Panel investigates fraud in injured workers program

A House hearing on Thursday aimed at investigating injured government workers' complaints about poor customer service from the federal workers' compensation program instead focused on ways to prevent civil servants from defrauding the $2 billion-a-year program.

For years, federal workers who claim they were injured on the job have complained to members of Congress that their agencies and the Labor Department's Office of Workers' Compensation Programs take too long to process their claims, fail to return phone calls and lose their case files. The Thursday hearing was the fourth one held on the subject since 1998 by Rep. Stephen Horn, R-Calif., chairman of the House Government Reform Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations.

"The subcommittee has heard countless complaints about the program," Horn said.

In part because the General Accounting Office is still in the midst of an investigation into the workers compensation program's timeliness and customer satisfaction measures-and because the Labor Department disputed some of GAO's methods--the hearing focused primarily on anti-fraud proposals.

Labor Department Inspector General Gordon Heddell said he would like the authority to compare workers compensation beneficiaries' records with Social Security records, to make sure that claimants aren't collecting disability benefits while holding other jobs.

Heddell also said that federal workers would be discouraged from filing frivolous claims if they had to take three days of sick leave, annual leave or leave without pay before collecting their salary through the workers' compensation program. Under current rules, employees who file workers compensation claims receive 45 days of pay before taking the three days of leave. The IG also recommended reducing long-term disability benefits when people reach retirement age.

Officials from GAO, the Labor Department and the Postal Service agreed with Heddell's recommendations. Shelby Hallmark, head of the Office of Workers Compensation Programs, said the Bush administration is crafting a legislative proposal that would include at least some of Heddell's ideas.

Reducing workers compensation costs is a major goal of the Postal Service, said Ronald Henderson, the Postal Service's chief of health and resource management. The Postal Service is projecting a $1.5 billion loss this year because of reduced mail volume. Workers' compensation will cost the service about $800 million this year-an amount equal to more than half the service's projected loss. The Postal Service accounts for more workers' compensation claims than any other federal agency.

Henderson said the service is working with the Labor Department and the Postal Inspection Service to lower its workers' compensation costs.

Injured federal workers, however, complain that agencies spend too much time fighting workers' compensation claims and not enough time improving workplace safety. Richard West, assistant inspector general at the Postal Service, said his office investigated a claim that postal managers wouldn't give an employee the opportunity to file a workers' compensation claim after a postal vehicle hit the employee on postal property and dragged her off the property. "Local postal management originally refused to provide her the form, stating they did not consider the accident to have occurred on postal property," West said. The managers provided the form and processed her claim after the inspector general's inquiry.

Postal managers' bonuses are based partially on their ability to keep workers' compensation costs down.

Hallmark said OWCP is installing new computer systems and telephone systems to improve service to injured workers.

While Horn said he appreciated the work that the Labor Department and Postal Service have done to improve the workers' compensation program, he said it appeared that little had been done to make the program more responsive to claimants.

"Undoubtedly, new computers and new telephone systems will help resolve some of these problems," Horn said. "But all the technology in the world will not force OWCP employees to treat injured employees, regardless of the merit of their claims, courteously respectfully, and in a timely manner. This is clearly a management problem that has been allowed to fester."