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USACE Combats Workers’ Compensation Fraud, Waste, and Abuse

A persistent crime that can affect us all

The U.S. Army Corps of Engineers (USACE) has been actively combating a costly and persistent crime since 1994. Workers’ compensation fraud and abuse of the federal workers’ compensation system by our employees are estimated to cost the Corps of Engineers approximately $1.5 million a year, funds that come directly from the USACE Construction General budget at USACE Headquarters. The Federal Employees Compensation Act (FECA) Fraud Investigation Program, a Corps-wide and command-mandated waste, fraud, and abuse program is USACE’s primary weapon in this battle.

U.S. Code (USC), Title 5, Chapter 81, “The Federal Employees Compensation Act,” provides medical and compensation benefits to USACE employees who are injured in the line of duty. The U.S. Department of Labor (DoL) manages the FECA on behalf of all federal agencies through the DoL Office of Workers’ Compensation Programs (OWCP), paying for medical bills associated with on-the-job injuries and replacing the injured party’s salaries and wages while they are recuperating. In the case of those personnel who are so severely injured that they cannot return to work, the FECA will replace their wages for life.

As with all good-intentioned programs, however, there are those who will seek to enrich themselves at the cost of others. Workers’ compensation fraud and abuse negatively affects USACE’s mission capability by reducing the amount of funds available for completion of projects vital to our nation’s infrastructure and warfighting capability. We also have to consider that when knowledge of individuals who are defrauding or abusing the system becomes common in the workplace, morale suffers and others consider the ease of abusing the system.

As federal employees, we understand that injuries do occur in the workplace. We should expect that injuries sustained in the line of duty will be paid for by the employer, and if those injuries incapacitated us to the extent that we were not able to work, we should be compensated accordingly. The FECA, envisioned as a fairness measure that would ensure that injured employees are still able to have a livelihood despite injuries that occur on the job, is a well-intentioned but flawed law. Passed with no mandatory cutoff dates or real provisions for returning the injured parties to work, the law and the funds it provides are at risk of serious abuses and blatant fraud.

Fraud is typically defined as a willful intent to take something by lying or obscuring the facts. Very few cases of workers’ compensation fraud start off as blatant fraud. Rather, fraud cases develop when employees get legitimately injured and they decide that they will not have to return to work if they remain injured, thus they begin to exaggerate the extent of their injury to continue to receive benefits. Benefits for an employee with a dependent are 75 percent of the employees original wages, tax free. As there is no mandatory removal date from the workers’ compensation program defined in the FECA, this flaw allows unscrupulous employees to claim injuries for decades.

Numerous USACE workers’ compensation recipients are in their fourth decade of receiving compensation benefits. If the employee is legitimately injured and deserves to be on the workers’ compensation rolls, then there is no need or tool to force them into retirement. However, commanders may want to consider return-to-work efforts whenever possible to help reduce workers’ compensation costs.

The flaws in the FECA law and DoL’s policies for handling FECA injury claims have left other Army agencies scrambling to develop workers’ compensation programs capable of reducing the abuses of the FECA. The USACE tool in this fight is the FECA Fraud Investigation Unit (FIU). The FIU is a highly specialized group of individuals dedicated to the deterrence of workers’ compensation fraud and abuse of the program. Exaggerations of injuries, falsely claimed injuries, and under-reporting or failure to report wages earned while receiving workers’ compensation benefits are just a few of the types of fraud the unit investigates.

In addition, the unit works with Injury Compensation Program Administrators (ICPA) in Civilian Personnel Advisory Centers throughout USACE to standardize injury-handling practices, train supervisors to be aware of potentially fraudulent claims, and encourage the individual commands to actively pursue return-to-work efforts for those individuals who can be returned to the workforce. Since the FECA FIU has been in place, it has provided the Department of the Army (DA) and the U.S. government with a cost savings of more than $60 million.

The mission of the FECA Fraud Investigation Program is “to identify fraud, waste and abuse in the area of worker compensation benefits and to reduce the cost associated with those benefits through the conduct of investigations and subsequent criminal, administrative or civil actions.” This mission statement encompasses a holistic twofold approach to reducing costs and is supported by a single objective – to verify and validate injury claims. Administrative inquiry, audits, and preliminary criminal investigation are tools used by the FECA FIU to ensure fraud and abuse are rooted out.

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