on workforce protections will come to order. I note that a quorum is present and without objection, the chair is authorized to call a recess at any time. Today's hearing is about examining the Federal Employees Compensation Act,
known as FICA, a more than century old law to consider how it might be improved to benefit injured federal workers while also protecting taxpayers from waste, fraud, and abuse. Enacted in 1916, FICA provides workers compensation benefits
to approximately 2.6 6 million civilian federal employees, employees of entities wholly owned by the United States, including the US Postal Service, and volunteers with volunteers in service to America and the Peace Corp. The FICA
program is administered and adjudicated by the Department of Labor's Office of Workers Compensation Programs. Through this program, DO provides benefits to individuals who sustain an injury or illness in the performance of duty anywhere in the world. Such benefits
include wage replacement, reasonable and necessary medical treatment related to the injury, vocational rehabilitation and job placement assistance for disabled workers, compensation for the permanent impairment of limbs and use of body systems, and compensation for
survivors of employees due to a work-related death. In fiscal year 2024, there were more than 86,000 new FICA cases. From July 1st, 2023 to June 30th, 2024, the program provided more than
$2.9 billion in benefits to more than 178,000 workers and survivors for work-related injuries or illnesses. Of these benefit payments, approximately $2 billion was for wage loss compensation, $843 million for medical and
rehabilitation services, and $143 million for death benefits payments to surviving dependents. However, FICA is widely considered to be in need of updating with the last meaningful changes made more than 50 years ago.
Critics critics of the existing program have argued that it is susceptible to waste, fraud, and abuse and that it can be at times overly generous as many beneficiaries remain on the program well into retirement. The need for reforming
FICA has long been recognized by presidential administrations from both parties in the Clinton administration, George W. Bush administration, Obama administration, and the first Trump administration all making reform proposals. While these administrations
have differed on many matters, they agree on many reforms to benefit FICA recipients. Such reforms include making the wage loss compensation level uniform for all beneficiaries, permitting physician assistants and nurse practitioners to approve claims for FICA
benefits, and allowing DO to communicate with the Social Security Administration to review claimants employment and wage information. Federal workers and taxpayers deserve a more efficient and effective program. Working together in a
bipartisan fashion, we can create comprehensive changes to ensure the FICA program is meeting the needs of workers and taxpayers. Creating a program that prevents abuse by bad actors reflects the realities of the 21st century and
provides adequate support to workers. And that is the end goal. I look forward to hearing from today's witnesses about their perspectives on FICA and discussing their recommendations about reforming this important program. With that, I yield to my ranking member for an opening statement.
Thank you, Mr. Chairman. Uh, good morning everyone. Thank you to our witnesses for being here today. Um, Vika is more Vika is more than just a compensation um statue. It
is a solemn promise, a promise that if a federal worker is injured on the job, we as government will make them whole. It is a commitment not only to those who wear a uniform or work on the front lines, but to every civilian federal
employee from postal workers to TSA agents to those inspecting our food supply and maintaining public safety. These individuals do their job with dedication and we must ensure they are protected when they are injured doing that work. Unfortunately, in a broader
landscape of workers compensation, we have seen a troubling trend. Years of regressive changes in many states have weakened employee compensation systems, leaving too many workers behind in their moment of greatest need.
VICA stands in as one of the la last stronghold of workers first compensation model and we have a responsibility to preserve and strengthen it not dismantle it in the name of cost-saving or efficiency. Historically this committee
has shown that FICA reform does not have to be partisan. In fact some of the most significant improvements have been made through bipartisan cooperation. We have demonstrated that when we put politics aside and focus on the mission of
supporting federal workers, we can deliver meaningful change, that legacy is worth continuing. We don't need to reinvent the wheel. We we can but we can modernize the vehicle. That means updating outdated procedures, improving
access to care, and ensuring injured workers don't fall through the cracks during the claim process. with partis with bipartisan work already underway including the improving access to workers compensation for injured federal workers from Chair Wberg and
Representative Courtney. We are headed in the right direction. But let me be clear, any changes to FICA must be driven by one question. How does this help workers? The conversation must be centered on listening to workers. Too
often decisions about federal workforce policy are made without real engagement with those directly impacted. We need to hear from the workers navigating the claim process, the physicians providing care, and the families who face
financial insecurity when benefits are delayed. Their experiences must guide our reforms. To help us understand the importance of strengthening REA, I want to share two stories from my home state of Minnesota. In November 2020, a postal
truck was hit by a speeding SUV, causing the truck to flip over. The letter carrier inside was found unconscious. He suffered numerous injuries including a broken wrist, a torn ACL, a broken chest
bone, internal bleeding, and a concussion. Since the incident, he has lived with PTSD and cognitive communication uh deficit. Sadly, he will never be able to work again. However, it is only due to Fika that his medical
treatment is covered and he and his family receive steady cash benefits that while falling short of a paycheck he once earned remain a vital lifeline. This is why FICA matters because when tragedy strikes, this law is what stands
between a lifetime of hardship and a measure of dignity. Now more than ever, we must remember that federal workers aren't just serving a government. They are serving all of us and so at a very least
they deserve FICA program that is fair and worthy of services they provide to the public. The tireless and often fearless dedication of our federal workers has real world impact on the safety and well-being of our communities. Just last week, I had the
privilege of honoring a letter carrier from my district in St. Louisis Park who was named NLC's 2025 National Hero of the Year for saving a person trapped in a burning car. This is only one example of the
spirit of public service that enimates our federal workforce. And it is exactly why our government must be committed to protecting them as they are protecting others. Because when our federal workers know that they will be treated fairly and supported in times of injury or
illness, it builds the kind of stability that strengthens not only the workforce, but also the quality and delivery of public service that millions of Americans rely on every day. Now, I know we will hear concerns about cost efficiency, and of course, we all want
to use tax dollars responsibly. But the smartest and most cost-effective thing we can do is invest in workplace safety. Fewer injuries or illnesses mean fewer claims and lower long-term costs. That
is why preser pre prevention uh matters like the proposed OSA heat stress rule aren't just good policy, they are common sense. Prevention is always cheaper than treatment. And when workers have the training, equipment, and protection they need, everyone benefits. Productivity
goes up, injury rates go down, and public trust in our institutions are strengthened. This shouldn't be a partisan issue. It's about dignity. It's about fairness. It's about whether we value the people who put in the work every single day to serve this country.
When they get hurt, they shouldn't be punish. They shouldn't be pushed into poverty. They shouldn't have to jump through hoops to get the care and compensation they have earned. And they certainly shouldn't be treated as a liability or line items. These are human
beings with families, careers, and futures that depend on our decisions in this room. We owe it to our workforce and to the public to maintain a system that reflects our values of fairness, compassion, and respect for those who serve. and we owe it to the institution
to pursue those values in a bipartisan way, building on past reforms with renewed focus on the people who are the foundation of our government's daily operations. So, I hope that is what today's hearing will reflect, a real commitment to protecting
workers, not cutting corners, a willingness to improve FICA, not by weakening its promise, but by strengthening the support it offers. Thank you again, Mr. Chairman, and I yield back. Pursuant to committee rule 8C, all members who wish to insert
written testimonies into the record may do so by submitting them to the committee clerk electronically in Microsoft Word format by 5:00 p.m. 14 days after this hearing. And without objection, the hearing record will remain open for 14 days to allow such statements and other extraneous material
noted during the hearing to be submitted for the official hearing record. I note that the subcommittee uh for the subcommittee that some of my colleagues who are not permanent members of the sub subcommittee may be waving on for the purpose of today's hearing. Now to the
introduction of witnesses. Uh I'll turn I'll start uh first witness is going to be Mr. Scott Simandera who is an analyst of the Congressional Research Service at the US Library of Congress here in Washington DC. Our second witness is Mr.
Luis Santos, the acting inspector general for the US Department of Labor in Washington DC. Our third witness is Mr. Brian Renfro, the uh national president for the National Association of Letter Carriers in also in Washington
DC. And our final witness is Miss Tammy Hull, the Inspector General for the US Postal Service as well in Washington DC. Thank you to all of you for being here. Uh we look forward to hearing each of your testimony today and pursuant to committee rules I would ask that each of
you limit your oral presentation to three minute summary uh in addition to your written statements that you've provided. The clock will countdown from 3 minutes as committee members have many questions for you and we look would like to spend as much time as possible on questions. Pursuant to committee rule 8D
and committee practice, however, we will not cut off testimony until you reach the fiveminute mark. I would also like to remind witnesses uh to be aware of their responsibility to provide the accurate information as they testify before the subcommittee here today. And
at this time, I will now recognize our first witness, Mr. Simandera, for your testimony. Thank you, Chairman McKenzie. Uh, Chairman Wahberg, Ranking Member Omar, members of the subcommittee, Scott Simander, and I am an analyst at the
Congressional Research Service. Thank you for inviting CRS to testify at this hearing today. Workers compensation has been described as a grand bargain between employers and their employees. For the federal government and its
workforce, the grand bargain is FICA, the Federal Employees Compensation Act. FICA provides compensation for the duration of a worker's disability, which can last until death. While workers may choose to convert to federal retirement
benefits, they are not required to do so, resulting in host agencies paying benefits for some workers after their expected retirement ages. Past FICA reform packages have included proposals to reduce the amount of FICA
compensation at retirement age to encourage workers to leave the FICA roles for federal retirement. However, converting from FICA to federal retirement could result in some workers, especially those injured early in their
federal careers, receiving a reduced benefit at retirement age. While most workers compensation systems base the level of compensation on twothirds of a worker's pre-disability wage, FICA provides augmented compensation in cases
in which a beneficiary has a spouse or dependence, bringing the level of compensation up to three4s of the pre-disability wage. While augmented compensation provides additional resources for a larger family, it
exceeds the compensation offered by a majority of state workers compensation systems and may result in a beneficiary receiving more from FICA than what their net pay would be if they return to work. Past reform packages have proposed
increasing the base rate of compensation and eliminating augmented compensation. All workers compensation systems have waiting periods of several days before compensation is paid with these waiting periods serving in similar
ways to deductibles in other insurance programs. FICA is unique among workers compensation programs in that workers with traumatic injuries are eligible for up to 45 days of continuation of pay at
100% of their regular salary from their host agencies before receiving FICA compensation. The FICA waiting period in these cases begins not at the time of injury but after the continuation of pay. This postponement of the waiting
period may blunt its deductible function and result in fewer injured federal employees sharing in the costs of their compensation. In 2006, Congress moved the waiting period for postal workers to before continuation of pay and since then there have been proposals to
implement this change across the federal government. This concludes the testimony of CRS. I would be happy to answer any questions the subcommittee may have. Thank you. And next we'll go to Mr. Santos.
Good morning, Chairman McKenzie, Chairman Wahberg, Ranking Members Omar, Ranking Member Scott, and members of the subcommittee. Thank you for the opportunity to testify today on our oversight of the Federal Employees Compensation Act program. FICA provides workers compensation benefits to nearly
three million federal employees across all three branches of government. In fiscal year 24, the program paid approximately 3.7 billion in benefits to over 178,000 claimants. Because FICA is the only remedy available to injured
workers, and because employing agencies bear the costs, it is critical that OWCP adjudicate claims promptly, issue payments accurately, and support workers in their recovery. Equally important, OWCP must ensure taxpayers only pay for
medical benefits that are safe, effective, necessary, and economical. Our audits and investigations have shown that FICA remains vulnerable to fraud, waste, and abuse, especially in its pharmaceutical spending. Since FY15, we
have opened over 320 investigations that led to 322 convictions and over $1.7 billion in monetary outcomes. One notable case involved two pharmacy owners who paid doctors kickbacks to prescribe unnecessary compound creams.
These were often mix in the back room ofarmacies at a cost of $15 per prescription and then charged to FICA at $16,000 each. The scheme led to a $45 million forfeite, the largest involving
a healthc care fraud case, and very long prison sentences. In addition to our investigative work, we have issued 33 audits and 79 recommendations over the past decade. Most recently, we found FICA over spent up to 321 million on
prescriptions drugs between FY 15 and 20 and allowed thousands of inappropriate or dangerous prescriptions, including fast acting fentanyl, even after controls were in place. In response to your work, Mr. Chairman, OWCP has significantly reduced pharmaceutical
spending from 436 million in FY16 to 43 million in FY24 and strengthen oversight using data analytics and a pharmacy benefit manager. While these are very positive steps, more remains to be done to further improve FICA. We recommend
that Congress provide OWCP with statutory access to social security wage records and NDNH move the three-day waiting period to immediately follow work-related injury and authorize OWCP to suspend indicted providers from participating in the program. Mr.
Chairman, thank you for the opportunity to testify and for the committee's continued support of the OIG's work. I have served now at the OG for 15 years and have very much enjoyed working with the committee especially the staff in many critical oversight issues. I also
want to pause here to thank the dedicated OIG staff for their work. All of the results I just spoke of are a result of their work. So, thank you for that and I'll be pleased to answer any questions. Great. Thank you, Mr. Santos. And I would concur that we do have excellent staff here on the committee. So, thank
you for recognizing that. Next up, I will recognize Mr. Renfro for your testimony. How about now? Thank you, Chairman McKenzie and Ranking Member Omar for the invitation to testify. Uh, thanks also to the subcommittee members for the
chance to bring the voice and views of America's 220,000 hardworking letter carriers to this hearing. I'm a letter carrier from Hattisburg, Mississippi, who was drawn to work with my union, the National Association of Letter Carriers, in large part to protect the health and
safety of my fellow letter carriers. We carry much of the nation's communication and commerce on our shoulders every single day. Five years ago, during a global pandemic, when most businesses shut down, as the rest of the nation sheltered in place, letter cares did not
take one day off. We were lifelines for the American people, delivering letter mail, ballots, test kits, packages, and providing a sense of normaly during a time of worldwide uncertainty. And as
e-commerce continues to boom, the people of this country are as dependent on our service as they have ever been before. And while serving the American public, despite our best efforts to avoid them, workplace injuries at the postal service are a fact of life.
vehicle accidents, repetitive motion injuries, heat stroke or frostbite or other injuries caused by weather extremes, assaults by criminals, and even more mundane injuries like slips and falls are common in the working lives of the letter carriers that I
represent. Worker workers compensation programs like FICA are incredibly important to America's working class, particularly to those with jobs like ours. the people who shower after work instead of beforehand. The ones who earn
their living with physically taxing jobs and those whose jobs expose them to the risks of injuries, occupational hazards, and unfortunately disabling accidents. The goal of the FICA program is to ensure that no worker suffers financially from their workplace
injuries. Postal employees account for nearly half of the claims made to the office of workers compensation programs each year and letter carriers file most of those claims. When letter carriers are injured on the job or develop occupational diseases, FICA benefits
provide critical financial support allowing them to time to heal and rehabilitate so they can rejoin the workforce or to compensate them for their lost wages if they are permanently unable to do so. I'd like to bring to the subcommittee's attention several ideas that will reduce
the overall usage of workers compensation in the first place. The first is the hazard of excessive heat. Letter carers report hundreds of heat injuries to the postal service annually. The postal service's
productivity f focused culture often even discourages us from reporting these injuries. Next is crime. Since the CO 19 pandemic, postal employees and city letter cares in particular have experienced a
significant increase in crime. Between 2019 and 2023, violent crime against postal employees nearly doubled. More than twothirds of these attacks involved a firearm or some other kind of weapon. Tragically, five letter carriers have been murdered while delivering mail
since 2022. NLC is committed to working with the postal service and Congress to do everything we possibly can to mitigate risk due to these factors and prevent injuries of any kind. We have worked with the Department of Labor and OWCP
specifically over multiple administrations to improve efficiency and claims processing which benefits both the department and the injured worker. And we are committed to continuing that work throughout this administration just as we did during the first Trump administration. When a
letter Care is injured, we must ensure they receive the care and the help that they need. Reducing benefits are making it harder for injured workers to access care are contrary to the goals we all share. Prompt provisions of benefits to injured employees and a more timely
return to the workplace. Thank you again for inviting me to testify. I look forward to answering any questions you may have. Thank you, sir. And lastly, I will recognize Ms. Hull for your testimony. Thank you. Good morning, Chairman McKenzie, Ranking Member Omar, and
members of the subcommittee. Thank you for inviting me here today to discuss our work related to the Federal Employees Compensation Act. When postal employees sustain a work-related injury or occupational disease, they are covered by FICA. While the postal service helps employees file claims and
manages efforts to return injured employees to work, the Department of Labor administers, implements, and enforces FICA. The Postal Service reimbures DO from postal revenues, and the workers compensation costs are significant. Last year, it paid almost a
billion a half dollars in claims and an additional $96 million in administrative fees. Our work at the IG found the postal service is taking steps to reduce its workers compensation costs, but more can be done to return employees to work and
reduce costs. We identified areas where current law restricts the postal service from using private sector best practices, including those adopted by some state governments. Allowing these best practices would have saved the postal service almost $350 million a
year. One significant restriction is FICA does not provide for settlement of claims through lumpsum payments and correspondingly does not have limits on total compensation or length of benefits. As of last fall, more than 600 postal employees age 80 or older were
receiving benefits. Three are currently a 100 or older. Claims are commonly paid over many years tax-free with cost of living adjustments. Thus, the incentive for employees to return to meaningful meaningful employment are minimized.
Other best practices include requiring employee employer selected physicians and the use of generic medications when available. We also do investigative work related to FICA. We coordinate with DOI to identify and investigate workers
compensation fraud by postal employees and healthcare providers. Our investigative work in this area results in substantial savings. We recently closed a case in Texas along with DOI where pharmacies paid kickbacks to doctors to prescribe certain medications
based on high reimbursement rates instead of patient need. This case returned about a hundred million dollars to do. To support this work, we embraced technology and data analytics. For example, to identify provider fraud, we
implemented an in-house artificial intelligence and machine learning model that identifies over billing for physical therapy and chiropractic care. Our work in this area has identified vulnerabilities and led to do making numerous policy changes in how it
manages the workers compensation program, including limitations on compounded drugs, billing restrictions, and third-party controls. Over time, we estimated the changes saved the postal service and rateayers over a billion a
half dollars. These changes also resulted in cost savings for all agencies with employees on workers compensation as well as improved patient safety. Thank you again and I'm happy to answer any questions. Thank you. Under committee rule nine, we
will now ask questions of witnesses uh under the fiveminut rule. and I'll recognize myself first for 5 minutes. Uh my first question is for Mr. Simandera. Under the FICA program, you mentioned that injured workers with dependents can
receive augmented compensation at 75% of their wages. And for some FICA beneficiaries, a 75% tax rate wage loss benefit exceeds their pre-injury gross income. Do you see or have you studied at all uh how this may serve as a
disincentive to return to work? Well, it certainly could be a disincentive. The as you said the if you look at the actual take-home pay, it can be higher under FICA because you're talking about with augmented
compensation 75% of the predisability wage tax-free and without other many other payroll deductions. Now, you can't receive a your normal federal salary increases. You can't get a competitive or a merit raise or
promotion while you're on FICA, but you do receive an annual cost of living adjustment even in years when federal employees that are working do not receive an adjustment. And so certainly this has been identified as one
potential disincentive for some injured workers to return to the workforce. Your written testimony also notes that the workers compensation program in 38 states in the District of Columbia as well as federal longshore
programs have set their benefits to 2/3 of a worker's gross wage with no augmented compensation for a worker's dependence. Can you discuss how those programs are performing in comparison to FICA and what can we learn from those state models and the federal longshore program?
It's always should exercise caution when comparing the state workers compensation programs and even the federal longshore program with FICA because there are differences that go beyond even the level of compensation. For example, most
workers in this country receive workers compensation through state programs and through private insurance companies. There's a private insurance company. Thus, it is a more adversarial model than what you have in FICA where you're
dealing only with the Department of Labor. States, as was mentioned by the uh postal service inspector general, states have options for lumpsum settlements of claims. FICA does not.
States uh many states have caps on benefits, either a total amount or an age cap um which can essentially force or force people off the roles and to work. In
addition, uh majority of states limit the choice of medical provider. Again, in FICA, you have a near unlimited choice of treating physician. So, I think when you compare FICA to the
states and you want to say, well, are states putting more people back to work? Do they have lower benefit uh durations and things like that? It's important to look at the whole package of benefits under FICA. And I
would say generally speaking, FICA is more generous in its benefits and administration than what you typically see in the state workers compensation programs or even in the federal longshore and harbor workers
compensation act program. Next, I'll go to Mr. Santos. Uh, your written testimony highlighted many examples of medical benefits fraud and the impact on prescription opioid abuse on the FICA program. The Office of Inspector General's audits have provided
critical assistance to do to help solve those problems. What further reforms would you recommend to further curb medical fraud within the FICA program? Thank you, Mr. Chairman. I will preface my response by giving OWCP uh quite a
bit of credit for their progress over the last 10 years. Um as a result of many of our audit oversight work as well as a result of our investigations and working closely with postal OIG and other OIGs, OWCP has taken several actions that have resulted improvements
in both the prevention of improper payments and fraud as well as the overall management of the program. Um in fact we've seen both as it relates to the management of compounded drugs the actions they took in response as well as
the management of opioids in the program significant progress on the part of OWCP. Having said that there are two recommendations that we have to Congress that we believe would f further strengthen the program and provide OWCP with additional tools to prevent
improper payments and fraud in particular. The first one is to authorize OWCP to access social security wage records as well as the national director of new hires which provides contemporaneous information about uh employment of individuals in the in the
United States and in doing so would afford uh OWCP the opportunity to cross match that information to identify under reporting of income or outside employment. We've also recommended um and this is a long-standing recommendation of the OJ for OWCP to be
authorized to suspend medical providers who are indicted for fraud involving the FICA program. Under current law, OWCP continues can continue to pay for services being provided by medical providers that we or others have
indicted uh uh with with crimes associated with fraud against the OWCP program. Sounds like some good recommendations there. Thank you. Uh with that, I will conclude my time and I will now recognize the ranking member for the
purpose of questioning the witnesses. Uh thank you, chairman. Again, thank you all uh for being here with us uh today and for your uh testimonies. Mr. Renfro. Um, if we were to think about some of the challenges that letter carriers
experience while navigating um the VCAP process, uh, if you were to start with the challenges that your members experience, what are some reforms um that Congress should consider um that would be timely and high quality high
quality claim process and benefit awards? Question. Your question is very timely. Um, as I mentioned in my my opening, we have made a significant amount of progress in recent years uh- with OWCP. But one issue that continues to be
prevalent is um access to physicians that treat employees um injured federal employees. And uh legislation has just recently been introduced um entitled uh improving access to workers compensation
for injured federal employees act. And this is bipartisan legislation that would expand that access to include physicians assistance and nurse practitioners. That really is a common sense solution to that problem that follows a trend that we have seen in the larger in health care really outside of
of our world around the country. Um, thank you. It is it's um fascinating. I think you talk about uh accessing um um physicians and and we talked about how the you know
um one of the other witnesses talked about how there is no cap on on who you could see um in regards to the benefit. So, it's fascinating to see um that sort of discrepancy. Uh Mr. Mr. Chairman, I request a unanimous consent to enter
into the record a document provided by the workers injury law and advocacy group summarizing stories provided by workers compensation attorneys of challenges that their clients have faced in the FICA program. Without objection,
I ask for unanimous consent to enter into the record a redacted letter from OWCP informing a Vika um uh claimment that an appeal hearing could not take place because the administration has
canled its contract for court reporters who transcribed hearings. Without objection, uh Mr. Mr. Renfro, how important is it for workers to be able to have a timely and fair hearing in their cases? I think it's very important. I think it's
important, of course, for the injured employee to get the benefits that the law entitles them to. Also think it's very much in the best interest of the Department of Labor and the best interest of OWCP to be able to provide those benefits as efficiently as possible. The hearing and adjudication
process is a part of that for some that file claims. Um you mentioned that there have been recent changes in regards to the availability of court reporters due to contracts. We have seen some delayed hearings uh in recent months as a result
of those actions. So we would very much be in favor of um improving or eliminating any barrier to timely access to whatever step in the process even if that w was a step that required a hearing. Appreciate that. Uh, Miss Hull,
um, you've heard uh, uh, President um, Renfo testify that, uh, the risk that letter carriers and other postal service employees phase from heat stress uh, which can cause heat related illnesses such as heat cramp, organ damage, heat
stroke, and even death. Um, what has your office found regarding um, USPS's need to protect workers from heat stress? Yes, we did a review. I think we issued the report, it was about a year ago, I believe, related to the heat issues that postal employees experience
and found that obviously significant problem. We did evaluate what the postal service was doing to protect its employees from heat and found that they were doing pretty good job of providing um equipment and things like that to protect employees. But we found real challenges in the training area. Making
sure that employees were adequately trained, that training uh uh records were accurate and that employees actually completed training so that they knew when you know if they were experiencing symptoms that they should stop and take a break and and and get
water and those kinds of things. So um so we we um have done work in that area and we're keeping our eye on it in case we need to do some additional work in that space. And how how do you see um overcoming some some of these challenges with with training and and and with the
workers when we're seeing um layoffs take place and and folks having to take on uh extra routes and they have to complete it within the amount of hours they were already doing their previous routes. Yeah, I think the management has to be aware of the of the stress that
that the employees are under and manage that stress effectively. Also, I think that it's really important that the postal service rolls out the vehicles with air conditioning as part of the vehicle itself. So, that uh it's hard to believe that there are still vehicles on
the road delivering mail that don't have air conditioning in this day and age. That's an important factor in this in this as well that I'm sure Mr. Renfro can speak more more effectively to than than even I can. So, appreciate that. Thank you. Go back.
Thank you. Next we will go to Chairman Wahlberg. Thank you, Mr. Chairman. Thanks for the panel for being here. And while I have you here, letter carriers, I want to say thank you for the service you provide. Um, being in a rural area myself. It's a
rural letter carrier. I think of most recently retired Jean who took special attention to my uh late u mother who lived in a cottage on our property out on the farm. And um Jean always was sure
where my mom was at and special needs were cared for. I didn't get the same care, but uh my mom did. So, thank you. Thank you for the work that you do day in day out. Um last Thursday, Congressman Joe Courtney and I introduced HR 1370 or 3170, the
improving access to workers compensation for injured federal workers act. This bipartisan bill amends FICA to allow injured workers to receive treatment for work-related injuries from statelicicensed physician assistants and nurse practitioners which in my neck of the
woods are in many cases the doctors in the rural community. Uh this is prohibited under current law and is contributing to long delays in care for many federal workers. Delays in care means delays in injured workers
returning to their jobs. Um, and nurse practitioners and physician assistants are a critical component in our healthcare delivery network. And we have our are and if we are trying to make the federal government more efficient, it makes no sense to prohibit workers from
receiving care from a reputable NP or PA. HR 3170 updates the federal employees compensation program to make it more efficient by improving access to care and getting federal employees back
to work quicker. Uh Mr. Simandera um as I mentioned under current law only physician uh physicians can certify a worker compensation claim in the FICA program. Uh that's why Congressman Courtourtney
and I introduced HR 3170 to allow NPs and PAs to treat VA beneficiaries. Can you describe how this change would increase access to care for injured federal workers, especially for those in rural areas?
One of the great strengths, one of the great advantages of the FICA program is the right to choose your treating physician. That is a right that is not given in a number of state workers compensation programs.
However, there have been persistent complaints about FICA and the other OWCP programs that while you have the right to choose your treating physician, there isn't a treating physician available for
you to choose, especially when you are outside of the Washington area or other metropolitan areas that have potentially a lot of federal employees. expanding the pool of providers to include nurse practitioners, physician
assistants, or as I think their national academy now prefers be referred, physician associates could expand the pool and allow greater access to physicians. It also could
bring certain non-traditional facilities such as urgent care clinics or medical clinics in retail stores into a greater role in providing care. The question that would have to be remain to be seen
is would this be enough to offset the problems that have got us here in the first place with why we don't have enough physicians doing the treating. I have heard complaints about issues with the billing system, uh, issues with
frequent changes in the payment system that frustrate physicians and their staff, difficulty with websites, including difficulty that the claimants have navigating the website where you can find a physician, and an overall
lack of awareness, for lack of a better word, marketing of the program to providers. So increasing the pool I think would increase accessibility but it's not the only potential solution to
the problems of access to medical care. Let us start. Okay. Thank you. Uh in the final few seconds, Mr. Santos, you you intimated the need for the ability for uh OWCP to uh access social security
information. expand on why that would be an important asset. Thank Thank you, Mr. Chairman. It would be very helpful for OWCP to have access to both social security wage records as well as the national director of new hires. It would help OWCP would
be able to more quickly identify unreported income by claimants as well as detect detect claims who have returned to work. It would also uh allowing for the timely and automated matching crossmatching of these systems would improve fraud prevention overall,
improper payments prevention overall as well as help the OWCP direct its very limited resources to uh those claims that require more attention from a um a fraud prevention perspective. And on the
back end, it would assist the OIG in our efforts to investigate related crimes. Yeah. And save the proper funds for the the proper recipients. So, thank you. I yield back. Thank you. Next, we'll go to Ranking
Member Scott. Thank you. Thank you, Mr. Chairman, um Mr. Santos, you mentioned the um scheme involving compound drugs, uh where I think you mentioned they mix up about $15 worth of materials and charge
$16,000. Um did you refer any of the doctors or physicians to the licensing boards as that investigation was going on? Thank Thank you, Ranking Member Scott. Um I know this is a a matter that is close to your heart. We've discussed this with your office for for many years
now. This these cases go back uh to really the beginning of the issues involving compounded creams which were originally identified by both our office and post solo office and in the course of our investigations we have referred many uh medical providers to include
doctors to their respective boards for suspension as well. Um, has the actions of Doge reduced your capacity to do your job cancelling leases, credit cards or anything? Uh,
thank you, ranking member. Um, there has been some limited impact on the the ability of labor to conduct its work. I believe four of our leases were included in the governmentwide cancellation of commercial leases. Um, since then, I've engaged with both the secretary and the
deputy secretary. do manages our space program. They have been very supportive of the need for labor o to continue maintaining these geographic locations, geographical locations. U many of these officers were law enforcement officers. So we have very specific space
requirements such as weapon storage, grand jury information, evidence rooms, interview rooms. And my understanding at this point in time is that some of these decisions are being revisited and we are I'm certainly hopeful that we'll be able to maintain these these locations. The
same is true for the purchase cards and the travel cards. Uh OIG was in fact uh was uh in fact impacted originally by having the suspension of both um purchase cards and travel cards. I engaged with the U leadership
immediately and within hours they understood the requirement for law enforcement to continue its work and reverse those decisions. So again it has had some limited impact on our work. Thank you. Uh can you say whether or not FICA is more vulnerable to fraud than
other health insuranceances? I cannot say that ranking member Scott. believe that the issues we find in the FICA program as it relates to both claimment fraud and medical provider fraud are very similar to the issues that are
identified by uh other law enforcement um programs in programs such as triricare or Medicare or Medicaid or in the private sector. So the same types of schemes and in targeting of the system we see that in the FICA program as well.
So now I I think it's very much uh a similar situation than many other healthc care benefit programs. Thank you. Mr. Renfro, you me we've heard about the problems with heat and crime. Uh there's legislation that's been
pending about heat stress where at certain temperatures and whatnot you have to take certain actions. Are you prevented? You've been trained apparently to to recognize problems. workers have been trained. Are is there
any limitation or resistance to them taking a break when the heat gets to a certain temperature, humidity at a certain temperature, when heat stroke is uh much more possible.
So the the postal service has a heat illness prevention plan, a HIP as it's called in place. Um it has been in place for a few years. In fact, the uh earlier discussions that that OIG Hole was
referencing about um training that the issue we had with training a couple of years ago is part of that hip. Um, the problem with that hip is it does not include all of the necessary mitigating factors that experts recommend to avoid
the hazard of excessive heat, such as a regimented work rest, a a work rest regimen. Um, when an employee is not in the heat for a period of time due to vacation or illness or they're off work and a climatization period when they
return. Um those are currently missing from the plan. Um there is a pending rule uh that would apply a heat safety standard to workers all across the country. Um we have of course been in communication with the department of
labor about that. We strongly support that rule. Thank you. And Mr. Mr. Sema Dero, do you know how long it takes to get a disability claim appealed if you have a problem? If you
disagree with the analysis, I I don't have uh that data available. Does anybody on the panel Does anybody on the panel know how long it takes to take to take a disability appeal? Thank you. Thank you, Mr. Chairman.
Thank you. Next, we'll go to Mr. Fine from Florida. Well, thank you, Mr. Chairman, and thanks for this having this important hearing today. Um, before I get to my questions, I I would note my perspective on this. I think it's incredibly important that we take care of those who
get hurt on the job when they're working for the federal government. I don't think anybody disagrees with that. But fraud puts the legitimacy of any of those types of programs at risk. And more importantly, the way I look at the world is when you give a dollar to someone who didn't deserve it, you steal
it from someone who did. And eventually, we're going to come up in a world where we run out of money. And so if we don't get rid of the fraud, we're going to end up cutting the things that we actually need to do. So Miss Holl, in your written testimony, you talked about express support for using technology and data analytics when reviewing FICA
expenditures. You talked about using AI and machine learning models to identify over billing, which is a, you know, nice way of putting fraud. Um, over billing for physical therapy and chiropractic treatments using those technologies. um what kinds of of analytics what have you
learned from doing it in effect how much fraud have you uncovered by doing that? Yeah, we we have um worked closely with uh do I in this space but we we have a pretty sophisticated data analytics
program and have used it and pointed it at this data set to identify fraudulent activity. Um in in some cases we've identified upcoding or use of codes that are that result in higher reimbursement
rates. We've identified uh employees that are um getting significant travel reimbursements to drive hours and hours for treatment and things like that which is in some cases can be fraudulent. We've identified providers that are that
are um uh prescribing these compounded pharmaceuticals. As we talked about earlier, we cannot um we we see lots of potential fraudulent activity in the space. We've opened at the postal service o we've opened about a thousand
cases in the last five years related to claimment fraud and another over a hundred related to provider fraud and worked many of those jointly with um with uh Louis's staff at DOI. There's there's a lot there. There's a and the more we we look using
data analytics at this data set, the more concerns that we have in in some of these areas from providers, but also from in some cases claimants uh u the uh the issue that that um uh Luis raised
about identifying um people that have gone back to work and that that are being compensated through other jobs while they're on the roles on the periodic roles for uh for uh their uh the postal service. We've many of our thousand cases that I was talking about
are in that space where we've identified postal employees that are receiving benefits but are also working other jobs. So if I were to put that in sort of analytic terms and numbers sounds bad. Are are we talking about like a $100,000 worth of fraud? A million 10
million hundred million a billion. We're talking about roughly $3 billion here. What's your based on the analytics you've done? What's the scope of the problem? How many zeros come after the numbers? Yeah, it's probably in the in the hundreds of millions of dollars in
certain aspects. What what what we see because the postal service employees often and and employees in this space can go on the periodic roles if they're committing fraud, they're not going to come off the roles until they're investigated and are required to come off the roles. an an employee that goes
on the roles when they're um early in their career, 20, 30 years old in their career, that's a long-term liability. So that's t that's you know a million dollars or more over a career. So that's so that's hundreds of millions of dollars that's either being taken from a
postal worker or somebody else who actually has a problem that they needs help with or that's money that we're borrowing from our grandkids to give to people who don't need it. Is that a reasonable way to look at it? It is. It is. Thank you, Mr. Chairman. Thank you. Next, we'll go to Mr. Mesmer from
Indiana. Thank you, Chairman. Uh, Mr. Seminara, under the FICA program, current schedule awards pay a fixed number of weeks for loss of an impairment of a body part based on written tables written decades ago. How should Congress update the scheduled framework so the awards track
contemporary medical impairment guides and labor market related realities? Yes, in fact, it's uh the current schedule basically goes back to 1966. Has not been substantially changed since then. Since that time, for
example, the American Medical Association guides to the evaluation of permanent impairment is now on its sixth published edition with now annual digital updates. Meaning, if you consider that, and that is a guide used throughout workers compensation,
including in the FICA program, they're updating that multiple times now, annually updating it. And yet the schedule awards not been updated since 1966. Another comparison, the VA, the VA
in the uh VA SRD, Veterans Affairs schedule for rating of disabilities since 2017 alone has updated their rating system for hundreds of medical conditions across 10 major body systems.
So there certainly is an opportunity for change, but only Congress can make the change. There is nothing in the law that allows for a change in the schedule in scheduled benefits through rulemaking,
meaning going to take a law to amend it. If a goal is to increase flexibility going forward, then one thing certainly to consider is allowing for changes to be made through rulemaking rather through Congress. That is, for example,
how the VA changes its schedule of rating disabilities. That's also how other uh other compensation programs um utilize that as well. But there certainly is an opportunity for change. It hasn't been changed since
1966. Um, but only Congress can make that change. Thank you, Mr. Santos. Inter agency communication and coordination are integral to the operation of the FICA program. The Department of Labor's Office of Workers Compensation Programs works with federal agencies and the workers to process
claims, provide benefits, and return employees to work. Which aspects of inter agency inter agency communication and coordination are working well and which ones are not? Thank you, Representative. We our office has not looked at this specific issue recently, but I recognize the importance of OWCP
to maintain these lines of communication. It assists both the claimant in in in receiving the benefits that they entitled to as well as the agencies right in in in communicating directly with with OWCP. This has been has been brought to my attention
previously and I understand that WCP is also aware of limitations that they have in communicating with the agencies. We have tried and facilitate that access on the part of OG's by facilitating access to data to to documents to information.
My understanding is also that OWCP has put in place a protocol I believe in 2017 to facilitate this uh communication between OIGs who may be investigating claim and fraud and OWCP so they can more readily receive the the information. But we recognize that this
is an area that where OWCP can make improvements. I would note I think from their perspective and again I can't speak for OWCPA but they have reported that um I believe each one of their claim examiners are responsible for over
500 claims in a given moment and and the the industry average should be between 120 and 200. So some of this is a reflection on resource constraints on the part of OWCP as well but we recognize that more can be done. Thank
you Miss Hall. Uh your office's 2023 report found that the cost per work hour of postal workers compensation program runs 31 to 41% higher than in private industry. It also found that the USPS could have saved nearly $693 million in just two years had have been able to use
private sector cost containment tools. Which cost cost containment mechanisms should the Congress authorize the USPS to adopt so this workers compensation program more closely mirrors private sector practices? Yes. As part of that work, we looked at how others were were um managing their
costs in their workers compens compensation programs. And what we saw was uh things like limitations on dollar amounts and duration of benefits. We saw something that I mentioned in my statement about allowing um allowing uh
settlements to uh to reduce the ongoing costs, buyouts and settlements to to help reduce the cost. We also looked at um the use of employer selected physicians versus employee selected physicians. So those are three of the areas that we saw were common in uh
private sector and in state uh workers compensation programs that that the uh FICA does not have. Okay. Thank you. Yield back my time. Thank you. Next is Miss Miller from Illinois. Thank you Mr. Santos. Under the current
FICA program, there have been instances of workers reporting an injury to collect disability benefits while they are subsequently found to be secretly working another strenuous job. What is being done to increase oversight and address this fraud and abuse within
FICA? Thank you, Representative. This has been a concern of ours from an OIG perspective for many years. not only our office but also postal OG's and many other OIGs who are responsible for investigating claim and fraud associated with their own programs. Many years ago,
following the issues we identified jointly with postal OIG on the compounded drug matters, Congress took action and provided both the authority and the funding for OWCP to create what's called a program integrity unit,
which has been in many ways a model of how this should be looked at from an oversight perspective. So they are constantly using data analytics. So is our office as well as postal IG to look at the claims uh because what we have found particularly over the pandemic is
that data really is the key to provide adequate and and comprehensive oversight of these matters and then the program integrity unit refers those cases to my office which then we take action in investigating these matters. It remains a concern certainly from our
perspective. Um but uh to OWCP's credit they are doing a better job identifying these matters and sending it our way for investigations and we also work very closely with other OIGs to pursue those cases. Thank you. And related to this, there are also some instances of injured
workers who continue to claim benefits long after they have rec recovered. What is being done to ensure this abuse of FICA benefits is reduced? Yes, that's also a very important matter and a concern for our office for for quite some time. This is one of the reasons we've recommended that Congress in
looking at potential reforms for the program authorize OWCP and specifically the pro the program integrity unit I mentioned to have access to social security wage records as well as the national director of new hires. The NDNH
specifically has uh updated information on income and employment. uh this is an HHS database. I believe employers are required to update the database within 20 days. So providing that access to OWCP would facilitating this data
matching and data analytics program I've referenced and then in identifying when claimants have returned to work or at times when they are unre under reporting their earnings which is also important. Those sound like good solutions and we need to make it happen. Also, I was
wondering are there is there any public recourse for reporting abuse of the system in in what sense specifically? Well, I'm just like is there is there any kind of portal where people are listed? Oh,
there is one. not aware it lists but certainly we have a venue for individuals who are aware of complaints or aware of allegations against uh federal employees who may be continue to receive infica as well as in the medical provider fraud. Not only do we labor oi operate our own hotline where
individuals can report these matters to I understand that all os have similar hotlines where they can be reported to. So absolutely there's a venue for individuals to bring these matters to our attention. Okay, that's fantastic. Thank you. And Miss Hall, the US Postal
Service has an annual operating revenue of 78 billion and over a half a million career employees. In my home state of Illinois, a 2021 investigative report showed that the USPS in Chicago has four
of the worst performing offices with that report showing 62,000 mail items were delayed over several months. The inspector general report also found that rates of improper scanning and handling of hundreds of
packages were as high as 50%. What is being done to address these dis deficiencies in the Chicago USPS offices? Yeah, great question. Uh Chicago has been a challenging area for the postal service for for a very long
time. we uh issued the report that you're speaking of and made recommendations to the postal service to address some of the causes of the problems that we saw. Um I don't know the status of those recommendations right now, but we can get we can get the status and get and get back to you on it. But we're continuing to do work
around the country and in Chicago looking at service issues in particular because there have clearly there are some hot spots around the country where service is challenging. Well, thank you and we'd be very grateful. Thank you. And I yield back. Appreciate
that. Next, we will go to Mr. Courtney from Connecticut. Thank you, uh, Mr. Chairman. Thank you for, uh, the the waiver and to the ranking member for, uh, the waiver that allows me to participate today. Uh, again, just, uh, as the, uh, lead co-sponsor on the
Democratic side for HR 3170, just wanted to, uh, just foot stomp a couple points that were made, um, by Mr. Renfro and Ms. Omar uh who uh raised this issue earlier in her questioning. Um this is a bill which has been introduced a number of times actually goes back to 2011. Um
it recognizes that uh direct access to nurse practitioners and u physician assistants is widely sort of embraced now in the health care system uh both at the state level and the federal level. The Medicare system has allowed direct billing by nurse practitioners and PAs
for almost a decade uh at this point. And um uh again it if anything it again has provided patients with access in a very stressed time in terms of physician shortages. Uh the American College of Medical um colleges and universities uh
reports that we're going to have a physician shortage of about 86,000 at the rates we're going right now in terms of retirements and um you know the inadequate replacement. So the the issue of physician access uh in terms of just the global system is if anything going
to worsen uh if we don't sort of provide other options and again Mr. Renfro your your testimony again I think powerfully um demonstrated what the the need is particularly in rural parts of the country. Um Mr. Chairman, I ask unanimous consent to uh enter into the
record a letter of support from the American Association of Nurse Practitioners for HR 3170 as well as um a letter in support of the legislation from the Workers Injury Law and Advocacy Group. Without objection. Thank you, uh Mr. Chairman. And in my remaining time,
um Mr. Renfro, you heard Miss Hall testify in favor of um basically overriding employees right to seek their own health care provider and instead um take doctors that are on a list provided uh by the the postal service. What what
is the letter carrier's position on that type of u uh possible change? Yeah, we would be very much opposed to modifying the current ability of federal employees that are injured right to seek
their own provider that that treats uh injured federal employees. Um I think you highlighted very well the need to expand those treatment options. Um I I would also just like to comment on a couple of other points that were raised in in the IG report.
um the recommendations regarding lump sum payments as opposed to continuing benefits. Um the the there's an issue raised about um requiring those that are injured to begin taking an OPM annuity at age 65.
Um we are very staunchly opposed to those type of reforms. Um, as I mentioned earlier, the the most pressing issue is access to care and this legislation would go a long way towards addressing that. I I will note one piece
that I think is important that was recommended um in the OIG's report and that is to maximize the usage of generic prescription drugs. Um we are in full support of that as that's also become you know a trend sort of across uh
across the healthcare industry and and again the OAG's office has done really impressive work in terms of identifying waste fraud and abuse which um you know Miss Hall's briefed the staff here and kudos um again to to OG the letter carriers completely support all efforts
right to to crack down on waste fraud and abuse in the system. We 100% support efforts to crack down on waste, fraud, and abuse because the the impact of u expenses that are eventually passed on to the postal service um is very much as
it was described earlier potentially um could result in benefits not being paid to someone who is entitled to them under the law. I I I think it's important for me to mention my union has invested very heavily in representing our employees that are injured and and one of the
primary reasons beyond of course ensuring that they receive their benefits is to make the process as efficient as we possibly can. We've also engaged directly through beginning with the Obama administration, the first Trump administration, the Biden administration, now with the second
Trump administration with OWCP to improve and modernize processes to offer them the perspective of the individual that's filing the claim and we've made a lot of progress as was mentioned earlier in recent years with OWCP and we really
believe that we can continue to do that. But it's important to us that benefits are paid efficiently to those who are entitled to them under the law. But we certainly are supportive of efforts to eliminate fraud, to eliminate waste, to eliminate abuse of the program so long
as it does not result in I think we have to be careful that we do not impact those um that do are entitled to those benefits and ensure they receive them. But yes, sir, we would 100% support any of those efforts. Great. Thank you, Mr. Chair. Yield back.
Thank you. And seeing no further questions, we will uh conclude the uh in interviewing and uh questioning of witnesses. And now we will move to closing remarks. And at this time, I would like to recognize the ranking
member for her closing remarks. Thank you, chairman, and thank you uh once again to our witnesses for speaking with us today. Today's hearing has reaffirmed a simple but powerful truth. The Federal Employees Compensation Act is not just a program. It is a promise.
A promise to federal workers who deliver our mail, guard our transportation system, inspect our food, and respond in times of crisis. These workers are not statistics or budget items. They are people who make our government function. and when
they are injured or fall sick through their work, they deserve a system that works for them, not against them. We have heard important testimony today about FICA's strengths, but we've also heard about its shortcomings, outdated procedures, delays in care, and
burdensome claim process. These are solvable problems, and as we have seen before, bipartisan cooperation can deliver meaningful lasting reforms. But let's be clear, any reform must keep one question front and
center. How does this help workers and their families? We cannot lose sight of that. This means not only supporting workers after injury, but also preventing injuries and death in the first place. Investment in workplace
safety like training, protective gear, and common sense protections such as the proposed OSHA heat stress rule are both morally right and fiscally savvy. Fewer injuries and illnesses mean fewer claims, lower costs, and a stronger and
more resilient system for everyone. What we cannot do is follow the course of workers compensation changes in the states which have cut benefits to the bone and pushed workers into poverty. I ask unanimous consent to enter into the
record a policy position from the American Public Health Association entitled the critical need to reform workers compensation which lays out the problems of state systems that we must avoid if we are committed to prioritizing the health and
well-being of workers. Without objection, the story I shared earlier of the injured letter carrier from Minnesota reminds us of what is truly at stake. His life was upended in an instant. And while he may never work again, Fica ensures that he and his
family are not abandoned. That is what this program is about. That is what this conversation is about. And so, let's take today's testimony to heart and let's build on the bipartisan progress already underway. We must ensure that FICA continues to reflect the best of
our values of compassion, fairness, and respect for those who serve our country, our constituents every day. Thank you, and I yield back the balance of my time. Thank you to the ranking member. And now I will uh deliver my closing remarks. And first of all, I'd just like to thank
all the members of the subcommittee for taking part in today's important hearing on FICA. and also to all of our witnesses for sharing their perspectives on how we can actually uh improve the program as we move forward. And I think
that we have all seen that after the 109-year law, having not been updated in the past 50 years, that it is long overdue that we make changes uh that bring us into the realities of the 21st century, closing and cracking down on those issues of waste, fraud, and abuse
in the system, but at the same time making sure that we deliver for those injured workers the benefits that they deserve. And so as we move forward in this process, I look forward to engaging in a bipartisan fashion with the members of the subcommittee, the members of the full committee and the outside
stakeholders here and others who may be interested. We appreciate all the input that we're gathering here today. But again, I think there is a path forward to do both of those things. Crack down on waste, fraud, and abuse and make sure that we're providing for injured federal workers. So with that, we will continue
our our important work to seek out possible solutions and look forward to doing that in a bipartisan fashion. Again, I would like to thank our witnesses for joining us and testifying before the subcommittee today. And without that, there will be no further business. And the subcommittee stands
adjourned.