Federal Workers' Compensation: Better Data and Management Strategies Would Strengthen Efforts to Prevent and Address Improper Payments

The Department of Labor (Labor) reported that it developed codes to identify reasons for improper payments and that its data system is collecting data on the causes of improper payments. In reviewing the data, Labor found a wide variety of debt reasons, with no single reason occurring more frequently than any other. The agency reports that it will continue to monitor the results and take appropriate future actions as needed.

The Department of Labor (Labor) agreed with most of the options outlined in this recommendation and reported that it is planning several efforts to implement them. As of January 2012, for example, the agency reported that it: (1) has developed an electronic form to allow agencies to electronically notify Labor when claimants return to work and began allowing all agencies to use the form as of 2/09; (2) continues to conduct monthly data matches with SSA's death records and has revised several forms used in survivors' claims to gather Social Security Numbers for survivor beneficiaries, enabling Labor to match these beneficiaries with SSA death records; (3) has implemented a system-generated automated request to be sent to SSA when a claimant achieves retirement eligibility age to identify cases in which FECA payments should be reduced due to SSA benefits; (4) has modified its agency query system as of 8/2008 to allow agencies to see details of all payments made to claimants and verify pay rates, premium pay additions, dates and hours paid, insurance deductions, and compensation rates; and (5) developed and deployed a new training module on payment accuracy in FY 2011.

The President's FY 2012 Budget included a legislative proposal for data matching with SSA. The Department of Labor (Labor) reports that it has investigated the National Directory of New Hires (NDNH) and communicated with HHS. Based on its findings, Labor determined that this would not be an effective solution due to: 1) limited participation by employers in the NDNH and 2) the fact that workers not reporting earnings to SSA would also not likely be listed on the NDNH (as legitimate employment).

In November 2010, the Department of Labor (Labor) reported that it implemented the system changes to collect data on overpayment resolutions and to identify outstanding debts. The agency developed codes in iFECS to allow analysis of OWCP's recovery effort. In addition, iFECS now alerts claims examiners when a claimant has a pending debt. With respect to holding staff accountable, Labor believes they are held accountable through individual performance standards, district office accountability reviews, and program plan goals. The agency noted that the data presented by GAO was not a fair representation of performance because it was collected during a period of functionality problems associated with the deployment of its new IT system. With respect to reducing the waiver threshold, Labor reported that its overpayment processing data system is developing additional capabilities. Furthermore, the cost associated with the manual review of overpayments required to determine fault, as well as required appeal mechanisms might be more than the additional recoveries to be gained. Labor also stated that it carefully evaluated having fiscal staff focus on recovering overpayments. The agency determined that the most cost effective debt collection strategy would be to keep this function with claims examiners, given the integral involvement of claims examiners in overpayment processing, the unavailability of fiscal staff to undertake this specialized activity, and expected continued budget constraints.