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Preventing Workers’ Compensation Fraud

Filed under Fraud, Top Stories

Tags: claims, compensation, Fraud, owcp

The Postal Service funds workers’ compensation benefits for employees who sustain job-related injuries. In FY 2008, the Postal Service paid $965 million in total benefits to workers’ compensation claimants for medical expenses and lost wages, and the estimated future liability for future workers’ compensation costs is nearly $7 billion. In addition, the Postal Service must pay the Department of Labor’s Office of Workers’ Compensation Programs (OWCP) for administering the workers’ compensation program. OWCP pays the claimants, medical providers, and beneficiaries and then bills the Postal Service for reimbursement in a process known as “charge-back billing.” The Postal Service paid nearly $60 million to OWCP for administrative fees alone in FY 2008.

While the Office of Inspector General (OIG) recognizes that fraudulent workers’ compensation claims make up a small percentage of the total claims, the OIG commits significant resources toward identifying claimants who defraud the system. In FY 2008, OIG investigations saved the Postal Service more than $197 million in future workers’ compensation costs, and the OIG arrested 51 individuals for workers’ compensation fraud. The following example highlights one of our recent successes.

It All Add$ Up

On October 2, 2008, a former Postal Service mail processing clerk from Montana was convicted in U.S. District Court on four counts of fraud following a 3-day trial in Billings, Montana. This former postal clerk had not worked since December 1986 and had received more than $650,000 in workers’ compensation payments since that time. She considered herself so disabled that she could not even “bend over to cut her toenails.” During a month-long surveillance in the fall of 2006, OIG agents saw a much more active woman as they videotaped her using a chain saw and wood splitter, unloading 10-foot logs from her pickup, and stacking large chunks of wood. (See above for some of the video footage.)

On January 21, 2009, Chief U.S. District Court Judge Richard Cebull ruled that the former clerk is suffering from a mental disorder and committed her to a federal medical center for up to 20 years.

This successful investigation saved the Postal Service approximately $781,000 in future workers’ compensation payments.

Do you have any suggestions for preventing workers’ compensation fraud?

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Permalink | Comments (12) | Feb 20, 2009

12 Responses to “Preventing Workers’ Compensation Fraud”

Clark Riley Says:
February 23rd, 2009 at 12:17 pm

Great work. We need to see these as often as you can catch them. A big morale booster to those that do work everyday for their money. Congratulations.

Ron Cikowski Says:
February 23rd, 2009 at 1:15 pm

Great Work! More energy and resources need to be spent on capturing employees that commit fraud

Peter L McGoey Says:
February 23rd, 2009 at 2:33 pm

The story on the Montana case is simply heartwarming! I think every Postal employee who works for their paycheck can appreciate the theft that occurs from this company in workers comp fraud. Love the fact that some are caught but not nearly enough! Since there are not enough OIG agents to go around, I think that we should use the resources we have to catch more offenders…… US! There should be an office that each employee could send suspicious videos to illustrating co-workers who are abusing the system. This could tip off agents and might possibly begin a case that could save millions. The abuser then would constantly have to be looking over their shoulder and would think twice about the choice not to work when they are truly capable of doing so!

ROY MCCAIN Says:
February 23rd, 2009 at 3:08 pm

GOOD FOR YOU!!

I HAVE 42 YEARS AND COUNTING.I PLAN TO HAVE A KNEE REPLACEMENT IN MARCH. I PLAN TO BE OUT ONLY 3 WEEKS AND MAY USE ANNUAL LEAVE.

IF WE CAN PLAY BY THE RULES,SO CAN SHE!

chili Says:
February 23rd, 2009 at 6:54 pm

Thanks for the great work….there is nothing worse for service, cost or employee morale than having to watch those that are obviously manipulating the system.
Amazing how their “restrictions” apply ony at work, butnot in their personal lives. I have never understood why the USPS tolerates this.There is simply nothing more gratifying than to see these frauds exposed and the perps brought to justice.

Just A Little Comment.. Says:
February 24th, 2009 at 8:57 am

I like the idea of self-regulation (employee involvement)…get the video recorders rolling and the referrals coming!!!!!

I wannabe OIG slacker Says:
February 24th, 2009 at 10:25 am

OIG is great - it only took them 20 years to catch a mentally ill person. How do I get a job like that?

doc Says:
February 24th, 2009 at 10:47 am

you really need to check out the spokane P&DC, There is alot of fraud here in the spokane area, and I,ve yet to see anyone get caught and cinvicted.

Bib Brother Says:
February 24th, 2009 at 12:04 pm

To USPS employees that want to help,

Use the OIG hotline (888) USPS-OIG, or contact your local OIG office, to report your allegation/s of workers’ compensation fraud. Let the OIG agents, who are trained law enforcement officers, investigate. You could be exposing yourself to liability and/or personal harm if you try to conduct surveillance. Beleieve it or not, there is alot more to these investigations than just taking photographs/video of the claimant involved in a physical activity.

little brother Says:
February 24th, 2009 at 3:20 pm

Of course this only applies to craft employees. If your a manager or 204B no problem. 204B here been on “light” duty from almost the time she was hired. She been milking it pretty good…but than again..she is in management, see no problem. Had a upper level manager collect OWCP. Her case was investigated, hold on now…by her HUSBAND, a postel inspector. Would you believe he found her injury to be “real”? See, no problem.

North Suburban 600 & 601 Racks Says:
February 24th, 2009 at 3:58 pm

Hey Cikowski!
did you ever find the ones that sent your desk to evanston?????

Itchy Feet Says:
February 24th, 2009 at 10:54 pm

The problem is more than just Worker’s Compensation. We have people with medical restrictions that are not job related. They are either unable to work more than eight hours or unable to do park and loop routes. Some are unable to wear a satchel or unable to lift trays off of the floor. Their is tremendous amounts of “accomadation” that is really expensive and unfair to the workers that are unlucky enough to be able bodied.

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