The Postal Service funds workers’ compensation benefits for employees who sustain job-related injuries. In FY 2008, the Postal Service incurred over $1.2 billion in workers' compensation expenses. In addition, the Postal Service estimated its liability for future workers’ compensation costs at nearly $8 billion. The U.S. Department of Labor’s Office of Workers’ Compensation Programs (OWCP) administers the workers’ compensation program and then bills the Postal Service for reimbursement. While the Office of Inspector General (OIG) recognizes that fraudulent workers’ compensation claims make up a small percentage of the total claims, the OIG commits significant resources toward identifying claimants who defraud the system. In FY 2008, OIG investigations saved the Postal Service more than $197 million in future workers’ compensation costs, and the OIG arrested 51 individuals for workers’ compensation fraud. The following example highlights one of our recent successes.
On October 2, 2008, a former Postal Service mail processing clerk from Montana was convicted in U.S. District Court on four counts of fraud following a 3-day trial in Billings, Montana. This former postal clerk had not worked since December 1986 and had received more than $650,000 in workers’ compensation payments since that time. She considered herself so disabled that she could not even “bend over to cut her toenails.” During a month-long surveillance in the fall of 2006, OIG agents saw a much more active woman as they videotaped her using a chain saw and wood splitter, unloading 10-foot logs from her pickup, and stacking large chunks of wood. (See above for some of the video footage.) On January 21, 2009, Chief U.S. District Court Judge Richard Cebull ruled that the former clerk is suffering from a mental disorder and committed her to a federal medical center for up to 20 years. This successful investigation saved the Postal Service approximately $781,000 in future workers’ compensation payments. Do you have any suggestions for preventing workers’ compensation fraud?