Strengthening Federal Workers' Compensation Programs: Ensuring Integrity, Efficiency, and Access

Health Care Costs and Drug PricingHouse Education and Workforce Subcommittee on Workforce Protections · 2026-03-18 · 119th Congress
The House Education and Workforce Subcommittee on Workforce Protections held this hearing to examine the Department of Labor's Office of Workers Compensation Programs (OWCP), which administers the Federal Employees' Compensation Act (FECA) and the Energy Employees Occupational Illness Compensation Program Act (EEOICPA). Begins at 0:07:15
Transcript
Highlights

Title

Reforming Federal Workers' Compensation: Care Access, Outsourcing, and AI

Purpose

The House Education and Workforce Subcommittee on Workforce Protections held this hearing to examine the Department of Labor's Office of Workers Compensation Programs (OWCP), which administers the Federal Employees' Compensation Act (FECA) and the Energy Employees Occupational Illness Compensation Program Act (EEOICPA). Members and witnesses discussed legislative proposals including HR 4122 (the Healthcare for Energy Workers Act), the use of managed care organizations and artificial intelligence in claims processing, and concerns about outsourcing, fraud, and access to physicians. Begins at0:07:15

Who spoke

Chairman McKenzie (R)0:07:15: Opened the hearing describing OWCP's history and scope, and highlighted HR 4122 and the prior FECA reform bill as bipartisan efforts to cut red tape0:08:32; noted state programs' adoption of AI and predictive modeling as models for federal efficiency0:09:49.

Ranking Member Omar0:10:33: Framed workers' compensation as a promise to federal, energy, and maritime workers0:10:33; criticized the Labor Department's apparent abandonment of a 2024 rule on coal mine operator self-insurance collateral, citing hundreds of millions in black lung liability shifted to taxpayers0:13:13; later pressed Mr. Johnson on Sedgwick's fines and a California penalty0:42:24 and submitted several documents for the record0:45:04.

Mr. Robert Johnson, President, Sedgwick Government Solutions0:17:07: Testified Sedgwick serves millions of injured workers annually and argued best care controls costs0:19:42; defended the company against fraud/penalty allegations without addressing specifics0:43:16; discussed provider networks, AI safeguards, and predictive analytics for fraud detection1:09:14.

Ms. Stephanie McCloud, Administrator/CEO, Ohio Bureau of Workers' Compensation0:20:34: Described Ohio's 1997 shift to managed care organizations (HPP), which cut claim filing time from 65 to 17 days0:23:17 and reduced employer premiums to their lowest in 65 years0:22:29; detailed AI tools including auto-adjudication, auto-indexing, and a policy chatbot expected to save 20,000 staff hours0:36:03.

Mr. Christopher Godfrey, Director of Research, Workers' Injury Law and Advocacy Group0:25:44: Argued the "grand bargain" requires prompt and adequate compensation0:26:47 and said outsourcing FECA functions to private contractors reduces accountability rather than costs0:27:37; raised concerns about schedule awards being paid consecutively rather than concurrently with wage-loss benefits1:00:29.

Mr. Patrick Howe, Executive Vice President, Nuclear Care Partners0:29:54: Advocated for HR 4122 to let nurse practitioners and physician assistants order care for energy workers0:30:51, citing a New Mexico patient's 4-hour trip to see a doctor0:31:45; described serious illnesses (pneumoconiosis, kidney disease, 22 cancer types) tied to radiation exposure1:18:28.

Chairman Walberg (Full Committee)0:46:05: Asked witnesses about improving return-to-work outcomes and telemedicine flexibility for energy workers0:48:28.

Ranking Member Scott (Full Committee, D-VA)0:57:39: Questioned Godfrey on independent contractor misclassification0:57:39 and private equity's role in workers' comp, noting it can incentivize denials and cost-shifting to taxpayers0:58:33.

Rep. Mesmer (R-IN)0:52:05: Asked about FECA modernization based on state models like Ohio and Indiana0:52:28, and potential downsides of managed care networks0:55:12.

Rep. Grothman (R-WI)1:02:22: Asked about metrics for the energy workers program1:02:31 and AI privacy safeguards1:04:39, and asked McCloud to rate the program's fraud level on a 0–10 scale1:07:12.

Rep. Fine (R-FL)1:08:29: Raised concerns about fraud in government-funded programs and questioned how predictive analytics improve fraud prevention1:09:14.

Rep. McBath (D-GA)1:13:56: Described her partnership with Rep. Allen on HR 4122, citing Georgia's rural physician shortages (42 counties without an internal medicine doctor, 10 with no physicians)1:16:05 and a constituent driving 6 hours round-trip for care1:17:06.

Rep. Allen (R-GA)1:20:20: Discussed HR 4122's origins and Georgia's energy worker population near Plant Vogtle and Savannah River Site1:21:00, and asked why the Energy Workers program hasn't adopted NP/PA authority already used by the VA and CMS1:24:46.

Key moments

Godfrey said outsourcing OWCP functions to private contractors "does not reduce costs, it reduces accountability," and that cost savings often just shift costs to Medicare, Medicaid, private insurance, or the VA0:27:370:28:01.

Omar cited a California Workers' Compensation Appeals Board finding that Sedgwick exhibited "such disregard for its legal and ethical obligations to provide medical care to critically injured workers," alongside a $1.5 million California penalty and a Tennessee fine over erroneous treatment denials0:42:240:42:53.

McCloud reported Ohio's managed care shift dropped average claim filing time from 65 days to 17 days and increased 2-week claim determinations from 1% to 46%0:23:000:23:17.

Godfrey testified that under current FECA administration, schedule awards for permanent loss (e.g., an amputated arm) cannot be paid concurrently with wage-loss compensation, calling this "an improper administration of the law"1:00:561:01:22.

McBath described a Coweta County, Georgia constituent with pneumoconiosis who must drive over 6 hours round trip to verify health benefits under current law1:17:06.

Howe said roughly 40% of Nuclear Care Partners' patient referrals come from word of mouth, and identified 22 cancer types linked to radiation/toxic exposure among energy workers0:34:131:18:56.

McCloud said Ohio consolidated from 57 managed care organizations to 7 due to stringent performance requirements, using report cards and incentive/set-off payments tied to outcomes0:56:380:57:07.

Scott and Godfrey discussed private equity's growing role in workers' comp, with Godfrey stating firms paid to take on high-dollar cases have incentive to deny or delay care to keep costs under what they were paid0:58:33.

Johnson said his company manages claims involving over 900,000 active providers nationally and uses historical outcome data, not lowest cost, to select preferred providers0:52:55.

McCloud noted Ohio's provider network grew from about 6,900 certified providers in 1995 (273,000 new claims/year) to nearly 92,000 providers today (67,000 new claims/year)0:50:370:51:04.

Metadata

CommitteeHouse Education and Workforce Subcommittee on Workforce Protections
Chamber / CongressHouse · 119th Congress
Date2026-03-18
TypeHearing
Witnesses
Mr. Christopher Godfrey — Director of Research, Workers' Injury Law and Advocacy Group
Mr. Patrick Howe — Executive Vice President of Sales, Nuclear Clear Partners
Mr. Patrick Howe — Executive Vice President, Nuclear Clear Partners
Mr. Robert Johnson — President, Sedgwick Government Solutions
Ms. Stephanie McCloud — Administrator and CEO, Ohio Bureau of Workers' Compensation
Videoyoutube
Transcript198 caption blocks · 12,911 words · 1:29:06 runtime
EventCongress.gov 119068