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Cummings Requests Congressional Hearing on AIG denying claims and the Department of Labor’s non enforcement

Posted by defensebaseactcomp on April 22, 2009

Cummings Requests Congressional Hearing on AIG Denying Claims for Civilians Injured in Iraq, Afghanistan

Washington, DC—Today, Congressman Elijah E. Cummings (D-Md.), a senior member of the House Committee on Oversight and Government Reform, sent a letter (text below) to Domestic Policy Subcommittee Chairman Dennis J. Kucinich (D-Ohio) requesting a hearing to examine a recent investigation by the Los Angeles Times, ABC News, and ProPublica. According to the investigation, AIG and other insurance companies have been unnecessarily denying and prolonging serious health insurance claims of civilian contractors who were injured or killed while participating in U.S. combat activities in Iraq and Afghanistan.

“The men and women who sacrifice their lives to protect our nation on the battlefield should be able to return to their families without having to wage another battle here at home to receive the health care they are more than entitled to receive,” Congressman Cummings said. “I was absolutely disgusted to read about the atrocities that individuals are being forced to endure as they attempt to get treatment for the injuries they received while serving our country.”

Under the Defense Base Act (DBA), contractors and subcontractors are required to purchase for employees working overseas insurance that covers medical care and disability payments for on-the-job injuries, as well as death benefits to the families of employees who are killed on the job. The costs of the insurance are built into the price of the contract between the contractor and the federal government.

The Department of Labor is designated by the law to administer the requirements of the DBA but has been unable to do an adequate job do to underfunding and increased claim volume. Further, the Department of Defense has not adopted a single-contract process for retaining an insurer under DBA, allowing insurance companies to inflate premium costs.

“There are clearly serious deficiencies in the health coverage of civilian employees who have been injured while working overseas to keep us safe here at home—costing not only the men and women who are being refused coverage for the treatment they need, but also for the American taxpayers who are footing the bill for their coverage,” Congressman Cummings said. “It is important that the Congress investigate this issue and take appropriate action to fix these problems.”

Specifically, Congressman Cummings would like a hearing to examine the DBA insurance practices at AIG, which handles the bulk of these claims, as well as the Department of Labor’s inability to enforce the requirements of DBA and the Pentagon’s development and implementation of the strategy required under the a provision included in the 2009 Duncan Hunter Defense Authorization Act to minimize insurance costs for the DOD and contractors.

The Text of the Letter:
April 21, 2009
The Honorable Dennis J. Kucinich
Chairman, Subcommittee on Domestic Policy
Oversight and Government Reform Committee
2445 Rayburn House Office Building
Dear Chairman Kucinich:
The Los Angeles Times, in conjunction with ABC News and ProPublica, reported on Friday, April 17, 2009, that the health insurance claims of civilian contractors who participated in military operations in Iraq and Afghanistan have been denied with unsettling frequency.[1] I write to request that the Domestic Policy Subcommittee of the Committee on Oversight and Government Reform hold a hearing to examine the issues detailed in the Los Angeles Times, ABC News,and ProPublica investigation.
Per the Defense Base Act (DBA), 42 U.S.C. 1651-1654, contractors and subcontractors are required to purchase workers’ compensation insurance for employees working overseas. The insurance purchased must cover medical care and disability payments for workers injured in the performance of job duties; it must also provide death benefits for the families of employees killed on the job. The costs of insurance premiums paid by the contracting firms are then built into the price of the contract between the contractor and the Federal Government.
Right now, there are more than 31,000 current and continuing civilian injury claims, as well as more than 1,400 claims for death benefits. The American International Group, Inc. (AIG) and other insurers have received some $1.5 billion in premium payments, while paying out $900 million in compensation and expenses. According to the article, AIG is the primary insurer retained by contracting firms, handling some 90 percent of civilian claims filed in the war zones in 2007.
The article goes on to describe the difficulty that claimants have encountered in receiving benefits for medical care and disability payments, as well as the challenges faced by the families of those killed in receiving death benefits. From prosthetic limbs to treatment for Post Traumatic Stress Disorder, the claimants have faced a “reject first and investigate later” mentality from the insurers.[2] In order to receive their legally mandated compensation, claimants often have to resort to mediation or litigation.
The Department of Labor (DOL) is the administrator of the DBA by statute. However, the article notes that because of underfunding and increasing claim volume, DOL has been unable to adequately enforce that: (1) contractors provide the mandatory coverage required under the DBA; and (2) insurers process the claims fairly and consistently.
Not only have claims been denied unfairly, but the contractors and insurers are able to operate with relative impunity. The Department of Defense (DOD), unlike the State Department and the Agency for International Development, has not adopted a competitive single-contract process for retaining an insurer under the DBA. Therefore, insurers are free to demand their own premium costs from contractors, with the taxpayers ultimately footing the bill. Further, in a September 28, 2007 report, the U.S. Army Audit Agency found AIG premiums to be “unreasonably high.”
As you are aware, the full committee on Oversight and Government Reform held a hearing on the DBA on May 15, 2008. The hearing examined taxpayer costs under the DBA, as well as the Pentagon’s failure to put appropriate controls on the program. As a result, the Duncan Hunter National Defense Authorization Act for FY2009 (P.L. 110-417) included a provision requiring the DOD to adopt an acquisition strategy that minimizes insurance costs for both the DOD and for contractors. The strategy was to include a competitive marketplace for the selection of insurers.
Despite our efforts to include the above constraints on the 2009 Defense authorization, the status quo remains. Regrettably, those most in need of assistance – the civilian employees injured while assisting our military – continue to face unnecessary delay and harm.
While AIG is not the only insurer providing this coverage, that firm handles the bulk of the claims. Over the last few months, AIG has engaged in a pattern of deception and reckless behavior with respect to taxpayer funds, and I am deeply disturbed that the firm may be withholding any payments contractually due to civilian contractors injured in Iraq or the families of civilian contractors killed in Iraq.
As mentioned at the outset of this letter, I am requesting a hearing of the Domestic Policy Subcommittee that could potentially examine the DBA insurance practices at AIG, DOL’s inability to enforce the requirements of the DBA, and the Pentagon’s development and implementation of the strategy required under the 2009 National Defense Authorization Act.
I thank you for your continued hard work to address the needs of all Americans, and I look forward to hearing from you.
Elijah E. Cummings
Member of Congress

15 Responses to “Cummings Requests Congressional Hearing on AIG denying claims and the Department of Labor’s non enforcement”

  1. Ms Sparky said

    That’s what we were hoping for!! Well done. Is there a contact person for people who haven’t been paid to contact them?

    Ms Sparky

  2. Krash said

    Thank you Congressman Cummings . . who do we, the injured contractor’s, need to contact??

  3. defensebaseactcomp said

    Coming right up !

  4. Awifewatchingherhusbandsuffer said

    Thank you very much. Many of us have been fighting for so long with little help. It is not onlt the contractors that suffer but their spouse and children. Thank you for speaking up for us.

  5. jana said

    oh yes, guess we the tax payers are stuck paying for something we already know about. GEEZ just review the last hearing and Hammer DOL Butt.

  6. jana said

    What about all those contractors who have already been screwed by AIG will this go retroactive for all.

  7. defensebaseactcomp said

    Thanks for joining in jana.
    Mainly yourself, along with so many people you’ve been there for, put in hours and hours with Waxmans Oversight Committee last year….
    We all saw some hope for our futures.
    Thought maybe the calvary was coming.
    Right before the hearing they told us they changed their minds about having injured contractors and supporters testify at the hearings. Instead they were going to use “government officials” to testify.
    They dumped us.
    All we got out of that was a quote, the same one everyone keeps using
    “Delays and Denials are the Rule”
    Business as usual.
    We very much appreciate Rep Cummings heartfelt concern and efforts to start this back us.
    It’s pretty hard to get excited about.
    We’ve been screwed over pretty good by the committee.

    We should be talking waste, fraud, and abuse by now.

  8. Awifewatchingherhusbandsuffer said

    Okay well then lets just go there and let not wait for them to call us. I am sick of sitting back and waiting. I am think that the abuse has been enough.

  9. John Jones said

    Thank you very much for your your efforts. It is encouraging to note that someone is looking after our interests.We took our jobs seriously and rendered professional service. We also spilt our blood on that battlefield looking after our clients. It does get quite lonely being far away from a people you considered as your countrymen.
    I feel that there should be criminal prosecution where deliberate attempts to deny claims are uncovered. Their actions are tantamount to treason.

  10. jana said

    What was really odd about this hearing that was planned in advance, is that at the last min. Congress decided to also hear the PTSD case on our military at the very same time and day. Which then left the majority of congress not available to hear the AIG/ KBR hearing.

  11. defensebaseactcomp said

    “Okay well then lets just go there and let not wait for them to call us. I am sick of sitting back and waiting. I am think that the abuse has been enough.”

    Couldn’t agree with you more!!

    We’ve done all we can to work within the system and we get nowhere.
    In ways in has gotten worse.
    The OALJ in Washington DC is not even assigning cases for hearings any longer, at least not for the last three months.
    Why would our members of Congress and our Department of Labor allow so many of us to have to suffer like this?
    They have been very aware of the situation and done nothing to help.

    Anyone interested can go to
    American Contactors in Iraq and use the email listed there to join up.

  12. defensebaseactcomp said

    “What was really odd about this hearing that was planned in advance, is that at the last min. Congress decided to also hear the PTSD case on our military at the very same time and day. Which then left the majority of congress not available to hear the AIG/ KBR hearing.”

    Yes, Jana, as I recall this was to be a long hearing, covering months and months of interviews with injured contractors and investigations into the insurance company practices.

    They had documentation of everything plus a lot more than came out in these recent television and newspaper stories.

    It was first postponed from it’s original date and then they put it up against a very important hearing on Veterans and PTSD which was televised on CSpan.

    Our hearing was not televised on any of three CSpan Channels and was cut short when Henry Waxman had to run to oversee a vote, which was planned, in the house.
    You’d have thought his pants were on fire to get out of there.

    Is it any wonder that those of us who have been telling our story for so long have to wonder why we keep getting shut out and shut up?

    Who gained from keeping this story under wraps?????

  13. Dave said

    Thank you Congressman Cummings!!!!!! I am a 25 yr military veteran and was injured in Afghanistan but CNA is just as bad as AIG in the processing of workers comp. benefits. Anyone who goes to Iraq or Afghanistan is a hero to me and should be treated as one. I wonder how many of those insurance lawyers or DOL Defense Base Act claims adjusters have been to Afghanistan or Iraq. The companies that hire on these heroes are just as ruthless by submitting non payment of compensation to the insurance companies and DOL. This is a crime and heads should roll for this. Where is the justice?

  14. john batterton said

    I was injured while working for KBR in Afghanistan. AIG started off paying $900.00 a week. Then i got a lawyer and they cut me off. Then we asked for an informal hearing and they started giving me $220.00 a week. Were they even come up with these numbers is beyond me. Does anyone know what happens after the informal hearing and how long does it take to get answers? If i didn’t get PTSD over there they are sure giving it to me now. Why would our President give that company all that money and let us get screwed so openly? Sure i went for the money but a huge part of it was helping and working along side our armed forces. I take and took great pride in that. And to get a permanent injury, lose my job, get hit with the taxes because i wasn’t their the 330 days. Haven’t i lost enough? I have real injury and i wish somebody would step up and take a look at the in your face abuse these big companies are doing . Obama talked of reform and change. i sure am not seeing it. Being the little guy i guess i won’t. How can a company that owes legitimate claims be aloud to give out millions in bonuses to the management. I’m just a carpenter but sure sounds simple to me. It kinda makes me want to buy a rifle and move to the woods. Maybe those people have something after all. Once again it looks like the lawyers are the ones making all the money. I have a true injury that occurred while i was working. What is there to dispute? It’s not like saying my back hurts. It’s visible why not just pay the claim and save a lot of time and money with judges and lawyers. O i forgot I’m just a Carpenter. Does anybody know if there is a way to e-mail the Whitehouse? Maybe they don’t know what’s happening out here. I did forget to three small things my KIDS!!!!! It’s time for CHANGE!!!
    If anybody has any helpful info please let me know at e-mail:

  15. Rob Simmons said

    Hi All
    Firstly let me say how glad I am to find this website at least I do not feel alone anymore.
    I will give brief history Jan 2004 I was a team leader working for Aegis BVI. We hit an IED on route Uranium just outside Hit Alanbar region. I suffered life and limb threatening injuries after surgery in theatre then in Germany I was returned to the UK undergoing more operations over 18 months. The result is that my Doctors, Surgeons, Podiatrist, Osteopath have stated I will not return to work. I offered to attend an IME in the USA which the insurers declined.
    I Quote “There is no need for you to attend an IME as your claim is based entirely on medical evidence and your case is well documented”
    On my return from holiday I was somewhat alarmed to read the email sent by the insurers. It said they wished to discuss settlement they listed certain items but stated that my surgeon had said that as I would continue to heal without future surgery any medical payments would be minimal a direct contradiction to what he had told me. I emailed him and his reply was. “That is not what I said in fact I have made it clear in all my clinical notes that in my opinion you will require further surgery in the future” I contacted the New York office LHWCA and was told “You need to get an attorney to get what you are entitled too”
    OK lets rewind
    I asked the question if I am entitled why do I need an attorney???????????? Because that’s how it works in the USA.
    November 2008 I contacted an attorney who was recommended by a friend in the USA. After going over the case with him and checking out the company I engaged him.
    We offered an IME in the USA again. Again the insurers declined as they only listed one injury and not the multiple injuries I sustained.. My attorney got the file from the DOL and it had hardly any information in it even though I have the emails from my case manager saying she had received the medical reports from the doctors in the UK.
    After 5 months my case went for an informal hearing the DOL administrator issued her recommendations and the insurers stated they would say what their position was after a visit to my surgeon to explain my injuries and the cause of the on going problems. This he did the insurers then decided to set up the IME with a doctor of their choice. I saw the doctor who did a full examination he went through the medical reports which were minimal. About a week later his secretary contacted me to see if I had any medical records or x rays as he was unable to obtain these from the insurers I provided copies of everything I had and 4 to 5 weeks later he produced his report again I quote
    “In my expert opinion and in the balance of probability the claims of the patient would seem fair and reasonable”
    The case was then referred to the office of ALJ for a formal hearing due to be held in Jan 2010. My attorney contacted me to say that the insurers were going to contest his fees as they were not listed in the recommendations. I asked what this meant for the case and the reply “If we go ahead and the judge does not award me my fee’s you will be liable and any compensation you are awarded will be reduced by my fee so you could end up with nothing” I pointed out that he was the legal expert and why had he not picked up this point. It has only recently become an issue was the reply.
    So to summarize
    You are not entitled to what you are entitled too and what you are entitled too goes to your attorney who you have to appoint to get what you are entitled too.
    Is that right ???????????? Am I confused you bet can you get a straight answer from anyone hmmmmmmm no you cannot.

    How about this though.
    Any compensation paid in settlement is refundable to the insurer under the War Hazards Comp Act
    This I presume is paid by the US government out of US citizens tax dollars.
    So the insurer have a claim for arguments sake worth 1 million US dollars they engage a law firm to fight it the claimant engages an attorney to protect his position you have informal conference then pay for a court case this claim is now worth how much 1.5 maybe? They pay the claim and claim it all back off of the US tax payer. How about the examiner at the DOL reads the medical evidence makes the recommendation the insurer pays. How much money would that save ?????????????
    Sorry for the rant thanks for reading Rob

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