Ms. SNYDER. They have a long history of adversary proceedings between mine operators and claimants, because they, as we know, had pneumoconiosis as part of their occupational disease compensation before the Federal act. And only because of the inequity among the several States did we really need a Federal act. As Mr. Smith, testified from the State of Kentucky-the State feels that there needs to be representation. In reviewing the States as they submit application to meet the Federal criteria under the Secretary of Labor's regulations, we will be looking very carefully at the provisions that they have regarding this matter, too. Senator TUNNEY. Senator Cook. Senator Cook. Well, in essence, what you are saying, Ms. Snyder, isn't it conceivable the present workmen's compensation law in Kentucky would be approved by the Secretary as meeting the criteria? Ms. SNYDER. It would have to meet our criteria before we spun that program off to Kentucky: yes, sir. Senator Cook. Therefore, they could operate it conceivably in the framework they operate it now? Ms. SNYDER. NO. Senator Cook. That is what I want to get around to, because what I want you to explain to me whether you can materially change the regulations as they existed under the Social Security Division, that you now feel will operate and function better under the Department of Labor. In other words, what problems did the Social Security Administration have with these claims you all feel you have solved? Ms. SNYDER. I think we are talking about two parts of a period of operation. One, from now, the interim period, to December 31. I think that we are operating almost identically now. On January 1, 1974, where we have more of an adversary proceeding with the mine operator possibly contesting the cases, we will then, and long before that, in November, have determined whether or not we would use the gross approach or net approach to offsets. I think the program will be most unlike Mr. Popick's description of his program, come January 1. And I think that it is too early to say at this point, how the mining industry will react. I think that we will see in the first year, and certainly before the courts now we have some lawsuits, two of them actually, which will determine maybe before January, which way the operations of this program will flow. Senator Cook. The major lawsuit being whether it shall still be the responsibility of the Federal Government and whether it will be MS. SNYDER. Whether certain provisions of the act will hold or not. Mr. JOHNSTON. Another big factor, Senator-to reiterate what you recognize—is that come January 1, there is no longer a requirement that the claimant file with the State. Senator Cook. The point I am trying to make to you though is———— Mr. JOHNSTON. There can be no loss there. Senator Cook. All right. If the workmen's compensation laws in the State of Kentucky are approved by the Secretary, then in essence they will still file with the State. Ms. SNYDER. The entire claims process will be in the State. Senator Cook. You are saying they no longer have to file with the State, but as I read 722.101 of your rules and regulations, that what in fact you have done, you have said that some of the technical points that exist under State law, residency requirements, so on and so forth, that all of these will be eliminated, but once the Secretary approves the workmen's compensation laws of a given State, that you will still proceed under those laws, subject to their approval by the Secretary. Mr. JOHNSTON. Well Senator Cook. Let me read to you. The state workmen's compensation law shall not be deemed to provide adequate coverage for pneumoconiosis during any period unless it is included in the list of state laws. *** 722.152 which says he shall evaluate those laws filed by the Secretary of Labor to provide adequate coverage for pneumoconiosis during such period. Now, the point I am trying to make to you is we are moving as of January 1 from the Social Security Administration in a direct payment from the Federal Government on a percentage of claims to the direct payment or the necessity of a payment by the company involved or the company that will be found liable. Now, let's say for those companies that have gone out of business, and so on and so forth, that a percentage of those claims will fall to the responsibility of the Federal Government and they will be assumed by the Federal Government. Ms. SNYDER. Right. Senator Cook. So henceforth there will be a much smaller percentage, obviously. But the point is, you are doing it on the perimeter of segregating this now and say we will evaluate your workmen's compensation laws. If they don't meet our standard, then make those changes in the legislative process. But once they are approved, then that decision is based at the State level. Ms. SNYDER. Yes. Senator Cook. And we will still be following that same adversary proceeding we are following now. Mr. JOHNSTON. Except we will not approve the State program that continues to allow, as an example, the massive lump-sum payments that have created many of the problems. Senator Cook. What are you going to do with lump-sum pay ments? Mr. JOHNSTON. As an example, under the Federal program-first of all, Senator, I cannot necessarily speak entirely for the whole Department of Labor Senator Cook. Yes, but the point I am trying to get Mr. JOHNSTON. The Federal program handles lump-sum payment in this fashion: It can never be more than 1 year. So if the claim takes 2 or 3 or 4 years to adjudicate, attorneys can only receive a percent of that first 1 year. So we have handled lump sum in some fashion other than allowing it to run for purposes of appeal up through the courts, which as anyone can envision, can take a considerable amount of time. Senator Cook. Wait a minute. What is your procedure going to be? Mr. JOHNSTON. We will only allow a percent of the first year on a lump sum. If you have a claim that existed for 4 or 5 years within an agency, and by virtue of administrative and judicial procedures has taken 4 or 5 years to be adjudicated and then the attorney collects 20 percent, under the regulations, of that amount. That amount that will be approved by the Department should be based upon a 1 year period. Senator Cook. The Department of Labor? Mr. JOHNSTON. Yes. Senator Cook. May I say to you, in all fairness, I look at the lawyers sitting in the back of the room that have testified; if you are saying to that miner, under the Department of Labor that he is going to be limited to 1 year if it takes him 4 years to pursue his case, I would rather take my chances with that lawyer on 4 years and get a great, big fat amount for the 4-year period, even if I do have to pay him 25 percent. Mr. JOHNSTON. He is still going to collect his money. As a practical matter, the Department of Labor procedure is Senator Cook. You haven't explained it to me yet and I am trying to get it out of you. Let's say it takes 4 years. Are you saying he is only entitled to 1 year at the time he is adjudicated or the fee can only be attributed to 1 year? Mr. JOHNSTON. The fee can only be attributable to 1 year. Senator Cook. That is easier. Mr. JOHNSTON. As a practical matter, I think this is an important matter for this committee to understand. The Department of Labor has taken the position that once a tentative determination of medical eligibility has been made, and in the initial stages we notify a "responsible operator," we may begin making payments at that point in time. Senator Cook. Wait a minute. Suppose the ultimate determination is negative? Mr. JOHNSTON. If the ultimate determination is negative, the Federal Government is going to pick up the tab anyway and we are not paying a massive lump sum. If the eligibility determination is made against the Department or the coal mine operator, then the Department or the responsible operator has a tab to pick up. Senator Cook. Let me ask you two one question. You can explain it and I will sit and listen and not interject. I was of the opinion that once we hit January 1, 1974, that first of all, if the States met the requirements of the Secretary of Labor relative to their present workmen's compensation laws, or if they had to amend them and change them pursuant to approval by the Secretary, that we then moved into an altogether new field of turning over to the States the responsibility for the adjudication of these programs under the guidelines that would be established by the Department of Labor and the Department of Labor would then, for all intents and purposes, or the Federal Government for all intents and purposes, would be totally out of the picture, with the exception of an adjudication against a defunct mining company or whatever the case may be, which would mean that percentage of cases would be assumed by the Federal Government. Am I wrong in this? Ms. SNYDER. You are absolutely correct. However, we do not anticipate by January 1, any State being ready. May I say that certain States whose State legislatures only meet every 2 years, are just beginning to become really active. We do not see this coming probably before another year. There was one State that passed unanimously in both its house of delegates and its State senate a law,-last January-and they are just submitting their regulations and request for approval to us now. Senator Cook. Which State is that, do you remember? Senator Cook. The only reason I ask, I would like to have the opportunity to read the statutory law. Ms. SNYDER. The State of Virginia passed unanimously in both its house of delegates and its senate a law which at the present time we are not sure quite what it looks like, but we understand it looks quite close to the Federal act. Senator Cook. That is what I would like an opportunity to view, because our State legislature goes into session in January. I just wondered whether there would be any recommended guidelines they could look at. Mr. JOHNSTON. We are scheduled to meet with your representatives on Thursday of this week. MS. SNYDER. October 4. Yes, sir. Mr. JOHNSTON. I might add, and I don't know whether you were aware of it, that we have already published a 20 CFR in the Federal Register, a bulletin— Senator Cook. I have it. Mr. JOHNSTON [continuing]. Which sets forth State criteria. As an example, where a State program allowed a contingency fee, we would not approve that program where inadequate control over legal fees is not exercised. We would also not allow waivers that have become a big problem in some States. We do not intend to just turn over the program and condone all of the abuses that members of Congress, both on the House and Senate side talked about and alluded to in many volumes of congressional history and see it occur all over again. The program does not necessarily have to be a mirror plan; we are not requiring absolute identity to the Federal plan. We recognize you can't take a single template and put it over all various States. Not only do you have different types of mining, strip versus underground, but you have various problems in different States. West Virginia has a completely different type of workmen's compensation set up than does Kentucky or Pennsylvania. Every State has its own peculiarities. So we are not in any way saying you must have a mirror plan nor are we imposing a single template over it, but we will require certain functions to be present and certain safeguards to be present. Senator Cook. You will be the overseer. May I ask you what procedure you are going through to make a determination as to what particular sum of money will have been appropriated by the Federal Government in these cases that will be the responsibility of the Federal Government as opposed to the responsibility of respective companies against the claim to be filed? Ms. SNYDER. Senator, we made, starting 8 months ago, some projections on what percentage we felt were going to be putative responsible operators and indeed the responsible operators and we testified before the Senate Appropriations Committees that 80 percent of the total approved cases we believed in fiscal 1974 will be the responsibility of the coal mining industry, with 20 percent being picked up by us, the Department of Labor. Senator Cook. All right. Then, as I understand you, Ms. Snyder, so we put this in perspective, you all will operate this procedure, your hearing officers; you will make these determinations until such time as the respective States meet the guidelines established in your regulations under their existing workmen's compensation laws, and then that responsibility will be vacated by the Department of Labor, except for an overseeing capacity, and they will be handled at the State level. Ms. SNYDER. I think it is safe to say, we are one Federal agency looking forward to going out of business. Senator Cook. You mean in this field. Ms. SNYDER. Yes. Mr. JOHNSTON. I would like to add one more comment concerning the legal assistance memorandum, or pamphlet, that Ms. Snyder alluded to. The question may be why haven't we done it sooner, why haven't we gotten it out so the people can read it. The problem is exactly as has been alluded to by previous witnesses in addition to Mr. Popick. We are dealing in many instances, especially in Appalachia, with an individual, unfortunately, who has not been afforded a full education. Therefore, we have gone at ends and have redrafted it using graphic designs, pictures, as opposed to word frames of reference. We have gone to great lengths to make it, we hope not condescending, but simple enough that an individual with only basic reading skills should be able to undertand the program, and lead him immediately to one of the Federal agencies for full assistance. Senator Cook. Mr. Chairman, for the benefit of this record, I would hope this record might stay open long enough, if your work is almost finished, so we might have a copy of that in its proposed final form, so it could be made a part of this record. I think it will be very helpful to the Congress to understand this. MS. SNYDER. We will try to. Senator Cook. If you can. Mr. JOHNSTON. We hope to be able to do that. Ms. SNYDER. We will make every attempt to. Mr. JOHNSTON. The two law suits have taken up a great deal of our time recently. Senator Cook. Thank you, Mr. Chairman. Senator TUNNEY. Thank you very much, Senator Cook. OFFICE OF THE COMMISSIONER, DEPARTMENT OF HEALTH, EDUCATION, and Welfare, Hon. JOHN V. TUNNEY, SOCIAL SECURITY ADMINISTRATION, U.S. Senate, Washington, D.C. DEAR SENATOR TUNNEY: This is a further report on our progress in administering the Black Lung Benefits Act of 1972. |