Claims

 

Claimants and consultants enter into contracts for services to perform services related to corrective action including site characterization and remediation.  The consultant submits invoices to the claimant in accordance with the contract for services between them and the claimant is responsible to pay the consultant in accordance with their contract.   The claimant then files a claim with USTIF for reimbursement of the consultant's costs.  The USTIF is responsible to the claimant to whom it has an obligation, not the consultant, who has a relationship with the claimant.  As a convenience, the USTIF will permit the claimant to submit approved invoices directly to the USTIF for payment directly to consultants. 

 What is meant by industry standards with regard to invoice payment and how does the Fund apply these standards? 

Industry standard labor rates, equipment and supply costs have been derived over time from the day to day review of invoices from over 100 consulting firms throughout the Commonwealth.  They represent what we routinely see charged by the majority of consultants doing remediation in Pennsylvania.  In 2005, USTIF/ICF reviewed more than 18,000 invoices.  Industry standard rates that are allowed are based on the task being completed and not necessarily on the individual completing the task.  For example, a project manager's rate of $85 per hour would not be reimbursable if the task was identified as groundwater sampling.  The rate allowed for that task would be in the neighborhood of $45 per hour.

 Labor time on invoices is sometimes deemed excessive, what is the determination of excessive work? 

USTIF/ICF applies the "reasonable and necessary" standard for corrective action costs, as mandated by regulation (Chapter 977.33(a)(1)) in review of all invoice charges.  In the reasonable and necessary review of a task being performed, the personnel performing the task along with their respective rate, and the overall level of effort to complete the task are all considerations.  USTIF/ICF continually observes common costs associated with similar tasks through the review of the thousands of invoices received each year.  Application of the reasonable and necessary standard can be seen in   the following example:  If routine groundwater monitoring of 3 to 4 monitoring wells, each 30 feet deep, in the industry typically requires 8-10 hours of labor by one technician with the coinciding necessary supplies and equipment. Then, if an invoice submitted for reimbursement for this work includes two technicians both billing 8-10 hours for groundwater monitoring, these costs would be "deemed excessive" and a deduction for the second individual would occur.   There are situations where two technicians may be necessary and with appropriate documentation and explanation would be considered.  Another example of a charge that would be "deemed excessive" is billing over 40 hours of AutoCAD operator time to construct a simple site base map as this is far greater level of effort than typically seen in the thousands of invoices USTIF/ICF have reviewed.

Unlike some States where specific unit prices are utilized, PA USTIF prefers to utilize industry standard which allows companies the flexibility to invoice and receive appropriate compensation for services based on varying site conditions.

Approximately 93% of all invoiced charges submitted to USTIF/ICF are approved for payment.  Therefore, USTIF/ICF disallows only about 7% of invoiced amounts for all reasons including cost above the industry standard and costs "deemed excessive".

 Can USTIF/ICF create a form list of what items will or will not be allowed? 

No.  An all inclusive list of items allowed or not allowed is not practical or beneficial to cleanup projects.  Items necessary on one site may not be necessary on another site.  As noted above, there are over 100 consulting firms working on claims in the Commonwealth and they generally have different approaches, use an extremely wide variety of supplies and equipment and charge for items in a variety of ways. Creating a useable list of items would limit innovation and introduction of new technologies and assume generic conditions at every site.  For example, while pressure transducers may be reasonable and necessary at various stages of site characterization or remediation at a site, to dedicate pressure transducers on every well is not reasonable and necessary or seen within the industry.   USTIF/ICF allows flexibility and encourages creativity for cost effective remediation of contaminated sites.

 Is it possible to get more detail as to what invoices are being paid with each check? 

All applicable information is provided on the remittance advice and ICF Consulting's invoice authorization cover sheet.   Reading ICF Consulting's invoice authorization cover sheet along with the remittance advice and understanding any applicable proration/deductible applied to the specific claim payment can be easily identified.

 What backup is required with submission of invoices?

One complete copy of the invoice and all appropriate backup that fully supports all charges on the invoice must be provided for payment recommendation.  These items include: 1) timesheets or a spreadsheet for personnel, both of which must include the employee name, title, date of work, hours worked, rate per hour, and be accompanied by a detailed description of the task completed for each date.   A general task description is not acceptable; 2) equipment rental must be fully documented with the date of use, equipment used and cost for the equipment. Employee timesheets/spreadsheet providing the detailed description of tasks completed coinciding with the equipment rental date must be provided when the equipment charge is outside the current billed period;  3)  purchases must have receipts and/or other cost documentation for expendable supplies;   4) subcontractor invoices must be submitted for all subcontractor work; 5)  all utility invoices; and 6) laboratory invoices that include a list of tests performed with their costs and laboratory analyses.   In short, in order to make a payment recommendation for any invoice to USTIF, ICF Consulting is required to verify every charge on an invoice.

 Can USTIF reduce the need for repeating backup with invoice submittals?

No.  Each invoice must stand on its own.   ICF Consulting is required to verify all charges prior to payment recommendations to USTIF.  The review of thousands of invoices prohibits ICF Consulting from expending the time to verify timesheets from a prior billing period.

Will USTIF or its Third Party Administrator accept an electronic signature for approval of remediation invoices and letters?

USTIF has determined electronic signatures are acceptable with the following conditions:

• Documents must be signed using a secure method where a user ID and password or pin are required.  In general, typing a name, regardless of font is not acceptable.
• When electronically signed documents are submitted to USTIF or its Third Pary Administrator, by anyone other than the signer, the signer should be copied as a courtesy in the transmission of the document.  For example, the participant of the Claim approves paying an invoice using an electronic signature and the consultant submits the invoice to RA-ICF-USTIF@icf.com; the consultant should include the participant in the email transmitting the invoice.
• An electronic signature using a secure method will be accepted for the submission of responses for Competitive Bidding.

 Would it help to provide with submission of the RAP and associated invoice, a discussion of alternative remedial options considered, their advantages/disadvantages, and total present value costs of each, showing the rationale for the remedial approach described in the RAP, prepared by a P.E.? 

Yes.  Any information that demonstrates that the remedial option chosen is the most effective and efficient method is welcomed and may facilitate reimbursement of RAP implementation.   Discussion of remedial alternatives is required in the SCR and how the remedial action will attain the standard for the site is required in the SCR.  These discussions should be as specific to the site conditions as possible.  The degree to which the remedial alternatives are feasible and applicable should be discussed.  The relative merits of the remedial alternatives with regard to both technical issues and cost effectiveness should also be addressed.  A cost comparison table for the remedial alternatives would be helpful.

 A site may be remediated to a statewide health standard or to a site specific standard, and there's a good chance the statewide health standard will require greater expenditure. Does USTIF make decisions for payment on a project based on the remedy selected? Will USTIF decline coverage for a statewide health standard if the Fund believes a site should be remediated to a site specific standard? Is there a way for a tank owner and the consultant to work in conjunction with USTIF to make a determination of a "best approach" in developing a remedy prior to implementing the remedial work? Is this something the consultant should call to USTIF's attention?  

The claimant (the tank owner and/or operator) as the remediator selects the cleanup standard; generally the Statewide Health Standard or Site-Specific Standard.  As the question indicates, the cost to achieve the Statewide Health Standard is generally higher than the cost to achieve the Site-Specific Standard. Additionally, attaining the Statewide Health Standard can generally be expected to take significantly longer than attaining the Site-Specific Standard.  Therefore, it may be advantageous to both the USTIF and the claimant to select the Site-Specific Standard rather than the Statewide Health Standard.  For example, if it is determined that a claim is eligible for coverage but the claim should be prorated because of the existence of contamination that is not eligible (e.g., releases prior to February 1994), then both the USTIF and the claimant will each have to pay a portion of the cleanup.  If a Statewide Health Standard cleanup is estimated to cost $500,000 and the claim is prorated at 80%, the USTIF will pay $400,000 and the claimant will pay $100,000 of the cleanup costs.  If, however, a Site-Specific Cleanup would cost $300,000, then the USTIF would consider adjusting the proration to 100% thereby lowering its costs from $400,000 to $300,000 and eliminating the costs for the claimant.  Either the claimant, ICF Consulting, or the USTIF can initiate this conversation regarding the selection of standards and proration.

 Applications for funding do not appear to have consistent timeframes for making a determination of eligibility, and in certain cases a determination can be substantially longer than the timeframes established by Chapter 245, especially relative to requirements for site characterization. Is there anything that can be done to expediate an eligibility determination so that an insured has a greater sense of certainty regarding the costs that will be incurred?  

An eligibility determination of a claim for payment depends on many factors as defined in the regulations. In some cases, the claimant may need to perform site characterization activities and transmit this information to USTIF/ICF prior to any eligibility determination.   For example, if contamination exists on the site as a result of a release of leaded gasoline prior to February 1994, there would be no coverage for the site.  However, if contamination on the site consists of unleaded gasoline that is the result of a recent release, the site would be 100% covered.  Combinations of historical releases and recent releases would be prorated accordingly.  The owner/operator is responsible under Chapter 245 for corrective action and must meet the statutory deadlines as required by those regulations.  

 Site characterizations often require a considerable amount of time and effort to define the problem and to develop an effective remedial solution. Does USTIF see it as "necessary" to invest in reasonable costs for problem definition and solutions development or is "necessary" interpreted as barebones site characterization with a focus instead on remediation?  

A proper site characterization is mandated by the Chapter 245 corrective action regulations.  Identification of the source is necessary to comply with the delineation of impacted soil, formulation of a conceptual model, completion of a fate and transport analysis, as well as other specific corrective action requirements.  However, beyond this Chapter 245 corrective action requirement, a thorough identification of the source of site groundwater impacts is critical for a successful and cost effective site remediation. Failure to properly identify and address the source is the most common reason that the USTIF sees for failed remedies and unnecessary costs.  For example, on one claim, the USTIF paid for a site characterization, installation of an air sparge and soil vapor extraction system, and the operation and maintenance of the system for five years.  After five years of operation, groundwater concentrations in some monitoring wells onsite were essentially unchanged.   In this case, the principal reason for the failure of this remedy was failure to properly identify and address the source of contamination in soil that is impacting groundwater.  In this case and in many others, a relatively modest additional expenditure in the site characterization phase allows impacts in the source area to be adequately addressed, thereby significantly shortening operation and maintenance periods for remedial activities.

 Often investigation of source areas is complicated by site operations, buried utilities uncertain site history and other reasons that can result in added investigation costs. In USTIF's view, how important is identifying, locating and focusing remedial efforts on the source area(s) in order to keep total cleanup costs down? 

A proper site characterization is mandated by the Chapter 245 corrective action regulations.  Identification of the source is necessary to comply with the delineation of impacted soil, formulation of a conceptual model, completion of a fate and transport analysis, as well as other specific corrective action requirements.   However, beyond this Chapter 245 corrective action requirement, a thorough identification of the source of site groundwater impacts is critical for a successful and cost effective site remediation. Failure to properly identify and address the source is the most common reason that the USTIF sees for failed remedies and unnecessary costs.   For example, on one claim, the USTIF paid for a site characterization, installation of an air sparge and soil vapor extraction system, and the operation and maintenance of the system for five years.   After five years of operation, groundwater concentrations in some monitoring wells onsite were essentially unchanged.  In this case, the principal reason for the failure of this remedy was failure to properly identify and address the source of contamination in soil that is impacting groundwater.  In this case and in many others, a relatively modest additional expenditure in the site characterization phase allows impacts in the source area to be adequately addressed, thereby significantly shortening operation and maintenance periods for remedial activities.

 Remedial pilot testing results can often be inconclusive or demonstrate only partial effectiveness/applicability of a technology (e.g., absence of minimal pneumatic influence, poor mass extraction potential, etc.). How important is it that pilot testing demonstrates that a technology will work, support the remedial design and be cost effective at a site relative to reimbursement of remedial costs? 

In some limited cases, an experienced consultant may be able to design, install, successfully operate a remediation system and cost effectively complete a site cleanup without pilot testing.  An example of this is an air sparge and soil vapor extraction system in a homogenous sand and gravel aquifer.  However, in most cases, remedial pilot testing is necessary to demonstrate that the selected alternative will be effective, to gather information to support the design of the remedial system (e.g., spacing of extraction points, sizing of pumps, etc.), and to demonstrate that the overall remedy is cost-effective for the site conditions relative to other viable alternatives. 

 There are many different ways to achieve a remedial end point, each with different projected remedial timeframes, different impacts to owners/operators and different present value costs. Does USTIF consider factors other than cost when determining whether a remedial approach is reasonable, necessary and appropriate? 

In general, shorter remedial timeframes are preferable to longer timeframes.  If contaminant plumes are not stable, shorter timeframes may prevent contamination from spreading compared to longer timeframe solutions and bring land back into productive use in the Commonwealth more rapidly.  Additionally, aggressive remediation often can be more cost-effective than lower intensity long-term solutions because the higher initial capital costs can be more than offset by reductions in sampling, and in operation, maintenance and monitoring costs.  In any case, it is incumbent on the remedial consultant to demonstrate the selected remedial approach will cost effectively remediate a site in a reasonable timeframe relative to other alternatives.

 Occasionally, cleanup plans have already been reviewed and approved by PADEP but the USTIF subsequently does not agree to reimburse the cleanup costs because of perceived inefficiencies, inadequate rationale and/or costly elements of the plan. How can this situation be avoided?  

The PaDEP's primary responsibility is to protect human health and the environment and does not have as a primary focus the cost effectiveness of the remedy.  The USTIF, on the other hand, is charged by statute and regulation with balancing corrective action and cost in such a way that the Fund remains solvent so that future sites can be cleaned up.   The USTIF collects fees from tank owners and operators and has a fiduciary responsibility to fund corrective action in a cost-effective manner.  In almost all cases, there are several approaches that can be effective in remediating an impacted site.  The PaDEP may approve any of these technically feasible remedies with some being far more cost effective than others.  The USTIF shares the PaDEP's concern to clean up impacted sites.  The USTIF must also exercise its fiduciary duties to see that the most cost effective remedy is applied to each site. 

 If the DEP approves a RAP why doesn't USTIF automatically pay all the invoiced costs to implement that remedy?  

The PaDEP's primary responsibility is to protect human health and the environment and does not have as a primary focus the cost effectiveness of the remedy.  The USTIF, on the other hand, is charged by statute and regulation with balancing corrective action and cost in such a way that the Fund remains solvent so that future sites can be cleaned up.  The USTIF collects fees from tank owners and operators and has a fiduciary responsibility to fund corrective action in a cost-effective manner.  In almost all cases, there are several approaches that can be effective in remediating an impacted site.  The PaDEP may approve any of these technically feasible remedies with some being far more cost effective than others.   The USTIF shares the PaDEP's concern to clean up impacted sites.  The USTIF must also exercise its fiduciary duties to see that the most cost effective remedy is applied to each site.