This is the accessible text file for GAO report number GAO-06-230 
entitled 'Federal Compensation Programs: Perspectives on Four Programs' 
which was released on December 13, 2005. 

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Report to Congressional Requesters: 

United States Government Accountability Office: 


November 2005: 

Federal Compensation Programs: 

Perspectives on Four Programs: 




Appendix I: Briefing Slides: 

Appendix II: GAO Contact and Staff Acknowledgments: 


DOE: Department of Energy: 

DOJ: Department of Justice: 

DOL: Department of Labor: 

EEOICP: Energy Employees Occupational Illness Compensation Program: 

HHS: Department of Health and Human Services: 

NIOSH: National Institute for Occupational Safety and Health: 

RECP: Radiation Exposure Compensation Program: 

SSA: Social Security Administration: 

VICP: Vaccine Injury Compensation Program: 

United States Government Accountability Office: 

Washington, DC 20548: 

November 18, 2005: 

Congressional Requesters: 

Since 1969, when Congress established the Black Lung Program as a 
temporary federal program to provide benefits for coal miners disabled 
by pneumoconiosis (black lung disease), the federal government has 
played an ever-increasing role in providing benefits to individuals 
injured as result of exposure to harmful substances. Although the Black 
Lung Program was initially designed to end in 1976, when state workers' 
compensation programs were to provide these benefits, it was amended to 
make it an ongoing federal program. Since that time, Congress has 
enacted several additional programs to provide benefits to individuals 
injured by exposure to such things as radiation and beryllium, a 
substance used in nuclear weapons production. In addition, the role of 
the federal government in many of these compensation programs has 
expanded over time. Most recently, legislative proposals have been 
introduced in the Senate and the House that would add asbestos to the 
list of substances for which federally administered compensation 
programs have been established. 

As Congress considers legislation to establish a compensation program 
for those injured by asbestos exposure, you asked us to provide you 
with information on four existing federal compensation programs: the 
Black Lung Program, the Vaccine Injury Compensation Program (VICP), the 
Radiation Exposure Compensation Program (RECP), and the Energy 
Employees Occupational Illness Compensation Program (EEOICP). As 
requested, our objectives were to (1) provide information on the design 
of the programs, including their purpose, financing, administration, 
benefits, and eligibility criteria; (2) describe the length of time it 
took to establish the programs, the costs of establishing and 
administering them, and the initial estimates and actual costs of 
benefits paid to date; and (3) provide information on the claims 
histories of the programs, including the number of claims, approval 
rates, and the length of time it has taken to finalize claims and 
compensate eligible claimants. On October 28, 2005, we briefed you on 
the results of our study. This report formally conveys the information 
we presented at that briefing (see app. I). 

To provide information on these programs, we reviewed previous GAO 
reports on these and other compensation programs;[Footnote 1] 
interviewed officials with the Departments of Labor (DOL), Justice 
(DOJ), and Health and Human Services (HHS), the Congressional Budget 
Office, and other experts about the start-up and ongoing administration 
of the programs; obtained data from the agencies on funding, costs, 
claims processing, number of claims, and approval rates; examined the 
relevant laws and regulations governing the programs; and reviewed 
studies and other publicly available information. 

We reviewed information on the four programs from their inception 
through the end of fiscal year 2004. We obtained initial estimates of 
the anticipated costs of benefits, the number of claims for the life of 
the programs, and the actual costs of benefits and claims from the date 
the programs were established through the end of fiscal year 2004. We 
also obtained information on the annual administrative costs for each 
program for fiscal year 2004. In addition, we obtained information on 
the total number of claims completed as of the end of fiscal year 2004 
and reviewed information on the time it has taken the agencies to 
finalize claims and compensate eligible claimants. We did not obtain 
cost or claim information on the portion of EEOICP initially 
administered by the Department of Energy (DOE) that was moved to DOL as 
of fiscal year 2005.[Footnote 2] We also did not consider the 
programmatic design of this portion of the program, except where noted. 
Although we did not independently assess the accuracy of the data 
obtained from the federal agencies, we determined the reliability of 
the data by interviewing knowledgeable agency officials regarding the 
completeness and accuracy of administrative data, reviewing related 
documentation, and obtaining assurances that the agencies conducted 
tests of the data for omissions and errors. We determined that the data 
were sufficiently reliable to meet the objectives of this engagement. 
Our work was conducted from June to October 2005 in accordance with 
generally accepted government auditing standards. 

In summary, we found that all four programs were designed to compensate 
individuals injured by exposure to harmful substances. However, their 
design, the agencies that administer them, their financing mechanisms, 
benefits paid, and eligibility criteria, including their standards of 
proof (the evidence claimants must provide to support their claims), 
differ significantly. For example, some programs, such as the Black 
Lung Program and EEOICP, were designed to compensate individuals for 
work-related injuries, while others, such as RECP and VICP, provide 
restitution to injured parties. Several federal agencies are 
responsible for the administration of the programs: DOL administers the 
Black Lung Program and EEOICP; DOJ administers the RECP program and 
shares administration of the VICP program with HHS and the Court of 
Federal Claims. Among the four programs, EEOICP and RECP are completely 
federally funded. The Black Lung Program is funded by a trust fund 
financed by an excise tax on coal, and VICP is funded by a trust fund 
financed by a per dose tax on each covered vaccine purchased. Benefits 
vary among the programs: They provide lump sum compensation and 
payments for lost wages, pain and suffering, medical and rehabilitation 
costs, and attorney's fees. Eligibility criteria among the programs 
vary widely. The Black Lung Program covers coal miners who show that 
they developed black lung disease and are totally disabled as a result 
of their employment in coal mines and their survivors; VICP covers 
individuals who show that they were injured by certain vaccines; RECP 
covers some workers in the uranium mining industry and others exposed 
to radiation during the government's atmospheric nuclear testing who 
developed certain diseases; and EEOICP covers workers in nuclear 
weapons facilities during specific time periods who developed specific 

All four programs were established within 2 years of their enacting 
legislation, and for some programs, benefits paid have exceeded the 
initial estimates. As specified in its enacting legislation, the Black 
Lung Program was effective upon enactment. Two of the programs--VICP 
and RECP--were established within 23 months and 18 months, 
respectively, of their enacting legislation. The portion of EEOICP 
administered by DOL was established within 9 months of its enacting 
legislation, and the portion initially administered by DOE was 
established within 23 months.[Footnote 3] Total benefits paid for the 
Black Lung Program and RECP have far exceeded initial estimates. For 
example, the initial estimate of benefits for the Black Lung Program 
developed in 1969 was about $3 billion, while actual benefits paid 
through 1976--when the program was initially to have ended--totaled 
over $4.5 billion; actual benefits paid through fiscal year 2004 have 
totaled over $41 billion. Actual costs have significantly exceeded the 
estimate for several reasons, including (1) the program was initially 
set up to end in 1976 when state workers' compensation programs were to 
have provided these benefits to coal miners and their dependents and 
(2) the program has been expanded several times since it was 
established in 1969, including several amendments that have increased 
benefits and added categories of claimants. In addition, although the 
costs of EEOICP benefits paid to date have been fairly close to the 
initial estimate, these costs are expected to rise substantially 
because of recent changes that were not anticipated at the time the 
estimate was developed--payments that were to have been made by state 
workers' compensation programs will now be paid by DOL. 

The number of claims filed and approval rates vary, but for all four 
programs, it has taken the agencies years to finalize some claims and 
compensate eligible claimants. The number of claims filed for three of 
the programs through the end of fiscal year 2004 exceeded the initial 
estimates (no estimates were available for VICP). Among the four 
programs, the number of claims filed ranged from 10,900 for VICP to 
960,800 for the Black Lung Program, and approval rates ranged from 31 
percent for VICP to 68 percent for RECP. As we previously reported, the 
agencies responsible for processing claims have, at various times, 
taken years to finalize some claims, resulting in some claimants 
waiting a long time to obtain compensation. Factors that affect the 
amount of time it takes the agencies to finalize claims include 
statutory and regulatory requirements for determining eligibility, 
changes in eligibility criteria that increase the volume of claims, the 
agency's level of experience in handling compensation claims, the 
availability of funding, factors outside the agencies' control such as 
incomplete applications being filed by claimants and claimants' 
difficulties in obtaining the evidence needed to meet the programs' 
standards of proof, and whether claims decisions can be appealed in the 

In conclusion, the federal role in all four programs has expanded 
significantly over time. All four have expanded to provide eligibility 
to additional categories of claimants, cover more medical conditions, 
or provide additional benefits. As might be expected, as the federal 
role for these four programs has grown, so have their costs. Beyond the 
costs associated with expanded eligibility, increasing medical costs 
and new research on exposure levels and medical conditions associated 
with that exposure that could lead to expanded eligibility may further 
increase program costs. The difficulty in estimating the actual cost of 
these programs may be due to the inherent difficulty of estimating the 
number of claimants and anticipating expansions of the programs. 
However, because these programs may expand significantly beyond the 
initial cost estimates, policymakers must carefully consider the cost 
and precedent-setting implications of establishing any new federal 
compensation programs, particularly in light of the current federal 
deficit. Finally, program design--including the extent to which 
programs allow claimants and payers to appeal claims decisions in the 
courts and the standards of proof for each program--can affect claims- 
processing time. Ultimately, these program design decisions reflect 
trade-offs between processing claims quickly and ensuring accuracy and 

We provided DOL, DOJ, and HHS with a draft of this report for review 
and incorporated their technical comments as appropriate. 

As arranged with your office, unless you publicly announce its contents 
earlier, we plan no further distribution of this report until 30 days 
after the date of the report. At that time, we will send copies of this 
report to the Attorney General, the Secretary of HHS, the Secretary of 
Labor, appropriate congressional committees, and other interested 
parties. It also will be available at no charge on GAO's Web site at 

If you have any questions about this report, please contact me at (202) 
512-9889 or at Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. Key contributors to this report are listed in 
appendix II. 

Signed by: 

Robert E. Robertson: 
Director, Education, Workforce, and Income Security Issues: 

List of Congressional Requesters: 

The Honorable John Conyers, Jr. 
Ranking Minority Member: 
Committee on Judiciary: 
House of Representatives: 

The Honorable William D. Delahunt: 
The Honorable Sheila Jackson Lee: 
The Honorable Zoe Lofgren: 
The Honorable Martin T. Meehan: 
The Honorable Jerrold Nadler: 
The Honorable Linda T. Sanchez: 
The Honorable Robert C. Scott: 
The Honorable Adam Smith: 
The Honorable Chris Van Hollen, Jr. 
The Honorable Maxine Waters: 
The Honorable Melvin L. Watt: 
The Honorable Anthony D. Weiner: 
The Honorable Robert Wexler: 
House of Representatives: 

[End of section] 

Appendix I: Briefing Slides: 

[See PDF for images] 

[End of slide presentation] 

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Robert A. Robertson (202) 512-9889: 

Staff Acknowledgments: 

Revae E. Moran, Assistant Director; Karen A. Brown, Analyst in Charge; 
Don D. Allison; David A. Eisentstadt; Jean L. McSween; Regina Santucci; 
Jeremy D. Sebest; and Roger J. Thomas made significant contributions to 
this report. 


[1] See the list of related GAO products at the end of appendix I. 

[2] GAO is currently reviewing DOE's costs and administration of this 
portion of EEOICP, but the results of this work will not be available 
until 2006. 

[3] One portion of EEOICP, Part B, has been administered by DOL since 
the inception of the program. Another portion, Part D, was initially 
administered by DOE. As of fiscal year 2005, that portion of the 
program was replaced with Part E, which will be administered by DOL. 
See appendix I for details. 

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