The Department of Energy does not have effective processes, procedures, and controls over the workers’ compensation program at the Hanford Site in Washington state, the DOE Office of Inspector General said Thursday.
Concerns ranged from inadequate communication with workers filing claims for illnesses and injuries to letters of credit issued without adequate controls to a third-party administrator for the workers’ compensation program, according to the IG audit report.
“We concluded that the department needs to dramatically increase its involvement in all aspects of the workers’ compensation process, especially to strengthen controls over documentation, claim determinations and financial controls,” the report said. “Additionally, efforts to improve communication, education and advocacy through the workers’ compensation process, as well as additional transparency about claim determinations, may serve to decrease conflict and reduce worker perceptions that claims are being mishandled and in a manner that they feel is unfair or harassing.”
The investigation was requested by Washington state’s two Democratic U.S. senators, Patty Murray and Maria Cantwell, in March 2017. The lawmakers said they heard accounts of workers’ compensation claims being dismissed on arbitrary grounds, tactics bordering on intimidation, and actions taken to discredit claims. Investigators with the Inspector General’s Office found no direct evidence to confirm or refute workers’ concerns about harassment and intimidation of those who filed compensation claims.
There are roughly 9,000 workers at Hanford, a former plutonium production complex now undergoing a massive environmental remediation program. They are employed by DOE, contractors, and preselected contractors.
The Energy Department is self-insured for Hanford workers’ compensation claims with the Washington state Department of Labor and Industries (L&I) and hired Lacey, Wash.-based Penser North America to administer the claims. Penser opens an average of 340 workers’ compensation claims a year from Hanford employees, the audit report said. The claims process appears to work well for simple cases, such as cuts or abrasions, with most of those claims approved, the IG found.
But complex claims, such as those related to exposure to chemical vapors associated with Hanford radioactive tank waste, led to worker frustration, the audit report said. “One difficulty associated with these claims is that it is not clear to what extent the health effects are a direct result of chemical vapors or other possible exposures or conditions,” according to the IG. “Department officials were aware of real problems in communication and trust with key stakeholders but did not take sufficient action to address these problems.”
Among the communication issues was inadequate information given to workers by Penser when the company recommended to L&I that claims be denied. Workers were often given generic reasons such as “no personal injury was sustained” without supporting facts or medical diagnoses, the report said. Penser collected information to provide to the state and recommended whether L&I should accept or deny the claim, but the state agency made the final decision.
Communication and trust issues in the workers’ compensation program were exacerbated by a process that was confusing for personnel filing claims, the report said: “The process involves many players, including the worker, the operating contractors, the union, health advocates, the occupational medical services, the Department, Penser, physicians and medical professions, attorneys and L&I.” Sometimes different doctors involved in cases would file conflicting medical opinions.
The inspector general evaluated some complex cases that involved hundreds of pages of records and found that Penser on occasion had failed to forward all information to the state. However, investigators did not try to determine if that affected the state’s decisions on the cases.
“This report should act as a wake-up call for the Department of Energy that improving safety and supporting workers at Hanford is a never-ending job,” Cantwell said in a prepared statement. “Over and over these investigations show that lack of communication and transparency leads to mistrust between workers and the Department.”
The audit also took DOE to task for inadequate financial oversight of the workers’ compensation program. Washington state failed to bill DOE for $21.8 million in pension payments the state made on the federal agency’s behalf from 2000 through 2016 to workers who were permanently and totally disabled. The Energy Department had the ability to detect the billing oversight, but failed to do so, the report said. It has reached a payment agreement with the state since the problem was discovered in 2016.
Most other payments in the program were made directly by Penser, including workers’ time loss checks, medical bills, and legal fees. It drew on a DOE letter of credit for the payments. But the audit found the department had inadequate oversight of the letter of credit funds. The Energy Department did not realize Penser was using a single bank account for DOE money and money from other contracts, the report said.
The Inspector General’s Office found several instances in which Penser had an excessive bank balance. For example, Penser received a $175,000 check for money recovered for DOE on April 26, 2017, and did not return all of the money to the department until March 8, 2018, after the audit identified the check as a concern. The audit also found Penser had nearly $10,000 from canceled checks, with the unused funds not returned to DOE.
The Energy Department generally agreed with audit findings and said it was reassuring that the large majority of claims appeared to be managed, processed, and paid without raising any concerns. The agency has hired an independent auditor to complete an audit of the entire Penser contract, including a reconciliation of the accounts used for claims processing. It also is partnering with L&I to provide support of additional claims oversight. To improve communication, it opened the Hanford Workforce Engagement Center in April to help Hanford personnel navigate the claims process. Murray and Cantwell required the center be opened in the fiscal 2018 appropriations bill.
