within the Department. It was completed some time early in 1977 by our Office of Internal Audit and Review. It raised a number of questions about the quality control of the FECA claims. I do not have the comparable statistics.

Mr. STEPHENS. Is that report the one that was dated October 20, 1977, which was performed by the Director of Audit Investigations? Mr. ELISBURG. That was probably the final version. I saw an earlier one in the spring.

Mr. STEPHENS. They make the statement in here-this is one of their findings: Inadequate evidence to support initial eligibility. Of the 243 disability and 42 death cases reviewed, 41 percent of the disability and 12 percent of the death claims did not contain sufficient documentation to support the statutory requirements necessary to accept the claims. Now, that would tend to corroborate the GAO report, would it not?

Mr. ELISBURG. I am not questioning the GAO report at all. I have only received that report Thursday. As far as this audit report is concerned, I think that is one of the bases upon which we have tried to tighten up our quality control and procedures, and lots of other things that we are doing.

Mr. STEPHENS. What, if any, steps have you taken in these 41 percent of these cases to review the files and obtain adequate medical evidence or shut off payments or take some redress?

Mr. ELISBURG. That was part of the overall periodic roll review. I would be glad to furnish the committee with whatever specifics I can as to individual cases.

Mr. STEPHENS. Could you furnish us with data on what you did when you found these deficient files? I would also like, if you can, for you to furnish data on what happened in cases that were uncovered by the GAO as to what steps you have taken to make sure the files are complete or shut off the payments.

Mr. ELISBURG. That may take some time, because we have to meet with GAO.

Mr. STEPHENS. I know, but I ask you, have you done anything now? If you have, it seems to me it should be easy to gather information.

Mr. ELISBURG. We have done a number of things through our accountability reviews, some of which we can furnish you. What I want to suggest is, we will be glad to give whatever information we can to the committee. It may be in aggregate form, or without the particular cases identified, in order to protect the rights of the individual claimants.

[The material referred to follows:]

ESA ACTIONS ON CASES IDENTIFIED BY GAO

We are in the process of updating actions taken on cases identified by the General Accounting Office after their review of a number of case files in our Jacksonville District Office. We will compile the results of the most recent actions taken and will provide the information to the committee as soon as it becomes available.

Mr. GAYDOS. I have one question I would like to ask. Under the internal setup that you have, who do the Regional Administrators report to; who are they responsible to?

Mr. ELISBURG. Me.

Mr. GAYDOS. You directly?

Mr. ELISBURG. Yes.

Mr. GAYDOS. If I would pick out, as an example, Mr. Hartman, and he had the responsibility of coordinating a program, do those Regional Administrators have anything to do with him?

Mr. ELISBURG. Lots.

Mr. GAYDOS. What is the association?

Mr. ELISBURG. Well, on most of the day-to-day operations the Assistant Regional Administrator or the Regional Administrators deal directly with Mr. Hartman. I try to deal and get involved in the broader policy questions, just as in the day-to-day operations, the wage and hour and so on, they would deal with the wage and hour people.

Mr. GAYDOS. If he were to make a determination, some policy determination, it comes through you?

Mr. ELISBURG. Yes.

Mr. GAYDOS. He does not have line authority, for instance, to tell that regional administrator to do something or not to do it? I want to know what your internal structure is.

Mr. ELISBURG. The official line of authority comes through methe actual operation on most things, Mr. Hartman. He deals directly with the Regional Administrators, and we deal with each other quite a bit.

Mr. GAYDOS. I am asking on behalf of the committee that you respond to any written interrogatories we may submit to you, if you could. We would appreciate it, rather than have you come back down again.

I want to thank you for the time you have given this morning, and also in preparation for your appearance. I want you to know that I will feel free to contact you if I think we have to, and the feeling should be mutual, in case you have information you think would be of some use to the committee.

Mr. ELISBURG. May I make one other observation, just a small point I would like to make for the record?

There was some discussion, I guess at the hearing here recently, about the number of cases of OWCP people filing claims on their own behalf, and the figure that came out in one of the reports reflected a total number of 156 cases. The implication was that is what we had last year. I would like to clarify for the record that the 156 cases were a cumulative total amounting from 1965 through 1977. That included both permanent disability, temporary disability, and medical charges, the bulk of which were medical payments my people made with no lost-time injuries, and that in fact in fiscal year 1977 there were no permanent disability cases. Mr. STEPHENS. This report, which has that 156 injuries in it, also lists-and this is on page 13, it lists several other agencies, including the Civil Aeronautics Board and so forth. Were those statistics from those agencies based from 1965 to the present?

Mr. ELISBURG. I am not certain. It was charge-back data. It was raw charge-back data, and when I furnish the information to the committee, I will furnish the comparative numbers.

Mr. STEPHENS. Could you make it for the same time frame? Mr. ELISBURG. Sure. Yes, that is what I would like to furnish. I just wanted to point out that we did not have 156 people go on compensation last year. We did not have any.

[The information referred to follows:]

FY 1977 Chargeback Data for Selected Agencies (FY 1961-1977)

g

Mr. GAYDOS. Let me close the hearing, Mr. Elisburg, with an observation on my part that I am glad that you end your testimony with a note of optimism, an affirmative consideration that something is going to be done, that you are in the process of making changes. Hopefully, they will be very materialistic and effective, and will make a substantial move forward to solve some of these problems. If not, we are going to have you back again, and we will try to do something else to stimulate you along those lines.

I want to congratulate you and your associates for a job well done, a good report, and I hope that the material that is requested will be made available. If counsel for the minority or Members have any questions, we will incorporate them in our request so that everybody shares it and there will be no controversy.

The hearings will stand recessed until the call of the Chair. [Material submitted for inclusion in the record follows:]

TESTIMONY OF J. JOSEPH VACCA, PRESIDENT, NATIONAL ASSOCIATION OF LETTER CARRIERS, AFL-CIO

Mr. Chairman and members of the subcommittee, the purpose of this proposed legislation is to amend Section 8118 of Title 5, United States Code, to provide for physical examinations with respect to claims for compensation for work injuries and to provide that continuation of pay under such Section shall not begin until the fourth day of disability. More specifically, with regard to the examinations, the immediate supervisor would be permitted, during the continuation of pay period (COP), to require the injured Federal employee to submit to an examination by a medical officer of the United States or by a physician designated or approved by the Supervisor for purposes of obtaining a second opinion concerning the employee's claim. The results thereof to be sent to the Secretary of Labor, who administers the Federal Employees' Compensation Act (FECA).

We must oppose this legislative proposal which attempts to cure some of the many problems of the compensation program by enactment of restrictive legislation. The 1974 Amendments to the FECA removed the "company" doctor concept from the Act and thus, followed the trend in State Workers' Compensation Programs to provide for the free choice of physician. By providing injured employees the right to the initial free choice of a physician, neither the Secretary of Labor nor the Federal Agencies lost their right to have so-called second examinations conducted by medical officers of the United States or physicians designated or approved by the Secretary. Under the provisions of 5 U.S.C. 8123, an employee may be required to submit to an examination as frequently and at the times and places as may be reasonably required. Instead of affecting good working relationships with OWCP for indicated second examinations, some Agencies, notedly the Postal Service, have reverted to the use of Fitness for Duty Examinations to contest requests for FECA compensation. The use of Fitness for Duty Examinations for such purpose must be seriously questioned-these examinations by Agency employed doctors who usually find against an employee, cause delay in payment, confusion and may lead to premature return to work when not fully recovered or forced retirement. Used in such a fashion, it is a form of harassment. The legislative proposal to permit Supervisors to require second examinations is more questionable than the present distorted use of Fitness for Duty Examinations. What qualifications does the average Supervisor have to make such determination? What background data is available that will enable the thousands and thousands of Federal Supervisors to decide who will be examined? How many of these examinations can a Supervisor authorize? The questions that can be raised are many as are the problems.

There are times, of course, that examinations should be conducted by a physician other than the one selected by the employee. We feel that this can now be properly accomplished without additional legislation. What appears to be needed is a proce dure whereby Agencies can bring to the Secretary's attention, questions and/or facts to justify a second examination. Any examination authorized by the Secretary will be fair with an appropriate and impartial physician, copies of pertinent medical reports made available or the entire case record furnished for the doctor's review. This will place the medical responsibility for these claims where it belongs-with the Secretary who administers the Law.

Much has been said about the need for a waiting period before COP commences. Those who want such days point to the various States, most or perhaps all of which have such days, preceding the payment of compensation. COP, of course, is not compensation. The FECA does have waiting days before compensation commences. To state that COP is salary for purposes of income tax then to say it is compensation for waiting day purposes is inconsistent. Further, the fact that the States have waiting days does not in and of itself mean that the Federal Government in attempting to be a model employer must continue to follow outmoded concepts which came into being with the advent of Workers' Compensation Laws shortly after the turn of this century. When the Congress enacted the 1974 Amendments to the FECA, it was well aware of the fact that State Laws had one or more waiting days. What the Congress was concerned with was the remedial nature of the FECA and not a concept which places a penalty on the injured worker merely because he/ she was unfortunate enough to be injured while working for his/her Government. The other reason frequently advanced to place waiting days at the beginning of COP is administrative costs for minor injuries. Thus, the injured Federal employee either works while injured or takes sick or annual leave to avoid a loss of pay. Leave was never intended to be used for injuries in the performance of duty.

One other argument set forth is the large increase in reported injuries because of the lack of waiting days. Why should this be questioned? Perhaps for the first time, there is reasonable accurate information available as to the number of injuries that are being sustained.

We do not, for one minute, doubt that there is some abuse and perhaps some fraud in this program. It should be located and eliminated; however, to penalize the vast majority of Federal employees for such small numbers of individuals or simply for cost factors by restricting their benefits or by adversial controls, cannot be condoned by this Union.

In presenting my prior testimony before this Committee on June 13, 1977, I mentioned the highly hazardous environment in which Postal employees work. The elimination of known and potential safety hazards is paramount to the health and physical well being of our Postal employees and this factor alone accounts for many of the reported injuries rather than waiting days or need for Supervisory authorized examinations.

I look forward to continued cooperation with this Subcommittee in obtaining solutions to problem areas in the Compensation Program, and I will be glad to answer any questions related to my testimony.

CONGRESS OF THE UNITED STATES,

HOUSE OF REPRESENTATIVES, Washington, D.C., March 2, 1978.

Hon. HARRY F. BYRD, Jr.,
Russell Senate Office Building,
Washington, D.C.

DEAR SENATOR BYRD: Thank you for your recent letter enclosing a copy of a letter which you received from Captain A. Kurzenhauser of the Norfolk Naval Shipyard. I am sure that Captain Kurzenhauser's remarks will be of interest to the Subcommittee membership as we continue our oversight activities in connection with the Federal Employees' Compensation Act. As you requested, this material will be incorporated in the official record of the Subcommittee's hearings on this subject. I appreciate your taking the time to let me have Captain Kurzenhauser's views. Sincerely,

Enclosure

JOSEPH M. GAYDOS, Chairman.

DEPARTMENT OF THE NAVY,

NORFOLK NAVAL SHIPYARD, Portsmouth, Va., January 16, 1978.

Hon. HARRY F. BYRD, Jr.,

U.S. Senate, Washington, D.C.

DEAR SENATOR BYRD: As you are aware, a former shipyard welder was recently convicted and sentenced for fraud in his claim for a hearing loss. I have enclosed two of the more pertinent articles from the Norfolk newspapers on this subject. Initially, the Office of Workers' Compensation Programs (OWCP) considered audiograms taken by this shipyard as nice-to-know information only. The results were devastating, as there was no way to legitimately controvert a hearing loss claim. Consequently, scheduled awards made by OWCP to claimants are so high and the