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Gulf Spill Paymaster Defends Progress While Weighing Changes

The paymaster managing the claims in the Gulf oil disaster says that he hopes to speed the payments, but that many claims don't have sufficient documentation. He also said he's thinking about some changes to make things clearer to claimants.

Kenneth Feinberg, the independent paymaster who took over managing Gulf spill damage claims from BP just over three weeks ago, has faced growing frustration from many claimants who have yet to see a check.

Although his Gulf Coast Claims Facility has approved payments of more than $150 million to date, participants in our BP Claims Project have reported delays, technical glitches and a lack of transparency in the review process for their claims.

We spoke with Feinberg on Tuesday about some of the most widespread problems we’ve been hearing about from claimants, as well as some of our own questions about how his operation works. Feinberg said he was considering creating an ombudsman to increase transparency for claimants, and his spokeswoman Amy Weiss later provided us with more comprehensive claims data (PDF) that showed that nearly a quarter of applications have been found to have insufficient documentation to be processed.

We’ve divided our conversation with Feinberg into the main subjects that we covered.


Delays on pending claims

For many participants in our BP claims project, delayed responses to their applications are becoming an increasingly urgent problem. Claimants have reported falling behind on their bills and having to close down their businesses. In two cases, claimants have told us that they are in danger of eviction. The latest statistics (PDF) from the Gulf Coast Claims Facility indicate that 15,844 of 55,708 emergency payment claims have been paid, meaning that nearly 40,000 claims — about 70 percent of the claims filed — are still pending. Feinberg’s operation approves between 1,000 and 1,500 claims per day, which has raised concerns that it could take a month or more before each claim can be reviewed.

But on Tuesday, Feinberg told us that significantly fewer than 40,000 claims include complete documentation. “Do not assume that all claims that are supposedly pending are ready to be processed,” he said. Feinberg said that thousands of claims are insufficiently documented, ineligible, duplicative or “suspicious,” and that the wait for claims that are fully documented and under review would be closer to two weeks. His office later released new statistics that indicated that 14,365 claims, slightly under a quarter of all claims submitted to date, do not have enough documentation to be processed, while 29,636 claims are currently under review.

These statistics indicate that two weeks is a feasible but highly optimistic timeline for processing fully documented claims. For claims with insufficient documentation, Feinberg said that his office was in the process of sending out letters to these claimants requesting further information. He did not commit to a timeline for how quickly a claimant could expect to receive notification if their claim was not fully documented.


Staffing of Feinberg’s operation

Last week, the Mobile Press-Register reported that Feinberg’s operation has 25 employees based in Washington, D.C., who review each claim, and approve a total of 1,000 claims per day. The report raised concerns that Feinberg’s organization was not adequately staffed, and that the Washington office was creating a bottleneck that delayed payments on claims.

Feinberg told us that he has kept the roughly 1,500 adjusters working in the Gulf from the Worley company (which was initially contracted by BP), but that he had added a final stop that claims must pass through before approval. “The last stop on the claims process is in Washington, D.C.,” Feinberg said. “All claims must go through this hub to ensure consistency. There are 25 employees in my office reviewing and finalizing claims.”

Feinberg said that adding more employees in the Washington would result in less consistency in payments, and that he was not considering hiring more there. If anything, Feinberg said that he would decrease the number of adjusters he has working in the Gulf as the volume of claims eases. “I’m comfortable with the staffing situation,” Feinberg said. “I’ve concluded that you reach a point of diminishing returns. I’m trying to improve efficiency.”


Increasing transparency for claimants

One of the most widespread problems that claimants have described is a lack of transparency in the claims review process. Applicants say that they are unable to speak with adjusters who have direct knowledge or decision power over their claims, and that telephone operators in Feinberg’s organization have no more information than is available on the claims website.

On Tuesday, Feinberg told us that he was considering changes to address this considerable source of frustration for applicants. “We are reconsidering how we can provide more transparency and more information to the claimant,” Feinberg said. “I’m thinking of providing a coordinator in each state who will be an ombudsman to help the claimant.”

We at ProPublica will continue to follow up on whether this and other measures to improve transparency and customer service are put in place.


Claims facility performance

In the three weeks that he has managed the claims process, Feinberg has faced criticism for his operation’s performance – notably for making and then retreating from a pledge to process fully documented claims within two days for individuals and one week for businesses.

On Tuesday, Feinberg issued a sweeping defense of his organization’s work, saying that he considers his program to be a success and noting that he is sending out money at a faster rate than BP. (Feinberg has paid out about $151 million in claims in a little over three weeks, while BP paid out approximately $400 million in about three and a half months.)

As he has in the past, Feinberg said that “I share blame” for the delays that have occurred, but said that the general picture was positive. “I want to emphasize that I think that overall the program is a success,” Feinberg said. “We are being more generous than BP ever was, and we are getting the money out faster than BP ever got it out.”

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