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Statement by
William Hobson
Director, Office of Special Programs, Health Resources and Services Administration
on
The National Vaccine Injury Compensation Program
before the
House Committee on Government Reform

September 18, 2002

Chairman Burton, Ranking Minority Member Waxman and Members of the Committee:

I am happy to appear before you today to discuss the National Vaccine Injury Compensation Program. As you know, the Program is administered jointly by the Department of Health and Human Services, the Department of Justice, and the U.S. Court of Federal Claims. As the Director, Office of Special Programs at HHS's Health Resources and Services Administration, I am eager to work with you to ensure a Program that is expeditious and fair, as Congress intended.

In your September 11th letter of invitation, you asked that I be prepared to discuss two things: the cases that were presented by the previous witnesses and the bill, H.R. 3741, the "National Vaccine Injury Compensation Improvement Act of 2002."

To address your first request: Because these cases are currently pending in Federal court, I cannot discuss them specifically. But, as you suggested in your letter, I can comment generally. On the human level, I express my deepest sympathy to anyone who has suffered a painful and debilitating injury and to the people who love and are responsible for caring for the injured person. Such occurrences are surely among the most difficult that any of us ever has to face. At the level of someone who works with the Program, I know the diligence and dedication of my co-workers who are charged with carrying out the National Vaccine Injury Compensation Program as established by Public Law 99-660. Our job at HHS is to do the best we can operating within the Program as established by law. Each case is handled individually; each case is subject to the same scrutiny.

To address your second request: I know that Chairman Burton and Ranking Minority Member Waxman have been working to modify and improve the National Vaccine Injury Compensation Program through H.R. 3741, which they introduced in February of this year. There are many provisions in the legislation that the Department of Health and Human Services supports- many of them also have the support of the Advisory Commission on Childhood Vaccines. I think you know that we work closely with the ACCV, which meets regularly and includes health professionals, parents of injured children, attorneys (including a representative of the vaccine manufacturers), and non-voting Federal personnel. The group advises the Secretary of HHS on the implementation of the Program. Some of the provisions supported by the ACCV and the Department include: adding family counseling as a compensable expense (section 4(a)); changing the procedures for the payment of attorney fees to allow payment directly to the petitioner's attorney under some circumstances (section 6); and slightly altering the composition and meeting schedule of the ACCV (section 8).

The Department would support additional provisions if they were modified. We support with modifications section 2, which addresses the basis for calculating projected lost earnings. We feel the exclusionary language, "excluding the incorporated self-employed" should be a part of this section to prevent possible misinterpretation. Since the Bureau of Labor Statistics says that it does not and cannot tabulate the average earnings of the incorporated self-employed, we feel this group should be specifically excluded from the calculation. Without the exclusion, this section could invite future litigation. The ACCV felt that section 11, "Public Service Announcement Campaign" would be more useful if it were structured as a general publicity effort. They suggested that such publicity include research on the best communication methods and other outreach activities to increase the public's, attorneys', and health care providers' awareness of the VICP. Thus, we support section 11 with modification.

The Department has real concerns with Section 3 of the bill, which would raise the death benefit from $250,000 to $300,000. The Department has concerns about provisions to increase non-economic award payments significantly in the bill. In light of other provisions that will expand the program's coverage and trends toward more claims being filed in the VICP, these provisions collectively may lead to higher vaccine budget costs that are not sustainable.

There are some provisions of H.R. 3741 that the Department does not support. Section 5 provides that a special master may make an interim award for attorney's fees and costs upon completion of the Rule 5 conference. We support a single payment of interim costs but oppose the payment of interim attorney's fees for several reasons. First, the Rule 5 conference is the first substantive status conference in a case, and in our view, occurs too early for such a determination for interim fees or costs to be made. In addition, focusing on requests for interim fees diverts time and resources from the prompt resolution of petitions. H.R. 3741 also does not impose any limit on the amount of attorney's fees that may be awarded on an interim basis. Not imposing a cap could result in excessive awards and invite collateral litigation. For these reasons the Department does not support interim attorneys' fees and only supports the payment of interim costs with modification to section 5 as written.

Although the Department supports section 7(a) of the bill, the general rule for the statute of limitations extension, we oppose section 7(b), which would allow a broad extension of the statute of limitations, enabling the filing of any claims arising from vaccines administered over the past 14 years. This provision of the bill would allow a look-back period of 14 years for claimants who either never filed with the National Vaccine Injury Compensation Program or whose claims were dismissed by the Court for not being filed in a timely manner. Thousands of new litigants would cause significant administrative burdens at the Department, at the Department of Justice, and on the Court. Based on Program experience in the 1990s, when 4000 claims were filed over a 2-year period, more than one-quarter of which were non-meritorious and eventually dismissed by the Court without medical review, a similar outcome is expected should section 7(b) be enacted. The Department sees that outcome as harmful in that it would lead to long delays in pending and future claims adjudication. This provision, along with the others, could significantly expand the VICP and the Department is concerned about the implication of this to the overall cost of the program. For these reasons, we cannot support H.R. 3741 as currently drafted.

Our first choice would of course be that no child is ever injured in the attempt to protect him or her through vaccination. However, because some children do suffer injury as a result of vaccine administration, we who work in the National Vaccine Injury Compensation Program are dedicated to making compensation as fair and expeditious as possible.

I would be happy to answer any questions you have and look forward to working with you and your staff to achieve our common goal of a well-administered National Vaccine Injury Compensation Program.