Workers Comp Fraud Investigations

(This article first appeared in the November/December 2015 issue of The American Postal Worker magazine.)

Special agents of the Postal Service Office of the Inspector General (OIG) are contracted to “safeguard postal revenue” and are supposed to “operate with integrity, be a model of ethical behavior, and treat people in a fair and respectful manner.”

When it comes to workers compensation fraud, however, these law enforcement officers often employ questionable tactics and exercise little fiducial responsibility: They have been cited by the Department of Labor (DOL) for violating federal regulations while conducting fraud investigations involving injured workers. Agents also have been performing claim management functions rather than ascertaining whether crimes occurred.

It’s unlawful for investigators to ask physicians about a claimant’s work tolerance limitations. This is a Health Resource Management (HRM) task, not an essential action of an official investigation; therefore, 20 CFR 10.506 applies. The regulation limits employing agencies to written contact with physicians treating injured workers covered by the Federal Employees Compensation Act (FECA).

The Employees Compensation Appeal Board (ECAB) found special agents using techniques that prejudice physicians against their patients in an effort to obtain desired medical opinions. Fearing that they, too, will become targets of investigation, physicians often fail to advocate for their patients.

The ECAB concluded that discussing investigations and sharing evidence with doctors “poisons the well,” which makes new medical opinions tainted and unpersuasive. (ECAB FS 11-863, September 26, 2012).

Where surveillance video is offered for the purpose of gaining a medical opinion, the employee must be notified, provided a copy if requested, and afforded an opportunity to explain the events depicted. (J.M., 58 ECAB 478, 486 (2007); Frederick Nightingale, 6 ECAB 268 (1953)).

But agents frequently use edited, secret surveillance to coerce doctors into agreeing to false accusations that their patients are exaggerating their limitations. Agents often make deceitful statements, employ misleading tactics, and engage in entrapment to justify charges against claimants for making false statements about their abilities. These scams cause OWCP to wrongfully terminate benefits and shamelessly destroy lives. That hardly qualifies as “operating with integrity” or treating people in a “fair and respectful manner.”

OIG agents portray injured workers as malingerers and can easily convince juries that don’t understand the FECA to indict their prey. Procuring questionable indictments bolsters the OIG’s conviction rate and increases cost-avoidance calculations and financial recovery figures. How else can they justify their own costs?

Agents count on a large number of the accused pleading guilty to lesser misdemeanor charges. The OIG calls these “pre-trial diversions.” Indicted by their peers and driven by fear, OIG victims often trade their future FECA benefits to avoid imprisonment, hefty fines, felony records, loss of employment and costly legal fees. Veterans also risk losing their VA benefits.

To seal the deal, prosecutors and agents agree that they will not mandate restitution of benefits. This, in essence, is a con, because pleading guilty to a false statement charge counts as misdemeanor fraud. Guilt of any fraud, felony or misdemeanor, not only permits OWCP to stop all future benefits, it permits OWCP to aggressively pursue full restitution of all FECA benefits previously received.

The unsuspecting claimant has been duped into repaying what could be hundreds of thousands of dollars when medical treatment, wage loss compensation and schedule awards are factored into the equation. Only a universal settlement, one that applies to all, can potentially thwart reimbursement obligations.

In Fiscal Year 2015, the USPS appropriated $243.9 million to fund the OIG, resulting in the return of $10.7 million to the Postal Service and 23 workers compensation fraud convictions (less than 1/6 of one percent). Safeguarding revenue or waste and abuse?

To learn more about your rights during USPS OIG Fraud Investigations, review the Industrial Relations article in September/October 2009 issue of The American Postal Worker.