As noted in Table 5, the number of pre-hearing remand cases has caused the backlog in the Branch of Hearings and Review to steadily increase to the point that it would have taken more than 16 person years to eliminate at the end of FY 1996. This backlog has materially lengthened the time it takes to have a hearing and receive a decision. When deserving injured employees are without benefits, justice delayed is justice denied.

     The FECA is remedial legislation and one of its major purposes is to prevent Federal employees, who are without income because of job-related injuries, from sinking into poverty. However, the combination of large numbers of improperly denied cases and delays in scheduling hearing has forced many injured employees into poverty which is directly contrary to the purpose of the Act. It is not unusual for an injured employee to wipe out his or her life savings, lose their house and be forced into bankruptcy because of lack of timely benefit payment.

     While cost savings and better service are complementary parts of the compensation covenant, Claimants are being cheated. Director DFEC Markey told me that 40% of Claimants whose benefits are terminated never respond. When I asked him to explain why this figure was so high he said "we just don't know." In light of a remand rate averaging 45% it would appear that DFEC should seek some answers. However, as shown by the thrust of the data and narrative presented in OWCP's Annual Reports, DFEC is not interested in those types of answers. DFEC is more interested in measuring its success by the amount of benefits reduced.

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     In addition, to deflect attention from its significant adjudication failures, DFEC has chosen to emphasize the timeliness of its decisions. Although DFEC attempts to equate "timely decision" with "correct decision" it is obvious that a correct decision, rendered outside of an arbitrary and capricious time standard, is preferable to an incorrect decision which is rendered within such a standard.

The Myth of Timeliness

     In his September 30 written testimony, Acting Director, OWCP Hallmark stated "[a]n average of 92 percent of all traumatic injury claims are approved upon initial adjudication.' This is misleading. In fact, in October 1993, DFEC implemented new procedures for adjudicating minor, lost-time traumatic injury cases. This type of injury represents the vast majority of all traumatic injuries reported to DFEC.(61) The FY93 Report described these procedures as follows:

by employing a computerized process when cases are created, many non-controverted, traumatic injury claims are screened to allow for the payment of medical bills which pass a series of checks for appropriateness of treatment. These cases are reviewed by a claims examiner only after medical bills exceed a certain amount, a wage-loss claim is filed, or the agency controverts the claim.(62)

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reported actually involved no lost time from work.(64) This means that the great majority of cases Acting Director Hallmark testified were "approved upon initial adjudication," involve minor or no lost time injuries. These cases are not reviewed by Claims Examiners and are not in fact "approved" in the normal understanding of that word, or the implication created by Acting Director Hallmark's testimony.

     When confronted with data showing a consistent remand rate of 45%, a senior OWCP official attempted to minimize the significance of this shortcoming by stating that the actual number of remanded cases is very small in comparison to the total number of injuries reported. This statement is reflective of the arrogance and insensitivity that permeates all of DFEC and OWCP. I am sure that the many employees whose decisions are remanded each year, after a lengthy delay, view the significance of their case differently. Furthermore, the number of cases remanded should be measured against the number of serious injuries reported in a year (10,000) rather than the total number of injuries reported in a year most of which are so minor that DFEC does not even devote staff resources to reviewing them.

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     From FY92 to FY96 the number of hearing requests dismissed each year averaged 1,056 and the number of withdrawal/no-shows averaged 567 per year. These numbers are high, representing respectively approximately 15% and 8% of the average yearly hearing requests and 28% and 15% of the average annual merit decisions, for the same period. A hearing request may be dismissed if the injury or death occurred prior to July 3, 1996; if the request was not made within 30 days of issuance of the decision; or, if the decision of the District Office was not final.

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     Director, DFEC Markey has stated that 40% of Claimant's whose benefits have been terminated do not respond. From FY93 to FY96 an average of 2,267 Claimants'had their benefits reduced or terminated each year.75 The average remand rate for this period was 42%. This means that, if every Claimant whose benefits were reduced or terminated exercised their appeal rights an average of 381 additional cases per year would have been remanded.76

     Another way to evaluate the number of remanded cases would be to compare it to the total number of serious injuries reported in a given year. Acting Director, OWCP Hallmark testified that DFEC receives approximately 10,000 serious injuries per year. This number corresponds to the number of QCM cases identified in Table 3. A more accurate indicator of DFEC's success would be to monitor its handling of these cases. The number of remanded cases, derived above, is 24% of the total serious injuries handled by DFEC in FY96.(*79)

     The number of remanded cases, and the fact that the majority of remands occur prior to hearing, suggest that DFEC's procedures, designed for headlong adjudications, are flawed.

The Rush to Judgment

     Director, DFEC. Markey and Acting Director, OWCP Hallmark established and enforced arbitrary and capricious time standards on the District Offices. These time standards require a District Office Claims Examiner to render a decision on a claim within 45 days and to act on a proposal to terminate benefits at the end of 30 days. These time frames are too short and are too rigidly enforced to permit appropriate consideration of the merits of the claim. This has resulted in significant numbers of prematurely denied cases.

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     For example, after the initial review of a claim a Claims Examiner wild write to the injured employee and advise him or her of any evidence necessary to perfect the claim for compensation. The injured employee is typically given 30 days to respond. However, when the Claims Examiner drafts the deficiency letter it is not received the same day it is dated. The letter spends some time in the District Office waiting to be mailed. The letter also takes time to reach the Claimant by mail. Therefore, a Claimant actually receives the letter several days after it is dated. The Claimant then prepares a response which takes several days to reach the District Office. In fact, when a decision is rendered 30 days from the date of the letter, the Claimant has not received "at least 30 calendar days" to respond as required by the regulation.(*80)

     When the time standards require a decision, the Claims Examiner will deny the claim if the requested information has not been submitted. A Claimant may ask for a hearing to appeal the denial of the claim. In the period between the time the claim is denied and the time the case is transferred to the Branch of Hearings and Review, the requested evidence may come in. In some cases the information is in fact received by the District Office in time but is not put into the case file quick enough to prevent the denial. However, unless specifically asked to do so, the District Office will not reconsider the denial. It appears to be directly contrary to the purpose of the FECA to quickly deny benefits without at the same time trying to quickly consider the merits of the claim when the requested evidence is received.

     Similar problems plague decisions to terminate benefits. In Kendall v.Brock (*81) a district court granted preliminary injunctive relief to a Claimant whose benefits were terminated without a pretermination notice or an opportunity to respond. DFEC then promulgated FECA Bulletin 86-85. This Bulletin established new procedures for the termination or reduction of compensation benefits.(*82)

     The procedures require that a Claimant, whose benefits will be reduced or terminated, must be notified of the proposed action by letter. This letter informs the Claimant that he or she has the right to submit evidence and argument against the proposed action within 30 days.(*83) The procedures state that

[c]ompensation and medical benefits should not be terminated or reduced during the 30 day period. Payment should continue until any evidence submitted by the Claimant has been reviewed and a formal decision has been issued.(*84)

     However, this 30 day period is rigidly enforced. The procedures further state:

[a] Claimant may state that he or she intends to submit additional evidence but cannot do so within the 30-day period. The Claims Examiner] CE should advise the Claimant that the OWCP will issue a decision at the end of the 30-day period and that the Claimant may submit the evidence later, in support of a request for reconsideration of the final decision.(*85)

___________________________________________________
*81 689 F.Supp. 354 (D. Vt. 1987).

*82 The procedures were incorporated into the Federal (FECA) Procedure Manual, ch. 2-1400.

*83 There is no statutory basis for this 30 day period. This is purely discretionary on the part of DFEC.

*84 FECA Procedure Manual (PM) ch. 2-1400.7c.

*85 FECA PM ch. 2-1400.8b. This is not an adequate remedy. In fact, reconsiderations take at least 90 days to complete. See n.95, infra, and accompanying discussion. A better solution would be to grant the Claimant a reasonable extension.

    As with the deficiency notice, the pre-termination notice is not released in a manner that will provide a Claimant with the full 30 days to respond.  The procedures require a Claims Examiner to refer the case file, with the notice of proposed termination and a copy of the evidence which forms the basis for the proposal, to a Senior Claims Examiner for review and concurrence. If the Senior Claims Examiner agrees with the proposed termination "he or she will so indicate on the notice and release the letter advising the Claimant of the proposed termination or reduction"(*86) If there is any delay between the date the Claims Examiner prepares the notice of proposed termination and the date the Senior Claims Examiner releases it, the Claimant has less than 30 days to respond. Furthermore, the termination procedures do not allow time for the notice to reach the Claimant by mail and for the Claimant's response to be processed by the DFEC mail room.

     DFEC continually emphasizes its timely decision making.(*87) However, when nearly half of these so-called "timely decisions" are remanded when appealed, it is incredible that the OWCP Annual Reports to Congress, continually herald DFEC's success in making timely decisions.

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Claimants Need More Time to Submit Required Evidence

     The rigidly enforced time standard are causing decisions to be made before the evidence necessary to render a correct decision can be submitted. As noted above, deficiency notices are not reaching Claimants in sufficient time so that they can make a timely response. Claimant also have insufficient time to response to termination notices as can been seen from the following illustration.

     During this whole period a Claimant is keep in the dark. However, when the proposal to terminate or reduce benefits is finally released, a Claimant is provided less than 30 days to assemble evidence to rebut the proposal. In many cases, a Claimant cannot even see a physician during this period, let alone have a medical report written and submitted. Since the opinion of the Claimant's treating physician is often discounted, a Claimant is at a further disadvantage since he or she must try to arrange an examination by a totally new physician. This imbalance is clearly not equitable and DFEC's rationale for its inequitable procedures is revealing.

     When confronted with the fact that Claimants are not receiving 30 days to correct deficiencies in their claims as required by the regulations, Director, DFEC Markey stated(*88)

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     When numerous decisions are set aside because of evidence later submitted, Director Markey's characterization of requests for extension as "frivolous" appears baseless. Although the data supports the conclusion that these requests are not "frivolous" Director, DFEC Markey states that "the office's high standards for timely adjudication militate" against them. From this comment it appears that, in today's world of lowered expectations, it is more important for Director Markey that adjudication gets done at all, let alone done well. In light of the enormous remand rate, it is obvious that adjudications are not being done well. There is no doubt that a remand rate of 45% represents a significant DFEC Failure.(*90)

     Director, DFEC Markey also makes the following conclusory statement: "[i]t does not appear that the 30-day overall time frame for requesting and submitting information has been burdensome to Claimants." He does not provide any basis for this assertion. However, when 55% of remanded cases are remanded prior to hearing it means either that the initial "timely adjudication" was incorrect or that additional evidence has come in between the date of the decision and the date of the remand. This places Director Markey on the horns of a dilemma. if in fact Claimants are provided sufficient time to submit requested information, then 45% of these "timely adjudications" were incorrect when rendered. An amazing statistic. If, on the other hand, these "timely adjudications" are in fact rendered before the requested information can be submitted, then there is something fundamentally wrong with the arbitrary and capricious time standards.

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     Director, DFEC Markey's January 27 memorandum also acknowledges that the current system does not provide a Claimant with at least 30 days to respond as is required by the regulations.  Incredibly, he then states: [t]he draft revision to OWCP's regulations addresses this point by stating that 'the Claimant will be allowed up to 30 calendar days to submit the evidence required."' Under the current regulations, Claimant's are granted a minimum of 30 days to submit evidence. Under the draft regulations, Claimant's are granted a maximum of 30 days.(*91) Perhaps I am misunderstanding, but how does granting Claimants less time, address the problem of insufficient time to submit evidence?

     The 30 day period appears to be DFEC's attempt to guarantee procedural due process. However, the 30 day period is not mandated by statute and, in light of the enormous remand rate, appears arbitrary, capricious and an abuse of discretion. It is clearly unfair and inequitable to allow a mechanical application of procedural due process to deprive injured employees of the more fundamental right to substantive due process (*92)

     Even though many incorrect decisions are set aside and the cases remanded to the District Office for remedial action, this is not an equitable result. While DFEC has not provided data on the length of time it takes to remand a case prior to hearing, it is reasonable to assume that it takes several months. In addition, Acting Director Hallmark has testified that it takes an average of 8 months to have a hearing and receive a decision. Of course deserving Claimants, who would otherwise be receiving benefits, are without benefits for this period,

     A more equitable way to address this problem would be to reengineer adjudication process to insure that decisions are correct when rendered and, of equal importance, to quickly revise incorrect or premature decisions.

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Claimants Do Not Receive Timely Resolution of
Improperly Denied Claims

     Section 8124(b)(1) of the FECA states that "[w]ithin 30 days after the hearing ends, the Secretary shall notify the Claimant in writing of his further decision and any modification of the award he may make and of the basis of his decision." The notice sent by Hearings and Review (H&R) to Claimants who request a hearing states: "[i]f you have requested an oral hearing, and it is determined that the case is in posture for such, you can expect the case to appear on a hearing docket in approximately six to eight months." Hearing Representative have 75 calendar days from the date of the hearing to release their decisions. Therefore, Claimants are not receiving notice of the results of the hearing within 30 days of the hearing.(*93)

     As noted in Table 5 above, H&R has an enormous backlog of work, This backlog has materially contributed to the substantial delay in the hearings process. Pre-hearing remand cases represent a very significant source of this backlog. example, the data in Table 4 establishes that, from FY88 to FY96, pre-hearing remand cases represented, on average, 25% of H&R's annual merit decisions, and 2.6 person years of work. Similarly, as documented in Table 5, from FY92 to FY96, pre-hearing remands represented 12% of the total hearing requests received by H&R, and 82% of H&R's annual disposition deficit. In fact, since 1992 the accumulated backlog in H&R has swollen to more than 5,000 cases, representing over 16 person years of work. Pre-hearing remand cases have represented 82% of this cumulative backlog. Diverting scarce resources to this superfluous category of cases means that H&R cannot timely process cases truly needing an oral hearing. Pre-hearing remand cases are superfluous since they represent cases where the decision is so obviously flawed that no additional evidence is needed to reverse it. Pre-hearing cases also contain evidence submitted in response to a District Office request but which has not been processed.

     These facts are well known to Director, DFEC Markey and Deputy Director, OWCP Hallmark since they receive a steady stream of complaints from members of Congress and others. Although they are aware of the problems caused by premature denials, they have chosen to emphasize the timeliness of decisions at the expense of the quality of the decisions. While DFEC can truthfully say, in OWCP Annual Reports, that District Offices are rendering timely decisions, Director, DFEC Markey dishonestly conceals the fact that large numbers of these decisions are wrong.

     It is also easier for Director, DFEC Markey to minimize the enormous backlog in H&R since this is just one Office among many District Offices and since he can emphasize statistics showing that the District Offices are rendering timely decisions. - Nevertheless, the enormous backlog in H&R, swollen by premature and facially incorrect denials, has materially impeded the swift resolution of improperly denied claims,

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     Even when a Claimant receives a decision reinstating benefits, he or she is not made whole. Deprivation of benefits for the extended periods of time associated with delays in the hearing process can have catastrophic effects which cannot be remedied by the mere payment of compensation. It is not unusual for this improper deprivation of benefits to cause injured employees to lose all their resources and sink into poverty.

When the FECA was amended in 1974, Congress stated

[i]t is essential that injured or disabled employees of all covered departments and agencies, including those of the United States Postal Service, be treated in a fair and equitable manner. The Federal Government should strive to attain the position of being a model employer.(*94)

     However it appears that the Federal Government is not a model employer and the agency responsible for insuring that Federal employees are treated in a fair and equitable manner has neglected its responsibility. Instead of a quick resolution, improperly denied cases often languish for more than a year, both in the District Office and the H&R, until a hearing is actually held and a decision rendered.

     Furthermore, the reconsideration process is not timely. Although the Procedure Manual states: "[t]he goal for issuing reconsideration decisions is 90 days from receipt of the request." (98) this is not adhered to. In fact the process takes so long that the delay affects a Claimant's other appeal rights. The ECAB will accept appeals filed up to 1 year from the date of the last merit decision. If a reconsideration decision is delayed beyond one year, the Claimant's right to review of the original decision by the ECAB is abrogated.

     A program where many of its decisions are overturned when appealed, where there are significant delays is reversing improper decision and, as result, where there are significant delays in the payment of compensation, is not streamlined to provide customer service.

DFEC Does Not Treat Claimants in a Fair and Equitable Manner

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