When Postal Service employees get hurt on the job or develop a work-related illness, workers’ compensation benefits are there to help — covering medical care and lost wages while they recover. These benefits are part of a federal program run by the Department of Labor, and USPS participates just like other federal agencies.

But here’s the thing:  Workers’ compensation is a big-ticket item for the Postal Service. In recent years, the Postal Service has spent more than $1.5 billion annually to reimburse workers’ compensation claims and administrative costs. And that’s not the whole story—each year, USPS also accrues additional non-cash expenses for future costs, adding to its financial liabilities.

At the OIG, our Office of Investigations works to reduce these costs by fighting fraud in the program. They investigate fraudulent charges by doctors, pharmacies, and other providers who look to exploit the workers’ compensation program. In one case, our special agents worked with five other Offices of Inspector General to stop a company that was billing federal programs, including the workers’ compensation program, for unnecessary medical supplies. Our special agents also investigate fraud by claimants who fail to report outside income or make other false statements. Read about one claimant who reported being disabled and unable to work while leading an active life running a business here.

In addition, we conduct audit and research work involving workers’ compensation. A recent white paper highlighted how the Postal Service’s average workers’ compensation costs per workhour were higher than for private industry, and the gap was getting larger. Had the Postal Service been able to operate workers’ compensation more like the private sector, it could have potentially saved $4.15 billion over 10 years. You can read about the OIG’s workers’ compensation work and find a list of related reports in our Focus on Workers’ Compensation.

Do you have ideas for controlling workers’ compensation costs? Let us know in the comments below.