Summary and Commentary: House Panel Revisits FECA-Related Issues

A U.S. House Education and Workforce subcommittee recently held a hearing on potential reforms to the Federal Employees’ Compensation Act (FECA), which provides wage replacement and medical benefits to federal employees injured on the job. The hearing explored several proposed changes to improve program efficiency and reduce fraud.

Key highlights:

FECA Expenditures: In the last reported year, the program disbursed $2.9 billion in compensation and $851 million in medical benefits to over 178,000 claimants.

Proposed Reforms:

– Eliminate dependent-based benefit increases
– Allow physician assistants and nurse practitioners to certify claims
– Increase data sharing with the Social Security Administration
– Concerns Over Long-Term Claims:
– Some beneficiaries remain on FECA rolls into advanced age; 600 are over 80, and 3 are over 100.
– There is discussion of shifting long-term recipients to disability retirement benefits, which are typically taxable.
– Fraud and Abuse:
– IGs from USPS and Labor cited fraud schemes involving healthcare providers (e.g., kickbacks, billing fraud) and some claimants (e.g., false injury claims, unreported work income).
– One claimant was ordered to repay over $743,000 after being convicted of fraud.
– Suggested Administrative Changes:
– Suspend payments to providers under indictment
– Require earlier enforcement of the 3-day waiting period before FECA benefits begin
– Align federal benefit structures with those of certain states that impose caps or reduce benefits at retirement age Commentary: This hearing reflects a bipartisan recognition that the FECA program, while vital, is in need of modernization. The suggestions aim to balance efficiency, integrity, and fairness—but they are not without controversy. Strengths of Proposed Reforms:
– Improved access to care via expanded provider roles (PAs and NPs)
– Fraud mitigation through data sharing and provider accountability
– Fiscal responsibility by exploring transitions to retirement benefits for aging, non- rehabilitative recipients

Concerns and Considerations:

• Cutting dependent-based benefits could disproportionately impact lower-income families.
• The narrative around “widespread fraud” risks stigmatizing legitimate claimants, especially when the majority of abuse stems from third-party medical providers.
• Automatically shifting older recipients to retirement benefits may neglect ongoing disability needs and penalize long-term injuries. Overall, the panel’s deliberation reflects an effort to preserve the sustainability of the FECA program while acknowledging the need for more flexible, modernized, and accountable administrative systems. However, any reform must ensure it doesn’t harm genuinely injured workers or erode the program’s fundamental purpose.