Detailed Information on the
Vaccine Injury Compensation Program Assessment

Conduct an independent evaluation of the VICP.

Develop methodology for estimating future awards for the VICP.

Develop methodology for estimating future awards for the VICP.

Develop methodology for estimating future awards for the VICP.

Obtain partner's (Advisory Commission) commitment to the annual and long-term goals of the VICP.

Reducing claims processing time by increasing the use of electronic file sharing between agencies, expert witnesses, and other parties.

Measure: Average claim processing time

Explanation:Measures length of time from date petition is filed to payment authorization for compensable cases and date of filing to judgment for dismissed cases. This measure encompasses total claim processing time, which is influenced by all program participants. These program participants (particularly petitioners, petitioners' counsel, and the Special Masters) do influence the speed with which VICP proceedings take place and impact the program's ability to achieve success under this measure * Longer processing times reflect the expectation that over 5,000 cases currently pending in several omnibus proceedings will begin to be resolved in the coming years. As these cases are finally resolved, they will increase significantly the average processing time for all cases completed during these years.

Measure: Decrease the average time that lump sum only awards are paid from the receipt of all required documentation to make payment. (Revised)

Explanation:Performance data for this revised measure will be available for FY 2007.

Measure: Decrease the average time settlements are approved from the date of the receipt of the DOJ settlement proposal

Explanation:HRSA is unable to reduce the average time any further because of factors inherent in the approval system, such as the necessary legal review and opinion by the HHS Office of General Counsel. Therefore, for FY 2008 and beyond, the annual target will be to maintain the program performance at 10.0 days.

Measure: Percentage of cases in which case settlements are completed within the court-ordered 15 weeks

Explanation:This measure tracks the percentage of claims in which settlements are processed within 15 weeks from the date of tentative agreeement between the parties and the settlement proposal is submitted to petitioner for his or her concurrence. Quickly and efficiently processing settlements is a top priority for the DOJ. This measure is calculated by determining the amount of time between a tentative agreement between the parties and the date on which the settlement stipulation is approved by appropriate officials at HRSA and DOJ.

Measure: Percentage of cases where the deadline for the Rule 4(b) report is met once the case has been deemed complete

Explanation:A Rule 4(b) report is akin to gonvernment's "answer" in a traditional civil lawsuit. Its purpose is to explain the government's position as to why an award should or should not be granted, provide a medical analysis of petitioner's claims, and assert any applicable legal arguments.

Measure: Percentage of cases in which judgment awarding compensation is rejected and an election to pursue a civil action is filed.

Explanation:Once a determination has been made that a petitioner is eligible for compensation they are able to reject an award and pursue a traditional civil lawsuit. This measure tracks the number of individuals who pursue civil litigation following a determination that they are eligible for compensation.

Measure: Median time to process an award for damages

Explanation:Once a petitioner has been found eligible for compensation, whether by decision or order of the special master or by the government's concession of a claim, the amount of damages must be determined. The measure tracks the median time it takes to complete this process.

Is the program purpose clear?

Explanation: Under the Vaccine Injury Compensation Program (VICP), individuals claiming injury from a covered vaccine file a petition for no-fault compensation with the US Court of Federal Claims, rather than filing a lawsuit against the vaccine manufacturer or administrator in the civil tort system. HHS is the general administrator of the program, and DOJ represents HHS before the Office of Special Masters. Special Masters of the Court conduct informal hearings as necessary to determine whether the petitioner is entitled to compensation from VICP and, if so, how much. VICP has two related purposes. The first is to provide a fair, simple, and efficient system for awarding compensation to claimants who have been injured by vaccines. The second is to relieve manufacturers from the specter of large, uncertain tort liability stemming from these claims and provide liability protection for vaccine administrators.

Evidence: Authorizing legislation (42 USC §§300aa-1-34), legislative record (HR Rep. No. 99-908), judicial interpretations (Schafer v. American Cyanamid Co., 20 F.3d 1; Shalala v. Whitecotton, 514 US 268, 115 S.Ct.1477).

Does the program address a specific and existing problem, interest, or need?

Explanation: In the U.S., vaccines have reduced or eliminated many infectious diseases that once routinely killed or harmed many infants, children, and adults. Vaccination provides a public good for all individuals in society by preventing the spread of disease. In order to promote the achievement of this public good, many states require virtually all children to be regularly vaccinated against the most common childhood diseases as a condition of daycare and school enrollment. While most of the Nation's population enjoys an enormous benefit from these and other immunizations, a small number of individuals are injured each year by vaccines. In the last decade, numerous changes in vaccine production and administration have reduced the number of adverse events and resulted in safer vaccines. For example, a more purified acellular pertussis (aP) vaccine has been licensed for use and has replaced the whole-cell pertussis vaccine used in DTP (diphtheria, tetanus, pertussis vaccine). Some vaccine-related injuries, however, still persist. Prior to the inception of the VICP, individuals could file lawsuits against vaccine manufacturers and administrators based on alleged vaccine-related injuries. These lawsuits were often time-consuming and expensive, and they often failed. The National Childhood Vaccine Injury Act of 1986 requires individuals to pursue compensation through the VICP before filing a lawsuit in the civil tort system. The VICP offers claimants an efficient, and generally more certain, avenue of recovery for legitimate vaccine-related injuries. This is accomplished through truncated discovery, presumed causation for Vaccine Injury Table injuries or conditions, attorney fee-shifting, no-fault compensation, and other procedural mechanisms. The program also protects the childhood vaccine market from the risks associated with tort litigation. Vaccine manufacturers are faced with substantial challenges, including the costs and uncertainties in developing new products, limited returns on investment for vaccines compared with other pharmaceutical products, a complex regulatory environment, and liability concerns. The vaccine market is small, comprising 5 manufacturers. In some cases, vaccines are supplied by a single manufacturer. VICP provides a measure of liability protection for these vaccine manufacturers and the health professionals who administrator the immunizations so that liability concerns do not drive them out of the market.

Evidence: In 2003, about 224 million VICP-covered vaccines were administered. As of April 12, 2005, 11,302 (4,689 autism/thimerosal and 6,613 non-autism/thimerosal) claims have been filed and compensation totaling over $1.5 billion has been awarded to 1,910 families. Currently, the program covers the following vaccines: diphtheria, tetanus, pertussis (DTP, DTaP, DT, TT, or Td), measles, mumps, rubella (MMR or any components), polio (OPV or IPV), hepatitis B, hepatitis A, Haemophilus influenzae type b (Hib), varicella (chicken pox), rotavirus, and pneumococcal conjugate. As of July 1, 2005, trivalent influenza vaccines will be covered under the VICP. The Institute of Medicine has published reports concluding that these vaccines can cause certain injuries or conditions for a limited number of individuals. Vaccines are added to the list of covered vaccines after the CDC recommends routine childhood administration and Congress enacts an excise tax. Once a vaccine is covered by the Program, HRSA issues a Notice of Proposed Rulemaking in the Federal Register that includes modifications to the Vaccine Injury Table. The Vaccine Injury Table is based on clear scientific evidence. The medical community and the public are given an opportunity to comment on injuries or conditions before they are added to or deleted from the Table. Individuals with a Table injury are presumed to meet the standards for compensation under the program. Eight years' retroactive coverage is provided for any vaccine or vaccine-related adverse event newly-added for coverage under the VICP.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The National Childhood Vaccine Injury Act of 1986 requires that all vaccine injury or death claims (with a limited exception for claims requesting damages of less than $1,000) be filed with the VICP before any subsequent civil action can proceed. As an alternative to the tort system for this specific class of lawsuits, therefore, VICP is unique. The Program's design also differentiates it from other available compensation options. It provides a streamlined, no fault system that is functionally different from the procedures used in any normal court proceeding. In the civil tort system, compensation is often awarded by juries, which can be swayed by sympathy for the family. Compensation under VICP is awarded based on the judgment of a Special Master from the Court of Federal Claims, and the proceedings have a strong focus on medical evidence and relevant factual information. In addition, VICP does not offer compensation for expenses that have been or will be paid by external parties (such as HMOs or other insurance providers) and, accordingly, does not overlap with the responsibilities and functions of those parties.

Evidence: Authorizing legislation (42 USC §§300aa-1-34).

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The VICP has two major groups of beneficiaries??claimants and manufacturers/administrators. In many respects, these two groups have competing interests, and any design change intended to improve outcomes for one group could hurt the other. As such, constructing an appropriate design that fully benefits both groups without any accompanying negative consequences is a significant challenge. Problems with the current design reflect the inherent difficulty in reconciling the groups' competing interests in a way that can consistently provide meaningful positive outcomes for all intended parties. From the manufacturers' and administrators' standpoint, the design of the program undermines some of the liability protection it offers. The VICP is not an exclusive remedy, and plaintiffs can opt out of the program if their claims are denied or the process proceeds too slowly. In addition, loopholes in the design and the underlying legislation allow some individuals to bypass the system entirely and seek redress directly through the tort system. For example, a class action suit comprising millions of individual claims alleging damages for each plaintiff of $999 or less (just under VICP's $1,000 limit) can circumvent VICP and expose manufacturers to hundreds of millions of dollars in total liability. Closing these loopholes or tightening the exclusivity provisions of the program would provide additional protection to the manufacturers and administrators, but at the cost of making it more difficult for some eligible individuals to receive compensation. The program's design also presents problems for petitioners. In an attempt to bring more certainty to the system, the program specifies that claims should be resolved within 270 days. While needless delays are obviously detrimental, the time limits of the program often place burdens on the petitioners to assemble a full claim package (complete with medical records that are frequently very difficult to obtain) and locate expert witnesses to testify on their behalf. However, these efforts are similar to requirements that petitioners would have to fulfill in order to bring a suit in civil court. Granting additional time to petitioners (as often happens) provides them with a better opportunity to articulate their claims, but simultaneously drags out the proceedings well past the timelines that were envisioned by the program's creators. On a separate issue, there is evidence that the excise tax rate, which was set by the Taxpayer Relief Act of 1997 (Public Law 105-34), is not calibrated to the needs of the program. The Trust Fund currently has a balance of about $2.1 billion and over the past three years has grown at an average rate of 7%. It is likely that the excise tax rate, 75 cents, currently exceeds the level necessary to pay vaccine injury claims.

Evidence: 1) Authorizing legislation (42 USC §§300aa-1-34). 2) Taxpayer Relief Act of 1997 (Public Law 105-34). 3) Trust Fund Balance FY 2001-2004. 4) General Accounting Office, "Vaccine Injury Trust Fund: Revenue Exceeds Current Need for Paying Claims," March 2000.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: VICP resources, which are derived from an excise tax on covered vaccines, are effectively targeted to reach the Program's intended beneficiaries: eligible claimants and vaccine manufacturers and administrators. Resources reach eligible claimants in the form of fair, appropriate compensation awards. To date, 1,910 eligible claimants have received compensation from the VICP. Thanks to the Program's streamlined processes, the vast majority of this compensation (86% between FY 2001 and FY 2004) goes directly to the claimants rather than attorneys or administrative entities. Resources reach vaccine manufacturers and administrators by providing them with a simpler and less volatile alternative to the traditional tort system??the 1,910 claimants who have received VICP funds are all claimants that manufacturers and administrators will not have to face in a regular court. In addition, the VICP limits claims for pain and suffering to $250,000, and transaction costs are reduced by as much as 56% in comparison to the tort system. This ensures that resources are not being used on ancillary expenses, but only for legitimate medical and related expenses, lost earnings, and reasonable fees. Unintended beneficiaries are avoided both through the reduced transaction costs and by limits placed on administrative expenses through the annual appropriations process.

Evidence: The program has historically had a high percentage of program funds allocated to petitioner awards. From 2001 to 2004, the program allocated $370 million, $318 million (86%) was for petitioner awards. During that same time period, $12 million (3%) was spent on attorney's fee awards and $40 million (11%) was spent on federal administrative costs.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The program has two specific long term performance measures. The first is the percent of civil suits filed after a determination that the petitioner is eligible for compensation. This captures the percent of petitioners who reject their award in favor of pursuing a claim in the traditional tort system. Driving this percentage down would indicate an increase in the number of petitioners who feel that the program has offered them fair compensation and a decrease in the number of civil suits filed against manufacturers or administrators. As such, this measure directly reflects the program's purpose and captures its intended outcomes. The second long term measure is the average time to process a claim from filing to payment for compensable claims and filing to judgment for non-compensable claims. While this is an output-focused measure, it does capture useful and necessary information, and it will enable the program to monitor a process that is heavily scrutinized by outside observers (e.g., GAO) as well as program participants. It should be noted, however, that these same program participants (particularly petitioners, petitioners' counsel, and the Special Masters) do influence the speed with which VICP proceedings take place and impact the program's ability to achieve success under this measure. The decision to use an output-focused second measure was made only after reasonable attempts to construct a second outcome measure were exhausted. The program tried to construct a measure that would capture the outcome related to petitioners who are not deemed eligible for compensation (and therefore are not part of the first long term measure). However, a variety of practical constraints??such as petitioners' privacy rights, the sealing of many civil court documents in vaccine cases, and the tracking of case dispositions outside of the program??prohibited the construction of any useful metric along these lines. The output measure is offered as both a useful measure and one that touches on all petitioners, rather than just those who are offered awards.

Evidence: See measure tab. Measures will be added to GPRA documents and strategic planning documents at the next opportunity.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The VICP does have ambitious targets and timeframes for its long term measures. For the first long term measure (% of claimants who reject their award), the baseline year is FY 2004, and there are targets of 0% through FY 2008. A 0% target is extremely aggressive because it leaves no room for even a single eligible claimant to reject his or her compensation, but historical data indicates that this is an achievable goal??the program has been able to operate at this very high level of performance several times in recent years. The second long term measure (average time for processing a claim) also has a baseline of FY 2004 and targets through FY 2008. The targets are made up of two components: processing times for normal VICP claims and processing times for omnibus claims (large groups of claims that were bundled together and stayed by the Special Masters some time ago). The VICP estimates that processing times for normal claims will decrease each year between now and FY 2008, even while accounting for an anticipated increase in claim filings. At the same time, however, the average processing times for omnibus claims is expected to increase each year??some omnibus claims were stayed several years ago, and when they are finally resolved (as they are expected to be over the next few years) they will add significantly higher processing times into the total. These increases in the omnibus processing times obscure the expected decreases in ordinary processing times but still represent an ambitious undertaking that will be challenging to achieve.

Evidence: See measures tab.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The VICP has discrete and quantifiable annual output measures that can demonstrate progress toward achieving the program's long-term outcomes. The program will track the long-term measures annually. HRSA and DOJ share one annual measure and have also each developed separate annual measures that reflect their respective program roles. Annual Measure #1 is the median amount of time to process an award for damages. This measure will be reported on by DOJ only. Program participants and outside observers have identified the speed with which damages are awarded as a problem, and DOJ is committed to improving the process in order to speed the overall disposition of cases and the awarding of compensation to eligible individuals. Annual Measure #2 tracks the percentage of cases where the deadline for the Rule 4(b) report is met, looking only at those cases where the case file is complete and ready to move forward. This measure will be reported on by both DOJ and HRSA. A Rule 4(b) report is the government's official response to a claim that has been filed. It describes why the government believes that an award should or should not be granted, provides a medical analysis of the petitioner's claim, and presents any applicable legal arguments. As such, it is the mechanism by which the government attempts to grant compensation to eligible claimants while denying compensation to those who are ineligible. This supports the program's first long term goal by helping to ensure that fair compensation is offered to eligible claimants, and it supports the second long term goal by moving cases toward disposition on a timely basis. This goal will be tracked and reported on by HRSA and DOJ. Annual Measure #3 tracks the average time that settlements are approved from the date of the receipt of the DOJ settlement proposal. This measure will be reported on by HRSA only. Annual Measure #4 tracks average time that lump sum only awards are paid from the receipt of a DOJ clearance letter. This measure will be reported on by HRSA only.

Evidence: "The DOJ Settlement Proposal/Settle Approval Performance Analysis, FY 2000-04" "Lump Sum Only Performance Analysis, FY 2000-04", Flowchart I of Claims Process (Page 13), Flowchart II of Damage Determination (Page 14), and Appendix A from the "National Vaccine Injury Compensation Program: A Program Overview", HHS Office of the Inspector General, December 1992, and Payment Process Summary Measures Tab

Does the program have baselines and ambitious targets for its annual measures?

Explanation: DOJ and HRSA have baselines and ambitious targets for each of their annual measures. The targets ambitiously seek improvements in performance each year and historical data indicates that these targets are realistic and achievable. The baseline year for each measure is FY 2004 and there are there are quantified targets for each year up to FY 2008. FY 2008 is the last year under DOJ's current strategic plan.

Evidence: Evidence: Measures Tab Annual Measure #1 tracks the median time to process an award for damages. The FY 2004 baseline for this measure is 529.5 days. Historical data show that the program brought the media processing time down from 533 days in FY 2002, although there was an increase to 564.5 days in FY 2003. The target for this measure is to reduce the processing time by 10-15 days each year after an initial adjustment period in FY 2005. Annual Measure #2 tracks the percentage of cases were the deadline for the Rule 4(b) report is met once the case has been deemed complete. The FY 2004 baseline for this measure is 75%. The program does not have historical data prior to FY 2004. The target for this measure is +2-3% per year. Annual Measure #3 tracks the average time settlements are approved from the date of the receipt of the DOJ settlement proposal. The FY 2004 baseline for this measure is 11 days. Historical data show that program annually reduced the settlement approval time by 1 to 4 days The target for this measure is 10 days for FY 2005 and beyond. HRSA is unable to reduce the average time any further because of factors inherent in the approval system, such as the necessary legal review and opinion by the HHS Office of General Counsel. Annual Measure #4 tracks the average time that lump sum only awards are paid from the receipt of a DOJ clearance letter. The FY 2004 baseline for this measure is 6 days. Historical data show that program annually reduced the settlement approval time by 0 to 1 days The target for this measure is 5 days for FY 2005 and beyond. HRSA is unable to reduce the average time any further because of factors inherent in the payment system, such as obtaining petitioner's social security numbers which are required by the U.S. Department of Treasury to issue a payment, as well as approvals and payment authorization procedures.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Within the Executive Branch of the Federal Government, the VICP is administered by HHS and DOJ. The 9-member Advisory Commission on Childhood Vaccines (ACCV) provides oversight of the VICP. In 2003, a workgroup comprised of various VICP stakeholders, including HRSA and DOJ, developed a joint strategic plan for the VICP, which was completed in 2004. The long-term measures adopted by HHS/DOJ through the PART process are not stated in the strategic plan or any other planning document. The ACCV has not had an opportunity yet to demonstrate commitment to the measures and targets as defined by HHS and DOJ.

Evidence: The National Vaccine Injury Compensation Program Strategic Plan, www.hrsa.gov/osp/vicp

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The VICP has been assessed many times by various internal and external evaluators, but no single evaluation or group of evaluations together meet each of the standards of quality, independence, scope, and regularity. There is a particular dearth of evaluations looking at overall program impact and effectiveness; most existing evaluations focused either on process (use of expert witnesses, claims processing times) or on only a portion of the overall program (failing to address the impact of the program on manufacturers, for example). In addition, the best available evaluations are not performed on a regular or semi-regular basis, but instead appear to be one-time assessments. The VICP has taken steps to address its need for an independent evaluation. It has a plan to commission an evaluation that will meet the standards of this question. The plan is discussed in additional detail under question 2.8.

Evidence: No qualifying evaluations exist to provide as evidence.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: HRSA's VICP budget requests do not provide a presentation that makes clear the impact of funding, policy or legislative decisions on expected performance nor does it explain why a particular funding level/performance result is the most appropriate. The program provides an annual estimate for claims in the Budget. This estimate has ranged from $66 million -$71 million. HRSA derives these estimates by increasing the previous fiscal year's actual expenditures on awards by 3 percent. The FY 2006 budget estimate did not include estimated claims for influenza and hepatitis B. DOJ's VICP budget requests are part of the larger Civil Division request. As such, VICP-specific performance indicators or funding information are often buried within discussions of Division-wide activities and resources. For example, the Performance and Resource Table, DOJ's primary mechanism for linking funding levels to levels of performance, does not include VICP's program-specific goals or even break out the VICP contribution to the goals that are reported. This makes it virtually impossible to see how a given funding level will support the achievement of the program's goals or how changing funding levels will impact those goals. Overall, discussion of the VICP within the request is limited. The FY 06 request, for example, contained separate sections on Civil Division's other major compensation programs (RECA and the 9/11 Victim's Compensation Fund), but the discussion of VICP was confined to a few sentences in a larger discussion of the Torts Division. A fuller treatment is needed to adequately address all relevant budget and performance issues.

Evidence: 1. Health Resources and Services Administration's FY 2005 Budget and FY 2006 Performance Budgets 2. Department of Justice Civil Division's FY 2005 and FY 2006 Performance Budgets

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The VICP is taking steps to address its identified strategic planning deficiencies: lack of buy-in on performance measures from key program partners, lack of a qualifying independent evaluation, and challenges in effectively integrating financial and performance information in annual budget requests. For example, the VICP will codify its long term and annual performance goals in future strategic planning documents, including GPRA reports and a revised joint strategic plan, and seek official buy-in from the Advisory Commission on Childhood Vaccines, a group charged with monitoring the implementation of the program and making recommendations for improvement. The Program has also prepared a plan to commission an independent evaluation that will meet the rigorous standards of the PART and produce comprehensive conclusions about the VICP's effectiveness. Finally, each agency is working to revise its budget submission process to make clear the link between funding, policy, and expected performance. This will require breaking out VICP-specific information within larger budget discussions and improving the accuracy of cost and performance estimates for the program.

Evidence: Evaluation plan

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: VICP maintains a detailed database of program statistics using information drawn from all 3 key program partners??DOJ, HHS, and the Office of Special Masters. These statistics include information on the number and size of any settlements, the number of cases resolved and pending, and the length of time each case has been in the system. This information is shared on a quarterly basis and used in management meetings to review trends, issues, challenges and strategies. The information is also provided quarterly to the Advisory Commission on Childhood Vaccines (ACCV), which is tasked with making recommendations for improvements to the VICP. ACCV members use the performance information as a basis for their decisions on these changes and improvements. DOJ will utilize CASES to track when a petitioner elects to reject judgment. CASES is the electronic database used by to monitor various statistical information regarding the VICP. One example of a management decision based on performance information was the decision to establish a special payments unit. HRSA, using the VICP database, found that payments were not being processed in a timely and efficient manner. After creating the new payments unit, payments were made more quickly, which benefited claimants and reduced processing costs for HRSA.

Evidence: The petitioner is required to file a claim with the U.S. Court of Federal Claims (the Court) and to send a copy to HRSA. The Court sends DOJ a copy of the claim. HRSA staff enters data from the claim into the VICP database, such a petitioners name and contact information, the vaccine(s) alleged to have caused the injury or death, and date of the vaccine injury or death. To ensure that a claim has been entered into the database, the Court sends HRSA the docket sheet with the Court's number for the claim. During the litigation process, DOJ will send HRSA supplemental records to enter additional data into the database, if necessary. After a claim has been litigated and the Court has made a decision about compensation, the Court's decisions are sent to HRSA from DOJ. These decisions are entered into the database. If the claims are compensated, then data are entered using legal documents indicating the type and amount of compensation from the Court. Examples of consolidated information reports (VICP Program Statistics Report, April 12, 2005 and VICP Program Summary of Cases Filed, February 14, 2005), ACCV Charter, May 24, 2004.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Federal managers at HRSA, specifically the Chief, Medical and Operations Branch, Division Director and Associate Administrator have annual performance evaluations. These annual performance evaluations do not tie directly to the program goals. Program managers are not held responsible for achieving key program results based on clearly defined performance standards. Annual performance appraisals evaluate managers on the program's strategic and operational direction, including the timeliness of reports. A larger goal to compile and report results and accomplishments mentions compensation payment timelines, but it is not clear what the goal and standard was. The evaluations do not examine the employee's degree of success in achieving the goals, but rather are assign a pass/fail rating. DOJ recently instituted a new system of "cascading" performance work plans. These plans are structured so that each individual's performance goals align with the goals of colleagues, managers, and, ultimately, the program overall. This ensures that each employee's performance directly supports the larger goals of the both the organization and the Department. These work plans are OPM certified and meet the standards of the President's Management Agenda. Progress toward an individual's goals is gauged with clearly defined measures and objectives. Employees are assigned a rating from a 3-tiered system to correspond with their degree of success in achieving those measures.

Evidence: Sample Performance Evaluation and Work Plans

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: The program has taken steps to ensure that compensation goes to the correct individuals in a timely manner. (See question 3.6) Each year, Congress appropriates a maximum amount that can be used from the trust fund to reimburse HHS, DOJ, and the U.S. Court of Federal Claims for administrative expenses related to VICP. Since 1990, Congress has annually appropriated "such sums as may be necessary" for post-1988 VICP injury or death claims. DOJ plans and tracks obligations through annual financial Operating Plans (OPs), which display actual obligations from the prior fiscal year and estimate obligations for the current fiscal year by object class. OPs are created after an enacted appropriation and must be revised immediately following any major changes (i.e., reprogrammings, transfers, rescissions). OPs are also updated as part of the Quarterly Status Review process, which compares projected and actual obligations as well as projected and actual performance to ensure that funds are being spent in accordance with the established plans and are achieving expected results. If there are significant deviations from the initial estimates, additional reviews are done and possible routes of action are identified. Although VICP is a part of the larger Civil Division OP, VICP resources are displayed on a separate line to facilitate independent tracking of the funds. Additional proof of the timely and appropriate obligation of funds includes consistent clean audits showing that obligations are accurate and proper.

Evidence: 1. Government Accountability Office (GAO), "Vaccine Injury Trust Fund: Revenue Exceeds Current Need for Paying Claims," March 31, 2000. 2. FY 2000 - FY 2005 Appropriation Acts 3. DOJ Budget Operations Manual and Budget Program Execution Manuals for instructions on format and content of OPs 4. Sample OP comparing estimated and actual obligations by object class 5. 2004 DOJ Performance and Accountability Report, Part III: Financial Section for evidence of clean audits.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The program's efficiency measure is the percentage of cases in which case settlements are completed within the court-ordered 15 weeks. Quickly and efficiently processing settlements is a top priority for the DOJ. The deadline of 15 weeks was determined in conjunction with the Special Master and petitioners' counsel, and all parties agree on the reasonableness of the timeline. The measure has both a baseline and ambitious targets. This measure is calculated by determining the amount of time between a tentative agreement between the parties and the date on which the settlement stipulation is approved by appropriate officials at HRSA and DOJ. To ensure that the most cost effective forms of payments are being utilized, the VICP negotiates and purchases annuity contracts, and requires the monitoring of market conditions, necessitating a payment system that mirrors (and exceeds) those of the private sector. HRSA has established measures to track how efficient the program is at approving settlements and making compensation payments. To be more cost-effective, the VICP successfully implemented financial management initiatives to purchase annuity contracts to provide Court-ordered streams of benefits. Claims are paid in a timely, efficient manner, and the VICP has developed a payment system which requires frequent contact with annuity brokers during the funding phase to get the lowest possible rates. DOJ also has procedures for achieving efficiencies. These include multiple initiatives to expand the electronic management of data, which saves time and copying costs, allows multiple parties to review documents simultaneously, and permits easier storage and searching of massive amounts of documentation. In addition to IT initiatives, DOJ is also enhancing the use of alternative dispute resolution (ADR) in the VICP, which allows cases to reach resolution more quickly than full adjudication and is generally a more cost effective option.

Evidence: The annuity rates are often obtained as "24 hour rates" which are available for only 24 hours during times of fluctuating interest rates and market conditions. These low rates, whether obtained within 24 hours or the usual 2 week funding deadline, can be purchased by the VICP without the additional cost of "lock-in" fees (which are costs charged to hold quotes for longer periods of time), because managers, analysts, and technicians in the payment chain have their annual performance tied to meeting funding deadlines, and understand that a missed deadline could cost the VICP several hundred thousand dollars per case. On each claim in which an annuity had been ordered, annuity brokers (who are independent agents) are required by the VICP to elicit bids from each insurance carrier that qualifies under the Draft Uniform Periodic Payment of Judgment Act, which would implement a strict industry standard that will allow only 10 or so of the most viable insurance carriers to do business with the VICP. This is a competitive process that has demonstrated savings of many millions of dollars over the years, and has saved hundreds of thousands of dollars per claim. Additionally, in the majority of cases, a return guarantee is purchased with the annuity, which provides that when an annuitant dies, the stream of benefits reverts to the Trust Fund (or to the general appropriation for pre-1988 awards) to be used to provide compensation for other individuals who suffer a vaccine related injury or death as determined by the Court. 15 Week Settlement Order; Sample electronic settlement data; General Order 11 on the use of ADR (www.uscfc.uscourts.gov/OSM/OSMOrders.htm).

Does the program collaborate and coordinate effectively with related programs?

Explanation: By statute, HHS and DOJ must collaborate to bring the position of the Executive branch before the Special Master. Upon the filing of a claim for compensation, HRSA is responsible for initially reviewing records, providing a medical analysis of the claim, retaining expert medical witnesses and, if appropriate, making recommendations about whether to concede or contest a claim for compensation. The DOJ represents HHS before the Special Master in all cases filed under the VICP. The Office of General Counsel at HHS must concur with all settlements. At the management level, a joint DOJ/HHS committee resolves issues concerning case file organization, medical records management, evidence control, and the coordination of expert witnesses. VICP staff participated in the establishment and implementation of the Smallpox Vaccine Injury Compensation Program (SVICP). The VICP medical staff conduct medical reviews of SVICP claims. The VICP collaborates with CDC, NIH, FDA and National Vaccine Program Office (NVPO) to develop vaccine policy. The Medical Director of the Division of Vaccine Injury Compensation serves as an ex officio member of CDC, FDA and NVPO vaccine advisory committees. CDC, NIH, FDA and NVPO staff serve as ex-officio members on the ACCV. One of the requirements for a vaccine to be added to the VICP is that it has to be recommended for routine administration to children by the CDC. Vaccine research from NIH and CDC, and other sources are used to determine whether injuries should be added to the Vaccine Injury Table.

Evidence: 1. Authorizing legislation (42 USC §§300aa-1-34) 2. August 27, 2003 Federal Register Notice, "Smallpox Vaccine Injury Compensation Program: Smallpox (Vaccinia) Vaccine Injury Table. The Team Leader of HRSA's Medical Analysis Unit helped to establish the SVICP Injury Table and was the contact for information about the Table. 3. The membership lists for the ACCV, ACIP, and NVAC show that HRSA, CDC, FDA and NIH serve as ex-officio members on each others advisory committees. ACCV List at www.hrsa.gov/osp/vicp/roster.htm; ACIP List at www.cdc.gov/nip/ACIP/members.htm; NVAC List at www.hhs.gov/nvpo/nvac/roster.html

Does the program use strong financial management practices?

Explanation: HRSA has been challenged to project future expenses from the trust fund and accurately reflect past obligations. The program provides an annual estimate for claims in the President's Budget. These estimates are derived from increasing the previous fiscal year's actual expenditures on awards by 3 percent. Some years HRSA did not apply this methodology. For example, the FY 2005 Budget projected $66 million in claims, the same level as projected in FY 2004 in the FY 2005 Budget. In addition, annual estimates do not take into account additions of vaccines to the program or increases in claims for a certain vaccine or condition. The FY 2005 Budget showed an FY 2003 $215 million obligation from the Trust Fund for claims, $140 million more than was actually obligated. In FY 2004, HHS OIG conducted an HHS financial statement audit. The audit reported that the Department had serious internal control weaknesses in its financial systems and processes for producing financial statements. OIG considered this weakness to be material. The audit recommended that HHS improve their reconciliations, financial analysis, and other key controls. The last HRSA-specific audit was done in 2002. The September 30, 2002 HRSA independent auditor's report found that the preparation and analysis of financial statements was manually intensive and consumed resources that could be spent on analysis and research of unusual accounting. The audit also found that HRSA's interagency grant funding agreement transactions were recorded manually and were inconsistent with other agencies' procedures. Finally, the audit found that HRSA had not developed a disaster recovery and security plan for its data centers. A series of legal documentation and clearances are required to issue compensation payments. Following negotiations and/or Court proceedings, the Court issues a narrative decision with detailed payment information on damages. This document is summarized in the Final Judgment, which must be accepted by petitioners. Finally, a clearance letter is required from the DOJ before any compensation payment can be issued. The decision and final judgment, which contain exact financial and payee information for lump sum awards, are the support documentation used when a payment is authorized. Annuity contracts ordered by the Court are purchased following a competitive process which requires bids from each of the qualified insurance carriers to provide the Court-ordered stream of benefits. Payments are issued by the Treasury Department, and tracked by the VICP internal data system, the Healthcare System Bureau's Budget Officer, and HRSA Division of Fiscal Operations. Additionally, compensation payments are reviewed quarterly by HRSA's contract audit staff. Appropriated funds for HHS's administrative expenses (direct operations) are fully obligated each fiscal year, with the majority of outlays consumed by staff salaries and benefits, and by the Expert Witness Program (EWP). VICP staff work closely in conjunction with the Bureau and Agency senior management and budget staff in formulating and tracking actual expenditures. DOJ received a disclaimer of opinion on its FY 2004 financial statements (as audited by the DOJ Inspector General and an external auditing firm, KPMG LLP). The consolidated disclaimer, however, was caused by a disclaimer on the financial statements of a component unrelated to the VICP. VICP (as part of the Offices, Boards, and Divisions group) received an unqualified opinion on its FY 2004 financial audit with no material internal control weaknesses reported. The auditors also found no instances of noncompliance with the Federal Financial Managers Improvement Act within VICP.

Evidence: 1. Health Resources and Services Administration's FY 2004 Budget and FY 2005 Performance Budget 2. 1. HHS FY 2004 Performance and Accountability Report 3. HRSA's 2002 audit report 4. 2004 DOJ Performance and Accountability Report, Section III. Commentary and Summary provided in OIG report #05-06 (www.usdoj.gov/oig/reports/OBD/a0506.htm).

Has the program taken meaningful steps to address its management deficiencies?

Explanation: HHS is in the process of developing a new performance plan for all HHS Civilian Managers and Supervisors that will be 4-tiered and must include performance objectives that are tied to the OPDIV Head's plan and the 10 x 10. This plan is scheduled to be implemented in September 2005. Commissioned Officer may have a performance contract attached to their plan as an addendum that includes specific outcomes and measure. DOJ's VICP/Civil Division managers meet regularly and review budget, performance, accounting, and personnel information in order to identify and address any management deficiencies. This task is aided by the careful tracking of program statistics, which enables managers to examine trends such as settlement completion times that might indicate problems with performance or management. VICP also takes management direction from the Department on the initiatives of the President's Management Agenda and from the ACCV, which reviews program performance data. When a deficiency is identified, steps are quickly taken to address the problem. After a 1999 GAO report noted delays in claims processing, for example, VICP instituted a number of policies designed to mitigate the problem. These include promoting the use of ADR to resolve cases more quickly and instituting "Project 97," under which all cases pending for at least 4 years were reviewed and given a new action plan outlining a strategy to advance the case to resolution. These policies have been very successful thus far. At the beginning of Project 97, for example, there were 70 cases that had been pending for more than 4 years; 8 months later, that number had been reduced to 29.

Evidence: ACCV meeting minutes, 12/02, discussing Project 97 and ADR usage (www.hrsa.gov/OSP/vicp/mindec02.htm).

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program has demonstrated some progress in achieving its long-term performance goals. For Long Term Measure 1, the percentage of eligible claimants who opt to reject their awards increased 1.5% between FY 2002 and FY 2003 but then decreased to 0% again in FY 2004. This indicates the partial achievement of progress. For Long Term Measure 2, the average claim processing time increased by 26 days between FY 2002 and FY 2003 but then decreased by 283 days in FY 2004. As on Long Term Measure 1, improved performance in FY 2004 (but not FY 2003) indicates partial achievement of progress. Progress on these measures will be assessed again in November following the submission of FY 2005 performance data. The final answer can be adjusted either up or down to reflect that data.

Evidence: 1 Question 2.1 2. Measures tab.

Does the program (including program partners) achieve its annual performance goals?

Explanation: The program has several years of data for three of its four annual measures. For Annual Measure #1, the median time to process an award for damages increased by 33 days between 2002 and 2003 and decreased by 35 days between 2003 and 2004. The program achieved some level of improved performance on this measure, but did not shown progress in FY 2003. For Annual Measure #2, the percentage of cases that met the Rule 4(b) deadline was 75.3% in FY 2004. The program does not have data prior to FY 2004 to measure its historical performance. For Annual Measure #3, the average time it took for settlements to be approved decreased by 1 days between 2002 and 2003 and decreased by 4 days between 2003 and 2004. The program has shown progress on this measures over the past several years. For Annual Measure #4, the average time that lump sum only awards were paid from the receipt of a DOJ clearance letter decreased by 1 days between 2002 and 2003 and did not decrease between 2003 and 2004. The program has shown progress on this measures over the past several years.

Evidence: Evidence: 1. Questions 2.3 and 2.4 2. Measures Tab

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The program's efficiency measure is the percentage of cases in which case settlements are completed within the court-ordered 15 weeks. This measure is calculated by determining the amount of time between a tentative agreement between the parties and the date on which the settlement stipulation is approved by appropriate officials at HRSA and DOJ. The program demonstrated improved efficiencies on this measure in 2003, but had declining performance in 2004. In 2002, the percentage of cases in which case settlements are completed within the court-ordered 15 weeks was 80%. In 2003, this rose to 92%. However, in 2004, it fell back to 80%. DOJ and HRSA have implemented several procedures to increase their efficiency. To be more cost-effective, the program implemented financial management initiatives to purchase annuity contracts to provide Court-ordered streams of benefits. DOJ has expanded their use of electronic management of data and is also enhancing the use of alternative dispute resolution (ADR) in the VICP.

Evidence: 1. Question 3.4 2. Measures Tab

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: VICP is unique among federal, state, and local programs, but it can be compared to the traditional tort system that provided compensation for vaccine injuries prior to its creation. Even though VICP is not perfect, it is a substantial improvement over the prior system. Potential lawsuits are reduced on a one-for-one basis by each claim settled administratively or through the adjudication of the Special Master, which helps to reduce the liability exposure of vaccine manufacturers. Transaction costs are lower for all parties under VICP, and a greater share of each award directly benefits the claimants. In addition, the VICP provides decisions that are more evidence-driven than decisions that may be rendered by a traditional jury. There are a number of other programs across the government that provide compensation to individuals who have died, sustained injuries, or otherwise suffered under designated circumstances. These include the 9/11 Victim's Compensation Program, the Smallpox Vaccine Injury Compensation Program, the Radiation Exposure Compensation Program, the Energy Employees Occupational Illness Compensation Program, and others. They are each designed to provide monetary compensation to eligible individuals, and many of them provide some type of public good as well (e.g., the 9/11 program provided liability protection to airlines that might have otherwise been driven out of the market due to litigation). Each program has its own unique attributes, including distinct purposes and different designs, but even a general comparison among programs is currently impossible due to a lack of available evidence providing meaningful comparison information.

Evidence: GAO Report HEHS-00-8; Report of the Federal Judicial Center on process/judicial procedure innovations in VICP (Use of Expert Testimony, Specialized Decision Makers, and Case Management Innovations in the National VICP, 1998); VICP Program Statistics Report, April 12, 2005.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: The VICP has been assessed many times by various internal and external evaluators, but no single evaluation or group of evaluations together meet each of the standards of quality, independence, scope, and regularity. Evaluations by GAO, the Federal Judicial Center, and the HHS Office of General Counsel have shown that the program is carrying out its mission and have identified areas where the program should devote additional efforts. The objective of the March 2000 GAO report was to review the operation of the program's trust fund and its adequacy to meet future claims. GAO found that, given the experience to date for claims payments and related administrative expenses, the trust fund balance appears to exceed the current program needs. The objective of the February 2000 GAO report was to discuss the policies and guidance for selecting structured settlement brokers used by DOJ. The report found that DOJ has issued policies and guidance on the selection of structured settlement brokers, but the application of the guidance is subjective and DOJ has limited internal controls. The objective of the December 1999 GAO report was to assess how long it took for a claim to be processed, the extent to which changes to the Vaccine Injury Table had made it more difficult for petitioners to get compensation, and why the trust fund had grown. GAO found that VICP appears to provide an easier process for obtaining compensation than the traditional civil tort forum. The report found that it took the program more than 2 years to process most of the claims. The report concluded that the changes to the Table made the compensation process easier for people with clear injuries, but made it more difficult for persons without Table injuries. The objective of the 1992 HHS OIG report was to review the structure and operations of the VICP. The report found that cases were delayed due to a front-end back-log for the Special Master and that the present vaccine injury table did not reflect the latest scientific evidence.

Evidence: 1. Government Accountability Office (GAO), "Vaccine Injury Trust Fund: Revenue Exceeds Current Need for Paying Claims," March 31, 2000. 2. GAO, "Structured Settlements: The Department of Justice's Selection and Use of Annuity Brokers," February 16, 2000. 3. GAO, "Vaccine Injury Compensation: Program Challenged to Settle Claims Quickly," December 22, 1999. 4. Federal Judicial Center, "Use of Expert Testimony, Specialized Decision Makers, and Case Management Innovations in the National Vaccine Injury Compensation Program," 1998. 5. HHS OIG, "The National Vaccine Injury Compensation Program: A Program Overview," December 1992. 6. Systems Assessment and Research, Inc., "Assessment of the National VICP Communication Materials," August 22, 2003.