Tuesday, December 7, 2010

Legislative Bulletin: H.R. 847, James Zadroga 9/11 Health and Compensation Act

As you are probably aware, once impeachment proceedings conclude tomorrow the Senate will vote to invoke cloture on the motion to proceed to:

  • Firefighters/collective bargaining, S.3991
  • $250 social security checks, S.395
  • DREAM Act, S.3992
  • 9-11 Health bill, H.R. 847

If cloture is invoked on the motion to proceed on any of the bills, the vote series will stop, and the Senate will consume the 30 hour post-cloture time on the motion to proceed to that bill.  In other words, we will only vote on the motion to proceed to H.R. 847, the 9/11 bill, today if cloture is NOT invoked on the first three measures.

A summary of H.R. 847 follows below.  Note that while we have heard rumors about the pay-for being changed, we have received no official word on same; regardless of what amendments may be offered if we actually move to the bill, we are voting on the House-passed bill, and a summary of that legislation’s revenue pay-for is included below.

And to clarify one point, the CBO score of H.R. 847 indicates that the measure will spend $7.4 billion in its first ten years, not $10.5 billion.  The text of the legislation also appropriates up to $4.2 billion in the bill’s second decade, meaning up to a total of $11.6 billion could be spent over the entire 20-year period.


H.R. 847 would amend the Public Health Service Act to establish new federal programs for 9/11 workers related to health monitoring and treatments, and expand eligibility for the 9/11 victim compensation fund.  Specific details of the legislation include the following:

World Trade Center Health Program:  The bill would establish within the Department of Health and Human Services a new program to provide medical monitoring, screening, and treatment to workers (including federal employees) who responded to the 9/11 attacks on the World Trade Center (WTC), and residents of New York City “who were directly impacted and adversely affected by such attacks.”  The program is intended to provide:

  • Medical monitoring for those exposed to airborne toxins or other hazards;
  • Screening for community members;
  • Treatment for “all medically necessary health and mental health care expenses (including necessary prescription drugs)” for both responders and community members;
  • Outreach to potentially eligible individuals to inform them of benefits available;
  • Uniform data collection and monitoring; and
  • Research on health conditions arising from the World Trade Center attacks.

Specific details of the program include:

Payments:  H.R. 847 provides that all health benefits provided under the program will be provided “without any deductibles, co-payments, or other cost-sharing” by the individual.  (Reimbursement to the program by the City of New York is addressed below.)  The bill provides for the creation of quality control and anti-fraud elements within the new program, and incorporates existing anti-fraud penalties to the WTC program.

Advisory and Steering Committees:  The bill creates a scientific and technical advisory committee to provide expertise on eligibility criteria and WTC-related health conditions, and two steering committees—one for WTC responders, the other for survivors—to co-ordinate the screening and treatment of eligible members.

Outreach:  The bill includes language requiring the Program Administrator to establish a website, create partnerships with local agencies, and take other measures necessary to inform potentially eligible beneficiaries of the existence of the WTC program.

Centers of Excellence:  The bill directs the Administrator to enter into contracts with Centers of Excellence with respect to monitoring, treating, and counseling individuals related to WTC-related health conditions.  Centers of Excellence include those facilities designated by the Administrator that have experience in treating WTC responders and survivors and meet other specified requirements.  The bill would reimburse Centers of Excellence “at a fair and appropriate” negotiated rate for their fixed infrastructure costs; payments for patients’ treatments would be made as outlined below.

Eligibility for Responders Program:  H.R. 847 includes several categories of 9/11-related responders eligible for the new federal health care program, provided they meet eligibility requirements and have a WTC-related health condition.  The bill would expand eligibility for the new program to persons who “performed rescue, recovery, demolition, debris cleanup, or other related services in the New York City disaster area” and meet certain criteria with respect to airborne toxins (persons categorized as meeting “modified criteria”).  H.R. 847 also specifies categories of currently eligible individuals in line to receive treatment covered by the program, including:

  • New York City Fire Department employees, and retirees, who “participated at least one day in the rescue and recovery effort at any of the former World Trade sites (including Ground Zero, Staten Island landfill, and the New York City Chief Medical Examiner’s office)” at any point between September 11, 2001 and July 31, 2002;
  • Surviving immediate family members of New York City firefighters, and retired firefighters, killed on September 11 at the World Trade Center who received mental health treatment related to their loss before September 1, 2008—but such individuals are only subject to reimbursement for mental health treatments;
  • Participants in the WTC cleanup efforts in Lower Manhattan (defined as areas south of Canal Street), the Staten Island landfill, or the barge loading piers who worked:
    • At least 4 hours between September 11 and September 14, 2001;
    • At least 24 hours between September 11 and September 30, 2001; or
    • At least 80 hours between September 11, 2001, and July 31, 2002;
  • New York City and Port Authority police, and retirees, who worked:
    • At least 4 hours between September 11 and September 14, 2001 in Lower Manhattan, the Staten Island landfill, or the barge loading piers;
    • At least 24 hours between September 11 and September 30, 2001 in Lower Manhattan;
    • At least 80 hours between September 11, 2001, and July 31, 2002 in Lower Manhattan; or
    • One day at Ground Zero, the Staten Island landfill, or the barge loading piers (but not Lower Manhattan as a whole) between September 11, 2001, and July 31, 2002;
  • Workers in the New York City Medical Examiner’s office between September 11, 2001 and July 31, 2002;
  • Workers in the Port Authority Trans-Hudson Corporation tunnel who worked at least 24 hours between February 1, 2002, and July 1, 2002; and
  • Vehicle maintenance workers exposed to debris for one day between September 11, 2001 and July 31, 2002.

The bill also extends eligibility to those fire and police workers and other volunteers who participated in cleanup efforts at the Pentagon or in Shanksville, PA in the days following the September 11 attacks.  The bill includes provisions for an application process lasting no more than 60 days, and an appeal in cases where applications are initially denied.

The bill limits the number of beneficiaries to a maximum of 25,000 who at any time qualify for the program, with no more than 2,500 meeting “modified criteria,” but exempts from the numerical cap those beneficiaries already receiving treatment for an identified WTC-related condition at the time of the bill’s enactment.

Expected Eligibility and Participation:  According to a Congressional Budget Office score of an earlier version of H.R. 847 released in June:

CBO estimates that roughly 650,000 individuals from the NYC disaster area—approximately 75,000 responders and 575,000 survivors—would meet the exposure requirements specified in the legislation, along with potentially another 10,000 responders from the Pentagon and Shanksville, Pennsylvania, sites.  Although many of those individuals may have or develop health conditions related to the terrorist attacks, CBO estimates that only a portion would participate in the WTC Health Program and apply for an award under the VCF [Victim Compensation Fund].  Overall, CBO expects that of the total population that meets the exposure requirements, slightly less than 15 percent [about 99,000 individuals] would enroll in the WTC Health Program by 2020 and slightly more than 5 percent [about 33,000 individuals] would receive awards from the VCF.

Conditions Eligible for Treatment:  The bill defines a WTC-related health condition as “an illness or health condition for which exposure to airborne toxins, any other hazard, or any other adverse condition resulting from the September 11, 2001 attacks on the World Trade Center…is substantially likely to be a significant factor in aggravating, contributing to, or causing the illness or health condition,” or a mental health condition for which the attacks are “substantially likely to be a significant factor in aggravating, contributing to, or causing the condition.”  The bill includes a list of aerodigestive (i.e., asthma and other pulmonary conditions), musculoskeletal, and mental health diseases (including post-traumatic stress disorder) that qualify for treatment.

H.R. 847 also includes an application process to add additional illnesses subject to review by the Administrator and the Advisory Committees, and permits physicians at Centers of Excellence to receive federal payments for treatments for WTC-related diseases not yet identified as such under the provisions above, subject to a subsequent determination by the Administrator as to whether or not the condition will be added to the eligible list of diseases.

Standards for Treatment:  The bill limits treatments paid for by the federal government to medically necessary standards, subject to protocols developed by the Administrator.  The bill includes provisions for an appeals process with respect to medical necessity determinations.

Payment Levels:  H.R. 847 provides that payments to physicians and other medical providers would generally be based upon reimbursement levels under the Federal Employees Compensation Act (FECA), which governs federal workers compensation claims.  The bill also includes language establishing a competitive bidding process among vendors to govern pharmaceutical purchases by eligible beneficiaries, and permits the Administrator to designate reimbursement rates for other services not referenced in the bill language.

Eligibility for Survivors:  H.R. 847 creates a separate program for various segments of the community affected by the World Trade Center attacks.  Eligible groups of individuals include:

  • “A person who was present in the New York City disaster area [defined as any area in Manhattan south of Houston Street and any block in Brooklyn within a 1.5 mile radius of the WTC site] in the dust or dust cloud on September 11, 2001;”
  • Individuals who “worked, resided, or attended school, child care, or adult day care in the New York City disaster area” for at least four days between September 11, 2001 and January 10, 2002—or at least 30 days between September 11, 2001 and July 31, 2002;
  • “Any person who worked as a clean-up worker or performed maintenance work in the New York City disaster area” between September 11, 2001 and January 10, 2002 “and had extensive exposure to WTC dust as a result of such work;”
  • Individuals residing or having a place of employment in the New York City disaster area between September 11, 2001 and May 31, 2003, and deemed eligible to receive grants from the Lower Manhattan Development Corporation;
  • Any individuals receiving treatment at the World Trade Center Environmental Health Center as of the date of the bill’s enactment; or
  • Additional individuals who claim a WTC-related health condition, as determined by the Administrator in consultation with the WTC committees.

The bill includes an application and certification process for community beneficiaries similar to that for responder beneficiaries discussed above.  The bill limits the number of beneficiaries to a maximum of 25,000 who at any time qualify for the program, of which no more than 2,500 may be individuals enrolled based on modified eligibility criteria, but exempts from the numerical cap those beneficiaries already receiving treatment for an identified WTC-related condition at the time of the bill’s enactment.

Beneficiaries under the community-based program would generally receive the same benefits and treatments as the WTC responders, except that the community-based program does not include musculoskeletal disorders in the list of identified health conditions (although some or all of these could be added under the process described above).

Treatment for Other Individuals:  H.R. 847 establishes an additional capped fund to finance care for those living in the New York disaster area at the time of the September 11 attacks, but not meeting the criteria listed above, who have been diagnosed with an identified WTC-related health condition.  The bill caps such spending at $20 million in Fiscal Year 2012, rising annually according to medical inflation rates.

Care Outside New York:  The bill would require the Administrator to “establish a nationwide network of health care providers” to treat eligible recipients outside the New York City metropolitan area, subject to certain reporting and quality requirements.

Research:  The bill would require the WTC Administrator to establish an epidemiological research program on health conditions arising from the World Trade Center attacks.  The program would cover diagnosis and treatment of WTC-related health conditions among responders and in sample populations from Lower Manhattan and Brooklyn, “to identify potential for long-term adverse health effects in less exposed populations.”

Payers:  In cases where an individual is eligible for workman’s compensation, or holds other private or public health insurance coverage, the bill provides that the federal government’s WTC program shall serve as a secondary payer for such claims, similar to the Medicare Secondary Payer program, except that the WTC program would serve as the primary payer for those eligible for Medicare.  Beginning in July 2014, the bill requires individuals to maintain health insurance, as required by the Patient Protection and Affordable Care Act’s individual mandate, in order to qualify for participation in the program.

The bill stipulates that “no funds may be disbursed” unless New York City has entered into a contract to pay for 10 percent of the expenditures necessary to carry out the title in Fiscal Years 2012 through 2018, and a specified similar amount for Fiscal Years 2019 and 2020, amounts that cannot be derived from any federal sources.

Funding:  The bill creates a fund to finance the programs established above, and provides a total of $3.35 billion in direct appropriations for Fiscal Years 2011-2019.  The bill provides up to an additional $1.1 billion in direct spending for Fiscal Years 2019 and 2020, provided that prior years’ spending did not reach the $3.35 billion cap, and that the cap is not exceeded through Fiscal Year 2020.  However, in its score of H.R. 847, the Congressional Budget Office said it “expects that the cap will be reached in 2019 and estimates that no additional health program spending would occur in 2020.”

Changes to September 11 Compensation Fund:  In addition to establishing the new programs established above, H.R. 847 would also make several changes to the September 11 victim compensation fund established in 2001 (Title IV of P.L. 107-42), as listed below.

Extension for Applications:  H.R. 847 would reopen applications to the September 11 compensation fund in cases where the Special Master for the compensation fund determines that the individual became aware of physical injuries suffered as a result of the September 11 attacks after applications to the compensation fund were closed.  The bill would generally reopen applications for the reasons stated above (and for individuals subject to the expanded eligibility provisions noted below) for two years after the individual knew, or should have known, of such injuries, provided the individual seeks treatment in a prompt manner and the claim can be verified.  Additional claims applications under this extension would be accepted through December 22, 2031.

Expansion of Eligibility Definitions:  The bill would modify the definition of eligibility for compensation to define the “immediate aftermath” of the September 11 attacks as including time through August 30, 2002.  The bill would also expand eligibility to include workers handling debris from the World Trade Center, including “any area contiguous to a site of [the 9/11] crashes that the Special Master determines was sufficiently close to the site that there was a demonstrable risk of physical harm” and “any area related to, or along, routes of debris removal,” including (but not limited to) the Fresh Kills landfill in Staten Island.

Applicability to Pending Lawsuits:  H.R. 847 would require debris workers or other individuals with pending legal claims relating to 9/11-related injuries, and wishing to seek compensation from the victim compensation fund, to withdraw those legal actions within 90 days after updated regulations regarding the fund application extension are promulgated.  The bill would permit individuals whose applications are denied by the Special Master subsequently to reinstitute their legal claims without prejudice within 90 days of the ineligibility determination—a right not granted to fund applications under the original 9/11 victims compensation program.

Limited Liability:  H.R. 847 limits the liability for construction and related contractors regarding workers’ claims to the sum of the funds available in the WTC Captive Insurance Company, an amount not exceeding $350 million from New York City, and the amount of all available insurance held by the Port Authority of New York and New Jersey and the relevant contractors and sub-contractors.

Funding:  The bill caps federal funding for new claims on the 9/11 compensation fund at $8.4 billion—$4.2 billion for the first ten year period following enactment, and $4.2 billion for the second ten year period.  The bill allows the Special Master to “ratably reduce” compensation payments over each ten year period such that all eligible individuals would receive payments during the first ten years, with the remaining balance provided during the second ten year period.

Attorneys Fees:  The bill caps attorneys fees at 10 percent of the award amount, subject to several exceptions.  The bill provides that “with respect to a claim made on behalf of an individual for whom a lawsuit was filed in the Southern District of New York prior to January 1, 2009, in the event that the representative believes in good faith that the limit [on fees]…will not provide adequate compensation for services rendered,” that representative may appeal to the Special Master for a higher fee award.

Additional Background on 9/11 Compensation Fund:  As noted above, Title IV of Public Law 107-42 authorized payments by the federal government to individuals injured or killed as a result of the September 11 attacks; eligible individuals (victims injured and families of individuals killed in the attacks) received $7 billion in payments before the fund closed in 2004.  Justice Department statistics note that during its operation, the fund issued award letters to 5,562 families whose relatives were killed in the September 11 attacks, and to 2,682 claimants suffering personal injuries as a result of the attacks.

While the process created under the law, and administered by Special Master Kenneth Feinberg, was praised by many victims’ families, Members of Congress, and outside experts as fair and judicious, proponents of H.R. 847 assert that first responders who worked at the World Trade Center site have incurred respiratory and other injuries as a result of the toxins inhaled at Ground Zero—but that these conditions only became manifest after the application period provided for in P.L. 107-42 expired.  Title II of H.R. 847 would therefore seek to reopen the compensation fund to allow these workers, and other individuals, to make claims for compensation.

However, asked by House Judiciary Committee Republican staff in 2008 to comment on a proposed draft of Title II in an earlier version of the legislation considered during the 110th Congress, former Special Master Feinberg responded with an e-mail noting several concerns with the approach taken by the bill sponsors and the majority.  These concerns included:

  • An extension of the eligibility definition of “immediate aftermath” from the first four days following September 11 (as prescribed in regulations creating the compensation fund) to August 30, 2002— which could result in “a huge influx of additional claims” and could cause some individuals to re-apply for compensation;
  • Language that “vastly extends [the fund’s] geographic scope,” potentially leading to “thousands and thousands of additional claimants” and causing additional individuals to re-apply for compensation;
  • An extension of the filing period until 2031—“no latent claims need such an extended date;”
  • Provisions requiring the Special Master to determine when an individual first knew or should have known about their injuries—“how can the Special Master possibly make that determination?” and
  • Language permitting individuals denied eligibility for compensation to return to the tort system and re-file their claims—a right which was specifically denied as a pre-condition for initial applicants of the 9/11 fund, but which some who were denied compensation by the Special Master may now attempt to exercise.

House Judiciary Committee Republican staff note that, to the extent the 9/11 compensation fund is re-opened, Mr. Feinberg recommends that it be done solely to allow first responders with diseases not manifest at the time of the initial application period to receive compensation—language narrower in scope than the provisions discussed above.

Treaty Withholding:  H.R. 847 is paid for by raising revenue on companies located in the United States that are employing American workers.  Under current law, certain payments (principally dividends, interest, and royalties) made by U.S.-based entities to a parent company based overseas are subject to a 30 percent withholding tax, unless the payment is made to a country with which the U.S. has a tax treaty.  In some circumstances, companies with parents located in countries without a tax treaty are able to effectively bypass the withholding tax by routing payments through a subsidiary in a tax treaty country, which then transfers the funds to the parent in the non-treaty country.  The provision would attempt to limit this practice by retaining a withholding tax to a foreign-based affiliate unless the tax would be reduced under a treaty if the payment had been made directly to the company’s parent corporation.