BEFORE THE

SUBCOMMITTEE ON WORKFORCE PROTECTIONS

OF THE

COMMITTEE ON EDUCATION AND

THE WORKFORCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

HEARING HELD IN WASHINGTON, DC, OCTOBER 3, 2000

Printed for the use of the Committee on Education

and the Workforce

Table of Contents *

OPENING STATEMENT OF CHAIRMAN CASS BALLENGER, SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES *

OPENING STATEMENT OF THE RANKING MINORITY MEMBER, MAJOR R. OWENS, SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES *

STATEMENT OF MICHAEL BROSTEK, DIRECTOR, TAX ADMINISTRATION AND JUSTICE, GENERAL ACCOUNTING OFFICE, WASHINGTON, D.C. *

STATEMENT OF PATRICIA A. DALTON, ACTING INSPECTOR GENERAL, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF LABOR, WASHINGTON D.C. *

STATEMENT OF SHELBY HALLMARK, ACTING DIRECTOR OF THE OFFICE OF WORKERS' COMPENSATION PROGRAMS, EMPLOYMENT STANDARDS ADMINISTRATION, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C. *

APPENDIX A - WRITTEN OPENING STATEMENT OF CHAIRMAN CASS BALLENGER, SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES *

APPENDIX B - WRITTEN OPENING STATEMENT OF THE RANKING MINORITY MEMBER, MAJOR R. OWENS, SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES *

APPENDIX C - WRITTEN STATEMENT BY CHARLOTTE FLOWERS, PRESIDENT OF LOCAL 1945 OF THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, BYNUM, ALABAMA *

APPENDIX D - STATEMENT OF MICHAEL BROSTEK, DIRECTOR, TAX ADMINISTRATION AND JUSTICE, GENERAL ACCOUNTING OFFICE, WASHINGTON, D.C. *

APPENDIX E - STATEMENT OF PATRICIA A. DALTON, ACTING INSPECTOR GENERAL, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF LABOR, WASHINGTON D.C. *

HEARING ON "INJURED FEDERAL WORKERS ON HOLD:

CUSTOMER COMMUNICATIONS AT DOL's

The Subcommittee met, pursuant to call, at 10 a.m., in Room 2175 Rayburn House Office Building, Honorable Cass Ballenger, Chairman of the Subcommittee presiding.

Present: Representatives Ballenger, Barrett, Owens, Woolsey, and Sanchez.

Staff Present: Victoria A. Lipnic, Professional Staff Member; Molly M. Salmi, Professional Staff Member; Robert Borden, Professional Staff Member; Heather Oellermann, Staff Assistant; Rob Green, Workforce Policy Coordinator; Peter Gunas, Workforce Policy Counsel; Patrick Lyden, Professional Staff Member; Deborah Samantar, Office Manager; Brian Compagnone, Minority Staff Assistant; and Peter Rutledge, Minority Senior Legislative Associate.

Chairman Ballenger. A quorum being present, the Subcommittee on Workforce Protections will come to order.

The Subcommittee is meeting today to hear the testimony on the Injured Federal Workers on Hold: Customer Communications at the Department of Labor's Office of Workman's Compensation Programs.

Under rule 12(b) of the committee rules, any oral opening statement at the hearings is limited to the Chairman and the ranking minority member. This will allow us to hear from our witnesses sooner and help members to keep their schedules. Therefore, if other members have statements, they can be included in the hearing record.

Without objection, the record will be held open for 14 days so that all statements, testimonies and other material referenced during the hearing will be inserted in the hearing record.

Chairman Ballenger. The Subcommittee on Workforce Protections is meeting today to review the federal employees compensation program. The focus of this hearing will be on the General Accounting Office's recent review of how the Department of Labor's Office of Workers' Compensation Programs communicates with injured Federal workers, agencies and others.

The GAO conducted this review at my request. The federal employees compensation program covers nearly 3 million civilian Federal employees, providing compensation and benefits to individuals who sustain a work-related injury or illness in the performance of their duties.

The Office of Workers' Compensation Programs, otherwise known as OWCP, plays a very important function in administering this program, providing benefits and also medical services to injured federal workers and assisting in their return to productive work at the earliest possible date.

While this Subcommittee has had other hearings to review the FECA (Federal Employees Compensation Act) program, this is the first hearing to examine how OWCP is performing in meeting and assessing their own objective of addressing customer service shortfalls.

Over the years, we have heard numerous complaints from claimants, agencies and Congressional offices about the difficulty in communicating with the OWCP. In some situations, claimants have had difficulty in contacting OWCP and getting information in a timely manner. And so the claimants must rely on a Congressional caseworker to help facilitate communication.

Just this past week, my office was contacted by a caseworker from Congressman LaFalce's district office on behalf of Judith Wiltsie, one of his constituents. Mrs. Wiltsie repeatedly made long distance phone calls in order to contact the New York City OWCP office regarding her claim. When she calls, she is typically transferred to voice mail because no one is available to take her call. Frequently, the voice mailbox is full, and she is unable even to leave a message, and when she is fortunate enough to reach a person, she is often asked to provide additional information. Then when she calls back to follow up with her claims examiner, she is told that that person is no longer her examiner; and she is referred to a new examiner and must begin the process all over again.

Now, as a businessman, I know that there will always be some unhappy customers. However, I can say that the call this week from Congressman LaFalce's office is not an isolated incident.

I fully expect to hear today that many of these problems are because the office has too few staff. Let me just point out, however, that responsiveness and courtesy to customers is fundamental to how one does business. There is a basic difference between how many people you have doing the work and simply how you do business.

I know that the Office of the Inspector General has also identified key problems with OWCP's administration of the FECA program. The Inspector General found that these problems, in turn, negatively impact OWCP's ability to provide sound information about the quality of their customer service and to make improvements in the program.

The Inspector General has already made a number of recommendations to the OWCP to improve the program and the customer service, and it is my understanding that OWCP has been receptive to those recommendations and has implemented the changes that were recommended.

I would like to thank all of the witnesses for appearing today, and I look forward to hearing about the problems with OWCP's customer communications and about specific recommendations for improvement or changes that can help resolve some of these problems.

Customers of the FECA program should not be adversely impacted by technical or other issues that may limit OWCP's ability to communicate in a timely manner with claimants, agencies and others.

Now Major Owens has an opening statement.

WRITTEN OPENING STATEMENT OF CHAIRMAN CASS BALLENGER, SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES – SEE APPENDIX A

Mr. Owens. Mr. Chairman, I join you in welcoming today's distinguished witnesses.

Particularly over the last 8 years, there has been a considerable amount of attention focused on the Federal Employees' Compensation Act and on the Office of Workers' Compensation Programs by the Inspector General's office, by the GAO, by the administration and by Congress. I believe that substantial improvements have been made in the program as a result.

OWCP is to be commended for improving the speed with which it processes cases and for emphasizing the importance of rehabilitation. It is vital that we remember that the primary purpose of this agency is to provide that injured Federal workers receive the benefits to which they are entitled. I think Mr. Hallmark has a firm grip on the agency's mission, and I commend him for that.

While there have been substantial improvements, as is clear from GAO's study, there are things that can be done better. I think that it is clear that the agency should do a better job on measuring customer satisfaction. Since agency performance depends on the agency's performance measures, this is not an esoteric issue, but is one that is intrinsic to the agency's ability to improve.

However, measuring customer satisfaction is not the primary mission of the OWCP. I got the distinct impression from the GAO's report that a number of regional directors were concerned that given their limited resources, improvements in measuring customer satisfaction may come at a cost to the agency's primary task, the timely and accurate processing of claims.

The questions that I would ask all of the panel members to try to address then is, can OWCP make the necessary improvements, given its current resources? Can the kinds of performance measures used by Social Security be implemented at OWCP without detracting from the ability of regional offices to handle claims promptly and accurately?

Until the front-line employees at OWCP can be convinced that the performance measures will enhance their ability to serve their clients, rather than detract from that ability, it will be very difficult to effectively implement any improved performance measures. If the results of those measures are simply to prove to those employees what they already suspect, that because of the time spent measuring customer satisfaction they are doing a poorer job of processing claims, it will be impossible to sell the performance measures to workers who must implement them and dubious even to attempt to do so.

This, then, is the dilemma that the GAO study raises in my mind, and I am most interested in how each of the panelists will address it.

Again, I want to thank all of you for being here and I look forward to your testimony.

WRITTEN OPENING STATEMENT OF THE RANKING MINORITY MEMBER, MAJOR R. OWENS, SUBCOMMITTEE ON WORKFORCE PROTECTIONS, COMMITTEE ON EDUCATION AND THE WORKFORCE, U.S. HOUSE OF REPRESENTATIVES- SEE APPENDIX B

Mr. Chairman, I would like unanimous consent to enter into the record a letter from Charlotte Flowers, the President of Local 1945 of the American Federation of Government Employees.

Chairman Ballenger. Without objection.

WRITTEN STATEMENT BY CHARLOTTE FLOWERS, PRESIDENT OF LOCAL 1945 OF THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, BYNUM, ALABAMA- SEE APPENDIX C

Chairman Ballenger. Now I would like to introduce our panel of witnesses: first, Mr. Michael Brostek, General Accounting Office; second, Ms. Patricia Dalton, Office of the Inspector General; and third, Mr. Shelby Hallmark, U.S. Department of Labor.

Let me remind the witnesses that under our committee rules they must limit their oral statements to 5 minutes, but their entire written statements will appear in the record. We will also allow the entire panel to testify before questioning the witnesses.

With that said, Mr. Brostek, you may begin your testimony.

Mr. Brostek. Mr. Chairman and members of the Subcommittee.

Chairman Ballenger. Could you pull that a little closer?

Mr. Brostek. Yes, sir.

Chairman Ballenger. Some of us have weak ears.

Mr. Brostek. Is that working okay now?

Chairman Ballenger. That is fine.

Mr. Brostek. Thank you for the opportunity to testify on how the Office of Workers' Compensation Programs, or OWCP, communicates with injured workers, employing agencies and medical service providers. I will briefly summarize my statement.

Chairman Ballenger. Pull it up just a little closer.

Mr. Brostek. A little more?

Okay. How is that now?

Chairman Ballenger. That is fine.

Mr. Brostek. Okay.

High-performing customer service organizations work to provide uniform levels of service to all of their customers. They set challenging goals to provide accurate and timely service, and they collect reliable information to determine how well they are providing services. Periodically, they survey their customers and employees to determine how well services are being provided and to obtain ideas for further service improvements.

OWCP has taken a number of steps to improve its telephone and written communications. Nevertheless, OWCP provided widely varying levels of service to those attempting to reach OWCP by phone, as you suggested, Mr. Chairman. It did not set goals for some important areas of telephone communications and its telephone and written communication goals were sometimes less exacting than those of high-performing organizations. It did not collect timely and credible performance data in many cases, and it did not adequately survey all of its customers and its employees.

Turning first to OWCP's telephone service levels, we placed calls to the 12 district offices to determine how often we could get through to the OWCP phone system. As the figure on the left shows, we were unable to get through over half the time to the Jacksonville office, about 39 percent of the time for San Francisco, and nearly 30 percent of the time in Dallas and Washington, D.C. We were unable to get through when we received a busy signal; no answer after the phone rang for a minute, or about 15 times; or when we received a message that the number we dialed was invalid.

We were much more successful in other offices, getting through every single time in Boston and in all but 2 percent of our calls to the Seattle district office.

We also found considerable variation in trying to reach an OWCP representative, an individual to talk to. As the figure on the right shows, for eight of the twelve district offices, we were unable to reach an individual on 50 percent or more of our calls. We were unable to reach someone 97 percent of the time in Jacksonville.

We were most successful in Cleveland, where only 13 percent of our calls failed to reach an OWCP representative.

When we checked whether the information in the OWCP automated system on billings and payment amounts and other items was accurate, we did have a much better result. The information was accurate 90 percent or more of the time for 11 of the 12 district offices.

Superior customer service results from striving to achieve challenging customer service goals. OWCP has set goals, but not for certain aspects of service related to our calls. OWCP has not set goals for the percent of time that callers should be able to access the telephone system, the percent of callers that should be able to reach a customer service representative or the percent of callers whose inquiries would be resolved on their first call to OWCP.

Some of the goals that OWCP had set for itself also did not appear to be exacting. For example, OWCP has a goal of returning 90 percent of calls that are not related to medical authorizations within 3 days of the call. This does not seem as challenging, for instance, as the administration-recommended goals that 98 percent of callers each reach a representative when they call and that 85 percent of their inquiries be resolved during that call.

Regardless of how challenging goals are, using them to manage customer service requires reliable performance measurements. OWCP has been gathering performance data and using it to improve its customer service operations. In several cases, however, we found that the performance data collected by OWCP districts was of questionable reliability, generally because sampling plans were not adequate or were not followed.

Further, customer service goals should be targeted to meet valid customer service needs. Such needs are identified by routinely and frequently surveying customers. OWCP does not routinely survey Federal agencies or medical service providers, two of its sets of customers; and its surveys of injured workers does not appear to be frequent enough to ensure that the workers can provide meaningful feedback on their interactions with OWCP staff.

In conclusion, OWCP's customer service often fell short of practices that are used by model service organizations or recommended by the administration. To improve its service, we believe OWCP needs to establish goals in important areas of telephone and written communications, to collect credible performance data, including more thorough surveys of its customers, and use the performance and survey data to identify areas needing improvement and to develop strategies for achieving those improvements.

This concludes my statement. I will be pleased to answer questions.

Chairman Ballenger. Thank you, Mr. Brostek.

STATEMENT OF MICHAEL BROSTEK, DIRECTOR, TAX ADMINISTRATION AND JUSTICE, GENERAL ACCOUNTING OFFICE, WASHINGTON, D.C. – SEE APPENDIX D

Chairman Ballenger. Ms. Dalton, you may begin.

Ms. Dalton. Good morning, Mr. Chairman and members of the committee. Thank you for inviting the Office of Inspector General here this morning to testify on our work in the Federal Employees' Compensation Act, and particularly our work in the customer service arena. I am here in my capacity as Acting Inspector General, and the views of the Inspector General's Office may not necessarily represent those of the Department of Labor.

Over the last 2 decades, the Office of Inspector General has made it a priority to effect positive changes and reduce the vulnerabilities in the FECA program. Our audits, evaluations and investigations have disclosed weaknesses that can lead to inefficiencies, ineffectiveness or loss of Federal funds. I would note that the Office of Workers' Compensation Programs has generally been very responsive to our recommendations over the years.

I would like to summarize very briefly some of our efforts related to customer service and program integrity, which I have detailed in my full statement. That work includes a cross-match between FECA and Social Security wage information that revealed potential claimant fraud and overpayments; coordinating a review of 13 Inspectors General that found employing Federal agencies generally needing to improve the management of their workers' compensation programs; a review of OWCP's customer service survey, which has led to changes in the way that OWCP handles the survey process; an analysis of the timeliness of claimant reimbursement of out-of-pocket medical expenses and the authorizations for surgical requests; an audit of OWCP's annual financial statements, which noted that FECA does not have policies and procedures in place to ensure that documents are requested and received on a timely basis to ensure continuing eligibility for benefits; an audit that analyzed improper medical provider billings, which revealed that millions of dollars are being lost annually because of improper or abusive medical provider billings.

Finally, we recently issued an audit on the implementation of a model safety and health program for the Department's Job Corps centers. I mention this audit because the start of any good workers' compensation program is prevention through an effective safety and health program.

Mr. Chairman, we believe that central to the success of any compensation program is the need to ensure that the appropriate amount of benefits be given to the appropriate people at the appropriate time. Therefore, we have also maintained a significant investigative presence in the FECA program. Over the past 5 years, we have

conducted many investigations into FECA claimants and medical providers that resulted in 231 indictments, 203 convictions and over $84 million in fines, restitutions and recoveries, and the like.

Mr. Chairman, even though OWCP has implemented measures to increase efficiency and effectiveness of the FECA program, there are still issues that need to be addressed. While some are administrative in nature and can be resolved by OWCP, there are other solutions that we believe are legislative and budgetary in nature. Among the legislative recommendations that the Inspector General's Office has made are the need to change the continuation of pay period; establish a retirement age for beneficiaries; add a wage-reporting requirement for totally disabled recipients; and verify employment information by using the new hire or Social Security databases.

In conclusion, Mr. Chairman, our work involving FECA has served to help the programs to be more effective and to work more efficiently. As demonstrated by the findings and recommendations, our efforts have focused on helping to improve service provided to claimants, while ensuring the integrity of the program.

This concludes my written statement and I would be happy to answer any questions.

Chairman Ballenger. Thank you, Ms. Dalton.

STATEMENT OF PATRICIA A. DALTON, ACTING INSPECTOR GENERAL, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF LABOR, WASHINGTON D.C.- APPENDIX E

Mr. Hallmark.

Mr. Hallmark. Thank you, Mr. Chairman and members of the subcommittee. It is an honor to appear before you again and to represent the 900-plus employees who work very hard every day to make the FECA program work for their fellow Federal workers.

Let me say at the outset that OWCP acknowledges that we have a problem with responding to inquiries, and we take the concerns of our customers about accessibility very seriously. But I believe it is very important to view those legitimate concerns in the context of our real progress in a number of customer service areas, and I would like to point some of those out.

First, we do, as Representative Owens indicated, a very good job of taking care of basic adjudication and timeliness of payment on new cases. We got control of our backlog in this area during the 1980s and early 1990s, and since then we have continued to improve steadily.

For example, since 1996, we have reduced the average time it takes to process an occupational disease case, which is fairly complicated, to about 75 days. That is almost a

month less than it took in 1996. Simpler "traumatic" cases get adjudicated in a matter of days typically, and most start getting medical benefits within days after we receive the notice of injury.

Since 1995, we have pursued a very broad strategic plan to widen the area of our customer service goals, while maintaining those bedrock timeliness issues I just mentioned. We now help 10 times as many injured workers return to the job as we did 10 years ago, and that, we think, is a very important accomplishment. We are also leading the Federal agencies in improving their services in their programs, including timeliness of their submission of claims, which is critical to our being able to serve. That has improved by almost 100 percent since 1996.

And we are proud of our co-leadership with OSHA on the Federal Worker 2000 initiative that the President announced in 1999. We have also established very challenging GPRA goals, which are responsible for, among other things, hundreds of millions of dollars of cost avoidance.

We have achieved all of those results with essentially the same staff that we had in 1995. I know, Mr. Chairman, you are anticipating my remarks in this regard, but they are very critical, and I hope that it makes sense before I finish.

Our administrative budget in the FECA program is about 5 percent of the total cost of this program. If you compare us with other workers' compensation schemes, that is a very low ratio, and we believe that is a central reason why we struggle in some areas.

We have launched a number of automation efforts to try to address our resource issues, and I would be glad to talk about those at great length, but in fact we are going to be in the process of transforming our program over the next 2 years as we move to electronic rather than paper files; as we receive claims and bills electronically in the first place; as we restructure our entire support system to make it much more efficient.

This is going to make a major difference in the outcomes of our process, and I see that someone, in copying my notes here, has lost a page for me. That is okay.

I am particularly proud of all the activities that I have just mentioned that have improved the way this program is delivered, and I think we are on the road to making much bigger improvements as time goes on. But as I said, we are struggling, and we have struggled with respect to the issue of responding to public inquiries. We get millions of letters. We get millions of calls every year and now we receive tens of thousands of faxes and e-mails as well. Expectations are rising in this area, and it is extremely labor intensive. We have not been able to keep up with that growing demand that is clear.

In 1999, the gap between those expectations and our delivery of services became very clear to us, and we set out to rethink and retool our entire communications process. We called this our "Communications Redesign," and we are very deeply involved in it at this time. It is described in great detail in my statement, and I would point you to those comments; but let me just say here that our goal is not to make marginal improvements in the way we do this business, but to make breakthroughs to the service levels that people really deserve in this program.

The GAO study refers to world-class organizations and how they handle telephones. We need some of those strategies in the FECA program, the most obvious being a national 800 number call center. For lack of resources, we frankly don't have that kind of a system, but in doing our Communications Redesign, we discovered that we really need it and we put it into our 2001 budget request which is pending before Congress. Unfortunately, to date, that has not been successful. Without those resources, we will continue to struggle in this area.

To put this into some kind of context, we have essentially no staff who spend all of their time answering the phones. Our folks carry a very heavy claims load, and as Mr. Owens indicated, there is a great balancing, painful balancing act at times, in terms of devoting time to answering the phone versus doing that fundamental work that gets checks out the door.

For example, our Jacksonville office, which was cited earlier, started out a phone bank a few years ago with 24 or more staff rotated on an ongoing basis into a phone bank. They found they couldn't keep that many people there and still maintain the workload and keep the cases being processed out the door. So they have cut it back to 8 staff on a regular basis. That results in the busy signals that you see on the chart. By contrast, the Social Security Administration, which GAO also reviewed, employs thousands of individuals who are dedicated to this job and other thousands who are supplementary to it, and a nationwide automated system that shifts calls around as needed when there is peak workload.

Likewise, the Ohio workers' comp system that they reviewed has 150 people working in a call center that takes in phone calls essentially similar to FECA's level of response.

By comparison, our 2001 budget request, we think, is modest.

We are not sitting on our hands in this area. We have a number of other initiatives that are described in my statement to improve our service, and even if we don't get the budget request, we will continue to work very hard in this area. But world class phone service will elude us without these additional resources.

With that said, if I may sum up here, communications in OWCP is not a totally bleak picture by any means. My statement includes a number of recent examples of what I consider to be truly excellent service in the case of plane crashes; in the case of medical authorizations that we respond to by e-mail; in the case of an individual person's injuries that we have addressed very rapidly. That is the kind of proactive service we want to provide, not just in individual cases, but in all the cases that are before us; and with your help with regard to our resource request, we believe we will be able to do that.

I will be glad to answer questions. Thank you.

Chairman Ballenger. Thank you, sir.

STATEMENT OF SHELBY HALLMARK, ACTING DIRECTOR OF THE OFFICE OF WORKERS' COMPENSATION PROGRAMS, EMPLOYMENT STANDARDS ADMINISTRATION, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C.– APPENDIX F

Chairman Ballenger. Mr. Hallmark, let me just say, it sounds like you are making a real effort at maybe overcoming some of the difficulties that you have run into. As a businessman myself, let me just say that the government itself is a service business, and that is, all you have got to do is provide service. I know, at home, if I ran into a supplier of insurance services or workers' comp services that didn't meet what I considered a proper demand and so forth, the best thing I could do is, you know, just fire them and go on to somebody else.

Now, I realize you have a little bit of difficulty there that maybe those of us in the private sector don't have; but I was just wondering, Mr. Brostek, your testimony indicates that OWCP follows fewer of the best practices for customer service than the other organizations that you have surveyed.

Should OWCP provide these services, do you think these practices, I mean? Excuse me.

Mr. Brostek. I think every organization has to determine which practices make the most sense for itself. Our point in making that comparison was to show that there are fewer of those practices that are employed by OWCP than these other model organizations.

In some cases, those other model organizations, as Mr. Hallmark has suggested, have centralized call centers, and some of those practices relate in part to being able to have a centralized call center. However, in many cases, even where the best practice relates to a centralized call center, some of the activities that are associated with that practice really are not dependent on having a centralized call center, for instance, keeping track of the type of calls you receive, the type of problems that are raised, so that you can take corrective actions to try to head those calls off before they even arrive.

So we think that it is important for OWCP to look at all of those best practices and make a judgment about which ones best apply to them.

Chairman Ballenger. Right.

One of the things I was trying to think of as Mr. Hallmark was talking and as all three of you spoke, your responsibility and your reaction to the public and so forth is pretty much like ours back home in our congressional offices. I don't know how you divide us up, but there are 435 of us. I think each one of us represents about 600,000. I don't know how that compares with your payroll and the 3 million that you serve, but I would say that we have got someone at certain times of the year, our Social Security disability just goes out the window and our veterans' benefits go out the window, and if you are also in charge of taking care of all the immigrants in your whole area and you live in North Carolina where we have the fastest growing number of immigrants of anybody in the United States, not as many as California, but the basic idea is, I think, what we are doing in our Congressional offices is exactly the same thing you do except in a much broader field.

And, in fact, we have one that specializes in Social Security, one person, and one in veterans' benefits and one in immigration law and so forth; and to some extent, very much what we have been trying to do is what Mr. Brostek is talking about. And I don't know, I guess probably Congress doesn't limit its funds to itself as much as we do limit the funds to you. We are generous that way, and maybe the ability to do that is a little bit more important.

Generally speaking, you must have--I mean, I don't know whether to ask Mr. Brostek or Ms. Dalton or Mr. Hallmark, but there are bound to be studies, private studies, studies of private services, that compare with this, and I am sure, Mr. Brostek that the studies you were using, were private studies?

Mr. Brostek. Yes. We looked in large part at a fairly comprehensive study that was done by the administration, the National Performance Review, where they went out and checked how some of the leading customer service organizations in the country achieved high levels of customer service.

Chairman Ballenger. Could you see in that specific area that more people or more equipment or more money than what Mr. Hallmark has to work with would have made a great deal of difference?

Mr. Brostek. Well, we didn't do a review of whether the funding for OWCP was sufficient. It is, I think, true that when you look at very well-performing customer service organizations, they have made fairly extensive investments in technology and other support services that enable those who are answering the phone to be more efficient. And one of the things that OWCP is working on that I think should help in this regard is, they are beginning to image into the computer system all the paperwork.

They are beginning this year in all of their offices to start doing that, so that later this year and next year when a call comes in, a customer service representative will be able to review the data on screen without fumbling through files and all; and there is a higher probability that they will be able to answer the questions that are asked when those calls come in.

Chairman Ballenger. Ms. Woolsey.

Ms. Woolsey. Thank you, Mr. Chairman.

Unless you correct me and tell me differently, I think we can all assume that there is not one employee at the OWCP that benefits from poor customer service. I mean, they get nothing out of not serving the public. So I think what we are here to do is figure out what it is the employees in the regional offices need to work smarter, not harder. We can't just be yelling at all of these people, "Do a better job," and then not provide them with the equipment that they need and the training that they need.

So my question to you, Mr. Brostek, is, in your analysis, did you look at the difference between Seattle and, say, San Francisco, and which of those offices had the beginnings or some of or all of the new communications equipment and the training?

Mr. Brostek. We didn't do a thorough comparison of the practices at the various offices we are engaging in order to provide good customer service, but one of the things that we did observe in our conversations with various officials in the district offices is that they didn't feel that they had a good idea of what their compatriots were doing around the country that was successful. They didn't believe that within OWCP there was sufficient sharing of the best practices that they have discovered in various district offices.

Ms. Woolsey. Well, thank you.

Then, Ms. Dalton, from your perspective as an umbrella, what are we doing to make sure that we know which offices need; are we funding our budget so that it is even possible to provide the best practices training and equipment?

Ms. Dalton. Certainly, I think--.

Ms. Woolsey. I can't hear you.

Ms. Dalton. Certainly, as was said earlier, there is a need for certain investments in equipment and computer systems; and some of that is going on. Mr. Brostek mentioned the imaging system that is going into the Jacksonville office, I think and several of the other offices, which my office in fact is looking at how that is happening, and that should benefit.

However, there are differences among the district offices, and in some of our work, we have noted that. And some of that is related to case load; some, the quality of management, quality of staff; differences in operating practices. I don't see any reason that that can't be analyzed and looked at with the differences that are involved between the district offices to see are there things that can be exported to other offices to make the whole program work better.

I do think some of that is being done now; though, you know, I think just good management practices, you need to continue to do that because an idea from one district office, if it works, needs to be moved to other district offices to see if it does work.

Mr. Hallmark. If I could contribute to that colloquy.

Ms. Woolsey. Yes, go ahead.

Mr. Hallmark. The Communications Redesign effort that I described briefly this morning, and is described in more detail in my statement, goes exactly to that point. One of the issues that we want to do is ensure that we share best practices.

The first thing we did was go and look at Social Security and Blue Cross and other entities that addressed these same kinds of problems; and they also want to share those best practices within our district offices. To that end, we have created a union-management partnership team which met last week, as a matter of fact, for the first time which will be setting up a whole structure of teams in every one of our offices to get at how we can improve our performance right now with the resources we have available to us, how we can set goals and what our standards for performance ought to be and sharing those ideas and improvements and best practices, as I said, across our entire system.

So we are engaged very deeply, and we are working very hard right now on exactly the point you are raising. But as I said in my testimony, the key that we think has to be unlocked here is the whole question of removing from our district offices a lot of these calls that basically are very difficult for them to handle, and handling them in an efficient national call center, like those that some of these high-performing organizations have.

And without that, I think we are going to continue to struggle.

Ms. Woolsey. Well, I appreciate that, because there are some agencies here in this country that if they have a difficult case, they say, call your Congressional office.

They do.

Chairman Ballenger. I know.

Ms. Woolsey. I mean, it is just impossible.

So what I hear you saying, that it is not because we have got poor employees with bad attitudes; it is that we have a good workforce that needs to be supported.

Best practices, best communications equipment, very important training ongoing are just as important; and training also, from the managers down.

Mr. Hallmark. If I can quickly respond to that, part of the Communications Redesign is focused immediately on training for telephone responses; and we have a contract we recently let, and that process is going forward, as well as training on written communications, both of which we think need to be much more focused for our staff to be able to do the work they need to do.

Ms. Woolsey. Well, all right. Don't be strangers to us because as it is going along, we need to know how it is working and where we need help and support, so that it doesn't end up in some echo-y cavern with, you know, we have spent all this money and it wasn't successful, if we could do something earlier on and make it work.

Thank you.

Chairman Ballenger. Mr. Barrett.

Mr. Barrett. Thank you, Mr. Chairman. I appreciate the testimony of our witnesses today. I have read a brief summary of the GAO report; and I would happen to agree with you, Mr. Chairman, coming from the private sector. If some of those problems were inherent in my operation, I think some changes would have been made very quickly.

But be that as it may, probably, Mr. Brostek, maybe, Ms. Dalton, in your investigations about the problems with communications, do you have any reason to believe that the people that were unable to make the contact with the district office might not have filed a claim because of their not being able to contact someone very quickly?

Mr. Brostek. That is not something that we had covered in our review, so I can't really comment on it.

Mr. Barrett. Ms. Dalton?

Ms. Dalton. I haven't seen that in any of our work. And one thing I would note too is that the initial claim filing is to be done through the agency that the employee works for, and the agency is then responsible for getting that claim information to OWCP.

Generally, when a claimant is inquiring, it is about the status of their claim; the claim should already be at the Office of Workers' Compensation Programs.

Mr. Barrett. Well, reading the summary and listening to your testimony, I just can't understand, I guess, why it is so difficult to answer telephones.

In your opinions, is it a lack of staff? Is it a problem with an outdated telephone system? Is it hours?

I think, Mr. Brostek, you referred to people being on duty 7 hours a day, one of you did?

Mr. Brostek. Yes, in one office, 4-1/2 hours.

Mr. Barrett. Philadelphia is different? New York is different?

Mr. Brostek. Yes.

Mr. Barrett. I guess the second part of that question would be, why? I mean, what is the problem basically?

Mr. Brostek. Well, there is--.

Mr. Barrett. Staff? Money? Excuse me.

Mr. Brostek. I think there are a number of different problems. In some cases, we were unable to get through due to phone system problems. For instance, some of the calls, we were getting a message that it was an invalid phone number. That actually, I think, is a telephone company problem and not an OWCP problem.

In some cases, I think it is that we need better technology so that people can handle the volume of calls that are coming through. When we were in the district offices observing operations, it did not appear to us that people were just sitting around with nothing to do. I think they were quite busy trying to adjudicate cases while at the same time handling the incoming phone calls. Whether or not there is a need for additional staff, I think, might depend a little bit on how much efficiency is gained through some of these investments that are currently being made in improved automated systems.

Mr. Hallmark. Mr. Barrett, if I could respond.

Mr. Barrett. Yes, Mr. Hallmark, briefly.

Mr. Hallmark. Briefly, I think the answer to your question is probably all of the above.

We do have equipment problems. Part of the request that I described this morning would be to upgrade and replace our communications switches and the basic communications hardware that we have in each of our district offices, where that is not up-to-date. That would address some of the problems that we have now and also allow us to do reporting that would get some of the information that IG and GAO have rightly said we need to have to be able to improve our performance over time. So that is part of the problem.

Another part of the problem is that, as I said earlier, we have a need to separate, I think, some of these calls to a national call center; and that does require a start-up investment.

And I guess finally I would say that we have a group of people who work very hard to answer these phones, but the workload of the program as a whole is very, very heavy. You mentioned the private sector and that these kinds of problems we solve in the private sector. One of the difficulties we have in government is that our funding is in pockets that are not fungible.

For example, we have an administrative discretionary budget which is very tightly controlled, as you know; and as I indicated earlier, it is a relatively thin amount of money to administer this kind of a program vis-à-vis the $2 billion in benefit outlays. I think in the private sector, there is an understanding that you should be able to share move resources across that boundary to be able to address major problems like this and to be able to get to the bottom in a hurry.

The Federal structure doesn't allow us to do that, so we, in fact, are carefully monitored on the discretionary side, and our budget vis-à-vis the State of Ohio, for example, which has essentially the same number of covered employees that they deal with, is one-third for administrative costs. We have roughly $100 million or less in our budget; they have $300 million. They cover 3 million people; we cover 3 million people.

Now, I am not saying that the programs are absolutely identical, but what I would say to you is that we have to struggle with a constraint, which I think is fundamentally difficult for us; and one of the things that I hope we can do with the additional resources is start to address those kinds of problems that I think you are right with more flexibility would have been addressed a long time ago.

Mr. Barrett. Well, you make a good point, too, and I appreciate that.

I know my time has expired, Mr. Chairman, but one more question of Mr. Hallmark.

Have you investigated the use of an 800 number and, if not, why?

Mr. Hallmark. As I said earlier, yes, in our Communications Redesign we have looked at 800 number systems at Social Security, at Blue Cross and other locations. We believe that is, in fact, absolutely appropriate. We have not been able to do that in the past because we didn't have the resources, not so much to put in the number, but to have people there to answer what we believe would be a substantially increased volume of calls that would be generated. That is why we have made the request that we have for the 2001 budget.

Mr. Barrett. Thank you.

Thank you, Mr. Chairman.

Chairman Ballenger. Before we shut this down, I am just wondering in your testimony, Mr. Hallmark, or actually it was Mr. Brostek, in your study of Dallas, the district office, you used e-mail to receive and respond to requests for medical authorizations; and other offices don't do it because of the Privacy Act concerns. What do you do in a situation when one of them is not doing it right?

Could you tell me, is Dallas in trouble or is the rest of the country not following properly?

Mr. Brostek. Well, we didn't take a look at the legal issue of whether or not there was a Privacy Act problem. I do think that is something that does need to be resolved, and if there is not a Privacy Act problem, then what Dallas is trying to do is probably worth replicating in other offices. But we didn't have sufficient time to take this to our legal counsel and try to get an opinion about whether there was a Privacy Act issue.

Chairman Ballenger. Have they thrown that at you, Mr. Hallmark?

Mr. Hallmark. The Privacy Act is a concern on the Internet because when you are not operating in an encrypted environment, which we do with respect to what we call our Agency Query System, which is a secure Internet site. But if you are using Internet to communicate with the outside world, with medical providers, there is no guarantee of privacy.

The Dallas office has taken steps to avoid using more than one identifier. Hopefully, I see the regional director in the back of the room there, and I am sure he is listening carefully. Hopefully, they are ensuring that providers don't use two identifiers in their e-mails to us.

The Privacy Act concern is one of the reasons why other offices haven't addressed this particular approach. Another is that we have struggled to have control over and accountability with regard to responding to telephone calls, letters, faxes; and in fact there is great concern among many other managers that it is difficult to add yet another layer.

What I would suggest to you is that our redesign team that was convened last week will be looking at this precise issue, among literally hundreds of others, and if in fact we find that e-mail approaches, properly structured so that privacy is not endangered, are appropriate, then we will be moving those and again sharing those best practices right across all 12 offices.

Chairman Ballenger. I believe this is a general question, but being in business myself, always in a situation where communication was the major problem and considering the heavy competition that is floating in the telecommunication world today and the fact that there is competition in just about every situation, are you legally authorized to be able to, say, bring in Bell Atlantic and let them knock heads with one of these other outfits to get your business?

I mean, obviously, you pay your bills. I would think that somebody somewhere would love to have your business if they don't have it now. That is the way it works in the private sector. Are you legally authorized to do something like that?

Mr. Hallmark. There are constraints with respect to long distance providers under the Federal FTS 2000 or 2001, or whatever it is at the present moment; but we are anticipating that should we receive the funding we have requested in 2001 that we would use at least for part of that call center technology, we would use private sector vendors who are experienced in delivering those kinds of services.

So, yes, we would try to, insofar as possible, use private sector.

Chairman Ballenger. The law has to be changed before you can do that?

Mr. Hallmark. Not with respect to contracting for call center operation or the delivery of those kinds of telecommunications services.

There are constraints, and it is a very difficult business in all of our 12 district offices to deal with the local telephone provider, the GSA telephone structure in the particular office, the long distance providers; and there are so many different computer systems. There are so many different players in that world that it is literally a continuing struggle just to make sure that the phones are working the way they are supposed to, let alone that we are providing world-class service.

So one of the things we have asked for in our request was staff who could be dedicated to making sure on a day-to-day basis that those systems work the way they are supposed to. They actually were built over the last 10 or 12 years out of existing resources with the best we could and using whatever technology that we could buy from the private sector; and in fact, it is a very complicated and a very difficult process.

Chairman Ballenger. You are probably regulated by the Federal Government, which is a completely unreasonable group of people to work with.

Mr. Hallmark. I would hardly say that, sir.

Ms. Woolsey. Mr. Chairman.

Chairman Ballenger. Yes, ma'am.

Ms. Woolsey. Just following up on that, Mr. Hallmark, we still have to remind everybody that upgrading, cabling, wiring, will cost the Federal Government. The private sector is not going to come in here and do it free just to provide us, so they can have our business later. So we have to fund what you have requested if we are going to go forward.

Mr. Hallmark. Whether it is done by Federal staff or private staff, the funding is necessary.

Ms. Woolsey. Right. I represent Telecom Valley, north of the Golden Gate Bridge, and I can tell you it is complicated; and you do need to factor in some staff around the country that will be able to keep your systems together because it is very, very important.

I want to say, coming from private industry, coming from the telecommunications industry, when we had in our design and manufacturing environments, when we had the best employees with the best attitudes and wanting to do the best job possible, when a company realized that they couldn't budget all of the equipment they needed to do everything that the employees thought that they could do if they had it, we knew that. I mean, we took it into consideration when we evaluated that work group and their successes.

We knew they could do better when they had to, you know, if in the budget we could have afforded every piece of equipment they wanted, because in private industry, even though money is fungible, if it isn't there, it isn't there.

So what I am saying to you is not that the money is not there, it is that I, for one, don't blame the agency until we give them what they need to do the job.

Thank you.

Chairman Ballenger. Well, let me thank you all for being here. Luckily, in spite of the warning I gave you earlier about getting called out of here, nothing has happened yet.

So, Mr. Hallmark, it sounds to me like you are doing your best to try to straighten it up; and if Mr. Brostek has got some brilliant ideas, or Ms. Dalton, that might help you in your direction, I am sure that they have got a statistical study and so forth, I am sure they would deliver the information to you on the studies that they come up with.

I hate to tell my compatriot from California, but would you believe that all of a sudden, because of this new TV that is coming out where you can get a screen as big as that, and perfectly clear, they are going around and wiring all of our houses in Hickory, North Carolina, for nothing?

Ms. Woolsey. Well_.

Chairman Ballenger. Trying to sucker us into buying a $2,000 or $3,000 TV, I think.

But anyhow let me thank you for being here.

Ms. Woolsey. They are doing that, and then, Mr. Chairman, your regular old TV won't work. You will have no choice but to buy that.

Chairman Ballenger. It is a Communist plot, is what it is.

Ms. Woolsey. No, actually, I think it is the consumer.

Chairman Ballenger. Anyway, I want to thank the witnesses for their valuable testimony and the members for their questions.

And again, Mr. Hallmark, it sounds to me like you are making a good effort. So we thank you kindly, and the committee stands adjourned.

[Whereupon, at 10:50 p.m., the Subcommittee was adjourned.]