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New Gulf Compensation Chief Lags in Processing Claims

Kenneth Feinberg’s new system for handling claims from the Gulf oil spill is already running into delays. Feinberg had guaranteed a two-day response time, but some claimants say it isn’t happening yet.

6:27 p.m.: This post has been updated.

Just over a week ago, when Kenneth Feinberg took over the process for handling damage claims from the Gulf oil spill, he promised to cut through the delays and confusion that applicants faced under the much-maligned BP system.

But signs are emerging that Feinberg’s goals – particularly his pledge to respond to personal claims for emergency payments within 48 hours – may be overly ambitious. Applicants participating in our BP Claims Project say that they have not received responses within two days of filing claims and that they have encountered an array of service problems, from a system crash to difficulty in transferring critical paperwork.

Amy Weiss, Feinberg’s spokeswoman, acknowledged on Sunday that the facility was experiencing delays. “In the first few weeks...we may be short of our 48-hour goal,” Weiss said in an e-mail.

Weiss said many of the claims could not be processed because they lacked sufficient documentation, and that the new Gulf Coast Claims Facility has approved about $6 million in payments to just under 1,200 individuals. Statistics from the GCCF indicate that only about 6 percent of total claims – for both individuals and businesses – had been paid as of Monday.

Feinberg’s guarantee of a two-day response time was central to his plan to improve the BP claims process. Speed is crucial to applicants struggling to pay their bills. Some have already waited months while BP deferred claim decisions.

But applicants told us they’ve gotten conflicting information about when the response period officially starts and, thus, how quickly they can expect to get paid.

Feinberg’s protocol for emergency payments says applications “will be evaluated preliminarily within 24 hours of receipt of the completed form and supporting documentation.” If the claim is approved, the protocol says, a payment is supposed to be authorized within another 24 hours.

But a page on the GCCF’s website gives different information: Its “Frequently Asked Questions” feature doesn’t specify how long the preliminary evaluation will take, and says payments will then be authorized within 48 hours.

Weiss said each source is partially right. She confirmed that the GCCF is supposed to complete its preliminary review within a day, but said it would take up to two days after that for payments to be issued.

Several applicants participating in our BP claims project said three days or more had passed without any response. (If you’ve filed a claim with the GCCF and are still waiting, you can tell us about your experience using this quick online form.)

Donna Davis, who filed a claim for lost income after being laid off from her job at a vacation condo rental company in Orange Beach, Ala., said a claims agent told her last Friday that claims would be paid within 48 hours after being reviewed, not 48 hours after being submitted. The review period could take up to three weeks, Davis said she was told.

Russell Porter filed his claim for property damage to his condo in Gulf Shores, Ala., on the morning of Aug. 23. When he contacted the GCCF two days later, a claims representative told him “since they have such a deluge of people, they’re asking people to wait 48 to 72 hours,” Porter said.

He called again the following day. This time, he said, a GCCF representative said “they have no idea how long it will take to process any claim.” Porter said he has spoken to eight different agents since refiling his claim.

Turning around claims in 48 hours is a “hellaciously aggressive” target for an operation as large as Feinberg’s, said Mike Dekema, a claims management consultant with 30 years of experience in the industry. “The guy should win the Nobel Prize if he can do this in the timeline that he has outlined,” he said.

He added that the first 30 days will be critical in shaping public perception of the new claims unit.

“The biggest concern I have is whether he is unreasonably setting expectations when people are already predisposed to have a negative opinion of the process,” Dekema said.

Some claimants told us their main source of frustration has been logistical hassles, rather than timing.

Marco Jackson, who said he had to shut down his seafood stand in Destin, Fla., after the spill, gave supporting documents to BP when he filed a business claim in June.

When GCCF took over, he resubmitted the claim, on Aug. 23, but was told he wouldn’t need to refile the documents. Then he was told he would. He tried to do it electronically, only to find the online system was down.

He followed up by phone, but discovered that GCCF had the wrong address for his claim. The claim remains in limbo.

“It’s getting to be a high level of frustration, because they’re supposed to be more competent than BP, and it’s looking like they’re less competent,” Jackson said.

Weiss said all documents submitted to BP should have been transferred to the new operation by now. She stressed that GCCF was working hard to speed up payments.

“We are literally working 24 hours a day to issue eligible payments as soon as possible,” she said.

Update: Amy Weiss, Feinberg’s spokeswoman, has provided more current figures for the number and value of claims processed by GCCF. She said the GCCF has now paid out close to $10 million since opening on Aug. 23. She said that the facility has received and is reviewing more than 31,000 claims

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