FECA Reform and Oversight: Prioritizing Workers, Protecting Taxpayer Dollars

Health Care Costs and Drug PricingHouse Education and Workforce Subcommittee on Workforce Protections · May 6, 2025 · 119th Congress
The House Education and Workforce Subcommittee on Workforce Protections held this hearing to examine the Federal Employees' Compensation Act (FECA), the century-old workers' compensation law covering roughly 2.6 million federal civilian employees, and to weigh reforms that could modernize the program while curbing fraud, waste, and abuse [0:06:41]. Begins at ▶ 0:06:13
Transcript
Highlights

Title

Reforming FECA's federal workers' compensation program

Purpose

The House Education and Workforce Subcommittee on Workforce Protections held this hearing to examine the Federal Employees' Compensation Act (FECA), the century-old workers' compensation law covering roughly 2.6 million federal civilian employees, and to weigh reforms that could modernize the program while curbing fraud, waste, and abuse▶ 0:06:41. Witnesses from the Congressional Research Service, the Department of Labor Office of Inspector General, the National Association of Letter Carriers, and the USPS Office of Inspector General testified on benefit structure, medical fraud, heat-related injuries, and proposed legislation to expand access to care. Begins at▶ 0:06:13

Who spoke

• Chairman McKenzie▶ 0:06:13: Opened the hearing, outlining FECA's history since 1916 and noting fiscal year 2024 saw more than 86,000 new cases and $2.9 billion in benefits paid▶ 0:07:43; later questioned witnesses on disincentives to return to work and medical fraud▶ 0:33:35.

• Ranking Member Omar (D-MN)▶ 0:09:55: Called FECA "a solemn promise" to injured federal workers▶ 0:10:22, shared a Minnesota letter carrier's case of permanent disability after a 2020 crash▶ 0:12:47, and pressed for prevention measures like the proposed OSHA heat stress rule▶ 0:15:09; later entered documents from the Workers' Injury Law and Advocacy Group into the record▶ 0:41:29.

• Scott Szymendera, Congressional Research Service▶ 0:18:58: Explained FECA's augmented compensation can reach 75% of pre-disability wages tax-free, versus the two-thirds standard in most state systems▶ 0:20:08; testified the schedule-award tables for permanent impairments have not been updated since 1966▶ 1:01:40 and said only Congress, not rulemaking, can currently change them▶ 1:03:11.

• Luiz Santos, Acting Inspector General, U.S. Department of Labor▶ 0:22:21: Said DOL OIG has opened over 320 investigations since FY 2015 leading to 322 convictions and $1.7 billion in monetary outcomes▶ 0:23:41, cited a $405 million forfeiture in a compounded-cream kickback scheme▶ 0:24:08, and recommended Congress grant OWCP access to Social Security wage records and authority to suspend indicted providers▶ 0:24:49.

• Brian Renfroe, National President, National Association of Letter Carriers▶ 0:25:44: Testified violent crime against postal employees nearly doubled between 2019 and 2023 and five letter carriers have been murdered since 2022▶ 0:29:10; opposed reducing benefits or limiting workers' choice of treating physician▶ 0:41:51.

• Tammy Hull, Inspector General, U.S. Postal Service▶ 0:30:00: Said USPS paid nearly $1.5 billion in workers' compensation claims plus $96 million in administrative costs last year▶ 0:30:57, and that adopting private-sector cost-containment tools could save almost $350 million a year▶ 0:31:24; noted more than 600 postal employees age 80 or older, including three centenarians, remain on the FECA rolls▶ 0:31:55.

• Chairman Walberg (R-MI)▶ 0:45:43: Described HR 3170, the Improving Access to Workers' Compensation for Injured Federal Workers Act, co-sponsored with Rep. Courtney, to let state-licensed nurse practitioners and physician assistants treat FECA claimants▶ 0:46:34.

• Ranking Member Scott (D-VA)▶ 0:51:54: Asked whether fraudulent doctors in the compound-drug scheme were referred to licensing boards▶ 0:52:22 and whether DOGE-related cuts (lease cancellations, purchase-card suspensions) hindered DOL OIG's work▶ 0:52:49; also questioned Renfroe on barriers to heat breaks▶ 0:54:52.

• Rep. Fine (R-FL)▶ 0:57:00: Argued fraud "steals" benefits from deserving recipients and pressed Hull on the scale of fraud identified through AI/data analytics, eliciting an estimate of "hundreds of millions of dollars"▶ 1:00:41.

• Rep. Mesmer▶ 1:01:40: Asked Szymendera about updating the decades-old schedule-award framework▶ 1:01:40 and Santos about interagency communication gaps, including OWCP claims examiners averaging over 500 cases each versus an industry norm of 120–200▶ 1:05:19.

• Rep. Miller (R-IL)▶ 1:07:09: Cited a 2023 IG report finding USPS workers' compensation costs run 31–41% higher per work hour than private industry and that private-sector tools could have saved nearly $693 million over two years▶ 1:05:47; also raised USPS Chicago service failures, including 62,000 delayed mail items▶ 1:10:51.

• Rep. Courtney (D-CT)▶ 1:11:45: Co-sponsor of HR 3170, cited a projected 86,000-physician shortage as justification for expanding NP/PA access▶ 1:13:05, and had Renfroe reaffirm opposition to restricting employees' choice of provider▶ 1:14:20.

Key moments

• Santos detailed a compounded-cream kickback scheme in which drugs costing about $15 per prescription were billed to FECA at inflated rates, producing a $405 million forfeiture — the largest health care fraud forfeiture of its kind▶ 0:23:41▶ 0:24:08.

• Hull said OWCP's pharmaceutical spending fell from $436 million in FY2016 to $43 million in FY2024 after oversight reforms including a pharmacy benefit manager▶ 0:24:31.

• Szymendera testified FECA's augmented compensation (75% of pre-disability wage, tax-free) can exceed a worker's net take-home pay if they returned to work, a potential disincentive to return▶ 0:34:07▶ 0:34:38.

• Hull disclosed more than 600 postal employees age 80 or older — three age 100 or older — remain on FECA benefit rolls, which have no settlement or duration caps▶ 0:31:55.

• Fine pressed Hull on the total scope of fraud detected via AI/data analytics; she estimated "hundreds of millions of dollars," including cases of postal employees receiving benefits while secretly working other jobs▶ 1:00:41▶ 1:00:12.

• Santos disclosed DOGE-related actions canceled four DOL OIG office leases and briefly suspended purchase/travel cards, though decisions are being revisited▶ 0:52:49▶ 0:53:14.

• Szymendera testified the FECA schedule-award tables for permanent impairment have not been updated since 1966, unlike the AMA's guides (sixth edition, annual updates) and the VA's disability ratings (updated since 2017)▶ 1:02:09▶ 1:02:25.

• Renfroe cited a near doubling of violent crime against postal employees from 2019–2023, with more than two-thirds involving a firearm or weapon, and five letter carriers murdered since 2022▶ 0:29:10.

• Miller cited a 2023 IG finding that USPS workers' compensation costs run 31–41% higher per work hour than private industry, with potential savings of $693 million over two years from private-sector cost tools▶ 1:05:47.

• Renfroe and Courtney sparred implicitly with Hull's testimony: Renfroe stated the letter carriers union is "very staunchly opposed" to proposals such as lump-sum settlements or mandatory OPM annuities at 65, which Hull's office had recommended as cost-containment tools▶ 1:14:44▶ 1:06:16.

Metadata

CommitteeHouse Education and Workforce Subcommittee on Workforce Protections
Chamber / CongressHouse · 119th Congress
DateMay 6, 2025
TypeHearing
Witnesses
Mr. Brian Renfroe — National President, National Association of Letter Carriers
Ms. Tammy Hull — Inspector General, U.S. Postal Service
Mr. Scott Szymendera — Congressional Research Service, U.S. Library of Congress
Mr. Luiz Santos — Acting Inspector General, U.S. Department of Labor
Videoyoutube
Transcript176 caption blocks · 11,189 words · 1:22:07 runtime
EventCongress.gov 118183