oversight

Black Lung Program: Further Improvements Can Be Made in Claims Adjudication

Published by the Government Accountability Office on 1990-03-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United   States   G&eraTAccounting   Office

                Report to Congressional Requesters
 GAO

March   1990
                BLACK LUNG
                PROGRAM
                Further Improvements
                Can Be Made in Claims
                Adjudication




GAO/HRD-90-75
      United States
GAO   General Accounting  Office
      Washington, D.C. 20648

      Human Resources Division

      B-203632                                      a

      March 21, 1990

      The Honorable Austin J. Murphy
      Chairman, Subcommittee on Labor Standards
      Committee on Education and Labor
      House of Representatives

      The Honorable Alan B. Mollohan
      House of Representatives

      The Honorable Frank McCloskey
      House of Representatives

      The Honorable Rick Boucher
      House of Representatives

      The Honorable George Miller
      House of Representatives

      This report responds to your requests for information about the Depart-
      ment of Labor’s Black Lung Disability Benefits Program. You raised con-
      cerns about possible difficulties miners were encountering in applying
      for benefits and asked that we provide information on several aspects of
      the application and approval process. In addition, you requested infor-
      mation on the program’s trust fund.

      The program, which the Congress established in 1969, provides compen-
      sation to coal miners or their survivors for total disability or death
      caused by black lung disease (pneumoconiosis or chronic respiratory dis-
      ease resulting from coal dust exposure). In fiscal year 1988,84,782 min-
      ers or their survivors were on the benefit rolls and were paid about $602
      million in benefits under part C of the program (covering claims filed
      since 1973) (see app. I).

      Miners and their survivors apply to the Department of Labor (DOL) for
      black lung disability benefits. Mine operators who are determined
      responsible for the disease pay benefits. If DOL does not identify a
      responsible mine operator, the Black Lung Disability Trust Fund pays
      benefits out of revenues generated by an excise tax on coal sales. Dissat-
      isfied parties (usually miners or coal mine operators) may appeal initial
      decisions to administrative law judges (ALJS). Further appeals may be
      made to DOL'S Benefits Review Board (BRB) and the federal courts.




      Page 1                 GAO/IlRL%W76 Be%ter Adjudication   of Black Lung Chime Needed
                       5203632




                   .


                       In response to your requests, we (1) determined the percentage of claims
                       approved and denied, (2) discussed with experts the adequacy of the
                       medical criteria DOL uses to determine black lung disease and total disa-
                       bility, (3) identified the average time DOL takes to adjudicate claims,
                       (4) evaluated the procedures used to collect overpayments of benefits,
                       and (5) obtained data on the status of the Black Lung Disability Trust
                       Fund.


                       Using DOL automated data, we (1) determined the percentages of miner
Methodology            claims approved by DOL for each of the eligibility criteria and (2) identi-
                       fied the average time DOL took to process claims. While we discussed this
                       data with DOL officials, we did not determine the accuracy of the auto-
                       mated data.

                       We discussed the adequacy of DOL'S medical eligibility criteria with doc-
                       tors considered black lung experts, DOL officials, and black lung
                       associations.

                       In reviewing DOL'S overpayment policies and procedures, we (1) held dis-
                       cussions with DOL officials, (2) examined selected case files, and (3) com-
                       pared the costs to collections of overpaid amounts during fiscal year
                       1988 and the first 3 quarters of fiscal year 1989.

                       We summarized DOL'S statements reporting trust fund activity. For this
                       analysis, our primary data source was DOL'S status of funds reports.
                       However, we did not determine the accuracy of these reports.

                       Our review began in October 1988 and concluded in August 1989.
                       Except for the limitations discussed above, we carried it out in accord-
                       ance with generally accepted government auditing standards.


                       Except for claims filed] during a 2-year period (March 1978-
Results in Brief       March 1980) in which DOL used more liberal eligibility criteria, only a
                       small percentage of miners have obtained black lung benefits. Excluding




                        ‘Filed claims include previously denied claims that were required to be x-e-reviewed.This also
                       includes claims pending when the new criteria went into effect.



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that 2-year period, DOL’S approval rate between 1973 and 1988, includ-
ing appeals, has been under 10 percent.’ Of all claims approved by JIOL,
about 90 percent were adjudicated under criteria in effect during that
2-year period.

The program’s current medical criteria for determining the existence of
black lung disease and total disability were implemented in 1980 and
1981. Medical experts term the standards for interpreting tests and the
instructions for performing the tests as reasonable.

Claimants appealing DOL'S initial decisions have experienced lengthy
delays while their cases awaited processing at the ALJ and BRB levels.
Delays at the ALJ level should be reduced beginning in 1990, because the
backlog of cases will be reduced. However, lengthy delays will continue
at the BRB level unless additional steps are taken to reduce the backlog
of cases there.

DOL’S  settlements of overpayments resulted in (1) substantially more
dollars collected than dollars spent, and (2) consistent decisions in the
three offices we visited. However, DOL'S initial overpayment notices to
claimants do not fully explain the options available to them in having
their overpayments forgiven.

While the ratio of coal taxes to program costs has improved, the black
lung trust fund continues to operate at a deficit. The deficit is covered
by borrowing from the federal government’s general fund, to which it
owed about $3 billion at the start of fiscal year 1989. Mainly, this is
because liability for nearly all the claims approved under the liberalized
criteria was assigned to the fund. Since 1986, several factors have
reduced annual deficits from about 40 percent to about 10 percent of
expenditures. These factors include increased coal tax revenues, a mora-
torium on interest owed the general fund, and the low rate of claims
approval.




‘We used the latest decision on each claim to compute the latest approval rate. At the time of our
review, about 13,000 claims were pending an appeal. Depending on the results of these appeals, the
approval rate could change.



Page 3                        GAO/HRDL)o76 Better Adjudication       of Black Lung Claims Needed
                          As experience was gained with the program,3 the Congress adjusted it
Program Eligibility       several times by changing financing provisions and revising eligibility
Criteria Changed          criteria. The Congress first amended the Black Lung Act in 1972. The
Several Times             amendments (1) broadened the definition of total disability,
                          (2) extended coverage to surface miners, and (3) provided disability
                          benefits for orphans of deceased miners.

                          In 1977, dissatisfied with the low rate at which applications for benefits
                          were approved, the Congress made further changes. It acted to remove
                          certain restrictive provisions in the law that had prevented a large
                          number of claimants from receiving benefits. Perhaps the most signifi-
                          cant provision was the requirement for DOL to apply “interim” eligibility
                          criteria until final criteria could be developed in consultation with the
                          National Institute of Occupational Safety and Health (NIOSH). The Con-
                          gress provided for the review of previously denied or pending black lung
                          claims under the interim criteria, which were issued August 18, 1978.”
                          In conjunction with NIOSH, DOL also developed permanent medical testing
                          criteria for determining black lung disease and total disability.

                          The 1980s saw the black lung program revert to more stringent eligibil-
                          ity criteria. On April 1,1980, DOL introduced the permanent criteria.
                          Under these criteria, miners had to demonstrate more severe disability
                          than previously required to prove eligibility.

                          In 1981, the Congress took additional actions to reduce eligibility. The
                          Black Lung Benefits Amendments of 1981 (P.L. 97-l 19)

                      l   permitted DOL to get a second opinion on X-ray evidence, for claims filed
                          on or after January 1, 1982, and
                      l   eliminated the presumption of eligibility for miners with 15 years of
                          coal mine employment who had evidence of a totally disabling chronic
                          pulmonary or respiratory condition.




                          %rom the start of the program in 1969 through 1973, it was administered by the Social Security
                          Administration (SSA). SSA continued to make benefit payments to miners whose claims were filed
                          prior to July 1, 1973. DOL is responsible for processing claims filed after that date.

                          4The effective date of the 1977 amendments was March 1,1978.



                          Page 4                       GAO/HRIHO-76 Better Adjudication      of Black Lung Claims Needed
                    B-203632




                    Between July 1973 and the end of 1977, DOL approved about 8 percent
Approval Rate in    of miners’ claims. Then, however, the approval rate rose sharply. DOL
1980s Returns to    approved about 50 percent of pending and previously denied claims
Pre-1978 Levels     filed under the interim criteria from March 1, 1978 to March 31, 1980.
                    About 90 percent of all approvals made by LIOL through calendar year
                    1988 were claims filed during this period.

                    When the program returned to more stringent criteria in the 198Os, the
                    allowance rate reverted to pre-1978 levels. DOL approved about 9 per-
                    cent of miners’ claims filed from April 1,1980, to December 30, 1988. Of
                    these, two-thirds were approved initially and the remaining were
                    approved on appeal at the ALJ level.

                    Besides the tightened eligibility criteria, other factors, such as reduced
                    dust levels in coal mines and improved health of coal miners, may have
                    contributed to the lower approval rates. We did not determine the rela-
                    tive effect of each of these factors nor the appropriateness of the more
                    recent approval rate.


                    On April 1, 1980, the Secretary of Labor, through regulations, estab-
Standards Used to   lished stringent new medical criteria for determining total disability due
Interpret Medical   to black lung disease. The new criteria (1) required a blood gas test, (2)
Tests               revised the values for the pulmonary function test, (3) included stan-
                    dards for X-ray evidence and physical examination, (4) instructed doc-
                    tors when to administer the exercise version of the blood gas test, and
                    (5) provided new standards for interpreting test results.

                    Medical experts told us that the standards DOL used to interpret medical
                    tests performed on miners are reasonable. Also, the instructions to doc-
                    tors performing the tests are reasonable to determine black lung disease
                    and total disability. For example, when the pulmonary function test is
                    interpreted, the new criteria require that miners demonstrate more loss
                    of pulmonary function capability than previously required for a deter-
                    mination of total disability.

                    Additionally, the medical experts termed adequate DOL'S instructions to
                    doctors performing the exercise version of the blood gas test on miners.
                    According to DOL'S program director, this blood gas test may be danger-
                    ous to about 10 percent of miners being tested. DOL instructs physicians
                    not to administer this blood gas test when it may be harmful to the
                    miner.



                    Page 5                 GAO/HRD9@76 Better Adjudication   of Black Lung Claims Needed
                         B-203622




                         During fiscal year 1988, backlogs of cases awaiting assignment to adju-
Backlogs of Appeals to   dicators prevented DOL from issuing timely decisions by ALJS and the
ALJs and BRB Cause       BRB. The backlog developed after large numbers of initial decisions made
Lengthy Delays           under the interim criteria were appealed. Mine operators, for example,
                         appealed 75 percent of the approvals in which they were named. On the
                         average, cases decided by ALJSduring fiscal year 1988 had been in the
                         ALJ process more than 3 years. Cases decided by the BRB took, on the
                         average, about 2-l/2 additional years. More than half of the elapsed
                         time during appeals involved cases sitting in backlogs.

                         Between fiscal years 1986 and 1990, DOL reduced the backlog of cases
                         appealed to AI.&. JIOL hired new staff and contracted with ALJS employed
                         by other federal agencies and retirees to increase productivity. The
                         reduction should improve the timeliness of ALJ decisions beginning in
                         fiscal year 1990. However, the time required to decide cases at the BRB
                         level will continue to be lengthy because of a growing backlog of cases.

                         With its current staff resources, BRB should be able to process about 800
                         cases more per year than the number of appeals expected to be received
                         beginning in fiscal year 1991. Without an increase in these resources, we
                         estimate that it would take the BRB about 10 years to dispose of the cur-
                         rent backlog of cases (about 8,000).

                         To eliminate the backlog of cases at the BRB within 3 years, we estimate
                         that BRB temporarily needs about 35 additional attorneys (decision writ-
                         ers). BRB also needs additional support staff, but we did not estimate the
                         number needed.

                         Other opportunities may exist for efficiency gains. Belief that BRB'S
                         operations can be made more efficient was expressed by several LKIL
                         officials and by DOL’S Inspector General (IG) in a 1986 report on BRB
                         operations. Before increasing BRB'S resources, DOL should determine if
                         other opportunities exist to achieve efficiencies.

                         To accommodate the increase in decisions drafted by attorneys, addi-
                         tional judges would be needed temporarily. Panels of three judges
                         review draft decisions written by attorneys and issue BRB'S final deci-
                         sions. The Longshoremen’s and Harbor Workers’ Compensation Act
                         authorizes nine judges for the BRB, five permanent and four temporary.’

                         “DOL is required to follow certain procedural and other rules contained in the provisions of the Long-
                         shoremen’s and Harbor Workers’ Compensation Act. The nine BRB judges decide both black lung and
                         longshore cases.



                         Page6                         GAO/HRD~76BetterA4judicationofBlsckLungClaimsNeeded
                      8203632




                       The BRB may delegate its powers to panels of judges, two of whom must
                       be permanent. Judges serve on panels on a rotating basis. Currently, the
                      judges appear to be working at capacity and cannot handle the tempo-
                       rarily increased workload.


                      Black lung benefit payments begin subsequent to the initial approval. If
DOL’s Collections     entitlement is reversed on appeal, DOL may require the claimant to repay
of Overpayments       these benefits. When entitlement is sustained on appeal and a mining
Exceed Costs          company is named as responsible, DOL requires the mining company to
                      reimburse any benefits paid on its behalf during the appeal.

                      In deciding whether to collect overpayments from claimants, LIOL consid-
                      ers (1) the relative costs and benefits of collection, (2) the financial con-
                      dition of the claimant, and (3) whether collection is “against equity and
                      good conscience. ” Overall, DOL'S collections exceeded costs. Also, when
                      deciding repayment based on the claimants’ ability to repay, the DOL
                      field offices we visited generally settled cases consistently. However,
                      DOL'S initial overpayment notices to claimants did not adequately
                      explain the options for having overpayments forgiven.

                      Generally, the overpayment notices emphasized the option of having the
                      debt waived only because of the claimant’s inability to pay. The notices
                      did not explain waivers whose basis was against equity and good con-
                      science. Without providing more information on what this constitutes,
                      most claimants probably would not know how to use this option. As a
                      minimum, DOL'S notice should include several of the examples that DOL
                      uses in its guidelines to its claims examiners. One such example is that
                      the claimant gave up a valuable right such as a job or other benefits to
                      accept the black lung benefits.


                      In 1978. the Congress established the Black Lung Disability Trust Fund
Revenue From Coal     to transfer liability for black lung disease to the coal industry. An excise
Excise Taxes          tax on the sales of coal production provided revenues for the trust fund.
Inadequate to Cover   The Congress intended that the revenues would cover the costs of black
                      lung benefits in cases where no mining company could be held liable.
Expenditures
                      Since 1978, coal tax revenues have only paid about 60 percent of pro-
                      gram expenditures. Most of the trust fund’s expenditures have been
                      monthly cash payments to beneficiaries approved under the interim cri-
                      teria. The trust fund borrowed from the general fund, to which it owed
                      about $3 billion as of the beginning of fiscal year 1989. However, the


                      Page 7                 GAO/HRLW@75 Better Adjudication   of Black Lung Claims Needed
                         B-203622




                         trust fund has borrowed less from the general fund in recent years.
                         Since fiscal year 1985, coal tax revenues have equaled about 90 percent
                         of recorded costs. The primary reasons for the improvement have been
                         (1) an annual increase in coal tax revenues since 1979, (2) a 5year mor-
                         atorium on the accrual of interest on money owed to the general fund,
                         and (3) the low percentage of claims approved in the 1980s. If the mora-
                         torium is not extended past its 1990 ending date, interest on the debt
                         alone could be about 50 percent of coal tax revenue in fiscal year 1991 *Ii


                         The Secretary of Labor should focus management attention on the back-
Recommendations to       log of cases at the BRB. Efforts should be taken to eliminate this backlog
the Secretary of Labor   in a reasonable period of time. These efforts should include a manage-
                         ment review of BRB'S operations to determine (1) the extent to which
                         greater efficiencies can be achieved with existing staff and (2) the level
                         of additional resources BRB may need to eliminate the backlog.

                         The Secretary should revise the Department’s overpayment notices.
                         These notices should include explanation of the “against equity and
                         good conscience” option and how it can be used to obtain a waiver.


                          If the Secretary of Labor adds resources to the BRB or takes other actions
Recommendation to         to eliminate the backlog of cases in a short period of time, additional
the Congress             judges will be needed at the BRB. The Congress should amend the Long-
                          shoremen’s and Harbor Workers’ Compensation Act to allow for a tem-
                         porary increase in the number of panel judges at the BRB.


                         You asked that we not obtain written comments on this report. How-
Agency Comments          ever, we did discuss the results of our review with appropriate agency
                         officials. Generally, the agency agreed with our observations and recom-
                         mendations. This report was prepared under the direction of Franklin
                         Frazier, Director of Income Security Issues (Disability and Welfare), who
                         may be reached on 275-1793 if you or your staff have any questions.
                         Other major contributors are listed in appendix VII.

                         Unless you publicly announce its contents earlier, we plan no further
                         distribution of this report until 30 days after the date of this report. We



                         “This assumes that fund benefit payments and coal tax revenues remain constant.



                         Page8                        GAO/HRD-90-76BetterAdjudicationofBlackLungClaimsNeeded
B-202622




then will send copies to the Secretary of Labor and other interested
parties.




Lawrence H. Thompson
Assistant Comptroller General




Page 9                GAO/HRD9@75 Better Adjudication   of Black Lung Claims Needed
Contents


Letter
Appendix I
Introduction              Background
                          Establishing Eligibility for Black Lung Benefits
                                                                                                             12
                                                                                                             13
                          Scope and Methodology                                                              14

Appendix II                                                                                                  16
Approval Rate for         Efforts by the Congress to Liberalize Eligibility in 1972                          16
                                                                                                             17
                          Restrictive Provisions Removed and New DOL
Black Lung Claims              Regulations Mandated
Adjudicated by DOL        Criteria Tightened in 1980 and 1981                                                18
                          Approval Rate in 1980 Returns to Pre- 1978 Levels                                  18

Appendix III                                                                                                 23
Medical Experts Call
DOL’s Medical Criteria
Reasonable
Appendix IV                                                                                                  25
Claims Processing         Initial Claims Processed Within 5 Months                                           25
                                                                                                             25
                          Timeliness of ALJ Decisions Should Improve
Times Lengthy,            Backlog of Cases Awaiting Adjudication at BRB                                      26
Backlogs Significant at
Benefits Review Board
Appendix V                                                                                                   30
DOL’s Debt Collection     Overpayment Collections Exceed Cost                                                30
                          Notices Received by Claimants Inadequate                                           31
Procedures
Appendix
 --        VI                                                                                                33
The Black Lung            Trust Fund Made Liable for Most Approvals                                          34
                          Coal Tax Revenues Do Not Cover Costs                                               34
Disability Trust Fund




                          Page 10                GAO/FIRDw)-75 Better Adjudication   of Black Jang Clalma Needed
                        Content.6




Appendix VII                                                                                                36
Major Contributors to
This Report
Tables                  Table II. 1: Approval Rate for Applications by Miners for                            19
                            Black Lung Benefits (Before and After Apr. 1,198O)
                        Table IV.l: ALJ Case Activity (Fiscal Years 1982-89)                                 26
                        Table IV.2: Benefits Review Board Case Activity (Fiscal                              27
                            Years 1982-89)
                        Table V. 1: Collecting Overpayments From Claimants and                              31
                            Mining Companies: Costs and Collections (Fiscal
                            Years 1988-89)
                        Table VI.l: Coal Tax Revenues (Fiscal Years 1979-88)                                 34

Figures                 Figure II. 1: DOL’s Reasons for Approval or Denial of
                             Miners’ Claims Filed Before April 1, 1980
                        Figure 11.2:DOL’s Reasons for Approval or Denial of
                             Miners’ Claims Filed After March 31, 1980
                        Figure 11.3:Applications for Black Lung Benefits Filed in
                             Fiscal Years 1973-88
                        Figure VI. 1: Funds Borrowed by Black Long Disability                                33
                             Trust Fund From the Treasury (Fiscal Years 1979-
                              88)
                        Figure VI.2: Coal Tax Receipts Compared With Program                                 35
                             Costs (Fiscal Years 1979-88)




                        Abbreviations

                        AIJ         Administrative Law Judge
                        BRB         Benefits Review Board
                        DOL         Department of Labor
                        HHS         Department of Health and Human Services
                        IG          Inspector General
                        NIOSH       National Institute of Occupational Safety and Health
                                    Office of Administrative Law Judges
                                    Social Security Administration


                        Page 11                 GAO/liRD9076   Better Adjudication   of Black Lung Claims Needed
        xtion


                    Miners sometimes develop black lung disease (pneumoconiosis or a
                    chronic respiratory condition resulting from inhaling coal dust). Lung
                    tissue is destroyed, resulting in the reduction of the lung’s ability to
                    transfer oxygen to the blood. The Federal Coal Mine Health and Safety
                    Act of 1969 (P.L. 91-173) established a program for compensating vic-
                    tims of black lung disease and imposed environmental standards for
                    dust levels in coal mines. The program pays monthly cash benefits to
                    eligible miners or their survivors for disabling respiratory and pulmo-
                    nary diseases resulting from miners’ exposure to dust during coal mine
                    employment.

                    Concern over the difficulties experienced by many miners with their
                    claims for black lung benefits was expressed by Congressmen Alan B.
                    Mollohan, Frank McCloskey, Rick Boucher, George Miller, and Austin J.
                    Murphy. The latter is Chairman of the Subcommittee on Labor Stan-
                    dards of the House Committee on Education and Labor. They requested
                    that we review the Black Lung Disability Benefits Program. Among the
                    specific issues identified for our examination were: (1) the percentage of
                    applications approved and denied under the program, (2) the adequacy
                    of the medical criteria used to adjudicate claims, (3) the average time it
                    takes to adjudicate claims and reasons for processing delays, (4) the pro-
                    cedures used to collect program overpayments, and (5) the status of the
                    Black Lung Disability Trust Fund.


                    The black lung program has two components, parts B and C. Only part C
Background          claims are discussed in this report. The parts differ as follows:

                l Under part B, benefits are payable only for claims filed before July 1,
                  1973 (December 31, 1973, for some survivors). Thus, no new benefi-
                  ciaries can be added to the rolls for part B. In fiscal year 1988, about
                  $980 million in benefits were paid under part B, which is administered
                  by the Social Security Administration under the Department of Health
                  and Human Services (HHS). Costs of the part B program are funded from
                  the general revenues.
                . Under part C, administered by the Department of Labor, nearly one-half
                  million persons have filed claims since 1973. As of September 1989,
                  84,782 claimants were receiving black lung benefits under part C. Costs
                  are supported largely by excise taxes on sales of coal, borrowing from
                  the U. S. Treasury, or direct payments from mine operators when they
                  are determined responsible. Program expenditures during fiscal year
                  1988 included $602 million in benefits to claimants and $55 million in
                  administrative costs.


                    Page 12               GAO/HRD90-75 Better Adjudication   of Black Lung Claims Needed
                           Appemdix I
                           Introduction




                           Claimants file for benefits at an SSAor DOL office. SSAoffices route claims
                           filed with them to the appropriate DOL office. At the DOL office, examin-
                           ers arrange for medical testing, document employment history, identify
                           liable mining companies, and make initial disability determinations.

                            Parties (claimants or mine operators) dissatisfied with the initial deci-
                           sion may appeal. The appeal process is adversarial. The mine operator
                           may seek to prove that the miner does not meet the program’s eligibility
                           criteria or that the mine operator is not the responsible employer. Con-
                            ferences sometimes are held to try to resolve differences. If still dissatis-
                            fied with the decision, any party may appeal to an administrative law
                           judge. Further appeals may be made to DOL'S Benefits Review Board. BRB
                           decisions may be appealed to a federal circuit court of appeals and sub-
                           sequently to the U.S. Supreme Court.


                           To be eligible for benefits, miners must prove they are totally disabled
Establishing Eligibility   from black lung disease arising out of coal mine employment. DOL gives
for Black Lung             each miner who files a claim for black lung benefits an opportunity to
Benefits                   substantiate the claim by a complete pulmonary evaluation. This
                           includes a physical examination, chest X-ray, pulmonary function test,
                           and blood gas test.

                           DOL  uses the results of pulmonary function tests and blood gas tests to
                           help determine whether the miner is totally disabled. Pulmonary func-
                           tion tests permit the identification and measurement of any breathing or
                           pulmonary capacity impairment. Blood gas tests permit the identifica-
                           tion and measurement of impairments involving the lung’s efficiency in
                           exchanging oxygen and carbon dioxide. When these test results, based
                           on criteria established by the Secretary of Labor, demonstrate the
                           miner’s inability to do usual coal mine employment or other comparable
                           gainful employment, the miner is considered totally disabled.

                           The primary method of establishing the existence of black lung disease
                           is through X-ray evidence. If X-rays identify scar tissue in the miner’s
                           lungs, a physician reading the X-ray determines whether the miner is
                           suffering from complicated black lung (large lesions usually more than 1
                           centimeter in diameter) or simple black lung (small lesions). Claims for
                           benefits cannot be denied, however, on the basis of a negative chest X-
                           ray alone. The act provides that a physician can use other medical tests
                           to make a determination of the existence of black lung disease.




                           Page 13                GAO/HRlMO-75 Better Adjudication   of Black Lung Claims Needed
                               Appendix I
                               Introduction




                               The act currently contains two major presumptions for claimants filing
                               after 1981-one rebuttable and one ix-rebuttable-to assist claimants in
                               establishing their eligibility for black lung benefits.’


Irrebuttable Presumption       If it is established that a miner suffers or suffered at death from “com-
of Total Disability From       plicated” black lung disease, there is a presumption that the miner is
                               totally disabled by, or that death was due to, the disease, or that the
Black Lung Disease             miner was totally disabled by the disease at the time of death. If this
                               presumption can be established, it cannot be rebutted by contrary evi-
                               dence thereby allowing miners to meet a basic eligibility criterion of
                               being totally disabled or of having died from black lung disease.


Presumption of                 If a miner who is suffering or suffered from black lung disease was
Relationship to                employed in a coal mine or mines for 10 years or more, there is a rebut-
                               table presumption that the disease arose out of coal mine employment.
Employment in Mines            Unlike the presumption described above, this one may be rebutted by
                               contrary evidence to show that there is no connection between the dis-
                               ease and the claimant’s coal mine employment.


                               JIOL provided us with automated data on approvals and denials of claims
Scope and                      (including reasons for denials) for fiscal years 1973-88. For our analysis,
Methodology                    we used the latest decision of record including decisions made on appeal
                               by ALJS or the BRB. Additionally, we analyzed DOL’S reasons for approval
                               or denial of claims at the initial level of the process.

                               We discussed DOL’S medical eligibility criteria with seven medical doctors
                               with an expertise in black lung disease. Others with whom we met or
                               spoke included

                           l   representatives from the United Mine Workers Union;
                           l   DOL district office officials in Johnstown (Pennsylvania), Columbus
                               (Ohio), and Lakewood (Colorado);
                           l   -4~s in San Francisco, Pittsburgh, Camden (New Jersey), Cincinnati, and
                               Washington, D.C.;




                               ’ The availability and use of presumptions has not remained constant over the life of the black lung
                               program. as the Congress and DOL have several times w-examined the eligibility requirements of the
                               program.



                               Page 14                       GAO/HID-90-75 Better Adjudication       of Black Lung Claims Needed
    Appendix I
    Introduction




l the National Black Lung Association and its West Virginia and Virginia
  chapters; and
. DOL officials in the Mine Safety and Health Administration.

    With medical experts,’ we discussed the criteria used to interpret medi-
    cal tests performed on miners and compared them with those used for
    interpreting similar medical tests in claims for state workers’ compensa-
    tion programs. We compared criteria used for X-rays, pulmonary func-
    tion tests, and blood gas tests.

    Using DOL’S automated data, we identified average case processing times
    at each level of the adjudicative process and identified stages at which
    delays occurred.

    In reviewing DOL’S overpayment collection policies and procedures, we
    discussed them with DOL officials at headquarters and in six district
    offices. Also, we compared the costs to collections. We judgmentally
    selected cases in three district offices to determine how consistently
    these field office personnel applied DOL’S collection policies and
    procedures.

    Concerning information on the trust fund, we (1) identified revenues
    and disbursements using DOL’S status of funds reports and (2) deter-
    mined whether DOL is more frequently naming responsible mine
    operators.

    Our review began in October 1988 and concluded in August 1989. We
    did not verify the accuracy of DOL’S automated data or determine the
    accuracy of DOL’S financial statements reporting trust fund activity.
    Except for these limitations, we carried out this review in accordance
    with generally accepted government auditing standards.




    ‘The medical experts included four officials from NIOSH. a faculty member from West Virginia IkC-
    versny’s medIcal school, a physician noted for his expertise with blood gas tests, and a physician
    noted for his expertise in interpreting X-ray evidence.



    Page 15                       GAO/HRD9@75      Better   Adjudication   of Black Lung Claims Needed
Approval Rate for Black Lung Claims
Adjudicated by DOL

                              About 90 percent of all approvals of miners’ black lung claims were
                              made using temporary criteria in effect during a 2-year period from
                              March 1,1978 to March 3 1,198O. Fewer than 10 percent of miners’
                              claims adjudicated under part C before and after this period were
                              approved.’

                              Since DOL began administering the Black Lung Disability Benefits Pro-
                              gram, it has adjudicated miners’ claims under three different sets of eli-
                              gibility criteria. In 1972, the Congress liberalized the criteria in an effort
                              to increase the approval rate. However, under these criteria, DOL
                              approved only about 8 percent of miners’ claims.

                              In 1978, dissatisfied with the low approval rate, the Congress
                              (1) amended the act to remove certain restrictive provisions in the law
                              that had prevented a large number of claimants from receiving benefits
                              and (2) mandated that DOL develop criteria for medical tests to evaluate
                              a claim of total disability. Using interim regulations, DOL approved about
                              60 percent of claims filed between March 1, 1978 and March 31,198O.

                              In 1980, DOL introduced more stringent criteria and the Congress further
                              tightened eligibility in 1982. Since March 31, 1980, DOL approved about
                              9 percent of the miners’ claims filed. We did not determine the appropri-
                              ateness of the approval rate.

                              An account of the program’s eligibility criteria and claims approval
                              rates under DOL follows.


                              In an effort to increase the program’s approval rate, the Congress
Efforts by the                amended part C of the Black Lung Act in 1972. The amendments
Congress      to Liberalize   (1) broadened the definition of total disability, (2) extended coverage to
Eligibility    in 1972        surface miners, and (3) added a rebuttable presumption of eligibility for
                              miners with 15 years of coal mine employment who demonstrated symp-
                              toms of black lung disease. Instead of requiring that miners be unable to
                              engage in substantial gainful employment to qualify for total disability,
                              the standard up to that time, the amendments required only that miners
                              be unable to perform jobs requiring them to use their coal mine skills.
                              This permitted miners to work in less demanding, noncoal-mine employ-
                              ment and remain eligible for black lung benefits. The rebuttable pre-
                              sumption of eligibility for miners with 15 years of coal mine


                              ’ We do not include survivors’ claims KI our analysis.



                              Page 16                        GAO/HRD-90-76 Better Adjudication   of Black Lung Claims Needed
                         Appendix II
                         Approval Rate for Black Lung Claims
                         Adjudicated by DOL




                         employment and evidence of black lung disease was added to ease evi-
                         dentiary burdens. However, only about 8 percent of miner claims
                         decided under the criteria were approved. Also, according to DOL, the
                         medical standards being applied were quite stringent.


                         Under liberalized “interim criteria” mandated by the Congress in 1978,
Restrictive Provisions   approvals of miner claims increased to about 50 percent. Most of these
Removed and New          approvals were made administratively at one of DOL’S district offices
DOL Regulations          and did not involve appeals. Only about 1 percent of the approvals
                         resulted from an appeal.
Mandated
                         The 1977 amendments removed from the law active provisions that had
                         prevented a large number of miners from receiving benefits and man-
                         dated that DOL develop regulations to implement the revised law. Going
                         beyond the medical definition of pneumoconiosis,’ the Congress again
                         broadened the statutory definition of black lung disease to include
                         respiratory and pulmonary impairments arising out of coal mine
                         employment.

                         Also, the amendments expanded coverage to individuals employed in or
                         around a coal mine in the extraction, preparation, or transportation of
                         coal. Standards applicable to medical tests were relaxed by (1) restrict-
                         ing DOL’S authority to use a second opinion on X-ray readings provided
                         by claimants as evidence of their disease and (2) prohibiting the devel-
                         opment of additional medical or other evidence if the evidence on file
                         was sufficient to approve a claim.

                         But the most significant provision in the amendments was the require-
                         ment that DOL develop new eligibility criteria in regulations. The amend-
                         ments mandated that DOL apply interim criteria in reviewing previously
                         denied or pending black lung claims. DOL also was required to consult
                         with the National Institute of Occupational Safety and Health in devel-
                         oping permanent medical testing criteria for more accurate diagnosis of
                         black lung disease and total disability.

                         DOL  issued interim eligibility criteria on August 18, 1978.3 Using pre-
                         sumptions contained in the act, DOL developed an “interim presump-
                         tion.” Generally, the new criteria presumed eligibility for miners with at

                         ‘A lung   disease produced by the deposition of coal dust and the lungs’ response to the retained coal
                         dust.

                         “The promsions of the 1977 amendments      applied to claims beginning March 1, 1978.



                         Page 17                         GAO/HRD9@75 Better Adjudication          of Black Lung Claims Needed
                     Appendix II
                     Approval Rate for Black Lug claims
                     AdJudicat.4 by DOL




                     least 10 years of coal mine employment and evidence of totally disabling
                     respiratory or pulmonary disease. These new criteria remained in effect
                     for claims filed prior to March 31,198O.


                     The claims approval rate was lowered for claims filed after March 31,
Criteria Tightened   1980. This was the effective date of permanent, more detailed, and
in 1980 and 1981     stringent standards that DOLdeveloped in consultation with IZIOSH.
                     Amendments in 1981 further tightened eligibility criteria by eliminating
                     a series of provisions that had been enacted previously to help particu-
                     lar groups of miners or survivors obtain entitlement.

                     The permanent regulations implemented a more comprehensive medical
                     testing procedure. They required miners to conclusively prove black
                     lung disease and total disability through the results of medical tests.
                     Miners also had to demonstrate more loss of pulmonary function capa-
                     bility than previously required for eligibility.

                     In 1981, the Congress also took steps to reduce eligibility. The Black
                     Lung Benefits Amendments of 1981 (P.L. 97-l 19) eliminated a restric-
                     tion on DOL'S authority to use a second opinion on X-rays that might
                     show the absence of black lung disease, for claims filed on or after Janu-
                     ary 1, 1982. The amendments also eliminated the presumption of eligi-
                     bility for miners with 15 years of coal mine employment who had
                     evidence of a totally disabling chronic pulmonary or respiratory disease.


                     The approval rate returned to levels prior to the 1977 amendments
Approval Rate        under part C. DOL approved about 9 percent of miner claims filed from
in 1980 Returns      April 1, 1980, to December 30, 1988, about one-third of these on appeal.
to Pre-1978 Levels   (See table II. 1.)




                     Page 18                   GAO/HRMJ@75 Better Adjudication   of Black Lung Claims Needed
                                            Approval Bate for Black Lung Claims
                                            Adjudicated by DOL




Table 11.1:Approval Rate for Applications
by Miners for Black Lung Benefits (Before                                                                       Claims filed
and After Apr. 1, 1980)                                                                          Before Apr. 1,199O     After Mar. WI1980
                                            Status of claims                                          No.    Percent          No.   Percent
                                            Totals decided                                         186.538            -        66.177             -
                                            Approved:
                                              On initial decision                                   87,285            47a       4,219                 6’
                                              On appeal (to ALJ)                                     2,075b            1        1 ,867b               3
                                              On appeal to BRB                                          71c                d
                                                                                                                                     6                 d


                                              Totals approved                                       99,431            48       6,092                  9
                                            Note: Initial approvals from Apnl 1, 1980, through December 31, 1981, were 11 percent. Srnce Decem-
                                            ber 31, 1981, when the Congress agarn changed elrgibility, the Initial approval rate has been about
                                            4 percent.
                                            aThe approval rate through 1977 was 8 percent
                                            bRepresents the difference between approvals and denrals of appealed initial decisions changed by
                                            ALJs.
                                            ‘Represents   the difference   between approvals and dentals of appealed ALJ decrsrons changed by the
                                            BRB

                                            dThe effect of BRB reversals on the approval rate was neglrgible


                                            In initial decisions, DOL approved about 4 percent of the miners’ claims
                                            filed during fiscal year 1988. We did not try to determine whether the
                                            current approval rate is reasonable or not. Also, we were unable to
                                            determine the effect, independently or collectively, of certain factors on
                                            the approval rate. Such factors included the tightened eligibility criteria
                                            and adjudicative process, the decline in applications for black lung bene-
                                            fits, the improved health of coal miners, and reduced dust levels in coal
                                            mines.


Tightened Eligibility                       We compared claims filed before April 1, 1980, with claims filed under
Criteria                                    current criteria. Most of the increase in denials involved miners’ failure
                                            to meet medical rather than nonmedical criteria. In most denied cases.
                                            the miners could not demonstrate either of the two basic medical crite-
                                            ria, total disability or black lung disease. However, the percentage of
                                            denied miners who proved either black lung or total disability, also
                                            increased significantly. (See figs. II.1 and 11.2.)

                                            The number of miners denied for nonmedical reasons did not change sig-
                                            nificantly. The nonmedical category includes claims not filed on time,
                                            claimants not considered coal miners, and miners who failed to provide
                                            evidence or were uncooperative.




                                            Page 19                           GAO/HB.D9@75 Better A~udication       of Black Lang Chime Needed
                                           Appendix II
                                           Approval Rate for Black Lung Claims
                                           Adjudicated by DOL




or Denial of Miners’ Claims Filed Before
April 1, 1980                                                                               1%
                                                                                            approved: complicated      black lung

                                                                                            6%
                                                                                            denied: proved either black lung or total
                                                                                            disability

                                                                                            3%
                                                                                            other approvals

                                                                                           3%
                                                                                           other denials




                                                                                            approved: simple black lung




                                                                                           denied: non-medical




                                                                                           denied: no black lung or total disability

                                           Note These are mtlal dIscussIons only




Applications Decrease                      The number of miners applying for benefits significantly declined dur-
in 1980s                                   ing the 1980s. Applications peaked during 1978, when the most liberal
                                           eligibility criteria were in effect. Since then, the numbers of applications
                                           have declined, reaching the lowest level in the program’s history during
                                           fiscal year 1988, at 3,104 applications. (See fig. 11.3.) Also, a decrease in
                                           the number of underground miners may have contributed to the decline
                                           in applications. DOL reported that 79,000 miners worked in underground
                                           mines in 1988, down from 102,000 in 1970.




                                           Page 20                       GAO/HBDW75   Better Adjudication     of Black Lung Claims Needed
                                          Appendix II
                                          Approval Rate for Black Lung Claims
                                          Adjudicated by DOL




Figure 11.2: DOL’s Reasons for Approval
or Denial of Miners’ Claims Filed After
                                                                                            denied: proved either black lung or total
March 31,199O                                         (                                     disability

                                                                                            denied: non-medical




                                                                                             5%
                                                                                             approved:   simple Ma& lung




                                                                A                            denied: no black lung or total disability
                                          Note: These are mltlal dlscusslons only




Coal Miners’ Health                       Seven  black lung medical experts with whom we spoke suggested that
Improves                                  fewer miners today suffer from totally disabling respiratory conditions.
                                          The primary reason cited was improved coal mine environmental condi-
                                          tions resulting from the imposition of dust standards. Also, the experts
                                          said that most cases of black lung found today are usually marginal
                                          (simple black lung), making diagnosis very difficult.

                                          A 1969 study performed by the Department of Interior’s Bureau of
                                          Mines (before dust standards) showed that dust levels in a sample of 29
                                          underground mines averaged 5.6 milligrams per cubic meter. In 1988,
                                          DOL inspectors found that the average dust level in underground coal
                                          mines was less than 1.3 milligrams per cubic meter. The 1969 act ini-
                                          tially required the average concentration of respirable dust in the work
                                          area to be no more than 3.0 milligrams of dust per cubic meter of air
                                          beginning in June 1970. As of December 30, 1972, the standard required
                                          a reduction in the dust level to 2.0 milligrams per cubic meter. Before
                                          these standards, dust levels in coal mines were unregulated.



                                          Page 21                        GAO,/HRD9@76 Better Adjudication    of Black Lung Claims Needed
  -
                                            Appendix II
                                            Approval Rate for Black Lung Claims
                                            Adjudicated by DOL




Figure 11.3:Applications for Black Lung Benefits Filed in Fiscal Years 1973-88




1973         1974   1975   1916   1977     1976      1979      1980      lSE1       1982     1983   1984    1985      1996    1987     1988
FiscaI Yun




                                             Based on the date of appkatlon     as prowded by DOL




                                             Page 22                          GAO/HRD9@75 Better Adjudication   of Black Lung Claims Needed
Appendix III

Medical Experts Call DOL’s
Medical Criteria Reasonable

               On April 1, 1980, DOL implemented its new medical criteria for determin-
               ing whether miners are totally disabled from black lung disease. The
               new criteria required a blood gas test, revised the values for the pulmo-
               nary function test, and included standards for X-ray evidence and phys-
               ical examination. The revised values used for interpreting these tests
               were more stringent than standards previously used.

               Existence of black lung disease is established primarily through X-rays
               used to identify whether coal dust concentrations exist in the miner’s
               lungs. When coal dust is found, X-ray evidence permits a determination
               of whether the concentrations are large (signifying complicated black
               lung disease) or small (simple black lung disease). Claims for benefits
               cannot be denied, however, on the basis of a negative chest X-ray alone.
               A physician can make a determination of the existence of black lung
               disease based on other medical tests.

               Total disability is determined through pulmonary function tests and
               blood gas tests, Pulmonary function tests permit the identification and
               measurement of any breathing or pulmonary capacity impairment.
               Blood gas tests permit the identification and measurement of impair-
               ments involving the lung’s efficiency in exchanging oxygen and carbon
               dioxide. When these test results, judged by criteria established by the
               Secretary of Labor, demonstrate the miner’s inability to perform usual
               coal mine tasks, the miner is considered totally disabled.

               The new criteria require miners to demonstrate a pulmonary function
               capability of 60 percent or less of normal compared with the 80 percent
               or less previously required for a determination of total disability. Doc-
               tors considered experts in pulmonary diseases with whom we discussed
               the new standards called them reasonable.

               State workers’ compensation programs in Kentucky and West Virginia
               generally required miners seeking benefits under the programs to
               demonstrate more evidence of total disability than did DOL for black lung
               benefits. For example, as stated above, DOL regards a miner as totally
               disabled if the miner has 60 percent or less of normal pulmonary func-
               tion capability. Under West Virginia’s workers’ compensation program,
               a miner must have 50 percent or less to be considered totally disabled.
               Under Kentucky’s program, a miner must have 55 percent or 1ess.l

               ‘State workers’ compensation programs generally defiie total disability in broader terms than those
               contained in federal criteria. Most states define total disability as the inability to engage in any gain-
               ful employment. Also, state programs provide for partial disability benefits.



               Page 23                         GAO/HRIMO-75 Better Adjudication          of Black Lung Claims Needed
Appendix III
Medical Ekperra call DOL’S
Medical Criterb~ Reasonable




According to DOL’S program director, the exercise version of the blood
gas test can be hazardous to about 10 percent of miners tested. DOL'S
guidance to doctors who administer such tests instructs them not to
administer the test if it imposes a hazard to the health of the miner. The
seven medical experts that we consulted concerning the guidance said
that the instructions are adequate.




Page 24                       GAO/HftDsQ75   Better Adjudication   of Black Lung Claims Needed
Appendix: I!’

Ckms ProcessingTimes Lengthy, Backlogs
Significant at Benefits Review Board

                   Processing times for initial decisions on claims for black lung benefits
                   during fiscal year 1988 appeared reasonable, but there were lengthy
                   delays in both the administrative law judge and Benefits Review Board
                   decision processes. Timeliness of the ALJ decision process should
                   improve beginning in fiscal year 1990, when the backlog of cases will be
                   eliminated. Processing times at the BRB will continue to be excessive,
                   however, because there is a backlog of cases waiting to be processed.

                   At the initial and AU levels, our analysis of claims processing involved
                   only black lung cases. At the BRB however, our analysis included black
                   lung and longshore cases. As required by law, DOL applies provisions of
                   the Longshoremen’s and Harbor Workers Compensation Act to process
                   appeals of both black lung and longshore cases.


                   DOL processed initial claims within about 5 months during fiscal year
Initial Claims     1988. This surpassed its processing goal of 6 months. Claims examiners
Processed Within   we interviewed said that most of their time was spent obtaining medical
5 Months           tests and identifying responsible mine operators. We did not identify
                   opportunities to shorten this process.


                   About 30 percent of initial decisions on black lung claims usually result
Timeliness of      in a hearing before an AIJ. ALJS consider all evidence previously submit-
ALJ Decisions      ted for the initial decision along with any new evidence. For ALJ deci-
Should Improve     sions made in fiscal year 1988, over 3 years elapsed on average between
                   the filing of an appeal and the decision and order by an ALJ. DOL'S Chief
                   ALJ believes that the entire process, beginning with the request for a
                   hearing and ending with an AIJ decision, should take about 1 year.

                   Most of the time (21 months) to process cases at the AIJ level resulted
                   from a backlog of cases awaiting assignment to ALJS because of the 1977
                   amendments. That legislation required the re-review of all previously
                   denied and pending claims. DOL'S Office of Administrative Law Judges
                   (OALJ) reduced the backlog of cases awaiting an AJJ decision from more
                   than 22,000 at the beginning of fiscal year 1986 to 4,901 at the begin-
                   ning of fiscal year 1990 (see table IV.1). OAU increased the annual
                   number of black lung cases disposed of by about 25 percent during fiscal
                   years 1987 and 1988. This was accomplished primarily by increasing the
                   number of ALJSthrough new hires and contracting with retired AWS.
                   During the same period, the numbers of cases appealed to OAIJ
                   decreased about 28 percent.



                   Page 25               GAO,/HRD!W76 Better Adjudication   of Black Lung C1a.h~ Needed
                                              Appendix N
                                              Claims Processing Times Lengthy, Backlogs
                                              Siguifbnt  at Benefits Review Board




Table IV.l: ALJ Case Activity (Fiscal Years
1982-89)                                                               Undecided                                             Undecided
                                                                             cases                                                 cases
                                                                   at beginning of        Appeals                               at end of
                                              Fiscal year               fiscal year       received       Dispositions        fiscal year
                                              1982                          13.876           6.140               7.220            12.796
                                              1983                          12,796           7,779               4,883            15,692
                                              1984                          15,692          10,286               5,425            20,553
                                              1985                          20,553           8,412               6,848            22,117
                                              1986                          22,117           5.892               8.196            19.813
                                              1987                          19,813           4,527              10,063            14,277
                                              1988                          14,277           3,905              10,292             7,890
                                              1989                           7,890           3,153               6,142             4,901
                                              Source OALJ


                                              Reductions in the backlog of cases should improve processing time at the
                                              CLUJ.With the backlog reduced to 4,901 cases on September 30, 1989,
                                              the Chief ALJ told us that it is at a manageable level. He said this should
                                              enable them to process all appeals within their goal of 1 year.

                                              The remaining 17 months involve case transmittal and the AIJ decision
                                              process. About 10-l/2 months were spent in the ALI decision process.
                                              The remaining time (about 6-l/2 months) involved delays in sending
                                              cases from the district offices to the OALJ in Washington, D.C. Since
                                              these cases were initially decided, however, DOL changed its procedures
                                              for sending cases from the district offices to the OAIJ. From fiscal year
                                              1987 through December 1989, district offices took 56 days on average to
                                              send cases to OALJ.


                                              Cases decided by the BRB during fiscal year 1988 took on average about
Backlog of Cases                              2-l/2 years. More than half of the elapsed time during these appeals
Awaiting Adjudication                         involved cases sitting in backlogs.
at BRB
                                              The BRB adjudicates appeals of AU decisions made under the black lung
                                              program and the Longshore and Harbor Workers’ Compensation Pro-
                                              gram. About 80 percent of BRB'S workload involves black lung cases.
                                              When dissatisfied parties appeal ALJ decisions, the BRB reviews the com-
                                              plaint and decides whether substantial evidence supports the finding of
                                              the ALJ. Attorneys perform the initial analysis of the complaints and
                                              draft decisions. After review by supervisory attorneys, the draft deci-
                                              sions are forwarded to panels of judges for a decision.




                                              Page 26                    GAO/HR.D-9@76 Better Adjudication   of Black Luug Claims Needed
                                         Appemdix N
                                         claims Prixesslng Times LengtbY, Backlogs
                                         Signifkant at Benefits Review Board




                                         Most of the over 2 years it took for cases to be decided by BRB during
                                         fiscal year 1988 involved cases sitting in backlogs awaiting assignment
                                         to attorneys. Cases sat in backlogs more than 15 months on average. The
                                         remaining time involved (1) about 2-l/2 months for BRB to receive the
                                         case folder from a district office, (2) about 7 months for the filing of
                                         complaints and any responses, and (3) about 2 months for BRB to issue
                                         decisions after the assignment of the case.

                                         Productivity at the BRB has not kept pace with increased appeals over
                                         recent years, as shown in table IV.2. The backlog of cases awaiting
                                         review increased to about 8,000 by the end of fiscal year 1989. To
                                         increase productivity and subsequently reduce processing time, DOL tem-
                                         porarily may need to increase attorney and judge resources at the BRB.
                                         However, DOL should first closely examine BRB'S organization and opera-
                                         tions to see if other opportunities exist to achieve productivity gains.
                                                                           ~     -~     ~~~
Table IV.2: Benefits Review Board Case
Activity (Fiscal Years 1982-89)                                 Undecided                                              Undecided
                                                                      cases                                                  cases
                                                            at beginning of           Appeals                             at end of
                                         Fiscal year             fiscal year          received     Dispositions        fiscal year
                                         1982                          2,763             2,556             1,011              4,308
                                         1983                          4.308             3.057             1.319              6,046
                                         1984                          6,046             2,892             2,317         ___- 6,621
                                         1985                          6,621             3,131             2,394              7.358
                                         1986                          7,358             3,172             3,607              6,961
                                         1987                          6.961             3.567             3.516              7,123
                                         1988                          7,123             4,526             4,101              7,548
                                         1989                          7,548             4,459             4,021              7,986
                                         Source BRB



Added Staff May Be                       DOL  officials believe that the number of appeal receipts will sharply
Neededto Eliminate                       decline in 1991 and may continue to decline in future years. BRB gave us
                                         estimates of the number of appeals it expects to receive in fiscal years
Backlog                                  1990 and 1991. It is difficult, however, to make reliable predictions of
                                         the number of receipts beyond 1991. For fiscal year 1990, BRB currently
                                         is operating at 74 attorney staff years for writing decisions. Supervisory
                                         attorneys who review draft decisions account for about 22 percent of
                                         BRB'S total attorney staffing. This level of staffing should dispose of
                                         about 4,000 cases, about the number it expects to receive this year, BRB
                                         officials said. This still would leave a backlog of about 8,000 cases at the
                                         end of fiscal year 1990. BRB assumes each attorney staff year accounts



                                         Page 27                    GAO/HID-9@76 Better Adjudication   of Black Lmng Claims Needed
                          Appendix IV
                          CIaims Processing Time6 Lengthy, Backiogs
                          SigniflcantatBenefitaReviewBoard




                          for 53.65 case dispositions yearly. Using this productivity level, it would
                          take an additional 149 attorney staff years to process this backlog of
                          CaSeS.

                          Because BRB'S future receipts are expected to be below 1990 levels, cur-
                          rent staff at the BRB will be able to reduce the backlog further. For
                          example, if there are only about 3,200 appeals received in 1991 (BRB
                          estimated 3,194 for its 1991 budget), current staffing (74 attorney staff
                          years) could dispose of about 800 backlogged cases. If annual receipts
                          and attorney (nonsupervisory) staffing remained at about 3,200 cases
                          and 74 staff years, respectively, it would take about 10 years to dispose
                          of the backlog.

                          We analyzed the possible effects of adding staff temporarily to reduce
                          the backlog. To illustrate the probable effects of adding temporary staff
                          for a 3-year period beginning in 199 1, we assumed that annual receipts
                          would be about 3,200 cases, and current staffing could dispose of
                          4,000 cases. If staffing remained at 74 attorneys, this would leave an
                          estimated backlog of about 5,600 cases at the end of the 3-year period.
                          An additional 104 attorney staff years, or about 35 per year for 3 years,
                          would be needed to eliminate this remaining backlog.

                          If attorney staff are added, BRB would need some increase in other
                          aspects of its operations, such as support staff. We did not consider
                          these in our projections.


Other Opportunities for   Several DOL officials told us they believe BRB'S operations can be made
Productivity Gains        more efficient. This also was stated by DOL'S Inspector General (IG) in a
                          1986 report on BRB'S operations. Before increasing BRB'S resources as we
                          projected above, DOL should determine if other opportunities exist to
                          achieve efficiencies. The multilevel review process cases generally go
                          through before final disposition was one area cited by the IG . While the
                          BRB adopted some of the IG’S recommendations, it still retains many lay-
                          ers of supervisory review. We identified many cases that did not seem to
                          require the levels of review currently being performed. We discussed
                          our conclusions with BRB'S Chief Counsel, who generally agreed that fur-
                          ther efficiencies can be achieved in the review process.

                          Also, as stated above, about 22 percent of BRB'S attorney staff are super-
                          visors and do not write decisions on cases. While an increase in staffing
                          appears to be the only way to eliminate the backlog in a relatively short
                          period of time, DOL management may want to examine the ratio of about


                          Page 28                   GAO/HRD9075       Better Adjudication   of Black Lung Claims Needed
                          AppendixIV
                          clainu3 Pnxessing TimeE Lengthy, Bac.kloga
                          SignifhntatBenefltsReviewBoard




                          one supervisor for every four staff attorneys to determine if it is war-
                          ranted. Placing some of these supervisors temporarily in the “line” to
                          write decisions may increase case dispositions and further streamline
                          the review process.

                          In our closing discussions with WL officials, we discussed the possible
                          need for a detailed management review of BRB'S operations and sug-
                          gested such a review may be desirable before resources are added to
                          BRB. The officials agreed with this approach and indicated they plan to
                          begin such a review in the near future.


Number of BRB Decisions   Panels of three judges review draft decisions written by attorneys and
Limited by Availability   issue DOL'S final decisions. The Longshore and Harbor Workers’ Compen-
                          sation Act authorizes nine judges -five permanent and four temporary.
of Judges                 The BRB may delegate its powers to panels of three judges, two of whom
                          must be permanent. Judges serve on panels on a rotating basis.

                          The nine judges should be expected to issue between 4,000 and
                          4,350 final decisions per year, BRB officials told us. They believe it would
                          be unwise to expect the judges to exceed this level. If BRB is going to
                          eliminate the backlog sooner than the 10 years we discuss on page 28, it
                          will have to increase the number of judges. For example, to eliminate the
                          backlog in 3 years beginning in fiscal year 1991, the panels of judges
                          must dispose of almost 5,900 cases yearly. The current number of judges
                          would not be able to handle this increased workload. To accommodate
                          the increased workload, additional judges would be needed temporarily.




                          Page29
Appendix V

DOL’sDebt CollectionProcedures


              Collections by the Department of Labor of overpayments exceeded costs
              even though DOL collected only about one out of every three dollars set-
              tled. Also, when deciding repayment based on the claimants’ ability to
              repay, the three offices we visited were generally consistent. However,
              the initial overpayment notices did not fully explain the options availa-
              ble to the claimants in handling their debt.

              DOL   collects money owed the trust fund by mine operators and claim-
              ants. Generally, these debts result from appeals by mine operators. In
              about 75 percent of the initial approvals involving a responsible mine
              operator, the mine operator appeals the decision. Until all appeals are
              completed, claimants receive benefits from the trust fund. If the original
              decisions remain unchanged, responsible mine operators must reimburse
              the trust fund for the benefits paid to claimants on their behalf. If the
              initial decision is later reversed, any benefits received during this period
              are considered overpayments to the claimants and DOL may require
              repayment.

              DOL  pursues collection of all overpayments owed by mine operators. For
              claimants, however, DOL bases its decision on whether to collect on
              (1) the cost benefit of collection, (2) the financial condition of the claim-
              ant, or (3) whether collection is against equity and good conscience.


              Amounts collected significantly exceeded the costs of black lung pro-
Overpayment   gram overpayment collection (see table V.1 for costs, and collections).
Collections   The amounts collected from claimants alone in fiscal year 1988 were
Exceed Cost   more than the total costs of all black lung program debt collection activi-
              ties In fiscal year 1988, DOL collected about seven dollars for every dol-
              lar spent on collection efforts.




              Page30                 GAO/HRD9@76Better Adjudication of Black Lung Claima Needed
                                            Appendix V
                                            DOL’s Debt Collection Pmcedms




‘able V.l: Collecting Overpayments
:rom Claimants and Mining Companies:        Dollars in thousands
Zests and Collections (Fiscal Years 1988-                                                                                 Amount collected
19)
                                            Collection category                                                             1988           198P
                                            Mining companies:
                                            Reimbursement     of benefits oaid                                             $17,718          $16,360
                                            Interest                                                                         4,079            6,747
                                              Totals collected                                                            $21,797           $23,107
                                            Claimants:
                                            Overpayments     settled:                                                       21,066            19,548
                                              Write-offsb                                                                    ( 4,307)          (4,700)
                                              Waivers                                                                       (10,117)           (9,338)
                                              Totals collected                                                             s6,642            $5,510
                                            Totals. all collections                                                       $28,439           $28,617
                                            Costs to collect:
                                            Estimated costsc                                                                  4,272            4,935
                                            Difference between collections and costs                                       $24,167           $23,683
                                            aAmounts recorded by DOL through the third quarter
                                            bUsuallyoccur when an overpaid miner dies before the account IS settled
                                            CBasedon the estimated time the district offlces and the national offices spend on debt collection active-
                                            ties.


                                            DOL pursues collection of all overpayments owed by mine operators. For
                                            claimants, however, DOL provides guidance to its district office staff on
                                            deciding whether to initiate or stop collection actions. The guidance pro-
                                            vides that designated officials, on a case-by-case basis, may take antici-
                                            pated costs of required administrative actions into consideration when
                                            determining whether to collect or end collection action on debts. This
                                            guidance is in accordance with Federal Claims Collection Standards.


                                            DOL’S initial overpayment notices to claimants do not adequately explain
Notices Received by                         the options available to have overpayments    forgiven. Claimants may
2laimants Inadequate                        apply for waiver of their uoL-declared debt if they prove (1) they are
                                            unable to pay or (2) that repayment is against equity and good con-
                                            science.’ Generally, the notices emphasize the option of having the debt
                                            waived because of the inability to pay. The notices do not provide an
                                            explanation of waiver based on being against “equity and good con-
                                            science.” Without more information, most claimants probably would not
                                            know how to use this option. As a minimum, we believe DOL’S notice

                                            ‘In assessingability to pay, DOLexaminesthe miners’income,assets,expenses,and dependents.
                                            Assetssuch asthe miner’s homeand car are not considered.



                                            Page 31                        GAO/HlUM@75 Better Adjudication           of Black L.ung Cldma Needed
Appendix V
DOL’s Debt Cdlection Procedurea




should include several of the examples that          DOL     uses in its guidelines to
its claims examiners.

When deciding waivers based on repayment being against equity and
good conscience, DOL considers whether the claimant (1) gave up a valu-
able right (e.g., a job that he or she cannot get back) to accept black lung
benefits; (2) changed his or her position for the worse (e.g., a dependent
child had been able to attend college because of the monthly benefits);
and (3) depended on erroneous information in acceptance of the benefits
(e.g., he or she was not informed that the benefits might have to be
repaid).

After reviewing a judgmentally selected sample of folders in three dis-
trict offices for cases in various payment and nonpayment status, we
found that LKJL made waiver decisions consistently in most cases.




Page 32                   GAO/HRIMO-75 Better Adjudication    of Black Lung claims Needed
 Ppe

%rhuzk                     Lung Disability Trust Fund


                                       The Congress established the Black Lung Disability Trust Fund to trans-
                                       fer the costs of the black lung program to the coal industry. The trust
                                       fund pays program administrative costs and monthly disability benefits
                                       when no coal mine operator is assigned liability for an approved claim.
                                       Most of the trust fund’s expenditures are the result of congressional
                                       actions in 1977 and 1981 that assigned the fund liability for several
                                       groups of beneficiaries.

                                       The trust fund is financed primarily through an excise tax on the sale of
                                       coal. However, if the tax revenue is insufficient to cover expenditures,
                                       the Secretary of Labor can borrow from the federal government’s gen-
                                       eral fund. Each year (from 1979 through 1988), coal taxes have been
                                       inadequate to cover program expenditures. The trust fund borrowed
                                       nearly $3 billion dollars from the Treasury during that time (see
                                       fig. VI. 1).


Figure VI.1: Funds Borrowed by Black
Long Disability Trust Fund From the
                                       so0   DousninYHHoN
Treasury (Ftscal Years 1979-66)




                                             1979         la0   198l       lssz      1989     1984     1065      1986     1967    lsw
                                             Fbcal   Ym


                                       The trust fund’s need to borrow from the general fund has been reduced
                                       over recent years. Yearly coal tax receipts are now about 90 percent of
                                       administrative and benefit costs. Over the life of the program, they have
                                       equaled about 60 percent. Also, the Congress imposed a moratorium on
                                       the accrual of interest on money borrowed from the general fund. The
                                       current moratorium on accrual of interest expires at the end of fiscal


                                       Page 33                         GAO/HBD9076     Better Adjudication    of Black Lung Claima Needed
                                       Appendix VI
                                       The Bhck Lung Disability Trust F’und




                                       year 1990. If the Congress does not act to extend the moratorium or
                                       increase coal taxes, interest on the debt alone could be again about
                                       50 percent of coal tax revenue in fiscal year 1991.


                                       Liability for about 91 percent of miner claims filed before April 1, 1980,
Trust Fund Made                        has been assigned to the trust fund. The 1977 amendments assigned to
Liable for Most                        the trust fund liability for claims in which the miner’s last coal mine
Approvals                              employment was before 1970.’ Because coal companies and their agents
                                       generally opposed accepting liability for approvals of claims readjudi-
                                       cated under the “interim criteria,” the Congress forgave them liability in
                                       the 1981 amendments.

                                       The rate at which mining companies are named as liable, however,
                                       increased to 38 percent for claims filed since March 31, 1980. For initial
                                       decisions made during 1988, the liability for about 52 percent of approv-
                                       als was assigned to mining companies.


                                       The Congress has increased the coal tax rate twice since 1977. The
Coal Tax Revenues                      yearly amount of coal excise taxes collected increased from $232 million
Do Not Cover Costs                     in 1979 to $601 million in 1988, shown in table VI.l.
Table W-1: Coal Tax Revenues (Fiscal
Years 1979-88)                         Dollars in thousands
                                                                                                                               Coal tax
                                       Fiscal year                                                                            revenues
                                       1979                                                                                     $232.056
                                       1980                                                                                      251,288
                                       1981                                                                                      237,097
                                       1982                                                                                      426,620
                                       1983                                                                                      490.731
                                       1984                                                                                      525,422
                                       1985                                                                                      548,356
                                       1986                                                                                      561 158
                                       1987                                                                                      574.769
                                       1988                                                                                      601,279


                                       But the tax revenues have been insufficient to cover program expendi-
                                       tures. Through the end of fiscal year 1988, the trust fund has borrowed

                                       ‘Prior to these amendments, DOL reported to the Congress that responsible operators were named in
                                       32 percent of the cases adjudicated



                                       Page 34                      GAO/HRDW76       Better Adjudication   of Black Long Claims Needed
                                          Appendix VI
                                          The Black Lung Disability Trust Fund




                                          about $3 billion. More recently, however, tax revenues have covered
                                          about 90 percent of the trust fund costs, as figure VI.2 shows.


Figure Vl.2: Coal Tax Receipts Compared
With Program Costs (Fiscal Years
                                          lQo0
1979-88)
                                           so0

                                           so0

                                           700

                                           so0

                                           so0

                                           400

                                           300

                                           200

                                           100




                                                        COdTaX
                                                 I
                                                         Program Costs
                                                 I


                                          The Congress prohibited the charging of interest on amounts owed by
                                          the trust fund to the general fund during fiscal years 1986 through
                                          1990. The estimated cost of this 5-year moratorium is about $2 billion.




                                          Page 36                        GAO/ERD9076   Better Adjudication   of Black Lung Claims Needed
Appendix VII

Major Contributors to This Report


Human1Resources       Cameo A. Zola, Assignment Manager
Division,             Regg Hatcher, Evaluator-in-Charge
Washington, D.C.      Ann V. White, Evaluator
                      C. Robert DeRoy, Evaluator (Computer Science)
                      Virginia T. Douglas, Reports Analyst
                      Joyce W. Smith, Secretary



Cincinnati Regional   Vern Nieporte, Evaluator
Office




(106338)              Page 36              GAO/HUD-s(I-75 Better Adjudication   of Black Lung Claima Needed
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