Healthcare Fraud

USPS OIG Investigations

The U.S. Postal Service Office of Inspector General (OIG) investigates two types of cases under the healthcare program: Office of Workers’ Compensation Program (OWCP) claimant fraud and OWCP medical provider fraud.

OWCP Claimant Fraud. A critical cost control area within the Postal Service is the funding of workers’ compensation benefits for employees who sustain job-related injuries.

It is a violation of federal criminal law for a claimant to knowingly make a false representation on an OWCP claim. (A false representation typically involves unreported income or misrepresentation of one’s physical limitation.) The OIG works closely with injury compensation units and postal management to identify instances of suspected workers’ compensation fraud. When the OIG special agents find instances of fraud, they gather facts and report findings to management and prosecutors. Criminal prosecutions of these offenders are an effective deterrent to combating workers’ compensation fraud. A conviction prevents those claimants from obtaining future OWCP benefits.

Based on the OIG’s successful investigative activity, the U.S. Department of Labor (DOL) can remove claimants who fraudulently obtain workers’ compensation benefits from the DOL periodic and daily rolls. As a result, the Postal Service avoids future compensation liability payments to DOL. The savings experienced by the Postal Service is called a cost avoidance. From the April 1, 2007, through September 30, 2007, reporting period, OIG special agents conducting healthcare investigations realized $87.9 million in cost avoidance.

Additionally, the OIG completed 971 investigations and obtained 16 criminal convictions during this reporting period. The Postal Service took personnel action against 307, including removals, letters of warnings, and claim terminations.

The OIG investigative goal in this area is to prevent and deter workers’ compensation fraud, not simply detect and investigate it. For example, to examine additional ways to control the escalating workers’ compensation costs, the Postal Service and the OIG, along with officials from DOL, convened in Arlington, Virginia, at the National Injury Compensation Symposium and Training Conference in April 2007. More than 200 attendees shared executive-level knowledge of the workers’ compensation program, discussed the program’s design and intended function, as well as the challenges facing the program, and provided investigative training to OIG special agents.

OWCP Medical Provider Fraud. The OIG also investigates allegations of fraud against medical providers who treat multiple Postal Service OWCP claimants.

The OIG also publicizes criminal workers’ compensation fraud to the Postal Service through an “Injury Compensation Fraud Highlights Newsletter.” The newsletter is designed to raise awareness and deter other attempts to defraud the government.

Former Postal Employee and Tattoo Artist Draws 6 Months in
Prison for Health Care Fraud

On May 2, 2008, a former Letter Carrier was sentenced in Federal District Court in Michigan to 6 months in prison after he was convicted on four counts of mail fraud and two counts of making a false statement to a government agency. The court also ordered the carrier to pay $40,831 in restitution to the Postal Service and to serve 2 years of supervised release with the first 6 months to be served in home confinement.

The sentence stemmed from a joint investigation launched by the U.S. Postal Service Office of Inspector General (OIG) and the U.S. Department of Labor (DOL). The OIG looked into an August 2006 allegation the postal employee operated an airbrush tattoo business while receiving workers’ compensation benefits.

Postal records indicated the carrier was receiving workers’ compensation benefits after reportedly suffering an on-the-job back injury, which totally disabled him. However, in August and September 2006, at five different fairs, OIG Special Agents videotaped the carrier carrying equipment, lifting heavy objects, jogging, bending, twisting, sitting, and standing for extended periods while working at the fairs. In November 2006, the Carrier completed OWCP documents claiming he had not been employed or involved in any business enterprise during the previous 15 months.

As a result of the OIG investigation, the carrier was indicted in 2007, the OWCP removed him from the disability rolls, and the Postal Service removed him from duty, resulting in a long-term cost savings for the Postal Service of more than $1 million.

“Collecting worker’s compensation benefits that are undeserved is fraud, plain and simple. Such conduct diverts money from the government and from those with rightful claims,” stated United States Attorney Stephen J. Murphy.

The sentence the Carrier received should act as a strong deterrent to others who may be thinking of defrauding the workers' compensation system. “Scam the system and you're going to lose your job, your benefits and you're going to jail. And you'll have to pay back the compensation that you fraudulently obtained,” said Scott Caspall, Special Agent in Charge of the Office of Inspector General’s Great Lakes Area Office.