s compensation benefits.

     Without any pre-notice and without any right of hearing, a federal employee’s previously awarded compensation benefits can be taken back by OWCP and demand for reimbursement made upon the employee at any time by the OWCP.

     The Sword of Damocles never hung so precariously over a head as does Section 8128(a)(1) hang over the head of an injured or diseased federal employee and her family. Should she fight so hard to eventually win her due benefits, and thus be finally able to feed and house her family again, at any time -- now or in the distant future -- without warning and with no chance to avoid, the sword of Section 8128(a)(1) can and will slash down with a fury upon the federal employee and her family.

     Section 8128(a)(1) is a prime example of unilateral regulatory control risen to an ultimate and final extreme without regard to its effect on federal employees.

RECOMMENDATION

     The present federal workers’compensation under OWCP is a federal system without accountability to any court of law; a federal system that costs the private insurance sector millions of dollars annually; and a federal system of unilateral control with no incentive to assure that the effects of its actions are in the best interest of the federal employee. The OWCP is essentially a federal agency that has and continues to answer to no one.

     The Veteran’s Administration was a similarly situated federal system. For decades the VA remained unaccountable for its actions and was the curse of veterans seeking disability compensation for their service connected injuries. For decades, veterans were left without legal representation in their claims for disability. In 1988, this Congress recognized that after decades of nonaccountability of the VA to veterans and after years of virtual unilateral control by the VA over veterans disability claims, veterans’ law and regulations needed a vast but simple and effective overhaul. This Congress properly decided that the laws for veteran’s seeking compensation for their service connected disability claims should be changed to the serve the best interest of the veterans rather the best interest of the VA.

     In 1988, this Congress enacted legislation creating a federal court system of review for veteran’s disability claims. VA disability claims, after VA administrative review, were made subject to federal court appellate review. The VA now affords veterans’ due process in the processing of their claims. Veterans are permitted to seek and retain legal representation with fees for same to be reimbursed by the VA should the veteran be the prevailing party on her claim. Veterans can rest assured that if their claims are wrongly decided at the administrative level, they will be at least be granted right of federal court review. Faced with such federal court review, the VA must necessarily act promptly and in the best interest of the veteran in the handling and processing of veterans’ disability claims.

     The undersigned recommends that this Congress also act in the best interest of the thousands of injured, diseased or killed federal employees seeking federal workers’ compensation for themselves and their families. The undersigned recommends that the most simple and effective means of insuring that the OWCP acts in the best interest of the federal employee (rather than the OWCP) is to allow the federal employee a basic right of federal court review of her federal workers’ compensation claim. With the prospect of federal court review overseeing its actions (or nonaction), the OWCP will have every incentive to act in the best interest of the injured federal employee rather than the best interest of OWCP.

     Federal court review of OWCP claims will require that the OWCP respond in a pre-set timely manner to federal employee’s request for information and action on their claim. Federal court review will insure that the OWCP responds in pre-set timely manner to federal employee’s and their physicians request for authorization of necessary medical treatment. Federal court review will insure that medical costs being presently diverted to private insurers for payment are correctly processed and accounted for by OWCP in a timely manner thus assuring the federal employee of the availability of medical treatment. Federal court review of OWCP claims will also assure that claimant that in case of appeal she will have greater opportunity to be represented by legal counsel.

     In summary, by simply allowing federal civilian employees to appeal their OWCP claims to a federal court of review; the above noted problems of nonaccountability and unilateral control of the OWCP disappear. Without such court oversight, federal employees seeking compensation for their on the job injuries remain subject to the whims and will of an essentially nonregulated agency.