Examining Medical Benefits Fraud in Federal Workers' Compensation

FICA Program Benefits and Disincentives

• 💡 Injured workers with dependents in the FICA program can receive augmented compensation at 75% of their wages, which can exceed their pre-injury gross income due to tax-free benefits and fewer payroll deductions.
• ⚠️ This can serve as a disincentive to return to work, as normal federal salary increases and promotions are forgone, though an annual cost of living adjustment is still provided.

Comparison to State and Longshore Programs

• ⚖️ State workers' compensation programs and the federal longshore program typically set benefits at two-thirds of a worker's gross wage with no augmented compensation for dependents.
• 🔍 FICA is generally more generous than state programs and the federal longshore program, offering features like unlimited choice of treating physician and no lump-sum settlement options, which can impact return-to-work rates.
• 📊 State programs often have benefit caps (total or age) and may limit medical provider choice, which can encourage workers to return to employment.

Combating Medical Benefits Fraud in FICA

• 📈 The Office of Inspector General (OIG) has seen significant progress from the Office of Workers' Compensation Programs (OWCP) in improving fraud prevention and payment management, particularly with compounded drugs and opioids.
• 🎯 Two key recommendations to Congress aim to further strengthen the program: authorizing OWCP to access social security wage records and the national directory of new hires to identify under-reporting of income or outside employment.
• 🩺 A long-standing recommendation is to authorize OWCP to suspend medical providers who are indicted for fraud involving the FICA program, preventing continued payments for services from indicted providers.