Fraud in FECA at OPM?

The Federal Employees’ Compensation Act (FECA) is a compensation program providing Federal employees’ medical benefits, income subsidies and support services in the event of a work-related injury or illness, as well as benefits to surviving family members in the event of a work-related death.

The Department of Labor’s (DOL) Office of Workers’ Compensation Programs administers the FECA program but the cost of benefits are ultimately paid by the agency that employed the injured worker. All Federal agencies have oversight and financial responsibilities for their FECA cases. The Inspector General for the Office of Personnel Management (OPM) was concerned about OPM’s overall oversight of FECA cases and checked to determine whether OPM was in compliance with Department of Labor (DOL) guidelines to prevent fraudulent claims, wasted funds and abuse.

The Inspector General concluded that OPM should use its own resources for verifying eligibility according to the report. While DOL administers the workers’ compensation program, OPM pays for its employees who collect payments. The agency paid $2.49 million in workers’ compensation benefits for 153 work-related injuries, diseases and deaths in fiscal 2015, the time period the IG examined. While only 31 percent (47) of OPM’s FECA cases
received wage compensation, they accounted for 76 percent of the agency’s charge back costs. 76 percent, or $1.91 million, was spent for wage compensation for injured employees.

It is not surprising that more closely monitoring the use of the FECA program pays dividends for the agency. The report noted that in 2012, Employee Services became more aggressive to returning injured employees to work. They developed an internal tracking system for new FECA cases to improve the monitoring of injured employees’ status for work. As a result, only five injured employees with an injury date later than 2012 are still receiving wage compensation.

Long-term FECA cases at OPM are subject to fraud, according to the report, which identified 15 FECA cases where either the injured employee or the surviving family member receives FECA payments with little verification of continued eligibility. It recommended that OPM should “establish a process to verify survivors’ and long-term injured employees’ continued eligibility for compensation to decrease the vulnerability of fraudulent compensation payments being made to ineligible beneficiaries.”

OPM did not agree with the recommendation and noted that responsibility for determining eligibility is the responsibility of the Labor Department even though the agency (OPM) pays the associated costs under the program.

FECA Report on OPM Oversight of Program

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

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About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.

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